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Cochin Shipyard Ltd.


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Series: EQ | ISIN: INE704P01017 | SECTOR: Miscellaneous

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Annual Report

For Year :

Director’s Report

Dear Shareholders,

1. The Directors have pleasure in presenting the 46th Annual Report of your Company along with the audited financial statements for the year ended March 31, 2018.

Financial Performance

2. The performance of Cochin Shipyard Limited (CSL) continued to be good during the year 2017-18. In spite of the continued global down-turn in shipbuilding industry, the turnover for the year was Rs.2355.12 crores as compared to Rs.2058.87 crores in the year 2016-17. The Profit Before Tax was Rs.604.86 crores as against Rs.493.40 crores in the previous year. The net profit was Rs.396.75 crores as compared to Rs.321.55 crores for the previous year. This performance is creditable considering the continuing recessionary conditions in the shipping and ship building sector.

3. The authorised share capital of the Company is Rs.2,50,00,00,000 divided into 25,00,00,000 equity shares of face value of Rs.10 each. The paid up share capital of the Company is Rs.1,35,93,60,000 divided into 13,59,36,000 equity shares of face value of Rs.10 each. CSL went in for an IPO in August 2017, which consisted of public issue of 3,39,84,000 equity shares of face value of Rs.10 each. In consequence of the IPO, the post issue paid up equity share capital of CSL increased from Rs.1,13,28,00,000 (pre-issue) to Rs.1,35,93,60,000 (post issue). The Company was listed in BSE & NSE on August 11, 2017.

Financial Highlights

(Rs. in Crs)

Sl No





Gross Income




Profit before finance cost, depreciation & tax




Finance costs




Depreciation & write off




Profit Before Tax




Provision for tax (Net)




Net profit




4. As per Office Memorandum F.No.5/2/2016-Policy dated May 27, 2016 issued by Department of Investment and Public Asset Management (DIPAM), every CPSE have to pay a minimum annual dividend of 30% of PAT or 5% of the net-worth, whichever is higher. Accordingly, your Directors are pleased to recommend a dividend of Rs.12/- per share on the 13,59,36,000 fully paid Equity shares of Rs.10 each. The total outgo for dividend and dividend tax would be approximately Rs.196.65 crores. No unclaimed dividend (previous years’) is due to be transferred to the Investor Education and Protection Fund (IEPF).

Dividend Distribution Policy

5. As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the top five hundred listed entities shall formulate a dividend distribution policy. Accordingly, dividend distribution policy has been adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining the profit into the business. The policy is enclosed as Annexure 1 to the this report and is available on the CSL’s website at Distribution%20Policy.pdf

Transfer to Reserves

6. During the year an amount of Rs.2.88 Crores was transferred to Debenture Redemption Reserves in terms of Section 71(13) of the Companies Act, 2013. As on March 31, 2018, the Company has Reserves and Surplus amounting to Rs.3119.93 crores which reflects the inherent financial strength of the Company.

Contribution to Exchequer

7. The total contribution made during the year by way of Value Added Tax, Income Tax, CST, Customs Duty, Service Tax, GST and Dividend Tax was Rs.357.49 Crores.


8. The Company achieved a total shipbuilding income of Rs.1731.86 crores during 2017-18 as against Rs.1515.82 crores in 2016-17. During the year 2017-18, the yard completed the delivery of two Double ended Ro-Ro vessels for Kochi Municipal Corporation. The yard completed various major milestones on the projects which are under construction such as keel laying and launching of SH 20 - Technology Demonstration Vessel (Special Purpose Vessel), steel cutting and keel laying of SH 21 and SH 22 - 500 pax vessels, steel cutting and keel laying of SH 23 and SH 24 - 1200 pax vessels and steel cutting for 16 nos. fishing vessels. Indigenous Aircraft Carrier (IAC) project progressed satisfactorily. Machinery outfitting of engine room and installation of 415 volt power generation and distribution system was completed. 3D modelling of major ship systems upto flight deck was also completed. Trials of DG sets 1 and 5 were completed successfully. Critical AFC equipment was received at the Yard. Phase 3 contract is expected to be concluded in the current financial year.


9. During the year, the Company achieved a total ship repair income of Rs.623.27 crores as compared to Rs.543.05 crores during the financial year 2016-17. Major vessels repaired during the year include INS Shakti, INS Nireekshak, INS Airavat, INS Sujata, INS Sutlej, M V Sagardweep - II, M V Kalighat, M V Bharat Seema, WSV Samudra Nidhi, DCI Dredge XIX etc. Also, after a long interval, CSL has started refit of Offshore Drilling Vessels by undertaking ongoing refit of MODU Sagar Bhushan from ONGC during the year.

Shipbuilding Order Book Position

10. The order book position as on March 31, 2018 is as follows:-

Vessel Type


Indigenous Aircraft Carrier for the Indian Navy, P-71


Technology Demonstration Vessel (Special Purpose Vessel) for DRDO


500 passenger cum 150 MT cargo vessel for A&N Administration


1200 passenger cum 1000 MT cargo vessel for A&N Administration


Tuna Longliner Cum Gil netter Fishing Boat


Expansion Projects

11. Details of major projects and initiatives taken up during 2017-18 are as follows:

i) International Shiprepair Facility (ISRF) at Cochin Port Trust

CSL continued to operate the dry dock & existing facilities in the leased area (first phase) at CoPT.

Dry dock repair of ten vessels have been completed during the financial year 2017-18. Meanwhile, CoPT had allotted the second phase land area (8.134 ha) to CSL in the month of November 2017. Ministry of Environment, Forests & Climate Change had issued Environmental & CRZ clearance for the ISRF project on June 22, 2017. CSL had awarded the construction contract for civil, mechanical & electrical works on October 10, 2017. Honourable Union Minister of Shipping, Shri Nitin Gadkari laid foundation stone for the ISRF project on November 17, 2017. Since then, the construction activities of the project had commenced. CSL expects to position Kochi as a major ship repair hub with major operations in the present ship repair dock coupled with increased capacities that would be available when the ISRF is commissioned.

ii) New Dry Dock Project

The new Dry Dock will enable the Company to build and repair specialised and technologically advanced large vessels such as LNG vessels, larger aircraft carriers, drill ships and dry-dock repairs of semi-submersibles, jack-up rigs, etc.

Subsequent to the receipt of all statutory clearances for the Dry Dock project, letter of acceptance was issued for the construction (Civil, Mechanical and Electrical) on April 27, 2018. Tendering for the 600 T Gantry crane is also under progress.

iii) Joint Venture with Hooghly Dock and Port Engineers Ltd. (HDPEL)

The Ministry of Shipping vide letter No. SY-11018/1/2010- HDPE dated March 29, 2017 approved the formation of joint venture partnership between Cochin Shipyard (74% stake in equity) and HDPEL (26% stake in equity) for upgradation and modernization of shipbuilding infrastructure at the two shipyard sites of Salkia and Nazirgunge in Kolkata. On October 23, 2017 a joint venture company named Hooghly Cochin Shipyard Ltd. (HCSL) has been incorporated as a subsidiary company of Cochin Shipyard. The Company executed shareholders agreement on November 17, 2017, and concession agreement and lease agreement were executed on January 19, 2018. The consultancy work for DPR is awarded to M/s. KITCO. HCSL being in the project implementation stage has reported a nonoperating income of Rs.18.57 lakh and a loss of Rs.37.07 lakh during the financial year 2017-18.

A separate statement containing the salient features of the financial statement of Subsidiaries/ Associates/Joint Venture Companies in Form AOC - 1 pursuant to provisions of Section 129 (3) of the Act, is attached along with the financial statements.

iv) New Initiatives

CSL has entered into an MOU with the Mumbai Port Trust on January 11, 2018 for operations and management of ship repair facility at Indira Dock. CSL shall utilize the facilities for the purpose of ship repair and allied services and for further expansion in the field of ship repair. Similar MOU has been signed with Kolkata Port Trust on March 17, 2018 for operations and management of ship repair facility at Netaji Subhas Dock. CSL shall utilize the facilities for the purpose of ship repair and allied services and for the growth of ship repair in the region.

CSL signed an MOU with Central Institute of Fisheries Technology on August 30, 2017 for building fishing vessels. The Company also signed an MOU with Joint Stock Company United Shipbuilding Corporation (USC), Russia, on February 02, 2018 to collaborate and engage in design, development and execution of high-end ‘state of the art’ vessels for inland and coastal waterways. Another MOI was signed on January 18, 2018 with Defence Research and Development Organisation (DRDO) for export of Defence vessels incorporating Defence systems developed by DRDO and produced by Indian OEMs. CSL signed contract on January 29, 2018 for construction of 16 nos Tuna Long Lining & Gillnetting Fishing Vessels under the diversification of trawl fishing boats from palk bay into deep sea fishing boats under Central sector on Blue Revolution Scheme with financial assistance from Government of India and the Government of Tamil Nadu.

Initial Public Offer

12. CSL’s Initial Public Offer of 3,39,84,000 equity shares of face value of Rs.10 each was opened on August 01, 2017 and closed on August 03, 2017. CSL listed in BSE and NSE on August 11, 2017. The company has raised Rs.1,442 crores from the IPO which has been a combination of fresh issue and offer for sale in the ratio of 2:1. The IPO was subscribed by over 75 times with more than 1.11 lakh crore being raised against the offer of Rs.1,442 crores. The Issue also saw a strong interest from retail segment with about 20 lakh applications, the highest in the last decade. The QIB portion was subscribed over 63 times and the HNI portion was subscribed by 287 times. Overall there were very positive market sentiments towards the IPO.

13. The proceeds of the fresh issue part of the IPO, totaling approx. Rs.961 crores will be used by CSL for part funding two expansion projects costing Rs.2768 crores viz. a larger dry dock at CSL premises and the ISRF. Balance amount of Rs.481 crores has been transferred to Government of India for Nation building.

Utilisation of IPO Proceeds

14. Details of utilization of funds from proceeds of IPO as on March 31, 2018 is given below:

Rs. Crs


Proceeds from Initial Public Offer (IPO)


Less: Amount estimated towards IPO expenses (Company’s share)


Net IPO proceeds


Add interest amount reinvested


Total proceeds plus interest


Less utilisation of proceeds for:

General Corporate Purpose (GCP)


Construction of New Dry Dock





Fund balance as on March 31, 2018


Parking of funds in Fixed Deposits


Parking of Funds in Current Accounts


Parking of funds as on March 31, 2018


Manpower Status

15. The manpower strength of the company as on March 31, 2018 was 1781 consisting of 331 executives, 167 supervisors and 1283 workmen.

Industrial Relations

16. Industrial Relation scenario of the Company remained generally cordial during the year. The Company continued the legacy of strike free period of last 33 years except one day strike on April 28, 2017 called by all the trade unions to protest against the disinvestment of Cochin Shipyard Limited through the Initial Public Offer of its equity shares. However, post IPO the issue has not been raised by the trade unions and the Industrial Relations climate has been generally peaceful in this respect.

17. All employees continue to render whole hearted support and co-operation to the management initiatives and targets set by the Company. The critical milestone in the industrial relations journey of any organisation is chalking out most reasonable and acceptable Long Term Settlement (LTS) for its employees. As far as the workmen under the Industrial Disputes Act 1947 are concerned, their next LTS is due for revision with effect from April 01, 2017. All recognised trade unions of the Company have submitted their charter of demands for the new LTS. Company has started negotiating with the recognised trade unions on the said charters of demand subject to the broad framework of guidelines issued by the government through the Department of Public Enterprises. As regards the Board level and below Board level officers and non-unionised supervisors, presidential orders have been issued for their pay revision effective from January 01, 2017 and valid upto December 31, 2027 (the pay revision orders in respect of these categories of employees have been implemented).

18. Various fora constituted towards promoting workers’ participation in management, continue to function well. They are joint councils, shop council, central safety committee, shop level safety committees, contract workers safety committee, canteen management committee, employees’ contributory provident fund trust etc.

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

Human Resource Development

Learning and Development activities during 2017-18

20. The syllabus based comprehensive training programme titled “Young Officers Competency Development Programme” covering young managers upto the level of Deputy Managers started during the last financial year continued this year also. During the current financial year a total of 47 sessions were held over five modules and the first batch consisting of 24 executives have since completed the training. A second batch comprising of 25 executives have commenced training. The faculty for this programme is primarily drawn from in-house talent as well as retired executives. The programme focuses in detail on all technical matters pertaining to Ship Building and Ship Repair and topics of relevance in other non technical areas. As part of facilitating knowledge transfer, a structured training programme for workmen in the trades of welder, pipe fitter, structural & engineering fitters and electrical covering 229 workmen was held during the year. The detailed syllabus for training of the workmen in various trades was prepared by a pool of retired employees of the yard. This structured programme aims to facilitate skill development of the new employees and make them capable of handling the challenges at work site. Apart from this in-house development programme, an exclusive skill development programme for pipe fitters under the Strategic Manufacturing Sector Skill Council (SMSSC) Scheme had been conducted and 18 participants mostly workmen drawn from the sub-contract pool of workmen in CSL and trainees had attended.

21. Executives at all levels were nominated to attend specific management development programmes at IIMA, IIMK, IIMC. Executives have also been nominated to NIAS-IISC. As part of a continuous learning and development five customized management development programmes were held in association with the Indian Institute of Management (IIMK), Kozhikode. CSL has also entered into specific MOUs with CUSAT and faculty support is extended by CSL for Naval Architecture course conducted. Two comprehensive one week programmes on “General Management” were conducted at the IIMK main campus covering 48 executives up to the level of AGMs. Three day programmes were conducted at IIMK Kochi campus covering 75 executives on communication effectiveness, contract management and finance for non finance managers etc. Further, sixteen in-house programmes were conducted in CSL on a wide range of topics ranging from GST updation to vigilance sensitization. The prominent technical programmes conducted in-house include joint programme by M/s. NIRDESH, Kozhikode and experts from the Indian Navy, NPOL and BHEL on “Warship inspection, tests and trials”, programme on “QC Inspection” conducted by renowned classification society, M/s. Indian Register of Shipping (IRS) and “Technical MDP on Ship Structures-Strength, Fabrication and Distortion Control by M/s. Asranet, UK and professors from IIT (Kharagpur). A total of eight executives were nominated for specialized international programmes in Japan/Europe ranging from three to four weeks for both technical and management development programmes. The topics include Energy Management, Quality Management, Project Management, Leadership and Problem Solving Techniques. A Technical Management Development programme on Passenger Ships by LRS with special emphasis on SRtP requirements was conducted with the participation of representatives from DGS, Design consultant M/s SEDS and CSL.

Encouraging Leadership

22. In order to encourage and motivate young executives for higher learning a scheme called “Nethruthwa Samvriddhi Yojana - Leadership Acceleration Programme (LEAP) has been launched. Under this scheme three executives have been granted study leave for two years to pursue post graduation from leading national level institutes (IITs/ NITs etc). The core benefit under the scheme is not only a grant of study leave for two years, but reimbursement of tuition fees upto Rs.10 lakhs in instalments after they come back and join for duty.

Educational Scholarships to Wards of Employees

23. ”Shipyard Pariwar Prathibha Puraskar”, an educational scholarship scheme introduced from the year 2016 aims to reward and promote the star performers among the wards of regular employees of CSL. A scholarship of Rs.25,000/- per year for a maximum period of 5 years shall be bestowed in the order of highest marks scored by the wards in Class XII final examination. During the year 2017-18, 20 eligible students have been granted scholarship under the said scheme.

Recognising Excellence

24. CSL has introduced the Employee Excellence Awards Scheme envisaging reward and recognition of innovative ideas and practices among the employees below the level of AGMs. The highest award under the scheme is Chairman’s award with a citation and cash price of Rs.15,000/-. There are also 10 Chairman’s commendations award with a citation and Rs.2000/each as cash price. The awards are presented to the winners on the occasion of Independence Day and Republic Day celebrations every year to the permanent employees while fixed term contract employees and advanced trainees are honoured during the valedictory ceremony of “Productivity Month Celebrations” or on “Safety Day” etc. In 2017-18, 47 permanent employees and 16 contract personnel/trainees have been honored with Chairman’s commendation which carries Rs.2,000/- cash prize.

Encouraging Thought Provoking Ideas

25. The talk series ‘Prajyoti’, where eminent personalities who have excelled in their professional field share their thoughts with the executives of CSL continued. During the year, two such talk sessions were held. Apart from the above, prominent persons also addressed a gathering of executives on procurement, procedures and policies. Experts from Lloyd’s Register of Shipping, UK also addressed a select gathering of executives.

Professional Assessments

26. During the year, an agency has been awarded the work for conducting executives’ Assessment Development Centre (ADC) and creation of Individual Development Plans (IDPs) for Succession Planning. The scope of work includes identification and validation of leadership and role based competencies for 17 key roles of CSL and also drawing up an Individual Development Plan for a group of 70 executives in the grades of Manager/ Senior Manager.


27. During the year, the Company has also trained 205 ITI trade apprentices, 71 engineering graduates, 71 diploma holders and 03 vocational trainees under the Apprentices Act. Under the Company scheme, specialised training primarily in the technical streams was extended to 600 Trainees. The Company during the year had also inducted 5 executive trainees for one year training. The Marine Engineering Training Institute approved by the Director General of Shipping, Govt. of India provided training to 130 engineering cadets during the year to enable them qualify for marine engineering jobs onboard vessels.

Status on affirmative action to implement Presidential directives on reservations

28. Cochin Shipyard has been strictly complying with the Presidential directives and guidelines on reservation for Scheduled Caste (SC)/ Scheduled Tribes (ST)/ Other Backward Classes (OBC) and Persons with Disabilities (PWD) issued by the Government of India from time to time. Shipyard has appointed a Liaison Officer for SC/ST/PWD/Ex - Servicemen and a separate Liaison officer for OBCs to oversee the implementation of reservation policies. Reservation percentage is ensured through the maintenance of Post Based Roster System as prescribed by the Government of India. During the year, training was imparted exclusively for employees belonging to these categories. Three executives belonging to SC/ ST category were deputed for training abroad. Regular meetings with the associations of the employees belonging to these categories were conducted to discuss and redress their grievances. Pursuant to Government orders, special recruitment drive was resorted during the year for filling up of vacancies reserved for Persons with Disabilities and out of 15 vacancies notified four candidates were selected. In order to support employees belonging to the SC/ ST/OBC/PWD employees who fall under the zone of consideration for promotion, special crash courses were arranged with the aid of expert external faculty on the topics of leadership, conversational English and other soft skills. As directed by Govt. of India under the Accessibility India Campaign, accessibility audit for PWD was carried out by an accredited agency M/s. Ekansh Trust, Pune. Further improvements in this regard have also been carried out.

Representation of SC/ST employees

29. The representation of SC and ST employees in various groups of posts as on March 31, 2018 is given under:


CSL’s Total Strength



Group A




Group B




Group C




Group D








Note: Against the total of 383 apprentices, 97 i.e, 25% belong to SC/ST community which is well above the statutory requirement.

Representation of OBC employees

30. The representation of OBC employees in various groups of posts as on March 31, 2018 is given under:


CSL’s Total Strength


Group A



Group B



Group C



Group D






Representation of minority employees

31. The representation of minority employees in various groups of posts as on March 31, 2018 is given under:


CSL’s Total Strength


Group A



Group B



Group C



Group D






Representation of Persons with Disabilities employees

32. The representation of Persons with Disabilities in various groups of posts as on March 31, 2018 is given under:


CSL’s Total Strength


Group A



Group B



Group C



Group D






Provision for safeguard of women

33. The Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder are strictly complied with. An Internal Complaints Committee has been constituted in accordance with the Act chaired by a senior woman executive. The Committee did not receive any complaint during the year 2017.

Welfare assistance for the care of differently abled children

34. A monthly welfare assistance of Rs.4,500 has been extended to all employees for taking care of their differently abled children. In addition, they have also been allowed grant of special leave/time off for a maximum of five days in a year.

Integrated Management System (IMS)

35. Cochin Shipyard continued to be an IMS compliant company encompassing ISO 9001:2008 (Quality Management System), ISO 14001:2004 (Environmental Management System) and OHSAS 18001: 2007 (Occupational Health and Safety Management System). CSL will be upgrading its Quality Management system and Environmental management systems to the latest ISO 9001:2015 and ISO 14001:2015 respectively by September 2018.

Facility Upgrade and Capital Expenditure

36. The total capital expenditure incurred in 2017-18 amounted to Rs.157.10 crores. This related to Renewals and Replacements, Modernization and Expansion, Dry Dock, ISRF, Research & Development projects, infrastructure for IAC etc.

Implementation of Official Language Policy

37. In pursuance of sub rule (4) of rule 10 of the Official Language (Use for the Official Purposes of the Union) Rules, 1976, Government of India have notified, in the Gazette of India, that 80% of ministerial staff of the Company have acquired working knowledge/ proficiency in Hindi.

38. Late Shankar Dayal Singh Memorial Award Scheme was introduced in CSL during 2013 as per directions from Ministry of Heavy Industries and Public Enterprises. This year the award was given to Smt. Priya A R, Junior Commercial Assistant. Incentive scheme for doing original work in Hindi has been made more attractive with a view to encourage employees to do more work in Hindi.

39. As per the instructions from Hindi Salahkar Samiti of Ministry of Shipping, essay writing and ‘What picture says’ competitions in Hindi were organized by the Company in connection with Hindi fortnight celebrations in which primary, high school and higher secondary students of schools in Kochi participated.

40. Various competitions in Hindi were organized in connection with Hindi fortnight celebrations 2017 for employees, children of employees and trainees of CSL. As part of implementation of Official Language Policy of Govt. of India, CSL observes first Wednesday of every month as Hindi Day. Four Hindi workshops were organized in the year 2017-18 in which a total of 101 employees participated. Spoken Hindi classes were organised in three batches in which 67 employees participated. Ninth issue of Hindi house journal, ‘Sagar Ratna’ was released during this year.

41. Committee of Parliament on Official Language visited on November 09, 2017.

42. Joint Hindi fortnight celebrations were organized from November 16 to November 30, 2017 under the auspices of Kochi TOLIC. 14 employees attended various competitions organized in this connection. Out of the above 8 employees won prizes.

Particulars of employees and related disclosures

43. In accordance with Ministry of Corporate Affairs notification no. GSR 463(E) dated June 05, 2015, Government Companies are exempt from Section 197 of the Companies Act, 2013 and its rules thereof.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

44. Details are placed at Annexure-2. The Company’s major initiative in the conservation of energy was installation of solar panels on the rooftop of various buildings inside CSL premises. The programme was commenced from the financial year 2013-14. Till date solar power plant having capacity of 535 KW has been commissioned and the power generated from solar panels is 15.05 lakhs unit as on March 31, 2018.

Risk Management

45. CSL has adopted a comprehensive Risk Management Policy at the 214th meeting of the Board of Directors held on September 16, 2014. The purpose of this policy is to put in place a comprehensive risk management system consisting of a defined process of risk management and methodology of identification, assessment, response, monitoring and reporting of risks. The policy would provide the management and Board of Directors an assurance that key risks are being properly identified and effectively managed.

46. As per the policy, CSL Board at the helm will review the risk management system in CSL. The Board shall discharge its responsibility of risk oversight by ensuring the review at periodical intervals. Board may also delegate to any other person or committee the task of independently assessing and evaluating the effectiveness of the risk management system. The CSL management comprising of CSL Board level and below Board level executives has been entrusted with the implementation of the risk management process. In this respect Risk Management Committees (RMC) and Risk Management Steering Committees (RMSCs) have been constituted to implement the policy in CSL. The Audit Committee and the Board of Directors review the risk management process and policy. The Yard’s product mix comprising of Defense and commercial shipbuilding and shiprepair gives the Company a natural hedge against market risk.

Research and Development (R&D) Activities

47. R&D policy of CSL is to enhance the company’s preeminence in Shipbuilding, Shiprepair and other chosen fields and products through Research and Development. In-house R&D activities have been undertaken during the year 2017-18 in the areas of welding procedure development and qualification of welders.

48. Welding of lower thickness plates using one side welding process is a specialised method. Capability building in above area is of paramount importance to yard. In the above context, Weld Procedure Development (WPS) has been undertaken in-house for welding of lower thickness plate of high strength steel (AH 36) of 10 mm thickness using one side welding process employing twin wire with copper backing. The procedure has been validated by ABS Classification society and welder has been qualified for performing the welding process.

Health, Safety & Environment (HSE)

49. CSL places HSE as one of its core value in operations considering the character of the industry. In order to strengthen the HSE awareness levels among the workforce new initiatives such as HSE briefings, issuing of HSE alerts and same as part of the tools box talks was implemented. CSL understands safety is a line function and it should be managed by everyone in their domain. In the year 2017-18 providing refresher safety training to contractors’ workmen was our focus area. The Company constantly strives to create and maintain HSE awareness to our employees and subcontractors’ workmen through various in-house and onsite training programmes including employees in the category of person with disability.

50. HSE performance for the last 3 calendar years is tabulated below:









Reportable accidents




Non Reportable Accidents




Number of Permanent Total Disability




Frequency Rate (Reportable accidents in one million man hours)




Fire Incident in MODU Sagar Bhushan

51. ”Sagar Bhushan”, Mobile Offshore Drilling Unit of ONGC (MODU Sagar Bhushan) arrived at Cochin Shipyard Limited on December 07, 2017 for repairs and the vessel was dry-docked on January 12, 2018. The vessel was scheduled to be undocked on February 28, 2018. This vessel was built in the year 1987 at Hindustan Shipyard Limited and had undergone repairs at CSL many times before and the last repair work by CSL on the vessel was in the financial year 2007.

52. On February 13, 2018, there was fire incident in the forward area of the vessel Sagar Bhushan. It was an explosion near the AC compartment in the forward area of the ship. The Fire Tender and the ambulance of CSL immediately rushed to the starboard side area of the vessel. The Fire Tenders from the Indian Navy and Kerala Fire Force also reached the site immediately. The rescue operation was carried out by CSL firemen, safety personnel and the other employees led by the Senior Management team including C&MD. 12 persons were taken out and sent to the hospital, of which 5 of them succumbed to injuries including one permanent employee of CSL. 4 persons were admitted to the hospital and 3 persons were given first aid at hospital and discharged on the same day itself. In addition to the above, two more persons who participated in the rescue operations were admitted to the hospital for reported giddiness or suffocation on the next day of the incident, but discharged on the same day. Information of the incident was reported to all authorities as mandated under the statutory provisions. The Hon’ble Finance Minister of Kerala visited the yard and also the families of the victims on the day of the incident at the behest of the Hon’ble Chief Minister of Kerala.

53. An internal enquiry was conducted on the incident and it was concluded that it was caused due to a momentary explosion of high impact that occurred in the air conditioning compartment. The enquiry revealed that the cause of the incident was a human error and was not due to any systemic failure. In the aftermath of the incident CSL has decided to introduce automatic closing valves in each of fuel gas hoses. Storage and distribution system of industrial gases in the Yard has been reviewed. Vessel man entry system has been strengthened on all ships and the frequency of gas monitoring has been increased in all confined spaces onboard vessels. Various other actions to tighten existing systems and to have a much higher level of safety culture amongst all stakeholders are underway. A detailed audit has been undertaken by an eight member specialist team from the Department of Factories and Boilers, Government of Kerala and their recommendations have been implemented substantially. All such actions have the full involvement and understanding of all employees, contractors, contract workmen, trainees etc.

54. CMD and Senior Management team visited the family of the deceased and assured them of full support. Considering the hardship being experienced by the kith and kin of the deceased and to meet the immediate penury of the families of the deceased, CSL had declared following financial assistance on February 13, 2018:

(i) Rs.10 Lakhs to the family of the deceased in addition to the statutory compensation and insurance relief as applicable to them.

(ii) Rs.25,000 to be disbursed on the day itself to enable the families to defray the expenses related to the funeral and other rituals.

(iii) All treatment expenses incurred for the best treatment for the injured.

55. On February 14, 2018 Shri P Radhakrishnan, Hon’ble Minister of State for Shipping visited Cochin Shipyard, and took stock of the situation. He met the CSL employees and officers at the site of the incident and appreciated the earnest efforts taken by the entire shipyard team in the rescue operations and subsequent actions. He conveyed his heartfelt condolences to the bereaved ones. He appreciated the steadfast and expeditious decisions taken by the CSL management in reaching out to the families of the deceased and for promptly announcing reasonable financial relief to the families of the deceased. He visited the injured at the hospital, interacted with their dear and near ones and promised full support from the Ministry of Shipping through the shipyard.

56. After the review and interactions, the Hon’ble Minister directed CSL to extend the following additional reliefs to the affected:

(i) Amount equivalent to two months normal wages to the injured immediately.

(ii) Appropriate employment on compassionate grounds to any eligible dependent of the deceased victims.

(iii) Appropriate financial aid towards the education of the children of the deceased up to and including graduate level.

(iv) In addition to the statutory compensation relief, Company to disburse wages to the injured till they return for work in CSL.

(v) One dependent of each of the deceased who have been offered employment by CSL, joined for permanent employment in CSL on June 01, 2018.

57. On February 17, 2018, Shri Paul Antony IAS, Chief Secretary of Kerala visited CSL, paid floral homage to the deceased and interacted with the representatives of the CSL employees and contractors.

58. All unions and associations expressed their satisfaction and gratitude to the management for their prompt rescue operations and empathetic support & relief to the kith and kin.

Industrial security

59. Total security of the Company continued to be robust without causing any serious security concern during the year. All security systems and measures introduced and installed in the Company are of international standards. Periodic joint survey was conducted by the Company and CISF. Twenty four hours waterfront patrolling in a dedicated speed boat with armed personnel and wireless surveillance (CCTV) system covering all critical locations and installations are in place. As per the security plan and policy of the Company, periodic security drills were conducted to ensure prompt mitigating action in the event of any security breach, crisis or calamities.

60. Effective access control systems including biometric embedded turnstile gates are in place in the Company. A full-fledged visitor’s facilitation center is operated for scrutiny and verification of the credentials of the visitors to the Company. Baggage scanning system has also been installed at the main entry gate of the Company. Apart from these, special systems and measures such as exclusive photo entry pass and special surveillance system, additional waterside security net around IAC etc are positioned and operated towards total security of the Indigenous Aircraft Carrier (IAC). A robust cyber security policy has also been adopted by the Company.

61. Materials entry and exit have been integrated with ERP module which ensures effective and vigilant monitoring of materials movement into and out of the Company. No case of theft, sabotage, leakage of information etc. was reported during the year.

62. The physical security of the Company has been entrusted to the Central Industrial Security Force (CISF) contingent of 133 personnel headed by an officer of the rank of Assistant Commandant.

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

Awards and Recognitions

64. During the financial year CSL received following awards:

(a) KMA excellence award for best CSR activities undertaken.

(b) Bureaucracy Today CSR excellence award for ‘Rural Development’, given by Bureaucracy Today.

(c) Madhu S Nair, CMD, Cochin Shipyard Limited, was honoured with the ‘CSR-Oriented Chairman/ CMD/MD of the Year (PSU)’ Award, given by Bureaucracy Today.

(d) MKK Nair Memorial Award for the Second Best Productivity Performance from Kerala State Productivity Council

(e) Kerala State Energy Conservation Award 2017 in the category of ‘Large Scale Energy Consumers.’

(f) ’Top Exporter (PSU) at Cochin for the calendar year 2017’ award from Customs, Central GST and Central Excise.

(g) Kerala State Renewable Energy Award 2017 in appreciation of commendable achievements towards the utilization of Renewable Energy in the category of ‘Industrial Units in the State of Kerala during the year 2016-17, given by Department of Power, Government of Kerala through ANERT.

(h) Corporate Citizen of the year 2018 Award for outstanding contribution to the profession, industry and society, given by Public Relations Council of India.

(i) ’Award for Best Stall’ in the National Level Vendor Development Programme cum Industrial Exhibition & B2B Meet, ‘IND EXPO 2017’ organised by MSME Development Institute, Thrissur, Ministry of MSME from December 07 to 09, 2017.

(j) ‘India Seatrade Award 2017’ for the Shipbuilding & Repair Yard of the Year.

Board of Directors & Key Managerial Personnel

65. The Board of CSL comprises of 12 directors; 4 Whole Time Directors, 6 Non-Official Part Time (Independent) Directors and 2 Official Part Time (Nominee) Directors of Government of India and Government of Kerala.

66. Shri Jiji Thomson IAS (Retd.) (DIN: 01178227), Shri Pradipta Banerji (DIN: 00630615) and Shri Nanda Kumaran Puthezhath (DIN: 02547619) took over charge as Non-Official Part Time (Independent) Directors with effect from July 15, 2017 vide Ministry of Shipping letter No. SY-11012/1/2016-CSL dated July 15, 2017. The Ministry of Shipping, Government of India vide letter F. No. SY-11012/1/2017-CSL dated October 04, 2017 appointed Shri Satinder Pal Singh IPS (DIN: 07490296), Joint Secretary, Ministry of Shipping, Government of India as Official Part Time (Nominee) Director on the Board of Cochin Shipyard Limited (CSL) in place of Shri Pravir Krishna (DIN: 06519104) with effect from October 04, 2017. Shri Sunny Thomas (DIN: 06882228), Director (Technical) retired from service by superannuation on November 30, 2017. Shri Bejoy Bhasker (DIN: 08103825) took over charge as Director (Technical) with effect from April 05, 2018 vide Ministry of Shipping letter No. SY-11012/4/2017-CSL dated April 04, 2018. The Ministry of Shipping, Government of India vide letter SY-11012/1/2017-CSL dated April 20, 2018 appointed Shri K.R Jyothilal IAS (DIN: 01650017), Principal Secretary (Transport), Govt. of Kerala as Official Part Time (Nominee) Director on the Board of CSL in place of Shri Elias George (DIN:00204510) with effect from April 20, 2018.

67. Details of changes in Key Managerial Persons during the financial year 2017-18 and also upto the date of this report are given below:

Sl No




Date of Appointment

Date of Cessation

Changes if any


Shri Madhu S Nair


Chairman & Managing Director

January 01, 2016


No Change


Shri D Paul Ranjan


Director (Finance) & Chief Financial Officer

May 01, 2014


No Change


Shri Sunny Thomas


Director (Technical)

June 01, 2014

November 30, 2017



Shri Suresh Babu N V


Director (Operations)

April 26, 2016


No Change


Shri Bejoy Bhasker


Director (Technical)

April 05, 2018




Smt. Kala V


Company Secretary

May 02, 1998


No Change

Declaration and Meeting of Independent Directors

68. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013. A separate meeting of Independent Directors was held on February 22, 2018 in which all the Independent Directors were present.

Details of Board Meetings held during 2017-18

69. Ten Board Meetings were held during the year 201718 and the gap between two meetings did not exceed 120 days. The dates on which the Board Meetings were held are as follows:

Sl. No


Board Strength

No. of Directors present


April 27, 2017




May 11, 2017




June 10, 2017




July 17, 2017




July 21, 2017




August 04, 2017




September 11, 2017




November 10, 2017




February 05, 2018




February 22, 2018



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

Remuneration Policy / Evaluation of Board’s Performance

71. Cochin Shipyard is a 75% Government of India owned Public Sector Enterprise under Ministry of Shipping. Presently the Directors of the Company are presidential appointees and their remuneration is fixed in accordance with the DPE guidelines. Accordingly, Article 21(a) of the Articles of Association of CSL states that President will appoint Directors and determine their remuneration. Since the Board level appointments are made by President of India, the evaluation of performance of such appointees is also done by the GOI. The Independent Directors evaluated the performance of the Board as a whole in a separate meeting of independent directors held on February 22, 2018.

Report of the Nomination & Remuneration Committee on Company’s Policy on Directors’ Remuneration

72. Presently, the remuneration of Board level appointees are determined in accordance with DPE guidelines. CSL at its 228th Board meeting held on December 14, 2016 adopted the Nomination and Remuneration Policy in compliance with the provisions of section 178 of the Companies Act, 2013. and at its 241st Board meeting held on May 24, 2018 amended the Policy. The Policy is available in the website of the Company at

Directors Responsibility Statement

73. Your Directors state that:

(a) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

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

(d) the Directors have prepared the annual accounts on a ‘going concern’ basis;

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

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

Contracts and arrangements with related parties

74. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material. Your Directors draw attention of the members to Note 46 to the financial statements which sets out related party disclosures as per Indian Accounting Standard (Ind AS) 24. Form AOC-2 has been attached as Annexure -3 as required under section 134(3)(h) of the Companies Act, 2013.

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

75. Presently, the CSR & SD Committee of CSL comprises of Smt. Roopa Shekhar Rai (DIN: 07565156), Non-Official Part Time Director as Chairperson of the Committee, Shri Radhakrishna Menon (DIN: 07518727), NonOfficial Part Time Director, Shri D Paul Ranjan (DIN: 06869452), Director (Finance), and Shri Bejoy Bhasker (DIN: 08103825), Director (Technical) as members. The Corporate Social Responsibility and Sustainability Development Committee (CSR & SD) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy can be accessed on the Company’s website at the link: http://

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

77. The CSL CSR projects are spread throughout length and breadth of Kerala covering the most common fields of CSR interventions appearing in Schedule VII of Companies Act 2013. However, the major focus areas of CSL CSR continued to be health, education, capacity building, environmental protection, sanitation and drinking water for the economically poor and weaker sections of the society including the differently abled ones, senior citizens etc. This year 33% of the total budget was specifically allocated to Swachh Bharat projects, emphasizing the need for supporting the national initiative of sanitation. Special initiatives were taken up focusing on programs including toilet construction in schools and individual households not only in coastal areas of Kerala but also in Lakshadweep.

78. During the year, CSL has spent Rs.857.08 lakhs for various ongoing and completed CSL CSR projects and related indirect expenses. The Annual Report on CSR activities is annexed herewith marked as Annexure-4.

Audit Committee

79. The present Audit Committee of CSL is constituted with Shri Radhakrishna Menon (DIN: 07518727), Non-Official Part Time Director as Chairman, Adv. Krishna Das E (DIN: 02731340), Non-Official Part Time Director and Shri Nanda Kumaran Puthezhath (DIN: 02547619), Non Official Part Time Director as members. During the year, all recommendations of the Audit Committee were accepted by the Board of Directors. Particulars regarding the Audit Committee are provided under the Section ‘Board Committees’ in the Report on Corporate Governance.

Corporate Governance

80. The Company is committed to maintaining the highest standards of corporate governance and has put in place an effective corporate governance system. The Company complies with the applicable regulations of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and also the guidelines on corporate governance issued by the Department of Public Enterprises. The Company also submits its quarterly progress reports on corporate governance within 15 days from the close of each quarter to the Ministry of Shipping as recommended by the DPE in this regard. The report on corporate governance forms part of the Directors’ Report.

Management Discussion and Analysis

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

Internal Financial Controls

82. The Company has in place adequate internal financial controls with reference to financial statements. During the year, the Company had engaged M/s. Varma & Varma, (Firm Registration No. 004532S) Chartered Accountants for reviewing and installing adequate Internal Financial Controls and to ensure proper and adequate systems for compliance with the provisions of all applicable laws. Such controls were tested and no reportable material weakness in the design or operation was observed. In order to provide for functional autonomy, the Company has a system wherein financial powers of the Board of Directors are delegated to the CMD. These powers are further sub-delegated to officers at various levels for smooth and efficient day to day functioning. An independent internal audit mechanism is in place for conducting extensive audit of various operational and financial matters. C&AG conducts proprietary audit. An independent Audit Committee of the Board of Directors also examines internal/ statutory audit observations and provides guidance based on the same. The Audit Committee also looks into the internal control system, Company procedures and internal audit performance and reports to the Board of Directors. The Company has implemented an integrated ERP System (SAP) since July 2014 which is enabling better management control.

Statutory Auditors

83. M/s. Krishnamoorthy & Krishnamoorthy (Firm Registration No. 001488S), Chartered Accountants, Ernakulam were reappointed as the Statutory Auditors of the Company by the Comptroller & Auditor General of India for the year 2017-18. The shareholders have delegated the power to fix the remuneration of Statutory Auditors to the Board and accordingly, the same has been fixed by the Board.

Auditors Report

84. M/s. Krishnamoorthy & Krishnamoorthy, Statutory Auditors have submitted their report on the standalone and consolidated financial statements of the Company for the year ended March 31, 2018 on May 24, 2018. The Report does not contain any qualification, reservation or adverse remark or disclaimer.

Comments of C&AG

85. The comments of the Comptroller and Auditor General of India under Section 143 (6) (b) of the Companies Act, 2013 on the standalone and consolidated financial statements of the Company for the year ended March 31, 2018 are placed at Annexure-5.

Cost Auditors

86. The Board has appointed M/s. Felix & Co (Firm Registration No. 100416), Cost Accountants, as the cost auditors for conducting the audit of cost records of the Company for the financial year 2017-18. The remuneration of Cost Auditor for the financial year 2018-19 will be ratified by the shareholders at the ensuing AGM.

Secretarial Auditor

87. The Board has appointed M/s. SVJS & Associates, Practising Company Secretaries, to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018 is annexed herewith marked as Annexure-6 to this Report. There is no qualification, reservation or adverse remark or disclaimer in the Secretarial Audit Report.

Internal Auditor

88. The Board has appointed M/s. Varma & Varma, Chartered Accountants, Kochi, to conduct Internal Audit for the financial year 2017-18.

Extract of Annual Return

89. The extract of annual return in Form MGT 9 as per Rule 12(1) of the Companies (Management & Administration) Rules, 2014 is placed at Annexure-7.

Investor Services

90. The shares of the Company are listed in BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”). CSL has paid listing fees to BSE and NSE on time. M/s. Link Intime India Private Limited are the Registrar & Transfer Agents in respect of these equity shares. The tax free Bonds issued by the Company in 2013-14 are fully dematerialized with both the depositories, NSDL and CDSL. These bonds are listed on Wholesale Debt Market (“WDM”) segment of BSE. CSL has paid the listing fees to BSE on time in respect of these Bonds. M/s. Link Intime India Private Limited are the Registrar & Transfer Agents and M/s. SBICAP Trustee Company Limited are the Debenture Trustees in respect of these Bonds.


91. Vigilance Department functions advocating transparency, equity and competitiveness in all procurement. Important CVC guidelines are discussed with Heads of Departments for its strict compliance. Emphasis was given to vigilance sensitization among the officers and supervisors for preventive vigilance.

92. Submission of annual property returns of executives was made online with a link to view the same to vigilance and the vigilance Dept. is scrutinizing the same.

93. Efforts were taken to develop an e-module to furnish the vigilance data of officers through online as a part of issue of online vigilance clearance.

94. Further the Department has conducted 68 surprise/ periodic inspection for the year in various areas of operations and suggested corrective actions on vigilance angle. All reports to the Central Vigilance Commission are submitted in time and no reference is pending with CVC.

95. One vigilance case was disposed off during the year 2017-18 and one case relating to a contractor is pending.

Right to Information Act

96. In order to promote transparency and accountability, your Company has implemented the provisions of the RTI Act, 2005 in its true letter and spirit and an appropriate mechanism has been set up in the Company with a dedicated centralized RTI Cell to provide information to the citizens under the provisions of this Act. All the RTI applications and the appeals received both on line and off line during the year 2017-18 have been processed and information was provided in a time bound manner as stipulated in the Act.

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

Vigil Mechanism

98. The Whistle Blower Policy of CSL adopted by the Board of Directors at the 198th Meeting held on February 22, 2012 is functioning as Vigil Mechanism of CSL. The Whistle Blower Policy of CSL is available at the link Whislte_Blower%20policy_CSL.pdf

Details of frauds reported by Auditors under Section 143

99. Nil.

Particulars of loans, guarantees or investments

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

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

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

(c) acquired by way of subscription, purchase or otherwise, the securities of any other body corporate, as prescribed under Section 186 of the Companies Act, 2013, except an investment of Rs.16.28 crores in the subsidiary company viz., Hooghly Cochin Shipyard Ltd. The said investment is within the limit of Section 186 of the Companies Act, 2013.

Material changes and commitments

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

Details of change in nature of business

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


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

Secretarial Standards

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

Significant and Material orders

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

Business Responsibility Report

106. The Securities and Exchange Board of India (SEBI) has mandated inclusion of Business Responsibility Report (“BR report”) as part of the Annual Report for 500 listed entities based on market capitalization. This SEBI mandate is also inserted as Regulation 34(2)(f) of SEBI (LODR) regulations 2015. The SEBI (LODR) Regulations, 2015 provide a format for BR reports. It also contains a list of nine Key Principles and various core elements under each principle to assess compliance with Environmental, Social and Governance norms. The Company’s BR report for the year forms part of the Annual Report.


107. The Board of Directors are extremely thankful for the continued patronage and support extended by the Hon’ble Prime Minister, Hon’ble Minister of Shipping and all officers of the Ministry of Shipping. The Board would also like to express their grateful appreciation for the support and co-operation from various offices of the Government of India, Government of Kerala, Government of West Bengal, various local bodies, the Comptroller & Auditor General of India, Statutory Auditors, Secretarial Auditors, Cost Auditors, Internal Auditors, Suppliers, Sub-contractors, Company’s Bankers and our valued customers. The Board also places on record its appreciation for the contribution and support extended by all employees of Cochin Shipyard Ltd. Your Directors express their appreciation and gratitude to all the shareholders/investors for the trust and confidence reposed in the Company and look forward to their continued support and participation in sustaining the growth of the Company in the coming years.

For and on behalf of the Board of Directors

Madhu S Nair

Chairman & Managing Director

DIN: 07376798

Place : Kochi

Date : June 30, 2018

Director’s Report