I welcome you all to the 105th Annual General Meeting of Garden ReachShipbuilders & Engineers Ltd. I thank you for attending the virtual AGM of theCompany and hope you and your dear ones have been able to take COVID 19 vaccine and aresafe and healthy in these difficult time.
During the financial year 2020-21 the unprecedented Covid-19 pandemic saw our nation'sGDP contract by 7.3% resulting in a lasting impact on the social fibre and the economicgrain of the country. Yet your company exhibited tenacity and resilience in such acalamity and came out unscathed.
Your Company is a labour intensive industry with heavy dependence on the supply chainsystem. On both these fronts due to lockdowns and other related challenges company hassuffered disruptions in production especially during the first and second quarters.However your Company fought back with new mitigation strategies including refinement ofvarious processes procedures and operations resulting in decent recovery in third andfourth quarters.
The Financial performance of the company has been satisfactory. While the Revenue fromoperations was down by around 20% to Rs.1141 Crore during the financial year 202021 asagainst Rs.1433 Crore in the previous year the EBITDA PBT and PAT margins have improvedby 18% 16% and 12% respectively. A detailed review of our revenue and margins ispresented in the Directors' Report.
I am also pleased to inform you that the company has declared a dividend of 50% perequity share of the face value of Rs.10/- each and has already paid an interim dividendof 38.50% per equity share. The Board has also recommended a final dividend of 11.50% perequity share of the face value of Rs.10/- each to be paid after approval of shareholdersat this Annual General Meeting.
As regards production performance I am happy to state that despite the Covid relatedrestrictions and associated uncertainties we were able to achieve major milestones.During the year your company launched the first of the three P17A Frigate two monthsahead of schedule. The year also saw us delivering three ships one each to the IndianNavy and Indian Cost Guard and one Fast Patrol Vessel (FPV) to the Govt of Seychelles. Itgives me immense pleasure to inform you that one of these ships the FPV to the IndianCoast Guard was delivered within two days of resuming normal work post lifting oflockdown during the 1st wave of pandemic. Our total warship delivery count nowstands at 107 a figure unmatched by any of the Indian Shipyard.
Orderbook Position & Capacity Building
You would be happy to note that with a healthy orderbook of Rs.25707 Crore involving17 ships under various stages of construction there is clear revenue visibility over thenext 6-7 years. The ships under construction include three major projects of the IndianNavy - 3 Nos P17A Frigates 4 Nos Survey Vessel (Large) and 8 Nos Anti Submarine ShallowWater Crafts. In addition one Fast Patrol Vessel of Indian Cost Guard and an Ocean GoingPassenger cum Cargo Vessel of 1700T for Govt of Guyana are also under construction.
The focus on capacity building is evident as the CAPEX in FY21 has almost tripled toRs.154 crore as compared to Rs.52 Crore during the previous year. I am happy to informthat the 250-Ton Goliath Crane weighing around 1600 tons that was ordered on a SouthKorean firm has since been received and commissioned at our Main Unit. Availability ofGoliath Crane will further boost Integrated Construction and productivity of the company.Further an open Storage area (3600 sqm area) for staging of hull blocks at Main Unit wascreated in Sep 2020. In addition two each non AC and climate-controlled Warehouses havealso been commissioned at the Main Works Unit of the Company to further enhance thestorage capacity. Two Nos Hull Block Fabrication Complexes having all-weather operationscapability a mini Steel Stock Yard 80 Ton weigh bridge and a CNC Underwater PlasmaCutting machine have been commissioned at the Rajabagan Dockyard Unit. Revitalizations ofthe facilities at RBD will enable this unit to be used as a feeder unit by way ofconcurrent manufacturing of a number of units/blocks to further enhance the IntegratedConstruction capacity of your company.
Research & Development and Technology Adoption
I am delighted to inform you that we have made multiple strides in our Research andDevelopment as well as technology adoption programs. Our Design department with 100 plusdesign experts continues to work on various product development initiatives. We have takenup efforts to develop the design for Green Energy based platforms for Inland WaterTransport. Towards this MoUs have been signed with a Canadian firm for assistance indesign development and integration of energy storage solutions and M/s GE Power Conversionfor providing solutions for electric/ hybrid propulsion. GRSE has also collaborated withIIT Kharagpur to develop an efficient hull form for the purpose. Your company is alsoworking on Hovercraft designs in collaboration with a foreign firm looking at the growingdemands for Hovercrafts in India and also in friendly countries.
Digital Transformation Journey
Digital transformation is one of the most significant megatrends of our generation onewhich is continuing to grow in scope and scale. It is redefining what business companiesare in forcing a shift in long held organizational principles and practices. Your companyrecognized this critical need and moving ahead in identifying and adopting suitableindustry 4.0 technologies in various areas of its operations with special focus on DesignProduction Planning Supply Chain Management and HR.
Towards this your company has successfully undertaken the development of an AI-enabledDesign Assistant "Jigyasha" in collaboration with an IIIT Hyderabad incubatedstartup. "Jigyasha" will enable our designers to extract required informationquickly from multiple documents and design guidelines.
Your company is implementing AVEVA Marine based PDM & Siemens Team Centre PLMsoftware and Critical Chain Project management (CCPM) systems besides several digitalinterventions to make Project Management more efficient and contemporary.
To secure the assets of the Company from any external threats your Company hasinstalled an AI-enabled high-end CCTV surveillance network at five major units. Thisstate-of- the-art technology will enable surveillance of our units round the clock.
I am happy to inform you that GRSE has been accorded the 'People Capability MaturityModel (PCMM) Level 2 Certification' in line with the CMMI Institute framework developedby Carnegie Mellon University (CMU) USA. As one of the few Indian companies to beaccorded this certification GRSE intends further focus on our biggest investment ourhuman capital through structured management of HR practices. .
Export - A Thrust Area
In line with the GoI focus exports have been a key focus area of your Company and oursustained efforts have resulted in the Shipyard grabbing export orders from a fewcountries a Government of Guyana order for construction of an Ocean-Going Passenger cumFerry Vessel at the cost of USD 12.73 Million and one Fast Patrol Vessel for Government ofSeychelles at the cost of USD 13 Million. Your Company has also exported seven Bridges.(Five Bridges to Bhutan and Two Bridges to Nepal) earning export revenue of Rs.3.15 Crore.
Our focus areas are the SAARC ASEAN African and Latin American countries and we havedevised certain strategies to aggressively pursue export opportunities.
Other Business Vertical
Your company's' foray in refit vertical have started on a good note by getting an orderfor refit of a Mauritius Coast Guard Ship besides undertaking Refits/Repairs work forIndian Coast Guard Vessels. Being one of our focus area we are strengthening thisdivision to further expand business opportunities.
Serving society is ingrained in our business model and towards this we had a CSR outlayof Rs.370 lakh in the areas of School Education Healthcare Nutrition & SkillDevelopment. I am happy to inform you that your company has ensured 100% utilisation ofthe allocated funds to complete all the targeted projects. Also as part of the greenenergy drive your Company undertook various projects including installation of SolarPower and Biogas plants introduction of Electric Vehicles for local commute by officialschanging of conventional lights into LED lights and procurement of energy-efficientwelding machines etc.
In pursuance of Hon'ble Prime Minister Shri Narendra Modi's vision of 'AtmanirbharBharat' to boost indigenisation in the Defence sector Raksha Mantri Shri Rajnath Singhhas notified the 'Second Positive Indigenisation List' of 108 items. This will give afurther boost to indigenisation with the active participation of the public and privatesectors for fulfilling the twin objectives of achieving self-reliance and promotingdefence exports.
On the domestic front the thrust on 'Make in India' provides us ample opportunities inboth Defence and non-Defence Sectors. Earmarking of around 64 % of the Indian Defencemodernisation funds under the capital acquisition budget for 2021-22 and allocation ofRs.33000 Crore as capital outlay to the Indian Navy for acquisitions and repairs augerswell for the cash flow and revenue realisation of our ongoing projects from thegovernmental outlay and also more business opportunities.
As I had mentioned earlier exports is a focus area and "exports provides us anocean of opportunities". I am hopeful that we will grab a few attractive exportorders in the coming years from our targeted nations.
The investment under infrastructure funding for roads in border states under theBharatmala project and the impetus to inland water transport by Govt of India gives newopportunity in these sunrise sectors to our Engineering division that makes Portable SteelBailey Bridges and a captive market for the likely boom in the river going vessels forinland waterways.
We are moving forward with our enhanced operational capabilities technology adoptionand a healthy order book.
In the coming years we envision GRSE doing value creation across the financial socialand economic canvas to usher in prosperity for its' stakeholders whilst strengtheningIndia's defence capabilities. Let's accelerate our company's forward march withpositivity purpose and passion. While the road ahead is not easy but let us not bedeterred by unexpected and temporary problems such as the pandemic and distraction byunimportant issues that dissipate our energies.
I express my heartfelt thanks to the Ministry of Defence Central and State GovernmentAuthorities and Indian Navy & Indian Coast Guard Authorities for their unstintedsupport and valuable guidance. I would also like to take this opportunity to convey myheartfelt gratitude to all our esteemed shareholders for their enduring faith andconfidence they have reposed in us. Last but not least I appreciate the untiring effortsand unflinching commitment of the Team GRSE who rose to the occasion in such testingtimes to achieve the goals of the Company. The support and faith reposed by the Board ofDirectors have helped steer the Company on a steady course and stable growth trajectory.
V. K. Saxena Rear Admiral IN (Retd.)
Chairman & Managing Director.