Corporate debt restructuring

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JMFL, a corporate debt restructuring company ensures timely and transparent mechanism for restructuring of corporate debts, to minimise the losses to the creditors, and aim at preserving viable corporates. For detailed information, visit https://www.jmfl.com/what-we-do/fund-based-activities/asset-reconstruction

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RED HERRING PROSPECTUS Dated: July 21 2017 Please read section 32 of the Companies Act 2013 100 Book Built Issue COCHIN SHIPYARD LIMITED Our Company was incorporated as Cochin Shipyard Limited on March 29 1972 as a private limited company under the Companies Act 1956 with the Registrar of Companies Kerala at Ernakulam. Our Company became a deemed public limited company under section 43A of Companies Act 1956 on July 1 1982. Our Company again became a private limited company with effect from July 16 1985. Our Company became a public limited company with effect from November 8 2016 and a fresh certificate of incorporation consequent upon conversion to public limited company was issued by the Registrar of Companies Kerala at Ernakulam. For further details including details of change in registered office of our Company see “History and Certain Corporate Matters” on page 145. Registered Office: Administrative Building Cochin Shipyard Premises Perumanoor Kochi - 682015 Kerala India. Contact Person: Ms. V. Kala Company Secretary and Compliance Officer Tel: +91 484 2501306 Fax: +91 484 2384001 E-mail: secretarycochinshipyard.com Website: www.cochinshipyard.com Corporate Identity Number: U63032KL1972GOI002414 OUR PROMOTER: THE PRESIDENT OF INDIA ACTING THROUGH THE MINISTRY OF SHIPPING PUBLIC ISSUE OF 33984000 EQUITY SHARES OF FACE VALUE OF ` 10 EACH “EQUITY SHARES” OF COCHIN SHIPYARD LIMITED “OUR COMPANY” OR “ISSUER” FOR CASH AT A PRICE OF ` ● PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF ` ● PER EQUITY SHARE AGGREGATING TO ` ● MILLION “ISSUE” CONSISTING OF A FRESH ISSUE OF 22656000 EQUITY SHARES AGGREGATING TO ` ● MILLION “FRESH ISSUE” AND AN OFFER FOR SALE OF 11328000 EQUITY SHARES BY THE PRESIDENT OF INDIA AGGREGATING TO ` ● MILLION “OFFER FOR SALE” AND “THE SELLING SHAREHOLDER”. THE ISSUE INCLUDES A RESERVATION OF UP TO 824000 EQUITY SHARES AGGREGATING TO ` ● MILLION FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES AS DEFINED HEREIN “EMPLOYEE RESERVATION PORTION”. THE ISSUE LESS EMPLOYEE RESERVATION PORTION IS REFERRED TO AS THE NET ISSUE. THE ISSUE AND THE NET ISSUE WILL CONSTITUTE 25.00 AND 24.39 RESPECTIVELY OF THE POST ISSUE PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY. THE FACE VALUE OF EQUITY SHARES IS ` 10 EACH. THE PRICE BAND RETAIL DISCOUNT EMPLOYEE DISCOUNT IF ANY IN RUPEES TO THE RETAIL INDIVIDUAL BIDDERS THE ELIGIBLE EMPLOYEES BIDDING IN THE EMPLOYEE RESERVATION PORTION AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDER IN CONSULTATION WITH THE BRLMS AND WILL BE ADVERTISED IN ALL EDITIONS OF ENGLISH NATIONAL DAILY NEWSPAPER BUSINESS STANDARD ALL EDITIONS OF HINDI NATIONAL DAILY NEWSPAPER BUSINESS STANDARD AND KOCHI EDITION OF MALAYALAM DAILY NEWSPAPER MATHRUBHUMI MALAYALAM BEING THE REGIONAL LANGUAGE OF KERALA WHERE OUR REGISTERED OFFICE IS LOCATED AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/ISSUE OPENING DATE AND SHALL BE MADE AVAILABLE TO BSE LIMITED “BSE” AND NATIONAL STOCK EXCHANGE OF INDIA LIMITED “NSE” AND TOGETHER WITH BSE THE “STOCK EXCHANGES” FOR UPLOADING ON THEIR RESPECTIVE WEBSITES. Retail Discount of ` ● per Equity Share to the Issue Price may be offered to the Retail Individual Bidders and Employee Discount of `● per Equity Share to the Issue Price may be offered to the Eligible Employees Bidding in the Employee Reservation Portion. In case of any revision to the Price Band the Bid/Issue Period will be extended by atleast three additional Working Days after such revision of the Price Band subject to the total Bid/Issue Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Issue Period if applicable will be widely disseminated by notification to the Stock Exchanges by issuing a press release and also by indicating the change on the website of the Book Running Lead Managers and at the terminals of the other members of the Syndicate. In terms of Rule 192biii of the Securities Contracts Regulation Rules 1957 as amended “SCRR” this is an Issue for at least 10 of the post-Issue paid-up Equity Share capital of our Company. In accordance with Regulation 261 of the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations 2009 as amended “SEBI ICDR Regulations” the Issue is being made through the Book Building Process wherein 50 of the Net Issue shall be available for allocation on a proportionate basis to Qualified Institutional Buyers “QIBs” “QIB Portion”. 5 of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders including Mutual Funds subject to valid Bids being received at or above the Issue Price. Further not less than 15 of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35 of the Net Issue shall be available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations subject to valid Bids being received at or above the Issue Price. Further 824000 Equity Shares shall be reserved for allocation to Eligible Employees subject to valid bids being received at or above the Issue Price. All potential Bidders shall mandatorily participate in the Issue through an Application Supported by Blocked Amount “ASBA” process by providing details of their respective bank account which will be blocked by the Self Certified Syndicate Banks “SCSBs”. For details see “Issue Procedure” on page 416. RISKS IN RELATION TO THE FIRST ISSUE This being the first public issue of our Company there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares is ` 10 and the Floor Price is ● times the face value and the Cap Price is ● times the face value. The Issue Price determined by our Company and the Selling Shareholder in consultation with the BRLMs as stated in “Basis for Issue Price” on page 98 should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk of losing their entire investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Issue. For taking an investment decision investors must rely on their own examination of our Company and the Issue including the risks involved. The Equity Shares in the Issue have not been recommended or approved by the Securities and Exchange Board of India “SEBI” nor does SEBI guarantee the accuracy or adequacy of the contents of this Red Herring Prospectus. Specific attention of the investors is invited to “Risk Factors” on page 18. ISSUER’S AND SELLING SHAREHOLDER’S ABSOLUTE RESPONSIBILITY Our Company having made all reasonable inquiries accepts responsibility for and confirms that this Red Herring Prospectus contains all information with regard to our Company and the Issue which is material in the context of the Issue that the information contained in this Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect that the opinions and intentions expressed herein are honestly held and that there are no other facts the omission of which makes this Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. Further the Selling Shareholder confirms all information set out about itself as the Selling Shareholder in context of the Offer for Sale included in this Red Herring Prospectus and accepts responsibility for statements in relation to itself and the Equity Shares being sold by it in the Offer for Sale. LISTING The Equity Shares offered through this Red Herring Prospectus are proposed to be listed on the BSE and the NSE. Our Company has received an ‘in-principle’ approval from the BSE and the NSE for the listing of the Equity Shares pursuant to letters dated March 31 2017. For the purposes of the Issue the Designated Stock Exchange shall be the BSE. A copy of this Red Herring Prospectus and the Prospectus shall be delivered for registration to the RoC in accordance with section 264 of the Companies Act 2013. For details of the material contracts and documents available for inspection from the date of this Red Herring Prospectus up to the Bid/Issue Closing Date see “Material Contracts and Documents for Inspection” on page 473. BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE SBI Capital Markets Limited 202 Maker Tower ‘E Cuffe Parade Mumbai - 400005 Maharashtra India Tel: +91 22 22178300 Fax: +91 22 22188332 E-mail: csl.iposbicaps.com Investor grievance e-mail: investor.relationssbicaps.com Contact Person: Mr. Nikhil Bhiwapurkar / Mr. Sandeep Tenneti Website: www.sbicaps.com SEBI Registration No.: INM000003531 Edelweiss Financial Services Limited 14 th Floor Edelweiss House Off. C.S.T Road Kalina Mumbai - 400098 Maharashtra India Telephone: +91 22 40094400 Fax: +91 22 40863610 E-mail: csl.ipoedelweissfin.com Investor grievance e-mail: customerservice.mbedelweissfin.com Contact Person: Mr. Siddharth Shah Website: www.edelweissfin.com SEBI Registration No.: INM0000010650 JM Financial Institutional Securities Limited 7 th Floor Cnergy Appasaheb Marathe Marg Prabhadevi Mumbai - 400025 Maharashtra India Tel: +91 22 66303030 Fax: +91 22 66303330 E-mail: csl.ipojmfl.com Investor grievance e-mail: grievance.ibdjmfl.com Contact Person: Ms. Prachee Dhuri Website: www.jmfl.com SEBI Registration No.: INM000010361 Link Intime India Private Limited C 101 247 Park L B S Marg Vikhroli West Mumbai 400 083 Maharashtra India Tel: +91 22 4918 6200 Fax: +91 22 4918 6195 Email: csl.ipolinkintime.co.in Investor grievance email: csl.ipolinkintime.co.in Contact Person: Ms. Shanti Gopalkrishnan Website: www.linkintime.co.in SEBI Registration No: INR000004058 BID/ISSUE PROGRAMME BID/ISSUE OPENS ON August 1 2017 BID/ ISSUE CLOSES ON August 3 2017

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TABLE OF CONTENTS SECTION I: GENERAL ------------------------------------------------------------------------------------------------------------------ 1 DEFINITIONS AND ABBREVIATIONS..............................................................................................................................1 PRESENTATION OF FINANCIAL INDUSTRY AND MARKET DATA ........................................................................ 13 FORWARD-LOOKING STATEMENTS ............................................................................................................................. 16 SECTION II: RISK FACTORS ------------------------------------------------------------------------------------------------------- 18 SECTION III: INTRODUCTION ---------------------------------------------------------------------------------------------------- 45 SUMMARY OF INDUSTRY ............................................................................................................................................... 45 SUMMARY OF BUSINESS ................................................................................................................................................ 47 SUMMARY FINANCIAL INFORMATION ....................................................................................................................... 54 THE ISSUE ........................................................................................................................................................................... 62 GENERAL INFORMATION ............................................................................................................................................... 64 CAPITAL STRUCTURE ...................................................................................................................................................... 73 OBJECTS OF THE ISSUE ................................................................................................................................................... 85 BASIS FOR ISSUE PRICE ................................................................................................................................................... 98 STATEMENT OF TAX BENEFITS ................................................................................................................................... 101 SECTION IV: ABOUT OUR COMPANY ----------------------------------------------------------------------------------------- 104 INDUSTRY OVERVIEW .................................................................................................................................................. 104 OUR BUSINESS ................................................................................................................................................................ 124 REGULATIONS AND POLICIES ..................................................................................................................................... 139 HISTORY AND CERTAIN CORPORATE MATTERS .................................................................................................... 145 OUR MANAGEMENT ....................................................................................................................................................... 151 OUR PROMOTER AND PROMOTER GROUP ................................................................................................................ 171 OUR GROUP COMPANIES .............................................................................................................................................. 172 RELATED PARTY TRANSACTIONS ............................................................................................................................. 173 DIVIDEND POLICY .......................................................................................................................................................... 174 SECTION V: FINANCIAL INFORMATION ------------------------------------------------------------------------------------- 175 FINANCIAL STATEMENTS ............................................................................................................................................ 175 SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IND AS ................................................................... 326 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ............................................................................................................................................................................................ 334 FINANCIAL INDEBTEDNESS ......................................................................................................................................... 369 SECTION VI: LEGAL AND OTHER INFORMATION ----------------------------------------------------------------------- 375 OUTSTANDING LITIGATION AND OTHER MATERIAL DEVELOPMENTS ........................................................... 375 GOVERNMENT AND OTHER APPROVALS ................................................................................................................. 382 OTHER REGULATORY AND STATUTORY DISCLOSURES ...................................................................................... 388 SECTION VII: ISSUE INFORMATION ------------------------------------------------------------------------------------------- 408 TERMS OF THE ISSUE ..................................................................................................................................................... 408 ISSUE STRUCTURE ......................................................................................................................................................... 413 ISSUE PROCEDURE ......................................................................................................................................................... 416 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES .................................................................... 461 SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION ---------------------------------------------- 462 SECTION IX: OTHER INFORMATION ------------------------------------------------------------------------------------------ 473 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ----------------------------------------------------- 473 DECLARATION ------------------------------------------------------------------------------------------------------------------------ 476

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1 SECTION I: GENERAL DEFINITIONS AND ABBREVIATIONS This Red Herring Prospectus uses certain definitions and abbreviations which unless the context otherwise indicates or implies shall have the meaning as provided below. References to any legislation act regulation rule guideline or policy shall be to such legislation act regulation rule guideline or policy as amended supplemented or re-enacted from time to time. The words and expressions used in this Red Herring Prospectus but not defined herein shall have to the extent applicable the meaning ascribed to such terms under the Companies Act the SEBI ICDR Regulations the SCRA the Depositories Act or the rules and regulations made there under. Notwithstanding the foregoing terms used in “Statement of Tax Benefits” “Financial Statements” and “Main Provisions of Articles of Association” on pages 101 175 and 462 respectively shall have the meaning ascribed to such terms in such sections. General Terms Term Description “our Company” the “Company” the “Issuer” we us or our Cochin Shipyard Limited a company incorporated under the Companies Act 1956 having its registered office at Administrative Building Cochin Shipyard Premises Perumanoor Kochi - 682015 Kerala India Company Related Terms Term Description Articles of Association/AoA The articles of association of our Company as amended Audit Committee The audit committee of the Board of Directors described in “Our Management” on page 163 Board/Board of Directors The board of directors of our Company or a duly constituted committee thereof CPSE Capital Restructuring Guidelines Office Memorandum bearing number F. No. 5/2/2016-Policy dated May 27 2016 issued by DIPAM on Guidelines on Capital Restructuring of Central Public Sector Enterprises CSR SD Committee Corporate Social Responsibility and Sustainability Development Committee which was re-constituted pursuant to the board meeting held on May 7 2016 Directors The directors of our Company Equity Shares The equity shares of our Company of face value of `10 each Key Management Personnel Key management personnel of our Company in terms of section 251 the Companies Act 2013 or regulation 21s of the SEBI ICDR Regulations and as disclosed in “Our Management” on page 168 Materiality Policy Our Company in its Board meeting held on January 24 2017 adopted a policy on identification of material creditors and material litigations Memorandum of Association/ MoA The memorandum of association of our Company as amended MoU The Memorandum of Understanding that our Company enters into with the Department of Public Enterprises Ministry of Shipping GoI every financial year Promoter The President of India acting through the Ministry of Shipping Registered Office / Registered and Corporate Office Registered Office of our Company located at Administrative Building Cochin Shipyard Premises Perumanoor Kochi - 682015 Kerala India Restated Financial Statements The restated audited financial statements of our Company which comprises in each case: a the audited balance sheet the audited statement of profit and loss and the audited cash flow statements as at and for the financial years ended March 31

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2 Term Description 2017 March 31 2016 and March 31 2015 and notes thereto prepared in accordance with Ind AS and the Companies Act and the rules made thereunder and b the audited balance sheet the audited statement of profit and loss and the audited cash flow statements as at and for the financial years ended March 31 2014 and March 31 2013 and notes thereto prepared in accordance with Indian GAAP and the Companies Act/ Companies Act 1956 as applicable restated in accordance with the SEBI ICDR Regulations and the Guidance Note on Reports in Company Prospectuses Revised issued by the ICAI together with the schedules notes and annexures thereto. RoC Registrar of Companies Kerala situated at Ernakulam India RMC Risk Management Committee SEBI Exemption Letter The exemption letter bearing number CFD/DIL-1/16351/2017 dated July 14 2017 issued by SEBI to our Company SEBI Observation Letter SEBI letter numbered CFD/DIL-1/OW/09006/2017 dated April 20 2017. Shareholders Shareholders of our Company Statutory Auditor/ Auditor The statutory auditor of our Company namely Krishnamoorthy Krishnamoorthy Chartered Accountants Issue Related Terms Term Description Acknowledgement Slip The slip or document issued by the Designated Intermediary to a Bidder as proof of registration of the Bid cum Application Form Allot/Allotment/Allotted Unless the context otherwise requires allotment of the Equity Shares pursuant to the Fresh Issue and transfer of Equity Shares offered by the Selling Shareholder pursuant to the Offer for Sale to the successful Bidders Allotment Advice Note advice or intimation of Allotment sent to the Bidders who have been or are to be Allotted the Equity Shares after the Basis of Allotment has been approved by the Designated Stock Exchange Allottee A successful Bidder to whom the Equity Shares is Allotted Application Supported by Blocked Amount or ASBA An application whether physical or electronic used by an ASBA Bidder to make a Bid and authorize a SCSB to block the Bid Amount in the ASBA Account ASBA Account A bank account maintained with a SCSB and specified in the ASBA Form submitted by Bidders for blocking the Bid Amount mentioned in the ASBA Form ASBA Bid A Bid made by an ASBA Bidder including all revisions and modifications thereto as permitted under the SEBI ICDR Regulations ASBA Bidder Any Bidder in the Issue who intends to submit a Bid ASBA Form/ Bid cum Application Form An application form whether physical or electronic used by an ASBA Bidder and which will be considered as an application for Allotment in terms of this Red Herring Prospectus and the Prospectus Banker to the Issue Bank which is a clearing member and registered with SEBI as banker to an issue and with whom the Public Issue Account will be opened namely State Bank of India Basis of Allotment The basis on which the Equity Shares will be Allotted to successful Bidders under the Issue and which is described in “Issue Procedure” on page 416 Bid An indication to make an offer during the Bid/Issue Period by an ASBA Bidder

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3 Term Description pursuant to submission of the ASBA Form to subscribe to or purchase the Equity Shares of our Company at a price within the Price Band including all revisions and modifications thereto as permitted under the SEBI ICDR Regulations. The term Bidding shall be construed accordingly Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form and payable by the Bidder as blocked in the ASBA Account upon submission of the Bid in the Issue which shall be net of the Employee Discount/Retail Discount as applicable. Bid Lot ● Equity Shares Bid/Issue Closing Date The date after which the Designated Intermediaries will not accept any Bids which shall be published in all editions of English national daily newspaper Business Standard all editions of Hindi national daily newspaper Business Standard and Kochi edition of Malayalam daily newspaper Mathrubhumi each with wide circulation. Bid/Issue Opening Date The date on which the Designated Intermediaries shall start accepting Bids which shall be published in all editions of English national daily newspaper Business Standard all editions of Hindi national daily newspaper Business Standard and Kochi edition of Malayalam daily newspaper Mathrubhumi each with wide circulation. Bid/Issue Period The period between the Bid/Issue Opening Date and the Bid/Issue Closing Date inclusive of both days during which prospective Bidders can submit their Bids including any revisions thereof Bidder Any prospective investor who makes a Bid pursuant to the terms of this Red Herring Prospectus and the Bid cum Application Form and unless otherwise stated or implied Bidding Centers Centers at which the Designated Intermediaries shall accept the Bid cum Application Forms i.e. Designated SCSB Branch for SCSBs Specified Locations for Syndicate Broker Centres for Registered Brokers Designated RTA Locations for RTAs and Designated CDP Locations for CDPs Book Building Process Book building process as provided in Schedule XI of the SEBI ICDR Regulations in terms of which the Issue is being made Broker Centres Broker centres notified by the Stock Exchanges where Bidders can submit the ASBA Forms to a Registered Broker. The details of such Broker Centres along with the names and contact details of the Registered Brokers are available on the respective websites of the Stock Exchanges www.bseindia.com and www.nseindia.com Cap Price The higher end of the Price Band above which the Issue Price will not be finalised and above which no Bids will be accepted Client ID Client identification number maintained with one of the Depositories in relation to the demat account Collecting Depository Participant or CDP A depository participant as defined under the Depositories Act 1996 registered with SEBI and who is eligible to procure Bids at the Designated CDP Locations in terms of circular no. CIR/CFD/POLICYCELL/11/2015 dated November 10 2015 issued by SEBI Cut-off Price Issue Price finalised by our Company and the Selling Shareholder in consultation with the BRLMs which shall be any price within the Price Band. Only Retail Individual Bidders and the Eligible Employees Bidding in the Retail Portion and Employee Reservation Portion respectively are entitled to Bid at the Cut-off Price. QIBs and Non-Institutional Bidders are not entitled to Bid at the Cut-off Price

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4 Term Description Demographic Details Details of the Bidders including the Bidder’s address name of the Bidder’s father/husband investor status occupation and bank account details Designated CDP Locations Such locations of the CDPs where Bidders can submit the ASBA Forms to Collecting Depository Participants. The details of such Designated CDP Locations along with names and contact details of the Collecting Depository Participants eligible to accept Bid cum Application Forms are available on the respective websites of the Stock Exchanges www.bseindia.com and www.nseindia.com Designated Date The date on which the amounts blocked by the SCSBs are transferred from the ASBA Accounts to the Public Issue Account after filing of the Prospectus with the RoC following which the Board of Directors may Allot Equity Shares to successful Bidders in the Issue Designated Intermediaries Syndicate Members sub-Syndicate/agents SCSBs Registered Brokers Brokers the CDPs and RTAs who are authorized to collect Bid cum Application Forms from the Bidders in relation to the Issue Designated RTA Locations Such locations of the RTAs where Bidders can submit the ASBA Forms to RTAs. The details of such Designated RTA Locations along with names and contact details of the RTAs eligible to accept ASBA Forms are available on the respective websites of the Stock Exchanges www.bseindia.com and www.nseindia.com Designated SCSB Branches Such branches of the SCSBs which shall collect the ASBA Forms a list of which is available on the website of SEBI at http://www.sebi.gov.in/sebiweb/other/OtherAction.dodoRecognisedyes or at such other website as may be prescribed by SEBI from time to time Designated Stock Exchange The BSE Draft Red Herring Prospectus or DRHP The draft red herring prospectus dated March 23 2017 filed with SEBI on March 24 2017 prepared in accordance with the SEBI ICDR Regulations Eligible Employee A permanent and full-time employee of our Company excluding such employee not eligible to invest in the Issue under applicable laws rules regulations and guidelines as on the date of registration of this Red Herring Prospectus with the RoC who are Indian nationals and are based working and present in India and continue to be on the rolls of our Company as on the date of submission of their ASBA Form and Bidding in the Employee Reservation Portion if any. Directors Key Management Personnel and other employees of our Company involved in the Issue Price fixation process cannot participate in the Issue as per Model Conduct Discipline and Appeal Rules of CPSEs and Office memorandum of DPE dated June 16 2009 and July 28 2009. An employee of our Company who is recruited against a regular vacancy but is on probation as on the date of submission of the ASBA Form will also be deemed a “permanent employee” of our Company. Eligible NRIs NRIs from jurisdictions outside India where it is not unlawful to make an offer or invitation under the Issue and in relation to whom the Bid cum Application Form and this Red Herring Prospectus will constitute an invitation to subscribe or to purchase the Equity Shares Employee Discount Discount of ` ● per Equity Share to the Issue Price given to Eligible Employees Bidding in the Employee Reservation Portion Employee Reservation Portion The portion of the Issue being up to 824000 Equity Shares aggregating to ` ● million available for allocation to Eligible Employees. The maximum Bid Amount under the Employee Reservation Portion by an Eligible Employee shall not exceed ` 500000 excluding Employee Discount. However the initial Allotment to an Eligible Employee in the Employee Reservation Portion shall not exceed ` 200000 excluding Employee Discount. Only in the event of an under-subscription in the Employee Reservation Portion

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5 Term Description post the initial allotment such unsubscribed portion may be Allotted on a proportionate basis to Eligible Employees Bidding in the Employee Reservation Portion for a value in excess of ` 200000 excluding Employee Discount subject to the total Allotment to an Eligible Employee not exceeding ` 500000 excluding Employee Discount Escrow Agreement/ Escrow Collection Bank The agreement dated July 20 2017 entered into between our Company the Selling Shareholder the Registrar to the Issue the BRLMs the Syndicate Members the Escrow Collection Banks and the Refund Banks for transfer of funds to and from Public Issue Account and where applicable refunds of the amounts collected on the terms and conditions thereof First Bidder Bidder whose name shall be mentioned in the Bid cum Application Form or the Revision Form and in case of joint Bids whose name shall also appear as the first holder of the beneficiary account held in joint names Floor Price The lower end of the Price Band subject to any revision thereto at or above which the Issue Price will be finalised and below which no Bids will be accepted Fresh Issue The fresh issue of 22656000 Equity Shares of face value of ` 10 each for cash at a price of ` ● each aggregating to ` ● million by our Company General Information Document/GID The General Information Document prepared and issued in accordance with the circular CIR/CFD/DIL/12/2013 dated October 23 2013 notified by SEBI and updated pursuant to the circulars CIR/CFD/POLICYCELL/III/2015 dated November 10 2015 and SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21 2016 suitably modified and included in “Issue Procedure” on page 428 Issue The public issue of 33984000 Equity Shares of face value of ` 10 each for cash at a price of ` ● each aggregating to ` ● million comprising the Fresh Issue and the Offer for Sale. The Issue comprises of Net Issue and Employee Reservation Portion. Issue Agreement The agreement dated March 23 2017 entered into between our Company the Selling Shareholder and the BRLMs pursuant to which certain arrangements are agreed to in relation to the Issue Issue Price The final price net of Retail Discount and Employee Discount as applicable within the Price Band at which Equity Shares will be Allotted to successful Bidders in terms of this Red Herring Prospectus. Issue Proceeds The proceeds of the Fresh Issue and the Offer for Sale that are available to our Company and the Selling Shareholder respectively Maximum RIB Allottees The maximum number of Retail Individual Bidders who can be allotted the minimum Bid Lot. This is computed by dividing the total number of Equity Shares available for Allotment to Retail Individual Bidders by the minimum Bid Lot Mutual Fund Portion 5 of the QIB Portion or 829000 Equity Shares which shall be available for allocation to Mutual Funds only Mutual Funds Mutual funds registered with SEBI under the Securities and Exchange Board of India Mutual Funds Regulations 1996 Monitoring Agency State Bank of India Monitoring Agency Agreement Agreement dated July 20 2017 entered into between our Company and the Monitoring Agency Net Issue 33160000 Equity Shares being the Issue less the Employee Reservation Portion aggregating to ` ● million Net Proceeds Proceeds of the Fresh Issue less our Company’s share of the Issue expenses. For further information about use of the Issue Proceeds and the Issue expenses see “Objects of the Issue” on page 85 Non-Institutional Bidders All Bidders that are not QIBs or Retail Individual Bidders or Eligible Employees Bidding in the Retail Portion or Employee Reservation Portion respectively and who have Bid for the Equity Shares for an amount more than `200000 but not

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6 Term Description including NRIs other than Eligible NRIs Non-Institutional Portion The portion of the Issue being not less than 15 of the Net Issue comprising of 4974000 Equity Shares which shall be available for allocation on a proportionate basis to Non-Institutional Bidders subject to valid Bids being received at or above the Issue Price Non-Resident A person resident outside India as defined under FEMA and includes a Non Resident Indian FVCIs FIIs and FPIs Offer for Sale Offer for sale of 11328000 Equity Shares by the Selling Shareholder at the Issue Price. Price Band Price band of a minimum price of ` ● per Equity Share Floor Price and the maximum price of ` ● per Equity Share Cap Price including any revisions thereof. The Price Band the Retail Discount the Employee Discount and the minimum Bid Lot size for the Issue will be decided by our Company and the Selling Shareholder in consultation with the BRLMs and will be advertised at least five Working Days prior to the Bid/Issue Opening Date in all editions of English national daily newspaper Business Standard all editions of Hindi national daily newspaper Business Standard and Kochi edition of Malayalam daily newspaper Mathrubhumi Malayalam being the regional language of Kerala where our registered office is located. Pricing Date The date on which our Company and the Selling Shareholder in consultation with the BRLMs will finalise the Issue Price Prospectus The Prospectus to be filed with the RoC after the Pricing Date in accordance with section 26 of the Companies Act 2013 and the provisions of the SEBI ICDR Regulations containing inter alia the Issue Price that is determined at the end of the Book Building Process the size of the Issue and certain other information including any addenda or corrigenda thereto Public Issue Account A bank account opened with the Bankers to the Issue by our Company under section 403 of the Companies Act 2013 to receive monies from the ASBA Accounts on the Designated Date QIB Category/QIB Portion The portion of the Net Issue being 50 of the Net Issue comprising of 16580000 Equity Shares which shall be Allotted to QIBs Qualified Institutional Buyers or QIBs or QIB Bidders Qualified institutional buyers as defined under Regulation 21zd of the SEBI ICDR Regulations Red Herring Prospectus or RHP This Red Herring Prospectus dated July 21 2017 issued in accordance with section 32 of the Companies Act 2013 and the provisions of the SEBI ICDR Regulations which does not have complete particulars of the price at which the Equity Shares will be offered and the size of the Issue including any addenda or corrigenda thereto. This Red Herring Prospectus will be registered with the ROC at least three Working Days before Bid Issue Opening Date and will become the Prospectus upon filing with the RoC after the Pricing Date Registered Brokers Stock brokers registered with the stock exchanges having nationwide terminals other than the Members of the Syndicate eligible to procure Bids in terms of circular no. CIR/CFD/14/2012 dated October 4 2012 issued by SEBI Registrar Agreement The agreement dated March 23 2017 entered into between our Company the Selling Shareholder and the Registrar to the Issue in relation to the responsibilities and obligations of the Registrar to the Issue pertaining to the Issue Refund Bank State Bank of India Registrar and Share Transfer Agents or RTAs Registrar and share transfer agents registered with SEBI and eligible to procure Bids at the Designated RTA Locations in terms of circular no.

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7 Term Description CIR/CFD/POLICYCELL/11/2015 dated November 10 2015 issued by SEBI Registrar to the Issue or Registrar Link Intime India Private Limited a company incorporated under the Companies Act 1956 having its registered office at C 101 247 Park L B S Marg Vikhroli West Mumbai 400 083 Maharashtra India Retail Discount Discount of ` ● per Equity Share to the Issue Price given to Retail Individual Bidders in the Retail Portion Retail Individual Bidders/RIBs Individual Bidders other than Eligible Employees Bidding in the Employee Reservation Portion who have Bid for the Equity Shares for an amount not more than ` 200000 in any of the bidding options in the Net Issue including HUFs applying through their Karta and Eligible NRIs Retail Portion The portion of the Net Issue being not less than 35 of the Net Issue consisting of 11606000 Equity Shares which shall be available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations subject to valid Bids being received at or above the Issue Price Revision Form Form used by the Bidders to modify the quantity of the Equity Shares or the Bid Amount in any of their ASBA Forms or any previous Revision forms. QIB Bidders and Non-Institutional Bidders are not allowed to withdraw or lower their Bids in terms of quantity and of Equity Shares or the Bid Amount at any stage. Retail Individual Bidders cannot revise their Bids after the Bid/Issue Closing Date Self Certified Syndicate Banks or SCSBs Banks registered with SEBI offering services in relation to ASBA a list of which is available on the website of SEBI at http://www.sebi.gov.in/sebi_data/attachdocs/1470395458137.html or such other websites and updated from time to time Selling Shareholder Our Promoter the President of India acting through the Ministry of Shipping Share Escrow Agent The share escrow agent appointed pursuant to the Share Escrow Agreement namely Link Intime India Private Limited Share Escrow Agreement The agreement dated July 20 2017 entered into among the Selling Shareholder our Company and the Share Escrow Agent in connection with the transfer of the Offer for Sale equity shares by the Selling Shareholder and credit of such equity shares to the demat account of the Allottees Specified Locations The Bidding centres where the Syndicate shall accept ASBA Forms from Bidders Stock Exchanges BSE Limited and National Stock Exchange of India Limited Syndicate Agreement The agreement dated July 20 2017 entered into between the BRLMs the Syndicate Members our Company the Selling Shareholder and Registrar to the Issue in relation to the collection of Bid cum Application Forms by Syndicate Members Syndicate Members Intermediaries registered with SEBI who are permitted to carry out activities as an underwriter in this case SBICAP Securities Limited Edelweiss Securities Limited and JM Financial Services Limited Syndicate or Members of the Syndicate The BRLMs and the Syndicate Members Systemically Important Non- Banking Financial Company A non-banking financial company registered with the Reserve Bank of India and having a net-worth of more than ` 5000 million as per the last audited financial statements. Underwriters The Book Running Lead Managers and the Syndicate Members Underwriting Agreement The agreement dated ● to be entered into among the Underwriters our Company and the Selling Shareholder on or after the Pricing Date Working Day “Working Day” means all days other than second and fourth Saturday of the month Sunday or a public holiday on which commercial banks in Mumbai are open for business provided however with reference to a announcement of

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8 Term Description Price Band and b Bid/Issue Period “Working Day” shall mean all days excluding all Saturdays Sundays or a public holiday on which commercial banks in Mumbai are open for business and with reference to the time period between the Bid/Issue Closing Date and the listing of the Equity Shares on the Stock Exchanges “Working Day” shall mean all trading days of Stock Exchanges excluding Sundays and bank holidays as per the SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21 2016 Technical/Industry Related Terms/Abbreviations Term Description 3D 3-Dimensional AN Administration Andaman and Nicobar Administration AHTS Anchor Handling Tug Supply vessel BWTS Ballast Water Treatment System CCTV Closed-circuit Television CGT Compensated Gross Tonnage CoPT Cochin Port Trust CSD Cutter Suction Dredgers CSR Corporate Social Responsibility cu m cubic metre CUSAT Cochin University of Science and Technology DCI Dredging Corporation of India DD DPR A detailed project report dated October 5 2016 prepared by HaskoningDHV India Private Limited in relation to setting up of a new Dry Dock DGLL Directorate General of Lighthouses and Lightships DGS Director General of Shipping Dry Dock Setting up of a new dry dock within the existing premises of our Company Dry Dock Project Consultant HaskoningDHV India Private Limited DWT Dead Weight Tonnage EEZ Exclusive Economic Zone EOT crane Electrical Overhead Travelling crane ERP Enterprise Resource Planning ETP Effluent Treatment Plant FPV Fast Patrol Vessels GCDA Greater Cochin Development Authority GME Graduate Marine Engineering GTT GTT Gaztransport Technigaz SA GTV Geotechnical Vessel HDPEL Hooghly Dock Port Engineers Limited HVAC Heating Ventilation and Air-Conditioning IAC Indigenous Aircraft Carrier IHOP Integrated Hull Outfit and Painting INS Indian Naval Ship IRRPL India Ratings and Research Private Limited ISO International Organization for Standardization ISRF International Ship Repair Facility ISRF DPR A detailed project report dated May 21 2015 prepared by a consortium of Inros Lackner SE Bremen Germany and Tata Consulting Engineers Limited India in relation to setting up of ISRF at Cochin Port Trust ISRF Project Consultant A consortium of Inros Lackner AG Bremen Germany and Tata Consulting Engineers Limited India JCEP Jyoti Comprehensive Education Programme kV HT cable kilo Volt High Tension Cable kW Kilowatt LDCL Lakshadweep Development Corporation Limited

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9 Term Description LLTT Level Luffing Transfer Trolley LNG Liquefied Natural Gas m metre MOEFCC Ministry of Environment Forest and Climate Change MT Motor Tanker MV Motor Vessel NABL National Accreditation Board for testing and calibration Laboratories NDT Non-Destructive Testing NPCC National Petroleum Construction Company Abu Dhabi OEM Original Equipment Manufacturer OHSAS Occupational Health and Safety Assessment Series PSV Platform Supply Vessel Ro-Ro Roll-On/Roll-Off STCW International Convention on Standards of Training Certification and Watchkeeping for Seafarers STP Sewage Treatment Plant Techcross Techcross Inc. TSHD Trailing Suction Hopper Dredgers UTL berth Union Territory of Lakshadweep berth V L T panels Volt Low Tension Panel WSV Well Stimulation Vessel Conventional and General Terms or Abbreviations Term Description `/Rs./Rupees/INR Indian Rupees AGM Annual General Meeting AIF Alternative Investment Fund as defined in and registered with SEBI under the SEBI AIF Regulations Air Act The Air Prevention and Control of Pollution Act 1981 Approval of Models Rules The Legal Metrology Approval of Models Rules 2011 AS/Accounting Standards Accounting Standards issued by the Institute of Chartered Accountants of India AY Assessment Year BIS Act The Bureau of Indian Standards Act 1986 BSE BSE Limited CAG Comptroller and Auditor General CAGR Compounded Annual Growth Rate Category I Foreign Portfolio Investors FPIs who are registered with SEBI as “Category I foreign portfolio investors” under the SEBI FPI Regulations Category II Foreign Portfolio Investors FPIs who are registered with SEBI as “Category II foreign portfolio investors” under the SEBI FPI Regulations Category III Foreign Portfolio Investors FPIs who are registered with SEBI as “Category III foreign portfolio investors” under the SEBI FPI Regulations CDSL Central Depository Services India Limited CIN Corporate Identity Number Client ID Client identification number of the Bidders beneficiary account Companies Act Companies Act 1956 and/or the Companies Act 2013 as applicable Companies Act 1956 Companies Act 1956 as amended without reference to the provisions thereof that have ceased to have effect upon the notification of the Notified Sections Companies Act 2013 The Companies Act 2013 to the extent in force pursuant to the notification of the Notified Sections CRZ Coastal Regulation Zone Depositories NSDL and CDSL Depositories Act The Depositories Act 1996 DIN Director Identification Number

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10 Term Description DIPAM Department of Investment and Public Asset Management DIPP Department of Industrial Policy and Promotion Ministry of Commerce and Industry Government of India DP ID Depository Participant’s Identification DP/Depository Participant A depository participant as defined under the Depositories Act DPE Department of Public Enterprises Ministry of Heavy Industries and Public Enterprises Government of India EBITDA Earnings before interest taxes depreciation and amortisation ECB External Commercial Borrowing Environment Act or EPA Environment Protection Act 1986 EPS Earnings Per Share Equity Listing Agreement Listing Agreement to be entered into with the Stock Exchanges on which the Equity Shares of our Company are to be listed ESI Act Employees State Insurance Act 1948 EU European Union FCNR Foreign Currency Non-Resident FDI Foreign Direct Investment FY Financial Year GDP Gross Domestic Product GoI Government of India GST Goods and Services Tax Consolidated FDI Policy Consolidated FDI Policy issued by the DIPP by circular D/o IPP F. No. 51/2016-FC-1 of 2016 with effect from June 7 2016 as amended. FEMA Foreign Exchange Management Act 1999 read with rules and regulations thereunder FEMA Regulations Foreign Exchange Management Transfer or Issue of Security by a Person Resident Outside India Regulations 2000 as amended FIIs Foreign Institutional Investors as defined under the SEBI FPI Regulations Financial Year/FY/Fiscal Unless stated otherwise the period of 12 months ending March 31 of that particular year FPIs A foreign portfolio investor as defined under the SEBI FPI Regulations FTA Foreign Trade Development and Regulation Act 1992 FTP Foreign Trade Policy 2015 - 2020 FVCI Foreign venture capital investors as defined and registered under the SEBI FVCI Regulations GAAR General Anti Avoidance Rules GDP Gross Domestic Product GIR General Index Register GoI or Government Government of India GST Goods and services tax Hazardous Chemical Rules Manufacture Storage and Import of Hazardous Chemical Rules 1989 Hazardous Wastes Rules The Hazardous and Other Wastes Management and Transboundary Movement Rules 2016 IDR Act Industrial Development and Regulation Act 1951 as amended ICAI The Institute of Chartered Accountants of India IFRS International Financial Reporting Standards Income Tax Act The Income Tax Act 1961 Ind AS The Indian Accounting Standards Ind AS Rules Companies Indian Accounting Standards Rules 2015 India Republic of India Indian GAAP Generally Accepted Accounting Principles in India IPO Initial Public Offering IRDAI Insurance Regulatory and Development Authority of India IRS Indian Register of Shipping IST Indian Standard Time IT Information Technology KGST Kerala General Sales Tax Act 1963

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11 Term Description KVAT Kerala Value Added Tax 2003 Legal Metrology Act Legal Metrology Act 2009 LM Act The Legal Metrology Act 2009 Merchant Shipping Act Merchant Shipping Act 1958 MICR Magnetic Ink Character Recognition Mn Million MoU Memorandum of Understanding Municipal Solid Wastes Rules The Solid Wastes Management Rules 2016 N.A./NA Not Applicable NAV Net Asset Value NECS National Electronic Clearing Services NEFT National Electronic Fund Transfer Notified Sections The sections of the Companies Act 2013 that have been notified by the Ministry of Corporate Affairs Government of India NRE Account Non Resident External Account NRI A person resident outside India who is a citizen of India or a person of Indian origin and shall have the meaning ascribed to such term in the Foreign Exchange Management Deposit Regulations 2000 NRO Account Non Resident Ordinary Account NSDL National Securities Depository Limited NSE National Stock Exchange of India Limited OCB/ Overseas Corporate Body A company partnership society or other corporate body owned directly or indirectly to the extent of at least 60 by NRIs including overseas trusts in which not less than 60 of beneficial interest is irrevocably held by NRIs directly or indirectly and which was in existence on October 3 2003 and immediately before such date had taken benefits under the general permission granted to OCBs under FEMA. OCBs are not allowed to invest in the Issue ONGC Oil Natural Gas Corporation p.a. Per annum P/E Ratio Price/Earnings Ratio PAN Permanent Account Number PAT Profit After Tax PIL Public Interest Litigation PSU Public Sector Undertaking Public Liability Act Public Liability Insurance Act 1991 RBI The Reserve Bank of India RoNW Return on Net Worth RTGS Real Time Gross Settlement SCRA Securities Contracts Regulation Act 1956 SCRR Securities Contracts Regulation Rules 1957 SEBI The Securities and Exchange Board of India constituted under the SEBI Act SEBI Act Securities and Exchange Board of India Act 1992 SEBI AIF Regulations Securities and Exchange Board of India Alternative Investments Funds Regulations 2012 SEBI FII Regulations Securities and Exchange Board of India Foreign Institutional Investors Regulations 1995 SEBI FPI Regulations Securities and Exchange Board of India Foreign Portfolio Investors Regulations 2014 SEBI FVCI Regulations Securities and Exchange Board of India Foreign Venture Capital Investor Regulations 2000 SEBI ICDR Regulations Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations 2009 as amended SEBI Listing Regulations Securities and Exchange Board of India Listing Obligations and Disclosure Requirements Regulations 2015 SEBI VCF Regulations Securities and Exchange Board of India Venture Capital Fund Regulations 1996 as repealed pursuant to the SEBI AIF Regulations Securities Act United States Securities Act of 1933

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12 Term Description SCI Shipping Corporation of India Limited sq mt square metre Sq. ft. Square feet State Government The government of a state in India STT Securities Transaction Tax Takeover Regulations Securities and Exchange Board of India Substantial Acquisition of Shares and Takeovers Regulations 2011 T Tonne U.K. or UK United Kingdom U.S./U.S.A./United States United States of America US GAAP Generally Accepted Accounting Principles in the United States of America USD/US United States Dollars VAT Value Added Tax VCFs Venture Capital Funds as defined in and registered with SEBI under the SEBI VCF Regulations or the SEBI AIF Regulations as the case may be Water Act The Water Prevention and Control of Pollution Act 1974 as amended Water Cess Act The Water Prevention and Control of Pollution Cess Act 1977 as amended

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13 PRESENTATION OF FINANCIAL INDUSTRY AND MARKET DATA Certain Conventions All references in this Red Herring Prospectus to “India” are to the Republic of India and all references to the “U.S.” “U.S.A” or “United States” are to the United States of America. Unless stated otherwise all references to page numbers in this Red Herring Prospectus are to the page numbers of this Red Herring Prospectus. Financial Data Unless stated otherwise the financial information in this Red Herring Prospectus is derived from our Restated Financial Statements prepared in accordance with Ind AS Indian GAAP and the Companies Act/ Companies Act 1956 as applicable restated in accordance with the SEBI ICDR Regulations. Our Company’s Financial Year commences on April 1 and ends on March 31 of the following year. Accordingly all references to a particular financial year unless stated otherwise are to the 12 month period ended on March 31 of that year. Unless the context otherwise requires all references to a year in this Red Herring Prospectus are to a calendar year and references to a financial year are to March 31 of that calendar year. Certain figures contained in this Red Herring Prospectus including financial information have been subject to rounding adjustments. All decimals have been rounded off to two or one decimal places. In certain instances i the sum or percentage change of such numbers may not conform exactly to the total figure given and ii the sum of the numbers in a column or row in certain tables may not conform exactly to the total figure given for that column or row. There are significant differences between Indian GAAP Ind AS U.S. GAAP and IFRS. Our Company does not provide reconciliation of its financial information to Ind AS IFRS or U.S. GAAP. Our Company has not attempted to explain those differences or quantify their impact on the financial data included in this Red Herring Prospectus and it is urged that you consult your own advisors regarding such differences and their impact on our financial data. Accordingly the degree to which the financial information included in this Red Herring Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting policies and practices the Companies Act the Indian GAAP Ind AS and the SEBI ICDR Regulations. Any reliance by persons not familiar with Indian accounting policies and practices on the financial disclosures presented in this Red Herring Prospectus should accordingly be limited. Our annual financial statements for periods subsequent to April 1 2016 are prepared and presented in accordance with Ind AS. Given that Ind AS differs in many respects from Indian GAAP our financial statements prepared and presented in accordance with Ind AS may not be comparable to our historical financial statements prepared under the Indian GAAP. On February 16 2015 the Ministry of Corporate Affairs issued the Ind-AS Rules for the purpose of enacting changes to Indian GAAP that are intended to align Indian GAAP further with IFRS. The Ind-AS Rules provide that the financial statements of the companies to which they apply shall be prepared in accordance with the Indian Accounting Standards converged with IFRS although any company may voluntarily implement Ind AS for the accounting period beginning from April 1 2015. With effect from April 1 2016 we are required to prepare our financial statements in accordance with the Ind AS. Pursuant to SEBI Circular number SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 31 2016 our restated financial information for the financial years 2017 2016 and 2015 included in this Red Herring Prospectus is prepared under the Ind AS while our restated financial information for the financial years 2014 and 2013 included in this Red Herring Prospectus is prepared under the Indian GAAP. We have not made any attempt to quantify or identify the impact of the differences between Indian GAAP and Ind AS applied to our financial statements and it is urged that you consult your own advisors regarding the impact of difference if any on financial data included in this Red Herring Prospectus. For details in connection with risks involving differences between Indian GAAP and IFRS see “Risk Factors – Significant differences exist between Ind AS and Indian GAAP on one hand and other accounting principles such as US GAAP and IFRS on the other which may be material to investors’ assessments of our financial condition.” on page 37 and for risks in relation to Ind AS see “Risk Factors – Public companies in India including us are required to compute Income Tax under the Income Computation and Disclosure Standards the “ICDS”. The

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14 transition to ICDS in India is very recent and we may be negatively affected by such transition.” on page 37 and “Significant Differences between Indian GAAP and Ind AS” on page 326. Unless the context otherwise indicates any percentage amounts as set forth in “Risk Factors” “Our Business” “Management’s Discussion and Analysis of Financial Conditional and Results of Operations” on pages 18 124 and 334 respectively and elsewhere in this Red Herring Prospectus have been calculated on the basis of our Restated Financial Statements prepared in accordance with Companies Act 2013 Ind AS Rules and Indian GAAP as applicable and restated in accordance with the SEBI ICDR Regulations. Currency and Units of Presentation All references to: • “Rupees” or “`” or “INR” or “Rs.” are to Indian Rupee the official currency of the Republic of India and • “USD” or “US” are to United States Dollar the official currency of the United States. Our Company has presented certain numerical information in this Red Herring Prospectus in “million” units. One million represents 1000000 and one billion represents 1000000000. Exchange Rates This Red Herring Prospectus contains conversion of certain other currency amounts into Indian Rupees that have been presented solely to comply with the SEBI ICDR Regulations. These conversions should not be construed as a representation that these currency amounts could have been or can be converted into Indian Rupees at any particular rate. The following table sets forth for the periods indicated information with respect to the exchange rate between the Rupee and other currencies: Amount in ` Currency As on March 31 2013 1 2 As on March 31 2014 1 2 As on March 31 2015 1 2 As on March 31 2016 1 2 As on March 31 2017 12 1 US 54.39 60.10 62.59 66.33 64.84 1 EUR 69.54 82.57 67.51 75.09 69.25 1 In case March 31 of any of the respective years is a public holiday the previous calendar day not being a public holiday has been considered. 2 Exchange rate is rounded off to two decimal places. Source: www.rbi.org.in Industry and Market Data Unless stated otherwise industry and market data used in this Red Herring Prospectus has been obtained or derived from publicly available information and from the report titled “A study on shipbuilding and ship repairing industry” dated March 2017 “CRISIL Report” issued by CRISIL which includes the following disclaimer: CRISIL Research a division of CRISIL Limited CRISIL has taken due care and caution in preparing this report Report based on the Information obtained by CRISIL from sources which it considers reliable Data. However CRISIL does not guarantee the accuracy adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. This Report is not a recommendation to invest / disinvest in any entity covered in the Report. CRISIL especially states that it has no liability whatsoever to the subscribers / users / transmitters/ distributors of this Report. CRISIL Research operates independently of and does not have access to information obtained by CRISIL’s Ratings Division / CRISIL Risk and Infrastructure Solutions Ltd CRIS which may in their regular operations obtain information of a confidential nature. The views expressed in this Report are that of CRISIL Research and not of CRISIL’s Ratings Division / CRIS. No part of this Report may be published/reproduced in any form without CRISIL’s prior written approval. Industry publications generally state that the information contained in such publications has been obtained from publicly available documents from various sources believed to be reliable but their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe the industry and market data used in this Red Herring Prospectus is reliable it has not been independently verified by us or the BRLMs or any of their affiliates or advisors. The data used in these sources may have been re-classified by us for the purposes of presentation. Data from these sources may also not be comparable. Such data involves risks uncertainties and

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15 numerous assumptions and is subject to change based on various factors including those discussed in “Risk Factors” on page 18. The extent to which the market and industry data used in this Red Herring Prospectus is meaningful depends on the reader’s familiarity with and understanding of the methodologies used in compiling such data. There are no standard data gathering methodologies in the industry in which business of our Company is conducted and methodologies and assumptions may vary widely among different industry sources. In accordance with the SEBI ICDR Regulations the “Basis for Issue Price” on page 98 includes information relating to our peer group companies. Such information has been derived from publicly available sources and neither we nor the BRLMs have independently verified such information.

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16 FORWARD-LOOKING STATEMENTS This Red Herring Prospectus contains certain “forward-looking statements”. These forward-looking statements generally can be identified by words or phrases such as “aim” “anticipate” “believe” “expect” “estimate” “intend” “objective” “plan” “project” “will” “will continue” “will pursue” or other words or phrases of similar import. Similarly statements that describe our strategies objectives plans prospects or goals are also forward- looking statements. All forward-looking statements are subject to risks uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Actual results may differ materially from those suggested by the forward-looking statements due to risks or uncertainties associated with the expectations with respect to but not limited to regulatory changes pertaining to the industries in India in which our Company operates and our ability to respond to them our ability to successfully implement our strategy our growth and expansion technological changes our exposure to market risks general economic and political conditions in India which have an impact on its business activities or investments the monetary and fiscal policies of India inflation deflation unanticipated turbulence in interest rates foreign exchange rates equity prices or other rates or prices the performance of the financial markets in India and globally changes in domestic laws regulations and taxes and changes in competition in the industries in which we operate. Important factors that could cause actual results to differ materially from our Company’s expectations include but are not limited to the following: • Dependence of commercial shipbuilding on the growth of global economy and global economic conditions • Dependence on limited number of customers for a significant portion of our revenue and loss of our major customers • Commissioning of our new proposed Dry Dock or the new ISRF in a timely manner or without cost overruns • Non accuracy of the cost estimates by the Dry Dock Project Consultant and the ISRF Project Consultant • of losses under our fixed price contracts as a result of cost overruns delays in delivery or failures to meet contract specifications • Our future growth and expansion being limited by our production capacities and the location at which we operate • The loss of or shutdown of our operations at our shipyard in Kochi from which our entire business operations are based • Non yielding of benefits expected by us from our strategic cooperation agreements • Inability to successfully execute our growth strategies • Inability to attract or retain key personnel and • Any adverse change in laws rules and regulations and legal uncertainties. For further discussion of factors that could cause the actual results to differ from the expectations see “Risk Factors” “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 18 124 and 334 respectively. By their nature certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result actual gains or losses could materially differ from those that have been estimated. We cannot assure the Bidders that the expectations reflected in these forward-looking statements will prove to be correct. Given these uncertainties Bidders are cautioned not to place undue reliance on such forward-looking statements and not to regard such statements as a guarantee of future performance. Forward-looking statements reflect the current views of our Company as on the date of this Red Herring Prospectus and are not a guarantee of future performance. These statements are based on the management’s beliefs and assumptions which in turn are based on currently available information. Although we believe the assumptions upon which these forward-looking statements are based are reasonable any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Neither our Company our Directors the BRLMs nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events even if the underlying assumptions do not come to fruition. In accordance with

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17 SEBI requirements our Company and BRLMs will ensure that the Bidders in India are informed of material developments until the time of the grant of listing and trading permission by the Stock Exchanges. In accordance with SEBI requirements our Company and the Selling Shareholder shall severally ensure that investors in India are informed of material developments from the date of this Red Herring Prospectus in relation to the statements and undertakings made by them in this Red Herring Prospectus until the time of the grant of listing and trading permission by the Stock Exchanges for this Issue. Further in accordance with Regulation 51A of the SEBI ICDR Regulations our Company may be required to undertake an annual updation of the disclosures made in this Red Herring Prospectus and make it publicly available in the manner specified by SEBI.

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18 SECTION II: RISK FACTORS An investment in equity shares involves a high degree of risk. You should carefully consider all the information disclosed in this Red Herring Prospectus including the risks and uncertainties described below before making an investment decision in our Equity Shares. If any one or a combination of the following risks actually occur our business prospects financial condition and results of operations could suffer and the trading price of our Equity Shares could decline and you may lose all or part of your investment. The risks described below are not the only ones relevant to us or our Equity Shares or the industry and regions in which we operate. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may arise or may become material in the future and may also impair our business results of operations and financial condition. To obtain a more detailed understanding of our Company prospective investors should read this section in conjunction with titled “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 124 and 334 respectively as well as the other financial and statistical information contained in this Red Herring Prospectus. In making an investment decision prospective investors must rely on their own examination of our Company and the terms of the Issue. You should consult your tax financial and legal advisors about the particular consequences to you of an investment in this Issue. This Red Herring Prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors including the considerations described below and elsewhere in this Red Herring Prospectus. See the section “Forward-Looking Statements” on page 16. Unless specified or quantified in the relevant risks factors below we are not in a position to quantify the financial or other implication of any of the risks described in this section. Unless otherwise stated the financial information of our Company used in this section has been derived from the Restated Financial Statements. INTERNAL RISK FACTORS Risk relating to Our Business and Our Industry 1. Worldwide demand and pricing in the commercial shipbuilding industry are highly dependent upon global economic conditions. If the global economy fails to grow at an adequate pace it may adversely impact the commercial shipbuilding industry which may negatively affect our business financial condition and growth prospects. The commercial shipbuilding industry is highly cyclical in nature and is also sensitive to the cyclical nature of the industries it serves such as the oil natural gas shipping transportation and other trade-related industries. According to the CRISIL Report a fall in the price of crude oil contributed to a recession in the shipbuilding industry as international oil companies reduced capital expenditure and delayed or cancelled orders for drill ships and offshore production facilities. The demand and pricing of our vessels are highly sensitive to global and regional economic conditions particularly in India China South Korea the Middle East Western Europe and the USA as well as seasonal and regional changes in demand and changes in the global fleet size. CRISIL has noted that there has been a sharp decline in the global shipbuilding order book after 2011. Particularly in relation to our commercial shipbuilding business continued economic growth in the world economy that exceeds growth in the global fleet size will be necessary to sustain a continued demand for new ships. However there can be no assurance that such economic growth will continue in the future or sustain or improve the performance of the shipbuilding and ship-repair industry. Any future deterioration in global economic conditions as well as downward trends in trade-related industries and our failure to accurately predict these cycles could have a material adverse effect on our business financial condition results of operations and prospects. 2. Loss of any of our major customers or a reduction in their orders or failure to succeed in tendering for shipbuilding or ship repair projects for the Indian Navy in the future despite our previous track record will have a material adverse impact on our business financial condition results of operations and growth prospects as we are dependent on a few of our major customers.

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19 Our top two customers accounted for 82.43 89.92 and 84.57 of our revenue from operations in Fiscals 2015 2016 and 2017 respectively. Further we are currently building India’s first Indigenous Aircraft Carrier “IAC” for the Indian Navy and this forms a significant part of our current order book. In the past we have undertaken complex and sophisticated repairs to ships of the Indian Navy Indian Coast Guard and merchant navy. Although part of our business strategy includes focusing on the expected growth in the requirements of the Indian Navy for new ships we do not have any contractual arrangements with the Indian Navy or GoI to construct or repair naval ships. Although we have more than 10 years of experience working with these customers and have current orders from these customers we cannot assure you that these customers will continue to engage us or that we will continue to sustain the general level of revenues that we have secured from them in the past. For example recently a new order for a series of FPVs was placed by the Indian Coast Guard with a private shipyard for the first time. Our customer in the ship building and ship repair industry follow the competitive bidding process and due to such procurement policy and competition we may suffer loss of new business from existing clients. If any of our major customers ceases to have business dealings with us or materially reduces the level or frequency of their orders for new vessels from us and we are unable to secure new orders from other sources to replace such a loss or reduction our business financial condition results of operations and prospects will be adversely affected. 3. We cannot assure you that our proposed Dry Dock or International Ship Repair Facility will become operational as scheduled or at all or operate as efficiently as planned. We have not as on date of this Red Herring Prospectus obtained certain licenses or approvals for our proposed ISRF project for which funds are being raised through the Issue. Our Company shall transfer the Net Proceeds assigned for the proposed ISRF project to a separate bank account and we shall incur all expenditure on the ISRF project through internal accruals till the time such pending approvals are received. Further if we are unable to commission our new proposed Dry Dock or the ISRF in a timely manner or without cost overruns our business results of operations and financial condition may be adversely affected. As on the date of this Red Herring Prospectus we have not obtained certain licenses or approvals from various authorities for our proposed ISRF project for which funds are being raised through the Issue. For further details see “Government and Other Approvals” on page 382. In relation to our proposed Dry Dock we have obtained environmental clearance dated November 9 2016 from the Ministry of Environment Forests and Climate Change “MoEFCC”. However the environmental clearance is subject to certain conditions including the outcome of an ongoing litigation in the Supreme Court of India. For more details see “Risk Factors -“The environmental clearance for our proposed Dry Dock and ISRF project is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others the prior clearance of the Standing Committee of the National Board for Wildlife.” on page 22. For more details see “Governmental and Other Approvals” on page 382. We entered into an agreement dated December 24 2012 for development and operation of ISRF with Cochin Port Trust “CoPT” under which we are in the process of setting up the ISRF. The ISRF will be established on 16.90 hectares of land and about 15.60 hectare of water body. Out of this we have taken on lease approximately 8.12 hectares of land and 15 hectares of water body from Cochin Port Trust including their existing ship-repair facility for a period of 30 years pursuant to the lease deed dated April 12 2013. Our Company will have to comply with the conditions set out in the lease deed before it can obtain the lease for the remaining part of the land. However there can be no assurance that we will be able to obtain the lease for the residual land and water body from CoPT. In relation to ISRF project we have obtained environmental clearance dated June 22 2017 from MoEFCC. However the environmental clearance is subject to certain conditions including obtaining prior clearance of the wildlife from the Standing Committee of the National Board for Wildlife and the outcome of an on-going litigation in the Supreme Court of India. For more details see “Risk Factors - “The environmental clearance for our proposed Dry Dock and ISRF project is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others the prior clearance of the Standing Committee of the National Board for Wildlife.” on page 22. Further we have received stage-I forest clearance from MoEFCC with a validity of five years and which is subject to certain conditions including total deemed forest area to be utilized would not exceed 0.01866 hectares. We cannot assure you that we will be able to meet all the conditions or would be able to obtain stage-2 approval under the Forest Conservation Act 1980. Pursuant to the SEBI Exemption Letter SEBI has permitted us to file this Red Herring Prospectus with Registrar of Companies pending the receipt of the approvals and has allowed us to raise funds through the Issue towards

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20 the proposed ISRF project and utilize such funds raised once the necessary approvals are received. We have undertaken to SEBI vide our letter dated July 10 2017 that the net proceeds assigned for the proposed ISRF project shall be transferred to a separate bank account and we shall incur all expenditure on the ISRF project through internal accruals till the time such pending approvals are received. Should there be any delay in receipt of such approvals we will have to continue financing the ISRF through our internal accruals of and/or through debt/firm arrangements without recourse to the funds raised through the Issue for ISRF project. Further in the event we are not able to obtain the licenses or approvals for our proposed ISRF project our Company shall utilize the Net Proceeds assigned for the proposed ISRF project as per the applicable provisions of the Companies Act and other applicable laws. The implementation of the ISRF is contingent upon the receipt of the pending approvals. However we cannot assure you that the construction of our proposed Dry Dock or ISRF will be completed as scheduled or will become operational as soon or operate as planned. Any delay or our inability to obtain approvals may adversely impact our ability to set up the proposed projects and may have a detrimental impact on our growth prospects. 4. The cost estimates by the Dry Dock Project Consultant and the ISRF Project Consultant have been derived from and benchmarked against similar maritime and dry dock/shipyard projects carried out by the Dry Dock Project Consultant and the ISRF Project Consultant respectively in recent years and may not be accurate. The anticipated cost of construction of our proposed Dry Dock will be `17989.91 million based on a conversion rate of `67.83 for one USD. The anticipated cost of the ISRF will be ` 9694.1 million. Our anticipated costs for our proposed Dry Dock and the ISRF are based on the DPRs prepared by the project consultants based on their estimates budgets and numerous assumptions and has not been appraised by any bank financial institution or other independent organisation. The Dry Dock Project Consultant maintains a confidential detailed in-house database of actual shipyard and maritime construction costs based on all the construction projects they have been involved with. The cost estimates provided under the DPR can be considered to be accurate to within +/-25 at DPR stage. The cost estimate also excludes buildings that are not included within the scope of Dry Dock Project Consultant. The cost estimate for our proposed Dry Dock project has been carried out by the Dry Dock Project Consultant in February 2016. We shall tender work in relation to the civil work and plant and machinery on the basis of the DPR and thus the final cost incurred by our Company may vary from the cost estimate provided by the Dry Dock Project Consultant. The actual cost of the project may vary from the cost estimate provided by the Dry Dock Project Consultant due to inflation and change in price of the equipment/ raw material/ man-power. Further the ISRF Project Consultants have estimated the capital construction costs based on applicable unit rates for similar works as on September 2014. For pricing specific material i.e. special maritime and onshore equipment the ISRF Project Consultants have considered imports from eligible countries. The ISRF Project Consultants have considered price escalations up to March 31 2017. The actual costs of construction of our facilities may exceed such budgeted amounts due to a variety of factors such as construction delays adverse changes in raw material costs interest rates labour costs foreign exchange rates regulatory and environmental factors weather conditions and our financing needs. While we have placed an order for the purchase of the shiplift and transfer system we are yet to obtain quotations for the actual construction of our proposed Dry Dock and the ISRF and we are yet to place orders for major civil contracts and other plant and machinery or both the projects. Our financial condition results of operations and liquidity would be materially and adversely affected if our project or construction costs materially exceed such budgeted amounts. Further we cannot assure you that the construction of our proposed Dry Dock or ISRF will be completed as scheduled or will become operational as soon or operate as efficiently as planned. For further details of the scheduled operational dates of our proposed Dry Dock and the ISRF see “Objects of the Issue” on page 85. If there are delays in the construction of our proposed Dry Dock or the ISRF problems with their facilities or for other reasons our proposed Dry Dock or the ISRF does not function as efficiently as intended or our utilisation of our proposed Dry Dock or the ISRF is not optimal we may not be able to take additional orders to produce anticipated or desired revenue as planned. As a result our business financial condition results of operations and prospects could be materially and adversely affected.

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21 5. We could incur losses under our fixed price contracts as a result of cost overruns delays in delivery or failures to meet contract specifications which may have an adverse effect on our business financial condition and results of operations. Our shipyard operations are subject to risks including among others the breakdown failure or sub-standard performance of machinery natural disasters like floods tsunamis earthquakes other natural disasters long periods of adverse weather social unrest disruptions in transportation and strikes which may result in operational disruptions. Although we believe we have taken an insurance cover that is typical for our business any material operational disruptions will adversely affect our ability to meet our construction schedules and cause delays in the delivery of vessels to our customers. We are dependent on our suppliers for the timely delivery of raw materials the most important of the raw materials being steel bought out equipment and components such as pumps propellers and engines. Additionally we outsource certain aspects of our shipbuilding work scope such as fabrication work vessel sub-assemblies etc. from time to time to our subcontractors. We also rely heavily on imports of steel and marine equipment and other shipping related components that are not manufactured domestically or due to pricing advantages. Sometimes we have to compete with our competitors for these components resulting in delays in the delivery of such components. We are also dependent on the timely completion of sub-contracted works by our subcontractors when we use their services. We may encounter situations where we are unable to deliver our products on a timely basis due to amongst other reasons late or lack of delivery of raw materials from our suppliers delivery of wrong material or sub-standard material or late completion of subcontracted works by our subcontractors. In addition we are also dependent on subcontract labour and production workers for the construction of our vessels. If we are unable to source such raw materials equipment and components from alternative suppliers on a timely basis our production schedule may be delayed thereby delaying the delivery of the vessel to our customers. In addition our profitability may also be adversely affected if we are unable to secure alternative sources of such raw materials equipment and components in a cost efficient manner or if we are unable to recover liquidated damages from the defaulting suppliers. Most of our shipbuilding contracts are fixed-price contracts. In the case of IAC which is presently under Phase II construction the yard effort work scope is covered under fixed-price contracts and all procurement is on a cost plus mark-up basis. In relation to small medium and large vessels we typically enter into contracts for a period ranging from 18-24 months 20-36 months and 40-72 months respectively prior to the scheduled delivery. All costs including labour and raw materials costs are forecasted by us when we enter into such fixed-price contracts. In case of cost variances from such estimates we are permitted to retain all cost savings on completed contracts but are liable for the full amount of all cost overruns. In the past we have witnessed cost overruns in the case of some of our contracts and we may also continue to witness the same in the future. The actual costs incurred on a fixed-price contract may vary from our estimates due to factors such as: • unanticipated variations in labour and equipment productivity over the term of a contract • unanticipated increases in labour raw material subcontracting and overhead costs including as a result of bad weather • delivery delays and corrective measures for poor workmanship and • equipment failures. We cannot assure you that these contracts if secured can be completed profitably. Significant cost overruns on our fixed price contracts could have a material adverse effect on our business financial condition results of operations and prospects. Depending on the size of the project variations from estimated contract performance could significantly reduce our earnings and could result in losses during any quarter of a fiscal or entire fiscal. All of our fixed price contracts provide for liquidated damages for late delivery. In the past we have been required to re-negotiate some of the terms such as price date of delivery scope of work of our shipbuilding contracts due to a delay in delivery of the vessel owing to a combination of internal as well as external factors beyond our control. We have also had to pay liquidated damages for delay in delivery and for quality issues. There can be no assurance that our customers in future will not rescind their shipbuilding contracts with us if there is a delay in delivery beyond the time stipulated in the contract or we may need to renegotiate some of our shipbuilding contracts. This may have an impact on our reputation which could have a material adverse effect on our financial condition results of operations and prospects.

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22 6. The environmental clearances for our proposed Dry Dock and ISRF project is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others for ISRF project the prior clearance of the Standing Committee of the National Board for Wildlife. In relation to our proposed Dry Dock and ISRF project we have received environmental clearances dated November 9 2016 and June 22 2017 respectively from the MOEFCC collectively the “Environmental Clearances”. The Environmental Clearancesfor the ISRF project are subject to amongst other conditions obtaining prior clearance of the Standing Committee of the National Board for Wildlife “NBWL”. Further as part of the general conditions the Environment Clearances are also subject to the final order of the Supreme Court of India in the matter of Goa Foundation vs Union of India in writ petition no. 460 of 2004 the “Goa Foundation PIL” as may be applicable to the Dry Dock and ISRF project. While we have received the clearance of NBWL for our proposed Dry Dock project on April 25 2017 there is no assurance that clearance from NBWL for our ISRF project will be available in time or at all to enable us to successfully complete the proposed ISRF project. Further in the event any adverse order is passed by the Supreme Court of India in the Goa Foundation PIL we may be required to temporarily or permanently discontinue the proposed Dry Dock and/or ISRF project or meet additional compliance or other associated costs in relation to the proposed Dry Dock and ISRF projects including costs after completion of such projects which cannot be currently ascertained or quantified. Further any requirements to incur additional costs as one of the conditions of the Environmental Clearances may adversely affect our business financial conditions reputation and results of operations. For further details in relation to the Goa Foundation PIL see “Outstanding Litigation and Other Material Developments – Details of pending litigation involving any other person whose outcome could have material adverse effect on the position of our Company” on page 379.” 7. Our future growth and expansion is limited by our production capacities and the location at which we operate. Our production capacity is limited by amongst other things the size of our shipyard the number size and capacities of our berths docks and our plant and equipment. See “Our Business - Our Operations” on page 133 for a discussion of our facilities. In addition the size and capacity of the vessels we construct is limited by our location at which we operate. Our proposed Dry Dock will be constructed within our current premises and the new ISRF facility will be constructed on land leased from Cochin Port Trust. Post the construction of our proposed Dry Dock we will not be able to undertake any further expansion activities on our premises due to a lack of additional space. Further the operations of the cranes at the proposed Dry Dock will be subject to the restrictions specified in the letter dated December 20 2016 issued by the Ministry of Defence to inter alia our Company.Currently we are limited to the construction of vessels up to 110000 DWT and repair of ships up to the size of 125000 DWT at our shipyard. In the event that we are unable to relocate or increase our production capabilities to enable us to construct such vessels we may lose business opportunities and our business results of operations financial condition and prospects will be adversely affected. We cannot assure you that we will be able to manage the future expansion of our facilities effectively. Any failure on our part to do so will have a material adverse effect on our business financial condition results of operations and prospects. 8. Our entire business operations are based out of a single shipyard at Kochi. The loss of or shutdown of our operations at our shipyard in Kochi will have a material adverse effect on our business financial condition and results of operations. Our shipbuilding and other facilities are based out of single premises in our shipyard in Kochi. Accordingly we rely exclusively on our facilities at our shipyard in Kochi to earn revenues pay our operating expenses and service our debt. Any significant interruption to or loss or shutdown of operations at our shipyard in Kochi would adversely affect our business. Our shipbuilding ship repair and other business activities may be subject to unexpected interruptions including from natural and man-made disasters. Our facilities and operations could be adversely affected by among other factors breakdown or failure of equipment difficulties or delays in obtaining spare parts and equipment power supply or processes performance below expected levels of output or efficiency obsolescence labour disputes natural disasters raw material shortages fire explosion and other unexpected

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23 industrial accidents and the need to comply with the directives of relevant government authorities. Furthermore any significant interruption to our operations directly or indirectly as a result of industrial accidents severe weather or other natural disasters could materially and adversely affect our business financial condition and results of operations. Similar adverse consequences could follow if war or war-like situation were to prevail terrorist attacks were to affect our related infrastructure or if the Government of India were to temporarily take over the facility during a time of national emergency. In addition any disruption in basic infrastructure such as in the supply of electricity from the State of Kerala or in our water supply could substantially increase our manufacturing costs. We do not maintain business interruption insurance and will not be covered for any claims or damages arising out of such disruptions. Any disruption of our existing supply of basic infrastructure services such as power or water our failure to obtain such additional supplies as required by us or an increase in the cost of such supplies may result in additional costs to us. In such situations our production capacity may be materially and adversely impacted. In the event our facilities are forced to shut down for a significant period of time our earnings financial condition and results of operation would be materially and adversely affected. 9. We may be unable to attract and retain sufficient skilled or qualified personnel. Our business financial condition and results of operations could be adversely affected if we are unable to recruit and retain suitable staff for our operations. Our operations require highly skilled and qualified personnel such as engineers skilled workmen and other technicians. Further we will require additional employees and subcontract labour and production workers at our proposed Dry Dock and ISRF facilities. However competition for skilled shipyard labour in India is intense. Our competitors may also be expanding their operations and may require additional workers. As a result we may from time to time experience difficulties in attracting and retaining highly skilled employees. For example our engineers are instrumental in analysing the design blueprints of new vessels and play a central role in designing the hull electrical and piping system and producing the production engineering drawings. They also play a critical role in our cost management system as we are dependent on them to formulate production design plans that will allow for the efficient utilisation of our raw materials. Our inability to maintain a sufficient number of skilled and qualified personnel to handle the more sophisticated and technology-intensive processes or our inability to pay substantially higher salaries to procure these personnel could have a material adverse effect on our business financial condition results of operations and prospects. Labour shortages could increase the cost of labour and hinder our productivity and ability to complete the construction of our vessels on time which would materially and adversely affect our business financial condition results of operations and prospects. We believe that the present salary levels of our employees are high compared to average industry standards in India. An increase in labour costs or minimum wage laws in Kerala may further increase our employee and labour costs. Employee compensation in India has historically been lower than employee compensation in the United States and Western Europe and in Asian countries such as South Korea and Japan for comparably skilled professionals which has been one of our competitive strengths. Employee compensation increases in India may reduce some of this competitive advantage and may negatively affect our profit margins. Furthermore as per the CRISIL Report the effective cost of labour in Indian shipyards is higher as compared to Japanese and Korean shipyards due to a lack of automated systems in Indian shipyards augmenting the production process. Although labour costs in India are lower they may increase at a faster rate than in the aforementioned countries and regions which could result in increased costs relating to engineers managers and other mid-level professionals. We may need to continue to increase the levels of our employee compensation to retain key employees and manage attrition. Such increase may have an adverse effect on our business profitability and financial condition. Further we utilise contract labour in our shipyard on a regular basis. In the event that we are unable to secure our required contract labour through these arrangements or if the costs for such services increase our business and results of operations may be adversely affected. In addition under the Contract Labour Regulation and Abolition Act 1970 as amended we may be required to absorb a number of such contract labourers as permanent employees. Any such order from a regulatory body or court may have an adverse effect on our business results of operations cash flows and financial condition. 10. There are outstanding legal and tax proceedings involving our Company. Further in one of the outstanding legal proceedings the Chairman and Managing Director of our Company has also been made a performa party. Any adverse decision in such proceedings may expose us to liabilities or penalties and may adversely affect our business financial condition results of operations and cash flows.

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24 As on the date of this Red Herring Prospectus we are involved in certain civil and tax direct and indirect proceedings which are pending at different levels of adjudication before various courts tribunals forums and appellate authorities. We cannot assure you that these legal proceedings will be decided in our favour. Decisions in proceedings adverse to our interests may have a significant adverse effect on our business financial condition results of operations and cash flows. In relation to tax proceedings in the event of any adverse outcome we may be required to pay the disputed amounts along with applicable interest and penalty and may also incur additional tax incidence going forward. A summary of pending tax proceedings and other material litigation involving our Company is provided below: I. Litigation against our Company in unit million S. No. Nature of litigation Number of cases against our Company Approximate amount involved to the extent quantifiable 1. Civil proceedings 36 USD 0.91 2. Indirect Tax proceedings consolidated 57 ` 2692.28 3. Direct Tax proceedings consolidated 13 ` 607.83 4. Actions by Statutory and Regulatory Authorities 1 ` 9.96 Out of eight customs cases three cases pertain to a refund claim of ` 34.43 million and five cases pertain to duty of `368.31 million paid by our Company under protest the service tax cases exclude penalty fines and interest that have not been quantified and for sales tax cases our Company has paid tax in certain cases in protest. The liability of our Company shall be reduced to that extent. Further the amount excludes `. 2.88 million of excess tax paid by our Company in one of the matters. The total income tax liability after adjusting the refunds due is `. 5.10 million. The office of Employees Provident Fund Organisation Kaloor Kochi Ministry of Labour and Employment made certain observations in relation to contribution of provident fund to employees and non-enrolment of employees. For details refer “Outstanding Litigation and Other Material Developments – Litigations involving our Company – Actions by Statutory and Regulatory Authorities.” on page 375. II. Litigation by our Company in ` million S. No. Nature of litigation Number of cases by our Company Approximate amount involved to the extent quantifiable 1. Civil proceedings 1 280.36 III. Litigation involving our directors Litigation against whole time director S. No. Nature of litigation Number of cases by our Company Approximate amount involved to the extent quantifiable 1. Civil proceedings 1 Not ascertainable Our Chairman and Managing Director has been made a proforma party in this legal proceeding. Litigation against our Independent director in ` million S. No. Nature of litigation Number of cases by our Company Approximate amount involved to the extent quantifiable 1. Criminal proceedings 1 712.56 Our Independent Director Mr. Nanda Kumaran Puthezhath has been made a party in this legal proceeding. The amounts claimed in these proceedings have been disclosed to the extent ascertainable. If any new developments arise such as a change in Indian law or rulings against us by appellate courts or tribunals we may

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25 need to make provisions in our financial statements that could increase our expenses and current or long term liabilities. For further details see “Outstanding Litigation and Other Material Developments” on page 375. 11. Our strategic cooperation agreements with various business partners may not yield the benefits we expect. We have entered into a number of strategic cooperation agreements with some of our customers. For example we signed a MoU with Lakshadweep Development Corporation Limited “LDCL” on April 12 2013 for routine dry-dock repairs and to also attend to emergency/afloat repairs to vessels. We have also entered into MoUs with DGLL for dry dock repairs of many of their ships DCI for repairs of dredgers Wartsila for the setting up of a workshop within our premises. Our board has also approved the formation of a joint venture between HDPEL and us for which we would invest `220 million towards the initial capital of the Company. We expect to enter into more strategic cooperation agreements during the development of our business. However some of these strategic cooperation agreements may not actually bring us benefits as we expected. Furthermore a strategic cooperation agreement may not be implemented as we expected. If our strategic cooperation partners refuse to adhere to the relevant strategic cooperation agreements or enter into individual contracts with us in relation to a specific matter we may not have legal rights to hold them liable for our damages or loss of profits. Therefore a strategic cooperation agreement may not convey any actual benefit to us. You should not rely on the strategic cooperation agreements to evaluate our results of operations and financial condition. 12. The delivery of IAC which forms a significant portion of our current order book has been delayed. Future delays may materially and adversely affect our reputation results of operations and financial condition. We are building India’s first IAC for the Indian Navy. The publicly available CAG report on this matter titled ‘Union Defence Services Navy and Coast Guard’ tabled on July 26 2016 states that IAC’s delivery with completion of all delivery-related activities is likely to be achieved only by 2023. This delay has been attributed by the CAG Report to several reasons including late procurement of key parts further delayed supply of key raw materials including steel and other bought out components and frequent changes to and lack of design information. The Indian Navy has claimed that many changes to the design which led to the delay were proposed by us. The CAG report also cites our lack of experience both in relation to vessel type and size and the complexity of the project. While we do not agree with CAG’s assessment of this matter further delay and disagreements in relation to this project may materially and adversely affect our reputation results of operations and financial condition. 13. Our growth rate the number of orders we have received in the past and our current order book may not be indicative of our future growth rate or the number of orders we will receive in the future. Our order book on hand as of a certain date represents the total nominal value of the contracts that have not been completed excluding the portion of revenue in respect of those orders that we have recognized as of such date. As of March 31 2017 our shipbuilding order book consisted of eight vessels with an aggregate outstanding revenue value of ` 29361.49 million. The successful conversion of these orders into our revenue depends on a number of factors including among other things absence of adverse changes in the Indian and global shipping markets the availability of funds to ship-owners competition our production capacity our research and development and our ability to deliver the vessels on time. Some of the factors are beyond our control and by nature are subject to uncertainty. Going forward our order book may be affected by delays cancellations and the renegotiations of the contracts if any therefore we cannot assure you that we will be able to deliver all of our existing orders on schedule and successfully turn them into our revenue. Therefore you should not consider our order book as an accurate indicator of our future performance or future revenue. As of March 31 2017 our ship repair order book had a total outstanding revenue value of `3698.32 million. While we currently do not have any ships on order in which we have a lack of experience or expertise in the future we may contract orders for new products or we may diversify our products into lines in which we have no experience and in such circumstances we cannot assure you that we may not encounter delays in the delivery of these vessels or that these vessels will not have defects poor workmanship or non-conformity to specifications. We have grown steadily in the last few years. Our total revenues and PAT have increased from `16604.52 million and `692.82 million respectively in Fiscal 2015 to `22085.01 million and `3121.82 million respectively in

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26 Fiscal 2017 at a CAGR of 15.33 and 112.27 respectively. We cannot assure you that we will be able to maintain our past growth rate or secure the same number of orders we have received in the past. Our past growth rate or secured orders should not be relied upon as indicators of our future growth rate or orders we will receive in the future. To the extent that we experience any significant decrease in demand for our products increase in competition or increase in the prices of raw materials equipment and components our business financial condition and results of operations may be materially and adversely affected. Our continuous growth depends on a number of factors many of which are beyond our control including the impact on demand for our products resulting from the macroeconomic policies of the Indian government and governments in other countries the level of competition in India and sectors in which we conduct business and the prices we pay for raw materials equipment and components. For example as on the date of this Red Herring Prospectus we have not received a single order for building an LNG vessel. Furthermore we face risks of a low growth rate of orders because the shipbuilding orders placed by our customers are typically non-recurring in nature. As a result we cannot assure you that we will receive the same number of orders as or more orders than we have received in the past or that the contract value of the order book will remain the same or increase. As a result you should not take the number of orders we have received in the past or the current value of our order book as an indicator of our performance or numbers of orders in the future. 14. We may face claims and incur additional rectification costs for defects and warranties in respect of our vessels and offshore business structures which could have a negative effect on our business financial condition and results of operations. We may face claims by our customers in respect of defects poor workmanship or non-conformity to our customers’ specifications in respect of vessels and offshore business structures built by us and such claims could be substantial. Such claims could also adversely affect our reputation and ability to grow our business. We generally extend a warranty period of 12 months to our customers for new vessels from the date of delivery. We are also generally required to give additional warranties for the time period between the completion of construction and delivery of our vessels. Due to the length of the warranty period extended by us we may be subject to claims from our customers and we may incur additional costs if rectification work is required in order for us to satisfy our obligations during the warranty period. We cannot assure that our warranty provisions will be sufficient to cover the costs incurred for defects. If the costs of any rectification works exceed the warranty provisions we have made our business financial condition results of operations and prospects may be adversely affected. 15. Our operations expose us to potential liabilities that may not be covered by insurance or greater than our existing insurance cover. As a result should we incur substantial liability which our insurance does not cover our business financial condition and results of operations may be adversely affected. Our operations are subject to inherent risks such as equipment defects malfunctions and failures equipment misuse and natural disasters that can result in fires and explosions. We maintain a standard fire and special perils policy but we do not have insurance for business interruption. Substantial portions of our activities involve the fabrication and refurbishment of large steel structures the operation of cranes and other heavy machinery and other operating hazards. These risks could expose us to substantial liability for personal injury wrongful death product liability property damage pollution and other environmental damages. Although we have obtained insurance for our employees as required by Indian laws and regulations as well as our important properties and assets our insurance may not be adequate to cover all potential liabilities. We also maintain various other insurance policies including: public liability insurance a directors/officers liability policy a marine hull policy ship repairer’s liability insurance policy and a builder’s risk insurance policy. We cannot assure you that insurance will be generally available in the future or if available that the premiums will not increase or remain commercially justifiable. If we incur substantial liability and the insurance does not or is insufficient to cover the damages our business financial condition results of operations and prospects may be materially adversely affected. 16. We may not be able to secure new contracts if we are unable to issue the requisite performance guarantees. The shipbuilding industry is a capital intensive industry and as the contract prices for new vessels are generally high we are usually required to furnish our customers with performance guarantees as security for the fulfilment of our contractual obligations under our shipbuilding contracts. In order for us to secure performance guarantees banks and financial institutions review among other things our financial standing and creditworthiness. Generally we arrange for banks to issue performance guarantees to our customers from our available banking facilities. If we do not have available banking facilities to issue the

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27 performance guarantees we approach other banks or financial institutions to issue the performance guarantee. While we have been able to procure performance guarantees for new contracts to date in the event that we are unable to do so and we are unable to satisfy the financial requirements prescribed by banks and financial institutions we will not be able to procure the requisite performance guarantees and as a result we may be unable to secure new contracts which would have a material adverse effect on our business financial condition results of operations and prospects. 17. We face the risk of unsatisfactory quality of work performed by our subcontractors which could result in a negative impact on our business reputation financial condition and results of operations. We rely substantially on subcontractors for our labour requirements. Instead of maintaining a large number of full time employees we employ a significant number of contract labour and production workers which we can increase or decrease to suit our requirements. We may outsource certain aspects of our shipbuilding work such as the production of certain vessel sub-assemblies and structural sections from time to time to our contractors. Despite our best efforts inspection supervision and quality management system these subcontractors may use poor quality or defective sub-components or underqualified or less skilled workers and as a result should a sub- standard quality of vessel be delivered this could adversely impact our reputation. Furthermore our subcontractors may not report safety concerns. This may lead to increased costs borne by us which could adversely affect our business reputation financial condition results of operations and prospects and our relationships with our customers. In addition should our subcontractors default on their contractual obligations or be unable to complete their work according to specifications on schedule our ability to deliver the vessels to our customers in accordance with the quality or timing specifications in the shipbuilding contract may be compromised which could have a material adverse effect on our business financial condition results of operations and prospects. Our Company also assumes liability for the work undertaken by the subcontractors in connection with any design or engineering work and hence any failure on the part of our sub-contractors to perform their obligations in a timely manner or at all could adversely affect our operations financial conditions and cash flows. 18. Our businesses are dependent on our information technology infrastructure and we rely on third-party licences for our business. We are dependent on our information technology infrastructure to conduct our business activities manage risks implement our internal control systems and manage and monitor our business operations. The key systems in place include an enterprise resource planning system which enables our management to more accurately assess the inventory production capacity procurement requirements and performance of each of our departments and assists them in allocating resources throughout our business and improves operational efficiency by enhancing supply chain and distribution management. We also use third party software for creating detailed designs in relation to the vessels we build. We rely on third party information technology service providers to maintain and upgrade our systems and have contracted reputable information technology companies widely accepted in our industry to construct and improve our information technology infrastructure. A failure or breakdown of any part of our information technology infrastructure can interrupt our normal business operations result in a slowdown in operational and management efficiency and impact our ability to meet our construction schedules. A serious dispute with our information technology service providers or termination of our licensing agreements or service contracts can impact our ability to upgrade our information technology infrastructure on a timely and cost- effective basis which is critical to maintaining our competitiveness. If any of these events occur our business financial condition and result of operations may be adversely affected. 19. Our planned capital expenditure may not yield the intended benefits or we may be unable to raise finances to fund our planned capital expenditure which may negatively impact our business financial condition and results of operations. We plan to use part of net proceeds internal accruals additional bank financing and future equity issuances to fund our planned capital expenditure and future expansion including the development of the Dry Dock. The amount of such additional required funding will depend on whether these projects are completed within budget the timing of completion of the construction of the Dry Dock and the ISRF expansion of our revenue generating operations any further investments we may make and the amount of cash flow from our operations in the future. If delays and cost overruns are significant the additional funding we would require could be substantial. Additional bank financing may not be available as and when required and if incurred would result in increased debt service obligations and could result in additional operating and financing covenants or liens on our assets that would restrict our operations. The sale of additional equity securities could result in additional dilution to our

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28 shareholders. As of June 30 2017 our fund-based financial indebtedness was `1230.00 million tax free bonds excluding interest. Our ability to obtain required funding on acceptable terms is subject to a number of uncertainties including: • limitations on our ability to incur additional debt including as a result of prospective lenders’ evaluations of our creditworthiness and pursuant to restrictions on incurrence of debt in our existing and anticipated credit arrangements • investors’ and lenders’ perception of and demand for debt and equity securities of shipbuilding companies and companies engaged in the offshore business as well as the offerings of competing financing and investment opportunities in India by our competitors • conditions in the Indian and international capital markets in which we may seek to raise funds • our future results of operations financial condition and cash flows and • economic political and other conditions in India and internationally. Further State Bank of Travancore “SBT” had issued a letter of credit on our behalf. However the related sanction letter has expired and SBT was merged with SBI with effect from April 1 2017. Subsequent to this merger our existing letter of credit and indebtedness has been transferred to SBI. We cannot assure you that necessary financing will be available in amounts or on terms acceptable to us or at all. If we fail to raise additional funds in such amounts and at such times as we may need we may be forced to reduce our capital expenditures and construction to a level that can be supported by our currently available funding sources and delay the construction of our proposed Dry Dock and ISRF which may result in our inability to meet drawing conditions under our current loan facilities or default and exercise of remedies by the lenders under our loan facilities. In that event we may be unable to complete our projects under construction and could suffer a partial or complete loss of our investments in our projects. 20. We cannot assure you that we will be able to compete successfully against our competitors and new entrants to the industry. If we are unable to compete effectively in any of our business segments it may adversely affect our business financial condition and results of operations. Our business is highly competitive. We face competition from existing competitors located both in India and elsewhere and in particular in South Korea Japan and China as well as new entrants to this industry. For further details see “Industry Overview” on page 104. We compete on the basis of our ability to fulfil our contractual obligations including the timely delivery of vessels constructed by us our yard’s capacity and operational efficiencies and the price and quality of the vessels we construct. Some of our competitors have more resources than we have and some of our competitors may have lower costs of operations including lower costs of raw materials and manpower than we have. In addition some of our competitors may have competitive advantages in building certain types of vessels compared to us given our current dock size and other facility constraints. Our competitors particularly those in India from time to time may engage in aggressive and unviable pricing and delivery schedules in order to gain market share. Further most of our clients follow competitive bidding processes due to which we may not be able to effectively bid for future projects. Moreover our competitors outside India may be able to source cheaper raw materials given that indigenous ancillary industries are virtually non-existent in India and therefore we are required to import a substantial portion of our major raw materials and other equipment. In addition a number of shipbuilding companies currently focus on building different types of vessels than we do. Although these shipbuilding companies currently do not compete with us they may possess the capability to build the types of vessels we build and we cannot assure you that they will not compete with us in the future. See “OurBusiness - Competition” for a description of our key competitors. Further due to recent liberalisation policies private companies have been allowed to bid for vessels used in defence-related projects. This may lead to increased competition and there can be no assurance that we will be able to compete successfully against our competitors as well as new entrants in our industry in the future or that the shipbuilding and ship-repair companies that are not directly in competition with us now will not compete with us in the future. Accordingly our business financial condition results of operations and prospects would be adversely and materially affected if we are unable to maintain our competitive advantage and compete successfully against our competitors and any new entrants to our industry in the future.

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29 21. We have had negative net cash flows in the past and may continue to have negative cash flows in the future. We had negative cash flow from our financing activities as set out below: in ` million For the Financial Year ended March 31 2017 2016 2015 Net cash from financing activities 1125.21 318.92 2353.93 For further details see “Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 175 and 334 respectively. We cannot assure you that our net cash flow will be positive in the future. 22. We are exposed to the risk of increases in the price of our raw materials. Further if we are unable to source quality raw materials required for our business at competitive prices our business results of operations and profitability may be adversely affected. The major components of our expenditure include raw materials such as steel the grade and quality of which in each project depends on the applicable classification rules and other materials equipment and other components such as pumps propellers and engines. In Fiscals 2015 2016 and 2017 respectively our material consumption costs constituted 64.5764.01 and 58.36 of our total costs respectively. In particular boughtout components accounted for nearly 90 of our total raw material cost in these recent fiscals. Shortages in the supply of the raw materials we use in our business may result in an increase in the price of these raw materials. For example there are supply-side constraints in relation to steel in India which we expect will continue in the future. The Indian steel industry has been unable to compete globally due to which the GoI has imposed significant duties on the import of steel from other countries such as China to protect the domestic steel industry. This has adversely affected us by increasing our cost of procurement. In addition the cost of certain raw materials such as steel may fluctuate in line with any changes in their global supply and demand. In the event that the price of our raw materials increase we will not be able to pass these price increases to our customers on our existing fixed contracts and our business financial condition and results of operations may be adversely affected. 23. We are subject to stringent labour laws and our workmen are unionised under a number of trade unions. Labour disputes could lead to lost production and increased costs. India has stringent labour legislation that protects the interests of workers including legislation that sets forth detailed procedures for discharge of employees and dispute resolution and imposes financial obligations on employers upon employee layoffs. As a result of such stringent labour regulations it is difficult for us to maintain flexible human resource policies discharge employees or downsize which may adversely affect our business financial condition and results of operations. Additional labour unrest could result due to the operative labour union within our workforce. We cannot assure you that there will not be any face strikes or work stoppages in the future which could have an adverse impact on our operations particularly given our dependence on a large workforce. For further details see “History and certain Corporate Matters – Lock-out Strikes etc’” on page 149. 24. Certain properties including the land on which we are constructing the ISRF are not owned by us and we enjoy only a leasehold right over certain of these properties. If we are unable to occupy and use this land or fails to extend the lease period on lease expiry on reasonable terms it may have a material adverse effect on the business financial condition and results of operations of our Company. We do not own the land on which the ISRF and related facilities are being constructed and has been taken by us on lease pursuant to a lease agreement dated April 12 2013 between the Cochin Port Trust and us for a term of 30 years together with the right to use 15 hectares or thereabouts of adjoining water body. In the event that we are unable to obtain an extension or the lease is terminated due to any reason or the lease expires after the original period of lease of 30 years we will have to transfer the ISRF facility to CoPT along with all the assets developed in relation thereto on the basis of a third-party valuation of assets to be paid by CoPT. Upon expiration of the lease agreement for our leased premises we will be required to negotiate the terms and

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30 conditions on which the lease agreement may be renewed. Termination of our lease may occur for reasons beyond our control such as breach of any terms of the lease agreement by the landlord of our premises. If we our current or future landlords breach the lease agreement we may have to shut down our operations at this site. Shut down of any part of our operations may cause disruptions to our business and may require significant expenditure which may materially and adversely affect our business financial condition and results of operations. 25. We are subject to extensive government regulation and if we fail to obtain maintain or renew our statutory and regulatory licenses permits and approvals required for our business our results of operations and cash flows may be adversely affected. Our operations are subject to extensive government regulation and we are required to obtain and maintain a number of statutory and regulatory permits and approvals under central state and local government rules in India generally for carrying out our business and for each of our manufacturing facilities. For details of applicable regulations and approvals relating to our business and operations see “Regulations and Policies” and “Government and Other Approvals” on pages 139 and 382 respectively. A majority of these approvals are granted for a limited duration and require renewal. The approvals required by our Company are subject to numerous conditions and we cannot assure you that these would not be suspended or revoked in the event of non-compliance or alleged noncompliance with any terms or conditions thereof or pursuant to any regulatory action. If there is any failure by us to comply with the applicable regulations or if the regulations governing our business are amended we may incur increased costs be subject to penalties have our approvals and permits revoked or suffer a disruption in our operations any of which could adversely affect our business. 26. Our business is expected to become more diversified and our historical results of operations may not be indicative of our future performance. Failure to successfully implement our new business model execute our new business strategies or develop new business may materially and adversely affect our business financial condition results of operations and prospects. We are presently constructing the first IAC for the Indian Navy. We have also obtained a licence to aid us in building LNG carriers using the patented membrane containment system. As part of our growth strategy we intend to diversify our product offerings to include vessels for inland water transportation. As we do not have sufficient experience in manufacturing these new products and since our contracts typically provide for liquidated damages for late delivery we may encounter greater risks of cost overruns and delays in delivery on these contracts than on those for the vessels we built in the past. These vessels are often more complex in design and more difficult to build. We may be unable to spread the cost of design and research and development among similar vessels or have a profit margin comparable to that from other vessels normally we build. We do not yet have all the technological know-how or intellectual property rights to build these vessels and may have to spend large amounts of fees to obtain licenses or invest a substantial amount of capital and human resources in conducting research and designing and building prototypes. Development costs of these new products may be excessive and may adversely affect our business financial condition and results of operations. We derived the majority of our revenue from our shipbuilding business which accounted for 83.4477.54 and 68.64 of our total revenue for Fiscals 2015 2016 and 2017 respectively. We expect to gain the capacity to manufacture complex products in the near future and a wider variety of other vessels in the long run. Even if we acquire the capacity and capability in the new segment there is no assurance that we will secure new orders in this segment competing with overseas shipyards. We are in the process of constructing our proposed Dry Dock at a total estimated cost of `17989.91 million. We are also setting up the ISRF at an investment of approximately `9694.1 million. We do not have previous track record or expertise in a project involving such capital expenditure. We cannot assure you that we will be successful due to among others the following factors: • our failure to correctly identify relevant market trends including those relating to customer demand for the type of vessels that we propose to build on this basis the cost of raw materials movements in foreign exchange rates and the price of such vessels • our inability to properly manage our cash flow financing resources and in relation to the new business model • higher interest expense or reduced interest income due to funding the new business model using our own

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31 capital • our failure to manage construction costs and cost overruns or • our inability to find customers to purchase or lease these vessels at prices acceptable to us. Our expansion within a short period of time has imposed on us new operational management and planning demands which are significantly different from those we encountered in operating our business and for which we may require different expertise and experience. The implementation of these strategies depends on a number of factors including among other things absence of adverse changes in the Indian and global shipping markets the availability of funds less competition government policies and our ability to retain and recruit competent employees. Some of the factors are beyond our control and by nature are subject to uncertainty. There is no assurance that our strategies can be implemented successfully. Any failure or delay in the implementation of any or all of these strategies may have a material adverse effect on our profitability and prospects. There can be no assurance that our revenues or profits will continue to increase or that our profit margin will not significantly decrease or that we will not experience losses from our new businesses. As a result our historical results of operations may not be indicative of our future performance. 27. Trade unions under which majority of our workmen are unionised have objected to the proposed Issue. This may lead to strikes lock-down or work stoppages which will adversely affect our operations reputation and financial condition. Majority of our workmen have opposed the proposed Issue and have submitted their statement of objection through their respective trade unions to us. A 24-hour strike was held by the worker unions against the proposed Issue on April 28 2017. We cannot assure you that we will not face any strikes or work stoppages in the future or agitations by our workmen against the proposed Issue which may affect adversely affect our reputation and could have an adverse impact on our operations. 28. We are dependent on the Cochin Port Trust “CoPT” for certain basic services required for daily operations. If our relationship with CoPT is negatively affected in any manner or if CoPT is unable to provide these services in the future it may have an adverse impact on our operations. We outsource certain basic services which are key to our daily operations such as pilotage tugs and voyage permits to CoPT. Timely availability of these services is a critical factor for successful execution of our daily operations. There can be no assurance that CoPT will continue to provide us these services in the future on terms favourable to us or at all. If our relationship with CoPT is negatively affected in any manner or if CoPT is unable to provide these services in the future it may have an adverse impact on our operations. 29. The sea channel adjacent to our shipyard suffers from siltation which requires incurring additional expenditure. The Kochi port is a riverine port which is prone to higher than usual levels of siltation. Due to this periodic dredging and maintenance is required to keep the water channel functional for our use and needs. This requires incurring of additional expenditure compared to shipyards in other parts of India. If we are required to incur substantial expenditure on dredging in relation to this it may affect our results of operations and financial condition. 30. We depend on the contribution of key management personnel. The loss of their services may have a material adverse effect on our business financial condition and results of operations. Our success depends to a significant extent upon the continued service of our key management personnel. If we lose the services of any of our existing key management personnel without timely and suitable replacements or are unable to attract and retain new personnel with suitable experience as we grow our financial performance and operations may be materially and adversely affected. Our Chairman and Managing Director Madhu S Nair and Director Technical Sunny Thomas Director Finance Paul Ranjan and Director Operations Suresh Babu N V have been with us for over 20 years and have been instrumental in charting the business direction and spearheading our growth. Accordingly the loss of one or more members of our senior management team could

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32 have a material adverse effect on our business financial condition results of operations and prospects as these persons may be difficult to replace. 31. Factors beyond our control or the control of our customers may cause our customers to terminate their projects postpone purchases from us or default on payments owed to us which may adversely affect our business financial condition and results of operations. Our customers retain the right to change/reduce the scope/terminate/indefinitely postpone their shipbuilding contracts. In the event of a change/reduction in scope/termination/indefinite postponement of a shipbuilding contract the customer is generally required to pay for work performed and raw materials purchased up to the date of termination and in most cases pay to us a termination fee representing our profit margin if the project had been completed which has to be agreed between the customer and us. However any termination of a significant contract would have a material adverse effect on our business financial condition results of operations and prospects. Furthermore factors beyond our control or the control of our customers may cause our customers to postpone purchases from us. Due to the possibility of changes in project scope and schedule as a result of exercises of our customers’ discretion or reasons outside the control of our customers we cannot predict with certainty when if or to what extent a project will be performed. Even where a project proceeds as scheduled it is possible that the contracting parties may default or otherwise fail to pay amounts owed. Any reduction in scope payment postponement or payment default in regard to order book projects or disputes with customers in respect of any of the foregoing could materially harm our financial condition results of operations and cash flows. 32. We have sought to renegotiate our agreements with some of our commercial shipping customers and we are engaged in arbitration with an agent in respect of a terminated agency agreement. We have sought to renegotiate some of our agreements with our commercial shipbuilding customers in the past. This renegotiation has been primarily due to our failure to deliver the vessels on time. Such delay was caused due to various factors including equipment failures delay in supply of materials and other technical reasons. We are also engaged in arbitration proceedings with an agent in respect of a terminated agency agreement and their brokerage claim on a particular shipbuilding contract secured by us from Saudi Arabia. On November 24 2015 the arbitral tribunal passed an award directing us to pay a commission of US 0.91 million along with interest at 8 per annum till payment is made to the agent. Aggrieved by the arbitral award we have filed a petition in the civil court for a stay of execution. The civil court has granted a stay of execution until the disposal of the original Petition. The matter is currently pending. For further details see “Outstanding Litigation and Other Material Developments –Litigations against our Company - Other material pending litigations” on page 376. We cannot assure you that the outcome of the proceedings will be favourable to us. An unfavourable outcome in this matter may have an adverse effect on our business profitability and financial condition. 33. We have contingent liabilities and commitments in our balance sheet as restated at March 31 2017. Further our Company may be subject to certain proceedings in respect of ongoing tax litigations and our Company has not presently provided for such disputed demands including penalties if any which may be imposed. Realisation of our contingent liabilities may adversely impact our profitability and may have a material adverse effect on our results of operations and financial condition. The following are the contingent liabilities and commitments in our balance sheet as restated as at March 31 2017. If any of these actually occur in the future they may adversely impact our profitability and may have a material adverse effect on our results of operations and financial condition: Particulars As on March 31 2017 Brief Description of the nature and obligation as on March 31 2017 ` in million A CONTINGENT LIABILITY To the extent not provided for a Guarantees

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33 Particulars As on March 31 2017 Brief Description of the nature and obligation as on March 31 2017 ` in million i Letters of Credit 3932.87 Represents LC opened by the Company in various banks for procurement of materials/assets ii Corporate Performance Guarantee 392.50 Performance guarantee given by Company to CoPT for performance of obligations under the contract agreement entered with CoPT during the contract period. b Other money for which the company is contingently liable i Greater Cochin Development Authority GCDA 6.91 Claim raised by GCDA for the land acquired for the Company is settled. However 8 land acquisition revision petition cases Valued at ` 6.91 millions filed by evictees is pending with the Honble Supreme Court and High Court. ii Customs duties 1794.12 Customs duty for materials under Bond and Indigenous vessels delivered. Includes an amount of ` 6.98 millions being Customs duty refund granted by Custom Excise and Service Tax Appellate Tribunal Bangalore against which an appeal is pending before the Honble High Court of Kerala. iv Sales Tax/Kerala Value Added Tax 139.63 2000-01 - `11.19 million 2001-02 - `7.34 million 2004-05 - `20.22 million 2005-06 - `65.22 million 2007-08 - `.35.65 million Under appeal. Under Appeal. Stay of collection of tax obtained in all cases. Demand reduced to the extent of appeal allowed by Deputy Commissioner Appeals. v Income Tax 607.78 Demand relating to Assessment Years: a AY 2009-10 - ` 7.77 million AY 2010-11 - ` 12.63 million AY 2011-12 - ` 42.02 million AY 2012-13 - ` 54.61 million AY 2013-14 - ` 22.14 million AY 2014-15 - ` 87.69 million b AY 1997-98 - ` 219.16 million AY 1998-99 - ` 96.73 million AY 1999-00 - ` 35.37 million AY 2000-01 - ` 17.03 million AY 2001-02 - ` 9.64 million c AY 2002-03 - ` 3.00 million vi Service Tax 164.75 Demand of Service Tax on IAC P-71 Design Consultancy as per show cause notice issued. Adjudication pending. 37.67 Refund claim of Service Tax on IAC P-71 granted by Commissioner Appeal. However Department filed Appeal before Custom

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34 Particulars As on March 31 2017 Brief Description of the nature and obligation as on March 31 2017 ` in million Excise and Service Tax Appellate Tribunal against the order of CommissionerAppeals. Also issued Show Cause Notice on CSL adjudication pending. 32.30 Demand of service tax on IAC P-II Management fees/handling charges as per the show cause notice issued. Adjudication pending. 233.96 Show cause notice issued for levy of service tax on ship repair without allowing deduction of materials for which VAT paid and disallowance of cenvat credit. Adjudication pending. 188.56 Show cause notice issued for levy of Service Tax on the repair of vessels owned by Union Territory of Lakshadweep Administration by denying the benefit of Notification No.25/212-ST dated June 20 2012 available for the repair of vessels owned by Govt. Departments. Adjudication pending. B COMMITMENTS To the extent not provided for a Estimated amount of contracts remaining to be executed on capital account and not provided for: 458.47 b Bank Guarantees 6936.65 The contingent liabilities of our Company arise as our Company is party to certain tax litigations pending before various tribunals and our Company may also be subject to imposition of penalty by the Income Tax Department in relation to such litigations. Our Company has not made provision for such penalties as may be imposed in its contingent liabilities as the amount of penalty which may be imposed is not quantifiable. 34. Our quality control department and quality control assurance and monitoring procedures may not identify all defects poor workmanship or non-conformities to client specifications which could adversely affect our reputation business prospects financial condition and results of operations. In addition to the various certifications received by us we have established a quality control department comprising of engineers and support personnel with significant experience in the shipbuilding industry and we intend to further strengthen this department. We have established a set of quality control assurance and monitoring procedures applicable to every stage of the vessel construction process. Testing and sea trials are also expected to be conducted prior to delivery of the vessel to our customers. However there can be no assurances that our quality control department and quality control assurance and monitoring procedures will identify all defects poor workmanship or non-conformities to our customers’ specifications in respect of vessels and Offshore Business structures built by us. If our quality control department and quality control assurance and monitoring procedures do not to identify certain defects poor workmanship or non-conformity to our customers’ specifications claims arising from such defects poor workmanship or non-conformities could be substantial. Such claims could also adversely affect our reputation business prospects financial condition and results of operations. 35. Our Company has applied for registration of certain trademarks including our corporate logo in its name. Until such registrations are granted we may not be able to prevent unauthorised use of such trademarks by third parties which may lead to the dilution of our goodwill and adversely affect our business. We have filed applications for registration of four trademarks including our corporate logo under the Trademarks Act 1999 “Trademarks Act” which is currently pending approval from the Registrar of Trademarks. In two of applications filed by us showcause hearing is expected and the other two are advertised before acceptance in

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35 the trademark journal. Although all the clarifications sought by the registration authority have been provided by us there can be no assurance that our trademark applications will be accepted and the trademarks will be registered. Pending the registration of these trademarks we may have a lesser recourse to initiate legal proceedings to protect our private labels. However we may have to incur additional cost in relation to this. In the event we are not able to obtain registrations due to opposition by third parties or if any injunctive or other adverse order is issued against us in respect of any of our trademarks for which we have applied for registration we may not be able to avail the legal protection or prevent unauthorised use of such trademarks by third parties which may adversely affect our goodwill and business. For further details on the trademarks which are pending registration see “Government and Other Approvals” on page 382. 36. We are subject to risks arising from currency exchange rate fluctuations including in respect to our proposed Dry Dock project which could adversely affect our business financial condition and results of operations. Changes in currency exchange rates may influence our results of operations. Globally a substantial part of all worldwide ship sales transactions and purchase of offshore structures is generally conducted in USD. While only a small portion of our total revenue in the last three years was received by us in currencies other than the Rupee this proportion may increase in the future. Since a significant part of our costs are incurred in Rupee depreciation of Rupee versus USD and EUR will result in lower revenues in Rupee terms which could adversely affect our profitability. We have a foreign exchange policy pursuant to which every contract net inflow of foreign exchange is hedged. As and when outflows are incurred the required foreign exchange is bought from market at the then prevailing exchange rate. However in the case of import components in respect of shipbuilding/ship repair contracts denominated in Rupee terms our Company is exposed to exchange rate fluctuation risk unless the contract with the ship owner provides for an exchange variation reimbursement clause. Further the DD DPR sets out the breakdown of the estimated cost involved in USD. The total cost of the proposed Dry Dock project has been disclosed in INR based on a conversion rate of ` 67.83 for USD one as on February 6 2016. Hence any fluctuation in the currency rates may affect the cost of our proposed Dry Dock Project and may influence our results of operations. Our future capital expenditures including raw materials equipment and machinery may be denominated in currencies other than Rupee. Therefore declines in the value of the Rupee against the USD or other foreign currencies would increase the Rupee cost of servicing and repaying those borrowings and their value in our balance sheet. The exchange rates between Rupee and USD and between Rupee and EUR have changed substantially in recent years and may continue to fluctuate significantly in the future. Although we may in the future enter into hedging arrangements against currency exchange rate risks there can be no assurance that these arrangements will successfully protect us from losses due to fluctuations in currency exchange rates. 37. We have not independently verified certain data in this Red Herring Prospectus. We have not independently verified data from the Report titled “A study on shipbuilding and ship repairing industry” dated March 2017 prepared by CRISIL contained in this Red Herring Prospectus and although we believe the sources mentioned in the report to be reliable we cannot assure you that they are complete or reliable. Such data may also be produced on a different basis from comparable information compiled with regards to other countries. Therefore discussions of matters relating to India its economy or the industries in which we operate that is included herein are subject to the caveat that the statistical and other data upon which such discussions are based have not been verified by us and may be incomplete inaccurate or unreliable. Due to incorrect or ineffective data collection methods or discrepancies between published information and market practice and other problems the statistics herein may be inaccurate or may not be comparable to statistics produced elsewhere and should not be unduly relied upon. Further we cannot assure you that they are stated or compiled on the same basis or with the same degree of accuracy as the case may be elsewhere. 38. One of the forms filed by us is not traceable and there are discrepancies in some of the forms filed by us with the RoC. We have been unable to locate one of the prescribed forms filed by us with the RoC in respect of the allotment of

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36 Equity Shares on June 17 1988. We have undertaken a RoC search to locate this form as well. While we believe that we had filed this form with the RoC in a timely matter we have not been able to obtain a copy of the form including from the RoC. We cannot assure you that we will be able to locate this form in the future or that we will not be subject to any penalty imposed by the relevant regulatory authority in this matter. While there is no outstanding litigation or regulatory proceeding on the date of this Red Herring Prospectus which requires this form there can be no assurance that this form will not be required in a legal proceeding in the future. Furthermore there are discrepancies in some of our Form-2 filings with the RoC in the past. We cannot assure you that we will not be subject to any penalty imposed by the relevant authority in this matter. 39. We may fail to enhance our market position by failing to improve our research and development capabilities access new markets and develop new relationships which complement our existing business operations which may have an adverse impact on our business financial condition and results of operations. As part of our expansion strategy we intend to enhance our market position through improving our research and development capabilities and accessing new markets and relationships which complement our existing business operations. The implementation of such expansion strategy is subject to a number of risks including but not limited to the risks of: • failing to assimilate new technology required for building the new products identified • failure of new equipment and facilities installed for the expansion • experiencing difficulties in obtaining regulatory approvals • being adversely affected by changes in market conditions and demands • experiencing the diversion of our management’s time and attention from other business concerns and • experiencing difficulties in retaining the key employees of who are essential to successfully managing those businesses. If any of these uncertainties materializes it may have an adverse effect on our business financial condition and results of operations. 40. Failure or delays in obtaining required certification from classification societies may cause delays in our delivery schedules and disruptions in our business. We are required to construct our vessels in accordance with contractual specifications and requirements and the rules and regulations of the classification societies. Depending on the requirements of our customers we need to obtain certification from a particular classification society that is allowed to conduct statutory surveys on behalf of the register of shipping subject to the latter’s authorisation for each vessel. The classification society may refuse to allow us to use the certificate if we fail to resolve issues it raises. As a result we may experience delays and disruptions in our shipbuilding process which may adversely affect our business financial condition and results of operations. 41. Our ability to pay dividends in the future will depend on number of factors including our profit after tax for the fiscal year utilisation of the profit after tax towards reserves our future expansion plans and capital requirements our financial condition our cash flows and applicable taxes including dividend distribution tax payable by our Company and the payments shall be subject to the CPSE Capital Restructuring Guidelines. Our ability to pay dividends in the future will depend on number of factors including our profit after tax for the fiscal year utilisation of the profit after tax towards reserves our future expansion plans and capital requirements our financial condition our cash flows and applicable taxes including dividend distribution tax payable by our Company. Any future determination as to the declaration and payment of dividends will be at the discretion of our Board and subsequent approval of shareholders and will depend on factors that our Board and shareholders deem relevant. We may decide to retain all our earnings to finance the development and expansion of our business and therefore may not declare dividends on our Equity Shares. We cannot assure you that we will be able to pay dividends in the future.

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37 In accordance with the CPSE Capital Restructuring Guidelines our Company is required to pay a minimal annual dividend of 30 of its PAT or 5 of its net worth whichever is higher unless an exemption is provided in accordance with this guideline. For further details see “Dividend Policy” on page 174. 42. If we are unable to establish and maintain an effective system of internal controls and compliances our business and reputation could be adversely affected. We manage regulatory compliance by monitoring and evaluating our internal controls and ensuring that we are in compliance with all relevant statutory and regulatory requirements. However there can be no assurance that deficiencies in our internal controls and compliances will not arise or that we will be able to implement and continue to maintain adequate measures to rectify or mitigate any such deficiencies in our internal controls in a timely manner or at all. As we continue to grow there can be no assurance that there will be no other instances of such inadvertent non-compliances with statutory requirements which may subject us to regulatory action including monetary penalties which may adversely affect our business and reputation. 43. Invocation of refund guarantees by our customers could impact our results of operation and we may face potential liabilities from lawsuits or claims by customers in the future. Although there have not been any invocation of refund guarantees by our customers in the past cancellation or delays in accepting of orders by our clients may lead to invocation of refund guarantees. Pursuant to the terms of our existing shipbuilding contracts we are required to provide advance and progress payment guarantees issued by a financial institution acceptable to our customers in respect of each instalment of the contract price that is paid to us by our customers. If the customer rejects the vessel upon sea trial or the contract is terminated by the customer under certain circumstances the customer has the right to invoke such refund guarantees and the entire amount that has been paid by the customer to us may become payable together with interest. If the refund guarantees are invoked by a customer we would be required to repay these amounts to the financial institution which furnished such guarantees. EXTERNAL RISK FACTORS 44. Public companies in India including us are required to compute Income Tax under the Income Computation and Disclosure Standards the “ICDS”. The transition to ICDS in India is very recent and we may be negatively affected by such transition. The Ministry of Finance has issued a notification dated March 31 2015 notifying ICDS which creates a new framework for the computation of taxable income. Subsequently the Ministry of Finance through a press release dated July 6 2016 deferred the applicability of ICDS from April 1 2015 to April 1 2016 and is applicable from Fiscal 2017 onwards and will have impact on computation of taxable income for Fiscal 2017 onwards. ICDS deviates in several respects from concepts that are followed under general accounting standards including Indian GAAP and Ind AS. There can be no assurance that the adoption of ICDS will not adversely affect our business results of operations and financial condition. 45. The GoI has implemented a new national tax regime by imposing GST. We are not in a position to quantify the impact of this development at this stage due to the limited information currently available in the public domain. If we are taxed at a higher rate under the GST regime our financial condition and results of operations may be adversely affected. The GoI has implemented a comprehensive national goods and services tax “GST” regime with effect from July 1 2017 that will combine taxes and levies by the Central and State Governments into a unified rate structure. Several provisions of the GST regime are currently ambiguous and we may have to change and adapt our systems and such changes might have a material adverse effect on our business financial condition and results of operations. Any such future increases or amendments may affect the overall tax liability of Indian companies and may result in significant additional taxes becoming payable. 46. Significant differences exist between Ind AS and Indian GAAP on one hand and other accounting principles such as US GAAP and IFRS on the other which may be material to investors’ assessments of our financial condition. Our Company is required to prepare annual and interim financial statements under Indian Accounting Standards

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38 “Ind AS” from periods beginning April 1 2016 as required under Section 133 of the Companies Act 2013 read with Circular SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 31 2016. We have not attempted to quantify the impact of US GAAP or IFRS on the financial data included in this Red Herring Prospectus nor do we provide a reconciliation of our financial statements to those of US GAAP or IFRS. US GAAP and IFRS differ in significant respects from Ind AS and Indian GAAP. Accordingly the degree to which the Ind AS and Indian GAAP financial statements which are restated as per SEBI ICDR Regulations included in this Red Herring Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Red Herring Prospectus should accordingly be limited. 47. The exit by the UK from the European Union has and could further impact global financial markets which could in turn adversely affect the trading prices of our Equity Shares. The exit by the UK from the European Union “EU” may impact the trading prices of our Equity Shares after listing. As a result of the referendum held in the UK on June 23 2016 which resulted in a vote in favour of the exit from the EU the global financial markets have experienced significant volatility and may continue to experience volatility. In addition the UK and member countries in the EU may face increased economic and financial volatility. Such economic and financial volatility may further impact global financial markets which may adversely affect the trading prices of our Equity Shares. 48. We may be affected by competition law in India and any adverse application or interpretation of the Competition Act could in turn adversely affect our business. The Competition Act was enacted for the purpose of preventing practices that have or are likely to have an adverse effect on competition in India and has mandated the CCI to separate such practices. Under the Competition Act any arrangement understanding or action whether formal or informal which causes or is likely to cause an appreciable adverse effect on competition is void and attracts substantial penalties. Further any agreement among competitors which directly or indirectly involves determination of purchase or sale prices limits or controls production or shares the market by way of geographical area or number of subscribers in the relevant market is presumed to have an appreciable adverse effect in the relevant market in India and shall be void. The Competition Act also prohibits abuse of a dominant position by any enterprise. On March 4 2011 the Central Government notified and brought into force the combination regulation merger control provisions under the Competition Act with effect from June 1 2011. These provisions require acquisitions of shares voting rights assets or control or mergers or amalgamations that cross the prescribed asset and turnover based thresholds to be mandatorily notified to and pre-approved by the CCI. Additionally on May 11 2011 the CCI issued the Competition Commission of India Procedure for Transaction of Business Relating to Combinations Regulations 2011 as amended which sets out the mechanism for implementation of the merger control regime in India. The Competition Act aims to among other things prohibit all agreements and transactions which may have an appreciable adverse effect in India. Consequently all agreements entered into by us could be within the purview of the Competition Act. Further the CCI has extra-territorial powers and can investigate any agreements abusive conduct or combination occurring outside of India if such agreement conduct or combination has an appreciable adverse effect in India. However the impact of the provisions of the Competition Act on the agreements entered into by us cannot be predicted with certainty at this stage. We are not currently party to any outstanding proceedings nor have we received notice in relation to non-compliance with the Competition Act or the agreements entered into by us. However if we are affected directly or indirectly by the application or interpretation of any provision of the Competition Act or any enforcement proceedings initiated by the CCI or any adverse publicity that may be generated due to scrutiny or prosecution by the CCI or if any prohibition or substantial penalties are levied under the Competition Act it would adversely affect our business financial condition results of operations and prospects. 49. Changing laws rules and regulations and legal uncertainties including adverse application of tax laws and regulations may adversely affect our business results of operations and cash flows. Our business results of operations and cash flows could be adversely affected by unfavourable changes in or interpretations of existing or the promulgation of new laws rules and regulations applicable to our business and operations.

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39 There can be no assurance that the GoI may not implement new regulations and policies which will require us to obtain approvals and licenses from the GoI or other regulatory bodies or impose onerous requirements and conditions on our business and operations. Any such changes and the related uncertainties with respect to the implementation of the new regulations may have an adverse effect on our business results of operations and cash flows. In addition we may have to incur capital expenditures to comply with the requirements of any new regulations which may also affect our results of operations and cash flows. See “Regulations and Policies” on page 139 for details of the laws rules and regulations currently applicable to us. The regulatory and policy changes including the instances mentioned below may adversely affect our business results of operations financial condition and prospects to the extent that we are unable to suitably respond to and comply with any such changes in applicable law and policy. Further the General Anti Avoidance Rules “GAAR” are proposed to be effective from April 1 2017. The tax consequences of the GAAR provisions being applied to an arrangement could result in denial of tax benefits among other consequences. In the absence of any precedents on the subject the application of these provisions is uncertain. If the GAAR provisions are made applicable to our Company it may have an adverse tax impact on us. 50. Our business is substantially affected by prevailing economic political and others prevailing conditions in India. Our Company is incorporated in India and almost all our assets and employees are located in India. As a result we are highly dependent on prevailing economic conditions in India and our results of operations are significantly affected by factors influencing the Indian economy. Factors that may adversely affect the Indian economy and hence our results of operations may include: • any increase in Indian interest rates or inflation • any exchange rate fluctuations • any scarcity of credit or other financing in India resulting in an adverse impact on economic conditions in India and scarcity of financing of our developments and expansions • prevailing income conditions among Indian consumers and Indian corporations • volatility in and actual or perceived trends in trading activity on India’s principal stock exchanges • changes in India’s tax trade fiscal or monetary policies • political instability terrorism or military conflict in India or in countries in the region or globally including in India’s various neighbouring countries • occurrence of natural or man-made disasters • prevailing regional or global economic conditions including in India’s principal export markets • any downgrading of India’s debt rating by a domestic or international rating agency • financial instability in financial markets and • other significant regulatory or economic developments in or affecting India or its natural gas sector. Any slowdown or perceived slowdown in the Indian economy or in specific sectors of the Indian economy could adversely impact our business results of operations and financial condition and the price of the Equity Shares. 51. Holders of Equity Shares may be restricted in their ability to exercise pre-emptive rights under Indian law and thereby suffer future dilution of their ownership position. Under Section 62 of the Companies Act a company incorporated in India must offer its equity shareholders pre- emptive rights to subscribe and pay for a proportionate number of equity shares to maintain their existing ownership percentages prior to issuance of any new equity shares unless the pre-emptive rights have been waived by the adoption of a special resolution by holders of three-fourths of the equity shares voting on such resolution. However if the laws of the jurisdiction that you are in do not permit the exercise of such pre-emptive rights without our filing an offering document or a registration statement with the applicable authority in such jurisdiction you will be unable to exercise such pre-emptive rights. If we elect not to file an offering document or

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40 a registration statement the new securities may be issued to a custodian who may sell the securities for your benefit. The value such custodian receives on the sale of any such securities and the related transaction costs cannot be predicted. To the extent that you are unable to exercise pre-emptive rights available in respect of the equity shares your proportional interests in our Company may be reduced by the new equity shares that are issued by our Company. 52. Natural disasters acts of war political unrest epidemics terrorist attacks or other events which are beyond our control may cause damage loss or disruption to our business and have an adverse impact on our business financial condition results of operations and growth prospects. We generally bear the risk of loss of raw materials or equipment and components in transit after our suppliers ship the supplies to us. We may face the risk of loss or damage to our properties machinery and inventories due to natural disasters such as snow storms typhoons and flooding. Acts of war political unrest epidemics and terrorist attacks may also cause damage or disruption to us our employees our facilities and our markets any of which could materially and adversely affect our sales costs overall operating results and financial condition. The potential for war or terrorist attacks may also cause uncertainty and cause our business to suffer in ways that we cannot predict. In addition certain Asian countries including Hong Kong China Singapore and Thailand have encountered epidemics such as severe acute respiratory syndrome or SARS and incidents of avian influenza or H5N1 bird flu. Past occurrences of epidemics have caused different degrees of damage to the national and local economies in India. A recurrence of an outbreak of SARS avian influenza or any other similar epidemic could cause a slowdown in the levels of economic activity generally which may adversely affect our business financial condition and results of operations. In the event any loss exceeds our insurance coverage or is not covered by our insurance policies we will bear the shortfall. In such an event our business financial condition and results of operations could be materially and adversely affected. 53. We are highly dependent on the growth of India and global trade activities for raw materials such as crude oil coal and iron ore. The commercial shipbuilding industry has traditionally experienced fluctuations in freight and charter rates and vessel values depending on factors including the demand for and supply of shipping capacity which in turn has been largely influenced by global demands for and supplies of raw materials such as crude oil coal and iron ore. Our product offerings are concentrated on IAC FPVs PSVs launch barges and bulk carriers. The price and supply of crude oil is unpredictable and fluctuates based on events outside our control including geopolitical developments supply and demand for oil and gas actions by Organisation of the Petroleum Exporting Countries and other oil and gas producers war and unrest in oil-producing countries and regions regional production patterns and environmental concerns. As a result an increase in the price of crude oil may adversely affect our profitability. In the last decade the prices for crude oil have been increasing as well as volatile. A significant or sustained increase in the price of crude oil or reduction in supply could increase our operating expenses and we may not be able to successfully pass on the costs to our customers and have a material adverse effect on our financial condition and results of operations. As far as the commercial ships like bulk carriers and PSVs are concerned it is expected that sustained economic growth in the India and worldwide would create a growing demand for these raw materials the prices and volumes of which have largely determined the growth of the global shipping industry. The expected increase in demand for crude oil in India and worldwide would necessitate further exploration of new reserves in deep seas which would in turn create a demand for offshore support vessels. We cannot assure you that the demand for raw materials can be sustained or will continue to grow or will not decrease. A decrease in demand in India or globally may cause a reduction in demand for the bulk carriers and offshore support vessels which we build and this decrease may adversely affect our business financial condition and results of operations. 54. Our costs may increase due to changes in regulations pertaining to the shipbuilding industry. The shipbuilding industry is heavily regulated by both Indian and international regulations. Among other things the vessels we construct for our customers are required to meet the standards and requirements of the classification society specified by our customer and the rules applicable to the type and size of vessels promulgated by the relevant regulatory authorities that may comprise maritime authorities of the country of registry and of nations which the vessel is likely to trade or transit through such as the Panama and Suez canals. Furthermore construction of certain shipyard facilities is subject to approvals from the Indian government. Due to the rapid expansion of our business our existing licenses permits authorisations or approvals may not match our growth

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41 and we may need to apply for new licenses permits authorisations or approvals. For example we may need goliath gantry cranes with lifting capacities higher than the existing ones at our shipyard for the construction of large vessels or customized offshore engineering products. If we cannot obtain the requisite licenses permits authorisations or approvals we may not be able to construct such new gantry cranes or may be ordered to remove any such existing facilities. If Indian or international regulations applicable to the shipping industry become more stringent in the future or additional regulations or controls requiring the adoption of new construction requirements are introduced that we cannot satisfy in a cost efficient manner or we are unable to pass any additional costs resulting from these new requirements to our customers our costs will increase. Any significant increase in cost due to changes in regulations in the shipbuilding industry may adversely affect our business financial condition and results of operations. 55. Any future issuance of our Equity Shares may dilute your shareholdings and sales of our Equity Shares may adversely affect the trading price of our Equity Shares. Any future equity issuances by us may lead to the dilution of investors’ shareholdings in our Company. In addition any sales of substantial amounts of our Equity Shares in the public market after the completion of the Issue or the perception that such sales could occur could adversely affect the market price of our Equity Shares and could impair the future ability of our Company to raise capital through offerings of our Equity Shares. We also cannot predict the effect if any that the sale of our Equity Shares or the availability of these Equity Shares for future sale will have on the market price of our Equity Shares. 56. Foreign investors are subject to foreign investment restrictions under Indian law which may adversely affect the market price of our Equity Shares. Under the foreign exchange regulations currently in force in India transfers of equity shares between non- residents and residents are permitted subject to certain exceptions if they comply with inter alia the pricing guidelines and reporting requirements specified by the RBI. If the transfer of equity shares is not in compliance with such pricing guidelines or reporting requirements or falls under any of the prescribed exceptions prior approval of the RBI will be required. Additionally shareholders who seek to convert the Indian Rupee proceeds from a sale of equity shares in India into foreign currency and repatriate any such foreign currency from India will require a no-objection/tax clearance certificate from the Indian income tax authorities. We cannot assure you that any required approval from the RBI or any other government agency can be obtained in a timely manner or on any particular terms or at all. Owing to possible delays in obtaining requisite approvals investors in our Equity Shares may be prevented from realising gains during periods of price increase or limiting their losses during periods of price decline. 57. You will not be able to immediately sell any of our Equity Shares you purchase in the Issue on an Indian Stock Exchange. Our Equity Shares will be listed on the Stock Exchanges. Pursuant to Indian regulations certain actions must be completed before the Equity Shares can be listed and trading may commence. Investor’ book entry or demat accounts with depository participants in India are expected to be credited within two working days of the date on which Allotment is approved by the designated stock exchange. Thereafter upon receipt of final listing and trading approval from the Stock Exchanges trading in the Equity Shares is expected to commence within six Working Days from the date of Bid/Issue closure. We cannot assure you that the Equity Shares will be credited to investors’ demat accounts or that trading in the Equity Shares will commence within the time periods specified above. 58. You may be subject to Indian taxes arising out of capital gains on the sale of our Equity Shares. Under current Indian tax laws unless specifically exempted capital gains arising from the sale of our Equity Shares are generally taxable in India. Any gain realised on the sale of listed equity shares on a stock exchange held for more than 12 months will not be subject to capital gains tax in India if Securities Transaction Tax “STT” has been paid on the transaction. STT will be levied on and collected by a domestic stock exchange on which the equity shares are sold. Any gain realised on the sale of equity shares held for more than 12 months which are sold other than on a recognised stock exchange and on which no STT has been paid to an Indian resident will be subject to long term capital gains tax in India. Further any gain realised on the sale of listed equity shares held

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42 for a period of 12 months or less which are sold other than on recognised stock exchanges and on which STT has been paid will be subject to short term capital gains tax in India. Capital gains arising from the sale of the equity shares will be exempt from taxation in India in cases where the exemption from taxation in India is provided under a treaty between India and the country of which the seller is resident. Generally Indian tax treaties do not limit India’s ability to impose tax on capital gains. As a result residents of other countries may be liable for tax in India as well as in their own jurisdiction on a gain upon the sale of our Equity Shares. 59. GoI will continue to control us post listing of our Equity Shares. Upon the completion of this Issue the GoI will hold approximately 101952000 Equity Shares or approximately 75 of our post-Issue paid up equity share capital. Consequently the President of India acting through the Ministry of Shipping will continue to control us and will have the power to elect and remove our directors and determine the outcome of most proposals for corporate action requiring approval of our Board or shareholders such as proposed five-year plans revenue budgets capital expenditure dividend policy transactions with other GoI controlled companies. Under the Companies Act this will continue to be a public sector undertaking which is owned and controlled by the President of India. This may affect the decision making process in certain business and strategic decisions taken by our Company going forward. 60. The interests of the GoI as our controlling shareholder may conflict with your interests as a shareholder. Under our Articles of Association the President of India by virtue of holding a majority of our Equity Share capital may issue directives with respect to the conduct of our business or our affairs for as long as we remain a government company as defined under the Companies Act. The interests of the President of India may be different from our interests or the interests of other shareholders. As a result the President of India may take actions with respect to our business and the businesses of our peers and competitors that may not be in our or our other shareholders’ best interests. The President of India could by exercising its powers of control delay or defer or initiate a change of control of our Company or a change in our capital structure delay or defer a merger consolidation or discourage a merger with another public sector undertaking. 61. Announcements by the GoI or the Kerala Government relating to increased wages for government and public sector employees will increase our expenses and may adversely affect our financial condition in the years of implementation. Department of Public Enterprises “DPE” only related to above has required government enterprises to implement salary increases for employees below board level executives as determined by the respective boards and management of the relevant government enterprises within a certain guideline set by the DPE. These governmental measures increase our labour costs and the next pay revision for non-unionised officers and employees was due w.e.f. January 1 2017 and a revision of the wage settlement agreement with unionised workmen w.e.f. April 1 2017. Although no further directives have been received from the GoI in relation to this and no wage negotiations have begun any announcements by the GoI relating to increased wages for government and public sector employees will increase our expenses and may adversely affect our operating results and financial condition. 62. Investors may not be able to enforce a judgment of a foreign court against our Company. Our Company is incorporated under the laws of India. Our Company’s Directors and Key Management Personnel are residents of India and our assets are located in India. As a result it may not be possible for investors to affect service of process upon our Company or such persons in jurisdictions outside India or to enforce against them judgments obtained from courts outside India. India has reciprocal recognition and enforcement of judgments in civil and commercial matters with only a limited number of jurisdictions which include the United Kingdom Singapore and Hong Kong. The United States has not been declared as a reciprocating territory for the purposes of the Code of Civil Procedure 1908 “Civil Code” and thus a judgment of a court outside India may be enforced in India only by a suit and not by proceedings in execution. In order to be enforceable a judgment from a jurisdiction with reciprocity must meet certain requirements of the Civil Code. The Civil Code only permits the enforcement of monetary decrees not being in the nature of any amounts payable in respect of taxes other charges fines or penalties and does not include arbitration awards. Therefore a final judgment for the payment of money rendered by any court in a non-reciprocating territory for civil liability whether or not predicated solely upon the general laws of the non-reciprocating territory would not be enforceable in India. Even if an investor obtained a judgment in such a jurisdiction against us our officers or directors it may be required to institute a new proceeding in India and obtain a decree from an Indian court. However the party in whose favour such final judgment is

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43 rendered may bring a fresh suit in a competent court in India based on a final judgment that has been obtained in a non-reciprocating territory within three years of obtaining such final judgment. It is unlikely that an Indian court would award damages on the same basis or to the same extent as was awarded in a final judgment rendered by a court in another jurisdiction if the Indian court believes that the amount of damages awarded was excessive or inconsistent with public policy in India. In addition any person seeking to enforce a foreign judgment in India is required to obtain prior approval of the RBI to repatriate any amount recovered pursuant to the execution of the judgment. 63. Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions. Indian legal principles related to corporate procedures directors’ fiduciary duties and liabilities and shareholders’ rights may differ from those that would apply to a company in another jurisdiction. Shareholders’ rights including in relation to class actions under Indian law may not be as extensive as shareholders’ rights under the laws of other countries or jurisdictions. Investors may have more difficulty in asserting their rights as shareholder in an Indian company than as shareholder of a corporation in another jurisdiction. 64. Our ability to raise foreign capital may be constrained by Indian law. As an Indian company we are subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit our financing sources for our projects and hence could constrain our ability to obtain financing on competitive terms and refinance existing indebtedness. In addition we cannot assure you that any required regulatory approvals for borrowing in foreign currencies will be granted to us without onerous conditions or at all. Limitations on foreign debt may have an adverse effect on our business growth financial condition cash flows and results of operations. 65. QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids in terms of quantity of Equity Shares or the Bid Amount at any stage after submitting a Bid. Pursuant to the SEBI Regulations QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids in terms of quantity of Equity Shares or the Bid Amount at any stage after submitting a Bid. Retail Individual Investors can revise their Bids during the Bid/Issue Period and withdraw their Bids until Bid/Issue Closing Date. While our Company is required to complete Allotment pursuant to the Issue within six Working Days from the Bid/Issue Closing Date events affecting the Bidders’ decision to invest in the Equity Shares including material adverse changes in international or national monetary policy financial political or economic conditions our business results of operation or financial condition may arise between the date of submission of the Bid and Allotment. Our Company may complete the Allotment of the Equity Shares even if such events occur and such events limit the Bidders’ ability to sell the Equity Shares Allotted pursuant to the Issue or cause the trading price of the Equity Shares to decline on listing. Prominent Notes • Public issue of 33984000 Equity Shares comprising fresh issue of 22656000 Equity Shares of face value of `10 each of our Company for cash at a price of ` ● per Equity Share less Retail Discount and Employee Discount as applicable and an Offer for Sale of 11328000 Equity Shares by the President of India. The Issue shall constitute 25.00 of the fully diluted post-Issue paid up Equity Share capital of our Company. • The Issue is being made through the Book Building Process wherein 50 of the Net Issue shall be available for allocation on a proportionate basis to QIBs. 5 of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIBs including Mutual Funds subject to valid Bids being received at or above the Issue Price. Not less than 15 of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35 of the Net Issue shall be available for allocation to Retail Individual Bidders subject to valid Bids being received at or above the Issue Price. • The net worth of our Company as at March 31 2017 was `20310.18 million. The net asset value per Equity Share of our Company as at March 31 2017 was `179.29. See “Financial Statements” on page 175. • The average cost of acquisition of Equity Shares by our Promoter is ` 10 per Equity Share. See “Capital Structure” on page 73.

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44 • For details of the related party transactions during the last five Fiscal Years pursuant to the requirements under Accounting Standard 18 “Related Party Disclosures” issued by the Institute of Chartered Accountants of India see “Restated Financial Statements – Note 46 of Annexure IV B – Restated Statement of Related Party Transactions” on page 266. • There has been no change in our Company’s name since incorporation. • There has been no financing arrangement whereby the Directors of our Company and their relatives have financed the purchase by any other person of securities of our Company other than in the normal course of business of the financing entity during the period of six months immediately preceding the date of filing of this Red Herring Prospectus. • Investors may contact any of the BRLMs who have submitted the due diligence certificate to SEBI for any complaints information or clarification pertaining to the Issue. For details regarding grievances in relation to the Issue see “General Information” on page 64.

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45 SECTION III: INTRODUCTION SUMMARY OF INDUSTRY Unless noted otherwise the information in this section has been obtained or derived from the “A study on Shipbuilding and Ship Repairing Industry” of March 2017 by CRISIL Research the “CRISIL Report” as well as other industry sources and government publications. All information contained in the CRISIL Report has been obtained by CRISIL from sources believed by it to be accurate and reliable. Although reasonable care has been taken by CRISIL to ensure that the information in the CRISIL Report is true such information is provided ‘as is’ without any warranty of any kind and CRISIL in particular makes no representation or warranty express or implied as to the accuracy timeliness or completeness of any such information. All information and estimates contained herein must be construed solely as statements of opinion and CRISIL shall not be liable for any losses incurred by users from any use of this publication or its contents. Neither our Company nor the BRLMs or any other person connected with the Issue has independently verified this information. Industry sources and publications generally state that the information contained therein has been obtained from sources believed to be reliable but their accuracy completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Industry sources and publications are also prepared based on information as of specific dates and may no longer be current or reflect current trends. Industry sources and publications may also base their information on estimates projections forecasts and assumptions that may prove to be incorrect. Accordingly investors should not place undue reliance on or base their investment decision on this information. Global Shipping Industry Seaborne Trade According to a 2016 UNCTAD report global seaborne trade increased by 2.1 to 10048 million tonnes in 2015. Dry bulk cargo comprised the largest share at 54. Developing economies accounted for the largest share of seaborne trade in volume terms at an estimated 60. Developing countries have become global manufacturing centres with growing demand for capital and consumer goods and are no longer viewed as only suppliers of raw materials. In terms of a regional comparison Asia was the largest loading and unloading region followed by the Americas Europe Oceania and Africa. As of January 2016 the global commercial fleet stood at 90917 vessels totalling 1.8 billion DWT. Dry bulk carriers comprised the largest share at 43.1 followed by the oil tanker segment with a share of approximately 27.9. Fleet The respective shares of oil tankers and general cargo vessels in the global fleet have declined over the years while those of dry bulk carriers and container ships have increased. As of January 2016 the dry bulk carriers with a 43 contribution in terms of gross registered tonnage GRT was the largest vessel category in the global fleet. The share of oil tankers which made up for 50 of the global fleet in 1980 has declined to 28 in 2016. Over this period the share of container vessels’ increased from 2 to 14 following China’s manufacturing-led growth as well as the shipping industry’s strategy to reduce costs using economies of scale. The fall in the oil tanker share was due to a change in the pattern of trade and demand primarily due to a decline in the refining capacity in Europe and a corresponding increase in Asia and the Middle East.

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46 Indian Shipping Industry Fleet The Indian commercial fleet saw an addition of 42 vessels with approximately 0.2 million GRT in 2015. In 2015 India’s total fleet strength was 1246 vessels with a GRT of 10.51 million. The majority of the Indian fleet is deployed for costal trade with approximately 70 of the registered vessels used for coastal trade while the remaining 373 vessels are engaged in overseas trade. However in tonnage terms the fleet deployed for coastal trade is approximately 1.5 million GRT while that for overseas trade is approximately 9 million GRT. In terms of GRT more than half of the fleet’s tonnage is accounted for by oil tankers. Over the past decade oil tankers have continued to account for a majority share. According to the Indian Ministry of Shipping the total overseas cargo handled at Indian ports was approximately 879.6 million tonnes in 2014-15. The vessels carrying Indian flags contributed approximately 7.5 of overseas cargo tonnage. Even as the total overseas cargo handled at Indian ports increased the contribution of vessels carrying Indian flags in terms of tonnage declined in absolute terms as well as in percentage terms. Meanwhile ships above the age of 20 years comprised over 40 of the Indian fleet as ship owners preferred to maintain the existing fleet due to uncertainty in global trade. However approximately 20 of the ships in the Indian fleet are below the age of five years indicating that new vessels have been added during the recent past.

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47 SUMMARY OF BUSINESS Overview We are the largest public sector shipyard in India in terms of dock capacity as of March 31 2015 according to the CRISIL Report. We cater to clients engaged in the defence sector in India and clients engaged in the commercial sector worldwide. In addition to shipbuilding and ship repair we also offer marine engineering training. As of May 31 2017 we have two docks – dock number one primarily used for ship repair “Ship Repair Dock” and dock number two primarily used for shipbuilding “Shipbuilding Dock”. Our Ship Repair Dock is one of the largest in India and enables us to accommodate vessels with a maximum capacity of 125000 DWT Source: CRISIL Report. Our Shipbuilding Dock can accommodate vessels with a maximum capacity of 110000 DWT Source: CRISIL Report. We are in the process of constructing a new dock a ‘stepped’ dry dock “Dry Dock”. This stepped dock will enable longer vessels to fill the length of the dock and wider shorter vessels and rigs to be built or repaired at the wider part. We are also in the process of setting up an International Ship Repair Facility “ISRF” which includes setting up a shiplift and transfer system. In the last two decades we have built and delivered vessels across broad classifications including bulk carriers tankers Platform Supply Vessels “PSVs” Anchor Handling Tug Supply vessels “AHTSs” launch barges tugs passenger vessels and Fast Patrol Vessels “FPVs”. We are currently building Indias first Indigenous Aircraft Carrier “IAC” for the Indian Navy. We have also grown our ship repair operations and are the only commercial shipyard to have undertaken repair work of Indian Navys aircraft carriers the INS Viraat and INS Vikramaditya. Our diversified offerings to the Indian clients engaged in the defence sector and to clients engaged in the commercial sector worldwide have allowed us to successfully adapt to the cyclical fluctuations of our industry. Over the last five Fiscals the break-down of our average operating revenues is set out below: Activity Clients engaged in the defence sector Commercial clients Shipbuilding 69.44 12.68 Ship repair 10.42 6.94 Other operating revenue 0.48 0.04 Our current shipbuilding order book includes Phase-II of the IAC for the Indian Navy two 500 passenger cum 150 ton cargo vessels and two 1200 passenger cum 1000 ton cargo vessels for the Andaman and Nicobar Administration “AN Administration” and a vessel for one of the Government of Indias “GoI” projects. Our current ship repair order book includes vessels from our key clients. We recently delivered two Roll-On/Roll-Off “Ro-Ro” vessels to the Kochi Municipal Corporation. We are a wholly-owned GoI company incorporated on March 29 1972 and were conferred the Miniratna status in 2008 by the Department of Public Enterprises GoI. Our shipyard is strategically located along the west coast of India midway on the main sea route connecting Europe West Asia and the Pacific Rim a busy international maritime route. In addition our shipyard is located close to the Kochi port as well as to offshore oil fields on the western coast of India and relatively close to the Middle East. We commenced our operations in 1975 and have over four decades of experience in shipbuilding. We have in the past delivered two of India’s largest double hull oil tankers each of 92000 DWT Source: CRISIL Report to the Shipping Corporation of India “SCI”. Over the years we have successfully responded to fluctuations in the shipbuilding requirements of the markets we operate in and have evolved from building bulk carriers to building smaller and more technically sophisticated vessels such as PSVs and AHTSs. We have worked with several leading technology firms in our industry including Rolls Royce Marine Norway and GTT Gaztransport Technigaz SA “GTT”. We believe this has added to our credibility in the international markets. Our key shipbuilding clients include the Indian Navy the Indian Coast Guard and the SCI. We have also exported 45 ships to various commercial clients outside India such as NPCC the Clipper Group Bahamas and Vroon Offshore Netherlands and SIGBA AS Norway.

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48 We began our ship repair operations in 1978 and have undertaken repairs of various types of vessels including upgradation of ships of the oil exploration industry as well as periodical maintenance repairs and life extension of ships. Our shipyard has over the years developed capabilities to handle various repair jobs. We have entered into MoUs with various clients including with the Lakshadweep Development Corporation Limited “LDCL” Directorate General of Lighthouses and Lightships “DGLL” and the Dredging Corporation of India “DCI” giving us the opportunity to undertake ship repair work for these organisations on a bulk volume basis. Our key ship repair clients include the Indian Navy the Indian Coast Guard SCI the Oil Natural Gas Corporation “ONGC” and DCI. We have also partnered with Techcross Inc. for technical support engineering service support and sharing of information in relation to the Ballast Water Treatment System “BWTS” products. Our Marine Engineering Training Institute at Kochi began in 1993 where we conduct marine engineering training programs. These programs are approved by Director General of Shipping “DGS” GoI. We also operate a material testing laboratory which was established in 1972. Our material testing laboratory has been accredited by the National Accreditation Board for Testing and Calibration Laboratories “NABL” and is one of the leading laboratories in Kerala in the field of chemical mechanical and non-destructive testing of various materials including metals welds and alloys. We have several certifications including the ISO 9001:2008 – Quality Management System ISO 14001:2004 - Environmental Management System and OHSAS 18001:2007 – Occupational Health and Safety Management System. Our listed debentures have been rated AA+ by since 2014 by various agencies including India Ratings and Research Private Limited “IRRPL” and CARE. We were also adjudged the “Shipbuilding Company of the Year” in 2015 by the Gateway Awards. For further details of awards we have received see “History and Certain Corporate Matters – Awards and Recognition” on page 147. Our Company has posted profits continuously in the last five Fiscals. Our total income and PAT before other comprehensive income has increased from `16604.52 million and `692.82 million respectively in Fiscal 2015 to `22085.01 million and `3121.82 million respectively in Fiscal 2017 at a CAGR of 15.33 and 112.27 respectively. Competitive Strengths We believe we benefit from a number of strengths that together differentiate us from our competitors: One of Indias leading public-sector shipyards catering to both commercial clients as well as clients engaged in the defence sector with a multitude of offerings for a broad range of vessels across life cycles We are the largest public sector shipyard in India in terms of dock capacity as of March 31 2015 according to the CRISIL Report. We have catered to both commercial clients and clients engaged in the defence sector evidenced by our revenues from shipbuilding and ship repair operations in recent Fiscals as set our below: in ` million Activity Fiscal 2015 Fiscal 2016 Fiscal 2017 Shipbuilding Clients engaged in the defence sector 12308.88 15028.76 13625.83 Commercial Clients 1331.69 1179.35 1510.90 Total 13640.57 16208.11 15136.73 Ship repair Clients engaged in the defence sector 537.64 2818.10 3788.96 Commercial Clients 1440.30 822.34 1647.70 Total 1977.94 3640.44 5436.66 Grand Total 15618.51 19848.55 20573.39 Shipbuilding for clients engaged in the defence sector is complex and time-consuming whereas commercial shipbuilding while relatively less complex is subject to business cycles. Catering to both commercial clients and clients engaged in the defence sector has helped us to address these issues relatively better. We are currently building Indias first IAC for the Indian Navy and have recently delivered the last FPV in a series of 20 to the Indian Coast Guard prior to the delivery date. We have also built two of India’s largest double hull oil tankers each of 92000 DWT Source: CRISIL Report for SCI and recently delivered a large deck cargo cum jacket launch barge for NPCC.

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49 In addition to shipbuilding we also undertake ship repair for the Indian Navy and repaired about 15 Indian Naval Ships on an average in the Fiscals 2014 2015 and 2016 respectively where our scope of work varied from routine to complex repairs. We also recently completed refits of INS Aditya INS Sukanya INS Shardul INS Viraat and INS Vikramaditya for the Indian Navy. We have also undertaken major revamping and refurbishing of oil rigs involving steel renewal up-gradation of drilling cementing mechanical HVAC and piping systems in almost all the major offshore vessels and rigs of ONGC. Our top customers include the Indian Navy and the Indian Coast Guard. These top two customers together accounted for 82.43 89.92 and 84.57 of our revenue from operations in Fiscals 2015 2016 and 2017 respectively. The Indian Navy has praised us for our high production standards quality construction and timely delivery. Source: https://www.indiannavy.nic.in/content/vikrant-navys-first-indigenous-aircraft-carrier- launched Our Marine Engineering Training Institute began in 1993 and we facilitate the DGS approved GME residential course for mechanical and naval architect engineering graduates. We also have a NABL accredited material testing laboratory. We believe that our diverse experience and multiple offerings put us in a good position to benefit from the recent ‘Make in India’ initiative introduced by the GoI pursuant to which a steady pipeline of future orders and opportunities is expected from Indian clients engaged in the defence sector as well as the Indian PSUs. Modern facilities and infrastructure and integrated capabilities to deliver quality products and services We believe that the state of the art infrastructure and facilities available at our shipyard combined with our vast expertise give us a significant edge over our domestic peers. While our proposed Dry Dock project will be set up on our existing shipyard premises the ISRF will be set up on land near our shipyard leased from the Cochin Port Trust “CoPT”. We believe that our modern facilities and infrastructure and integrated capabilities have helped us built a strong reputation for quality and timely delivery over decades of doing business with both our Indian and international clients. Our integrated shipbuilding infrastructure at the shipyard allows us to undertake structural machinery and electrical design and to prepare detailed production engineering drawings. During the shipbuilding design process 3D hull piping and electrical models are created ensuring optimum error free ship designs. Inputs for various NC equipment are also generated on these systems. Quay III which is used for shipbuilding has a length of 630m and has two LLTT cranes with capacities of 40T and 20T respectively. Our ship repair facilities include our Ship Repair Dockmeasuring 270m x 45m x 12m that enables us to undertake the repair of vessels with a maximum capacity of 125000 DWT. Our shipyard currently has one of the largest ship repair capacities among the Indian public sector shipyards Source: CRISIL Report. Additionally we have two quays Quay I with a length of 290m and a 15T cranage and Quay II with a length of 208m and a 10T cranage. Both quays have LLTT cranes. Order book with a strong customer base of reputable ship owners and marquee clients Shipbuilding We have built a variety of vessels ranging from bulk carriers tankers and passengers ships to offshore support vessels and port crafts. In the last five years we have built and delivered over 35 vessels to clients worldwide. We have built and repaired vessels and provided other offshore project services to some of the biggest corporates both in India and globally. Our Indian clients include the Indian Navy the Indian Coast Guard SCI ONGC DGLL and DCI. Our key foreign clients include NPCC the Clipper Group Vroon and SIGBA AS. We are currently building Indias first IAC for the Indian Navy. We are also currently constructing two 500 passenger cum 150 ton cargo vessels and two 1200 passenger cum1000 ton cargo vessels for the AN Administration and a vessel for one of GoIs projects. Ship repair We commenced ship repair operations in 1978 and have over the years developed adequate capabilities to handle

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50 complex and sophisticated repair jobs. We have also entered into special MoU arrangements to enhance our ship repair business. For example we repaired LDCL and DCI vessels under our respective MoUs with them. In Fiscal 2016 major repair works for commercial clients included work on the GTV Samudra Sarvekshak and the WSV Samudhra Nidhi for SCI and on the Dredge VIII and Dredge XIX for the DCI and MV Kavaratti for LDCL. In the last Fiscal we believe our docks were running at full capacity due to which we had to turn away certain new requests. Competitive cost structure and efficient operations We believe that we offer our clients competitive cost structures for their shipbuilding and ship repair needs. We have implemented measures to help ensure that our operations run efficiently. We seek to achieve optimum utilisation of our full capacity through effective production planning and scheduling and have delivered or are in the process of delivering all the vessels we have contracted for including in certain cases delivery ahead of schedule such as some of the FPVs for the Indian Coast Guard and deck cargo cum launch barge for NPCC. In some cases where we were able to deliver the vessels ahead of schedule to our customers we were able to secure additional bonuses over and above the cost of the ship including from the Clipper Group as well as repeat orders from satisfied clients. We are committed to the timely delivery of vessels and place great emphasis on the quality of our construction. This helps to minimise the need to undertake rectification works for defects or non- compliance with our customers’ specifications and reduces our exposure to liquidated and other damages under our shipbuilding contracts. We believe we have achieved further cost savings through our cost management activities. We operate an efficient system of sub-contracting which aids multiple repair projects and production planning. For example rather than maintaining a large number of full time employees we employ a significant number of contract labour workers enabling us to keep the size of our workforce flexible based on our requirements. As of May 31 2017 we had 1824 full time employees two employees on deputation from other government organisations and 612 contract employees. As of May 31 2017 we also employed about 3178 sub-contract workers on a daily basis.We also seek to manage the cost of the engines and other equipment used in our vessels by obtaining quotes from our approved vendors and the cost of our raw materials and components through the selection of suppliers and subcontractors based on several criteria including the pricing and the quality of their products and reliability of their services. Generally we avoid buying from intermediaries and prefer to deal directly with manufacturers so as to form long-term relationships with these manufacturers and wherever possible obtain better pricing terms. Our shipyard is strategically located along the west coast of India on the main sea route connecting the Persian Gulf to Asia and is approximately 610 nautical miles from Mumbai a busy international maritime route that is conveniently located for ships travelling on this route in need of repair. In addition our shipyard is located close to the offshore oil fields on the western coast of India and relatively close to the Middle East which we believe will be an advantage in tapping the offshore rig market. Due to our shipyards proximity to the Kochi port we are well-positioned to benefit from the port’s infrastructure facilities such as its approach channel and navigation facilities. Led by a dedicated board long serving and experienced senior management backed by a strong pool of experienced professionals We are one of Indias leading shipyards making us an employer of choice and providing a better incentive to our management to continue to pursue excellence in our businesses. Each of our key management staff has on average more than 25 years of experience in the industry and has been with our Company for an average of two decades. Some of our senior management have grown within our organisation from trainee positions to head their respective departments. We believe that our organisational culture and experienced board and senior management have been instrumental in helping us achieve a low cost structure continuous profit margins efficient operations short delivery schedules relatively lower attrition and fewer employee disputes. We have a large pool of experienced naval architects engineers and draftsmen. We believe that our employees are instrumental to our success including for the quality of our products and services and our ability to operate in a cost-efficient manner. We focus on the overall development of our employees through the implementation of training programmes to enhance employee loyalty reduce attrition rates improve skills and service standards and increase productivity. For example we provide regular in-house training for our employees such as skill development programs for various specialised tasks. We also have a MoU with Cochin University of Science and Technology “CUSAT” that provides two seats for their M. Tech degree course in marine engineering annually

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51 for executives or officers sponsored by us. Continuous profits leading to robust financial performance We are a profitable and dividend paying shipyard. Our Company has posted profits continuously in the last five Fiscals. Our total income and PAT before other comprehensive income have increased from `16604.52 million and `692.82 million respectively in Fiscal 2015 to `22085.01 million and `3121.82 million respectively in Fiscal 2017 at a CAGR of 15.33 and 112.27 respectively. Additionally we have continuously delivered positive RoE margins over the last five Fiscals. We paid dividends to our shareholders at rates of 15 15 15 and 76.50 in Fiscals 2013 2014 2015 and 2016 respectively and declared dividend of 89.70 in Fiscal 2017. Our strong liquidity position in terms of total cash and bank balance of 20032.06 million as of June 30 2017 enables us to continue to stay invested in our business and to consistently pay our suppliers on time and benefit from supplier goodwill. The strength of our balance sheet in terms of liquidity and indebtedness provides us with a number of competitive advantages such as lower finance costs and better financial terms for our future borrowing needs. As of June 30 2017 we had fund based indebtedness in the form of tax free infrastructure bonds amounting to `1230.00 million excluding interest due on these bonds. Apart from this our Company had availed of non-fund based facilities of `2152.92 million USD 2.04 million and EUR 4.69 million. Our listed debentures has been rated AA+ since 2014 by various agencies including IRRPL and CARE. Our Strategies Our objective is to enhance our market position by expanding our capabilities capitalising on opportunities both in domestic and international markets in our industry and to enhance our competitiveness. Our business strategies are: Expand our capabilities through our proposed Dry Dock and International Ship Repair Facility We are in the process of developing our Dry Dock and ISRF. Once developed we believe that these new facilities will expand our existing capabilities significantly and help us build and repair a broader variety of vessels including new generation aircraft carriers and oil rigs which are expected to be key growth drivers in the short to near long term. The process of setting up an ISRF will allow us to undertake repair of a broader range of vessels. Dry Dock In addition to our existing dock we are in the process of building a Dry Dock at a total estimated cost of `17989.91 million. The length of the Dry Dock will be greater than the length of our existing docks. The larger size of our proposed Dry Dock will enable us to build and repair ships of higher capacity and large naval vessels such as aircraft carriers. Further the greater width of our Dry Dock will also enable us to undertake building and repair of rigs within our shipyard. In relation to our proposed Dry Dock HaskoningDHV India Private Ltd has prepared a Detailed Project Report dated October 5 2016. We have also completed the Environmental Impact Assessment study and have obtained environmental clearance from the MoEFCC which is subject to certain conditions. We have also received the National Wildlife Board’s clearance on April 25 2017. For more details see “Risk Factors – The environmental clearances for our proposed Dry Dock and ISRF project is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others for ISRF project the prior clearance of the Standing Committee of the National Board for Wildlife.” on page 22 and see “Governmental and Other Approvals” on page 382. ISRF We entered into an agreement for development and operation of an international ship repair facility dated December 24 2012 with Cochin Port Trust under which we are in process of setting up an ISRF which inter-alia contains provisions for liquidated damages indemnity and termination. For the ISRF we have leased approximately 8.12 hectares of land and 15 hectares of water body from CoPT including their existing ship-repair facility for a period of 30 years pursuant to the lease deed dated April 12 2013. Since then we have begun using the existing dry dock and allied facilities in the leased area for carrying out ship repair in a limited way.

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52 The ISRF will comprise of a ship-lift transfer system and allied facilities to be built at an estimated investment of ` 9694.1 million. We have appointed a consortium of Inros Lackner SE and Tata Consulting Engineers Limited as project consultants. A detailed project report was prepared by the project consultants and received the GoI approval on May 19 2016. We have also obtained the environmental clearance for the project from the MoEFCC. The environment clearance is subject to certain conditions including obtaining prior clearance of the standing committee of the National Wildlife Board. For more details see “Risk Factors – The environmental clearances for our proposed Dry Dock and ISRF project is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others for ISRF project the prior clearance of the Standing Committee of the National Board for Wildlife.” on page 22 and see “Governmental and Other Approvals” on page 382. Build a strong order book by bidding vigorously for projects to be awarded by the Indian PSUs and defence sector pursuant to ‘Make in India’ initiative We believe we are well-positioned to benefit from the recent ‘Make in India’ initiative pursuant to which the GoI is keen to encourage defence manufacturing in India. Policy initiatives such as granting infrastructure status to shipbuilding granting right of first refusal to Indian shipyards for shipbuilding and ship repair work of the Indian PSUs and support through the new financial assistance scheme are expected to provide a steady pipeline of orders and become key drivers of growth. Our proposed Dry Dock and ISRF will increase our ability to build repair and service a broader range of vessels including vessels of larger capacities. As we are one of the very few commercial shipyards to have won defence orders from the Indian Navy and the Indian Coast Guard in the past and have been able to deliver successfully on these mandates we believe that we are well positioned to take advantage of future orders placed by the Indian Navy and other Indian PSUs. We believe that we have an advantage over other defence PSUs as they currently do not have the capacity to construct certain types of ships especially those of bigger dimensions such as the IAC. The GoI also plans to promote inland water transportation and coastal shipping. We believe that this will present several opportunities including building high speed ferry crafts dredgers ropax vessels and large capacity passenger ships. This will create demand for shipbuilding and ship repair services which we believe we are well equipped to deliver. For example we recently bid in a tender floated by Hooghly Dock Port Engineers Ltd “HDPEL” a GoI enterprise for the upgradation operation maintenance and management of two of its shipyards at Salkia and Nazirgunge located at Howrah West Bengal successfully. The Ministry of Shipping GoI approved the formation of a joint venture between our Company and HDPEL on March 29 2017. Our Board accorded its approval for incorporating a joint venture company with HDPEL and investing an amount of `220 million as the initial capital in the joint venture company on April 27 2017. However the agreements in relation to this joint venture are yet to be executed. Continue to enhance our construction quality and delivery time and enhance our price competitiveness in order to increase our market share We believe that our emphasis on quality of construction and timely delivery has been a key factor in our ability to attract new customers and to retain our existing customers. For example we recently delivered seven FPVs for the Indian Coast Guard ahead of the contractual delivery schedule. The final FPV in a series of 20 was delivered on December 30 2016 ahead of the scheduled delivery date of March 2017. We believe that we are achieving the highest standards in India across in many areas of shipbuilding such as plate preparation and cutting processes block fabrication hull erection outfitting design and engineering sourcing procurement and project management. Furthermore with the rising production cost globally we believe there will be greater demand for offshore support vessels and other commercial vessels that are built by shipyards with a competitive cost structure and which can offer vessels at competitive prices. With our in-house fabrication workshops we intend to continue to develop in-house capabilities in various manufacturing processes thereby enabling us to lower our costs of production and maintain our price competitiveness. We also believe our operations will benefit from our business partnerships with firms like GTT. We believe that continuing to enhance our production planning and sequencing processes and inventory management will also help us to maintain our cost competitiveness and further reduce the construction period of ships.

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53 Strengthen our market leadership by continuously adding upgraded and new vessel models to our offerings and expanding customer services Leveraging our experience in building other vessels we plan to expand our product offerings. We believe that we are strong contenders for building the next aircraft carrier for the Indian Navy due to our unique experience in constructing such vessels. With this experience we will also be able to bid for other defence projects. Furthermore we believe that we are well-positioned to pitch for opportunities in the rig building and repair business owing to our proximity to offshore locations. With the construction of our proposed Dry Dock and ISRF we will also be able to build and repair new vessel models. We are well-positioned to follow the latest domestic and international standards for our new offerings. We also plan to expand our operations to cover the entire life cycle of a broader range of vessels. Continue to leverage our market position and our relationships with customers suppliers and other business partners to support our growth and improve our competitiveness We plan to use our leading position in the Indian shipbuilding and ship repair industry to develop new relationships with banks suppliers universities and colleges technical schools classification societies ship design institutes as well as companies in upstream and downstream oil and offshore services industries and to create a favourable environment for our sustainable development. We plan to further strengthen our long-term cooperation with well-known universities such as CUSAT to jointly provide training carry out research and development and develop a potential workforce to support our future growth. We have also set up a section for the preparation of basic designs to enhance our design capabilities and to cater to future design requirements. We believe that these initiatives will also help us in attracting the best talent to Kochi by creating a network of shipbuilding and ship repair experts and helping Kochi to become as an important center for shipping and related businesses.

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54 SUMMARY FINANCIAL INFORMATION The following tables set forth the summary financial information derived from the Restated Financial Statements as of and for the years ended March 31 2017 2016 2015 2014 and 2013. The financial statements referred to above are presented under “Financial Statements” beginning on page 175. The summary financial information presented below should be read in conjunction with these financial statements the notes thereto and “Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages 175 and 334 respectively. RESTATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES In ` Million Particulars As at 31 st Mar 2017 As at 31 st Mar 2016 As at 31 st Mar 2015 Proforma ASSETS Non-current assets a Property Plant and Equipment 3028.53 2964.39 2894.37 b Capital work-in-progress 539.23 241.72 127.79 c Intangible assets 677.59 737.80 806.60 d Financial Assets i Investments 0.92 0.92 1.92 ii Trade receivables - 321.35 295.98 iii Loans 14.54 15.24 13.98 iv Other Financial assets - 1655.30 - e Income tax assets net 360.13 266.64 250.13 f Deferred tax assets net 243.34 322.09 236.72 g Other non-current assets 245.79 98.42 95.79 5110.07 6623.87 4723.28 Current assets a Inventories 1864.70 2316.91 3033.84 b Financial Assets i Trade receivables 3069.92 4540.98 5825.37 ii Cash and cash equivalents 6759.81 5114.71 4565.97 iii Bank balances other than ii above 13153.10 13089.42 9628.50 iv Loans 4.67 4.03 4.35 v Other Financial assets 2326.92 1192.38 324.35 c Current Tax Assets Net 169.47 - - d Other current assets 705.71 606.31 807.19 28054.30 26864.74 24189.57 Total Assets 33164.37 33488.61 28912.85 EQUITY AND LIABILITIES Equity : a Equity Share capital 1132.80 1132.80 1132.80 b Other Equity 19177.38 17109.24 14406.49 20310.18 18242.04 15539.29 Liabilities : Non-current liabilities a Financial Liabilities i Borrowings 1230.00 1230.00 1230.00 ii Other financial liabilities 26.12 26.12 26.12 b Provisions 214.16 189.65 193.22 1470.28 1445.77 1449.34 Current liabilities a Financial Liabilities i Trade payables 1613.16 2098.77 1709.84 ii Other financial liabilities 1019.68 1644.42 1209.63 b Other current liabilities 6646.19 7723.00 6472.46 c Provisions 2104.88 2150.71 2282.13

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55 Particulars As at 31 st Mar 2017 As at 31 st Mar 2016 As at 31 st Mar 2015 Proforma d Current Tax Liabilities Net - 183.90 250.16 11383.91 13800.80 11924.22 Total Equity and Liabilities 33164.37 33488.61 28912.85 RESTATED SUMMARY STATEMENT OF PROFIT AND LOSS In ` Million Particulars For the year ended 31 st Mar 2017 For the year ended 31 st Mar 2016 For the year ended 31 st Mar 2015 Proforma I Income Revenue from operations 20594.88 19900.07 15832.61 Other income 1490.13 1068.74 771.91 Total Income 22085.01 20968.81 16604.52 II Expenses: Cost of materials consumed 10087.26 10543.22 10008.08 Changes in inventories of work-in-progress 139.55 164.41 192.25 Sub contract and other direct expenses 3193.67 1916.65 1597.83 Employee benefits expense 2166.65 2090.75 2128.46 Finance costs 105.35 119.40 183.22 Depreciation and amortisation expense 385.11 371.93 376.98 Other expenses 1344.01 1425.42 1129.74 Provision for anticipated losses and expenditure 140.80 169.33 268.02 Total expenses 17283.30 16472.29 15500.08 III Profit before tax 4801.71 4496.52 1104.44 IV Tax expense: 1 Current tax 1601.14 1664.37 485.28 2 Deferred tax 78.75 85.37 73.66 V Profit for the year 3121.82 2917.52 692.82 VI Other comprehensive income A Items that will be reclassified to profit or loss i Effective portion of gains/losses on cash flow hedging instruments - 3.55 22.29 ii Income tax relating to items that will be reclassified to profit or loss 1.23 7.58 B Items that will not be reclassified to profit or loss i Re-measurements of post employment benefit obligations 16.30 17.67 29.05 ii Changes in fair value of FVTOCI equity instruments - 1.00 iii Income tax relating to items that will not be reclassified to profit or loss 5.64 6.12 9.87 Other comprehensive income for the year 10.66 10.23 4.47 VII Total Comprehensive Income for the year 3111.16 2907.29 688.35 VIII Earnings per equity share of Rs 10 each: 1 Basic Rs 27.56 25.75 6.12 2 Diluted Rs 27.56 25.75 6.12

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56 RESTATED SUMMARY STATEMENT OF CHANGES IN EQUITY A. Equity Share Capital In ` Million As at 1 st April 2014 Changes in equity share capital during the year As at 31 st Mar 2015 1132.80 0.00 1132.80 As at 1 st April 2015 Changes in equity share capital during the year As at 31 st Mar 2016 1132.80 0.00 1132.80 As at 1 st April 2016 Changes in equity share capital during the year As at 31 st Mar 2017 1132.80 0.00 1132.80 B. Other Equity In ` Million Reserves and Surplus Capital Redemption reserve Debenture redemption reserve FVTO CI - Equity instru ments Total Capital Reserve Securities Premium Reserve General Reserve Retained Earnings Balance as at 1 st Apr 2014 26.36 0.12 514.74 11999.53 1191.42 8.26 - 13740.43 Changes in accounting policy or prior period errors Restated balance at the beginning of the reporting period 26.36 0.12 514.74 11999.53 1191.42 8.26 - 13740.43 Profit for the year 692.82 692.82 Other comprehensiv e income for the year 4.47 4.47 Total comprehensiv e income for the year 688.35 688.35 Hedge Reserve 22.29 22.29 Dividends including taxes - - Transfer from retained earnings 117.53 146.36 28.83 - Amortisation of premium - - Balance at the end of the reporting period Proforma 26.36 0.12 632.27 12519.23 1191.42 37.09 - 14406.49

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57 Reserves and Surplus Capital Redemption reserve Debenture redemptio n reserve FVTOCI - Equity instruments Total Capital Reserve Securities Premium Reserve General Reserve Retained Earnings Balance as at 1st Apr 2015 26.36 0.12 632.27 12519.23 1191.42 37.09 - 14406.49 Changes in accounting policy or prior period errors - Restated balance at the beginning of the reporting period 26.36 0.12 632.27 12519.23 1191.42 37.09 - 14406.49 Profit for the year 2917.52 2917.52 Other comprehensiv e income for the year 9.23 1.00 10.23 Total comprehensiv e income for the year 2908.29 1.00 2907.29 Dividends including taxes 204.51 204.51 Transfer from retained earnings 28.83 28.83 - Amortisation of premium 0.03 0.03 Balance at the end of the reporting period 26.36 0.09 632.27 15194.18 1191.42 65.92 1.00 17109.24 Balance as at 1st Apr 2016 26.36 0.09 632.27 15194.18 1191.42 65.92 1.00 17109.24 Changes in accounting policy or prior period errors - Restated balance at the beginning of the reporting period 26.36 0.09 632.27 15194.18 1191.42 65.92 1.00 17109.24 Profit for the year 3121.82 3121.82 Other comprehensiv e income for the year 10.66 10.66 Total comprehensiv e income for the year 3111.16 - 3111.16 Dividends including taxes 1043.01 1043.01

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58 Reserves and Surplus Capital Redemption reserve Debenture redemptio n reserve FVTOCI - Equity instruments Total Capital Reserve Securities Premium Reserve General Reserve Retained Earnings Transfer from retained earnings 28.83 28.83 - Amortisation of premium 0.01 0.01 Balance at the end of the reporting period 26.36 0.08 632.27 17233.50 1191.42 94.75 1.00 19177.38 RESTATED SUMMARY STATEMENT OF CASH FLOWS In ` Million Particulars For the Year Ended 31st Mar 2017 For the Year Ended 31st Mar 2016 For the Year Ended 31st Mar 2015 Proforma A. Cash flow from Operating Activites Net profit before tax 4801.71 4496.52 1104.44 Adjustments for : Depreciation and amortisation 358.43 344.98 346.96 Value of surrendered land written off 0.00 0.56 0.00 Interest expense 105.35 109.70 172.79 Interest income 1308.55 993.61 535.49 Rental income 5.54 10.01 32.81 Dividend income 19.90 0.05 0.11 Loss on sale of fixed assets 41.48 0.63 0.77 Profit on sale of fixed assets 0.66 0.17 0.00 Profit on investments 46.10 0.00 0.00 Loss on derivative contracts Net 22.28 6.97 53.40 Unrealised loss/gain on derivative contracts Net 3.87 0.13 3.39 Exchange difference from FE transactions 22.72 2.28 73.44 Expenses on Initial Public Offer 18.21 0.00 0.00 Effective loss/gain of cash flow hedges 3.55 0.00 0.00 0.00 0.00 Operating cash flow before working capital changes 3906.85 3953.37 926.32 Adjustments for working capital changes: Increase / decrease in inventories 452.21 716.93 925.35 Increase / decrease in trade and other receivables 1622.33 4465.71 4589.24 Increase / decrease in trade and other payables 2358.28 1530.31 941.80 Cash generated from operation before Income Tax 3623.11 1734.90 7382.71 Income tax paid 1500.30 1334.18 748.54 Net cash generated from Operating Activities A 2122.81 400.72 6634.17 B. Cashflow from Investing Activities Purchase of assets 404.27 347.77 347.73 Capital Work In Progress 297.52 113.92 52.14 Investment in Mutual Funds 11378.50 0.00 0.00 Redemption of Mutual Funds 11378.50 0.00 0.00 Sale or withdrawal of fixed assets 1.06 0.29 0.00 Interest received 1276.69 918.33 522.30 Rent received 5.54 10.01 32.81 Dividend income 19.90 0.00 0.00 Profit on investments 46.10 0.00 0.00

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59 Particulars For the Year Ended 31st Mar 2017 For the Year Ended 31st Mar 2016 For the Year Ended 31st Mar 2015 Proforma Net cash from investing operation B 647.50 466.94 155.24 C. Cashflow from Financing Activities Issue of Tax free Bonds 0.00 0.00 0.00 Premium on issue of Tax free Bonds 0.00 0.00 0.00 Short term borrowings 0.00 0.00 2109.18 Loss/profit on derivative contracts Net 22.28 6.97 53.40 Loss on exchange difference from FE transactions 22.72 2.28 73.44 Redemption of Preference Shares 0.00 0.00 0.00 Dividend paid 866.59 169.92 169.92 Dividend tax paid 176.42 34.59 28.88 Interest paid 105.37 109.72 172.79 Expenses on Initial Public Offer 21.83 Net cash from financing activities C 1125.21 318.92 2353.93 D. Net Increase in Cash Cash Equivalent A+B+C 1645.10 548.74 4435.48 Cash and cash equivalent at the beginning of the year 5114.71 4565.97 130.49 Cash and cash equivalent at the end of the year 6759.81 5114.71 4565.97 Net cash increase/ decrease 1645.10 548.74 4435.48 RESTATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES In ` Million Particulars As at 31st Mar 2014 As at 31st Mar 2013 I. EQUITY AND LIABILITIES 1 Shareholders’ funds Share capital 1132.80 1132.80 Reserves and surplus 13762.72 11119.16 2 Non-current liabilities Long term borrowings 1230.00 0.00 Other long term liabilities 56.12 51.30 Long term provisions 179.36 197.43 3 Current liabilities Short term borrowings 2109.18 0.00 Trade payables : 1716.11 1400.30 Other current liabilities 6064.88 6840.10 Short-term provisions 3620.59 3264.43 Total 29871.76 24005.52 II. ASSETS 1 Non-current assets Fixed assets iTangible assets 2972.58 2403.56 ii Intangible assets 728.38 1.26 iii Capital work in progress 75.65 1380.09 Non-current investments 1.92 1.92 Deferred tax asset Net 163.06 162.60 Long-term loans and advances 139.34 69.42 Other non-current assets 676.52 618.84 2 Current assets Inventories 3959.19 3552.60 Trade receivables 12028.15 6839.08 Cash and bank balances 5564.31 7039.65 Short-term loans and advances 1919.64 633.90 Other current assets 1643.02 1302.60

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60 Particulars As at 31st Mar 2014 As at 31st Mar 2013 Total 29871.76 24005.52 RESTATED SUMMARY STATEMENT OF PROFIT AND LOSS In ` Million Particulars For the year ended 31st Mar 2014 For the year ended 31st Mar 2013 I. Revenue from operations 17978.49 16798.67 II. Other income 610.61 869.22 III. Total revenue I + II 18589.10 17667.89 IV. Expenses: Cost of materials consumed 7757.49 8793.18 Changes in inventories of work-in-progress 402.15 530.46 Sub contract and other direct expenses 1737.06 2026.09 Employee benefits expense 2091.92 1888.08 Finance costs 192.56 226.37 Depreciation and amortisation expense 253.22 188.00 Other expenses 1419.66 1015.38 Provision for anticipated losses and expenditure 404.68 87.86 Total expenses 14258.74 13694.50 V Profit before tax III-IV 4330.36 3973.39 VI Tax expense: Current tax 1513.12 1265.17 Deferred tax 0.46 44.74 Net Profit+/Loss- from Ordinary Activities after tax V- VI 2817.70 2663.48 Extraordinary itemnet of tax expense - - VII Profit for the year 2817.70 2663.48 VIII Earnings per equity share Face value of ` 10 each: 1 Basic Rs 24.87 23.51 2 Diluted Rs 24.87 23.51 RESTATED SUMMARY STATEMENT OF CASH FLOWS In ` Million Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 A. Cash flow from Operating Activities Net profit before tax 4330.36 3973.39 Adjustments for : Depreciation and amortisation 215.74 143.35 Value of surrendered land written off 0.00 0.00 Interest expense 189.50 225.59 Interest income 508.29 589.72 Rental income 6.37 7.70 Dividend income 0.09 0.61 Loss on sale of fixed assets 0.47 2.44 Profit on sale of fixed assets 0.02 0.00 Profit on investments 0.00 0.00 Loss on derivative contracts Net 275.95 125.04 Unrealised loss/gain on derivative contracts Net 3.03 33.92 Exchange difference from FE transactions 6.87 73.12 Expenses on Initial Public Offer 0.00 0.00 Effective loss/gain of cash flow hedges 0.00 0.00 Operating cash flow before working capital changes 4493.41 3764.74

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61 Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 Adjustments for working capital changes: Increase / decrease in inventories 406.59 68.06 Increase / decrease in trade and other receivables 8270.76 2012.63 Increase / decrease in trade and other payables 774.21 4595.65 Cash generated from operation before Income Tax 4958.15 1249.78 Income tax paid 883.60 766.65 Net cash generated from Operating Activities A 5841.75 483.13 B. Cashflow from Investing Activities Purchase of assets 1512.35 694.47 Capital Work In Progress 1304.44 743.91 Investment in Mutual Funds 0.00 0.00 Redemption of Mutual Funds 0.00 0.00 Sale or withdrawal of fixed assets 0.02 0.00 Interest received 353.90 498.14 Rent received 6.37 7.70 Dividend income 0.09 0.61 Profit on investments 0.00 0.00 Net cash from investing operation B 152.47 931.93 C. Cashflow from Financing Activities Issue of Tax free Bonds 1230.00 0.00 Premium on issue of Tax free Bonds 0.12 0.00 Short term borrowings 2109.18 0.00 Loss/profit on derivative contracts Net 275.95 125.04 Loss on exchange difference from FE transactions 6.87 73.12 Redemption of Preference Shares 0.00 391.42 Dividend paid 169.92 197.32 Dividend tax paid 28.88 32.01 Interest paid 161.30 225.59 Expenses on Initial Public Offer Net cash from financing activities C 2710.12 898.26 D. Net Increase in Cash Cash Equivalent A+B+C 2979.16 1347.06 Cash and cash equivalent at the beginning of the year 3109.65 4456.71 Cash and cash equivalent at the end of the year 130.49 3109.65 Net cash increase/ decrease 2979.16 1347.06

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62 THE ISSUE The following table summarises the details of the Issue: Issue 33984000 Equity Shares aggregating to ` ● million of which: i Fresh Issue 1 22656000 Equity Shares aggregating to ` ● million ii Offer for Sale 2 11328000 Equity Shares aggregating to ` ● million of which: Employee Reservation Portion 34 Up to 824000 Equity Shares aggregating to ` ● million Net Issue to the Public 33160000 Equity Shares A QIB Portion 3 16580000 Equity Shares of which: Available for allocation to Mutual Funds only 5 of the QIB Portion 5 829000 Equity Shares Balance of QIB Portion for all QIBs including Mutual Funds 5 15751000 Equity Shares B Non-Institutional Portion 3 Not less than 4974000 Equity Shares C Retail Portion 34 Not less than 11606000 Equity Shares Pre and post Issue Equity Shares Equity Shares outstanding prior to the Issue 113280000 Equity Shares Equity Shares outstanding after the Issue 135936000 Equity Shares Utilisation of Net Proceeds For details see “Objects of the Issue” on page 85. Our Company will not receive any proceeds from the Offer for Sale. Allocation to Bidders in all categories including the Employee Reservation portion except the Retail Portion shall be made on a proportionate basis subject to valid Bids received at or above the Issue Price. 1 The Issue has been authorised by our Board pursuant to a resolution passed at its meeting held on December 22 2015 and by our Shareholders pursuant to a resolution passed at the AGM held on September 20 2016. 2 The Selling Shareholder through its letter bearing file number SY-12021/1/2007–CSL. Vol IV dated November 23 2015 conveyed the approval granted by the GoI for the Issue. The Equity Shares offered by the Selling Shareholder in the Issue have been held by them for a period of at least one year prior to the date of the Draft Red Herring Prospectus with SEBI and are eligible for being offered for sale in the Offer as required by the SEBI ICDR Regulation. The Selling Shareholder through its letter bearing file number SY- 12021/1/2007-CSL Vol. V dated December 6 2016 conveyed the consent for inclusion of 11328000 Equity Shares of our Company held by the President of India acting through the Ministry of Shipping Government of India as part of the Offer for Sale portion of the Issue. 3 Under-subscription if any in any category except the QIB Portion would be allowed to be met with spill over from any of the category or combination of categories at the discretion of our Company the Selling Shareholder the Book Running Lead Managers and the Designated Stock Exchange and in accordance with applicable laws rules regulations and guidelines subject to valid Bids being received at or above the Bid Price. Under-subscription in the Employee Reservation Portion shall be added to the Net Issue. 4 The Selling Shareholder through its letter bearing file number SY-12021/1/2007–CSL. Vol IV dated November 23 2015 conveyed the approval of price discount of 5 on Issue price to the retail investors subject to the advice of the BRLMs and prevailing market condition and 5 discount for Employee Reservation Portion. Retail Individual Bidders and Eligible Employees bidding at a price within the Price Band can make payment at the Bid Amount which will be less Retail Discount or Employee Discount as applicable at the time of making a Bid. Retail Individual Bidders and Eligible Employees bidding at the Cut-Off Price have to ensure payment at the Cap Price less Retail Discount or Employee Discount as applicable at the time of making a Bid. Retail Individual Bidders must ensure that the Bid Amount does not exceed `200000. The maximum Bid Amount under the Employee Reservation Portion by an Eligible Employee shall not exceed ` 500000 excluding Employee Discount. However the initial Allotment to an

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63 Eligible Employee in the Employee Reservation Portion shall not exceed ` 200000 excluding Employee Discount. Only in the event of an under-subscription in the Employee Reservation Portion post the initial allotment such unsubscribed portion may be Allotted on a proportionate basis to Eligible Employees Bidding in the Employee Reservation Portion for a value in excess of ` 200000 excluding Employee Discount subject to the total Allotment to an Eligible Employee not exceeding ` 500000 excluding Employee Discount. 5 If the aggregate demand from Mutual Funds is less than 829000 Equity Shares the balance Equity Shares available for allotment in the Mutual Fund Portion will be added to the QIB Portion and allocated proportionately to QIB Bidders in proportion to their Bids. Notes: 1. The Issue and Net Issue shall constitute 25.00 and 24.39 respectively of our post-Issue equity share capital. 2. The Issue comprises the Fresh Issue which shall constitute 16.67 of our post-Issue equity share capital and the Offer for Sale shall constitute 8.33 of our post-Issue equity share capital. 3. The Equity Shares being offered pursuant to the Offer for Sale have been held by the Selling Shareholder for a period of at least one year immediately preceding the date of the Draft Red Herring Prospectus. 4. Our Company will not receive any proceeds from the Offer for Sale. For further details regarding the Issue Structure and Issue Procedure see “Issue Structure” and “Issue Procedure” on page 413 and 416 respectively.

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64 GENERAL INFORMATION Registered and Corporate Office Cochin Shipyard Limited Administrative Building Cochin Shipyard Premises Perumanoor Kochi - 682015 Kerala India Tel: +91 484 2501306 Fax: +91 484 2384001 Website: www.cochinshipyard.com Email: secretarycochinshipyard.com Corporate Identity Number: U63032KL1972GOI002414 Address of the Registrar of Companies Our Company is registered with the RoC Kerala situated at the following address: Registrar of Companies Company Law Bhawan BMC Road Thrikkakara Kochi – 682021 Kerala India Tel: +91 484 2423749 Fax: + 91 484 2422327 Board of Directors The following table sets out the composition of our Board as on the date of this Red Herring Prospectus: Name and Designation DIN Address Mr. Madhu S. Nair Chairman and Managing Director 07376798 XI/356-A Sreelakam Off Kundanoor Chilavanoor Road Kundanoor Maradu P.O. Kochi - 682304 Kerala India Mr. D. Paul Ranjan Director Finance and Chief Financial Officer 06869452 Grace 28/2090 A Thottunkathara Road Kadavanthra P.O. Ernakulam - 682020 Kerala India Mr. Sunny Thomas Director Technical 06882228 1/34 Kallukalam House Paruthely Avenue Road Edappally P O Ernakulam - 682024 Kerala India Mr. Suresh Babu N.V Director Operations 07482491 Nikerthil House Palluruthy P.O. Perumpadappu Ernakulam - 682006 Kerala India Mr. Pravir Krishna Part Time Official Nominee Director 06519104 C2/17 Char Imli Bhopal – 462016 Madhya Pradesh India Mr. Elias George Part Time Official Nominee Director 00204510 No.4 Neptune Country Chilavannoor Road Kadavanthra Kochi - 682020 Kerala India Mr. Krishna Das E Non-Official Part Time Independent Director 02731340 Sree Krishna Kripa Pannicode P O Kunisseri Palakkad - 678681 Kerala India Mr. Radhakrishna Menon Non-Official Part Time Independent Director 07518727 Sreeniketan Thrikodithanam P O Changanacherry Kottayam -686105 Kerala India Ms. Roopa Shekhar Rai Non-Official Part Time Independent Director 07565156 10 East High Court Road Ramdaspeth Nagpur - 440010 Maharashtra India Mr. Jiji Thomson Non-Official Part Time 01178227 Annamiria NCC Road Ambalamukku Peroorkada P.O Trivandrum – 695005 Kerala India

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65 Name and Designation DIN Address Independent Director Mr. Pradipta Banerji Non-Official Part Time Independent Director 00630615 B-309 Nilgiri Building No. B-24 IIT Powai Mumbai – 400076 Maharashtra India Mr. Nanda Kumaran Puthezhath Non-Official Part Time Independent Director 02547619 Lakshmi PRA 104 Ganganagar Palliparambukavu Thripunithura – 682301 Kerala India. For further details of our Board of Directors see “Our Management” on page 151. Chief Financial Officer Mr. D. Paul Ranjan is the Chief Financial Officer of our Company. His contact details are as follows: Mr. D. Paul Ranjan Director Finance Administrative Building Cochin Shipyard Premises Perumanoor Kochi - 682015 Kerala India Tel: +91 484 6641222 Fax: +91 484 2365334 Email: paulranjancochinshipyard.com Company Secretary and Compliance Officer Ms. V. Kala is the Company Secretary and the Compliance Officer of our Company. Her contact details are as follows: Ms. V. Kala Administrative Building Cochin Shipyard Premises Perumanoor Kochi - 682015 Kerala India Tel: +91 484 2501306 Fax: +91 484 2384001 Email: secretarycochinshipyard.com Investors Grievances Investors can contact the Company Secretary and Compliance Officer the BRLMs the Registrar to the Issue in case of any pre-Issue or post-Issue related problems such as non-receipt of Allotment Advice non-credit of Allotted Equity Shares in the respective beneficiary account or refund orders and non-receipt of funds by electronic mode. All grievances may be addressed to the Registrar to the Issue with a copy to the relevant Designated Intermediary to whom the Bid cum Application Form was submitted. The Bidder should give full details such as name of the sole or first Bidder Bid cum Application Form number Bidder DP ID Client ID PAN date of the submission of Bid cum Application Form address of the Bidder number of the Equity Shares applied for and the name and address of the Designated Intermediary where the Bid cum Application Form was submitted by the Bidder. All grievances relating to Bids submitted with Registered Brokers may be addressed to them with copy to the Stock Exchanges and to the Registrar to the Issue. Further the Bidder shall also enclose the Acknowledgement Slip from the Designated Intermediaries in addition to the documents/information mentioned hereinabove. Book Running Lead Managers SBI Capital Markets Limited 202 Maker Tower ‘E’ Cuffe Parade Mumbai 400005

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66 Maharashtra India Tel: +91 22 2217 8300 Fax: +91 22 2218 8332 Email: csl.iposbicaps.com Investor grievance e-mail: investor.relationssbicaps.com Contact Person: Nikhil Bhiwapurkar / Sandeep Tenneti Website: www.sbicaps.com SEBI Registration No.: INM000003531 Edelweiss Financial Services Limited 14 th Floor Edelweiss House Off. C.S.T Road Kalina Mumbai 400098 Maharashtra India Telephone: +91 22 40094400 Fax: +91 22 40863610 E-mail: csl.ipoedelweissfin.com Investor grievance e-mail: customerservice.mbedelweissfin.com Contact Person: Siddharth Shah Website: www.edelweissfin.com SEBI Registration No.: INM0000010650 JM Financial Institutional Securities Limited 7 th Floor Cnergy Appasaheb Marathe Marg Prabhadevi Mumbai – 400025 Maharashtra India Tel: +91 22 6630 3030 Fax: +91 22 6630 3330 Email: csl.ipojmfl.com Investor grievance e-mail: grievance.ibdjmfl.com Contact Person: Prachee Dhuri Website: www.jmfl.com SEBI Registration No.: INM000010361 Syndicate Members SBICAP Securities Limited Marathon Futurex 12 th Floor AB Wing Mafatlal Mill Compound N.M. Joshi Marg Lower Parel Mumbai 400 013 Maharashtra India Tel: + 91 22 4227 3300 Fax: +91 22 4227 3390 Email: archana.dedhiasbicapsec.com Contact Person: Archana Dedhia Website: www.sbismart.com SEBI Registration No.: BSE: INB011053031 NSE: INB231052938 Edelweiss Securities Limited 2 nd Floor MB Towers Plot no 5 Road No 2 Banjara Hills Hyderabad 500 034 Telangana India Tel: +91 22 4063 5569 Fax: +91 22 6747 1347 E-mail: csl.ipoedelweissfin.com Contact Person: Prakash Boricha Website: www.edelweissfin.com

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67 SEBI Registration No.: BSE: INB011193332 NSE: INB231193310 MSEI: INB261193396 JM Financial Services Limited 2 3 4 Kamanwala Chambers Ground Floor Sir P M Road Fort Mumbai 400001 Maharashtra India Tel: +91 22 6136 3400 Email: surajit.misrajmfl.com Contact Person: Surajit Misra Website: www.jmfinancialservices.in SEBI Registration No.: INB/F 011054831 NSE INB/F231054835 Registrar to the Issue Link Intime India Private Limited C 101 247 Park L B S Marg Vikhroli West Mumbai 400 083 Maharashtra India Tel: +91 22 4918 6200 Fax: +91 22 4918 6195 Email: csl.ipolinkintime.co.in Investor grievance email: csl.ipolinkintime.co.in Contact person: Shanti Gopalkrishnan Website: www.linkintime.co.in SEBI Registration No: INR000004058 Indian Legal Counsel to our Company and the Selling Shareholder Khaitan Co. One Indiabulls Centre Tower 113 th Floor 841 Senapati Bapat Marg Elphinstone Road Mumbai 400013 Maharashtra India Tel: +91 22 6636 5000 Fax: +91 22 6636 5050 International Legal Counsel to our Company and the Selling Shareholder Herbert Smith Freehills LLP 50 Raffles Place 24-01 Singapore Land Tower Singapore 048623 Tel: +65 6868 8000 Fax: +65 6868 8001 Indian Legal Counsel to the Book Running Lead Managers Cyril Amarchand Mangaldas 201 Midford House Midford Garden Off M.G. Road Bengaluru 560001 Karnataka India Tel: +91 80 2558 4870 Fax: +91 80 2558 4266

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68 Statutory Auditors of our Company Krishnamoorthy Krishnamoorthy Chartered Accountants 39/3217 Illom Block I Paliam Road Cochin – 682016 Tel: +91 484 236 3676 +91 484 237 4654 Fax: +91 484 237 1845 Firm Registration No: 001488S Email: k_krishnamoorthyhotmail.com Peer Review No: 009524 Banker to the Issue and Refund Bank State Bank of India Capital Market Branch Videocon Heritage Building Charanjit Rai Marg Off. D.N. Road Fort Mumbai 400 001 Maharashtra India Tel: +91 22 2209 4932 Fax: +91 22 2209 4921 Email: nib.11777sbi.co.in Website: www.sbi.co.in Contact Person: Indrakant Chaurasia Designated Intermediaries Self-Certified Syndicate Banks In relation to Bids submitted to a member of the Syndicate the list of banks that have been notified by SEBI to act as the SCSBs for the ASBA process is provided on the website of SEBI at http://www.sebi.gov.in/sebiweb/other/OtherAction.dodoRecognisedyes. For list of branches of the SCSBs named by the respective SCSBs to collect the ASBA Forms please refer to the above-mentioned link. Registered Brokers The list of the Registered Brokers eligible to accept ASBA forms including details such as postal address telephone number and e-mail address is provided on the websites of the BSE and the NSE at http://www.bseindia.com/downloads/ipo/List20of20SCSBs_MGL_170620161034.pdf and https://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm respectively as updated from time to time. RTAs The list of the RTAs eligible to accept ASBA Forms at the Designated RTA Locations including details such as address telephone number and email address is provided on the websites of Stock Exchanges at http://www.bseindia.com/Static/Markets/PublicIssues/RtaDp.aspxexpandable6 and http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm respectively as updated from time to time. Collecting Depository Participants The list of the CDPs eligible to accept ASBA Forms at the Designated CDP Locations including details such as name and contact details is provided on the websites of the Stock Exchanges at http://www.bseindia.com/Static/Markets/PublicIssues/RtaDp.aspxexpandable6 and http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm respectively as updated from time to time.

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69 Bankers to our Company State Bank of India First Floor Vankarath Towers Bye-Pass Junction Padivattom Ernakulam Kochi – 682024 Kerala India Tel: +91 484 2340027 Fax: +91 484 2341100 E-mail: sbi.04062sbi.co.in Website: www.sbi.co.in Contact Person: Mr. R. Ganesh IDBI Bank Limited Specialised Corporate Branch IDBI Building Panampilly Nagar Kochi - 682036 Kerala India Tel: +91 484 2323324 Fax: +91 484 2310490 E-mail: ag.panickeridbi.co.in Website: www.idbi.com Contact Person: Mr. Anil Panicker Syndicate Bank Aishwarya Buildings M.G. Road Opposite Cochin Shipyard Perumanoor Branch Ernakulam Kerala India Tel: +91 484 2359444 Fax: +91 484 2358951 E-mail: br.4303syndicatebank.co.in Website: www.syndicatebank.co.in Contact Person: Mr. Ajithkumar P. R. Union Bank of India Nodal Regional Office Union Bank Bhavan PB No. 3255 M G Road Ernakulam - 682035 Kerala India Tel: +91 484 238521/ 2385206 Fax: +91 484 2385203 E-mail: cmpnd.ernakulamunionbankofindia.com Website: www.unionbankofindia.com Contact Person: Mr. R. K. Singh IPO grading No credit rating agency registered with SEBI has been appointed in respect of obtaining grading for the Issue. Inter se allocation of responsibilities The following table sets forth the inter se allocation of responsibilities for various activities among the BRLMs: Sr. No. Activity Responsibility Co-ordinator 1. Capital structuring positioning strategy and due diligence of our Company including its operations/management/business plans/legal etc. Drafting and design of the Draft Red Herring Prospectus Red Herring Prospectus Prospectus including a memorandum containing salient features of the Prospectus. The BRLMs shall ensure compliance with stipulated requirements and completion of prescribed formalities with the Stock Exchanges RoC and SEBI including finalisation of Prospectus and RoC filing. BRLMs SBI Capital Markets Limited 2. Drafting and approval of all statutory advertisement BRLMs SBI Capital Markets Limited 3. Drafting and approval of all publicity material other than statutory advertisement as mentioned above including corporate advertising brochure etc. BRLMs JM Financial Institutional Securities Limited 4. Appointment of Intermediaries - Registrar to the Issue Advertising Agency Printers and Banker to the Issue and Monitoring Agency and coordinating with them for execution of their respective agreements. BRLMs Edelweiss Financial Services Limited 5. Marketing and road-show presentation and preparation of frequently asked questions for the road show team BRLMs JM Financial Institutional Securities Limited 6. Domestic Institutional marketing of the Issue which will cover inter alia: • Institutional marketing strategy • Finalizing the list and division of domestic investors for one-to-one meetings and • Finalizing domestic road show and investor meeting schedule BRLMs SBI Capital Markets Limited

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70 Sr. No. Activity Responsibility Co-ordinator 7. International Institutional marketing of the Issue which will cover inter alia: • Institutional marketing strategy • Finalizing the list and division of international investors for one-to-one meetings and • Finalizing international road show and investor meeting schedule BRLMs Edelweiss Financial Services Limited 8. Non-institutional and Retail marketing of the Issue which will cover inter alia • Finalising media marketing and public relations strategy • Finalising centres for holding conferences for brokers etc • Follow-up on distribution of publicity and Issue material including form the Prospectus and deciding on the quantum of the Issue material and • Finalising collection centres BRLMs JM Financial Institutional Securities Limited 9. Coordination with Stock-Exchanges for book building software bidding terminals and mock trading payment of STT on behalf of Selling Shareholder and payment of 1 security deposit to the designated stock exchange. BRLMs SBI Capital Markets Limited 10. Managing the book and finalization of pricing in consultation with our Company BRLMs SBI Capital Markets Limited 11. Post-issue activities which shall involve essential follow-up steps including follow-up with bankers to the issue and SCSBs to get quick estimates of collection and advising the issuer about the closure of the issue based on correct figures finalisation of the basis of allotment based on technical rejections listing of instruments demat credit refunds/ unblocking of funds release of 1 security deposit handling of investor grievances for redressal media compliance report and coordination with various agencies connected with the post-issue activity such as registrars to the issue bankers to the issue SCSBs including responsibility for execution of underwriting arrangements as applicable. BRLMs Edelweiss Financial Services Limited Even if any of these activities are being handled by other intermediaries the BRLMs shall be responsible for ensuring that these agencies fulfil their functions and enable them to discharge this responsibility through suitable agreements with our Company. Credit Rating As this is an Issue of Equity Shares the requirement of credit rating is not applicable. Experts Except as stated below our Company has not obtained any expert opinions: Our Company has received written consent from the Statutory Auditors namely Krishnamoorthy Krishnamoorthy who hold a valid peer review certificate to include its name as required under section 261av of the Companies Act in this Red Herring Prospectus and as an “Auditor” or “Statutory Auditor” and “expert” as defined under section 238 of the Companies Act in respect of the examination report dated July 17 2017 of the Statutory Auditors on the restated audited financial statements of our Company as at and for the Fiscal years ended March 31 2017 2016 2015 2014 and 2013 and the statement of tax benefits dated July 19 2017 included in this Red Herring Prospectus and such consents have not been withdrawn as on the date of this Red Herring Prospectus.

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71 Trustees As this is an Issue of Equity Shares the requirement of appointment of trustees is not applicable. Appraising Agencies None of the objects of the Issue for which the Net Proceeds will be utilised have been appraised. Monitoring Agency Our Company has appointed State Bank of India as the Monitoring Agency in accordance with Regulation 16 of the SEBI ICDR Regulations. Further as per the SEBI Listing Regulations in accordance with the corporate governance requirements the Audit Committee of our Company would be monitoring the utilization of the proceeds of the Issue. The details of the Monitoring Agency are as follows: State Bank of India Commercial Branch First Floor Vankarath Towers NH By-pass Junction Padivattom Ernakulam - 682 024 Kerala India Tel: +91 484 234 0062 Fax: +91 484 234 1100 Contact Person: R. Ganesh AGM RM Book Building Process Book building in the context of the Issue refers to the process of collection of Bids from investors on the basis of this Red Herring Prospectus and the Bid cum Application Forms within the Price Band which will be decided by our Company and the Selling Shareholder in consultation with the BRLMs and which shall be notified in all editions of English national daily newspaper Business Standard all editions of Hindi national daily newspaper Business Standard and Kochi edition of Malayalam daily newspaper Mathrubhumi Malayalam being the regional language of Kerala where our registered office is located each with wide circulation at least five Working Days prior to the Bid / Issue Opening Date. The Issue Price shall be determined by our Company and the Selling Shareholder in consultation with the BRLMs after the Bid / Issue Closing Date. The principal parties involved in the Book Building Process are: • our Company • the Selling Shareholder • the BRLMs • the Syndicate Members • the SCSBs • the Registered Brokers • the Registrar to the Issue • the Escrow Collection Banks • the RTAs and • the Collecting Depository Participants. All Bidders can participate in the Issue only through the ASBA process. In accordance with the SEBI ICDR Regulations QIBs Bidding in the QIB Portion and Non-Institutional Investors Bidding in the Non-Institutional Portion are not allowed to withdraw or lower the size of their Bids in terms of the quantity of the Equity Shares or the Bid Amount at any stage. Retail Individual Bidders and Eligible Employees bidding in the Employee Reservation Portion can revise their Bids during the Bid/ Issue Period and withdraw their Bids until the Bid / Issue Closing Date.

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72 Our Company confirms that it will comply with the SEBI ICDR Regulations and any other directions issued by SEBI for this Issue. The Selling Shareholder confirms that it will comply with the SEBI ICDR Regulations and any other directions issued by SEBI as applicable to the respective portion of their respective Equity Shares offered in the Offer for Sale. The process of Book Building under the SEBI ICDR Regulations and the Bidding Process are subject to change from time to time and the investors are advised to make their own judgment about investment through this process prior to submitting a Bid in the Issue. For further details see “Issue Structure” and “Issue Procedure” on pages 413 and 416 respectively. For an illustration of the Book Building Process and the price discovery process see “Issue Procedure – Part B – Basis of Allocation” on page 448. Notwithstanding the foregoing the Issue is also subject to obtaining i the final approval of the RoC after the Prospectus is filed with the RoC and ii final listing and trading approvals of the Stock Exchanges which our Company shall apply for after Allotment. Withdrawal of the Issue For details in relation to refund on withdrawal of the Issue see “Terms of the Issue – Withdrawal of the Issue” on page 410. Underwriting Agreement After the determination of the Issue Price and allocation of the Equity Shares but prior to the filing of the Prospectus with the RoC our Company and the Selling Shareholder shall enter into an Underwriting Agreement with the Underwriters for the Equity Shares proposed to be offered through the Issue. It is proposed that pursuant to the terms of such Underwriting Agreement the BRLMs shall be responsible for bringing in the amount devolved in the event that the Syndicate Members do not fulfill their underwriting obligations. Pursuant to the terms of the Underwriting Agreement the obligations of the Underwriters are several and are subject to certain conditions to closing as specified therein. The Underwriting Agreement is dated ● and has been approved by our Board of Directors / committee thereof and the Selling Shareholder. The Underwriters have indicated their intention to underwrite the following number of Equity Shares: This portion has been intentionally left blank and will be filled in before filing of the Prospectus with the RoC in ` million Name address telephone fax and email of the Underwriters Indicated number of Equity Shares to be Underwritten Amount Underwritten ● ● ● ● ● ● ● ● ● The above mentioned underwriting will be finalised after pricing and actual allocation and subject to the provisions of the SEBI ICDR Regulations. In the opinion of our Board of directors and the Selling Shareholder based on a certificate given by the Underwriters the resources of the above mentioned Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. The Underwriters are registered with SEBI under section 12 1 of the SEBI Act or registered as brokers with the Stock Exchanges. Allocation among the Underwriters may not necessarily be in proportion to their underwriting commitments set forth in the table above. Notwithstanding the above table the Underwriters shall only be responsible for ensuring payment with respect to the Bids procured by them. In the event of any default in payment the respective Underwriter in addition to other obligations defined in the Underwriting Agreement will also be required to procure subscribers for or subscribe to the Equity Shares to the extent of the defaulted amount in accordance with the Underwriting Agreement. The underwriting arrangements mentioned above shall not apply to the applications by the ASBA Bidders in the Issue except for ASBA Bids procured by any member of the Syndicate.

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73 CAPITAL STRUCTURE The equity share capital of our Company as on the date of this Red Herring Prospectus is set forth below: in ` except share data Aggregate nominal value Aggregate value at Issue Price A. Authorised Share Capital 250000000 Equity Shares of the face value ` 10 each 2500000000 - B. Issued subscribed and paid up Equity Share capital before the Issue 113280000 Equity Shares of the face value ` 10 each 1132800000 - C. Present Issue in terms of this Red Herring Prospectus which consists of: Fresh Issue of 22656000 Equity Shares of the face value ` 10 each 226560000 ● Offer for Sale of 11328000 Equity Shares by the Selling Shareholder of the face value ` 10 each 113280000 ● Of which: Employee Reservation Portion up to 824000 Equity Shares of the face value ` 10 each 8240000 ● D. Net Issue to the Public 33160000Equity Shares of the face value ` 10 each 331600000 E. Issued subscribed and paid up Equity Share capital after the Issue 135936000 Equity Shares of the face value ` 10 each 1359360000 F. Securities Premium Account Before the Issue as on March 31 2017 Nil After the Issue ● For details on changes in authorized share capital of our Company see “History and Certain Corporate Matters” on page 145. Our Board of Directors has approved the Issue pursuant to a resolution passed at their meeting held on December 22 2015 and our shareholders have approved the Issue pursuant to a resolution passed at the AGM held on September 20 2016. The Selling Shareholder through its letter bearing file number SY-12021/1/2007–CSL. Vol IV dated November 23 2015 conveyed the approval granted by the GoI for the Issue. The President of India acting through the Ministry of Shipping Government of India has approved the Offer for Sale of 11328000 equity shares of our Company vide its letter bearing file number SY- 12021/1/2007-CSL Vol. V dated December 6 2016. The Equity Shares under the Issue have been held by the Selling Shareholder for a period of at least one year prior to the filing of the Draft Red Herring Prospectus with SEBI and are eligible for being offered for sale in the Issue as required by the SEBI ICDR Regulation. Our Company has reserved around 0.60 of the post issue capital i.e. up to 824000 Equity Shares of the face value ` 10 each in the Employee Reservation Portion. In the event the Equity shares offered to our Employees under the Employee Reservation are not fully subscribed the remaining unsubscribed portion of the Equity shares shall be offered to the public. As on March 31 2017 our Company has a securities premium account of ` 85095.53 on account of the secured bonds issued by our Company. Notes to the Capital Structure: 1. Equity Share capital history of our Company: Date of Allotment/date when fully paid up Number of Equity Shares Face Value ` Issue price per Equity Share ` Consideration cash bonus consideration other than cash Nature of Allotment Cumulative number of Equity Shares Cumulative Equity Share Capital ` March 27 1973 90010 1000 1000 Cash Allotment to our Promoter as initial subscriber of MOA 90010 90010000 1 1000 1000 Cash Allotment to Mr. 90011 90011000

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74 Date of Allotment/date when fully paid up Number of Equity Shares Face Value ` Issue price per Equity Share ` Consideration cash bonus consideration other than cash Nature of Allotment Cumulative number of Equity Shares Cumulative Equity Share Capital ` P.N. Jain joint secretary to GoI Ministry of Finance as initial subscriber to MOA 1 1000 1000 Cash Allotment to Mr. B.P. Srivastava Director Projects Ministry of Shipping Transport as initial subscriber to MOA 90012 90012000 1 1000 1000 Cash Allotment to Mr. S. Kasthuri chief projects officer as initial subscriber to MOA 90013 90013000 1 1000 1000 Cash Allotment to Mr. R.C. Gupta under- secretary to GoI Ministry of Shipping Transport as initial subscriber to MOA 90014 90014000 March 19 1974 54943 1000 - Consideration other than cash Allotment to our Promoter 144957 144957000 March 19 1974 70000 1000 1000 Cash Allotment to our Promoter 214957 214957000 June 25 1974 10000 1000 1000 Cash Allotment to our Promoter 224957 224957000 June 25 1974 52 1000 - Consideration other than cash Allotment to our Promoter 225009 225009000 December 7 1977 301041 1000 1000 Cash Allotment to our Promoter 526050 526050000 February 11 1980 15000 1000 1000 Cash Allotment to our Promoter 541050 541050000 August 28 1981 5000 1000 1000 Cash Allotment to our Promoter 546050 546050000 March 15 1982 74200 1000 1000 Cash Allotment to our Promoter 620250 620250000 August 25 1984 7000 1000 1000 Cash Allotment to our Promoter 627250 627250000 March 30 1985 2350 1000 1000 Cash Allotment to our Promoter 629600 629600000 March 21 1986 2500 1000 1000 Cash Allotment to our Promoter 632100 632100000 February 21 1987 2500 1000 1000 Cash Allotment to our Promoter 634600 634600000 June 18 1987 5000 1000 1000 Cash Allotment to our Promoter 639600 639600000 November 2 1987 5000 1000 1000 Cash Allotment to our Promoter 644600 644600000 March 2 1988 20000 1000 1000 Cash Allotment to our Promoter 664600 664600000 June 17 1988 18700 1000 1000 Cash Allotment to our Promoter 683300 683300000 February 23 1989 20000 1000 1000 Cash Allotment to our Promoter 703300 703300000 June 27 1989 8800 1000 1000 Cash Allotment to our 712100 712100000

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75 Date of Allotment/date when fully paid up Number of Equity Shares Face Value ` Issue price per Equity Share ` Consideration cash bonus consideration other than cash Nature of Allotment Cumulative number of Equity Shares Cumulative Equity Share Capital ` Promoter December 19 1989 20000 1000 1000 Cash Allotment to our Promoter 732100 732100000 March 23 1990 11500 1000 1000 Cash Allotment to our Promoter 743600 743600000 June 25 1992 29300 1000 1000 Cash Allotment to our Promoter 772900 772900000 April 29 1993 25000 1000 1000 Cash Allotment to our Promoter 797900 797900000 March 18 1994 22500 1000 1000 Cash Allotment to our Promoter 820400 820400000 April 27 1996 32500 1000 1000 Cash Allotment to our Promoter 852900 852900000 April 4 1996 15000 1000 1000 Cash Allotment to our Promoter 867900 867900000 July 25 1996 25000 1000 1000 Cash Allotment to our Promoter 892900 892900000 December 16 1996 28150 1000 1000 Cash Allotment to our Promoter 921050 921050000 June 27 1997 16850 1000 1000 Cash Allotment to our Promoter 937900 937900000 November 28 1997 24750 1000 1000 Cash Allotment to our Promoter 962650 962650000 May 29 1998 22650 1000 1000 Cash Allotment to our Promoter 985300 985300000 June 29 1999 52500 1000 1000 Cash Allotment to our Promoter 1037800 1037800000 December 23 1999 13100 1000 1000 Cash Allotment to our Promoter 1050900 1050900000 March 27 2000 5900 1000 1000 Cash Allotment to our Promoter 1056800 1056800000 March 27 2000 6000 1000 1000 Cash Allotment to our Promoter 1062800 1062800000 September 22 2000 5650 1000 1000 Cash Allotment to our Promoter 1068450 1068450000 March 28 2001 11500 1000 1000 Cash Allotment to our Promoter 1079950 1079950000 June 25 2001 32850 1000 1000 Cash Allotment to our Promoter 1112800 1112800000 August 16 2002 20000 1000 1000 Cash Allotment to our Promoter 1132800 1132800000 With effect from March 17 2009 1132800 equity shares of face value of `1000 each were split into 113280000 Equity Shares of the face value of `10 each. For further details on Equity Shares issued for consideration other than cash please refer to the table below. Note: RoC filings pertaining to allotment dated June 17 1988 is not traceable. Refer to the “Risk Factors – One of the forms filed by us is not traceable and there are discrepancies in some of the forms filed by us with the RoC” on page 35. 2. Preference Share Capital history of our Company The following is the history of the preference share capital of our Company: Date of allotment Number of preference shares allotted/redee med Face value ` Issue price / Conversion price ` Nature of consideration Details April 27 1995 1191420 1000 1000 Cash Allotment of 7 non cumulative preference shares to our Promoter

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76 Date of allotment Number of preference shares allotted/redee med Face value ` Issue price / Conversion price ` Nature of consideration Details September 5 2009 400000 1000 1000 Cash Redemption of 7 non cumulative preference shares at par December 30 2011 200000 1000 1000 Cash Redemption of 7 non cumulative preference shares at par March 23 2012 200000 1000 1000 Cash Redemption of 7 non cumulative preference shares at par March 23 2013 391420 1000 1000 Cash Redemption of 7 non cumulative preference shares at par 3. Except as stated below our Company has not issued any Equity Shares for consideration other than cash: Date of allotment/date when fully paid up No. of Equity Shares Face Value ` Type of allotment Persons to whom the Equity Shares were issued Reason for allotment/Benefits to our Company March 19 1974 54943 1000 Issuance of Equity Shares for consideration other than cash Promoter These Equity Shares were allotted to our Promoter towards the provisional valuation of assets taken over by our Company from the erstwhile Cochin shipyard project of GoI. June 25 1974 52 1000 Issuance of Equity Shares for consideration other than cash Promoter These Equity Shares were allotted to our Promoter towards the final valuation of assets taken over by our Company from the erstwhile Cochin shipyard project of GoI. 4. Our Company has not allotted any shares in terms of any scheme approved under sections 391-394 of the Companies Act 1956. 5. Our Company has not issued any Equity Shares out of its revaluation reserves. 6. Our Company has not made any issue of specified securities at a price that may be lower than the Issue Price during the preceding one year from the date of this Red Herring Prospectus. 7. Our Company presently does not have any intention or proposal to alter the capital structure for a period of six months from the date of opening of the Issue by way of split / consolidation of the denomination of Equity Shares or further issue of Equity Shares including issue of securities convertible into exchangeable directly or indirectly for the Equity Shares whether by way of preferential issue or bonus or right issue or further public issue of Equity Shares or qualified institutions placement or otherwise. 8. Build-up of Promoter’s shareholding and Lock-in: As on date of this Red Herring Prospectus our Promoter holds 113279700 Equity Shares equivalent to approximately 100 of the issued subscribed and paid-up Equity Share capital of our Company.

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77 a Details of the build-up of our Promoter’s shareholding in our Company: Date of allotment/date when fully paid up Number of Equity Shares Face Value ` Issue price per Equity Share ` Consideration cash bonus consideration other than cash Nature of allotment Cumulative number of Equity Shares Percentage of total pre-Issue paid-up capital Percentage of total post-Issue paid-up capital March 27 1973 90010 1000 1000 Cash Allotment to our Promoter 90010 7.95 6.62 December 12 1973 1 1000 1000 Cash Transfer to President of India by nominees of Promoter 90011 0.00 0.00 March 19 1974 54943 1000 - Consideration other than cash Allotment to our Promoter 144954 4.85 4.04 March 19 1974 70000 1000 1000 Cash Allotment to our Promoter 214954 6.18 5.15 June 25 1974 10000 1000 1000 Cash Allotment to our Promoter 224954 0.88 0.74 June 25 1974 52 1000 - Consideration other than cash Allotment to our Promoter 225006 0.00 0.00 December 7 1977 301041 1000 1000 Cash Allotment to our Promoter 526047 26.57 22.15 February 11 1980 15000 1000 1000 Cash Allotment to our Promoter 541047 1.32 1.10 August 28 1981 5000 1000 1000 Cash Allotment to our Promoter 546047 0.44 0.37 March 15 1982 74200 1000 1000 Cash Allotment to our Promoter 620247 6.55 5.46 August 25 1984 7000 1000 1000 Cash Allotment to our Promoter 627247 0.62 0.51 March 30 1985 2350 1000 1000 Cash Allotment to our Promoter 629597 0.21 0.17 March 21 1986 2500 1000 1000 Cash Allotment to our Promoter 632097 0.22 0.18 February 21 1987 2500 1000 1000 Cash Allotment to our Promoter 634597 0.22 0.18 June 18 1987 5000 1000 1000 Cash Allotment to our Promoter 639597 0.44 0.37 November 02 1987 5000 1000 1000 Cash Allotment to our Promoter 644597 0.44 0.37 March 2 1988 20000 1000 1000 Cash Allotment to our Promoter 664597 1.77 1.47 June 17 1988 18700 1000 1000 Cash Allotment to our Promoter 683297 1.65 1.38 February 23 1989 20000 1000 1000 Cash Allotment to our Promoter 703297 1.77 1.47 June 27 1989 8800 1000 1000 Cash Allotment to our Promoter 712097 0.78 0.65 December 19 1989 20000 1000 1000 Cash Allotment to our Promoter 732097 1.77 1.47 March 23 1990 11500 1000 1000 Cash Allotment to our Promoter 743597 1.02 0.85 June 25 1992 29300 1000 1000 Cash Allotment to our Promoter 772897 2.59 2.16 April 29 1993 25000 1000 1000 Cash Allotment to our Promoter 797897 2.21 1.84 March 18 1994 22500 1000 1000 Cash Allotment to our Promoter 820397 1.99 1.66 April 4 1996 15000 1000 1000 Cash Allotment to our Promoter 835397 1.32 1.10

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78 Date of allotment/date when fully paid up Number of Equity Shares Face Value ` Issue price per Equity Share ` Consideration cash bonus consideration other than cash Nature of allotment Cumulative number of Equity Shares Percentage of total pre-Issue paid-up capital Percentage of total post-Issue paid-up capital April 27 1996 32500 1000 1000 Cash Allotment to our Promoter 867897 2.87 2.39 July 25 1996 25000 1000 1000 Cash Allotment to our Promoter 892897 2.21 1.84 December 16 1996 28150 1000 1000 Cash Allotment to our Promoter 921047 2.48 2.07 June 27 1997 16850 1000 1000 Cash Allotment to our Promoter 937897 1.49 1.24 November 28 1997 24750 1000 1000 Cash Allotment to our Promoter 962647 2.18 1.82 May 29 1998 22650 1000 1000 Cash Allotment to our Promoter 985297 2.00 1.67 June 29 1999 52500 1000 1000 Cash Allotment to our Promoter 1037797 4.63 3.86 December 23 1999 13100 1000 1000 Cash Allotment to our Promoter 1050897 1.16 0.96 March 27 2000 5900 1000 1000 Cash Allotment to our Promoter 1056797 0.52 0.43 March 27 2000 6000 1000 1000 Cash Allotment to our Promoter 1062797 0.53 0.44 September 22 2000 5650 1000 1000 Cash Allotment to our Promoter 1068447 0.50 0.42 March 28 2001 11500 1000 1000 Cash Allotment to our Promoter 1079947 1.02 0.85 June 25 2001 32850 1000 1000 Cash Allotment to our Promoter 1112797 2.90 2.42 August 16 2002 20000 1000 1000 Cash Allotment to our Promoter 1132797 1.77 1.47 With effect from March 17 2009 1132797 equity shares of face value of `1000 each held by our promoter were split into 113279700 Equity Shares of the face value of `10 each. Total 113279700 10 - - - 113279700 100 83.33 Assuming full subscription and allotment in the Fresh Issue b Details of Promoter’s contribution locked in for three years: As per regulation 321a and 36 of the SEBI ICDR Regulations an aggregate of 20 of the post- Issue equity share capital of our Company held by our Promoter shall be considered as promoter’s contribution and locked in for a period of three years from the date of Allotment “Promoter’s Contribution” and our Promoters’ holding in excess of 20 shall be locked in for a period of one year. The MoS pursuant to its letter bearing file number SY-12021/1/2007-CSL Vol.V dated December 6 2016 granted consent to include upto 27187200 Equity Shares held by them as Promoter’s Contribution and have agreed not to sell or transfer charge or pledge or otherwise encumber in any manner the Promoter’s Contribution from the date of filing of the Draft Red Herring Prospectus until the commencement of the lock- in period specified above. The MoS has confirmed to our Company and the BRLMs that the acquisition of Equity Shares constituting the 20 of the fully diluted post-Issue equity share capital of our Company has been financed from the consolidated fund of India and no loans or financial assistance from any bank or financial institution has been availed for such purpose.

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79 Details of Promoter’s shareholding that would be considered for Promoter’s contribution is as provided below: Date of allotment/ transfer or when the Equity Shares were made fully paid up No. of Equity Shares locked - in Face value ` Issue/ Acquisition price per Equity Share ` of post- Issue Capital Consideration Nature of Transaction August 16 2002 2000000 10 1000 1.47 Cash Allotment to our Promoter June 25 2001 3285000 10 1000 2.42 Cash Allotment to our Promoter March 28 2001 1150000 10 1000 0.85 Cash Allotment to our Promoter September 22 2000 565000 10 1000 0.42 Cash Allotment to our Promoter March 27 2000 600000 10 1000 0.44 Cash Allotment to our Promoter March 27 2000 590000 10 1000 0.43 Cash Allotment to our Promoter December 23 1999 1310000 10 1000 0.96 Cash Allotment to our Promoter June 29 1999 5250000 10 1000 3.86 Cash Allotment to our Promoter May 29 1998 2265000 10 1000 1.67 Cash Allotment to our Promoter November 28 1997 2475000 10 1000 1.82 Cash Allotment to our Promoter June 27 1997 1685000 10 1000 1.24 Cash Allotment to our Promoter December 16 1996 2815000 10 1000 2.07 Cash Allotment to our Promoter July 25 1996 2500000 10 1000 1.84 Cash Allotment to our Promoter April 4 1996 697200 10 1000 0.51 Cash Allotment to our Promoter Total 27187200 20.00 With effect from March 17 2009 each Equity Share of face value of `1000 was split into 100 Equity Shares of `10 each. The Issue /Acquisition price pertains to issuance of Equity shares of face vaue of `1000 each. All the aforesaid Equity Shares which are considered for the purposes of the Promoter’s Contribution are eligible as per the SEBI ICDR Regulations. The minimum Promoter’s contribution has been brought in to the extent of not less than the specified minimum lot and from the ‘Promoter’ as required under the SEBI ICDR Regulations. All Equity Shares offered as minimum Promoters’ contribution were fully paid up at the time of their issue. The Equity Shares that are being locked-in are not ineligible for computation of Promoter’s Contribution under Regulation 33 of the SEBI ICDR Regulations. In this connection we confirm the following: i The Equity Shares offered for Promoters Contribution are not acquired in the last three years from the date of this Red Herring Prospectus: a for consideration other than cash and revaluation of assets or capitalization of intangible assets or b arising from bonus issue by utilization of revaluation reserves or unrealised profits of our Company or from a bonus issue against Equity Shares which are otherwise ineligible for computation of Promoter’s contribution ii The equity shares offered for Promoter’s Contribution does not include any equity shares acquired during the preceding one year at a price lower than the price at which equity shares are being offered to the public in the Issue iii The equity shares offered for Promoters Contribution have not been formed by the conversion of partnership firm into a company iv The equity shares offered for Promoters Contribution are not subject to any pledge and

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80 v The equity shares offered for Promoter’s Contribution does not consist of equity shares for which specific written consent has not been obtained from our Promoter for inclusion of its subscription in the minimum Promoter’s Contribution subject to lock-in. All Equity Shares except the Equity Shares held by the nominees are in dematerialised form. Our Company undertakes that the Equity Shares held by the nominees would be transferred to our Promoter and dematerialised post listing of Equity Shares. c Details of other equity share capital locked-in for one year: In terms of regulation 37 of SEBI ICDR Regulations and in addition to the above Equity Shares forming part of the Promoter’s Contribution that are locked-in for three years the entire pre-Issue share capital of our Company excluding the Equity Shares proposed to be sold in the Offer for Sale will be locked-in for a period of one year from the date of Allotment in this Issue. d Other requirements in respect of lock-in: In terms of regulation 39 of SEBI ICDR Regulations Equity Shares held by our Promoter which are locked in for a period of one year may be pledged only with scheduled commercial banks or PFIs as collateral security for loans granted by such banks or financial institutions provided that the i pledge of the Equity Shares is one of the terms of the sanction of the loan and ii if the Equity Shares are locked-in as Promoter’s contribution for three years under regulation 36a of the SEBI ICDR Regulations then in addition to the requirement in i above such shares may be pledged only if the loan has been granted by the scheduled commercial bank or public financial institution for the purpose of financing one or more of the objects of the Issue. The Equity Shares held by our Promoter may be transferred to new promoters or persons in control of our Company subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the SEBI Substantial Acquisition of Shares and Takeovers Regulations 2011 as amended.

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81 9. Shareholding Pattern of our Company as on the date of this Red Herring Prospectus Pursuant to regulation 31 of the SEBI Listing Regulations the holding of specified securities are divided into the following three categories: a Promoter and Promoter Group b Public and c Non Promoter - Non Public. Summary statement holding of Equity Shareholders as on date of this Red Herring Prospectus: Category I Category of shareholder II Nos. of shareholders III No. of fully paid up Equity Shares held IV No. of Partly paid- up Equity Shares held V No. of shares underlying Depository Receipts VI Total nos. shares held VII IV+V+ VI Shareholding as a of total no. of shares calculated as per SCRR 1957 VIII As a of A+B+C2 Number of Voting Rights held in each class of securities IX No. of Shares Underlying Outstanding convertible securities including Warrants X Shareholding as a assuming full conversion of convertible securities as a percentage of diluted share capital XI VII+X As a of A+B+C2 Number of Locked in shares XII Number of Shares pledged or otherwise encumbered XIII Number of Equity Shares held in dematerialised form XIV No of Voting Rights Total as a of A+B+C No. a As a of total Shares held b No. a As a of total Shares held b Class – Equity Shares A Promoter and Promoter Group 7 113280000 - - 113280000 100.00 113280000 100.00 - 100.00 - - 113279700 B Public - - - - - - - - - - - - - C Non Promoter- Non Public - - - - - - - - - - - - - C1 Shares underlying DRs - - - - - - - - - - - - - C2 Shares held by Employee Trusts - - - - - - - - - - - - - C3 Shares underlying ESOP’s - - - - - - - - - - - - - Total 7 113280000 - - 113280000 100.00 113280000 100.00 - 100.00 - - 113279700 As on date of filing of Red Herring Prospectus there are five directors of our Company holding total of 290 equity shares as nominee of the President of India and 10 equity shares are held by Mr. Pradeep Kumar Roy as a nominee of the President of India. All Equity Shares except the Equity Shares held by the nominees are in dematerialised form. Our Company undertakes that the Equity Shares held by the nominees would be transferred to our Promoter and dematerialised post listing of Equity Shares.

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82 10. Up to 824000 Equity Shares have been reserved for allocation to Eligible Employees subject to valid Bids being received at the Issue Price and subject to the maximum Bid Amount by each Eligible Employee not exceeding `500000 on a net basis. However the initial Allotment to an Eligible Employee in the Employee Reservation Portion shall not exceed ` 200000 excluding Employee Discount. Only in the event of an under-subscription in the Employee Reservation Portion post the initial allotment such unsubscribed portion may be Allotted on a proportionate basis to Eligible Employees Bidding in the Employee Reservation Portion for a value in excess of ` 200000 excluding Employee Discount subject to the total Allotment to an Eligible Employee not exceeding ` 500000 excluding Employee Discount. Only Eligible Employees are eligible to apply in this Issue under the Employee Reservation Portion. Bids by Eligible Employees bidding under the Employee Reservation Portion may also be made in the Net Issue and such Bids will not be treated as multiple Bids. 11. Any unsubscribed portion in Employee Reservation category shall be added to the Net Issue. Under subscription if any in Non-Institutional Bidders and Retail Individual Investors would be met with spill over from any other categories or combination of categories at the discretion of our Company and the Selling Shareholder in consultation with the Book Running Lead Managers and the Designated Stock Exchange. However under-subscription if any in the QIB Portion will not be allowed to be met with spill-over from other categories or a combination of categories. Any inter-se spill over if any would be effected in accordance with applicable laws rules regulations and guidelines. Under-subscription if any in any category except the QIB Portion would be allowed to be met with spill over from any of the category or combination of categories at the discretion of our Company the Selling Shareholder the Book Running Lead Managers and the Designated Stock Exchange and in accordance with applicable laws rules regulations and guidelines subject to valid Bids being received at or above the Bid Price. 12. The list of top 10 shareholders of our Company and the number of Equity Shares held by them is as under: a Top 10 shareholders as on the date of this Red Herring Prospectus: Name of the Shareholders Number of Equity Shares of pre-Issue Share Capital President of India 113279700 99.99 Mr. Pravir Krishna 100 Negligible Mr. Madhu S. Nair 100 Negligible Mr. D. Paul Ranjan 70 Negligible Mr. Sunny Thomas 10 Negligible Mr. Suresh Babu N. V 10 Negligible Mr. Pradeep Kumar Roy 10 Negligible As a nominee of our Promoter. b Top 10 shareholders as on 10 days before this Red Herring Prospectus: Name of the Shareholders Number of Equity Shares of pre-Issue Share Capital President of India 113279700 99.99 Mr. Pravir Krishna 100 Negligible Mr. Madhu S. Nair 100 Negligible Mr. D. Paul Ranjan 70 Negligible Mr. Sunny Thomas 10 Negligible Mr. Suresh Babu N. V 10 Negligible Mr. Pradeep Kumar Roy 10 Negligible As a nominee of our Promoter. c Top 10 shareholders as on two years before the date of filing of this Red Herring Prospectus Name of the Shareholders Number of Equity Shares of pre-Issue Share Capital President of India 113279700 99.99 Mr. Barun Mitra 100 Negligible Cmde K Subramaniam 100 Negligible

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83 Name of the Shareholders Number of Equity Shares of pre-Issue Share Capital Mr. D. Paul Ranjan 100 Negligible As a nominee of our Promoter. 13. Neither our Promoter nor our Directors and their immediate relatives have purchased or sold any Equity Shares during the period of six months immediately preceding the date of filing of the Draft Red Herring Prospectus. 14. Our Directors Mr. Madhu S. Nair Mr. D. Paul Rajan Mr. Pravir Krishna Mr. Sunny Thomas and Mr. Suresh Babu N.V hold Equity Shares in our Company as a nominee of the President of India. None of our Directors hold Equity Shares of our Company in their individual capacities. None of our KMPs hold Equity Shares in our Company in their individual capacities. 15. The total number of holders of the Equity Shares as on the date of this Red Herring Prospectus is seven consisting of the President of India and its nominees. 16. Our Promoter our Company our Directors and the BRLMs have not entered into any buyback or standby arrangements or any other similar arrangement for purchase of Equity Shares from any person being offered in this Issue. Further the BRLMs have not entered into any buy-back safety net and/or standby arrangements for purchase of Equity Shares from any person. 17. As on the date of this Red Herring Prospectus the BRLMs and/or their associates do not hold any Equity Shares. 18. There will be only one denomination of the Equity Shares unless otherwise permitted by law. Our Company shall comply with such disclosure and accounting norms as may be specified by SEBI from time to time. 19. There have been no further issue of capital whether by way of issue of bonus shares preferential allotment rights issue or in any other manner during the period commencing from submission of the Draft Red Herring Prospectus with the SEBI and there will be no such issuances until the Equity Shares have been listed on the Stock Exchanges. 20. There has been no financing arrangement by which the Directors of our Company and their relatives have financed the purchase by any other person of securities of our Company other than in the normal course of business of the financing entity during the period of six months immediately preceding the date of filing of the Draft Red Herring Prospectus with the SEBI. 21. None of our Equity Shares are subject to any pledge. 22. The Equity Shares including the Equity Shares being offered in the Offer for Sale are fully paid-up and there are no partly paid-up Equity Shares. 23. Our Company does not currently have any employee stock option scheme / employee stock purchase scheme for our employees. 24. The Issue is being made for at least 10 of the post Issue paid-up capital pursuant to Rule 192biii of SCRR read with Regulation 411 of the SEBI ICDR Regulations. Our Company is eligible for the Issue in accordance with Regulation 261 of the SEBI ICDR Regulations. Further the Issue is being made through the Book Building Process where in 50 of the Net Issue shall be available for allocation to QIBs on a proportionate basis. 5 of the QIB Portion shall be available on a proportionate basis only to Mutual Funds and the remainder of the QIB Portion shall be available for allocation to all QIBs including Mutual Funds subject to valid Bids being received at or above the Issue Price. Further not less than 15 of the Net Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35 of the Net Issue will be available for allocation to Retail Individual Investors subject to valid Bids being received at or above the Issue Price. The allotment of Equity Shares to each Retail Individual Investor shall not be less than minimum Bid Lot subject to availability of Equity Shares in Retail Portion and the remaining available Equity Shares if any shall be allotted on proportionate basis. 25. Our Company has not made any public issue of its Equity Shares or rights issue of any kind or class of

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84 securities since its incorporation. 26. No person connected with the Issue including but not limited to the BRLMs the members of the Syndicate our Company the Selling Shareholder our Directors and our KMPs shall offer any incentive whether direct or indirect in any manner whether in cash or kind or services or otherwise to any Bidder for making a Bid. 27. There are no outstanding convertible securities or any other right which would entitle any person any option to receive Equity Shares after the Issue. 28. An oversubscription to the extent of 10 of the Net Issue can be retained for the purposes of rounding off to the nearer multiple of allotment lot. 29. Our Company shall ensure that transactions in the Equity Shares by our Promoter between the date of registering this Red Herring Prospectus with the RoC and the Bid/Issue Closing Date if any shall be reported to the Stock Exchanges within 24 hours of such transaction. 30. Except to the extent of tendering Equity Shares in the Issue as the Selling Shareholder our Promoter will not participate in the Issue. 31. No payment direct or indirect in the nature of discount commission and allowance or otherwise shall be made either by us or our Promoter to the persons who are Allotted Equity Shares.

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85 OBJECTS OF THE ISSUE The Issue comprises of a Fresh Issue by our Company and an Offer for Sale by the Selling Shareholder. The Offer for Sale The proceeds of the Offer for Sale shall be received by the Selling Shareholder. Our Company will not receive any proceeds from the Offer for Sale. The Fresh Issue Our Company proposes to utilise the Net Proceeds towards funding of the following objects: 1. Setting up of a new dry dock within the existing premises of our Company “Dry Dock” 2. Setting up of an international ship repair facility at Cochin Port Trust area “ISRF” and 3. General corporate purposes. In addition our Company expects to receive the benefits of listing of the Equity Shares on the Stock Exchanges and enhancement of our Company’s brand name and creation of a public market for our Equity Shares in India. The main objects and objects incidental and ancillary to the main objects set out in the Memorandum of Association enable our Company to undertake its existing business activities and the activities for which funds are being raised by our Company through the Fresh Issue. Proceeds of the Fresh Issue The details of the proceeds of the Fresh Issue are summarized in the table below. Particulars Estimated Amount in ` million Gross Proceeds of the Fresh Issue ● Less: Issue Expenses in relation to the Fresh Issue ● Net proceeds of the Fresh Issue “Net Proceeds” ● To be finalized upon determination of the Issue Price. Requirement of Funds and Utilisation of Net Proceeds Our fund requirements and deployment of the Net Proceeds mentioned below are based on our internal management estimates our Company’s current business plan and the detailed project reports of the Dry Dock and ISRF by HaskoningDHV India Private Limited and a consortium of Inros Lackner SE and Tata Consulting Engineers Limited respectively. The aforesaid internal management estimates and our Company’s current business plan are based on current conditions and are subject to revisions in light of changes in external circumstances or costs or our financial condition business or strategy. For further details of factors that may affect these estimates see “Risk Factors” on page 18. The Net Proceeds are proposed to be used in accordance with the details provided in the following table: Particulars Amount in ` million Setting up of Dry Dock 4430.00 Setting up of ISRF 2295.00 General corporate purposes ● Total ● May be revised upon determination of the Issue Price and updated in the Prospectus. To be finalised upon determination of the Issue Price and updated in the Prospectus prior to filing with the RoC. The amount shall not exceed 25.00 of the gross proceeds of the Fresh Issue. Schedule of implementation and deployment of the Net Proceeds We propose to deploy the Net Proceeds for the aforesaid purposes in accordance with the estimated schedule of

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86 implementation and deployment of funds set forth as under: In ` million Sr. No. Particulars Total estimated cost Amount deployed as on June 30 2017 Amount which will be financed from Net Proceeds Schedule of estimated utilisation Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023 1. Setting up of a Dry Dock within the existing premises of our Company 17989.91 140.83 4430.00 2730.55 6500.00 6000.00 2618.53 Nil Nil 2. Setting up of an international ship repair facility “ISRF” at Cochin Port Trust area and 9694.1 317.32 2295.00 1500.00 2000.00 3000.00 2000.00 800.00 76.78 3. General corporate purposes ● ● ● ● ● ● ● ● Total 27684.01 458.15 ● ● ● ● ● ● ● To be finalised upon determination of the Issue Price In accordance with the certificate of Krishnamoorthy Krishnamoorthy Statutory Auditors dated July 19 2017 as of June 30 2017 our Company has deployed ` 140.83 million towards setting up of Dry Dock. In accordance with the certificate of Krishnamoorthy Krishnamoorthy Statutory Auditors dated July 19 2017 as of June 30 2017 our Company has deployed ` 317.32 million towards setting up of ISRF. The fund deployment indicated above is based on current circumstances of our business management estimates DD DPR and ISRF DPR. Further the schedule of estimated utilisation of the Net Proceeds of the ISRF project is subject to receipt of the prior clearance of the wildlife from the Standing Committee of the National Board for Wildlife “NBWL clearance”. Until receipt of the NBWL clearance the Net Proceeds assigned for the proposed ISRF project shall be transferred to a separate bank account and we shall incur all expenditure on the ISRF project through our internal accruals and hence the schedule of estimated utilisation of the Net Proceeds of the ISRF project is based on our estimate from our management and may undergo further changes. We may have to revise the aforesaid estimates from time to time on account of various factors such as financial and market conditions competitive environment of the industry in which we operate costs of equipments and interest/ exchange rate fluctuations receipt of the requisite approvals and other external factors which may not be within the control of our management. This may entail rescheduling the proposed utilisation of the Net Proceeds and changing the allocation of funds including the sources of funds from its planned allocation at the discretion of our management subject to compliance with applicable laws. Subject to applicable laws in the event of any increase in the actual utilisation of funds earmarked for the objects of the Issue such additional funds for a particular activity will be met by way of means available to us including from internal accruals and any additional equity and/or debt arrangements. We believe that such alternate arrangements would be available to fund any such shortfalls. Further if the actual utilisation towards any of the objects is lower than the proposed deployment then such balance will be used for future growth opportunities including funding existing objects if required and general corporate purposes subject to applicable laws. In the event that the estimated utilization out of the Net Proceeds in a fiscal is not completely met the same shall be utilized in the subsequent fiscals. Schedule of Implementation Sr.No Project activity particulars Estimated date A. Setting up of Dry Dock 1. Commencement of Construction activities January 2018 2. Commencement of RCC piling works June 2018 3. Commencement of Dock Wall works July 2018 4. Completion of Dock Wall and associated works April 2019

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87 Sr.No Project activity particulars Estimated date 5. Completion of Dock Floor October 2019 6. Completion of Mechanical Electrical Works April 2020 7. Completion of Installation of Cranes May 2020 8. Completion of Dock Commissioning June 2020 B. Setting up of ISRF 1. Award of contract for shiplift transfer system January 2017 2. Commencement of construction activities at site November 2017 3. Completion of casting of RCC piles January 2019 4. Completion of Shiplift transfer system yard for 2 vessels and berths for aflaot repair February 2020 5. Completion of Additional yard for 2 more vessels August 2021 6. Completion of Additional yard for 2 more vessels August 2022 The aforesaid schedule of implementation is based on current circumstances of our business management estimates. Further the aforesaid schedule of implementation of the ISRF project is subject to receipt of the NBWL clearance. Until receipt of the NBWL clearance the Net Proceeds assigned for the proposed ISRF project shall be transferred to a separate bank account and we shall incur all expenditure on the ISRF project through our internal accruals and hence the schedule of implementation of the Net Proceeds of the ISRF project is based on our estimate from our management and may undergo changes. We may have to revise the aforesaid estimates from time to time on account of various factors such as financial and market conditions competitive environment of the industry in which we operate costs of equipment’s and interest/ exchange rate fluctuations receipt of the requisite approvals and other external factors which may not be within our control. This may entail rescheduling the proposed utilisation of the Net Proceeds and changing the allocation of funds including the sources of funds from its planned allocation at the discretion of our Company subject to compliance with applicable laws. Means of Finance The total estimated cost for setting up of Dry Dock and ISRF is ` 27684.01 million. Out of this we intend to utilize ` 6725 million from the Net Proceeds. The remaining cost of setting up of Dry Dock and ISRF other than amounts deployed as on June 30 2017 is to be financed through existing internal accrual of our Company and through debt/firm arrangements of finance through verifiable means. Details of estimated means of finance for setting up of Dry Dock and ISRF is set forth below. in ` million Particulars Amount A Total estimated cost of setting up Dry Dock and ISRF 27684.01 B Amounts already deployed as on June 30 2017 towards setting up of Dry Dock and ISRF B1. Amount already deployed as on June 30 2017 towards setting up of Dry Dock 140.83 B2. Amount already deployed as on June 30 2017 towards setting up of ISRF 317.32 C Amount proposed to be financed from the Net Proceeds 6725.00 D Funds required excluding funding through Net Proceeds and amount already deployed D A- B+C 20500.86 E Funds required excluding the Net Proceeds and identifiable internal accruals E A – C – F 8610.00 Firm arrangement for over 75 of the funds required excluding the Net Proceeds and identifiable internal accruals has been made as follows: 6457.50 a Sanction of credit facilities/term loan from State Bank of India for Dry Dock 4190.00 b Sanction of credit facilities/term loan from State Bank of India for ISRF 4420.00 F Funds from the existing identifiable internal accruals 12349.01 G Cash and Bank Balances as on June 30 2017 20032.06 In accordance with the certificate of Krishnamoorthy Krishnamoorthy Chartered Accountants Statutory Auditors dated July 19 2017 as of June 30 2017 our Company has deployed ` 140.83 million towards setting up of Dry Dock.

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88 In accordance with the certificate of Krishnamoorthy Krishnamoorthy Chartered Accountants Statutory Auditors dated July 19 2017 as of June 30 2017 our Company has deployed ` 317.32 million towards setting up of ISRF. In accordance with the certificate of Krishnamoorthy Krishnamoorthy Statutory Auditors dated July 19 2017 the total cash and bank balances of our Company as on June 30 2017 was ` 20032.06 million. Out of the aforementioned our Company proposes to utilize firstly the funds from the Net Proceeds secondly the funds from the existing identifiable internal accruals and lastly the funds from the credit facilities/term loan from State Bank of India for the Dry Dock and ISRF. The environmental clearances for our proposed Dry Dock and ISRF project is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others for ISRF project the prior clearance of the Standing Committee of the National Board for Wildlife. For details of the government and other approvals in relation to setting up of the Dry Dock and ISRF see “Government and Other Approvals” on page 382. Further see the “Risk Factors – The environmental clearances for our proposed Dry Dock and ISRF project is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others for ISRF project the prior clearance of the Standing Committee of the National Board for Wildlife.” on page 22. Pursuant to the SEBI Exemption Letter SEBI has has permitted our Company to utilize the Net Proceeds assigned towards the proposed ISRF project and utilize such funds raised once the necessary approvals are received. We have undertaken to SEBI vide our letter dated July 10 2017 that the net proceeds assigned for the proposed ISRF project shall be transferred to a separate bank account which would be utilised only after requisite pending approvals are received and we shall incur all expenditure on the ISRF project through internal accruals till the time such pending approvals are received. Further see the “Risk Factors – We cannot assure you that our proposed Dry Dock or International Ship Repair Facility will become operational as scheduled or at all or operate as efficiently as planned. We have not as on date of this Red Herring Prospectus obtained certain licenses or approvals for our proposed ISRF project for which funds are being raised through the Issue. Our Company shall transfer the Net Proceeds assigned for the proposed ISRF project to a separate bank account and we shall incur all expenditure on the ISRF project through internal accruals till the time such pending approvals are received. Further if we are unable to commission our new proposed Dry Dock or the ISRF in a timely manner or without cost overruns our business results of operations and financial condition may be adversely affected.” on page 19. Except as disclosed above the entire requirements of the objects detailed above are intended to be funded from the Net Proceeds. In view of above we confirm that with respect to the objects our Company has made firm arrangement of finance through verifiable means towards 75 of the stated means of finance excluding the amount proposed to be raised through the Issue and existing identified internal accruals. While we have available debt financing for 75 of the funds required excluding the Net Proceeds the expenditure already incurred and existing identified internal accruals we may at the discretion of the management utilize our future internal accruals in order to reduce our financing costs. Details of the utilisation of Net Proceeds of the Fresh Issue The details of utilisation of the Net Proceeds of the Fresh Issue are set forth herein below: A. Setting up of Dry Dock Our Company proposes to set up a Dry Dock to augment its shipbuilding/ ship repair capacity essentially required to tap the market potential of building specialized and technologically advanced large vessels such as Liquefied Natural Gas “LNG” vessels indigenous aircraft carriers of higher capacity jack up rigs drill ships large dredgers and repairing of offshore platforms and larger vessels. The Dry Dock shall be located at the northern end of the existing site premises of our Company and accordingly there will be no additional cost in relation to lease/purchase of land for setting up the new Dry Dock. For further details of our property see “Our Business” on page 124. HaskoningDHV India Private Limited “Dry Dock Project Consultant” has prepared a detailed project report dated October 5 2016 “DD DPR” for setting up of a new dry dock within our Company’s premises. The Dry Dock is proposed to be a stepped dock with a minimum clear length of 310 metre width of 75 metre at the wider part and width of 60 metre at the narrower part. The dock depth would be 13 metre with a draught of up to 9.5 metre. This stepped dock is proposed to be used for enabling longer vessels to fill the length of the Dry Dock and wider shorter vessels and maritime equipment such as rigs to be constructed or repaired at the wider

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89 part of the Dry Dock. The cost of development of the Dry Dock was estimated by the Dry Dock Project Consultant to be US 265.23 million. ` 17989.91 million based on a conversion rate of ` 67.83 for one US as on February 6 2016. This estimate includes the civil mechanical electrical allied services and equipment associated with the Dry Dock. The breakdown of the cost estimate as on February 2016 is as follows: Sr. No. Specification Cost Estimate in US million 1 Civil and structural works 135.00 2 Mechanical and electrical works 32.73 3 Other dock equipment 55.20 4 Equipment outside of main contract 4.03 5 Additional goliath crane optional 25.60 6 Dry Dock Project Consultant fees 5.80 7 Contingency at 3 6.87 Total 265.23 The estimate is accurate within +/- 25.00 at DD DPR stage and includes contingency value for unforeseen items or items of risk. The estimate excludes buildings that are not included within the scope of the Dry Dock Project Consultant. The Dry Dock Project Consultant has assumed that there shall be no further cost in relation to any ground improvement or piling with reference to the civil and structural work other than the dry dock area and grand assembly area. Furthermore the additional goliath gantry crane is optional and its cost is based on the budget cost that is provided by a European supplier and a Korean supplier. Moreover taxes are included in the above stated estimates within +/-25.00 accuracy. For details of the government and other approvals in relation to setting up of the Dry Dock see “Government and Other Approvals” on page 382. Further the DD DPR mentions certain risks applicable to our Company in relation to setting up of the Dry Dock. For further details on certain risks disclosed in the DD DPR see “Risk Factors – We cannot assure you that our proposed Dry Dock or International Ship Repair Facility will become operational as scheduled or at all or operate as efficiently as planned. We have not as on date of this Red Herring Prospectus obtained certain licenses or approvals for our proposed ISRF project for which funds are being raised through the Issue. Our Company shall transfer the Net Proceeds assigned for the proposed ISRF project to a separate bank account and we shall incur all expenditure on the ISRF project through internal accruals till the time such pending approvals are received. Further if we are unable to commission our new proposed Dry Dock or the ISRF in a timely manner or without cost overruns our business results of operations and financial condition may be adversely affected.” and “Risk Factors – The environmental clearances for our proposed Dry Dock and ISRF project is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others for ISRF project the prior clearance of the Standing Committee of the National Board for Wildlife.” on pages 19 and 22 respectively. Also refer to “Outstanding Litigations and Other Material Devlopments – Details of pending litigation involving any other person whose outcome could have material adverse effect on the position of our Company.” on page 379. The detailed breakdown of the cost estimate in the DD DPR is as follows: 1. Civil and structural works The detailed breakdown of the cost of civil and structural works is as set forth below: Sr. No. Particulars Amount in US million 1. Construction of dock floor dock sill dock walls entrance works abutments and piers 64.5 2. Pump house and substations 06.3 3. Excavation and filling 10.8 4. Crane tracks 26.0 5. Grand Assembly area and paved areas around the dock 09.7 6. Cofferdam and temporary works 10.0 7. Entrance and intermediate gates 07.7 Total 135.0

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90 At present it is assumed that areas around the dock excluding the piled portion of the grand assembly area shall be allowed to settle and topped up as necessary such that currently no cost has been allowed for any ground improvement or piling. The design of the Dry Dock is based on using traditional well understood construction methods. A ground investigation was carried out in November/December 2015 by EDC Geotechnical Consultants. The key areas of construction include dock walls dock floor dock cope crane beams substations grand assembly piled and ground bearing general pavements pump house quay walls piers entrance and intermediate gates buildings and foundations for mechanical electrical and control equipment contaminated water treatment plant temporary works and crane erection. Furthermore certain modifications shall be undertaken to connect the Dry Dock to the existing shipyard infrastructure of our Company. 2. Mechanical and electrical works The detailed breakdown of the cost of mechanical and electrical works is as set forth below: Sr. No. Particulars Amount in US million 1. Mechanical service distribution system 9.32 2. Control systems local area network closed circuit television fire and gas detection system as well as the public address system 2.40 3. Existing main intake substation 0.16 4. Equipment for substations adjacent dock 12.30 5. Area lighting 0.65 6. Distribution service units 1.65 7. Cabling 3.75 8. Down shop lead system lightning earthing 2.50 Total 32.73 The concept design proposes that the power source to the Dry Dock shall primarily be obtained from the existing main receiving station which is the main intake substation currently supplying power to the whole shipyard. The mechanical systems and services include the provision of all equipment associated with the provision of welding gases compressed air and water facilities for various fabrication/ repair activities on the vessels in the Dry Dock various construction blocks in the general assembly area and other activities in the adjacent area. It also covers the equipment for the dewatering operations associated with the dry dock ballasting of the vessels during re-floating and the associated pumping equipment to maintain the working area. 3. Other dock equipment The detailed breakdown of the cost of other dock equipment is as set forth below: Sr. No. Particulars Amount in US million 1. Cranes 45.10 2. Pumps 6.00 3. Winches capstans fenders and bollards 2.50 4. Contaminated water treatment plant 1.60 Total 55.20 Crane costs are based on budget costs provided by a European supplier and a Korean supplier for 600t goliath crane 2no. 75t85m jib cranes. Pump costs are based on the current understanding of pumping requirements and the use of 3no.dewatering pumps. Our Company shall procure cranes separately. The erection of the cranes need to be carefully programmed by the contractor and the crane supplier. The Dry Dock shall also have contaminated water treatment plant to remove suspended solids like sand grit and oil. 4. Equipment outside of main contract Certain other equipment that shall be required for the successful functioning of the Dry Dock are firefighting tank and equipment industrial water tank and equipment compressed air equipment electrical distribution system for

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91 compressed air equipment and acetylene storage system. The Dry Dock Project Consultant envisaged that construction can be completed within the minimum period of 30 months if the contractor carries out work in an intensified manner uses modern materials and equipment and carries out shift work to increase the time to task. The critical part of the construction phase is the main dock wall construction temporary entrance cofferdam and the excavation of the dock piling work underground substations and pump room. It is to be noted that these constructions are also dependant on weather and the contractor will be required to use regular and efficient methods for transporting the excavated material off-site after which the construction of pump house including the fitting of mechanical electrical and control systems shall follow. B. Setting up of ISRF A consortium of Inros Lackner SE and Tata Consulting Engineers Limited “ISRF Project Consultant” has prepared a detailed project report dated May 21 2015 “ISRF DPR” for setting up of ISRF. The ISRF project shall be established on 16.90 hectare of land and about 15.6 hectare of water area. Our Company has leased 8.12 hectare of land and 15 hectare or thereabout of adjoining water body from Cochin Port Trust vide the lease deed dated April 12 2013 for a period of 30 years. For further details of the lease and certain risks in relation to the lease see “Our Business” and “Risk Factors” on page 124 and 18 respectively. The ISRF envisages the construction of a ship lift for vessels a transfer system six work stations approximately eight afloat berths depending on the availability and size of vessels for repair jetties administrative buildings and allied facilities and upgradation of the existing workshops. The envisaged ship lift would be designed for vessels up to a length of 130 metre with a lifting capacity of 6000 tonnes. The cost of development of the ISRF including the main technological equipment required for shipyard repair process was estimated by the ISRF Project Consultant to be ` 9694.1 million. The estimated capital construction costs are based on the price that is applicable to the date of submission of the ISRF DPR on May 21 2015 along with a price escalation which is considered up to March 31 2017. Our Company has already placed purchase order for the procurement of shiplift and transfer system. The tendering process in respect of major civil mechanical and electrial works is also under process. The ISRF DPR estimated the capital cost in relation to the construction of ship lift seaside landside mechanical and electrical work and technological equipment for the ISRF in the premises of Willingdon Island Cochin Port Trust Kochi. The breakdown of the capital cost estimate in the ISRF DPR is as follows: Sr. No. Specification Total cost excluding taxes in ` million 1. Sea Side Works 2769.5 2. Land Side Works 3229.2 3. Mechanical Works 210.6 4. Electrical Works 226.5 5. Technological Equipment and Ship Lift 2740.8 Sub total 9176.7 Contingencies at 3 275.3 ISRF Project Consultant fees 242.1 Grand Total 9694.1 However the capital cost calculation excludes the fees for disposal of contaminated soil maintenance dredging dredging work in front of UTL berth aids to navigation traffic signage contingencies for unforeseeable costs and risks except for the construction works for instance change / upgradation in technique insurances except the ones from the contractors/suppliers price escalation / inflation after March 2017 administrative and marketing costs for our Company purchase/lease of the land upon which the ISRF is built permits and legal costs taxes involving the construction of other facilities which are not listed in the ISRF DPR financing and commissioning the ISRF prior to commercial operation supply e. g. electricity gas water costs for training and furniture and personal portable tools. The ISRF DPR also does not include the labour costs and supplies for running and maintaining ISRF. Our Company has received certain government approvals in relation to the setting up of ISRF. For further details of approvals see “Government and Other Approvals” on page 382. Further the ISRF DPR mentions certain risks applicable to our Company in relation to the setting up of ISRF. For further details on certain risks in ISRF see “Risk Factors – We cannot assure you that our proposed Dry Dock

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92 or International Ship Repair Facility will become operational as scheduled or at all or operate as efficiently as planned. We have not as on date of this Red Herring Prospectus obtained certain licenses or approvals for our proposed ISRF project for which funds are being raised through the Issue. Our Company shall transfer the Net Proceeds assigned for the proposed ISRF project to a separate bank account and we shall incur all expenditure on the ISRF project through internal accruals till the time such pending approvals are received. Further if we are unable to commission our new proposed Dry Dock or the ISRF in a timely manner or without cost overruns our business results of operations and financial condition may be adversely affected.” and “Risk Factors – The cost estimates by the Dry Dock Project Consultant and the ISRF Project Consultant have been derived from and benchmarked against similar maritime and dry dock/shipyard projects carried out by the Dry Dock Project Consultant and the ISRF Project Consultant respectively in recent years and may not be accurate.” on pages 19 and 20 respectively. Also refer to “Outstanding Litigations and Other Material Devlopments – Details of pending litigation involving any other person whose outcome could have material adverse effect on the position of our Company.” on page 379. The detailed breakdown of the capital cost estimate in the ISRF DPR is as follows: 1. Seaside works The detailed breakdown of the cost is as set forth below: Sr. No. Particulars Amount in ` million 1. Dismantling of seaside structures 13.7 2. Dredging work 236.3 3. Piling work 1368.9 4. Concrete work 811.6 5. Siltation mitigation 339 Total 2769.5 The seaside of the proposed ISRF lies in the Mattancherry channel. This is a shallow channel and the natural water depth is not sufficient for the ship lift and allied facilities. Therefore the channel access area ship lift area and afloat berths area shall have to be deepened along with periodic de-siltation under the ship lift platform and maintenance dredging in the remaining area. Furthermore the existing dolphin as well as the existing jetty are close to the entrance of the ship lift. To construct a functional ISRF these structures will have to be demolished and removed along with the navigation aid equipment and slip ways on the landsides. The earth work required for plot development or gradation will have to be optimised and the workstation area will have to be levelled to support the concrete deck while casting. 2. Landside works The detailed breakdown of the cost is as set forth below: Sr. No. Particulars Amount in ` million 1. Refurbishment of existing facilities 125 2. Compound wall 14.8 3. Land development 25 4. Workshops and Sheds 120 5. Open yards 1 6. Tanks 153.6 7. Operational building 75.7 8. Workstation area piling work 1316.3 9. Work station area deck slab 1096.3 10. Utility trenches 56.8 11. Dismantling of landside structures 21.8 12. ETP/STP 102.2 13. Roads and parking 68 14. Storm water drainage domestic sewer line effluent line 52.7 Total 3229.2 The envisaged site for the ISRF has several existing workshops that were built in the year 1938. Some old

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93 buildings will have to be demolished some will have to be upgraded and occupied for different use and some new buildings will have to be constructed. Furthermore the existing facility and the proposed ISRF will have to be integrated to avoid duplication of facilities and to keep existing facility in vogue. The existing facilities like water supply and drainage will be connected with the new one or maintained separately to ease the operation. Further for assuring optimal vessel turnaround avoiding any vessel queuing time repair operations construction of adequate number and sizes of berths suitable material handling equipment and ship lift and transfer systems from berth to repair area and vice versa shall be carried out in the ISRF. 3. Mechanical works The detailed breakdown of the cost is as set forth below: Sr. No. Particulars Amount in ` million 1. Compressed air system 33.6 2. EOT crane 19.1 3. Ventilation system 5.1 4. Air conditioning system 13.6 5. Gases storage and transfer system 50.9 6. Fire protection system 43.7 7. Water storage and transfer system 1 8. Utility piping distribution network for process water potable water 32.6 9. Set and accessories 11 Total 210.6 The estimation for the mechanical and electrical equipment has been done by the ISRF Project Consultant on the basis of confirmation of media consumption list received from our Company at various stages. There are various mechanical utility systems which are required for workstations as well as for repair shops. For instance systems like compressed air system gases system fire protection system cranes HVAC and water systems will have to be built for the smooth functioning of the ISRF. 4. Electrical works The detailed breakdown of the cost is as set forth below: Sr. No. Particulars Amount in ` million 1. High tension panels cables and transformers 32.0 2. Low tension panels and cables 61.3 3. Static frequency converter 6.2 4. Battery chargers battery charger distribution boards and static uninterrupted power supply 7.9 5. Indoor and outdoor lighting 21.5 6. Earthing System 4.5 7. Supervisory control and data acquisition system and networking 7.1 8. Fire detection and alarm system and telephone and networking 21.5 9. Others 22.5 10. 10 miscellaneous 16.0 11. 15 installation 26.0 Total 226.5 The estimated maximum demand of power for the existing dry dock and the proposed ISRF is 4849kVA. To cater to this power requirement several electrical facilities such as 11kV receiving yard 11kV indoor switchgear 11kV HV cabling system LV cabling system distribution transformer LT panels of 440V 60Hz 415V 50Hz and 380V 50Hz 110V 50Hz and 24V 50Hz APFC panels frequency converter indoor and outdoor lighting system earthing and lightning protection system static UPS system DC system and FDAS system are required to be installed. 5. Technological equipment and ship lift

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94 The detailed breakdown of the cost is as set forth below: Sr. No. Particulars Amount in ` million 1. Various workshops proposed at ISRF 162.5 2. Ship lift/ transfer system/work stations/ dry dock/ jetties 2296.6 3. Transport equipment 26.5 4. Cost for delivery installation commissioning and training 249.2 5. Blacksmith / Foundry 2.0 6. Blasting and Painting Works Final Coating 4.1 Total 2740.8 The requirements of the ship repair production areas are calculated on the final annual repair throughput of 84 vessels. The ISRF DPR assumes that the ISRF shall work independently and autonomously from the workshops of the main yard. Therefore necessary workshops are planned and determined in the ISRF DPR to achieve the full repair capacity. The aforesaid workshops include pipe shop/ boiler shop electrical and electronic shop steel fabrication/ locksmith shop engine repair shop carpentry and sawing shed rigger shop as well as the maintenance and service workshop. Further since the material handling equipment is crucial transport operations are one of the key processes at ship repair facilities. The number of cranes as well as the type and number of suitable forklifts and trucks are essential for the effectiveness of the ship repair and have been accordingly factored in the ISRF DPR. C. General corporate purposes Our Company proposes to deploy the balance Net Proceeds aggregating to ` ● million towards general corporate purposes subject to such utilisation not exceeding 25.00 of the Gross Proceeds of the Fresh Issue in compliance with the SEBI ICDR Regulations. The general corporate purposes for which our Company proposes to utilise Net Proceeds include meeting exigencies and expenses incurred by our Company in the ordinary course of business. In addition to the above our Company may utilise the Net Proceeds towards other expenditure in the ordinary course of business considered expedient and as approved periodically by the Board or a duly constituted committee thereof subject to compliance with necessary provisions of the Companies Act. Our Company’s management in accordance with the policies of the Board shall have flexibility in utilising surplus amounts if any. In case of variations in the actual utilization of funds designated for the purposes set forth above increased fund requirements for a particular purpose may be financed by surplus funds if any which are not applied to the other purposes set out above. Our Company undertakes to utilise the Net Proceeds in accordance with the Objects of the Issue set out above. Our Company further undertakes to apply for and obtain all the necessary approvals and consents in relation to the Objects of the Issue set out above as and when required under applicable law. For details of approvals in relation to the Objects of the Issue see “Government and Other Approvals” on page 382. D. Issue expenses The total expenses of the Issue are estimated to be approximately ` ● million. The Issue expenses consist of listing fees underwriting fees selling commission fees payable to the BRLMs fees payable to legal counsels Bankers to the Issue including processing fee to the SCSBs for processing Bid cum Application Forms submitted by the Bidders procured by the Syndicate Member and submitted to the SCSBs and Registrar to the Issue brokerage and selling commission payable to Registered Brokers RTAs and CDPs printing and stationery expenses advertising and marketing expenses and all other incidental and miscellaneous expenses for listing the Equity Shares on the Stock Exchanges. The Issue expenses will be shared upon successful completion of the Issue between our Company and the Selling Shareholder on a pro-rata basis in proportion to the Equity Shares issued and allotted by our Company in the Fresh Issue and the Equity Shares sold by the Selling Shareholder in the Offer for Sale. However in the event that the Issue is withdrawn by our Company for any reason whatsoever all the Issue related expenses will be borne by our Company. Any payments by our Company in relation to the Issue expenses on behalf of the Selling Shareholder shall be reimbursed by the Selling Shareholder to our Company. The break-up for the Issue expenses is as follows:

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95 in ` million Activity Estimated expenses 1 As a of the total estimated Issue expenses 1 As a of the total Issue size 1 Fees payable to BRLMs including underwriting commission brokerage and selling commission • • • Selling commission and processing fees for SCSBs 4 5 • • • Brokerage selling commission and processing/uploading charges for Members of the Syndicate Registered Brokers’ RTAs and CDPs 2 3 • • • Fees payable to Registrar to the Issue • • • Printing and stationery expenses • • • Advertising and marketing expenses • • • Others • Listing fees • • • • SEBI BSE and NSE processing fees • • • • Fees payable to Legal Counsel • Fees payable to the Monitoring Agency • • • • Miscellaneous • • • Total estimated Issue expenses • • • 1 Amounts will be finalised at the time of filing the Prospectus and on determination of Issue Price and other details. 2 Selling commission on the portion for Retail Individual Bidders portion for Eligible Employees and the portion for Non-Institutional Bidders which are procured by members of the Syndicate including their Sub Syndicate Members RTAs and CDPs would be as follows: Portion for Retail Individual Bidders 0.35 of the Amount Allotted plus applicable service tax Portion for Non-Institutional Bidders 0.15 of the Amount Allotted plus applicable service tax Portion for Eligible Employees 0.25 of the Amount Allotted plus applicable service tax Amount Allotted is the product of the number of Equity Shares Allotted and the Issue Price. In addition to the selling commission referred above any additional amounts to be paid by our Company and Selling Shareholder shall be as mutually agreed upon the Book Running Lead Managers their affiliate Syndicate Member our Company and Selling Shareholder before the opening of the Issue. The Syndicate RTAs and CDPs shall be entitled to processing/uploading charges of ` 10 plus applicable service tax per valid Bid cum Application Form procured by them. 3 Processing/uploading charges payable to the Registered Brokers on the portion for Retail Individual Bidders Non-Institutional Bidders and Eligible Employees which are directly procured by the Registered Brokers and submitted to SCSB for processing would be as follows: Portion for Retail Individual Bidders ` 10 per valid Bid cum Application Form plus applicable service tax Portion for Non-Institutional Bidders ` 10 per valid Bid cum Application Form plus applicable service tax Portion for Eligible Employees ` 10 per valid Bid cum Application Form plus applicable service tax Based on valid Bid cum Application Forms 4 Selling commission payable to the SCSBs on the portion for Retail Individual Bidders Non-Institutional Bidders and Eligible Employees which are directly procured by them would be as follows: Portion for Retail Individual Bidders 0.35 of the Amount Allotted plus applicable service tax Portion for Non-Institutional Bidders 0.15 of the Amount Allotted plus applicable service tax Portion for Eligible Employees 0.25 of the Amount Allotted plus applicable service tax Amount Allotted is the product of the number of Equity Shares Allotted and the Issue Price. No additional processing/uploading charges shall be payable by our Company and the Selling Shareholder

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96 to the SCSBs on the applications directly procured by them. 5 Processing fees payable to the SCSBs on the portion for Retail Individual Bidders Non-Institutional Bidders and Eligible Employees which are procured by the members of the Syndicate /Sub-Syndicate /Registered Brokers / RTAs /CDPs and submitted to SCSBs for blocking would be as follows. Portion for Retail Individual Bidders ` 10 per valid Bid cum Application Form plus applicable service tax Portion for Non-Institutional Bidders ` 10 per valid Bid cum Application Form plus applicable service tax Portion for Eligible Employees ` 10 per valid Bid cum Application Form plus applicable service tax Based on valid Bid cum Application Forms The Issue expenses shall be payable within 30 working days post the date of receipt of the final invoice from the respective Designated Intermediaries by our Company in accordance with the arrangements/ agreements entered into by our Company with the relevant Designated Intermediary. Interim use of Net Proceeds Our Company in accordance with the policies established by the Board from time to time will have flexibility to deploy the Net Proceeds. Pending utilisation for the purposes described above our Company will deposit the Net Proceeds only with one or more Scheduled Commercial Banks included in Second Schedule of Reserve Bank of India Act 1934 as may be approved by our Board. In accordance with section 27 of the Companies Act 2013 our Company confirms that it shall not use the Net Proceeds for buying trading or otherwise dealing in shares of any other listed company. Bridge Financing Facilities Our Company has not raised any bridge loans from any bank or financial institution as on the date of this Red Herring Prospectus which are proposed to be repaid from the Net Proceeds. Monitoring of Utilisation of Funds Our Company has appointed State Bank of India as the Monitoring Agency for the Issue. Our Board and the Monitoring Agency will monitor the utilization of Net Proceeds and the Monitoring Agency shall submit its report to our Company in terms of regulation 162 of the SEBI ICDR Regulations. Pursuant to regulation 32 of the SEBI Listing Regulations our Company and the Monitoring Agency shall on a quarterly basis disclose to the Audit Committee the deviations and the category wise variations of the Net Proceeds and after such review the statements shall be submitted to the Stock Exchanges. This information will also be advertised in newspapers simultaneously with the interim or annual financial results of our Company after placing the same before the Audit Committee. We will disclose the utilization of the Net Proceeds under a separate head in our balance sheets until such time as the Net Proceeds remain unutilized clearly specifying the purpose for which such Net Proceeds have been utilized. In the event that we are unable to utilize the entire amount that we have currently estimated for use out of the Net Proceeds in a fiscal we will utilize such unutilized amount in the next fiscal. Variation in Objects In accordance with section 138 and section 27 of the Companies Act 2013 the SEBI ICDR Regulations and applicable rules our Company shall not vary the objects of the Fresh Issue without our Company being authorised to do so by the Shareholders by way of a special resolution through postal ballot. In addition the notice issued to the Shareholders in relation to the passing of such special resolution “Postal Ballot Notice” shall specify the prescribed details as required under the Companies Act and the applicable rules. The Postal Ballot Notice shall simultaneously be published in the newspapers one in English and one in Malayalam the vernacular language of the jurisdiction where our Registered Office is situated. Our Promoter or controlling Shareholders will be required to provide an exit opportunity to such Shareholders who do not agree to the proposal to vary the objects subject to the provisions of the Companies Act 2013 and in accordance with such terms and conditions including in respect of pricing of the Equity Shares in accordance with the Companies Act 2013 and provisions of Chapter VI-A of the SEBI ICDR Regulations.

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97 Other Confirmations No part of the proceeds of the Fresh Issue will be paid by us as a consideration to our Promoter our Directors or our Key Management Personnel except in the normal course of business and in compliance with the applicable law. There are no existing or anticipated transactions in relation to the utilization of the Net Proceeds with our Promoter Directors or Key Management Personnel.

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98 BASIS FOR ISSUE PRICE The Issue Price will be determined by our Company and the Selling Shareholder in consultation with the BRLMs on the basis of assessment of market demand for the Equity Shares through the Book Building Process and on the basis of quantitative and qualitative factors as described below. The face value of the Equity Shares is ` 10 each and the Issue Price is ● times the face value at the lower end of the Price Band and ● times the face value at the higher end of the Price Band. Qualitative Factors Some of the qualitative factors which form the basis for the Issue Price are: • One of India’s leading public-sector shipyards catering to both commercial clients as well as clients engaged in the defence sector with a multitude of offerings for a broad range of vessels across life cycles. • Modern facilities and infrastructure and integrated capabilities to deliver quality products and services. • Order book with a strong customer base of reputable ship owners and marquee clients. • Competitive cost structure and efficient operations. • Led by a dedicated board long serving and experienced senior management backed by a strong pool of experienced professionals. • Continuous profits leading to robust financial performance. For further details see “Our Business” “Risk Factors” and “Financial Statements” on pages 124 18 and 175 respectively. Quantitative Factors The information presented below relating to our Company is based on the Restated Financial Statements prepared in accordance with Companies Act and SEBI ICDR Regulations. Our Company has only one set of restated financial statements since it has no associates subsidiaries joint ventures to consolidate. Some of the quantitative factors which may form the basis for computing the Issue Price are as follows: 1. Basic and Diluted Earnings Per Share “EPS” as adjusted for change in capital: As per our Restated Financial Statements: Year ended Basic EPS in ` Diluted EPS in ` Weight March 31 2015 6.12 6.12 1 March 31 2016 25.75 25.75 2 March 31 2017 27.56 27.56 3 Weighted Average 23.38 23.38 Note: i Basic EPS: Net Profit after tax as restated divided by weighted average number of Equity Shares outstanding at the end of the period/ year at the end of the period/ year. ii Diluted EPS: Net Profit after tax as restated divided by weighted average number of Equity Shares outstanding at the end of the period/year for diluted EPS. iii Weighted average number of Equity Shares is the number of Equity Shares outstanding at the beginning of the year/period adjusted by the number of Equity Shares issued during the year/period multiplied by the time weighting factor. The time weighting factor is the number of days for which the specific shares are outstanding as a proportion of the total number of days during the year/period. iv The above statement should be read with significant accounting policies and notes on Restated Financial Statements as appearing in the Financial Statements.

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99 v The EPS has been calculated in accordance with Accounting Standard 20 – “Earnings per Share” notified by Companies Accounting Standards Rules 2006 as amended. 2. Price/Earning P/E ratio in relation to Issue Price of ` ● per Equity Share of ` 10 each: As per our Restated Financial Statements: a P/E based on basic and diluted EPS at the lower end of the Price Band for Fiscal 2017 is ● b P/E based on basic and diluted EPS at the higher end of the Price Band for Fiscal 2017 is ● Industry P/E Ratio Particulars P/E Highest NA Lowest NA Average NA Source: The highest and lowest industry P/E shown above is based on the industry peer set provided below under “Basis for Issue Price – Comparison of accounting ratios with Listed Industry Peers for Fiscal 2017” on page 100. For further details see “Basis for Issue Price – Comparison of accounting ratios with Listed Industry Peers for Fiscal 2017” on page 100. 3. Return on Net Worth “RoNW”: As per our Restated Financial Statements: Year ended RoNW Weight March 31 2015 4.46 1 March 31 2016 15.99 2 March 31 2017 15.37 3 Weighted Average 13.76 Note: i Return on Net Worth has been computed as Net Profit after tax as divided by Net Worth at the end of the period/year. ii Net Worth for Equity Shareholders has been computed as sum of share capital and reserves and surplus includes Securities Premium and Surplus / Deficit in Standalone Statement of Profit and Loss. 4. Minimum Return on Increased Net Worth for maintaining Pre-Issue EPS for the year ended March 31 2017 As per our Restated Financial Statements: Based on the Basic and Diluted EPS: At the Floor Price – The minimum return on increased net worth required to maintain pre-Issue Basic and Diluted EPS for the year ended March 31 2017 is ● at the Floor Price At the Cap Price – The minimum return on increased net worth required to maintain pre-Issue Basic and Diluted EPS for the year ended March 31 2017 is ● at the Cap Price 5. Net Asset Value “NAV” per Share As per our Restated Financial Statements: Year ended NAV ` per share March 31 2017 179.29 Issue Price: ` ● Net asset value after the Issue: ` ●

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100 Note: Net Asset Value per Equity Share has been computed as Net Worth for Equity Shareholders divided by the total number of Equity Shares outstanding at the end of the period/ year. Issue Price will be determined on the conclusion of the Book Building Process. 6. Comparison of accounting ratios with Listed Industry Peers for Fiscal 2017 Name of Company Unconsolidated /Consolidated Face value ` per share EPS ` per share NAV ` per share 2 P/E RoNW Basic 1 Diluted 1 Company Cochin Shipyard Limited Unconsolidated 10 27.56 27.56 179.29 ●/● 15.37 Peers Reliance Defence and Engineering Limited 3 Consolidated 10 7.84 7.84 19.65 NA 39.89 ABG Shipyard Limited Consolidated 10 686.55 686.55 587.29 NA NA Bharati Defence and Infrastructure Limited Consolidated 10 438.92 438.92 673.27 NA NA 1 Basic and diluted EPS refer to basic and diluted EPS sourced from the annual reports of the aforesaid companies. 2 NAV for peer - Reliance Defence and Engineering Ltd. is computed as the closing net worth of the as of March 31 2017 divided by the closing outstanding number of fully paid up equity shares as sourced from the audited financials of for the financial year ended March 31 2017. 3 Net Worth for Equity Shareholders for Reliance Defence and Engineering Ltd. has been computed as sum of share capital and entire reserves and surplus as break-up of various reserves is not available. P/E ratio for Reliance Defence and Engineering Ltd. is Not Applicable since the company reported loss for the financial year ended March 31 2017. Financial Information of both ABG Shipyard Ltd. and Bharati Defence and Infrastructure Ltd. pertain for financial year ended March 31 2016 as information for financial year ended March 31 2017 are not publically available. P/E ratio for the aforesaid peers is not applicable since the aforesaid companies reported loss for the financial year ended March 31 2016 RoNW for ABG Shipyard Ltd. and Bharati Defence and Infrastructure Ltd. are not applicable since both the Net Profit after Tax and Net worth for such companies are negative 7. The Issue price is ● times of the face value of the Equity Shares. The Issue Price of ` ● has been determined by our Company and Selling Shareholder in consultation with the BRLMs on the basis of the demand from investors for the Equity Shares through the Book-Building Process and is justified in view of the above qualitative and quantitative parameters. Investors should read the above mentioned information along with “Risk Factors” and “Financial Statements” on pages 18 and 175 respectively to have a more informed view. The trading price of the Equity Shares of our Company could decline due to the factors mentioned in “Risk Factors” on page 18 or any other factors that may arise in the future and you may lose all or part of your investments.

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101 STATEMENT OF TAX BENEFITS STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS To The Board of Directors Cochin Shipyard Limited Administrative Building P.O Bag No. 1653 Perumanoor P.O. Kochi 682 015 Kerala India Dear Sirs Sub: Statement of possible special tax benefits the “Statement” available to Cochin Shipyard Limited “the Company” and its Shareholders prepared in accordance with the requirements under Schedule VIII – Clause VIIL of the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations 2009 as amended the “Regulations” We enclose herewith the statement showing the current position of special tax benefits available to the Company and to its shareholders as per the provisions of the Income Tax Act 1961 as applicable to the assessment year 2018-19 relevant to the financial year 2017-18 for inclusion in the Red Herring Prospectus and Prospectus collectively the “Offer Documents” in connection with the proposed Issue. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant provisions of the Income Tax Act 1961. Hence the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilment of such conditions which based on business imperatives the Company faces in the future the Company may or may not choose to fulfill. The benefits discussed in the enclosed statement are neither exhaustive nor conclusive. Further the preparation of the enclosed Statement and its contents was the responsibility of the Management of the Company. We were informed that this statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the Issue. We are neither suggesting nor are we advising the investor to invest money or not to invest money based on this statement. We do not express any opinion or provide any assurance as to whether: 1 the Company or its shareholders will continue to obtain these benefits in future 2 the conditions prescribed for availing the benefits have been/would be met with 3 the revenue authorities/courts will concur with the views expressed herein. Limitations Our views expressed herein are based on the facts and assumptions indicated above. No assurance is given that the revenue authorities/courts will concur with the views expressed herein. Our views are based on the existing provisions of law and its interpretations which are subject to change from time to time by subsequent legislative regulatory administrative or judicial decisions. We do not assume responsibility to update the views consequent to such changes. We shall not be liable to the Company for any claims liabilities or expenses relating to this assignment except to the extent of fees relating to this assignment as finally judicially determined to have resulted primarily from bad faith or intentional misconduct. We will not be liable to any other person in respect of this Statement. The enclosed Annexure is intended solely for your information and for inclusion in the Offer Documents in connection with the Issue and is not to be used referred to or distributed for any other purpose without our prior written consent. Yours faithfully

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102 For Krishnamoorthy Krishnamoorthy Chartered Accountants Firm Registration No.: 001488S C.R. Rema Partner Membership No: 029182 Place: Ernakulam Date: July 19 2017

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103 Annexure to the Statement of Tax Benefits STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS This statement is only intended to provide the Special tax benefits available to the Company and its Equity Shareholders under the Income Tax Act 1961 in a general and summarized manner and does not purport to be exhaustive or comprehensive and is not intended to be a substitute for professional advice. In view of the individual nature of tax consequence and the changing tax laws each investor is advised to consult their own tax advisor with respect to specific tax implications arising out of their participation in the issue. I. UNDER THE INCOME TAX ACT 1961 THE “ACT” A. SPECIAL TAX BENEFITS AVAILABLE TO THE COMPANY There are no special tax benefits available to the Company. B. SPECIAL TAX BENEFITS AVAILABLE TO THE SHAREHOLDERS OF THE COMPANY The shareholders of the Company are not entitled to any special tax benefits under the Act. Notes: a. The above statement of Direct Tax Benefits sets out the possible tax benefits available to the Company and its shareholders under the current tax laws presently in force in India. b. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences the changing tax laws each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue. c. We have not commented on the taxation aspect under any law for the time being in force as applicable of any country other than India. Each investor is advised to consult its own tax consultant for taxation in any country other than India. d. Our views expressed in this statement are based on the facts and assumptions as indicated in the statement. No assurance is given that the revenue authorities/courts will concur with the views expressed herein. Our views are based on the existing provisions of law and its interpretation which are subject to change from time to time. We do not assume responsibility to update the views consequent to such changes.

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104 SECTION IV: ABOUT OUR COMPANY INDUSTRY OVERVIEW Unless noted otherwise the information in this section has been obtained or derived from the “A study on Shipbuilding and Ship Repairing Industry” of March 2017 by CRISIL Research the “CRISIL Report” as well as other industry sources and government publications. All information contained in the CRISIL Report has been obtained by CRISIL from sources believed by it to be accurate and reliable. Although reasonable care has been taken by CRISIL to ensure that the information in the CRISIL Report is true such information is provided ‘as is’ without any warranty of any kind and CRISIL in particular makes no representation or warranty express or implied as to the accuracy timeliness or completeness of any such information. All information and estimates contained herein must be construed solely as statements of opinion and CRISIL shall not be liable for any losses incurred by users from any use of this publication or its contents. Neither our Company nor the BRLMs or any other person connected with the Issue has independently verified this information. Industry sources and publications generally state that the information contained therein has been obtained from sources believed to be reliable but their accuracy completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Industry sources and publications are also prepared based on information as of specific dates and may no longer be current or reflect current trends. Industry sources and publications may also base their information on estimates projections forecasts and assumptions that may prove to be incorrect. Accordingly investors should not place undue reliance on or base their investment decision on this information. Global Shipping Industry Seaborne Trade According to a 2016 UNCTAD report global seaborne trade increased by 2.1 to 10048 million tonnes in 2015. Dry bulk cargo comprised the largest share at 54. Developing economies accounted for the largest share of seaborne trade in volume terms at an estimated 60. Developing countries have become global manufacturing centres with growing demand for capital and consumer goods and are no longer viewed as only suppliers of raw materials. In terms of a regional comparison Asia was the largest loading and unloading region followed by the Americas Europe Oceania and Africa. As of January 2016 the global commercial fleet stood at 90917 vessels totalling 1.8 billion DWT. Dry bulk carriers comprised the largest share at 43.1 followed by the oil tanker segment with a share of approximately 27.9. Fleet The respective shares of oil tankers and general cargo vessels in the global fleet have declined over the years while those of dry bulk carriers and container ships have increased. As of January 2016 the dry bulk carriers with a 43 contribution in terms of gross registered tonnage GRT was the largest vessel category in the global fleet. The share of oil tankers which made up for 50 of the global fleet in 1980 has declined to 28 in 2016. Over this period the share of container vessels’ increased from 2 to 14 following China’s manufacturing-led growth as well as the shipping industry’s strategy to reduce costs using economies of scale. The fall in the oil

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105 tanker share was due to a change in the pattern of trade and demand primarily due to a decline in the refining capacity in Europe and a corresponding increase in Asia and the Middle East. Indian Shipping Industry Fleet The Indian commercial fleet saw an addition of 42 vessels with approximately 0.2 million GRT in 2015. In 2015 India’s total fleet strength was 1246 vessels with a GRT of 10.51 million. The majority of the Indian fleet is deployed for costal trade with approximately 70 of the registered vessels used for coastal trade while the remaining 373 vessels are engaged in overseas trade. However in tonnage terms the fleet deployed for coastal trade is approximately 1.5 million GRT while that for overseas trade is approximately 9 million GRT. In terms of GRT more than half of the fleet’s tonnage is accounted for by oil tankers. Over the past decade oil tankers have continued to account for a majority share. According to the Indian Ministry of Shipping the total overseas cargo handled at Indian ports was approximately 879.6 million tonnes in 2014-15. The vessels carrying Indian flags contributed approximately 7.5 of overseas cargo tonnage. Even as the total overseas cargo handled at Indian ports increased the contribution of vessels carrying Indian flags in terms of tonnage declined in absolute terms as well as in percentage terms. Meanwhile ships above the age of 20 years comprised over 40 of the Indian fleet as ship owners preferred to maintain the existing fleet due to uncertainty in global trade. However approximately 20 of the ships in the Indian fleet are below the age of five years indicating that new vessels have been added during the recent past. Global Shipbuilding Industry The shipbuilding industry comprises construction and modification of ships offshore vessels rigs liquefied natural gas “LNG” carriers and vessels for clients engaged in the defence sector. The broad categories of ships

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106 built are passenger carriers offshore vessels dry bulk carriers tankers including LNG carriers container ships and vessels for clients engaged in the defence sector. On average it takes 15-18 months to build a conventional vessel i.e. a bulk carrier tanker or container ship and 28-32 months to construct a LNG vessel and offshore rig and support vessel. Over the past few decades the shipbuilding industry has shifted from Europe to Asia due to a number of factors including cheap labour competitive manufacturing and steel-making sectors and state support. Following factors have enabled China the Republic of Korea and Japan to dominate the shipbuilding industry: • Typically a shipyard requires a working capital of approximately 25-35 of the cost of the ship during the entire construction period. The interest rates presently offered to shipyards in these aforesaid countries are significantly low. • In addition to the cost advantage that China and South Korea have their respective governments provide discounts or subsidies at the time of sale of ships which represent approximately 5-10 and approximately 15-20 of the total ship cost in case of China and South Korea respectively. This helps shipyards in these countries to bid at a lower price in international tenders. In 2015 China South Korea and Japan together accounted for 91 of the global industry in terms of deliveries with China comprising the largest share at 36 followed by South Korea and Japan at 34 and 21 respectively. Order Book Trends I. Year-wise In line with falling shipyard capacity and the stretched finances of owners and banks the global order book declined for most vessel types in 2015 and 2016. Between 2012 and 2016 the global order book declined at a CAGR of 7.7. The order books for container ships oil tankers dry bulk carriers and general cargo have declined 46 51 61 and 82 respectively from their peak values in 2008 and 2009. According to CRISIL the sluggishness was primarily due to a combination of excess supply and low demand especially in the dry bulk and container segments.

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107 II. Vessel-wise Dry bulk and oil tankers together account for more than 80 of the global order book. While the share of dry bulk has seen a downward trend over the four year period from April 2012 to April 2016 the shares of oil tanker and container ship segments has improved. During the year to January 1 2016 the total dry bulk order book declined on account of surplus capacity that still exists and uncertainties concerning the demand for dry bulk commodities from China. The tanker order book has remained at a similar level between 2012 and 2015 even as excess capacity and volatility in crude oil prices persisted due to a rise in demand on account of oil stockpiling especially by Asian countries such as China increases in refinery runs slow expansion in the oil fleet supply slow steaming and changes in trading pattern. Over the same period the LNG order book declined due to oversupply amid persistent fleet additions while charter rates were high and the container order book declined due to excess capacity cascading ship capacity moved from main or artery lanes to secondary routes uncertainty about the future of slow steaming and the alignment of major container ship operators in four mega-alliances listed below: • 2M - Maersk Line and Mediterranean Shipping Company MSC • CKYHE - Cosco Shipping K-Line Yang Ming Marine Transport Hanjin Shipping and Evergreen Shipping Agency • G6 - American President Lines APL Hapag Lloyd Orient Overseas Container Line OOCL Nippon Yusen NYK Mitsui O.S.K. Lines MOL and Hyundai Merchant Marine Co. and • Ocean Three - CMA CGM China Shipping CSCL United Arab Shipping Company UASC Hamburg Sud through vessel share. These alliances have been formed to create economies of scale by sharing space on mega-vessels which reduce the operating cost due to their sheer volume.

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108 Revenue trends South Korea’s large shipbuilders Hyundai Heavy Industries Co. and Daewoo Shipbuilding Marine Engineering Co. reported heavy losses in 2015. This was largely because South Korea’s shipyards bid aggressively in recent years for overseas oil rigs and energy platforms to fill their order books and to avoid direct competition with Chinese shipbuilders who had the advantage of cheap labour to make low-profit tankers. The global recession dented overall demand for shipping thus lowering demand for new ships. A fall in the price of crude oil resulted in a challenging business environment for global shipbuilders as international oil companies reduced capital expenditure and delayed or cancelled orders for drill ships and offshore production facilities. These factors along with considerable excess capacity resulted in a recession in the shipbuilding industry. Indian Shipbuilding Industry Overview Based on the types of ships built the Indian shipbuilding industry can be broadly categorized as follows: i Large ocean-going vessels catering to overseas as well as coastal trade ii Medium size specialized vessels such as port crafts fishing trawlers offshore vessels inland and other smaller crafts and iii Defence/ naval crafts and vessels for the coast guard. Sector-wise classification The Indian shipbuilding industry can be divided into three segments: i Public-sector shipyards in the commercial segment: Historically India’s major shipyards have been public- sector shipyards which primarily build merchant-class ships and naval vessels. Public-sector shipyards include Cochin Shipyard Hooghly Dock Port Engineers. ii Defence shipyards: Four naval shipyards come under the purview of the Indian Ministry of Defence namely Hindustan Shipyard Mazagon Dock Goa Shipyard and Garden Reach Shipbuilders Engineers. iii Private-sector shipyards: The three publicly listed private-sector shipyards are Bharati Defence and Infrastructure Ltd. ABG Shipyard and Reliance Defence and Engineering “RDEL” Shipyard formerly Pipavav. Larsen Toubro Ltd is another major private sector shipyard. In addition there are a number of smaller private shipyards building smaller ships and vessels including coastal vessels launch barges tugs patrol ships and fishing ships. As of March 2015 the private sector accounted for approximately two-thirds of the total shipbuilding order book in terms of the number of ships with outstanding orders for 199 ships amounting to a combined tonnage of 2567 thousand DWT. In fiscal 2015 private sector shipyards delivered 24 ships with a combined tonnage of approximately 98 thousand DWT. Among public-sector shipyards key names include Cochin Shipyard Hindustan Shipyard and Mazagaon Dock. Large private-sector shipyards include ABG Shipyard Bharati Defence and Infrastructure Ltd. and RDEL Shipyard and Larsen Toubro Shipyard.

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109 Capacity Trends The shipbuilding capacity of public-sector shipyards marginally declined between fiscal 2011 to fiscal 2015. In fiscal 2015 Goa Shipyard increased its capacity by more than double from 4500 DWT to 10000 DWT. The private-sector’s shipbuilding capacity on the other hand increased at a CAGR of approximately 3 between fiscal 2011 and fiscal 2015. The capacity enhancement of the private-sector was due to new shipyards such as Larsen Toubro who entered in 2014 with a capacity of 30000 DWT Sembmarine Kakinada who started operations in 2015 with a capacity of 50000 DWT and Chidambaranar Shipcare who set up a shipbuilding facility with a capacity of 3500 DWT.

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110 Shipbuilding capacities of major shipbuilders as of fiscal 2015 are shown below: As per a report released by the Ministry of Shipping within the public sector Cochin Shipyard possessed a maximum ship-building capacity of approximately 110000 DWT followed by Hindustan Shipyard 80000 DWT and Alcock Ashdown Ltd 15000 DWT as of fiscal 2015 as shown below. The private sector holds the largest share of overall capacity of shipyards in India. Among private sector shipyards RDEL has a maximum capacity of approximately 400000 DWT followed by Bharati Defence and Infrastructure Ltd. at approximately 70000 DWT as of fiscal 2015 as shown below.

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111 Shipbuilding capacity of companies by type and size as of fiscal 2015 Cochin Shipyard is in the process of expanding its capacity in order to build large ships such as LNG vessels large container vessels and new generation aircraft carriers. Commercial Order book Trends The shipbuilding order book position declined during fiscal 2014 and fiscal 2015 due to a number of factors such as persistent excess supply and weak global trade.

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112 I. Vessel -wise The share of dry cargo segment rose significantly in fiscal 2013 mainly because RDEL Shipyard’s orders were reclassified from bulk cargo to dry cargo. Between fiscal 2011 and fiscal 2015 the order book of public sector shipyards was lower than that of private sector shipyards due to the vessels for clients engaged in the defence sector in their order book. However execution of the order book of private shipyards remains uncertain due to the stressed financial position of major shipyards like ABG Shipyard RDEL Shipyard and Bharati Defence and Infrastructure Ltd. According to industry interactions some orders of commercial vessels placed with private-sector shipyards have either been cancelled or put on hold. Additionally the majority of orders of ships for clients engaged in the defence sector have been placed with the public-sector shipyards. As of fiscal 2015 Indian shipbuilders had orders for 292 ships with an aggregate tonnage capacity of 2.68 million DWT. Of these 57 ships with an aggregate capacity of 1.385 million DWT were export orders. In DWT terms domestic orders comprised a greater share of the order book of the public-sector while the private-sector order book is more evenly distributed. Domestic orders contributed a major part of the order book for public-sector in terms of number of ships however the order book was equally shared by domestic and export orders in terms of DWT. Considering the order book as of March 2015 the average capacity in DWT of export orders is more than that of the domestic orders. The public-sector shipyards were limited in their ability to take up large export orders due to inadequate capacity and pending orders.

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113 As of March 31 2015 Goa Shipyard and Cochin Shipyard are the only public-sector shipyards who have received export orders. In the public-sector Cochin Shipyard has the largest export order book. In the Dry bulk and offshore segment ABG Shipyard has the largest domestic order book among private-sector shipyards. II. Public-sector company-wise As of March 31 2015 Hindustan Shipyard has typically contributed approximately half of the public-sector’s order book. However its order book size in DWT saw a sharp decline during fiscal 2014 and remained at similar level in fiscal 2015. The order book size in DWT of Cochin Shipyard and Mazagaon Dock increased marginally from fiscal 2012 to fiscal 2015. Among public-sector shipyards the average tonnage DWT per ship on order is highest for Cochin Shipyard followed by Hindustan Shipyard. III. Private-sector company-wise The order book of private-sector is largely contributed by two shipyards ABG Shipyard and RDEL Shipyard. However the order books of RDEL Shipyard and ABG Shipyard declined at a CAGR of 7 and 14 respectively from fiscal 2012 to fiscal 2015.

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114 Commercial Delivery Trends The number of ships delivered by the private-sector as well as in DWT terms declined after fiscal 2012. With the exception of fiscal 2014 public-sector deliveries outpaced those of private-sector shipyards in DWT terms. Among public-sector shipyards GRSB delivered the most ships in DWT terms from fiscal 2011 to fiscal 2015. Defence Order Book Trends Naval shipbuilding is a sub-segment of the Indian shipbuilding sector. It is characterised by a value addition of 65 during the construction of ships which is contributed by ancillary industries including steel producers main engine builders and equipment suppliers. Growth of the domestic shipbuilding sector which imports 45 of its input requirement can become a significant factor for large-scale indigenisation of heavy-engineering products and ancillaries. Traditionally even as naval ancillary components have been acquired from outside India the shipbuilding activity has been carried out indigenously. However over the years the Indian government has pursued a policy towards greater indigenisation of defence equipment. The domestic defence shipbuilding industry primarily caters to two sub-segments the Indian Navy and the Indian Coast Guard. Both Indian Navy and the Indian Coast Guard currently possess a large fleet. Defence Public-Sector Units DPSUs account for the major portion of the scheduled new fleet additions to the naval fleet. These DPSUs currently have a large order book for ships for clients engaged in the defence sector. Mazagaon Dock Goa Shipyard Garden Reach Shipping Engineers and Hindustan Shipyard are major PSUs catering to the defence sector sub-segment. A significant number of orders have been placed with these DPSUs over the past two years. In fiscal 2015 Goa Shipyard’s order book had five offshore patrol vessels and was also nominated to build 12 mine counter measure vessels for `326 billion. Mazagaon Dock is executing orders for three destroyers of project P15-A four destroyers of plan 15-B four frigates of project P17-A and six Scorpene-class submarines. Cochin Shipyard is executing the order for one aircraft carrier and a series of fast patrol vessels. Garden Reach Shipping Engineers has an order book that includes three stealth frigates under project P-17A four Anti-Submarine Warfare Corvettes ASCs four Water Jet Fast Attack Crafts WJFACs and eight Landing Craft Utilities LCUs.

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115 The order book for the Indian shipbuilding industry is expected to receive a boost on account of the ship acquisition plans of Indian Navy and Coast Guard. Ship orders for clients engaged in the defence sector are expected to increase between fiscal 2016 and fiscal 2021 with the Indian Navy’s and Coast Guard’s ambitious plans for a 200-ship fleet each. The Indian shipbuilding industry is expected to deliver 14000 to 17000 DWT by fiscal 2021 through the partial or full execution of orders for both the Indian Navy and Indian Coast Guard. CRISIL Research expects delivery of some of the most important orders such as Scorpene-class submarines P15-A P15-B and P17-A vessels within this timeframe. Most of these ships are currently at various stages of completion. Defence Delivery Trends The defence fleet has seen significant additions from the domestic shipbuilding industry in the past two years. Goa Shipyard handed over one naval offshore patrol vessel and Mazagaon Dock delivered INS Kochi the second ship of plan 15-A. Cochin Shipyard delivered a series of FPVs to the Indian Coast Guard. Cochin Shipyard and Garden Reach Shipping Engineers received and executed orders for ships for foreign clients engaged in the defence sector. The Garden Reach Shipping Engineers delivered one ASC INS Kamorta and also completed its export order of CGS Barracuda an offshore patrol vessel to the government of Mauritius. As of fiscal 2016 Goa Shipyard has an export order book of approximately `12000 million comprising patrol vessels and interceptor boats for Mauritius and the Sri Lankan Navy. Among private shipyards ABG Shipyard completed its delivery of one pollution control vehicle to the Indian Coast Guard. Global Ship-repair Industry According to a report published by the Ministry of Shipping at the India Maritime Summit 2016 the global ship repair market is approximately US 12 billion. Shipyards in Singapore Bahrain Dubai and Middle East account for a major share of this market. These locations have achieved a dominant position despite higher cost of ship repair services compared to other Asian countries largely due to the availability of a skilled workforce and the latest technology which allows these shipyards to attract demand from other low cost locations like India Malaysia and Indonesia. According to the Ministry of Shipping at the India Maritime Summit 2016 Indian ship repair industry’s market potential is approximately US1.5 billion `102 billion. Indian Ship-repair Industry Market size According to the Statistics of India’s Ship Building and Ship Repair Industry published by the Ministry of Shipping the total market size of the Indian ship-repair industry in fiscal 2015 was approximately `5043 million. From fiscal 2011 to fiscal 2015 the market size has remained constant except for during fiscal 2013 when it crossed the `10000 million level in part due to Mazagaon Dock’s high value orders. This was an isolated case as Mazagon Dock does not typically undertake ship repairing. The share of the public-sector in the revenues earned through ships repaired is much higher compared to the private-sector. The average realisation per ship repaired by the public-sector is higher compared to that of the private-sector. Market share

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116 Cochin Shipyard accounting for approximately 39 of the total revenues earned in fiscal 2015 through ship- repair is the leading shipyard in the ship-repair industry. It is followed by Goa Shipyard with a share of approximately 20 in the revenues earned in fiscal 2015 through ship-repair. The private-sector shipyards in this segment are Sembmarine Kakinada Larsen Toubro and ABG Shipyard. In terms of market size the share of the public-sector remained higher than the private-sector from fiscal 2011 to fiscal 2015. The number of ships repaired by the public and private-sectors increased at a CAGR of 18 and 52 respectively during this period. Capacity Trends The public-sector had a largely stable ship-repair capacity between fiscals 2011 and 2015. GSL contributed with a major capacity addition in fiscal 2015 which more than doubled its capacity from 4500 DWT to 10000 DWT. The ship-repair capacity of the private-sector improved following the commencement of operations of two new shipyards viz. Larsen Toubro Ltd with 30000 DWT and Sembmarine Kakinada with 54000 DWT capacity. I. Region-wise The western coast of India houses almost 60 of the overall ship-repair capacity of the country. As the shipyards are located along the sea coast there are no shipyards in northern India. The majority of the shipyards on the western coast are located in Gujarat Maharashtra Kerala and Goa while major shipyards in the east are concentrated in West Bengal. II. Company-wise The public-sector owns nine dry docks and three wet docks. Cochin Shipyard and Garden Reach Shipbuilders Engineers have two and five dry docks respectively. Only Hindustan Shipyard and Garden Reach Shipbuilders Engineers have both dry as well as wet docks. Some shipyards also provide other repairing facilities such as a jetty shiplift slipway submersible ship or platform and quay. Among private-sector shipyards ABG Shipyard has two and NN Shipbuilders and Engineers has three slipways. Cochin Shipyard had the largest ship-repair capacity within the public sector as of fiscal 2015 followed by Hindustan Shipyard. Within the private sector RDEL Shipyard had the largest ship-repair capacity followed by Bharati Defence and Infrastructure Ltd as shown below.

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117 III. Port-wise Kandla Mumbai Mormugao Cochin V O Chidambaranar Visakhapatnam Paradip and Kolkata are the major ports in India. The Kolkata port has four dry docks while the rest have one each. The Mormugao and Visakhapatnam ports have eight workshops each while the Paradip port has only one. In terms of dimensions Mumbai port is the largest. All major ports except the V O Chidambaranar port have cranes. In fiscal 2015 the Mumbai port recorded the highest number of ship-repairs while the Kolkata port had the highest occupancy of dry docks among the major ports. Future outlook The ship-repair industry is expected to grow at a CAGR of 8 to 10 between fiscal 2016 and fiscal 2021. Indian ship-repair yards will be driven by greater focus towards diversifying their revenue streams to withstand the slowdown in ship building. Indian yards are expected to benefit from the increasing strength of the Indian Navy and the Coast Guard’s operational and support fleet which will drive the repairs business. Moreover higher indigenisation in ships for clients engaged in the defence sector are expected to augment the revenue per refit and repair driving growth and increasing the proportion of defence repairs over the next five years. Revenue generated through repairs of foreign vessels is also expected to improve in the wake of service tax exemptions granted by the central government in 2014 and a reduction of central excise duty on capital goods raw

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118 materials and spares used for the repair of ocean going vessels. Indian shipyards are facing increasing competition from foreign shipyards as their shipbuilding capacities remain underutilised. Also major Indian shipyards are sceptical about taking in foreign vessels as the average ticket sizes are lower despite similar capacity requirements. Key drivers Strategic positional advantage India’s strategic position along the east bound and west bound international trade routes offers an opportunity to cater to vessels plying on these routes. A main container route connecting America and Europe to the East passes very close to the Indian coastline presenting a major opportunity for repairs. Capacity additions • Cochin Shipyard is in the process of adding one more dry dock of size 310 x 75/60 x 13 M which will enable it to undertake repairs of vessels like LNG carriers semi-submersibles jack up rigs and drill ships. • Full commissioning of the international ship repairing facility at Cochin port with state of the art ship repair facilities will enable Cochin to position itself as a major ship repair hub. The target is to enhance Cochin Shipyard’s ship-repair capability by 70-90 ships per annum. • Phase 3 and 4 of development the expansion and upgradation of infrastructure at Goa Shipyard are under progress. This development is expected to enhance its capabilities for the repair of ships for clients engage in the defence sector. • The construction of a floating dry dock facility at V O Chidambaranar port is in the feasibility study phase. This facility would enhance its capacity to carry out underwater repairs of tugs launch boats and other watercrafts. • The project to modernise ship repairing facilities at Kolkata dock is expected to improve its capabilities to service both Indian and foreign vessels. The project is still in the planning stages. • There is a proposal underway for refurbishment of the existing Hughes dry dock at Mumbai port. This project aims to provide adequate wet berth facilities to complement dry docks to cater to afloat repairs. • In order to create adequate dry docking facilities and maintenance capacities for vessels plying through Andaman and Nicobar waters a project to create a ship repair facility ship lift/slipway capable of handling 5000 DWT vessels is underway and is in the pre-feasibility stage according to a report published at the Maritime India Summit 2016. Indian Defence Sector Budgetary allocation trends

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119 The Indian budgetary allocation for defence in 2015-16 was `2467 billion which is approximately 1.75 of the country’s GDP. From fiscal 2011 to fiscal 2016 the allocation for defence increased at a CAGR of 9. During this period revenue expenditure remained largely constant while capital expenditure increased at a CAGR of approximately 11. Defence budget fiscal 2016 In fiscal 2016 the Indian Army accounted for the highest share of the defence budget followed by the Indian Air Force and then the Indian Navy which accounted for approximately 18 of the total defence budget. Indian Navy During fiscal 2012 to fiscal 2016 the budgetary allocation for the Indian Navy was in the range of between 14- 17 of the total budget. The allocation to the Indian Navy has declined over the last two years in absolute terms. Key GoI Initiatives The Indian government has taken the following key initiatives to develop and promote the domestic shipbuilding industry:

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120 New Shipbuilding Policy December 2015 The Indian cabinet approved the new shipbuilding policy in December 2015 granting financial assistance and infrastructure status to the industry. The government has set aside `40 billion to implement the scheme over the next 10 years. Key policy features include: • Granting financial assistance to both state-owned and private shipbuilders on each ship they build except for smaller boats and fishing vessels. However financial assistance given would be scaled down by three percentage points every three years starting with 20 in the first three years down to 11 in the 10th year • The assistance will be given on the contract price or fair price whichever is lower • Both state-owned and private shipyards will get the assistance only after they construct and hand over to the ship to the buyer • Indian shipyards will have the right of first refusal for government purchases implying that even if the shipyard is not the lowest bidder an option is provided to the shipyard to match the lowest foreign bid and secure the contract and • Granting infrastructure status to the shipbuilding and ship-repair industry making it entitled to various government incentives and tax benefits. Indirect tax incentives November 2015 The government issued a notification in November 2015 highlighting the indirect-tax incentives proposed to be provided to the industry: • Exemption from customs and central excise duties on all raw materials and parts for use in the manufacture of ships vessels tugs and pusher crafts. • Currently certain specified vessels are exempt from the basic customs duty and central excise duty. Consequently for such vessels manufactured in export-oriented units and cleared to the domestic tariff area they are not eligible for exemption on raw materials and parts of such vessels. A suitable amendment is being made to the relevant notifications to provide this exemption even if such vessels are exempt from the basic customs duty and central excise/CV duty. • The requirement of manufacture of ships vessels tugs and pusher crafts in a custom-bounded warehouse to avail of the customs and excise-duty exemptions has also been removed. Instead these exemptions will now be subject to actual user conditions. • Central excise duty exemption on inputs used in the repair of ocean-going vessels has been granted in the Union Budget for fiscal 2017. The financial assistance policy coupled with the exemption from customs and central excise duties on all raw materials and parts for use in the manufacture of ships vessels tugs or pusher crafts will reduce the cost of manufacturing ships in India thus improving the competiveness of Indian shipbuilders. However the impact of the policy is not great enough to offset weak global commercial demand. The financial assistance policy of 2015 provides assistance post-delivery of the vessel as against 30 assistance on booking the order as per the ship building subsidy scheme 2002 which led to India garnering an approximate 1.2 share of the global order book. In a situation where major private shipyards are facing financial issues owing to high working capital needs the new policy might not be as effective. Following a freight revival in the shipping market competition from major global shipyards is expected to intensify to an extent that offsets the excess cost competitiveness gained through financial assistance and tax exemptions. National Investment and Infrastructure Fund Union Finance Minister Arun Jaitley announced the creation of a National Investment and Infrastructure Fund NIIF in Union Budget 2015-16 which would receive an annual flow of `20000 crore. This will enable the trust

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121 to raise debt and in turn invest in infrastructure finance companies such as IRFC and NHB National Housing Bank. The infrastructure finance companies can then leverage this extra equity manifold. With a view to attracting investments from Qatar under the umbrella of NIIF a memorandum of understanding MOU was signed with Qatar Investment Authority QIA on June 5 2016. The objective of the MOU is to facilitate QIA to study investment opportunities in the infrastructure sector in India develop a framework for the exchange of information with regard to such investments opportunities and enable both sides to decide on joint investments. It will remain in effect for 12 months during which both parties will discuss and agree on the terms principles and criteria for such investments. NIIF shall share with QIA a pipeline of investment opportunities available in the infrastructure sector in India. Make in India Initiative Gas Authority of India has signed contracts to buy LNG from suppliers in the US. Transporting this gas will require large specialised LNG carriers. As part of the ‘Make in India’ campaign the Government of India is keen that one-third of the total number of ships should be built by Indian shipyards. Deregulation The Ministry of Shipping has taken steps to improve the ease of doing businesses such as: • rescinding 13 obsolete and unnecessary rules under the Merchant Shipping Act. Of these 13 rules six have been rescinded and seven have been pre-published before rescindment. • eliminating the requirement for registration of ship repair units with the Directorate General of Shipping. The Ministry of Finance and the Ministry of Commerce and Industry have now been instructed to extend concessions and facilities to ship repair units without such registration. • allowing re-rolled steel from re-cycling yards and ship breaking units to be certified for use in the construction of inland barges river sea vessels type 1 and 2 and port and harbour crafts after ascertaining its sourcing and processing which will help lower the cost of construction. Sagarmala Project According to the national perspective plan the Sagarmala project aims to transform existing ports and create new ones with world-class technology and infrastructure. The project is also expected to integrate ports with industrial clusters and the hinterland through rail road inland and coastal waterways. The government is expected to invest US16 billion for the project’s completion. The project is expected to tackle underutilised ports by focussing on port modernisation efficient evacuation and coastal economic development. It will also complement the Golden Quadrilateral project and provide sea connectivity to major industrial centres.

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122 Development of Inland Waterways Transport Inland waterways transport will be an alternative for the existing mode of transportation. This will decongest the existing modes and bring advantages in the form of fuel and cost savings. The proposed 101 inland waterways will require an estimated investment of US5.5 billion over the next two years. Inland waterways accounts for only 3 of India’s total transport compared with 47 in China and 44 in the European Union. The government’s initiative to develop inland waterways is a big business opportunity for the Indian shipbuilding industry in the form of future orders building dredgers and small bulk carrier vessels. Defence Sector Liberalisation The Indian government has taken steps to encourage the domestic defence shipbuilding industry. In August 2014 the foreign direct investment limit was increased from 26 to 49 to cut imports by indigenising defence production. India is among the top ten defence spenders in the world and such a move to encourage domestic manufacturing bodes well for Indian shipbuilders with a defence presence. In line with the Indian government’s vision of ‘Make in India’ the Indian Navy has prepared a guideline document the Indian Naval Indigenisation Plan INIP 2015-2030 to enunciate the need for developing various advanced systems for its platforms. This plan recognises that the industry including the private-sector can play a vital role in meeting the sophisticated needs of the armed forces through cost-effective utilisation of its know- how and existing infrastructure in pursuance of the government of India’s vision of ‘Make in India’. The Indian Navy has achieved approximately 90 indigenisation in the ‘FLOAT’ category and approximately 50 to 60 in ‘MOVE’ category depending upon the type of propulsion and in the ‘FIGHT’ category they have achieved approximately 30 indigenisation. Some of the major equipment currently imported which holds much scope for indigenisation are weapons sensors propulsion systems especially gas turbines marine diesel engines for main propulsion and gear boxes under the ‘MOVE’ category. The unavailability of domestic equipment manufacturing ancillary companies hinders Indian shipbuilding companies as these costs represent approximately 50-55 of the total shipbuilding costs and these materials have to be ultimately imported. Labour is another major cost for shipbuilding accounting for approximately 10-15 of the total costs. According to CRISIL the lower cost of labour in India compared to China South Korea and Japan could aid in competitiveness ahead of increasing levels of indigenisation. In addition over the last few years major private shipyards such as RDEL Shipyard ABG Shipyard and Bharati Defence and Infrastructure Ltd have had to opt for corporate debt restructuring on account of the inherent disadvantages like the unavailability of cheap raw materials and limited government support compounded by economic downturn a decline in global trade and a liquidity crunch.

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123 Defence Procurement Policy DPP 2016 The new defence procurement policy was introduced in March 2016 to initiate a new procurement regime for defence equipment. The following are some of the key features: • ‘Buy Indian-IDDM’ Procurement Category: Pursuant to the ‘Make in India’ initiative in defence production DPP 2016 has introduced a new procurement category Buy Indian Indigenously-Designed Developed and Manufactured or ‘Buy Indian-IDDM’. In terms of prioritisation the new category which would also be used for procurement of all locally designed and developed items under the revamped ‘Make’ procedures is placed above the existing ‘Buy Indian’ category which in turn is placed above the other categories namely the ‘Buy and Make Indian’ ‘Buy and Make’ and ‘Buy Global’. • Under the new category indigenously designed equipment with a 40 Indigenous Content “IC” or equipment not necessarily designed in house but having a 60 IC is intended for procurement from the domestic industry. • The new DPP has divided the ‘Make’ projects into two categories Make-I Government Funded and Make- II Industry Funded apart from giving a decisive say to the Micro Small and Medium Enterprises MSMEs. For Make-I projects the government would lead in funding prototype development by the industry whereas for Make-II projects which are largely confined to import substitution the industry that would bear the full costs of development. • Introduction of L1-T1 methodology for award of contracts: In a significant change from the past DPP 2016 has introduced the L1-T1 methodology for selecting the supplier of military goods under the ‘Buy’ and ‘Buy and Make’ schemes. Under this methodology the final bidder would not necessarily be selected on the basis of lowest price quoted by the technically compliant vendors the so-called L1 methodology but by a combination of price and superior technology offered by the qualified vendors. • An increase in the offset threshold limit: DPP 2016 has raised the offset threshold limit from `3 billion to `20 billion.

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124 OUR BUSINESS This section should be read in conjunction with “Risk Factors”“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Financial Statements” on pages 18 334 and 175 respectively.With effect from April 1 2016 we are required to prepare our financial statements in accordance with the Ind AS. Accordingly our restated financial information for the Fiscals 2017 2016 and 2015 included in this Red Herring Prospectus is prepared under the Ind AS while our restated financial information for the Fiscals 2014 and 2013 included in this Red Herring Prospectus is prepared under the Indian GAAP. References to “restated” below are to our restated financial information. Overview We are the largest public sector shipyard in India in terms of dock capacity as of March 31 2015 according to the CRISIL Report. We cater to clients engaged in the defence sector in India and clients engaged in the commercial sector worldwide. In addition to shipbuilding and ship repair we also offer marine engineering training. As of May 31 2017 we have two docks – dock number one primarily used for ship repair “Ship Repair Dock” and dock number two primarily used for shipbuilding “Shipbuilding Dock”. Our Ship Repair Dock is one of the largest in India and enables us to accommodate vessels with a maximum capacity of 125000 DWT Source: CRISIL Report. Our Shipbuilding Dock can accommodate vessels with a maximum capacity of 110000 DWT Source: CRISIL Report. We are in the process of constructing a new dock a ‘stepped’ dry dock “Dry Dock”. This stepped dock will enable longer vessels to fill the length of the dock and wider shorter vessels and rigs to be built or repaired at the wider part. We are also in the process of setting up an International Ship Repair Facility “ISRF” which includes setting up a shiplift and transfer system. In the last two decades we have built and delivered vessels across broad classifications including bulk carriers tankers Platform Supply Vessels “PSVs” Anchor Handling Tug Supply vessels “AHTSs” launch barges tugs passenger vessels and Fast Patrol Vessels “FPVs”. We are currently building Indias first Indigenous Aircraft Carrier “IAC” for the Indian Navy. We have also grown our ship repair operations and are the only commercial shipyard to have undertaken repair work of Indian Navys aircraft carriers the INS Viraat and INS Vikramaditya. Our diversified offerings to the Indian clients engaged in the defence sector and to clients engaged in the commercial sector worldwide have allowed us to successfully adapt to the cyclical fluctuations of our industry. Over the last five Fiscals the break-down of our average operating revenues is set out below: Activity Clients engaged in the defence sector Commercial clients Shipbuilding 69.44 12.68 Ship repair 10.42 6.94 Other operating revenue 0.48 0.04 Our current shipbuilding order book includes Phase-II of the IAC for the Indian Navy two 500 passenger cum 150 ton cargo vessels and two 1200 passenger cum 1000 ton cargo vessels for the Andaman and Nicobar Administration “AN Administration” and a vessel for one of the Government of Indias “GoI” projects. Our current ship repair order book includes vessels from our key clients. We recently delivered two Roll-On/Roll-Off “Ro-Ro” vessels to the Kochi Municipal Corporation. We are a wholly-owned GoI company incorporated on March 29 1972 and were conferred the Miniratna status in 2008 by the Department of Public Enterprises GoI. Our shipyard is strategically located along the west coast of India midway on the main sea route connecting Europe West Asia and the Pacific Rim a busy international maritime route. In addition our shipyard is located close to the Kochi port as well as to offshore oil fields on the western coast of India and relatively close to the Middle East. We commenced our operations in 1975 and have over four decades of experience in shipbuilding. We have in the past delivered two of India’s largest double hull oil tankers each of 92000 DWT Source: CRISIL Report

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125 to the Shipping Corporation of India “SCI”. Over the years we have successfully responded to fluctuations in the shipbuilding requirements of the markets we operate in and have evolved from building bulk carriers to building smaller and more technically sophisticated vessels such as PSVs and AHTSs. We have worked with several leading technology firms in our industry including Rolls Royce Marine Norway and GTT Gaztransport Technigaz SA “GTT”. We believe this has added to our credibility in the international markets. Our key shipbuilding clients include the Indian Navy the Indian Coast Guard and the SCI. We have also exported 45 ships to various commercial clients outside India such as NPCC the Clipper Group Bahamas and Vroon Offshore Netherlands and SIGBA AS Norway. We began our ship repair operations in 1978 and have undertaken repairs of various types of vessels including upgradation of ships of the oil exploration industry as well as periodical maintenance repairs and life extension of ships. Our shipyard has over the years developed capabilities to handle various repair jobs. We have entered into MoUs with various clients including with the Lakshadweep Development Corporation Limited “LDCL” Directorate General of Lighthouses and Lightships “DGLL” and the Dredging Corporation of India “DCI” giving us the opportunity to undertake ship repair work for these organisations on a bulk volume basis. Our key ship repair clients include the Indian Navy the Indian Coast Guard SCI the Oil Natural Gas Corporation “ONGC” and DCI. We have also partnered with Techcross Inc. for technical support engineering service support and sharing of information in relation to the Ballast Water Treatment System “BWTS” products. Our Marine Engineering Training Institute at Kochi began in 1993 where we conduct marine engineering training programs. These programs are approved by Director General of Shipping “DGS” GoI. We also operate a material testing laboratory which was established in 1972. Our material testing laboratory has been accredited by the National Accreditation Board for Testing and Calibration Laboratories “NABL” and is one of the leading laboratories in Kerala in the field of chemical mechanical and non-destructive testing of various materials including metals welds and alloys. We have several certifications including the ISO 9001:2008 – Quality Management System ISO 14001:2004 - Environmental Management System and OHSAS 18001:2007 – Occupational Health and Safety Management System. Our listed debentures have been rated AA+ by since 2014 by various agencies including India Ratings and Research Private Limited “IRRPL” and CARE. We were also adjudged the “Shipbuilding Company of the Year” in 2015 by the Gateway Awards. For further details of awards we have received see “History and Certain Corporate Matters – Awards and Recognition” on page 147. Our Company has posted profits continuously in the last five Fiscals. Our total income and PAT before other comprehensive income has increased from `16604.52 million and `692.82 million respectively in Fiscal 2015 to `22085.01 million and `3121.82 million respectively in Fiscal 2017 at a CAGR of 15.33 and 112.27 respectively. Competitive Strengths We believe we benefit from a number of strengths that together differentiate us from our competitors: One of Indias leading public-sector shipyards catering to both commercial clients as well as clients engaged in the defence sector with a multitude of offerings for a broad range of vessels across life cycles We are the largest public sector shipyard in India in terms of dock capacity as of March 31 2015 according to the CRISIL Report. We have catered to both commercial clients and clients engaged in the defence sector evidenced by our revenues from shipbuilding and ship repair operations in recent Fiscals as set our below: in ` million Activity Fiscal 2015 Fiscal 2016 Fiscal 2017 Shipbuilding Clients engaged in the defence sector 12308.88 15028.76 13625.83 Commercial Clients 1331.69 1179.35 1510.90 Total 13640.57 16208.11 15136.73 Ship repair Clients engaged in the defence sector 537.64 2818.10 3788.96 Commercial Clients 1440.30 822.34 1647.70 Total 1977.94 3640.44 5436.66

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126 Activity Fiscal 2015 Fiscal 2016 Fiscal 2017 Grand Total 15618.51 19848.55 20573.39 Shipbuilding for clients engaged in the defence sector is complex and time-consuming whereas commercial shipbuilding while relatively less complex is subject to business cycles. Catering to both commercial clients and clients engaged in the defence sector has helped us to address these issues relatively better. We are currently building Indias first IAC for the Indian Navy and have recently delivered the last FPV in a series of 20 to the Indian Coast Guard prior to the delivery date. We have also built two of India’s largest double hull oil tankers each of 92000 DWT Source: CRISIL Report for SCI and recently delivered a large deck cargo cum jacket launch barge for NPCC. In addition to shipbuilding we also undertake ship repair for the Indian Navy and repaired about 15 Indian Naval Ships on an average in the Fiscals 2014 2015 and 2016 respectively where our scope of work varied from routine to complex repairs. We also recently completed refits of INS Aditya INS Sukanya INS Shardul INS Viraat and INS Vikramaditya for the Indian Navy. We have also undertaken major revamping and refurbishing of oil rigs involving steel renewal up-gradation of drilling cementing mechanical HVAC and piping systems in almost all the major offshore vessels and rigs of ONGC. Our top customers include the Indian Navy and the Indian Coast Guard. These top two customers together accounted for 82.43 89.92 and 84.57 of our revenue from operations in Fiscals 2015 2016 and 2017 respectively. The Indian Navy has praised us for our high production standards quality construction and timely delivery. Source: https://www.indiannavy.nic.in/content/vikrant-navys-first-indigenous-aircraft-carrier- launched Our Marine Engineering Training Institute began in 1993 and we facilitate the DGS approved GME residential course for mechanical and naval architect engineering graduates. We also have a NABL accredited material testing laboratory. We believe that our diverse experience and multiple offerings put us in a good position to benefit from the recent ‘Make in India’ initiative introduced by the GoI pursuant to which a steady pipeline of future orders and opportunities is expected from Indian clients engaged in the defence sector as well as the Indian PSUs. Modern facilities and infrastructure and integrated capabilities to deliver quality products and services We believe that the state of the art infrastructure and facilities available at our shipyard combined with our vast expertise give us a significant edge over our domestic peers. While our proposed Dry Dock project will be set up on our existing shipyard premises the ISRF will be set up on land near our shipyard leased from the Cochin Port Trust “CoPT”. We believe that our modern facilities and infrastructure and integrated capabilities have helped us built a strong reputation for quality and timely delivery over decades of doing business with both our Indian and international clients. Our integrated shipbuilding infrastructure at the shipyard allows us to undertake structural machinery and electrical design and to prepare detailed production engineering drawings. During the shipbuilding design process 3D hull piping and electrical models are created ensuring optimum error free ship designs. Inputs for various NC equipment are also generated on these systems. Quay III which is used for shipbuilding has a length of 630m and has two LLTT cranes with capacities of 40T and 20T respectively. Our ship repair facilities include our Ship Repair Dockmeasuring 270m x 45m x 12m that enables us to undertake the repair of vessels with a maximum capacity of 125000 DWT. Our shipyard currently has one of the largest ship repair capacities among the Indian public sector shipyards Source: CRISIL Report. Additionally we have two quays Quay I with a length of 290m and a 15T cranage and Quay II with a length of 208m and a 10T cranage. Both quays have LLTT cranes. Order book with a strong customer base of reputable ship owners and marquee clients Shipbuilding We have built a variety of vessels ranging from bulk carriers tankers and passengers ships to offshore support vessels and port crafts. In the last five years we have built and delivered over 35 vessels to clients worldwide. We have built and repaired vessels and provided other offshore project services to some of the biggest corporates

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127 both in India and globally. Our Indian clients include the Indian Navy the Indian Coast Guard SCI ONGC DGLL and DCI. Our key foreign clients include NPCC the Clipper Group Vroon and SIGBA AS. We are currently building Indias first IAC for the Indian Navy. We are also currently constructing two 500 passenger cum 150 ton cargo vessels and two 1200 passenger cum1000 ton cargo vessels for the AN Administration and a vessel for one of GoIs projects. Ship repair We commenced ship repair operations in 1978 and have over the years developed adequate capabilities to handle complex and sophisticated repair jobs. We have also entered into special MoU arrangements to enhance our ship repair business. For example we repaired LDCL and DCI vessels under our respective MoUs with them. In Fiscal 2016 major repair works for commercial clients included work on the GTV Samudra Sarvekshak and the WSV Samudhra Nidhi for SCI and on the Dredge VIII and Dredge XIX for the DCI and MV Kavaratti for LDCL. In the last Fiscal we believe our docks were running at full capacity due to which we had to turn away certain new requests. Competitive cost structure and efficient operations We believe that we offer our clients competitive cost structures for their shipbuilding and ship repair needs. We have implemented measures to help ensure that our operations run efficiently. We seek to achieve optimum utilisation of our full capacity through effective production planning and scheduling and have delivered or are in the process of delivering all the vessels we have contracted for including in certain cases delivery ahead of schedule such as some of the FPVs for the Indian Coast Guard and deck cargo cum launch barge for NPCC. In some cases where we were able to deliver the vessels ahead of schedule to our customers we were able to secure additional bonuses over and above the cost of the ship including from the Clipper Group as well as repeat orders from satisfied clients. We are committed to the timely delivery of vessels and place great emphasis on the quality of our construction. This helps to minimise the need to undertake rectification works for defects or non- compliance with our customers’ specifications and reduces our exposure to liquidated and other damages under our shipbuilding contracts. We believe we have achieved further cost savings through our cost management activities. We operate an efficient system of sub-contracting which aids multiple repair projects and production planning. For example rather than maintaining a large number of full time employees we employ a significant number of contract labour workers enabling us to keep the size of our workforce flexible based on our requirements. As of May 31 2017 we had 1824 full time employees two employees on deputation from other government organisations and 612 contract employees. As of May 31 2017 we also employed about 3178 sub-contract workers on a daily basis.We also seek to manage the cost of the engines and other equipment used in our vessels by obtaining quotes from our approved vendors and the cost of our raw materials and components through the selection of suppliers and subcontractors based on several criteria including the pricing and the quality of their products and reliability of their services. Generally we avoid buying from intermediaries and prefer to deal directly with manufacturers so as to form long-term relationships with these manufacturers and wherever possible obtain better pricing terms. Our shipyard is strategically located along the west coast of India on the main sea route connecting the Persian Gulf to Asia and is approximately 610 nautical miles from Mumbai a busy international maritime route that is conveniently located for ships travelling on this route in need of repair. In addition our shipyard is located close to the offshore oil fields on the western coast of India and relatively close to the Middle East which we believe will be an advantage in tapping the offshore rig market. Due to our shipyards proximity to the Kochi port we are well-positioned to benefit from the port’s infrastructure facilities such as its approach channel and navigation facilities. Led by a dedicated board long serving and experienced senior management backed by a strong pool of experienced professionals We are one of Indias leading shipyards making us an employer of choice and providing a better incentive to our management to continue to pursue excellence in our businesses. Each of our key management staff has on average more than 25 years of experience in the industry and has been with our Company for an average of two decades. Some of our senior management have grown within our organisation from trainee positions to head their respective departments. We believe that our organisational culture and experienced board and senior management

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128 have been instrumental in helping us achieve a low cost structure continuous profit margins efficient operations short delivery schedules relatively lower attrition and fewer employee disputes. We have a large pool of experienced naval architects engineers and draftsmen. We believe that our employees are instrumental to our success including for the quality of our products and services and our ability to operate in a cost-efficient manner. We focus on the overall development of our employees through the implementation of training programmes to enhance employee loyalty reduce attrition rates improve skills and service standards and increase productivity. For example we provide regular in-house training for our employees such as skill development programs for various specialised tasks. We also have a MoU with Cochin University of Science and Technology “CUSAT” that provides two seats for their M. Tech degree course in marine engineering annually for executives or officers sponsored by us. Continuous profits leading to robust financial performance We are a profitable and dividend paying shipyard. Our Company has posted profits continuously in the last five Fiscals. Our total income and PAT before other comprehensive income have increased from `16604.52 million and `692.82 million respectively in Fiscal 2015 to `22085.01 million and `3121.82 million respectively in Fiscal 2017 at a CAGR of 15.33 and 112.27 respectively. Additionally we have continuously delivered positive RoE margins over the last five Fiscals. We paid dividends to our shareholders at rates of 15 15 15 and 76.50 in Fiscals 2013 2014 2015 and 2016 respectively and declared dividend of 89.70 in Fiscal 2017. Our strong liquidity position in terms of total cash and bank balance of 20032.06 million as of June 30 2017 enables us to continue to stay invested in our business and to consistently pay our suppliers on time and benefit from supplier goodwill. The strength of our balance sheet in terms of liquidity and indebtedness provides us with a number of competitive advantages such as lower finance costs and better financial terms for our future borrowing needs. As of June 30 2017 we had fund based indebtedness in the form of tax free infrastructure bonds amounting to `1230.00 million excluding interest due on these bonds. Apart from this our Company had availed of non-fund based facilities of `2152.92 million USD 2.04 million and EUR 4.69 million. Our listed debentures has been rated AA+ since 2014 by various agencies including IRRPL and CARE. Our Strategies Our objective is to enhance our market position by expanding our capabilities capitalising on opportunities both in domestic and international markets in our industry and to enhance our competitiveness. Our business strategies are: Expand our capabilities through our proposed Dry Dock and International Ship Repair Facility We are in the process of developing our Dry Dock and ISRF. Once developed we believe that these new facilities will expand our existing capabilities significantly and help us build and repair a broader variety of vessels including new generation aircraft carriers and oil rigs which are expected to be key growth drivers in the short to near long term. The process of setting up an ISRF will allow us to undertake repair of a broader range of vessels. Dry Dock In addition to our existing dock we are in the process of building a Dry Dock at a total estimated cost of `17989.91 million. The length of the Dry Dock will be greater than the length of our existing docks. The larger size of our proposed Dry Dock will enable us to build and repair ships of higher capacity and large naval vessels such as aircraft carriers. Further the greater width of our Dry Dock will also enable us to undertake building and repair of rigs within our shipyard. In relation to our proposed Dry Dock HaskoningDHV India Private Ltd has prepared a Detailed Project Report dated October 5 2016. We have also completed the Environmental Impact Assessment study and have obtained environmental clearance from the MoEFCC which is subject to certain conditions. We have also received the National Wildlife Board’s clearance on April 25 2017. For more details see “Risk Factors – The environmental clearances for our proposed Dry Dock and ISRF project is subject to the final order in the matter of Goa

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129 Foundation v. Union of India and amongst others for ISRF project the prior clearance of the Standing Committee of the National Board for Wildlife.” on page 22 and see “Governmental and Other Approvals” on page 382. ISRF We entered into an agreement for development and operation of an international ship repair facility dated December 24 2012 with Cochin Port Trust under which we are in process of setting up an ISRF which inter-alia contains provisions for liquidated damages indemnity and termination. For the ISRF we have leased approximately 8.12 hectares of land and 15 hectares of water body from CoPT including their existing ship-repair facility for a period of 30 years pursuant to the lease deed dated April 12 2013. Since then we have begun using the existing dry dock and allied facilities in the leased area for carrying out ship repair in a limited way. The ISRF will comprise of a ship-lift transfer system and allied facilities to be built at an estimated investment of ` 9694.1 million. We have appointed a consortium of Inros Lackner SE and Tata Consulting Engineers Limited as project consultants. A detailed project report was prepared by the project consultants and received the GoI approval on May 19 2016. We have also obtained the environmental clearance for the project from the MoEFCC. The environment clearance is subject to certain conditions including obtaining prior clearance of the standing committee of the National Wildlife Board. For more details see “Risk Factors – The environmental clearances for our proposed Dry Dock and ISRF project is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others for ISRF project the prior clearance of the Standing Committee of the National Board for Wildlife.” on page 22 and see “Governmental and Other Approvals” on page 382. Build a strong order book by bidding vigorously for projects to be awarded by the Indian PSUs and defence sector pursuant to ‘Make in India’ initiative We believe we are well-positioned to benefit from the recent ‘Make in India’ initiative pursuant to which the GoI is keen to encourage defence manufacturing in India. Policy initiatives such as granting infrastructure status to shipbuilding granting right of first refusal to Indian shipyards for shipbuilding and ship repair work of the Indian PSUs and support through the new financial assistance scheme are expected to provide a steady pipeline of orders and become key drivers of growth. Our proposed Dry Dock and ISRF will increase our ability to build repair and service a broader range of vessels including vessels of larger capacities. As we are one of the very few commercial shipyards to have won defence orders from the Indian Navy and the Indian Coast Guard in the past and have been able to deliver successfully on these mandates we believe that we are well positioned to take advantage of future orders placed by the Indian Navy and other Indian PSUs. We believe that we have an advantage over other defence PSUs as they currently do not have the capacity to construct certain types of ships especially those of bigger dimensions such as the IAC. The GoI also plans to promote inland water transportation and coastal shipping. We believe that this will present several opportunities including building high speed ferry crafts dredgers ropax vessels and large capacity passenger ships. This will create demand for shipbuilding and ship repair services which we believe we are well equipped to deliver. For example we recently bid in a tender floated by Hooghly Dock Port Engineers Ltd “HDPEL” a GoI enterprise for the upgradation operation maintenance and management of two of its shipyards at Salkia and Nazirgunge located at Howrah West Bengal successfully. The Ministry of Shipping GoI approved the formation of a joint venture between our Company and HDPEL on March 29 2017. Our Board accorded its approval for incorporating a joint venture company with HDPEL and investing an amount of `220 million as the initial capital in the joint venture company on April 27 2017. However the agreements in relation to this joint venture are yet to be executed. Continue to enhance our construction quality and delivery time and enhance our price competitiveness in order to increase our market share We believe that our emphasis on quality of construction and timely delivery has been a key factor in our ability to attract new customers and to retain our existing customers. For example we recently delivered seven FPVs for the Indian Coast Guard ahead of the contractual delivery schedule. The final FPV in a series of 20 was delivered on December 30 2016 ahead of the scheduled delivery date of March 2017. We believe that we are achieving the highest standards in India across in many areas of shipbuilding such as plate preparation and cutting processes block fabrication hull erection outfitting design and engineering sourcing procurement and project management.

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130 Furthermore with the rising production cost globally we believe there will be greater demand for offshore support vessels and other commercial vessels that are built by shipyards with a competitive cost structure and which can offer vessels at competitive prices. With our in-house fabrication workshops we intend to continue to develop in-house capabilities in various manufacturing processes thereby enabling us to lower our costs of production and maintain our price competitiveness. We also believe our operations will benefit from our business partnerships with firms like GTT. We believe that continuing to enhance our production planning and sequencing processes and inventory management will also help us to maintain our cost competitiveness and further reduce the construction period of ships. Strengthen our market leadership by continuously adding upgraded and new vessel models to our offerings and expanding customer services Leveraging our experience in building other vessels we plan to expand our product offerings. We believe that we are strong contenders for building the next aircraft carrier for the Indian Navy due to our unique experience in constructing such vessels. With this experience we will also be able to bid for other defence projects. Furthermore we believe that we are well-positioned to pitch for opportunities in the rig building and repair business owing to our proximity to offshore locations. With the construction of our proposed Dry Dock and ISRF we will also be able to build and repair new vessel models. We are well-positioned to follow the latest domestic and international standards for our new offerings. We also plan to expand our operations to cover the entire life cycle of a broader range of vessels. Continue to leverage our market position and our relationships with customers suppliers and other business partners to support our growth and improve our competitiveness We plan to use our leading position in the Indian shipbuilding and ship repair industry to develop new relationships with banks suppliers universities and colleges technical schools classification societies ship design institutes as well as companies in upstream and downstream oil and offshore services industries and to create a favourable environment for our sustainable development. We plan to further strengthen our long-term cooperation with well-known universities such as CUSAT to jointly provide training carry out research and development and develop a potential workforce to support our future growth. We have also set up a section for the preparation of basic designs to enhance our design capabilities and to cater to future design requirements. We believe that these initiatives will also help us in attracting the best talent to Kochi by creating a network of shipbuilding and ship repair experts and helping Kochi to become as an important center for shipping and related businesses. Our Current Order Book As of March 31 2017 our shipbuilding order book position is as follows: Project/Vessel Client Confidential GoI IAC Indian Navy 500 passenger cum 150 MT cargo vessel AN Administration 500 passenger cum 150 MT cargo vessel AN Administration 1200 passenger cum 1000 MT cargo vessel AN Administration 1200 passenger cum 1000 MT cargo vessel AN Administration Double ended Ro Ro Ferry Kochi Municipal Corporation Double ended Ro Ro Ferry Kochi Municipal Corporation Revenue to be recognised in future in ` million 29361.49 We have not received any new ship building orders after March 31 2017. As of March 31 2017 the ship repair order book position in terms of revenue to be recognised in future only

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131 orders where value of outstanding order is greater than ` 50.00 million is `3698.32 million. We have received the ship repair orders greater than ` 50.00 million after March 31 2017 aggregating to `333.41 million from our key clients. The shipbuilding contracts we enter into with our customers stipulate the agreed specifications of the vessel and certification society with which the vessel is intended to be certified. Typically we are permitted to subcontract any portion of the construction work of the vessel to subcontractors other than few major sub-contract tasks such as the main hull structure and superstructures for which we require the prior approval of the client. Our Product Offerings Shipbuilding We are one of the largest public-sector shipyards in India with a shipbuilding capacity of 110000 DWT. Our shipbuilding operations consist of the construction of vessels for clients engaged in the defence and in the commercial sector shipping industry. Vessels built by us include tankers bulk carriers offshore support vessels launch barges buoy tender vessels FPVs passenger vessels and aircraft carriers. We also run a NABL-accredited material testing laboratory which operates as an independent test house. All sections of the laboratory have been designed and equipped with instruments to cater to our quality assurance activities and to extend similar services to the neighbouring institutions industries and government organisations. Some of the vessels we have built in the past or are currently in the process of building include: Clients engaged in the defence sector • IAC: India’s first IAC is being designed by the Indian Navy and built by us. It is one of the Ministry of Defence’s most prestigious warship projects. It is Indias first IAC. • FPV: We recently constructed 20 FPVs for the Indian Coast Guard. The primary role of these vessels includes fisheries protection and monitoring patrol within Exclusive Economic Zone “EEZ” coastal patrol anti- smuggling search and rescue operations and anti-piracy operations. These vessels also provide communication links escort convoys during time of war and hostility. These high speed boats are weight sensitive and require extensive use of aluminium. We have developed special techniques to ensure high quality welding and fabrication of aluminium structures for these vessels. Clients engaged in the commercial sector • Double hull tanker: The vessel was designed as a single screw diesel-driven double hull tanker carrying oil in bulk with machinery space and all accommodations including a navigation bridge. We have built double hull tankers for the SCI. • Bulk carrier: This ship was designed and built as a single screw diesel engine driven bulk carrier for unrestricted worldwide service. The vessel complies with the requirements for type “B” ships defined by the International Convention on Load lines 1966. Among other customers we have built bulk carriers for the Clipper Group Bahamas. • Dredger: We constructed a 1700 cu m trailer suction hopper dredger for the Chennai Port Trust which was delivered in May 2004. • Buoy Tender Vessel: This is a specialized multi-purpose ship which is used for transportation and placement of buoys in position at deep seas recovering and maintenance of buoys towing and mooring of light vessels distress management transportation of equipment and materials in containers and for repair of light houses in remote islands. The designs of these vessels are Rolls Royce Marine UT 755-S and they are being built under the classification requirements of Indian Register of Shipping. • PSVs: Among others our platform supply vessels are of the popular UT-755-L /UT- 755 LN design. The vessel is designed for satisfying the specific demands of the offshore industry for transport of deck cargo pipes liquid cargo and cement and unloading to rigs production platforms and pipe-laying barges. These vessels are the backbone of offshore oil fields industry which acts as a lifeline carrying all operational supplies

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132 and stores to far offshore installation. • AHTSs: These vessels are high-end anchor handlers equipped with two diesel engines and two controlled pitch propellers. In addition to the anchor handling facility these vessels have all the capabilities of a PSV. These vessels are used as support platforms for oil rigs and platforms. We have built these vessels for SCI. In relation to our building of defence vessels our key customers include the Indian Navy and the Indian Coast Guard. In relation to our commercial vessels our key customers include the Clipper Group SCI NPCC Vroon SIGBA AS DGLL and AN Administration. In relation to our offshore offerings our key customers include SCI. Ship repair We commenced ship repair operations in 1978 and have undertaken repairs of all types of ships including the up- gradation of ships of the oil exploration industry as well as periodical maintenance repairs and life extension of ships of the Indian Navy UTL Indian Coast Guard Fisheries and Port Trust as well as merchant ships of SCI and ONGC and various other private owners. Clients engaged in the defence sector In addition to shipbuilding we also undertake ship repair for the Indian Navy and repaired about 15 Indian Naval Ships on an average in the Fiscals 2014 2015 and 2016 respectively where our scope of work varied from routine to complex repairs. We also completed refits of INS Aditya INS Sukanya and INS Shardul for the Indian Navy. We are the only shipyard to have undertaken dry dock repairs of aircraft carriers INS Viraat and INS Vikramaditya for the Indian Navy. Clients engaged in the commercial sector In Fiscal 2016 major repair works for commercial clients included work on the GTV Samudra Sarvekshak and the WSV Samudhra Nidhi for the SCI and on the Dredge VIII and Dredge XV for the DCI. Additionally we have entered into special arrangements to enhance our ship repair business. For example we entered into MoUs with LDCL and DCI in 2013 to take up the dry dock and afloat repairs of some of their vessels. Offshore services We have also offered offshore project services since 1996 and upgradation services since 1999. We have undertaken a number of offshore projects for ONGC. We have been undertaking repair and revamping of oil rigs since 1986. We have undertaken major revamping and refurbishing of oil rigs at our shipyard involving steel renewal up-gradation of drilling cementing mechanical HVAC and piping systems in almost all the major offshore vessels and rigs of ONGC. In addition we have upgraded the drilling capacity of rigs and also worked in the upgradation of a drilling rig the first by an Indian shipyard. We have successfully completed the offshore project for spudcan repairs of Sagar Ratna at Bombay High by loading her on a self-propelled submersible barge which required a high level of project management efficiency with coordination of various activities and logistical support. Another project of similar nature was the clamp on project of ONGC at HB HD HE platforms in Heera fields. Marine Engineering Training We have a Marine Engineering Training Institute through which we facilitate the DGS approved GME residential course under STCW-2010 for mechanical and naval architect engineering graduates. There are 140 sanctioned seats per year which are filled in two batches with 108 trainees admitted in January and 32 admitted in August. We also offer additional courses including six months practical training for marine engineering students from colleges affiliated to universities fire prevention and firefighting and elementary first aid training. The students are either sponsored by shipping companies or directly enrolled. Material Testing Services We operate a material testing laboratory established on our premises in 1972. Our laboratory is one of the leading material testing laboratories in Kerala in the field of chemical mechanical and non-destructive testing of metals

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133 welds and alloys. The laboratory is an independent test house and all sections of the laboratory have been designed and equipped with instruments to cater to our quality assurance activities and to extend similar services to the neighbouring institutions industries and government organisations. Our material testing laboratory has been accredited by the NABL. Our Operations Shipbuilding Process Construction and delivery of a vessel can generally range between 12 to 48 months depending on the type of ship. We undertake new shipbuilding contracts taking into account the existing delivery schedules of our ongoing projects. The following diagram illustrates our shipbuilding process: Payment Terms The contract price is typically payable in instalments. Typically 10-20 is paid at the time of signing of the agreement and keel laying and the rest is paid immediately before the delivery of the vessel. The contracts also usually provide for liquidated damages in the event of any delay in delivery. In certain instances the contracts also provide for an additional bonus payment in the event of construction and delivery ahead of schedule. We are typically required to insure the vessel against all risks typically from the time of keel-laying to the date of delivery of the vessel to our customer. We typically provide a warranty period of 12 months following the delivery of the vessel which covers all parts of the vessel and equipment manufactured furnished or supplied by us. Quality Assurance and After Sales Service We believe that the quality of our vessels and the services that we provide to our customers are crucial for our continued growth. As of May 31 2017 our quality control department consists of 67 personnel and is headed by S Varadarajan who has more than 30 years of experience in the shipbuilding and ship repair industry. As of May 31 2017 the department comprises of 15 officers and various support personnel. Every commercial vessel built by us is certified by a qualified shipping classification society. A classification society certifies that a vessel has been built in accordance with the rules of the society. Our ability to construct vessels that conform to the different standards and requirements of these classification societies reflects our ability

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134 to construct vessels that are acceptable worldwide. We have an established set of quality control assurance and monitoring procedures applicable to every stage of the vessel construction process. Visual inspections are conducted throughout the construction process for adherence to the production and design blueprints. Weld joints are tested by various non-destructive testing “NDT” procedures in accordance with the plan approved by the client and the relevant classification society. We use advanced design software in our construction process. Equipment testing system trials and sea trials are conducted prior to delivery of the vessel to our customers. If rectification work is required as part of our contractual arrangement retrials are undertaken prior to delivery to ensure that the vessel meets all requirements and specifications required. In relation to ship repair a quality control cell has been established which ensures quality in hull and machinery repair. Quality control in hull repairs is ensured through testing of weld joints through NDT procedures in the presence of representatives of classification societies. Quality of machinery repairs is ensured through testing of systems and equipment in the presence of the owners representative and with the help of OEM engineers. Our Facilities The following diagram illustrates our shipyard: The infrastructure and facilities available at our shipyard have received various accreditations. For more details see “History and Certain Corporate Matters – Awards and Recognition” on page 147. Our Company also owns and operates a grid connected captive solar power plant of total capacity of 335 KW. Shipbuilding Our shipbuilding facilities include a dry dock steel stock yard hull shop assembly shop pipe and sheet metal shop testing laboratory for quality control and marine coating shops. Our dock measures 255 x 42.8 x 9 M and can build ships up to 110000 DWT. This dock and the grand assembly area are served by two gantry cranes. We are generally following an Integrated Hull Outfit and Painting “IHOP” system of construction as followed in Japanese yards for the sound and efficient construction of the vessels. Our steel stockyard has an area of 18000 sq. mt. and is aided by two gantry cranes of 25T each and one semi-gantry crane of 25T. Our hull shop built on a covered area of approximately 55000 sq. mt. is self-sufficient with infrastructure required for fabrication of hull blocks up to 50T. The shop is provided with EOT cranes 50T for along the bay movements and gantry crane 20T and trailers for across the bay transfer of materials. We have two transporters with capacities of 150T and 100T respectively.Equipment available in the hull and pipe shops includes machines for mangling blasting and priming steel cutting steel plate shearing frame and beam bending section cutting welding welded panel cutting one-side welding and pipe bending.

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135 Our assembly shop includes a telescopic sliding roof and two gantry cranes which span over it and the building dock. Hull blocks up to 300T can be jumboised here and erected in the building dock using the gantry crane. We undertake structural machinery and electrical design and prepare production drawings. We also have on our premises a well-equipped laboratory capable of undertaking relevant NDT tests. Finally we also have seven covered humidity-controlled marine coating shops of 20 x 20 x 12.5 M each equipped for blasting and painting fabricated units in controlled and favourable ambient conditions. Ship repair Our ship repair facilities include a dockmeasuring 270 x 45 x 12 M that enables us to undertake repairing of vessels of up to 125000 DWT. In addition we have two quays with 15T and 10T cranage respectively and LLTT cranes. Major equipment at our engine and machine shop includes heavy duty lathes plano miller dynamic balancing machine bar boring equipment inside grinding machine horizontal drilling machine cylindrical grinding machine shrinkage equipment high pressure water jet blasting machines electric shop for overhauling or rewinding of motors and testing instrumentation calibration shop hydraulic piping repairs fabrication facilities and a carpentry shop. Our Collaborations We have been successful in forging business partnerships with leading technology players in our business. Some of the MoUs we have entered into include: Business Partner Date Scope of work LDCL April 12 2013 We undertake dry-dock and afloat repairs of their vessels. CUSAT May 26 2014 CUSAT has reserved two seats in their MTech degree course in marine engineering for our executives. We provide lab facilities and internships to CUSAT students under the MoU. DGLL October 21 2015 We undertake dry-dock repairs of their vessels on a nomination basis. DCI November 2 2015 We undertake repair of DCIs dredgers on a nomination basis. Techcross November 4 2015 We receive technical support and engineering and provide shipyard support services to Techcross such as office warehousing and installation services. We also operate a joint marketing framework with Techcross for marketing of various BWTS products and operate a preferential price tier system to allow our customers access to Techcross BWTS products at competitive rates. Wartsila January 13 2016 Wartsila has set up a containerised self-sufficient workshop within our shipyard primarily catering to propeller metallurgical repairs. We derive rental income from this workshop. Wartsila also provides training to our personnel in relation to repair of Warstila engines. Competition We operate in a competitive environment and we expect to face greater competition from existing competitors located both in India and globally and in particular from shipyards in China South Korea and Japan. We compete on the basis of our ability to fulfil our contractual obligations including the timely delivery of vessels constructed or repaired by us our shipyards capacity and capabilities and the price and quality of the vessels we construct. Some of our competitors have more resources than us while certain competitors may have lower cost of operations. In addition certain competitors may have competitive advantages in building or repairing certain types of vessels compared to us. Our competitors in defence shipbuilding are Mazagon Dock Shipbuilders Limited Goa Shipyard Limited Garden Reach Shipbuilders and Engineering Limited LT Shipyard and Reliance Defence and Engineering limited. Our competitors in commercial shipbuilding in India include Bharati Shipyard ABG Shipyard Reliance Defence and Engineering and LT Shipyard. We also face competition from LT Shipyard Reliance Defence and Engineering Limited and Hindustan

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136 Shipyard in the defence ship repair segment and from Colombo dockyard Dubai dry dock Arab ship repair yard and Keppel Singapore in the commercial ship repair segment. For further details see “Industry Overview” on page 104. Sales and Marketing As of May 31 2017 our business development department had 12 employees. We also use reputed international ship brokers to develop business in foreign markets. We focus on targeting existing customers and strive to further develop our relationship with our customers by providing a proactive after-delivery service and responding to feedback. We believe that our customer-driven philosophy of quality service and integrity leads to close customer relationships which provides us with opportunities to be invited to bid for new projects. Human Resources We have a group of dedicated committed and highly skilled personnel and staff. As of May 31 2017 our Company employed a total workforce of 1824 full-time employees which comprised of 309 officers 181 supervisors and 1334 workmen and 894 trainees in various departments. All our employees are based in Kochi. As of May 31 2017 we also employed a minimum of 3178 contract labour. Our contract workforce strength undergoes regular change based on the necessity and work involved. A significant number of our employees are unionized. We have collective agreements with various trade unions that our employees are a part of. We believe that the relationship between our management and our employees is good and we have not experienced any significant disputes with our employees in the last decade. Employee Training We recognise that our employees are an invaluable resource and that the competency and dedication of our employees has been instrumental to our success. To help ensure that our employees are equipped with the necessary skills and expertise we conduct various training programs for our employees. Such training programs are either conducted in-house by our senior staff or external faculty and they involve both classroom lessons and on-the-job training by qualified instructors. Property Our registered office and corporate office are located on the same premises as our shipyard which is on land owned by us. The Dry Dock is proposed to be situated on our owned premises. However we plan to set up the ISRF on land leased and to be leased from the CoPT. Insurance Our shipbuilding contracts require us to maintain a builders risk insurance policy and insure our vessels including all machinery materials equipment appurtenances and outfit that are to be delivered to our customers for their vessels or built onto or installed in or upon their vessels including supplies provided by our customers against all risks typically from the time of keel-laying to the date of delivery of the vessels to our customers. The amount insured is typically at least equivalent to the aggregate of the payments made to us by our customers or the contract price. These insurance policies are in accordance with our shipbuilding contracts and we believe that they are adequate for our business operations. In relation to our ship repair contracts we hold a ship repairers liability insurance policy covering all vessels under repair which is renewed annually. We also arrange warranty insurance policies for the vessels delivered to cover the guarantee obligations of our shipyard on a case by case basis. Furthermore we maintain a standard fire and special perils insurance policy covering the whole factory and associated assets which is renewed every year in addition to our public liability insurance directors and officers liability insurance and marine hull insurance. We are required to contribute to social security contributions including provident fund contributions gratuity pension medical insurance and group personal accident insurance covering death permanent partial disability or permanent total disability due to work related accidents or otherwise of our employees in accordance with the Indian legal and regulatory requirements. Except for the aforementioned policies which are required by law we

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137 have not taken up any other policies for our employees. Health Safety and Environment We have an effective risk management system with self-regulatory processes and procedures for ensuring that the business is conducted in a risk conscious manner. Under our risk management system operational contractual financial business and reputational risks arising are assessed by the respective risk owners and suitable mitigating measures are taken in advance. We are committed to creating and maintaining a safe work environment on an ongoing basis. We are subject to extensive health safety and environmental laws regulations and production process safety and environmental technical guidelines which govern our processes and facilities. For further details see “Regulations and Policies” on page 139. We have implemented a health and safety system to inform new employees of our work and safety policies. Our employees holding supervisory positions are required to ensure that all employees comply with these policies. We also focus on raising safety awareness among our employees and subcontractors’ workmen through various in-house and onsite training programs. For example in 2016 first aid training was given to employees across departments to make the workplace safer improve the team members ability to save a life and prevent an injury from becoming serious. Industrial Security The physical security of our shipyard has been entrusted to an external body. As per the security arrangements we have round-the-clock waterfront patrolling with armed personnel and wireless CCTV surveillance systems covering all critical locations and installations in our shipyard. We also have a biometric access control system for various categories of persons entering our shipyard. There is a visitor’s facilitation centre for the scrutiny and verification of the credentials of visitors to our Company. Apart from this additional special systems and measures continue to be employed for the complete security of the IAC such as an exclusive entry pass and special surveillance system and a special waterside security net. We also have a cyber security policy in place. Our security systems have not experienced any security breach or incident in the last three Fiscals. An industrial security audit is conducted and a joint survey is conducted by us through an external agency annually. Information Technology Information technology is an essential element of our operations infrastructure. We invest in information technology as its use directly lowers cost enables scalable operations improves efficiency reduces business continuity risks and enables a secure enterprise. We use an integrated information technology system through ERP which covers major aspects of our business including shipbuilding ship repair and other areas of the shipyard as well as our administrative and corporate departments. The stabilisation phase of our ERP system was completed in December 2014. Our information technology systems provide for the real time exchange of accurate information between our departments. Awards and Accolades Over the years we have received several awards and accolades including Shipbuilding Company of the Year in 2015. For further details see “History and Certain Corporate Matters – Awards and Recognition” on page 147. Certifications We have been accredited with ISO 9001:2008 – Quality Management System Standard ISO 14001:2004 – Environmental Management System and OHSAS 18001:2007 – Occupational Health and Safety Management System.

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138 Intellectual Property We have filed applications for registration of four trademarks including our corporate logo under the Trademarks Act which is currently pending approval from the Registrar of Trademarks. For more details see “Governmental and Other Approvals” on page 382. We believe we are one of the first Indian companies to obtain a license from GTT to use the patented membrane containment system known as the Mark III Flex Membrane Technology to construct liquefied gas carriers. This license allows us to utilise any of GTTs integrated tank techniques for transporting liquid gas particularly liquefied natural gas. Our business or profitability is not materially dependent on any patent grant of license from third parties industrial commercial or financial contract including a contract with a customer or supplier or new production process. Corporate Social Responsibility We believe in corporate responsibility and contributing to the communities in which we operate. While being focussed on sustained financial performance we are also aware of the necessity and importance of social stewardship. We seek to enrich the lives of future generations through our efforts to improve the lives of less privileged citizens in relation to health education community development capacity building and green technology. As part of our initiatives to realise our CSR vision we facilitate integrated community development. We hope to improve the quality of life education and infrastructure of our communities and provide children with better opportunities to learn and grow in a greener world and a more equitable society. We spent `42.25 million `62.72 million and `72.36 million in Fiscals 2015 2016 and 2017 respectively in accordance with our CSR policy. Key highlights of our CSR initiatives in Fiscal 2017 include: • Providing accommodation and food for financially weak patients near Thiruvananthapuram Medical College • Support for construction of independent houses for the victims of Endosulphan in Kasargode in Kerala as part of its overall housing scheme planned in collaboration with the Government of Kerala • Support for ‘Kerala Suchitwa Mission’ for making Kerala anopen defecation free state and • Promotion of education through the construction of a hostel building for tribal students in Kudayathoor Idukki.

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139 REGULATIONS AND POLICIES The following description is a summary of the relevant regulations and policies as prescribed by the Government of India and other regulatory bodies that are applicable to our Company for running our business. The information detailed below has been obtained from various legislations including rules and regulations promulgated by regulatory bodies and the bye laws of the respective local authorities that are available in the public domain. The regulations set out below may not be exhaustive and are merely intended to provide general information to the investors and neither designed nor intended to substitute for professional legal advice. For details of government approvals obtained by us see “Government and Other Approvals” on page 382. I. Regulations applicable to the Shipping Sector i Industrial Development and Regulation Act 1951 as amended “IDR Act” The IDR Act has been liberalized under the New Industrial Policy dated July 24 1991 and all industrial undertakings are exempt from licensing except for certain industries such as ships and other vessels drawn by power. The IDR Act is administered by the Ministry of Industries and Commerce through the Department of Industrial Policy and Promotion “DIPP”. The main objectives of the IDR Act is to empower the Government to take necessary steps for the development of industries to regulate the pattern and direction of industrial development and to control the activities performance and results of industrial undertakings in the public interest. The DIPP is responsible for formulation and implementation of promotional and developmental measures for growth of the industrial sector. ii Merchant Shipping Act 1958 as amended “Merchant Shipping Act” The Merchant Shipping Act is the principal legislation that applies to ships that are registered in India or which are required to be registered under this Act. The Merchant Shipping Act also provides for the regulations governing the transfer mortgage and sale of ships. Pursuant to the Merchant Shipping Act the National Shipping Board has been established for the development of Indian shipping industry. With a view to ensure safety of the vessels the Merchant Shipping Act makes it compulsory for the installation of life saving appliance fire appliance and radio telegraphy radio telephone and direction finder. iii Merchant Shipping Cargo Ship Construction and Survey Rules 1991 “Merchant Shipping Rules 1991” The Merchant Shipping Rules 1991 classifies the ships and prescribe the specifications relating to among other things construction of hull including structural strength construction and testing of watertight bulkheads decks and inner bottoms construction and testing of watertight decks trunks tunnels duet keels and ventilators watertight doors ballast and bilge pumping and drainage arrangements the type of machinery boilers and electrical installations required unattended machinery spaces including alarm and other safety systems protection of cargo ships against shock fire flooding additional requirements for tankers and periodical surveys of cargo ships. iv Merchant Shipping Construction and Survey of Passenger Ships Rules 1981 “Merchant Shipping Rules 1981” The Merchant Shipping Rules 1981 sets forth the requirements in relation to structure of the passenger ship which includes watertight sub-division of compartments fitting of collision bulkhead double bottom tanks and watertight recesses and trunk ways. It also prescribes requirements in relation to fire protection passenger accommodation lighting and ventilation as well as the usage of space. v The Legal Metrology Act 2009 “LM Act” The LM Act seeks to establish and enforce standards of weights and measures regulate trade and commerce in weights measures and other goods which are sold or distributed by weight measure or number and for matters connected therewith or incidental thereto. The LM Act makes it mandatory to obtain a license from the Controller of Legal Metrology by any person who manufactures sells or repairs any weight or measure. All weights or measures in use or proposed to be used in any transaction or protection are required to be verified and stamped at such place and during such hours as the

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140 Controller of Legal Metrology may specify on payment of prescribed fees. Further no person shall import any weight or measure unless he is registered in such manner and on payment of such fees as may be prescribed. Various penalties have been provided for contravention of the provisions of the LM Act. The penalty of using non-standard weight or measure may attract a fine of up to ` 20000 and a subsequent offence may lead to penalties and imprisonment extending to three years along with fine. In case a person imports any weight or measure without being registered under the LM Act he may be punished with fine which may extend to `25000. The LM Act also provides for provisions relating to compounding of offences. vi The Legal Metrology Approval of Models Rules 2011 “Approval of Models Rules” The Approval of Models Rules lay down provisions regarding approvals of models of weights and measures. The Approval of Models Rules state that only recognised laboratories shall carry out tests for approval of models. Application for approval of models needs to be made to the director of legal metrology with the prescribed information. Once a model is approved a certificate of approval is issued pursuant to which a license to manufacture the model may be obtained from the State Government. The procedure for issue revocation and suspension of the certificate of approval is also laid down in the Approval of Model Rules. The Approval of Models Rules have repealed the Standards of Weights and Measures Approval of Models Rules 1987. vii Foreign Trade Development and Regulation Act 1992 “FTA” and the Foreign Trade Policy 2015 - 2020 “FTP” The FTA provides for the development and regulation of foreign trade by facilitating imports into and facilitating exports from India. The FTP governs the export and import of goods and services in India which require an import export code “IEC” number unless specifically exempted. Exports and imports are free unless specifically regulated by the FTP or the Indian trade classification based on harmonised system of coding which is used for regulating import and export operations. Under the FTA an IEC granted by the director general of foreign trade will be required to be obtained in the event any import or export of the product is envisaged. Failure to obtain the IEC number attracts a penalty of `1000 or five times the value of the goods on which contravention is made or attempted whichever is more. viii Shipbuilding Financial Assistance Policy 2016- 2026 “Financial Assistance Policy” The Government of India has approved a new Financial Assistance Policy for the Indian shipyards to provide them a level playing field vis-à-vis the foreign shipyards. Financial assistance at the rate of 20 of the “Contract Price” or the “Fair Price” as determined by international valuers whichever is lower is to be granted to shipyards for shipbuilding contracts signed during April 1 2016 to March 31 2026. The 20 financial assistance would be provided for 10 years reducing at the rate of three percent every three years. ix Classification of Ships as per relevant class rules In the case of commercial vessels the design construction and survey of the vessels have to satisfy the rule requirements of relevant classification societies selected by the owner. Classification societies are authorised by flag states to issue statutory certificates on their behalf. x Regulation of Foreign Investment in India Foreign investment in Indian securities is governed by the provisions of the Foreign Exchange Management Act 1999 as amended “FEMA” read with the applicable FEMA Regulations. Consolidated FDI Policy consolidates and supersedes all previous press notes press releases and clarifications on FDI issued by the DIPP. Consolidated FDI Policy will be valid until the DIPP issues an updated circular. Foreign investment is permitted except in the prohibited sectors in Indian companies either through the automatic route or the approval route where approval from the Government of India or the Reserve Bank of India “RBI” is required depending upon the sector in which foreign investment is sought to be made. Under the automatic route the foreign investor or the Indian company does not require any approval of the RBI or Government of India for investments. Where FDI is allowed on an automatic basis without the approval of the concerned Ministry /

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141 Department of Government of India the RBI would continue to be the primary agency for the purposes of monitoring and regulating foreign investment. Subject to the provisions of the Consolidated FDI Policy FDI is allowed under the automatic route in the manufacturing sector. xi The Electricity Act 2003 “Electricity Act” The Electricity Act consolidates the laws relating to generation transmission distribution trading and use of electricity. It lays down provisions in relation to transmission and distribution of electricity. It states that the State Government can specify suitable measures for specifying action to be taken in relation to any electric line or electrical plant or any electrical appliance under the control of a consumer for the purpose of eliminating or reducing the risk of personal injury or damage to property or interference with its use. Our Company has installed the captive power plant and solar power plant for our own use. We do not transmit/ distribute or trade electricity as a licensee and hence a license is not required in that regard. xii Central Electricity Authority Measures relating to Safety and Electric Supply Regulations 2010 as amended “Electricity Regulations” The Electricity Regulations are framed under the Electricity Act 2003 and they lay down the provisions in relation to the safety provisions for electrical installations and apparatus of voltage exceeding 650 volts. The said installation requires approval by electric inspector before commencement of supply and recommencement after shutdown for six months for electrical installations exceeding 650 volts. xiii The Atomic Energy Radiation Protection Rules 2004 “Radiation Protection Rules” The Radiation Protection Rules are framed under the Atomic Energy Act 1962 and they apply to practices adopted and interventions applied with respect to radiation sources. Since our Company stores certain radioactive materials it is required to ensure certain compliances in relation to their storage. The atomic energy regulatory board issues license under the said Act and Rules for possession and operation of the industrial radiography exposure devices “IRED” containing radiography source/ radiation generating equipment for industrial radiography purposes at authorised sites. The licensee shall obtain permission from AERB prior to the routine operation of each IRED after procurement. II. Regulations applicable to the Central Public Sector Enterprises As a Central Public Sector Enterprise “CPSE” we are required to comply with certain laws and regulations such as guidelines on corporate social responsibility and sustainability for central public sector enterprises Prevention of Corruption Act 1988 the Central Vigilance Commission Act 2003 and Right to Information Act 2005 amongst others. III. Labour Law Regulations We are required to comply with certain labour and industrial laws which includes the Factories Act 1948 Employees’ Provident Funds and Miscellaneous Provisions Act 1952 the Employees State Insurance Act 1948 the Minimum Wages Act 1948 the Maternity Benefit Act 1961 the Payment of Bonus Act 1965 Workmen’s Compensation Act 1923 the Payment of Gratuity Act 1972 Contract Labour Regulation and Abolition Act 1970 the Payment of Wages Act 1936 Industrial Disputes Act 1947 Industrial Employment Standing Orders Act 1946 the Apprentices Act 1961 the Trade Unions Act 1926 Equal Remuneration Act 1976 Public Premises Eviction of Unauthorized Occupants Act 1971 the Indian Boilers Act 1923 and the Sexual Harassment of Women at Workplace Prevention Prohibition and Redressal Act 2013 amongst others. IV. Intellectual Property Laws Intellectual Property in India enjoys protection under both common law and statute. Under statute India provides for patent protection under the Patents Act 1970 copyright protection under the Copyright Act 1957 trademark protection under the Trade Marks Act 1999 and design protection under the Designs Act

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142 2000. The above enactments provide for protection of intellectual property by imposing civil and criminal liability for infringement. V. Environmental Laws The business of our Company is subject to various environment laws and regulations. The applicability of these laws and regulations varies with different operations. Major environmental laws applicable to the business operations include: i The Environment Protection Act 1986 as amended “EPA” The EPA is an umbrella legislation in respect of the various environmental protection laws in India. Under the EPA the Government of India is empowered to take any measure it deems necessary or expedient for protecting and improving the quality of the environment and preventing and controlling environmental pollution. This includes rules for inter alia laying down standards for the quality of environment standards for emission of discharge of environment pollutants from various sources as given under the Environment Protection Rules 1986 inspection of any premises plant equipment machinery examination of manufacturing processes and materials likely to cause pollution. Penalties for violation of the EPA include fines up to `100000 or imprisonment of up to five years or both. The imprisonment can extend up to seven years if the violation of the EPA continues. There are provisions with respect to certain compliances by persons handling hazardous substances furnishing of information to the authorities in certain cases establishment of environment laboratories and appointment of Government analysts. ii The Air Prevention and Control of Pollution Act 1981 as amended “Air Act” The Air Act has been enacted to provide for the prevention control and abatement of air pollution. The Air Act was enacted with a view to protect the environment and surroundings from any adverse effects of the pollutants that may emanate from any factory or manufacturing operation or activity. It lays down the limits with regard to emissions and pollutants that are a direct result of any operation or activity. Periodic checks on the factories are mandated in the form of yearly approvals and consents from the corresponding Pollution Control Boards in a state. Pursuant to the provisions of the Air Act any person establishing or operating any industrial plant within an air pollution control area must obtain the consent of the relevant State Pollution Control Board prior to establishing or operating such industrial plant. The State Pollution Control Board is required to grant consent within a period of four months of receipt of an application but may impose conditions relating to pollution control equipment to be installed at the facilities. No person operating any industrial plant in any air pollution control area is permitted to discharge the emission of any air pollutant in excess of the standards laid down by the State Pollution Control Board. iii The Water Prevention and Control of Pollution Act 1974 as amended “Water Act” The Water Act aims to prevent and control water pollution as well as restore water quality by establishing and empowering the Central Pollution Control Board and the State Pollution Control Boards. Under the Water Act any person establishing any industry operation or process any treatment or disposal system use of any new or altered outlet for the discharge of sewage or new discharge of sewage must obtain the consent of the relevant State Pollution Control Board which is empowered to establish standards and conditions that are required to be complied with. In certain cases the State Pollution Control Board may cause the local Magistrates to restrain the activities of such person who is likely to cause pollution. Penalty for the contravention of the provisions of the Water Act include imposition of fines or imprisonment or both. iv The Water Prevention and Control of Pollution Cess Act 1977 as amended “Water Cess Act” The Water Cess Act provides for levy and collection of a cess on water consumed by industries with a view to augment the resources of the Central and State Pollution Control Boards constituted under the Water Act. Under the Water Cess Act every person carrying on any industry is required to pay a cess calculated on the basis of the amount of water consumed for any of the purposes specified under the Water Cess Act at such rate not exceeding the rate specified under the Water Cess Act. v The Hazardous and Other Wastes Management and Transboundary Movement Rules 2016 “Hazardous Wastes Rules”

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143 The Hazardous Wastes Rules impose an obligation on every occupier of a facility generating hazardous waste for safe and environmentally sound handling of hazardous waste generated at such facility. Every person engaged in generation processing treatment packaging storage transportation use collection destruction conversion offering for sale and transfer of hazardous waste must obtain an approval from the applicable State Pollution Control Board. The occupier the importer the transporter and the operator of disposal facility are liable for damages to the environment or third party resulting from the improper handling and disposal of hazardous waste. vi Manufacture Storage and Import of Hazardous Chemical Rules 1989 “Hazardous Chemical Rules” Entities which engage in any industrial activity involving hazardous chemicals are required to adhere to the Hazardous Chemical Rules. There are provisions in relation to major incidents involving hazardous chemicals safety measures as well as import and transport of hazardous chemicals. vii Public Liability Insurance Act 1991 “Public Liability Act” The Public Liability Act as amended imposes liability on the owner or controller of hazardous substances for any damage arising out of an accident involving such hazardous substance. A list of hazardous substances covered by the Public Liability Act has been enumerated by the Government by way of a notification. The owner or handler is also required to take out an insurance policy insuring against liability under the legislation. The rules made under the Public Liability Act mandate that the employer has to contribute towards the environment relief fund a sum equal to the premium paid on the insurance policies. This amount is payable to the insurer. viii The Solid Wastes Management Rules 2016 “Solid Wastes Rules” The Solid Wastes Rules applies to every domestic institutional commercial and any other non-residential solid waste generator except industrial waste hazardous waste hazardous chemicals bio medical wastes e- waste lead acid batteries and radio-active waste that are covered under separate rules framed under the Environment Protection Act 1986. As per the Solid Waste Rules the local authority or panchayat is required to make an application in Form-I for grant of authorisation for setting up waste processing treatment or disposal facility if the volume of waste is exceeding five metric tonnes per day including sanitary landfills from the State Pollution Control Board or the Pollution Control Committee as the case may be. Any municipal solid waste generated is required to be managed and handled in accordance with the procedures specified in the Municipal Solid Wastes Rules. Penalties for contravention of the provisions of the Municipal Solid Wastes Rules will be as specified in the EPA. ix Construction and Demolition Waste Management Rules 2016 “Waste Management Rules” The Waste Management Rules applies to waste resulting from construction re-modeling repair and demolition of any civil structure of individual or organisation or authority who generates construction and demolition waste such as building materials debris rubble. x The Batteries Management and Handling Rules 2001 as amended “Batteries Rules” The Batteries Rules are framed under the Environment Protection Act 1986 and apply to every manufacturer importer re-conditioner assembler dealer recycler auctioneer consumer and bulk consumer involved in manufacture processing sale purchase and use of batteries or components thereof. It prescribes the responsibilities of manufacturer importer assembler and dealers of the batteries as well as lays down the responsibilities of the recycler of the batteries. xi E-Waste Management Rules 2016 “E-Waste Rules” The E-Waste Rules apply to every manufacturer producer consumer bulk consumer collection centres dealers e-retailer refurbisher dismantler and recycler involved in manufacture sale transfer purchase collection storage and processing of e-waste or electrical and electronic equipment including their components consumables parts and spares which make the product operational.

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144 VI. Tax Legislations The tax related laws that are applicable to our Company include the Goods and Service Tax Act 2017 the Income Tax Act the Income Tax Rules the Customs Act 1962 Customs Tariff Act 1975 local body tax in respective states and Finance Act 1994. VII. Inclusion of “shipyard” as a part of Harmonised Master List for Infrastructure Sub-Sectors Pursuant to the amendment in the master list of infrastructure sub-sectors issued vide notification f. no. 13/06/2009-INF dated March 27 2012 and amended vide notification no. SI 85 from Department of Economic Affairs Ministry of Finance dated April 8 2016 “Harmonised Master List of Infrastructure sub- sectors” a new sub-category of “shipyard” was added under the category of “transport”. As the RBI notification dated November 25 2013 harmonised the RBI definition of infrastructure lending with the Harmonised Master List of Infrastructure sub-sectors the inclusion of “shipyard” as a new sub-category enables flexible structuring of long term project loans long-term funding from infrastructure funds at lower rates of interest and for a longer tenure and issuance of bonds for meeting working capital requirements. Further RBI has recently brought in significant changes to the external commercial borrowing guidelines the “ECB Guidelines” with respect to companies in the infrastructure and other related sectors. As per the revised framework for the ECB Guidelines published vide A.P. DIR Series Circular No. 32 dated November 30 2015 “Revised Framework for ECB Guidelines” companies in infrastructure sector have been placed under track-II i.e. long term ECB which effectively means that overseas borrowings by such entities shall need to comply with 10 year minimum average maturity unless ECB is denominated in INR. The term ‘infrastructure sector’ for the purpose of the Revised Framework for ECB Guidelines is defined as per the Harmonised Master List of Infrastructure sub-sectors. Also as per the Revised Framework for ECB Guidelines the restriction in respect of raising of ECB for general corporate purposes including working capital has been done away with. The individual limits under automatic route for companies in infrastructure and manufacturing sectors is upto USD 750 million or equivalent.

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145 HISTORY AND CERTAIN CORPORATE MATTERS Brief history of our Company Our Company was incorporated as ‘Cochin Shipyard Limited’ on March 29 1972 as a private limited company under the Companies Act 1956 with the Registrar of Companies Kerala at Ernakulam. Our Company became a deemed public limited company under section 43A of Companies Act 1956 on July 1 1982. Our Company again became a private limited company with effect from July 16 1985. Our Company became a public limited company with effect from November 8 2016 and a fresh certificate of incorporation consequent upon conversion to public limited company was issued by the Registrar of Companies Kerala at Ernakulam. Our Company is a government company as per sub-section 45 of section 2 of the Companies Act 2013. The Ministry of Shipping Road Transport and Highways GoI vide letter bearing file number SY-12022/1/02- CSL dated July 21 2008 conveyed the approval of the Department of Public Enterprises granting our Company the status of ‘Category I Miniratna Company’. As a Miniratna Company our Company is eligible to some enhanced delegation of powers to the Board including having greater autonomy to incur capital expenditure for our projects without the GoI approval. Changes in the Registered Office The Registered Office of our Company was originally located at Building No XXIII/1042 Perumanoor Kochi – 682015 Kerala and was changed to Administrative Building Cochin Shipyard Premises Perumanoor Kochi – 682015 with effect from November 19 1977 to ensure greater operational efficiency. Main objects of our Company The main objects contained in the Memorandum of Association of our Company are as follows: 1. “To Acquire Undertaking. To acquire and take over from the Government of India their Cochin Shipyard Project along with all or any of the assets liabilities responsibilities and commitments of the Government of India in connection therewith. 2. To carry on all or any of the business of builders owners wrights brokers repairers operators agents refitters vendors and /or salvagers of ships of all kinds including passenger ships oil tankers bulk carriers container ships warships naval vessels crafts and fleet auxiliaries aircraft carriers destroyers frigates supply vessels dredgers lightships tugs barges launches lighters floating cranes and other floating crafts for various purposes provided that in respect of warships naval vessels crafts and fleet auxiliaries aircraft carriers destroyers frigates and supply vessels such business shall be carried on as authorized by the Ministry of Defence including Department of Defence Production. 3. Ownership and Proprietorship of Docks. To carry on all or any of the business of proprietors managers and/or operators of docks wharves jetties piers workshops warehouses and stores. 4. To carry on the business of engineers manufactures repairers assemblers processors and/or fitters of engines boilers machinery and equipment and components thereof required for ships and vessels of all kinds and for other purpose. 5. To Carry on Consultancy Work in all Fields of Activity. To carry on the business as consultants in all the fields in which our Company is engaged or authorized to engage in including ship design naval architecture marine mechanical electrical civil metallurgical and electronic engineering manufacture of ancillary items and equipment building of all types of ships and machinery and in all kinds of planning relating to layout operations repair design work necessary for all the above works for the benefit of our Company itself or for an outside party with or without remuneration and to establish competent organization for the purpose as deemed necessary.” The existing and proposed activities of our Company are and shall be within the scope of the objects clause of the Memorandum of Association. Amendments to our Memorandum of Association Set out below are the amendments to our Memorandum of Association since the incorporation of our Company:

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146 Date of Shareholders’ Resolution Nature of amendment December 7 1977 Clause V of the Memorandum of Association was amended to reflect the increase in authorised share capital from `500000000 divided into 500000 equity shares of `1000 each to `550000000 divided into 550000 equity shares of `1000 each. August 12 1981 Clause V of the Memorandum of Association was amended to reflect the increase in authorised share capital from `550000000 divided into 550000 equity shares of `1000 each to `700000000 divided into 700000 equity shares of `1000 each. February 23 1989 Clause V of the Memorandum of Association was amended to reflect the increase in authorised share capital from `700000000 divided into 700000 equity shares of `1000 each to `800000000 divided into 800000 equity shares of `1000 each. August 26 1993 Clause V of the Memorandum of Association was amended to reflect the increase in authorised share capital from `800000000 divided into 800000 equity shares of `1000 each to `1000000000 divided into 1000000 equity shares of ` 1000 each. September 28 1994 Clause V of the Memorandum of Association was amended to reflect the increase in authorised share capital from `1000000000 divided into 1000000 equity shares of `1000 each to `2200000000 divided into 1000000 equity shares of `1000 each and 1200000 7 non- cumulative redeemable preference shares of `1000 each. September 22 1998 Clause V of the Memorandum of Association was amended to reflect the increase in authorised share capital from `2200000000 divided into 1000000 equity shares of `1000 each and 1200000 7 non- cumulative redeemable preference shares of `1000 each to `2500000000 divided into 1300000 equity shares of `1000 each and 1200000 7 non-cumulative redeemable preference shares of `1000 each. March 17 2009 Clause V of the Memorandum of Association was amended to reflect the subdivision of equity shares of face value of `1000 each into fully paid up 100 equity shares of `10 each to reflect the division of capital of our Company as `2500000000 divided into 130000000 equity shares of `10 each and 1200000 7 non-cumulative redeemable preference shares of ` 1000 each. September 20 2016 Clause V of the Memorandum of Association was amended to reflect the reclassification of 130000000 equity shares of face value of `10 each and 1200000 7 non-cumulative redeemable preference shares of face value of `1000 each to 250000000 equity shares with face value of `10 each. Major events in our history The table below sets forth the key events in the history of our Company: Year Major events April 1972 Laying of foundation stone for hull shop of our Company July 1975 Vice Admiral N. Krishnan and Admiral S. M. Nanda sign the contract for building the first bulk carrier at Cochin Shipyard July 1981 Delivery of first ship named ‘Rani Padmini’ October 1990 Delivery of first tanker named ‘007 Motilal Nehru’ May 1993 Received approval from Directorate General of Shipping for starting Graduate Engineer’s Course for six months at our Company May 1999 Delivered the Double Hull Motor Tanker ‘M.T. Abul Kalam Azad’ with a dead weight at design draught of 83576 T to Shipping Corporation of

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147 Year Major events India Limited February 2003 Delivered first export order LB II Barge to National Petroleum Construction Company Abu Dhabi January 2004 Contract signed for building of six bulk carriers for M/s Clipper Group Bahamas – The first series of export order November 2006 Delivered nine fire-fighting tugs to Saudi Seaport Authority Saudi Arabia from December 2004 February 2009 Keel laying of the first Indigenous Aircraft Carrier for the Indian Navy October 2010 Signed the shipbuilding order of 20 Fast Patrol Vessels for Indian Coast Guard September 2011 Set up the 500 Tonne Bollard Pull facility at Vizhinjam the largest facility for bollard pull test in Asia December 2012 Signed contract for setting up of ISRF at Cochin Port Trust August 2013 Launched the first Indigenous Aircraft Carrier for the Indian Navy December 2013 Allotment of 8.51 Secured redeemable non-convertible tax-free bonds of face value of `1000 million March 2014 Delivered the 100 th ship built by our Company July 2014 Implemented SAP ERP System December 2015 Obtains license from GTT to build LNG Ships using the containment system known as the Mark-III Technology December 2016 The last ship of the 20 Fast Patrol Vessel delivered to Indian Coast Guard June 2017 Delivered double ended Ro-Ro ferry ‘Sethusagar – I and II’ to Kochi Municipal Corporation Awards and Recognition Our Company has received the following awards: Year of award Award Description 2017 KMA Excellence Award-2017 For undertaking best CSR activities 2017 Rajbhasha Karyanvan Puraskaar Awarded first prize by Nagar Rajbhasha Karyanvan Samiti Upakram Kochi for best implementation of official language Hindi during the year 2015-16 2017 Recognition of WIPS Activities Award Awarded by Forum of Women in Public Sector under the aegis of SCOPE in its 27 th National Meet held at Nagpur on February 11 2017 – February 12 2017 2016 Award for Outstanding Safety Performance Winner of the award for outstanding performance in industrial safety in the category of very large size engineering industries having more than 750 employees given by National Safety Council Kerala Chapter 2016 KMA Excellence Award-2016 For best in-house magazine 2016 Safety Award - 2016 Award for outstanding performance in industrial safety in the category of very large factories having more than 500 workers given by Department of Factories Boilers Government of Kerala 2016 National safety council Kerala chapter safety awards Award for outstanding safety performance for outstanding performance in industrial safety as winner by achieving the lowest frequency rate of accidents 2016 Award for top 50 PSU organisations with innovative HR practices Award presented by Times Ascent to top 50 PSU organisation with “Innovative HR Practices” at Asia Pacific HRM Congress 2016 KMA excellence award For best CSR activities undertaken

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148 Year of award Award Description 2016 BT-CSR excellence award Award of excellence in the category of best performing PSE CSR head given by Bureaucracy Today 2016 Best corporate citizen award Winner in category III awarded by National Institute of Personnel Management Kerala chapter 2015 The Gateway awards for shipbuilding company of the year Shipbuilding Company of the Year in recognition of healthy order book and technical competence and also for active contribution to “Make in India” initiative 2015 TMA- HLL CSR award Trivandrum management association jointly with HLL Lifecare Limited awarded our Company as winner for spending `54.6 million for the benefit of society 2015 Samatva 2015 Winner of best CSR practices among public sector undertakings In addition to the above Ministry of Heavy Industries and Public Enterprises Government of India has issued ‘Excellent’ rating to our Company for the Financial Year 2010-11 2012-13 2013-14 2014-15 and 2015-16 on the basis of the audited data of the central public sector enterprises under the Ministry of Shipping. Accreditations and Certifications Our Company has received the following accreditations and certifications: Certificate Particulars ISO 14001:2004- Environmental Management System DNV GL certified the management system of our Company to conform to the Environmental Management System standard of ISO 14001:2004 for: • design development and construction of ships repairs maintenance and overhaul of ships and offshore structures and • training marine engineers and conduct of firefighting and first aid courses. OHSAS 18001:2007- Occupational Health and Safety Management System DNV GL certified the management systems of our Company to conform to the occupational health and safety management system standard of OHSAS 18001:2007 for: • design development and construction of ships repairs maintenance and overhaul of ships and offshore structures and • training marine engineers and conduct of firefighting and first aid courses. ISO 9001:2008 – Quality Management System Standard DNV GL certified the management system of our Company to conform to the quality management system standard of ISO 9001:2008 for: • design development and construction of ships repairs maintenance and overhaul of ships and offshore structures and • training marine engineers and conduct of firefighting and first aid courses. Number of Shareholders of our Company Total numbers of Shareholders of our Company as on the date of this Red Herring Prospectus is seven. Corporate Profile of our Company For details of our Company’s corporate profile business description of activities services products technology managerial competence and capacity built-up location of plant marketing competition market of each segment growth of our Company exports and profits due to foreign operations with country-wise analysis standing of our Company in relation to prominent competitors with reference to our products and services environmental issues technology major suppliers major customers geographical segment and management see “Our Business” “Our

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149 Management” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 124 151 and 334 respectively. Our Holding Company Our Company does not have a holding company. Subsidiaries of our Company As on the date of this Red Herring Prospectus our Company does not have any subsidiary. Injunction or restraining order Our Company is not operating under any injunction or restraining order. Capital raising activities through equity or debt by our Company For details in relation to equity and debt capital raised by our Company see “Capital Structure” “Financial Statements” and “Financial Indebtedness” on pages 73 175 and 369 respectively. Changes in the activities of our Company during the last five years There have been no changes in the activities undertaken by our Company during a period of five years prior to the date of this Red Herring Prospectus which may have had a material effect on the profits or loss of our Company or affected our business including discontinuance of lines of business loss of agencies or markets and similar factors. Defaults or rescheduling of borrowings with financial institutions/ banks and conversion of loans into equity There have been no defaults or rescheduling of borrowings with the financial institutions/ banks/ debenture holders. None of our outstanding loans have been converted into equity shares. Lock-out Strikes etc. There have been instances of strikes lock-outs or instances of labour unrest in our Company. For instance the contract workers went on an indefinite strike from May 29 2011 which was called off on June 24 2011. Additionally a 24-hour strike was held by the worker unions against the proposed Issue on April 28 2017. For details see “Risk Factors – Trade unions under which majority of our workmen are unionised have objected to the proposed Issue. This may lead to strikes lock-down or work stoppages which will adversely affect our operations reputation and financial condition.” on page 31. Time and Cost Overruns in setting up the projects Except as stated below our Company has not faced any time and cost overrun in setting up the Dry Dock: As per the DD DPR the suggested programme for the construction of the Dry Dock was to commence by July 2016 subject to the receipt of the Environmental Clearance from MOEFCC and Public Investment Board approval by the end June 2016. Our Company has received environmental clearance and CRZ clearance numbered F. No. 10-9/2015-IA III for the Dry Dock from MOEFCC on November 9 2016 and approval of the proposal for construction of Dry Dock project in our Company’s premises vide letter numbered SY-13013/3/2014- CSL from the Government of India acting through the Ministry of Shipping dated August 5 2016. However the environmental clearance is subject to certain conditions including the outcome of an ongoing litigation in the Supreme Court of India. For more details see “Risk Factors - The environmental clearances for our proposed Dry Dock and ISRF project is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others for ISRF project the prior clearance of the Standing Committee of the National Board for Wildlife.” on page 22. For more details see “Governmental and Other Approvals” on page 382. In relation to ISRF project we have obtained environmental clearance dated June 22 2017 from MoEFCC. However the environmental clearance is subject to certain conditions including obtaining prior clearance of the wildlife from the Standing Committee of the National Board for Wildlife and the outcome of an on-going litigation in the Supreme Court of India. For more details see “Risk Factors - The environmental clearances for our proposed

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150 Dry Dock and ISRF project is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others for ISRF project the prior clearance of the Standing Committee of the National Board for Wildlife.” on page 22. The construction of the ISRF project shall commence after the receipt of the pending approvals. For details see “Risk Factors – We cannot assure you that our proposed Dry Dock or International Ship Repair Facility will become operational as scheduled or at all or operate as efficiently as planned. We have not as on date of this Red Herring Prospectus obtained certain licenses or approvals for our proposed ISRF project for which funds are being raised through the Issue. Our Company shall transfer the Net Proceeds assigned for the proposed ISRF project to a separate bank account and we shall incur all expenditure on the ISRF project through internal accruals till the time such pending approvals are received. Further if we are unable to commission our new proposed Dry Dock or the ISRF in a timely manner or without cost overruns our business results of operations and financial condition may be adversely affected.” on page 19. Summary of key agreements • Memorandum of Understanding signed with Ministry of Shipping for the financial year 2017-2018 Our Company enters into a Memorandum of Understanding with Department of Public Enterprises Ministry of Shipping GoI “MoU” every financial year. The MoU sets out certain performance targets “Targets” before the beginning of the financial year and the performance of our Company is evaluated against the Targets at the end of the financial year. For the year 2017-18 our Company has proposed to undertake the following in the MoU: i to carry out the construction of i 300 KWP solar power plant on roof top of hull shop ii replacement of asbestos sheet with aluminium sheet in roof top of hull shop 4 baysiii marine engineering training institute complex and hostel building iv multistoried residential complex for employees v company guest house vi service utility complex vii office space for service engineers in ancillary area. Our Company has undertaken to initiate the Dry Dock project and ISRF pursuant to the grant of environmental clearance by MOEFCC vide letter dated June 22 2017 which is subject to the final order in the matter of Goa Foundation v. Union of India and amongst others for ISRF project the prior clearance of the Standing Committee of the National Board for Wildlife. Financial and Strategic Partners Our Company does not have any financial and strategic partners as of the date of filing this Red Herring Prospectus. Details regarding acquisition of business/undertakings mergers amalgamations and revaluation of assets Our Company has not acquired any business or undertaking and has not undertaken any merger amalgamation or revaluation of assets. Details of guarantees given to third parties by our Promoter Our Promoter has not given any guarantees on behalf of our Company to third parties. Partnership Firms Our Company is not a partner in any partnership firm.

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151 OUR MANAGEMENT Board of Directors Under the Articles of Association our Company is required to have a minimum of three Directors. We currently have twelve Directors of which six are Independent Directors. The following table sets forth the details regarding the Board as of the date of this Red Herring Prospectus: Sr. No. Name Designation Occupation and DIN Age in years Address Other Directorships 1. Mr. Madhu S. Nair Designation: Chairman and Managing Director Occupation: Service DIN: 07376798 51 XI/356-A Sreelakam Off Kundanoor Chilavanoor Road Kundanoor Maradu P.O. Kochi - 682304 Kerala India - 2. Mr. D. Paul Ranjan Designation: Director Finance and Chief Financial Officer Occupation: Service DIN: 06869452 57 Grace 28/2090 A Thottunkathara Road Kadavanthra P.O. Ernakulam - 682020 Kerala India - 3. Mr. Sunny Thomas Designation: Director Technical Occupation: Service DIN: 06882228 59 1/34 Kallukalam House Paruthely Avenue Road Edappally P.O. Ernakulam - 682024 Kerala India - 4. Mr. Suresh Babu N.V Designation: Director Operations Occupation: Service DIN: 07482491 56 Nikerthil House Palluruthy P.O. Perumpadappu Ernakulam - 682006 Kerala India - 5. Mr. Pravir Krishna Designation: Part Time Official Nominee Director Occupation: Service DIN: 06519104 55 C2/17 Char Imli Bhopal- 462016 Madhya Pradesh • Dredging Corporation of India Limited • Shipping Corporation of India Limited 6. Mr. Elias George Designation: Part Time Official Nominee Director Occupation: Service DIN: 00204510 60 No.4 Neptune Country Chilavannoor Road Kadavanthra Kochi - 682020 Kerala India • Kochi Metro Rail Limited • Cochin Smart Mission Limited

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152 Sr. No. Name Designation Occupation and DIN Age in years Address Other Directorships 7. Mr. Krishna Das E Designation: Non Official Part Time Independent Director Occupation: Advocate DIN: 02731340 47 Sree Krishna Kripa Pannicode P.O. Kunisseri Palakkad - 678681 Kerala India - 8. Mr. Radhakrishna Menon Designation: Non Official Part Time Independent Director Occupation: Entrepreneur DIN: 07518727 53 Sreeniketan Thrikodithanam P.O. Changanacherry Kottayam - 686105 Kerala India - 9. Ms. Roopa Shekhar Rai Designation: Non Official Part Time Independent Director Occupation: Social Worker DIN: 07565156 63 10 East High Court Road Ramdaspeth Nagpur - 440010 Maharashtra India - 10. Mr. Jiji Thomson Designation: Non-Official Part Time Independent Director Occupation: Service DIN: 01178227 61 Annamiria NCC Road Ambalamukku Peroorkada P.O Trivandrum 695005 Kerala India - 11. Mr. Pradipta Banerji Designation: Non-Official Part Time Independent Director Occupation: Professor DIN: 00630615 56 B-309 Nilgiri Building No. B-24 IIT Powai Mumbai 400076 Maharashtra India - 12. Mr. Nanda Kumaran Puthezhath Designation: Non-Official Part Time Independent Director Occupation: Retired banker DIN: 02547619 64 Lakshmi PRA 104 Ganganagar Palliparambukavu Thripunithura – 682301 Kerala India. • Atlas Jewellery India Limited • INKEL Limited • INKEL-KSIDC Projects Limited All the Directors of our Company are Indian nationals and none of the Directors are related to each other.

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153 Brief Biographies of the Directors Mr. Madhu S. Nair aged 51 years is Chairman and Managing Director of our Company from January 1 2016. He was appointed to theposition of Chairman and Managing Director of our Company by the Ministry of Shipping through a selection process of Public Enterprise Selection Board. He had joined our Company as a management trainee in June 1988. He holds a degree of bachelor of technology in naval architecture and ship building from Cochin University of Science and Technology India and a degree of master in engineering with specialisation in naval architecture and ocean engineering from Osaka University Japan. He has completed a training course in shipbuilding-production control at Ishikawajima Harima Heavy Industries Overseas Vocational Training Association organised by the Japan International Cooperation Agency under the International Cooperation Programme of the government of Japan. Furthermore he has also attended an intensive Japanese language course at Osaka International Centre. He is a member of the Royal Institution of Naval Architects London. He has received an award named “CEO with HR Orientation–World HRD Congress–a Tribute to CEOs” presented by Times Ascent. He has approximately 28 years of work experience with our Company. Mr. D. Paul Ranjan aged 57 years is Director Finance and Chief Financial Officer of our Company from May 1 2014. He was appointed to the position of Director Finance by the Ministry of Shipping through a selection process of Public Enterprise Selection Board. He holds a degree of bachelor of commerce from Madurai Kamaraj University. He is a chartered accountant and has completed a post qualification course in information systems audit from the Institute of Chartered Accountants of India. He had joined our Company as an executive trainee in December 17 1984. He has approximately 32 years of work experience with our Company wherein his responsibilities included financial management strategic planning risk management forex management budgeting and cost control. He is also in charge of the information systems department. Mr. Sunny Thomas aged 59 years is Director Technical of our Company from June 1 2014. He was appointed to the position of Director Technical of our Company by the Ministry of Shipping through a selection process of Public Enterprise Selection Board. He holds a degree of bachelor of technology in naval architecture and ship building from University of Cochin and a degree of master in business administration with specialisation in finance from Indira Gandhi National Open University India. He also holds certificate in project risk management from the Institute of Project Management Certification. He has completed group training in the field of shipbuilding organised by Japan International Cooperation Agency under the International Cooperation Programme of the Government of Japan. He has also undergone shipbuilding training course with Ishikawajima- Harima Heavy Industries Limited Japan. Furthermore he has completed intensive Japanese language course conducted by Tokyo International Centre Japan International Cooperation Agency. He had joined our Company as a management trainee in August 3 1981. He has approximately 35 years of work experience with our Company wherein he has worked across areas such as ship design ship repair ship building as well as outsourcing and project execution. Mr. Suresh Babu N. V aged 56 years is Director Operations of our Company from April 26 2016. He was appointed to the position of Director Operations of our Company by the Ministry of Shipping through a selection process of Public Enterprise Selection Board. He holds a degree of bachelor of engineering mechanical from the University of Kerala. He holds a diploma in management from Indira Gandhi National Open University. He has completed one year group training course in shipbuilding repairing and maintenance conducted by Overseas Shipbuilding Cooperation Centre under International Cooperation Programme of the Government of Japan under Colombo Plan. He has also undergone a practical training course with shipyard in Sekaidu of Kawasaki Heavy Industries Limited. Furthermore he has completed supplementary course in Japanese language held at Overseas Shipbuilding Cooperation Centre. He joined our Company as an executive trainee in February 1 1985. He has approximately 31 years of work experience with our Company wherein he has had experience across various areas of the shipyard such as ship building materials and ship repair. Mr. Pravir Krishna aged 55 is Part Time Official Nominee Director of our Company from April 17 2017. He holds a graduate and post graduate degree in economics. He has completed a course on negotiating strategies and public private partnership from Indian Institute of Management Bangalore in the year 2009. He is the joint secretary Ministry of Shipping Government of India since November 23 2015. He joined the land revenue management and district administration as sub-divisional officer in August 1989. He worked as a director in the cabinet secretariat from February 2004 to May 2007. He assumed the charge of joint secretary in the Ministry of Health and Family Welfare in May 2007 and continued till January 2009. He was the principal secretary in the public health and family welfare department Government of Madhya Pradesh from April 2012 to November 2015. Mr. Elias George aged 60 years is Part Time Official Nominee Director of our Company from November 27

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154 2012. He holds a degree of bachelor of technology in naval architecture and shipbuilding from the University of Cochin. He retired from the Indian administrative service on October 31 2016. He was the additional chief secretary transport Government of Kerala prior to his retirement. He belongs to the 1982 batch of the Indian administrative service Kerala cadre. He started his career as an assistant collector and worked in different departments like irrigation forest civil supplies labour industries and tourism in several departments in the Kerala as well as in central ministries. Also he is the managing director of the Kochi Metro Rail Limited. Mr. Krishna Das E aged 47 years is Non-Official Part Time Independent Director of our Company from March 21 2016. He holds a degree of bachelor in commerce from University of Calicutand a bachelor of law from Mangalore University. He is an advocate on the roll of the bar council of Kerala since 1996 and practising in the District Courts at Palakkad Kerala. Mr. Radhakrishna Menon aged 53 years is a Non Official Part Time Independent Director of our Company from March 21 2016. He holds a degree of bachelor in legal social science from Bharati Vidyapeeth’s New Law College Pune. He is the president of Travancore Travel and Tourism Co-operative Society Limited. In addition to being an entrepreneur and proprietor of Devi Agency and Devi Traders he is also the vice-president of the World Malayalee Organisation. He is a non-official member of general council for National Livestock Mission Ministry of Agriculture and Farmer Welfare Government of India. Ms. Roopa Shekhar Rai aged 63 years is Non-Official Part Time Independent Director of our Company from March 21 2016. She holds a degree of bachelor in science from Nagpur University and master of arts from Rashtrasant Tukadoji Maharaj Nagpur University. She also holds a diploma in homoeopathic medical science from Homoeopathic and Biochemic Doctor’s Training Institute. She was a chairperson of the ladies wing of Vidarbha Industries Association in the year 1994-95. Mr. Jiji Thomson aged 61 years is Non-Official Part Time Independent Director of our Company from July 15 2017. He holds bachelor of arts and master of arts degrees in economics from University of Kerala and degree of master of social science in Public Economic Management from University of Birmingham UK. He belongs to the 1980 batch of the Indian administrative service Kerala cadre. In the past he has been the chief secretary of the Government of Kerala from January 2015 to February 2016 and director general in Sports Authority of India Ministry of Youth Affairs and Sports from March 2013 to January 2015. Mr. Pradipta Banerji aged 56 years is Non-Official Part Time Independent Director of our Company from July 15 2017. He holds a degree of bachelor of technology from Indian Institute of Technology Delhi. He also holds a degree of master of science and a doctorate of philosophy Ph.D from University of California Berkeley USA. He has done an executive development programme with Kellogs School of Management Northwestern University USA. He is currently associated with Indian Institute of Technology Bombay. He is the former director of Indian Institute of Technology Roorkee. He has received “Excellence in Teaching” award from Indian Institute of Technology Bombay. Mr. Nanda Kumaran Puthezhath aged 64 years is Non-Official Part Time Independent Director of our Company from July 15 2017. He holds bachelor of arts and master of arts degrees from Calicut University. He is also a certified associate of the Indian Institute of Bankers. He has been associated with State Bank of India since 1975 to 2011 post which he was appointed as the managing director of State Bank of Travancore from 2011 to 2013. He has also held various positions including the president of MobMe Wireless Solutions Limited the chief executive officer of Alpha Palliative Care and the managing director of Atlas Jewellery India Limited. Confirmation from Directors None of the Directors of our Company have held or currently hold directorship in any listed company whose shares have been or were suspended from being traded on any of the stock exchanges in the past five years. Further none of the Directors of our Company are or were associated in the capacity of a director with any listed company which has been delisted from any stock exchanges. Understanding with major shareholders customers suppliers or others pursuant to which Directors were appointed As per Article 21a of the Articles of Association the Chairman of the Board of Directors and the Government representatives on the Board of Directors shall be appointed by the President of India. Other members of the Board of Directors shall be appointed or reappointed by the President of India in consultation with the Chairman of the Board of Directors. The Directors shall be paid such remuneration as the President of India may from time to

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155 time determine. The Directors appointed shall be entitled to hold office for such period as the President of India may determine. Except as stated above none of our Directors or Key Management Personnel have been appointed pursuant to any arrangement or understanding with major shareholders customers suppliers or others. Borrowing powers of the Board Subject to the Memorandum and Articles of Association of our Company and pursuant to the shareholders’ resolution dated September 20 2016 the Board is authorised to borrow up to an aggregate amount of ` 20000 million for the purpose of the business of our Company notwithstanding that the amount to be borrowed and amount already borrowed by our Company may exceed the aggregate of the paid-up share capital and free reserves of our Company. Details of Appointment and Term of the Directors: S. No. Name of Director Ministry of Shipping Order No. and Date Date of Appointment of Director Term 1. Mr. Madhu S. Nair SY-11011/1/2009 -CSL dated December 11 2015 January 1 2016 For a period of five years with effect from the date of assumption of charge of the post till the date of his superannuation or until further orders whichever is the earliest 2. Mr. D. Paul Ranjan SY-11012/1/2009 -CSL. Vol-II dated April 4 2014 May 1 2014 For a period of five years from the date of assumption of charge of the post on or after May 1 2014 or till the date of his superannuation or until further orders whichever is the earliest 3. Mr. Sunny Thomas SY-11012/3/2010 -CSL dated May 12 2014 June 1 2014 For a period of five years from the date of assumption of charge of the post on or after June 1 2014 or till the date of his superannuation or until further orders whichever is earlier 4. Mr. Suresh Babu N.V SY-11012/2/2010 -CSL dated April 26 2016 April 26 2016 For a period of five years from the date of his assumption of charge of the post or till the date of his superannuation or until further orders whichever is the earliest 5. Mr. Pravir Krishna SY-11012/1/2017 -CSL dated April 17 2017 April 17 2017 From the date of the letter of appointment and until further orders from the Government 6. Mr. Elias George SY-11012/5/95 - CSL dated November 27 2012 November 27 2012 From the date of the letter of appointment and until further orders from the Government 7. Mr. Krishna Das E SS- 11012/05/2014 - SY II dated March 21 2016 March 21 2016 Fixed tenure of three years from the date of notification of appointment or until further orders whichever is earlier 8. Mr. Radhakrishna Menon SS- 11012/05/2014 - SY II dated March 21 2016 March 21 2016 Fixed tenure of three years from the date of notification of appointment or until further orders whichever is earlier 9. Ms. Roopa Shekhar Rai SS- 11012/05/2014 - SY II dated March 21 2016 March 21 2016 Fixed tenure of three years from the date of notification of appointment or until further orders whichever is earlier 10. Mr. Jiji Thomson SY- 11012/1/2016- CSL dated July 15 2017 July 15 2017 Fixed tenure of three years from the date of notification of appointment or until further orders whichever is earlier.

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156 S. No. Name of Director Ministry of Shipping Order No. and Date Date of Appointment of Director Term 11. Mr. Pradipta Banerji SY- 11012/1/2016- CSL dated July 15 2017 July 15 2017 Fixed tenure of three years from the date of notification of appointment or until further orders whichever is earlier. 12. Mr. Nanda Kumaran Puthezhath SY- 11012/1/2016- CSL dated July 15 2017 July 15 2017 Fixed tenure of three years from the date of notification of appointment or until further orders whichever is earlier. Pursuant to Department of Personnel and Training’s O.M. Number 1/2/2016-EOACC dated April 13 2016 Except for the whole time Directors who are entitled to statutory benefits and post-retirement medical benefits on completion of tenure of their employment with our Company no Director is entitled to any benefit on termination of their directorship with our Company. Remuneration of the Directors A. Chairman and Managing Director and Whole Time Directors: The following table sets forth the remuneration paid by our Company to the Chairman and Managing Director and existing Whole Time Directors for the Fiscal 2017: In ` million Name of Director Total remuneration Mr. Madhu S. Nair 3.57 Mr. D. Paul Ranjan 3.95 Mr. Sunny Thomas 3.89 Mr. Suresh Babu N.V 3.17 The Government Nominee Directors of our Company or Part Time Official Directors of our Company derive their salary benefits and facilities from the Government of India and Government of Kerala and are therefore not paid by our Company. B. Non Official Part Time Independent Directors Non Official Part Time Independent Directors are paid sitting fees for each meeting of the Board and Committees thereof. They are also subject to the maximum amount as prescribed under the Companies Act. Presently our Company pursuant to the Board resolution dated January 24 2017 is paying upto ` 15000 to Non Official Part Time Independent Directors for each meeting of the Board and Committees thereof. Details of the terms and conditions of appointment of the Chairman and Managing Director and Whole Time Directors: The Ministry of Shipping prescribes the terms and conditions of appointment of the Chairman and Managing Director as well as the Whole Time Directors. Our Company prescribes the terms and conditions of employment for each of the Whole Time Directors in consonance with the terms and conditions prescribed by Ministry of Shipping. Mr. Madhu S. Nair Mr. Madhu S. Nair is the Chairman and Managing Director of our Company. He was appointed on January 1 2016 pursuant to the Ministry of Shipping Order SY-11011/1/2009 -CSL dated December 11 2015. The current terms and conditions of his employment were prescribed by Ministry of Shipping Order No. SY-11011/1/2009- CSL dated January 8 2016. Some of the key terms and conditions amongst others as revised from time to time are as under: Term For a period of five years with effect from January 1 2016 in the first instance or till the date of his superannuation or until further orders whichever occurs earlier

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157 and in accordance with the Companies Act. The appointment may however be terminated even during this period by either side on three months’ notice or on payment of three months’ salary in lieu thereof. After the expiry of the first year his performance will be reviewed to enable government to take the view regarding continuance or otherwise of the balanced period of tenure. Pay ` 75000 per month in the existing pay scale of ` 75000 - ` 90000 Headquarters His headquarters will be at Kochi where the Registered Office of our Company is located. He will be liable to serve in any part of India at the discretion of our Company. Dearness allowance Dearness Allowance would be paid in accordance with the new IDA scheme spelt out in the DPE’s O.M. dated November 26 2008 and April 2 2009. Housing House rent and residential accommodation is provided as per the Ministry of Shipping orders as amended from time to time. Annual increment He will be eligible to draw his annual increment at three percent of basic pay on the anniversary date of his appointment in the scale and further increments to the same date in subsequent years until the maximum of pay scale is reached. After reaching the maximum of pay scale one stagnation increment equal to the rate of last increment drawn will be granted after completion of every two-year period from the date he reaches the maximum of his pay scale provided he gets a performance rating of “Good” or above. He will be granted a maximum of three such stagnation increments. Conveyance As per the Ministry of Shipping orders as amended from time to time Performance related payment He shall be eligible for approved performance related payment as per DPE’s O.M.’s dated November 26 2008 February 9 2009 and April 2 2009. Other benefits and perquisites/ superannuation The Board of Directors will decide on the allowances and perks subject to a maximum ceiling of 50 of his basic pay as indicated in DPE’s O.M. dated November 26 2008 and April 2 2009. He shall be eligible for superannuation benefit based on approved schemes as per DPE’s O.M.s dated November 26 2008 and April 2 2009. Leave He will remain subject to the leave rules of our Company. Restriction on joining private commercial undertakings after retirement/ resignation He shall not accept any appointment or post whether advisory or administrative in any firm or company whether Indian or foreign with which our Company has or had business relations within one year from the date of his retirement/ resignation without prior approval of the Government. Conduct discipline and appeal rules The Conduct Discipline and Appeal Rules framed by our Company in respect of our non-workmen category of staff would also mutatis mutandis apply to him with the modification that the Disciplinary Authority in his case would be the President of India The Government also reserves the right not to accept his resignation if the circumstances so warrant i.e. the disciplinary proceedings are pending or a decision has been taken by the competent authority to issue a charge sheet to him Mr. D. Paul Ranjan Mr. D. Paul Ranjan is the Director Finance and Chief Financial Officer of our Company. He was appointed on May 1 2014 pursuant to Ministry of Shipping Order SY-11012/1/2009 -CSL. Vol-II dated April 4 2014. The current terms and conditions of his employment were prescribed by Ministry of Shipping Order No. SY- 11012/1/2009-CSL Vol. II dated December 19 2014. Some of the key terms and conditions amongst others as revised from time to time are as under: Term For a period of five years with effect from May 1 2014 in the first instance or till the date of superannuation or until further orders whichever event occurs earlier and in accordance with the provisions of the Companies Act. The appointment may however be terminated even during this period by either

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158 side on three months’ notice or on payment of three months’ salary in lieu thereof. After the expiry of the first year his performance will be reviewed to enable government to take a view regarding continuance or otherwise for the balance period of tenure. Pay ` 65000 per month in the existing pay scale of ` 65000 - ` 75000 Headquarters His headquarters will be at Kochi where the Registered Office of our Company is located. He will be liable to serve in any part of India at the discretion of our Company. Dearness allowance Dearness Allowance would be paid in accordance with the new IDA scheme spelt out in the DPE’s O.M. dated November 26 2008 and April 2 2009. Housing House rent and residential accommodation is provided as per the Ministry of Shipping orders as amended from time to time. Annual increment He will be eligible to draw his annual increment at three percent of basic pay on the anniversary date of his appointment in the scale and further increments to the same date in subsequent years until the maximum of pay scale is reached. After reaching the maximum of pay scale one stagnation increment equal to the rate of last increment drawn will be granted after completion of every two-year period from the date he reaches the maximum of his pay scale provided he gets a performance rating of “Good” or above. He will be granted a maximum of three such stagnation increments. Conveyance As per the Ministry of Shipping orders as amended from time to time Performance related payment He shall be eligible for approved performance related payment as per DPE’s O.M.’s dated November 26 2008 February 9 2009 and April 2 2009. Other benefits and perquisites/ superannuation The Board of Directors will decide on the allowances and perks subject to a maximum ceiling of 50 of his basic pay as indicated in DPE’s O.M. dated November 26 2008 and April 2 2009. He shall be eligible for superannuation benefit based on approved schemes as per DPE’s O.M.s dated November 26 2008 and April 2 2009. Leave He will remain subject to the leave rules of our Company. Restriction on joining private commercial undertakings after retirement/ resignation He shall not accept any appointment or post whether advisory or administrative in any firm or company whether Indian or foreign with which our Company has or had business relations within one year from the date of his retirement/ resignation without prior approval of the Government. Conduct Discipline and Appeal Rules The Conduct Discipline and Appeal Rules framed by our Company in respect of our non-workmen category of staff would also mutatis mutandis apply to him with the modification that the disciplinary authority in his case would be the President of India. The Government also reserves the right not to accept his resignation if the circumstances so warrant i.e. the disciplinary proceedings are pending or a decision has been taken by the competent authority to issue a charge sheet to him. Mr. Sunny Thomas Mr. Sunny Thomas is the Director Technical of our Company. He was appointed on June 1 2014 pursuant to Ministry of Shipping Order SY-11012/3/2010 -CSL dated May 12 2014. The current terms and conditions of his employment were prescribed by Ministry of Shipping Order No. SY-11012/3/2010-CSL dated December 19 2014. Some of the key terms and conditions amongst others as revised from time to time are as under: Term For a period of five years with effect from June 1 2014 in the first instance or till the date of superannuation or until further orders whichever event occurs earlier and in accordance with the provisions of the Companies Act. The appointment may however be terminated even during this period by either side on three months’ notice or on payment of three months’ salary in lieu thereof. After the expiry of the first year his performance will be reviewed to enable government to take a view regarding continuance or otherwise for the balance period of tenure.

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159 Pay ` 65000 per month in the existing pay scale of ` 65000 - ` 75000. Headquarters His headquarters will be at Kochi where the Registered Office of our Company is located. He will be liable to serve in any part of India at the discretion of our Company. Dearness allowance Dearness Allowance would be paid in accordance with the new IDA scheme spelt out in the DPE’s O.M. dated November 26 2008 and April 2 2009. Housing House rent and residential accommodation is provided as per the Ministry of Shipping orders as amended from time to time. Annual increment He will be eligible to draw his annual increment at three percent of basic pay on the anniversary date of his appointment in the scale and further increments to the same date in subsequent years until the maximum of pay scale is reached. After reaching the maximum of pay scale one stagnation increment equal to the rate of last increment drawn will be granted after completion of every two-year period from the date he reaches the maximum of his pay scale provided he gets a performance rating of “Good” or above. He will be granted a maximum of three such stagnation increments. Conveyance As per the Ministry of Shipping orders as amended from time to time. Performance related payment He shall be eligible for approved performance related payment as per DPE’s O.M.’s dated November 26 2008 February 9 2009 and April 2 2009. Other benefits and perquisites/ superannuation The Board of Directors will decide on the allowances and perks subject to a maximum ceiling of 50 of his basic pay as indicated in DPE’s O.M. dated November 26 2008 and April 2 2009. He shall be eligible for superannuation benefit based on approved schemes as per DPE’s O.M.s dated November 26 2008 and April 2 2009. Leave He will remain subject to the leave rules of our Company. Restriction on joining private commercial undertakings after retirement/ resignation He shall not accept any appointment or post whether advisory or administrative in any firm or company whether Indian or foreign with which our Company has or had business relations within one year from the date of his retirement/ resignation without prior approval of the Government. Conduct Discipline and Appeal Rules The Conduct Discipline and Appeal Rules framed by our Company in respect of our non-workmen category of staff would also mutatis mutandis apply to him with the modification that the Disciplinary Authority in his case would be the President of India. The Government also reserves the right not to accept his resignation if the circumstances so warrant i.e. the disciplinary proceedings are pending or a decision has been taken by the competent authority to issue a charge sheet to him. Mr. Suresh Babu N.V Mr. Suresh Babu N.V is the Director Operations of our Company. He was appointed on April 26 2016 pursuant to Ministry of Shipping Order SY-11012/2/2010-CSL dated April 26 2016. The current terms and conditions of his employment were prescribed by Ministry of Shipping Order No. SY-11012/2/2010-CSL dated May 26 2016. Some of the key terms and conditions amongst others as revised from time to time are as under: Term For a period of five years with effect from April 26 2016 in the first instance or till the date of superannuation or until further orders whichever event occurs earlier and in accordance with the provisions of the Companies Act. The appointment may however be terminated even during this period by either side on three months’ notice or on payment of three months’ salary in lieu thereof. After the expiry of the first year his performance will be reviewed to enable government to take a view regarding continuance or otherwise for the balance period of tenure. Pay ` 65000 per month in the existing pay scale of ` 65000 - ` 75000. Headquarters His headquarters will be at Kochi where the Registered Office of our Company is located. He will be liable to serve in any part of India at the discretion of our Company.

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160 Dearness allowance Dearness Allowance would be paid in accordance with the New IDA Scheme spelt out in the DPE’s O.M. dated November 26 2008 and April 2 2009. Housing House rent and residential accommodation is provided as per the Ministry of Shipping orders as amended from time to time. Annual increment He will be eligible to draw his annual increment at three percent of basic pay on the anniversary date of his appointment in the scale and further increments to the same date in subsequent years until the maximum of pay scale is reached. After reaching the maximum of pay scale one stagnation increment equal to the rate of last increment drawn will be granted after completion of every two-year period from the date he reaches the maximum of his pay scale provided he gets a performance rating of “Good” or above. He will be granted a maximum of three such stagnation increments. Conveyance As per the Ministry of Shipping orders as amended from time to time. Performance related payment He shall be eligible for approved performance related payment as per DPE’s O.M.’s dated November 26 2008 February 9 2009 and April 2 2009. Other benefits and perquisites/ superannuation The Board of Directors will decide on the allowances and perks subject to a maximum ceiling of 50 of his basic pay as indicated in DPE’s O.M. dated November 26 2008 April 2 2009 June 1 2011 and June 29 2012. He shall be eligible for superannuation benefit based on approved schemes as per DPE’s O.M.s dated November 26 2008 and April 2 2009. Leave He will remain subject to the leave rules of our Company. Restriction on joining private commercial undertakings after retirement/ resignation He shall not accept any appointment or post whether advisory or administrative in any firm or company whether Indian or foreign with which our Company has or had business relations within one year from the date of his retirement/ resignation without prior approval of the Government. Conduct Discipline and Appeal Rules The Conduct Discipline and Appeal Rules framed by our Company in respect of our non-workmen category of staff would also mutatis mutandis apply to him with the modification that the Disciplinary Authority in his case would be the President of India. The Government also reserves the right not to accept his resignation if the circumstances so warrant i.e. the disciplinary proceedings are pending or a decision has been taken by the competent authority to issue a charge sheet to him. Details of service contracts entered into by the directors with the Issuer providing for benefits upon termination of employment Except in the case of Whole-Time directors as aforementioned there exist no service contracts entered into by our Company with any Directors for provision of benefits or payments upon termination. Shareholding of the Directors The Articles of Association do not require the Directors to hold any qualification shares in our Company. The shareholding of the Directors as a nominee of the President of India in our Company as on the date of this Red Herring Prospectus is mentioned below: Sr. No. Name No. of Equity Shares Shareholding 1. Mr. Pravir Krishna 100 Negligible 2. Mr. Madhu S. Nair 100 Negligible 3. Mr. D. Paul Ranjan 70 Negligible 4. Mr. Sunny Thomas 10 Negligible 5. Mr. Suresh Babu N.V 10 Negligible Bonus or profit sharing plan of the Directors The Chairman and Managing Director and the Whole Time Directors are eligible for approved performance related payment as per DPE’s O.M.’s dated November 26 2008 February 9 2009 and April 2 2009.

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161 Interests of Directors The Whole Time Directors may be regarded as interested to the extent of the remuneration payable to them for services rendered as Whole Time Directors of our Company and to the extent of other reimbursements of expenses payable to them as per their terms of appointment. The Independent Directors are paid sitting fees for attending the meetings of the Board and committees of the Board and to the extent of other reimbursements of expenses payable as per their terms of appointment. The nominee Directors of the Government of India and Government of Kerala are not entitled to remuneration or sitting fee or any other remuneration from our Company. No consideration in cash or shares or otherwise has been paid or agreed to be paid to any of our Directors or to the firms or companies in which they are interested as a member by any person either to induce him to become or to help him qualify as a Director or otherwise for services rendered by him or by the firm or company in which he is interested in connection with the promotion or formation of our Company. Except as stated in “Financial Statements – Related party disclosure as per Ind AS 24 for fiscal 2017 2016 and 2015 and Related party disclosure as per AS 18 for fiscal 2014 and 2013” on pages 266 and pages 321 respectively the Directors of our Company do not have any other interest in the business of our Company. None of our Directors are interested in any transaction of our Company in acquisition of land construction of building and supply of machinery. Further none of our Directors are related to an entity from whom our Company has acquired land or proposes to acquire land. Our Directors may also be regarded as interested in the Equity Shares if any held by them or that may be subscribed by and allotted to the companies firms and trusts if any in which they are interested as directors members promoters and/ or trustees pursuant to this Issue. All of our Directors may also be deemed to be interested to the extent of any dividends payable to them and other distributions in respect of the Equity Shares if any. No amount or benefit has been paid or given within the two preceding years or is intended to be paid or given to any of our Directors except the normal remuneration for services rendered as Directors. Some of the Directors also hold Equity Shares in our Company as nominee shareholders of the President of India to comply the minimum number of shareholders as per the Companies Act. Further the Directors of our Company have no interest in any property acquired by our Company within two years of the date of this Red Herring Prospectus or proposed to be acquired by our Company. Our Directors do not have any interest in appointment of the BRLMs Registrar to the Issue Banker to the Issue or any such intermediaries registered with SEBI. As on date no relatives of any of the Directors have been appointed to any office or place of profit in our Company. No proceedings/ investigations have been initiated by SEBI against any of our Directors. None of the sundry debtors of our Company is related to our Directors or us in any way. Changes in the Board in the last three years The changes in the Board in the last three years are as follows: S. No. Name Date of Appointment Date of Cessation Reason 1. Mr. Kartik Subramaniam - December 31 2015 Retirement 2. Mr. L. N. Vijayaraghavan - September 16 2014 End of tenure 3. Mr. R S Sundar - August 31 2015 Resignation under section 168 of the Companies Act 4. Mr. Mahalingam Raman - January 24 2015 End of tenure

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162 S. No. Name Date of Appointment Date of Cessation Reason 5. Mr. S. K. K. Krishnan - January 24 2015 End of tenure 6. Dr. S. Mohan - November 26 2015 End of tenure 7. Dr. G. C. Gopala Pillai - November 26 2015 End of tenure 8. Mr. N. Raghuram - November 26 2015 End of tenure 9. Mr. M. C. Jauhari - January 20 2015 Nomination withdrawn by appointing authority Government of India 10. Mr. Barun Mitra January 20 2015 - Appointment 11. Mr. Madhu S. Nair January 1 2016 - Appointment 12. Mr. Krishna Das E March 21 2016 - Appointment 13. Mr. Radhakrishna Menon March 21 2016 - Appointment 14. Ms. Roopa Shekhar Rai March 21 2016 - Appointment 15. Mr. Suresh Babu N.V April 26 2016 - Appointment 16. Mr. Barun Mitra - April 17 2017 Nomination withdrawn by appointing authority Government of India 17. Mr. Pravir Krishna April 17 2017 - Appointment 18. Mr. Jiji Thomson July 15 2017 - Appointment 19. Mr. Pradipta Banerji July 15 2017 - Appointment 20. Mr. Nanda Kumaran Puthezhath July 15 2017 - Appointment Corporate Governance The provisions of the Companies Act and the SEBI Listing Regulations with respect to corporate governance will be applicable to our Company immediately upon the listing of the Equity Shares with the Stock Exchanges. Our Company is in compliance with the requirements of the applicable regulations in respect of corporate governance as specified in the SEBI Listing Regulations and the Companies Act relating to the constitution of committees such as the Audit Committee Stakeholder Relationship Committee Nomination and Remuneration Committee and Corporate Social Responsibility and Sustainability Development Committee and adoption of the board diversity policy nomination and remuneration policy policy on related party transactions vigil mechanism for directors and employees whistle blower policy policy on insider trading regulations policy on preservation of documents and policy for determining materiality of an event/information for making adequate disclosure of such an event/information before the stock exchanges. Furthermore in compliance with the SEBI Listing Regulations and the Companies Act we have a woman director on the Board of Directors. Pursuant to MCA notifications dated June 5 2015 and July 5 2017 the Central Government has exempted/ modified the applicability of certain provisions of the Companies Act 2013 in respect of Government Companies. In accordance with this notification the DPE Guidelines on Corporate Governance for Central Public Sector Enterprises and pursuant to our Articles matters pertaining to among others appointment remuneration and performance evaluation of our Directors are determined by the President of India. Further our Statutory Auditor is appointed by the Comptroller and Auditor General of India. Accordingly in so far as the aforestated matters are concerned the terms of reference of our Nomination and Remuneration Committee and Audit Committee only allow these committees to take on record the actions of the President of India or the Comptroller and Auditor General of India as the case may be. SEBI vide the SEBI Observation Letter has exempted our Company from compliance with the corporate governance requirements in relation to the terms of reference of our Nomination and Remuneration Committee and Audit Committee. Other than as described above our Company is in compliance with corporate governance norms prescribed under

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163 SEBI Listing Regulations including in relation to the composition of its committees such as the Audit Committee and the Stakeholders Relationship Committee. The corporate governance framework is based on an effective independent Board separation of the Board’s supervisory role from the executive management team and constitution of the Board Committees as required under law. The Board of Directors functions either as a full board or through various committees constituted to oversee specific operational areas. Our Company’s executive management provides the Board with detailed reports on its performance periodically. The details of the Audit Committee Stakeholders Relationship Committee Nomination and Remuneration Committee and Corporate Social Responsibility committees are given below: Committees of the Board Our Company has constituted the Audit Committee and the Stakeholders Relationship Committee for compliance with corporate governance requirements in addition to other non-mandatory committee: a Audit Committee The Audit Committee was originally constituted on August 21 2008 by adoption of a circular resolution. The present committee was reconstituted in the board meeting held on May 7 2016 and the present terms of reference of the Audit Committee was adopted on September 20 2016. It presently comprises of the following members: Name of the Directors Designation Mr. Radhakrishna Menon Chairman Mr. Krishna Das E Member Mr. Elias George Member The Company Secretary is the secretary of the Audit Committee. Scope and terms of reference: The scope and function of the Audit Committee is in accordance with section 177 of the Companies Act 2013 regulation 183 of the SEBI Listing Regulations and the guidelines on corporate governance on Central Public Sector Enterprises issued by the Department of Public Enterprises. Terms of reference for the Audit Committee are as follows: 1. Oversight of the listed entity’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct sufficient and credible 2. Recommendation for appointment remuneration and terms of appointment of auditors of our Company based on the order of Comptroller Auditor General of India 3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors 4. Reviewing with the management the annual financial statements and auditors report thereon before submission to the board for approval with particular reference to: a Matters required to be included in the director’s responsibility statement to be included in the board’s report in terms of clause c of sub-section 3 of section 134 of the Companies Act 2013 b Changes if any in accounting policies and practices and reasons for the same c Major accounting entries involving estimates based on the exercise of judgment by management d Significant adjustments made in the financial statements arising out of audit findings e Compliance with listing and other legal requirements relating to financial statements f Disclosure of any related party transactions g Modified opinions in the draft audit report 5. Reviewing with the management the quarterly financial statements before submission to the board for

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164 approval 6. Reviewing with the management the statement of uses / application of funds raised through an issue public issue rights issue preferential issue etc. the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue and making appropriate recommendations to the board to take up steps in this matter 7. Reviewing and monitoring the auditor’s independence and performance and effectiveness of audit process 8. Approval or any subsequent modification of transactions of our Company with related parties 9. Scrutiny of inter-corporate loans and investments 10. Valuation of undertakings or assets of our Company wherever it is necessary 11. Evaluation of internal financial controls and risk management systems 12. Reviewing with the management performance of statutory and internal auditors adequacy of the internal control systems 13. Reviewing the adequacy of internal audit function if any including the structure of the internal audit department staffing and seniority of the official heading the department reporting structure coverage and frequency of internal audit 14. Discussion with internal auditors of any significant findings and follow up there on 15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board 16. Discussion with statutory auditors before the audit commences about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern 17. To look into the reasons for substantial defaults in the payment to the depositors debenture holders shareholders in case of non-payment of declared dividends and creditors 18. To review the functioning of the whistle blower mechanism 19. Approval of appointment of chief financial officer after assessing the qualifications experience and background etc. of the candidate 20. Review the following information: a Management discussion and analysis of financial condition and results of operations b Statement of significant related party transactions as defined by the audit committee submitted by management c Management letters / letters of internal control weaknesses issued by the statutory auditors d Internal audit reports relating to internal control weaknesses and e The appointment removal and terms of remuneration of the chief internal auditor shall be subject to review by the audit committee f Statement of deviations: i Quarterly statement of deviations including report of monitoring agency if applicable submitted to stock exchanges in terms of regulation 321 of the SEBI Listing Regulations ii Annual statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice in terms of regulation 327 of the SEBI Listing Regulations 21. To review the follow up action on the audit observations of the CAG audit 22. Recommend the appointment removal and fixing of remuneration of Cost Auditors and Secretarial Auditors and 23. Carrying out any other function as specified by the Board from time to time. b Stakeholder Relationship Committee

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165 The Stakeholder Relationship Committee was constituted and the present terms of reference were adopted pursuant to the Board resolution dated September 20 2016. The Stakeholder Relationship Committee presently comprises of the following members: Name of the Directors Designation Mr. Krishna Das E Chairperson Mr. D. Paul Ranjan Member Mr. Sunny Thomas Member Scope and terms of reference: 1. The Stakeholder Relationship Committee shall consider and resolve the grievances of the security holders of the listed entity including complaints related to transfer of shares non-receipt of annual report and non-receipt of declared dividends. c Nomination and Remuneration Committee The Remuneration Committee was constituted pursuant to the circular resolution adopted on December 13 2008. It was reconstituted and renamed as Nomination and Remuneration Committee by circular resolution adopted on March 30 2015. It was re-constituted pursuant to the board meeting held on May 7 2016 and the present terms of reference of the Nomination and Remuneration Committee were adopted on September 20 2016. It presently comprises of the following members: Name of the Directors Designation Mr. Krishna Das E Chairman Mr. Elias George Member Ms. Roopa Shekhar Rai Member Scope and terms of reference: Terms of reference for the Nomination and Remuneration Committee are as follows: 1. Decide on the annual bonus/ performance pay/ variable pay pool and policy for its distribution across the executives and non-unionized supervisors of our Company 2. Formulation and modification of schemes for providing perks and allowances for officers and non-unionized supervisors 3. Any new scheme of compensation like medical scheme pension etc. to officers non-unionized supervisors and the employees as the case may be and 4. Exercising such other roles assigned to it by the provisions of the SEBI Listing Regulations and any other laws and their amendments from time to time. d Corporate Social Responsibility and Sustainability Development Committee Corporate Social Responsibility “CSR” committee was constituted pursuant to the board meeting held on September 5 2008. Further a Sustainability Development committee was constituted pursuant to the board meeting held on November 23 2011. The aforesaid two committees were merged into CSR and Sustainability Committee pursuant to the circular resolution dated March 8 2013. The present CSR and Sustainability Development Committee “CSR SD Committee” was re-constituted pursuant to the board meeting held on May 7 2016 and the present terms of reference of the CSR SD Committee were adopted on March 8 2013. The present constitution of the CSR SD Committee is as follows: Name of the Directors Designation Ms. Roopa Shekhar Rai Chairperson Mr. Radhakrishna Menon Member Mr. D. Paul Ranjan Member Mr. Sunny Thomas Member

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166 Scope and terms of reference: 1. Recommend CSR and sustainability development policy to the board 2. Recommend plan of action and projects to be initiated in the short medium and long term for CSR and sustainability development 3. To recommend the annual CSR and sustainability development plan and budget and 4. Periodic review of CSR and sustainability development policy plans and budgets. e Risk Management Steering Committee The Risk Management Policy had been adopted pursuant to the Board Resolution dated September 16 2014. The objectives of the Risk Management Policy are interalia as follows: 1. To improve our Company’s ability to prevent risk or timely detection of risk 2. To identify risks and its mitigation 3. To standardize risk management process 4. To facilitate sharing of risk information The risk management policy was adopted to minimize the organizational risks to an acceptable level and adopt risk management practices which would help our Company to attain its goals and objectives while at the same time ensuring minimization of risks. Pursuant to the Risk Management Policy the Risk Management Steering Committee RMSC was formed as the apex committee in the risk management governance structure. In addition to the RMSC three function-related risk management committees i.e. RMC1 RMC2 and RMC3 were also formed. The aforesaid committees provide updates to the RMSC about risk related to a operations b human resources marketing and modernisation and c finance information technology and legal respectively. The RMSC interalia appraises the board of directors of our Company about various risk management initiatives. It presently comprises of the following members: Name of the member Designation Mr. Paul Ranjan Director Finance Mr. Sunny Thomas Director Technical Mr. Suresh Babu N.V. Director Operations In addition to the above committees our Board has also constituted an IPO Committee pursuant to resolution dated December 22 2015.

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167 Management Organisation Structure of our Company Director Finance Mr. D. Paul Ranjan Director Operation Mr. Suresh Babu N. V. Director Technical Mr. Sunny Thomas Chairman and Managing Director Mr. Madhu S. Nair Company Secretary Ms. V. Kala CGM Technical and HSE Mr. Murugaiah M CGM HR and Training Mr. K. J. Ramesh CGM Design and Defence Projects Mr. Bejoy Bhasker

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168 Key Management Personnel All the KMPs are permanent employees of our Company. In addition to the Chairman and Managing Director Whole Time Directors and Chief Financial Officer whose details have been provided above under “Our Management – Brief biographies of the Directors” on page 153 the details of the other KMP as of the date of this Red Herring Prospectus are set forth below: Mr. Bejoy Bhasker aged 52 years is the chief general manager design and defence projects of our Company. He holds a degree of bachelor of technology mechanical from the University of Kerala with first rank and gold medal. He holds a degree of master of technology mechanical from the Indian Institute of Technology Madras. He completed advanced diploma in management from Indira Gandhi National Open University. He was a recipient of the national scholarship scheme in the year 1980-81 which is given to the meritorious students. Upon completion of studies he joined our Company on June 29 1988 as an executive trainee. He was awarded the “Manager of the Year” award in 2014 by Kerala Management Association. He heads the ship design and defence projects and has been involved in ship building outfit department and ship repair department of our Company. He shall hold his office till the date of superannuation on May 31 2025. The remuneration paid to him in the last Fiscal was ` 2.97 million. Mr. K. J. Ramesh aged 56 years is the chief general manager human resource of our Company. He holds a degree of bachelor in Science from the University of Madras. He also holds a degree of master of arts in social work from the University of Madras. He has also completed diploma in human resource management as well as diploma in management from Indira Gandhi National Open University. He also holds a degree of bachelor of law from Cochin University of Science and Technology. Upon completion of studies he joined our Company on December 17 1984. Furthermore he has completed the short-term module course on total quality management conducted by International Center for Promotion of Enterprises in collaboration with the faculty of economics University of Ljubljana. He was the recipient of HR leadership award granted by IPE HRM congress in 2012. He has received an award named “HR Leadership Award PSU Focus–World HRD Congress” presented by Times Ascent in February 2017. He heads the human resource department of our Company. He shall hold his office till the date of superannuation on March 31 2021. The remuneration paid to him in the last Fiscal was ` 2.97 million. Mr. Murugaiah M. aged 55 years is the chief general manager technical and HSE of our Company. He holds a degree of bachelor of technology mechanical from the University of Kerala. He holds a degree of master of business administration from the Madurai Kamraj University. He joined our Company as an executive trainee on August 1 1986. He also holds a certificate in project risk management from the Institute of Project Management Certification. He heads the technical and health safety and environment department of our Company. He shall hold his office till the date of superannuation on October 31 2021. Prior to joining our Company he was a temporary mechanical engineer at FACT Engineering and Design Organisation. The remuneration paid to him in the last Fiscal was ` 2.85 million. Ms. V. Kala aged 49 years is the general manager company secretary and the compliance officer of our Company. She is a member of the Institute of Company Secretaries of India. She is also an associate of the Institute of Cost and Works Accountants of India. She also holds a degree of bachelor of commerce from the University of Calcutta. She joined our Company on May 2 1998. She has an experience of more than 18 years with our Company. She shall hold her office till the date of superannuation on May 31 2028. Prior to joining our Company she was an accountant with Deesha Communications Private Limited and assistant finance manager with Concert Capital Limited. The remuneration paid to her in the last Fiscal was ` 2.57 million. Mr. Bejoy Bhasker Mr. K. J. Ramesh and Mr. Murugaiah M. are identified as KMPs in terms of SEBI ICDR Regulations. Service Contracts Except for the appointment letters and subsequent office orders issued by our Company our KMPs have not entered into any service contract in relation to their appointment and remuneration. Changes in the KMPs in the last three years S. No Name of the KMP Date of change Reason of change 1. Mr. Madhu S. Nair January 1 2016 Change in designation from chief general manager business development to Chairman and Managing

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169 S. No Name of the KMP Date of change Reason of change Director with effect from January 1 2016 2. Mr. K. J. Ramesh January 1 2016 Appointed as chief general manager human resource 3. Mr. Suresh Babu N. V April 26 2016 Change in designation from chief general manager ship repair to Director Operations with effect from April 26 2016 4. Mr. Murugaiah. M May 2 2016 Appointed as chief general manager technical and HSE Shareholding of the KMPs Some of our KMPs such as Mr. Madhu S. Nair Mr. Sunny Thomas Mr. Suresh Babu N. V and Mr. D. Paul Ranjan hold equity shares as a nominee of the President of India in our Company. None of the KMPs hold any equity shares in their individual capacities. Contingent and deferred compensation payable to the Directors/ KMPs There is no contingent or deferred compensation payable to the Directors/KMPs which does not form part of their remuneration. Bonus or profit sharing plan for the KMPs Our Company has formulated the ‘Performance Related Payment Scheme’ vide office order number PERL/075/2010 dated April 28 2010 which is in accordance with the DPE orders on pay-revision dated November 26 2008 February 9 2009 and April 2 2009 which stipulate the procedures on performance management system. Interests of the KMPs Except as disclosed in “Our Management – Key Management Personnel” and “Our Management – Shareholding of the KMPs” on pages 168 and 169 respectively none of the Key Management Personnel have any interest in our Company other than to the extent of remuneration and benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business. Except statutory benefits upon termination of their employment in our Company resignation or superannuation as the case may be and certain post-retirement benefits no officer of our Company is entitled to any benefit upon termination of such officer’s employment in our Company or superannuation. Payment or benefits to officers of our Company non-salary related No non-salary amount or benefit has been paid or given to any officer of our Company in the last two years or is intended to be paid other than their remuneration for the services rendered in the ordinary course of their employment. Employee Stock Option Scheme Our Company does not have any scheme of employee stock option or employee stock purchase scheme. Relationships among KMP None of the KMPs are related to each other. Family relationship of Directors with the KMP None of the KMPs are related to the Directors of our Company.

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170 Loans taken by Directors/ KMP Except as disclosed in the “Financial Statements” on page 175 our Directors/ key management personnel under Companies Act 2013 have not taken any loan from our Company. Further following are the details of loans availed by Mr. Bejoy Bhasker Mr. K. J. Ramesh and Mr. Murugaiah M. who have been identified as KMPs in terms of SEBI ICDR Regulations as on March 31 2017: in ` million Name of the KMP Opening Balance as on April 1 2016 Loans Taken during 2016- 17 Repayments Balance as on March 31 2017 Interest accrued as on March 31 2017 Mr. Bejoy Bhasker 0.10 0.04 0.08 0.06 0.08 Mr. K. J. Ramesh 0.01 0.05 0.04 0.02 0.00 Mr. Murugaiah M 0.09 0.05 0.12 0.02 0.00

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171 OUR PROMOTER AND PROMOTER GROUP Our Promoter is the President of India acting through the Ministry of Shipping. Our Promoter along with its nominees currently holds 100 of the pre-Issue paid-up equity share capital of our Company. After this Issue our Promoter shall hold 75 of the post Issue paid-up equity share capital of our Company. As our Promoter is the President of India acting through the Ministry of Shipping disclosures on the Promoter Group defined in regulation 2zb of the SEBI ICDR Regulations as specified in Schedule VIII of the SEBI ICDR Regulations have not been provided.

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172 OUR GROUP COMPANIES As on the date of this Red Herring Prospectus we do not have any ‘Group Companies’ since there are no companies disclosed as related parties in the Restated Financial Statements of our Company prepared in accordance with Accounting Standard 18/ Ind AS 24 issued by the Institute of Chartered Accountants of India and there are no companies that are considered material by our Board for identification as ‘Group Companies’ in accordance with the provisions of the SEBI ICDR Regulations.

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173 RELATED PARTY TRANSACTIONS For details of the related party transactions during the last five Fiscals pursuant to the requirements under Accounting Standard 18/ Ind AS 24 “Related Party Disclosures” issued by the Institute of Chartered Accountants of India see “Financial Statements – Note 42 of Annexure IV A2 - Related party disclosure as per AS 18” and “Financial Statements – Note 46 of Annexure V - Related party disclosure as per Ind AS 24” on page 321 and 266.

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174 DIVIDEND POLICY As per CPSE Capital Restructuring Guidelines all central public sector enterprises are required to pay a minimum annual dividend of 30 of profit after tax or 5 of the net-worth whichever is higher subject to the maximum dividend permitted under the extant legal provisions and the conditions mentioned in the aforesaid memorandum. However the declaration and payment of dividends on our Equity Shares will be recommended by our Board and approved by our shareholders at their discretion subject to the provisions of the Articles and the Companies Act. Further the dividends if any will depend on a number of factors including but not limited to our earnings guidelines issued by the DPE capital requirements and overall financial position of our Company. In addition our ability to pay dividends may be impacted by a number of factors including the results of operations financial condition contractual restrictions and restrictive covenants under the loan or financing arrangements we may enter into. For further details refer to “Financial Statements – Annexure VII – Statement of Dividend Paid” and “Financial Indebtedness” on pages 274 and 369 respectively. Our Company may also from time to time pay interim dividends. The dividend declared by our Company and dividend tax thereon for the last five Fiscals is presented below: Particulars Fiscal 2017 Fiscal 2016 Fiscal 2015 Fiscal 2014 Fiscal 2013 Face value of Equity Shares in ` per Equity Share 10 10 10 10 10 Total Dividend declared in ` million 1016.12 866.59 169.92 169.92 169.92 Number of Equity Shares in million 113.28 113.28 113.28 113.28 113.28 Total Dividend per Equity Share ` 8.97 7.65 1.5 1.5 1.5 Total Dividend Rate 89.7 76.5 15.00 15.00 15.00 Dividend Tax in ` million 206.86 176.42 34.59 28.88 28.88 Dividend payable for Fiscal 2017 was declared by our Company on July 17 2017 payable within 15 days. Dividend for the respective financial years have been subsequently paid Our Company has not declared any dividend on 7 non cumulative preference shares in the last five Fiscals. Our Company has in the past redeemed all 7 non cumulative preference shares issued and as of the date of this Red Herring Prospectus our Company does not have any preference share capital. For details see “Capital Structure” on page 73. The amounts distributed as dividends in the past are not necessarily indicative of our dividend amounts if any or our dividend policy in the future. For further details “Risk Factors” on page 18. There is no guarantee that any dividends will be declared or paid or that the amount thereof will not decrease in the future. Future dividends will depend on guidelines issued by DPE our profits revenues capital requirements contractual restrictions and overall financial position of our Company.

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175 SECTION V: FINANCIAL INFORMATION FINANCIAL STATEMENTS Particulars Page no. Restated Financial Statements 176 to 325

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Independent Auditor’s Report on Restated Financial Information in connection with the Initial Public Offering of Cochin Shipyard Limited To The Board of Directors Cochin Shipyard Limited Administrative Building 39/6080 Cochin Shipyard Premises Perumanoor M G Road Ernakulam Kerala - 682015 Dear Sirs 1. We have examined the attached Restated Financial Information of Cochin Shipyard Limited the “Company” which comprises the Restated Summary Statement of Assets and Liabilities as at March 31 2017 2016 2015 2014 and 2013 the Restated Summary Statements of Profit and Loss including other comprehensive income and Restated Summary Statement of changes in equity for each of the years ended March 31 2017 2016 and 2015 and the Restated Summary Statements of Profit and Loss for years ending March 31 2014 and 2013 and Restated Summary Statement of Cash Flows for each of the years ended March 31 2017 2016 2015 2014 and 2013 respectively and the Summary of Significant Accounting Policies and Notes forming part of the Restated Financial Information collectively the “Restated Financial Information” as approved by the Board of Directors of the Company prepared in terms of the requirements of: a. section 26 of Part I of Chapter III of the Companies Act 2013 hereinafter referred to as “the Act” read with Rule 4 to Rule 6 of the Companies Prospectus and Allotment of Securities Rules 2014 the “Rules” b. the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations 2009 as amended from time to time in pursuance of provisions of Securities and Exchange Board of India Act 1992 "ICDR Regulations" read along with the SEBI circular No. SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 31 2016 on Clarification regarding disclosures in Offer Documents issued by the Securities and Exchange Board of India the “SEBI” and c. the Guidance Note on Reports in Company Prospectuses Revised 2016 issued by the Institute of Chartered Accountants of India as amended from time to time the “Guidance Note” 176

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2. The preparation of the Restated Financial Information is the responsibility of the Management of the Company for the purpose set out in paragraph 14 below. The Management’s responsibility includes designing implementing and maintaining adequate internal control relevant to the preparation and presentation of the Restated Financial Information. The Management is also responsible for identifying and ensuring that the Company complies with the Act Rules ICDR Regulations and the Guidance Note. 3. We have examined such Restated Financial Information taking into consideration: a. The terms of reference and terms of our engagement agreed upon with you in accordance with our engagement letter dated December 14 2016 in connection with the proposed Initial Public Offering IPO of the Company b. The Guidance Note Revised on Reports in Company Prospectuses Revised 2016 issued by the Institute of Chartered Accountants of India and c. The Guidance Note on Reports or Certificates for Special Purposes Revised 2016 which include the concepts of test checks and materiality. This Guidance Note requires us to obtain reasonable assurance based on verification of evidence supporting the Restated Financial Information. This Guidance Note also requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India. Management’s Responsibility for the Restated Financial Information 4. The Restated Financial Information expressed in Indian Rupees in Millions have been compiled by the Management from the : a. Audited financial statements of the Company as at and for the year ended March 31 2017 which include the comparative Ind AS financial statements as at and for the year ended March 31 2016 prepared in accordance with the Indian Accounting Standards “Ind-AS” notified under the Companies Indian Accounting Standards Rules 2015 and Companies Indian Accounting Standards Amendment Rules 2016 which have been approved by the Board of directors at their meeting held on June 10 2017. b. Audited financial statements of the Company as at and for the years ended March 31 2015 2014 and 2013 prepared in accordance with the accounting standards notified under the section 133 of the Companies Act 2013 “Indian GAAP” which have been approved by the Board of directors at their meetings held on July 29 2015 July 23 2014 and June 17 2013 respectively. 177

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The Restated Financial Information also contains the proforma Ind AS financial statements as at and for the year ended March 31 2015. These proforma Ind AS financial statements have been prepared by making restatement and Ind AS adjustments to the Indian GAAP financial statements as at and for the year ended March 31 2015 which have been approved by the Board of directors at their meeting held on July 29 2015 as described in Note 3.6 of Annexure V 1. The Financial Statements for the financial years ended March 31 2017 2016 and 2015 were audited by us. M/s Babu Abraham Kallivayalil Co. Chartered Accountants for the financial year ended March 31 2014 and M/s Menon Ayyar Chartered Accountants for the financial years March 2013 collectively the "Prior Auditors" have audited the financial statements of the Company as at and for the year ended on the respective dates. Accordingly reliance has been placed on the audited statements of accounts and audit report thereon issued by the Prior Auditors for the respective financial years audited by them. Auditor’s Responsibilities 5. Our work has been carried out in accordance with the Standards on Auditing under section 14310 of the Act Guidance Note on Reports in Company Prospectuses Revised 2016 and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India and pursuant to the requirements of Section 26 of the Act read with applicable provisions within Rule 4 to Rule 6 of the Rules and the ICDR Regulations. This work was performed solely to assist you in meeting your responsibilities in relation to your compliance with the Act and the ICDR Regulations in connection with the Issue. 6. Our examination of the Restated Financial Information has not been carried out in accordance with the auditing standards generally accepted in the United States of America “U.S” standards of the US Public Company Accounting Oversight Board and accordingly should not be relied upon by any one as if it had been carried out in accordance with those standards or any other standards besides the standards referred to in this report. Opinion 7. In accordance with the requirements of Section 26 of Part I of Chapter III of the Act read with the Rules the ICDR Regulations and the Guidance Note we have examined the following summarized financial statements of the Company contained in the Restated Financial Information of the Company which have been arrived after making adjustments 178

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and regrouping /reclassifications which in our opinion were appropriate and have been fully described in Annexure V and Annexure IV A: Notes on Adjustments for Restatement of Profit and Loss and based on our examination we report that : i The proforma financial information as at and for the year ended March 31 2015 are prepared after making proforma adjustments as mentioned in Note 3.6 of Annexure V 1. ii the Restated Summary Statement of Assets and Liabilities of the Company as at March 31 2017 2016 and 2015 under Ind AS as set out in Annexure-I and as at and for the years ended March 31 2014 and 2013 under Indian GAAP as set out in Annexure-I A to this report. iii The Restated Summary Statement of Profit and Loss including other comprehensive income of the Company for the years ended March 31 2017 2016 and 2015 under Ind AS as set out in Annexure-II and The Restated Summary Statement of Profit and Loss for the years ended March 31 2014 and 2013 under Indian GAAP as set out in Annexure-II A to this report. iv The Restated Summary Statement of changes in equity of the Company for the years ended March 31 2017 2016 and 2015 under Ind AS as set out in Annexure- III to this report. v The Restated Summary Statement of Cash Flows of the Company for the years ended March 31 2017 2016 and 2015 under Ind AS as set out in Annexure-IV and for the years ended March 31 2014 and 2013 under Indian GAAP as set out in Annexure-III A to this report. 8. Based on the above and according to the information and explanations given to us we further report that the Restated Financial Information of the Company as attached to this report and as mentioned in paragraph 7 above read with Notes on Adjustments for Restatement of Profit and Loss Annexure V and Annexure IV A Significant Accounting Policies and Notes forming part of the Restated financial information and Other Notes to Financial Information Annexure V 1 and V 2 and Annexure IVA 1 and IVA 2 as described in paragraph 9 i and ii and paragraph 10 i and ii have been prepared in accordance with the Act the Rules and the ICDR Regulations and i there have been no changes in accounting policies of the Company during the years ended March 31 2017 2016 2015 2014 and 2013 ii have been made after incorporating adjustments for the material amounts in the respective financial years to which they relate iii there are no qualifications in the Auditor’s Report which require any adjustments except in case referred to in item 7 i Annexure IV A and 179

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iv there are no extra-ordinary items that needs to be disclosed separately other than those presented in the Restated Financial Information. 9. We have also examined the following Restated Financial Information of the Company set out in the Annexures prepared by the Management and approved by the Board of Directors on July 17 2017 as at and for the years ended March 31 2017 2016 and 2015. i Notes on Adjustment for Restatement of Profit and Loss as enclosed in Annexure V ii Significant Accounting Policies and Notes forming part of the Restated Financial Information as enclosed in Annexure V1 iii Restated Summary Statement of Property plant and equipment as enclosed in Note 4 to Annexure V2 iv Restated Summary Statement of Capital work-in-progress as enclosed in Note 5 to Annexure V2 v Restated Summary Statement of Intangible assets as enclosed in Note 6 to Annexure V2 vi Restated Summary Statement of Other investments – non-current as enclosed in Note 7 to Annexure V2 vii Restated Summary Statement of Trade receivables- non-current as enclosed in Note 8 to Annexure V2 viii Restated Summary Statement of Loans- non-current as enclosed in Note 9 to Annexure V2 ix Restated Summary Statement of Other financial assets- non-current as enclosed in Note 10 to Annexure V2 x Restated Summary Statement of Income tax assets/ liabilities net as enclosed in Note 11 to Annexure V2 xi Restated Summary Statement of Deferred tax as enclosed in Note 12 to Annexure V2 xii Restated Summary Statement of Other non-current assets as enclosed in Note 13 to Annexure V2 xiii Restated Summary Statement of Inventories as enclosed in Note 14 to Annexure V2 xiv Restated Summary Statement of Trade receivables- current as enclosed in Note 15 to Annexure V2 xv Restated Summary Statement of Cash and cash equivalents as enclosed in Note 16 to Annexure V2 xvi Restated Summary Statement of Bank balances other than cash and cash equivalents as enclosed in Note 17 to Annexure V2 xvii Restated Summary Statement of Loans- current as enclosed in Note 18 to Annexure V2 180

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xviii Restated Summary Statement of Other Financial Assets- current as enclosed in Note 19 to Annexure V2 xix Restated Summary Statement of Other current assets as enclosed in Note 20 to Annexure V2 xx Restated Summary Statement of Equity Share capital as enclosed in Note 21 to Annexure V2 xxi Restated Summary Statement of Other Equity as enclosed in Note 22 to Annexure V2 xxii Restated Summary Statement of Borrowings as enclosed in Note 23 to Annexure V2 xxiii Restated Summary Statement of Other financial liabilities – non-current as enclosed in Note 24 to Annexure V2 xxiv Restated Summary Statement of Provisions- non-current as enclosed in Note 25 to Annexure V2 xxv Restated Summary Statement of Trade payables- current as enclosed in Note 26 to Annexure V2 xxvi Restated Summary Statement of Other financial liabilities-current as enclosed in Note 27 to Annexure V2 xxvii Restated Summary Statement of Other current liabilities as enclosed in Note 28 to Annexure V2 xxviii Restated Summary Statement of Provisions- current as enclosed in Note 29 to Annexure V2 xxix Restated Summary Statement of Revenue From Operations as enclosed in Note 30 to Annexure V2 xxx Restated Summary Statement of Other Income as enclosed in Note 31 to Annexure V2 xxxi Restated Summary Statement of Cost of Materials Consumed as enclosed in Note 32 of Annexure V2 xxxii Restated Summary Statement of Changes in Inventories of Work-in-Progress as enclosed in Note 33 of Annexure V2 xxxiii Restated Summary Statement of Sub Contract and Other Direct Expenses as enclosed in Note 34 of Annexure V2 xxxiv Restated Summary Statement of Employee benefits expense as enclosed in Note 35 to Annexure V2 xxxv Restated Summary Statement of Finance costs as enclosed in Note 36 to Annexure V2 xxxvi Restated Summary Statement of Depreciation and amortization expense as enclosed in Note 37 to Annexure V2 181

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xxxvii Restated Summary Statement of Other expenses as enclosed in Note 38 to Annexure V2 xxxviii Restated Summary Statement of Provision for Anticipated Losses and Expenditure as enclosed in Note 39 of Annexure V2 xxxix Restated Summary Statement of Earnings per equity share as enclosed in Note 40 to Annexure V2 xl Restated Summary Statement of Contingent Liabilities and Commitments as enclosed in Note 41 of Annexure V2 xli Statement of Additional Information to the Restated Financial Information in Notes 42-45 and Notes 47- 56 to Annexure V2 xlii Statement of Related Party Disclosures as enclosed in Note 46 to Annexure V2 xliii Statement of Capitalisation as enclosed in Annexure VI xliv Statement of Dividend paid as enclosed in Annexure VII xlv Restated Statement of Accounting Ratios as enclosed in Annexure VIII xlvi Restated Statement of Tax Shelter as enclosed in Annexure IX According to the information and explanations given to us in our opinion the Restated Financial Information contained in Annexures I to IV and the above Restated Other Financial Information contained in Annexures V to IX accompanying this report read with Significant Accounting Policies and Notes forming part of the Restated financial information disclosed in Annexure V1 are prepared after making adjustments and regroupings or reclassifications as considered appropriate and have been prepared in accordance with the Act the Rules and the ICDR Regulations and the Guidance Note. 10. We have also examined the following Restated Financial Information of the Company set out in the Annexures prepared by the Management and approved by the Board of Directors on July 17 2017 for the years ended March 31 2014 and 2013 proposed to be included in the RHP. i Notes on Adjustments for Restatement of Profit and Loss as enclosed in Annexure IV A ii Significant Accounting Policies and Notes forming part of the Restated Financial Information as enclosed in Annexure IV A1 iii Restated Summary Statement of Share Capital as enclosed in Note 1 of Annexure IV A2 iv Restated Summary Statement of Reserves and Surplus as enclosed in Note 2 of Annexure IV A2 v Restated Summary Statement of Long Term Borrowings as enclosed in Note 3 of Annexure IV A2 182

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vi Restated Summary Statement of Other Long term liabilities as enclosed in Note 4 of Annexure IV A2 vii Restated Summary Statement of Long term provisions as enclosed in Note 5 of Annexure IV A2 viii Restated Summary Statement of Short Term Borrowings as enclosed in Note 6 of Annexure IV A2 ix Restated Summary Statement of Trade Payables as enclosed in Note 7 of Annexure IV A2 x Restated Summary Statement of Other Current Liabilities as enclosed in Note 8 of Annexure IV A2 xi Restated Summary Statement of Short Term Provisions as enclosed in Note 9 of Annexure IV A2 xii Restated Summary Statement of Fixed Assets as enclosed in Note 10 of Annexure IV A2 xiii Restated Summary Statement of Non Current investments as enclosed in Note 11 of Annexure IV A2 xiv Restated Summary Statement of Deferred Tax as enclosed in Note 12 of Annexure IV A2 xv Restated Summary Statement of Long Term Loans Advances as enclosed in Note 13 of Annexure IV A2 xvi Restated Summary Statement of Other Non Current Assets as enclosed in Note 14 of Annexure IV A2 xvii Restated Summary Statement of Inventories as enclosed in Note 15 of Annexure IV A2 xviii Restated Summary Statement of Trade Receivables as enclosed in Note 16 of Annexure IV A2 xix Restated Summary Statement of Cash and Bank balances as enclosed in Note 17 of Annexure IV A2 xx Restated Summary Statement of Short-term Loans and Advances as enclosed in Note 18 of Annexure IV A2 xxi Restated Summary Statement of Other Current Assets as enclosed in Note 19 of Annexure IV A2 xxii Restated Summary Statement of Revenue from Operations as enclosed in Note 20 of Annexure IV A2 xxiii Restated Summary Statement of Other Income as enclosed in Note 21 of Annexure IV A2 xxiv Restated Summary Statement of Cost of Materials Consumed as enclosed in Note 22 of Annexure IV A2 xxv Restated Summary Statement of Changes in Inventories of Work-in-Progress as enclosed in Note 23 of Annexure IV A2 183

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xxvi Restated Summary Statement of Sub Contract and Other Direct Expenses as enclosed in Note 24 of Annexure IV A2 xxvii Restated Summary Statement of Employee Benefits Expense as enclosed in Note 25 of Annexure IV A2 xxviii Restated Summary Statement of Finance Costs as enclosed in Note 26 of Annexure IV A2 xxix Restated Summary Statement of Depreciation and Amortisation Expense as enclosed in Note 27 of Annexure IV A2 xxx Restated Summary Statement of Other Expenses as enclosed in Note 28 of Annexure IV A2 xxxi Restated Summary Statement of Provision for Anticipated Losses and Expenditure as enclosed in Note 29 of Annexure IV A2 xxxii Restated Summary Statement of Contingent Liabilities and Commitments as enclosed in Note 30 of Annexure IV A2 xxxiii Statement of additional information to the Restated Financial Information in Notes 31 to 41 and Note 43 to Annexure IV A 2 xxxiv Restated Summary Statement of Related Party Transactions as enclosed in Note 42 of Annexure IV A2 xxxv Statement of Dividend proposed as enclosed in Annexure V A xxxvi Restated Statement of Accounting Ratios as enclosed in Annexure VI A xxxvii Restated Statement of Tax Shelter as enclosed in Annexure VII A According to the information and explanations given to us in our opinion the Restated Financial Information contained in Annexures I A to III A and the above Restated Other Financial Information contained in Annexures IV A to VII A accompanying this report read with Significant Accounting Policies and Notes forming part of the Restated Financial Information disclosed in Annexure IV A1 are prepared after making adjustments and regroupings or reclassifications as considered appropriate and have been prepared in accordance with the Act the Rules and the ICDR Regulations and the Guidance Note. 11. This report should not in any way be construed as a re-issuance or re-dating of any of the previous audit reports issued by us or the Prior Auditors of the Company nor should this report be construed as a new opinion on any of the financial statements referred to herein. 12. We have no responsibility to update our report for events and circumstances occurring after the date of the report. 184

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Emphasis of Matter 13. We draw attention to the following: a. Note 30 of Annexure V 2 and Note 20 of Annexure IV A2: Restated Statement of Revenue from Operations to the Restated Financial Information regarding the basis on which the Company has recognized revenue from ship building/ ship repair activities based on the Company’s own assessment of physical completion and further reliance is placed on the technical assessment and activity based cost estimates defined by the Management for the purpose of recognition of income b. Note 52 of Annexure V2 and Note 34 of Annexure IV A 2: Other Notes to the Restated Financial Information with respect to the years ended March 31 2016 2015 2014 and 2013 regarding balances under trade receivables deposits claims and sundry creditors which are subject to confirmation/ reconciliation and consequent adjustment if any. Our opinion is not modified in respect of these matters. Restriction on Use 14. Our report is intended solely for use of the Management for inclusion in the Offer document to be filed with Securities and Exchange Board of India Registrar of Companies Kerala and concerned Stock Exchanges in connection with the proposed Initial Public Offering of the Company. Our report should not be used referred to or distributed for any other purpose except with our prior consent in writing. For Krishnamoorthy Krishnamoorthy Chartered Accountants Firm Registration Number : 001488S C.R.Rema Partner Membership No. : 029182 Place of Signature : Kochi Date: July 17 2017 185

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ANNEXURE I Cochin Shipyard Limited RESTATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES ₹ in Millions Particulars Note No. As at 31 st Mar 2017 As at 31 st Mar 2016 As at 31 st Mar 2015 Proforma ASSETS Non-current assets a Property Plant and Equipment 4 3028.53 2964.39 2894.37 b Capital work-in-progress 5 539.23 241.72 127.79 c Intangible assets 6 677.59 737.80 806.60 d Financial Assets i Investments 7 0.92 0.92 1.92 ii Trade receivables 8 - 321.35 295.98 iii Loans 9 14.54 15.24 13.98 iv Other Financial assets 10 - 1655.30 - e Income tax assets net 11 360.13 266.64 250.13 f Deferred tax assets net 12 243.34 322.09 236.72 g Other non-current assets 13 245.79 98.42 95.79 5110.07 6623.87 4723.28 Current assets a Inventories 14 1864.70 2316.91 3033.84 b Financial Assets i Trade receivables 15 3069.92 4540.98 5825.37 ii Cash and cash equivalents 16 6759.81 5114.71 4565.97 iii Bank balances other than ii above 17 13153.10 13089.42 9628.50 iv Loans 18 4.67 4.03 4.35 v Other Financial assets 19 2326.92 1192.38 324.35 c Current Tax Assets Net 11 169.47 - - d Other current assets 20 705.71 606.31 807.19 28054.30 26864.74 24189.57 Total Assets 33164.37 33488.61 28912.85 EQUITY AND LIABILITIES Equity : a Equity Share capital 21 1132.80 1132.80 1132.80 b Other Equity 22 19177.38 17109.24 14406.49 20310.18 18242.04 15539.29 186

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Particulars Note No. As at 31 st Mar 2017 As at 31 st Mar 2016 As at 31 st Mar 2015 Proforma Liabilities : Non-current liabilities a Financial Liabilities i Borrowings 23 1230.00 1230.00 1230.00 ii Other financial liabilities 24 26.12 26.12 26.12 b Provisions 25 214.16 189.65 193.22 1470.28 1445.77 1449.34 Current liabilities a Financial Liabilities i Trade payables 26 1613.16 2098.77 1709.84 ii Other financial liabilities 27 1019.68 1644.42 1209.63 b Other current liabilities 28 6646.19 7723.00 6472.46 c Provisions 29 2104.88 2150.71 2282.13 d Current Tax Liabilities Net 11 - 183.90 250.16 11383.91 13800.80 11924.22 Total Equity and Liabilities 33164.37 33488.61 28912.85 Note: The above statement should be read with Notes on Adjustments for Restatement of Profit and Loss appearing in Annexure V Significant Accounting Policies and Notes forming part of the Restated Financial Information in Annexure V 1 Other Notes to Financial Information in Annexure V 2 The accompanying notes are an integral part of the Restated Financial Information For and on behalf of Board of Directors V KALA SUNNY THOMAS D PAUL RANJAN MADHU S NAIR Company Secretary Director Technical Director Finance Chairman and Managing Director Chief Financial Officer DIN - 06882228 DIN - 06869452 DIN - 07376798 Kochi dated July 17 2017 As Per our report attached For M/s KrishnamoorthyKrishnamoorthy Chartered Accountants Firm Registration No.001488S C.R.REMA Partner Membership Number 029182 Kochi dated July 17 2017 187

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ANNEXURE – II Cochin Shipyard Limited RESTATED SUMMARY STATEMENT OF PROFIT AND LOSS ₹ in Millions Particulars Note No. For the year ended 31 st Mar 2017 For the year ended 31 st Mar 2016 For the year ended 31 st Mar 2015 Proforma ₹ in Millions I Income Revenue from operations 30 20594.88 19900.07 15832.61 Other income 31 1490.13 1068.74 771.91 Total Income 22085.01 20968.81 16604.52 II Expenses: Cost of materials consumed 32 10087.26 10543.22 10008.08 Changes in inventories of work-in-progress 33 139.55 164.41 192.25 Sub contract and other direct expenses 34 3193.67 1916.65 1597.83 Employee benefits expense 35 2166.65 2090.75 2128.46 Finance costs 36 105.35 119.40 183.22 Depreciation and amortisation expense 37 385.11 371.93 376.98 Other expenses 38 1344.01 1425.42 1129.74 Provision for anticipated losses and expenditure 39 140.80 169.33 268.02 Total expenses 17283.30 16472.29 15500.08 III Profit before tax 4801.71 4496.52 1104.44 IV Tax expense: 1 Current tax 11 1601.14 1664.37 485.28 2 Deferred tax 11 78.75 85.37 73.66 V Profit for the year 3121.82 2917.52 692.82 188

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Particulars Note No. For the year ended 31 st Mar 2017 For the year ended 31 st Mar 2016 For the year ended 31 st Mar 2015 Proforma VI Other comprehensive income A Items that will be reclassified to profit or loss i Effective portion of gains/losses on cash flow hedging instruments - 3.55 22.29 ii Income tax relating to items that will be reclassified to profit or loss 1.23 7.58 B Items that will not be reclassified to profit or loss i Remeasurements of post employment benefit obligations 16.30 17.67 29.05 ii Changes in fair value of FVTOCI equity instruments - 1.00 iii Income tax relating to items that will not be reclassified to profit or loss 5.64 6.12 9.87 Other comprehensive income for the year 10.66 10.23 4.47 VII Total Comprehensive Income for the year 3111.16 2907.29 688.35 VIII Earnings per equity share of Rs 10 each: 40 1 Basic Rs 27.56 25.75 6.12 2 Diluted Rs 27.56 25.75 6.12 Note: The above statement should be read with Notes on Adjustments for Restatement of Profit and Loss appearing in Annexure V Significant Accounting Policies and Notes forming part of the Restated Financial Information in Annexure V 1 Other Notes to Financial Information in Annexure V 2 The accompanying notes are an integral part of theRestated Financial Information For and on behalf of Board of Directors V KALA SUNNY THOMAS D PAUL RANJAN MADHU S NAIR Company Secretary Director Technical Director Finance Chairman and Managing Director Chief Financial Officer DIN - 06882228 DIN - 06869452 DIN - 07376798 Kochi dated July 17 2017 As Per our report attached For M/s KrishnamoorthyKrishnamoorthy Chartered Accountants Firm Registration No.001488S C.R.REMA Partner Membership Number 029182 Kochi dated July 17 2017 189

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ANNEXURE – III Cochin Shipyard Limited RESTATED SUMMARY STATEMENT OF CHANGES IN EQUITY A. Equity Share Capital ₹ in Millions As at 1 st April 2014 Changes in equity share capital during the year As at 31 st Mar 2015 1132.80 0.00 1132.80 As at 1 st April 2015 Changes in equity share capital during the year As at 31 st Mar 2016 1132.80 0.00 1132.80 As at 1 st April 2016 Changes in equity share capital during the year As at 31 st Mar 2017 1132.80 0.00 1132.80 B. Other Equity ₹ in Millions Reserves and Surplus Capital Redemp tion reserve Debent ure redem ption reserve FVTO CI - Equity instru ments Total Capital Reserve Securities Premium Reserve General Reserve Retained Earnings Balance as at 1 st Apr 2014 26.36 0.12 514.74 11999.53 1191.42 8.26 - 13740.43 Changes in accounting policy or prior period errors Restated balance at the beginning of the reporting period 26.36 0.12 514.74 11999.53 1191.42 8.26 - 13740.43 Profit for the year 692.82 692.82 Other comprehensive income for the year 4.47 4.47 Total comprehensive income for the year 688.35 688.35 Hedge Reserve 22.29 22.29 Dividends including taxes - - Transfer from retained earnings 117.53 146.36 28.83 - Amortisation of premium - - Balance at the end of the reporting period Proforma 26.36 0.12 632.27 12519.23 1191.42 37.09 - 14406.49 190

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Reserves and Surplus Capital Redemp tion reserve Debent ure redem ption reserve FVTO CI - Equity instru ments Total Capital Reserve Securities Premium Reserve General Reserve Retained Earnings Balance as at 1st Apr 2015 26.36 0.12 632.27 12519.23 1191.42 37.09 - 14406.49 Changes in accounting policy or prior period errors - Restated balance at the beginning of the reporting period 26.36 0.12 632.27 12519.23 1191.42 37.09 - 14406.49 Profit for the year 2917.52 2917.52 Other comprehensive income for the year 9.23 1.00 10.23 Total comprehensive income for the year 2908.29 1.00 2907.29 Dividends including taxes 204.51 204.51 Transfer from retained earnings 28.83 28.83 - Amortisation of premium 0.03 0.03 Balance at the end of the reporting period 26.36 0.09 632.27 15194.18 1191.42 65.92 1.00 17109.24 191

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Reserves and Surplus Capital Redemp tion reserve Debent ure redem ption reserve FVTO CI - Equity instru ments Total Capital Reserve Securities Premium Reserve General Reserve Retained Earnings Balance as at 1st Apr 2016 26.36 0.09 632.27 15194.18 1191.42 65.92 1.00 17109.24 Changes in accounting policy or prior period errors - Restated balance at the beginning of the reporting period 26.36 0.09 632.27 15194.18 1191.42 65.92 1.00 17109.24 Profit for the year 3121.82 3121.82 Other comprehensive income for the year 10.66 10.66 Total comprehensive income for the year 3111.16 - 3111.16 Dividends including taxes 1043.01 1043.01 Transfer from retained earnings 28.83 28.83 - Amortisation of premium 0.01 0.01 Balance at the end of the reporting period 26.36 0.08 632.27 17233.50 1191.42 94.75 1.00 19177.38 Note: The above statement should be read with Notes on Adjustments for Restatement of Profit and Loss appearing in Annexure V Significant Accounting Policies and Notes forming part of the Restated Financial Information in Annexure V 1 Other Notes to Financial Information in Annexure V 2 The accompanying notes are an integral part of the Restated Financial Information For and on behalf of Board of Directors V KALA SUNNY THOMAS D PAUL RANJAN MADHU S NAIR Company Secretary Director Technical Director Finance Chairman and Managing Director Chief Financial Officer DIN - 06882228 DIN - 06869452 DIN - 07376798 Kochi dated July 17 2017 As Per our report attached For M/s KrishnamoorthyKrishnamoorthy Chartered Accountants Firm Registration No.001488S C.R.REMA Partner Membership Number 029182 Kochi dated July 17 2017 192

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ANNEXURE – IV Cochin Shipyard Limited RESTATED SUMMARY STATEMENT OF CASH FLOWS ₹ in Millions Particulars For the Year Ended 31st Mar 2017 For the Year Ended 31st Mar 2016 For the Year Ended 31st Mar 2015 Proforma A. Cash flow from Operating Activites Net profit before tax 4801.71 4496.52 1104.44 Adjustments for : Depreciation and amortisation 358.43 344.98 346.96 Value of surrendered land written off 0.00 0.56 0.00 Interest expense 105.35 109.70 172.79 Interest income 1308.55 993.61 535.49 Rental income 5.54 10.01 32.81 Dividend income 19.90 0.05 0.11 Loss on sale of fixed assets 41.48 0.63 0.77 Profit on sale of fixed assets 0.66 0.17 0.00 Profit on investments 46.10 0.00 0.00 Loss on derivative contracts Net 22.28 6.97 53.40 Unrealised loss/gain on derivative contracts Net 3.87 0.13 3.39 Exchange difference from FE transactions 22.72 2.28 73.44 Expenses on Initial Public Offer 18.21 0.00 0.00 Effective loss/gain of cash flow hedges 3.55 0.00 0.00 0.00 0.00 Operating cash flow before working capital changes 3906.85 3953.37 926.32 Adjustments for working capital changes: Increase / decrease in inventories 452.21 716.93 925.35 Increase / decrease in trade and other receivables 1622.33 4465.71 4589.24 Increase / decrease in trade and other payables 2358.28 1530.31 941.80 Cash generated from operation before Income Tax 3623.11 1734.90 7382.71 Income tax paid 1500.30 1334.18 748.54 Net cash generated from Operating Activities A 2122.81 400.72 6634.17 193

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Particulars For the Year Ended 31st Mar 2017 For the Year Ended 31st Mar 2016 For the Year Ended 31st Mar 2015 Proforma B. Cashflow from Investing Activities Purchase of assets 404.27 347.77 347.73 Capital Work In Progress 297.52 113.92 52.14 Investment in Mutual Funds 11378.50 0.00 0.00 Redemption of Mutual Funds 11378.50 0.00 0.00 Sale or withdrawal of fixed assets 1.06 0.29 0.00 Interest received 1276.69 918.33 522.30 Rent received 5.54 10.01 32.81 Dividend income 19.90 0.00 0.00 Profit on investments 46.10 0.00 0.00 Net cash from investing operation B 647.50 466.94 155.24 C. Cashflow from Financing Activities Issue of Tax free Bonds 0.00 0.00 0.00 Premium on issue of Tax free Bonds 0.00 0.00 0.00 Short term borrowings 0.00 0.00 2109.18 Loss/profit on derivative contracts Net 22.28 6.97 53.40 Loss on exchange difference from FE transactions 22.72 2.28 73.44 Redemption of Preference Shares 0.00 0.00 0.00 Dividend paid 866.59 169.92 169.92 Dividend tax paid 176.42 34.59 28.88 Interest paid 105.37 109.72 172.79 Expenses on Initial Public Offer 21.83 Net cash from financing activities C 1125.21 318.92 2353.93 D. Net Increase in Cash Cash Equivalent A+B+C 1645.10 548.74 4435.48 Cash and cash equivalent at the beginning of the year 5114.71 4565.97 130.49 Cash and cash equivalent at the end of the year 6759.81 5114.71 4565.97 Net cash increase/ decrease 1645.10 548.74 4435.48 194

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The cash Flow Statement has been prepared under the “Indirect Method” as set out in India Accounting Standard -7 “Cash Flow Statement”. Note: The above statement should be read with Notes on Adjustments for Restatement of Profit and Loss appearing in Annexure V Significant Accounting Policies and Notes forming part of the Restated Financial Information in Annexure V 1 Other Notes to Financial Information in Annexure V 2 The accompanying notes are an integral part of theRestated Financial Information For and on behalf of Board of Directors V KALA SUNNY THOMAS D PAUL RANJAN MADHU S NAIR Company Secretary Director Technical Director Finance Chairman and Managing Director Chief Financial Officer DIN - 06882228 DIN - 06869452 DIN - 07376798 Kochi dated July 17 2017 As Per our report attached For M/s KrishnamoorthyKrishnamoorthy Chartered Accountants Firm Registration No.001488S C.R.REMA Partner Membership Number 029182 Kochi dated July 17 2017 195

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ANNEXURE – V NOTES ON ADJUSTMENTS FOR RESTATEMENT OF PROFIT AND LOSS 1. Below mentioned is the summary of results of restatement made in the audited accounts for the respective years and its impact on the profits of the Company: sl no Particulars ₹ in millions 2016-17 2015-16 2014-15 Proforma Total Comprehensive income as per Audited Statement of Profit Loss 3210.82 2716.70 2344.77 Adjustments 1 Prior period Expenses See Note No.3 a below 0.00 0.00 87.38 2 Effect of Navy Acquired Asset – restated See Note 3 b below 0.00 7.72 6.26 3 Excess Provision written back See Note 3 c below 138.24 2.06 83.71 4 Materialisation of Contingent Liabilities See Note 3 d below 0.00 110.60 4.90 5 Liabilities Provided related to earlier Years See Note 3 e below 0.00 168.52 352.74 6 Change in Contract Terms See Note 3 f below 0.00 0.00 2751.76 7 Fair valuation – Ind AS adjustmentsSee Note 3 g below 0.07 0.13 0.00 8 ECL adjustment– Ind AS adjustmentsSee Note 3 g below 0.00 30.51 0.00 Sub Total 138.31 299.98 2568.75 9 Current Tax Impact See Note 3 h below 33.70 45.03 994.94 10 Deferred Tax Impact See Note 3 h below 4.95 64.36 82.61 Sub Total 38.65 109.39 912.33 Total 99.66 190.59 1656.42 Net Profit after Taxation as Restated 3111.16 2907.29 688.35 arrived after making IndAS adjustments to the audited IGAAP financials 2. Changes in Accounting Policies: The Audited financial statements for the financial year ended 2017 with comparatives for the financial year ended 2016 is prepared under Indian Accounting Standards Ind AS and restated financial information for these years are prepared based on the Audited Accounts. For the year ended 31 ST March 2015 financial information have been prepared on proforma basis in accordance with requirements of SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 312016"SEBI Circular".As envisaged by the SEBI Circular the Company has followed the same accounting policy choices both mandatory exceptions and 196

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optional exemptions availed as per Ind AS 101 as initially adopted on its Ind AS transition date ie. April 12015 while preparing these proforma financials and accordingly suitable restatement adjustments in the accounting heads have been made. These proforma Ind AS financial statements for Fiscal 2015 have been prepared by making restatement and Ind AS adjustments to the audited Indian GAAP financial statements as at and for the year ended March 312015.For the Fiscals 2013 and 2014 the Audited financial statements and Restated Financial information have been prepared in accordance with Indian GAAP 3. Other Adjustments In the financial statements for the Fiscal years ended 31 st March 2017 31 st March 2016 and 31 st March 2015 certain items of income/expenses have been identified as adjustments pertaining to earlier years. These adjustments were recorded in the year in which they were identified. However for the purpose of Restated Financial Statements such adjustments have been appropriately recorded in the respective years to which the transactions pertain. Adjustments related to financial years prior to year ended 31 st March 2013 have been adjusted against the opening balance of the Restated Summary Statement of Profit and Loss Account as at 1 st April 2012. The details of such adjustments are as under: a Prior Period Items In the Financial statements for the Fiscal years ended 31 st March 2017 31 st March 2016 and 31 st March 2015 certain items of income/expenses have been identified as prior period items. For the purpose of this statement such prior period items have been appropriately adjusted in the respective years. b Effect of Indian Navy Acquired Asset– restated The claim for asset acquired/constructed to augment the construction of Indigenous Aircraft Carrier Quay III expansion and allied works was initially denied by Indian Navy and hence accounted as Companys asset and repairs expense and depreciation claimed in the accounts during the financial years 2013-14 and 2014-15.Later on during the financial year 2015-16 after lot of deliberations Indian Navy accepted the claim. In the financial year 2015-16 when Indian Navy agreed to fund these assets and paid off ₹ 81.18 millions to the Company the Company wrote back/credited back the depreciation and repairs charged during the two previous years and treated the asset as Indian Navy acquired asset in the Financial statements. For restatement purpose items such as depreciation written back fixed assets Indian Navy acquired asset asset on infrastructure depreciation and repairs expense have been adjusted so as to reflect the original transaction of charging the asset as Indian Navy funded asset. c Excess Provision written back In the financial statements for the Fiscal years ended 31 st March 2017 31 st March 2016 and 31 st March 2015 certain Provisions created in earlier years were written back. For the purpose of Restatement the said provisions wherever required have been appropriately adjusted in the respective years in which the same were originally created and the balance brought forward in Profit and Loss Account as at 1 st April 2012. In the case of ship repair contracts completed and invoices settled during the year income recognized is net of reductions due to price variation admitted. In the case of unsettled invoices the income is recognised net of estimated amount of reductions. Differences if any on settlement are adjusted against income in the year of settlement. For the purpose of Restatement the said differences have been adjusted in the respective years in which income is recognized. d Materialisation of Contingent Liabilities In the financial statements for the Fiscal years ended 31 st March 2017 31 st March 2016 and 31 st March 2015contingent liabilities are disclosed in the notes to accounts and are not recognized in the books of accounts . However during the said periods certain contingent liabilities had subsequently materialised and were provided for only in the subsequent year. For the purpose of Restatement the said liabilities have been adjusted to the respective year in which the liability relates to including adjustment to the balance brought forward in Profit and Loss Account as at 1 st April 2012. 197

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e Liabilities Provided related to earlier Years During the years under consideration certain liabilities have been identified by the Company which were required to be provided in earlier years. For the purpose of Restated Financial Statements provisions for liabilities pertaining to earlier years accounted for during Fiscal years ended 31 st March 201731 st March 2016 and 31 st March 2015have been adjusted in the respective financial years to which they pertain and in the balance brought forward in Profit and Loss Account as at 1 st April 2012. f Change in Contract Terms In respect of Indigenous Aircraft Carrier IAC income pending the signing of Phase II Contract the income in respect of Phase II activities completed during financial years 2013-14 and 2012-13 were recognised in financial year 2013-14 at the rate of Phase I Contract and the same is qualified in Auditor’s Report 2013-14. Since the contract for phase II has been signed between Indian Navy and the Company on 16-12-2014 2014-15 the difference between Phase I Rate and Phase II Rate is applied on Phase II activities performed during financial years 2012-13 and 2013-14 and income is recognised in the financial year 2014-15 for the same. For Restatement the same is adjusted in the actual financial years - 2013-14 and 2012-13. g IndAS adjustments The Proforma financial information of the Company as at and for the year ended 31 st March 2015 is prepared in accordance with requirements of SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/4 dated 31 st March 2016 “SEBI Circular”. As envisaged by the SEBI Circular the Company has followed the same accounting policy choices both mandatory exceptions and optional exemptions availed as per Ind AS 101 as initially adopted on its Ind AS transition date i.e. 1 st April 2015 while preparing the proforma financial information for the FY 2014-15 and accordingly suitable restatement adjustments in the accounting heads has been made in the financial information for the years ended 31 st March 2017 and 31 st March 2016. h Prior Year Tax The Profit and Loss Account of some years include amounts paid/provided for or refunded/written back in respect of shortfall/excess income tax arising out of assessments appeals etc. which have now been adjusted in the respective years. Also income tax current tax and deferred tax has been computed on adjustments made as detailed above and has been adjusted in the Restated Statement of Profit and Loss for Fiscal years ended 31 st March 201731 st March 2016 and 31 st March 2015. 4. Material Regrouping Appropriate adjustments have been made in the Restated Financial Statements wherever required by a reclassification of the corresponding items of income expenses assets liabilities receipts and payments in order to bring them in line with the groupings as per the audited financial statement of the Company as at and for the year ended 31 st March 2017. 198

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5. Matter of emphasis in the Auditors’ report a Matters adjusted in Restated Financials Auditors’ Report 2014-15 a. Note No: 6.1 to the financial statements regarding recognition of differential income of ₹ 2751.70 millions during the financial year 2014-15 based on Phase II contract signed during the year with the Indian Navy in respect of certain Phase II activities of the Indigenous Air Craft Carrier carried out in 2013-14 and recognized as income in the same year at Phase I rates. Accordingly adjustments are made to the statement of financial information as restated for the year ended 31 st March 2013 31 st March 2014 and 31 st March 2015 as per Note No.3 f b Matters not adjusted in restated Financials Auditors’ Report 2016-17 a. Note No.30 to the financial statements regarding the basis on which the Company has recognized revenue from ship building/ ship repair activities based on the Company’s own assessment of physical completion and further reliance is placed on the technical assessment and activity based cost estimates defined by the Management for the purpose of recognition of income Auditors’ Report 2015-16 a. Note No.20 to the financial statements regarding the basis on which the Company has recognized revenue from ship building/ship repair activities based on the Company’s own assessment of physical completion and further reliance is placed on the technical assessment and activity based cost estimates defined by the Management for the purpose of recognition of income. b. Note No: 35 to the financial statements regarding balances under trade receivables deposits claims and sundry creditors which are subject to confirmation/reconciliation and consequent adjustment if any. Auditors’ Report 2014-15 a. Note No: 33 to the financial statements regarding balances under trade receivables loans and advances deposits claims and sundry creditors which are subject to confirmation/reconciliation and consequent adjustment if any. b. Note No: 35 to the financial statements regarding the implementation of new ERP System and the migration of all financial and cost records to the new system which is under stabilization and subject to post implementation audit. 6 Auditor’s qualifications a Audit qualifications which do not require any corrective adjustment in the financial information are as follows: In addition to the audit opinion on the financial statements the auditors are required to comment upon the matters included in the Companies Auditor’s Report Order 2016 issued by the Central Government of India in terms of sub-section 11 of Section 143 of the 2013 Act .Certain statements/comments included in audit opinion on the financial statements CARO and Audit Comment to the Directions/Sub-Directions issued by the Comptroller Auditor General of India under section 143 5 of the Companies Act2013 which do not require any adjustments in the Restated Statements are reproduced below in respect of the financial statements presented. i Financial Year ended 31 st March2017 1. Audit Comment to the Directions/Sub-Directions issued by the Comptroller Auditor General of India under section 143 5 of the Companies Act2013 a During the year the Company has written off advance paid to a Supplier amounting to Rs.47.86 millions. As per the policy followed by the company liquidated damages where the levies depend on decisions regarding force majeure condition of contract are accounted for on completion of contract and/or when final decision is taken. Based on our examination of the records of the Company and according to the information and 199

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explanations given to us Liquidated damages accounted for has not been waived /written off during the year. Based on the explanation given to us the Company does not have the practice of claiming interest on delayed payment from customers though certain contracts provide for the same. b Project wise cost details are maintained by the Company in the Integrated SAP-ERP system and based on our examination of these records no material discrepancies were observed in project-wise cost maintained. However there is scope for further strengthening and improvement in timely booking of costs to a particular job order. 2. CARO – Clause vii b Details of dues outstanding with respect to Income tax Sales tax Value Added Tax Service Tax and Duty of Customs on account of dispute. Sl. No. Name of the statute Nature of Liability Amount unpaid Period to which the amount relates Forum where the dispute is pending 1 Income Tax Act 1961 Income Tax 219.16 AY 1997-98 Honble High Court of Kerala 2 Income Tax Act 1961 Income Tax 96.73 AY 1998-99 Honble High Court of Kerala 3 Income Tax Act 1961 Income Tax 35.37 AY 1999-00 Honble High Court of Kerala 4 Income Tax Act 1961 Income Tax 17.03 AY 2000-01 Honble High Court of Kerala 5 Income Tax Act 1961 Income Tax 9.64 AY 2001-02 Honble High Court of Kerala 6 Income Tax Act 1961 Income Tax 0.06 net of Rs.229.79 millions adjusted against refunds/paid under protest AY 2002-03 AY 2009-10 AY 2010-11 AY 2011-12 AY 2012-13 AY 2013-14 AY 2014-15 Commissioner of Income Tax Appeals 7 Kerala General Sales Tax Act 1963 Sales Tax 4.90 1996-1997 Deputy Commissioner Appeals 8 Kerala General Sales Tax Act 1963 Sales Tax 5.80 1999-2000 Assessing Authority Commercial Taxes Remanded back to Assessing Officer by Kerala Sales Tax Appellate Tribunal 9 Kerala General Sales Tax Act 1963 Sales Tax 11.19 2000-01 Deputy Commissioner Appeals 10 Kerala General Sales Tax Act 1963 Sales Tax 7.34 2001-02 Deputy Commissioner Appeals 200

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11 Kerala General Sales Tax Act 1963 Sales Tax 20.22 2004-05 Deputy Commissioner Appeals 12 Kerala Value Added Tax Act 2003 Value Added Tax 65.22 2005-06 KVAT Appellate Tribunal 13 Kerala Value Added Tax Act 2003 Value Added Tax 35.65 2007-08 KVAT Appellate Tribunal 14 Finance Act 1994 Service Tax 61.54 Apr 2003- Mar 2007 Custom Excise Service Tax Appellate Tribunal Bangalore 15 Finance Act 1994 Service Tax 4.28 Apr 2007- Dec 2008 Commissioner of Central Excise Appeals 16 Finance Act 1994 Service Tax 2.64 Jan 2009 - Sep 2009 Commissioner of Central Excise Appeals 17 Finance Act 1994 Service Tax 3.32 Oct 2009 - Sep 2010 Commissioner of Central Excise Appeals 18 Finance Act 1994 Service Tax 4.33 Oct 2010 - Sep 2011 Commissioner of Central Excise Appeals 19 Finance Act 1994 Service Tax 2.89 Oct 2011 - Jun 2012 Commissioner of Central Excise Appeals 20 Finance Act 1994 Service Tax 0.93 Jul 2012 - Mar 2015 Commissioner of Central Excise Appeals 21 Finance Act 1994 Service Tax 4.25 Jul 2012 - Mar 2013 Commissioner of Central Excise Appeals 22 Finance Act 1994 Service Tax 4.67 Apr 2013 - Mar 2014 Custom Excise Service Tax Appellate Tribunal Bangalore 23 Finance Act 1994 Service Tax 4.85 Apr 2014 - Mar 2015 Custom Excise Service Tax Appellate Tribunal Bangalore 24 Finance Act 1994 Service Tax - net of amount paid under protest Rs.37.67 millions 2003-04 2004- 05 2005-06 2006-07 2007- 08 2008-09 Custom Excise Service Tax Appellate Tribunal Bangalore 25 Customs Act 1962 Duty of Customs 2.33 Interest on additional duty 2004-05 Commissioner of Customs Kochi 26 Customs Act 1962 Duty of Customs 1489.14 2010-2015 Honble High Court of Kerala 27 Customs Act 1962 Duty of Customs 2.75 Interest on additional duty 1984-1990 Chief Commissioner of Customs Bangalore 201

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28 Customs Act 1962 Duty of Customs 2.21 2013-14 Custom Excise Service Tax Appellate Tribunal Bangalore 29 Customs Act 1962 Duty of Customs 2.66 2014-15 Commissioner of Customs Kochi 30 Customs Act 1962 Duty of Customs - Net of amount paid under protest Rs.26.12 millions 2003-04 Custom Excise Service Tax Appellate Tribunal Bangalore ii Financial Year ended 31 st March2016 1 Audit Comment to the Directions/Sub-Directions issued by the Comptroller Auditor General of India under section 143 5 of the Companies Act2013 a During the year the Company has written off balance due from sundry debtors amounting to ₹0.95 millions. As per the policy followed by the company liquidated damages where the levies depend on decisions regarding force majeure condition of contract are accounted for on completion of contract and/or when final decision is taken. Based on our examination of the records of the Company and according to the information and explanations given to us Liquidated damages accounted for has not been waived /written off during the year. Based on the explanation given to us the Company does not have the practice of claiming interest on delayed payment from customers though certain contracts provide for the same. b Based on our examination of the books and records of the Company during the financial year 2015-16 claims disallowed by the Indian Navy amounting to ₹1.00millions have been adjusted against income in the books of accounts and claims disallowed amounting to ₹10.78 millions have been resubmitted and pending approval this has not been adjusted in the Statement of Profit and Loss. 2 CARO – Clause vii b Details of dues outstanding with respect to Income tax Sales tax Value added tax Service Tax and Duty of Customs on account of disputes ₹ in millions Name of Statute Nature of the dues Amount ₹ Period to which the amount relates Forum where dispute is pending Income Tax Act 1961 Income Tax 6.33 AY 2000-01 Assessing Authority Case remanded by Income Tax Appellate Tribunal 0.83 AY 2002-03 Income Tax Appellate Tribunal 0.03 AY 2003-04 Income Tax Appellate Tribunal 28.86 AY 2010-11 Commissioner of Income Tax Appeals 41.26 AY 2011-12 Commissioner of Income Tax Appeals 202

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54.61 AY 2012-13 Commissioner of Income Tax Appeals 22.14 AY 2013-14 Commissioner of Income Tax Appeals Kerala General Sales Tax Act 1963 Sales Tax 4.90 1996-97 Deputy Commissioner Appeals 5.80 1999-00 Assessing Authority Commercial Taxes Remanded back to Assessing Officer by the Kerala Sales Tax Appellate Tribunal. 11.19 2000-01 Deputy Commissioner Appeals Value Added Tax 7.34 2001-02 Deputy Commissioner Appeals 20.22 2004-05 Deputy Commissioner Appeals Kerala Value Added Tax Act 2003 Value Added Tax 65.22 2005-06 Deputy Commissioner Appeals 35.65 2007-08 Deputy Commissioner Appeals Finance Act 1994 Service Tax 61.54 April 2003- March 2007 Custom Excise Service Tax Appellate Tribunal Bangalore 4.63 April 2007- December 2008 Commissioner of Central Excise Appeals 2.85 January 2009- September 2009 Commissioner of Central Excise Appeals 3.59 October 2009- September 2010 Commissioner of Central Excise Appeals 4.33 October 2010- September 2011 Commissioner of Central Excise Appeals 2.90 October 2011- June 2012 Commissioner of Central Excise Appeals 0.41 July 2012- September 2013 Commissioner of Central Excise Appeals 4.59 July 2012- March 2013 Commissioner of Central Excise Appeals 0.54 October 2013- March 2015 Commissioner of Central Excise Appeals 203

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Customs Act 1962 Duty of Customs 2.33 Interest on addl. duty 1992-1993 Custom Excise Service Tax Appellate Tribunal Bangalore 1489.14 2010-2015 Hon’ble High Court of Kerala. 2.75 Interest on addl. duty 1984-1990 Custom Excise Service Tax Appellate Tribunal Bangalore 2.21 Interest on addl. duty 2013-2014 Custom Excise Service Tax Appellate Tribunal Bangalore Amount mentioned net of taxes paid. iii Financial Year ended 31 st March 2015 1. Note No.18 to the financial statements regarding the basis on which the Company has recognized revenue from ship building/ship repair activities based on the Company’s own assessment of physical completion and further reliance is placed on the technical assessment and activity based cost estimates defined by the Management for the purpose of recognition of income 2. Note No: 32 to the financial statements regarding accounting of liabilities towards subcontract works at the end of the year based on Company’s estimate the ultimate impact if any of the above estimates on the financial statements is not ascertainable at this stage. 3. Audit Comment to the Directions/Sub-Directions issued by the Comptroller Auditor General of India under section 143 5 of the Companies Act2013 a There are no cases of waiver/write off of debts loans etc. and no instances of waiver of interest which have been charged to revenue. Based on the explanation given to us the Company does not have the practice of claiming interest on delayed payment from customers though certain contracts provide for the same b The Company has not received any assets as Gift from Government or other authorities. Records maintained relating to items dispatched out of the Company against returnable gate pass offers scope for improvement and the procedures followed relating to items sent out on returnable basis needs to be strengthened. c According to the information given to us a report on age wise analysis of pending legal/ arbitration cases other than Statutory matters is given below. ₹In millions Serial No Age of pending cases No of cases Amount involved ₹ in millions Legal Expenses ₹ Reasons for pendency/ Present position 1 0-3 years 30 151.93 Total legal expenses incurred during the year amounts to ₹.5.19 millions Previous year- ₹.1.55 millions The delay is attributable to adjournments in courts/ legal matters/ other court related matters. 2 4-6 years 5 280.36 The delay is attributable to adjournments in courts/ legal matters/ other court related matters. 3 7-10 years 2 - The delay is attributable to adjournments in courts/ legal matters/ other court related matters. 4 Above 10 years 10 157.29 The delay is attributable to adjournments in courts/ legal matters/ other court related matters. 204

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to the extent quantifiable and having financial impact on the Company 4. CARO Clause ii a – Frequency of physical inventory verification needs to be increased. Clause vii c The following dues of Income tax Sales tax and Value added tax have not been deposited by the Company on account of disputes: ₹ in millions Name of Statute Nature of the dues Amount ₹ Period to which the amount relates Forum where dispute is pending Income Tax Act 1961 Income Tax 6.33 AY 2000-01 Case remanded by ITAT 0.83 AY 2002-03 Income Tax Appellate Tribunal 0.03 AY 2003-04 Income Tax Appellate Tribunal 28.86 AY 2010-11 Commissioner of Income Tax Appeals 41.26 AY 2011-12 Commissioner of Income Tax Appeals 54.61 AY 2012-13 Commissioner of Income Tax Appeals Kerala General Sales Tax Act 1963 Sales Tax 11.19 2000-01 Deputy Commissioner Appeal Value Added Tax 7.34 2001-02 Deputy Commissioner Appeal 20.22 2004-05 Deputy Commissioner Appeal Kerala Value Added Tax Act 2003 Value Added Tax 65.22 2005-06 Deputy Commissioner Appeal 35.65 2007-08 Deputy Commissioner Appeal Amount mentioned net of taxes paid. 205

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ANNEXURE – V 1 Significant Accounting Policies and Notes forming part of the Restated Financial Information for the years ended 31 st March 2017 2016 and 2015 1. Company Overview Cochin Shipyard Limited is incorporated under the provisions of the Companies Act applicable in India on 29 th March 1972 as a Private Limited Company. The Company is domiciled in India and having registered office at Perumanoor Kochi Kerala. Pursuant to a resolution passed at the AGM of the Company held on 20 th September 2016 the Company has changed the status to Public Limited Company on 8 th November 2016. The Company is mainly engaged in the construction of vessels and repairs refits of ships and rigs.Government of India owns 100 of the Company’s equity share capital of the Company. The Restated Summary Statement of Assets and Liabilities of theCompany as at 31 st March 2017 2016 and 2015 and the related Restated Summary Statement of Profit and Loss Restated Summary Statement of Changes in Equity and Restated Summary Statement of Cash Flows for the years ended 31 st March 2017 2016 and 2015 hereinafter collectively referred to as “Restated Financial Information” have been prepared specifically for inclusion in the Offer Document to be filed by the Company with the Securities and Exchange Board of India “SEBI” in connection with proposed Initial Public Offering IPO of its equity shares. These Restated Financial Information have been prepared in accordance with Indian Accounting Standards “Ind AS” notified under the Companies Indian Accounting Standards Rules 2015 and Companies Indian Accounting Standards Amendment Rules 2016. These Restated Financial Information have been prepared to comply in all material respects with the requirements of Part I of Chapter III to the Companies Act 2013 and the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations 2009 “the SEBI regulations” as amended from time to time. The Proforma financial information of the Company as at and for the year ended 31 st March 2015 is prepared in accordance with requirements of SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/4 dated 31 st March 2016 “SEBI Circular”. As envisaged by the SEBI Circular the Company has followed the same accounting policy choices both mandatory exceptions and optional exemptions availed as per Ind AS 101 as initially adopted on its Ind AS transition date i.e. 1 st April 2015 while preparing proforma financial information for the FY 2014-15 and accordingly suitable restatement adjustments in the accounting heads have been made in the proforma financial information. This proforma Ind AS financial information have been prepared by making Ind AS and restatement adjustments tothe Audited Indian GAAP financial statements as at and for the year ended 31 st March2015. 2. Significant Accounting Policies 2.1 Statement of compliance These financial statements have been prepared in accordance with Ind AS as notified under the Companies Indian Accounting Standards Rules 2015 read with Section 133 of the Companies Act 2013. In accordance with the notification issued by the Ministry of Corporate Affairs the Company has adopted Indian Accounting Standards referred to as “Ind AS” notified under the Companies Indian Accounting Standards Rules 2015 with effect from 1 st April 2016. Previous period have been restated to Ind AS. In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard the Company has presented a reconciliation from the presentation of financial statements under Accounting Standards notified under the Companies Accounting Standards Rules 2006 “Previous GAAP” to Ind AS of Shareholders’ equity as at 31 st March 2016 and 1 st April 2015 and of the comprehensive net income for the year ended 31 st March 2016. 2.2 Basis of preparation of Financial Statements These financial statements have been prepared on the historical cost basis except for certain financial instruments which are measured at fair values at the end of each reporting period as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 206

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2.3 Use of estimates and judgements The preparation of the financial statements in conformity with the Ind AS requires management to make judgements estimates and assumptions that affect the application of accounting policies and the reported amounts of assets liabilities and disclosures as at date of the financial statements and the reported amounts of the revenues and expenses for the years presented. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates under different assumptions and conditions. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. 2.4 Critical Accounting estimates and judgements: The application of significant accounting policies that require critical accounting estimates involving complex and subjective judgements and the use of assumptions in the financial statements have been disclosed below: Useful lives of property plant and equipment The Company reviews the estimated useful lives and residual values of property plant and equipment at the end of each reporting period. Assumptions are also made as to whether an item meets the description of asset so as to warrant its capitalisation and which component of the asset may be capitalised. Reassessment of life may result in change in depreciation expense in future periods. Valuation of deferred tax assets The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. Significant judgements are involved in determining the elements of deferred tax items. Impairment of unquoted investments The Company reviews its carrying value of investments annually or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount the impairment loss is accounted for. Recognition and measurement of provisions The recognition and measurement of provisions are based on the assessment of the probability of an outflow of resources and on past experience and circumstance known at the balance sheet date. The actual outflow of resources at a future date may therefore vary from the figure included in provisions. Provision towards Guarantee repairs A provision is made towards guarantee repairs/claims in respect of newly built ships/small crafts delivered and repaired ships on the basis of the technical estimation done by the Company. The guarantee claims received from the ship owners are reviewed every year till settlement of the same. In case of a shortfall in the provision made earlier additional provisions are made. Contingencies and commitments 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 we treat 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 we do not expect them to have a materially adverse impact on our financial position or profitability. Provision for doubtful debts The Company makes provisions for doubtful debts based on an assessment of the recoverability of trade and other receivables. The identification of doubtful debts requires use of judgement and estimates. Where the expectation is 207

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different from the original estimate such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed. Provision for inventories Management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the aged inventory items with the respective net realisable value. The purpose is to ascertain whether a provision is required to be made in the financial statements for any obsolete and slow-moving items and that adequate provision for obsolete and slow-moving inventories has been made in the financial statements. Revenue Recognition The Company uses the percentage of completion method in accounting for its fixed price contracts. The use of the percentage of completion method requires the Company to estimate the costs expended to date as a proportion to the total cost to be expended on a project considering the physical progress or financial progress whichever is lower. Provision for estimated losses if any on the uncompleted part of the contracts are provided in the period in which such losses become probable based on the expected contract estimates at the reporting date. Recognition and measurement of defined benefit obligations The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate trends in salary escalation and vested future benefits and life expectancy. The discount rate is determined with reference to market yields at the end of thereporting period on the Government bonds. The period to maturity of the underlying bonds correspond to the probable maturity of the post employment benefit obligations. 2.5 Property Plant and Equipment PPE On adoption of Ind AS the Company retained the carrying value for all of its property plant and equipment as recognised in the financial statements as at the date of transition to Ind AS measured as per the previous GAAP and used that as its deemed cost as permitted by Ind AS 101 First time adoption of Indian Accounting Standards. PPE are initially recognised at cost. The initial cost of PPE comprises its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management including non refundable duties and taxes net of any trade discounts and rebates. The cost of PPE also includes interest on borrowings borrowing cost directly attributable to acquisition construction or production of qualifying assets upto initial recognition. PPE are stated at cost less accumulated depreciation other than free hold land which are stated at cost and impairment losses if any. Subsequent costs are included in the assets carrying amount or recognised as a separate asset as appropriate only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the items are material and can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to Statement of profit and loss during the reporting period in which they are incurred. 2.6 Capital work in progress and intangible assets under development: Capital work in progress and intangible assets under development are property plant and equipment that are not yet ready for their intended use at the reporting date which are carried at cost comprising direct cost related incidental expenses and attributable borrowing cost. 2.7 Depreciation Depreciation on property plant and equipment is provided on straight-line method based on useful life of the asset as prescribed in Schedule II to the Companies Act 2013. For the assets acquired from Cochin Port Trust for International Ship Repair Facility ISRFdepreciation is provided on the basis of remaining useful life as assessed by technical experts. An item of property plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain/loss arising on derecognition of the 208

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asset is included in the Statement of profit and loss when the asset is derecognised.Fully depreciated assets still in use are retained in financial Statements at residual value . Depreciation method useful lives and residual values are reviewed at each reporting date and adjusted prospectively if appropriate. 2.8 Intangible Assets Design development: Cost incurred on Design Development which are not directly chargeable on a product are capitalized as Intangible Asset and amortised on a straight-line basis over a period of five years. Software: Cost of software which is not an integral part of the related hardware acquired for internal use is capitalised as intangible asset and amortised on a straight-line basis over a period of three years. Right to use: Up- front fee paid for securing right to use of land and other facility is capitalized as intangible asset and amortised on a straight line basis over the period of lease for which the right has been obtained. Internally generated procedure: Cost of internally generated weld procedure is capitalized as Intangible Asset and amortised on a straight-line basis over a period of three years. 2.9 Impairment of Assets The Company assesses the impairment of assets with reference to each cash generating unit at each Balance Sheet date. If events or changes in circumstances based on internal and external factors indicate that the carrying value may not be recoverable in full the loss on account and the recoverable amount is accounted for accordingly. The recoverable amount is the higher of an assets fair value less costs of disposal and value in use. 2.10 Investments Investments that are readily realizable and are intended to be held for not more than one year from the date of such investments are classified as current investments. All other investments are classified as Non current. Current investments are carried at lower of cost and fair value. Non-current investments are valued at cost unless there is a permanent diminution in the value thereof. 2.11 Inventories a Raw materials components stores and spares are valued at weighted average cost method or net realisable value whichever is lower. Provision for obsolescence / non- usability / deterioration is determined on the basis of technical assessment made by the management. Goods in transit is valued at lower of cost or net realisable value. Stock of materials in respect of construction of defence vessels wherein the cost incurred is reimbursed by the owner are shown as reduction from the advances paid by the owner for construction of the vessel. b Work in progress: Work in progress Ship Building :- Work in progress is recognised only when the percentage of physical completion is less than the financial completion in which case the cost proportionate to excess of percentage of financial completion over physical completion is treated as Work in progress. In the case of Indigenous Aircraft Carrier since all the materials belongs to Indian Navy work in progress is not recognized. Work in progress of ships/offshore structures under repair which have not reached 75 stage of physical completion and general engineering jobs are valued at cost. Work- in- progress of ships where physical construction has not started is also valued at cost. c Loose tools stock are valued at cost and tools in use are revalued after providing for loss on revaluation estimated at 30 of book value. d Stock of scrap is valued at net realizable value after adjusting customs duty if any payable on the scrap. 2.12 Financial instruments Trade Receivables 209

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The Company assesses at each Balance Sheet date whether a financial asset or a group of financial asset is impaired. Ind AS 109 requires expected credit loss to be measured through a loss allowance. The Company recognises lifetime expected credit losses for all trade receivables that do not constitute a financing transaction. Impairment loss allowance is based on a simplified approach as permitted by Ind AS 109. As a practical expedient the company uses a provision matrix to determine the impairment loss on the portfolio of its trade receivables. Full provision is made for all trade receivables considered doubtful of recovery when the debt is more than three years or if it is certain that the debt is not recoverable. Where debts are disputed in legal proceedings provision is made if any decision is given against the company even if the same is taken up on appeal to higher authorities/courts. Impairment loss allowance or reversal that is required to be recognised at the reporting date is recognised as an impairment loss or gain in the Statement of Profit Loss Account. Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities other than financial assets and financial liabilities at fair value through profit or loss are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. Cash and cash equivalents The Company considers all highly liquid financial instruments which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage. Financial assets at amortised cost Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at fair value through other comprehensive income FVTOCI Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows that give rise on specified dates to solely payments of principal and interest on the principal amount outstanding and by selling financial assets. The Company has made an irrevocable election to present subsequent changes in the fair value of equity investments not held for trading in Other Comprehensive Income. Financial assets at fair value through profit or loss FVTPL Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in profit or loss. Financial liabilities Financial liabilities are measured at amortised cost using the effective interest rate method. Off setting of financial instruments Financial assets and financial liabilities are off set and the net amount is reported in financial statements if there is a currently enforceable legal right to off set the recognised amounts and there is an intention to settle on a net basis to realise the assets and settle the liabilities simultaneously. 2.13 Foreign Currency Transactions 210

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The financial statements are presented in Indian Rupees “INR” which is the functional currency and presentation currency of the Company. a. Foreign Currency Transactions: Foreign exchange transactions are recorded in functional currency adopting the exchange rate prevailing on the dates of respective transactions. Monetory items denominated in foreign currencies at the year end are re- measured at the exchange rate prevailing on the balance sheet date. Non monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on restatement is recognised in the statement of Profit and Loss. b. Derivative instruments and hedge accounting: The Company designates certain foreign exchange forward contracts as hedge instruments in respect of foreign exchange risks. These hedges are accounted for as cash flow hedges. Derivatives are initially recognised at fair value on the date a derivative contact is entered into and are subsequently re-measured to their fair value at the end of each reporting period. The use of foreign currency and derivative contracts is governed by the Company’s foreign exchange risk management policy approved by the Board of Directors which provide written directives on the use of such financial derivatives consistent with the Company’s risk management strategy. The company does not use derivative financial instruments for speculative purposes. The hedge instruments are designated and documented as hedges at the inception of the contract. The effectiveness of hedge instruments to reduce the risk associated with the foreign currency exposure that is being hedged is assessed and measured at inception and on an ongoing basis. The ineffective portion of designated hedges are recognised immediately in the Statement of Profit and Loss. The effective portion of change in the fair value of the designated hedging instrument is recognised in the Other Comprehensive Income and accumulated under the heading cash flow hedge reserve. Hedge accounting is discontinued when the hedging instrument expires or is sold terminated or exercised without replacement or rollover as part of hedging strategy or if its designation as a hedge is revoked or when the hedge no longer meets the criteria for hedge accounting. Any gain or loss recognised in Other Comprehensive Income and accumulated in equity till that time remains and is recognised in Statement of Profit and Loss when the forecasted transaction ultimately affects the profit or loss. When a forecasted transaction is no longer expected to occur the cumulative gain or loss accumulated in equity is transferred to the Statement of Profit and Loss. 2.14 Advance/progress payments received Advance/progress payments received from customers in respect of repair work of ships/offshore structures are shown as deduction from the amount of work in progress in respect of income recognized under proportionate completion method. In the case of ship building the advance payment received is adjusted only when the ship is invoiced. 2.15 Provision Contingent Liabilities and Contingent assets A provision is recognised 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. Provision towards guarantee claims in respect of ships/ small crafts delivered wherever provided /maintained is based on technical estimation. For ships delivered guarantee claims are covered by way of insurance policies covering the guarantee period on case to case basis where ever required. Contingent liability is disclosed when the company has a possible obligation or a present obligation and it is probable that a cash flow will not be required to settle the obligation. Contingent assets are not disclosed in the financial statements unless an inflow of economic benefits is probable. 2.16 Revenue Recognition 211

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a Contracts for the construction of ships and small crafts Other than Indigenous Aircraft Carrier The income from ship building is recognized on percentage of completion method in the proportion the cost incurred for the work performed up to the reporting date bear to the estimated total contract cost considering the physical progress or financial progress whichever is lower. Where current estimates of total contract costs and revenue indicate a loss provision is made for the entire loss irrespective of the amount of work done. b Construction of Indigenous Aircraft Carrier In the case of construction of IAC which is partly fixed price basis and partly cost plus basis the income from fixed price is recognised on the percentage of completion method. Mark up from cost plus part of contract activities for materials and design outsourcing are recognised when payments towards the same are made. Cost of materials value of design outsourcing and other expenses incurred for the vessel which are recoverable separately from Navy is charged off to statement of Profit and Loss when materials are consumed/activities are performed/expenses are incurred and are grossed up with the value of work done and recognised as income. c Contracts for repair of ships/ Offshore structures: Income from repair of ships /Offshore structures is recognized based on proportionate completion method when proportionate performance of each ship repair activity exceeds 75 after taking into consideration possible contingencies with reference to the realizable value of work done. The proportionate progress is measured by the Companys technical evaluation of the percentage of physical completion of each job. In the case of ship repair contracts completed and invoices settled during the year income recognized is net of reductions due to price variation admitted. In the case of unsettled invoices the income is recognised net of estimated amount of reductions. Differences if any on settlement are adjusted against income in the year of settlement. d Liquidated damages and interest on advances No income has been recognized on account of 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. e Accounting for insurance claims i Warranty/Builder Risk claims In the case of guarantee defects covered under warranty insurance policies or claims under builders risk Insurance Policies the insurance claims lodged will be recognized in the accounts in the year in which the survey is completed and the probable amount of settlement 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 accounts on settlement of the claims by way of receipt of the amount from the Insurance Company. f Others Dividend income is recognized when the Companys right to receive payment has been established. 2.17 Employee benefits Employee benefits consist of salaries and wages contribution to provident fund superannuation fund gratuity fund compensated absences and towards medical assistance. 212

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Post-employment benefit plans Defined Contribution plans Defined contribution to Employees Pension scheme for eligible employees are made to CSL Superannuation Pension Trust for Executives and Supervisors/CSL Workmen Pension Trust Pension Trusts 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 also makes contribution towards provident fund in substance a defined contribution retirement benefit plan. 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 Employees’ Provident Fund by the Government under para 60 of the Employees’ Provident Fund Scheme 1952 for the reason that the return on investment is less or for any other reason then the deficiency shall be made good by the Company. Having regard to the assets of the fund and the return on the investments the Company does not expect any deficiency as at the year end. The Company also makes contribution towards Employees Medical Assistance Trusts which 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. Defined benefit plans The Company provides for gratuity a defined benefit retirement plan covering eligible employees. The liability or asset recognised 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 annually 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 tenure approximating the tenures 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. 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. 2.18 Borrowing cost General and specific borrowing costs directly attributable to acquisition/ construction or production of qualifying assets net of income earned on temporary deployment of funds are capitalized as part of cost of such assets upto the date when such assets are ready for intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred. 213

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2.19 Leases As a lessee: Leases are classified as finance leases whenever the terms of lease transfer substantially all the risks and rewards of ownership to the lessee. Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. i Operating Lease: Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of the time pattern in which economic benefits from leased assets are consumed or unless the lease agreement explicitly states that increase is on account of inflation ii Finance Lease: Assets taken on lease by the Company in its capacity as lessee where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such leases are capitalised at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognised for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year. 2.20 Prior period adjustment Prior period adjustments due to errors having material impact on the financial affairs of the Company are corrected retrospectively by restating the comparative amounts for prior periods presented in which the error occurred or if the error occurred before the earliest period presented by restating the opening statement of financial position. 2.21 Taxes on Income 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 recognised in Statement of Profit and Loss except when they relate to items that are recognised in other comprehensive income or directly in equity in which case the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Current tax Current tax is measured at the amount of tax expected to be payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act 1961.Current tax assets and current tax liabilities are off set 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. Deferred tax Deferred income tax is recognised using the Balance Sheet approach. Deferred income 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 income 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. 214

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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. 2.22 Earnings Per Share Basic and Diluted Earnings per share is calculated by dividing the net profit attributable to equity shareholders by the weighted average number of equity shares/dilutive potential equity shares outstanding as at the end of the reporting period as the case may be. 2.23 Segment Reporting 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 Repair of Ships/offshore structures. 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”. 2.24 Cash flow statement Cash Flows are reported using the Indirect Method whereby profit/loss before tax is adjusted for the effect of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments and items of income or expenses associated with investing or financial cash flows. Cash flows from operating investing and financial activities of the Company are segregated based on the available information. For the purpose of cash flow statement Cash and cash equivalent comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less which are subject to an insignificant risk of changes in value net of outstanding bank overdrafts if any. Bank overdrafts are disclosed within borrowings in current liabilities in the Balance Sheet 2.25 Dividend to equity shareholders Dividend to equity shareholders is recognised as a liability and deducted from shareholders’ equity in the period in which the dividends are approved by the equity shareholders in the general meeting. 2.26 Recent accounting pronouncements - Standards issued but not yet effective Standards issued but not yet effective in March 2017 the Ministry of Corporate Affairs issued the Companies Indian Accounting Standards Amendments Rules 2017 notifying amendments to Ind AS 7 ‘Statement of Cash Flows’ and Ind AS 102 ‘Share-based payment.’ These amendments are in accordance with the recent amendments made by International Accounting Standards Board IASB to IAS 7 ‘Statement of Cash Flows’ and IFRS 2 ‘Share-based payment’ respectively. The amendments are applicable from 1 st April 2017. Amendment to Ind AS 7: The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities including both changes arising from cash flows and non-cash changessuggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities to meet the disclosure requirement. 215

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The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated. Amendment to Ind AS 102: The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards modification of cash settled awards and awards that include a net settlement feature in respect of withholding taxes. It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values’ but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction the transaction is accounted for as such from the date of the modification. Further the amendment requires the award that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement. The requirements of the amendment have no impact on the financial statements as the standard is not applicable to the Company. 3. Explanation of transition to Ind AS As stated in Note No.2.1 the Companys financial statements for the year ended 31 st Mar 2017 are the first annual financial statements prepared by the Company in order to comply with Ind AS. The adoption of Ind AS was carried out in accordance with Ind AS 101 using 1 st April 2015 as the transition date.The transition was carried out from previous GAAP based on the AS framework to Ind AS. The exemptions and exceptions applied by the Company in accordance with Ind AS 101 First–time Adoption of Indian Accounting Standards the reconciliations of equity and total comprehensive income in accordance with Previous GAAP to Ind AS are explained below. The following reconciliations provide a quantification of the effect of significant differences arising from the transition from the previous GAAP to Ind AS as required under Ind AS 101. 216

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First Time Ind AS adoption reconciliation 3.1 Effect of Ind AS adoption on the Restated Summary Statement of Assets and Liabilities as at 31 st March 2016 and 1 st April 2015 ₹ in millions Particulars Not es As at 31 st Mar 2016 Latest period presented under previous GAAP As at 1 st April 2015 Date of Transition As per Restated Previous GAAP Effect of Ind AS Transition As per Restated Ind AS Balance sheet As per Restated Previous GAAP Effect of Ind AS Transiti on As per RestatedIn d AS Balance sheet ASSETS 1 Non-current assets a Property Plant and Equipment 2964.39 2964.39 2894.37 0.00 2894.37 b Capital work-in-progress 241.72 241.72 127.79 0.00 127.79 c Intangible assets 737.80 - 737.80 806.60 0.00 806.60 d Financial Assets i Investments 0.92 0.92 1.92 0.00 1.92 ii Trade receivables h 339.96 18.61 321.35 326.49 30.51 295.98 iii Loans f 13.66 1.58 15.24 12.80 1.18 13.98 iv Other Financial assets 1655.30 1655.30 e Income tax assets net 266.64 266.64 250.13 0.00 250.13 f Deferred tax assets net 326.21 4.12 322.09 226.16 10.56 236.72 g Other non-current assets f 101.96 3.54 98.42 97.97 2.18 95.79 2 Current assets a Inventories 2316.91 2316.91 3033.84 0.00 3033.84 b Financial Assets - i Trade receivables 4540.98 4540.98 5825.37 0.00 5825.37 ii Cash and cash equivalents 5114.71 5114.71 4565.97 0.00 4565.97 iii Bank balances other than ii above 13089.42 13089.42 9628.50 0.00 9628.50 iv Loans 4.03 4.03 4.35 0.00 4.35 v Other Financial assets 1192.38 1192.38 324.35 0.00 324.35 c Other current assets 606.31 606.31 807.19 0.00 807.19 Total Assets 33513.30 24.69 33488.61 28933.80 20.95 28912.85 217

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Particulars Not es As at 31 st Mar 2016 Latest period presented under previous GAAP As at 1 st April 2015 Date of Transition As per Restated Previous GAAP Effect of Ind AS Transition As per Restated Ind AS Balance sheet As per Restated Previous GAAP Effect of Ind AS Transiti on As per Restated Ind AS Balance sheet EQUITY AND LIABILITIES EQUITY a Equity Share capital 1132.80 1132.80 1132.80 0.00 1132.80 b Other Equity bf g h 16076.86 1032.38 17109.24 14230.17 176.32 14406.49 LIABILITIES 1 Non-current liabilities a Financial Liabilities i Borrowings 1230.00 1230.00 1230.00 0.00 1230.00 ii Other financial liabilities 26.12 26.12 26.12 0.00 26.12 b Provisions 189.65 189.65 193.22 0.00 193.22 2 Current liabilities a Financial Liabilities i Trade payables 2098.77 2098.77 1709.84 0.00 1709.84 ii Other financial liabilities 1644.42 1644.42 1209.63 0.00 1209.63 b Other current liabilities 7723.00 7723.00 6472.46 0.00 6472.46 c Provisions b 3193.72 1043.01 2150.71 2486.64 204.51 2282.13 Current Tax Liabilities Net g 197.96 14.06 183.90 242.92 7.24 250.16 Total Equity and Liabilities 33513.30 24.69 33488.61 28933.80 20.95 28912.85 218

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3.2 Total equity reconciliation as at 31 st March 2016 and 1 st April 2015 Particulars Notes As at 31 st Mar2016 Latest period presented under previous GAAP As at 1 st April 2015 Date of Transition ₹ in millions Total Equity under Previous GAAP Audited 17321.50 15610.67 Restatement Adjustments 111.84 247.70 Total Equity under previous GAAP restated 17209.66 15362.97 Reversal of proposed Dividend and Dividend Distribution Tax b 1043.01 204.51 Impact of Fair valuation of Security Deposit through Profit or Loss FVTPL f 1.96 1.00 Provision for Expected credit loss of Trade Receivables h 18.61 30.51 Income Tax on adjustments g 14.06 7.24 Deferred Tax on Ind AS Adjustments g 4.12 10.56 Total Equity under Ind AS 18242.04 15539.29 219

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3.3 Effect of Ind AS adoption on the Restated Summary statement of Profit and Loss for the year ended 31 st March 2016. ₹ in millions Particulars Notes For the year ended 31 st Mar 2016 Latest period presented under previous IGAAP As perRestated Previous GAAP Effect of Ind AS Transition As per Restated Ind AS Balance sheet I Income Revenue from operations 19900.07 19900.07 Other income f 1068.34 0.40 1068.74 Total Income 20968.41 0.40 20968.81 II Expenses: Cost of materials consumed 10543.22 10543.22 Changes in inventories of work-in-progress 164.41 164.41 Sub contract and other direct expenses 1916.65 1916.65 Employee benefits expense c d 2108.42 17.67 2090.75 Finance costs 119.40 119.40 Depreciation and amortisation expense 371.93 371.93 Other expenses c e f 1425.06 0.36 1425.42 Provision for anticipated losses and expenditure h 181.23 11.90 169.33 Total expenses 16501.50 29.21 16472.29 III Profit before tax 4466.91 29.61 4496.52 IV Tax expense: 1 Current tax g 1673.54 9.17 1664.37 2 Deferred tax g 89.49 4.12 85.37 V Profit for the year 2882.86 34.66 2917.52 220

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Particulars Notes For the year ended 31 st Mar 2016 Latest period presented under previous IGAAP As per Restated Previous GAAP Effect of Ind AS Transition As per Restated Ind AS Balance sheet VI Other comprehensive income A Items that will be reclassified to profit or loss i Effective portion of gains/losses on cash flow hedging instruments c 0.00 3.55 3.55 ii Income tax relating to items that will be reclassified to profit or loss g 0.00 1.23 1.23 B Items that will not be reclassified to profit or loss i Remeasurements of post employment benefit obligations c d 0.00 17.67 17.67 ii Changes in fair value of FVTOCI equity instruments c e 0.00 1.00 1.00 iii Income tax relating to items that will not be reclassified to profit or loss g 0.00 6.12 6.12 Other comprehensive income for the year 0.00 10.23 10.23 VII Total Comprehensive Income for the year 2882.86 24.43 2907.29 221

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3.4 Total Comprehensive income reconciliation for the year ended 31 st March 2016 ₹ in millions Particulars Notes For the year ended 31 st Mar2016 Latest period presented under previous GAAP Profit as reported under previous GAAP 2750.31 Restatement Adjustments 132.55 Profit as per Restated GAAP 2882.86 Impact of Fair valuation of Security Deposit through Profit or Loss FVTPL f 0.96 Provision for Expected credit loss of Trade Receivables h 11.9 Reclassification of diminution in carrying value of investments to Other Comprehensive Income OCI c e 1.00 Reclassification of actuarial gains / losses arising in respect of employee benefit schemes to Other Comprehensive Income OCI c d 17.67 Tax Adjustments g 5.05 Profit After Tax as reported under Ind AS 2917.52 Other Comprehensive Income net of tax c 10.23 Total Comprehensive Income as reported under Ind AS 2907.29 Note: Under previous GAAPtotal Comprehensive income was not reported.Therefore the above reconciliation starts with profit under the previous GAAP. 222

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3.5 Effect of Ind AS adoption on the Restated Summary statement of Cash Flows for the Year ended 31 st March 2016 There are no material adjustments to the statement of cash flows as reported under Previous GAAP Notes to Reconciliation between previous GAAP and Ind AS a Deemed Cost The Company has elected to consider the carrying value of Property Plant and Equipment PPE and Intangible asset as deemed cost as at the date of transition. b Dividend Including dividend tax Under the previous GAAP dividends proposed by the Board of directors after the Balance sheet date but before the approval of the financial statements were considered as adjusting events Accordingly the provision for proposed dividend was recognised as a liability. Under Ind AS such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly the liability for proposed dividend including dividend distribution tax of ₹ 1043.01millionsas at 31 st March 2016 ₹ 204.51 millions as at 1 st April 2015 included under provisions have been reversed with corresponding adjustment to retained earnings. Consequently the total equity has increased by an equivalent amount. c Other Comprehensive Income OCI Under Ind AS all items of income and expense recognised in a period should be included in profit or loss for the period unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income includes remeasurements of defined benefit plans effective portion of gains and losses on cash flow hedging instruments and fair value gains or losses on FVTOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP. d Employee benefits Under previous GAAP actuarial gains and losses were recognized in statement of profit and loss. Under Ind AS the actuarial gains and losses form part of remeasurement of net defined benefit liability/asset which is recognized in other comprehensive income in the respective periods. This has resulted in increase in net profit by ₹ 17.67 millions for year ended 31 st March 2016. However the same does not result in difference in equity or total comprehensive income. e Investments Under previous GAAP current investments were measured at lower of cost or fair value and long term investments were measured at cost less diminution in value which is other than temporary under Ind AS Financial assets other than amortized cost are subsequently measured at fair value. Fair value changes with respect to investments in equity instruments designated as at fair value through other comprehensive income have been recognised in the other comprehensive income for the year ended 31 st March 2016. Consequent to the above profit for the year ended 31 st March 2016 increased by ₹ 1.00 million. However there is no change in other equity. f Security Deposit Under the previous GAAP interest free lease security deposits that are refundable in cash on completion of the lease term are recorded at their transaction value. Under Ind AS all financial assets are required to be recognised at fair value. Accordingly the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent. Consequent to this change the amount of security deposits decreased by ₹ 38.77 millions as at 31 st March 2016 ₹ 39.17 millions as on 1 st April 2015. The prepaid rent increased by ₹ 36.80 millions as at 31 st March 2016₹ 38.17 millions as on 1 st April 2015. The profit for the year decreased by ₹ 0.96 millions due to amortisation of the prepaid rent of ₹ 1.36 millions which is partially off-set by the notional interest income of ₹ 0.40 millions recognised on security deposits. 223

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g Tax adjustments Tax adjustments include current tax and deferred tax impact on account of differences between previous GAAP and Ind AS. These adjustments has resulted in an increase in equity and Total Comprehensive Income under Ind AS by ₹ 9.94 millions as at 31 st March 2016 h Expected credit Loss The Company recognises lifetime expected credit losses for all trade receivables that do not constitute a financing transaction. Impairment loss allowance is based on a simplified approach as permitted by Ind AS 109. As a practical expedient the company uses a provision matrix to determine the impairment loss on the portfolio of its trade receivables. 3.6 Total Equity Reconciliation as at 31 st March 2015 –Proforma The Proforma financial information of the Company as at and for the year ended 31 st March 2015 is prepared in accordance with requirements of SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/4 dated 31 st March 2016 “SEBI Circular”. As envisaged by the SEBI Circular the Company has followed the same accounting policy choices both mandatory exceptions and optional exemptions availed as per Ind AS 101 as initially adopted on its Ind AS transition date i.e. 1 st April 2015 while preparing the proforma financial information for the FY 2014-15 and accordingly suitable restatement adjustments in the accounting heads has been made in the proforma financial information. This proforma Ind AS financial information have been prepared by making Ind AS adjustments to the audited Indian GAAP financial statements as at and for the year ended 31 st March 2015 as described in this Note.The impact of Ind AS 101 on the equity under Indian GAAP as at 31 st March 2015 and the impact on the profit or loss for the year ended 31 st March 2015 due to the Ind- AS principles applied on proforma basis during the year ended 31 st March 2015 can be explained as under: Particulars Notes As at 31 st March 2015 Proforma ₹ in millions Total Equity under Previous GAAP Audited 15610.67 Restatement Adjustments 247.70 Total Equity under previous GAAP restated 15362.97 Dividendsincluding dividend distribution tax not recognised as liability until declared under Ind AS b 204.51 Impact of Fair valuation of Security Deposit through Profit or Loss FVTPL e 1.00 Provision for Expected credit loss of Trade Receivables f 30.51 Income Tax on adjustments g 7.24 Deferred Tax on Ind AS Adjustments g 10.56 Total Equity under Ind AS 15539.29 224

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3.7 Effect of proforma Ind AS adjustments on the Statement of Assets and Liabilities as at 31 st March 2015 ₹ in millions Particulars Notes As at 31 st March 2015 Proforma As per Restated Previous GAAP Effect of Ind AS Transition As per Restated Ind AS Balance sheet ASSETS 1 Non-current assets a Property Plant and Equipment 2894.37 0.00 2894.37 b Capital work-in-progress 127.79 0.00 127.79 c Intangible assets 806.60 0.00 806.60 d Financial Assets i Investments 1.92 0.00 1.92 ii Trade receivables f 326.49 30.51 295.98 iii Loans e 12.80 1.18 13.98 iv Other Financial assets e Income tax assets net 250.13 0.00 250.13 f Deferred tax assets net 226.16 10.56 236.72 g Other non-current assets e 97.97 2.18 95.79 2 Current assets a Inventories 3033.84 0.00 3033.84 b Financial Assets - i Trade receivables 5825.37 0.00 5825.37 ii Cash and cash equivalents 4565.97 0.00 4565.97 iii Bank balances other than ii above 9628.50 0.00 9628.50 iv Loans 4.35 0.00 4.35 v Other Financial assets 324.35 0.00 324.35 c Other current assets 807.19 0.00 807.19 Total Assets 28933.80 20.95 28912.85 225

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Particulars Notes As at 31 st March 2015 Proforma As per Restated Previous GAAP Effect of Ind AS Transition As per Restated Ind AS Balance sheet EQUITY AND LIABILITIES EQUITY a Equity Share capital 1132.80 0.00 1132.80 b Other Equity e fb g 14230.17 176.32 14406.49 LIABILITIES 1 Non-current liabilities a Financial Liabilities i Borrowings 1230.00 0.00 1230.00 ii Other financial liabilities 26.12 0.00 26.12 b Provisions 193.22 0.00 193.22 2 Current liabilities a Financial Liabilities i Trade payables 1709.84 0.00 1709.84 ii Other financial liabilities 1209.63 0.00 1209.63 b Other current liabilities 6472.46 0.00 6472.46 c Provisions b 2486.64 204.51 2282.13 Current Tax Liabilities Net g 242.92 7.24 250.16 Total Equity and Liabilities 28933.80 20.95 28912.85 226

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3.8 Effect of proformaInd AS adjustments on the Statement of Profit and Loss for the year ended 31 st March 2015 ₹ in millions Particulars Notes For the year ended 31 st Mar 2015 Proforma As per Restated Previous GAAP Effect of Ind AS Transition As per Restated Ind AS Balance sheet I Income Revenue from operations 15832.61 15832.61 Other income e 770.73 1.18 771.91 Total Income 16603.34 1.18 16604.52 II Expenses: Cost of materials consumed 10008.08 10008.08 Changes in inventories of work-in- progress 192.25 192.25 Sub contract and other direct expenses 1597.83 1597.83 Employee benefits expense c d 2157.51 29.05 2128.46 Finance costs 183.22 183.22 Depreciation and amortisation expense 376.98 376.98 Other expenses e 1127.56 2.18 1129.74 Provision for anticipated losses and expenditure f 237.51 30.51 268.02 Total expenses 15496.44 3.64 15500.08 III Profit before tax 1106.90 2.46 1104.44 IV Tax expense: 1 Current tax g 475.75 9.53 485.28 2 Deferred tax g 63.10 10.56 73.66 V Profit for the year 694.25 1.43 692.82 227

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Particulars Notes For the year ended 31 st Mar 2015 Proforma As per Restated Previous GAAP Effect of Ind AS Transition As per Restated Ind AS Balance sheet VI Other comprehensive income A Items that will be reclassified to profit or loss i Effective portion of gains/losses on cash flow hedging instruments c 0.00 22.29 22.29 ii Income tax relating to items that will be reclassified to profit or loss g 0.00 7.58 7.58 B Items that will not be reclassified to profit or loss i Remeasurements of post employment benefit obligations c d 0.00 29.05 29.05 ii Changes in fair value of FVTOCI equity instruments 0.00 - iii Income tax relating to items that will not be reclassified to profit or loss g 0.00 9.87 9.87 Other comprehensive income for the year 0.00 4.47 4.47 VII Total Comprehensive Income for the year 694.25 5.90 688.35 228

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3.9 Total Comprehensive Income reconciliation for the year ended 31 st March 2015 Particulars Notes For the year ended 31 st Mar2015 Proforma ₹in millions Profit as reported under previous GAAP 2350.66 Restatement Adjustments 1656.41 Profit as per Restated GAAP 694.25 Impact of Fair valuation of Security Deposit through Profit or Loss FVTPL e 1.00 Reclassification of actuarial gains / losses arising in respect of employee benefit schemes to Other Comprehensive Income OCI cd 29.05 Provision for Expected credit loss of Trade Receivables f 30.51 Tax Adjustments g 1.03 Profit After Tax as reported under Ind AS 692.82 Other Comprehensive Income net of tax c 4.47 Total Comprehensive Income as reported under Ind AS 688.35 3.10 Effect of Ind AS adoption on the Restated Summary statement of Cash Flows for the Year ended 31 st March 2016 There are no material adjustments to the statement of cash flows as reported under Previous GAAP Notes to Proforma adjustments: a Deemed Cost The Company has elected to consider the carrying value of Property Plant and Equipment PPE and Intangible asset as deemed cost as at the date of transition. b Dividend Including dividend tax Under the previous GAAP dividends proposed by the Board of directors after the Balance sheet date but before the approval of the financial statements were considered as adjusting events Accordingly the provision for proposed dividend was recognised as a liability. Under Ind AS such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly the liability for proposed dividend including dividend distribution tax of ₹ 204.51 millionsas at 31 st March 2015 included under provisions have been reversed with corresponding adjustment to retained earnings. Consequently the total equity has increased by an equivalent amount. c Other Comprehensive Income OCI Under Ind AS all items of income and expense recognised in a period should be included in profit or loss for the period unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income includes remeasurements of defined benefit plans effective portion of gains and losses on cash flow hedging instruments and fair value gains or losses on FVTOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP. d Employee benefits Under previous GAAP actuarial gains and losses were recognized in statement of profit and loss. Under Ind AS the actuarial gains and losses form part of remeasurement of net defined benefit liability/asset which is recognized in other comprehensive income in the respective periods. This has resulted in increase in net profit by ₹ 29.05 millions for year ended 31 st March 2015. However the same does not result in difference in equity or total comprehensive income. 229

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e Security Deposit Under the previous GAAP interest free lease security deposits that are refundable in cash on completion of the lease term are recorded at their transaction value. Under Ind AS all financial assets are required to be recognised at fair value. Accordingly the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent. Consequent to this change the amount of security deposits decreased by ₹ 39.17 millions as on 31 st March 2015. The prepaid rent increased by ₹ 38.17 millions as on 31 st March 2015. The profit for the year and total equity as at 31 st March 2015 decreased by ₹ 1.00 million due to amortisation of the prepaid rent of ₹ 2.18 millions which is partially off-set by the notional interest income of ₹ 1.00 million recognised on security deposits. f Expected credit Loss The Company recognises lifetime expected credit losses for all trade receivables that do not constitute a financing transaction. Impairment loss allowance is based on a simplified approach as permitted by Ind AS 109. As a practical expedient the company uses a provision matrix to determine the impairment loss on the portfolio of its trade receivables. g Tax adjustments Tax adjustments include current tax and deferred tax impact on account of differences between previous GAAP and Ind AS. These adjustments has resulted in an increase in equity and Total Comprehensive Income under Ind AS by ₹ 3.32 millions as at 31 st March 2015 230

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ANNEXURE V2: OTHER NOTES TO FINANCIAL INFORMATION Note 4 Restated Summary Statement of Property Plant and Equipments As at 31st Mar 2017 ₹ in Millions Gross carrying amount Depreciation Net Carrying amount Particulars As at 1st April 2016 Additions/ adjustments during the year Disposal/ adjustment s during the year As at 31st March 2017 As at 1st April 2016 For the year Adjust ment/ withdr awal As at 31st March 2017 As at 31st March 2017 As at 31st March 2016 Owned Assets Land Freehold 58.76 - - 58.76 - - - - 58.76 58.76 Buildings 1228.52 113.73 0.20 1342.05 442.11 42.52 0.12 484.51 857.54 786.41 Plant and equipment 2666.66 168.37 23.70 2811.33 1283.54 138.68 20.02 1402.20 1409.13 1383.12 Furniture and fixtures 90.29 21.45 0.88 110.86 37.92 9.00 0.85 46.07 64.79 52.37 Vehicles 79.64 12.35 1.57 90.42 62.24 4.39 1.39 65.24 25.18 17.40 Office equipment 25.37 2.85 0.79 27.43 13.47 3.73 0.74 16.46 10.97 11.90 Others - - - - - - Data Processing Equipments 113.42 16.28 0.67 129.03 72.26 17.12 0.62 88.76 40.27 41.16 Docks and quays 1022.69 - - 1022.69 610.52 29.94 - 640.46 382.23 412.17 Railway sidings 2.21 - - 2.21 2.10 - - 2.10 0.11 0.11 Electrical installation 206.41 20.05 - 226.46 129.88 22.84 - 152.72 73.74 76.53 Drainage and water supply 13.35 - - 13.35 12.67 - - 12.67 0.68 0.68 Vessels 17.74 - 13.61 4.13 14.09 0.21 11.98 2.32 1.81 3.65 Books 1.32 - - 1.32 1.32 - - 1.32 - - Sub Total 5526.38 355.08 41.42 5840.04 2682.12 268.43 35.72 2914.83 2925.21 2844.26 Leased Assets Buildings 132.53 7.28 42.12 97.69 26.28 10.03 5.89 30.42 67.27 106.25 Plant and equipment 24.19 0.87 - 25.06 17.80 1.25 - 19.05 6.01 6.39 Docks and quays 2.50 - - 2.50 2.31 0.06 - 2.37 0.13 0.19 Electrical installation 9.72 24.69 - 34.41 2.42 2.08 - 4.50 29.91 7.30 Sub Total 168.94 32.84 42.12 159.66 48.81 13.42 5.89 56.34 103.32 120.13 Total 5695.32 387.92 83.54 5999.70 2730.93 281.85 41.61 2971.17 3028.53 2964.39 231

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Restated Summary Statement of Property Plant and EquipmentsAs at 31st Mar 2016 ₹ in Millions Particulars Deemed cost as at 1st April 2015 Additions/ adjustments during the year Dispos al/ adjustm ents during the year As at 31st March 2016 As at 1st April 2015 For the year Adjust ment/ withdr awal As at 31st March 2016 As at 31st March 2016 As at 31st March 2015 Land Freehold 59.32 - 0.56 58.76 - - - - 58.76 59.32 Buildings 1167.91 60.61 0.00 1228.52 404.38 37.73 0.00 442.11 786.41 763.53 Plant and equipment 2462.36 206.46 2.16 2666.66 1152.28 133.28 2.02 1283.54 1383.12 1310.08 Furniture and fixtures 75.00 16.42 1.13 90.29 31.27 7.59 0.94 37.92 52.37 43.73 Vehicles 76.71 3.03 0.10 79.64 57.01 5.32 0.09 62.24 17.40 19.70 Office equipment 19.59 6.96 1.18 25.37 10.73 3.78 1.04 13.47 11.90 8.86 Others - - - - - Data Processing Equipments 111.01 3.72 1.31 113.42 57.92 15.45 1.11 72.26 41.16 53.09 Docks and quays 1027.22 - 4.53 1022.69 580.04 34.79 4.31 610.52 412.17 447.18 Railway sidings 2.21 - - 2.21 2.10 - - 2.10 0.11 0.11 Electrical installation 190.42 18.47 2.48 206.41 110.62 21.62 2.36 129.88 76.53 79.80 Drainage and water supply 13.35 - - 13.35 12.67 - - 12.67 0.68 0.68 Vessels 15.88 1.86 - 17.74 13.99 0.10 - 14.09 3.65 1.89 Books 1.32 - - 1.32 1.32 - - 1.32 - - Sub Total 5222.30 317.53 13.45 5526.38 2434.33 259.66 11.87 2682.12 2844.26 2787.97 Leased Assets Buildings 106.42 26.11 - 132.53 16.95 9.33 - 26.28 106.25 89.47 Plant and equipment 24.17 0.02 - 24.19 16.47 1.33 - 17.80 6.39 7.70 Docks and quays 2.50 - - 2.50 1.54 0.77 - 2.31 0.19 0.96 Electrical installation 9.72 - - 9.72 1.45 0.97 - 2.42 7.30 8.27 Sub Total 142.81 26.13 - 168.94 36.41 12.40 - 48.81 120.13 106.40 Total 5365.11 343.66 13.45 5695.32 2470.74 272.06 11.87 2730.93 2964.39 2894.37 232

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Restated Summary Statement of Property Plant and EquipmentsAs at 31st Mar 2015 Proforma ₹ in Millions Gross carrying amount Depreciation Net Carrying amount Particulars Deemed cost as at 1st April 2014 Additions/ adjustments during the year Dispos al/ adjustm ents during the year As at 31st March 2015 As at 1st April 2014 For the year Adjust ment/ withdr awal As at 31st March 2015 As at 31st March 2015 As at 31st March 2014 Land Freehold 56.36 2.96 - 59.32 - - - - 59.32 56.36 Buildings 1130.57 37.51 0.17 1167.91 369.67 34.82 0.11 404.38 763.53 760.90 Plant and equipment 2347.08 115.69 0.41 2462.36 1010.11 142.46 0.29 1152.28 1310.08 1336.97 Furniture and fixtures 60.60 14.62 0.22 75.00 25.56 5.93 0.22 31.27 43.73 35.04 Vehicles 75.27 1.45 0.01 76.71 47.54 9.48 0.01 57.01 19.70 27.73 Office equipment 18.60 1.67 0.68 19.59 7.29 4.08 0.64 10.73 8.86 11.31 Others - - - Data Processing Equipments 96.85 19.40 5.24 111.01 48.88 14.22 5.18 57.92 53.09 47.97 Docks and quays 1027.22 - - 1027.22 543.52 36.52 - 580.04 447.18 483.70 Railway sidings 2.21 - - 2.21 2.10 - - 2.10 0.11 0.11 Electrical installation 175.48 14.94 - 190.42 88.34 22.28 - 110.62 79.80 87.14 Drainage and water supply 13.35 - - 13.35 9.84 2.83 - 12.67 0.68 3.51 Vessels 15.88 - - 15.88 13.91 0.08 - 13.99 1.89 1.97 Books 1.32 - - 1.32 1.32 - - 1.32 - 0.00 Sub Total 5020.79 208.24 6.73 5222.30 2168.08 272.70 6.45 2434.33 2787.97 2852.71 Leased Assets Buildings 107.25 - 0.83 106.42 8.14 9.20 0.39 16.95 89.47 99.11 Plant and equipment 24.55 - 0.38 24.17 14.49 2.32 0.34 16.47 7.70 10.06 Docks and quays 2.50 - - 2.50 0.77 0.77 - 1.54 0.96 1.73 Electrical installation 9.46 0.26 - 9.72 0.49 0.96 - 1.45 8.27 8.97 Sub Total 143.76 0.26 1.21 142.81 23.89 13.25 0.73 36.41 106.40 119.87 Total 5164.55 208.50 7.94 5365.11 2191.97 285.95 7.18 2470.74 2894.37 2972.58 233

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Note 5 Restated Summary Statement of Capital work -in -progress Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Plant and machinery Buildings and Civil works 529.99 229.57 94.51 Construction materials 9.24 12.15 32.29 Capital goods in transit - - 0.99 Total 539.23 241.72 127.79 Note 6 : Restated Summary Statement of Intangible Assets As at 31st Mar 2017 ₹ in Millions Gross carrying amount Amortisation Net Carrying amount As at 1st April 2016 Additions/ adjustments during the year Disposal/ adjustme nts during the year As at 31st March 2017 As at 1st April 2016 For the year Adjustm ent/ withdra wal As at 31st March 2017 As at 31st March 2017 As at 31st March 2016 Internally generated weld procedure 2.77 - 2.77 0.15 0.93 - 1.08 1.69 2.62 Computer software 173.71 16.37 - 190.08 113.53 50.65 - 164.18 25.90 60.18 Right to use - land and ship repair facility 750.00 - 750.00 75.00 25.00 - 100.00 650.00 675.00 926.48 16.37 - 942.85 188.68 76.58 - 265.26 677.59 737.80 234

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Restated Summary Statement of Intangible Assets As at 31st Mar 2016 ₹ in Millions Gross carrying amount Amortisation Net Carrying amount Deemed cost as at 1st April 2015 Additions/ adjustmen ts during the year Disposal/ adjustments during the year As at 31st March 2016 As at 1st April 2015 For the year Adjust ment/ withdr awal As at 31st March 2016 As at 31st March 2016 As at 31st March 2015 Internally generated weld procedure - 2.77 - 2.77 - 0.15 - 0.15 2.62 - Computer software 172.36 1.35 - 173.71 65.76 47.77 - 113.53 60.18 106.60 Right to use - land and ship repair facility 750.00 - - 750.00 50.00 25.00 - 75.00 675.00 700.00 922.36 4.12 - 926.48 115.76 72.92 - 188.68 737.80 806.60 Restated Summary Statement of Intangible Assets As at 31st Mar 2015Proforma ₹ in Millions Gross carrying amount Amortisation Net Carrying amount Deemed cost as at 1st April 2014 Additions/ adjustments during the year Disposal/ adjustments during the year As at 31st March 2015 As at 1st April 2014 For the year Adjustment/ withdrawal As at 31st March 2015 As at 31st March 2015 As at 31st March 2014 Computer software 33.21 139.23 0.08 172.36 29.83 36.01 0.08 65.76 106.60 3.38 Right to use - land and ship repair facility 750.00 - - 750.00 25.00 25.00 - 50.00 700.00 725.00 783.21 139.23 0.08 922.36 54.83 61.01 0.08 115.76 806.60 728.38 235

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Note 7 Restated Summary Statement of Investments-Non Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Unquoted equity instruments Investments carried at Fair value through Other Comprehensive Income FVTOCI Cochin Shipyard Employees Consumer Co-operative Society Limited 2175 B Class shares of ₹ 100 each 0.22 0.22 0.22 Kerala Enviro Infrastructure Limited 70000 equity shares of ₹ 10 each fully paid up 0.70 0.70 0.70 Cochin Waste to Energy Private Limited -100000 equity shares of ₹ 10 each fully paid up 1.00 1.00 1.00 Less diminution in value of Investment Cochin Waste to Energy Private Limited 1.00 1.00 - Total 0.92 0.92 1.92 Aggregate value of unquoted investment 1.92 1.92 1.92 Aggregate value of impairment in value of investment 1.00 1.00 - Note 8 Restated Summary Statement of Trade receivables - Non Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Trade receivables-Unsecured Considered good - 321.35 295.98 Considered doubtful - 493.64 457.48 Less: Allowance for doubtful debts Expected credit loss allowance - 493.64 457.48 Total - 321.35 295.98 236

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Note 9 Restated Summary Statement of Loans - Non Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Unsecured considered good: Security deposits 5.59 5.17 4.77 Employee advances Loans to related parties 0.23 0.17 0.00 Other employees 8.72 9.90 9.21 Total 14.54 15.24 13.98 Note 10 Restated Summary Statement of Other Financial Assets - Non Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Bank deposits with maturity period more than 12 months - 1655.30 - Total - 1655.30 - Note 11 Restated Summary Statement of Income tax assets / liabilities net Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Non current tax assets Advance income tax net of provisions 360.13 266.64 250.13 Current tax assets Advance income tax net of provisions 169.47 - - Current tax liability Provision for current tax net of advance tax - 183.90 250.16 237

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Income tax recognised in profit or loss ₹ in Millions Particulars For the year ended 31 st March 2017 For the year ended 31 st March 2016 For the year ended 31 st March 2015 Proforma Current tax: In respect of current year 1601.14 1664.37 485.28 Total A 1601.14 1664.37 485.28 Deferred tax: In respect of current year 78.75 85.37 73.66 Total B 78.75 85.37 73.66 Income tax expense recognised in the Statement of Profit and Loss A+B 1679.89 1579.00 411.62 The income tax expense for the year can be reconciled to the accounting profit as follows:- ₹ in Millions Particulars For the year ended 31 st March 2017 For the year ended 31 st March 2016 For the year ended 31 st March 2015 Proforma Profit before tax 4801.71 4496.52 1104.44 Income tax expense calculated 34.608/33.99 1661.79 1556.16 375.41 Effect of expenses that are not deductible in determining taxable profit 347.03 375.73 395.65 Effect of expenses that are allowable in determining taxable profit 529.77 216.29 208.56 Effect of Expenses incurred on Corporate Social Responsibility not deductible in determining taxable profit 25.04 17.97 15.09 Effect of income that is exempt from taxation 3.59 0.02 0.04 Others 100.64 69.18 92.27 1601.14 1664.37 485.28 Adjustments for changes in estimates of deferred tax assets 78.75 85.37 73.66 Income tax expense recognised in the Statement of Profit and Loss 1679.89 1579.00 411.62 238

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Note 12 Restated Summary Statement of Deferred Tax as at 31 st Mar 2017 Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Deferred tax liabilities 414.88 420.33 404.22 Deferred tax assets 658.22 742.42 640.94 Total 243.34 322.09 236.72 Deferred tax liabilities/assets in relation to 2016-17 Particulars Opening balance Recognised in Statement of Profit and Loss Closing Balance ₹ in Millions Provisions 626.15 213.42 412.73 Property plant and equipment 420.33 5.45 414.88 Others 116.27 129.22 245.49 Total 322.09 78.75 243.34 Deferred tax liabilities/assets in relation to 2015-16 Particulars Opening balance Recognised in Statement of Profit and Loss Closing Balance ₹ in Millions Provisions 468.00 158.15 626.15 Property plant and equipment 404.22 16.11 420.33 Others 172.94 56.67 116.27 Total 236.72 85.37 322.09 Deferred tax liabilities/assets in relation to 2014-15 Proforma Particulars Opening balance Recognised in Statement of Profit and Loss Closing Balance ₹ in Millions Provisions 267.60 200.40 468.00 Property plant and equipment 378.71 25.51 404.22 Others 274.17 101.23 172.94 Total 163.06 73.66 236.72 239

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Note 13 Restated Summary Statement of Other non-current assets Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Unsecured considered good Capital advances 167.45 19.13 15.71 Advances other than capital advances: Security deposits 16.78 15.20 14.62 Advance rentals to Cochin Port Trust 35.44 36.80 38.17 Deposits with Customs department 26.12 27.29 27.29 Total 245.79 98.42 95.79 240

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Note 14 Restated Summary Statement of Inventories Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Raw Materials and components At lower of weighted average cost or net realisable value 570.77 590.33 2194.91 Less : Provision for obsolescence non-usability deterioration and reduction in value of inventory 46.74 45.78 40.33 Goods-in transit At lower of cost or net realisable value 32.74 110.98 31.80 556.77 655.53 2186.38 Work-in-progress Valued at cost 879.48 739.93 575.52 Work-in-progress Valued at net realisable value 264.98 772.46 113.91 1144.46 1512.39 689.43 Stores Spares At lower of weighted average cost or net realisable value 63.78 51.70 48.61 Less : Provision for obsolescence non-usability deterioration and reduction in value of inventory 1.38 1.86 1.86 Goods-in transit At lower of weighted average cost or net realisable value 1.48 6.43 0.02 63.88 56.27 46.77 Loose Tools At cost 89.33 81.96 90.86 Scrap Valued at net realisable value 10.26 10.76 20.40 Total 1864.70 2316.91 3033.84 241

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Note 15 Restated Summary Statement of Trade Receivables-Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Unsecured Considered good 3069.92 4540.98 5825.37 Considered doubtful 659.73 - - Less: Allowance for doubtful debts Expected credit loss allowance 659.73 - - Unsecured considered doubtful Net - - - Total 3069.92 4540.98 5825.37 Note 16 Restated Summary Statement of Cash and Cash equivalents Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Cash on hand - 0.12 0.18 Balance with Banks In current account 164.18 9.86 10.05 In current account on behalf of Indian Navy 2965.63 4169.73 4258.24 Term deposits with original maturity of less than three months 3630.00 935.00 297.50 Total 6759.81 5114.71 4565.97 Funds received from Indian Navy for the construction of Indigenous Aircraft Carrier are held in separate account. 242

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Specified Bank Notes SBN disclosure During the year the company had Specified Bank Notes SBN or Other Denomination Notes as defined in the MCA notification G.S.R. 308E dated March 30 2017 on the details of SBN held and transacted during the period from 8 November 2016 to 30 December 2016 the denomination wise SBNs and other notes as per the notification is given below: Rupees Particulars SBNs ODNs Total Closing Cash on hand/ Imprest Cash as on November 82016 133000.00 67705.00 200705.00 + Permitted Receipts 17463200.00 17463200.00 - Permitted Payments 13452700.00 13452700.00 - Amount Deposited in Banks 133000.00 3879000.00 4012000.00 Closing Cash on hand/ Imprest Cash as on December 30 2016 - 199205.00 199205.00 Explanation: For the purpose of this clause the term Specified Bank Notes shall have the same meaning provided in the notification of the Government of India in the Ministry of Finance Department of Economic affairs number S.O.3407 E dated the 8 November 2016. Permitted Receipts and Permitted payments includes Salary Advance of Rs.12995000/- released as per GOI Order No:2530/E.coord/2016 in the form of cash. Note 17 Restated Summary Statement of Bank balances other than cash and cash equivalents Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Term Deposits with banks with original maturity more than 3 months and less than 12 months 13153.10 13089.42 9628.50 Total 13153.10 13089.42 9628.50 Deposit with banks for more than 3 months maturity as at 31 st Mar 2015 includes ₹ 79.49 millions parked with Company’s bankers for meeting the expenditure in the due course of implementation of the ISRF project. Out of deposits with banks with maturity upto 12 months₹ 7.20 millions is lien marked in favour of The Registrar of High Court of Kerala 243

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Note 18 Restated Summary Statement of Loans - Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Unsecured considered good Employee advances Loans to related parties 0.05 0.05 - Other employees 4.62 3.98 4.35 Total 4.67 4.03 4.35 Note 19 Restated Summary Statement of Other Financial Assets - Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Cash flow hedges: Foreign exchange forward contracts At Fair value through Other Comprehensive Income - 7.42 3.99 Interest accrued on bank deposits 423.59 390.44 315.51 Interest accrued on employee advances Related parties 0.05 0.07 - Other employees 3.28 4.55 4.85 Fixed Deposit with HDFC Ltd 1900.00 789.90 - Total 2326.92 1192.38 324.35 244

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Note 20 Restated Summary Statement of Other Current Assets Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Unsecured advances Advances other than capital advances Advances to related party 0.08 0.05 0.03 Other advances 421.01 260.12 272.25 Advances considered doubtful 0.01 47.87 47.87 421.10 308.04 320.15 Less: Provision for doubtful advances 0.01 47.87 47.87 421.09 260.17 272.28 Others Balance with Cochin Port Trust Sales Tax department and CBEC 82.60 90.51 92.43 Miscellaneous deposits 0.74 0.58 0.67 Prepaid expenditure 53.35 81.39 74.94 Miscellaneous current assets Including claims receivable 147.93 173.66 366.87 Total 705.71 606.31 807.19 Note 21 Restated Summary Statement of Equity Share Capital Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma Number ₹ in Millions Number ₹ in Millions Number ₹ in Millions Authorised 7 Non-cumulative redeemable preference shares of ₹ 1000/- each 0 0.00 1200000 1200.00 1200000 1200.00 Equity shares of ₹ 10/- each 250000000 2500.00 130000000 1300.00 130000000 1300.00 Issued Subscribed and Fully paid up Equity shares of ₹ 10 each fully paid up 113280000 1132.80 113280000 1132.80 113280000 1132.80 Total 113280000 1132.80 113280000 1132.80 113280000 1132.80 245

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21.1 Reconciliation of number of shares and amounts outstanding Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma Number ₹ in Millions Number ₹ in Millions Number ₹ in Millions Equity Shares outstanding at the beginning of the year 113280000 1132.80 113280000 1132.80 113280000 1132.80 Add : shares issued during the year - - - - - - Equity Shares outstanding at the end of the year 113280000 1132.80 113280000 1132.80 113280000 1132.80 21.2 Details of shareholders holding more than 5 shares in the company Name of Shareholder As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma Number of Shares held of holding Number of Shares held of holding Number of Shares held of holding The President of India 113280000 100 113280000 100 113280000 100 246

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Note 22 Restated Summary Statement of Other Equity Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Capital Reserves 26.36 26.36 26.36 Capital Redemption Reserve 1191.42 1191.42 1191.42 Securities Premium Reserve 0.08 0.09 0.12 Debenture Redemption Reserve 94.75 65.92 37.09 General Reserve 632.27 632.27 632.27 Retained Earnings 17232.50 15193.18 12519.23 19177.38 17109.24 14406.49 Capital Reserves Balance as at the beginning and end of the year 26.36 26.36 26.36 Capital Redemption Reserve Balance as at the beginning and end of the year 1191.42 1191.42 1191.42 Securities Premium Reserve Balance as at the beginning of the year 0.09 0.12 0.12 Less: Amortisation of premium 0.01 0.03 - Balance as at the end of the year 0.08 0.09 0.12 Debenture Redemption Reserve Balance as at the beginning of the year 65.92 37.09 8.26 Add: Current year transfer 28.83 28.83 28.83 Balance as at the end of the year 94.75 65.92 37.09 Other Reserves General Reserve Balance as at the beginning of the year 632.27 632.27 514.74 Add: Transfer from surplus in Statement of Profit and Loss 117.53 Balance as at the end of the year 632.27 632.27 632.27 Retained Earnings Balance as at the beginning of the year 15193.18 12519.23 11999.53 Add: Provision for proposed dividend and tax on dividend - - 198.80 Hedge Reserve transferred to Other Comprehensive Income -22.29 15193.18 12519.23 12176.04 Add: Profit for the period 3121.82 2917.52 692.82 247

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Add: Other Comprehensive income 10.66 10.23 4.47 Total comprehensive income for the current year 3111.15 2907.29 688.35 18304.34 15426.52 12864.39 Less : Transfer to Debenture Redemption Reserve 28.83 28.83 28.83 Dividend on equity shares 866.59 169.92 169.92 Tax on dividend 176.42 34.59 28.88 Transfer General reserve 117.53 Balance as at the end of the year 17232.50 15193.18 12519.23 Total: 19177.38 17109.24 14406.49 The Board of Directors of the Company have recommended a dividend of ₹ 8.97/- per equity share of face value of ₹ 10/- for the financial year ended 31 st March 2017 at the board meeting held on 10 th June 2017 Note 23 Restated Summary Statement of Borrowings Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions a Bonds - from other parties Secured Tax Free Redeemable Non Convertible Bonds -Series 2013- 14 1230.00 1230.00 1230.00 Total 1230.00 1230.00 1230.00 Tax Free Infrastructure Bond Series 2013-14 a Tranche 1: 1000 bonds of face value of ₹1.00 million totalling ₹ 1000 million with interest rate of 8.51 payable annually redeemable at par due for redemption on 02 nd December 2023 b Tranche 2: 230 bonds of face value of ₹1.00 million totalling ₹ 230 million with interest rate of 8.72 payable annually redeemable at par due for redemption on 28 th 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 District. Utilisation : Out of the issue proceeds of ₹ 1230 million received as on date the Company has fully utilised/adjusted funds towards various expenditure incurred on International Ship Repair Facility ISRF project. 248

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Note 24 Restated Summary Statement of Other Financial liabilities - Non Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Payable to Chennai Port Trust 26.12 26.12 26.12 Total 26.12 26.12 26.12 Liability of ₹ 26.12 million to Chennai Port Trust in respect of customs duty is covered by a refund appeal lying before Commissioner Appeals which is also shown as deposits with Customs department under Note No. 13 Note 25 Restated Summary Statement of Provisions - Non Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Provision for employee benefits - Compensated absences Refer Note No 35 214.16 189.65 193.22 Total 214.16 189.65 193.22 249

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Note 26 Restated Summary Statement of Trade Payables-Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Trade payables Unsecured Outstanding dues of Micro enterprises and Small enterprises 58.50 133.38 103.10 Outstanding dues of creditors other than Micro enterprises and Small enterprises 1554.66 1965.39 1606.74 Total 1613.16 2098.77 1709.84 The average credit period on goods and services are within 30 to 60 days. The trade payables are non-interest bearing. To the extent the Company has received intimation from the vendors regarding their status under the Micro Small and Medium Enterprises Development Act 2006 the details of trade payables are provided as under: Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma Amount Due and Payable at the year end Principal 58.50 133.38 103.10 Interest on above Principal - - - Payment made during the year after the due date Principal - - - Interest - - - Interest due and payable for Principal already paid - - - Total Interest accrued and remained unpaid at year end - - - Note:The interest payable to such vendors if any is not likely to be material. - - - 250

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Note 27 Restated Summary Statement of Other Financial Liabilities - Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Interest accrued but not due 28.20 28.20 28.20 Others Security and other deposits 108.79 87.58 78.47 Statutory dues 70.20 81.15 86.37 Others Payables 812.49 1447.49 1016.59 Total 1019.68 1644.42 1209.63 Note 28 Restated Summary Statement of Other Current Liabilities Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Advance for Indigenous Aircraft Carrier Cost plus 55527.52 42954.09 35700.61 Less: Indigenous Aircraft carrier inventory in stock 5710.77 3979.34 3086.78 Less: Material issued 35204.55 26890.10 20625.75 Less: Design and other direct expenses 3047.46 3001.14 2857.89 Less: Advance for purchase of materials and services 3471.94 1534.66 1881.82 Less: Other expenses against cost plus activities 5760.65 4415.92 3478.47 2332.15 3132.93 3769.90 Advance for Indigenous Aircraft Carrier fixed price contract 26788.38 22658.78 18150.40 Less : income recognised so far 26872.45 23467.45 19211.40 84.07 808.67 1061.00 Advance for Indigenous Aircraft Carrier infrastructure 2634.72 2296.59 1917.71 Less: Assets on infrastructure 2487.92 2218.78 2004.42 Less: Prepayment 0.64 - - 251

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146.16 77.81 86.71 Advance outstanding for Indigenous Aircraft Carrier works Net 2394.24 2402.07 2622.19 Advances for other ship building contracts 4196.77 5290.99 3835.17 Advances for ship repair and others 52.96 27.82 13.08 Income received in advance 2.22 2.12 2.02 Total 6646.19 7723.00 6472.46 Note 29 Restated Summary Statement of Provisions - Current Particulars As at 31st Mar 2017 As at 31st Mar 2016 As at 31st Mar 2015 Proforma ₹ in Millions Provision for Employee benefits Gratuity 26.20 27.91 31.02 Compensated absences 33.28 66.12 67.12 Others 2.12 1.64 479.43 61.60 95.67 577.57 Other Provisions Taxes and duties 9.95 7.29 7.30 Sales tax/VAT 13.35 12.77 10.71 Provision for shipbuilding loss 3.50 81.00 - Guarantee repairs 67.25 62.80 52.67 Liquidated damages - 44.87 53.19 Expenditure / contingencies 531.48 523.79 729.86 Subcontract 1417.75 1322.52 850.83 2043.28 2055.04 1704.56 Total 2104.88 2150.71 2282.13 252

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Note 30 Restated Summary Statement of Revenue from operations Particulars For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma ₹ in Millions Sale of products Ship building: Indigenous Aircraft Carrier IAC 13150.44 11590.69 7635.23 Vessels other than IAC 1986.29 4617.42 6005.34 Engineering works - 3.06 8.39 15136.73 16211.17 13648.96 Sale of services Ship repairs 5436.66 3640.44 1977.94 5436.66 3640.44 1977.94 Other operating revenue 21.49 48.46 205.71 Total 20594.88 19900.07 15832.61 253

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Note 31 Restated Summary Statement of Other Income Particulars Nature Recurring/Non- Recurring For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma ₹ in Millions Other Income as restated 1490.13 1068.74 771.91 Net Profit/loss before Taxas restated 4801.71 4496.52 1104.44 Other Income as as of Netprofit 31.03 23.77 69.89 Training facilities Recurring 31.52 34.09 42.43 Income from sale of scrap and stores Recurring 17.34 14.14 45.26 Profit on sale of fixed assets Non - Recurring 0.66 0.17 - Income from laboratory services Recurring 3.79 3.58 2.98 Rent received Recurring 13.08 12.86 34.26 Hire charges received Recurring 2.91 0.33 0.45 Interest on bank deposits Recurring 1243.97 991.26 531.15 Interest from others Non - Recurring 64.58 2.35 4.34 Dividend income from equity investments Recurring 0.05 0.05 0.11 Dividend income from Mutual Funds Recurring 19.85 - - Profit on sale of investments Non - Recurring 46.10 - - Net gain /loss on foreign currency transactions Recurring 22.72 2.28 73.44 Miscellaneous income Recurring 23.56 7.63 37.49 Total 1490.13 1068.74 771.91 254

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Note 32 Restated Summary Statement of Cost of Materials Consumed Particulars For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma ₹ in Millions Raw Materials Steel 228.65 819.68 178.30 Pipe 72.42 118.63 53.70 Paint 143.95 170.59 121.49 Bought out components 9642.24 9434.32 9654.59 Total 10087.26 10543.22 10008.08 Note 33 Restated Summary Statement of Changes in Inventories of Work-in-Progress Other than those which are recognised as income on percentage/proportionate completion method Particulars For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma ₹ in Millions Work -in-progress : At the beginning of the year 739.93 575.52 383.27 Less: at the end of the year 879.48 739.93 575.52 Decretion/Accretion to work-in-progress 139.55 164.41 192.25 255

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Note 34 Restated Summary Statement of Sub Contract and Other Direct Expenses Particulars For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma ₹ in Millions Sub contract and off loaded jobs 1659.25 1383.72 991.80 Hull insurance 7.61 20.98 19.69 Other direct expenses 1526.81 511.95 586.34 Total 3193.67 1916.65 1597.83 Note 35 Restated Summary Statement of Employee Benefits Expense Particulars For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma ₹ in Millions Salaries wages bonus/exgratia and allowances 1916.93 1839.67 1884.78 Contribution to Provident Fund and Family Pension Fund 116.41 116.65 119.10 Gratuity 11.02 11.60 8.97 Staff welfare expenses 122.29 122.83 115.61 Total 2166.65 2090.75 2128.46 Other Benefit Plan - Compensated absences The principal assumptions used for the purpose of actuarial valuation were as follows: Particulars As at 31st March 2017 As at 31st March 2016 As at 31st March 2015 Discount Rate p.a 7.40 8.00 7.80 Rate of increase in compensation levels 3.00 3.00 3.00 256

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Amount recognised in the Statement of Profit and Loss in respect of defined benefit plans are as follows:- ₹ in Millions Particulars For the year ended 31st March 2017 For the year ended 31st March 2016 For the year ended 31st March 2015 Service Cost: Current Service Cost 17.35 18.60 10.63 Net Interest expense 17.66 17.54 19.85 Acturial Gain/Loss recognised during the period 26.63 30.31 54.98 Expenses recognised in the statement of profit and loss 61.64 66.45 85.46 The amount included in the Balance Sheet arising from the entitys obligation in respect of its defined benefit plan is as follows:- ₹ in Millions Particulars For the year ended 31st March 2017 For the year ended 31st March 2016 For the year ended 31st March 2015 Present Value of Defined Benefit Obligation at end of the year 247.44 255.77 260.34 Fair Value of Plan Assets at the end of the year - - - Net Liabilities /Assets recognized in the Balance Sheet 247.44 255.77 260.34 Movements in present value of the defined benefit obligation are as follows:- ₹ in Millions Particulars For the year ended 31st March 2017 For the year ended 31st March 2016 For the year ended 31st March 2015 Defined Benefit Obligation at beginning of the year 255.77 260.34 261.48 Current Past Service Cost 17.35 18.60 10.63 Current Interest Cost 17.66 17.54 19.85 Actuarial Gain/ Loss 26.63 30.31 54.98 Benefits paid 69.97 71.02 86.60 Defined Benefit Obligation at end of the year 247.44 255.77 260.34 Movements in the fair value of the plan assets are as follows: ₹ in Millions Particulars For the year ended 31st March 2017 For the year ended 31st March 2016 For the year ended 31st March 2015 Fair Value of Plan Assets at the beginning of the year - - Expected Return on Plan Assets - - Actuarial Gain/ Loss - - Contributions from the employer 69.97 71.02 86.60 Benefits paid 69.97 71.02 86.60 Fair Value of the Assets at the end of the year - - - 257

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Defined Benefit Plan-Gratuity The principal assumptions used for the purpose of actuarial valuation were as follows: Particulars For the year ended 31st March 2017 For the year ended 31st March 2016 For the year ended 31st March 2015 Discount Rate p.a 7.40 8.00 7.80 Rate of increase in compensation levels 3.00 3.00 3.00 Expected Rate of Return on Plan Asset 7.40 8.00 9.00 Amount recognised in the Statement of Profit and Loss/Other comprehensive income in respect of defined benefit plans are as follows:- ₹ in Millions Particulars For the year ended 31st March 2017 For the year ended 31st March 2016 For the year ended 31st March 2015 Service Cost: Current Service Cost 8.78 9.02 8.58 Net Interest expense 1.12 1.21 0.19 Components of defined benefit costs recognised in statement of profit and loss 9.90 10.23 8.77 Remeasurement of the net defined benefit liability: Actuarial Gain/Loss on Plan Obligations 18.14 23.32 26.36 Difference between Actual Return and Interest income on Plan assets gain/loss 1.84 5.65 2.69 Components of defined benefit costs recognised in Other Comprehensive Income 16.30 17.67 29.05 The amount included in the Balance Sheet arising from the entitys obligation in respect of its defined benefit plan is as follows:- ₹ in Millions Particulars For the year ended 31st March 2017 For the year ended 31st March 2016 For the year ended 31st March 2015 Present Value of Defined Benefit Obligation at end of the year 371.37 448.46 515.24 Fair Value of Plan Assets at the end of the year 345.17 420.55 484.22 Net Liabilities /Assets recognized in the Balance Sheet 26.20 27.91 31.02 258

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Movements in present value of the defined benefit obligation are as follows:- ₹ in Millions Particulars For the year ended 31st March 2017 For the year ended 31st March 2016 For the year ended 31st March 2015 Defined Benefit Obligation at beginning of the year 448.46 515.24 608.55 Current Service Cost 8.78 9.02 8.58 Current Interest Cost 30.50 34.96 47.39 Actuarial Gain/ Loss 18.14 23.31 26.36 Benefits paid 134.51 134.07 175.64 Defined Benefit Obligation at end of the year 371.37 448.46 515.24 Movements in the fair value of the plan assets are as follows: ₹ in Millions Particulars For the year ended 31st March 2017 For the year ended March 31 2016 For the year ended 31st March 2015 Fair Value of Plan Assets at the beginning of the year 420.55 484.22 597.51 Expected Return on Plan Assets 29.38 38.94 46.68 Actuarial Gain/ Loss 1.84 0.45 2.17 Contributions from the employer 27.91 31.02 17.84 Benefits paid 134.51 134.08 175.64 Fair Value of the Assets at the end of the year 345.17 420.55 484.22 The plan assets are managed by the Gratuity Trust formed by the Company. Note 36 Restated Summary Statement of Finance Costs Particulars For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma ₹ in Millions Bank interest 0.21 4.57 67.64 Interest others 0.00 - 0.00 - Interest under Income Tax Act - 9.70 10.42 Interest on tax free bonds 105.14 105.13 105.16 Total 105.35 119.40 183.22 259

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Note 37 Restated Summary Statement of Depreciation and Amortisation Expense Particulars For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma ₹ in Millions Depreciation on property plant and equipments 281.85 272.06 285.95 Amortisation of intangible asset 76.58 72.92 61.01 Total 358.43 344.98 346.96 Add : Loss on revaluation of tools 26.68 26.95 30.02 Total 385.11 371.93 376.98 Note 38 Restated Summary Statement of Other Expenses Particulars For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma ₹ in Millions Consumption of stores 165.91 189.64 118.56 Consumption of spares 15.49 17.10 21.10 Rates and taxes 21.29 4.73 1.48 Power 185.62 173.88 151.30 Fuel 77.41 78.54 75.75 Water 21.89 25.73 19.05 Repairs and maintenance: - - - Building and roads 51.73 49.70 53.39 Plant and machinery 10.56 35.22 27.84 Others 103.78 130.44 132.92 Maintenance dredging 73.38 85.58 50.90 Transport and stores handling 22.32 18.91 18.36 260

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Travelling and conveyance expenses 45.61 51.42 41.01 Printing and stationery 7.40 7.55 5.75 Postage telephone and telex 6.01 7.38 5.31 Advertisement and publicity 31.60 36.50 24.32 Lease rent 62.04 59.50 58.41 Hire charges 57.46 26.40 18.56 Insurance charges 33.39 32.35 24.31 Security expenses 131.09 106.79 78.95 Auditors remuneration 0.87 0.87 0.56 Auditors remuneration for other services 0.40 0.29 0.11 Training expenses 45.88 57.20 29.51 Legal expenses 1.24 6.21 5.19 Liquidated damages - 6.28 103.86 Consultancy 3.31 13.71 11.93 Bank charges 16.23 5.22 5.95 Net loss /gain on derivative contracts 14.86 7.10 56.78 Corporate social responsibility Refer Note no.45 72.36 62.72 53.23 Write off of stores - - 11.39 Loss on sale/write off of property plant and equipments 41.48 0.63 0.77 Miscellaneous expenses 53.12 127.83 36.75 Total 1344.01 1425.42 1129.74 Auditors remuneration Auditors remuneration for other services and Miscellaneous expenses include: Rs in lakhs Particulars For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma For Audit Fees 0.87 0.87 0.56 For Limited Review/other services 0.40 0.29 0.11 For certification for Initial Public Offer 0.92 - Total 2.19 1.16 0.67 Out of audit fee towards certification of IPO ₹ 0.77 millions is included under miscellaneous expense and ₹ 0.15 millions included under Note. 20 pending completion of Initial Public Offer. 261

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Note 39 Restated Summary Statement of Provision for Anticipated Losses and Expenditure Particulars For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma ₹ in Millions Provision for: Doubtful debts / advances 74.05 33.94 78.37 Non moving / perpetual inventory verification 5.69 5.44 2.30 Liquidated damages - - 10.31 Expenses and contingencies 57.56 48.95 177.04 Provision for loss on Ship Building 3.50 81.00 - Total 140.80 169.33 268.02 Note 40 Restated Summary Statement of Earnings per Equity Share Particulars For the year ended 31st Mar 2017 For the year ended 31st Mar 2016 For the year ended 31st Mar 2015 Proforma ₹ in Millions Net Profit after tax ₹ in million 3121.82 2917.52 692.82 Number of Equity Shares 113280000 113280000 113280000 Basic and Diluted Earnings Per Share EPS in ₹ 27.56 25.75 6.12 Face value per equity in ₹ 10.00 10.00 10.00 262

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41. Restated Summary Statement of Contingent Liabilities and Commitments ₹ in millions Particulars As on 31 st March 2017 As on 31st March 2016 As on 31st March 2015 Proforma Brief Description of the nature and obligation as on 31.03.2017 ₹ in millions ₹in millions ₹ in millions A CONTINGENT LIABILITY To the extent not provided for a Guarantees i Letters of Credit 3932.87 1400.31 2712.41 Represents LC opened by the Company in various banks for procurement of materials/assets ii Corporate Performance Guarantee 392.50 392.50 392.50 Performance guarantee given by Company to CoPT for performance of obligations under the contract agreement entered with CoPT during the contract period. b Other money for which the company is contingently liable i Greater Cochin Development Authority GCDA 6.91 6.91 6.91 Claim raised by GCDA for the land acquired for the Company is settled. However 8 land acquisition revision petition cases Valued at ₹ 6.91 millions filed by evictees is pending with the Honble Supreme Court and High Court. ii Customs duties 1794.12 2201.12 2369.14 Customs duty for materials under Bond and Indigenous vessels delivered. Includes an amount of ₹ 6.98millions being Customs duty refund granted by CESTAT Bangalore against which an appeal is pending before the Honble High Court of Kerala. iv Sales Tax/Kerala Value Added Tax 139.63 139.63 139.63 2000-01 - ₹ 11.19millions 2001-02 - ₹ 7.34millions 2004-05 - ₹ 20.22millions 2005-06 - ₹ 65.22millions 2007-08 - ₹. 35.65millions Under appeal. Stay of collection of tax obtained in all cases. Demand reduced to the extent of appeal allowed by DCA. 263

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v Income Tax 607.78 154.05 131.92 Demand relating to Assessment Years: a AY 2009-10 - ₹ 7.77millions AY 2010-11 - ₹ 12.63millions AY 2011-12 - ₹ 42.02millions AY 2012-13 - ₹ 54.61millions AY 2013-14 - ₹ 22.14millions AY 2014-15 - ₹ 87.69millions b AY 1997-98 - ₹ 219.16millions AY 1998-99 - ₹ 96.73millions AY 1999-00 - ₹ 35.37millions AY 2000-01 - ₹ 17.03millions AY 2001-02 - ₹ 9.64millions c AY 2002-03 - ₹ 3 millions vi Service Tax 164.75 164.75 164.75 Demand of Service Tax on IAC P- 71 Design Consultancy as per Show Cause Notice issued. Adjudication pending 37.67 37.67 37.67 Refund claim of Service Tax on IAC P-71 granted by Commissioner Appeal. However Department filed Appeal before CESTAT against the order of Commissioner Appeals. Also issued Show Cause Notice on CSL adjudication pending. 32.30 32.30 32.30 Demand of Service Tax on IAC P- 71Management fee/handling charges as per Show Cause Notice issued. Adjudication pendng. 233.96 233.96 0.00 Show Cause Notice issued for levy of service tax on ship repair without allowing deduction of materials for which VAT paid and disallowance of Cenvat Credit. Adjudication pending. 188.56 188.56 0.00 Show Cause Notice issued for levy of Service Tax on the repair of vessels owned by UTLA by denying the benefit of Notification No.25/212-ST dt. 20-6-2012 available for the repair of vessels owned by Govt. Departments. Adjudication pending. 264

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B COMMITMENTS To the extent not provided for a Estimated amount of contracts remaining to be executed on capital account and not provided for: 458.47 68.15 43.59 b Bank Guarantees 6936.65 3799.24 B CONTINGENT ASSETS a Insurance claims 91.52 - - CSL has lodged an insurance claim for ₹ 91.52millionstowards the expenses incurred by the yard in connection with the salvage recovery of the Deck Cargo Launch Barge BY 095 due to the drifting incident occurred during the onward delivery voyage to Abu Dhabi. Survey has not completed and no intimation has been received from the Insurance company regarding the settlement. 41.1 CONTINGENCIES AND COMMITMENTS I Income Tax Assessments a The Income Tax Assessment of the company have been completed up to AY 2014-15 Demands raised as per the assessment orders totaling to ₹226.85millions for the Assessment Years 2009-10 2010-11 2011-12 2012-13 2013-14 and 2014-15 are shown under Contingent Liability pending disposal of the appeals filed before the Commissioner of Income Tax Appeals. The demands are mainly due to disallowance of certain genuine claims. However the above demands have been adjusted against the refund due for the subsequent years. b The Income Tax department has gone for appeal against the order of the ITAT allowed in favour of CSL before the Honble High Court of Kerala which is still pending for disposal. c The Company has filed appeal before the ITAT against the order of Assessing Officer/ Commissioner of Income Tax Appeals and the appeal was partly allowed in favour of CSL the effect to the order has not yet been given by the reassessing officer. II Sales Tax Assessment under KGST Act The Sales Tax assessments under Kerala General Sales Tax Act up to the Assessment Year 2004-05 have been completed and orders were issued for all the years except for the year 2002-03 2003-04. Due to apparent mistake in the orders issued for the year 2000-01 and 2001-02 applications have been filed for rectification of the orders. Pending rectification to the assessment orders the demands thereto have been shown under Contingent Liabilities. For the Assessment year 2004-05 against the demand for ₹20.22millions Company has filed appeal before the Deputy Commissioner Appeals. Pending disposal of the appeal the tax due as per assessment order has been shown under Contingent Liabilities. III Sales Tax Assessments under KVAT Act The KVAT assessments from Assessment Year 2005-06 to Assessment Year 2007-08 have been completed and assessment orders were issued for Assessment Year 2005-06 and Assessment Year 2007-08 with a demand of ₹ 283.66millions and ₹ 547.47millions respectively. Assessment order for the year 2006-07 is pending. The appeals filed by the Company against the above order before the Deputy Commissioner Appeals have been decided in 265

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favour of the Company and remanded for fresh assessments. Accordingly the demands as per the original assessment orders have become null. As such no demand exists as on reporting date. Fresh assessment for the above years is pending. 42. The dispute between M/s Apeejay Shipping Ltd formerly Surendra Overseas Ltd and the Company in the matter of ship 005 was referred for arbitration by the Honble Supreme Court of India. The arbitration award July 2009 was in favour of the Company under which the Company is to receive ₹280.36 millions from M/s Apeejay Shipping Ltd. The company has filed a petition before Sub Court Ernakulam for passing a decree. M/s Apeejay Shipping Ltd has moved the Sub Court to quash the Award of the Umpire and the Company has filed Counter Affidavit against this move. The matter is pending before the court. No credit has been taken in the books of account pending final decree of the Court. 43. Permanent Machinery for Arbitration Department of Public Enterprises Govt. of India has notified award in favour of the Company in the dispute between the Company and M/s Oil and Natural Gas Corporation Ltd on the Works Contract Tax issue and ONGC has paid to the Company the disputed sum along with interest amounting to ₹ 264.22millions as per the award. ONGC has gone on appeal before the Law Secretary Ministry of Law Justice against the award. Pending disposal of ONGC appeal no adjustment has been made in the accounts. 44. Litigation : The Company is subject to legal proceedings and claims in the ordinary course of business. The Companys Management does not reasonably expect that these legal actions when ultimately concluded and determined will have material and adverse effect on the Companys results of operation. 45. 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 those specified in Schedule VII of the Companies Act 2013. The utilisation of CSR funds are done through direct spending as per the recommendations of CSR committee. Details of amount required to be spent and the amount utilised are given below: a Gross amount required to be spent by the Company during the period ended 31 st Mar 2017 ₹ 72.17millions b Amount spent during the year ₹ in millions Particulars In cash Yet to be paid in cash Total i Construction/acquisition of any asset 62.05 - 62.05 ii On purposes other than i above 10.30 - 10.30 46. Related Party disclosure as per Ind AS 24 Related Party Nature of Relationship 2016-17 2015-16 2014-15 Shri. Madhu S Nair Chairman Managing Director w.e.f 01 Jan 2016 Key Managerial Personnel Key Managerial Personnel - Shri. Paul Ranjan D Director Finance Chief Financial Officer w.e.f 01 May 2014 Key Managerial Personnel Key Managerial Personnel Key Managerial Personnel Shri. Sunny Thomas Director Technical w.e.f 01 Jun 2014 Key Managerial Personnel Key Managerial Personnel Key Managerial Personnel 266

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Shri. Suresh Babu N V Director Operations w.e.f. 26 Apr 2016 Key Managerial Personnel - - Cmde. Subramaniam K Chairman Managing Director Upto 31 Dec 2015 - Key Managerial Personnel Key Managerial Personnel Capt. Sunder R S Director Operations 21 Nov 2011 to 31 Aug 2015 - Key Managerial Personnel Key Management Personnel Smt V Kala Company Secretary Key Managerial Personnel Key Managerial Personnel Key Management Personnel Shri. RavikumarRoddam Director Finance Upto 30 April 2014 - - Key Managerial Personnel Shri. Vinaya Kumar P Director Technical 01 Sep 2011 to 31 May 2014 - - Key Managerial Personnel Nature of transaction- Remuneration ₹ in millions Particulars As at 31 st Mar 2017 As at 31 st Mar 2016 As at 31 st Mar 2015Proforma Short term benefit 14.83 14.44 16.89 Post-employment Benefit 2.31 1.23 1.40 Total 17.14 15.67 18.29 Nature of transaction- Loans ₹ in millions Name of Related Party Opening Balance as on 1/4/2016 Loans Taken during 2016-17 Repay ment Balance as on 31/03/17 Interest accrued as on 31/03/17 MADHU S NAIR 0.23 0.04 0.25 0.02 0.00 PAUL RANJAN D 0.01 0.04 0.04 0.01 0.00 SUNNY THOMAS 0.01 0.04 0.04 0.01 0.00 KALA V 0.02 0.04 0.04 0.02 0.00 SURESH BABU N V 0.35 0.04 0.09 0.30 0.05 267

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Name of Related Party Opening Balance as on 1/4/2015 Loans Taken during 2015-16 Repay ment Balance as on 31/03/16 Interest accrued as on 31/03/16 MADHU S NAIR 0.28 0.01 0.06 0.23 0.07 PAUL RANJAN D 0.01 0.01 0.01 0.01 0.00 SUNNY THOMAS 0.01 0.01 0.01 0.01 0.00 KALA V 0.01 0.02 0.01 0.02 0.00 Name of Related Party Opening Balance as on 1/4/2014 Loans Taken during 2014-15 Repayments Balance as on 31/03/15 Proforma Interest accrued as on 31/03/15 Proforma PAUL RANJAN D 0.01 0.01 0.01 0.01 0.00 SUNNY THOMAS 0.01 0.01 0.01 0.01 0.00 SUNDAR R S 0.00 0.00 0.00 0.00 0.00 KALA V 0.19 0.01 0.19 0.01 0.00 Loan balances have been considered from the year of attaining KMP status. 47. 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 but fair value disclosures are required 268

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₹ in millions Financial assets/ financial liabilities Fair value as at Fair Value hierarchy 31 st Mar 17 31 st Mar 16 31 st Mar 15 Proforma Financial Assets Non Current i Investments 0.92 0.92 1.92 Level III ii Trade Receivables - 321.35 295.98 Level II iii Loans 14.54 15.24 13.98 Level II ivOthers - 1655.30 - Level II Current ii Trade Receivables 3069.92 4540.98 5825.37 Level II iiiCash Cash equivalents 6759.81 5114.71 4565.97 Level II ivBank Balances other than iii 13153.10 13089.42 9628.50 Level II v Loans 4.67 4.03 4.35 Level II viOthers 2326.92 1192.38 324.35 Level II Total Financial Assets 25329.88 25934.33 20660.42 Financial Liabilities Non Current i Borrowings 1230.00 1230.00 1230.00 Level I ii Other financial liabilities 26.12 26.12 26.12 Level II Current i Trade Payables 1613.16 2098.77 1709.84 Level II ii Other financial liabilities 1019.68 1644.42 1209.63 Level II Total Financial Liabilities 3888.96 4999.31 4175.59 Note: 1. The investments in equity instruments are not held for trading. Instead they are held for medium or long term strategic purpose. Upon the application of Ind AS 109 the Company has chosen to designate these investments in equity instruments as at FVTOCI as the directors 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. 2. 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. 3. There were no transfers between Level 1 and 2 in the period. 4. Loans Borrowings are at the market rates and therefore the carrying value is the fair value 5. The carrying amount of trade receivables trade and other payables short term loans are considered to be the same as their fair value due to their short term nature 6. Difference between carrying amounts and fair values of bank deposits other financial assetsother financial liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented. 269

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Financial Instruments by category ₹ in millions 31st March 2017 31st March 2016 31st March 2015 Proforma FVTPL FVTOCI Amortised Cost FVTPL FVTOCI Amortised Cost FVTPL FVTOCI Amortised Cost Financial Assets Investments -Equity instruments 0.92 0.92 1.92 Trade receivables 3069.92 4862.33 6121.35 Cash Cash equivalents 19912.91 18204.13 14194.47 Other Financial Assets 2346.13 2866.95 342.68 TOTAL Financial Assets 0.92 25328.96 0.00 0.92 25933.41 0.00 1.92 20658.50 Financial liabilities Borrowings 1230.00 1230.00 1230.00 Trade payables 1613.16 2098.77 1709.84 Capital creditors Other financial liabilties 1045.80 1670.54 1235.75 Total Financial Liabilities 3888.96 0.00 0.00 4999.31 0.00 0.00 4175.59 48. Financial Risk Management Policy Financial Risk Management Objective and Policies: The Company’s principal financial liabilities other than derivatives comprise loans and borrowings trade and other payables and advances from Customers. The main purpose of these financial liabilities is to finance the Company’s operations projects under implementation and to provide guarantees to support its operations. 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. All derivative activities for risk management purposes are carried out by under the supervision of the Forex Risk Management Committee by assigning necessary resources. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below. 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 currency risk and other price risk such as equity price risk and commodity risk. Financial Assets affected by market risk include loans and borrowings deposits and derivative financial instruments. 270

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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 relates primarily to the Company’s long-term debt obligations with floating interest rates. 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. The Company manages its foreign currency risk by hedging transactions that are expected to realise in future and are governed by the policies of the Company as approved by the Board. Commodity Price Risk The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of steel major machineries equipments etc. Therefore the Company plans its purchases closely to optimise the price. Credit Risk 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 financing activities including deposits with banks and financial institutions foreign exchange transactions and other financial instruments. 49. Lease arrangements ₹ in millions Particulars As at 31 st Mar 2017 As at 31 st Mar 2016 As at 31 st Mar 2015 Proforma a Premises taken on operating lease: With respect to non-cancellable operating lease the future minimum lease payment as at Balance Sheet date is as under: For a period not later than one year 55.87 54.77 52.26 For a period later than one year and not later than five years 234.99 230.38 225.86 For a period later than five years 1684.72 1745.23 1804.54 50. Segment Reporting The Company has identified two major operating segments viz Shipbuilding and Repair of ships/ offshore structures. Segment wise analysis has been made on the above basis and amounts allocated on a reasonable basis. The Company has two major business segments –“Ship Building” and “Ship Repair”. Revenue under Ship building includes ₹ 13150.44 millions for 2016-17one customer ₹ 15028.76 millions for 2015-16two customers and ₹ 12308.88 millions for 2014-2015two customers having more than 10 revenue of the total revenue for the respective years. And for Ship repair revenue includes ₹ 3788.96 millions for 2016-17one customer ₹ 2818.09 millions for 2015-16two customers and ₹ 537.64 millions for 2014-15two customers having more than 10 revenue of the total revenue for the respective years. 271

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Segment Reporting – TOTAL REVENUE 2016-17 2015-16 2014-15 Proforma ₹ in millions Ship Building 15158.22 16259.63 13854.67 Ship Repair 5436.66 3640.44 1977.94 Others 1490.13 1068.74 771.91 TOTAL 22085.01 20968.81 16604.52 51. Capital Management The companys 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 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. Particulars As at 31 st Mar 2017 As at 31 st Mar 2016 As at 31 st Mar 2015 Proforma ₹ in millions Long term borrowings 1230.00 1230.00 1230.00 Net Debt 1230.00 1230.00 1230.00 Equity Share Capital 1132.80 1132.80 1132.80 Other equity 19177.38 17109.24 14406.49 Total Equity 20310.18 18242.04 15539.29 Gearing Ratio 6.06 6.74 7.92 No changes were made in the objectives policies or processes for managing capital during the years ended 31 st March 2017 and 31 st March 2016. 52.Balances of Sundry Debtors Loans and advances deposits claims and sundry creditors are subject to confirmation and consequent reconciliationif any for the years ended 31 st March 2016 and 31 st March 2015. 53. 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 for based on the work done. 272

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54.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. 55. Figures in brackets denotes minus figures. 56. Previous year figures have been regrouped and classified wherever necessary to conform to the current year presentation. Annexure VI - Statement of Capitalisation ₹ in millions Particulars Pre-offer for the year ended 31 st March 2017 Adjusted for post offer Debts Short Term Debts 0.00 Long term debts 1230.00 Total Debts 1230.00 Share HoldersFunds Share Capital 1132.80 Reserves as restated 19177.38 Total Share HoldersFunds 20310.18 Total debts / Total Shareholders funds 6.06 Long term debts / Total Shareholders funds 6.06 Shareholders fund post issue can be calculated only on the conclusion of the book building process. 273

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Annexure VII -Statement of DividendPaid Particulars Year Ended 31 st March 2017 Year Ended 31 March 2016 Year Ended 31 March 2015 Proforma Paid-up equity share capital ₹ in millions 1132.80 1132.80 1132.80 Amount of dividend paid on equity shares during the financial year ₹ in millions 866.59 169.92 169.92 Rate of dividend equity 76.50 15.00 15.00 Corporate Dividend Tax 176.42 34.59 28.88 refers to dividend actually paid during the respective years Annexure VIII – Restated Statement of Accounting Ratios ₹ in millions As at /for the Year ended 31 st Mar 17 31- As at /for the Year ended 31 st Mar 16 As at /for the Year ended 31 st Mar 15 Proforma Basic Earnings Per Share Basic EPS Profit for the year 3121.82 2917.52 692.82 Number of Weighted average equity shares 113.28 113.28 113.28 Par value per share 10 10 10 Earnings Per Share-Basic 27.56 25.75 6.12 Diluted Earnings Per Share Diluted EPS Profit for the year 3121.82 2917.52 692.82 Number of Weighted average equity shares 113.28 113.28 113.28 Par value per share 10 10 10 Earnings Per Share-Diluted 27.56 25.75 6.12 274

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Net Asset Value Per Equity Share ₹ Net worth as restated 20310.18 18242.04 15539.29 Number of equity shares outstanding 113.28 113.28 113.28 Net Asset Value NAV per Equity Share ₹ 179.29 161.03 137.18 Net Profit after tax as restated 3121.82 2917.52 692.82 Net worth as restated 20310.18 18242.04 15539.29 Return on Net worth for equity shareholders 15.37 15.99 4.46 Note: The ratios have been computed as per the following formulae: i Basic and Diluted Earnings per Share Net Profit after tax as restated for the year / period attributable to equity shareholders Weighted average number of equity shares outstanding during the year / period ii Net Assets Value NAV Net worth as restated at the end of the year / period Number of equity shares outstanding at the end of the year / period iii Return on Net worth Net Profit after tax as restated for the year / period attributable to equity share holders Net worth as restated at the end of the year / period Net worth for ratios mentioned above is as arrived as mentioned below: Net worth as restated Equity share capital + Reserves and surplus Includes Securities Premium and Surplus / Deficit in Standalone Statement of Profit and Loss. 275

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Annexure IX: Restated Statement of Tax Shelters ₹ in millions Particulars 31-Mar-17 31-Mar- 16 31-Mar-15 Proforma Profit before exceptional item current and deferred taxes restated 4785.41 4481.40 1097.68 Less: Exceptional Item Profit before exceptional item current and deferred taxes as restated A 4 785.41 4481.40 1097.68 Weighted average tax rate B 34.608 34.608 33.99 Tax Expense at weighted average rate C 1656.13 1550.92 373.10 Adjustments Permanent Differences Expenses disallowed/Income allowed 308.17 51.05 119.09 Income exempt under the Income Tax Act 11.02 0.23 0.11 Others 18.59 16.15 0.04 Total D 315.74 66.97 119.02 Temporary Differences Difference between book depreciation and tax depreciation 15.74 46.54 53.81 Provision for anticipated losses and gains 496.46 444.04 596.49 Disallowance under Sec 43B 43.69 0.02 4.59 Adjustments due to reinstatement 33.46 150.81 333.83 Total E 490.95 246.71 204.26 Net Adjustments D+E F 175.21 313.68 323.28 Tax Liability/Saving thereon G 60.63 108.56 109.89 Current Tax provision for the year as per restated accounts C+G H 1595.50 1659.48 482.99 For and on behalf of Board of Directors V KALA SUNNY THOMAS D PAUL RANJAN MADHU S NAIR Company Secretary Director Technical Director Finance Chairman and Managing Director Chief Financial Officer DIN - 06882228 DIN - 06869452 DIN - 07376798 Kochi dated July 17 2017 As Per our report attached For M/s KrishnamoorthyKrishnamoorthy Chartered Accountants 276

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Firm Registration No.001488S C.R.REMA Partner Membership Number 029182 Kochi dated July 17 2017 277

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ANNEXURE –IA RESTATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES Particulars Note No. As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions I. EQUITY AND LIABILITIES 1 Shareholders’ funds Share capital 1 1132.80 1132.80 Reserves and surplus 2 13762.72 11119.16 2 Non-current liabilities Long term borrowings 3 1230.00 0.00 Other long term liabilities 4 56.12 51.30 Long term provisions 5 179.36 197.43 3 Current liabilities Short term borrowings 6 2109.18 0.00 Trade payables : 7 1716.11 1400.30 Other current liabilities 8 6064.88 6840.10 Short-term provisions 9 3620.59 3264.43 Total 29871.76 24005.52 II. ASSETS 1 Non-current assets Fixed assets 10 iTangible assets 2972.58 2403.56 ii Intangible assets 728.38 1.26 iii Capital work in progress 75.65 1380.09 Non-current investments 11 1.92 1.92 Deferred tax asset Net 12 163.06 162.60 Long-term loans and advances 13 139.34 69.42 Other non-current assets 14 676.52 618.84 2 Current assets Inventories 15 3959.19 3552.60 Trade receivables 16 12028.15 6839.08 Cash and bank balances 17 5564.31 7039.65 278

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Short-term loans and advances 18 1919.64 633.90 Other current assets 19 1643.02 1302.60 Total 29871.76 24005.52 Note: The above statement should be read with Notes on Adjustments for Restatement of Profit and Loss appearing in Annexure IV A Significant Accounting Policies and Notes forming part of the Restated Financial Information in Annexure IV A 1 Other Notes to Financial Information in Annexure IV A 2 For and on behalf of Board of Directors V KALA SUNNY THOMAS D PAUL RANJAN MADHU S NAIR Company Secretary Director Technical Director Finance Chairman and Managing Director Chief Financial Officer DIN - 06882228 DIN - 06869452 DIN - 07376798 Kochi dated July 17 2017 As Per our report attached For M/s KrishnamoorthyKrishnamoorthy Chartered Accountants Firm Registration No.001488S C.R.REMA Partner Membership Number 029182 Kochi dated July 17 2017 279

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ANNEXURE – IIA RESTATED SUMMARY STATEMENT OF PROFIT AND LOSS Particulars Note No. For the year ended 31st Mar 2014 For the year ended 31st Mar 2013 ₹ in Millions I. Revenue from operations 20 17978.49 16798.67 II. Other income 21 610.61 869.22 III. Total revenue I + II 18589.10 17667.89 IV. Expenses: Cost of materials consumed 22 7757.49 8793.18 Changes in inventories of work-in- progress 23 402.15 530.46 Sub contract and other direct expenses 24 1737.06 2026.09 Employee benefits expense 25 2091.92 1888.08 Finance costs 26 192.56 226.37 Depreciation and amortisation expense 27 253.22 188.00 Other expenses 28 1419.66 1015.38 Provision for anticipated losses and expenditure 29 404.68 87.86 Total expenses 14258.74 13694.50 V Profit before tax III-IV 4330.36 3973.39 VI Tax expense: Current tax 1513.12 1265.17 Deferred tax 12 0.46 44.74 Net Profit+/Loss- from Ordinary Activities after tax V-VI 2817.70 2663.48 Extraordinary itemnet of tax expense - - VII Profit for the year 2817.70 2663.48 VIII Earnings per equity share Face value of ` 10 each: 280

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1 Basic Rs 24.87 23.51 2 Diluted Rs 24.87 23.51 Note: The above statement should be read with Notes on Adjustments for Restatement of Profit and Loss appearing in Annexure IV A Significant Accounting Policies and Notes forming part of the Restated Financial Information in Annexure IV A 1 Other Notes to Financial Information in Annexure IV A 2 The accompanying notes are an integral part of the Restated Financial Information For and on behalf of Board of Directors V KALA SUNNY THOMAS D PAUL RANJAN MADHU S NAIR Company Secretary Director Technical Director Finance Chairman and Managing Director Chief Financial Officer DIN - 06882228 DIN - 06869452 DIN - 07376798 Kochi dated July 17 2017 As Per our report attached For M/s KrishnamoorthyKrishnamoorthy Chartered Accountants Firm Registration No.001488S C.R.REMA Partner Membership Number 029182 Kochi dated July 17 2017 281

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ANNEXURE – III A RESTATED SUMMARY STATEMENT OF CASH FLOWS Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 ₹ in Millions A. Cash flow from Operating Activities Net profit before tax 4330.36 3973.39 Adjustments for : Depreciation and amortisation 215.74 143.35 Value of surrendered land written off 0.00 0.00 Interest expense 189.50 225.59 Interest income 508.29 589.72 Rental income 6.37 7.70 Dividend income 0.09 0.61 Loss on sale of fixed assets 0.47 2.44 Profit on sale of fixed assets 0.02 0.00 Profit on investments 0.00 0.00 Loss on derivative contracts Net 275.95 125.04 Unrealised loss/gain on derivative contracts Net 3.03 33.92 Exchange difference from FE transactions 6.87 73.12 Expenses on Initial Public Offer 0.00 0.00 Effective loss/gain of cash flow hedges 0.00 0.00 0.00 0.00 Operating cash flow before working capital changes 4493.41 3764.74 Adjustments for working capital changes: Increase / decrease in inventories 406.59 68.06 Increase / decrease in trade and other receivables 8270.76 2012.63 Increase / decrease in trade and other payables 774.21 4595.65 282

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Cash generated from operation before Income Tax 4958.15 1249.78 Income tax paid 883.60 766.65 Net cash generated from Operating Activities A 5841.75 483.13 B. Cashflow from Investing Activities Purchase of assets 1512.35 694.47 Capital Work In Progress 1304.44 743.91 Investment in Mutual Funds 0.00 0.00 Redemption of Mutual Funds 0.00 0.00 Sale or withdrawal of fixed assets 0.02 0.00 Interest received 353.90 498.14 Rent received 6.37 7.70 Dividend income 0.09 0.61 Profit on investments 0.00 0.00 Net cash from investing operation B 152.47 931.93 C. Cashflow from Financing Activities Issue of Tax free Bonds 1230.00 0.00 Premium on issue of Tax free Bonds 0.12 0.00 Short term borrowings 2109.18 0.00 Loss/profit on derivative contracts Net 275.95 125.04 Loss on exchange difference from FE transactions 6.87 73.12 Redemption of Preference Shares 0.00 391.42 Dividend paid 169.92 197.32 Dividend tax paid 28.88 32.01 Interest paid 161.30 225.59 Expenses on Initial Public Offer Net cash from financing activities C 2710.12 898.26 D. Net Increase in Cash Cash Equivalent A+B+C 2979.16 1347.06 Cash and cash equivalent at the beginning of the year 3109.65 4456.71 283

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Cash and cash equivalent at the end of the year 130.49 3109.65 Net cash increase/ decrease 2979.16 1347.06 The cash Flow Statement has been prepared under the “Indirect Method” as set out in Accounting Standard -3 “Cash Flow Statements”. Note: The above statement should be read with Notes on Adjustments for Restatement of Profit and Loss appearing in Annexure IV A Significant Accounting Policies and Notes forming part of the Restated Financial Information in Annexure IV A 1 Other Notes to Financial Information in Annexure IV A 2 The accompanying notes are an integral part of the Restated Financial Information For and on behalf of Board of Directors V KALA SUNNY THOMAS D PAUL RANJAN MADHU S NAIR Company Secretary Director Technical Director Finance Chairman and Managing Director Chief Financial Officer DIN - 06882228 DIN - 06869452 DIN - 07376798 Kochi dated July 17 2017 As Per our report attached For M/s KrishnamoorthyKrishnamoorthy Chartered Accountants Firm Registration No.001488S C.R.REMA Partner Membership Number 029182 Kochi dated July 17 2017 284

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ANNEXURE IVA: NOTES ON ADJUSTMENTS FOR RESTATEMENT OF PROFIT AND LOSS 1.Below mentioned is the summary of results of restatement made in the audited accounts for the respective years and its impact on the profits of the Company: ₹ in millions 2013-14 2012-13 Profit after Tax as per Audited Accounts 1942.42 1852.68 Adjustments 1 Prior period Expenses See Note No.3 a below 95.23 37.87 2 Depreciation and Amortisation See Note 3 b below 9.92 1.73 3 Effect of Navy Acquired Asset – restated See Note 3 c below 1.46 0.00 4 Excess Provision written back See Note 3 d below 3.81 27.74 5 Materialisation of Contingent Liabilities See Note 3 e below 19.34 4.90 6 Liabilities Provided related to earlier Years See Note 3 f below 12.94 127.76 7 Change in Contract Terms See Note 3 g below 1468.56 1283.20 Sub Total 1420.80 1217.88 8 Current Tax Impact See Note 3 h below 538.93 454.77 9 Deferred Tax Impact See Note 3 h below 6.59 47.69 Sub Total 545.52 407.08 Total 875.28 810.80 Profit after Tax as Restated 2817.70 2663.48 2. Changes in Accounting Policies: There has been no change in Accounting Policies during the Fiscal Years Ended 31 st March 2014 and 31 st March 2013 3. Other Adjustments In the financial statements for the Fiscal Years Ended 31 st March 2014 and 31 st March 2013 certain items of income/expenses have been identified as adjustments pertaining to earlier years. These adjustments were recorded in the year in which they were identified. However for the purpose of Restated Financial Statements such adjustments have been appropriately recorded in the respective years to which the transactions pertain. Adjustments related to financial years prior to year ended 31 st March 2013 have been adjusted against the opening balance of the Restated Summary Statement of Profit and Loss Account as at 1 st April 2012. The details of such adjustments are as under: a Prior Period Items 285

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In the Financial statements for theFiscal years ended 31 st March 2014 and 31 st March 2013 certain items of income/expenses have been identified as prior period items. For the purpose of this statement such prior period items have been appropriately adjusted in the respective years. b Depreciation and amortisation Pursuant to the notification of Schedule II of the Companies Act 2013 “the 2013 Act” by the Ministry of Corporate Affairs effective 1 April 2014 the Management has internally reassessed and changed wherever necessary the useful lives to compute depreciation to conform to the requirements of the 2013 Act for Companies incorporated in India. Consequently the carrying amount as at 1 st April 2014 is being depreciated over the revised remaining useful life of the asset. Accordingly an amount of ₹ 38.51 millions net of deferred Tax of ₹ 19.83millions representing the written down value of fixed asset with nil revised remaining useful life as at 1 st April 2014 was reduced from the retained earnings as at such date. The same has been adjusted in the respective years and in the balance brought forward in Profit and Loss Account as at 1 st April 2012. c Effect of Indian Navy Acquired Asset– restated The claim for asset acquired/constructed to augment the construction of Indigenous Aircraft Carrier Quay III expansion and allied works was initially denied by Indian Navy and hence accounted as Companys asset and repairs expense and depreciation claimed in the accounts during the financial years 2013-14 and 2014-15.Later on during the financial year 2015-16 after lot of deliberations Indian Navy accepted the claim. In the financial year 2015-16 when Indian Navy agreed to fund these assets and paid off ₹ 81.18 millions to the Company the Company wrote back/credited back the depreciation and repairs charged during the two previous years and treated the asset as Indian Navy acquired asset in the Financial statements. For restatement purpose items such as depreciation written back fixed assets Indian Navy acquired asset asset on infrastructure depreciation and repairs expense have been adjusted so as to reflect the original transaction of charging the asset as Indian Navy funded asset. d Excess Provision written back In the financial statements for the Fiscal years ended31 st March 2014 and 31 st March 2013 certain Provisions created in earlier years were written back. For the purpose of Restatement the said provisions wherever required have been appropriately adjusted in the respective years in which the same were originally created and the balance brought forward in Profit and Loss Account as at 1 st April 2012. In the case of ship repair contracts completed and invoices settled during the year income recognized is net of reductions due to price variation admitted. In the case of unsettled invoices the income is recognised net of estimated amount of reductions. Differences if any on settlement are adjusted against income in the year of settlement. For the purpose of Restatement the said differences have been adjusted in the respective years in which income is recognized. e Materialisation of Contingent Liabilities In the financial statements for the Fiscal years ended31 st March 2014 and 31 st March 2013contingent liabilities are disclosed in the notes to accounts and are not recognized in the books of accounts . However during the said periods certain contingent liabilities had subsequently materialised and were provided for only in the subsequent year. For the purpose of Restatement the said liabilities have been adjusted to the respective year in which the liability relates to including adjustment to the balance brought forward in Profit and Loss Account as at 1 st April 2012. f Liabilities Provided related to earlier Years During the years under consideration certain liabilities have been identified by the Company which were required to be provided in earlier years. For the purpose of Restated Financial Statements provisions for liabilities pertaining to earlier years accounted for during the Fiscal years ended31 st March 2017 31 st March 2016 31 st March 2015 31 st March 2014 and 31 st March 2013have been adjusted in the respective financial years to which they pertain and in the balance brought forward in Profit and Loss Account as at 1 st April 2012. g Change in Contract Terms 286

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In respect of Indigenous Aircraft Carrier IAC income pending the signing of Phase II Contract the income in respect of Phase II activities completed during financial years 2013-14 and 2012-13 were recognised in financial year 2013-14 at the rate of Phase I Contract and the same is qualified in Auditor’s Report 2013-14. Since the contract for phase II has been signed between Indian Navy and the Company on 16-12-2014 2014-15 the difference between Phase I Rate and Phase II Rate is applied on Phase II activities performed during financial years 2012-13 and 2013-14 and income is recognised in the financial year 2014-15 for the same. For Restatement the same is adjusted in the actual financial years - 2013-14 and 2012-13. h Prior Year Tax The Profit and Loss Account of some years include amounts paid/provided for or refunded/written back in respect of shortfall/excess income tax arising out of assessments appeals etc. which have now been adjusted in the respective years. Also income tax current tax and deferred tax has been computed on adjustments made as detailed above and has been adjusted in the Restated Statement of Profit and Loss for the Fiscal years ended31 st March 2014 and 31 st March 2013 and in the balance brought forward in Profit and Loss account as at 1 st April 2012. 4. Profit and Loss Account as at 1 st April 2012 Particulars Amount ₹ in millions Profit and Loss Account as at 1 st April 2012 Audited 7821.25 Prior PeriodSee Note 3 a above 39.28 Depreciation and Amortisation -Schedule II Impact See Note No.3 b above 69.98 Excess Provision written Back See Note No.3 d above 192.46 Materialisation of Contingent Liabilities See Note No.3 e above 120.14 Liabilities Provided related to earlier Years See Note 3 f above 406.43 Current Tax Impact See Note 3 h above 17.32 Deferred Tax Impact See Note 3 h above 110.18 Profit and Loss Account as at 1 st April 2012 Restated 7505.38 5. Material Regrouping Appropriate adjustments have been made in the Restated Financial Statements wherever required by a reclassification of the corresponding items of income expenses assets liabilities receipts and payments in order to bring them in line with the groupings as per the audited IGAAP financial statement of the Company as at and for the period ended 31 st March 2016. 287

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6. Matter of emphasis in the Auditors’ report a Matters not adjusted in restated Financials Auditors’ Report 2013-14 a. Balances under Trade Receivables and payables other current liabilities other non-current assets long and short term loans and advances are in the process of confirmation/reconciliation and consequent adjustment if any upon confirmation. b. Non-accounting of fixed assets financed by Indian Navy as Company’s fixed assets in the books of account of the Company and non-provision of depreciation thereof as the ownership is stated to be vested with Navy and non- accounting of assets and underlying outstanding liabilities of IAC pertaining to goods pending inspection/goods in transit as at year end are not quantified. 7. Auditor’s qualifications i Adjusted in Restated Financials Auditors’ Report 2013-14 1 Reliance on the recognition of ₹ 9332.00 millions under revenue from operations on ship building of Indigenous Aircraft Carrier IAC for Indian Navy pertains mostly to phase-II of the construction provisionally based on the rates approved for phase-I including₹ 864.80 millions as referred to in Note for which formal contract defining the terms is yet to be entered into Accordingly adjustments are made to the statement of financial information as restated for the year ended 31 st March 2013 31 st March 2014 and 31 st March 2015 as per Note No.3 g ii Other audit qualifications which do not require any corrective adjustment in the financial information are as follows: In addition to the audit opinion on the financial statements the auditors are required to comment upon the matters included in the Companies Auditor’s Report Order 2016 issued by the Central Government of India in terms of sub-section 11 of Section 143 of the 2013 Act .Certain statements/comments included in audit opinion on the financial statements CARO and Audit Comment to the Directions/Sub-Directions issued by the Comptroller Auditor General of India under section 143 5 of the Companies Act2013 which do not require any adjustments in the Restated Statements are reproduced below in respect of the financial statements presented. a Financial Year ended 31 st March2014 1. Reliance on the recognition of revenue from ship building/repair based on the Company’s own assessment of physical completion. Refer Note number 18 2. Accounting of liabilities towards subcontract work based on Company’s estimate pending confirmation by the parties. Refer note number 5A We are unable to determine the financial impact of the above qualifications in points i to iii in the absence of appropriate details. 3 CARO Clause I b the fixed assets have been stated to be physically verified by the Management during the year and is not observed by us. However the Physical verification procedure needs to be strengthened. As explained to us no material discrepancies were noticed on such physical verification. Clause ii b In our opinion the procedure of physical verification of inventories followed by the Management need to be strengthened in relation to the size of the Company and the nature of its business. 288

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Clause iv In our opinion and according to the information and explanations given to us the internal control system should be strengthened to commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. According to the information and explanations given to us there is no continuing failure to correct major weaknesses in internal control. Clause vii In our opinion the scope of internal audit function carried out by firm of Chartered Accountants need to be enlarged to commensurate with the size of the Company and nature of its business. Clause ix b The particulars of dues towards value added tax income tax customs duty excise duty service tax entry tax and cess as at 31 st March 2014 which have not been deposited on account of disputes are furnished below: ₹ in millions Name of Statute Nature of the dues Amount Period to which the amount relates Forum where dispute is pending Income Tax Act 1961 Income Tax 6.33 AY 2000-01 Case remanded by ITAT 0.86 AY 2002-03 AY 2003-04 Income Tax Appellate Tribunal 28.86 AY 2010-11 Commissioner of Income Tax Appeals 41.26 AY 2011-12 Commissioner of Income Tax Appeals Kerala Value Added Tax Act 2003 Value Added Tax 35.65 2007-08 KVAT Appellate Tribunal 65.22 2005-06 KVAT Appellate Tribunal Kerala General Sales Tax Act 1963 Sales Tax 20.22 2004-05 Deputy Commissioner Appeal 7.34 2001-02 Deputy Commissioner Appeal 11.19 2000-01 Deputy Commissioner Appeal Finance Act 1994 Service Tax 164.75 2004-05 Commissioner of Central Excise Customs Service Tax Clause xxi–During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanation given to us we have neither come across any instance of fraud on or by the Company noticed nor reported during the year nor have been informed of such case by the Management except tampering of certain e-tickets by the Company’s travel agents. As explained to us the financial implication in the instant case based on the initial assessment is around Rs 0.19 millions only. 289

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b Financial Year ended 31 st March 2013 1. Accounting of liabilities towards unsettled and incomplete subcontract work at the end of the year on an estimated basis 2. Effect of using estimates for arriving at the total contract cost for the purpose of recognition of income from ship building contracts under percentage completion method recognition of anticipated loss on ship building contracts and for recognition of income from ship repair activities under proportionate completion method and reduction from invoice value for arriving at ship repair turnover and the consequent impact if any on the profitability and current assets as on the Balance sheet date is not ascertainable. 3. CARO Clause ix b The details of dues of Income Tax Sales Tax Wealth Tax Service Tax Customs Duty Excise Duty and cess which have not been deposited on account of any dispute are detailed below: ₹ in millions Name of Statute Nature of the dues Amount Period to which the amount relates Forum where dispute is pending Income Tax Act 1961 Income Tax 6.33 0.86 35.08 A.Y.2000-01 A.Y.2002-03 AY2003-04 A.Y.2004-05 AY 2005-06 AY 2008-09 AY 2010-11 Case remanded by ITAT pending before Assessing Officer Income Tax Appellate Tribunal Commissioner of Income Tax Appeals Kerala Value Added Tax Act 2003 -do- -do- Penalty Value Added Tax -do- 254.68 278.66 547.47 2008-09 2005-2006 2007-2008 KVAT Appellate Tribunal Deputy Commissioner Appeal\ -do- Kerala General Sales Tax Act 1963 Sales Tax 11.99 7.34 19.64 2000-01 2001-02 2004-05 Deputy Commissioner Appeal\ -do- -do- Finance Act 1994 Service Tax 32.29 164.75 24.24 2003-042004- 052005-062006-07 2007-08 2004-05 2009-102010-11 2011-12 Customs Excise and Service Tax Appellate Tribunal Commissioner Central Excise Service Tax 290

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ANNEXURE IVA 1: Significant Accounting Policies and Notes forming part of the Restated Financial Information for the years ended 31 st March 2014 and 2013 1.1 Basis of preparation of financial statements The Restated Financial Statements have been prepared under Indian Generally Accepted Accounting Principles IGAAP and in accordance with the requirements of: a. section 26 of Part I of Chapter III of the Companies Act 2013 read with Rule 4 to Rule 6 of the Companies Prospectus and Allotment of Securities Rules 2014 b. item IX of Part A of Schedule VIII of the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations 2009 as amended to date in pursuance of provisions of Securities and Exchange Board of India Act1992 read along with the SEBI circular No. SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 31 2016 on Clarification regarding disclosures in Offer Documents under the SEBI Regulations issued by the Securities and Exchange Board of India in connection with the Proposed Initial Public Offering of Equity Shares of the Company. 1.2 Use of estimates In the preparation of financial statements the management makes estimates and assumptions in conformity with the Generally Accepted Accounting Principles in India. Such estimates and assumptions are made on reasonable and prudent basis taking into account all available information. However actual results could differ from these estimates and assumptions and such differences are recognized in the period in which results are ascertained. 1.3 Property Plant and Equipments and depreciation Tangible assets are stated at cost of acquisition less accumulated depreciation and impairment if any. Cost comprises of purchase price inward freight duties taxes and any attributable cost of bringing the assets to its working condition for its intended use. Subsequent expenditure incurred on existing fixed assets is added to their book value only if such expenditure increases the future benefits from the existing assets beyond their previously assessed standard of performance. Spares stand-by equipment and servicing equipment meeting the definition of property plant and equipment PPE are recognised in accordance with the Accounting Standard 10 Revised on Plant Property and Equipment issued by MCA vide Notification dated 30 March 2016 read with General Circular 04/2016 dated 27th April 2016. Capital work in progress comprises of the cost of fixed assets that are not yet ready for their intended use at the reporting date. Depreciation on fixed assets is provided on straight-line method based on useful life of the asset as prescribed in Schedule II to the Companies Act 2013 effective from 01.04.2014 except in respect of the following items: -For the assets acquired from Cochin Port Trust for International Ship Repair Facility ISRF depreciation is provided on the basis of useful life as assessed by technical experts. 1.4 Intangible Asset and amortisation Cost incurred on Design Development which are not directly chargeable on a product are capitalised as Intangible Asset and amortised on a straight-line basis over a period of five years. Cost of software which is not an integral part of the related hardware acquired for internal use is capitalised as intangible asset and amortised on a straight-line basis over a period of three years. Up- front fee paid for securing right to use of land and other facility is capitalised as intangible asset and amortised on a straight line basis over the period of 30 years for which the right has been obtained. Cost of internally generated weld procedure is capitalised as Intangible Asset and amortised on a straight-line basis over a period of three years. 1.5 Impairment of Assets The Company assesses the impairment of assets with reference to each Cash Generating Unit at each Balance Sheet date. If events or changes in circumstances based on internal and external factors indicate that the carrying value may not be recoverable in full the loss on account and the recoverable amount is accounted for accordingly. 291

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1.6 Investments Investments that are readily realizable and are intended to be held for not more than one year from the date of such investments are classified as current investments. All other investments are classified as Noncurrent. Current investments are carried at lower of cost and fair value. Non-current investments are valued at cost unless there is a permanent diminution in the value thereof. 1.7 Revenue Recognition a Contracts for the construction of ships and small crafts Other than Defence Vessels The income from ship building is recognized on percentage of completion method in proportion to the cost incurred for the work performed up to the reporting date bear to the estimated total contract cost considering the physical progress or financial progress whichever is lower. Where current estimates of total contract costs and revenue indicate a loss provision is made for the entire loss irrespective of the amount of work done. b Construction of Defence vessels Income from the construction of vessels which are on fixed price basis is recognized on percentage of completion method in proportion to the cost incurred for the work performed up to the reporting date bear to the estimated total contract cost considering the physical progress or financial progress whichever is lower. Where current estimates of total contract costs and revenue indicate a loss provision is made for the entire loss irrespective of the amount of work done. c Construction of Indigenous Aircraft Carrier IAC In the case of construction of IAC which is partly fixed price basis and partly cost plus basis the income from fixed price part is recognized on the percentage of completion method. Income from cost plus part of the contract activities for design outsourcing and material procurement are recognized when the activities are performed / materials received/ payments made. Cost of material and other expenses incurred for the vessel which are recoverable separately from Indian Navy is charged off to the Statement of Profit and Loss and are grossed up with the value of work done and recognized as income. d Contracts for repair of ships/ offshore structures: Income from repair of ships /offshore structures is recognized based on proportionate completion method when proportionate performance of each ship repair activity exceeds 75. The proportionate progress is measured by the Companys technical evaluation of the percentage of physical completion of each job. Revenue is recognized after taking into consideration possible contingencies with reference to the realizable value of work done. In the case of ship repair contracts completed and invoices settled during the year income recognized is net of reductions due to price variation admitted. In the case of unsettled invoices the income is recognised net of estimated amount of reductions. Differences if any on settlement are adjusted against income in the year of settlement. e Excise Duty The products manufactured by the Company such as ships / ship repair are exempted from the purview of excise duty. f Liquidated damages and interest on advances No income has been recognized on account of 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. g Others Dividend income is recognized when the Companys right to receive is established. 292

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1.8 Inventories a Raw materials components stores and spares are valued at weighted average cost method or net realisable value whichever is lower. Provision for obsolescence / non- usability / deterioration is determined on the basis of technical assessment made by the management. Goods in transit is valued at cost. Stock of materials in respect of construction of defence vessels wherein the cost incurred is reimbursed by the owner are shown as reduction from the advances paid by the owner for construction of the vessel. b Work in progress: Ship Building: - Work- in- progress is recognised only when the percentage of physical completion is less than the financial completion in which case the cost proportionate to excess of percentage of financial completion over physical completion is treated as Work in progress. In the case of Indigenous Aircraft Carrier since all the materials belongs to Indian Navy Work in progress is not recognized. Work- in -progress of ships/offshore structures under repair which have not reached 75 stage of physical completion and general engineering jobs are valued at cost. Work- in- progress of ships where physical construction has not started is also valued at cost. c Loose tools stock are valued at cost and tools in use are revalued after providing for loss on revaluation estimated at 30 of book value. d Stock of scrap is valued at net realizable value after adjusting customs duty if any payable on the scrap. 1.9 Advance/progress payments received Advance/progress payments received from customers in respect of repair work of ships/offshore structures are shown as deduction from the amount of work -in -progress in respect of income recognized under proportionate completion method. In the case of ship building the advance payment received is adjusted only when the ship is invoiced. 1.10 Employee benefits a Liability in respect of Defined benefit plan is provided on the basis of actuarial valuation as on the date of Balance Sheet. The method of actuarial valuation adopted is the Projected Unit Credit method. b Liability for payment of gratuity is determined by actuarial valuation as per Accounting Standard 15 Revised and funded to Employees Group Gratuity Trust as per Rules. c Defined contribution to Employees Provident Fund and Employees’ Pension Scheme 1995 are made on a monthly basis as per respective statutes. d Liability in respect of Leave entitlement is made on actuarial valuation basis at the year end and provided for as per Accounting Standard 15 Revised. 1.11 Borrowing cost General and specific borrowing costs directly attributable to acquisition/ construction or production of qualifying assets are capitalised as part of cost of such assets up to the date when such assets are ready for intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred. 1.12 Prior period adjustment Prior period adjustments and extra ordinary items having material impact on the financial affairs of the Company are disclosed. 1.13 Foreign Currency Transactions a. Foreign Currency Transactions: Foreign exchange transactions are recorded adopting the exchange rate prevailing on the dates of respective transactions. Monetary assets and liabilities denominated in foreign currencies existing as on the Balance Sheet date are translated at the exchange rate prevailing as at the Balance Sheet date. The exchange difference arising from the settlement of transactions during the period and effect of translations of assets and liabilities at the Balance Sheet date are recognized in the Statement of Profit and Loss. 293

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b. Derivative instruments and hedge accounting: The company uses foreign currency derivative contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and highly probable forecasted transactions. The company designated these as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30- Financial Instruments: Recognition and Measurement issued by Institute of Chartered Accountants of India The use of foreign currency and derivative contracts is governed by the Companys policies approved by the Board of Directors which provide written principles on the use of such financial derivatives consistent with the Companys risk management strategy. The company does not use derivative financial instruments for speculative purposes. Foreign currency derivative instruments are initially measured at fair value and are re-measured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated as effective cash flow hedges are recognized in Hedge Reserve Account under Shareholders Funds and the ineffective portion is recognized in the Statement of Profit and Loss. Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognized in the Statement of Profit and Loss as and when they arise. Hedge accounting is discontinued when the hedge instrument expires or is sold terminated or exercised or no longer qualifies for hedge accounting. If a hedged transaction is no longer expected to occur the net cumulative gain or loss recognized in reserves is transferred to the Statement of Profit and Loss. 1.14 Earnings Per Share Basic/Diluted Earnings per share reported is calculated by dividing the Net Profit after Tax for the year including post tax effect of any extraordinary items by the weighted average number of equity shares/dilutive potential equity shares outstanding as at the end of the year as the case may be. 1.15 Taxes on Income Current tax is determined as the amount of tax payable in respect of taxable income for the year computed in accordance with the provisions of the Income Tax Act 1961. Deferred tax liability or asset is recognized at subsequently enacted tax rates subject to the consideration of prudence on timing difference being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized only to the extent there is reasonable certainty that sufficient future taxable income will be available except that deferred tax asset arising due to unabsorbed depreciation and losses are recognized if there is a virtual certainty that sufficient future taxable income will be available to realize the same. 1.16 Provisions Contingent Liabilities and Contingent Assets A provision is recognised 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 are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Provision towards guarantee claims in respect of ships/ small crafts delivered wherever provided /maintained is based on technical estimation. As per revised policy for ships delivered the guarantee claims are covered by way of insurance policies covering the guarantee period on case to case basis wherever required. Insurance claims against Guarantee defects and Builders risk will be recognised in the year in which the survey is completed and probable amount of settlement is intimated by the Insurance Company. All other Insurance claims are recognised in the year of settlement by way of receipt of the settlement amount. Contingent liability is disclosed when the company has a possible obligation or a present obligation and it is probable that a cash flow will not be required to settle the obligation. Contingent assets are neither recognized nor disclosed in the accounts. 1.17 Segment Reporting Identification of segments: The Company’s operating businesses are organized and managed separately according to the nature of products and services provided. Unallocated items: Unallocated items include general income and expense items which are not allocated to any business segment. 1.18 Cash Flow Statement 294

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Cash flows are reported using the indirect method whereby Profit / Loss before extra-ordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from Operating Investing and Financing activities of the Company are segregated based on the available information. 295

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ANNEXURE IVA2 : OTHER NOTES TO FINANCIAL INFORMATION Note 1 Restated Summary Statement of Share Capital Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Authorised 7 Non-cumulative Redeemable Peference shares of ₹1000/- each 1200.00 1200.00 Equity shares of ₹ 10/- each 1300.00 1300.00 Issued Subscribed and Fully paid up Equity shares of ₹ 10 each fully paid up 1132.80 1132.80 Total 1132.80 1132.80 1.1 Reconciliation of number of shares and amounts outstanding Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions ₹ in Millions Equity Shares outstanding at the beginning of the year 1132.80 1132.80 Add : Shares issued during the year Equity Shares outstanding at the end of the year 1132.80 1132.80 1.2 Details of shareholders holding more than 5 shares in the company Name of Shareholder As at 31st Mar 2014 As at 31st Mar 2013 of holding of holding The President of India 100 100 Note 2 Restated Summary Statement of Reserves and Surplus Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions 296

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Capital Reserves Balance as at the beginning and end of the year 26.36 26.36 26.36 26.36 Capital Redemption Reserve Balance as at the beginning of the year 1191.42 800.00 Add: Current year transfer 0.00 391.42 Balance as at the end of the year 1191.42 1191.42 Securities Premium Reserve Premium on Tax Free Bonds Balance as at the beginning of the year 0.00 0.00 Add: Current year transfer 0.12 0.00 Balance as at the end of the year 0.12 0.00 Debenture Redemption Reserve Balance as at the beginning of the year 0.00 0.00 Add: Current year transfer 8.26 0.00 Balance as at the end of the year 8.26 0.00 Other Reserves General Reserve Balance as at the beginning of the year 417.62 324.99 Add: Transfer from surplus in Statement of Profit and Loss 97.12 92.63 Balance as at the end of the year 514.74 417.62 Hedge Reserve As per last Balance Sheet - gain/loss 2.25 11.51 Add: Net gain/loss during the year 24.54 13.76 Closing balance - gain/loss 22.29 2.25 Surplus in the Statement of Profit and Loss Balance as at the beginning of the year 9486.01 7821.25 Add: Adjustments made to opening reserve 0.00 315.87 9486.01 7505.38 Add : Net Profit for the current year 2817.70 2663.48 12303.71 10168.86 Less : Less: Transfer to Capital Redemption Reserve 0.00 391.42 Transfer to Debenture Redemption Reserve 8.26 0.00 Transfer to Reserves 97.12 92.63 Proposed dividend 169.92 169.92 Tax on dividend 28.88 28.88 Balance as at the end of the year 11999.53 9486.01 297

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Total 13762.72 11119.16 Note 3 Restated Summary Statement of Long Term Borrowings Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Tax Free Secured Redeemable Non-Convertible Bonds -Series 2013-14 1230.00 0.00 Total 1230.00 0.00 Tax Free Infrastructure Bond Series 2013-14 a Tranche 2: 230 bonds of face value of ₹ 1.00 million totalling ₹ 230 million with interest rate of 8.72 payable annually redeemable at par due for redemption on 28 th March 2029 . b Tranche 1: 1000 bonds of face value of ₹1.00 million totalling ₹ 1000 million with interest rate of 8.51 payable annually redeemable at par due for redemption on 02 nd December 2023 4.2 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 Kanayannurtaluk Ernakulam District. Utilisation : Out of the issue proceeds of ₹ 1230 million received as on date the Company has fully utilised/adjusted funds towards various expenditure incurred on International Ship Repair Facility ISRF project. Note 4 Restated Summary Statement of Other long term Liabilities Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Trade payables 30.00 25.18 Others 26.12 26.12 Total 56.12 51.30 There are no dues to Micro Small and Medium Enterprises as on 31st March 2014 previous year - Nil which are overdue and required to be disclosed as per MSMED Act 2006. This information has been determined to the extent such parties have been identified on the basis of information available with the Company. Note 5 Restated Summary Statement of Long Term Provisions Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Provision for employee benefits Leave entitlement 179.36 197.43 Total 179.36 197.43 298

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Note 6 Restated Summary Statement of Short Term Borrowings Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Short term borrowings from banks secured 1153.18 0.00 Short term borrowings from banks unsecured 956.00 0.00 Total 2109.18 0.00 SBI-EPC Loan 7.70 upto 31/7/13 and 7 during 1/8/13 - 31/3/14 Short Term Loan from UBI for IAC 10.25 Note 7 Restated Summary Statement of Trade Payables Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Trade payables Unsecured Outstanding dues of Micro Small and Medium Enterprises 43.61 25.31 Outstanding dues of creditors other than Micro Small and Medium Enterprises 1672.50 1374.99 Total 1716.11 1400.30 Out of trade payables₹ 43.61 millions is dues to Micro Small and Medium Enterprises as on 31st March 2014 previous year - ₹ 25.31 millions which are overdue and required to be disclosed as per MSMED Act 2006. This information has been determined to the extent such parties have been identified on the basis of information available with the Company. Note 8 Restated Summary Statement of Other Current Liabilities Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Advance for Indigenous Aircraft Carrier Cost plus 26402.65 24124.71 Amount advanced by the Company for Cost plus 956.00 0.00 Less: Indigenous Aircraft carrier inventory in stock 5528.10 5592.81 Less: Material issued 15201.44 10586.64 Less: Design and other direct expenses 2745.88 2717.11 299

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Less: Advance for purchase of materials 1468.33 1323.88 Less: Other expenses against cost plus activities 2921.68 2463.22 506.78 1441.05 Advance for Indigenous Aircraft Carrier fixed price contact 11252.00 10410.00 Less : Income recognised so far 17582.24 11907.01 6330.24 1497.01 Advance for Indigenous Aircraft Carrier infrastructure 1917.71 1917.71 Less: Assets on infrastructure 2007.10 1895.68 Less: WIP/advance to contractors for infrastructure 0.00 0.63 89.39 21.40 Advance outstanding for Indigenous Aircraft Carrier works Net 6926.41 34.56 Less : transfer to Trade Receivables 6926.41 34.56 Advance outstanding for Indigenous Aircraft Carrier works Net 0.00 0.00 Advances for other ship building contracts 4785.26 5811.57 Advances for ship repair and others 36.42 76.72 Interest accrued but not due 28.20 0.00 Income received in advance 0.00 3.76 Creditors for expenses 95.65 53.37 Other liabilities 1119.35 894.68 Total 6064.88 6840.10 Note 9 Restated Summary Statement of Short Term Provisions Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Provision for Employee Benefits Gratuity 11.04 96.93 Leave entitlement 82.12 75.92 Others 30.67 0.18 123.83 173.03 Other Provisions For taxation 1960.99 1252.11 For proposed dividend 169.92 169.92 For dividend tax 28.88 28.88 For taxes and duties 5.27 5.27 For KGST/KVAT 53.86 41.94 For guarantee repairs 47.77 28.00 For liquidated damages 146.00 103.61 300

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For expenditure / contingencies 516.92 393.66 For subcontract 567.15 1068.01 3496.76 3091.40 Total 3620.59 3264.43 Note 10 Restated Summary Statement of Fixed Assets As at 31st Mar 2014 GROSS BLOCK DEPRECIATION NET BLOCK PARTICULA RS Additions/ Disposal/ As at adjustment s Adjustm e nts As at As at For the Adjustment / As at As at As at 1st Apr during the during the 31st Mar 1st Apr year withdrawal 31st Mar 31st Mar 31st Mar 2013 year year 2014 2013 2014 2014 2013 i. Tangible assets Land Freehold 56.36 0.00 0.00 56.36 0.00 0.00 0.00 0.00 56.36 56.36 Buildings 1089.68 148.14 0.00 1237.82 339.24 38.57 0.00 377.81 860.01 750.44 Plant and equipment 2345.67 128.23 5.42 2468.48 967.50 111.15 5.17 1073.48 1395.00 1378.17 Furniture and fixtures 56.33 4.33 0.06 60.60 22.30 3.31 0.05 25.56 35.04 34.03 Vehicles 73.87 3.91 2.51 75.27 42.28 7.64 2.38 47.54 27.73 31.59 Office equipment 15.36 3.38 0.14 18.60 6.64 0.71 0.06 7.29 11.31 8.72 Docks and quays 572.02 457.70 0.00 1029.72 522.85 21.44 0.00 544.29 485.43 49.17 Railway sidings 2.21 0.00 0.00 2.21 2.10 0.00 0.00 2.10 0.11 0.11 Electrical installation 171.45 13.49 0.00 184.94 82.97 5.86 0.00 88.83 96.11 88.48 Drainage and water supply 13.35 0.00 0.00 13.35 9.79 0.05 0.00 9.84 3.51 3.56 Vessels 15.88 0.00 0.00 15.88 12.95 0.96 0.00 13.91 1.97 2.93 Books 1.32 0.00 0.00 1.32 1.32 0.00 0.00 1.32 0.00 0.00 4413.50 759.18 8.13 5164.55 2009.94 189.69 7.66 2191.97 2972.58 2403.56 ii. Intangible Assets Computer software 30.04 3.17 0.00 33.21 28.78 1.05 0.00 29.83 3.38 1.26 Right to use of land and ship repair facility 0.00 750.00 0.00 750.00 0.00 25.00 0.00 25.00 725.00 0.00 301

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30.04 753.17 0.00 783.21 28.78 26.05 0.00 54.83 728.38 1.26 Total i+ii 4443.54 1512.35 8.13 5947.76 2038.72 215.74 7.66 2246.80 3700.96 2404.82 302

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Note 10 Restated Summary Statement of Fixed Assets As at 31st Mar 2013 Tangible Intangible ₹ in Millions GROSS BLOCK DEPRECIATION NET BLOCK PARTICULAR S Additio ns/ Disposal/ As at adjustm ents adjustment s As at As at For the Adjust ment/ As at As at As at 1st Apr during the during the 31st Mar 1st Apr year withdra wal 31st Mar 31st Mar 31st Mar 2012 year year 2013 2012 2013 2013 2012 i. Tangible assets Land Freehold 45.04 11.32 0.00 56.36 0.00 0.00 0.00 0.00 56.36 45.04 Buildings 1004.60 85.08 0.00 1089.68 302.57 36.67 0.00 339.24 750.44 702.03 Plant Equipment 1782.70 577.38 14.41 2345.67 895.44 84.91 12.85 967.50 1378.17 887.26 Furniture Fixtures 49.24 7.92 0.83 56.33 20.21 2.87 0.78 22.30 34.03 29.03 Vehicles 73.97 0.08 0.18 73.87 34.92 7.53 0.17 42.28 31.59 39.05 Office Equipment 14.13 4.04 2.81 15.36 7.52 1.11 1.99 6.64 8.72 6.61 Others Docks Quays 572.02 0.00 0.00 572.02 519.64 3.21 0.00 522.85 49.17 52.38 Railway sidings 2.21 0.00 0.00 2.21 2.10 0.00 0.00 2.10 0.11 0.11 Electrical Installation 163.67 7.78 0.00 171.45 77.83 5.14 0.00 82.97 88.48 85.84 Drainage water supply 13.35 0.00 0.00 13.35 9.74 0.05 0.00 9.79 3.56 3.61 Vessels 15.88 0.00 0.00 15.88 11.99 0.96 0.00 12.95 2.93 3.89 Books 1.32 0.00 0.00 1.32 1.32 0.00 0.00 1.32 0.00 0.00 3738.13 693.60 18.23 4413.50 1883.28 142.45 15.79 2009.94 2403.56 1854.85 ii. Intangible Assets Computer Software 29.18 0.86 0.00 30.04 27.88 0.90 0.00 28.78 1.26 1.30 29.18 0.86 0.00 30.04 27.88 0.90 0.00 28.78 1.26 1.30 Total 3767.31 694.46 18.23 4443.54 1911.16 143.35 15.79 2038.72 2404.82 1856.15 iii. Capital Work in Progress 303

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Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Plant and machinery Buildings and Civil works 47.42 1356.47 Construction materials 27.77 0.84 Capital goods in transit 0.46 22.78 Total 75.65 1380.09 Note 11 Restated Summary Statement of Non Current investments Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions UNQUOTED AT COST NON TRADE Investment in Cochin Shipyard Employees Consumer Co-operative Society Limited 2175 B Class shares of ₹ 100 each 0.22 0.22 Kerala Enviro Infrastructure Limited 70000 equity shares of ₹ 10 each fully paid up 0.70 0.70 Cochin Waste to Energy Private Limited -100000 equity shares of ₹ 10 each fully paid up 1.00 1.00 Less Diminution in value of Investment Cochin Waste to Energy Private Limited 0.00 0.00 Total 1.92 1.92 304

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Note 12 Restated Summary Statement of Deferred Tax as at 31 st Mar 2014 ₹ in Millions CURRENT YEAR CHARGE/CREDIT AS AT 31 st Mar 2013 2013-14 AS AT 31 st Mar 2014 DEFERRED TAX LIABILITY DEPRECIATION 301.22 77.49 378.71 DEFERRED TAX ASSETS Unpaid Statutory Liablities 111.93 0.17 112.10 Other Items 351.89 77.78 429.67 TOTAL 463.82 77.95 541.77 DEFERRED TAX LIABILITY /ASSET NET 162.60 0.46 163.06 Restated Summary Statement of Deferred Tax as at 31 st Mar 2013 ₹ in Millions CURRENT YEAR CHARGE/CREDIT AS AT 31 st Mar 2012 2012-13 AS AT 31 st Mar 2013 DEFERRED TAX LIABILITY DEPRECIATION 218.85 82.37 301.22 DEFERRED TAX ASSETS Unpaid Statutory Liablities 104.40 7.53 111.93 Other Items 321.79 30.10 351.89 TOTAL 426.19 37.63 463.82 DEFERRED TAX LIABILITY /ASSETNET 207.34 44.74 162.60 305

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Note 13 Restated Summary Statement of Long Term Loans Advances Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Unsecured considered good Capital advances 16.35 4.85 Security deposit 82.84 20.87 Others Secured considered good Employee advances Related Parties 0.00 0.00 Others 14.03 17.58 Unsecured considered good Deposits with Customs department 26.12 26.12 Advance Income Tax Net of provision 0.00 0.00 Total 139.34 69.42 Note 14 Restated Summary Statement of Other Non Current Assets Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Unsecured Long term trade receivables Considered good 448.38 364.08 Considered doubtful 421.53 245.64 Less: Provision for doubtful debts 421.53 245.64 Unsecured Others Income tax refund due 228.14 254.76 Total 676.52 618.84 306

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Note 15 Restated Summary Statement of Inventories As taken valued and certified by the Management Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions At lower of Weighted Average Cost or Net Realisable Value Raw Materials and components 2741.25 1370.29 Less : Provision for obsolescene non-usability deterioration and reduction in value of inventory 42.93 44.00 Goods-in transit 256.76 634.39 2955.08 1960.68 Work-in-progress Valued at cost 383.27 785.42 Work-in-progress Valued at realisable value 440.65 586.02 823.92 1371.44 At lower of Weighted Average Cost or Net Realisable Value Stores Spares 81.11 81.53 Less : Provision for obsolescene non-usability deterioration and reduction in value of inventory 4.66 4.60 Goods-in transit 7.01 5.41 83.46 82.34 Loose Tools Valued at cost 91.17 107.87 Goods-in transit 0.46 0.04 Scrap Valued at Net Realisable Value 5.10 30.23 Total 3959.19 3552.60 Note 16 Restated Summary Statement of Trade Receivables Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Unsecured considered good Outstanding for a period exceeding six months from the date they were due for payment 302.34 97.32 Outstanding for a period less than six months from the date they were due for payment 11725.81 6741.76 307

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Total 12028.15 6839.08 Note 17 Restated Summary Statement of Cash and Bank Balances Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Cash on hand 0.18 0.12 Balance with Banks: In current account 80.31 2454.53 Demand deposits with banks with original maturity of less than three months 50.00 655.00 Cash and Cash Equivalents 130.49 3109.65 Balance with Banks: Deposits with banks with maturity upto 12 months 5433.82 3930.00 Other Bank balances 5433.82 3930.00 Total 5564.31 7039.65 Bank balance in current account includes advance from Indian Navy for IAC project and parked in Flexi Deposit A/c Deposits with banks of more than 3 months maturity as at 31 st Mar 2014 includes ₹ 230.00 millions parked with Company’s bankers for meeting the expenditure in the due course of implementation of the ISRF Project 8.94 2386.69 Note 18 Restated Summary Statement of Short-term Loans and Advances Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions To Related parties Secured Considered Good- Employee Advance 0.00 0.08 Other than to related parties Others 1919.64 633.82 Unsecured considered doubtful Others 0.01 0.01 1919.65 633.91 Less: Provision for doubtful advances 0.01 0.01 Total 1919.64 633.90 308

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Note 19 Restated Summary Statement of Other Current Assets Particulars As at 31st Mar 2014 As at 31st Mar 2013 ₹ in Millions Interest accrued on bank deposits/others 304.07 149.01 Interest accrued on employee advances To Related Parties 0.02 0.12 Others 3.09 3.66 Others Including claims receivable 269.33 252.73 Advance income tax 1033.96 837.75 Gratuity Trust advance/adjustment account 0.00 41.40 Balances with Customs Port Trust and Excise 8.19 16.13 Forward contract 22.90 1.39 Other deposits 1.46 0.41 Total 1643.02 1302.60 Note 20 Restated Summary Statement of Revenue from operations Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 ₹ in Millions Sale of products Ship building: Indigenous Aircraft Carrier IAC 10800.59 6572.18 Vessels other than IAC 4739.05 7424.28 15539.64 13996.46 Less: Excise duty 0.00 37.36 15539.64 13959.10 Sale of services Ship repairs 2286.51 2835.99 2286.51 2835.99 Other Operating Revenue 152.11 3.55 Engineering works 0.23 0.03 Total 17978.49 16798.67 309

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Note 21 Restated Summary Statement of Other Income Particulars Nature Recurring/Non- Recurring For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 ₹ in Millions Other Income as restated 610.61 869.22 Net Profit/loss before Taxas restated 4330.36 3973.39 Other Income as a of Netprofit 14.10 21.88 Source of Other income Training facilities Recurring 40.81 37.50 Income from sale of scrap and stores Recurring 14.33 80.42 Profit on sale of fixed assets Non-Recurring 0.02 0.00 Income from laboratory services Recurring 2.34 2.38 Rent received Recurring 6.37 7.70 Hire charges received Recurring 0.71 2.60 Interest on bank deposits Recurring 505.89 584.55 Interest from others Non-Recurring 2.39 5.17 Dividend income Recurring 0.09 0.61 Net gain /loss on foreign currency transactions Recurring 6.87 73.12 Miscellaneous income Recurring 30.79 75.17 Total 610.61 869.22 Note 22 Restated Summary Statement of Cost of Materials Consumed Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 ₹ in Millions Raw Materials Steel 641.68 634.22 Pipe 81.79 88.97 Paint 77.20 83.60 Bought out components 6956.82 7986.39 Total 7757.49 8793.18 310

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Note 23 Restated Summary Statement of Changes in Inventories of Work-in-Progress Other than those which are recognised as income on percentage/proportionate completion method Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 ₹ in Millions Work -in-Progress at cost: At the beginning of the year 785.42 254.96 Less: at the end of the year 383.27 785.42 Decretion/Accretion to Work-in-Progress 402.15 530.46 Note 24 Restated Summary Statement of Sub Contract and Other Direct Expenses Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 ₹ in Millions Sub contract and off loaded jobs 1137.85 1359.64 Hull insurance 21.73 26.90 Other direct expenses 577.48 639.55 Total 1737.06 2026.09 Note 25 Restated Summary Statement of Employee Benefits Expense Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 ₹ in Millions Salaries wages bonus/exgratia and allowances 1841.02 1622.65 Contribution to Provident Fund and Family Pension Fund 112.55 95.81 Gratuity 19.94 97.14 Staff welfare expenses 118.41 72.48 Total 2091.92 1888.08 311

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Disclosure on Employee benefits as per Accounting Standard 15 Revised Employee Benefits for the below mentioned defined benefits schemes have been provided in the accounts. Gratuity Earned Leave Entitlement In respect of Leave Travel Concession relating to the block period 2010-2013 provision amounting to ₹ 2.70 millions towardsunavailed portion has been made considering the full eligibility of the employees in this behalf. Actuarial valuation of leave entitlement and gratuity has been done with the following assumptions. 2013-14 ₹ in millions 2012-13 ₹ in millions Particulars Leave entitlement Unfunded 31/03/2015 Gratuity entitlement Funded 31/03/2015 Leave entitlement Unfunded 31/03/2014 Gratuity Funded 31/03/2014 Discount rate 9.10 9.10 8.10 8.00 Salary escalation rate 3.00 3.00 3.00 3.00 Expected rate of return on plan assets - 9.00 9.00 2013-14 ₹ in millions 2012-13 ₹ in millions Particulars Leave entitlement Unfunded 31/03/2014 Gratuity Funded 31/03/2014 Leave entitlement Unfunded 31/03/2013 Gratuity Funded 31/03/2013 Present value of obligation as the beginning of the year 298.11 683.61 270.85 751.76 Interest cost 18.95 48.83 17.20 53.73 Current service cost 10.75 12.91 10.07 21.60 Benefits paid / provision withdrawn 97.63 146.52 -82.52 -224.18 Past service cost - - Actuarial gain /loss on obligations 31.29 9.72 82.52 80.69 Present value of obligation as at the end of the year 261.48 608.55 298.11 683.61 312

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2013-14 ₹ in millions 2012-13 ₹ in millions Particulars Leave entitlement 31/03/2014 Gratuity Funded 31/03/2014 Leave entitlement 31/03/2013 Gratuity Funded 31/03/2013 Fair value of plan assets as at the beginning of the year - 628.08 777.39 Expected return on plan assets - 52.81 60.58 Actuarial gain/loss - 0.99 1.48 Contributions: 72.85 64.13 82.52 15.76 Benefits paid 72.85 146.52 82.52 224.18 Fair value of plan assets as at the end of the year - 597.51 628.08 Expenses recognized in the Statement of Profit and loss 2013-14 ₹ in millions 2012-13 ₹ in millions Particulars Leave entitlement 31/03/2014 Gratuity Funded 31/03/2014 Leave entitlement 31/03/2013 Gratuity Funded 31/03/2013 Current service cost 10.75 12.91 10.07 21.6 Interest cost 18.95 48.83 17.2 53.73 Expected return on plan assets - 52.82 -60.59 Net actuarial gain/loss recognized in the year 31.29 10.72 82.52 82.18 Past service cost - - Expenses recognized in statement of profit and loss 60.99 19.64 109.79 96.93 313

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Gratuity expenses includes ₹ 0.30 millions previous year ₹ 0.22 millions being amount paid towards insurance premium Risk cover. The provision for sick leave encashment created in the accounts in the past years has been reversed during the year on account of the inadmissibility of the sick leave for encashment as directed by the Ministry of Shipping/DPE. Note 26 Restated Summary Statement of Finance Costs Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 ₹ in Millions Bank interest 160.68 224.98 Interest others 0.62 0.62 Interest under Income Tax Act 3.06 0.77 Interest on Tax Free Bonds 28.20 0.00 Total 192.56 226.37 Note 27 Restated Summary Statement of Depreciation and Amortisation Expense Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 ₹ in Millions Depreciation on Tangible assets 189.69 142.45 Amortisation of Intangible asset 26.05 0.90 Total 215.74 143.35 Add : Loss on Revaluation of tools 37.48 44.65 Total 253.22 188.00 314

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Note 28 Restated Summary Statement of Other Expenses Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 ₹ in Millions Consumption of stores 116.54 112.53 Consumption of spares 27.03 9.73 Rates and taxes 9.89 5.83 Power 159.46 134.81 Fuel 80.89 77.09 Water 15.93 14.40 Repairs and maintenance: Building and roads 54.46 48.80 Plant and machinery 37.39 27.53 Others 55.16 64.17 Maintenance dredging 115.22 60.74 Transport and stores handling 20.24 19.06 Travelling and conveyance expenses 41.51 35.89 Printing and stationery 6.87 5.65 Postage telephone and telex 4.47 4.60 Advertisement and publicity 18.20 14.17 Lease rent 50.44 2.31 Hire charges 18.52 15.88 Insurance 23.65 17.79 Security expenses 80.31 52.76 Auditors remuneration 0.51 0.60 Auditors remuneration for other services 0.24 0.03 Training 18.87 18.36 Legal expenses 1.55 0.83 Liquidated damages 113.13 108.70 Consultancy 3.66 4.06 Bank charges 5.18 4.95 Net loss /gain on derivative contracts 278.97 91.12 Corporate Social Responsibility 36.00 30.00 Write off of stores and spares 2.88 0.00 Loss on sale and write off of fixed assets 0.66 2.44 Miscellaneous expenses 21.83 30.55 Total 1419.66 1015.38 315

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Note 29 Restated Summary Statement of Provision for Anticipated Losses and Expenditure Particulars For the Year Ended 31st Mar 2014 For the Year Ended 31st Mar 2013 ₹ in Millions Provision for: Doubtful debts / advances 182.51 0.61 Non moving inventory 10.16 7.49 Liquidated damages 103.12 19.00 Expenses and contingencies 108.89 60.76 Total 404.68 87.86 30. Restated Summary Statement of Contingent Liabilities and Commitments Particulars As on 31st March 2014 As on 31st March 2013 Brief Description of the nature and obligation as on 31.03.2017 ₹ in millions ₹ in millions A CONTINGENT LIABILITY To the extent not provided for a Guarantees i Letters of Credit 2124.79 1953.36 Represents LC opened by the Company in various banks for procurement of materials/assets ii Corporate Performance Guarantee 392.50 0.00 Performance guarantee given by Company to COPT for performance of obligations under the contract agreement entered with COPT during the contract period b Other money for which the company is contingently liable i Greater Cochin Development Authority GCDA 6.91 6.91 Claim raised by GCDA for the land acquired for the Company is settled. However 8 land acquisition revision petition cases Valued at ₹ 6.91 millions filed by evictees is pending with the Honble Supreme Court and High Court.. 316

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ii Customs duties 870.00 2054.85 Customs duty for materials under Bond and Indigenous vessels delivered. Includes an amount of ₹ 6.98millions being Customs duty refund granted by CESTAT Bangalore against which an appeal is pending before the Honble High Court of Kerala. iii Penalty levied by KVAT authorities on export of ships 0.00 254.68 Appeal allowed in favour of the Company by KVAT Appellate Tribunal. Presently no demand exists. iv Demand for KGST/KVAT for the Asst Years 2001-022004-05 2005-06 2007-08 mainly due to levy of KVAT on the export turnover of ships 139.63 865.11 2000-01 - ₹ 11.19millions 2001-02 - ₹ 7.34millions 2004-05 - ₹ 20.22millions 2005-06 - ₹ 65.22millions 2007-08 - ₹. 35.65millions Under appeal. Stay of collection of tax obtained in all cases. Demand reduced to the extent of appeal allowed by DCA. v Income Tax 77.30 42.26 Demand relating to Assessment Years: a AY 2009-10 - ₹ 7.77millions AY 2010-11 - ₹ 12.63millions AY 2011-12 - ₹ 42.02millions AY 2012-13 - ₹ 54.61millions AY 2013-14 - ₹ 22.14millions AY 2014-15 - ₹ 87.69millions b AY 1997-98 - ₹ 219.16millions AY 1998-99 - ₹ 96.73millions AY 1999-00 - ₹ 35.37millions AY 2000-01 - ₹ 17.03millions AY 2001-02 - ₹ 9.64millions c AY 2002-03 - ₹ 2.99millions vi Service Tax 164.75 164.75 Demand of Service Tax on IAC P-71 Design Consultancy as per Show Cause Notice issued. Adjudication pending 0.00 32.29 Service Tax on the amount paid towards brokerage and commission. Appeal allowed in favour of the Company. Presently no demand exists. 0.00 24.24 Demand of Service Tax raised by the Department on the income tax remitted by the Company on the foreign payments made has been paid by the Company and appeal has been filed against the above demand. 317

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B COMMITMENTS To the extent not provided for a Estimated amount of contracts remaining to be executed on capital account and not provided for: 36.89 33.47 30.1. CONTINGENCIES AND COMMITMENTS I Income Tax Assessments a The Income Tax Assessment of the company for the AY 2013-14 and 2012-13 have been completed .Demands raised as per the assessment orders totaling to ₹226.85millions for the Assessment Years 2009-10 2010-11 2011-12 2012-13 2013-14 and 2014-15 are shown under Contingent Liability pending disposal of the appeals filed before the Commissioner of Income Tax Appeals. The demands are mainly due to disallowance of certain genuine claims. However the above demands have been adjusted against the refund due for the subsequent years. b The Income Tax department has gone for appeal against the order of the ITAT allowed in favour of CSL before the Honble High Court of Kerala which is still pending for disposal. c The Company has filed appeal before the ITAT against the order of Assessing Officer/ Commissioner of Income Tax Appeals and the appeal was partly allowed in favour of CSL the effect to the order has not yet been given by the reassessing officer. II Sales Tax Assessment under KGST Act The Sales Tax assessments under Kerala General Sales Tax Act up to the Assessment Year 2004-05 have been completed and orders were issued for all the years except for the year 2002-03 2003-04. Due to apparent mistake in the orders issued for the year 2000-01 and 2001-02 applications have been filed for rectification of the orders. Pending rectification to the assessment orders the demands thereto have been shown under Contingent Liabilities. For the Assessment year 2004-05 against the demand for ₹20.22millions Company has filed appeal before the Deputy Commissioner Appeals. Pending disposal of the appeal the tax due as per assessment order has been shown under Contingent Liabilities III Sales Tax Assessments under KVAT Act The KVAT assessments from Assessment Year 2005-06 to Assessment Year 2007-08 have been completed and assessment orders were issued for Assessment Year 2005-06 and Assessment Year 2007-08 with a demand of ₹ 283.66millions and ₹ 547.47millions respectively. Assessment order for the year 2006-07 is pending. The appeals filed by the Company against the above order before the Deputy Commissioner Appeals have been decided in favour of the Company and remanded for fresh assessments. Accordingly the demands as per the original assessment orders have become null. As such no demand exists as on reporting date. Fresh assessment for the above years is pending. 31. The dispute between M/s Apeejay Shipping Ltd formerly Surendra Overseas Ltd and the Company in the matter of ship 005 was referred for arbitration by the Honble Supreme Court of India. The arbitration award July 2009 was in favour of the Company under which the Company is to receive ₹280.36 millions from M/s Apeejay Shipping Ltd. The company has filed a petition before Sub Court Ernakulam for passing a decree. M/s Apeejay Shipping Ltd has moved the Sub Court to quash the Award of the Umpire and the Company has filed Counter Affidavit against this move. The matter is pending before the court. No credit has been taken in the books of account pending final decree of the Court. 318

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32. Permanent Machinery for Arbitration Department of Public Enterprises Govt. of India has notified award in favour of the Company in the dispute between the Company and M/s Oil and Natural Gas Corporation Ltd on the Works Contract Tax issue and ONGC has paid to the Company the disputed sum along with interest amounting to ₹ 264.22millions as per the award. ONGC has gone on appeal before the Law Secretary Ministry of Law Justice against the award. Pending disposal of ONGC appeal no adjustment has been made in the accounts. 33. 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 for based on the work done. 34. Balances of sundry debtors loans and advances deposits claims and sundry creditors are subject to confirmation and consequent reconciliation if any. 35. Litigation:The Company is subject to legal proceedings and claims in the ordinary course of business. The Companys Management does not reasonably expect that these legal actions when ultimately concluded and determined will have material and adverse effect on the Companys results of operation 36. 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. 37. Segment Reporting: The Company is engaged in two major activities viz Shipbuilding and Repair of ships/ offshore structures. Segment wise analysis has been made on the above basis and amounts allocated on a reasonable basis. TOTAL REVENUE ₹ in millions 2013-14 2012-13 Ship Building 15691.98 13962.68 Ship Repair 2286.51 2835.99 Others 610.61 869.22 TOTAL 18589.10 17667.89 38. Value of Imports on CIF basis 2013-14 2012-13 Particulars ₹in millions Raw materials 2544.29 3726.15 Components Spares 1160.03 1706.87 Capital goods 63.57 4.39 3767.89 5437.41 39.Value of Imported/indigenous raw materials spares and bought out components consumed and percentage thereof: ₹ in millions Particulars 2013-14 2012-13 Value ₹in millions Value ₹in millions 319

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40.Expenditure in Foreign Currency On Payment basis other than those in item 40 above ₹ in millions Particulars 2013-14 2012-13 Payments to foreign consultants 70.06 75.21 Commissioning and installation charges 35.16 74.26 Brokerage and commission 0.00 66.39 Advance payments to suppliers 130.40 222.99 Design and documentation charges 1715.26 131.16 Others 136.51 95.23 41. Earnings in foreign exchange on due basis Particulars 2013-14 2012-13 Income from shipbuilding 736.49 6125.16 Income from ship repair 1.53 0.00 Raw Materials Imported 287.72 35.93 253.34 31.6 Indigenous 512.96 64.07 548.29 68.4 800.68 100 801.63 100 Bought out components Imported 3736.14 53.70 5175.20 64.76 Indigenous 3220.67 46.30 2816.35 35.24 6956.81 100 7991.55 100 Spares Imported 3.89 14.40 4.82 22.99 Indigenous 23.14 85.60 16.13 77.01 27.03 100 20.95 100 320

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42. Related party disclosure as per AS 18 Sl No Related Party 31.03.2014 31.03.2013 1 CMDE. Subramaniam K Chairman Managing Director Upto 31 Dec 2015 Key Management Personnel Key Management Personnel 2 CaptSundar R S Director Operations 21 Nov 2011 to 31 Aug 2015 Key Management Personnel Key Management Personnel 3 Shri. RavikumarRoddam Director Finance Upto 30 April 2014 Key Management Personnel Key Management Personnel 4 Shri. Vinaya Kumar P Director Technical 01 Sep 2011 to 31 May 2014 Key Management Personnel Key Management Personnel Name of the transacting related party Name of transaction 2013-14 ₹ in million 2012-13 ₹ in million CMDE. Subramaniam K Remuneration 3.50 3.62 CaptSundar R S Remuneration 2.73 2.29 Shri. RavikumarRoddam Remuneration 2.92 3.07 Shri. Vinaya Kumar P Remuneration 2.67 2.39 Loans Advances to Key Management Personnel ₹ in Millions Name of Related Party Opening Balance as on 1/4/2013 Loans Taken during 2013-14 Repayments Balance as on 31/03/14 Interest accrued as on 31/03/14 VINAYA KUMAR P 0.08 0.00 0.08 0.00 0.02 Name of Related Party Opening Balance as on 1/4/2012 Loans Taken during 2012-13 Repayments Balance as on 31/03/13 Interest accrued as on 31/03/13 SUNDAR R S 0.00 0.00 0.00 0.00 0.07 VINAYA KUMAR P 0.17 0.00 0.09 0.08 0.05 Loan balances have been considered from the year of attaining Key Management Personnel status. 43. Previous year figures have been regrouped and classified wherever necessary to conform to the current year presentation. Annexure VA -Statement of Dividend Proposed for the year ₹ in millions Particulars Year Ended 31 March 2014 Year Ended 31 March 2013 Paid-up equity share capital 1132.80 1132.80 Proposed Dividend 169.92 169.92 321

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Rate of dividend equity 15.00 15.00 Corporate Dividend Tax 28.88 28.88 The dividend disclosed is excluding tax payable on such dividend. 322

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Annexure VIA – Restated Statement of Accounting Ratios ₹ in millions As at /for the Year ended 31 st Mar 14 31- As at /for the Year ended 31 st Mar 13 Basic Earnings Per Share Basic EPS Profit for the year 2817.70 2663.48 Number of Weighted average equity shares 113.28 113.28 Par value per share 10 10 Earnings Per Share-Basic 24.87 23.51 Diluted Earnings Per Share Diluted EPS Profit for the year 2817.70 2663.48 Number of Weighted average equity shares 113.28 113.28 Par value per share 10 10 Earnings Per Share-Diluted 24.87 23.51 Net Asset Value Per Equity Share ₹ Net worth as restated 14895.52 12251.96 Number of equity shares outstanding 113.28 113.28 Net Asset Value NAV per Equity Share ₹ 131.49 108.16 Net Profit after tax as restated 2817.70 2663.48 Net worth as restated 14895.52 12251.96 Return on Net worth for equity shareholders 18.92 21.74 323

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Annexure VII A: Restated Statement of Tax Shelters ₹ in millions Particulars 31-Mar-14 31-Mar-13 Profit before exceptional item current and deferred taxes as restated 4330.36 3973.39 Less: Exceptional Item Profit before exceptional item current and deferred taxes as restated A 4330.36 3973.39 Weighted average tax rate B 33.99 32.445 Tax Expense at weighted average rate C 1471.89 1289.17 Adjustments Permanent Differences Expenses disallowed/Income allowed 119.78 19.17 Income exempt under the Income Tax Act 0.10 0.60 Others 0.24 68.17 Total D 119.92 86.74 Temporary Differences Difference between book depreciation and tax depreciation 227.97 211.68 Provision for anticipated losses and gains 224.83 140.25 Disallowance under Sec 43B 0.51 7.53 Adjustments due to reinstatement 4.01 183.72 Total E 1.38 160.68 Net Adjustments D+E F 121.30 73.94 Tax Liability/Saving thereon G 41.23 24.00 Current Tax provision for the year as per restated accounts C+G H 1513.12 1265.17 For and on behalf of Board of Directors V KALA SUNNY THOMAS D PAUL RANJAN MADHU S NAIR Company Secretary Director Technical Director Finance Chairman and Managing Director Chief Financial Officer DIN - 06882228 DIN - 06869452 DIN - 07376798 Kochi dated July 17 2017 324

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As Per our report attached For M/s KrishnamoorthyKrishnamoorthy Chartered Accountants Firm Registration No.001488S C.R.REMA Partner Membership Number 029182 Kochi dated July 17 2017 325

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326 SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IND AS Our Restated Financial Information included in this Red Herring Prospectus is prepared in accordance with Ind AS for the financial years ended March 31 2017 March 31 2016 and March 31 2015 and in accordance with Indian GAAP for the financial years ended March 31 2014 and March 31 2013. The following table summarizes certain of the areas in which differences between Indian GAAP and Ind AS could be significant to our financial position and results of operations. This summary should not be taken as an exhaustive list of all the differences between Indian GAAP and Ind AS. No attempt has been made to identify all recognition and measurement disclosures presentation or classification differences that would affect the manner in which transactions or events are presented in our financial statements or notes thereto. Certain principal differences between Indian GAAP and Ind AS that may have a material effect on our financial statements are summarized below. Accordingly no assurance can be provided to investors that our financial statements would not be materially different if prepared in accordance with Ind AS. Potential investors should consult their own professional advisors for an understanding of the differences between Indian GAAP and Ind AS and how those differences might affect the financial information disclosed in this Red Herring Prospectus. Sl. No Ind AS No Particulars Treatment as per Ind AS Treatment as per Indian GAAP 1 Ind AS 1 Presentation of Financial Statements Other Comprehensive Income OCI: In d AS-1 requires the presentation of a statement of Other Comprehensive Income OCI as part of the financial statements. This statement presents all the items of income and expense including reclassification adjustments that are not recognized in the Statement of Profit and Loss as required or permitted by other Ind AS. Other Comprehensive Income OCI: There is no concept of inclusion of statement of Other Comprehensive Income OCI under Indian GAAP. Hence all the items of incomes and expenses are recognized in the Statement of Profit and Loss. Statement of Changes in Equity SOCIE: Ind AS-1 requires the presentation of all transactions with equity holders in their capacity as equity holders to be presented in the statement of changes in equity the "SOCIE". The SOCIE is considered to be an integral part of financial statements. The statement of changes in equity includes the following information: • total comprehensive income for the period • the effects on each Statement of Changes in Equity SOCIE: Indian GAAP does not require a Statement Of Change In Equity. However information relating to the appropriation of profits and movement in capital and reserves is presented in the line items Share Capital and Reserves and Surplus in the Balance Sheet.

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327 Sl. No Ind AS No Particulars Treatment as per Ind AS Treatment as per Indian GAAP component of equity of retrospective application or retrospective restatement in accordance withIndAS 8 and • for each component of equity a reconciliation between the opening and Closing balances separately disclosing each change. Extraordinary Items: Under Ind AS 1 presentation of items of income and expenditure as extraordinary is prohibited. Extraordinary Items: Extraordinary items are disclosed separately in Indian GAAP to determine the net profit after tax. Items of income or expense to be disclosed as extraordinary should be distinct from the ordinary activities and are determined by the nature of the event or transaction in relation to the business ordinarily carried out by an entity. Other Disclosures: Ind AS-1 requires disclosure of: a Critical judgments made by the management in applying accounting policies b Key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year and c Information that enables users of financial statements to evaluate the entitys objectives policies and processes for managing capital. Further domicile and Other Disclosures: There are no specific disclosure requirements under Indian GAAP for: a Critical judgments made by the management in applying accounting policies b Key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year and c Information that enables users of financial statements to evaluate the entity’s objectives policies and processes for managing capital.

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328 Sl. No Ind AS No Particulars Treatment as per Ind AS Treatment as per Indian GAAP legal form of the entity its country of incorporation and the address of its registered office/ principal place of business to be disclosed in the notes. 2 Ind AS 2 Inventories Amount paid for deferred settlement terms in procurement of inventories is to be recognized as an interest expense. Consistent cost formula needs to be applied for inventories of similar nature and use to the entity. There are no specific provisions relating to the recognition of interest expense relating to inventory procured on deferred settlement terms. Cost formula could be applied differently for each of the inventory items. 3 Ind AS 8 Accounting Policies and Changes in Accounting Estimates Restatement and Reclassification of Items: The restatement/ reclassification of items and retrospective application of accounting policy in the financial statements are permitted with additional disclosures of nature reason and amount reclassified/ restated. Further a third balance sheet as at the beginning of the preceding period needs to be presented. Omissions/Misstateme nts: Ind-AS 8 treats all omissions/misstatement in an entity’s earlier period financial statements including balance sheet misclassification as an error/prior period item. Hence Material errors are corrected retrospectively by restating the comparative amounts for prior periods presented in which the error occurred before the earliest period presented by restating the opening statement of financial position. Restatement and Reclassification of Items: Under Indian GAAP there is no requirement of retrospective adjustment of restatement and reclassification and change accounting policy. Omissions/Misstatements: Requires rectification of prior period items with prospective effect.

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329 Sl. No Ind AS No Particulars Treatment as per Ind AS Treatment as per Indian GAAP 4 Ind AS 10 Events after the reporting date Disclosure of Non – Adjusting Events: Ind AS 10 requires material Non – Adjusting events to be in the financial statements. Dividends: As per Ind AS-10 proposed dividend is not to be recognized. The accounting of such appropriation is not permitted until approved by the shareholders at an annual general meeting. However Ind AS 1 requires separate disclosure of the amount of proposed dividend. Disclosure of Non – Adjusting Events: AS 4 requires non- adjusting events to be disclosed in the report of the approving authority for example the board’s report. Dividends: Under Indian GAAP proposed dividend is shown as an appropriation of profit in the Statement of Profit and Loss. 5 Ind AS 109 Financial Instruments – Premium on forward contracts Forward Contract: Under Ind AS 109 changes in fair value of the derivative hedging instrument which are designated as “Cash Flow Hedges” are recognized under Other Comprehensive Income and held in Hedging Reserve net of taxes to the extent the hedges are effective. To the extent that the hedge is ineffective changes in fair value are recognized in the Statement of Income and reported within foreign exchange gains/losses net. Hedge accounting is discontinued when the hedging instrument expires or is sold terminated or exercised without replacement or rollover as part of hedging strategy or if its designation as a hedge is revoked or when the hedge no longer meets the criteria for hedge accounting. Any gain or loss recognised in Other Comprehensive Income and accumulated in Forward Contract: Forward contracts other than those entered into to hedge foreign currency risk on unexecuted firm commitments or highly probable forecast transactions are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on such contracts are recognized in the period in which they arise. All the other derivative contracts including forward contracts entered into to hedge foreign currency risks on unexecuted firm commitments and highly probable forecast transactions are recognized in the financial statements at fair value as on the date of the balance sheet. Under Accounting Standard AS 30 "Financial Instruments: Recognition and Measurement" on the accounting of derivative contracts the gains or losses on the fair valuation/settlement of the derivative contracts covered under the standard are recognized in the statement of profit and loss or balance sheet as the case may be after

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330 Sl. No Ind AS No Particulars Treatment as per Ind AS Treatment as per Indian GAAP equity till that time remains and is recognised in Statement of Profit and Loss when the forecasted transaction ultimately affects the profit or loss. When a forecasted transaction is no longer expected to occur the cumulative gain or loss accumulated in equity is transferred to the Statement of Profit and Loss.The cumulative gain or loss previously recognized in the hedging reserve is transferred to the statement of income upon the occurrence of the related forecasted transaction. If the forecasted transaction is no longer expected to occur such cumulative balance is immediately recognized in the statement of income. Changes in fair value of foreign currency derivative instruments not designated as cash flow hedges have to be recognized in the statement of income and reported within foreign exchange gains/ losses net. applying the test of hedge effectiveness. Under the test of hedge effectiveness where the hedge in respect of off-balance sheet items is effective the gains or losses have to be recognized in the "hedging reserve" which forms part of "reserves and surplus" line item in the balance sheet. The amount recognized in the "hedging reserve" has to be transferred to the statement of profit and loss in the period in which the underlying hedged item affects the statement of profit and loss. Gains or losses in respect of ineffective hedges have to be recognized in the statement of profit and loss in the period in which such gains or losses are incurred. The premium paid/received on a foreign currency forward contract designated as Cash Flow hedge is accounted as expense/ income over the life of the contract. Long term borrowings - Bonds Under Ind AS bonds has to be recognized as non derivative financial liabilities and to be measured at amortised cost using effective interest rate method. No major adjustments are considered necessary since the company does not have an obligation to pay material premiums/additional charges etc over and above the rate of interest fixed on these bonds and is redeemable at par and hence the effective interest rate is not Recognised at the initial amounts raised less redeemed portion if any.

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331 Sl. No Ind AS No Particulars Treatment as per Ind AS Treatment as per Indian GAAP materially different. 6 Ind AS 17 Read with Ind AS 109 Leases – Fair Valuation of Rent Deposits Under Ind AS in case of an operating lease the difference between the nominal value and the fair value of the deposit under the lease is considered as prepaid rent. This is expensed on a straight line basis over the term of the lease. The lessee also recognizes interest income using Internal Rate of Return through its Statement of Profit and Loss over the life of the deposit. There is no specific accounting treatment specified under Indian GAAP for the accounting of deposits provided by the lessee under a lease. Deposits are generally accounted as assets at historical cost. Ind AS 17 Scope Ind AS 17 deals with lease of land and composite leases. It also states that when a lease includes both land and building elements an entity assesses the classification of each element as finance or an operating lease separately in accordance with the criteria laid in the standard However under Indian GAAP it excludes from its scope the lease of land. 7 Ind AS 19 Employee Benefits – Treatment for actuarial gains or losses on retirement benefits Recognition of Actuarial Gain/Losses: Ind AS 19 requires that actuarial gains or losses representing the changes in the present value of the defined benefit obligation resulting from experience adjustment and effects of change in actuarial assumptions are recognized immediately in Other Comprehensive Income OCI. However actuarial gains or losses arising on other long-term employee benefits will continue to be recognized immediately in the statement of Profit and Loss for the period. Recognition of Actuarial Gain/Losses: As per AS 15 ‘Employee Benefits’ actuarial valuation is used to determine the present value of benefit obligation and is carried out every year. The fair value of the benefit obligations is determined at every balance sheet date. All actuarial gains or losses recognized in the Statement of Profit or Loss. 8 Ind AS 109 Financial Instruments – Provision for Doubtful Debts Provision for Doubtful Debts – In addition to the specific provisions under Provision for Doubtful Debts – Under Indian GAAP provisions are made for specific

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332 Sl. No Ind AS No Particulars Treatment as per Ind AS Treatment as per Indian GAAP Indian GAAP under Ind AS at each reporting date an entity shall assess whether the credit risk on trade receivables has increased significantly since initial recognition. When making the assessment an entity shall use the Expected Credit Loss model to provide for a loss allowance over and above any provision for doubtful debts in the Statement of Profit and Loss. receivables based on the circumstances such as Credit Default of customer or disputes with customers. An enterprise should assess the provision of doubtful debts at each period end which in practice is based on relevant information such as past experience actual financial position and cash flows of the debtors. Different methods are used for making provisions for bad debts including ageing analysis and individual assessment of recoverability. 9 Ind AS 21 Effects of changes in Foreign Exchange Rates Functional and presentation currency Under Ind AS the functional currency is the currency of the primary economic environment in which the entity operates. Foreign Currency is a currency other than the functional currency. Presentation currency is the currency in which the financial statements are presented. Foreign currency is a currency other than the reporting currency which is the currency in which the Financial Statements are prepared. Under Indian GAAP there is no concept of functional currency. 10 Ind AS 12 Deferred Taxes : Profit and Loss Approach vs Balance Sheet Approach Deferred Taxes are computed for temporary differences between the carrying amount of an asset or liability in the Statement of Financial Position and its tax base. Current Tax and Deferred Tax are recognized outside Profit or Loss if the tax relates to items that are recognized in the same or different period outside Profit or Loss. Therefore the tax on items recognized in Other Comprehensive Income OCI or directly in Equity is also recorded in Other Comprehensive Income OCI or in Equity as appropriate. Deferred taxes are computed for timing differences in respect of recognition of items of profit or loss for the purpose of financial reporting and for income taxes. 11 Ind AS Property Plant Asset retirement Indian GAAP did not require

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333 Sl. No Ind AS No Particulars Treatment as per Ind AS Treatment as per Indian GAAP 16 Equipment obligation is required to be estimated and included in Cost of Property Plant Equipment. inclusion of asset retirement obligation costs in the cost of the asset. 12 Ind AS 18 Revenue Recognition Revenue should be measured at the fair value of the consideration received or receivable. Where the inflow of cash or cash equivalents is deferred revenue is measured at the present value of future cash flows. Under Indian GAAP Revenue is measured at the amount recoverable from the customers for goods supplied services rendered or the use of resources used by them. Discounting of deferred revenue is normally not required.

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334 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion of our financial condition and results of operations together with our restated financial information which is included in this Red Herring Prospectus. The following discussion and analysis of our financial condition is based on our restated financial statements for the Fiscals ended March 31 2017 2016 and 2015 including the related notes and reports prepared in accordance with Ind AS and included in this Red Herring Prospectus. Our restated financial statements have been derived from our audited financial statements. This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those described under “Presentation of Financial Industry and Market Data” “Risk Factors” and “Forward Looking Statements” on pages 13 18 and 16 respectively and elsewhere in this Red Herring Prospectus. We prepare our financial statements in accordance with Indian accounting standards which differ in material respects from IFRS and U.S. GAAP. Overview We are the largest public sector shipyard in India in terms of dock capacity as of March 31 2015 according to the CRISIL Report. We cater to clients engaged in the defence sector in India and clients engaged in the commercial sector worldwide. In addition to shipbuilding and ship repair we also offer marine engineering training. As of May 31 2017 we have two docks – dock number one primarily used for ship repair “Ship Repair Dock” and dock number two primarily used for shipbuilding “Shipbuilding Dock”. Our Ship Repair Dock is one of the largest in India and enables us to accommodate vessels with a maximum capacity of 125000 DWT Source: CRISIL Report. Our Shipbuilding Dock can accommodate vessels with a maximum capacity of 110000 DWT Source: CRISIL Report. We are in the process of constructing a new dock a ‘stepped’ dry dock “Dry Dock”. This stepped dock will enable longer vessels to fill the length of the dock and wider shorter vessels and rigs to be built or repaired at the wider part. We are also in the process of setting up an International Ship Repair Facility “ISRF” which includes setting up a shiplift and transfer system. In the last two decades we have built and delivered vessels across broad classifications including bulk carriers tankers Platform Supply Vessels “PSVs” Anchor Handling Tug Supply vessels “AHTSs” launch barges tugs passenger vessels and Fast Patrol Vessels “FPVs”. We are currently building Indias first Indigenous Aircraft Carrier “IAC” for the Indian Navy. We have also grown our ship repair operations and are the only commercial shipyard to have undertaken repair work of Indian Navys aircraft carriers the INS Viraat and INS Vikramaditya. Our diversified offerings to the Indian clients engaged in the defence sector and to clients engaged in the commercial sector worldwide have allowed us to successfully adapt to the cyclical fluctuations of our industry. Over the last five Fiscals the break-down of our average operating revenues is set out below: Activity Clients engaged in the defence sector Commercial clients Shipbuilding 69.44 12.68 Ship repair 10.42 6.94 Other operating revenue 0.48 0.04 Our current shipbuilding order book includes Phase-II of the IAC for the Indian Navy two 500 passenger cum 150 ton cargo vessels and two 1200 passenger cum 1000 ton cargo vessels for the Andaman and Nicobar Administration “AN Administration” and a vessel for one of the Government of Indias “GoI” projects. Our current ship repair order book includes vessels from our key clients. We recently delivered a two Roll-On/Roll-Off “Ro-Ro” vessels to the Kochi Municipal Corporation. We are a wholly-owned GoI company incorporated on March 29 1972 and were conferred the Miniratna status in 2008 by the Department of Public Enterprises GoI. Our shipyard is strategically located along the west coast of India midway on the main sea route connecting Europe West Asia and the Pacific Rim a busy international

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335 maritime route. In addition our shipyard is located close to the Kochi port as well as to offshore oil fields on the western coast of India and relatively close to the Middle East. We commenced our operations in 1975 and have over four decades of experience in shipbuilding. We have in the past delivered two of India’s largest double hull oil tankers each of 92000 DWT Source: CRISIL Report to the Shipping Corporation of India “SCI”. Over the years we have successfully responded to fluctuations in the shipbuilding requirements of the markets we operate in and have evolved from building bulk carriers to building smaller and more technically sophisticated vessels such as PSVs and AHTSs. We have worked with several leading technology firms in our industry including Rolls Royce Marine Norway and GTT Gaztransport Technigaz SA “GTT”. We believe this has added to our credibility in the international markets. Our key shipbuilding clients include the Indian Navy the Indian Coast Guard and the SCI. We have also exported 45 ships to various commercial clients outside India such as NPCC the Clipper Group Bahamas and Vroon Offshore Netherlands and SIGBA AS Norway. We began our ship repair operations in 1978 and have undertaken repairs of various types of vessels including upgradation of ships of the oil exploration industry as well as periodical maintenance repairs and life extension of ships. Our shipyard has over the years developed capabilities to handle various repair jobs. We have entered into MoUs with various clients including with the Lakshadweep Development Corporation Limited “LDCL” Directorate General of Lighthouses and Lightships “DGLL” and the Dredging Corporation of India “DCI” giving us the opportunity to undertake ship repair work for these organisations on a bulk volume basis. Our key ship repair clients include the Indian Navy the Indian Coast Guard SCI the Oil Natural Gas Corporation “ONGC” and DCI. We have also partnered with Techcross Inc. for technical support engineering service support and sharing of information in relation to the Ballast Water Treatment System “BWTS” products. Our Marine Engineering Training Institute at Kochi began in 1993 where we conduct marine engineering training programs. These programs are approved by Director General of Shipping “DGS” GoI. We also operate a material testing laboratory which was established in 1972. Our material testing laboratory has been accredited by the National Accreditation Board for Testing and Calibration Laboratories “NABL” and is one of the leading laboratories in Kerala in the field of chemical mechanical and non-destructive testing of various materials including metals welds and alloys. We have several certifications including the ISO 9001:2008 – Quality Management System ISO 14001:2004 - Environmental Management System and OHSAS 18001:2007 – Occupational Health and Safety Management System. Our listed debentures have been rated AA+ by since 2014 by various agencies including India Ratings and Research Private Limited “IRRPL” and CARE. We were also adjudged the “Shipbuilding Company of the Year” in 2015 by the Gateway Awards. For further details of awards we have received see “History and Certain Corporate Matters – Awards and Recognition” on page 147. Our Company has posted profits continuously in the last five Fiscals. Our total income and PAT before other comprehensive income has increased from `16604.52 million and `692.82 million respectively in Fiscal 2015 to `22085.01 million and `3121.82 million respectively in Fiscal 2017 at a CAGR of 15.33 and 112.27 respectively. Significant factors affecting our results of operations The following is a discussion of certain factors that have had and continue to have a significant effect on our financial results: Global and domestic demand and pricing for commercial and defence vessels Demand for commercial vessels Demand for commercial vessels of the type that we manufacture and sell depends principally upon overall trends in the commercial shipping industry. The principal factors affecting shipbuilding demand in the segments in which we operate include: • Global GDP growth and seaborne trade growth • Prevailing commercial freight rates • Age and condition of existing fleet of commercial vessels

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336 • The cost of building new vessels compared to the cost of purchasing and/or repairing existing vessels • Changes in laws or regulations that affect the types of ships that can be used to transport specified cargo such as crude oil and • Viability of other modes of transport. We believe that growth in the global economy and increases in world trade have brought about the recent growth in the shipping industry and increased demand for vessels. Bulk carrier fleet demand is affected primarily by growth in global seaborne trade. Bulk carrier operators have enjoyed robust freight rates in the last few years and have steadily increased their fleets to take advantage of these favourable freight rates. We believe that the Government of India intends to promote inland waterways and marine transportation with the development of 101 inland waterways which may lead to the increase in demand for dredgers and small bulk carrier vessels. We also expect a growth in demand for commercial vessels from regional port trusts Indian PSUs and corporates globally. Demand for defence vessels We expect a steady growth in demand for vessels for clients engaged in the defence sector in the near to short term due to Indias stated defence procurement policy. We believe that our leading position as a commercial shipyard in India multiple offerings and advanced capabilities put us in a good position to benefit from the recent ‘Make in India’ initiative introduced by the GoI pursuant to which a steady pipeline of future orders and opportunities is expected from the defence sector as well as Indian PSUs. The IAC we are building for the Indian Navy will form a substantial portion of our order book in the next few years. Ship-repair Ship-repair is a key component of our business in addition to shipbuilding as we believe it provides us with good margins. We enjoy a degree of exclusivity in the ship-repair business as only few of our competitors in India have a ship-repair offering of our size and capability. We believe that the GoI intends to promote inland waterways and marine transportation which may lead to growth in the number of ship-repair orders. To be able to cater to this growing demand we are in the process of setting up the ISRF a new facility exclusively for ship-repairing near our existing premises. Pricing New vessel prices are largely determined by the supply of shipbuilding berths and demand for new vessels. Various other factors also influence the price of new vessels including: • Vessel prices vary according to the particular specifications of the new vessel. For example custom designed vessels built to meet a buyer’s specific requirements typically cost more than ships ordered in accordance with a shipyard’s standard specifications • Certain shipbuilding countries have a competitive advantage over their competitors due to lower costs enabling their shipyards to offer customers lower prices. We benefit from low-cost skilled labour vis-à-vis overseas yards and various incentives and subsidies the Indian government has offered and intends to offer in the future and • The size of a particular order can also have an impact on price. Shipbuilders can achieve economies of scale associated with larger orders both in respect to the size of the vessel and the number of vessels and therefore are generally willing to offer price discounts for larger orders. New vessel prices for different ship types move to a large extent in parallel with one another so that a reduced demand in one sector may reduce prices in another sector. New vessel prices are a function of the supply of berths to the whole market and not just to individual sectors. Capacity limitations

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337 Our production capacity is limited by amongst other things the size of our shipyards the number size and capacities of our slipways berths docks including the New Dry Dock and the ISRF which are under construction and our plant and equipment. In addition the size and capacity of the vessels we construct is limited by the locations at which we operate. Currently we are limited to the construction of vessels of up to 110000 DWT and ship-repairing of up to 125000 DWT at our existing facilities. These limitations have restricted our ability to expand our business by constructing larger vessels for which we believe there is greater demand and on which we believe we can achieve better profit margins and by increasing our annual output. Upon completion of the New Dry Dock we anticipate that we will be able to build higher capacity vessels and repair of Offshore Rigs. See “Risk Factors - We cannot assure you that our proposed Dry Dock or International Ship Repair Facility will become operational as scheduled or at all or operate as efficiently as planned. We have not as on date of this Red Herring Prospectus obtained certain licenses or approvals for our proposed ISRF project for which funds are being raised through the Issue. Our Company shall transfer the Net Proceeds assigned for the proposed ISRF project to a separate bank account and we shall incur all expenditure on the ISRF project through internal accruals till the time such pending approvals are received. Further if we are unable to commission our new proposed Dry Dock or the ISRF in a timely manner or without cost overruns our business results of operations and financial condition may be adversely affected.” on page 19 for a description of certain risks related to our New Dry Dock. Order backlog and new orders We accept orders for different types of ships based on a number of factors including: • the margins we expect to achieve on the different types of vessels we construct • the reputation of the ship-owners placing the orders • our projected capacity utilisation level during the period in which the vessel would be required to be constructed and • status of order book and order backlog at the time of receiving orders. The new orders that we receive for the construction of vessels and our order backlog or order book have a significant effect on our future revenues. We generally accept orders for construction of vessels to be delivered up to 12 months to 48 months from the date of the order. As of June 30 2017 we had orders for vessels to be delivered from 2017 through 2020. Productivity Our production volumes margins and profitability depend to a significant extent on our production efficiencies. We use a combination of man-hours available and our tonnage capacity to estimate our productivity. Our productivity is also affected by the number of hours we operate. We are constrained in our ability to increase the number of shifts at our shipyard. Although we have not experienced any significant shutdowns in the past any significant shutdowns in the future would adversely affect our productivity. Cost of skilled labour Competition for skilled shipyard labour and engineers in India is intense and as we and others expand our and their operations this competition may increase. We may from time to time experience an inability to attract and retain highly skilled employees or increased costs to do so. Labour shortages could increase our production cost and hinder our productivity and ability to meet our customers’ delivery schedule. Further we utilise subcontract labour and production workers in our shipyard on a regular basis. In the event that we are unable to secure required subcontract labour and production workers at an acceptable cost or with the required skill sets we may face an increase in cost delay in delivery schedule and a decrease in quality of our vessels which could lead to an adverse impact on our results of operations. Changes in Segment Contribution to Revenue The contribution of a particular segment to our total revenue for each year depends on the orders we receive from customers the scheduled delivery dates of vessels and the contract prices that we are able to secure for the different types of vessels. A major portion of our order book in the near-term will be the IAC we are building for the Indian

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338 Navy. The division of our revenues from defence and commercial projects depends on our order book. Once our New Dry Dock is ready we will able to build other types of vessels as well given our increased capacity and we plan to increase our product lines to build larger more complex vessels with higher profit margins and more advanced technology. Results of our performance may change as the mix of our vessels changes and our past performance may not be indicative of our future results. We expect a greater volume of ship repair orders in the near future which may result in lower revenue but higher margins. Depreciation and amortisation expenses We had net carrying amount of fixed assets of `3706.12 million as of March 31 2017 and `3702.19 million as of March 31 2016 that was subject to depreciation. Our total depreciation and amortisation expenses in Fiscal 2017 Fiscal 2016 and Fiscal 2015 were `385.11 million `371.93 million `376.98 million and respectively. We expect our depreciation expenses to increase as a result of the construction of our New Dry Dock and ISRF. Taxation The Government of India has proposed a comprehensive national GST regime that will combine taxes and levies by the Central and state Governments into a unified rate structure. Given the limited availability of information in the public domain concerning GST we have not been able to do an impact analysis of GST on our business and results of operations and we are unable to provide any assurance as to the tax regime following implementation of GST. The implementation of this new structure may be affected by any disagreement between certain state Governments which could create uncertainty. Any such future amendments may affect our overall tax efficiency and may result in significant additional taxes becoming payable. Significant Accounting Policies 1.1 Statement of compliance These financial statements have been prepared in accordance with Ind AS as notified under the Companies Indian Accounting Standards Rules 2015 read with Section 133 of the Companies Act 2013. In accordance with the notification issued by the Ministry of Corporate Affairs the Company has adopted Indian Accounting Standards referred to as “Ind AS” notified under the Companies Indian Accounting Standards Rules 2015 with effect from 1 st April 2016. Previous period have been restated to Ind AS. In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard the Company has presented a reconciliation from the presentation of financial statements under Accounting Standards notified under the Companies Accounting Standards Rules 2006 “Previous GAAP” to Ind AS of Shareholders’ equity as at 31 st March 2016 and 1 st April 2015 and of the comprehensive net income for the year ended 31 st March 2016. 1.2 Basis of preparation of Financial Statements These financial statements have been prepared on the historical cost basis except for certain financial instruments which are measured at fair values at the end of each reporting period as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 1.3 Use of estimates and judgements The preparation of the financial statements in conformity with the Ind AS requires management to make judgements estimates and assumptions that affect the application of accounting policies and the reported amounts of assets liabilities and disclosures as at date of the financial statements and the reported amounts of the revenues and expenses for the years presented. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates under different assumptions and conditions. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

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339 1.4 Critical Accounting estimates and judgements: The application of significant accounting policies that require critical accounting estimates involving complex and subjective judgements and the use of assumptions in the financial statements have been disclosed below: Useful lives of property plant and equipment The Company reviews the estimated useful lives and residual values of property plant and equipment at the end of each reporting period. Assumptions are also made as to whether an item meets the description of asset so as to warrant its capitalisation and which component of the asset may be capitalised. Reassessment of life may result in change in depreciation expense in future periods. Valuation of deferred tax assets The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. Significant judgements are involved in determining the elements of deferred tax items. Impairment of unquoted investments The Company reviews its carrying value of investments annually or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount the impairment loss is accounted for. Recognition and measurement of provisions The recognition and measurement of provisions are based on the assessment of the probability of an outflow of resources and on past experience and circumstance known at the balance sheet date. The actual outflow of resources at a future date may therefore vary from the figure included in provisions. Provision towards Guarantee repairs A provision is made towards guarantee repairs/claims in respect of newly built ships/small crafts delivered and repaired ships on the basis of the technical estimation done by the Company. The guarantee claims received from the ship owners are reviewed every year till settlement of the same. In case of a shortfall in the provision made earlier additional provisions are made. Contingencies and commitments 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 we treat 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 we do not expect them to have a materially adverse impact on our financial position or profitability. Provision for doubtful debts The Company makes provisions for doubtful debts based on an assessment of the recoverability of trade and other receivables. The identification of doubtful debts requires use of judgement and estimates. Where the expectation is different from the original estimate such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed. Provision for inventories Management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the aged inventory items with the respective net realisable value. The purpose is to ascertain whether a provision is required to be made in the financial statements for any obsolete and slow-moving items and that adequate provision for obsolete and slow-moving inventories has been made in the financial statements.

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340 Revenue Recognition The Company uses the percentage of completion method in accounting for its fixed price contracts. The use of the percentage of completion method requires the Company to estimate the costs expended to date as a proportion to the total cost to be expended on a project considering the physical progress or financial progress whichever is lower. Provision for estimated losses if any on the uncompleted part of the contracts are provided in the period in which such losses become probable based on the expected contract estimates at the reporting date. Recognition and measurement of defined benefit obligations The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate trends in salary escalation and vested future benefits and life expectancy. The discount rate is determined with reference to market yields at the end of the reporting period on the Government bonds. The period to maturity of the underlying bonds correspond to the probable maturity of the post employment benefit obligations. 1.5 Property Plant and Equipment PPE On adoption of Ind AS the Company retained the carrying value for all of its property plant and equipment as recognised in the financial statements as at the date of transition to Ind AS measured as per the previous GAAP and used that as its deemed cost as permitted by Ind AS 101 First time adoption of Indian Accounting Standards. PPE are initially recognised at cost. The initial cost of PPE comprises its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management including non refundable duties and taxes net of any trade discounts and rebates. The cost of PPE also includes interest on borrowings borrowing cost directly attributable to acquisition construction or production of qualifying assets upto initial recognition. PPE are stated at cost less accumulated depreciation other than free hold land which are stated at cost and impairment losses if any. Subsequent costs are included in the assets carrying amount or recognised as a separate asset as appropriate only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the items are material and can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to Statement of profit and loss during the reporting period in which they are incurred. 1.6 Capital work in progress and intangible assets under development: Capital work in progress and intangible assets under development are property plant and equipment that are not yet ready for their intended use at the reporting date which are carried at cost comprising direct cost related incidental expenses and attributable borrowing cost. 1.7 Depreciation Depreciation on property plant and equipment is provided on straight-line method based on useful life of the asset as prescribed in Schedule II to the Companies Act 2013. For the assets acquired from Cochin Port Trust for International Ship Repair Facility ISRF depreciation is provided on the basis of remaining useful life as assessed by technical experts. An item of property plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain/loss arising on derecognition of the asset is included in the Statement of profit and loss when the asset is derecognised. Fully depreciated assets still in use are retained in financial Statements at residual value . Depreciation method useful lives and residual values are reviewed at each reporting date and adjusted prospectively if appropriate.

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341 1.8 Intangible Assets Design development: Cost incurred on Design Development which are not directly chargeable on a product are capitalized as Intangible Asset and amortised on a straight-line basis over a period of five years. Software: Cost of software which is not an integral part of the related hardware acquired for internal use is capitalised as intangible asset and amortised on a straight-line basis over a period of three years. Right to use: Up- front fee paid for securing right to use of land and other facility is capitalized as intangible asset and amortised on a straight line basis over the period of lease for which the right has been obtained. Internally generated procedure: Cost of internally generated weld procedure is capitalized as Intangible Asset and amortised on a straight-line basis over a period of three years. 1.9 Impairment of Assets The Company assesses the impairment of assets with reference to each cash generating unit at each Balance Sheet date. If events or changes in circumstances based on internal and external factors indicate that the carrying value may not be recoverable in full the loss on account