Note No. - 5

Deferred Tax Assets (net)

5.1 Reconciliation of tax expenses and the accounting profit multiplied by domestic tax rate:

Since the Company has incurred loss during the year ended March 31, 2026 and previous year, no tax is payable for these years as per provisions of Income Tax Act, 1961, the calculation of effective tax rate is not relevant and hence not given.

5.2 The Company has not recognised net deferred tax assets as Company is not certain that sufficient future taxable income will be available against which deferred tax assets can be realised considering its present order book and anticipated orders and opportunities in the defence sector as evidences.

11.1 Charge is created on the current assets as under:

All current assets of the Company, including inventory, receivables, and cash balances, are secured by a second pari-passu charge in favor of the lenders, subject to the first charge of working capital lenders. The Company is required to route operational cash flows through the designated Trust and Retention Account and comply with all reporting and insurance requirements as stipulated in the sanction letter.

11.2 Contract Assets represents the Company’s right to consideration for work performed under shipbuilding contracts where revenue has been recognised over time in accordance with Ind AS 115, but the right to invoice the customer is conditional upon achieving specified contractual milestones or other conditions. The amount will be classified to trade receivable when the Company’s right to consideration becomes unconditional.

12.3 Terms and Rights attached to Equity Shares:

The Company has only one class of Equity Share having par value of INR 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation of the Company, the equity share holders will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amount. The distribution will be in proportionate to the number of equity shares held by the shareholders.

Nature and Purpose of Reserves :

Capital Reserve:

a) This Reserve was created at the time of forfeiture of amounts received against convertible share warrants in the financial year 2011 - 12. It shall be utilised in accordance with the provisions of the Companies Act, 2013 (the Act), therefore not available for distribution of dividend.

b) Further increase in capital reserve during the financial year 2022-23 is on account of extinguishment of value of equity capital based on the resolution plan apporved Hon’ble NCLT Ahemdabad bench. (Number of shares extinguished 734,909,113 of INR 10 each amounting to INR 73,490.91 lakhs)

14.1 As per approved resolution plan of the Company, as on 31 March 2025, an amount of INR. 1,14,400 Lakh was payable to secured financial creditors beyond 31 March 2026. The same is fully paid off during the year.

14.2 The Company has availed a Rupee Term Loan facility of INR. 1,02,017.27 Lakhs (Previous Year: INR. Nil) from NaBFID, secured by a first pari-passu charge on immovable and movable fixed assets, intangible assets. The loan is also secured by second pari passu charge on trade receivables, inventories, book debts and other current assets of the Company, both present and future, subject to the rights of working capital lenders in accordance with the financing documents. The loan carries an interest rate linked to the 1-year NaBFID Lending Rate plus a spread of 1.25%, with a door-to door tenor of 10.75 years and structured quarterly repayments with moratorium of nine months. The facility is further secured by corporate guarantees and is subject to various financial and non financial covenants.

14.3 During the period the company has taken interest free unsecured loan from Hazel Infra Limited of INR 61,096.20 lakhs.

Defined Benefit Plan

The Employees Gratuity Fund Scheme, which is a defined benefit plan, is managed by a trust maintained with Life Insurance Corporation of India (LIC). The Company has made contribution to the above mentioned trust upto the financial year ended March 31, 2009 and thereafter no contributions have been made. The Employees Leave Encashment Scheme which is a defined benefit plan is unfunded.

The present value of the obligation is determined based on actuarial valuation using Projected Units Credit Method, which recognizes each period of service as giving rise to additional units of employees benefit entitlement and measures each unit separately to buildup the final obligation.

The estimates of rate of increase in salary are considered in actuarial valuation, taking into account, inflation, seniority, promotion, attrition and other relevant factors including supply and demand in the employment market. The above information is certified by Actuary.

In the absence of detailed information regarding plan assets which is funded with Life Insurance Corporation of India, the composition of each major category of plan assets, the percentage and amount for each category of the fair value of plan assets has not been disclosed.

The above sensitivity analysis is based on an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. In presenting the above sensitivity analysis, the present value of defined obligation has been calculated using the projected unit credit method at the end of reporting period, which is the same as that applied in calculating the defined obligation liability recognized in the Balance Sheet.

vii) Risk Exposure :

1 Investment Risk: The Present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of reporting period on Government bonds.

2 Interest Risk: A decrease in the bond interest rate will increase the plan liability: however, this will be partially offset by an increase in the return on the plan debt investment.

3 Liquidity Risk: The present value of the defined plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

4 Salary Risk: The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

viii) Details of Asset-Liability Matching Strategy: Gratuity benefits liabilities of the Company are funded. There are no minimum funding requirements for a Gratuity benefits plan in India and there is no compulsion on the part of the Company to fully or partially pre-fund the liabilities under the Plan. The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it may not be possible to explicitly follow an asset-liability matching strategy to manage risk actively in a conventional fund.

b) Leave Encashment (Unfunded)

During the FY 2020-21, The Company changed its leave policy wherein accumulation of leave is restricted and encashment of leave facility was withdrawn.

Consequently as there is no liability towards the leave encashment acturial valuation has not been carried out.

Note : Above details are captured from the Actuarial report. The Company had certain gratuity liability Pre-CIRP and also making certain provision for the Post-CIRP basis the calculation done by HR department of the company.

As per the actuarial valuation report there is net assets position. However, Company had continued the gratuity liability on conservative basis. Accordingly outstanding liability towards gratuity and leave encashment in note no. 15 will not match with above disclosure.

Note No.-28 Exceptional item

The company has recognized the Right-of-Use (ROU) asset related to the security deposit in the previous financial year retrospectively from F.Y. 2022-23 (being the year in which the effect of the approved Resolution Plan was given in the books of accounts of the Company). As a result, the impact of INR 222.64 lakhs has been reported in exceptional item in the financial statement of FY 2024-25.

Note No.-31

The Company has issued a Bond cum legal undertaking for INR 10,000 lakhs (Previous Year: INR 10,000 lakhs) in favour of President of India acting through Development Commissioner of Kandla Special Economic Zone for setting up a SEZ unit for availing exemption from payment of duties, taxes or cess or drawback and concession etc. a General Bond in favour of the President of India for a sum of INR 15,300 lakhs (Previous Year : INR 15,300 lakhs) as Security for compliance of applicable provisions of the Customs Act, 1962 and the Excise Act, 1944 for EOU unit, a bond cum legal undertaking for INR 1,350 lakhs (Previous Year: INR 1,350 lakhs) in favour of President of India acting through D.R.I. Ahmedabad, Zonal Unit as security of compliance under Central Excise Act, 1944.

Note No.-32 Going Concern

The financial statement for the period and year ended March 31, 2026 have been prepared on going concern assumptions by the Board of Directors of the Company.

Note No.-33 Leases

The Company has entered into a non-cancellable leasing agreements for Land and Infrastructure Facilities for a period between 5 to 60 years which are renewable by mutual consent on mutually agreeable terms. There is an escalation clause in the lease agreement during the lease period in line with expected general inflation. There are no restrictions imposed by lease arrangements and there are no sub-leases. There are no contingent rents. Disclosures as required under Ind AS 116 on “Lease” are given below:

Note No.-34 Segment Reporting

The Company is engaged only in the business of Ship-building and repairs. As such, there are no separate reportable segments.

Segment information as per Ind AS 108 on Operating Segment :

Information provided in respect of revenue items for the year ended March 31, 2026, and in respect of assets/ liabilities as at March 31, 2026.

I The risk - return profile of the Company’s business is determined predominantly by the nature of its products. The Company is engaged in the business of Shipbuilding, Repair and Fabrication. Further based on the organisational structure, internal management reporting system, nature of production process and infrastructure facilities used, there are no separate reportable segments.

II Revenue from Major Customers :

Revenue from operations includes INR 16,672 lakhs (Previous Year: 692.48) from Two customers (Previous Year: Four) having more than 10% of the total revenue.

1 The Company Secretary of the Company, Mr. Vishant Shetty, has tendered his resignation, effective June 22, 2025. The position of Company Secretary has been subsequently filled by the appointment of Ms. Priti P. Dave, effective December 17, 2025.

2 E Complex Private Limited (“ECPL”), an erstwhile wholly-owned subsidiary of the Company is admitted for Corporate Insolvency Resolution Process (CIRP) with NCLT Ahmedabad since December 9, 2020. The CIRP process was completed as per the NCLT order dated December 4, 2023 which was set-aside, but the same is challenged and now pending for final hearing before the Supreme court of India. Company has already impaired this investment.

Although the Company continues to hold 100% of the equity share capital of ECPL, the management has assessed that the Company does not have control over ECPL in accordance with Ind AS 110. Hence ECPL has not been considered a related party for the purposes of disclosures under Ind AS 24.

b) Terms and Conditions of transactions with related parties

The transactions with related parties are at arm’s length price and in the ordinary course of business. Outstanding balances at the year-end are unsecured and interest have been accounted on market rate except the advances, which is merely reimbursement of expenses. This assessment is undertaken at each financial year through examining the financial position of the related party and the market in which the related party operates.

Note No.-36 Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The funding requirement is met through a mixture of equity, internal accruals, long term borrowings and short term borrowings. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

Note No.-37

Ind AS 115 - Revenue from Contracts with Customers Disclosure:

The Company derives revenue primarily from shipbuilding and related engineering contracts. Revenue is recognised over time as the performance obligations are satisfied, based on the measure of progress towards complete satisfaction of the performace obligaitons.

Note No.-38

Other Statutory Information

(a) The Company has not revalued its Property, Plant and Equipment (including Right-of-Use Assets) and intangible assets during the year.

(b) The Company has not given any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment granted to promoters, directors, KMPs and related parties.

(c) The Company has not used borrowings for purpose other than specified purpose of the borrowing. Further, there is no delay in creation of charges with ROC beyond the statutory period.

(d) The Company does not have any Benami Property. Further, there are no proceedings initiated or are pending against the Company for holding any Benami Property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

(e) The Company did not have any transactions with any struck-off companies during the year.

(f) The Company has not traded or invested in Crypto currency or Virtual Currency during the current financial year.

(g) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(h) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(i) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(j) The Company has been declared as a wilful defaulter by any bank or financial institution or government or any government authority.

(k) 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.

(l) The Board at its meeting held on November 22, 2024, has considered and approved the Scheme of Arrangement and Amalgamation between Triumph Offshore Private Limited (“the Transferor Company” or “TOPL”) and Swan Defence and Heavy Industries Limited [Formerly known as Reliance Naval and Engineering Limited] (“the Transferee Company” or “SDHI”) and their respective shareholders and creditors under Sections 230 to 232 read with Section 66 and Section 52 and other applicable provisions of the Companies Act, 2013 and Rules & Regulations made thereunder (“The Act”), which inter alia provides for the following:

1. Reduction and re-organisation of the capital of the Transferee Company.

2. Amalgamation of the Transferor Company with the Transferee Company and in consideration thereof, SDHI will issue 1325 (One Thousand Three Hundred and Twenty Five) 8% Non-Convertible Redeemable Preference Shares having face value of INR 10/- (Rupees Ten) each credited as fully paid-up to be issued

to the equity shareholders of TOPL for every 1000 (One Thousand) Equity Shares of INR 10/- (Rupee Ten) each fully paid-up, held by such shareholders in TOPL.

As on 31^st March, 2026, the Company had received the requisite approvals from the Stock Exchanges for proceeding with the filing of the Petition before the Hon’ble National Company Law Tribunal, Ahmedabad Bench (“NCLT”). Pursuant thereto, the Company filed the Petition with the Hon’ble NCLT on 27^th March, 2026.

Subsequent to the date of the financial statements, the following developments have taken place in the matter:

The Order of the Hon’ble NCLT was received on 13^th April, 2026 and updated order was received on 16^th April, 2026.

Pursuant to the said Order, the NCLT-convened Extraordinary General Meeting (“EGM”) of the shareholders of the Company was duly held on 25^th May, 2026, and the requisite shareholders’ approval has been obtained.

(m) All the charges of the Company as appearing on the MCA portal are in the process of being satisfied / modified to give effect of the approved resolution plan as entered into with the financial creditors.

Note No.-39

Financial Instruments - Evaluation of risks Accounting classification and fair values

A Carrying Value as on reporting date & Fair Value hierarchy:

The following table shows carrying amount and fair values of financial assets and financial liabilities, including their levels in fair value hierarchy. It does not include fair value information of financial assets and liabilities not measured at fair value if the carrying amount is reasonable approximation of fair value.

With respect to disclosure of fair value of financial instruments such as cash and cash equivalents, other bank balances, trade receivables and other receivables, other current financial assets, borrowings and other current financial liabilities at March 31, 2026 and March 31, 2025 are similiar to carrying value because their carrying amounts are a reasonable approximation of the fair values due to their short term nature.

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework, which is reviewed by them periodically.

a Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers, loans and investment in debt securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.

ii Cash and Cash Equivalents

The Company held cash and bank balance with credit worthy banks of INR 28,885.76 Lakhs at March 31, 2026 (March 31, 2025: INR 2917.98 Lakhs). The credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks where credit risk is largely perceived to be extremely insignificant.

b Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Management monitors rolling forecasts of the Company’s liquidity position on the basis of expected cash flows. The Company manages its liquidity risk by preparing monthly cash flow projections to monitor liquidity requirements. In addition, the Company projects cash flows and considering the level of liquid assets necessary to meet these, monitoring the Balance Sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

C Market Risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices and will affect the Company’s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. The Company is exposed to market risk primarily related to interest rate risk and the market value of the investments.

i Currency Risk

The Company is exposed to currency risk on account of its trade and other payables in foreign currency. The functional currency of the Company is Indian Rupee. Currency risk is not material, as the Company does not have any exposure in foreign currency.

ii Interest Rate Risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk

The Company’s exposure to interest rate risk primarily arises from its borrowings carrying floating interest rate, which are linked to benchmark rate prescribed by the respective lender.

iii Price Risk

Price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. It arises from financial assets such as investments in quoted instruments and units of mutual funds.

a Fair value sensitivity analysis for fixed rate Instruments

The Company does not account for any fixed rate financial assets or financial liabilities at fair value through Profit or Loss. Therefore, a change in interest rates at the reporting date would not affect Profit or Loss.

b Cash flow sensitivity analysis for variable rate Instruments

The Company is exposed to cash flow interest rate risk primarily in relation to its floating-rate borrowings, which are linked to the NaBFID Lending Rate. Assuming all other variables remain constant, a 100 basis points increase or decrease in the applicable interest rate would result in an increase or decrease, respectively, in the Company’s annual finance costs and profit before tax by approximately INR 1,014.41 Lakhs, based on the floating-rate borrowings outstanding as at the reporting date. The analysis assumes that the outstanding borrowings and all other variables remain unchanged throughout the period.

Note No.-41 Other

Previous year figures have been regrouped and rearranged, wherever necessary to make them comparable with those of the current year.

Net amount of INR 4,211.91 lakhs was payable to various overseas parties. The amount to be paid as per approved resolution plan against these amount is NIL. Hence the same is written back in the FY 2022-23 and the Company is in process of doing necessary compliance with RBI and FEMA.