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Garden Reach Shipbuilders & Engineers Ltd.

BSE: 542011 Sector: Others
NSE: GRSE ISIN Code: INE382Z01011
BSE 00:00 | 22 May 135.10 -4.30






NSE 00:00 | 22 May 135.10 -4.25






OPEN 135.00
52-Week high 249.40
52-Week low 105.30
P/E 10.50
Mkt Cap.(Rs cr) 1,548
Buy Price 134.50
Buy Qty 110.00
Sell Price 137.50
Sell Qty 25.00
OPEN 135.00
CLOSE 139.40
52-Week high 249.40
52-Week low 105.30
P/E 10.50
Mkt Cap.(Rs cr) 1,548
Buy Price 134.50
Buy Qty 110.00
Sell Price 137.50
Sell Qty 25.00

Garden Reach Shipbuilders & Engineers Ltd. (GRSE) - Chairman Speech

Company chairman speech

Dear Shareholders

It gives me immense pleasure in welcoming all of you to this 102na AnnualGeneral Meeting of the Company. I would like to take this opportunity to share with youthe current Industry Scenario the Company's significant achievements during the past yearand the future outlook for the Company.

lndustry Scenario & Growth Strategy

Defence shipbuilding in India is emerging as an area of focus for public and privatesector shipyards alike. While the public sector shipyards are the frontrunners in thedefence shipbuilding space an increasing number of private shipyards are undertakingspecific measures to enhance competence and modify their existing shipbuilding repairfacilities to suit the needs of the Indian Navy and the Indian Coast Guard. Few among theprivate shipyards who entered the shipbuilding market as commercial shipbuilders havebeen repositioning themselves as companies with defence shipbuilding capabilities.

Acknowledging the competition both from public and private shipyards your Company hasstepped up its performance in terms of productivity cost competitiveness quality timelydelivery etc. Your Company is striving to set up new profit centers throughdiversification product addition adoption of latest processes & methods envisagingmodern shipbuilding requirements and self- reliance. Your Company is also looking atopportunities to promote and fruitfully implement the real objectives of 'Make in India'initiative of the nation to become totally self-reliant in the area of Maritime Securityof the country and to also explore opportunities in the export of warships.

Turnaround Performance & Dividend

I am pleased to share that during the Financial Year 2017-18 the topline of yourCompany has achieved significant growth and recorded an increase of 45% over previousyear. The Company's Profit Before Tax (PBT) was recorded at Rs. 127.75 crore and the NetProfit (PAT) was at T 86.80 crore which are 535% and 657% higher than last year's results.The Company's Net Worth stands at Rs. 1015.93 crore as on 31 Mar 2018.

The Board of Directors of the Company has recommended a dividend @ 4435% on theCompany's paid up equity capital amounting to Rs. 50.80 crore (approx.). During the yearthe Company has made a contribution of Rs. 218.61 crore to the National Exchequer by wayof payment of dividend taxes and duties to various Government Agencies.

Disinvestmentand IPO

The Cabinet Committee on Economic Affairs on 12 Apr 2017 had approved disinvestmentof the Company's shares through IPO and its subsequent listing. Your Company had filed theDraft Red Herring Prospectus with SEBI on 26 Mar 2018. Thereafter your Company filed itsRed Herring Prospectus with the Registrar of Companies on 07 Sep 2018 for disinvestment of25.50% of the Equity Share Capital of the Company held by the President of India throughthe Ministry of Defence Government of India. The Issue opened on 24 Sep 2018 and closedon 01 Oct 2018. The Issue saw a reasonable response from the public.

Moll Rating

In terms of parameters contained in the Memorandum of Understanding signed by yourCompany with the Government of India for the year 2017-18 your Company is expected to berated as '‘Excellent" in its performance this year which marks a significantimprovement over the 'Good' rating received last year.

Significant Achievements

• Delivered 06 Warships to Indian Navy in 16 months between Jun 2017 and Sep 2018.

• Delivery of last two LCUs & last WJFAC with Zero Shipbuilders Liability andafter completion of Weapon & Sensor Trials

• For the 1st time in the country - Integration of Carbon CompositeSuperstructure with steel Hull on-board INS Kiltan 3"1 Anti-SubmarineWarfare Corvette delivered to the I nd ian Navy.

• Successful Bidders for construction of 4 Hydrographic Survey Vessels (Large) and8 Anti- Submarine Warfare Shallow Water Crafts for Indian Navy in Competitive BiddingProcess which also included participation from Leading Private Shipyards of the Country.

• Received orders for supply of 28 Nos. 1 MW DG Set for P-17A project at a totalvalue of Rs. 225.82 crore which is highest ever order received by DEP Ranchi.

• Commissioned a Virtual Reality Lab.

Corporate Governance

Your Company has been upholding highest standards of transparent & ethicalGovernance practices while creating value for all the stakeholders. In testimony for9'" year in succession your Company has achieved excellent grading in compliance withthe conditions of Corporate Governance for Central Public Sector Enterprises Governmentof India.

GRSE also received 'Nil' comments from CAG for 18 years in a row

Your Company also received ICC PSE Excellence Award for Corporate Governance.

Order Book Position

As on 31 Jul 2018 the order book position of the Company stands at around Rs.20313.61 crore for all our product categories of which our shipbuilding order bookconsisted orders of 13 vessels with an aggregate outstanding revenue value of Rs.20029.42 crore. Your Company is continuing with its efforts for bagging more orders forall our business verticals.

I am also pleased to inform you that your Company has emerged as the lowest bidder forthe construction of 04 Nos. Survey Vessel (Large) for the Indian Navy and as the L2 bidderfor the construction of 08 Nos. Anti-Submarine Warfare-Shallow Water Crafts (ASW-SWC)which we have proposed to build at LI price. The combined order value for both the ordersis approximately Rs. 8000 crore and is expected to boost our order book by a handsomeamount. The two contracts are expected to be signed by end 2018.

Way Ahead

Your Company is strategically placed as an institution of excellence and eminence inthe warship building. You will be glad to know that the Company has planned to deliver 10warships in the next 02 financial years. Your Company has set a visionary target for theValue of Production ('VoP') increasing to three folds over the period of next 05 years(2023-24) from the present level. In order to achieve this VoP target and make the entireship construction process time and cost effective your Company has worked out a strategyin consultation with M/s. Fincantieri Italy to implement Integrated ConstructionTechnology in Project P-17A and future warship projects of existing domestic customers(Indian Navy & Coast Guard) and overseas customers.

Weare focusing on the following growth strategies to build this Shipyard into a worldclass facility:

• Further Strengthen Relationship with Indian Navy and Indian Coast Guard byfocusing on securing orders for the construction of major weapon vessel platforms tooptimize our capacity utilization.

• Repair and Refitting of Indian Navy and Indian Coast Guard Vessels sincesubstantial market opportunities are anticipated in the coming decade in these areas.

• Upgrading Our Technological Capabilities and Facilities

• Enhancing Research and Development Capabilities by investing a greater amount ofcapital as a percentage of revenue towards R&D for the development and design ofwarships and engineering products.

• Aligning Processes to Changing Market Environments by developing strategies tocompete in the competitive marketplace.

• Pursuing New Market Opportunities for other products including ship repairdeck machinery marine pumps bridges and marine engines.

New Initiatives

Your Company has entered into a MoU with M/s. Elbeit Systems Isreal for theproduction of Unmanned Surface Vessel in GRSE under "Make in India" initiativeof the Government of India with an eventual indigenisation content of over 60%. AnotherMoU was entered into by the Company with M/s Khulna Shipyard (KSY) Bangladesh to developshipbuilding skill and know-how of Khulna Shipyard. The MoU authorizes your Company tojointly participate with KSY for shipbuilding projects of customers of KSY and to setforth understanding under which the parties will work together toward achieving theseobjectives.

Your Company also entered into a MoU with M/s. Construction Development CorporationLtd. a state owned company under Druk Holdings and Investments [DHI] Royal Government ofBhutan for promulgation of export business and cooperation on mutual interests for supplyof Bailey Bridges

Make in India

In line with the Make in India initiative of the Govt of India your company hasachieved the distinction of delivering the ASW Corvettes and LCUs with an IndigenousContent of over 90% a major step towards achieving Self-Reliance in Stateof the ArtWarship Design and Construction.

Research & Development

Your Company continues its efforts in working towards developing various conceptdesigns for vessels that can cater to the future requirement of Indian Navy and IndianCoast Guard. Generic design of platforms are also being developed which can cater torequirements of auxiliary vessels like survey and research pollution control frontlinewarships like frigates corvettes and also the vessels required for inland and coastalsecurity.

Towards this end your Company has recently inaugurated a Virtual Reality Lab at itsCentral Design Office for undertaking line out inspection on the CAD model user reviewsof critical departments at a much earlier stage and marketing of futureship designs.

Information Technology

Leveraging of technology through ERP & other IT Tools to bring in speed &efficiency in all our processes is a key focus area. Going forward steps are beinginitiated to bring in Artificial Intelligence in our Products & Processes.

Industrial Relations

Industrial Relations situation during the period across all the Units of your Companyincluding DEP Ranchi was generally been peaceful and harmonious.

HR Initiatives

Over the years the Company has developed the competency and capabilities of its humanresources which has created a talent pool and their rich shipbuilding experience made usstand apart in the field of warship design & construction. The strategic focus of theCompany has been to bring in contemporary HR Policies Processes & Practices so as toconstantly nurture & develop talents and build expertise. Value driven HRinterventions viz. Leadership Capability Development Succession Planning and CompetencyMapping have contributed significantly to the business. Aligning HR to the requirement ofPeople Capability Maturity Model is on the cards. This initiative will provide a newdirection to HR wherein competency based HR systems will be institutalised. The variousmeasures taken by HR have been recognized by way of your Company bagging the ICC PSEExcellence Award for "Human Resource Management'.

Safety First Safety Must-Alwaysa priority

Upholding the "Safety First Safety Must" Mantra your Company continues totake Workplace Health Safety Security & Environment (HSSE) including SustainableDevelopment as an integral component of its business policies and strategic plans. Inorder to ensure smooth and safe operations across locations systematic approach to safetymanagement has been adopted through close monitoring of implementation of safety norms andprocedures at work place. Renewable Energy and Sustainability are the thrust areas for theCompany. During the year your Company has installed a Bio-Gas Plant for recycling /conversion of food & kitchen waste (from the canteens) at Main Works Unit. Furtheryour Company has installed total 600kWp rooftop Solar Power Plant at Main Works Unit whichreduces consumption of conventional electrical energy and facilitates reduction inemission of greenhouse gas by about 650 ton.

Sustainable Social Care & Warmth

Your Company has on a sustained basis contributed to touch over marginalized lives andmainstreamed their aspirations for embarking on a life transforming journey based onhealth care education & skill development and community development. Your Company'smodest involvement in grass-root driven programmes for empowering the underprivileged hasbeen recognized and awarded for Economic Times Bengal Corporate Award for "Best CSRIdea" and ICC PSE Excellence Award for "CSR & Sustainability"

Skill Development

Your Company is committed to the Government's initiative to promote 'Skill India' byundertaking various skill development programmes both within and outside the Company. Wehave undertaken initiatives to support Government ITIs i.e. setting up Centre ofExcellence in Advanced Welding at Tollygunge Government ITI and Adoption of Women ITIKolkata (Gariahat) to boost the Skill India Mission.

In addition your Company has imparted technical training personality development andemployability skills training to the apprentices employed by your Company Further aspart of capacity building exercise various executives of your Company were sent abroadfor advanced training on topics like Integrated Construction Main Engine CPP ShaftingDry Docking and Electronic Control Systems for the P-17A project. Apart from this variousonsite trainings were also conducted for the executives of your Company.

Swachh Bharat

Swachh Bharat Mission (SBM) was launched on 02 Oct 2014 to fulfill the vision of acleaner India by 02 Oct 2019 as a tribute to Mahatma Gandhi on his 150' birth anniversary.Taking cognizance of the National mission and the local needs of the community yourCompany has initiated multiple interventions in the school level under the broaderguidelines of Swachh Vidyalaya Abhiyan. Your Company has constructed toilet units handwashing facility provided colour coded waste bins installed incinerators and otherancillary support structures / items as per school and community requirement in vicinityof the Production Units of your Company.

Further your Company has undertaken various in-house initiatives like such as trainingto employees on cleanliness and hygiene organizing mini marathon to spread awareness oncleanliness and hygiene painting and essay competition for employees' families on topicsof cleanliness tree plantation etc. to create awareness among people.


I would like to conclude by thanking the Central and State Government AuthoritiesIndian Navy and Coast Guard Authorities and the Shareholders for their continued trustand confidence they have reposed in us. I would like to place on record our sincere thanksto the Comptroller & Auditor General of India the Principal Director of CommercialAudit the Statutory and Branch Auditors Internal Auditors Cost Auditors SecretarialAuditors and the Principal Controller of Defence Accounts (Navy) for their valuablesuggestions and co-operation. I acknowledge the patronage of our Bankers Suppliers andBusiness Associates. I also acknowledge with gratitude the continual assistance andguidance received from Ministry of Defence Department of Defence Production Indian NavyIndian Coast Guard and Ministry of Home Affairs. Last but not the least I appreciate thededication and hard work put in by all the employees of the Company to achieve its goaland the Board of Directors who have supported and guided the Company to put it on a pathof accelerated growth.

Thanking you all

V. K. Saxena
Place: Kolkata Rear Admiral IN (Retd.)
Dated: 4" October 2018 Chairman & Managing Director