Cochin Shipyard Limited — Capital/Financing Update 2021

Feb 12, 2021

SEC/48/2017-63 February 12, 2021

The ManagerCompliance Department	The ManagerCompliance Department
BSE Limited	The National Stock Exchange of India Ltd.
Phiroze Jeejeebhoy Tower	Exchange Plaza
Dalal Street	Bandra -Kurla Complex, Bandra (East)
Mumbai –400 001	Mumbai –400 051

Scrip Code/Symbol: 540678/COCHINSHIP

Dear Sir / Madam,

Subject: Monitoring Agency Report for the Quarter ended December 31, 2020

1. The Monitoring Agency Report issued by the State Bank of India ("the Monitoring Agency") for the Quarter ended December 31, 2020 pursuant to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 is enclosed herewith for the purpose of dissemination of information widely to the members.

2. We would also like to mention that the Company has fully utilized the funds raised through its Initial Public Offer (IPO) concluded in August 2017 and hence, this is the final Monitoring Agency Report in this regard.

Thanking you,

For Cochin Shipyard Limited Syamkamal N Company Secretary & Digitally signed by Syamkamal N Date: 2021.02.12 17:03:46 +05'30'

Compliance Officer

ഭാരതീയ സ്റ്റേറ്റ് ബാങ്ക് भारतीय स्टेट बैंक STATE BANK OF INDIA

FORMAT OF REPORT TO BE SUBMITTED BY MONITORING AGENCY [See regulation $82(2)$ and $82(3)$ ]

Report of the Monitoring Agency

Name of the Issuer: COCHIN SHIPYARD LIMITED

For quarter ended: DECEMBER 31, 2020

Name of the Monitoring Agency: STATE BANK OF INDIA

(a) Deviation from the objects: NO DEVIATION

• Utilization different from Objects stated in the offer document but in line with change of objects approved by shareholders' resolution;

$\alpha$ r

• $-$ Utilization neither in line with Objects stated in the offer document nor approved by shareholders' resolution
• $-$ In case there is no deviation, the same shall be stated.

(b) Range of Deviation*: NOT APPLICABLE

Indicate the range of percentage deviation from the amount of issue proceeds earmarked for the objects. For example, up to 10%, 10 - 25%, 25-50%, 50-75%, 75-100%, not ascertainable etc.

* The range of deviation may be computed by taking weighted average of financial deviation of each object in the ratio of issue proceeds allocated for it. Non-financial deviation may be indicated separately by way of notes.

Declaration:

We hereby declare that this report is based on the format as prescribed by SEBI (ICDR) Regulations, 2018, We further declare that this report provides a true and fair view of the utilization of the issue proceeds.

We declare that we do not have any direct / indirect interest in or relationship with the issuer/promoters/directors/management and also confirm that we do not perceive any conflict of interest in such relationship therest while monitoring and reporting the utilization of the issue proceeds by the issuer.

$12|2|2$ Signature: Name and Designation of the Authorized Signatory: Designation of Authorized person/Signing Authority:

t. WISWANATHAN.Æsst. GROUGEL Morger.

Obank.sbi 8 0484 - 2340100 0484 - 2340027 0484 - 2341222 0484 - 2340028 0484 - 2340029 0484 - 2341555 日 0484-2341100 sbi.04062@sbi.co.in

കൊമേഴ്സ്വൽ ശാഖ എറണാകുളം വങ്കാരത്ത് ടവേഴ്സ് എൻ. എച്ച്. ബൈപാസ് ജംഗ്ഷൻ പാടിവടം, കൊച്ചി – 682 024

वाणिज्यिक शाखा एरणाकुलम वन्कारत्त टवेर्स एन.एच्च. बैपास जंग्षन पाटिवटटं, कोच्चि - 682024

Commercial Branch Ernakulam Vankarath Towers NH By - Pass Junction Padivattom, Kochi - 682 024

l) Issuer Details: Name of the issuer Names olthe promoter

Industry/sector to which it belongs

1. Issue Details: Issue Period

Type of issue (public/rights) Tlpe of specified securities IPO Grading, if any Issue size (in Rs. crore)

: COCHIN STIIPYARD LIMITED

• : The President of India acting through Ministry of Shipping
• : Ship building and ship repair
• : I't August 2017 3'd August 2017
• : Public Issue
• : Equity shares
• :Nil

: Fresh Issue of up to 2,26,56,000 equity shares of face value of Rs.10 each aggregating to Rs. 961.95 crore.

3) Details of the arrangement made to ensure the monitoring of issue proceeds:

(Give item by item description for all the objects stated in offer document separately in following format)

Particulars	Reply	Settingup of DryDock	Settingup ofISRF	GeneralCorporatePurposes	Comments of theMonitoringAgency	Comments ofthe Board ofDirectors
Whether all the utilization is as per disclosure inOffer Document?	YeVNo	Yes	N.A	N.A.	Yes
Whether Sharehotder approval has been obtained incase ofmaterial deviations* from expendituresdisclosed in the Offer Document?	Yes/No	N.A	N.A	N,A.	N.A
Whether the means offinance for the disclosedobjects ofthe lssue has changed?	Yes/No	No	No	No	No
ls there any major deviation observed over theearlier monitoring agency reports?	Yes/No	No	No	No	No
Whether all Govemment / statutory approvalsrelated to the object(s) have been obtained?	YeVNo	Yes	Yes	N.A.	Yes
Whether all arrangements pertaining to technicalassistance/collaboration are in operation?	YeVNo	Yes	Yes	N.A.	No deviationreported
Are there any favorable events improving theviability of these object(s)?	YeVNo	No	No	No	No such eventsnoticed./ reported
Are there any unfavorable events affecting theviability of these object(s)?	Yes/No	No	No	No	No such eventsnoticed/ reported
Is there any other relevant informalion that maymaterially aflect the decision making oftheinYestors?	YesiNo	No	No	No	Nit

I{here material deviarion nay be defined lo mean:

a) Deviation in the objects or purposes lor which thefunds have been raised

b) Deiation in the arnount oflands actually utilized by more than Iqok oflhe amounl projected in the ofier documents.

4) Details of object(s) to be monitored:

(i) Cost of object(s)-

(Give ltem by ltem Description for all the Objects Stated in Offer Document separately in following format)

		Portion of theOriginal Cost of the			Comments of the Board of Directors
sl.No.	ItemHead	project to b€ fundedby rhe IPO (Rs. inCrore)* OriginalCost (as per OfferDocument)	RevisedCost	Comments ofthe MonitoringAgency	Reasonof costreyision	Proposedfinancingoption	Particulars offirmarrangementsmade
1	Setting up of Dry Dock	5 10.00		No revision in costreported	N.A	N.A	N.A
2	Setting up ofISRI	265.00		No revision in costreported	N.A	N.A.	N.A
3	General CorporatePurposesr+	165.23		No revisionreporled.	N.A	N.A.	N.A
	TOTAL	940.23

tCost as indicated in the Objects Chapter ofProspectus dated August 4, 20l?. r* ln the Ofler Document, the gross proceeds from fresh issue was mentioned as Rs.961.34 Crore assuming the entire €mployee reservation portion would get fully subscribed, which was at a discount€d price of Bs 4l l/-per share. Since the employee reservation portion did not get fully subscribed, the unsubscribed portion has been allotted to other categories in the respeciive ratios and hence there is a slight increase in the amount of issue proceeds. The actual issue proceeds comes to Rs. 961.95 crore; out ofwhich Rs.20 crore was estimated as CSL's share ofissue expenses. However, CSL's share ofissue expenses have now been estimated at Rs.21.72 crore and, accordingly, the net issue proceeds have been reduced to Rs. 940.23 crore. The increase in the issue expenses have been adjusted against the Generdl Corporate Purpose and the portion of General Corporate pu4)ose in the net issue proceeds is reduced to Rs. 165.23 crore.

(ii) Progress in the object(s)-

(Give item by item Desffiption for all the Objects Stated in Offer Document separately in the following format)

st.No.	ItemHeadr	Amountaspropos€din th€OfferDocument(Rs. inCrore)	Amounl utilized(Rs. in Crore)			Total		Comments ofBoard ofDirectors
			As atbeginningof thequarter	Duringthequarter	At theend ofthequarter	unutilizedAmount(Rs. inCrore)	Commentsof th€MonitoringAgency	Reasonof idlefunds	ProposedCourse olAction
I	Setting up ofDry Dock atExisting premises of CochinShipyard Limited, Cochin.	510.00	501.56	8.44	510.00		Please referNotesbelow.		Please referNotes below.
2	Setting up of ISRF atCochin Port Trust Area, Cochin	265.00	265.00		265.00
3	General Corporate Purposes	165.23	165.23		16s.23
	TOTAL	940.23	931.79	8.44	910.23

tProvide following details under ltem Head. (a) N ane of t he obj ec(s) : ft)Brief description o/ the object(s): (c)Location of the object(s) (if applicable):

Notes

• l. Tendering of cME works delayed by 02 months due to re-engineering design for optimization.

• 1. Construction period was increased by 06 months due to inclusion ofground improving works for more feasibility in execution.

• Finalization ofcontract took 88 days for establishing techno-commercial points with required c 3.

• cSL has awarded the Tumkey contract for cME works to M/s. L&T construction chennai signed on May 25,2018. Construction works commenced on June 01,201g. and rf . 4.

• ) Unprecedented flood that devastated Kerala in August 2018, the healy monsoon and flood during 2019 hampered progress.

• 6 The activities carried out at night shift were regulated due to collective resistance from nearby dwellers regarding noise and vibrations.

• 7 Unforeseen drifting of Sunken Flap Gate has hindered the completion of critical works like cofferdam, pump house works and Earth work excavation for the dock floor. The said unforeseen hindrance was successfulfy salvaged on october 05, 2020 and towed to the existing cSL Dry Dock on octob er 16,2020.

• 8 Due to the outbreak of COVID-I9 Pandemic and unforeseen obstruction due to Sunken Flap Gate, IWs. Larsen & Toubro (construction contractor) has notified the force majeure event. The cbmpany has intimated the cessation of force majeure effective from September 01, 2020 with regard to the iandemic and October 16,2020 with regard to the unforeseen obstruction due to Sunken Fla[Gate to lWs. Larsen & Toubro (Construction contractor).

• 9 Also, M/s. Hyundai Samho Heavy Industries, Korea has notified the force majeure event from February 26, 2020 onwards and force majeure is still continuing.

• The lockdowns and night curfew due to COVID-I9 Pandemic disrupted the material supply and labour availability (experienced on their exodus) resulted in the extremely low productivity. 10

• Even though the construction work by L&T partially restarted from April 27, 2020 post second lockdown, for complying MFIA guidelines with respect to the social distancing norms the woiks are performed with 50% labour strength, which is a major hindrance in the project's progress in the backdrop of the limited project area available. ll

• Significant shortage of labours at site due to non-availability of long distance trains and surging COVIDl9 cases in Kerala. 12

(iii)Deployment of unutilized IPO proceeds- NOT APPLICABLE

	Completion Date			Comments of the Board ofDirectors
Object(s)	As per theOfferDocument	Actual*	Delay (No. ofdays/months)	Reason ofdelay	ProposedCourse ofAction
Setting up ofDry Dock atExisting premises ofCochin Shipyard Limited,Cochin.	June 2020	December2022	30 Months	Please refer NoteNo. I below.
Setting up ofISRF atCochin Port Trust Are4Cochin.	August 2022	August 2022	NIL	Please refer Note No. 2 below.

(iv)Delay in implementation of the object(s)-

* In case ofcontinuing object(s) please specify latest/revised estimate ofcompletion date.

Note No. I

• 1. Tendering ofcME works delayed by 02 months due to re-engineering design for optimization.
• 1. Construction period was increased by 06 months due to inclusion of ground improving works for more feasibility in execution.
• 1. Finalization of contract took 88 days for establishing techno-commercial points with required clarity.
• 1. CSL has awarded the Turnkey Contract for CME works to M/s. L&T Construction Chennai and contract signed on May 25,2018. Construction works commenced on June 01,201g.

• 5' Unprecedented flood that devastated Kerala in August 2018, the heavy monsoon and flood during 2019 hampered progress.

• The activities carried out at night shift were regulated due to collective resistance from regarding noise and vibrations. 6.

• 1. Unforeseen drifting of Sunken Flap Gate has hindered the completion of critical works like cofferdam, pump house works and Earth work excavation for the dock floor. The said unforeseen hindrance was successfully salvaged on October 05, 2020 and towed to the existing CSL Dry Dock on Octob er 16,2020.
• 1. Due to the outbreak of COVID-19 Pandemic and unforeseen obstruction due to Sunken Flap Gate, M/s. Larsen & Toubro (Construction contractor) has notified the force majeure event. The Company has intimated the cessation of force majeure effective liom September 01, 2020 with regard to the pandemic and October 16,2020 with regard to the unforeseen obstruction due to Sunken Flap Gate to IWs. Larsen & Toubro (Construction contractor).
• 1. Also, lvl/s. Hyundai Samho Heavy lndustries, Korea has notified the force majeure event from February 26, 2020 onwards and force majeure is still continuing.
• 1. The.lockdowns and night curfew due to COVID-I9 Pandemic disrupted the material supply and labour availability (experienced on their exodus) resulted in the extremely low productivity.

• Il. Even though the construction work by L&T partially restarted from A pri|27,2020 postsecond lockdown, for complying MHA guidelines with respect to the social distancing norms the wo;ks are performed with 50% labour strength, which is a major hindrance in the project's progress in the backdrop ofthe limited project area available.

• 1. Significant shortage oflabours at site due to non-availability of long distance trains and surging COVID- [9 cases in Kerala.

Note No. 2

• l. CSL had initially placed order for the procurement of shiptift & transfer system on the consortium of M/s Broehl GmbH, Germany & lws IMG, Germany on January 19, zol7. Meanwhile, IWs Broehl became insolvent and hence CSL had to renegotiate and finally, contract for the procurement ofshiplift & transfer system signed with the consortium of lws IMG, Germany & lws Syncrolift AS, Norway on December 10, 2019. Accordingly, delivery schedule of shiplift components will be in such a manner to achieve the milestone, viz., "Completion of Shiplift and transfer system, yard for 2 vessels and berths for aflaot repaiC' by October 2021.
• 1. All possible steps are being implemented to upkeep the project completion date of Aug 2022 even with the prevailing impacts ofCOVID-19 Pandemic. Nevertheless it depends on the effect of COVID-19 crisis pertinent to the associated disruptions in material and labour shortage being experienced. Force Majeure notice issued by main construction contractor, ship lift supplier, crane supplier and other contractors/ vendors. Even though the works partially restarted from April 27,2020 post lockdown, progress ofwork is impact€d due to the restrictions mentioned in MIIA orders especially in the ba&drop of the limited project area available for execution.