Mazagon Dock Shipbuilders Ltd Management Discussions

A. FORWARD LOOKING STATEMENTS

This Management Discussion and Analysis Report contains certain statements that may be construed as forward-looking statements within the meaning of applicable securities laws and regulations. These statements include, but are not limited to, discussions relating to the Companys business strategy, future growth prospects, operational performance, market opportunities, infrastructure development initiatives, capital expenditure plans, technological advancement, indigenisation efforts and economic and industry environment.

Forward-looking statements are based on certain assumptions, expectations and projections concerning future events and are subject to various risks, uncertainties and other beyond the control of the Company. Actual results may differ materially from those expressed or implied ed to delivering long-in such statements due to factors including changes in

Government policies relating to defence procurement, budgetary allocations, geopolitical technological changes, supply chain disruptions, regulatory developments, fluctuations exchange rates, economic conditions affecting the Companys The Company undertakes no obligation to publicly update, amend or revise any forward-looking statements, whether as a result of new information, across future events or otherwise, except as required under applicable laws and regulations.

B. FY 2025-26: STRATEGIC HIGHLIGHTS

During FY 2025-26, the Company continued to strengthen its position as Indias premier defence shipyard through sustained execution of complex shipbuilding and submarine programmes, enhancement of indigenous manufacturing capabilities, augmentation and expansion of its maritime ecosystem.

Key developments during the year included:

Continued progress in execution of ongoing advanced materials, green defence shipbuilding and submarine automation, programmes including offshore projects and export order project.

Strengthening of ship repair, refit and lifecycle support capabilities. position, with

Continued focus on indigenisation and development of domestic in support of the Government of Indias

Aatmanirbhar Bharat initiative.

• Progressindevelopmentofstrategicinfrastructure including Nhava Yard and associated waterfront facilities.

Expansion of international presence through acquisition of a controlling stake in Colombo

Dockyard PLC. expectations regarding the

Continued operational excellence and capability enhancement.

Strong financial performance supported by many of achievementwhich areof project milestones and prudent financial management.

TheCompanyremains term value to stakeholders while contributing to Indias maritime security and defence preparedness. developments,

C. INDUSTRY STRUCTURE AND DEVELOPMENTS

Global Maritime and Defence Environment in foreign and other factors operations. The global maritime landscape continues to witness significant transformation geopolitical dynamics, changing security technological advancements and increasing emphasis the world are on maritime dominance. Nations strengthening naval capabilities to secure strategic interests, protect sea lines of communication and address emerging security challenges. As maritime security assumes increasing importance, demand for advanced naval platforms, support vessels, maintenance services and lifecycle support capabilities continue to grow. infrastructure The global shipbuilding industry remains a strategically important sector supporting defence preparedness, international trade, energy security and industrial development. In addition to traditional shipbuilding activities, increasing focus is digitalisation, technologies and lifecycle support solutions to improve operational efficiency and sustainability.

Indian Defence Shipbuilding Sector the reassessed Indias geographical length of Indias coastline i.e.11,098.81 kilometres and its strategic location along major international shipping routes, provides a strong foundation for development of a robust maritime ecosystem. Maritime trade continues to constitute a significant component activity and is expected to grow ofIndiaseconomic further in line with the countrys economic expansion and increasing integration with global markets.

The Indian Navy and the Indian Coast Guard play a critical role in safeguarding Indias maritime interests and ensuring security across a vast maritimedomain. Continuous modernisation of naval assets and strengthening of maritime capabilities are expected to drive sustained demand for warships, submarines, support vessels, specialised platforms and lifecycle support services.

The Government of India continues to accord high priority to the development of indigenous defence manufacturing capabilities. Policy initiatives such

Aatmanirbhar Bharat, make in India, make for the

World, Defence Acquisition Procedure (DAP), positive indigenisation lists and increasing emphasis on domestic procurementare

Indian defence manufacturers and shipyards.

Plan and various The Indian Naval Indigenisation defence sector reforms seek to enhance domestic design, development and manufacturing capabilities while strengthening the indigenous vendor ecosystem.

These initiatives are expected to reduce import dependence, promote technological self-reliance and generate long-term opportunities for the domestic shipbuilding industry.

Economic Significance of Shipbuilding

The shipbuilding industry occupies a unique position within the industrial ecosystem owing to its strong forward and backward linkages with a wide range of sectors including steel, heavy engineering, electronics, defence manufacturing, logistics and transportation.

The industry generates substantial employment opportunities and contributes significantly to industrial development and technological advancement.

The Governments continuing focus on maritime infrastructure, port-led development, coastal shipping tion objectives. and the blue economy is expected to further strengthen growth prospects for shipbuilding, ship repair, marine engineering and allied maritime

Maritime Sector Opportunities

Indias aspiration to emerge as a leading maritime nation presents significant opportunities across defence shipbuilding, commercial shipbuilding, ship repair, refit and maintenance services. Growing maritimetrade, expansion of port infrastructure, offshore increasing activities and rising demand for assets are expected to create long-term growth opportunities for the maritime sector.

Ship repair and lifecycle support services are increasingly emerging as attractive business segments due to the expanding fleet of defence and commercial vessels requiring maintenance, modernisation and operational support throughout their lifecycle.

Outlook for Indigenous Defence Manufacturing

Indias defence manufacturing sector is undergoing structural transformation supported by policy reforms, increasing capital expenditure on defence modernisation and growingparticipationof domestic industry. The emphasis on indigenisation and development of a self-reliant defence industrial base is expected to strengthen domestic manufacturing capabilities and enhance opportunities for Indian defence enterprises.

Against this backdrop, Mazagon Dock Shipbuilders

Limited remains well-positioned to leverage its extensive experience, proven capabilities, modern infrastructure and skilled workforce to contribute to the nations maritime and defence objectives while pursuing sustainable growth opportunities.

D. COMPANY OVERVIEW

Mazagon Dock Shipbuilders Limited ("MDL" or "the Company"), a Navratna Defence Public Sector

Undertaking under the administrative control of the

Ministry of Defence, Government of India, is Indias leading shipyard engaged in the construction,repair, refit, modernisation and lifecycle support of warships, submarines and allied engineering products.

Over the decades, the Company has developed significant expertise in warship construction,submarine building, systems integration,engineering, project management and lifecycle support services. MDL is the only Indian shipyard to have built destroyers and conventional submarines for the Indian Navy and has played a pivotal role in supporting Indias maritime defencecapabilitiesand Since its nationalisation delivered a diverse range of defence and commercial. platforms, including destroyers, frigates, corvettes, missile boats, submarines, offshore patrol vessels and various commercial vessels and offshore structures. Thereflectits strong Companys accomplishments engineering capabilities, commitment to quality and ability to execute complex projects of strategic national importance.

The Company operates through its Operations and

Technical Division and is supported by modern infrastructure facilitiesat Mumbai, Nhava and other operational locations. Continuous adoption, infrastructure augmentation, process improvements and human capital development have strengthened the Companys capability to undertake complex projects while maintaining high standards of quality and reliability.

During the year, the Company continued to strengthen its strategic presence within the maritimesector through investments, collaborations and business initiatives. The acquisition of a controlling stake in Colombo Dockyard PLC represents a significant milestone in expanding the Companys international footprint and enhancing opportunities in shipbuilding, ship repair, marine engineering and allied maritime services.

The Company continues to focus on operational excellence, indigenisation, infrastructure modernisation, sustainability, digital transformation and capability enhancement while contributing towards strengthening Indias maritime and defence preparedness.

E. SWOT ANALYSIS

Strengths:

World-Class Infrastructure and Manufacturing Capabilities

The Company possesses state-of-the-art shipbuilding and submarine construction by modern manufacturing facilities, dry docks, wet basins, workshops, heavy lifting equipment and specialised integrationfacilities. Continuous investments in infrastructure modernisation and capacity enhancement have strengthened the Companys ability to execute complex defence projects efficiently.

Strategic Importance and Proven Track Record

MDL enjoys a unique position within Indias defence manufacturing ecosystem as the only shipyard to have constructed both destroyers and conventional submarines for the Indian Navy. The Companys proven executioncapabilities,strong project management expertise and successful delivery record provide a significant competitive advantage.

Strong Indigenisation Focus

The Companys dedicated focus on indigenisation has contributed to increasingdomestic content in defence platforms, strengthening the indigenous vendor ecosystem and reducing dependence on imports.

These efforts are aligned with national objectives of achieving self-reliance in defence manufacturing.

Strategic Geographic Location investments in

Located in Mumbai, the commercial capital of India and headquarters of the Western Naval Command, the

Company benefits from proximity to key stakeholders, customers, suppliers and ancillary industries, resulting in operational efficiencies and improved coordination.

Technical Expertise and Design Capabilities

The Company possesses a strong pool of naval architects, engineers, project professionals and technical specialists supported by extensive experience in design, systems integration and construction of complex naval platforms.

Infrastructure Expansion Initiatives

Development of facilitiesat Nhava Yard and enhancement of waterfront infrastructure at South

Yard Annex are expected to significantly strengthen future capacity, operational flexibility and business growth opportunities.

Weaknesses:

Long Project Execution Cycles

Warship and submarine construction involve extended execution timelines owing to their technological complexity, stringent quality requirements and evolving customer specifications infrastructure supported

Waterfront Constraints and Siltation

The Companys operations require periodic dredging and maintenance of waterfront facilities.Such involve recurring expenditure and operational planning challenges.

Dependence on Critical Suppliers

Timely availability of specialised equipment, systems and materials from domesticand international suppliers remains criticalfor project execution and delivery schedules.

High Skill Dependency

Construction of sophisticated defence platforms requires a highly skilled workforce possessing specialised technical competencies. Sustaining and developing such capabilities remains a continuous organisational priority.

Dependence on Overseas Suppliers for Select Critical Systems

Certain critical systems, sensors, propulsion equipment and specialised components continue to be sourced from overseas suppliers, exposing the Company to supply chain and geopolitical risks.

Opportunities:

Defence Modernisation Programmes

Indias continuing focus on naval modernisation and maritime capability enhancement presents substantial long-term opportunities for warship construction, submarine programmes and lifecycle support services.

Indigenisation and Aatmanirbhar Bharat

Government indigenous manufacturing and domestic significant opportunities for expansion of local content and development of indigenous capabilities.

Ship Repair and Lifecycle Support

Growing demand for maintenance, repair, refit lifecycle support services for defence and commercial vessels offers a promising avenue for and sustainable revenue generation.

Export Opportunities

Increasing global demand for defence and maritime platforms presents opportunities for expansion into international markets through exports, strategic partnerships and collaborative programmes.

Industry 4.0 and Digital Transformation

Adoption of advanced technologies, automation, artificial intelligence, digital data analytics productivity,

Diversification into Adjacent Sectors

The Companys engineering capabilities provide opportunities to diversify into offshore support segments.

Threats:

Increasing Competition

Growing participation of private sector entities international players in defence manufacturing may intensify competition for future business opportunities

Geopolitical and Supply Chain Uncertainties

Global geopolitical developments, restrictions and supply chain disruptions availability of critical timelines.

Fixed-Price Contract Risks

Cost escalation, inflationary pressures, foreign exchange rates volatility and delays in project executionmay adversely affect margins under fixed-price contracts, particularly in projects involving Systems and critical material.

Technological Evolution

Rapid advancements in defence technologies require continuous investments in capability enhancement, infrastructure and skill development to maintain competitiveness.

Regulatory and Policy Changes

Changes in defence procurement procedures, taxation, regulatory frameworks or budgetary priorities may and influence business opportunities and operational performance. Despite these challenges, your Company has successfully transformed itself into a centre of excellence—powered by modern infrastructure, a highly skilled workforce, and a team of dedicated engineers.

This synergy of capability, commitment, and continuous improvement ensures that the shipyard remains at the forefront of Indias defence shipbuilding landscape.

F. SEGMENT-WISE / PRODUCT-WISE PERFORMANCE

The Company is primarily engaged in the construction, manufacturing repair, refit, modernisation and lifecycleand defence platforms opportunities and allied engineering products. to improve efficiencyandprojectexecution. Considering the strategic and security-of the Companys operations and available in respect of detailed segment reporting, performance is discussed at a broad operational level. engineering, The Companys operations are structures, underwater systems, aerospace integrated shipbuilding, submarine construction, and other engineering and lifecycle support activities. the year, continued progress was achieved across key operational areas through execution contracts, enhancement of infrastructure capabilities and strengthening of indigenous manufacturing initiatives.

.

The broad operational performance during FY 2025-26 is summarised below:
Operational Area	FY 2025-26 Performance Highlights
Defence Shipbuilding	Continued execution of ongoing warship construction programmes and achievement
	of key production milestones
Submarine Construction &	Progress in submarine construction activities and continued support for lifecycle
Lifecycle Support	maintenance requirements
Ship Repair & Refit	Expansion of repair, refitand maintenance activitiesfor defence and commercial
Engineering &	Continued support through engineering, fabrication, systems integration and allied
Manufacturing Activities	manufacturing activities
Infrastructure Development	Progress in capacity augmentation, modernisation
	initiatives

The Companys diversified capabilities across shipbuilding, submarine construction, engineering and lifecycle support continue to provide resilience and position the Company to address evolving requirements of defence and maritime stakeholders.

G. OUTLOOK

The Company remains focused on strengthening its position as Indias premier defence shipyard while pursuing opportunities expansion, operational excellence and international growth. Supported by a strong order book, robust execution capabilities and favourable policy initiatives promoting indigenous defence manufacturing, the Company remains well positioned to capitalise on emerging opportunities sectors.

Ship Repair and Lifecycle Support

The global maritime industry is witnessing increasing demand for lifecycle support services, including repair, refit, maintenance and modernisation of naval and commercial vessels. The Company continuesto accord strategic importance to this segment and is undertaking initiatives to expand its repair and refit capabilities. Given Indias strategic location on major international shipping routes and the increasing size of domestic

naval and commercial fleets, ship repair and lifecycle support services are expected to emerge as an important growth driver in the coming years.

Diversification Initiatives

The Company continues to explore opportunities for diversification into adjacent sectors leveraging its established engineering expertise,project management capabilities and manufacturing infrastructure. Strategic initiatives are being pursued in areas including underwater platforms, marine engineering systems, offshore structures, heavy engineering equipment and other specialised engineering applications.

The Company also continues to evaluate opportunities that complement its core competencies and contribute to long-term business sustainability.

The Companyfordiversification,infrastructure is in dialogue with State Governments (Local Maharashtra and Andhra Pradesh) on both coasts of India to explore feasibility of setting up a Greenfield Shipyard in line with Government of Indias Maritime Amrit Kaal Vision 2047.

Infrastructure Modernisation in the maritime and defence Continuous infrastructure enhancement remains an important strategic priority. Investments in modern facilities, advanced manufacturing technologies, automationand digital systems are expected to strengthen productivity, improve project execution efficiency and support future business growth. The Company remains committed to upgrading existing facilities evolving technological requirements and international best practices.

Nhava Yard Development

The development of the Nhava Yard, admeasuring approximately 37 acres, represents one of the most significant capacity expansion initiatives undertaken by the Company. The greenfield shipyard is being developed in a phased manner to support shipbuilding, ship repair and future growth requirements. The facilities include construction of Workshops, Stores, Administrative Building, provision of LL Cranes and allied services. This will facilitate construction of ships and offshore platforms.

The short-term development plan focuses on optimisingutilisation of existing infrastructure to support current business opportunities, term development plan aims to establish world-class facilities capable of supporting construction,is expected repairand modernisation of larger and more complex vessels and submarines.

Upon completion, tives are expected to support the enhance the Companys operational flexibility and long-termgrowthpotential

Additional Waterfront Infrastructure

The Company has undertaken the development of the newly acquired land parcel of approximately into its operational15 acres adjacent to the existing to strengthen its shipbuilding, repair and maintenance capabilities. The facility is being developed to enable simultaneous construction, outfitting and various types of vessels. Upon completion, will enhance the waterfront handling capacity from the existing 80 DWT to 200 DWT, enabling simultaneous execution infrastructure is expected to augment operational capacity, improve execution efficiency and support future programmes involving larger and technologically advanced

Floating Dry Dock Project

In order to strengthen shipbuilding and lifecycle support capabilities, the Company has undertaken the development of a new Floating Dry Dock of capacity to handle the dry-docking requirements of future major Projects and enhance operational capabilities.

The proposed facility is expected to improve docking flexibility, reduce operational constraints and support future growth in ship repair, maintenance and modernisation activities

Indigenisation

Indigenisation remains a strategic priority for the

Company and forms an integral part of its long-term growth strategy. Significant efforts continue be directed towards increasing domestic sourcing, strengthening indigenous vendor capabilities and reducing dependence on imported systems and equipment.

The Companys indigenisation the national vision of Aatmanirbhar Bharat while contributing to improved supply chain resilience, cost optimisation and technological self-reliance.

Digital Transformation and Industry 4.0

The Company continues to pursue digital transformation initiatives aimed at improving productivity, operational efficiency and decision-making processes Adoption of Industry 4.0 technologies,whilethe long- digital manufacturing systems, automation, data analytics and to enhance intelligence-based applications project management, quality control and resource utilisation.

Companys These the facility is expected to significantly objective of achieving higher levels of operational excellence and competitiveness.

Sustainability and ESG Focus

The Company continues to integrate sustainability business considerations practices. Efforts are directed towards energy optimisa conservation, waste resource management, environmental stewardship and adoption ofof sustainable technologies wherever feasible.

The Company also remains committed to strengthening governance practices, promoting employee well-being, supporting community development initiatives and enhancing transparency through robust disclosure and reporting frameworks.

These initiatives support the Companys long-term objective of creating sustainable value while maintaining alignment with evolving stakeholder expectations and environmental, social and governance (ESG) principles.

Export

The Company remains focused on expanding its international presence through exports, strategic collaborations and participation in global maritime opportunities.

With extensive experience in construction sophisticated naval platforms and proven engineering capabilities, the Company is well positioned to explore . opportunitiesinternationalmarkets whileselect strengthening Indias position in the global defence and maritime ecosystem.

H. BUSINESS RISKS AND CONCERNS

The Company operates in a complex toand dynamic environment characterised by long project cycles, technological advancements, evolving customer requirements and global supply chain interdependencies. Effective risk management remains integral to achieving strategic objectives and sustaining long-term growth.

The Company has established a structured risk management framework for identification, assessment, monitoring and mitigation of business risks. Risk management processes are periodically reviewed by the

Management and the Risk Management ensure timely response to emerging risks and changing businessconditions

The key business risks and mitigation measures are summarised below:

Risk Category	Potential Impact	Mitigation Framework
Project Execution	Delays in achievement of project milestones,	Robust project planning, periodic milestone
Risk	cost overruns and impact on contractual	reviews, management oversight and project
	commitments	monitoring mechanisms
Supply Chain Risk	Delays in procurement of critical materials,	Vendor development initiatives, supplier
	equipment and systems impacting execution	diversification, inventory planning and
	schedules	indigenisation programmes
Dependence on	Exposure to geopolitical	Enhanced localisation developments, efforts, indigenous
Overseas Suppliers	sanctions and international supply chain	vendor development and strategic sourcing
	disruptions tives initia
Infrastructure and	Operational disruptionsarising from facility	Continuous infrastructure upgrades, preventive
OperationalRisk	constraints, waterfront maintenance	maintenance programmes and capacity
	requirements and infrastructure-related	augmentation projects
	challenges
Regulatory and	Financial, legal and reputational exposure	Comprehensive compliance framework, legal
Compliance Risk	arising from changes in laws, regulations and	oversight, internal audits and continuous
	contractual obligations	regulatory monitoring
CompetitionRisk	Increased competitiveOperational excellence initiatives, productivity intensity leading
	to pricing pressure and reduced market	enhancement, technology adoption and
	opportunities	capability development
Order Book and	Delays, deferment or modificationof	Diversification of business opportunities,
Revenue Risk	customer programmesimpacting revenue	expansion into lifecycle support and exploration
	visibility	of export market
Cyber Security and	Potential disruption to operations, Cyber security governance framework,
ecurity S Information	compromise of sensitive information and	information security controls, continuous
Risk	reputational impact	monitoring and periodic assessments
Human Capital Risk	Availability and retention of specialised	Talent development programmes, succession
	technical talent required for complex projects	planning, capability enhancement initiatives
		and employee engagement measures
Foreign Exchange	Impact on procurement costs due to	Monitoring of foreign currency exposure and
Risk	fluctuations in exchange rates	implementation of appropriate financial risk
		management measures

The Company continuously reviews its risk profileand mitigation strategies to ensure and sustainable value creation for stakeholders.

I. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established a comprehensive system of internal controls and internal financial controls commensurate with the size, scale and complexity of its operations. The control framework is designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, safeguarding of assets, reliability of financial reporting, compliance with applicable laws and regulations, and achievement of organisational objectives.

The internal control framework encompasses policies, procedures, organisationalstructures, approval mechanisms, delegation of powers and monitoring processes coveringallsignificantoperational,financial and compliance activities.

These controls are periodically reviewed and strengthened in line with evolving business requirements, regulatory developments and emerging risks.

Internal Financial Controls

The Company maintains an adequate system of Internal Financial Controls over Financial Reporting designed to ensure orderly and efficient conduct of business, accuracy and completeness of accounting records, prevention and detection of fraud and errors, safeguarding of assets and timely preparation of reliable financial information.or The internal financial control framework covers key business processes including procurement, contract management, inventory management, project accounting, treasury operations, payroll processing, capital expenditure, fixed asset management, statutory compliance and financial reporting.

Internal Audit Function

The Internal Audit function operates independently

and adopts a risk-based approach for evaluating the adequacy and effectiveness of internal controls, governance processes and risk management practices. Internal audits are conducted across operational, financial, technical and compliance areas in accordance with approved audit plans.

Observations arising from internal audits are reviewed by the Management and corrective actions are monitored through a structured follow-up mechanism toensuretimely implementation of recommendations.

Audit Committee Oversight

The Audit Committee of the Board provides oversight of the Companys financial reporting processes, internal control systems and audit functions. The Committee periodically reviews internal audit reports, statutory audit observations, internal financial and appropriate controls, risk management processes and compliance status. eeCommitt Thealso monitors implementation of corrective actions and provides guidance to strengthen governance and control processes across the organisation.

Enterprise Risk Management

The Company has implemented an Enterprise Risk

Management framework for systematic identification, assessment, monitoring and mitigation of risks that may impact achievement of strategic and operational objectives.

The Risk Management Committee periodically reviews the Companys risk profile, effectiveness of mitigation measures and emerging risks arising from changes in the business environment, technological developments,

regulatory requirements and geopolitical conditions.

Cyber Security and Information Security Risk

As the Company continues to strengthen digitalisation and technology adoption across business operations, cyber security and protectionof critical information assets remain important priorities.

Potential cyber threats may result in operational disruption, compromise of sensitive information adverse business impact.

To address these risks, the Company has implemented appropriate cyber security governance mechanisms, information security controls, access management protocols, network monitoring systems and periodic security assessments. Continuous efforts are undertaken to strengthen cyber resilience and safeguard critical information infrastructure.

ERP and Digital Control Environment

The Companys operationsare supported by integrated

Enterprise Resource Planning (ERP) systems and digital platforms that facilitate standardisation of processes, automated controls, transaction monitoring and real-time reporting.

The use of technology-enabled controls enhances transparency, accountability and operational efficiency while reducing the risk of manual errors and process deviations.

Delegation of Powers and Governance Framework

The Company has established clearly defined delegation of financial, administrative and operational powers supported by documented policies, procedures and approval hierarchies. These frameworks ensure accountability, segregation of duties oversight over decision-making processes.

Periodic reviews are undertaken to ensure that delegated authorities remain aligned with organisational requirements and governance expectations.

Statutory, Cost and Secretarial Audits

The financial statements of the Company are subjected to Statutory Audit in accordance with the provisions of the Companies Act, 2013 and applicable auditing standards.

In addition, Cost Audit and Secretarial Audit conducted by independent professionals as required under applicable laws. Findings and recommendations arising from such audits are reviewed and appropriate corrective actions are implemented

Comptroller and Auditor General of India Review

Being a Government Company, the accounts of the Company are subject to review by the Comptroller and Auditor General of India in accordance with the applicable provisions of the Companies Act, 2013.

The Company extends full cooperation during such reviews and takes appropriate measures to address observations and recommendations, wherever applicable.

Vigilance and Whistle Blower Mechanism

The Company has established a robust vigilance framework and Whistle Blower Mechanism to promote ethical conduct, transparency, accountability and integrityinallbusiness

Employees and stakeholders are encouraged to report genuine concerns regarding unethical conduct, fraud, corruption, financialimpropriety or violation of applicable policies through designated channels.

Adequate safeguards are provided against victimisation of individuals reporting concerns in good faith.

Internal Control Assessment

Based on the reviews undertaken during the year and considering the audit observations, management

Financial Performance: reviews and monitoring mechanisms in place, the Management believes that the Companys internal control systems and internal financial controls are adequate and operating effectively.

J. FINANCIAL PERFORMANCE VIS-A-VIS

OPERATIONAL PERFORMANCE

The financial performance of the Company during FY 2025-26 reflectscontinuedprogress in execution of ongoing contracts, achievement of key production milestones, strengthening of indigenous sourcing initiatives and prudent financial management The Company maintained its focus on operational efficiency, project execution, effective utilisation of resources while continuing investments in infrastructure enhancement and capability development.

Particulars	FY 2025-26 ( in Lakh)	FY 2024-25 ( in Lakh)
Total Income	13,98,239	12,59,099
Revenue from Operations	12,83,964	11,43,188
EBITDA	3,40,230	3,24,846
Profit Before Tax	3,25,048	3,10,920
ProfitAfter Tax	2,43,577	2,32,488
Net Worth	8,84,316	7,18,084
Earnings Per Share ( )(FV 5)	60.38	57.63
Book Value Per Share ( )(FV 5)	219.22	178.02
Dividend Per Share ( )(FV 5)	18.12	17.31

Operational Performance Vis-a-vis Financial Performance

The Companys financial performance was supported by continued execution of achievement of project milestones, strengthening of project management practices and prudent financial discipline. Revenue from Operations increased from 11,43,188 lakhs in FY 2024-25 to 12,83,964 lakh in FY 2025-26, reflecting sustained progress in project execution and recognition of Profit Before Tax increased from 3,10,920 lakhs in FY 2024-25 to 3,25,048 lakh in FY 2025-26. the year was supported by operational efficiencies, effective cost management and continued focus on value creation. Net Worth increased by 23.15% from 7,18,084 lakhs as at 31 March 2025 to 8,84,316 lakh as at 31 March 2026, reflecting the Companys strong financial position andconsistent earnings performance.

The Companys strong balance sheet, healthy liquidity position and robust order book continue to provide a solid foundation for future growth and investment in strategic initiatives.

Human Resource Profile

The Companys manpower profile as on 31 March

2026 is summarised below:

Particulars	FY 2025-26
Total Employees (including	5,770
Functional Directors)
Fixed Term Employees	2,988
Women Employees	242

During the year, the Company continued its recruitment initiatives to strengthen organisational capabilities across various functions. Recruitment undertaken in line with business requirements and

Governmentdirectives, with emphasis on attracting talent possessing specialised technical and managerial competencies required for future growth. During the year under review, 240 Permanent & 114 Fixed Term employees were onboarded.

Learning, Development and Capability Building

The Company continues to accord high priority to learning and development initiatives aimed at enhancing technical expertise, managerial capabilities and leadership effectiveness. Employees are provided opportunities to participate in technical, functional, behavioural and leadership development programmes through internal and external training interventions.

Special emphasis is placed on developing competencies in emerging technologies, project management, digital transformation, quality systems, safety management and specialised shipbuilding and submarine construction disciplines. towards strengthening organisational capability and improving overall operational effectiveness.

Employee Health, Safety and Well-being

The Company remains committed to ensuring the health, safety and well-being of its employees. Various employee wellness initiatives, preventive healthcare programmes, awareness sessions on various topics like Cancer, Stroke, Obesity, Fitness, Lifestyle/Cardiac Diseases etc., and medical support facilitiesare provided to promote a healthy and productive work environment.

Periodic health check-ups, health awareness programmes and employee wellness initiatives are undertaken to support physical and mental well-being.

Occupational health and workplace safety continueto remain integral components of the Companys Human

Resource and operational management

During the year under review, 5,611 employees underwent annual medical checks.

Industrial Relations

Industrial relations remained cordial and harmonious throughout the year, reflecting the Companys continued commitment to constructive employee engagement, transparent communication and collaborative problem-solving.

The Company maintains regular interaction with employee representatives and recognised unions to address workplace concerns and foster mutual trust and cooperation. The positive industrial relations climate contributed significantly to uninterrupted operations and successful execution of business objectives during the year.

Further details relating to industrial relations are provided in the Boards Report forming part of this Annual Report.

Diversity, Equity and Inclusion

The Company remains committed to fostering a diverse, equitable and inclusive workplace that provides equal opportunities for all employees. Efforts continue to be directed towards enhancing workforce diversity, encouraging greater participation of women professionals and creating an environment that promotes respect, dignity and equal opportunity.

Women employees continue to contribute across various technical, managerial and leadership roles within the organisation. Around 5.93 % Executives in Middle Management/higher Management level initiatives contribute are represented by Women. The Company actively supports initiatives aimed at professional development, leadership enhancement and career progression of women employees.

Regular awareness programmes and sensitisation initiatives are conducted to promote a safe, inclusive and respectfulworkplace. The Company has established appropriate mechanisms for prevention, prohibition and redressal of sexual harassment at the workplace in accordance with applicable legal requirements.

The Company also provides support facilities and employee welfare measures aimed at promoting work-life balance and employee well-being.

Women in Leadership and Organisational Participation

Women employees are represented across various management levels, employee forums and organisational committees. The Companyframework.

encourage greater participation of women in leadership roles and decision-making processes.

Women employees actively contribute to various committees and forums relating to employee welfare, grievance redressal, diversity initiatives and organisational development. Such participation strengthens inclusiveness and promotes diverse perspectives in organisational decision-making.

Skill Development and Apprenticeship Training

The Company continues to actively support

Government of Indias Skill India Mission through extensive apprenticeship and skill development initiatives.

Trade Apprentices

During FY 2025-26, 523 Trade Apprentices were inducted and provided structured training comprising ed to conducting skills development and on- classroominstruction, in an environmentally responsible the-job training in various technical disciplines relevant to shipbuildingandengineeringoperations. energy efficiency and

Graduate and Diploma Apprentices

The Company inducted 200 Graduate and Diploma

Apprentices under the Apprentices Act for structured one-year training programmes designed pollutionto prevention, enhance employability and develop industry-relevant competencies.

Apprentices were provided practicalexposure across multiplefunctions commercial, information technology, human resources and administration, thereby enabling comprehensive professional development.

Marine Engineering Apprenticeship

The Company continued to support development of marine engineering talent through training programmes for cadets and trainees from various maritime and marine engineering institutions.

The Company continues to participate in various

Government-sponsored skill development and internship initiatives aimed at enhancing employability and supporting national skill development objectives.

Training infrastructure established by the Company supports skill development activities trades and contributes towards creation engineering and skilled workforce for the maritime, manufacturing sectors.

Employment Generation and Industry Support

The Companys apprenticeship programmes contribute significantly towards employment generation by enhancing industry readiness and employability of trainees. Placement opportunities are facilitated through collaboration with vendors, industry partners and other organisations within the manufacturing and engineering ecosystem.

The committed to strengthening Company remains

Indias skill development ecosystem through continued investments in training, capability building and workforce development initiatives.

M. ENVIRONMENTAL PROTECTION, TECHNOLOGY ABSORPTION, RENEWABLE ENERGY DEVELOPMENTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company remains its and operations sustainable manner. Environmental stewardship, adoptionresourceconservation, of sustainable practicescontinueto form integral components of the Companys operationalphilosophy.

The Company undertakes various environmentalprotection, waste management, energy conservation and of natural resources. Continuous efforts are also made towards adoption of advanced technologies, process improvements and sustainable operational including engineering, finance, practices aimed at enhancing environmental impact.

Information as per the DPE Guidelines on Corporate Governance relating to Environmental Protectionand Conservation, Technological Conservation, Energy Developments, Foreign Exchange Conservation is provided in Annexure 1 to this report and should be read in conjunctionwith this Report.

N. CORPORATE SOCIAL RESPONSIBILITY

The Company remains committed social value through its Corporate Social Responsibility

("CSR") initiatives undertaken in accordance with the provisions of the Companies Act, 2013 and the CSR Policy of the Company.

Details relating to CSR governance, projects and programmesin specialisedundertaken during FY 2025-26, expenditure incurred and impact created are providedof a in the Boards Report and the Annual Report on Corporate Social Responsibility forming part of this Annual Report.

O. DISCLOSURE OF ACCOUNTING TREATMENT

Thefinancial statements of the Company have been prepared in accordance with the provisions of the

Companies Act, 2013, applicable Indian Accounting Standards (Ind AS), the SEBI (Listing Obligations Disclosure Requirements) Regulations, accounting principles generally accepted in India.

The accountingpolicies adopted in the preparation the financialstatements have been applied consistently and are appropriate to the nature of the Companys business and operations.

No accounting treatment different from that prescribed under the applicable Indian Accounting Standards has been followed in the preparation of the financial statements. In the event of any departure from the prescribed accounting standards in future, the nature of such departure, financialimpact and management 2015 and other justification shall be disclosed in accordance with applicable regulatory requirements.