Cochin Shipyard Ltd Asbestos Problem

1. Cochin Shipyard Limited
India’s premier Shipyard
IMAGE HERE
Contracts Management
Brief of the matter How settled
1 Shipowners claim for USD 2
million against consequential
damages/guarantee claims -
International arbitration in
London
CSL contested, initiated London
arbitration. However settled with the
shipowners at USD 130000 through
mutual negotiation of which 50%
claimed from insurance. Board
approved the settlement
2 Dispute from European Union
based Shipowner on traces of
asbestos in gasket in ship
delivered by CSL. Potential
consequential guarantee
claim of Rs 30 crs+ huge
reputational impact
A Committee negotiated with the
shipowner and settled at Rs 10 crs for
replacement of gaskets under
guarantee. Consequential claims
dropped. Board approved the
negotiation
3 Claim from engineering
consultants for new Dry Dock
for additional work towards
reengineering the design to
contain project cost.
CSL understood clients additional
efforts and time – Paid extra Rs 4 Crs
over and above the contract price.
However project was saved & cost
contained by Rs 350 Crs
Some examples of settlement of claims

2. DRAFT RED HERRING PROSPECTUS
Dated: March 23, 2017
(The Draft Red Herring Prospectus will be updated upon filing with the RoC)
(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 134.
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: secretary@cochinshipyard.com; Website: www. www.cochinshipyard.com
Corporate Identity Number: U63032KL1972GOI002414
OUR PROMOTER: THE PRESIDENT OF INDIA ACTING THROUGH THE MINISTRY OF SHIPPING
PUBLIC ISSUE OF 33,984,000 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
22,656,000 EQUITY SHARES AGGREGATING TO [●] MILLION (“FRESH ISSUE”) AND AN OFFER FOR SALE OF 11,328,000 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 824,000 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 THE BSE
LIMITED (“BSE”) AND THE NATIONAL STOCK EXCHANGE 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 19(2)(b)(iii) 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 26(1) 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, 824,000 Equity Shares shall be reserved for allocation on a
proportionate basis 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 303.
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 88) 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 Draft Red Herring
Prospectus. Specific attention of the investors is invited to “Risk Factors” on page 17.
ISSUER’S AND SELLING SHAREHOLDER’S ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft 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 Draft 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 the Draft 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 Draft 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 the 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 [●] and [●], respectively. For the purposes of the Issue, the Designated Stock Exchange shall be [●]. A copy of the Red Herring Prospectus and the Prospectus shall be delivered for registration
to the RoC in accordance with section 26(4) 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 357.
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.ipo@sbicaps.com
Investor grievance e-mail:
investor.relations@sbicaps.com
Contact Person: Mr. Nikhil Bhiwapurkar / Mr.
Sandeep Tenneti
Website: www.sbicaps.com
SEBI Registration No.: INM000003531
Edelweiss Financial Services Limited
14th
Floor, Edelweiss House, Off. C.S.T Road,
Kalina
Mumbai - 400098, Maharashtra, India
Telephone: +91 (22) 40094400
Fax: +91 (22) 40863610
E-mail: csl.ipo@edelweissfin.com
Investor grievance e-mail:
customerservice.mb@edelweissfin.com
Contact Person: Mr. Siddharth Shah
Website: www.edelweissfin.com
SEBI Registration No.: INM0000010650
JM Financial Institutional Securities Limited
7th
Floor, Cnergy, Appasaheb Marathe Marg,
Prabhadevi, Mumbai - 400025, Maharashtra,
India
Tel: +91 (22) 66303030
Fax: +91 (22) 66303330
E-mail: csl.ipo@jmfl.com
Investor grievance e-mail:
grievance.ibd@jmfl.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.ipo@linkintime.co.in
Investor grievance email: csl.ipo@linkintime.co.in
Contact Person: Ms. Shanti Gopalkrishnan
Website: www.linkintime.co.in
SEBI Registration No: INR000004058
BID/ISSUE PROGRAMME
BID/ISSUE OPENS ON [●]
BID/ISSUE CLOSES ON (FOR QIBs) (
*)
[●]
BID/ ISSUE CLOSES ON (FOR OTHER BIDDERS) [●]
(
*)
Our Company and the Selling Shareholder, in consultation with the BRLMs, may, consider closing the Bid/Issue Period for QIBs one Working Day prior to the Bid/Issue Closing Date
in accordance with the SEBI ICDR Regulations.

3. 268
and the Petitioner filed a petition bearing number O.P. (arbitration) 30 of 2009 under section(s) 30
and 33 of the Arbitration and Conciliation Act, 1940 to set aside the Award-II. During the pendency
of this petition before the Civil Court, the Petitioner filed an application bearing number I.A. 5625
of 2011 to seek permission to examine the arbitrator and the general manager of the Petitioner’s
company as witnesses. The Civil Court, vide order dated December 23, 2011, rejected the application
holding that there was no justification to examine the arbitrator (“Order-II”). The Petitioner filed a
writ petition bearing number 482 of 2013 before the High Court which concurred with the view
expressed by the Civil Court vide its order dated August 11, 2014. However, the High Court granted
liberty to the Petitioner to produce other available evidence to substantiate its claim and specifically
permitted examination of its employees as witness in the proceeding. Thereafter, in relation to O.P.
(Arbitration) 30 of 2009 pending before the Civil Court, the Supreme Court vide its order dated
December 15, 2014 in the special leave appeal (civil) 34309 of 2014 granted stay on further
proceedings. Further our Company filed an appeal before the Supreme Court questioning the legal
tenability of the order passed by the High Court on August 11, 2014. The Supreme Court vide its
judgement on civil appeal number 9187 of 2015 dated November 6, 2015 held that no witness
examination is permissible, within the parameters of Sections 30 and 33 of the Arbitration Act, 1940
to prove a legal misconduct on the part of the arbitrator. The Supreme Court granted the permission
to the Petitioner to examine any witness in court. This matter is currently pending before the sub-
court, Ernakulam.
2. Our Company filed a petition bearing number O.S. 124 of 2013 against Superwaudite Jointings
Private Limited, Ahmedabad (“Respondent”) before the Subordinate District Judge Court,
Ernakulam (“Civil Court”) on January 30, 2013 in relation to the purchase orders placed with the
Respondent. Our Company placed the purchase orders for asbestos free gaskets for its vessels. The
Respondent confirmed that the gaskets it had supplied to our Company were asbestos-free. However,
it was later reported and certified that the gaskets contained asbestos content. Consequently, our
Company was compelled to settle the claims raised by the owners of the vessels, i.e. the companies
owned by the Vroon group. Our Company has claimed ` 140.46 million with future interest from
the Respondent for the loss and damages sustained by us (“Petition”). The Respondent filed a
written statement on September 21, 2013 wherein it denied supplying gaskets with asbestos content
to our Company. It further stated that our Company failed to raise any claim in relation to the quality
of the gaskets during the twelve month guarantee period. Thereafter, our Company filed a petition
bearing number O.P. (C) 693 of 2015 before the High Court of Kerala at Ernakulam (High Court”)
for seeking directions to the Civil Court to accept our witness list for examination. The High Court,
vide its order dated August 7, 2015, directed the Civil Court to permit our Company to take steps for
availing the presence of the witnesses for examination. This matter is currently pending before the
Civil Court.
III. Outstanding dues to small scale undertakings and other creditors by our Company
As on September 30, 2016, our Company has 1,374 creditors. Based on the Materiality Policy adopted
by our Board, the threshold for material dues is 5% of total trade payable as at September 30, 2016, i.e.
5% of ` 3,557.15 million which is ` 177.86 million. Details of the dues owed to creditors are given
below:
Sr.
No.
Name of the creditor
Amount Outstanding
(in ` million)
1. Bharat Electronics Limited 580.74
2. Dredging Corporation of India 468.13
3. Bharat Heavy Electricals Limited 379.94
Total 1,428.81
The details pertaining to net outstanding dues towards creditors are available on the website of our
Company at http://cochinshipyard.com/investors.htm. It is clarified that such details available on our
website do not form a part of this Draft Red Herring Prospectus. Anyone placing reliance on any other
source of information, including our Company’s website www.cochinshipyard.com or
http://cochinshipyard.com/investors.htm would be doing so at their own risk.

4. 8/24/2018 Login Page
http://courtnic.nic.in/hcs/content_v1.asp 1/1
High Court of Kerala
Case Status Information System
Case Status : Disposed
Status Of : OP (CIVIL) 693 Of 2015
Litigants :
M/S. COCHIN SHIPYARD LTD Vs. M/S. SUPERWAUDITE JOINTINGS
PRIVATE LIMI
Pet's Adv : SRI.M.GOPIKRISHNAN NAMBIA
Res's Adv : SRI.V.ABRAHAM MARKOS
Last Date of Hearing : Friday, August 07, 2015
Next / Final Date of
Hearing :
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Case Updated On : Tuesday, August 11, 2015
Category : LOWER COURT MATTERS CIVIL
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