Mazagon Dock Shipbuilders Ltd

Dear Members,

Your Directors are pleased to present the 93rd Annual Report of Mazagon Dock Shipbuilders Limited ("MDL" or "the Company"), together with the Audited Standalone and

Consolidated Financial Statements for the financial year ended 31 March 2026.

Key Developments During the Year:

The Company achieved several significant operational, strategic and business milestones during FY 2025-26. The key developments are summarised below: i. The Second and Third Stealth Frigate under Project 17A, namely INS Udaygiri and INS Taragiri, were delivered to the Indian Navy on 01 Jul 2025 and 28

Nov 2025 respectively. ii. The Keel Laying Ceremony of the first and second ships undertheMulti-Purpose Vessel (MPV) Project was held at MDL on 02 April 2025 and 17 Nov 2025 respectively. The ceremony marked a significant milestone in the construction commercial arina. iii. The Keel Laying Ceremony of the three Fast Patrol

Vessels (FPVs) was held at MDL on 27 May 2025 , 30 October 2025 and 29 January 2026 respectively. Keel Laying Ceremony of the 1st Next Generation Offshore Patrol Vessel (NGOPV) was laid on 22 Jul 25 followed by 2nd & 3rd NGOPV on 17 Mar 26. iv. The Hon'ble President of India Smt. Droupadi Murmu undertook a dived sortie onboard INS Vaghsheer, an

MDL-built submarine, on 28 December 2025. v. The Company acquired controlling stake in Colombo

Dockyard PLC (CDPLC), Sri Lanka, thereby significantly expanding the company's international presence and market reach. vi. MDL entered into an exclusive Teaming Agreement (TA) with Swan Defence and Heavy Industries Limited

(SDHI) for collaboration in the design and construction of Landing Platform Docks (LPDs) for the Indian Navy. This collaboration reflects the

Partnership envisaged by the Government of India. vii. MDL signed a Tripartite Memorandum of Understanding

(MoU) with the Indian Navy and the Brazilian Navy on

9 December 2025 at Bras?lia, Brazil, to strengthen cooperation in the maintenance and lifecycle support of Scorpene-class submarines and other naval platforms, marking a significant milestone in cooperation.

viii. MDL organised the Atmanirbhar Submarine Ecosystem Conclave on 10 March 2026 with Shri Dinesh Mahur,

Additional Secretary (Defence Production), as the Chief Guest. The conclave provided a platform for Indian industry partners to enhance indigenous capabilities and increase domesticcontent in future submarine programmes.

1. FINANCIAL PERFORMANCE AND CAPITAL STRUCTURE

1.1 Standalone Financial Results:

The financial performance of the Company during FY 2025-26 reflects continued operational strength, timely project execution and sustained focus on value creation.

Particulars	Current Financial year	Previous Financial Year
of	2025-26	2024-25
Revenue from Operations	12,83,964	11,43,188
Other Income	1,14,275	1,15,911
Profit/loss before 3,40,230 3,24,846
Depreciation, Finance
Costs, Exceptional items
and Tax Expense
Less: Depreciation/	9,268	11,519
Amortisation/ Impairment
Profit /loss before Finance	3,30,962	3,13,327
Costs, Exceptional items
and Tax Expense
Less: Finance Costs	5,914	2,407
Profit /loss before	3,25,048	3,10,920
Exceptional items and Tax
Expense
Add/(less): Exceptional	-	-
items
Profit /loss before Tax	3,25,048	3,10,920
of Public-Private Expense
Less: Tax Expense (Current	81,471	78,432
& Deferred)
Profit /loss for the year (1)	2,43,577	2,32,488
Total Comprehensive	144	-275
Income/loss (2)
Total (1+2)	2,43,721	2,32,213
Brazil defence
Balance of profit /loss for	6,97,915	5,36,899
earlier years
Add: Retained Earnings	2,43,721	2,32,213
Less: Transfer to Debenture	-	-
Redemption
Less: Transfer to Reserves	-	-
Less: Dividend paid on	77,490	71,197
Equity Shares
Less: Dividend paid on	-	-
Preference Shares
Less: Dividend	-	-
Distribution Tax
Balance carried forward	8,64,146	6,97,915

Revenue from Operations

11,431.88 crore in FY 2024-25 to 12,839.64 crore in FY 2025-26. Profit Before Tax (PBT) increased by 4.54%, from 3,109.20 crore in FY 2024-25 to 3,250.48 crore in FY 2025-26. Profit After Tax increased by 4.77%, from 2,324.88 crore in FY 2024-25 to 2,435.77 crore in FY 2025-26.

The Income Distribution compared to FY 2024-25 is provided below:

INCOME DISTRIBUTION	FY 2025-26	FY 2024-25
Cost of Materials consumed	52.03	45.13
Employee benefit Expenses	6.70	7.77
Finance Costs	0.42	0.19
Depreciation and	0.66	0.92
Amortization expenses
Sub-Contracting charges	7.09	10.49
Other Expenses	7.30	5.11
Provisions	2.54	5.70
Exceptional Items	- statements of -
Tax Expense	5.83	6.23
Other Comprehensive Income	0.01	-0.02
Total Comprehensive Income	17.42	18.48
Total	100	100

 

1.2 Consolidated Financial Result:

The Company has prepared the Consolidated Financial

Statements for the financial year ended 31 March 2026

in accordance with Section 129(3) of the Companies Act, 2013 read with the applicable Indian Accounting

Standards. The Consolidated Financial Statements form part of this Annual Report.

The financial performance and key highlights of the

Company are set out in the preceding table. A detailed discussion on the macroeconomic environment, industry outlook, business performance, opportunities, risks and concerns, and other factors influencing the Company's operations and performance is provided in the Management Discussion and Analysis Report, which is annexed as Appendix G and forms part of this Report.

1.3 Subsidiaries, Step-down Subsidiaries and Associate Company

Pursuant to the acquisition of a 51% equity stake in

Colombo Dockyard PLC (CDPLC) during the year, CDPLC has become a subsidiary of the Company.

Accordingly, as at 31 March 2026, the Company had one subsidiary, namely Colombo Dockyard PLC (CDPLC), and one associate company, namely Goa Shipyard Limited (GSL).

Further, as at 31 March 2026, CDPLC had three subsidiaries, which consequently became the Company's step-down subsidiaries. The details of these StatementforFY2025-26as step-down subsidiaries are provided below:

SL No	Subsidiaries	Holding by CDPLC (%)
1.	Dockyard General Engineering Services (Pvt) Limited, Colombo, Srilanka	100%
2.	Dockyard Total Solutions (Private) Limited, Colombo, Srilanka	100%
3.	Ceylon Shipping Agency (Pte) Limited, Singapore	51%

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of subsidiary, step-down thefinancial subsidiaries and associate company in Form AOC-1 is annexed as Appendix ‘A' and forms part of the Financial Statements. Highlights of performance of subsidiaries, associates and joint venture companies and their contribution to the overall performance of the Company during FY 2025-26 is given below:

Sr. No.	Name of the Associate/ Subsidiary	MDL Share Holding (%)	Revenue from operations	Profit Before Tax/ (Loss)
I	Associate
	Goa Shipyard Limited	47.21	3,76,430.20	44,228.31
	Total (A)		3,76,430.20	44,228.31
II	Subsidiary
	Colombo Dockyard PLC (CDPLC)*	51	105,196.69**	(8,354.79) **
	Total (B)		105,196.69	(8,354.79)
	Grand Total		481,626.89	35,873.52

*Note: The above financial results of CDPLC represents it's consolidated financial results including those of it's subsidiaries for the period from 1st January, 2025 to 31st March, 2026, being the reporting period adopted by CDPLC following it's acquisition.

**For conversion into INR, average exchange rate for 15 months period, from 01.01.2025 to 31.03.2026 has been considered. INR 1 = LKR 3.4408

During the current financial year total dividend received by MDL is as follows -

Sr. No.	Name of the Associate/ Subsidiary	Amount in Lakhs
1	Goa Shipyard Limited	550
2	Colombo Dockyard PLC (CDPLC)	Nil
	Total	550

1.4 Capital Structure:

The authorised Equity Share Capital of the Company as on 31 March 2026 stood at 323.72 crore comprising of 64,74,40,000 (Sixty-Four Crores Seventy-Four Lakh Forty Thousand) equity shares of 5 each. The paid-up Equity Share Capital as on 31 March 2026 stood at 201.69 crore comprising of 40,33,80,000 (Forty Crores Thirty-Three Lakh Eighty Thousand) equity shares of 5 each.

During the year under review, there was no change in the authorised or paid-up share capital of the company. Further, the Company has not issued any equity shares with differential rights as to dividend, voting or otherwise during the year.

Offer for Sale (OFS):

During April 2025, the Government of India, inter alia towards achieving the minimum public shareholding requirement prescribed under Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended, and Regulation 38 of the SEBI(LODR) Regulations 2015, divested 3.61 % of it's equity stake in the Company, representing 14,563,465 equity shares, through the stock exchange mechanism by way of Offer for Sale (OFS). Consequently, the Government of India's shareholding in the Company stood reduced to 81.22 %.

1.5 Dividend:

For the FY 2025-26, the Board of Directors approved payment of following interim dividends:

First Interim Dividend of 6 per equity share of 5 each (120%), amounting to 242.03 Crores approved on 27 October 2025. Second Interim Dividend of 7.50 per equity share of 5 each (150%), amounting to 302.54 Crores approved on 05 February 2026.

The Board has recommended a Final Dividend of 4.62 per equity share of 5 each (92.4%). Subject to shareholders' approval, the proposed Final Dividend would involve a cash outflow of 186.36 crore. Accordingly, the total dividend declared/recommended for the FY 2025-26, comprising of interim dividend already paid and the proposed Final Dividend, aggregates to 730.93 Crores representing 18.12 per equity share of 5 each (362.40%)..

1.6 Transfer to Reserves:

The Board does not propose to transfer any amounts to reserves for the FY 2025-26.

1.7 Contribution to the Exchequer:

For the FY 2025-26, the Company's contribution to the national exchequer by way of Income Tax, GST, IGST on imports and Customs Duty stood at 2,499.53 crores.

1.8 Public Deposits: related parties, directors,

The Company has not accepted any deposits from the public within the meaning of Chapter V of the

Companies Act, 2013. No amount of principal or interest was outstanding as on 31 March 2026 or on the date of this Report.

1.9 Loans, Guarantees or Investments:

The Company has not granted any loans, provided any guarantees or made any investments covered under

Section 186 of the Companies Act, 2013 during the year under review.

1.10 Contracts and Arrangements with Related Parties

During the year under review, your Company did not enter into any contract / arrangement with related parties requiring approval or disclosure under section 188 of the Companies Act, 2013 and the rules made thereunder. The details of the related party transactions, as Indian Accounting Standard (IndAS) 24 are provided in Note 45 to the financial statements. Form AOC-2 containing the particulars of contracts or arrangements with related parties is annexed as Appendix ‘B' to this Report, in accordance with under section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of Companies (Accounts) Rules, 2014. The Company's

Policy on Related Party Transactions, https://mazagondock.in/images/pdf/1related-party-transaction-policy(revised).pdf

1.11 Material Changes subsequent to the date of Financial

Statements:

No material changes or commitments affecting financial between the end of FY 2025-26 and the date of this Report.

1.12 Details of significant and material orders passed by the regulatorsorcourtsortribunalsimpactingthe going concern status and company's operationsin future:

No significant or material orders were passed by any regulator, court or tribunal during the year that would impact the going concern status of the Company or materially affect its future operations.

1.13 Agreements under Schedule III of SEBI LODR

Regulations:

During FY 2025-26, no agreements requiring disclosure under Clause 5A of Paragraph A of Part A of Schedule

III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015 were entered into or disclosed by the shareholders, promoters, promoter key managerial groupentities, personnel or employees of the Company or its subsidiary or associate company.

2. BUSINESS OPERATIONS AND GROWTH

2.1 Review of Operations:

FY 2025-26 was marked by significant achievements across shipbuilding, submarine construction, defence production, .initiatives exportsandstrategic The Company continued to strengthen its position as India's leading defence timely shipyard through execution of projects, enhancement of indigenous capabilities and expansion of its global footprint. The operational performance during the year reflects MDL's continued commitment to quality, technological excellence, timely project delivery and nationalself-reliance in defence manufacturing. tobedisclosedunder For the FY 2025-26, the Company recorded a revenue of 12,839.64 crore as against 11,431.88 crore in the previous FY 2024-25. There is no material change in the nature of business of the Company during the year.

2.2 Order Book Position:

The Company maintained a robust order book during is available at

FY 2025-26, providing long-term revenue visibility and reinforcing its position as one of India's premier defence shipbuilding enterprises.

The status of the Company's major projects under execution is set out below: a) Destroyer Project: Destroyer Ships are potent combatants which are

Contemporary and State-of-the-Art platforms.

First Destroyer of Project P15B was delivered on

28 October 2021 and has been commissioned into the Indian Navy on 21 November 2021. Second Destroyer of the project was delivered on 24 November 2022 and has been commissioned on 18 December 2022. Third Destroyer of the project was delivered on 20 October 2023 and has been commissioned on 26 December 2023. The Fourth Destroyer of the project was delivered on 20 December 2024 and commissioned on 15 January 2025. All the four ships have been delivered before

Contractual timelines and guarantee related activities are being executed now. b) Frigate Project: MDL was awarded contract to build four (4) ships under P17A Project in the year 2015. The First of Class of 17A Project was delivered in December 2024 and has been commissioned on 15 January 2025. The subsequent ships were successfully delivered on 01 Jul 25, 28 Nov 25 and 30 Apr

26, respectively.

The Company hosted the NAMAN Car Rally at its Mumbai premises on 31st October 2025 to commemorate the commissioning of INS Udaygiri, being the 100th warship, that was designed by Warship Design Bureau of Indian Navy and built by MDL. The event highlighted the rich maritime heritage, craftsmanship and vision of Aatmanirbhar Bharat. c) Repair & Refit Projects: Your company completed refit project of Coast Guard Vessel and five commercial vessels during FY 2025-26. Six-month guarantee period of a Coast Guard Project ICGS Saksham is currently in progress. d) Coast Guard (CG) Project: Under the Coast Guard Projects, MDL is constructing 01 FPVs. Contracts for these projects were signed in

October 2023, December 2023 & January 2024 respectively with a total contract value of Rs. 2991 Crore. The production of all three Projects have commenced. The Keel for Training Ship was laid on 13 Jan 25. The Production of four NGOPVs commenced on 31 May 24, 19 Dec 24, 24 Mar 25 & 20 Aug 25 respectively. The keel for 1st NGOPV was laid on 22 Jul 25 followed by 2nd & 3rd NGOPV on 17 Mar 26. The production of six FPVs also commenced. The keel for three FPVs was laid on 27 May 25, 30 Oct 25 & 29 Jan 26 respectively. These ships will perform as Training Platform for Coast Guard recruits, Coastal patrolling, Ocean surveillance, Anti-smuggling and Anti-piracy operations, logistic supports, rescue operations and to supplement

Naval resources.

e) Project Multi-Purpose Commercial Vessels: Multi-purpose vessels, or MPVs, are known for their versatility, perform across various functions. MDL has signed an order with M/s Navi Merchants, Denmark for the construction six 7500 DWT Multi-Vessel at a value of USD 85 million ( 715 Crores) with an optional clause for four more vessels. The productionof the first three vessels commenced on 24 September 2024, 16 October 2024 & 03

January 2025 respectively. Keel laying of 1st Vessel was held on 02 Apr 2025 and 2nd Vessel was held on 17 Nov 2025. f) Submarine Project: MDL is the only shipyard in India which has constructed Conventional Submarines with two different technologies i.e. German SSK class and

French Scorpene class Submarines.

MDL has successfully constructed and delivered

06 Scorpene Class Conventional Submarines to the Indian Navy under licensed construction collaboration with French Collaborator M/s Naval

Group under Project P-75. one g) Offshore Projects:

MDL is also diversifying its business into offshore projects. Currently, following three Offshore projects for M/s ONGC are in progress:

• Part Replacement of Pipeline Project (PRPP)

- MDL has received a NOA (Notification of Ship, 06 NGOPVsand14 Award) for PRPP from M/s ONGC on 07

December 2023 for part replacement of Subsea pipelines (approx. 44 kms). The

Project is on the verge of completion.

• Discovered Small Field-II Project - MDL has received a NOA (Notification of Award) for the project DSF-II from M/s ONGC on

08 August 2024 for building six (6) new well Head platforms and modification three platforms along with Subsea pipe laying of approx. 200 kms. Fabrication two Jackets & Top sides at the Nhava Yard is approaching completion. Additionally, fabrication currently in progress at Vietnam.

• PRP 8(a) Project- MDL has received a NOA

(Notification

September 2024 for Subsea pipe laying of approx. 59.8 kms. & 17.9 kms. of Piggy back along with modificationto the existing platforms. Pipe laying swing and are expected to be completed during the next season, spanning 15 Oct 26 to 15 May 27.

The successful completion of these projects will enable your company to fully revitalize its offshore division and strengthen its positionin the global market.

2.3 Capital Projects and Capacity Expansion

The Company is committed modernisation on a continual basis. The major capital projects under implementation Level a) Replacement of the existing Luffing Cranes with new modernised cranes has been undertaken in a phased manner. b) A 150 T Level LuffingCrane is also being set up at

Alcock Yard. c) Manufacture of a new Caisson Gate for the East Yard Dry Dock has been undertaken for replacing the existing Caisson Gate. d) Development of the Company's land parcel at Nhava Yard, admeasuring approximately 37 acres, is being undertaken. The facilities construction of Stores, Administrative Building, provision of LL

Cranes and allied services. This will facilitate construction of ships and e) Development of the newly acquired land parcel of approximately 15 acres adjacent to MPA land is being undertaken. The facility is being developed for simultaneous construction types of New Builds and repair/refit of vessels. The new infrastructure will provide adequate capacity for simultaneous execution of multiple projects. f) A New Fabrication Workshop, including stores, is being set up at Alcock Yard inside the Company's premises. g) Replacement of the Kasara Basin Gate is in progress. h) Infrastructure augmentation is being progressed in East yard to undertake pressure hull fabrication for future Submarine projects.

2.4 Other Infrastructure Projects:

Towards undertaking the construction and next generation vessels, MDL has undertaken construction of a New Floating Dry are in full capacity to handle the dry-docking requirements of future major Projects.

Your Company is committed towards upgrading the skills of the potential workforce of the shipbuilding industry and towards this a skill development hub is being created with an Apprentice Training School (ATS) and associated development work at Gavan village, Navi Mumbai. to the upgradation Your Company is continuously modernizing its office infrastructure across its premises to enhance of its existinginfrastructure and facilities operational efficiency, employee productivity and workplace standards.

2.5 Performance against MoUs

MDL had signed Memorandum of Understanding (MoU) with Ministry of Defence, Government of India for the FY 2025-26 outlining targets and various performance parameters for the Company, the performance rating of which is currently awaited. For the previous FY 2024-25, your Company had achieved "Excellent" performance rating with a score of 90.74. During FY 2025-26, your Company achieved a Profit before Tax (PBT) before exceptional items of 3,250.48 crore. The import content in Value of Production for FY

2025-26 and FY 2024-25 was 2723.26 Crore and Stands,Jetty,Workshops, 1,885.61 Crores, respectively.

Onboarding on TReDS platforms:

MDL has onboarded to all five (05) TReDS platforms as platforms. detailed below: DTX onboarded on 20.02.2026 C2TReDS onboarded on 20.02.2026 and

RXIL onboarded on 30.04.2024

M1 Exchange onboarded on 30.01.2019 Invoice Mart onboarded on 28.05.2018

Against the MoU target for MDL for publishing 250 numbers of Internship Opportunities, MDL had posted 500 opportunities against which 918 received.

3. Technology, Innovation and Business Development

3.1 Research & Development (R&D):

The Company's R&D policy was approved by the Board in June 2013, following the guidelines issued by the Department of Public Enterprises in September 2011.

A dedicated committee was established to oversee its implementation.

MDL for the period under review, pursued targeted

R&D initiatives in collaboration with academic institutions, start-ups, and MSMEs, not only within the core defence sector but also in critical areas such as autonomous underwater technology and sustainable, eco-friendly transportation solutions.

Further,MDLactively of India's iDEX initiative and, in partnership with startups, MSMEs, and innovators, has taken on several challenges.

MDL continues to explore innovative AI initiatives partnership with domestic start-ups. Three major R&D projects were successfully completed through collaboration and start-ups within the Tamil Nadu Defence Corridor. These projects involved the development of AI-powered technologies, including: have been

• AI-enabled Computerized Radiography (RT)

AI-based Robotic Weld Inspection using Phased Array Ultrasonic Testing (UT)

AI-enabled Remotely Operated Vehicles (ROVs) These solutions have been e domains, with full-scale AI optimization respectiv ted as more operational data becomes available.anticipa In addition, MDL has developed a state-of-the-art basic design framework for naval vessels, featuring advanced and optimized systems for equipment, machinery, weaponry, and overall arrangement. MDL has also implemented Product Data Management (PDM) and Product Lifecycle Management (PLM) systems for the frigates currently under construction.

The Submarine Division has undertaken focused

R&D initiatives through collaboration

Institutions, Start Ups & MSMEs not only in the core Defence sector but also other critical areas like underwater autonomous technology, sustainable & environment friendly transport solutions etc.

Innovative R&D projects are currently in progress at

Submarine division not only in the defence sector but also in the field of energy and other civil applications.

Military products like Expendable Underwater Target (EUT) and Mobile Target Emulator (MTE) which are being developed in partnership with the industry and are designed to simulate the situation of actual moving submarine for training purpose and for decoy measures.

MDL has developed India's first Fuel Cell powered Electric Vessel (FCEV) as a ‘Proof of Concept'. MDL is also undertaking a few Artificial intelligence (AI) Projects under R & D viz; Autonomous/ unmanning of Surface academia, and vessels and Optimum utilization of Fuel cell under

Hybrid power management. Discussion is in progress with IIT Chennai, with the potential clients for commercialisation. Modern marine transport solutions like Hybrid Electric

& Solar boats which can provide sustainable and environment friendly options.

Solar Boat has been launched in December 2023. This

Boat can offer a better alternative to conventional diesel boats resultingsecuring a commercial order from M/s Jawaharlal Nehru Port Authority (JNPA), Mumbai.

The R&D team has also developed prototype of Lithium- deployed in their Ion Battery system for Submarine in collaboration with M/s QMAX as technology partner. In addition to the above, MDL is actively participating in iDEX initiative of Govt of India and in collaboration with Start-ups/ MSMEs/ Innovators has already accepted various challenges like Development of Steering console for manoeuvring of Underwater platform, Design & Development of Submersible Boat,

Development of Rudder & Hydroplane blades for underwater platforms, etc.

Your Company has spent approximately 7.67% of the

PAT towards R&D expenditure during the FY 2025-26. The various projects undertaken under R&D are elaborated in Annexure 1 to Appendix ‘G'. In order to promote R&D, your Company has joined hands under CSR with IIT Bombay, IIT Madras, IIT Hyderabad and IIT Indore. MDL has supported following six research projects with IITs under CSR.

Sr. No.	K	Name of Project	Project Objectives
1	IIT Bombay	Robotic Sensors based automatic programmingapproach for robotic welding, which would enable with collision detection for rapid the rapid deployment of robotic welding for deployment.	welding for Shipbuilding:Development of an automatic programming eased productivity incr Shipbuildingresulting
2	IIT Bombay	Improved Resistance via Robotic Plasma Surface Treatment promising approach to enhance the performance Technology.	Adhesion & Corrosion To explore the potential for Marine Applications discharge (DBS) plasma surface treatment as a of protective coatings
			applications
3	IIT Indore	Investigations Development for on Laser based Large parameters towards Laser Cleaning of Area Cleaning of Biofouling from Ship Biofouling from Ship Hull. Hulls.	on Prototype To Investigate the To clearing without any impact on the Ship Hull. To design and optimise large area Cleaning. To investigate the growth/complete removal of micro-organism after the treatment of Laser.
4	IIT Indore	Impact Induced Failure of Stiffened To develop a computer code for contact forces Curved FRP Ship Panels under Hygro (loading, unloading and reloading) due to impact on - thermal Environment. curved FRP Ship panels for varying shape, size and	speed of Impactor.
5	IIT Hyderabad	Time-dependent and structural health monitoring of and Structural Health Monitoring (SHM) of Ship Ship structure considering uncertainty. structures considering uncertainties	reliability analysis To perform a time dependent reliability analysis
6	IIT Madras	Construction Tank at Dept. of IIT Madras	The primary of Circulating focus is on the design, analysis, and Ocean Engineering, construction of the Circulating Water Channel (CWC), including the procurement of advanced instruments. This robust setup will facilitate precise experimental studies, enabling the CWC to become a foundationalresourceforfluiddynamics research. The CWC's testing capabilities allow for scaled model studies of complex phenomena such as turbulence and cavitation.

The above-mentioned research-based projects will help in developing technologies in marine/ocean/naval technologies.

3.2 Atmanirbhar Bharat Initiatives/ Indigenisation:

The Company continuedto advance the Government of India's vision of Atmanirbhar Bharat through sustained efforts towards indigenisation, strengthening domestic supply chains and enhancing platforms.

In furtherance of these initiatives, the Company continued to strengthen indigenous design, engineering and manufacturing capabilities through close collaboration with domestic industry, research institutions and technology partners, thereby supporting the national objective of achieving greater self-reliance in defence production and promoting indigenous technological development.

The Company's key initiatives, programmes and achievements in advancing the objectives of Atmanirbhar Bharat and promoting indigenisation are outlined below: a) Strong Commitment to Indigenisation: Since the establishment of a dedicated Indigenisation Department in October 2015, MDL has actively collaborated with Indian industry to develop indigenous alternatives to imported equipment, contributionto systems and items in line with the Government of India's Make in India and Atmanirbhar Bharat initiatives. As on date, a total of 116 major systems and equipment/items for ships and submarines have been successfully indigenised, a majority of which have been developed in partnership with MSMEs. b) Key Indigenous Development Initiatives of MDL includes:

Electric Propulsion Motor (EPM) critical for submarine propulsion - progressive headways achieved in development of the system

Hanger Fire Fighting System (HFFS) ensures on-board Helo-deck safety - Development of the system is completed. Trials are in progress.

Controllable Pitch Propeller (CPP) & Shaft

System, converts engine power into propulsion - Development of the system is in progress. c) MDL Innovation Program (MIP): MDL has introduced its own in-house innovation scheme, the MDL Innovation Program (MIP), mirroring the Ministry of Defence's iDEX initiative. The programme is administered by the Indigenisation Department and has a dedicated funding allocation of 10 Crores for the period 2024 2027. It is aimed at providing financial assistance—up to Rs One Crore per project—to start-ups, MSMEs, academic professionals, and partner incubators to foster indigenous development. d) Success Stories under Innovation

Excellence (iDEX) DISC-6: As a proof of concept under the iDEX DISC-6 Challenge, MDL has indigenously developed the Steering Console for Midget Submarines. This critical system is responsible for controlling the submarine's movement in all three dimensions by managing the Rudder and Diving planes. e) Ongoing Projects under Innovation in Defence fence Excellence (iDEX) DISC-10: MDL is actively contributingto the iDEX DISC-10 initiative with projects aimed at indigenising key submarine technologies such as the Sonar Beacon, Windlass

& Capstan, and Digital Bearing Time Device. These items are currently under development. f) Contribution to the Positive Indigenisation (PIL): MDL has made a substantial the Ministry of Defence'sPositive Indigenisation List (PIL) by submitting1,024 items. Out of these,

75 items have already been indigenised, while the rest are in various stages of Research, Design, and development. g) Outreach and Industry Engagement: In its efforts to promote indigenisation participation, MDL also conducted a seminar through the SRIJAN Portal on 08 September

2025. The event served as a platform to share and information, invite industry collaboration, discuss future opportunities in indigenous development of Naval equipment and system components. h) MDL organized "Atmanirbhar Submarine Ecosystem Conclave" on 10 Mar'26 at Mumbai for fostering collaboration between MDL & Industry Partners for creating strong, resilient and self-reliant Submarine Ecosystem in the country.

236 Representatives from 142 Companies including OEM/MSMEs/Industry Partners attended the conclave. During the conclave, one to one technical interaction held with representatives of all OEM/MSMEs/Industry

Partners. MDL mapped the requirements with capabilities of Industry partners and encouraged for active involvement in Indigenizationefforts to strengthen domesticdefense manufacturing ecosystem. i) MDL remains committed to strengthening India's

Defence manufacturing ecosystem by fostering industry innovation, supporting MSMEs, and reducing dependency on imports through focused indigenisation initiatives. j) Indigenization of Submarine Equipment: MDL has proactively pursued indigenous development for items/ equipment for conventional Submarine.

3.3 Strategic Partnerships

The Company continued to strengthen its collaborative ecosystem through strategic partnerships and alliances aimedatenhancingdomesticcapabilities and de objectives. supporting national a) Teaming Agreement for Landing Platform Docks

(LPDs)

The Teaming Agreement executed with Swan Defence and Heavy Industries Limited (SDHI) for Landing Platform Dock projects represents an important step towards promoting indigenous defence manufacturing through a collaborative

Public-Private Partnership model.

The partnership is expected to combine the strengths of both organisations and support future naval shipbuilding requirements. b) International Cooperation

The Memorandum of Understanding signed with the Indian Navy and the Brazilian Navy marks a significant milestone in international defence cooperation.

The arrangement is expected to facilitate collaborationin submarine maintenance, lifecycle support and related maritime activities, enhancing India's position in the global naval support ecosystem.

3.4 Quality Assurance and Technical Excellence

The successful executionof complex naval programmes during the year reflects the Company's strong emphasis on quality assurance, engineering excellence and adherence to stringent defence standards.

The Company remains committed to maintaining world-class quality systems and continuously improving quality practices, operational processes and technical capabilities to meet evolving customer requirements and stringent defence standards.

The key quality initiatives undertaken during the year are summarised below: a) Quality Management System (QMS) MDL has obtained and maintained Quality Management System (QMS) certificationin accordance with ISO 9001 Standards since

1998. The Company continues to implement and strengthen its Quality Management System in accordance with ISO 9001:2015 standards. During the year, 54 Lead Auditors and 85 Internal Auditors were trained to carry out internal audits for sustenance of the QMS in the Shipbuilding

Division.

As part of sustaining the QMS under ISO

9001:2015, the Second Surveillance Audit of the Shipbuilding Division, including Nhava Yard and

Ship Repair & Refit Division, was successfully conducted from 9 to 11 February 2026 by M/s International Certification Services Pvt. Ltd. (ICS)

The First Surveillance Audit of the Submarine Division under ISO 9001:2015 was conducted from 3 to 4 April 2025 and was successfully completed with nil non-conformity reports by M/s International Certification Services Pvt. Ltd. (ICS) covering the scope of "Design, Development,

Construction, Refit, Test and Trials of Submarines".

Based on the audit, the Submarine Division continues to be certified as compliant with the requirements of ISO 9001:2015. b) Quality Concepts i. 5S (Workplace Management System) MDL has implemented the 5S Workplace Management System across 21 workshops, stores and offices. Internal audits were carried out regularly and, as part of sustaining the initiative, re-thereby all 21 locations was successfully through an external agency. ii. Quality Circles (QC) Quality Circle movement was introduced in October 2004. Over the years, MDL has developed 29 Quality Circle teams across various shops, sections and projects. These teams continue to analyse work-related issues and implement practical and cost effective solutions.During the year, Quality

Circle teams represented MDL at the

Chapter Convention on Quality Concepts (CCQC-2025) and the 39th National Conventionon Quality Concepts (NCQC-

2025), where they received various awards, details of which are provided under the section "Awards and Recognition" c) Technology Advancement in Quality Assurance

To strengthen quality assurance through digital transformation and Industry 4.0 technologies, MDL continued to implement advanced quality control and inspection systems. Major undertaken during the year include:

Implementation of AI-enabled Weld Inspection using Computerised Radiography (AI-RT),

Advanced TFM/FMC Ultrasonic Technique (AI-UT), Parikshan Portal for online inspection, Code-based compartment inspection, AR/VR-enabled LoI, Phased Array Ultrasonic Testing (PAUT), and introduction of advanced 3D Measurement Videoscope Inspection and Wi-Fi enabled X-ray machines.

Implementation of Vacuum Testing at the shop floor to ensure tank integrity and facilitate early detection blasting/painting operations, in accordance with

PSPC requirements. d) Capacity Building and Knowledge Enhancement in Quality

To strengthen quality competencies across the organisation, specialised training and knowledge-sharing initiatives were undertaken during the year. Training programmes and certification courses, including ISO 9712, ISO 13805, ASNT, NACE, CWIP and PAUT, were conducted to enhance the technical capabilities of Quality Control and Production Further, MDL's Quality Control teams participated in national and international conferences relatingto quality management and inspection practices.

To further strengthen technical competencies,

28 personnel were trained by NACE on Coating and Lining, while two personnel underwent specialised training by IDEMI on Competence of

Testing & Calibration Laboratories and Internal Audit, reflecting the Company's continued commitment to professional excellence and continuous learning.

3.5 Information Technology

The Company continued to strengthen its digital capabilities by leveraging technology to enhance operational business processes and promote paperless operations. During the year, several initiatives were implemented across key functional areas through SAP ERP and other digital platforms to enhance automation, data integrity and user experience. The major initiatives undertaken during the year are outlined below: a) Enhancement in the existing SAP ERP Landscape: i. Implementation of Internal Audit Module in

SAP ERP:

The existing manual Internal Audit process has been replaced with an Online Module in SAP ERP. The module facilitates expeditious execution of Internal Audit processes and enables retrieval of relevant information in digital form. It captures all observations and requirements raised by the auditors, along with the corresponding responses submitted by the auditees.

The module also facilitates uploading of supporting documents while recording observations, queries and replies through ofdefectsprior toerection ws. workflo multiple ii. Development of Digital Employee Medical Case Record in SAP ERP:

The in-house system for digitisation of Employee Medical Case Records is another step towards achieving paperless functioning of the

Department. The system facilitates maintenance of employees' medical records, including patients' medical history, medicines prescribed and clinical notes.

. iii. Development of Gratuity Module in SAP actively ERP: This add-on feature has been developed to calculate and process the gratuity amount payable to employees upon their retirement or resignation from the services of MDL.

The gratuity amount is computed in the system based on the applicable gratuity rules, eligibility criteria and employee details available in the SAP-HR Module.

The system also facilitates accounting gratuity-related transactions, preparationof financial records such as the cash book, trial balance and balance sheet. Further, it generates the "Monthly Bank

Reconciliation Statement of Gratuity Trusts

Bank Account" and the "Gratuity Report" on a real-time basis, as required. iv. Development of Transport Module in SAP ERP:

The Transport Module has digitised transparency, real-time process relating from users and their approval by the Transport Department through the SAP Portal. v. Development of Post-Recruitment Module in SAP ERP:

The existing manual post-recruitment activities have been digitised. facilitates intimation and tracking various onboarding processes and enables automated e-mail communication within

MDL during the post-recruitment stage of candidates.

vi. Integration of Attendance Recording System (ARS) with SAP ERP:

The standalone Attendance Recording System (ARS) at the Security Complex has been integrated with SAP

ERP, ensuring compliance with cyber security requirements. The integration has enabled real-time availability of employee attendance details on the SAP Portal. b) MDL Website Enhancements and Audit Compliances: The "Foreign Bidder Module" has been provisioned to facilitate submission of commercial bids by foreign vendors.

The Annual Safe to Host (STH) Certificate for the MDL Website, along with its Application Modules, has been obtained through a CERT-In empanelled Auditor and CIRA.

Additional compliances, including the "Accessibility Audit through IAAP-certified Auditor" and "CQW GIGW 3.0 Compliance Certification through STQC" for the MDL Website, have also been ensured. c) MDL IT Infrastructure Compliance for Cyber Security: i. MDL was accredited to ISO/IEC 27001:2022 Information Security Management System in October 2025. This has ensured alignment of IT-related processes and documentation at MDL with the requirements of the

ISO Standard. ii. Advisories issued by competent cyber security authorities, viz., CSG, CERT-In and CIRA, were implemented and circulated for compliance.

3.6 Procurement from MSMEs & GeM:

The Company continues to comply with the Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012, which mandates procurement of at least 25% of the total annual procurement from MSEs. During FY 2025-26, the Company achieved procurement of 33.53% from MSEs, exceeding the prescribed target.

As part of its continued efforts to broaden and strengthen the MSME vendor ecosystem, the Company conducted four Vendor Development Programs (VDPs) during FY 2025-26 exclusively organized for MSEs owned by SC/ST entrepreneurs and women entrepreneurs. Further, to expand its vendor base and promote wider industry participation, the Company participated in 16 national-level programs (including four programs exclusively for MSEs owned by SC/ST entrepreneurs and women entrepreneurs) organized by the MSME Development Institute (DI), State Directorates, NSSH and industry associations such as DICCI, FICCI, CII, etc. a. Timely payment to MSE vendors:

	Details of MSE invoices FY 2025-26
Total amount involved(Rs.) i	No. of invoices delay(count) ii	No. of suppliers involved in delay(count) iii	Total annual procurement value ( ) iv	Total no. of invoices during the year (count) v	Total no. of suppliers during the year engaged in annual procurement (count) vi
Nil	Nil	Not applicable	1009.43 cr.	11445	979
Invoices pending beyond 45 days :	NIL

b. Procurement through GeM: The annual procurement undertaken through GeM in FY 2025-26 is 1838.58 Cr. The total annual procurement of goods and services is 3010.32 Cr. c. Break-up of procurement from:

(i) Micro and Small Enterprises (MSEs) overall - 1009.43 (ii) MSEs owned by SC /ST entrepreneurs - 2.50 Cr. (iii) MSEs owned by women entrepreneurs - 52.09 Cr.

d. Shortfall in MSE Procurement Targets are as follows:

MDL has achieved total 33.53 % of procurement from MSEs which is exceeding the stipulated target of 25% in MSE order 2012. But the procurement from SC/ST & Women MSEs are falling short of sub targets of 4% & 3% respectively. MDL has made concerted efforts to take SC/ST and Women MSEs on board as indicated below:

tedParticipa Organised in 04 04 and

Vendor Development Programs (VDPs) for MSEs owned by SC/ST and Women

Entrepreneurs.

Participated in 12 VDPs organised by various Govt bodies.

• A separate Women's MSME Cell to improve women participation in the procurement is formed.

However, despite extensive outreach efforts described above, since very few MSE SC/ST & MSE Women Vendors exist in the Engineering segment catering to the needs of Shipbuilding

& Submarine sector, MDL has fallen short of achieving these stipulated sub targets.

As per MSE order 2012 & subsequent amendments, in the event of failure of such MSEs

(SC/ST & Women) to participate in tender process or to meet tender requirement or to match L1 price, 4% sub-target for procurement earmarked for MSEs owned by SC/ST entrepreneurs and 3% procurement earmarked for women entrepreneur will also be met from other MSEs.

3.7 Marketing Initiatives and Exports:

The Company's strong order book, successful execution of ongoing projects, expanding export opportunities and strategic investments provide a strong foundation for future growth.

The Companyremainsfocusedontimely delivery of ongoing projects, development of new capabilities and pursuit of emerging opportunities in domestic international markets. a) Marketing During FY 2025-26, your company significantly expanded its global outreach and strengthened its position as India's premier warship and submarine builder through focused international initia marketingand business development

Your company participated in leading global defence exhibitions, (International Exhibition of Technology for Defense and Disaster Prevention) Peru 2025, DEFEA (Defence Exhibition Athens) Greece

2025 and DSEI (Defence and Security Equipment

International) London 2025, showcasing

India's indigenous shipbuilding and submarine construction capabilities to worldwide. These platforms enabled your company to demonstrate its technological strengths, project execution capabilities lifecycle support expertise while generating multiple business leads across strategic international markets.

In addition to international exhibitions, company actively engaged with foreign navies, defence ministries and maritime agencies through seminars and bilateral interactions facilitated by Indian Missions in the Philippines, South Africa, Germany and Malaysia. These engagements enhanced the visibility of India's maritime industrial capabilities and positioned your Company as a trusted partner for long-term naval and maritime cooperation.

Your company's marketing approach continues to evolve from product-centric promotion to capability-led engagement, highlighting its ability to deliver integrated maritime solutions encompassing design, construction, modernization, maintenance, training and technology transfer. This strategic positioning expected to support sustainable export growth and strengthen your Company's international footprint. b) Exports

Your company possesses a distinguished legacy of constructing 808 ships and than 240 vessels and maritime platforms over the years. Building upon this strong foundation, your Company is actively pursuing opportunities across defence shipbuilding, commercial shipbuilding,and submarine support services, ship repair, modernization, technology transfer and maritime infrastructure development.

Key Export Highlights:

Your company is currently executing contract for the construction

7,500-ton Dry Cargo Ships for a European client, demonstrating its competitiveness in international commercial shipbuilding markets.

A landmark tripartite Memorandum of

Understanding between the Brazilian Navy, Indian Navy and MDL was signed during the year, establishing a framework for cooperation in submarine sustainment, maintenance procedures, technical support and lifecycle management of Scorpene-class submarines. This strategic engagement opens a significant opportunity for your company to emerge as a global partner for submarine maintenance and support services.

In a transformationalmilestone, your company acquired a controlling stake in Colombo Dockyard

PLC, Sri Lanka. This acquisition marks MDL's first major internationalacquisition and substantially strengthens its presence in the Indian Ocean

Region. The acquisition provides enhanced shipbuilding and repair capacity, access to new international customers, and a strategic platform to expand into high-growth maritimemarkets across South Asia, the Middle East and Africa.

Your company continues to explore opportunities in submarine manufacturing supply chains, including fabrication of pressure hull sections and specialized engineering services for global submarine programs.

• During the year, your company secured submarine-related inspection and engineering orders from Malaysia and entered into strategic cooperation arrangements to pursue future opportunities in Southeast Asia.

Your company's integrated maritime solutions portfolio today includes warship design, commercial ship design, technology transfer, shipyard development support, training, modernization, and lifecycle extension services, thereby positioning comprehensive maritime solutions provider.

3.8 Health Safety & Environment Management System:

Yourcompany'sIntegratedHealth,Safety&Environment

Management System (HSEMS) has been certifiedto ISO 14001:2015 and OHSAS 18001:2007 by M/s KBS Certification,accredited by Joint Accreditation of Australia and New Zealand (JAS-ANZ), a member of the InternationalAccreditation Forum (IAF). The standard OHSAS 18001:2007 was upgraded to ISO 45001:2018 in September, 2021.

This certification reflects MDL's commitment to sustainable development, continual improvement and excellence in Health, Safety & Environmental performance, enhancing its operationalcredibility and business prospects. The HSEMS certification until July 2028.

4. HUMAN RESOURCE MANAGEMENT

4.1 Human Resource

The Company's employees remain its most valuable asset and continue to be the driving force behind its sustained growth and operational excellence. The

Company's Human Resource strategy is focused on attracting, developing and retaining talent, fostering leadership capabilities, promoting employee well-being and creatinga high-performance work culture aligned with its strategic objectives.

The Company remains committed to building a competent, motivated and future-ready workforce capable of meeting evolving business requirements and supporting long-term organisational growth. During FY 2025-26, Human Resource continued to focus on employee development, organisational capability enhancement, workforce engagement, leadership development, succession planning and strengthening employee competencies to support sustained organisational

4.2 Workforce Profile, Reservation of Posts and Employee

Demographics:

As on 31 March 2026, the Company had a workforce comprising executives, non-deployed across various operational, technical and administrative functions. The Company continues to maintain an appropriate workforce structure to support its expanding business requirements and execution commitments.

The Company continues to comply with the Presidential Directives of the Government of India relating to reservation of posts for Scheduled Castes (SCs) and

Scheduled Tribes (STs) in recruitment. it as a

The total manpower strength of the Company as on 31 March 2026 stood at 5,770 (including the CMD and

Functional Directors). Of the total workforce, 2,988 employees were engaged on a Fixed Term basis, 83 were Ex-servicemen, 834 belonged to the Scheduled Caste category and 499 belonged to the Scheduled

Tribe category. The representation of Scheduled Castes System and Scheduled Tribes in the total workforce stood at

14.45% and 8.65%, respectively.

Out of the 2,988 employees engaged on a Fixed Term basis, 398 belonged to the Scheduled Caste category and 254 belonged to the Scheduled Tribe category.

The statement showing the representation

Castes and Scheduled Tribes in various categories of posts as on 1 January 2025 and 1 January 2026 is as is valid below:

	As on 01st January 2025			As on 01st January 2026
Classification of Posts / services	Total Strength	Schedule Caste	Schedule Tribe	Total Strength	Schedule Caste	Schedule Tribe
Permanent:
Group "A"*	945	181	72	945	183	73
Group "B"	29	6	1	34	9	2
Group "C" (Excluding Safaiwala)	1703	235	158	1814	246	170
Group "C" Safaiwala	0	0	0	0	0	0
Temporary:
Group "A"	0	0	0	0	0	0
Group "B"	0	0	0	0	0	0
Group "C" (Excluding Safaiwala)	0	0	0	0	0	0
Group "C" Safaiwala	0	0	0	0	0	0
Group "C" (Apprentice Under Act) 0 0 0 0 0 0
Fixed Term Contract:
Group "A"	0	0	0	0	0	0
Group "B"	0	0	0	0	0	0
Group "C" (Excluding Safaiwala)	3426	473	303	3028	403	257
Group "C" Safaiwala	0	0	0	0	0	0

*Includes Board level executives

4.3 Employment of Women:

As per Recommendation No. 51, Para (ii)(a) of the National Commission for Women (NCW) contained in its Annual Report for the year 1995-96 and in accordance with the directions of the Ministry of Defence vide letter No. 39(6)/99/D(B&C) dated 27 August 1999, the position of women employees in the Company as on 31 March 2026 is as under: a) Executives

Sr. No.	Grade	No. of Employees	Women	Percentage
1	E0	34	3	8.82
2	E1	51	11	21.57
3	E2	15	3	20.00
4	E3	150	14	9.33
5	E4	240	21	8.75
6	E5	273	9	3.30
7	E6	146	9	6.16
8	E7	43	4	9.30
9	E8	19	2	10.52
10	E9	4	0	0
11	CVO	1	0	0
12	CMD & Functional Directors	5	0	0
	Total	981	76	7.47

b) Non-Executives (Operatives)

Sr. No	Grade	No. of Employees	Women	Percentage
1	WG-01	8	0	0
2	WG-02	370	3	0.81
3	WG-03	7	0	0
4	WG-04	14	0	0
5	WG-05	2605	67	2.57
6	WG-06	322	6	1.86
7	WG-07	779	18	2.31
8	WG-08	285	8	2.81
9	WG-09	8	0	0
10	WG-10	2	0	0
11	WG-3A	0	0	0
12	WG-4A	47	0	0
	Total	4447	102	2.29

c) Non-Executives (Staff)

Sr. No.	Grade	No. of Employees	Women	Percentage
1	SI-03	1	0	0.00
2	SI-04	1	0	0.00
3	SI-05	276	48	17.39
4	SI-06	15	4	26.67
5	SI-07	32	6	18.75
6	SI-08	9	4	44.44
7	SI-09	7	1	14.29
8	SI-10	1	1	100.0
	Total	342	64	18.71

As on 31st March 2026, out of 5770 employees, 5528 constitutes male employees and 242 constitute female employees. There are no transgender employees.

Being a heavy engineering industry, against the vacancies notified, MDL receives a relatively lower number of applications from women candidates in various trades and disciplines.

4.4 Persons with Disabilities (PWD) As On 31 Mar 2026:

The total number of physically challenged employees as on 31 Mar 2026 was 116 and its percentage to total employees works out to 2.01%.

Sr. No.	Group	HI	LD	VI	TOTAL
1	Group-A	7	15	10	32
2	Group-B	0	0	0	0
3	Group-C	15	62	7	84
	Total	22	77	17	116

Note: HI- Hearing Impaired, LD-Locomotive Disability, VI-Visually Impaired.

4.5 Health and Well-being Initiatives

The Company continued to undertake various initiatives aimed at promoting physical, mental and emotional well-being of employees.

Periodic health awareness programmes, medical facilities and wellness initiatives were organised to encourage healthy lifestyles and enhance employee productivity.

4.6 Diversity and Inclusion

The Company remains committed to providing equal opportunities and fostering an inclusive work environment characterised by fairness, respect and mutual trust.

Efforts continued during the year to strengthen diversity, promote inclusive practices and ensure a workplace free from discrimination and

4.7Prevention of Sexual Harassment (POSH)

The Companyremainscommitted to providing a safe, secure and inclusive workplace for all employees.

The Company continues to conduct regular awareness and sensitisation programmes to promote a respectful workplace culture.Awarenessinitiatives are carried out through training programmes, print and digital media, and engagement with external agencies to reinforce appropriate workplace behaviour and prevention of sexual harassment.

An Internal Committee (IC) has been constituted in accordance with the provisions of the Sexual

Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The status of complaints received and disposed of by the Internal Committee during FY 2025-26 is as under: Number of complaints received during the financial year- 01

Number of complaints disposed-off 01

Number of complaints pending for more than 90 days - Nil

4.8 Industrial Relations:

Industrial relations remained cordial and harmonious throughout FY 2025-26.

The Company continued and collaborative relationshipwith recognised unions and employee representatives through regular dialogue and engagement. This positive industrial climate contributed significantly to operational stability, productivity enhancement and timely execution of projects.

The Board places on record its appreciation for the cooperation and commitment demonstrated by employees and recognised unions during the year.

4.9 Employee Training and Development

The Company continued to accord high priority to learning and development as a key enabler of organisational excellence.

Various training programmes, workshops, seminars and development year to enhance technical competencies, managerial capabilities, leadership skills and behavioural effectiveness of employees across all levels. The training framework was designed to address current operational requirements while also preparing employees for future technological and business challenges.

The Company also continued to focus on strengthening . specialised technical capabilities in shipbuilding, submarine construction, engineering, project management, quality assurance, digital technologies and advanced manufacturing systems.

These initiatives support the Company's objective of maintaining technological leadership in the defence shipbuilding sector.

Some of the key training and development initiatives undertaken during the year are as follows: a) During the year under review, 970 Officers underwent training In-House & and 347 Officers were trained outside the Organisation. b) 1 Orientation programme and 4 External programs were conducted for Directors including Independent Directors. c) Strategic Conclave of top Management including CMD and Board Members was organised to discuss core theme around Diversification and Decoding of Values of our Organisation. d) MDL has collaborated with AI University,

Karjat to keep its executive updated with the recent developments in AI space and around

50 executives undergone training on AI at AI University. Additionally, 6 executives have undergone training of AI Tools for Employee

Productivity and Cyber Security & AI at IPE, Hyderabad and 2 executives have undergone to maintain a constructive training for AI-Powered Design of Experiment using Data Analytics and Minitab at CII, Vikhroli. e) Offsite ‘Teambuilding' Programmes were conducted to create cohesiveness among all in which a total of 114 executives and 111 non-Executives participated. f) Programmes on Intellectual Property Rights were conducted to create an IPR Driven Innovation wherein 119 employees were benefited. g) Global challenges such as climate change, pollution,resource depletion training programme on capacity building on the aspect of sustainability and BRSR was conducted to cater the importance of Environmental, social and governance (ESG) and sustainability in business operations and to understand the importance, latest policies and reporting requirements. of learning and essentials behind ESG and BRSR. 78 no. of executives participated in the training programme. h) An in-house capsule programme comprising

‘Health', ‘Safety', ‘First Aid' & ‘Fire developed and conducted. Around 49 programs were conducted on the said topics and around 2997 employees were trained. i) In today's digital world, Cyber Security plays a pivotal role in terms of sensitivity and security of information. In order to address the above,

Training sessions on Cyber Security Awareness organised through external faculty, wherein 1449 employees participated j) Customised 02 days Training modules on ‘Life

Vision Architect' has been devised for employees for their Spiritual and Material development. Total

04 sessions were conducted at Jeevan Vidya Mission at Karjat & 266 Executives and Non-executives participated k) Capsule programmes on the retiring employees and their spouse were conducted for 80 retiring employees over 04 sessions covering ‘Diet Management', ‘Wealth Management', ‘Mind Management' & ‘Wellness'. l) 2 days' preventive vigilance programme was conducted in line with the CVC guidelines and 187 Executives participated m) In order to the ensure safety and dignity of women employees, a sensitizationprograms on ‘Preventionof Sexual Harassment of Women at Workplace' (POSH) were conducted. A total of 198 Employees participated in the said programme. On the occasion of Women's Day,

MDL also organized various outreach for women Executives including outsourced women employees. These programmes aimed to empower the women employees in MDL. n) MDL continued to secure a robust talent pipeline by providing a number of training sessions to

BOAT and Marine Engineering Apprentices, in Trade apprentices.additionto 595 o) In house on the job training was undertaken with active participation from Fitters, Riggers, Electricians, Electronic Mechanics Store Staff, Draughtsman & Quality Control Inspector, and Electronic Mechanic, Store Staff, etc. p) Employees were also nominated for various Training Programmes organised by external

Agencies/ Institute on Health, Fire Fighting, Aid, and Behavioural subject like Health and Wellness,

First Aid, Fire Fighting, Entrepreneurship of the Heart: creating impact with Integrity", "Resilience Fighting'was and Purpose: Lesson from my Journey" by Mr. Anand Kumar- Super 30, Building Grit: How to succeed against all odds by Mr. Anand Kumar-

Super 30, Artificial Intelligence, Capacity building on the aspect of Sustainability & BRSR, Change

Management: Creativity and Innovation, Dining Etiquettes, Disciplinary Proceeding and Framing of Charge sheet, Effective Communication and Interpersonal Skills, Effective Leadership and Decision making, Effective Time Management and Work- Life Balance, , Financial planning,

Fundamental of coating & lining, GeM

Procurement, Import Procedures INCO Terms and

Effective Disposal of Scrap, Intellectual Property

Rights, Mentoring and succession planning,

Preventive Vigilance, Professional grooming and benefited. & office Etiquette, Security Sensitization, Retirement Planning, Stress Management and planning for

Emotional Intelligence, q) Executives were also nominated outside MDL for various programs including ‘Magnetic Particle Testing(MPT) Level II, Propertieson Design and Construction Submarines, ‘Basic Emergency Training (BOSIET), ‘Ultrasonic Testing in the program.

Level II, ‘Enhancing Procurement Processes for Sustainability, ‘Mastering Employment Labour Law Reforms & New Labour, ‘Cyber Security,

‘Electrical Compliance and Regulation for

Ensuring Electrical Safety, ‘Welding Technology:

Fundamentals of Metallurgical & Quality Aspects of Welded Components & Equipment, ‘Life Vision Architect, ‘IND AS Training Workshop,

Intelligence, ‘Capacity Building - Infrastructure Finance, ‘Basic Maintenance and Trending

Technologies in Hydraulics & pneumatics system,

‘Government e-Marketplace (GeM) - Defence

Procurement, ‘Offshore Structures & Submarine

Pipelines/ Risers, ‘Microsoft MSP for PERT activities in Planning,

Act, 2005 etc. r) Training programs on Mentoring and Succession planning, Dining Etiquette, Professional grooming & office Etiquette, Online training programs on IGOT, Capacity building on the aspect of sustainability and BRSR and awareness of the

SEBI (Prohibition of Insider Trading) Regulations were conducted for MDL employees.

4.10 Leadership Development

Special emphasis was placed on leadership development and succession planning initiatives to build a strong leadership pipeline and ensure organisational continuity. Development eness effectiv to organisational to strengthen strategic thinking, decision-making capabilities, people management skills and business leadership competencies.

A future ready Succession Planning and Leadership Development Plan (SPLDP) that integrates both CPSE standard and global best practices was designed by

MDL which emphasizes on peer learning advantage, structured progress and efficiency & cost effectiveness to organise with a scalable model. The policy on MDL SPLDP has been approved by the Board.

4.11 Employee Welfare Measures

Employee welfare continued to remain a key priority for the Company. The Company provides a comprehensive employee welfare framework encompassing healthcare, insurance, social security, employee assistance, post-retirement benefits, health and wellness, education and other welfare measures with a view to promoting employee well-being and fostering a safe, healthy and supportive work environment.

The Company's employee welfare framework, inter alia, comprises Group Savings Linked Insurance Scheme (GSLIS), Group Personal Accident Insurance

Scheme (GPAIS), comprehensive medical facilities, schemes, health and wellness programs, death benefit their familiesfinancial in deserving cases, post-retirement medical benefits, pension schemes and various other welfare measures in accordance with the Company's policies.

During FY 2025-26, hospitalization claims 54.18 crore were reimbursed for employees and their eligible dependent family members. Financial assistance of 27 lakh was extended to the eligible legal heirs of deceased non-executive employees in cases of death in harness. An amount of 9,96,950 was disbursed RighttoInformation under the Death Benefit Scheme. The Company also facilitated post-retirement medical benefits to eligible retirees and their spouses, administered contributory superannuation (pension) schemes for executives and non-executives, provided Group Personal Accident Insurance coverage to employees and facilitated timely settlement of retirement benefits, including issuance of PPOs under the EPFO PRAYAAS initiative through the

"Pension Mitra" helpdesk.

4.12 Performance Management

The Company continued to strengthen its performance management framework to align individual performance with organisational objectives foster accountability, recognise merits and support career development, programmes were conducted thereby contributing and continuous improvement.

The performance management system supports employee development, recognition and career progression while contributing to overall organisational effectiveness.

4.13 Employee Engagement various employee TheCompany continued engagement initiatives during the year to promote teamwork, communication, collaboration and a positive organisational culture thereby enhancing employee morale and participation.

4.14 Employee Recognition and Rewards

The Company continued to recognise outstanding contributions made by employees and teams through various recognition and reward programs.

During the year, 62 employees received the Worker of the Month Award, 149 employees received CMD/ Directors AwardsandCommendationsunder various categories and 16 employees received CMD-On the Spot Commendation and Cash Awards. These initiatives reinforce a cultureofinnovation,operational excellence, teamwork and sustained high performance.

D Initiatives 4.15 Organisational

During the year, the Company undertook organisational restructuring initiatives to strengthen its organisational framework and enhance operational effectiveness amounting in line with evolving businessto requirements. The restructuring focused on optimising organisational structure, improving role clarity, strengthening functional integrations and enhancing organisational agility to support future growth and business objectives.

4.16 Human Resource Outlook

The Company will continue to invest in talent development, leadership capability enhancement, employee well-being and organisational effectiveness to support its long-term growth strategy.

Human Resource initiatives will remain focused on building a future-ready workforce capable of delivering excellence in an increasingly dynamic and technology-driven business environment.

The Board places on record its sincere appreciationfor the dedication, commitment and contribution of all employees, whose collective efforts have played a significant role in the Company's achievements during FY 2025-26. The Company remains confident that its strong human capital foundation will continue to support sustainable growth and long-term value creation.

4.17 National Integration: initiativ the year to promote the spirit of national integration and TheCompanycontinuedtoundertakevarious constitutional values. Some of the major initiatives undertaken are as follows: a) Commemoration of 150 Years of the National Song of the National Song "Vande Mataram" on 7 November 2025. Employees National Song at their respective workplaces. b) Constitution Day: Constitution Day was observed on 26 November 2025, during which a large number of employees participated in the reading of the Preamble to the Constitution of India. c) CSR Initiatives:TheCompanycontinueditseffortstowardstheupliftment of the underprivileged and weaker sections of society through various Corporate Social Responsibility (CSR) initiatives in the areas of healthcare, sanitation, skill development, rural development, education and rehabilitation

4.18 Reservation for SCs/STs/OBCs:

Your company has been observing all the Government directives and instructions issued from time to time on of posts for SCs/STs/OBCs. All the rosters of SC/ST/OBC/PWD are maintained, which is inspected by the LiaisonOfficerandSC/STUnions,fromtime statistics totime. Detailed recruitment made during the FY 2025-26 and the representation of Ex-servicemen and number of women employees as on 01 Jan 2026 are as given below:

Particulars of Recruitment made during the Calendar Year 2025. The number filled by SC's / ST's, Reasons for shortfall and steps taken to improve the position

Classification of Posts/ services	Total Number of posts Advertised	Schedule Caste	Schedule Tribes	and steps taken to		Reason for shortfall improve the position
Permanent:		Notified	Filled	Notified	Filled
Group "A"	01	0	0	0	0	-
Group "B"	06	01	01	02	01	1 ST candidate not found
Group "C" (Excluding Safaiwala)	0	0	0	0	0	-
(Fix Term)
Group "C" Safaiwala	0	0	0	0	0	-
Fixed Term Contract
Group "A"	11	2	2	1	1	-
Group "B"	0	0	0	0	0	-
Group "C" (Excluding Safaiwala)	0	0	0	0	0	-
Group "C" Safaiwala	0	0	0	0	0	-

 

Statement showing representation of Ex-Servicemen in Group ‘C' & ‘D' and Number of Women Employees as on 01st
January 2026 Classification of Posts / services	Total Strength	Ex-servicemen No	Women Employees %	No	%
Permanent
Group "A"	945	79	8.34	73	07.72
Group "B"	34	0	0.00	03	8.82
Group "C"	1814	4	0.22	36	01.98
(Excluding Safaiwala)
Group "C" Safaiwala
Fixed Term Contract
Group "A"	9	1	11.11	0	0.00
Group "B"	0	0	0	0	0
Group "C"(Excluding Safaiwala)	3028	3	0.10	113	03.73
Group "C" Safaiwala

4.19 Grievance Redressal Committees for SCs/STs:

Weaker sectionsof the society are given adequate protection in the form of just and equitable treatment at the hands of employer. To ensure the same, a separate "Grievance Redressal Cell" has been constituted for SC/ST employees. A quarterly meeting of representatives of SC/ST is held with Director (CP&P) wherein grievances related to SC/ST are discussed and resolved.

5. CORPORATE GOVERNANCE AND LEADERSHIP

5.1 Governance & Sustainability

The Company remains committed to the highest standards of corporate governance and recognises that robust governance practices are fundamental to sustainable value creation, stakeholder confidence and long-term business success.

The governance framework of the Company is aligned with the provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, DPE Guidelines on Corporate Governance and other applicable statutory requirements. The Company continues to strengthen its governance framework through transparent decision-making processes, effective Board oversight, robust internal controls and a strong compliance culture.

5.2 Corporate Governance

Pursuant to Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015 and the applicable DPE Guidelines, a separate Report on Corporate Governance is annexed as Appendix ‘C' to this Report.

The Secretarial Auditor of the Company has issued a certificate confirming compliance with the conditions of Corporate Governance as stipulated under the SEBI LODR Regulations. The certificate is annexed as Appendix ‘D' to this Report.

5.3 Implementation of Right to Information (RTI) Act, 2005

The Company remains committed to transparency and accountability in its functioning and has established the necessary institutional framework for effective implementation of the Right to Information Act, 2005. Appropriate officers have been designated as Assistant Public Information Officers, Public Information Officers Appellate Authorities for facilitating access to information under the Act.

During FY 2025-26, the Company received126RTIapplicationsand14firstappealsthroughonlineandofflinemodes.

The information sought was furnished in accordance with the provisions of the Act. Quarterly returns were filed with the Central Information Commission (CIC) within the prescribed timelines.

Further, proactive disclosures under Section 4(1)(b) of the Act have been hosted on the Company's website and are subjected to third-party audit in accordance with CIC guidelines.

5.4 Meetings of the Board

During FY 2025-26, the Board met seven times to deliberate on strategic, operational, financial, governance and compliance matters.

The meetings were held on 8 April 2025, 29 May

2025, 27 June 2025, 28 July 2025, 27 October 2025, 9 January 2026 and 5 February 2026

The meetings were conducted in compliance with the provisions of the Companies Act, 2013, SEBI LODR

Regulations and applicable Secretarial Standards. Details regarding attendance of Directors at Board Meetings are provided in the Corporate Governance

Report annexed as Appendix ‘C'.

5.5 Company's Policy on Directors Appointment and

Remuneration

Being a Central Public Sector Enterprise (CPSE), the appointment, tenure and remuneration of Functional

Directors, including the Chairman & Managing Director, are determined by the Government of India through the Public Enterprises SelectionBoard (PESB) and the Administrative Ministry.

Government Nominee Directors are appointed by the Ministry of Defence and are not entitled to any remuneration or sittingfees from the Company.

Independent Directors are appointed by the

Government of India and are entitledto sitting fees for attending meetings of the Board and its Committees in accordance with the applicable statutory provisions and Board-approved policy.

Pursuant to the exemption granted by the Ministry of CorporateAffairsvideNotificationNo. G.S.R. 463(E) dated 5 June 2015, Government Companies are exempt from the requirement of formulating a policy under Section 134(3)(e) of the Companies Act, 2013 relating to Directors' appointment, remuneration.

5.6 Board Evaluation

Pursuant to the Ministry of Corporate Affairs Notification dated 5 June 2015, Government Companies are exempt from the requirement relating to annual evaluation of the Board, its committees and individual Directors, as the performance of Directors is evaluated by the Administrative Ministry.

However, in terms of Regulation 17(10) of SEBI LODR

Regulations, 2015, the performance evaluation of Independent Directors for the financial year ended 31

March 2026 was carried by the Board.

5.7 Changes in the Board of Directors and Key Managerial Personnel

The following changes took place in the composition of the Board and Key Managerial Personnel during the year under review and up to the date of this report:

Chairman & Managing Director:

Capt. Jagmohan (Retd.) (DIN: 08630668) was appointed as Chairman & Managing Director with effect from 21

April 2025.

Shri. Biju George, (DIN-09343562) held the Additional

Charge of Chairman & Managing Director of the

Company till 20 April 2025

Government Nominee Director:

Shri Dinesh Mahur, Additional Secretary (Defence Production) (DIN: 10862645), was appointed as Government Nominee Director with effect from

30 April 2026 in place of Shri Rajeev Prakash, Joint Secretary (Naval Systems) (DIN: 08590061).

Independent Directors:

Shri Kedarnath Gupta (DIN: 06460508) has been appointed as an Independent Director of the Company for a period of three years with effect from 21 May

2025.

Shri Sambasiva Rao Chandu (DIN: 02296283) ceased to be an Independent Director with effect from 23 January 2026 consequent upon his resignation. Shri Dattaprasad Kholkar (DIN: 10054086) ceased to be an Independent Director with effect from 23 February 2026 upon completion Dr. Vivek Atul Bhuskute (DIN: 09417992) and Smt. Veni Thapar (DIN: 01811724) were appointed as

Independent Directors for a period of one year with effect from 21 April 2025 and completed their tenure on 20 April 2026.

Company Secretary and Compliance Officer:

Shri Lalatendu Acharya was appointed as Company

Secretary and Compliance Officer with effect from 1

June 2025 in place of Smt. Madhavi Kulkarni, who was redesignated as Assistant Company Secretary.

Pursuant to organisationalrestructuring of the Company,

Director (Shipbuilding) has been re-designated as

Director (Operations) and Director

Engineering) as Director (Technical) w.e.f. 12 May 2026.

5.8 Constitution of Audit Committee

The Audit Committee has been constituted in accordance with Section 177 of the Companies

Act, 2013 and the applicable provisions of the SEBI

LODR Regulations. The in overseeing financial reporting, internal controls, risk management, audit processes and regulatory compliance.

The composition and terms of reference of the Audit Committee are provided in the Corporate Governance Report. All recommendations made by the Audit Committee during FY 2025-26 were accepted by the

Board.

5.9 Declaration of Independence and Separate Meeting of Independent Directors

The Company has received declarations from all Independent Directors confirming that they meet the criteria of independence prescribed under the

Companies Act, 2013 and the SEBI LODR Regulations,

2015.

Based on the declarations undertaken, the Board is of the opinion that the Independent Directors possess the requisite integrity, expertise and experience and continue to fulfil initiatives in the conditions of independence prescribed under applicable laws.

A separate meeting was held on 5 February 2026 in accordance with the provisions of the Companies Act, 2013. All Independent

Directors attended the meeting.

The Independent Directors have also confirmed compliance with the Company's Code of Business Conduct and Ethics for Board Members and Senior Management.

5.10 Corporate Social Responsibility (CSR)

The Company remains responsibility with its business sustainable and inclusive development initiatives. MDL continues to undertake impactful CSR aimed at creating long-term social value and contributing positively to the communities in it operates, in accordance with its Corporate Social

Responsibility Policy and the provisions of Section of the Companies Act, 2013.

During FY 2025-26, the Company implemented 35

CSR projects across various thematic areas including Healthcare & Nutrition, Education,Skill Development, Heritage Conservation and Research & Development.

The Annual Report on CSR containing the requisite disclosures as prescribed under the Companies Act, 2013 forms part of this Board's Report as Appendix ‘E'.

The major CSR under theseassists thematic Board areas are summarised below: a) Healthcare and Healthcare continued to be one of the key focus areas of the Company's CSR year. The Company supported various projects aimed at improving access to quality healthcare services, strengthening healthcare infrastructure and extending healthcare support to economically weaker sections of society, defence personnel and their dependants.

The major healthcare initiatives undertaken during the year are as follows:

Aspirational Districts: MDL has undertaken a project to address anaemia among women and adolescent girls in Nandurbar district through supply of digital haemoglobinometers for receivedandtheassessment frontline health workers.

Healthcare Facilities: Your Company has continued undertaking new the Healthcare sector during FY 2025-26.

Your Company continued its support to of the Independent Directors

Government Hospitals, namely LTMMC & GH Hospital, Sion, Mumbai; King Edward Memorial Hospital, Parel, Mumbai; and AIIMS, Raipur by providing necessary medical equipment to strengthen public healthcare services for the benefit of the needy sections of society. In order to strengthen healthcare facilities for Armed Forces veterans and their dependants, MDL supported Naval Hospitals at Mumbai, Karwar, Navi Mumbai and Goa through supply of medical equipment.

Further, MDL also continued its support towards to integratingsocial treatment and completion of surgeries of 300 through children suffering from congenital heart disease

(CHD) at Sri Sathya Sai Sanjeevani Hospital, Navi

Mumbai (Maharashtra) and Raipur (Chhattisgarh). which Further, the Company continued to accord special focus to cancer care and treatment during FY

135

2025-26. In this regard, Tata Memorial Hospital, Parel, Mumbai was supported through provision of surgical instruments for facilitating robotic and laparoscopic surgeries for economically weaker patients at subsidised cost.

MDL also continued its support to two shelter homes in Mumbai and Navi Mumbai to assist cancer patients and their dependants visiting

Mumbai for treatment at Tata Memorial Hospital and ACTREC, Navi Mumbai. b) Support for Vulnerable Sections of Society

As part of its commitment towards inclusive social development, the Company continued to support projects benefiting persons with orphaned children and other vulnerable sections of society.

Support for Persons with Disabilities and Orphans/Homeless Children: MDL supported equipping therapy units at Aastha's Centre of Excellence for Persons with Disabilities supported intellectually challenged children and adults at Children's Home, Mankhurd, benefiting265 children and adults who are victims of natural calamities, and loss of parents.

• Further, MDL undertook support towards the medical and nutritional of 150 orphans, destitute and homeless children residing at Maharashtra State Women's Council Asha Sadan, Byculla, Mumbai. c) Education and Skill Development Education and skill development continued to remain important focus areas of the Company's

CSR initiatives. The Company supported projects aimed at promoting quality education, enhancing employability and creating sustainable livelihood opportunities.

The major are as follows:

Education Sector: MDL continued support to the "MDL Super 10" project at Bhonsala Military School, Nagpur, to provide quality education to students from marginalised communities. to EnvironmentalFY 2025-26, Protectionsupport wasand extended to 41 students from the tribal-dominated Shahapur area of Thane district.

MDL also supported the care and education of 150 orphan and economically disadvantaged children across five units of Matruchaya in Goa and supported digitisation district of Madhya Pradesh.

Further, MDL continued its support towards 110 Abhyasikas (Tuition urban slum areas of Vijayawada, benefiting approximately 3,300 underprivileged children.

• Skill Development: To promote women empowerment through skill development, MDL supported establishment of a vocational skill centre and training of 200 women in Navi Mumbai. The Company also continued its support for Apprenticeship Training at Apprenticeship Training School,

MDL, Mumbai. d) Research & Development

In line with its commitment to promote research, in Goa. TheCompanyalso innovation and technological development, the Company continued to support collaborative research initiatives with premier academic institutions. The Company joined hands with IIT

Madras, IIT Bombay, IIT Hyderabad and IIT Indoresocialapathy to support research projects in marine, ocean and naval technologies, which are expected to benefit start-ups, MSMEs and Indian industry. requirements e) Heritage Conservation The Company also continued to support initiatives aimed at preserving India's rich maritimeheritage. The Company supported the development of the National Maritime Heritage

Complex at Lothal, Gujarat, for establishment of a world-class maritime museum.

.11 Conservation

Foreign Exchange Earnings and Outgo

Pursuant to MCA

04 Sep 2015, your Company, being a Government Company undertaken duringtheyear engaged in producing defence equipment, is exempt from furnishing the particulars relating to the disclosure of information with respect to conservation its of energy, technology absorption, foreign exchange earnings and outgo required under the provisions of

Section134(3)(m) read with Rule 8(3) of the Companies

(Accounts) Rules, 2014 in the Board's Report.

During Details relating Conservation, energy developments, Foreign Exchange Conservation in accordance with the DPE Guidelines on Corporate Governance are provided under Annexure 1 to the Management Discussion and Analysis Report (MDA) at Appendix ‘G' to this Report. of 15 rural schools in Harda

5.12 Swachh Bharat Initiatives

In line with the Swachh Bharat Mission of Government of India, your Company has continued the clean-ship of areas/wards in Mazagon, Mumbai: a) Clean-ship of adjacent areas/Roads of MDL by external agency: MDL has engaged a clean-ship - specificagency for carrying out daily cleaning of roads (approx. 4.5 km) adjacent to MDL. b) Celebration of ‘Swacchata hi Seva 5.0 Campaign' from 17.09.2025 – 02.10.2025 - Cleanliness drive (Shramadaan) was organized from 17.09.2025

– 02.10.2025 within and surrounding areas of

MDL and conducted various outreach like:

Identifications of Scraps.

Segregation of records records.

Cleanliness drive in MDL residential

Complex. c) Cleanliness drive (Shramadaan ) in the surrounding public areas viz Road, and market areas.

Plogging (Picking of Single Use Plastic) and collection of Plastic waste.

Tree Plantation. d) Celebration ofSwachhata Pakhwada, 2025 from 01st Dec 2025 to 15th Dec 2025. In accordance with the Ministry's guidelines promulgated, various outreach activities

01 Dec 2025 to 15 Dec '2025 at MDL.

5.13 Particulars of Employees and Related Disclosures

In accordance with the Ministry of Corporate Affairs notification no. GSR 463(E) dated 05 June 2015,

Company being a Government Company is exempt from the applicability of Section Act, 2013 including the requirement relating to disclosureof

Report.

5.14 Copy of Annual Return

134(3) Pursuant to Section 92(3) read with Section

(a) of the Companies Act, 2013, Annual Returns of the Company are available on the Company's website and is available at the weblink https://mazagondock.in/ English/pages/Annual-Return.

The Annual Return for the FY 2025-26 shall be made available on the website of the Company at the same link after filingthe same with the Registrar of

Companies.

5.15 Secretarial Standards

The Company has complied with the applicable

Secretarial Standards issued by the Institute of

Company Secretaries of India and approved by the

Central Government under Section 118(10) of the

Companies Act, 2013.

5.16 Directors' Responsibility Statement

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Directors hereby confirm that: -a) in the preparation

FY ended on 31 March 2026, the applicable

Accounting Standards have been followed and no weeding ofold material departures have been made therefrom; b) appropriate accounting selected and applied consistently, and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of as at 31 March 2026 and of the profit of the

Company for the year ended on that date; c) proper and sufficient care has in maintenance of adequate accounting accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the

Company and for preventing and detectingfraud and other irregularities; has been conducted d) the annual accounts have been prepared on a going concern basis; e) adequate Internal Financial Controls have been laid down and such controls are operating effectively; and 197 of theCompanies f) proper systems have been devised to ensure compliance with applicable laws and such systems are adequate and operating effectively.

5.17 Statutory Auditors and their Report

Your Company being a Government Company, the Statutory Auditors of the Company are appointed by the Comptroller and Auditor General of India

(C&AG). For the FY 2025-26, M/s. Sarda & Pareek

LLP, Chartered Accountants, were appointed as the Statutory Auditors of the Company. The Report of the Statutory Auditors on the Standalone and Consolidated Financial Statements for FY 2025-26 forms part of the Annual Report.

The report does not contain any qualifications, reservations, or adverse remarks which would otherwise call for any further comments pursuant to Section 134(3)(f) of the Companies Act, 2013.

It may be noted that during the year under review, no incidence of fraud has been reported by the Auditors under section

143(12) of the Companies Act, 2013 read with Rule 13 of the Companies (Audit and Auditors) Amendment Rules, 2015.

5.18 Comments of the Comptroller & Auditor General of India

The "NIL Comments Certificate" of the Comptroller and Auditor General of India pursuant to Section 143(6)(b) of the

Companies Act, 2013 on the Financial Statements of the Company for FY 2025-26 forms part of this Annual Report.

5.19 Secretarial Audit

For the FY 2025-26, M/s. SVJS & Associates, Company Secretaries (Secretarial Auditors) conducted the Secretarial Audit of the Company.

The Secretarial Auditor has not reported any qualification, reservation or adverse remark, except the observations summarized below:

Sl. No.	Secretarial Auditor's Observation	Board's Reply
1.	During certain periods of FY 2025-26, the composition of the Board	Being a Government Company,
	was not in compliance with the requirements relating to the number	appointment of Directors, including
	of Independent Directors, Non-Executive Directors and Independent	Independent Directors, is made by the
	Woman Director under the Companies Act, 2013 and the SEBI	President of India acting through the
	(Listing . Regulations,2015 Obligations andDisclosureRequirements) Ministry of Defence (MoD). Accordingly,
	The intermittent vacancy of the Independent Woman Director was	the delay in fillingthe vacancies was
	also not filled within the prescribed timeline.	beyond the control of the Company. The
2.	Vacancies in the office ofIndependentDirectorswerenotfilledwithin	Company has already taken up this issue
under Regulation17(1E) of the SEBI (Listing the timelines	with the Ministry of Defence, and the
Regulations, 2015.	Obligations and	Government is seized of the

The detailed observations of the Secretarial Auditor are contained in the Secretarial Audit Report inForm MR-3, which forms part of this Report and is annexed as Appendix ‘F'.

5.20 Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 and the applicable rules, the Company has maintained cost records as prescribed by the Central Government.

For the FY 2025-26, M/s. Dhananjay V Joshi & Associates, Cost Accountants was appointed as Cost Auditors for conducting Cost Audit of the Company under Section 148 of the Companies Act, 2013. The Cost Audit Report for preceding FY 2024-25 was filed with the Ministry of Corporate Affairs within the prescribed timelines

5.21 Adequacy of Internal Financial Controls with Reference to the Financial Statements a) The Company has established adequate Internal financialcontrols commensurate with the size, scale and complexity of its operations. b) The internal control framework is designed to ensure:

orderly and efficient conduct of business;

• safeguarding of assets;

prevention and detection of fraud and errors; accuracy and completeness of accountingrecords; and formation. in timelypreparationofreliablefinancial

c) The system of Internal Control comprises well defined organization structures, pre-identified authority level and procedure issued by management covering all vital and important areas of activities which includes Purchase, Inventory consumption, Fixed Assets, Cash

& Bank management and Treasury, Payroll, Statutory Compliance, Personnel & all other activities involved in process. d) The Company has an Internal Audit Department, which monitors compliances of Company's procedures, and policies with well-defined annual audit programme and significant audit observations are reported to the of Board of Directors. The Internal Audit function is headed by AGM/ HOD (Internal Audit) who is reporting directly to the Chairman & Managing

Director. e) The Board is of the opinion that the Company has adequate Internal Financial Controls with reference to the financial statements and that such controls were operating effectively during the year.

6. AWARDS, RECOGNITIONS AND OFFICIAL LANGUAGE

6.1 Awards and Recognitions:

The Company continued to receive recognition national and international forums during FY 2025-

26 for excellence in quality management, corporate social responsibility, human resource management, information technology, financial performance and official language implementation, These recognitions reflect the Company's continued commitment towards operational excellence, innovation, quality, governance and stakeholder value creation.

The major awards and recognitions received during the year are summarised below: a) Quality Excellence (i) Twenty-nine Quality Circle teams from

MDL presented their case studies at the

Chapter Convention on Quality Concepts (CCQC-2025) organised by the Quality

Circle Forum of India, Mumbai Chapter.

Of the 29 teams that participated, 28 teams received the Gold tives.Award, while one team received the Silver Award, demonstrating MDL's sustained focus on quality improvement and employee-driven innovation.

The Company also secured several special recognitions in categories including:

• Poem Competition

• Essay Competition statement closing

• Slogan Competition

• Best Model Competition

• Best Presentation of the Day

• Best Case Study Award

Audit Committee (ii) National Conventionon Quality Concepts (NCQC-2025)

• Ten Quality Circle teams represented MDL at the 39th National Convention on Quality Concepts (NCQC-2025) held at Greater Noida.

• Of the participating teams:

• Eight teams received the Par Excellence Award

• Two teams received the Excellent Award These achievements underscore the at Company's strong culture of continuous improvement and employee (iii) International Quality Two Quality Circle teams, Rainbow etc. and Prerna, represented MDL at the

International Convention on Quality Control Circles (ICQCC) held at Taipei International Convention Centre, Taiwan.

Both teams demonstrated outstanding performance and secured Gold Awards, bringing international

Company. b) Corporate Social Responsibility Recognition

MDL was conferred with the Best Healthcare

Support Initiative of the Year Award at the Indian

Social Impact Awards 2025 held in New Delhi.

The award recognises the Company's impactful contribution towards healthcare and community welfare through its Corporate Social Responsibility c) Best Enterprise Award in the Navratna Category: MDL received the Best Enterprise Award in the

Navratna Category during the 36th National

Meet of Women in Public Sector (WIPS).

The recognition reflects the Company's commitment towards inclusive growth, employee development and organisational d) InformationTechnology Awards The Company received recognition

Governance Now 10th India PSU IT Forum & Awards 2025 in the following categories:

"Digital TransformationLeader (CIO/CTO) Award" and "Digital Transformation Excellence Award". These awards acknowledge MDL's continued progress in digital transformation and technology-enabled governance. e) Human Resource Excellence MDL received the Governance Now 11th PSU Award for HR Excellence (Overall Category) in recognition of its human resource management practices and employee development f) Official Language Awards The Company's Official

"Jaltarang" received the Second Prize from the

Mumbai Town Official Language Implementation were conducted.

MDL was also awarded the Rajbhasha Samman were Shield for outstanding implementation of Hindi and promotion of Official In addition, the Company received an Appreciation Letter from the Central Translation Bureau for contribution towards promotion of Hindi. g) Financial Excellence Awards

The Company received the following prestigious recognitions for excellence in financial management:

(i) India's Most Influential CFO National

Leadership Awards 2026 by Times Aspire. (ii) Best Overall Financial Performance (Strong Financial Strength) – Governance Now 12th PSU Awards

These recognitions reflect financial management practices.

h) AnnualReport

MDL received the 4th Edition Best Annual Report Award for Heavy Manufacturing, reflecting excellence in corporate reportingand disclosure practices. i) Performance Excellence Award 2025 was presented. during 25th CEOs Conference at Shillong by Indian Institution of Industrial

Engineering at the

6.2 nguage Implementation Activities La Official a) The Company continued its efforts towards effective implementation of the Official Language Policy of the Government of India and promotion of the progressive use of Hindi in official work.

Various awareness programmes, competitions, workshops, training initiatives and incentive schemes were organised during the year to encourage wider use of Hindi across the organisation and strengthen compliance with the Official Language Act, 1963 and the rules framed thereunder. initiatives. b) Hindi Fortnight (Hindi Pakhwada) was organised from 15 September 2025 to 30 September 2025.

During the period, various competitions including Language magazine Hindi Typing, Quiz, Translation, Storytelling, Poetry Recitation,Crossword, Slogan Writing, Idioms and Phrases, and Singing Competitions for Hindi- Separate competitions speaking and non-Hindi-speaking executives initiatives and non-executives to encourage broader participation.

The programme commenced with the ceremonial lighting of the lamp by the Director (Corporate

Planning & Personnel). c) Under the Hindi Teaching Scheme, a total of

34 executives and non-executives successfully qualified in the Praveen, Pragya and Parangat examinations conducted during the November

2025 session.

As part of the Hindi awareness Programmes quiz competition based on the life and works of Munshi Premchand was organised through online mode under the aegis of the Town Official Committ (TOLIC). LanguageImplementation theCompany's robust performance and sound financial Employees actively participated in various programmes and competitions organised by TOLIC and secured awards and recognitions.

d) The Company's Official Language magazine "Jaltarang" continued to serve as an important platform for promoting Hindi literary and creative contributions.

The magazine is published on a half-yearly basis, and contributors are encouraged through awards and honorariums. e) The various awards and recognitions received under this category reflect commitment towards promoting Hindi and ensuring effective implementation of the Language Policy across the organisation.

7. VIGILANCE

7.1 Vigilance Activities

The Vigilance Departmentcontinuedto play a proactive role in promoting transparency, accountability, integrity and ethical conduct across the organisation through preventive vigilance initiatives, awareness programmes, system improvement measures and effective complaint management mechanisms.

The Department remained focused on strengthening organisational processes and fostering a culture of integrity in line with the guidelines issued by the

Central Vigilance Commission (CVC).

7.2 Vigilance Administration

During FY 2025-26, a total of 17 surprise/spot checks were conducted, resulting in one systemic improvement promulgated by the Competent Authority. Four CTE-type intensive examinations were carried out. In addition, 47 complaints were received and processed in accordance with CVC guidelines; investigations led to four systemic improvements, each formalised through official circulars. Scrutiny of nine Audit

Paras was undertaken and 27 training sessions were organised to reinforce awareness of rules, regulations, and internal procedures,executives in with 2,474 attendance.

7.3 Vigilance Awareness Week 2025

Vigilance Awareness Week 2025 was observed from

27 October 2025 to 2 November 2025 under the theme "Vigilance: Our Shared Responsibility".

The observance focused on disposal of pending cases, complaint resolution, capacity building, digital initiatives and asset management. The Company also organised various awareness programmes, training sessions and sensitisation initiatives to promote ethical conduct, transparency and accountability among employees and stakeholders. Capacity building remained a priority, with training and sensitisation programmes conducted for over 1,650 employees spanning executives, security staff, and covered included procurement, preventive vigilance, disciplinary procedures, POSH etc. An additional 6,747 online courses were completed by employees through the iGOT platform.

7.4 Digital Vigilance Initiatives

The Company continued to leverage technology to strengthen transparency, improve monitoring and enhance operational efficiency.

Digital initiatives undertaken during the year included systems relating to:

• SAP-integrated attendance management

• Bid monitoring

• Digital medical records

• Internal audit digitisation

These initiatives contributed towards improved governanceandprocessefficiency.

On the digital front, MDL introduced systems for SAP-integrated attendance, bid monitoring, digital medical records, and internal audit digitisation. confirmed the integrity of fixed and movable assets, with obsolete items disposed of in accordance with prescribed rules.

7.5 Participative Vigilance

The Vigilance Department continued participative vigilance through employee engagement and stakeholder outreach programmes.

Integrity Pledge campaigns, awareness activities, Reports/ competitions and educational outreach initiatives were organised during the year to reinforce ethical values and vigilance awareness.

Awareness sessions were also conducted at four educational institutions, with 508 students participating in various competitions. A total of 2,747 employees, 159 customers reaffirmed their commitment to ethical conduct by taking the Integrity Pledge. Internal engagement initiatives included quiz competitions, essay writing,poster making, drawing from over 500 employees and skit performances by the Mazagon Dock Sports Club. Capacity Building and Awareness: Capacity building remained a key focus area during the year. Training programmes and awareness sessions were organised covering subjects such as: a) Procurement procedures b) Preventive vigilance c) Disciplinary procedures Regulations, d) POSH compliance e) Governance and ethics

The programmes were attended by employees across different categories and contributed towards strengthening awareness of vigilance and compliance requirements.

7.7 Knowledge Sharing and Stakeholder Engagement continued publication The Department vigilance journal "Sucharita", providing a platform for dissemination sharing in the areas of governance, ethics and vigilance administration. erence between the amount of

Vendor and contractor grievance redressal meetings were also organised to strengthen transparency and stakeholder engagement.

Vigilance Awareness messages were disseminated through banners, social media, bulk SMS, and correspondence. Collectively, these efforts reflect

Department's commitment to embedding a culture of integrity across the organisation ecosystem.

7.8 Vigilance Commitment

The Vigilance Department remains fostering a culture of integrity, transparency and accountability across the organisation and will continue to strengthen preventive vigilance measures through awareness, system improvements and stakeholder engagement initiatives.

8. STATUTORY AND REGULATORY DISCLOSURES

8.1 Management Discussion & Analysis Report

As per Regulation

Regulations, the Management Discussion and Analysis

Report is available under Appendix ‘G' to this Report.

8.2 Risk Management

The Company has established a comprehensive Risk

Management Framework for identification, assessment, monitoring and mitigation of risks that may impact achievement of its strategic, operational, financial and compliance objectives. The risk management framework enables proactive identification and management of emerging risks and supports informed decision-making across the organisation.Details of the Company's risk management practices are provided in the Management Discussion and Analysis Report forming part of this Annual Report.

AsperRegulation21oftheSEBIListing the Company has constituted a Risk Management Committee. The Risk Management Committee assists the Board in overseeing the risk management process and ensuring effective implementation of mitigation measures. Details of its terms of reference, Risk Management Policy etc. are set out in the Corporate Governance Report.

8.3 Details of any application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 ofof2016)its during the year along with their status as at the end of the financial year practices and knowledge of best

NIL

8.4 Details of the valuation done at the time of one-timesettlement and the valuation done while taking loans from banks or financialinstitutions, along with the reasons for such differences - Not applicable official 8.5 Compliance with the Maternity Benefit Act, 1961:

Company is fully compliant with the Maternity Benefit the

Act, 1961. and its broader

8.6 Business Responsibility Sustainability Report (BRSR)

Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 2015, the Business Responsibility and

Sustainability Report (BRSR) for FY 2025-26 has beento prepared.

The BRSR reflects the Company's commitment towards responsible business conduct and transparent reporting of environmental, social and governance performance indicators.

BRSR along with reasonable assurance Report of BRSR Core, which is received from Independent

Assurance Provider, M/s. Bureau Veritas (India) Pvt.34(2) (e) of the SEBI Listing

Ltd can be accessed from the Company's website at https://mazagondock.in/English/pages/Business-

Responsibility-and-Sustainability-Report

8.7 Vigil Mechanism / Whistle Blower Policy

The Company has established a Vigil Mechanism and

Whistle Blower Policy to provide employees with an appropriate mechanism for reporting genuine concerns relating to unethical behaviour, actual or suspected fraud, violation of the Company's Code of Conduct or other instances of misconduct, if any.

The mechanism provides adequate safeguards against victimisation of persons who avail the mechanism in good faith and ensures direct access to the Chairperson of the Audit Committee in appropriate cases. No person was denied access to the Audit Committee during the year under review.

8.8 Declaration of Compliance with the Code of Conduct of Board of Directors and Senior Management

Declaration by the Chairman and Managing Director (CMD) regarding affirmation of compliance with the

Code of Conduct of Board of Directors and Senior Management of the Company, for the year ended 31

March 2026 is attached to this Report at Appendix ‘H'.

8.9 CEO & CFO

Pursuant to Regulation 17(8) of SEBI (LODR) Regulations 2015 and the DPE Guidelines, the Compliance the Financial Statements and Internal Controls related to the financialreporting to this Report at Appendix ‘I'.

9. ACKNOWLEDGMENT:

The Board places on record its sincere appreciation for the continued support and guidance received from the Government of India, Ministry of Defence, Indian Navy, Department of Public Enterprises, Comptroller and Auditor General of India, statutory and regulatory authorities, shareholders, customers, bankers, suppliers, business associates and all other stakeholders.

The Board also expresses its gratitude to employees at all levels for their dedication,commitment and contribution success.

The Directors look forward to the continuedsupport of all stakeholders as the Company pursues its strategic objectives and reliance and global leadership in the maritimeand defence sectors.

	For and on behalf of the Board
	Sd/-
	for the FY 2025-26 isattached Capt. Jagmohan (Retd.)
	Chairman & Managing Director
	DIN: 08630668
Place: Mumbai
Date: 30 July 2026