Mazagon Dock Shipbuilders Ltd Auditor Reports

To the Members of

Mazagon Dock Shipbuilders Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Mazagon Dock Shipbuilders Limited (the "Company"), which comprise the Balance Sheet as at March of 31, 2026, and the Statement of Profit

Changes in Equity and Statement of Cash Flows for the year ontingent Assets. (Refer then ended, and notes to the financialstatements, including material accounting policy information and other explanatory information. In our opinion and to the best of our information and according to the explanations given to us the aforesaid financial statements give the information required by the Companies

Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company at March 31, 2026, and profit, other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities those Standards are further described in the ‘Auditors

Responsibilities for the Audit of the Financial section 133 of the Act in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled responsibilities in accordance with these the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to the following matters in the notes the standalone Ind AS financial Statements;

1. Balance of advances to vendors and balances outstanding in sundry creditors are subject to confirmation and reconciliation. (Refer Note 37 Point No. 1)

2. Balance due to/from Indian Navy (Debtor) is subject to confirmation and reconciliation. (Refer Note 37 Point

No. 2)

3. Reversal of provision of Liquidated Damages (LD) amounted to 26,247 Lakhs. (Refer Note 57)

4. Recognition of a provision for expected loss on onerous contracts amounted to 1,05,959 Lakhs in accordance with Ind AS 115, Revenue from Contracts with Customers, and Ind AS 37, Provisions, Contingent Note 59)Liabilitiesand

5. Reversal of a provision for project related non-moving inventories amounted to 9,045.67 Lakhs. (Refer Note

60)

Our opinion is not modified in respect of these matters.

Other Information

The Companys Board of Directors is responsible for the other information. As informed to us, the Company does not have any other information to be included in the annual report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

Responsibilitiesof Management and Those Charged with

Governance for the Financial Statements

The Companys Board of Directors is responsible for the matters stated in section134(5) of the Act, with respect to the preparation of these Financial Statements that give a true under and fair view of the financial position, financial performance

(including other comprehensive income), Changes in Equity

Statements and Cash Flows of the Company in conformity with the Ind read with the ASprescribed under section Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the our other ethical provisions of the Act for safeguarding of the assets of the and Company and for preventing and detecting frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy to and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Companys financial reporting process.

Key Audit Matters:

Key audit matters are those matters that, in our professional judgement, were of most

Financial Statements for the year ended March 31, 2026. These matters were addressed in the context of our audit of the

Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report:

Sr. No. Key Audit Matter	How our audit addressed the key audit matter
1 Revenue Recognition for Ship / Submarine Construction & Repair Contracts	We have verified the contractual terms with respect to performance obligations and criteria for transfer of control of goods or services to the customer for recognition of revenue is in accordance with Indian Accounting Standards.
Referred to in Note No. 1 - 2.2(j) of the Financials Statement	Studied the Cost cycle process for allocating the actual expenses incurred on various projects as per contract.
The company recognizes the revenue from Ship/ Submarine Construction/ repair contracts when the company satisfies a performance obligation in accordance to Ind-AS 115 Revenue from Contracts from Customer only when it can reasonably measure its progress towards complete satisfaction of obligation or by transferring goods or service to a customer.	Assessed the reasonableness and completeness of cost estimates made by Management under each contract. In this regard, we have relied on the technical data provided by the various departments.
When the control of the goods produced and rendered services is transferred over time to the customer, revenue is recognized over time under the percentage of completion method (PoC). Penalties if any, are reduced from the revenue.	Verified the Cost sheet for each project determining the Revenue recognition for fixed price contracts and cost plus contracts including the actual cost incurred up to the date and its comparison with overall contract price and further estimated costs to complete the project as provided by the management.
For the application of the overtime method (PoC method), the measure of the progress towards complete satisfaction of a performance obligation is based on inputs (i.e. cost incurred)	Verified the input cost incurred over the time for satisfaction of performance obligation. Conducted Test check of the
This revenue recognition process is identified as key audit matter as these contracts involved:	System and procedures adopted for recording the flow of transactions along with the audit trail.
- Identification of actual cost incurred on each contract.	Verified the identification and measurement of year end contract assets and contract liabilities related to each contract.
- These contracts require determination of stage of completion and significant estimation of future cost of completion of each contract.	We had assessed appropriateness of disclosure made as per applicable Indian Accounting Standards and applicable financial reporting framework.
- At the period end, a significant amount of contract assets or contract liabilities related to each contract is to be identified.
For the year ended March 31,2026, contract revenue amounted to H 12,80,902 Lakhs (Previous year: H 11,19,604 Lakhs).
2 Provision for Expected Loss on Onerous Fixed- Price Contracts	Evaluated processes deployed by Management for identifying onerous contracts as per Ind AS 37.
The Company has identified fixed-price contracts where future expected costs of fulfilling contract obligations exceeded the expected revenue from such contracts, resulting in an onerous contract. A provision for expected loss for onerous contracts was recognized as per Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets.	Tested cost estimates against project cost, historical data, and estimates made at the time of bidding.
This was identified as a Key Audit Matter due to the material impact on the financial statements, significant judgment in cost estimation, and risk of misstatement in the provision (Refer Note 61 in the financial statements).	Reviewed the accuracy of provision recognized for full expected loss on each of identified onerous contracts.
For the year ended March 31,2026, the provision for expected loss on onerous contracts amounted to 7 1,05,959 Lakhs (PY 752,138 Lakhs).	Compared total estimated cost under each contract, cost already incurred and expected future cost for fulfilling contract obligations, determined by the Management to arrive at expected loss on each contract.
	We have verified the contractual terms with respect to performance obligations and criteria for transfer of control of goods to customer for recognition of revenue on these onerous contracts in accordance with Indian Accounting Standard.
	Examined cost overrun causes and controls identified by Management.
	We had assessed appropriateness of disclosure made as per applicable Indian Accounting Standards and applicable financial reporting framework

Information other than the Standalone Financial Statements and Auditors Report thereon

The Companys Board of Directors are responsible for the other information. The other information comprises the information included in the Directors report and Management discussion and analysis but does not include the Standalone Financial Statements and our Auditors Report thereon. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibilitiesare to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone

Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work, we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Auditors Responsibilities for

Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone financialstatements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resultingfrom error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,or the AuditoftheStandalone the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances.Undersection143(3)

(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating

Evaluate the appropriateness of accounting used and the reasonableness of accounting estimates and related disclosures made by management and Board of Directors.

• Conclude on the appropriateness of management and Board of Directors use of the going concern basis of

143 of accounting and, based on the auditevidenceobtained, (11) of section whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions the Company to cease to continueasagoing concern.

Evaluate the overall presentation,structure and content of the standalone financial disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation

Materiality is the magnitude of the misstatements in the financial statements that, individually or aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning of the scope of our audit work and evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatement in financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficienciesin internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were most significant in the audit of standalone financial statements for the current period We describe these matters in the auditors report unless the law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated ofsuchcontrols. in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 (the "Order"), issued by the Central Government of India in terms of sub-section the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. may cause (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those statements,includingthe books.

(c) The Balance Sheet, the Statement of Profit and .

Loss including other comprehensive income, the Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of (e) On the basis of the written representations received from the directors as on March 31, 2026 taken on record by the Board of Directors, none of the directors are disqualified as on March

31, 2026 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the eness of such controls, refer to effectiv operating our separate Report in "Annexure B".

3. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: a. The Company has disclosed the impact of pending litigations its standalone financial statements; (Refer Note No 36.2 to 36.5 to the standalone financial statements). b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. c. There were no amounts which were required to be transferred to the Investor Education and ProtectionFund by the Company. d. The Management has represented that a) to the best of its knowledge and belief, as disclosed in note 52 to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries b) The management has represented, that, to the best of its knowledge and belief, as disclosed in note 52 to the accounts, no funds have been received by the Company from any persons or entities,including foreign entities("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any whatsoever ("Ultimate Beneficiaries") by on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate c) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause

(i) and (ii) of Rule 11(e) of the Companies (Audit and Auditors) Rules, 2014 as provided under (a) and (b) above contain any material misstatement e. The finalon its financial dividend paid by the Company positionin the year in respect of the same declared for the previous year is in accordance with section

123 of the Companies Act 2013 to the extent it applies to payment of dividend. The Board of

Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual

General Meeting. The dividend declared is in accordance with section 123 of the Act to extent it applies to declaration of dividend. (Refer Note 19 to the standalone financial statements). f. Based on our examination, the Company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility. The audit trail feature has been operating throughout the year for all transactionsrecorded in the accounting software.

Further, during the course of our audit and post implementation,we did not come across any instance of the audit trail feature being tampered with and the audit trail has been preserved by the company as per the statutory requirements for record retention.

4. With respect to the matter to be included in the Auditors Report under section 197(16) of the Act, as amended; As per notification No. G.S.R. 463 (E). Dated 5th June 2015 issued by Ministry of Corporate Affairs, Provisions of section 197 of Companies Act 2013 is not applicable, being a Government Company. Accordingly, the section 197(16) of the Act is not applicable to the Company. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

5. As required under section 143(5) of the Companies

Act, 2013, we give in the ‘Annexure C, a statement on the directions issued by the Comptroller and Auditor General of India after complying the suggested methodology of Audit, the action impact on the accounts and financial statement of the company.

ANNEXURE A TO INDEPENDENT AUDITORS REPORT

OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF MAZAGON DOCK SHIPBUILDERS LIMITED FOR THE YEAR ENDED MARCH 31, 2026

[Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements in the Independent Auditors Report]

ii. In respect of the Companys Inventory: a. As per the information and explanations given to us, the Inventory (except those held with third parties) has been physically verified

Management and the external auditor during the year at reasonable intervals. The coverage and procedures of the verification carried out by the and explanations

Management are appropriate. The discrepancies of between the physical inventory and the book records noticed on physical verification material and have been properly dealt with in the books of accounts. No discrepancies of 10% or more in the aggregate for each class of inventory were noticed during the year; b. According to the information and explanation given to us and on the basis of our examination of the records of the Company, the Company has been sanctioned and explanations of five crore rupees, in aggregate, from banks of on the basis of security of current assets. In our opinion, the quarterly statements filed by the company with such banks are in agreement with the books of accounts of the Company. iii. According to the information us and on the basis of examination

Company, the Company has not provided any security or granted any Loans or advance in the nature of loans, secured or unsecured, to Companies, Firms, Limited

Liability Partnerships or any other parties during the year. The Company has not made any investments in or Firms or Limited Liability Partnerships during the year. The Company has made investments in one Subsidiary Company during the year.

b) According to the information and explanations given to us and based on the audit procedures conducted by us, in our opinion the investments of the loans madeand the terms and conditions granted are not prejudicial to the interest of the Company. Further, the Company has not provided any guarantees bythe or given any securities or granted any advance in the nature of loans during the year. c) According to the information given to us and on the basis of our examination the records of the Company, in the case of loans were not given, which is repayable along with interest on induction of prototype of the product on successful completion of project, in our opinion the repayment of principal and payment of interest has been stipulated and the repayments of principle and interest are not yet due. Further, the Company has not given any advance in the nature of loan to any party during the year. capital limits in excess d) According to the information given to us and on the basis of our examination the records of the Company, there is no overdue amount for more than ninety days in respect of loans given. Further, the Company has not given any advances in the nature of loans to any party and explanations during the year. given to of the records of the e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no loan granted falling due during the year, which has been renewed or extended or fresh loans loansgranted to settle the over dues of existing given to same parties.Further, the Company has not given any advance in nature of loans to any party during the year.

f) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not granted any loans either repayable on demand or without specifying any terms or period of repayment. Further, the Company has not given any advance in the nature of loans to any party during the year. iv. According to the information and explanations given to us and on the basis of our examination of the records of the company, the Company has neither, directly or indirectly, granted any loan, or provided guarantee or security to any of its directors or to any other person in whom the director is interested, in accordance with the provisions of Section 185 of the

Act nor made investments through more than two layers of investment companies in accordance with the provisions of Section provisions stated in paragraph 3(iv) of the Order are not applicable to the Company.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not provided any guarantee or security as specified under Section and 186 of the Companies Act, 2013 ("the Act"). In respect of the investments made and loans granted by the Company, in our opinion the provisions of Section

186 of the Act have been complied with. v. According to the information us and on the basis of our examination of the company, the Company has neither accepted any deposits from the public nor any amounts which are deemed to be deposits, within the meaning of

Sections 73, 74, 75 and 76 of the Companies Act,

2013 and the rules framed there under. Accordingly, the provisions stated under clause 3(iv) of the Order is not applicable to the Company. Also, there are no amounts outstanding as on March 31, 2026, which are in the nature of deposits. vi. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section in respect of its manufactured goods and services provided by it and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not carried out a detailed examination of the records with a view to determine whether these are accurate or complete. vii.(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, undisputed statutory dues including goods

186 of the Act. Accordingly, and services tax, provident fund, employees state Insurance, income-tax, sales tax, duty of customs , duty of excise, value added tax, cess and any other statutory dues have been regularly deposited by the Company with appropriate authorities in all cases

There are no undisputed amounts payable in respect of

185

Goods and Services tax, provident fund, income-tax, in arrears as at March 31, 2026, outstanding for a period of more than six months from the date they became payable. vii.(b) According to the information and explanations given and explanations given to to us and the records of the Company examined by of the records us, there are dues relating to goods and services tax, provident fund, employees state insurance, income-tax, cess, and other statutory dues which have not been deposited on account of any dispute are given below.

Rs. is Lakhs

Name of the Statute	Nature of Dues	Period	Amount	Forum where dispute is pending	Part-payment under protest
Central Excise Act, 1944	Excise Duty (Including Interest/ Penalty)	FY 2000-01 to FY 2003-04	265.03	Commissioner (Appeals)	Nil
BST Act, 1959	Sales Tax	FY 1980-81 to FY 2004-05	99600.32	Maharashtra sales tax tribunal, Mumbai	240.79
CST Act, 1956	Sales Tax FY	1981-82, FY 2011-12	2.32	Jt. Commissioner of sales tax & MSTT	2.28
MVAT Act, 2002	Value added Tax	FY 2005-06 to FY 2017-18	16138.12	Jt. Commissioner of sales tax & MSTT	403.88
Karnataka Sales Tax Act	Karnataka Sales Tax	FY 1989-90 to FY 1992-93, FY 1995-96 to FY 1996-97	316.40	Pending before Karnataka sales tax appellate Tribunal	12.60
Service Tax Act, 1994	Service Tax (Including Interest/ Penalty)	FY 2001-02 to FY 2003-04	4721.93	Appeal before Bombay High Court	NIL
CGST Act, 2017	Sales Tax FY	2017-18	5.26	Commissioner (Appeals)	NIL
Customs Act, 1962	Custom Duty (Including Interest/ Penalty)	FY 2008-09, FY 2023-24, FY 2024-25	85	Assistant Commissioner of Customs	NIL
Income Tax Act, 1961	Interest U/s 234(c)	FY 2021-22	28.51	Commissioner of Income Tax (Appeals)	NIL
Income Tax Act, 1961	Income Tax	FY 2019-20	200.00	Commissioner of Income Tax (Appeals)	NIL

viii. According to the information and explanations given us and on the basis of our examination of the records of the company, there are no transactionswhich are not recorded in the books of account which have been surrendered or disclosed as income during the year in Income-tax Assessment of the Company. Accordingly, the provision stated under clause 3(viii) of the Order is not applicable to the Company. ix. (a) According to the information and explanations given to us and on the basis of our examination of the records of the company, the Company has taken working capital loans from banks. There is no default committed by the company in repayment of loan or interest thereon due to any lenders during the year.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the company, we report that the Company has not been declared wilful defaulter by any bank or financial institution or government

(c) In our opinion and according to the information and explanations provided to us and on the basis of our examination of the records of the company, no money was raised by way of term loans. Accordingly, the provision stated under clause 3(ix)(c) of the Order is not applicable to the Company.

(d) According to the information and explanation provided to us and on the basis of our examination of the records of the company, there are no funds raised on short term basis have been used for long-term purposes by the Company during the year. Accordingly, the provision stated under clause 3(ix)(d) of the Order is not applicable to the Company.

(e) According to the information and explanation provided to us and on the basis of our examination of the records of the company, the Company has not taken any funds from any entity or person or on account of or to meet the obligations of subsidiary, associate. Accordingly, or any government authority. reporting under clause 3(ix)(e) of the order is not applicable to the Company.

(f) According to the information and explanation provided to us and on the basis of our examination of the records of the company, the Company has not raised any loans during the year on the pledge of securities held in its subsidiary, associate. Accordingly, reporting under clause 3(ix)(f) of the order is not applicable to the Company. x. (a) In our opinion and according to the information explanation given to us and on the basis of our examination of the records of the company, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, the provisions stated under clause 3(x)(a) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully, partly, or optionally convertible debentures during the year.

Accordingly, the provisions stated under clause 3(x)(b) of the Order are not applicable to the Company. xi. (a) Based on our examination of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we report that no fraud by the Company or on the

Company has been noticed or reported during the year in the course of our audit.

(b) Based on our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, a report under Section143(12) of the Act, in Form

ADT-4, as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 was not required to be filed with the Central Government. Accordingly, the provisions stated under clause 3(xi)(b) of the Order is not applicable to the Company.

(c) Based on our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, there was no whistle blower complaint received by the Company during the year. xii. The Company is not a Nidhi Company. Accordingly, the provisions stated under clause 3(xii)(a) to (c) of the Order are not applicable to the Company. xiii. According to the information to us and based on our examination of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the

Companies Act, 2013, where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards. xiv.(a) In our opinion and based on our examination, the

Company has implemented internal audit system commensurate with the size and nature of its business.

(b) On the basis of the report provided by the management, we have considered the report of the Internal Auditors issued till date for the period under audit. xv. According to the information and explanations given to us and based on our examination of the records of the

Company, in our opinion, during the year, the Company has not entered into any non-cash transactions with directors or persons connected with its directors and accordingly, the reporting on compliance with the provisions of Section 192 of the Companies Act, 2013 in clause 3(xv) of the Order is not applicable to the Company. xvi.(a) The Company is not required to be registered under

Section 45 IA of the Reserve Bank of India Act, 1934 (2 of the books and records of 1934) and accordingly, the provisions stated under clause 3(xvi)(a) of the Order are not applicable to the Company. (b) The Company is not engaged in any Non-Banking

Financial or Housing Finance activities during the year and accordingly, the provisions stated under clause 3 (xvi)(b) of the Order are not applicable to the Company. (c) The Company is not a Core investment Company (CIC) as defined in

India. Accordingly, the provisions stated under clause 3 (xvi)(c) of the Order are not applicable to the Company.

(d) According to the information and explanations provided to us, the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, not have any Core Investment Company (as part of its group). Accordingly, the provisions stated under clause 3(xvi)(d) of the order are not applicable to the Company. xvii. Based on the overall review of standalone financial statements, the Company has not incurred cash losses in the current financial preceding financial year. Accordingly, the provisions stated under clause 3(xvii) of the Order are not applicable to the Company. xviii. There has been no resignation of the statutory auditors during the year. Accordingly, the provisions stated under clause 3(xviii) of the Order are not applicable toandexplanationsgiven the Company. of the records

xix. According to the information and explanations given us and on the basis of the financial ratios (as disclosed note 55 to the standalone financial and expected dates of realization of financial assets and payment of financialliabilities, other information accompanying the financialstatements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due. xx.(a) There are no unspent amounts towards Corporate Social Responsibility (CSR) on other than ongoing projects requiring a transfer to a Fund specified

Schedule VII to the Companies Act in compliance with in second proviso to sub-section (5) of said Act. Accordingly, reportingunder clause 3(xx)(a) of statements),ageing the Order is not applicable for the year.

(b) According to the information us and based on our examination

Company, an amount of Rs. 1105.00 Lakhs remaining unspent under sub-section (5) of

Companies Act, pursuant to an ongoing project, has been transferred to special account in compliance with the provision of sub-section (6) of said Act. Refer Note 30 (15) to the Standalone Financial Statements.

ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT

OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF MAZAGON DOCK SHIPBUILDERS LIMITED

[Referred to in paragraph 2 (f) under ‘Report on Other Legal and Regulatory Requirements in the Independent Auditors Report of even date to the Members of Mazagon Dock Shipbuilders Limited on the Standalone Financial Statements for the year ended March 31, 2026]

Report on the Internal Financial Controls under Clause (i) of

Sub-section 3 of Section143 of the Companies Act, 2013

("the Act")

We have audited the internal financialcontrols with reference to standalone financialstatements of Mazagon Dock statements was established

Shipbuilders Limited ("the Company") as of March 31, 2026 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Opinion

In our opinion, the Company, including has, in all material respects, an adequate internal financialcontrols with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2026, based on the internal control with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the

Guidance Note on Audit of Internal Financial Controls Over

Financial Reporting issued by the Institute of Chartered

Accountants of India (ICAI) (the "Guidance Note").

Managements Responsibility for Internal Financial Controls

The Companys Board of Directors are responsible for establishing and maintaining internal financial on the internal control with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the control with Guidance Note. These responsibilities include the design, statements is a process designed to implementation and maintenance of adequate internal controls that were operating effectively for ensuring financial the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone . We conducted financial our audit in accordance with the Guidance Note and the

Standards on Auditing, issued by ICAI and deemed to be prescribed under section143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those

Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone and maintained and if financial such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financialcontrols with reference to financial controls based

Meaning of Internal Financial Controls With reference to Standalone Financial Statements

A companys internal financial to provide financial reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control with reference to financialstatements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With reference to financial statements

Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial control with reference to financial statements may become inadequate because of changes in conditions,or that the degree of compliance with the policies or procedures may deteriorate.

ANNEXURE C TO THE INDEPENDENT AUDITORS REPORT

OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF MAZAGON DOCK SHIPBUILDERS LIMITED

[Referred to in paragraph 5 under ‘Report on Other Legal and Regulatory Requirements in the Independent Auditors Report of even date to the Members of Mazagon Dock Shipbuilders Limited on the Standalone Financial Statements for the year ended March 31, 2026]

As required under section 143(5) of the Companies Act, 2013, Statement on the directions issued by the

Auditor General of India

According to the information and explanations given to us by the management and on the basis of our examination of books and records of the Company, we report that:

Sr. No.	Directions Replies
1	Assess the fair valuation of all the investments, both quoted and unquoted, made directly by the Company or through Trusts, for Post retirement benefits of the employees. This includes verifying valuation methodologies, ensuring consistency with Ind AS and reviewing supporting documentation. The auditor shall provide a brief note on the valuation approach, its reasonability, and compliance with applicable regulations, reporting any material deviations or misstatements.	Investments for postretirement benefits of the employees is done by the separate Trusts established for the purpose of PF, Pension and Gratuity. Since we are not auditors of the trust, we are unable to comment about investments of the trust. In case of compensated absences, the company has invested in funds, which are fair valued at year end. The Company has obtained an independent actuarial valuation as at 31st March 2026 for its post-retirement benefit obligations (Gratuity, Pension and Post-Retirement Medical Benefits) in accordance with Ind AS 19 Employee Benefits. The valuation has been carried out using the Projected Unit Credit (PUC) Method by a qualified independent actuary. The discount rate adopted is based on the prevailing market yield on Government Securities of appropriate tenure. The actuarial assumptions including salary escalation rate, attrition rate and mortality rate are consistent with past experience and are considered reasonable. In respect of Compensated Absences, the liability has been actuarially valued and the corresponding funds are invested and carried at fair value as at year end. The actuarial report and related disclosures have been incorporated in the financial statements.
	2 tions may also be reported. implica financial Whether the Company has a system in place to process all the accounting transactions through IT system? If yes, whether review of this system and controls that are significant to the Companies financial reporting security has been done by Information Auditing Organisations at a minimum frequency of once in a year and material discrepancies found, if any, have been suitably reported? The implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the	The Company has a system in place to process all the accounting transactionsthrough IT system. Based on our verification on test check basis during the audit, we have not come across accounting transactions outside IT system which may have implications on the integrity of the accounts along process as with the financial implications. well as cyber Cyber security audit was carried out on Security 06.03.25 by cert-in Empanelled vendor and no material discrepancies were reported. empaneled by Cert-In Cyber security audit for FY 2025-26 is in progress.
3	Whether funds (grants/ subsidy etc.) received/ receivable for specificschemes from Central/ State Government or its agencies were properly accounted for as per the applicable accounting standards or norms and whether the received funds were utilised as per its terms and conditions? Whether accounting of interest earned on grants received has been done as per terms and conditions of the Grant. List the cases of deviation.	No Funds (grants/subsidy etc) were received / receivable for specific schemes from Central/State Government or its agencies during the year.
4	Whether the Company has identified the key Risk areas? If yes, whether the Company has formulated any Risk Management Policy to mitigate these risks? If yes, (a) whether the Risk Management Policy has been formulated considering global best practices? (b) whether the Company has identified its data assets and whether it has been valued appropriately?	The Company has identifiedand recorded key risk areas and duly formulated Risk Management Policy to mitigate those risks. In our opinion and to the best of our information (a) the Risk Management Policy has been formulated considering global best practices. (b) The Company has identifiedits data assets. However, as informed to us, formal third party qualitative evaluation of the same is in process.
	5 of SEBI, Department of rules and regulations Whether the Company is complying with the Securities and Exchange Board we have not come across cases of deviation with respect to of India (SEBI) (Listing Obligation and Disclosure Requirements) Regulations,2015, and other applicable Obligation and Disclosure Requirements) Regulations, 2015, Investment and Public Asset Management, Ministry of Corporate Affairs, Departmentof Investment and Public Asset Management, Ministry of of Public Enterprises, Reserve Bank of India, Telecom Regulatory Authority of India, CERT- IN, Ministry of Electronics and Information Technology and National Payments Corporation Payments Corporation of India wherever applicable except non- of India wherever applicable? If not, the cases of deviation may be highlighted.	Based on our verification on test check basis during the audit, non compliances with applicable laws, rules and regulations such as Securities and Exchange Board of India (SEBI) (Listing and other applicable rules and regulations of SEBI, Department Corporate Affairs, Department of Public Enterprises, Reserve Bank of India, Telecom Regulatory Authority of India, CERT-IN, Ministry of Electronics and Information Technology and National compliance of Regulations 17(1), 18(1) and 19 of The Securities and Exchange Board of India (SEBI) (Listing Obligation and Disclosure Requirements) Regulations, 2015 due to inadequate numbers of Independent Directors including Women Directors. The appointment of Directors is made by the Government of India and hence the non-compliance is beyond the control of the Company.

 

	For SARDA & PAREEK LLP
	Chartered Accountants
	FRN No. 109262W/W100673
	Sd/-
	CA Niranjan Joshi
	Partner
Place: Mumbai	Membership No. 102789
Date: April 30, 2026	UDIN: 26102789OTGHSN6620