Swan Energy Ltd

1) Your directors are pleased to present the One Hundred and Sixteenth (116^th) Annual Report together with the Audited Financial Statements (Standalone & Consolidated) for the year ended 31^st March, 2024.

(' in lakhs)

On standalone basis, revenue from operations for the financial year 2023-24 was ' 38,581.34 lakhs as compared to ' 54,722.62 lakhs in the previous year. Earnings before interest, tax, depreciation and amortization (EBITDA) for the year was ' 2,327.30 lakhs as compared to ' 3,033.60 lakhs in the previous year. Profit after Tax (PAT) for the year was ' 217.30 lakhs as compared to ' 363.50 lakhs in the previous year.

On consolidation basis, revenue from operations for the financial year 2023-24 was ' 5,01,714.60 lakhs as compared to ' 1,43,814.37 lakhs in the previous year. Earnings before interest, tax, depreciation and amortization (EBITDA) for the year was ' 95,059.79 lakhs as compared to ' 24,190.35 lakhs in the previous year. Profit after Tax for the year was ' 58,596.68 lakhs as compared to ' (6,104.92) lakhs in the previous year.

The last few years have proven to be a phase of intense action and reflection for the global economy. We have seen a global pandemic, geopolitical tensions, supply chain disruptions, the rise and fall of cryptocurrency and many other public and private upheavals. As some of these tensions still persist, our economy continues to be resilient, clocking a strong GDP growth year on year. As a clearer picture of the global market emerges,

I believe we are standing at the threshold of a period of great opportunity and growth.

Your company remains committed to delivering sustainable growth and creating long-term value for its stakeholders. The resilient, competitive, and profitable growth in the year has propelled your company to new highs.

The textile division continues to operate at above optimal capacity levels. Constant cost cutting measures and focus on operational efficiencies has led to an increase in EBIDTA margins. Your company will continue to innovate and perform at the highest levels of environmental and social governance.

The Swan LNG Project is ready to commence operations in the coming financial year. This will significantly enhance your company's growth trajectory.

The real estate division has achieved a major milestone wherein it has obtained the Occupation Certificate for the residential project in Bangalore. Your company will continue to evaluate real estate opportunities and plans to mobilize its land banks across Mangalore and Bangalore.

In our Petroleum and Petrochemical vertical, our consolidated revenue from operations has experienced an increase of 78% for the financial year 2023-24 to INR 3,854 crores. This is primarily driven because of anticipated and realized disruption in petroleum industry and our ability to deliver largely into India and southeast Asia. This growth reflects our efforts and commitment to driving excellence in our operations.

Your company has successfully acquired Reliance Naval and Engineering Limited through the NCLT process. This is a significant milestone which will help your company foray into the defense and shipbuilding sector. A substantial portion of the restoration activities have been completed and the shipyard is fully geared to commence operations in the coming Financial Year.

Your company remains dedicated to embracing cutting-edge technologies and practices that promote sustainability. Our efforts to reduce carbon emissions, optimize resource utilization, and foster a safe work environment have gained momentum and will continue to be a top priority. We assure you that your company remains committed to upholding the highest standards of governance, transparency, and ethical practices. Together, we shall embrace the future with optimism, determination, and the desire to build a brighter tomorrow.

The progress of India's first Greenfield LNG Port Terminal, with the total capacity of 10 MMTPA, at Jafrabad Port in Amreli district of Gujarat, being set up through two subsidiaries, namely SWAN LNG PRIVATE LIMITED (“SLPL”) and TRIUMPH OFFSHORE PRIVATE LIMITED (“TOPL”) is summarized under:

The first phase of the Project, awarded under ‘Swiss Challenge' route and developed on PPP basis, having capacity of 5 MMTPA LNG (extendable upto 10 MMTPA), comprising development of LNG Port facilities, utilizing a FSRU for LNG receipt, storage, regasification and send-out, to be operated on tolling business model, is under implementation.

SEL is the Lead Promoter with 63% equity stake, Government of Gujarat 26% stake (15% by GMB & 11% by GSPL), 11% stake by Indian subsidiary of Mitsui OSK Lines (MOL), Japan, who is also the technical partner of the Project.

SLPL has already executed regasification agreements for reservation of capacity aggregating to 4.5 MMTPA on Arm basis for a period of 20 years with State-owned GSPC [1.5 MMTPA], BPCL, IOCL and ONGC [1 MMTPA each].

The execution of firm regasification agreement for reservation of 90% capacity with State Government PSU, including Concession Agreement with GMB & GoG for 30 years (extendable to further 20 years) makes the future of the project very robust. Moreover, all the necessary approvals and EPC Contracts required for project implementation are in place and the construction is progressing well.

On Project implementation work, the Company has achieved an overall 83.95% progress on the construction of Port Project upto 31^st March 2024.

Below is the progress on various EPC packages awarded by the Company:

During the year, the Company has pre-paid the entire loan, along with interest, to the consortium of Banks, amounting to ~ ' 220600 Lakh on 01^st March, 2024.

The Company, being a subsidiary of Swan Energy Limited (SEL), was incorporated as a special purpose vehicle (SPV) for the purpose of acquiring and owning a new built Floating storage & Regasification Unit (FSRU) to be deployed for the LNG terminal project, being implemented by Swan LNG Private Limited” (“SLPL”), another subsidiary of SEL.

TOPL (SEL 51% & IFFCO 49% equity stake), entered into a shipbuilding contract for the construction of one (1) FSRU having a capacity of 1,80,000 CBM LNG with M/s Hyundai Heavy Industries Company Limited, South Korea (HHI) and post completion of construction, the Company has successfully taken the delivery of FSRU “Vasant 1” from HHI Shipyard at Ulsan, South Korea, on 29^th September, 2020. Post-delivery formalities, FSRU started sailing from Ulsan port, South Korea on 4^th October, 2020.

Post-delivery of FSRU, it was put on charter hire with charterer, as under, for its interim utilization as LNG Carrier till Jafrabad LNG port is ready, which has yielded decent revenue generation and saving of parking charges.

I. entered into Time Charter Party Agreement (“TCPA”) with “M/s CNTIC V Power Energy”, a Hong kong based Company, for interim utilization of the vessel as LNG Carrier for the period 01^st November, 2020 to 15^th March, 2021, which got completed on 28^th February, 2021.

ii. entered into TCPA with Tema LNG, Ghana; executed on 26^th April, 2021 for 270 days, subsequent to which the vessel departed from Ghana on 27^th February 2022.

iii. entered into Bare Boat Charter (“BBC”) arrangement with Botas Trading IC (“BOTAS”) w.e.f. 02^nd January, 2023, which expired on 01^st January, 2024 (+/-) 30 days.

After expiry of charter arrangement with Botas as above, there had been subsequent long negotiations with Botas, consequent to which, the Board of TOPL has, at its Board Meeting held on 31^st July, 2024, considered and approved the following:

i. disposal / sale of the FSRU unit/vessel to BOTAS at a consideration of US $ 399 Million, subject to shareholders' approval, signing of definitive documents, completion of customary closing conditions under the definitive documents, receipt of regulatory approvals and approval of Board and shareholders of holding company, i.e., Swan Energy Limited;

ii. Execution / signing of Norwegian Sale Form (NSF) only after completion of all compliances and receipt of all requisite approvals;

iii. pre-payment of ' 82481 Lakhs to its consortium of lenders towards full & final repayment, subject to receipt of advance remittance from Botas.

Subsequent to receipt of advance remittance from Botas, TOPL has made pre-payment of ' 82481 Lakhs to its consortium of lenders towards full and final repayment of the outstanding debt on 01^st August, 2024.

The status of the properties owned through wholly owned subsidiaries (WOS) is summarized as under:

I. Cardinal Energy & Infrastructure Pvt Ltd (CEIPL):

i. Sai Tech Park, Bangalore - It is a developed commercial property, located at the IT park of Whitefield, Bangalore. It comprises 2.96 lac sq. ft with three buildings, all been entirely leased out to Harman Connected Services Corporation India Private Limited (Erstwhile Symphony Teleca Corporation India Private Limited) at annual rent of ' 1348 Lakhs.

ii. Technova Park, Hyderabad - The commercial property, located at Gachibowli area of Hyderabad. It comprises an area of 2.92 lakh sq. ft and has been leased out to M/s Google Connect Services India Private Limited (Indian subsidiary of Google) at annual rent of ' 1852 Lakhs.

iii. BTM, Bangaluru - It is a land, admeasuring 0.75 acre in the heart of Bangalore. The company has started work on the project to construct a high end residential property. The Construction on site is expected to begin in this financial year.

iv. Yeswantpur area, Bengaluru - A residential project of 22 story tower, having 3 wings (A, B, C) has been completed, and delivered ! The Occupation Certificate for the project was received in March, 2024. The project is now at a ready to move in stage and 60% of the inventory has been sold. The balance sales are expected to be done by the end of the Calendar year.

No major development during the year on the land parcels at Bengaluru, Mangalore, Mysore and Chennai. All feasible options are being explored in order to develop / monetize these properties.

During the current financial year, the Process House of the Company at Ahmedabad has posted a profit before tax of ' 1839.42 Lakh as against profit before tax of ' 1449.57 Lakh for the previous year.

Subsequent to National Company Law Tribunal (NCLT) Ahmedabad order dated 23^rd December, 2022, approving the Resolution Plan submitted by the Resolution Applicant, M/s Hazel Mercantile Limited (HML) to acquire RNEL, through a SPV, namely Hazel Infra Limited (“HIL”), wherein SEL and HML shareholding is 74% & 26% respectively, an upfront payment of ' 23142 Lakhs was remitted to the lenders on 27^th October, 2023. Thereafter, the control of RNEL was handed over by the Monitoring Committee to the new management on 4^th January, 2024.

In terms of Resolution Plan to issue 1 new equity share in lieu of 275 old equity shares, Corporate action has been executed at NSDL, CDSL and 26,82,150 new equity shares has been allotted in lieu of 73,75,91,263 old shares to the Public category of shareholders, and the management of RNEL is in the process of recommencing trading of its shares on the stock exchanges.

Further, an application seeking change of name from RNEL to ‘Swan Defence and Heavy Industries Limited' has been submitted to Ministry of Corporate Affairs, which is pending for approval.

As on the date of this Report, the implementation of the Resolution Plan and completion of pending compliances are under way.

The company, at its Board meeting held on 24^th June, 2024, considered and approved the acquisition of 26,21,50,000 equity shares of ' 10/- each of TOPL (representing 49% of total equity of TOPL) from Indian Farmers Fertiliser Cooperative Limited (“IFFCO”) at a total price of ' 44000 Lakhs, as per duly executed Share Purchase Agreement (“SPA”). The said SPA was ratified and approved by Board of Directors of TOPL at its meeting held on 26^th June 2024. SEL has paid the entire consideration of ' 44000 Lakhs to IFFCO and the formalities related to transfer of Shares are in process.

Prior to the acquisition mentioned above, your company held 51% equity in TOPL. After the acquisition, TOPL become a wholly owned subsidiary of the Company.

The Board of Directors (“Board”) is pleased to recommend a dividend @ Re. 0.10 per Equity share (10%) on 31,34,56,886 Equity Shares of Re 1 each for the year ended 31^st March, 2024, subject to the approval of the Shareholders at the ensuing 116^th AGM.

The company has not transferred any amount to the General Reserve during the year.

The Register of Members and Share Transfer Books of the Company will be closed from Friday, 20^th September 2024 to Thursday, 26^th September 2024 (both days inclusive) to determine the eligibility of shareholders to receive the dividend for the financial year ending on 31^st March, 2024.

According to the Finance Act, 2020, dividend income will be taxable in the hands of the Members w.e.f. April 1, 2020, and the Company is required to deduct tax at source from the dividend paid to the Members at prescribed rates as per the Income Tax Act, 1961.

The Company has fixed 19^th September, 2024 as the “Record Date” for the purpose of determining the entitlement of Members to receive dividend for the Financial Year 2023-2024.

7) SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES:

During the year, ‘Reliance Naval and Engineering Limited', being subsidiary of Hazel Infra Limited incorporated at Gujarat, became the step down subsidiary of the company with effect from 7^th August, 2024.

A statement in Form AOC - 1, pursuant to Section 129(3) of the Act, giving details of the subsidiary companies of the Company is attached to the Accounts. The financial statements and related documents of the Subsidiary companies shall be kept open for inspection at the registered office of the Company.

The company does not have any Joint Ventures or Associate companies.

During the year under review, there is no change in the authorised share capital of the Company.

During the year under review, the Company has issued shares via Qualified Institutional Placement (“QIP”). The paid-up Equity share capital as on 31^st March, 2024 was ' 3134.57 Lakhs.

The above equity shares so allotted rank pari passu with the existing equity shares of the Company.

Except as stated above, there was no other change in the share capital of the Company.

As required under Regulation 34(2)(e) of the SEBI (LODR) Regulations, 2015, a Management Discussion and Analysis is annexed to this Report - Annexure - A.

As required under Regulation 34(3) read with Schedule V (C) of the SEBI (LODR) Regulations, 2015, a report on the ‘Corporate Governance', together with a certificate of statutory auditors, confirming compliance of the conditions of the Corporate Governance, is annexed to this report - Annexure B.

Further, in compliance of Regulation 17(5) of the SEBI (LODR) Regulations, 2015, your Company has adopted a ‘Code of Conduct and Ethics' for its Directors and Senior Executives.

The Report on BRSR is annexed to this Report - Annexure - C and is available on website of the company. www.swan.co.in

9.4 Annual Return:

In terms of Section 134 and 92 of the Companies Act, 2013 (“the Act”), an extract of the Annual Return is placed on the website of the Company www.swan.co.in

The familiarisation programme is to update the Directors on the roles, responsibilities, rights and duties under the Act and other statutes and about the overall functioning and performance of the Company.

The policy and details of familiarisation programme is available on the website of the Company at www.swan.co.in

Information under Section 134 (3) (m) of the Act, read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 is annexed to this Report - Annexure D.

9.7 Particulars of Employees:

Pursuant to provisions of Section 136 (1) of the Act and as advised, the statement containing particulars of employees under Section 197 (12) of Act, read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure E.

During the year under review, 8 (Eight) Board Meetings were convened and held. The required details are given in the Corporate Governance Report forming part of this report.

The Independent Directors of the Company have submitted their Declaration of Independence, as required under the provisions of Section 149(7) of the Act, stating that they meet the criteria of independence as provided in section 149(6) of the Act.

The Board is of the opinion that all the Independent Directors possess integrity, have relevant expertise, experience and fulfil the conditions specified under the Act, and the Listing Regulations.

9. 10 Disclosure regarding Company's Policies under the Companies Act, 2013:

The Board has framed a Policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178 (3) of the Act for the directors, key Managerial Personnel and other employees of the Company. The Policy is available on the Company's website at https://swan. co.in/reports.

The Report on CSR is annexed to this Report - Annexure - F.

iii. Whistle Blower Policy / Vigil Mechanism:

The Company has a Whistle Blower policy to deal with instances of fraud and mismanagement, which is available on the Company's website at https://swan.co.in/reports.

During the reporting period, no person has been denied access to the Chairman of the Audit Committee.

The Company has a structured Risk Management policy. The Risk Management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are integrated with the management process such that they receive the necessary consideration during decision making. The Policy is available on website of the company. www.swan.co.in

The Report on DDP is annexed to this Report - Annexure - G and is available on website of the company. www.swan.co.in

The Company has a well-defined process of identification of related parties and transactions there with, its approval and review. The disclosures of RPTs and Policy for the same is hosted on the Company's website at https://swan.co.in/reports.

All the Related Party Transactions entered into during the financial year were on an arm's length basis and were in the ordinary course of business. Related Party Transactions (RPTs) entered into by the company during the financial year, which attracted provisions of section 188 of the Companies Act, 2013 and as defined under regulation 23 of listing regulations, 2015, a detailed disclosure of these transaction with the related parties are provided in the Notes to the Financial Statements.

There were no transaction requiring disclosure under section 134(3)(h) of the Act, hence the prescribed Form AOC-2 does not form a part of this report.

During the year 2023-24, pursuant to section 177 of the Companies Act, 2013 and regulation 23 of Listing Regulations, 2015, all RPTs were placed before the Audit Committee for its approval.

Members are requested to refer note no. 40 forming part of the Annual Audited Financial Statements which set out related party disclosure.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at https://swan.co.in/ reports

The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and Related Parties. This Policy specifically deals with the review and approval of Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All the Related Party Transactions entered in the Ordinary Course of Business and at Arm's Length were reviewed and approved by the Audit Committee. All Related Party Transactions are placed before the Audit Committee for its review on a quarterly basis.

Details required to be disclosed pursuant to the provisions of Section 186 of the Act are disclosed in the Notes to the Financial Statements and forms a part of this Annual Report.

10) Auditors:

M/s N. N. Jambusaria & Co., Chartered Accountants, Mumbai (Registration No. 104030W), were appointed as statutory auditors of the Company at the 114^th AGM held on 28^th September 2022 for the second term of five consecutive years, to hold office from the conclusion of 114^th AGM until conclusion of 119^th AGM.

As per the amended section 139 of the Act, the appointment of Statutory Auditors is not required to be ratified at every AGM.

There is no qualification, reservation or adverse remark or disclaimer by the Auditors in their Report. Hence, Report of the auditors, read with the notes to the financial statements, is self-explanatory and need no elaboration.

Your company is required to maintain cost records. Accordingly, pursuant to the recommendation of the Audit Committee, the Board has appointed M/s Nisha Patel & Associates, Cost Accountants (Firm Registration No. 102667) as the Cost Auditor for the financial year ending on 31^st March, 2025, at a remuneration of ' 75,000/- (Rupees Seventy-Five thousand only) plus applicable taxes, who have given consent and eligibility certificate to act as a Cost Auditors of your Company.

The remuneration payable is required to be ratified at the ensuing 116^th AGM.

Pursuant to the recommendation of the Audit Committee, The Board has appointed M/s Jignesh M. Pandya & Co. (CP No. 7318), a practicing Company Secretary, to undertake the Secretarial Audit of the Company for the year ended 31^st March, 2024.

Secretarial Audit Report of the Company for the year ended 31^st March, 2024 is annexed to this Report as Annexure - H.

In terms of Section 118 (10) of the Act, the Company states that the applicable Secretarial Standards i.e., SS-1 and SS-2, issued by the Institute of Company Secretaries of India, relating to Meetings of Board of Directors and General Meetings respectively, have been duly complied with.

Your Company has been regular in meeting its obligation towards payment of Principal/Interest to the Banks and other institutions.

The Board of Directors of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis which forms a part of the Annual Report.

Your Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. These controls have been identified by the management and are checked for effectiveness across all locations and functions by the management and tested by the Auditors on a sample basis. The controls are reviewed by the management periodically and deviations, if any, are reported to the Audit Committee periodically.

During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

At the ensuing AGM, Mr. Nikhil Merchant (DIN: 00614790), retires by rotation and being eligible, offers himself for re-appointment.

Mr. Chetan Selarka (DIN: 03224037) Chief Financial Officer of the Company has been designated as Whole Time Director (Key Managerial Personnel) and Chief Financial Officer of the company with effect from 14^th August 2024.

Mr. Ashish Bairagra (DIN: 00049591) has been appointed as an Independent Director of the Company with effect from 14^th August 2024.

Mr. Prabhakar Reddy Patil (DIN: 00377406) has been appointed as an Independent Director of the Company with effect from 14^th August 2024.

Mr. Arun Agarwal, Company Secretary and Compliance Officer has tendered his resignation on 30^th June 2024 and Mr. Deepesh Kedia has been appointed as Company Secretary & Compliance Officer from 01^st July 2024.

During the financial year under review:

Pursuant to the Section 134 of the Act and SEBI (LODR) Regulations 2015, the Board has carried out an annual evaluation of its own performance, all the committees and Individual Directors including chairman of the Board.

There was no change in the nature of business of the Company;

The Company has not accepted any deposits from public;

iv. Significant and material orders passed:

There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future;

v. Prevention of Sexual Harassment of Women at Workplace:

The Company has constituted a committee in compliance of the provisions of “Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013”.

No case was reported to the Committee during the year under review.

There were no applications made or any proceedings pending under IBC by or against the Company;

There were no instances of onetime settlement with any Banks or Financial Institutions; viii Giving of loan for purchase of shares:

The Company has neither made any provision of money nor provided any loan to the employees of the company for subscription to/purchase of shares of the Company, pursuant to section 67 of the Act and Rules made thereunder;

The Statutory/Cost/Secretarial Auditors have not reported any instances of frauds committed in the Company by its officers or employees to the Audit Committee under Section 143(12) of the Companies Act;

There were no significant material changes and commitments, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

There are various Board constituted Committees as stipulated under the Act and SEBI Listing Regulations namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility (CSR) Committee and Risk Management Committee. Brief details pertaining to composition, terms of reference, meetings held and attendance there at of these Committees during the year has been enumerated in Corporate Governance report.

Pursuant to Section 134 (3) (c) of the Act, the Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) appropriate accounting policies have been selected and applied consistently. Judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the company as on 31^st March, 2024 and of the profit of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the Annual accounts have been prepared on a going concern basis;

(e) internal financial controls have been laid down and followed by the company and that such controls are adequate and are operating effectively;

(f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The relationship with all the concerned continued to remain harmonious and cordial throughout the year under review.

19) APPRECIATION:

The Directors place on record their appreciation for support and timely assistance from Financial Institutions, Banks, Government Authorities and above all, its Shareholders, who have extended their valuable support to the Company.

The Directors also wish to appreciate sincere and dedicated efforts and services by all the employees/staff