Swan Corp Ltd Management Discussions

a. MARKET OUTLOOK

The global economy displayed structural resilience, expanding by approximately 3.4% in 2025 despite localized turbulence and shifting trade frameworks. However, the escalation of the Middle East crisis and subsequent disruptions across key maritime trade corridors caused sharp spikes in global oil and gas prices, injecting volatility into industrial supply chains and prompting the IMF to moderate its 2026 global growth projection to 3.1%. Defying these external headwinds, India firmly anchored its position as one of the worlds most dynamic major economies, registering a robust growth rate of 7.5% in FY 2025-26.

This exceptional domestic performance was driven by resilient consumption and a structural push via public capital expenditure exceeding 5% of GDP, heavily focused on national infrastructure, defence modernisation, and digital initiatives. The domestic monetary environment provided further stability, with headline CPI inflation softening to a record low of 2.2% during the year, enhancing consumer purchasing power and boosting investment momentum across the real estate and industrial sectors. Policy support remained growth-oriented yet disciplined, with targeted fiscal actions continuously improving the business ecosystem and insulating the country from the worst of the external trade headwinds.

Against this intricate macroeconomic backdrop, your Company maintained its strategic focus on precise operational execution and disciplined risk management. While global energy shocks introduced near-term volatility, our agile petroleum trading model, shipbuilding pipeline, premium real estate developments, and new-age technology mandates are perfectly aligned with Indias structural transformations. Consequently, the Company effectively adapted to the volatile environment, recording a total income of 5,14,351.00 lakhs in FY 2025-26 compared to 6,88,368.00 lakhs in the previous year, solidifying the framework for sustainable long-term value creation.

b. INDUSTRY OUTLOOK

Oil and Gas

Indias shift toward a gas-based economy continues to drive the sector, supported by sustained investments in pipeline connectivity, expanding regasification capacity, and City Gas Distribution (CGD) networks. Simultaneously, India remains one of the largest consumers of petroleum products globally, with baseline domestic demand driven by rapid industrialisation, infrastructure expansion, and increasing vehicular mobility.

Although recent market volatility has introduced near-term price sensitivity across key consuming sectors like fertilisers, steel, and petrochemicals, the long-term structural demand outlook remains exceptionally strong. On the global front, the international energy markets faced severe headwinds toward the close of FY 2025-26 as escalating geopolitical tensions around the Strait of Hormuz led to spikes in spot LNG prices, global crude rates, freight costs, and marine insurance premiums. These challenges are compounded by delays in major global liquefaction projects, which are expected to keep the supply-demand balance relatively tight through 2026 and 2027. Evolving regulatory environments and shifting regional trade dynamics continue to reshape global energy flows, making supply chain resilience an absolute necessity for trading entities. Against this backdrop, the Company proactively adopted a highly disciplined and cautious approach across its unified energy portfolio. The FSRU-based LNG infrastructure project has reached an advanced stage of readiness, with management planning commercial operations to commence in the future as market conditions normalise. In tandem, the trading segment strategically pivoted by reducing its overall inventory exposure and transitioning toward an order-backed trading model, in the UAE. Your Company reported revenue of

3,75,645.32 lakhs from petroleum trading during FY 2025-26, successfully minimising inventory price risk and preserving working capital despite intense international headwinds.

Shipbuilding

The global shipbuilding sector is navigating a robust expansion phase. According to industry estimates from Fortune Business Insights, the global market is projected to grow from USD 175.71 billion in 2026 to USD 274.19 billion by 2034, reflecting a compound annual growth rate of 5.72%. This momentum is primarily driven by global fleet replacement cycles and the International Maritime Organizations strict decarbonisation mandates, which compel a massive transition toward green, dual-fuel, and LNG-powered vessels.

Domestically, the Indian shipbuilding ecosystem is undergoing a historic structural transformation. Recognizing the strategic and economic necessity of maritime self-reliance, the Government of India rolled out a comprehensive 69,725 crore shipbuilding and maritime reform package in September 2025. A central pillar of this initiative is the upgraded Shipbuilding Financial Assistance Scheme (SBFAS 2.0), which carries a dedicated 24,736 crore allocation valid through 2036. This policy framework directly positions Indian shipyards to capture high-value international orders. Furthermore, the recent decision to grant Infrastructure

Status to large ships will significantly lower domestic borrowing costs, creating a highly competitive capital environment for local manufacturers.

Against this dynamic backdrop, Swan Defence and Heavy Industries Limited (SDHI) scaled its execution capabilities and completely revitalised its commercial order book during the current fiscal year. Capitalising on the global demand for specialized tonnage, the Company achieved a massive breakthrough in commercial shipbuilding by securing two marquee international mandates. First, SDHI won a USD 227 million contract from Rederiet Stenersen AS, Norway, for six 18,000 DWT IMO Type II chemical tankers. Building on this momentum, the Company rapidly expanded into the emerging green vessel segment by securing an order for four 92,500 DWT dual-fuel ammonia bulk carriers from Energy ONE Limited.

Simultaneously, the Company reinforced its strategic footprint in the defence sector. SDHI successfully secured a prestigious defence export mandate from the Government of the Sultanate of Oman to construct a training vessel for the Royal Navy of Oman. This milestone not only validates the yards defence-grade engineering capabilities but also perfectly aligns with Indias rising prominence in global indigenous defence exports.

Your Company reported revenue of 28,213.87 lakhs from the Shipbuilding segment during FY 2025-26, reflecting the significant scale-up of operations at SDHI and gradual strengthening of its business development capabilities. The Company remains well-positioned to expand its presence across domestic and international shipbuilding markets, supported by an experienced engineering and execution team, robust strategic tie-ups with domestic and global players, a highly favorable domestic policy environment, and a functional infrastructure now firmly in place post-resurrection.

Real estate

Indias real estate sector is undergoing a profound structural maturation, fundamentally driven by rapid urbanisation, rising per capita incomes, and massive government-led infrastructure investments. The domestic market has transitioned into a phase of sustained value creation, with industry research projecting the Indian real estate market to scale from approximately USD 0.53 trillion in 2025 to over USD 1.2 trillion by 2032, reflecting a robust double-digit compound annual growth rate (CAGR).

Parallel to residential growth, Indias commercial real estate market demonstrated exceptional resilience and expansion. Office leasing volumes were predominantly fuelled by the aggressive expansion of Global Capability Centres, multinational corporations, and domestic technology firms. Key business hubs like Bengaluru and Hyderabad continued to dominate national leasing activity, highlighting sustained institutional demand for technology-enabled, premium office parks and scalable commercial workspaces.

The residential real estate market continued to benefit from improved transparency, regulatory reforms, and growing demand for premium and mid-income housing.

Against this highly favorable backdrop, your Company reported revenue of 12,577.59 lakhs from the Real Estate segment during FY 2025-26, reflecting consistent progress across both residential execution and commercial asset management. Capitalising on the broader industry trend of premiumization, the division maintained a sharp focus on expanding its residential pipeline in Bengaluru. The Company is currently developing BODHI at Jayanagar, Bengaluru, a premium residential project strategically targeted at the expanding upper mid-income and luxury buyer segments. Simultaneously, the Company successfully leveraged the robust commercial leasing environment, maintaining high-yielding IT and business parks in key tech hubs while strategically expanding its commercial footprint in Mumbai. Your Company continues to focus on long-term value creation through strategic development, efficient execution, financial discipline, and the monetisation of its real estate assets and land holdings in India.

Textile

The Indian textile and apparel industry remains a vital economic pillar, driving industrial production and contributing significantly to national employment and exports. The domestic market is on a robust trajectory, with official projections targeting an expansion of the total market size to USD 350 billion by 2030. To overcome global demand softness and competitive pricing pressures, the sector is undergoing a structural transformation. Key government initiatives, such as the PM MITRA mega textile parks and the Production Linked Incentive scheme, are currently focused on building manufacturing scale and integrating domestic players deeper into global value chains.

Against this evolving environment, your Company reported revenue of Rs 20,682.78 lakhs from the Textile segment in FY 2025-26. This reflects a gradual improvement in operational scale despite continued global demand uncertainties. The segment maintained stable performance throughout the year, driven by rigorous cost management, operational efficiencies, and a strict focus on product quality.

c. OPPORTUNITIES

Oil and Gas

The unified oil and gas sector presents robust growth opportunities through the following supportive developments: Transition Fuel Tailwinds: Indias structural shift toward a gas-based economy and expanding City Gas Distribution networks firmly position natural gas as a critical cornerstone fuel across industrial and transportation sectors.

Sustained Domestic Demand: Indias structurally robust baseline demand, fuelled by rapid industrialization and expanding vehicular mobility, continues to provide high-volume liquidity and reliable market absorption.

Long-Term Revenue Visibility: The advanced readiness of the Jafrabad LNG terminal, secured by 4.5 MMTPA binding regasification agreements with major public sector undertakings, ensures highly protected and sustained revenue generation once commercial operations commence.

Agile Trading Models: The strategic pivot toward an order-backed, asset-light trading framework significantly minimizes inventory price risks, allowing the Company to capitalize on global market volatility while preserving working capital.

Shipbuilding

The shipbuilding sector presents strong growth opportunities driven by:

Global Fleet Replacement Supercycle and Capacity Constraints: Aging global fleets and a four-year backlog at tier-1 Asian yards are accelerating international demand for fleet modernisation and new vessel construction.

Domestic PSU Order Pipeline: The governments aggregated requirement for 437 vessels unlocks an estimated 2.2 lakh crore pipeline, providing long-term commercial visibility and a stable demand baseline. Robust Domestic Defence Procurement Programme: A projected 80% expansion in the Indian Navys frontline combat fleet by FY30 creates a massive, multi-year domestic order book across all major vessel categories.

Capital Subsidy for Capacity Expansion: A 25% capital subsidy under the Shipbuilding Development Scheme (SbDS) enables cost-effective brownfield expansion and critical infrastructure modernisation.

Government Policy Support and Maritime Infrastructure Push: Initiatives like Maritime Amrit Kaal Vision 2047 and SBFAS are structurally improving the global competitiveness of domestic shipbuilders.

Real estate

Key catalysts accelerating our real estate portfolio include:

Metropolitan Premiumization: The structural shift toward a K-shaped recovery and rising white-collar incomes are driving robust demand for premium residential properties across major economic hubs like Bengaluru and Hyderabad. Urbanisation Tailwinds: Sustained urban migration and a rising preference for homeownership among younger professionals ensure consistent, long-term demand for modern, well-integrated living spaces.

Textile

The textile sector presents strong growth opportunities driven by:

Value-Added Manufacturing and Sustainable Shifts: Increasing global demand for eco-conscious, traceable fabrics is driving a structural transition toward high-margin, value-added apparel manufacturing. Global Export Access: Recently activated Free Trade Agreements (FTAs) provide a significant competitive advantage, enabling the sector to seamlessly expand its global footprint and capture premium international markets.

d. THREATS, RISKS, AND CONCERNS

Oil and Gas

The sector faces the following key hurdles and supply chain constraints:

Geopolitical Trade Disruptions & Price Anomalies: Extreme market volatility induced by regional conflicts and localised tensions surrounding the Strait of Hormuz directly disrupt standard maritime routes and global energy trade flows, inflating international pricing, rawaterial costs, and freight rates. m FSRU Deployment Dependencies: Operational timelines remain tightly coupled with the successful conclusion of negotiations and the finalization of deployment contracts with global Floating Storage and Regasification Unit providers.

Margin Constraints: Supply-side disruptions and procurement bottlenecks constrain localised trading margins and necessitate highly agile inventory risk management to protect profitability.

Shipbuilding

The growth trajectory in shipbuilding is constrained by several critical execution bottlenecks and industry risks: Global Competition from Subsidised Shipyards: International yards in China, South Korea, and Japan benefit from significant state subsidies, presenting persistent challenges for Indian shipbuilders to compete on aggressive pricing and delivery schedules.

Execution and Project Delivery Risks: Undertaking large-scale, technically complex mandates requires stringent multi-phase project scheduling and rigorous multi-vendor execution, where delays can impact project profitability.

Dependence on Imported Equipment and Components: A deep reliance on foreign suppliers for critical maritime technology and propulsion systems exposes specialized engineering projects to currency fluctuations, supply disruptions, and procurement bottlenecks.

Volatility in Raw Material Prices: Unpredictable fluctuations in the cost of steel, specialty alloys, and marine equipment can significantly compress project margins, particularly within fixed-price contracting structures.

Natural Disasters and Climate Risks: Operational facilities located in coastal areas are inherently exposed to weather-related disruptions, such as cyclones or heavy monsoons, which can adversely affect construction schedules.

Real Estate

The sectors growth is moderated by the following persistent headwinds:

Input Price Dynamics: Unpredictable swings in the cost of foundational building materials, such as steel and cement, along with fluctuating labor wages, threaten project-level profitability and require constant cost calibration.

Cyclical Absorption: Hyper-local competition across specific metropolitan submarkets demands highly calibrated project launch velocities to maintain sales momentum and mitigate holding costs.

Textile

The key areas of concern for the textile industry are:

Subdued Global Absorption: Broad-based demand uncertainties in mature overseas export zones continue to challenge structural export volumes and delay revenue realization.

Cost Competitiveness: Rigorous cost undercutting from low-wage competing economies, specifically Bangladesh and Vietnam, exerts constant pressure on pricing power and operational margins.

e. OUTLOOK:

Looking ahead, your Company remains focused on operational resilience across its core businesses. The continued scale-up of operations at SDHI to capture global and defense opportunities, the advanced readiness of our LNG infrastructure, and the expansion of our real estate portfolio alongside ongoing debt reduction are expected to drive sustainable future growth. Concurrently, stabilizing performance in our textile and petroleum segments ensures a balanced and robust corporate portfolio.

While geopolitical uncertainties, global supply chain disruptions, and commodity price volatility continue to pose macroeconomic challenges, your Company maintains an agile, risk-calibrated operating approach. Management remains firmly committed to prudent capital allocation, strategic asset monetisation, and operational efficiency to protect margins, ensure business continuity, and deliver long-term value.

f. FINANCIAL AND OPERATIONAL PERFORMANCE:

( Rs in lakhs)

Particulars	For the year ended 31 st March, 2026	For the year ended 31 st March, 2025
Sales	21,601.17	13,546.33
Other Income	6,845.79	3,447.12
Profit before Depreciation and Tax	4,244.85	2,048.00
Depreciation	753.57	824.90
Taxes	731.62	317.61
Profit/ (Loss) after depreciation and taxes	2,759.66	905.49
Add: Comprehensive Income	(5.78)	(14.88)
Total Comprehensive Income	2,753.88	890.61

g. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRY RELATIONS FRONT, INCLUDING

NUMBER OF PEOPLE EMPLOYED:

The company continues to give utmost importance to Human Resources Development and keeps relations normal. As on 31 st March, 2026, there are 158 employees, including 4 Whole-Time Directors.

Acknowledging the pivotal role of its workforce in driving our growth and significant emphasis is placed on fostering the personal and professional development of employees. Diverse training and development initiatives are regularly conducted to upskill staff and broaden their knowledge base. Throughout the year, the Company has maintained harmonious relations with its employees, expressing gratitude for their invaluable contributions to operational growth and commending them for their proactive initiatives.

h. KEY FINANCIAL RATIOS:

Sr. No.	Ratios	31 st March, 2026	31 st March, 2025	% Variation	Reason for variation
1	Current Ratio	2.80	2.77	0.99%
2	Debt-Equity Ratio	0.08	0.08	0.00%
3	Debt Service Coverage Ratio	46.84	6.54	616.21%	Due to increase in revenue from operation and reduction of Interest expense during the year
4	Return on Equity Ratio	0.76%	0.27%	181.48%	Due to increase in revenue from operation and reduction of Interest expense during the year
5	Inventory turnover ratio	1.71	1.13	51.33%	Due to increase in revenue from operation during the year
6	Trade	2.80	1.55	80.65%	Due to increase in revenue from operation
	Receivables turnover ratio				during the year
7	Trade payables turnover ratio	3.85	1.64	134.76%	Due to increase in Cost of traded goods sold during the year.
8	Net capital turnover ratio	0.28	0.18	55.56%	Due to increase in revenue from operation during the year
9	Net profit ratio	16.16%	9.03%	78.96%	Due to increase in revenue from operation and reduction of Interest expense during the year
10	Return on Capital employed	0.71%	0.30%	136.67%	Due to increase in revenue from operation and reduction of Interest expense during the year
11	Retun on investment	0.55%	0.18%	208.98%	Due to increase in revenue from operation and reduction of Interest expense during the year

i. INTERNAL CONTROL SYSTEMS:

The Company has a comprehensive system of internal controls suited to the nature, scale, and complexity of its operations. These controls ensure the accuracy and completeness of financial statements and the timely preparation of reliable financial information. The Company continually evaluates and enhances these controls to maintain operational efficiency, accuracy of records and risk minimisation. j. PRECAUTIONARY STATEMENTS:

This report contains forward looking statements that address expectations and projections about the future, based on certain assumptions of future events. Companys actual results, performance or achievements may, thus, differ materially from those projected in any such forward looking statements.

	For and on behalf of the Board of Directors
	Navinbhai C. Dave
Place: Mumbai	Chairman
Date: 29 th May 2026	DIN: 01787259