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Garden Reach Shipbuilders & Engineers Ltd.

BSE: 542011 Sector: Others
NSE: GRSE ISIN Code: INE382Z01011
BSE 00:00 | 04 Jun 149.00 0.10
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149.65

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152.10

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146.00

NSE 00:00 | 04 Jun 149.15 0.60
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151.95

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OPEN 149.65
PREVIOUS CLOSE 148.90
VOLUME 2926
52-Week high 249.40
52-Week low 105.30
P/E 11.58
Mkt Cap.(Rs cr) 1,707
Buy Price 147.30
Buy Qty 20.00
Sell Price 150.95
Sell Qty 5.00
OPEN 149.65
CLOSE 148.90
VOLUME 2926
52-Week high 249.40
52-Week low 105.30
P/E 11.58
Mkt Cap.(Rs cr) 1,707
Buy Price 147.30
Buy Qty 20.00
Sell Price 150.95
Sell Qty 5.00

Garden Reach Shipbuilders & Engineers Ltd. (GRSE) - Director Report

Company director report

Directors’ Report

To

The Members

Garden Reach Shipbuilders & Engineers Limited

1. Your Directors have great pleasure in presenting before you the Annual Report ofyour Company for the financial year 2016-17.

2. The Audited Financial Statements for the financial year 2016-17 together with theReport of the Statutory Auditors of your Company are appended to this Report.

PERFORMANCE HIGHLIGHTS

3. Turnover / Value of Production: During the financial year 2016-17 yourCompany registered a Value of Production ('VoP') of Rs. 930.41 crore as against Rs.1662.00 crore in the previous year.

4. Profit Before Tax: The Company recorded its Profit Before Tax of Rs. 20.89crore for FY 2016-17 as against Rs. 249.15 crore in the previous year.

GRADING UNDER MEMORANDUM OF UNDERSTANDING WITH DPE

5. Your Company has been rated "Very Good" in the MoU 2015-16 by theDepartment of Public Enterprises. The composite score for the year 2015-16 was 74.84 outof 100.

6. The assessment for the year 2016-17 will be done by DPE on the basis of the AnnualReport to be submitted after the Annual General Meeting. As per internal assessment it isexpected that your Company will be rated "Good" during this year.

AWARDS & RECOGNITIONS

7. Your Company has received the following awards and recognitions during the year:

(a) GOLD Award at the International Convention on Quality Control Circle- 2016(ICQCC-2016): GRSE's Quality Circle Team "ANANYA" participated in theInternational Convention on Quality Control Circle - 2016 (ICQCC-2016) held at BangkokThailand and was conferred with GOLD Award in recognition of its outstanding performanceon 'Quality Control' activities.

(b) 'Rajbhasha Kirti Puraskar': GRSE has been awarded the prestigious RajbhashaKirti Puraskar - 1st Prize for the year 2015- 16 for Excellence inImplementation of Official Language in the Company and the prestigious Rajbhasha KirtiPuraskar - 2nd Prize for the Company's Hindi Magazine

Rajbhasha Jagriti under Grih Patrika Puraskar for the year 2015-16. This is the HighestAward of the Govt of India for excellence in implementation of Official Language.

GRSE is the proud winner of the Rajbhasha Kirti Puraskar for Excellence inImplementation of Official Language forfour years in a row.

(c) ISO 9001:2015 Certification: The three major facilities - Design OfficeMain Works Unit and Fitting Out Jetty Unit of GRSE's Shipbuilding Division have beenaccredited with ISO 9001:2015 Certification. It may be mentioned that other facilities ofShipbuilding Division are already ISO 9000 complied. With the completion of ISO 9001certification of GRSE's Ship Building Division the Shipyard is at par with the mostadvanced shipyards in the world.

The final certificate of ISO 9001:2015 conforming to the scope of Ship Design ShipBuilding and Ship Repair was issued by IRQS.

Further the other Units of GRSE i.e. DEP Ranchi Deck Machinery UnitTaratala andBailey Bridge Unit 61 Park are already ISO certified and with this all divisions of GRSEare now ISO 9001 certified.

SIGNIFICANT ACHIEVEMENTS DURING THE FINANCIAL YEAR 2016-17

Deliveries of Ships

8. During the year under review your Company has delivered the first ship of LandingCraft Utility (LCU) class 'L-51' (GRSE Yard 2092) to Indian Navy on 30 Sep 16. This shipwas subsequently commissioned into the Indian Navy on 28 Mar 17 by Vice Admiral BimalVerma Commander-in- Chief Andaman and Nicobar Command at Port Blair. The commissioningceremony was attended by Vice Admiral Dilip Deshpande Controller of Warship Productionand Acquisition RAdm V K Saxena (Retd.) C&MD GRSE and other dignitaries.

9. Your Company has also delivered the first 03 ships of the highly maneuverableFollow-On Water Jet Fast Attack Craft (FO-WJFAC) class Ships ‘Tarmugli’Tihayu’ & ‘Tillanchang’ to Indian Navy on 16 Apr 30 Aug & 21 Dec16 respectively.

10. The Indian Navy commissioned the Fast Attack Craft 'Tarmugli' on 23 May 16.'Tihayu' the second ship of Tarmugli Class was commissioned at the Eastern Naval CommandVisakhapatnam on 19 Oct 16. Both of these ships were commissioned into the Indian Navy byVice Admiral HCS Bisht Flag Officer Commanding-in-Chief Eastern Naval Command atVisakhapatnam.

11. 'Tillanchang' the 3rd ship of the FO-WJFAC project was commissionedinto the Indian Navy by Vice Admiral Girish Luthra Flag Officer Commanding-in-ChiefWestern Naval Command at Karwar on 09 Mar 17.

Major Projects in Progress

12. Third ship of Anti-Submarine Warfare Corvette (ASWC) class 'Kiltan' (GRSE Yard3019) is in advanced stages of construction. GRSE is confident of handing over this shipto Indian Navy by Sep 2017.

13. The second ship of Landing Craft Utility (LCU) MK-IV class 'L-52' (GRSE Yard 2093)is also being readied for delivery. The ship conducted its CST in Mar 2017 and is expectedto be delivered by Jun 2017.

Inauguration of Modernised Facility at DEP Ranchi

14. The modernised Diesel Engine Assembly Shop of Diesel Engine Plant Ranchi of yourCompany was inaugurated on 25 Apr 2016. This modernisation was commenced during Jul 2014at an estimated expenditure of Rs. 12 crore. The objective of modernisation was to createa new

state-of-the-art Diesel Engine Assembly Shop that would enable carrying out overhauland assembly of engines under dust and moisture proof environment. With the commissioningof this "Modernised Diesel Engine Assembly Shop" your Company's DEP Ranchi Unitis poised to take up work on next generation of marine diesel engines and also move aheadon manufacture of marine diesel engines under 'Make in India' initiatives.

OPERTATING RESULTS

15. The summarized operating results for the financial years 2016-17 and 2015-16 aregiven below:

( Rs. in crore)

Particulars 2016-17 2015-16
Value of Production 930.41 1662.00
Profit Before Depreciation Interest and Tax 56.66 281.34
Finance Cost 3.04 1.03
Finance Cost due to discounting 6.08 3.37
Depreciation 26.65 27.80
Profit Before Tax 20.89 249.15
Provision for Tax 8.65 87.09
Profit After Tax 12.23 162.05
Other Comprehensive Income (Net of Tax) 0.23 (4.80)
Total Comprehensive Income 12.46 157.25

16. The financial position of your Company as on 31 Mar2017and31 Mar 2016 is shownbelow:

R in crore)

Particular As on 31 Mar 17 As on 31 Mar 16
Capital Employed 981.12 1106.13
Gross Block 604.54 566.40
Net Block 358.34 343.70
Working Capital 622.78 762.43
Net Worth 1081.51 1134.26
Value Added 302.74 483.07
Ratios: (%)
Profit before interest and tax: Capital Employed (%) 2.44 22.62
Profit after tax: Net Worth (%) 1.15 13.86

VALUE OF PRODUCTION

17. During the financial year under review your Company achieved VoP of Rs. 930.41crore as against Rs. 1662.00 crore during the previous year.

18. The comparative VoP for the three Divisions are as follows:

f Rs. in crore)

Year Ship Division Engineering Division Engine Division Total
2016-17 840.89 85.80 3.72 930.41
2015-16 1533.39 109.79 18.83 1662.00

PROFIT BEFORE TAX

19. Your Company earned Profit Before Tax of Rs. 20.89 crore as against C249.15 crorein the previous year.

NET WORTH

20. During the year under review your Company reported Net Worth of Rs. 1081.51 croreas at 31 Mar 17 against Rs. 1134.26 crore as reported at 31 Mar 16.

VALUE ADDITION

21. The Value Added during the financial year under review was Rs. 302.74 crore asagainst Rs. 483.07 crore during the previous year. The Value Added per Employee was f12.61 lakh as compared to Rs. 18.64 lakh during the previous year.

APPROPRIATIONS & DIVIDEND

22. Considering the financial performance of your Company in the year 2016-17 theDirectors are pleased to recommend the following appropriations from the disposablesurplus:

( Rs. in crore)

Profit After Tax 12.23
Less :
Transfer to General Reserve -
Dividend on the Paid-up Capital 54.08
Dividend Tax 11.01
Balance retained in Statement of Profit & Loss (52.86)

CONTRIBUTION TO EXCHEQUER

23. Your Company has made a contribution of f144.08 crore to the National Exchequerduring the financial year 2016-17 as detailed below:

(Rs in crore)

(a) Income Tax Wealth Tax & Dividend Tax 84.26
(b) Customs Duty 1.90
(c) Excise Duty 4.43
(d) Sales Tax (Including Entry Tax) 47.30
(e) Service Tax 6.19
TOTAL 144.08

Note: The above figures are inclusive of Education Cess but exclusive of the ExciseDuty & Taxes included in the purchase price of the inputs.

CAPITAL STRUCTURE

24. The Authorized Equity Share Capital of your Company as on 31 Mar 17 was Rs. 125crore. During the year under review the Government of India did not make any freshinvestments in the Share Capital of your Company. Consequently the Paid-up Equity ShareCapital as on 31 Mar 17 remained the same at Rs. 123.84 crore.

LOANS FROM THE GOVERNMENT

25. Your Company neither had any outstanding loan to the Government of India at thebeginning of the year nor did it take any fresh loan during the current year.

CONTRACTS AND ARRANGEMENTS WITH

RELATED PARTIES

26. During the year under review your Company did not enter into any contract /arrangement / transaction with Related Parties in pursuance of Section 188 of theCompanies Act 2013 and the rules framed thereunder.

EXPENDITURE ON ENTERTAINMENT AND

FOREIGN TRAVEL

27. Expenditure on business promotion abroad during the year was Rs. 97.59 lakh(approx.). An amount of Rs. 2.44 crore (approx.) was spent on foreign travel by yourCompany's Executives for export promotion and for business visits.

FOREIGN EXCHANGE EARNINGS & OUTGO

28. The information in respect of Foreign Exchange Earnings and Outgo is contained inNote 49 & 50 of the Financial Statements.

MICRO SMALL AND MEDIUM ENTERPRISES

29. Your Company has been providing increased thrust on enhancing procurement fromMicro Small and Medium Enterprises (MSMEs) and has implemented the Public ProcurementPolicy for MSMEs issued by the Ministry of MSMEs. Your Company extends technical guidanceand requisite support to these industries wherever required. Your Company is regularlyconducting MSME Vendor Development programmes in association with Cll and MSME MinistryGovt of West Bengal. Our quality control personnel visit these industries to assist andensure that the quality of the products meet the requisite standards.

30. During 2016-17 your Company procured items worth Rs. 55.36 crore from the MSEswhich is approx. 27.27% of the total annual procurement value (considering exclusions asapplicable for MSEs). List of items reserved for MSEs procurement is available on yourCompany’s website at: http://www.qrse.nic.in/mse notice website.pdf.

AUDITORS

31. The Comptroller & Auditor General of India have under Section 139(5) of theCompanies Act 2013 appointed M/s. G P Agrawal & Co. Chartered Accountants Kolkataas the Statutory Auditors for your Company and M/s. Sinha & Ghelani CharteredAccountants as Branch Auditors for the Diesel Engine Plant Ranchi for the year 2016-17.

32. The Comments of the C&AG u/s 143(6) of the Companies Act 2013 on theFinancial Statements of the Company for financial year 2016-17 will be appended onreceipt.

COST AUDITORS

33. Pursuant to Section 148 of the Companies Act 2013 and the Companies (Cost Recordand Audit) Rules 2014 the Board of Directors of your

Company has appointed M/s. Chatterjee & Co. Cost Accountants Kolkata as the CostAuditors of your Company for the financial year2016-17to conduct audit of cost recordsmaintained by your Company.

MANPOWER

34. The total Manpower strength on permanent roll of your Company as on 31 Mar 17 was2401 including 504 Officers. During the previous quarter ended 31 Dec 16 a total of 2459employees were borne in the roll of the Company including 01 employee on contractualservice. Statements showing the representation of SC/ST/Women etc. as on 31 Dec 16 as wellas the total recruitment made during the period from Jan to Dec 16 are given at Appendix- "A" and "B" respectively.

35. Your Company has no employee covered under Section 197(12) of the Companies Act2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

CORPORATE GOVERNANCE

36. Your Company is committed to maintain the highest standards of corporate governancein all spheres of business activity carried out by your Company and continues to laystrong emphasis on transparency accountability and integrity. Your Company hasimplemented the Guidelines on Corporate Governance for CPSEs issued by Department ofPublic Enterprises (DPE) vide OM No. 18(8)/2005-GM dated 14 May 2010 both in letter andspirit. The Report on Corporate Governance along with Compliance Certificate from M/s.Maheshwari R & Associates Practicing Company Secretaries as required under the saidGuidelines has been placed at Appendix - "C" hereto.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

37. The Management Discussion & Analysis Report as required under the DPEGuidelines on Corporate Governance for CPSEs is placed at Appendix - "D"to this Report.

BOARD OF DIRECTORS

38. The following Directors ceased to be Members of the Board of your Company duringthe period under review:

(a) Shri Ramesh Chandra Nautiyal Director (Personnel)

(b) RAdm Anil Kumar Verma IN (Retd).

Chairman & Managing Director

39. The Board of Directors of your Company placed on record its deep appreciation forthe valuable contributions made by the outgoing Directors during the tenure of theirassociation with your Company.

40. The Board welcomed the appointment of the following three new Directors during thefinancial year 2016-17:

(a) Shri Ashwani Kumar Mahajan Addl. FA(AK)& JS Part-Time Government Director

(b) Shri Asit Kumar Nanda Director (Personnel)

(c) RAdm Vipin Kumar Saxena IN (Retd.) Chairman & Managing Director

41. Your Company has received declarations from all the Independent Directors of yourCompany confirming that they meet the criteria of independence as prescribed under boththe Companies Act 2013 and the Guidelines on Corporate Governance for CPSEs issued by theDepartment of Public Enterprises.

MEETINGS OF THE BOARD

42. Nine meetings of the Board of Directors were held during the year under review. Forfurther details please refer to the Report on Corporate Governance placed at Appendix-"C" of this Report.

DISCLOSURES

CSR & Sustainability Committee

43. The CSR & Sustainability Committee of the Board of Directors comprise of ShriAjay Bhattacharya Independent Director as Chairman Director (Shipbuilding) and Director(Personnel) as Members. For further details please refer to the Report on CorporateGovernance placed at Appendix - "C" of this Report.

Audit Committee

44. The Audit Committee of the Board of Directors comprise of following Directors:

1 Shri Swapan Kumar Mukherjee Chairman Independent Directors
2 Cmde M Jitendran Member
3 Shri Ajay Bhattacharya Member
4 Cmde (Retd.) R Ghosh Member Director (Shipbuilding)

For further details please refer Report on Corporate Governance placed at Appendix-"C"ofthis Report. It is further stated that all the recommendations made by the Audit Committeewere accepted by the Board.

Vigil Mechanism

45. As a part of its vigil mechanism your Company has adopted a Whistle Blower Policyto provide appropriate avenues to the employees of your Company to report to themanagement instances of unethical behavior actual or suspected fraud or violation ofyour Company's Code of Conduct. As per the Whistle Blower Policy a whistle blower cansend written communications to the Chairman & Managing Director of your Company (orany person to whom he has delegated his power). Alternatively he may send such ProtectedDisclosure directly to the Chairman Audit Committee. Once a Protected Disclosure isreceived a Screening Committee comprising the Chairman & Managing Director of yourCompany a Functional Director as nominated by C&MD and the Chairman Audit Committeewill be constituted to investigate into the matter. All employees are encouraged to usethis whistle blowing mechanism and voice their concerns to the Management. Further allemployees have been given access to the Chairman Audit Committee. The Whistle BlowerPolicy can be accessed on your Company's website at the following link: http://www.grse.nic.in/Whistle%20Blower% 20 Policy.pdf

EXTRACT OF ANNUAL RETURN

46. The extract of Annual Return of your Company for the financial year 2016-17 in FormMGT-9 as required under Section 92(3) and Rule 12 of the Companies (Management andAdministration) Rules 2014 is appended as Appendix-"E" to this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

47. Pursuant to the requirement under Section 134(5) of the Companies Act 2013 yourDirectors hereby confirm that:

(a) in the preparation of the annual accounts for the year ended 31 March 2017 theapplicable accounting standards read with requirements set out under Schedule III to theCompanies Act 2013 had been followed and there are no material departures from the same;

(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as at 31 March 2017 and of the profitof your Company for the year ended on that date;

(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of your Company and for preventing and detecting fraud and otherirregularities;

(d) the Directors had prepared the annual accounts on a 'going concern' basis; and

(e) the Directors had devised proper systems to ensure compliance with the provisionsof all the applicable laws and that such systems are adequate and operating effectively.

RISK MANAGEMENT AND INTERNAL FINANCIAL

CONTROLS

48. Your Company has in place a Risk Management Policy in line with the DPE Guidelineson Corporate Governance for CPSEs to ensure the integration and alignment of the riskmanagement system with the corporate and operational objectives. The Policy is aimed atputting in place a comprehensive risk management system consisting of a defined process ofrisk management the methodology of identification assessment response monitoring andreporting of risk. The policy would provide assurance to the management and the Board thatkey risks are being properly defined and effectively managed. The Risk Management SteeringCommittee (RMSC) constituted under the Policy has been entrusted with the responsibilityto identify and monitor the risks associated with the business of the Company and takemitigating actions for addressing those risks. The RMSC is assisted by various RiskManagement Committees formed under the respective functional CGMs / GMs / In-chargeswhich evaluates the risks identified in their respective areas of operation.

49. Internal Control Systems in your Company are commensurate with the nature of itsbusiness and the size & complexity of its operations. These systems are routinelytested and certified by Statutory as well as Internal Auditors. Such controls along withcomplementary controls were tested and no reportable material weaknesses in process/operation were observed. An independent internal audit mechanism is in place forconducting audit in various operational and financial matters. C&AG also conductspropriety audits. Significant audit observations and follow up actions thereon arereported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness ofyour Company's internal control environment and monitors the implementation of auditrecommendations.

PERFORMANCE OF SHIP DIVISION

50. Your Company has delivered 04 ships to the Indian Navy in the FY 2016-17 viz. thefirst of the LCU class 'L-51' and the first three ships of FO-WJFAC class -‘Tarmugli’ ‘Tihayu’ & ‘Tillangchang’. With regard theFO-WJFAC class ships the RBD Unit dedicated for production of small ships from KeelLaying to Delivery has enabled the Company to achieve these deliveries.

51. The following cardinal events were achieved during the financial year 2016-17:

Delivered Ships

SI. No. Ship Yard Delivery
1 Tarmugli (1a FO-WJFAC) 2109 16 Apr 16
2 Tihayu (3a FO-WJFAC) 2111 30 Aug 16
3 L-51 (1s' Landing Craft Utility) 2092 30 Sep 16
4 Tillanchang (2" FO-WJFAC) 2110 21 Dec 16

Ships ready for Delivery

SI. No. Ship Yard Status
1 L-52 (2nd LCU) 2093 Ship conducted its CST in Mar 17. Will be delivered by Jun17
2 Tarasa (4m FO-WJFAC) 2112 Will be delivered by May 17
3 Kiltan (3raASWC) 3019 Will be delivered by Sep 17

Ships Launched

SI. No Ship Yard Launch Date
1 Tarasa (4th FO-WJFAC) 2112 30 Jun 16
2 L-57 (7th LCU) 2098 24 Nov 16
3 L-58 (8th LCU) 2099 16 Dec 16

Start Production

SI. No. Ship Yard Date
1 fpv 2113 16 Apr 16
2 2nd FPV 2114 05 Sep 16
3 3d FPV 2115 05 Nov 16
4 4m FPV 2116 02 Dec 16

ENGINEERING DIVISION

52. The Value of Production achieved by the Engineering Division during the financialyear 2016- 17 amounted to Rs. 86 crore.

PORTABLE STEEL BRIDGE UNIT

53. The Portable Steel Bridge Unit of your Company has supplied 74 bridges during theyear under review amounting to Rs. 81 crore as against 70 bridges supplied in the previousyear amounting to Rs. 80 crore. The marginal growth is mainly because of increase incompetition and most of the customers resorted to competitive bidding. In this businesssegment as on date registered competitors are 15 as against 4 about 3 years back.

54. The sustained efforts initiated during previous years to increase businesspotential resulted in entering into an MoU & Rate Contract with Rate. Gen. of BorderRoads for supply of Galvanized Bridges. Against this an order for supply of 12 Bridges toProject ‘Himank’ is under execution and 5 Nos. are already supplied.

55. During this year the Bailey Bridge Unit had supplied 17 Nos. of Bridges to theGovernment of Odisha & Chhattisgarh under the prevailing MoU agreement and some moreare in the process of supply.

56. In export business the Company has received orders worth Rs. 4 crore from Bhutanand had fruitful discussions with Myanmar and expect to supply good number of bridgesduring 2017- 18.

57. To enable to compete in the Global Market the R&D team of the Unit hadvalidated the bridge design (i.e. using both 5 ft. & 7 ft. Panel) to AASHTO Standardsand efforts are in progress to further increase the bridge span. To confirm to the latestversion of IRC-6 the Double Lane Bridge design for 7.5 m width (i.e. from the earlier 7 mwidth) is under validation followed by live load test scheduled in 2017-18.

58. At present your Company's order book is about Rs. 65 crore and the unit is poisedto cross a VoP figure of Rs. 100 crore during 2017-18.

59. The Bailey Bridge unit of your Company has also commenced production of PortableSteel Bridges from DEP unit at Ranchi in Jul 2016 to meet extra demand after completion ofnecessary infrastructure augmentation.

DECK MACHINERY AND NAVAL PUMP UNIT

60. The equipment manufactured and supplied by Taratala Unit of your Company’sDeck Machinery and Pump Department consists of Marine Fresh Water and Sea Water Pumps ofdifferent discharge and heads Rail Less Helo Traversing Systems Hydraulic andConventional Boat Davits Anchor and Warping Capstans Ammunition and Rocket LauncherDavits Survey Motor Boat Davits Hydrographic Davits Oceanographic Winches Aft Anchorcum General Purpose Winch for beaching operations of flat bottom ships etc. for IndianCoast Guard and Indian Naval Ships.

61. A total number of 25 different equipment and machinery have been supplied tovarious new construction yards as well as operational ships of Indian Navy and IndianCoast Guard besides 13 number pumps supplied for SNF and SNM class of ships of Indian Navyduring FY 2016-17. State- of-the-art electro-hydraulic boat davits with programmable logiccircuits for attaining precise control in life boats operation at sea by auto tensioninghas been manufactured and supplied after successful factory acceptance trials forreplacement of Russian origin davits for Talwar Class of Ships. Harbour Acceptance Trialsof 02 numbers RailLess Helo Traversing System on CGOPVs has been successfully completed atGSL.

62. The unit has registered a Value of Production worth Rs. 5 crore in FY 2016-17.

ENGINE DIVISION (RANCHI)

63. The VoP achieved by the Engine Division stood at Rs. 4 crore during 2016-17. Thelow VoP of the Unit is mainly due to non-finalization of work order for W6 routines ofMain Engines of Ex- SCGS Topaz with ND(V) which is likely to be finalized in 2017-18.

64. During the year under review the Service Partner Agreement with MTU(lndia) hadbeen operationalized and W6 routine of six engines have commenced in newly modernizedassembly shop for Coast Guard Ship ICGS Aruna Asaf AN & ICGS Subhadra Kumari Chauhan.

65. During this year License Agreement with M/s. MTU(F) Germany for Assembly of MTU12/16V4000M90 engine from SKD level to PKD & Local manufacturing of Parts up to 40%over next 4-5 years have been negotiated and was signed on 04 Mar 2017. Under thisagreement your Company plans to produce 12 Nos. of engines during 2017-18.

FUTURE OUTLOOK

Shipbuilding Division

66. As on 31 Mar 2017 your Company has orders for construction of 18 ships namely 02ASWCs 07 LCUs 01 FO-WJFAC 03 P-17A ships and 05 FPVs. Out of them 15 ships (02 ASWCs07 LCUs 01 Follow-On WJFAC and 05 FPVs) are presently under construction. Of the 15warships planned for delivery by mid-2019 10 belong to the Indian Navy. These ships arein various phases of their outfitting activities. 06 ships are expected to be delivered inthe current financial year and balance 04 ships in FY 2018-19. As regards to 05 FastPatrol Vessels (FPVs) the construction of ships has commenced. These are planned fordeliveries from beginning of 3a quarter of 2018 and last ship by 2ndquarter of 2019.

67. Your Company has planned to deliver 15 warships in the next two financial years2017- 18 & 2018-19. The Company is confident to enhance its performance in the comingyears and your Company is targeting delivery of the 2nd LCU & the lastFO-WJFAC in early part of next financial year. Your Company has set a very challengingtarget to increase its Value of Production to about Rs. 3000 crore over the next fiveyears.

68. Considering the performance of the Company in this financial year it has beenassessed that improvement in VoP in the coming years would majorly be contributed from theP-17A Project. Accordingly it has been decided to advance start production of P-17A shipfrom Sep 2017. The Shipyard has accordingly commenced tendering action for subcontractingwork for the P-17A Project.

69. Given that Project P-17A is to be completed in unprecedented challenging timelinesit needs to be handled with advanced planning and production methodologies employinginnovative ideas. Towards this end the Shipyard has worked out a strategy in consultationwith M/s. Fincantieri Italy to implement Integrated Construction Technology in P-17AProject and future warships. Several teams of officers have already undergone training inIntegrated Construction concepts at Fincantieri Italy for this purpose.

70. The primary focus of Design and R&D teams is to develop new state-of-the-artships for the Indian Navy and Indian Coast Guard. R&D is also being undertaken todevelop new Engineering products primarily in the Portable Steel Bridges segment DeckMachineries RailLess Helicopter Handling System and Marine Pumps considering the increasein requirements of our customers viz. Indian Navy. As regards to more definitivevalidations of new designs at tendering stage your Company had entered into an MoU withIIT Kharagpur being a premier institute in the country and R&D centre in NavalArchitecture for undertaking such specialized analysis and validation. This MoU alsoextends to various specialized design analyses for ongoing projects. This will enable yourCompany to avail necessary expertise and specialized technical services in hydrodynamicaerodynamic structural design & analysis from the Institute.

71. The modernised facilities at Main Yard of your Company have enhanced facilities forIntegrated Constuction which will result in considerable reduction in build period ofships. This will pave the way for adoption of this technology for all future warshipconstruction in the Shipyard and enable your Company to improve quality and reduce buildperiod thereby meeting the stiff timelines as being achieved by leading global players inshipbuilding industry.

72. After creating world class modern infrastructure facilities your Company has nowembarked upon new measures for modernization to upgrade the machines / tools in variousworkshops up-

gradation in planning software design tools networking & e-mailing software etc.to achieve higher productivity.

73. Your Company is fully committed to build quality ships for Indian Navy IndianCoast Guard & also for export orders. Rajabagan Dockyard (RBD) has been refurbishedand converted into a full- fledge- shipyard from where a number of ships have already beendelivered to Indian Nay & Indian Coast Guard. With this your Company is the only DPSUShipyard established with three independent production lines for big ships as well assmall ships.

74. At the same time the Shipyard is also developing the RBD unit as a major hub forundertaking fabrication and outfitting work such as plumbing cabling hull outfit etc. bysubcontractors. Towards this demolition of old buildings has been completed anddevelopment of identified areas is underway. Further your Company has planned to set upan additional plate cutting and plate storage facilities in this unit.

75. Your Company is also developing the outsourcing base with adequate qualityassurance coverage for hull fabrication plumbing cabling and hull outfit etc. to furtherstrengthen the efforts being made by your Company for meeting delivery schedules and toachieve higher customer satisfaction. Your Company is extensively outsourcing non-coreactivities of shipbuilding to the locally developed vendors. Activities like detaileddrawing preparation block fabrication pipe installation cable laying &connectorisation insulation work blasting & painting ship cleaning etc. areoutsourced and undertaken with the help of private participation.

76. By adopting the above strategies with enhanced shipbuilding capacity and keeping inview the expertise of your Company in building variety of warships for Indian Navy andIndian Coast Guard and also looking at the Maritime Capability Perspective Plan (MCPP) ofIndian Navy upto 2027 your Company is confident to bag orders of warships from bothIndian Navy and Indian Coast Guard as well as Export Orders for optimizitation of capacityutilization.

77. Asummary of your Company's future plan for the shipbuilding and engineeringdivisions for a steady business growth is given below:

(a) Optimum utilization of the Shipyard's capabilities & capacity and cutting downcost for shipbuilding projects of Indian Navy & Indian Coast Guard.

(b) Explore Non-Defence shipbuilding market for building special ships like PollutionControl Vessels Air Cushion Vehicles Research Vessels Dredgers Boats for MHA Rivercrafts for Inland Waterways Authority of India etc.

(c) Impetus to Ship Repair business to tap potential orders from Indian Navy &Indian Coast Guard.

(d) Upgrade and expand business of Prefabricated Steel Bridges Engine &Engineering products.

Portable Steel Bridges Division

78. The present capacity of Bailey Bridge unit is 06 bridges per month on an averageas assessed by Controllerate of Duality Assurance - Engineering Establishment [CCA (EE)].The Bailey Bridge Unit's Design & Development Department is involved in continuousupgradation of the product to meet the changing market requirements. The Unit has 4 Nos.of Patented designs to its credit. The latest being a bridge with higher spans and loadcapacity which meets international AASHTO standards too. This has enabled the Company toparticipate actively in global market. Through R&D efforts the Company is planning tofurther reduce the weight of Portable Steel Bridge and also the cost which shall help infurther enhancing its order book to double in next 2 to 3 years. The Company has furtherplanned to upgrade and expand its business of Pre-fabricated Steel Bridges Engine andEngineering products.

79. Your Company is also exploring the possibility of exporting Pre-fabricated SteelBridges to Peru and Myanmar apart from Bhutan. During the past 6 years your Company hassupplied good number of Portable Steel Bridges to Bhutan Myanmar and Sri Lanka. Effortsare being made to bag some supply orders from other SAARC countries and also from a LatinAmerican nation namely PERU.

CONSERVATION OF ENERGY

80. (a) Steps taken for Conservation of Energy

As a part of commitment of your Company towards energy conservation for reducing theimpact of atmospheric climate change continuation of various measures as implemented byyour Company during FY 2016-17 are listed in the succeeding paragraphs. All these actionshave facilitated in reducing consumption of electrical energy (i.e. conventional energy)as well as reduction in emission of greenhouse gases:

(i) Replacement of conventional T8 (36 Watt) lamp with energy efficient T5 (18 watt)LED light (total 180 nos.). Further 18 watt CFL light have been replaced by 9 watt LEDlight (total 90 nos.) without changing luminous intensity. This has effectively reducedthe electricity consumption from CESC grid which works out to 17858 kWh annually andthere by saving of about Rs. 1.6 lakh annually.

(ii) Replacement of 250 watt High Bay light and Flood Light with 100 watt LED High Bayand Flood Light (total 25 nos. each) without changing luminous intensity. This works outto 28080 kWh annually and thereby saving of about Rs. 2.53 lakh annually.

(iii) The Shipyard is continuing its endeavour towards optimum utilization of energy onprogressive basis by using star rated air- conditioners accredited by Bureau of EnergyEfficiency. Using battery operated material handling equipment is also a part of theenergy conservation initiative.

(iv) Your Company is maintaining the accreditation on Integrated Management Systemharmonizing ISO 14001: 2004(Environment Management System)BS OHSAS 18001:2007(Occupational Health & Safety Assessment Standard) and EN ISO 50001:2011 (EnergyManagement System) by certification body TUV NORD Germany.

(v) IMS stage audit for ISO certification was completed in early Mar 17 and there wasno Non-conformity on energy conservation.

(b) Steps taken by your Company to utilise Alternate Sources of Energy

(i) Being committed to promote green energy under sustainable development on long termbasis your Company has installed 200 kWp grid interactive solar power plant on the rooftop of Modern Hull Shop in end Jan 17 to provide electrical power to the shop.

(ii) With the above new plant the total installed capacity of rooftop solar plant is500 kWp and its present generation capacity is about 6.5 lakh units annually. This enablesGRSE to reduce consumption of conventional electrical energy and saving in electricitybill. Further this facilitates reduction in emission of greenhouse gas by about 550 tonper annum.

(iii) As per the commitment to Ministry of Defence total installed capacity of rooftopsolar plant in your Company will be 1000 kWp (i.e. 1 MW) by FY 2021 -22.

(c) Capital investment on energy conservation equipment

Capital investment made by the Company for installing the 200kWp grid interactive solarpower plant is Rs. 1.2 crore.

TECHNOLOGY ABSORPTION

81. Your Company has a robust Research & Development Plan. In the Central DesignOffice (CDO) a dedicated multi-disciplinary team is continuously working towardsdeveloping various concept designs for vessels that can cater to the future requirement ofIndian Navy. Generic design platforms are also being developed which can cater torequirements of auxiliary vessels like survey and research pollution control etc.front-line warships like frigates corvettes and vessels required for inland and coastalsecurity. The total Research & Development expenditure during the year 2016-17 was Rs.86616114/-.

ERP & IT

82. The highlights of the year under review in the area of ERP & IT are as follows:

(a) Biometric Attendance System:

The attendance system for all GRSE employees has been transformed to Biometric (SmartCard + Finger Print) in place of existing Smart Card System for more secure andpersonalized attendance system. Biometric for Contract Labours has also been implemented.

(b) Development of MIS Dashboard with analytical reports for Senior Managementhas been implemented.

(c) Visitor Gate Pass Management System

has been implemented to computerize total visitor management from any Gate with minimumwaiting time for visitors.

(d) High Quality Video Conferencing System

has been implemented to facilitate communication within as well as outside of GRSEpremise.

(e) Process has been initiated to digitize the existing Paper Files to searchable e-Documents with online Document Management System.

e-PROCUREMENT&REVERSE AUCTION

83. e-Procurement is the key component of "Mission Mode Project" underNational e-Governance Plan. It has several advantages such as cost saving saving in timesafety security speed and above all transparency in achieving efficiency inprocurement. The following milestones were achieved during the year under review:

(a) Value of materials procured through e- mode has been Rs. 1578.33 crore. TheMaterials Department of the Company achieved 98.86% of its total procurement throughe-procurement mode.

(b) Wider participation of vendors in e- procurement has been achieved. Number ofVendors registered with your Company's e-procurement system rose from 1870 to 1990 during2016-17 an increase of nearly 6.42%.

(c) 650 nos. of tenders have been floated through e-procurement mode during thefinancial year 2016-17.

(d) Approximately 550 nos. of vendors obtained on-line training on e- procurementprocedure during the year.

QUALITY ASSURANCE

84. The performance of the Quality Assurance (QA) Department of your Company during thefinancial year 2016-17 has been outstanding. During the said period QA Department hasefficiently and effectively handled the inspection load upto the satisfaction of NavalInspection Agencies like WOT MTU ETMU ICG and Class Inspection Authorities like ABSIRS DNV for 16 ships all together at different units of your Company. During this periodCST of five ships viz. FO- WJFACs - Tillanchang (Yard 2110) Tihayu (Yard 2111) &Tarasa (Yard 2112) and LCUs - L-51 (Yard 2092) & L-52 (Yard 2093) were successfullyconducted that proved the efficacy and strength of the QATeam of yourCompany.

85. The third ASWC (P-28 ships) ‘Kiltan* (Yard 3019) has been fitted withComposite Superstructure (CSS) instead of steel superstructure. Bulkheads and Decks of CSSare of FRP sandwich construction made up of a Core Resin layer reenforced by two outermostlayers of CFRP (Carbon Fibre Re-enforced Plastic) material. It was a new challenge foryour Company to complete the complex and first-of- type activities like installation andlamination of CSS module with main ship hull mounting of outfit items on CSS. Throughoutthis period the QA department of your Company focused on the quality of the outfittingwork on CSS of Kiltan (Yard 3019).

86. Your Company achieve another milestone by acquiring ISO 9001:2015 certification inShipbuilding Ship Repair & Ship Design.

VENDOR DEVELOPMENT

87. Your Company has analysed complete production activities identified core andstrategic operations and undertaken comprehensive mapping of activities to be outsourced.Accordingly vendor development initiatives like organizing Vendor Meet participation inVendor Fairs / Melas programs / seminars / conferences / conclaves organized by CMFICCI BCCI NSIC FOSME other Defence Shipyards State / Central Governments IndustryDefence Linkage etc. has been undertaken to induct technically competent and financiallycapable vendors from across the country for outsourced jobs. Long term association jointventures strategic partnership etc. with interested business associates is beingexplored. The net outsourcing content of the Shipyard has been recorded as 49% confirmingachievement of fairly high indigenization levels in warship construction projects executedby the Shipyard in FY 2016-17.

88. Your Company in association with Cll organized "Make in India" seminaron Indigenous Diesel Engines for Naval Platforms on 16 Sep 2016 at New Delhi to promotedevelopment of indigenous manufacturing of Diesel Engines for Naval Platforms andfulfillment of the "Make in India" concept of the Government of India.

89. Your Company also participated in the "Vibrant Gujarat" organizedtogether by Government of Gujaratand Cll underthe aegis of Government of India atGandhinagar Gujarat from 08-12 Jan 2017. In the said event Business CollaborationAgreement was signed with a private business house towards indigenous designcollaboration.

90. During the year your Company has registered 113 new permanent vendors and as on 31Mar 2017 the Shipyard has 1985 available vendors. The manufacturing vendor base asdirected by Ministry of Defence ('MoD') has been increased by more than 6% in 2016-17. InFY 2016-17 the Shipyard has inducted 20 interested new competent solvent vendorsregistered with other Defence shipyards.

91. Your Company participated in the Defence Conclave linking MSMEs at BalasoreOdisha National Level Vendor Development Programmes of SMEs at New Delhi KolkataDurgapur organized by Ministry of MSME. Your Company has been actively promotingdevelopment and participation of SMEs in outsourcing programs for goods and services whichare low in cost generic in nature and less technology intensive as part of itsoutsourcing policy. The contribution by SME vendors is measured in terms of financialvalues and it is approximately 27% of total value of non-core products procured by theShipyard in 2016-17.

92. Your Shipyard organized a special Vendor Development Programme exclusively for MSMESC/ST entrepreneurs on 03 Aug 2016. The executives from MSME Development InstituteKolkata and the West Bengal President of Dalit Indian Chamber of Commerce & Industryattended the said event represented by large number of business houses from differentfields giving positive responses.

QUALITY CIRCLE ACTIVITIES

Quality Circle

93. The concept of Quality Circle is being implemented in various departments of yourCompany by the IE&P Department. This year 6 (Six) Quality Circle Teams from theCompany had

participated in Chapter Convention on Quality Circles 2016 organized by QCFI KolkataChapter. All the six teams were ranked GOLD Category.

94. National Convention on Quality Concepts 2016 organized by QCFI Flead Quarter washeld at Raipur Madhya Pradesh where 6 (six) Quality Circle teams from the Companyparticipated. Performances of four teams were judged in PAR EXCELLENCE Category and twoteams were judged in EXCELLENT Category.

95. ICQCC - 2016 was held at Bangkok Thailand where one QC team from GRSE hadparticipated and wasjudged in the "Gold" Category.

"5-S" Activities of your Company

96. The drive for improving housekeeping at your Company has been undertaken by thelE&P Department under the initiative of workplace Management applying "5-S"principles. The three best shops / departments in each area of Production ProductionSupport and Service Group considering all the units including DEP Ranchi were awarded thePrizes based on their performance during 2016 on GRSE Day. During 2016 the 5-S Audit wasalso conducted by engaging Cll experts which shows that there was coherence in theobservations made by external team.

TPM Activities

97. As far as maintenance of machines and other facilities are concerned thecalculation and monitoring of machine availability vis-a-vis the quality of work performedby them is very important. TPM Initiative has been implemented by IE&P Department inthree large shops viz. Ship Building Shop Plate Preparation Shop and Modern HullShop at the Main Unit of the Company. The efforts are being made to spread this conceptacross the Company.

SAFETY AT WORK

98. Like earlier years this year the 46h National Safety Week wascelebrated in all Units of your Company w.e.f. 04 to 10 Mar 17. On this occasion Safety& Health Pledge as promulgated by National Safety Council was administered includingdisplay of Safety Banners at different Units of GRSE. Various Safety Competitions(self-composed Safety Poem Safety Speech Safety Quiz and Safety Laghu Natika) were alsoorganised for the Company's employees. As a part of observance of National Safety Week2017 one day Workshop on "Safety Awareness" was also organised on 09 Mar 17 atFOJ Conference Hall in collaboration with Directorate of Factories Govt of West Bengaland National Safety Council West Bengal Chapter.

99. The Shipyard has achieved a safety frequency rate of 5.98 during FY 2016-17.

100. Your Company continues its endeavor to maintain high standard of safety all aroundthe yards. Fire and safety training programmes are conducted regularly in the Yard for allcategories of employees including business associates to invoke safety awareness.

101. Publication of quarterly Safety Bulletin has been started from the 2ndquarter of 2016-17 to improve safety awareness amongst the employees.

HUMAN RESOURCE & ADMINISTRATION Industrial Relations

102. During the period under review Industrial Relations situation across all units ofyour Company including DEP Ranchi has been generally peaceful and harmonious baring fewincidents. There has been no major incident influencing Industrial Relations of your

Company reported during the period. Your Company initiated proactive action to addressconflict situation thereby reducing the threat of Industrial unrest.

Trade Union Election

103. Election for recognition of Trade Union as 'Sole Bargaining Agent' in respect ofOperative category of employees was held on 08 Dec 16 by the Government Machineriesthrough secret ballot. GRSE Ltd. Workmen's Union had secured highest votes. Accordinglyin terms of the certificate issued by the Registrar of Trade Unions West Bengal theabove Union has again been recognized as the 'Sole Bargaining Agent' for a period of twoyears with effect from 09 Dec 16.

Visit of Parliamentary Committee

104. A Parliamentary Committee on the Welfare of Other Backward Classes (OBCs) duringtheir visit to Shilong Kolkata and Gangtok from 23 to 28 Jun 16 had a meeting with theCompany's Management on 25 Jun 16 and reviewed the implementation of Reservation Policyfor OBCs at the Company.

Major HR Initiatives

105. In order to give focus on Human Resource Development your Company has takenvarious initiatives during the year. The following HR initiatives were taken during theyear:

(a) Knowledge portal has been introduced with the objective of sharing of knowledge andexpertise amongst employees. The employees can access the knowledge portal from any systemand can go through the information uploaded in knowledge portal as per their area ofinterest.

(b) In order to ensure probity and efficacy among employees your Company has modifiedpremature retirement scheme for of officers and introduced periodical review in line withthe provisions of FR 56(J) following a quarterly calendar. Periodical review under FR56(l) has also been implemented in respect of non- unionized supervisors.

(c) Skill Development Initiatives: A MoU on Strategic Partnership on Skill Developmentbetween Ministry of Defence (MoD) and Ministry of Skill Development & Entrepreneurshipwas signed on 13 Jul 15. Various action points for implementation by DPSUs/OFB during2016-17 were set in accordance with the said MoU. The achievements in respect of theaction points in FY 2016-17 are given below:

(i) Adoption of ITI : Govt. Women ITI Kolkata was adopted in FY 2016-17 and Rs.17.35 lakh has been spent under CSR for upgradation of training and infrastructurefacilities of COPA and Electronic MechanicTrades.

(ii) Setting up of Centre of Excellence (CoE) for advanced training in identifiedskill deficient area: A Centre of Excellence (CoE) in Welding trade has been set up atGovt. ITI Tollygunge. Rs. 32.11 lakh has been spent under CSR for setting up the COE.

(iii) Spending upto 20% of CSR Funds on skill development activities: 25.14% ofCSR Budget for FY 2016-17 has been spent on various skill development initiatives.

(iv) Increasing the intake of Apprentices under the 'Apprenticeship Act' from 2.5%to 10% of total manpower: As on

31 Mar 17 your Company has engaged 465 apprentices which is 19.36% of manpowerstrength including the strength of contract labours whom the Company is paying directly.

(v) Donation of spare equipments in working condition to ITIs for training purposes:15 Nos. spare equipment / machines in working condition viz. Lathe Milling machinesWelding machine etc. available in production departments were donated to Government ITIHowrah Homes for utilizing them for training purpose.

(d) Swachh Bharat Mission: Hon'ble Prime Minister of India gave a call for "SwachhBharat "as a mass movement to realize Mahatma Gandhi's dream of a Clean India. TheCompany has joined the call of the Prime Minister for Swachh Bharat Mission and followingactions were taken during the year:-

(i) The Swachh Bharat Campaign was implemented across GRSE by organizing a series ofactivities like 'mass pledge on Swacchta' by the employees cleanliness drive carryingout inspection and repair work of all sanitary facilities in office premises weeding outof old files disposal of old items including furniture.

(ii) A fortnight-long Swachh Bharat Pakhwada (Fortnight) was celebrated from 1- 15 May16 across the Company. The Pakhwada started with administration of Swachhta pledge byC&MD to all the employees. During the Pakhwada various events such as march past andmini marathon in the Corporate Office intensive cleanliness drive in public places suchas local park and bus stand painting and essay competition and seminar for schoolchildren tree plantation inside the company premises etc. were organized for spreadingawareness on cleanliness and hygiene.

(iii) The 2na Anniversary of Swachh Bharat Mission was celebrated in frontof Administrative Building of FOJ unit on 02 Oct 2016 in the presence of C&MDDirectors senior officers and other employees. C&MD addressed the employees on therelevance of Swachh Bharat and ideologies of Mahatma Gandhi. The Swachhta pledge wasadministered by C&MD to the employees followed by an intensive cleanliness driveinside and outside FOJ unit.

Welfare Activities

106. Celebration of GRSE Day: The 58'hGRSE Day was celebrated on 19Apr 17. The morning function was held at the Main Unit of the Company. The functionstarted from 1000 hrs. with lighting of the ceremonial lamp by C&MD Directors andCVO. The retired employees of the Company who had served the Company for 40 years or morewere felicitated on this occasion. GRSE Shri was conferred to 01

employee and C&MD's Commendation to 71 employees for their excellent performanceduring 2016. GRSE Merit Awards were conferred to 39 employees' children for theiroutstanding academic performance in 2016.

Persons with Disabilities

107. Your Company has extended all the relaxation / concessions to the employees withdisabilities as per the Government Directives. In addition to the normal TransportAllowance of Rs. 18/- per day of physical attendance separate Transport Allowance ispresently being paid for blind orthopedically handicapped with disability of lowerextremities deaf and dumb employees @ Rs. 1000/-per month.

108. During the year 2016 your Company has recruited three persons with disabilitiesout of total recruitment of 92 employees.

Empowerment of Women

109. During 2016-17 a total 92 officers have been appointed out of which theemployment rate of female employees is 06 i.e. 6.5%.

110. In order to strengthen the women empowerment of the Company GRSE WIPS (Women inPublic Sector) Chapter has been constituted. The GRSE WIPS Chapter has members from allcadres of employees and is actively supported by the Management so that the femaleemployees can meet periodically and freely exchange their views. The WIPS members andCoordinator are sponsored to attend the WIPS National Meet as well as Regional Meets.

111. A common Email ID has been created comprising all the women employees for bettercommunication.

CORPORATE SOCIAL RESPONSIBILITY

112. Corporate Social Responsibility (CSR) is an integral part of your Company'scorporate philosophy and your Company is committed to grow its business in a sociallyresponsible way. Towards this end your Company has adopted a comprehensive CSR Policythat defines the framework for your Company's Social Initiatives Programme. The Policyidentifies the focus areas of your Company's CSR and Sustainability activities to benefitthe marginalized sections of the local community through different projects that enhanceincome through creation of sustainable livelihood opportunities and improving the qualityof life. Your Company places thrust on the areas of health care education & skilldevelopment and community development under CSR and conservation of natural resources andenergy efficient initiatives under Sustainability initiatives. Your Company would alsoundertake other need based initiatives in compliance with Schedule VII to the CompaniesAct 2013. All social interventions are identified keeping in mind the needs andrequirements of the community beneficiaries for whom these interventions are intended tobe implemented.

113. Your Company's Policy on Corporate Social Responsibility can be accessed on itswebsite link at http://www.grse.nic.in/pdf/GRSE-CSR-Policy 14-Jan-15.pdf. The Annual Report on your Company’s CSR activities asrequired under the Companies (Corporate Social Responsibility Policy) Rules 2014 has beenappended as Appendix - "F"to this Report.

OFFICIAL LANGUAGE

Official Language Implementation Committee

114.Official Language has been implemented spiritedly during the period under review.All

quarterly meetings of Official Language Implementation Committee were held under thechairmanship of Chairman & Managing Director to review the progress made by variousdepartments.

Rajbhasha Awards

115.(a) In recognision of the excellence in Implementation of Official Language in theCompany your Company bagged two prestigious awards detailed below:

(i) 1sl Prize in the National Award ’Rajbhasha Kirti Puraskar’ forthe year 2015-16 from the Honorable President of India which is being awarded to theCompany for the fourth time in a row.

(ii) Rajbhasha Shield for the year 2015-16 by Town Official Language ImplementationCommittee which was presented by the Honorable Governorof West Bengal.

(b) Company's Hindi Magazine "Rajbhasha Jagriti" was conferred twoprestigious awards as follows:

(i) 'Rajbhasha Kirti Puraskar' from the Honorable President of India.

(ii) 1st prize by Town Official Language Implementation Committee presentedby Honora ble Governor of West Bengal.

(c) DGM (OL) GRSE received appreciation letters by Honorable Governor of West Bengalfor her contributions in editing the Rajbhasha Jagriti Magazine and for excellence inimplementation of Official Language in the Company.

Efforts to Promote Use of Official Language

116. In order to promote use of Official Language in the Company the followingactivities had been undertaken:

(a) Celebration of Hindi Day /Month

(b) Publication of 13lh& 14th edition of Hindi Magazine"Rajbhasha Jagriti"

(c) Hindi Computer Workshops

(d) In-House Hindi Training

(e) Implementation of various incentive schemes

(f) Books for Hindi Library

(g) Hindi competition in schools.

Preparation of GRSE Shipyard Glossary

117. Action has been initiated with the help of Commission for Scientific and TechnicalTerminology for preparation of Shipyard Glossary.

PUBLICITY & PUBLIC RELATIONS

118. As a measure towards Brand Building Publicity and Public Relations your Companyhas participated & organised the following events:

(a) Participated in the Eurosatory - 2016 exhibition from 13 to 17 Jun 16 held atParis France.

(b) Participated in the Africa Aerospace & Defence - 2016 exhibition from 14 to 18Sep 16 held at Pretoria South Africa.

(c) Participated in the Vibrant Gujarat 2016 exhibition from 09 to 13 Jan 17 held atGandhinagar Gujarat.

(d) Organised a Vendor Meet for MSME entrepreneurs of SC/ST category (03 Aug 2016) - Inpursuance of the Company's objective to explore the opportunity of increasing the vendorbase for SC/ST category MSME Vendors a Special Vendor Development Programme exclusivelyfor MSME entrepreneurs belonging to SC/ST category was organised by your Company on 03 Aug2016. The meet was inaugurated by Chairman & Managing Director GRSE. The President ofWest Bengal Chapter of Dalit Indian Chamber of Commerce & Industry and officials ofMSME Development Institute Kolkata also attended the programme. Representatives frommore than Forty (40) business houses attended the event and evinced keen interest inpursuing business opportunities with your Company. Spot Registration of prospectivevendors was also conducted for the participating firms.

(e) 'Make in India' seminaron Indigenous Diesel Engines (16 Sep 16) - A full dayseminar on the theme "Make in India Seminar on Indigenous Diesel Engines for NavalPlatforms / Armoured Tanks and Fighting Vehicles" was organized jointly by yourCompany and Confederation of Indian Industry (Cll) on 16 Sep 2016 at New Delhi. There waswide participation in the Seminar from Indian Navy Indian Army Indian Industry andGlobal OEMs. Detailed deliberations were held during the seminar on User Perspective onCaptive demand for diesel engines perspective of Indian manufacturer / Global OEMs andWay Ahead for Indigenisation of diesel engines suitable for defence applications.

(f) Conducted an Interactive Vendor Development Programme for P-17A Project at GRSEKolkata (29 Nov 16) - A day bng Special Interactive Vendor Development Programme wasconducted by the Company at Main Works Kolkata on 29 Nov 16. The event was inauguratedby the Chairman & Managing Director of the Company. Director (Shipbuilding) along withother senior Management officials of the Company interacted with the business houses fromdifferent parts of the country present in the said event. The discussion was focused onIntegrated Construction of Mega Blocks with pre-outfitting for P-17A Project.Representatives from Twelve business houses attended the event and gave positiveresponses.

IMPLEMENTATION OF RT1 ACT

119. Implementation of RTI matters is being complied in line with the Right toInformation Act 2005. During the year 2016-17 a total of 92 RTI requests were receivedwhile the opening balance from previous year was 17 RTI Applications. A total of 101 RTIapplications were replied to during the year and remaining 8 RTI Applications were takenas carry forward for the year 2017-18. In case of RTI appeals 13 appeals were receivedduring 2016-17 and 1 appeal was as opening balance from previous year. A total of 10 RTIappeals were decided and replied to while 4 RTI appeals were carried forward for the year2017-18. The Quarterly Returns have been uploaded on the CIC's website within due date bythe CPIO and Assistant CPIO. Also the quarterly returns in the DOPT website are beinguploaded as per schedule.

PUBLIC GRIEVANCES

120. Prompt acknowledgement is issued upon receipt of Public Grievances and the matteris resolved by thorough examination of facts of the case with due diligence. During theyear under review a total of 21 Public Grievances were received and 20 were resolvedwhile 1 public grievance was carried forward for the year 2017-18 for its resolution.Details of the Grievance Committee have been uploaded on the Company's website with theprovision of a link to the PG Portal to enable the citizen to file grievances online.

VIGILANCE ACTIVITIES

121. The main thrust of the Vigilance Department is to ensure transparency fairness& probity in all spheres of activities of the Company. Towards this end focus of thedepartment was on both predictive & preventive vigilance during the year. Manyspheres of activities were taken up and various processes were carefully observedanalysed and scrutinised to ensure that the systems of checks & balances are workingas per the required parameters and there are no leakages and loopholes in the system. Inmany cases the officers were counselled and advised to improve their behaviour and mannerof carrying out various official activities instead of going for harsher punitivemeasures. Apart from the above the following activities were also carried out by theVigilance Department during the year:

(a) Investigations were conducted regarding complaints received from various sourcesand appropriate actions were taken.

(b) As a preventive measure regular & surprise inspections and verification offiles were carried out. Annual Property Returns filed by the officers were scrutinized.Vigilance status of officers was assessed at various stages.

(c) Structured meetings with C&MD were held at regular interval to appraise thestatus of vigilance cases.

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

(e) Suggestions for system improvements have been made to the management and the sameare being followed up to ensure that they are implemented.

(f) ID and digital signatures provided to all officers of e-Procurement Cell so thatthey can independently access the portal.

(g) Security of your Company has now been entrusted to CISF. Employees of Contractors& Sub-contractors are being screened & security checked by the CISF.

(h) Training was imparted to newlyjoined officers in Vigilance Department in the fieldof Departmental Proceedings Contract Managementand CDARules.

(i) Your Company observed Vigilance Awareness Week during 31 Oct to 05 Nov 2016. ShriManoj Kumar (IAS) Coal India Ltd. presented his valuable comments in the seminarorganised on 02 Nov 2016.

(j) Your Company took active part in the Vigilance Study Circle Kolkata Chapter heldin the month of Oct 2016. The overall objective of vigilance activities had been toencourage transparency in the organization.

122. The other activities of Vigilance Department are to ensure the existence of acorruption-free environment and also to ascertain that the various guidelines of the CVCMOD and DPE etc. are complied with. The role of the CVO is to guide the management toachieve the various objectives laid down in the above mentioned lines.

GENERAL

123. Your Directors state that no disclosure or reporting is required in respect of thefollowing 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'sReport 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 orotherwise.

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

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013

124. In pursuance of Section 4 of The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013' the Internal Complaints Committeeoperating in the Company has been reconstituted on 06 Aug 14 with an outside NGOrepresentative.

125. Awareness programme on Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 was conducted by the NGO representative on 22 Mar 17to sensitize female employees including newly joined ladies about the provisions of theAct. A total 26 female employees had attended the workshop.

126. The following is the summary of sexual harassment complaints received and disposedoff during the calendar year 2016:

(a) No. of complaints received : One

(b) No. of complaints disposed of: One

ACKNOWLEDGEMENTS

127. Your Directors express their deep appreciation and place on record their gratitudeto the Department of Defence Production and other Departments in the Ministry of Defencefor their continued support assistance and guidance. The Directors also express theirsincere thanks to the Ministry of Surface Transport Govt of India as also to theGovernments of West Bengal Jharkhand and various other States for their continuedco-operation and valuable support. Your Directors are particularly grateful to the IndianNavy and Coast Guard Headquarters Ministry of Home Affairs Ordnance Factory BoardKolkata Port Trust Public Works Departments of various State Governments PoliceDepartment of West Bengal & Kolkata and other valued customers as well as businessassociates for the confidence reposed by them in your Company. We will fail in our duty ifwe do not acknowledge the cooperation and positive approach of the Warships ProductionSuperintendent and his dedicated team under whose watchful eyes our ships are being built.Also we thank all classification societies in particular IRS & ABS who haveensured quality and adherence to the standards.

128. The Directors acknowledge with thanks the valuable advice rendered by andco-operation received from the Comptroller and Auditor General of India the PrincipalDirector of Commercial Audit Ex-offico Member of the Audit Board Bengaluru PrincipalController of Defence Accounts (Navy) Mumbai Controller of Defence Accounts (Navy)Kolkata Registrar of Companies Company Law Board and the Department of PublicEnterprises.

129. The Directors wish to place on record their appreciation to its Statutory Costand Internal Auditors Company Bankers Trade Unions and ail Officers and Employees atvarious levels of the organisation for their hard work dedication and commitment. Theenthusiasm and unstinted efforts of the employees have enabled your Company to remain atthe forefront of the industry despite increased competition from several existing and newplayers.

For and on behalf of the Board of Directors

(V K Saxena)
Kolkata Rear Admiral IN (Retd.)
Dated: 30"’June 2017 Chairman & Managing Director