Swan Defence and Heavy Industries Ltd Directors Report

To,

The Members

Reliance Naval and Engineering Limited

The newly constituted Board of Directors of the Company hereby present the 27^th (Twenty Seventh) Directors Report together with the Audited Financial Statements of the Company for the financial year ended March 31, 2024.

Pursuant to the Order dated January 15, 2020, of the Honble National Company Law Tribunal, Ahmedabad ("NCLT"), the Corporate Insolvency Resolution Process ("CIRP") was initiated in respect of the Company in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 ("IBC"/ "Code") and related rules and regulations issued thereunder, effective from January 15, 2020 (the "CIRP Commencement Date"). Shri Rajeev Sawangikar was appointed as the Interim Resolution Professional ("IRP") pursuant to the NCLT Order. Thereafter, the Committee of Creditors ("CoC") of the Company resolved with the requisite voting share to replace the IRP with Shri Sudip Bhattacharya as the Resolution Professional ("RP" or "Resolution Professional"). Subsequently, the Honble NCLT approved the appointment of Shri Sudip Bhattacharya as the RP for the Company vide its Order dated May 05, 2020

The powers of the Board of Directors of the Company were suspended effective from the commencement date of the Corporate Insolvency Resolution Process (CIRP), and such powers, along with the management of the Companys affairs, were vested in the Interim Resolution Professional (IRP), Resolution Professional (RP), or Monitoring Committee (MC) in accordance with the provisions of the Insolvency and Bankruptcy Code (IBC) and the Resolution Plan.

Under Regulation 15(2A) and 15(2B) of the SEBI (LODR) Regulations, 2015, the provisions of Regulations 17, 18, 19, 20, and 21 relating to the Board of Directors, the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders Relationship Committee, and the Risk Management Committee do not apply to a listed entity undergoing the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC). However, the role and responsibilities of the Board of Directors, and its Committees, were fulfilled by the Resolution Professional (RP) or Monitoring Committee, in accordance with Sections 17 and 23 of the IBC and the Sanctioned Resolution Plan.

Pursuant to the NCLT order dated December 23, 2022 ("NCLT Order"), the Adjudicating Authority approved the resolution plan ("Approved Resolution Plan") submitted by Hazel Mercantile Limited ("Resolution Applicant") for the Company under Section 31 of the Code. In accordance with the provisions of the Code and the NCLT order, the Approved Resolution Plan is binding on the corporate debtor and its employees, members, creditors, guarantors, and other stakeholders involved in the resolution plan.

In terms of approved Resolution Plan, Monitoring Committee comprising 2 (Two) representatives of the Financial Creditors, 2 (Two) representatives of the Resolution Applicants, was constituted on December 23, 2022, to manage the affairs of the Company as a going concern and supervise the implementation of the Resolution Plan until January 04, 2024.

Members are kindly requested to note that the incumbents of the reconstituted Board of Directors of the Company were appointed on the Board of the Company with effect from December 08, 2023 and took over the affairs of the company with effect from January 04, 2024. Prior to that, the Resolution Professional was handling the affairs of the company during the Corporate Insolvency Resolution Process ("CIRP") until December 23, 2022, and thereafter till January 04, 2024 the Monitoring Committee ("MC") were entrusted with and responsible for the management of the Companys affairs.

The reconstituted Board of Directors, which took over the management of the Companys affairs from the Monitoring Committee on January 04, 2024, is presenting this Report and the Financial Statements for the year ended March 31, 2024, under the provisions of the Companies Act, 2013, the rules and regulations framed thereunder ("the Act"), and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

The present Board of Directors disclaims any responsibility for all current and future liabilities, including contingent liabilities, whether crystallized or uncrystallized, arising from non-compliance with statutory obligations by the Resolution Professional or the Monitoring Committee during their tenure. This includes, but is not limited to, non-compliance with the Act, Listing Regulations, and other SEBI/ Corporate Laws up to January 04, 2024.

An immunity has been provided to the new management as per the provision contained in the sanctioned Resolution Plan and relief provided by virtue of the order passed by the National Company Law Tribunal from all the past non-compliance committed by the erstwhile management / resolution professional / monitoring committee prior to the acquisition of control of the Company. This disclaimer clarifies that the newly constituted Board of Directors, its officers, and the new management are insulated from any irregularities or legal obligations incurred before assuming control of the Companys management on January 04, 2024.

For the period under review, the Company was not operational due to the suspension of its management. The management control of the Company was entrusted to the Resolution Professional until December 23,2022, and thereafter the Monitoring Committee ("MC") had management control till January 04, 2024. Board of the Company took over the affairs of the company with effect from January 04, 2024. In view of the above facts, the Directors Report for the year under review has been prepared to the extent applicable.

Financial Results

The financial performance of the Company, on standalone basis, for the financial year ended March 31, 2024 is summarised below:

(Amount in In Lacs)

Particulars	Financial year ended March 31, 2024	Financial year ended March 31, 2023
Total Income	246	776
Profit / (Loss) before taxation	(12136)	(1,58,430)
Exceptional items		19,52,123
Tax expenses (Net) (including deferred tax and tax for earlier years)	-
Profit / (Loss) after taxation	(12136)	17,93,693
Other Comprehensive Income	-	-
Total Comprehensive Income for the year	(12136)	17,93,693

Financial Performance and State of Affairs of the Company:

There were no business operations during the year under review as the Company was under Corporate Insolvency Resolution Process ("CIRP") until January 09, 2023 and was under the supervision of Monitoring Committee until January 04, 2024, for the rest of period, newly reconstituted board. was in power. However, the income from other source were Rs 246 Lakhs.

Dividend:

During the year under review, since the Company was under CIRP and due to current year losses, no dividend on the equity shares of the Company has been recommended.

Reserves:

In view of the losses incurred during the financial year ended March 31, 2024, no amount has been transferred to Reserve.

Subsidiary Companies, Associate and Joint venture:

Following is the status of Subsidiary and Associate Companies:

Sr. No.	Name of the Company	Nature of entity	Status	Accounting of investment
1	E Complex Private Limited	Wholly Owned Subsidiary	Under CIRP	Impaired in FY 2020-21
2	RMOL Engineering and Offshore Limited	Wholly Owned Subsidiary	Under liquidation	Impaired in FY 2018-19 and written off in FY 2022-23
3	REDS Marine Services Limited	Wholly Owned Subsidiary	Under liquidation	Impaired in FY 2018-19 and written off in FY 2022-23
4	Reliance Technologies and Systems Private Limited	Wholly Owned Subsidiary	Ongoing	Impaired in FY 2018-19 and written off in FY 2022-23
5	PDOC Pte. Limited	Subsidiary	Ongoing	Impaired in FY 2018-19 and written off in FY 2022-23
6	Conceptia Software Technologies Private Limited	Associate	Ongoing	Carried in the books

Due to the write-off and impairments of investments in subsidiary companies, the financial information of the subsidiaries has not been considered for the consolidation of the financial statements of the Company, except for one associate, i.e., Conceptia Software Technologies Private Limited.

Material Changes Post Closure of Financial Year:

The upfront payment, as per approved resolution plan, was due by March 23, 2023. The Company obtained extension from the Committee of Creditors ("CoC") as well as the Honble NCLT, Ahmedabad Bench, for the payment of the upfront amount. In accordance with the extension granted by the Honble NCLT, the upfront payment, along with interest for the delay, was made on October 27, 2023

The first tranche, as per the plan, was due by December 23, 2023. The Company obtained an extension from the CoC as well as the Honble NCLT, and the payment was deferred to December 23, 2024, as per the deferred payment agreement. The payment was made on August 07, 2024, along with interest as stipulated in the deferred payment agreement.

Corporate Governance:

During the period under the review, the Management Control of the Company was in the hands of the Monitoring Committee till January 04, 2024 and thereafter with the New Management. In view of the same, information in relation to the same forms part of the Annual Report as Corporate Governance Report to the extent applicable.

Number of Board Meetings and Committee meetings

The reconstituted Board after assuming the management control met twice (2) until March 31, 2024. Details of the Board and Committee meeting and the attendance therein is explained in details in Corporate Governance Section of the Annual Report.

Declaration of Independence:

The Company has received Declaration of Independence as stipulated under section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from Independent Directors confirming that he/she is not disqualified from being appointed/re-appointed/ continue as an Independent Director as per the criteria laid down in section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Independent Directors of the Company have registered themselves with the data bank maintained by Indian Institute of Corporate Affairs (IICA). In terms of section 150 of the Companies Act, 2013 read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014.

Performance Evaluation

The Independent Directors of the newly constituted Board of the Company, at their first meeting held on March 28, 2024, reviewed and discussed various matters, including the performance evaluation of the Board and individual Directors. It was agreed that, given the Boards constitution in December 2023 following the NCLT proceedings, and the appointment of the new management, including the Chairman, in February 2024, the financial year ending March 31, 2024, was too brief to conduct a meaningful evaluation of the Board, its Committees, and the Chairman. Consequently, no evaluation was undertaken.

Deposits / Unpaid dividend:

Following the assumption of management responsibility by the reconstituted Board on January 4, 2024, the Board has neither accepted nor renewed any deposits from the public in accordance with Section 73 of the Companies Act, 2013 (‘the Act) and the applicable Rules thereunder. Further, pursuant to the sanctioned resolution plan, any unpaid dividends owed to the equity shareholders of the Company have been extinguished, and no claims shall remain outstanding against the Company or its officers.

Particulars of Loans, Guarantees or Investments:

Details of loans, guarantees or investments covered under the provisions of Section 186 of the Act are given in notes to the standalone financial statements forming part of the Annual Report.

Change in the nature of business:

There was no change in the nature of business of the Company during the year under review.

Internal Financial Control ("IFC") systems and their adequacy:

The management of the Company is currently in the process of implementing effective internal control systems pertaining to financial reporting.

Significant and Material Orders impacting going concern basis passed by the regulators or courts or tribunals

The Honble National Company Law Tribunal (‘NCLT) vide its order dated December 23, 2022, approved the resolution plan submitted by Hazel Mercantile Limited ("Resolution Applicant") for the Company under Section 31 of the Code. In accordance with the provisions of the Code and the NCLT order, the approved resolution plan is binding including but not limited on the Company and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan.

Management Discussion and Analysis Report

Considering that the Company was entirely non-operational and under the supervision of the Resolution Professional until January 04, 2024, the Management Discussion and Analysis Report has been prepared in so far as applicable and is included in the Annual Report.

Change in Share Capital

As a part of the implementation of the Resolution Plan approved by the Honble NCLT under Section 31 of the Insolvency and Bankruptcy Code, 2016, vide its order dated December 23, 2022 the following changes have taken place in the share capital of your Company during the year under review:

a. Cancellation and extinguishment of all equity shares and allotment of shares to existing shareholders in the ratio 275: 1 pursuant to the approved resolution plan;

b. Allotment of 5,00,00,000 fresh ordinary equity shares of face value of Rs 10/- each to the Special Purpose Vehicle ‘Hazel Infra Limited Authorised Share Capital

As of March 31, 2024, there is no change in the Authorised Capital of the Company Paid-up Share Capital

Pursuant to the approved of Resolution Plan as approved by Honble NCLT:

a. All existing ordinary equity shares, totaling 73,75,91,263 shares of Rs 10 each, held by the shareholders, were cancelled and extinguished. In exchange, 26,82,150 new ordinary equity shares of Rs 10 each were issued to the shareholders, at a ratio of 1 (one) new equity share of Rs 10 face value for every 275 (two hundred seventy-five) ordinary equity shares previously held

b. 5,00,00,000 fresh ordinary equity shares of Rs 10 each were issued to the Special Purpose Vehicle, ‘Hazel Infra Limited.

c. The existing issued, subscribed, and paid-up 42,245,764 Compulsorily Redeemable Preference Shares (CRPS) of Rs 100 each were fully cancelled and extinguished.

As on March 31, 2024, the total equity paid-up share capital of your Company was Rs 5,268 Lakhs divided into 5,26,82,150 equity shares of Rs 10 each fully paid-up.

Particulars of employees and related Disclosures:

Due to absence of information, the reconstituted Board is unable to furnish the disclosures required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Directors Responsibility Statement:

Members may kindly note that, the management control of Company was handed over to the Reconstituted Board only on January 04, 2024. Monitoring Committee appointed as per approved resolution plan was the in charge of management of the affairs of the Company from April 01, 2023 to January 03, 2024 and the Reconstituted Board of Directors assumed control over the affairs and of the Company on January 04, 2024.

Accordingly, pursuant to Section 134(5) of the Act, the Reconstituted Board of Directors, based on the knowledge/information gained by them, about the actions of Monitoring Committee (i.e. who were entrusted with and responsible for the management of the affairs of the Company prior to January 04, 2024) and the affairs of the Company in a limited period of time from January 04, 2024 to March 31, 2024, from the records of the Company, state that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for that period;

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

d) the Directors had prepared the annual accounts on a going concern basis; and

e) the Directors, are in the process of reviewing existing internal financial controls and strengthening it wherever required taking into consideration future scale of operation of the Company. However, the Directors are of the opinion that existing internal financial controls are commensurate with its current level of commercial activity.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013:

Details of the complaints received under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, have been explained in Corporate Governance section.

Statutory Auditors and Auditors Report:

At the 23^rd Annual General Meeting ("AGM") of the Company held on November 10, 2020, M/s Pipara and Co LLP, Chartered Accountants, were appointed as the statutory auditors for a term of five consecutive years, until the conclusion of the 28^th AGM. However, M/s Pipara and Co LLP resigned on October 12, 2024, before completing their term.

Following the resignation, and based on the recommendation of the Audit Committee, the Board of Directors appointed M/s N. N. Jambusaria & Co., Chartered Accountants, as the statutory auditors to fill the casual vacancy caused by the resignation, at their meeting on October 17, 2024.

Further, M/s N. N. Jambusaria & Co., the existing Statutory Auditor was appointed to fill causal vacancy created by the Resignation of M/s Pipara & Co LLP, Chartered Accountants (FRN: 107929W / W100219) at 25^th Annual General Meeting of the Company, to hold office until the conclusion of 27^th Annual General Meeting. Consequently, M/s N. N. Jambusaria & Co. would vacate the office as statutory auditor on the conclusion of 27^th Annual General Meeting scheduled to be held on December 27, 2024.

Accordingly, the Board of Directors ("Board") of the Company on the recommendation of the Audit Committee, has recommended the appointment of M/s N. N. Jambusaria & Co., ("N. N. Jambusaria") Chartered Accountants (Firm registration number 104030W) as Statutory Auditors for a period of 5 continuous years i.e. from the conclusion of 27^th Annual General Meeting till the conclusion of 32^nd Annual General Meeting of the Company in accordance with the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014.

Terms and Conditions of appointment of N. N. Jambusaria:

Tenure:

5 years from the conclusion of the 27^th Annual General Meeting till the conclusion of the 32^nd Annual General Meeting Audit Fees:

The fixed fees for the statutory audit, limited review, audit of internal control over financial reporting, statutory certifications, and other professional work are Rs 16.30 Lakh for FY 2024-25, plus applicable taxes, travel, and other out-of-pocket expenses incurred in connection with the statutory audit. The proposed fees are based on the scope of work, team size, industry experience, expertise, and the time and effort required from N. N. Jambusaria for FY 2024-25. Further, the Fees for the remaining tenure of N. N. Jambusaria as statutory auditors for FY 2025-26 to FY 2028-29 will be approved by the Board of Directors and/or the Audit Committee

Reporting of Fraud:

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and Rules framed thereunder, either to the Company or to the Central Government.

Secretarial Auditor and Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Resolution professional had appointed M/s. Jignesh M Pandya & Co, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is enclosed towards the end of this report.

The observations and comments given by the Secretarial Auditor in their Report are self-explanatory and hence do not call for any further comments under Section 134 of the Act.

Cost Auditors and Cost Audit Records:

There was no appointment of Cost Auditors during the Reporting Period.

Particular of contracts or arrangements with related parties referred to in Sub-Section (1) of Section 188 of the Companies Act, 2013:

The transactions with Related Parties have been disclosed in the financial statement of the Company for FY 2023-24.

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

Due to the unavailability of confirmation regarding the disclosure of Conservation of energy, technology absorption and foreign exchange earnings and outgo, the reconstituted Board is not in a position to confirm the status of the disclosure during the reporting period.

Whistle Blower Policy:

Due to the lack of confirmation regarding compliance under the Vigil Mechanism system, the reconstituted Board is unable to verify compliance with this disclosure under whistle blower policy

Familiarization programme for Independent Director:

As part of the implementation of the Resolution Plan approved by the Honble NCLT through its order dated December 23, 2022, the erstwhile Board of Directors of the Company was replaced by a new Board of Directors, effective December 08, 2023, which took control of the management of the Company from January 04, 2024. During the Board meetings held in the financial year 2023-24, following the reconstitution of the Board, presentations were made on various matters, including the Companys business and operations, industry and regulatory updates, and other relevant topics as part of the familiarization programs.

Vigil Mechanism:

Due to the lack of confirmation regarding compliance under the Vigil Mechanism system, the reconstituted Board is unable to verify compliance with this disclosure.

Acknowledgement:

Reconstituted Board would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review and also wish to place on record its deep sense of appreciation for the committed services by the Companys executives, staff and workers.

	For and on behalf of Board of Directors
	Paresh Merchant	Nikhil Merchant
	Director	Chairman & Managing Director
	DIN: 00660027	DIN: 00614790
Date: November 11, 2024 Place: Mumbai