Terms, Rights, Preferences and Restrictions attaching to each class of shares:

The Company has only one class of equity shares having par value of 7 5 each and is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company in proportion to the number of equity shares held.

Sub-division & other Information

Note 1. On 27^th December, 2024, the company sub-divided every 1 (one) Equity Share of the face value of 7 10/- each into 2 (Two) Equity Share of the Face value of 7 5/- each as approved by share holders on 28^th November, 2024 by Postal Ballot. The record date for the share split was December 27, 2024.

Note 2. During the Q3 of FY 2024-25, as result of splitting of share of the company, every 1 (one) Equity Share of the face value of 7 10/- each sub divided into 2 (Two) Equity Share of the Face value of 7 5/- each.

Offer for Sale by Promoters: The Govt of India (being Promoter of MDL) approved and initiated on 03.04.2025 an Offer for Sale (OFS), Promoter has sold 1,45,63,465 Equity Shares representing 3.61% of the equity share capital of the Company. The OFS pertains to a sale of existing equity shares held by the promoters and does not involve issuance of new shares or any proceeds to the company.

Movement of each item in Other Equity is detailed in Statement of Changes in Equity The description of the nature and purpose of reserve within equity is as follows:

Capital reserve: The capital reserve was created till 1974 on the realized profit on sale of fixed asset.

Capital redemption reserve: These reserves are created out of redemption of 7% redeemable cumulative preference shares and buyback of equity shares.

Other Comprehensive Income: These reserves are created on account of actuarial valuation of defined employee benefit plan.

Indigenisation Fund: These fund was created as per Indigenisation policy for providing support for future indigenisation. No provision has been made since FY 2020-21.

Final Dividend: The Board has recommended the final dividend for FY 2025-26 of 7 18,636.16 lakhs (i.e. 7 4.62 per share). This proposed dividend is subject to the approval of shareholders in ensuing Annual General Meeting.

35 Business Segment Reporting

a) The Company is engaged in the production of defence equipment and was exempted from ‘Segment Reporting’ vide notification S.O. 802(E) dtd. 23rd February, 2018 by amending notification no G.S.R. 463(E) dated 5th June, 2015. In view of the above, no disclosure is made separately by the Company on operating segments under Ind AS 108.

b) For management purposes, the Company is organized into two major segments - Shipbuilding and Submarine (New Construction and Repairs) and others.

c) There are no geographical segments within the business segments.

37.1 Letters seeking confirmation of balances in the accounts of sundry creditors were sent to vendors. But confirmation letters from all vendors are not received. On the basis of replies received from certain vendors, adjustments wherever necessary have been made in the accounts. Consequent adjustments thereof, if any, will be given effect to in the books of account in the year of completion of the reconciliation process.

37.2 Balances due to / from Indian Navy (Debtors) included in current assets / current liabilities/advances are subject to reconciliation and confirmation. Consequent adjustments thereof,if any, will be given effect to in the books of account in the year of completion of the reconciliation process.

38 Normal Operating Cycle

The classification of current and non-current balances of assets and liabilities are made in accordance with the normal operating cycle defined as follows -

The Normal Operating Cycle in respect of different business activities is defined as under-

a) In case of Ship / Submarine Building and Ship / Submarine repair and refit activities, normal operating cycle is considered as the time period from the effective date of the Contract / Letter of Intent (LOI) to the date of expiry of guarantee period.

b) In case of other business activities, normal operating cycle will be the time period from the effective date of the contract/order to the date of expiry of guarantee period.

Gratuity liability is a defined benefit obligation as at end of each financial year and is provided for basis an actuarial valuation using projected unit credit method made at the end of each financial year. The Gratuity Fund is invested in a Group Gratuity-Cum-Life Assurance cash accumulation policy by an insurer. The investment return earned on the policy comprises interest declared by an insurer having regard to its investment earnings. It is known that insurer’s overall portfolio of assets is well diversified and as such, the long term return on the policy is expected to be higher than the rate of return on Central Government Bonds. Historically too, the returns declared by an insurer on such policies have been higher than Government Bond yields.

39.2 Actuarial valuation of liability towards GratuityDefined Benefit Plans Gratuity - as per actuarial valuation

The Ind AS-19 Employee Benefits stipulates that the rate used to discount post-employment benefit obligation (both funded & non-funded) shall be determined by reference to market yields at the end of reporting period on Government Bonds. The currency and term of the Government Bonds shall be consistent with the currency and estimated term of the post-employment benefit obligation.

39.4 Actuarial valuation of liability towards Provident FundDefined Benefit Plan Provident Fund as per actuarial valuation

In accordance with Indian law, all eligible employees of the Company in India are entitled to receive benefits under the Provident Fund plan in which both the employee and employer (at a determined rate) contribute monthly to a Trust set up by the Company to manage the investments and distribute the amounts entitled to employees. This plan is a defined benefit plan as the Company is obligated to provide its members a rate of return which should, at the minimum, meet the interest rate declared by Government administered provident fund. The contributions made by Company and the shortfall of interest, if any are recognised as an expense in the statement of profit and loss under employee benefit expenses. In accordance with an actuarial valuation of provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions as mentioned below, there is no deficiency in the Guaranteed interest cost as the present value of the expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of Government administered provident fund.

43 Russian (USSR) deferred State Credit

An intergovernmental agreement between Russian Federation and Government of India was reached for reconstructing of Russian Deferred State Credit in Rouble in connection with procurement of equipment for certain ships built and delivered by the Company to India Navy in earlier years. The deferred payment liability (non-interest bearing) of 4 16,320 Lakhs, payable over 45 years from 1992-93, in equal annual installments of P 214 Lakhs was converted from Rouble to units of Special Drawings Rights (SDR) and stated in Rupees. The amount payable within a year of 4 538 Lakhs (Previous year - 4 490 Lakhs). The balance loan amount has been reinstated at the present rate of SDR as on 31st March 2026. These payments are reimbursable by Indian Navy. Accordingly, 4 5,916 Lakhs (amortised costs of 4 2413 Lakhs) held at foreign supplier deferred credit as on 31.03.2026

44 Pursuant to notification S.O. 2437(E) dated 4th September, 2015, following information on the exemption granted under section 129 of the Companies Act, 2013 has not been disclosed in the financial statements.

i) Goods purchased under broad heads

ii) Value of import on CIF basis

iii) Expenditure on foreign currency

iv) Total value of imported raw material

v) Earning in foreign currency

Valuation technique used to determine fair value

Specific valuation technique used to value financial instruments include:

The fair value of the remaining financial instruments is determined using discounted cash flow analysis.

Fair Value Hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are

(a) recognised and measured at fair value

(b) measured at amortised cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of input used in determining fair value, the company has classified the financial instruments in three levels prescribed under the Ind AS.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

49 Financial risk management

a) Credit Risk

Credit Risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities ( primarily trade receivables) including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

i) Trade Receivables and contract asset

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally carrying no credit terms. Outstanding customer receivables are regularly monitored. Trade receivables are primarily from Navy (being department of Govt. of India), hence the credit risk is considered low. Further the Company receives advance against orders which also mitigates the credit risk.

ii) Financial Instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Management in accordance with the company’s investment policy. Investment of surplus funds are made only in accordance with the Department of Public Enterprises(DPE) guidelines on investemtnt of surplus funds, with the approved banks and within credit limits assigned to each bank. The limits applicable to single bank and public / private sectors as per the DPE guidelines minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to repay the principal and interest.

b) Liquidity Risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the underlying business, the Company maintains sufficient cash and liquid investments available to meet its obligation.

The Company’s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements, if any.

The Company considers supplier finance arrangements as part of its trade payables and manages the same within its overall liquidity risk management framework.

As at 31 March 2026, the Company does not expect any additional liquidity risk arising from such arrangements.

c) Market Risk

i) Foreign currency risk and sensitivity

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.

The Company is exposed to foreign currency risk since it imports components from foriegn vendors. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency (T). In most of the Contracts, the gains / losses from forex exchange fluctuations are passed on / borne by the customer of the Company. Therefore, the foreign exchange risk and sensitivity of the Company is Nil.

ii) Foreign Currency Risk Exposure

The company’s exposure to foreign currency risk at the end of the reporting period expressed in INR (foreign currency amount multiplied by closing rate), are as follows:

50 Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objectives of the Company’s capital management are to

- maximise the shareholder value while providing stable capital structure that facilitate considered risk taking and pursuit of business growth

- safeguard the company’s ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders

- maintain an optimal capital structure to reduce the cost of capital.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and business opportunities. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

52 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

56 National Institute For R&D in Defence Ship Building (NIRDESH) was established on 20th November, 2010 as a society with objective of conducting research in defence ship building and related areas. Currently, the members of NIRDESH include four PSU shipbuilding companies (MDL, GRSE, GSL & HSL) and co-opted members of Indian Navy, Coast Guard and DRDO. The society is headed by CMD, MDL and Director (Shipbuilding) MDL is designated as Director (NIRDESH). The total capital contribution paid by MDL is 7 1,781.71 Lakhs and 2,097.79 Lakhs is contribution payable to NIRDESH as on 31-03-2026, which is reflected under head Trade Payable. The total amount of 7 3,879.51 Lakhs has already been charged to expenditure in earlier years. During FY 2024-25 NIRDESH has initiated three (3) research & development projects by inviting proposal and placing purchase orders on startup firms. The expected date of completion is October-2026.

57 As of March 31, 2025, the books of accounts reflects liquidated damages of 7 94,005 Lakhs for Project P17A out of which 7 52,085 Lakhs were towards 2nd and 3rd ship, in anticipation of delay of five months each. However, the second ship was delivered on 1st July, 2025 with actual delay of three months and one day and third ship was delivered on 28th November, 2025 with actual delay of one month and 28 days, both after considering a grace period of one month. Consequently, excess liquidated damages of 7 26,247 Lakhs have been reversed and adjusted in revenue. As on 31st March, 2026 LD of Project P17A stood at 7 67,758 Lakhs

58 The Company has incurred an expenditure of 7 10,060 lakhs during FY 2025-26 (Previous year 7 3,572 Lakhs), in accordance with the approval granted by the Board at its meeting held on 26.07.2023, towards the development of concept and design for tendering/acquiring of a future contract. Since the contract has not yet been finalised, no revenue has been recognised during the year and the entire amount has been charged to Statement of Profit & Loss.

59 The project cost as estimated on 31.03.2026 for certain ongoing projects is likely to exceed the contractual revenue from these contracts, therefore difference between Estimated project cost and Contractual revenue needs to be provided as expected loss on onerous contracts. The expected loss arising from such contracts is required to be recognized in the current financial statements. The total estimated loss is proportionately adjusted through revenue, based on Percentage completion Method as on 31st March, 2026 and the balance loss, is recognised by creating a provision for expected loss on onerous contracts. The total estimated loss is 7 1,17,972 Lakhs, of which 7 12,013 Lakhs is adjusted through revenue, and provision is made for balance loss of 7 1,05,959 Lakhs.

60 In certain cases/yards, project related inventory has remained non-moving for several years following project completion. Consequently till March 31, 2025, a provision of 2 9045.67 lakhs was created for inventory pertaining to completed projects/yards to ensure accurate valuation. During the FY 2025-26, a technical committte was formed to evaluate inventory obsolescence of Inventory. Following the committee recomendations, the existing inventory provision has been fully reversed as of year end FY 2025-26.

61 Pursuant to the contract amendment of P75 project, additional revenue amounting to 7 12,328 Lakhs have been recognised during the period.

62 The Government of India has enacted four Labour Codes consolidating existing labour laws. The Ministry of Labour & Employment published draft Central Rules and FAQs to enable assessment of the financial impact due to changes in regulations. The Company has considered and assessed the impact of the changes, consistent with the Labour Codes, draft rules, FAQs. Considering the non-recurring nature of this impact, the Company has presented such incremental impact under “employees benefit expenses” in the statement of profit and loss for the year ended March 31, 2026. The Company continues to monitor the finalisation of Central / State Rules and clarifications from the Government on other aspects of the Labour Code and would provide appropriate accounting effect on the basis of such developments as needed.

63 A In the preparation of these Ind AS Financial Statements, figures for the previous year have been regrouped / reclassified,

wherever considered necessary to conform to current year presentation.

63 B Use of Funds:

The company has used funds for the purpose for which they were borrowed from banks and financial institutions during the year.

63 C Change due to revaluation:

During the year company has not revalued its Property Plant and Equipment (PPE) and intangible assets.

63 D Other additional regulatory disclosures as required under Schedule Ill

i) Valuation by registered valuer:

During the year the company has not revalued its property, plant and equipment or intangible assets.

ii) Loans and advances

The company has not granted any loans and advances in the nature of loans to promoters, directors, Key Managerial Personnel (KMPs) and the related parties, repayable on demand or granted without specifying terms.

iii) Benami Property:

No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1986 (45 of 1988) and the rules made there under.

iv) Wilful Defaulter:

The company has not been declared as wilful defaulter by any bank or financial institution or any other lander during the year.

v) Registration of Charges or satisfaction with Register of Companies (ROC):

There are no charges or satisfaction of charges pending for registration with the Registrar of Companies (ROC) beyond the statutory period.

vi) Comptiance wIth number of Layer of Companies:

The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules 2017.

vii) Scheme of arrangement:

During the year there is no Scheme of Anrrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 for the company

viii) Undisglosed income:

During the year the company has not disclosed any income in terms of any transaction not recorded in the books of accounts that has been surrendered or disclosed as income in the tax assessment under the Income Tax Act 1961.

ix) Virtual Currency:

The Company has not traded or invested in Crypto currently or Virtual Currency during the financial year.