Your Board of Directors is delighted to present the Annual Report on the performance of your
Company and its Audited Financial Statements for the Financial Year ended 31^st March 2026,
along with the Reports of the Statutory Auditors and the Comptroller & Auditor General of
India (C&AG) thereon.

FINANCIAL PERFORMANCE

The financial performance of your Company has been exceptional
during the financial year 2025-26. During the year, the Company
has registered a growth in Revenue from Operation by 38%, by
registering '7,002.16 crore against '5,075.69 crore in the previous
year. Furthermore, EBIDTA and PAT also experienced robust growth,
increasing by 41% and 42%, respectively, highlighting our strong
operational performance and profitability.

The financial highlights for the financial year 2025-26 and 2024-25
are as follows:

The financial position of your Company as on 31 March 2026 and 31
March 2025 is appended below:

(' in crore)

Value of Production

Your company has achieved a record Value of Production ('VoP') of
'6,994.81 crore as against '5,070.98 crore during the previous year.
The comparative VoP for the three Divisions of the Company are as
follows:

(' in crore)

Net Worth

Your Company reported a Net worth of '2,626.12 crore as on 31
March 2026 against '2,079.26 crore as reported on 31 March 2025.

Value Addition

The Value added during the financial year under review was '2,992.13
crore as against '1,479.75 crore during the previous year. The Value
added per employee rose to '187.59 lakh compared to '87.56 lakh in
the previous year.

Appropriations

Based on the financial performance of your Company in the year 2025¬
26, the Board of Directors are pleased to recommend the following
appropriations from the disposable surplus:

(' in crore)

Contribution to the Exchequer

During the financial year 2025-26, your Company contributed '110.89
crore to the National Exchequer by way of Income Tax and GST.

Dividend Distribution Policy

Pursuant to Regulation 43A of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations,
2015 ("SEBI Listing Regulations"), the Board of Directors of the
Company have formulated a Dividend Distribution Policy keeping in
view the provisions of SEBI Listing Regulations, the Companies Act,
2013 and Guidelines issued by the Department of Public Enterprises

(DPE) and the Department of Investment and Public Asset Management
(DIPAM). The Policy is available on the Company's website athttps://
grse.in/wp-content/uploads/2022/04/GRSE-Dividend-Distribution-
Policy.pdf.

Dividend

Pursuant to the approval of the Board of Directors on 04 Nov 2025,
your Company has paid an interim dividend of '5.75/- per equity share
of face value of '10/- each to Shareholders who were on the Register
of Members as on 11 Nov 2025, being the record date fixed for this
purpose. Further, pursuant to the approval of the Board of Directors
on 28 Jan 2026, your Company has paid an 2^nd interim dividend of
'7.15/- per equity share of face value of '10/- each to Shareholders
who were on the Register of Members as on 03 Feb 2026, being the
record date fixed for the payment of 2^nd Interim Dividend. Thereafter,
the Board, at its meeting held on 28 Apr 2026 has recommended final
dividend of '6.70/- per equity share of face value of '10/- each for
the financial year 2025-26. Thus, the total dividend for the financial
year 2025-26, if approved by the Shareholders, would be '19.60/- per
equity share.

MOU Rating

Your Company has been rated "Excellent" with a score of 94.35 out
of 100 as per MoU Evaluation for FY 2024-25 by the Department of
Public Enterprises. Further, on the basis of actual achievements vis-a¬
vis parameters laid down in the MoU signed with the Government of
India, your Company is expected to be rated "Excellent" again for its
performance during the FY 2025-26.

A. SHIPBUILDING

The total shipbuilding income achieved by the Company during 2025¬
26 is ' 6,490.61 crore, as against '4,757.03 crore in 2024-25. Notably,
during the FY 2025-26 the Company delivered 08 Nos. frontline/
strategic Ships to the Indian Navy and of which during the year 05
ships are already commissioned by the Indian Navy.

The shipyard also completed following important milestones during
the year:

(a)    Ship Launches - One (Naval Warship)

(b)    Keel Laying - Nine (Two Naval Warships and 7 Non-defence
platforms)

(c)    Plate Cutting - Eleven non-Defence vessels

The company currently is executing 11 projects consisting of 39
platforms.

During the year, your company signed an export contract with the M/s
Carsten Rehder Schiffsmakler and Reederei GmbH & Co. KG Germany
for Design, development, construction and delivery of 04 Nos. Multi¬
Purpose Vessel CORAL 7500 on 19 Sep 2025 for a total contract
value 62.44 million USD. These hybrid Vessels with Green Initiatives &
Attributes will advance the idea of "Make in India, Make for World' to
a new level, marking a key milestone in its global outreach and export
capabilities.

The Company has also signed the Contract for Construction of two
Coastal Research Vessels (CRVs) for the Geological Survey of India
(GSI) on 11 Jun 2025.

B.    SHIP REPAIR

The ship repair business has witnessed multi-fold increase in the
revenue over the past four years, and this performance growth is the
result of the company aggressively pursuing high value tenders of
offloaded refits of Indian Navy, Coast Guard and other commercial
vessels. In addition to Indian vessels, the Company also won export
orders for refit of 01 ship each from Mauritius Coast Guard (MCGS
Barracuda) and Seychelles Coast Guard (PS Zoroaster) for a value of
'123.07 crore and '29.05 crore respectively.

During the year 2025-26 the revenue from Ship Repair activities surged
to '272.93 crore from ' 113.82 crore in the year 2024-25, reflecting
exponential growth and operational efficiency.

Significant refits completed in the recent past include two Naval
ships, an Indian Coast Guard Advanced OPV, Seychelles Coast Guard
vessel SCGS Zoroaster and a few commercial vessels. Presently major
ongoing work include refits of Mauritius Coast Guard OPV MCGS
Barracuda, MV Indira Point of DGLL, Govt. of India and construction
of 02 Pontoons in the west coast for Indian Coast Guard.

C.    ENGINEERING DIVISION

The Value of Production (VoP) achieved by the Engineering Division
during the financial year 2025-26 amounted to '216.56 crore in
comparison to '149.79 crore during financial year 2024-25.

Portable Steel Bridge Unit

During 2025-26, the Bailey Bridge unit has achieved a Value of
Production (VoP) of '202.07 crore. This included the production of
110 bridges totalling 11,254 MT, compared to 102 bridges totalling
7,715 MT in the preceding year.

The Company has also exported 30 sets of Bridges to Nepal, Sri Lanka
and Bhutan amounting to '27.20 crore (11 sets of Bridges under
Ministry of External Affairs to Sri Lanka and Nepal, 16 Sets of Bridges
to Ministry of Infrastructures and Transport, Bhutan and 03 Sets of
Bridges to Private Agencies in Nepal & Bhutan) during 2025-26.

Your Company has delivered successfully 20 sets of Double Lane MSBs
to BRO under the MOU with DGBR (BRO). The Company has also
been successful in delivering 07 sets of Double Lane Bridges to PWD
Nagaland and 08 bridges to NHIDCL (Ministry of Road Transport and
Highways under MoUs). All these bridges hold utmost importance for
restoration and developmental works in the far-flung hilly regions of
the country.

During the year, your Company achieved a major milestone through
delivery of 05 sets of Bailey bridges for Northern Command (Indian
Army) and 07 sets of various spans of Bailey Bridges to PWD
Uttarakhand in a short span to restore immediate and critical geo¬
connectivity in the flood affected regions of Uttarakhand.

Under R&D initiatives, your Company has completed the supply of 60
Meters Steel Through Type Permanent Bridge for the 1^st time at Sikkim
and Arunachal Pradesh. Design of these bridges was carried out in
collaboration with BERD, Portugal.

Also, assembly and load testing /trials of the 400 feet Foot Suspension
Bridge were completed successfully at Belur works/GRSE.

Deck Machinery Unit

Your Company is the only DPSU shipyard which has a dedicated division
for design, development & manufacturing of Deck Machinery. The
Deck Machinery Unit of GRSE, an ISO 9001-2015 qualified marine deck
equipment manufacturing unit, has been designing and manufacturing
a range of equipment for applications onboard ships over the last over
three decades. These equipment conforms to the stringent marine
operational requirements for certification by Classification Societies
(IRS/ABS/RINA) and Defence Quality Assurance. The Company has
been supplying Deck Machinery to the Indian Navy & Indian Coast
Guard for decades and had maintained a varied portfolio of products
ranging from Aircraft handling equipment to Deck Machinery, from
vessels ranging from FACs to Aircraft Carriers. In the recent past, The
Company has supplied several equipment such as Anchor/ Mooring
Capstans, Windlass, RLHTS, Telescopic Hangers, Boat Davits, Deck
Cranes, Accommodation Ladders etc for P15Bs, DSVs, PCVs, SVLs,
ASWSWCs, P17As and NGOPVs. GRSE has extensively worked on
certain niche Helicopter Handling Equipment such as RLHTS, GSEs &
Telescopic Hangers. This equipment's are performing well on Seagoing
Platforms and the Company also provides pan India support to the
Indian Navy and Coast Guard by way of supply of spares and repair
assistance through partnerships with reputed engineering firms at all
ports in the country.

In the preceding year the Company has added new equipment to its
portfolio, some of which includes:

(a)    Tactical Air Navigation System (TACAN).

(b)    Power Distribution Panels (PDPs)

(c)    Marine Valves (Hull & Line)

(d)    Rail Less Helo Traversing System (RLHTS & Ground Support
Equipment for handling MH60R, SK42C and ALH series
helicopters

(e)    Foldable Hanger Doors.

(f)    New Generation Helo Harnessing and Traversing System

(g)    Knuckle Boom Cranes/ Knuckle Telescopic Boom Cranes

The Unit has also undertaken Factory Acceptance Trials (FATs) for over
forty-five (45) Nos. deck machinery equipment, in addition to Harbour
Acceptance Test (HATs), Sea Acceptance Test (SATs) across various
platforms and locations including Chennai, Vizag, Mumbai, Karwar,
Goa and Kolkata.

Further, during the year, the Unit has supplied over forty (40) Nos.
of different types of major deck machinery equipment for installation
on multiple new construction yards, in addition to meeting ABER and
B&D requirements.

D.    ENGINE DIVISION

The Diesel Engine Plant (DEP) of your Company at Ranchi has
successfully completed the prestigious 1 MW DA Project for Indian
Navy's P-17A Frigates being built by GRSE and MDL.

DEP, Ranchi has also installed, tested and commissioned one (01)
MTU 4000 series engine onboard ICGS C-435 post W6 routines and
successful Factory Acceptance Trials.

GRSE has also set up a dedicated production line for Bailey Bridge
Components at DEP unit at Ranchi, where Bailey Bridge Division of
DEP Unit achieved a VoP of approx. '40.37 crore and production of
2804 MT during the financial year 2025-26. In addition to the above,
the unit has supplied B & D spares worth '10.53 crore during the FY
2025-26.

During the year the DEP Unit has successfully completed Factory
acceptance Trials of 04 nos 500 KW DAs and balance DG sets are
in various stages of assembly and testing. The Unit has also recently
upgraded the Load control system of the old Test Bed for concurrent
trials of two engines.

E.    NSG PROJECT

In line with Govt of India's vision of achieving Self-reliance in defence
manufacturing, Naval Surface Gun (NSG) has been developed by your
Company along with M/s BHSEL, Hyderabad to meet the emerging
requirements of modern naval warfare at best level of effectiveness
and suitable either as main armament for small size vessels or as
secondary armament for larger ship.

With the entered MoU in place with collaborative partners for 15
Years, GRSE is expecting additional orders in the near future for
approximately 33 guns with an estimated order value of '990.00
crore, for Indian Navy's ships planned for induction into the fleet. In
addition, GRSE is also in discussions with the Indian Coast Guard (ICG)
regarding the upgradation of Guns onboard ICG ships to enhance
defence capability. GRSE has also participated in the EOI issued for
the indigenous development of the gun under the Make II route,
reinforcing its commitment to the Govt of India's vision of self-reliance
in defence and expanding its footprint in the naval weapon systems
domain.

EXPORT INITIATIVES

Your Company has taken initiatives to export Naval ships to the
friendly foreign countries and has identified SAARC, ASEAN, African
& Latin American countries as the focus areas. Further, GRSE regularly
supplies Portable Pre-fabricated Steel (Bailey, Bailey Suspension &
Modular) Bridges and its components to the neighbouring countries
such as Nepal, Bhutan, Sri Lanka, Myanmar and Bangladesh. Efforts

are also on to further enhance the export of Bailey Bridges and their
components to other friendly foreign countries as well. Your company
has been nominated by Ministry of Defence (MoD) to focus on Export
Promotion for 11 countries (Bangladesh, Oman, Philippines, Saudi
Arabia, Seychelles, UAE, Malaysia, Vietnam, Morocco, Madagascar &
New Zealand).

During FY 2025-26, your Company has generated revenue (VoP) of
'270.70 crore from export orders which includes '161.47 crore from
Shipbuilding, '86.14 crore from Ship Repair and '23.09 crore from the
Bailey Bridges. The Company has exported/ executing Export Orders
for 07 Countries (Bangladesh, Germany, Mauritius, Nepal, Bhutan,
Sri Lanka & Seychelles) and has generated revenue (VoP) of '270.70
crore from export orders.

The export orders of the Company also include building of one Trailing
Suction Hopper Dredger-TSHD for Bangladesh, eight Multi-Purpose
Vessels - MPV and four Multi-Purpose Vessel (Hybrid) - MPV(H)
for Germany worth of 186 Million USD. The Company had signed
a contract for Short Refit (SR-2) of Seychelles Coast Guard Ship 'PS
Zoroaster' having basic Contract Value '29.05 crore. The same has
been handed over to the Seychelles Coast Guard, Govt. Republic of
Seychelles on 14 May 2026, ahead of its schedule. The Company also
signed contract for Normal Refit of Mauritius Coast Guard Ship 'CGS
Barracuda' having basic Contract Value of '123.07 crore.

The Engineering Division of the Company has signed a Contract for
Supply of 25 Nos. Misc., types & spans of Portable Pre-Fabricated Steel
Bridges to Sri Lanka, Nepal and Bhutan.

ORDER BOOK POSITION

The total order book position of your Company for the three (3)
divisions as on 31 Mar 2026 is as follows:

Further, your company has emerged as the L1 shipyard for the Next
Generation Corvette project. The price negotiation has already been
completed and we are awaiting the formal signing of the contract to
the tune of around '33,000 crore.

NEW INITIATIVES

Towards long-term business growth there is a need to embrace
new technologies, and your company has taken up following major
initiatives through signing of Memorandum of Understanding (MoUs)
during FY 2025-26:

(a)    MoU with Bharat Sanchar Nigam Limited (BSNL) to strengthen
digital connectivity infrastructure.

(b)    Tripartite MoU with Blue Horizon Strategic Engineering Pvt. Ltd.
(BHSEL) and M/s Elbit System Land Ltd., Israel for development
and manufacture of Naval Surface Gun indigenously at India and
series supply to Indian Navy and Indian Coast Guard.

(c)    MoU signed with IIT-KGP (Department of Ocean Engineering &
Naval Architecture) to provide industry exposure and improve
industry academia interaction.

(d)    MoI with M/s Bernd Becker Shipmanagement GmbH & Co. KG,
Germany for construction & supply of vessels by GRSE.

(e)    MoI & SA with M/s Carsten Rehder Schiffsmakler und Reederei
GmbH & Co. KG, Hamburg, Germany for construction and
delivery of CORAL 7500-HYBRID Multi-Purpose Vessels.

(f)    MoI with M/s Arya Shipping BV, Herten, The Netherlands for
construction and delivery of 3,600 TDW Hybrid Propulsion Cargo
Vessels.

(g) MoU with M/s SWAN Defence and Heavy Industries Ltd.
Gujarat for Strengthening indigenous shipbuilding capabilities in
commercial segment.

(h)    MoU with M/s Reintjes GmbH, Germany for collaborative
approach regarding long-term arrangements comprehensively
covering Assembly and Testing of gearboxes at GRSE facility
including lifetime support for Spares and Services for such
gearboxes assembled at GRSE.

(i)    02 separate MoUs with M/s Caterpillar INC, Irving, USA for the
production, sale and service of High Speed and Medium Speed
Engines.

(j)    MoU with Kalyani Strategic Systems Limited (KSSL), Pune to
mutually identify opportunities in defence manufacturing and
collaborate on the same.

(k)    MoU with Hindustan Shipyard Ltd., Visakhapatnam (HSL) for
collaboration in construction of commercial vessels like MR
Tankers (Product Carriers), Very Large Gas Carriers (VLGC) and
to form Consortium for Bid submissions of tenders of SCI and
any other similar future project on mutual agreements.

(l)    MoU with Andhra Pradesh Maritime Board (APMB) to facilitate
and promote investments in the state of Andhra Pradesh on
shipbuilding.

(m)    02 MoUs with Deendayal Port Authority, Gujarat: for Strategic
Alliance through mutual assistance and cooperation in Setting
up Green Field Shipyard and construction of Green Tug in
compliance with the GTTP specifications.

(n)    MoU with Modest Infrastructure Private Limited (MIPL) to set up
and run a green field shipyard at Ratanpar Shipyard, Bhavnagar,
Gujarat.

(o)    MoU with Shipping Corporation of India (SCI) and with Syama
Prasad Mookerjee Port (SMPK) to explore and pursue joint
business opportunities within the domestic markets with focus
on new building projects for commercial ships and building
of GTTP compliant Green Tugs.

(p)    MoU with Indian Port Rail & Ropeway Corporation Limited (IPRCL)
for development, execution, implementation of infrastructure
projects including shipbuilding, ship repair and bridges and allied
civil works.

(q)    MoU with M/s Navsys Marine Technology Pvt. Ltd, Hyderabad,
to create a preferential supply/ demand line for ships being built
by GRSE.

(r)    MoU with M/s Sunstone Maritime Group A/S Copenhagen
Denmark to leverage respective expertise, infrastructure and
technological capabilities to explore opportunities for joint
construction of vessel.

(s)    MoU with M/s Kongsberg Maritime AS, Norway for construction
and delivery of Polar Research Vessel similar to the vessel Sir
David Attenborough.

(t)    MoU with M/s Serco Inc., USA for joint development of the
SWATH Research Vessel based if contract of such vessel is
awarded to GRSE.

(u)    MoU with M/s Tardid Technologies Pvt. Ltd. Bengaluru for joint
development of ASV MCM project, manufacture of multipurpose
autonomous vessels and Allied AI requirements in Ship Building.

(v)    MoU with M/s Aries marine LLC, Dubai, UAE to explore potential
export opportunities especially in Commercial Offshore Vessel
segment as part of GRSE's initiative towards global market
expansion.

(w)    Tripartite MoU with Indian Coast Guard Station Vadinar and
Garrison Engineer (I) (CG&P), MES, Porbandar for Design,
Construction & Provisioning of Steel Pontoon (55 Mtrs) for FPV
type of Ship at CG Jetty, Vadinar.

(x)    Tripartite MoU with Commander, DHQ-15 OKHA, ICGS and
Garrison Engineer (I) (CG&P), Porbandar for Design, Construction
& Provisioning of 01 Pontoon at CG Jetty, Okha.

(y)    MoU with M/s Centum Electronics Limited, Bangalore for
collaborative framework regarding formation of a business
partnership aimed at the joint research and development (R&D)
of Tactical / Air Navigation System (TACAN) for Indian Navy /
Indian Warships / DPSU/PSU/ Private Shipyards.

(z)    MoU with M/s Berg Propulsion Production AB, Sweden to
leverage capabilities and technical know-how for various
propulsion equipment and system.

RESEARCH & DEVELOPMENT

Your Company has continued to strengthen its position as a leading
indigenous defence and shipbuilding organization, making significant
strides in advanced maritime technologies, autonomous systems, and
green vessel development. The Company's R&D efforts remained
aligned with the national vision of Atma Nirbhar Bharat and Maritime
India Vision 2030. The R&D initiatives of the Company demonstrate
commitment to innovation across multiple domains such as Green
shipping and sustainable technologies, Autonomous surface and
underwater systems, Advanced defence platforms and Integrated
unmanned ecosystems, focusing on advancing indigenous capabilities,
fostering strategic collaborations, and delivering cutting-edge maritime
solutions for both defence and commercial sectors. During the year
the Company has spent Rs 37.53 crore on R&D related activities. The
initiatives to indigenously develop latest technology in collaboration
with industry partners have been summarised as follows:-

(a)    Green Energy Technology - Hybrid Electric Feeries

Green/ renewable energy usage is a major focus area globally.
Building upon the successful prototype development and delivery
of the electric ferry 'Dheu' to the Government of West Bengal,
GRSE leveraged its in-house design expertise and R&D capabilities
to secure a major order for 13 hybrid electric ferries (7 vessels of
100 passenger capacity and 6 vessels of 200 passenger capacity).
During the year the design phase for all vessels was substantially
completed, incorporating advanced hybrid propulsion systems
optimized through R&D and model testing. The project reflects
GRSE's capability to translate research into scalable commercial
solutions. These ferries are expected to significantly reduce
emissions and operational costs, supporting national goals for
green shipping and inland waterways modernization.

(b)    Autonomous Vessels

Autonomous systems are set to revolutionize the maritime sector.
With extensive expertise in designing and building complex
platforms, GRSE is actively collaborating with start-ups and
innovators to develop cutting-edge autonomous technologies.

(c)    Advancement in Unmanned Surface Vessels (USVs)

GRSE continued to expand its footprint in autonomous maritime
systems through the development and demonstration of the
Swadheen Unmanned Surface Vessel (USV). A major milestone
was achieved with the successful sea trials and demonstration
of Swadheen USV to one of our major customers and this
demonstration showcased critical capabilities including
Autonomous navigation, Waypoint tracking, Station-keeping
and Operational reliability in real sea conditions

(d)    Autonomous Underwater Vehicle (AUV) - Neerakshi

The Neerakshi AUV, developed through collaborative R&D
efforts, was successfully demonstrated at CME Pune on 28 July
2025. Notably, Demonstration validated the AUV's operational
capabilities in controlled environments and that the system
is designed for applications such as underwater surveillance,
inspection, and reconnaissance.

This milestone represents progress toward indigenous
underwater autonomy, a critical domain for both defence and
scientific applications.

(e)    ASV-MCM Project (Make-2) - Autonomous Mine
Countermeasure Vessel

GRSE is actively engaged in the Autonomous Surface Vessel for
Mine Countermeasure (ASV-MCM) project under the Make-2
category, in collaboration with Bharat Electronics Limited (BEL).
In which GRSE is responsible for the Complete vessel design and
construction, Design and development of Launch and Recovery
Systems (LARS) for MCM payloads. During the year Significant
progress was made in vessel design and engineering and
Development of complex LARS systems advanced in parallel with
vessel construction planning.

This project is a major step toward indigenization of mine
countermeasure capabilities, reducing dependency on imports
and enhancing naval operational readiness.

(f)    Extra Large Autonomous Underwater Vehicle (XLAUV) -
Make-1 Project

During the year the Company made notable progress in the
XLAUV Make-1 project. This initiative underscores GRSE's entry
into high-end underwater autonomous systems, aligned with
global naval technological trends.

(g)    Development of Unmanned Aerial Systems

GRSE has also expanded its R&D efforts into Unmanned Aerial
Drones (UAVs) for maritime applications under which Ground
trials have been successfully completed, validating system
performance and control. Next phase for this involves ship-based
trials, including Launch from a moving vessel and Recovery and
landing on a moving platform.

This capability is critical for enhancing maritime surveillance,
reconnaissance, and situational awareness, especially in naval
operations.

(h)    Energy Harvesting from Tidal and River Currents using
Pontoon-Integrated Custom Turbine Technology:

The Pontoon-Integrated Custom Turbine Technology is a cutting-
edge renewable energy solution designed to harness the kinetic
energy of tidal and river currents. The system consists of a
floating pontoon structure integrated with a custom turbine that
captures the energy of moving water to generate electricity. The
pontoon, anchored securely to the riverbed, floats on the water's
surface, allowing the turbine to operate efficiently with minimal
disruption to the surrounding environment. This technology
is specifically designed for easy deployment, scalability, and
adaptability to varying water flow conditions, making it an ideal
fit for shipyard operations that are located near coastal or riverine
areas.

In the context of shipyard operations, this technology offers a
consistent, renewable power source, which can supplement the
energy-intensive processes involved in shipbuilding.

MAKE IN INDIA INITIATIVES

As part of Make in India initiatives of Ministry of Defence through
indigenisation efforts, GRSE has made commendable progress by
successfully incorporating a high percentage of indigenous content
into the ships. In-house design capability, Innovations in technology
and strategic partnerships have propelled achieving over 90%
Indigenous Equipment Fit for Anti-Submarine Shallow Watercraft
(ASW-SWC), 87% for Survey Vessel Large (SVL), and 80% for P17A
Frigates. Some of the initiatives are enumerated as under:

(a)    Positive Indigenisation Lists (PILs): In continuous pursuit of
self-reliant India and to provide opportunity to the domestic
industry DDP/MoD has notified Five (05) PILs for DPSUs for
which there would be an embargo on the import beyond the
timeline indicated against them. GRSE has total 41 items in 5 PILs
promulgated by MoD/ DDP and out of which 34 items have been
indigenised so far.

(b)    Indigenisation Portal (SRIJAN Defence Portal): To promote
indigenisation initiatives of DPSUs & Services and encourage
private entity, SRIJAN Defence Portal was launched by MoD
on 14 Aug 20. As on date, GRSE has uploaded 56 items in the
portal (including 41 PIL items & 15 Non PIL Items), which were
earlier imported or indigenous vendors not available, have been

displayed on the portal. So far, GRSE has successfully indigenised
44 items (34 PIL & 10 Non PIL items).

(c)    Implementation of Make-II: As per directive of the DDP/
MoD and as approved by the Board of GRSE, a "Framework for
implementation of 'Make-II' procedure at GRSE" was adopted in
the GRSE's Procurement Manual on 09 Jul 2019 (Industry funded
prototype development). As on date, GRSE has 7 items identified
under Make-II initiatives and out of them 4 items have been
successfully indigenised. As per directive of DDP/MoD, granular
level plan with tentative timelines for ongoing project submitted
on 18 Mar 25.

(d)    IPR related progress at GRSE: To maintain national sovereignty
and achieve military superiority framework, the "Mission
Raksha Gyan Shakti" (MRGS) was instituted in 2018 by the
Ministry of Defence. This impetus from Ministry has become
key driver, stimulating innovation as well as ingenuity in the
GRSE ecosystem. GRSE has filed 218 IPRs (214 IPRs post MRGS
launching) out of which 117 IPRs are granted (20 Patents, 77
copyrights & 20 Trademarks) as on date. GRSE has trained 1614
personnel including own employees as well as private vendor on
IPR awareness till date.

Some of the key items indigenised under DDP/MoD PIL for the period

from 01 Apr 2025 to 31 Mar 2026 are enumerated below:

(a)    30mm Naval Surface Gun (NSG): GRSE with its Manufacturing
Partner M/s BHSEL have gained significant maturity in the
technical processes, and quality-control protocols of the gun
system. Reliability and operational confidence in the system have
increased substantially. This is evidenced by the fact that Pre¬
Delivery Inspection (PDI), Joint Receipt Inspection (JRI), Setting-
To-Work (STW), installation, and trials of three ships were carried
out entirely by Indian entities without any foreign involvement.
The period was also utilised for in-house defect identification,
rectification, and onboard assembly activities, thereby adding
substantially to our knowledge base for providing comprehensive
warranty and post-warranty support.

(b)    60 M Steel Through Type Bridge with Steel Deck:

GRSE has successfully developed Steel through type bridge
having span length 60 mtr, designed as Open Web Through truss
with steel decking of chequered plate and having a carriage way
width of 7.5 metres and a footway along of 1.5 mtr width. The
bridge is designed to meet 70R / Double Class-A vehicle Loading
as per Indian Road Congress (IRC-6) Indian Standard

(c)    Non-Slip Epoxy Surface for Modular Steel Bridge Decking
System: GRSE has developed non-slip epoxy surface on modular
steel bridge through iDEX DISC 10 route to provides a heavy-
performance anti-skid wearing surface and provides a highly
solid traction on top of the chequered plate of steel decks. This
solution can be applied on top of galvanised / painted chequered
plate decks for modular bridges, either before dispatch or in-situ.

(d)    Autonomous Underwater Vehicle: GRSE has developed
Neerakshi AUV - an indigenously developed Autonomous
Underwater Vehicle (AUV) designed for underwater surveillance
and mine countermeasure applications. The vehicle features
modular payload capability, advanced sonar systems, and
autonomous navigation. It has been successfully tested in
diverse environments, including high altitude lakes and extended
endurance trials.

(e) Active Tank Roll Stabilization System: Active anti-roll tank
stabilization system is a most advanced concept involving controlled
water movement between two separate or interconnected tanks
fitted in port and stbd side of the ship. Pumps or / and high-
pressure air is used to control water movement between the
tanks. The timing of the flow is synchronised with the roll natural
frequency of the ship to dampen the roll motion of the vessel.
Roll motion sensors, control system to control the flow of water
and anti-roll tanks are major components of the system. Similar
technology is available in market mainly from foreign vendors;
therefore, GRSE has develop indigenous technology through
iDEX DISC 05 route to fulfil this gap in naval design/construction
domain in line with Atmanirbhar Bharat goal.

INNOVATION

GRSE Accelerated Innovation Nurturing Scheme: GRSE launched
the third edition of 'GRSE Accelerated Innovation Nurturing Scheme
(GAINS)', GAINS-2025 by the Hon'ble Defence Secretary, India Shri
Rajesh Kumar Singh on 22 Aug 2025. The Open Challenge received an
overwhelming response with 101 proposals received from innovators
across the country. Of them 13 promising proposals (from 11
Innovators) were selected at Stage - I for detailed evaluation. The 13
Stage - I winners submitted Detailed Project Report (DPR) for Stage
- II evaluation. The Stage - II evaluation carried out and 03 Proposals
(from 02 Innovators) were declared as the winners of GAINS 2025
on 07 May 2026. All the 03 winning proposals will be awarded with
formal 'Development Contract', that will be fully funded by GRSE.

Summary of AI Projects successfully undertaken through GAINS
in FY 25-26:

(a)    AI Based SOTR & Tender Generation: This project has
successfully generated TNC compliance matrix, Bill of Materials
(BOM) and SOTRs from RFP/Tender documents using AI tools.
AI algorithms has automated the extraction and synthesis of
technical requirements, reducing the time taken to draft new
SOTRs, BOMs & TNC compliance matrix by up to 80%. By
utilizing AI-based text analysis and standardization, the solution
has minimized errors in technical specifications, leading to
higher-quality documentation. In future this will reduce the need
for revisions and ensure consistency in design documents such as
SOTR, TNC compliance matrix and BOM documents.

(b)    AI Based Master Data Governance for Project Material:

Material master data in GRSE is currently maintained in the
SAP ECC ERP system as 12-18-digit codes. The process to
create new material codes from material description in the ship
build specification document/BOM is done by Central Design
Office using a set of voluminous codification rules and records
maintained as offline Microsoft Word documents. This leads
to errors and is also time consuming to search through and
maintain manual records. These rules need to be rationalized
based on industry-standard master data management rules to
reduce the possibility of duplicate material codes and thereby
eliminating duplicate inventory.The deployable version has
undergone quality tests & necessary improvements. Currently, all
new material codes are being generated using this AI tool.

(c)    IDEX Projects of GRSE: GRSE is actively working with various
start-ups selected through iDEX route and has developed the
following products / solutions:

• Design of Active Roll Stabilization (System for Naval Ship
(DISC -05)

•    AI Enabled Welding Helmet (DISC-06)

•    Implementation of Industry 4.0 without Wi-Fi Connectivity
(DISC-09)

•    Heavy Duty Non-Slip Epoxy Wearing Surface for Modular
Steel Bridge (DISC-10)

(d)    DRISHTI: Under the aegis of the Department of Defence
Production (DDP), MoD, the DPSU-Driven Research & Innovation
for Strategic and High-Impact Technology Integration (DRISHTI)
Challenges, featuring 101 problem statements from various
DPSUs, were formally launched by the Hon'ble Raksha Mantri
during the National Defence Industrial Conclave (NDIC) held on
19 and 20 March 2026 in New Delhi. In this context, GRSE has
identified 07 problem statements under the DRISTHI framework,
focusing on design-led innovations

(e)    Implementation of Industry 4.0 & QA 4.0: GRSE has
embarked on a journey towards the adoption of Industry 4.0
(Shipyard 4.0) with the objective of transforming its operational
ecosystem, enhancing productivity, and improving quality
standards. Considering the complex and sensitive nature of
shipbuilding operations, along with the IT security and compliance
requirements, GRSE has adopted a phased and structured
approach for implementation rather than a full-scale, yard-wide
deployment. GRSE continues to introduce new initiatives in this
domain, and implementation remains an ongoing process with
continuous evaluation and improvement.

(f)    GRSE'S approach is aligned with the vision of the Department
of Defence Production (DDP), Ministry of Defence (MoD),
Government of India, for modernization and digital
transformation of Defence Public Sector Undertakings (DPSUs)
under I 4.0 & QA 4.0 initiative. Following projects completed for
the year 2025-2026.

i)    Online Bill Processing System (OBPS)

ii)    Online Vendor Registration Portal (OVRP)

iii)    Robotic Welding in shipbuilding fabrication

iv)    Robotic Painting of Outer Hull

v)    Development of software for AI Enabled Material Code
Generation

vi)    Tab based Online Inspection Monitoring System (OMS)

vii)    Version 2 of AI Enabled Automatic Weld Defect Identification
System (i-weld)

viii)    Extended application of Phased Array Ultrasonic Testing

ix)    Integration / Assembly of 1 MW Diesel Alternator -P17A

x)    Testing / IFAT of 1 MW Diesel Alternator -P17A

INFRASTRUCTURE AND TECHNOLOGICAL MODERNIZATION

In continuation of thrust on infrastructure modernisation &
technological upgradation in line with the functional & production
necessities, the Company has spent a total of '77 crore as a part of
CAPEX investment during the year 2025-26 Some of the major facilities
created/modernised during FY 2025-26 and currently in progress are
as under:

(a) Dehumidifier room at RBD: Construction of 864 m²
Dehumidifier Room RBD was completed in April 2025.

(b)    Rooftop Solar Plant: As a part of green energy initiative, 250
kWp roof top solar power plant has been commissioned in this
year at DEP- Ranchi Unit. With this, the total capacity of rooftop
solar plant of the Company is now 3050 kWp,

(c)    Tower Cranes: To facilitate outfitting work of ships, total 03
Nos. Tower Crane each of capacity 10 Ton has been successfully
commissioned at Dolphin Jetty, Main Work and Ganga & Hooghly
Jetty at RBD.

(d)    Ship launching pad for Commercial Ship at RBD Uni:

Construction of ship launching area of approx. area 10216 Sqm
for commercial ship building at RBD unit has been completed.

(e)    Concrete Hardstand at RBD Unit: Creation of approx.12000
Sqm concrete hardstand at RBD for block fabrication and other
production activity has been completed.

(f)    EOT Cranes: To increase the production capacity at 61 P, 4 Nos.
10T EOT cranes has been successfully commissioned at 61P.

(g)    Asbestos Free GRSE: All the asbestos sheds of Kolkata based
Units of GRSE have been replaced with metal Sheets and GRSE is
now a asbestos free company.

(h)    Development of Timber Pond site, Shalimar, Howrah: GRSE
has signed a 30-year lease with SMPK for an existing shipyard
at Shalimar, Howrah. Phase-1 & Phase-2 development of Timber
Pond Site at Shalimar, Howrah is under progress.

(i)    Rejuvenation of Slipway-2, RBD: Revamping of slipway-2 at
RBD unit is in progress.

(j)    Creation of Brownfield Shipyard at Raichak: GRSE is in the
process of signing a lease agreement with SMPK for a 32-acre
plot of land for construction of a brownfield shipyard. Consultant
has been engaged for preparation of DPR.

(k)    Revamping of Jetties at MW & RBD: Consultant has been
engaged for preparation of DPR and detail design & drawing.

FUTURE OUTLOOK

A strong order book for design and construction of Warships for Indian
Navy along with non- defence platforms at this juncture holds exciting
times ahead for GRSE. With all the policy initiatives taken by the
Government of India in the recent times for encouraging & supporting
'Atmanirbharta', the overall scenario for warship building looks quite
positive in coming years. The defence shipbuilding segment continues
to look promising on account of ambitious acquisition plan of the
Indian Navy and Indian Coast Guard which is quite encouraging for
the Indian Shipbuilders and the entire eco-system. As per information
from public domain, based on fleet expansion goals of Indian Navy and
Indian Coast Guard targeting over 150-200 ships, the potential market
for new build construction for defence is pegged upwards of Rs 1.5
lakh Crores over the next decade. A number of Request for Proposals
(RFPs) for various shipbuilding projects have been floated by the MoD
during last one year and some more are expected to come out in
the near future. GRSE also plans to enter in to the highly competitive
commercial shipbuilding segment in order to address domestic as
well as global demands for ships. The Ministry of Ports, Shipping and
Waterways has forecasted an aggregated demand of over 400 vessels
worth an estimated Rs 2.2 lakh Crore, as part of the 2047 MAKV
strategy to ensure maritime trade of Indian goods by Indian built and
Indian flagged vessels. Your company has identified Ocean going
Ferry (Cargo + Passenger), Multi-purpose Vessels, Tugs, Dredger,
Barges, and E-Ferry as targeted non-defence products to promote
Export Market in Friendly Foreign Countries (FFCs). The shipyard has
made significant breakthrough in commercial shipbuilding by securing
export orders for construction of 01 advanced Dredger for Bangladesh
as well as 12 Multipurpose Vessels for Germany.

It is a good opportunity for the company to become part of
global value chain to meet our vision of becoming global player in
Shipbuilding. Our willingness to adopt latest technologies and modern
tools in various areas of operations would play a significant role in
improving efficiency, quality and productivity of the Company. The
Company has taken steps to adopt Industry 4.0 practices in its core
areas of functioning.

GRSE has strengthened its green energy footprint with inauguration
of a 250 kWp Rooftop Solar Power Plant at DEP Ranchi Unit on Feb
20, 2026. The total capacity of Rooftop Solar Power Plant at GRSE is
3050 KWp. With this the total capacity of rooftop solar plants at GRSE
is now 2800 kWp which is 76.25% of agreement load of 4MW. GRSE
is committed to use of renewable energy with continual enhancement
of the solar power plant capacity as part of its Green initiatives.

GRSE delivered India's largest "Fully Electric 150 Passenger Catamaran
Ferry - DHEU" to Government of West Bengal on 09 Jan 25. This Zero-
Emission Electric Passenger Catamaran Ferry revolutionised passenger
transport across River Hooghly as well as National Waterways - 1.
Consequently, your company received Orders for supply of 07 Nos. 100
PAX and 06 Nos. 200 PAX Hybrid Ferries from Water Transport Dept.
Govt. of West Bengal during FY 2024-25. During FY 2024-25, GRSE
received Order for supply of 01 No. Acoustic Research Ship (ARS) for
Naval Physical and Oceanographic Laboratory (NPOL), DRDO, Kochi,
Kerala and 01 No. Ocean Research Vessel (ORV) for National Centre
for Polar & Ocean Research (NCPOR), Ministry of Earth & Science, Gol,
02 Nos. Coastal Research Vessel (CRV) for Geological Survey of India
(GSI), 08 Nos. 7500 DWT 'Multi-Purpose Vessel - MPV' for M/s Carsten
Rehder Schiffsmakler and Reederei GmBH & Co. KG, Germany in FY
2024-25 and again 04 Nos. 7500 DWT 'Multi-Purpose Vessel (Hybrid)
- MPV(H)' for M/s Carsten Rehder Schiffsmakler and Reederei GmBH
& Co. KG, Germany in FY 2025-26 and 01 No. 58.70 M long 'Trailing
Suction Hopper Dredger - TSHD' for BIWTA, Bangladesh. GRSE is
also working on several projects incorporating new technologies such
as Unmanned Surface Vessel, Autonomous Underwater Vessel, Ship
based drones, Green platforms etc.

Your Company's major future plans for steady business growth and
stability are as follows:

(a)    To become a Global player by increasing export footprint by
looking at the entire operations from the view point of cost,
delivery time, quality & credibility. In this regard, GRSE is actively
pursuing all avenues to increase geo-strategic reach for exports of
defence as well as commercial ships to friendly foreign countries.
The current export orders, as a result of aggressive marketing
strategy in the last few years has now allowed GRSE to gain a
foothold in the export market, especially in Europe.

(b)    Continuous endeavour towards assessment of tentative & likely
opportunities from the Indian Navy, Indian Coast Guard, Indian
Army, BRO, Ministry of Home Affairs, Ministry of Earth Sciences,
National Centre for Polar and Ocean Research, Naval Physical and
Oceanographic Laboratory, Inland Waterways Authority of India,
Shipping Corporation of India, Kochi Water Metro, Government
of West Bengal and other State Governments over the next five
Years.

(c)    Your Company also senses a huge opportunity in the GoI's drive
to increase the share of Indian built and Indian flagged ships that
will carry out our maritime trade. Newbuild projects catering for
more than 100 ships, feeding Oil, fertiliser and steel industries
are expected in the near future. GRSE has prepared itself through
ramping up of design and construction resources to capitalise on
this demand.

(d)    To meet the growing demands of the defence and commercial
shipbuilding sectors, GRSE has envisioned the establishment of
state-of-the-art greenfield shipyards, on the west and east coasts
in next 3-5 years to enhance in-house capacity. This expansion
is necessary to overcome the inherent limitations of its current
riverine shipyard. GRSE is concurrently exploring potential
options on East and west coast, in addition to acquiring parcels

of land in West Bengal, with higher tidal depths availability. GRSE
is also in the process of augmentation of infrastructure at its
current premises at Kolkata to upgrade its capacity of concurrent
construction from 28 to 32 ships.

(e)    Your Company believes that innovation in the production
processes coupled with enhanced efficiency and optimum
utilisation of resources is the key to reduce production costs.
The Company intends to leverage its design, engineering and
manufacturing capabilities to improve its procurement and
production processes.

(f)    Your Company has also planned to further strengthen and expand
the refit & repair business verticals and is actively targeting orders
from the Indian Navy, Indian Coast Guard, Ministry of Home
Affairs, Govt. of West Bengal, Odisha and Tamil Nadu for AMC
& Refits of GRSE built vessels & vessels of other companies.

(g)    Towards diversification, growth of the Engineering and Engine
business segments is also being aggressively pursued. GRSE
continues to expand its footprint in the manufacture of modular
and portable steel bridges, such as Bailey-type and advanced pre¬
fabricated variants, which are crucial for defence, disaster relief,
and remote connectivity. This includes indigenisation efforts
towards Medium Speed engines and shafting/propellers.

(h)    Your Company is steadily building on the successful development
of prototypes of Autonomous Vessels, as also widening our
footprint in green vessels, especially ferries and tugs. These
verticals are expected to create a niche in these areas and
capture a significant share of the domestic market, as well as
provide export opportunities.

(i)    GRSE has also embarked on a strategic initiative to design,
develop, and manufacture Naval Surface Guns and other
artillery systems to meet the Indian Navy's evolving needs. Going
forward, GRSE expects a steady order book on this front.

VENDOR DEVELOPMENT INITIATIVES
WITH EMPHASIS ON DIVERSITY,
SUSTAINABILITY & INCLUSIVITY

GRSE continues to foster a paradigm where vendors are treated as our
partners rather than independent entities, and our vendor ecosystem
reflects the principles of supply chain resilience and sustainable growth.

The Company's Vendor Development Policy is geared toward
cultivating a robust and diverse supplier base by expanding the vendor
pool within existing verticals and aligning with future business needs.
This approach enhances supply chain efficiency and adds significant
value to productivity. GRSE conducts a series of online and offline
vendor development programs throughout the year to identify and
onboard capable partners.

To enhance ease of doing business, GRSE has developed an Online
Vendor Registration Portal providing accessible remote onboarding for
potential vendors. The portal has seen strong adoption, with hundreds
of applications already submitted and many more in the pipeline. The
streamlined and transparent registration process has significantly
reduced turnaround time.

Quality vendor assessment remains a cornerstone of our development
process. GRSE's internal teams conduct detailed evaluations, including
site visits, to establish reliable partnerships. This effort aims to shorten
lead times, foster innovation, and build capabilities aligned with
GRSE's pursuit of excellence in shipbuilding.

GRSE actively promotes awareness of the mutual value created through vendor partnerships. The company regularly participates in nationwide
industry forums organized by esteemed bodies such as ICC (DMMF), BCCI, MSME-DFO, NSIC-NSSHO and participated several Programs like,
"MSMEs in Defence Production - Awareness Session for MSMEs and Large Industries at Shillong, Meghalaya", "Indian Defence Manufacturing
Conclave-2025 at Jabalpur" ; "SAGAR SANKALP 2026", "National Defence Industries Conclave at Delhi and others across various states.

Initiatives such as a robust vendor grievance redressal mechanism, online bill processing, and vendor performance evaluation contribute to
enhanced transparency, trust, and alignment with global best practices.

In line with Government of India directives, GRSE places special emphasis on onboarding MSMEs, including those led by SC/ST and Women
entrepreneurs. Notably, GRSE has met its targets under the MSME Public Procurement Policy for FY (2025-26), achieving more than 25%
procurement from MSEs and 3% from Women-owned MSEs.

The list of items reserved for procurement from MSEs is available on your Company's website athttps://grse.in/policies-for-msme/.

GRSE is registered on the TReDS platform launched by the Reserve Bank of India, enabling seamless financing and discounting of MSME trade
receivables through multiple financiers.

As a Defence PSU, GRSE is mandated to onboard all new vendors on SRIJAN DEEP Portal and generate URN/PRN, as per the MOD guidelines from
time to time.

GRSE has onboarded at all five (05) Operational TReDS platforms. Platform wise details of the same is as follows:

During the FY 2025-26, the company does not have any amount of bills pending and paid beyond the prescribed timeline under the MSMED Act.
The details are tabulated below:

Achievement w.r.t. 'Timely Payment to MSE Vendors' at GRSE tabulated below:

Details for Compliance Parameters on procurements as required under the DPE OM dated 24 Mar 2026 are as under.

During FY 2025-26:

(a)    Total Procurement of goods or services is '2026.12 crore.

(b)    Procurement of goods or services through MSEs (including SC/ST owned MSEs and Women owned MSEs) is '1401.36 crore, which is
69.165% of total procurement.

(c)    Procurement    of goods or services through SC/ST owned MSEs is '29.32 crore, which is 1.447% of total procurement.

(d)    Procurement    of goods or services through Women owned MSEs is '103.06 crore, which is 5.087% of total procurement.

(e)    The above data is also available at MSME Sambandh Portal.

(f)    During the year the Company has achieved the prescribed targets for MSEs Procurements including MSEs owned by SC/ST entrepreneurs and

MSEs owned    by the woman entrepreneurs with condition as stipulated vide Public Procurement Policy for MSEs Order 2012, "Within this 25%

(Twenty Five Percent) quantity, a purchase preference of four (4) percent is reserved for MSEs owned by Scheduled Caste (SC)/ Scheduled
Tribe (ST) entrepreneurs and three (3) percent is reserved for MSEs owned by women entrepreneur (if they participate in the tender process
and match the L1 price). However, in event of failure of such MSEs to participate in tender process or meet tender requirements and L1 price,
four percent sub-target for procurement earmarked for MSEs owned by SC/ST entrepreneurs and three (3) percent earmarked to women
entrepreneur will be met from other MSEs", the MSE procurement (for SC/ST) by GRSE, is considered achieved.

(g)    Reasons for shortfall in procurement from SC/ST owned MSEs are (i) Not having sufficient number of SC/ST vendors in Eastern India and (ii)
Existing vendor base has very small periphery of deliverables for shipbuilders.

GOVERNMENT e-MARKETPLACE (GeM)

Since inception of the Government e-Market (GeM) (from 2017), Your company has consistently achieved high target procurement volume.
During financial year 2025 -26 the company procured items worth ' 1115.47 crore on GeM against the Administrative Ministry GeM Procurement
target of '1100 crore. During the year the Company Procured goods and services worth '2026.12 crore and procurement through GeM was
been 55.05 % of the total procurement.

INFORMATION TECHNOLOGY

Your company has a robust IT system and all the key business processes such as Supply Chain, Finance, HR, Payroll, Vendor Management, and
Plant Maintenance have been seamlessly integrated into SAP ERP. This includes establishing a state-of-the-art on-premise Data Centre in Kolkata
and a Disaster Recovery Centre in Mumbai. Further, the company employs advanced technologies like AVEVA and CADMATIC CAD, VR LAB, and
PDM-PLM to enhance design operations.

Cyber Security is accorded adequate impetus with a well-defined organizational structure headed by the Chief Information Security Officer
(CISO). The company has implemented secured intranet LAN separated from ILL-based internet LAN across all units, conducted comprehensive
Cyber Security Enhanced Awareness Training, and centralized SAP-ERP management to optimize IT infrastructure efficiency. The entire internet
LAN network of the company has been integrated with 'Central Security Operation Centre (CSOC)' at MoD, Delhi for continuous monitoring
and protection of emerging cyber threats. Additionally, the company facilitates remote work through secure VPN access and high-end Video
Conferencing solutions. The Company also has company-wide comprehensive CCTV surveillance system ensuring effective monitoring, control and
enhancing safety and security measure.

(A) Outbound Teambuilding Programmes

Outbound Teambuilding Workshop for officers in senior management level (Executive Directors, Chief General Managers and General
Managers) was conducted. This workshop was aimed at strengthening the camaraderie amongst the officials for enhanced accomplishment
of organizational goals.

(B) Leadership Development Programmes

•    Directors' Certification in Risk Governance & Leadership was conducted for Senior Management Level Officers. This programme was aimed
to strengthen understanding across emerging risk themes, Board roles, responsibilities, and regulatory expectations, ERM frameworks
Risk culture, ethics, and vigilance mechanisms, ESG and sustainability risks, Financial and compliance risk oversight, Crisis governance and
geopolitical risk etc.

•    Training Programme on Leadership and Good Governance was conducted for officers in Senior Management Level. It aimed to develop key
leadership skills such as emotional intelligence, decision making, communication and conflict resolution skills for effective collaboration.

•    Mid-Career Training Program on "Leading and Managing in the 21st Century" was conducted for officers who were promoted in the rank of
Deputy General Managers and Senior Managers. It aimed to develop and sharpen the managerial and leadership skills of mid-level managers.

Management Development Program for "Women Professionals - Reach Where You Aspire To" was conducted for women officers in Middle
Management Level. The program addressed the unique challenges and opportunities that women encounter in their professional trajectories.
It aimed to help women sharpen their managerial skills, develop new skills and carve leadership path for themselves.

(C)    Advanced Technical Training Programmes

GRSE executives were imparted technical upgradation training conducted by reputed training providers in India on topics like NACE (National
Association of Corrosion Engineers) Coating Inspector Program (Level-1 & 2); Certified Welding Inspector Course, Comprehensive Course on
Maintenance & Troubleshooting of Hydraulic System, Distortion Control in Ship Building, Training on MTU Engine Control System ECU 7M
& MTU4000M90 SERIES ENGINES etc.

(D)    Functional Training Programmes

Workshops on various functional areas like Project & Risk Management Programmes, Supply Chain Management, Public Procurement &
GeM, Contract Management, HR Finance and Vigilance related topics etc. were conducted for in order to develop their knowledge in various
functional domains.

(E)    Safety Trainings

The following trainings on Safety domain were conducted for employees as per MoU directives:

(a)    Safety (Refresher) Training through GST- K in which around 350 employees were trained.

(b)    Sensitization Training on Statutory Safety Regulations in which more than 40 employees were trained.

(F)    Integrated Government Online Training (iGOT) Platform

Integrated Government Online Training (iGOT) Platform is a
comprehensive online portal under Mission Karmayogi to guide
government employees in their capacity building journey. The
employees are advised and encouraged to complete various
courses available in iGOT platform under several domains
viz. Code of Conduct, Office Procedures, Information &
Communication Technology, Governance, Law, Management,
Public Administration, Procurement & Contract Management,
Financial Concepts, Project Management, AI & ML etc. During
FY 2025-26 employees have completed around 2976 course
and completed 2673 Learning Hours in iGOT. By utilizing the
iGOT platform, the company has trained significant number of
employees by faculties of reputed institutes economically without
affecting one's work schedule.

(G)    Apprentice Training

The company has trained 176 apprentices during FY 2025-26.
Apprentices were engaged under Trade Apprentice, Graduate
Apprentice and Technician Apprentice categories and their
total strength was approx. 11.1% of total manpower strength.
The company has a dedicated Apprentice Training Department
named Technical Training Centre for conducting Apprenticeship
training at Taratala Unit. Apart from the technical training,
various development programmes were conducted for overall
personality development of the apprentices. Safety awareness
training sessions were conducted for all apprentices before they
were placed for on-job-training in the yard.

(H)    Marine Skill Training

Marine Skill Training for local unemployed youth was conducted
at Technical Training Centre of GRSE Ltd through M/s Centre
for Excellence in Maritime and Shipbuilding (CEMS). The training
was conducted in 04 trades as Marine Electrical Fitter, Marine
Welder, Marine Structural Fitter and Marine Plumbing & piping
and around 80 trainees completed their training. The training
was consisted of 03 months theory & practical training at
Technical Training Centre and 03 months On-Job-Training at
shipbuilding units. All candidates received their original course
completion certificate (NSDC and CEMS) after completion of
training. All eligible candidates who had attendance more than
75% and successfully completed the training, were given a grant
of '12500/- by the company.

(I)    Annual Health Check-up for Employees

The annual health check-up was organized for the employees
and 1590 personnel were benefited from this initiative.

(J)    Review and Revision of HR Policies

HR policies on talent acquisition, talent management, career
progression and welfare are reviewed time to time in view of
company's requirements, Ministry guidelines and dynamic
industry trends. In the FY 2025-26, Company got its Manpower
Augmentation plan approved from the Administrative Ministry.
New policies on Performance Awards and Higher Studies were
promulgated. Existing policies like TA/DA Rules for Officers and
Supervisors, Accident and Hurt on Duty Policy, Recruitment and
Promotion Rules for officers were revised as per organizational
requirement. A Succession Planning and Leadership Development
Plan was also prepared for developing crucial leadership pipelines
within the organization.

(K)    Persons with Disabilities (PWD)

The Company extended all necessary relaxations /concessions
to the employees with disabilities as per the Statute / Govt.
directives.

(L)    Empowerment of Women

The women representation is 9.5% of the total strength in the
Company at the end of FY 2025-26. During 2025, out of total
recruitment of 110 employees, 09 were female employees which
is 8.2%.

EMPLOYEE ENGAGEMENT INITIATIVES

(A) GRSE Day Celebration

The 67^th GRSE Day was celebrated on 22 April 2026. 'GRSE
Shri' and 'CMD's Commendation' awards were conferred on
employees for their outstanding performance in the year 2025.
Further, GRSE Merit Awards were given to the employees'
children who excelled in academic performance in the year 2024¬
25. During the event, 'GRSE Varta 2026', an annual In-House
Journal and Hindi magazine of GRSE was released. GRSE also
felicitated an ex-employee who had completed 40 years of service
before retirement for his contribution and long association. RBD
unit was adjudged as the cleanest unit and was conferred with
Swachh Unit Award.

(B) Celebration of GRSE Family Day "AHOBAN - 2026"

AHOBAN, the annual event purely curated for family members inside the Company premises, was held on 31 Jan 2026 with the active
participation of 1,300 employees and family members. Filled with various fun activities for children and spouse, the day brings together the
entire GRSE family.

(C) Vanita 2026: International Women's Day

GRSE celebrated International Women's Day with a beautifully curated Day Out programme "Vanita" on 10 March 2026 for all its lady
employees. The event reflected the inclusive and empowering culture of the company and its persistent commitment to make women thrive
at their best.

The programme essentially featured engaging group activities designed to foster meaningful connections and strengthen the workplace
culture of belonging and mutual respect. The celebration also showcased enthralling cultural performances of dance and music by own
employees.

SAFETY AT WORK

The Shipyard has strived to ensure safe working environment at the company, and in order to achieve the goal, systematic approach to safety
management has been adopted through close monitoring and implementation of safety norms and procedures at work place. GRSE achieved a
safety frequency rate of 0.70 (for permanent workers) and 1.05 (for contractor workers) during the year 2025-26.

In order to maintain high safety standard, GRSE have imparted system-based Safety Training to all employees including contractor employees
through Group Safety Training Kiosk (GSTK), where 794 batches (approx.) of Safety Awareness Programme on different topics like Material
Handling, Hot Work, Electrical Safety, Painting Activity, Height Work Activity, Work at Confined Space etc. have been organized at Main, FOJ and
RBD unit.

As a promotional measure, following Safety awareness programmes were conducted as a Part of Celebration Of 55th National Safety Week:

HEALTH AND SAFETY INITIATIVES FOR HUMAN RESOURCES

As required under DPE OM dated 24 Mar 2026, it may be stated that
Health & Safety improvement parameters pertaining to GRSE was
approved by Administrative Ministry (DDP-MoD) on 11 Jul 2025 and
was submitted to DPE by GRSE on 25 Mar 2026 for information. The
target prescribed by the Administrative Ministry and achievement on
Health and Safety initiatives for Human Resources is as under:

(a)    Organizing Health Check-ups for all employees across all units in
Fourth quarter (Unit: % of employee strength, Excellent Target:
Covering 75% of employees on roll)

Achievement as on 31 Mar 2026:

•    Annual Health Check-up conducted during Q4 of FY 2025¬
26.

•    Health Check-up conducted for 1525 employees out of
total strength of 1604

•    95.07% achieved

(b)    Organizing Cancer Screening camps for Women employees along
with Health awareness sessions in Third / Fourth quarter (Unit: %
of women employee's strength, Excellent Target: Covering 75%
of women employees on roll)

Achievement as on 31 Mar 2026:

•    Cancer Screening camps for Women employees conducted
for 69 employees.

•    Total strength of Women Employees: 81

•    85.2% achieved

(c)    Conduct of Safety refreshment (Internal) training. (Unit: No.
of participant employees, Excellent Target: for at least 350
employees across all Units of GRSE)

Achievement as on 31 Mar 2026:

•    Safety refreshment (Internal) training conducted for 362
participant employees.

(d)    Conduct of Statutory Safety Regulations (External / Internal)
training. (Unit: Number of participant employees, Excellent
Target: for at least 40 employees)

Achievement as on 31 Mar 2026:

•    Total 44 number of participants attended the Statutory
Safety Regulations training conducted by External faculty

(e)    Organizing Safety awareness training for Contract employees
engaged through outsourcing agencies. (Unit: Number of
Contract employees engaged, Excellent Target: For at least 2000
Contract employees)

Achievement as on 31 Mar 2026:

•    Safety awareness training conducted for 18834 Contract
employees engaged through outsourcing agencies.

INDUSTRIAL SECURITY

GRSE is a Public Sector Undertaking functioning under the
administrative control of the Ministry of Defence, Govt. of lndia. The
shipyard has been declared a "Prohibited Place" under the Indian
Official Secret Act 1923. Sec-2 clause 8 sub clause (a) published under
Govt. of West Bengal Gazette Notification Bo. 2145/ (I) (7)-P dated
30^th Mar 2004. It is also placed in Category 'A' i.e. "Highly Sensitive"
from security point of view by the IB, Ministry of Home Affairs.

The physical security of the production units of our Company has
been entrusted to the Central Industrial Security Force (CISF). Further,
twenty-four hours water-front patrolling with armed personnel and a
robust CCTV system covering all critical and important locations are in
place. The entry / exit of all employees is being done through Facial
Recognition System. The Police Clearance Certificate of all Contractor
Labourers are being obtained before issue of the Gate Pass.

OFFICIAL LANGUAGE

GRSE is committed to adhere to the Official Language (OL) policy of
the Government of India (GoI). During the year 2025-26, the Company
has achieved the various targets prescribed in the Annual Programme
2025-26 issued by Dept. of OL, Ministry of Home Affairs (MHA), Govt.
of India to transact official work in Hindi. The efforts made towards
implementation of Official Language include:

(a)    Hindi Month Celebrations: Hindi Month and Hindi Day was
observed during September-October month in all the Units and
Offices of the Company. During the Hindi month, employees of
the Company participated enthusiastically in various programs
and competitions.

(b)    Official Language Inspection of GRSE: The Official Language
inspections of GRSE, Kolkata, were conducted and the status of
Official Language implementation at GRSE was appreciated and
described as "Excellent and Commendable".

(c)    Official Language Implementation Committee: Official
Language Implementation Committee (OLIC) meetings were
conducted on quarterly basis under the chairmanship of the
Chairman & Managing Director, to review the progress made by
various departments.

(d)    Hindi Hasya Kavi Sammelan on World Hindi Day: The first
ever Hindi Hasya Kavi Sammelan in GRSE was organized during
the year. Internationally renowned poets from various parts of
the country, including Mr. Rajesh Chetan, Ms. Gauri Mishra, Mr.
Govind Rathi and Mr. Vikas Baukhal, enthralled the audience
with their touching and humorous poems.

(e)    Incentives: Incentive Schemes are propagated among all
employees and number of employees who took part in these
schemes were awarded with cash prize.

(f)    Hindi competition under the aegis of TOLIC: GRSE organized
Hindi Travelogue/memoir writing competition under the aegis
of Town Official Language Implementation Committee in GRSE
Bhavan for the member organizations of TOLIC on 21^st November
2025 in which a large number of Nominated employees from
PSUs participated.

(g)    Rajbhasha Awards:

(i) TOLIC RAJBHASHA SHIELD: Garden Reach Shipbuilders
& Engineers Limited, Kolkata was awarded the prestigious
Rajbhasha Shield - First Prize for the best implementation
of Official Language for the year 2024-25.

(ii)    TOLIC Active Participation Award: Active Participation
Award has been awarded to GRSE for the year 2025-26 by
Town Official Language Implementation Committee.

(iii)    Three awards from Rajbhasha Seva Sansthan, New
Delhi: GRSE was honored with the following 03 prestigious
awards during the All India Official Language Conference
and Skill Enhancement Seminar organized by the Rajbhasha
Seva Sansthan:

(a)    "Rajbhasha Shree Samman" to the Chairman and
Managing Director, GRSE.

(b)    First Prize to GRSE's Hindi magazine "Rajbhasha
Jagriti" in the Best Hindi Magazine category.

(c)    First Prize to GRSE for the best "Official Language
implementation

(iv)    Prizes in Various Inter-PSU Hindi Competitions: Our

GRSE employees have made us proud by winning various
prizes in Hindi Competitions organized by different PSUs
during the year 2025-26 under the aegis of TOLIC (PSU),
KOLKATA.

(v)    Mgr (OL) has been awarded appreciation letter by TOLIC
for Excellence in Implementation of Official Language in
GRSE.

AWARDS & RECOGNITIONS

During the year, your Company has received various awards and
recognitions. Some of the important accolades conferred to the
Company are as under:

(a)    GRSE received Management Excellence Award 2025' by

the Calcutta Management Association (CMA) at Kolkata in the
category of Corporate Leadership.

(b)    GRSE received 'PSU Samarpan Award 2025' at the 4th Edition
of the PSU Transformation Conclave by Gov Connect held in
New Delhi in the category of leadership and commitment to
excellence in the Indian Public Sector Undertaking (PSU) space in
the category of Corporate Leadership.

(c) GRSE received "Digital Transformation Excellence" Award
in the "Best Use of Emerging Technologies" category at 10th
Governance Now PSU IT Awards ceremony.

(d)    GRSE has been awarded for the Category 'Manufacturing-
Public-Medium' at the '19th National Awards for Excellence
in Cost Management' organised by the Institute of Cost
Accountants of India (ICMAI).

(e)    QA Laboratory of GRSE has been assessed and successfully
received the renewal certificate of NABL accreditation

for Non-Destructive Testing (NDT) Services as per ISO/IEC
17025:2017, effective from 20 Feb 2025.

(f)    In recognition of their outstanding contributions to the growth
and success of GRSE Ltd, two senior women officers namely Smt.
Aparajita Ghosh, CGM (Finance) and Smt. Swagata Sen Roy, GM
(CP & CC) of the shipyard received the Indian PSU Nari Shakti
Samman Awards 2025 at a ceremony held at the Constitution
Club of India, New Delhi on 15 Oct 2025.

(g)    GRSE was conferred with the esteemed award for "Excellence
in Financial Performance" by Hon'ble Raksha Mantri for its
sustained and well-demonstrated growth in both physical and

financial domains. The award was presented at 'Samudra Utkarsh', organised by the MoD, DDP showcasing Indigenous Warship building.

(h) GRSE received gold award in International Convention on Quality Control Circles (ICQCC 2025) held at Taipei, Taiwan.

(i)    GRSE received the BCC&I Social Leadership Award 2025 in the 'Healthcare & Empowerment, Holistic Development' category at 4th CSR
Conclave & Social Leadership Awards 2025 by The Bengal Chamber of Commerce and Industry (BCC&I) at a grand ceremony held at Taj City
Centre, Kolkata.

(j)    GRSE has further strengthened its track record of promoting workplace inclusivity by securing the prestigious "Women in Public Sector
(WIPS) Award 2026" at the 36th National Meet of WIPS on 11 Feb 2026.

(k)    GRSE received multiple awards at the 15th PSE Conclave & Excellence Awards organised by the Indian Chamber of Commerce in New
Delhi.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of corporate governance in all spheres of business operations and continues to lay
strong emphasis on transparency, accountability and integrity. Your Company complies with the applicable regulations under the Companies Act,
2013, the SEBI Listing Regulations and also the Guidelines on Corporate Governance for CPSEs issued by Department of Public Enterprises (DPE),
except with respect to the composition of Board of Directors viz. appointment of Independent Directors including a Woman Director. Further, due
to inadequate number of Independent Directors during the year on the Board, the Company was unable to reconstitute its Audit Committee and
Nomination and Remuneration Committee of the Board of Directors. After cessation of sole Independent Director on the Board, the Company
was unable to reconstitute CSR Committee, Stakeholders Relationship Committee and Risk Management Committee from 06 Apr 2025 to 31
May 2025.

GRSE being a Government Company, the power to appoint Directors vests with the Government of India and the Company has made necessary
intimations to the Administrative Ministry for filling up the post of Independent Directors including that of a Woman Director. The Company also
strives to comply with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Further, DPE Guidelines on Corporate Governance for CPSEs provide that CPSEs would be graded on the basis of their compliance with the
Guidelines. DPE has graded GRSE as "Excellent" for the year 2024-25.

In terms of Regulation 34 of the SEBI Listing Regulations and DPE Guidelines, a Report on Corporate Governance along with Compliance
Certificate issued by M/s. Maheshwari R & Associates, Company Secretaries forms part of this Annual Report.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of your Company comprises a total of ten (10) directors which includes four (4) Whole-Time Directors, five (5) Part-Time Non-Official
(Independent) Directors including one (1) Woman Director, and one (1) Government Nominee Director.

During the year 2025-26, the following changes took place in the Board of Directors and of Key Managerial Personnel (KMP) of your Company:

DIRECTORS RETIRING BY ROTATION

Pursuant to Section 152(6) of the Companies Act, 2013 and Article
206 and 207 of Article of Association of the Company, Capt. P
Sunilkumar, IN (Retd.), Director (Corporate Planning and Personnel),
who has served on the Board of Directors the longest amongst the
retiring directors, is liable to retire by rotation, and being eligible,
offers himself for reappointment.

DECLARATION AND MEETING OF CRITERIA BY INDEPENDENT
DIRECTORS

During the financial year 2025-26, the Company has received
declarations from all the Independent Directors of the Company
confirming that they meet the criteria of independence as prescribed
under the Companies Act, 2013, the Guidelines on Corporate
Governance for CPSEs issued by the Department of Public Enterprises
and the SEBI Listing Regulations. Further, in the opinion of the Board,
the Independent Directors fulfil the conditions prescribed under the
SEBI Listing Regulations and are independent of the management
of the Company. The Independent Directors of the Company have
confirmed that they have registered themselves with the Indian
Institute of Corporate Affairs (IICA), and have included their name in
the databank of Independent Directors within the statutory timeline
and they will also appear for the online proficiency test within the
prescribed time, wherever applicable.

MEETINGS OF INDEPENDENT DIRECTORS

During the year 2025-26, no Meeting of Independent Directors was
held since there was only One (01) Independent Director on the Board
of Directors of the Company.

MEETINGS OF THE BOARD

Nine (09) meetings of the Board of Directors were held during the
year. For further details, please refer to the ‘Report on Corporate
Governance'.

REMUNERATION POLICY & EVALUATION OF BOARD'S
PERFORMANCE

Your Company is a Government of India company under the Ministry
of Defence. The Directors of the Company are appointed by the
President of India and their remuneration is fixed in accordance with
the DPE Guidelines by the Administrative Ministry. The Articles 194

and 216 of the Articles of Association of your Company also states
that the President of India will appoint Directors and determine their
remuneration. Since, the Board level appointments are made by
President of India, the evaluation of performance of such appointees
is also done by the Government of India.

AUDIT COMMITTEE

During the year, the Audit Committee was not reconstituted due
to non-availability of adequate number of Independent Directors on
the Board of the Company in accordance with Section 177 of the
Companies Act, 2013, the DPE Guidelines on Corporate Governance
for CPSEs, 2010 and the SEBI Listing Regulations.

For further details, please refer the ‘Reporton Corporate Governance'.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) and 134(5) of
the Companies Act, 2013, your Directors hereby confirm that: -

(a)    In the preparation of the Annual Accounts for the year ended
31 March, 2026, the applicable accounting standards read with
requirements set out under Schedule III to the Companies Act,
2013, had been followed and there are no material departures;

(b)    The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the
state of affairs of your Company as at 31 March, 2026 and of the
profit of your Company for the year ended on that date;

(c)    The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with
the provisions of the Companies Act, 2013 for safeguarding the
assets of your Company and for preventing and detecting fraud
and other irregularities;

(d)    The Directors have prepared the Annual Accounts on a ‘going
concern' basis;

(e)    The Directors have laid down internal financial controls to be
followed by your Company and such internal financial controls
are adequate and were operating effectively; and

(f)    The Directors had devised proper systems to ensure compliance
with the provisions of all the applicable laws and that such
systems are adequate and operating effectively.

STATUTORY AUDITORS

Your Company being a CPSE, the Comptroller & Auditor General of
India (C&AG) has, under Section 139(5) of the Companies Act, 2013,
appointed M/s. Guha Nandi & Co., Chartered Accountants, Kolkata,
as the Statutory Auditors of the Company for the financial year 2025¬
26.

The Comments of the C&AG u/s 143(6) of the Companies Act, 2013
on the Financial Statements of the Company for financial year 2025-26
form part of this Report.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 and the
Companies (Cost Record and Audit) Rules, 2014, the Board of
Directors of your Company has appointed M/s. Chatterjee & Co., Cost
Accountants, Kolkata, as the Cost Auditors of your Company for the
financial year 2025-26 to conduct audit of cost records maintained by
your Company.

SECRETARIAL AUDITOR

In terms of Section 204(1) of the Companies Act, 2013 and
Regulation 24A of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI
Listing Regulations"), M/s. Mehta & Mehta, Company Secretaries
was appointed to conduct Secretarial Audit of the Company for a
term of five (05) consecutive years, commencing from the FY 2025¬
26, at the 109^th AGM held on 19 Sep 2025. The Secretarial Audit
Report of M/s. Mehta & Mehta, Company Secretaries is placed at
Appendix - "C" to this Report. The Secretarial Audit Report has no
adverse remarks. However, the other observations and clarifications
made by the Secretarial Auditor in their Secretarial Audit Report are
self-explanatory.

Pursuant to the Regulation 24A of the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 ("SEBI Listing Regulations"), the Company has obtained an
Annual Secretarial Compliance Report for the year 2025-26 from
M/s. Mehta & Mehta, Company Secretaries, confirming compliance
of SEBI Regulations / Circulars / Guidelines issued thereunder and
applicable to the Company and the said report was filed with the
National Stock Exchange of India Limited and BSE Ltd. There are no
adverse remarks in the said report.

INTERNAL AUDITOR

The Board of your Company has appointed M/s. SPAN & Associates,
Chartered Accountants for carrying out Internal Audit of the Company
for the financial year 2025-26.

DETAILS OF FRAUDS REPORTED BY AUDITORS UNDER SECTION
143 OF THE COMPANIES ACT, 2013

Nil

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the year under review, your Company did not enter into any
contract / arrangement / transaction with related parties in pursuance
of section 188 of the Companies Act, 2013 and the rules framed
thereunder and Regulation 23 of the SEBI Listing Regulations. Your
Directors draw attention of the Members to Note 32 to the financial
statements which sets out related party disclosures as per Indian
Accounting Standard 24. The Form AOC-2 on details of related party
transactions has been attached as Appendix - "D" to this Report, as
required under section 134(3)(h) of the Companies Act, 2013. The

Company has a Policy on Related Party Transactions, which can be
accessed athttps://grse.in/policies/GRSE Policy for Related Party
Transactions.pdf

PARTICULARS OF LOAN, GUARNATEES OR INVESTMENTS

During the year under Report, your Company has not:

(a)    given any loan to any person or other body corporate;

(b)    given any guarantee or provided security in connection with a
loan to any other body corporate or person; nor

(c)    acquired by way of subscription, purchase or otherwise, the
securities of any other body corporate, as prescribed under
Section 186 of the Companies Act, 2013.

VIGIL MECHANISM

As a part of its vigil mechanism, your Company has adopted a Whistle
Blower Policy to provide appropriate avenues to the employees of
your Company to report to the management, instances of unethical
behaviour, actual or suspected fraud or violation of your Company's
Code of Conduct. As per the Whistle Blower Policy, a whistle blower
can send written communications to the Chairman & Managing
Director of your Company (or any person to whom he has delegated
his power). Alternatively, the whistle blower may send such Protected
Disclosure directly to the Chairman, Audit Committee. Once a
Protected Disclosure is received, a Screening Committee comprising
the Chairman & Managing Director of your Company, a Functional
Director as nominated by C&MD and the Chairman, Audit Committee,
will be constituted to investigate into the matter. All employees
are encouraged to use this whistle blowing mechanism and voice
their concerns to the Management. During the year, due to non¬
availability of Audit Committee, no personnel have been denied
access to the Members of the Board of Directors or the Chairman &
Managing Director of the Company. The Whistle Blower Policy can be
accessed on your Company's website athttps://grse.in/wp-content/
uploads/2022/04/Whistle-Blower-Policv-1.pdf.

ANNUAL RETURN

In accordance with the Companies Act, 2013, the Annual Returns in
the prescribed format will be available on your Company's website at
https://grse.in/annual-returns/.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion & Analysis Report as required under
the SEBI Listing Regulations and the DPE Guidelines on Corporate
Governance for CPSEs forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Garden Reach Shipbuilders & Engineers Limited's Corporate Social
Responsibility (CSR) projects framed to enhance inclusive development,
social justice, sustainable development, community welfare and are
aligned with the GoI's vision of sustainable and inclusive development.
The Company remains committed to expanding its CSR efforts,
ensuring that its contributions continue to make a meaningful
difference in the society. CSR is not just an obligation for GRSE but
an integral part of its business. By aligning its business objectives with
social and environmental commitments, GRSE exemplifies responsible
corporate citizenship, strengthening its role as contributor to national
development. GRSE has embedded CSR into its corporate governance
and core philosophy, reflecting its commitment to the social and
environmental responsibility alike business operations.

GRSE's CSR initiatives have played a significant role in mainstreaming
the differently abled, holistic development of underprivileged and
vulnerable children, empowering the youth, healthcare etc. for the
disadvantaged segment in the society. These initiatives have played
significant role in socio-economic development of a large segment of
underprivileged populace. The detailed outline of the Annual Report
on CSR initiatives undertaken during the FY 2025-26 has been annexed
at "Appendix - E"

RISK MANAGEMENT

Pursuant to Regulation 21 of SEBI Listing Regulations, the Company
has constituted a Risk Management Committee. The details of the
Committee and its terms of reference, Risk Management Policy etc.
are set out in the Corporate Governance Report and a detailed note
on Risk Management is provided in the Management Discussion and
Analysis Report, which forms part of this report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In terms of Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015,
the Company has prepared Business Responsibility and Sustainability
Report (BRSR) on Environment, Social and Governance (ESG)
parameters in the prescribed format for the FY 2025-26 along with
reasonable assurance report of BRSR Core, which is received from
Independent Assurance Provider which is appended to this Report.

INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls with
reference to financial statements. A detailed note on Internal Financial
Controls is provided in the Management Discussions and Analysis
Report, which forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company being a Government Company engaged in producing
defence platforms, the disclosure of information with respect to
conservation of energy, technology absorption, foreign exchange
earnings and outgo under the provisions of Section 134(3)(m) read
with Rule 8(3) of the Companies (Accounts) Rules, 2014 is not required
as the MCA vide its notification GSR No.680 (E) dated 04 Sep 2015
has granted exemption to Defence Public Sector Undertakings.

IMPLEMENTATION OF RTI ACT

RTI matters are being executed as per the provisions of the Right
to Information Act, 2005 and Rules made therein. During the year
2025-26, a net total of 169 number of RTI Requests through online/
offline mode were received to provide 'information', while opening
balance number from previous year was brought forwarded as 02 in
number. A total of 147 number of RTI applications were replied to
during the year including 01 RTI application which was transferred
to other concerned Public Authority and remaining 24 number of RTI
applications were taken as "Carried forward" to the year 2026-27.

Total 20 number of RTI First Appeals were received during 2025-26
through online/offline mode and 02 number of First Appeals were
Carried Forward as "opening balance" from previous year. A total of
18 number of RTI First appeals were decided and replied and remaining
04 number of RTI First appeals were taken as "carried forward" to the
year 2026-27.

In this financial Year 2025-26, 01 number of RTI Second Appeals was
filed with Central Information Commission (CIC) and 02 number of
Second Appeals were Carried Forward as "opening balance" from

previous year. Total 03 number of RTI Second Appeals had since been
heard and decided.

The Quarterly Returns are being uploaded on the CIC's website as well
as on the DOPT website. Proactive Disclosures of information were
updated on the website of GRSE under RTI link as directed by CIC.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT,
2013

In pursuance of Section 4 of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition & Redressal) Act 2013, the Internal
Committee was reconstituted on 18^th October 2024 initially comprising
of 10 members for West Bengal based units and presently comprising
of 9 members in view of superannuation of 1 member. A separate
Internal Committee is in existence for DEP Unit, Ranchi. The Internal
Committee of DEP was reconstituted on 23 Jul 2025 comprising of 5
members.

In accordance with Section 21 of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition & Redressal) Act 2013 and the
Rules framed thereunder, the following details are submitted:

COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961

The Company is fully compliant with the Maternity Benefit Act, 1961.
PUBLIC GRIEVANCES

In order to facilitate resolution of grievances in a transparent and
time bound manner, the Department of Administrative Reforms &
Public Grievances, Ministry of Personnel, Public Grievance & Pensions,
Government of India has initiated a web-based monitoring system at
www.pgportal.gov.in (PG Portal).

During the year 2025-26, a total of 25 number of Public grievance
application through online/offline mode were received and 03 number
of Public grievances were brought forward as "opening balance" from
previous year. Total 23 number of Public Grievances were resolved and
remaining 05 number of Public Grievance applications were taken as
carried forward to the year 2026-27

VIGILANCE ACTIVITIES

Company has a well-established Vigilance Department headed by the
Chief Vigilance Officer (CVO) appointed by DoPT, Govt. of India.The
main thrust of the Vigilance Department is to ensure transparency,
fairness & probity in all spheres of activities of the Company. Towards
this, the focus of the department was on both, punitive, preventive
and surveillance Vigilance and utmost effort was given on preventive
vigilance.

The existing processes were carefully observed, analysed and reviewed
to ensure transparency as well as the systems of checks & balances
are working as per the requisite parameters. In certain cases, the
management was advised for systemic improvements.

Major activities carried out by the Vigilance Department during the
year are as follows:

(a)    Investigations were conducted on complaints received from
various sources and appropriate actions were taken.

(b)    As a preventive measure, regular & surprise inspections and
scrutiny of files were carried out.

(c)    Suggestions for system improvements have been made to the
management for implementation.

(d)    For Capacity Building, Vigilance Officers attended the CVC
Master Trainer Training Programme and session on Drafting of
Charge Sheet were conducted for the officers.

(e)    Training on Vigilance Administration was conducted for newly
Joined officers & supervisors.

(f)    One Day Sensitization Programme on Vigilance Administration,
Vigilance Angle & Preventive Vigilance was conducted for Senior
and Mid- level officers by Ex-CVC Director.

(g)    As per CVC mandate CTE Type Inspection was conducted.

(h)    Annual Property Returns filed by the officers were scrutinized.
Vigilance status of officers was assessed at various stages. The
implementation of actionable points is being monitored through
quarterly reports and submitted to MoD informing the status of
action taken.

(i)    The following Vigilance Activities have been made online in
2025:

(i)    Implementation of Online OTP based Complaint
Management System.

(ii)    Initiative was taken for Generation of SAP Data for Quarterly
Report.

(j)    Agreed List was drawn up with the CBI and close liaison was also
maintained with the CBI.

(k)    Three-Month Campaign from 18^th August 2025 (Monday) to 17^th
November 2025 (Monday) was undertaken as per CVC mandate
on Preventive Vigilance with focus on the following five areas:

(i)    Disposal of Pending Complaints

(ii)    Disposal of Pending Cases

(iii)    Capacity Building Programmes

(iv)    Asset Management

(v)    Digital Initiatives

(l)    The Company observed Vigilance Awareness Week during 28
Oct - 03 Nov 2025. Conducted various competitions (i.e. Online
Quiz contest, Slogan Writing, Essay writing and Drawing/
Cartoon making contest among the employees and their family
members), also carried out outreach programme for Vigilance
Awareness for Public/Citizen/Students in School and Gram
Sabha.

(m)    The Vigilance Magazine "SAJAGATA" has been published first
time in GRSE.

(n)    Structured Review Meetings (SRM) with C&MD were held at
regular intervals to apprise the status of vigilance cases.

INTEGRITY PACT

One of the initiatives of the Central Vigilance Commission (CVC)
to eradicate corruption in procurement activity is the purpose for
introduction of Integrity Pact in large value contracts. In line with
the directives from Ministry of Defence and the CVC, your Company
has adopted Integrity Pact with all vendors / suppliers / contractors /
service providers for all Orders / Contracts of value '2 crore and above
and only those vendors/bidders, who commit themselves to IP with
the Company would be considered competent to participate in the
bidding process.

The Integrity Pact essentially envisages an agreement between the
prospective vendors/bidders and the principal (GRSE), committing the
persons/officials of both sides, not to resort to any corrupt practices
in any aspect/stage of the contract. Only those vendors/bidders,
who commit themselves to such a Pact with the principal, would be
considered competent to participate in the bidding process. Integrity
Pact, in respect of a particular contract, would be operative from the
stage of invitation of bids till the final completion of the contract. Any
violation of the same would entail disqualification of the bidders and
exclusion from future business dealings.

As recommended by the CVC, the Company has appointed
Independent External Monitors (IEMs) for monitoring implementation
of Integrity Pact in the Company. During the Financial Year 2025-26,
the IEMs monitored Orders / Contracts of value '2 crore and above
and held quarterly meetings with commercial department and half
yearly structured meetings with the Chairman & Managing Director.

GENERAL

Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:

(a)    Detailed reasons for any voluntary revision of financial statement
or Board's Report in the relevant financial year in which the
revision is made.

(b)    Details relating to deposits covered under Chapter V of the
Companies Act, 2013.

(c)    Issue of equity shares with differential rights as to dividend,
voting or otherwise.

(d)    No significant or material orders were passed by the Regulators
or Courts or Tribunals which impact the going concern status
and future operations of your Company.

ACKNOWLEDGEMENTS

Your Directors express their deep appreciation and place on record
their gratitude to the Department of Defence Production and other
Departments in the Ministry of Defence for their continued support,
assistance and guidance. The Directors also express their sincere
thanks to the Government of India and also to the Government of
West Bengal, Jharkhand and various other States, for their continued
co-operation and valuable support. Your Directors are particularly
grateful to the Indian Navy, Indian Army and Indian Coast Guard
Headquarters, Border Road Organisation (BRO), Ministry of Home
Affairs, Syama Prasad Mookerjee Port Trust, Public Works Departments
of various State Governments, Police Department of West Bengal &
Kolkata and other valued customers as well as business associates
for the confidence reposed by them in your Company. We will fail
in our duty if we do not acknowledge the co-operation and positive
approach of the Warship Production Superintendent, Coast Guard

Refit Production Superintendent and their dedicated teams under
whose oversight our ships are being built/ refitted. Also, we thank all
classification societies, in particular, IRS, ABS, BVR, and DNV who have
ensured quality and adherence to the required standards.

The Directors acknowledge with thanks the valuable advice rendered
by, and co-operation received from the Comptroller and Auditor
General of India, the Principal Director of Commercial Audit, Ex¬
officio Member of the Audit Board, Bengaluru, Principal Controller of
Defence Accounts (Navy), Mumbai, Controller of Defence Accounts
(Navy), Kolkata, Registrar of Companies, the Department of Public
Enterprises, the Securities Exchange Board of India, the National Stock
Exchange of India Limited and BSE Limited.

The Directors wish to place on record their appreciation to its
Statutory, Cost, Internal and Secretarial Auditors, Company's Bankers,
Trade Unions and all Officers and Employees at various levels of the
organisation for their hard work, dedication and commitment. The
enthusiasm and unstinted efforts of the employees have enabled your
Company to remain at the forefront of the industry despite increased
competition from several existing and new players.

For and on behalf of the Board of Directors

Sd/-

Place: Kolkata    Cmde P R Hari, IN (Retd.)

Dated: 10 July, 2026    Chairman & Managing Director

DIN: 08591411