CHAIRMAN’S STATEMENT Ladies & Gentlemen, 1. On behalf of the Board of Directors, I have immense pleasure in welcoming all of you to the 98th “Annual General Meeting” of the Company and share with you all, some of the Company’s significant achievements during the year 2013-14. 2. During the year 2013-14, the Company has achieved a turnover of `1,612crore, which is a growth of 5% over the previous year 2012-13. The Company’s Profit Before Tax recorded as `187.23 Crore and Net Profit as `121.46 crore. The Company’s Net Worth has also gone up by 11% over the previous year. 3. During 2013-14, the Company has delivered two (02) ships (IPV Class) to the Indian Coast Guard and progressed the work on seventeen (17) other ships including four (04) ASW Corvettes, four (04) WJFACs, eight (08) LCUs and most prestigious order of MOPV for our neighboring country Mauritius. Overall, during the year the company has progressed the work on seventeen (17) ships which is a remarkable achievement. The Company also launched the first ship of Landing Craft Utility (LCU) MK-IV class during the year in the presence of Shri Ashok Kumar Gupta, IAS, Additional Secretary (Defence Production). 4. The first Anti-Submarine Warfare Corvette (ASWC), “INS Kamorta” was delivered to Indian Navy on 12th July 2014. The ASW Corvette is a frontline warship with anti-submarine warfare capability with advanced stealth features including very low signature radiated under water noise. The successful construction of ASWC by your company show cases the capability of the shipyard to build most complex and most advanced frontline warship for the nation. I am happy to inform that, the ship was commissioned on 23 Aug 2014 by Hon’ble Raksha Mantri Shri Arun Jaitley in the august presence of Admiral R K Dhowan, Chief of Naval Staff and other distinguished guests. 5. These accomplishments were possible only due to the guidance and unstinted support of the Government of India, especially the Department of Defence Production and I am extremely grateful to them. The active role of the members of the Board of Directors, especially the Independent Directors, the dedicated efforts put in by the Officers, Supervisors and Workers of the Company as well as the trust and confidence reposed by our valued customers, the Indian Navy, the Indian Coast Guard and the Ministry of Home Affairs. Performance highlights of the year 2013-14 6. Financial Parameters: The Company has registered Profit Before Tax of `187.23 crore. 7. Turnover/Value of Production: The Company has achieved a growth of 5% in its turnover and recorded a turnover of `1,612 crore. This turnover is so far the highest achieved by your company. 8. Dividend: For the year 2013-14, the Directors are pleased to recommend a dividend @ 20% (including 10% as interim dividend) on the Company’s paid up equity capital amounting to `24.77 crore (approx.). 9. MOU Rating: In terms of parameters contained in the Memorandum of Understanding signed with the Government for the year 2013-14, the Company is expected to be rated as “Excellent” in its performance. This would be the fifth consecutive year wherein your company would achieve “Excellent” grading in respect of the targets set in MoU. 10. Awards & Recognition: The Company during the year has received “Best Performing Defence Shipyard Award” for 2010-11 and 2011-12 from Hon’ble Raksha Mantri. The Company also received second prize (Region-C) of the prestigious Indira Gandhi Rajbhasha Puraskar for the year 2011-12 from Honourable President of India and “PSE Excellence Award 2013” from DPE-ICC in recognition to the CSR & Sustainability efforts of the Company. GRSE received a Certificate of Appreciation for being a Model Total Quality Management Company by CII for 2013. GRSE, Director (Finance), Shri K. K. Rai won the BT Star PSU Excellence Award 2014, “The Star PSU Director (Finance) for Outstanding Performance” in the Category of Non Maharatna & Navratna PSUs. The Company was conferred the IIIE Performance Excellence Award in the Golden Category (Financial & Operational Strength), for the year 2012-13. The QC Teams of the Company also executed very well this year and won three (3) “Par Excellence” and seven (7) “Excellent” Awards in the National Convention Organised by the Quality Circle Forum of India. 11. Certification: GRSE is the first Ship Building organisation in the country and the first DPSU to get accreditation on Integrated Management System harmonizing ISO 14001:2004 (Environment Management System), BS OHSAS 18001:2007 (Occupational Health & Safety Assessment Standard), and EN ISO 50001:2011 (Energy Management System). 12. Corporate Governance: The Company’s philosophy on Corporate Governance is based on the principles of honesty, integrity, accountability, adequate disclosures, legal compliances, transparency in decision making and avoiding conflicts of interest. The Company gives importance to adherence to adopted corporate values and objectives and discharging social responsibilities as a corporate citizen. The Company believes in customer satisfaction, financial prudence and commitment to values. Our corporate structure, business and disclosure practices have been aligned to our Corporate Governance Philosophy. Shipbuilding and Production Achievements 13. The Company’s Shipbuilding and Engineering activities have registered a substantial growth due to greater thrust on enhanced productivity, improved quality control and dedicated human resource. The following are the main achievements for this year. (a) Infrastructure Up-gradation: The new “Integrated Shipbuilding Facility” has been successfully completed and the same was inaugurated by Hon’ble Raksha Rajya Mantri, Shri Jittendra Singh, on 06 Jun 13. The 1st ship constructed at the new inclined berth was Offshore Patrol Vessel for Mauritius Government (MOPV) was successfully launched on 02 Aug 13. Subsequently, two Landing Craft Utility (LCU) ships are being concurrently constructed at the new Inclined Berth (keel laid on 30 Aug 13). (b) Delivery of Ships: During the year, GRSE has delivered two (02) ships to Indian Coast Guard, ICGS “Rajveer” and ICGS “Rajdhwaj”. (c) Launching of Ships: During the year GRSE has launched first ship of Landing Craft Utility (LCU) MK-IV class of ships. (d) Keel Laying: During the year, GRSE laid the Keel of the first two LCUs and of the first follow-on WJFACs for Indian Navy. (e) Start Production: The Company also commenced the production of eight (08) ships for the Indian Navy. (f) Portable Steel Bridges: Your Company has supplied 33 Bridges during 2013-14 amounting to `36.56 crore. During the year, your Company have entered in to an MOU with Govt of Odisha for supply of about 100 bridges a year on turnkey basis. A similar MOU was signed with the Govt of Chattisgarh too. (g) Deck Machinery: Deck Machinery Unit has achieved a remarkable feat in this year by way of successful supply and carrying-out of HATs of Rail less Helo Traversing System to handle a helicopter on board ship for P28 ASW Corvettes. Being the only proven indigenous supplier of such systems, the company has bagged orders for 5-NOPVs and 3-CTSs from Pipavav & ABG Shipyards respectively. Good numbers of further offers are under process. You will be pleased to know that this has an indigenous content of about 72%. The Unit has supplied 58 Nos. – Equipment to various shipyards and also towards in-house consumptions and registered a value of Production/turnover of `12.76 crore. The present order book position for various Deck Machinery items and Naval Pumps is about `63 crore. (h) Engine Department (Ranchi): The Value of Production achieved by Engine Department during the year under review amounted to `5.40 crore. This is mainly because of low order book and aging of assembly & test facilities. In order to expanding the business, modernisation of assembly & test facilities of marine engines has been undertaken. On completion of this up-gradation, Engine Division will enter in to an extended MOU with MTU Asia for production of Marine Engines at SKD level and this is likely to get business of about `428 crore in phased manner in next ten years. (i) Order Book Position: The present order book position of the Company is `10,404 crore. Out of these, sales of approximately `5,257 crore have been completed and the Balance Order book is approximate `5,147 crore. (j) Bench Marking: Five Shipyards GRSE, MDL, GSL, CSL & HSL, jointly appointed M/s PWC to benchmark the performance. M/s PWC has already submitted their report which is under implementation. Future Outlook 14. GRSE’s stated vision is to become a world class shipbuilder. A road mapis being evolved for achieving this objective based on performance review of GRSE for the preceding five years and findings of SWOT Analysis carried out during the year. From the SWOT it has emerged that there are great opportunities available for the Company to build Defence and Coastal Security Vessels. Accordingly the Company’s efforts are being focussed on exploiting such opportunities based on the Company’s strength and on minimizing the adverse effect of its weaknesses. The strength of infrastructure and production facilities is being leveraged to have strategic alliances to address the emerging opportunities and reducing the impact of perceived threats. 15. The initiatives taken during the year 13-14 include: a. Commissioning of the 2nd phase of Modernisation Program in July 2013. b. Completion of a Benchmarking Study to understand best in the world, ship production processes and plan to implement the good practises prevalent across the world. c. Continual improvement in skill set of employees through various trainings and workshops. d. Regular brainstorming sessions on formulation of immediate, short and long term business strategies and implementation of points discussed, with monitoring at appropriate levels. 16. GRSE is planning to use the land available at Raichak, West Bengal, for making blocks/panels for ships, over the next 6-10 years through PPP model in association with Indian Private Entity. 17. The Company has entered into a MoU with HSL on 19 Apr 14 intending to explore future co-operation opportunities in ship building & ship repair. The first project in consideration is 05 Nos Fleet Support Ship for Indian Navy for which a consortium is being formed between GRSE & HSL. 18. Export Initiatives: Over the last one year the GRSE Team has aggressively focussed on undertaking various Export Initiatives including participation in prestigious exhibitions. During this year, the GRSE team has been actively pursuing for export orders from countries such as Vietnam, Philippines, Venezuela Peru, and Peru for products ranging from Landing Ship Tanker Large, Light Frigates to Fast Patrol Boats and Bailey Bridges. 19. Industrial Relations: Industrial relations situation during the period across all Units of the Company including DEP, Ranchi was generally peaceful and harmonious. 20. Corporate Social Responsibility: Corporate Social Responsibility (CSR) is an integral part of the Company’s corporate philosophy. CSR activities aim to benefit the marginalized sections of the local community through different projects that enhance income through creation of sustainable livelihood opportunities and improving the quality of life. The GRSE CSR Policy focuses on the following thrust areas : (i) Health Care. (ii) Education & Skill Development. (iii) Community Development. Acknowledgements 21. I would like to conclude by thanking the Central and State Government Authorities, Naval and Coast Guard Authorities, and the Shareholders for their continued trust and confidence they have reposed in us. I would like to place on record our sincere thanks to the Comptroller & Auditor General of India, the Principal Director of Commercial Audit, the Statutory and Branch Auditors, and the Principal Controller of Defence Accounts (Navy) for their valuable suggestions and co-operation. I acknowledge the patronage of our Bankers, suppliers and Business Associates. I also acknowledge with gratitude the continual assistance and guidance received from Indian Navy and Indian Coast Guard. Last, but not the least, I appreciate the dedication and hard work put in by all the employees of the Company to achieve its goal and the Board of Directors who have supported and guided the Company to put it on a path of accelerated growth. Thanking you all, Kolkata, A.K. Verma, Dated, 25th August, 2014 Rear Admiral (Retd.) Chairman & Managing Director DIRECTORS’ REPORT – 2013-14 To The Members, Garden Reach Shipbuilders & Engineers Limited 1. Your Directors have great pleasure in presenting the 98th Annual Report on the working of the Company for the financial year 2013-14. 2. The audited Profit & Loss Account for the financial year 2013-14 and the Balance Sheet, as on 31 Mar 14, together with the Report of the Auditors of the Company, and the comments of the Comptroller & Auditor General of India on the Auditors’ Report under Section 619(4) of the Companies Act, 1956, are appended to this Report. PERFORMANCE HIGHLIGHTS 3. Turnover/Value of Production : The Company has achieved a growth of 5% in its turnover and rendered a turnover of `1611.67 crore as against `1529.15 crore. This turnover is so far the highest achieved by your company. 4. Profit Before Tax : The Directors are delighted to inform that the Company has recorded Profit Before Tax of `187.23 crore. Grading vide Memorandum of Understanding with DPE: 5. The Company has been rated “Excellent” in the MoU 2012-13 by the Department of Public Enterprises. The composite score for the year 2012-13 was 1.17. 6. The assessment for the year 2013-14 will be done by DPE on the basis of the Annual Report to be submitted after the Annual General Meeting. As per internal assessment, it is expected that the Company will be rated “Excellent” during this year also. This will be the fifth consecutive year when your Company will be rated “Excellent”. Awards &Recognitions : 7. The Company has received the following awards/ recognitions during the year: (i) Best Performing Defence Shipyard : The company has been adjudged the “Best Performing Defence Shipyard” in the Country for the two consecutive years 2010-11 and 2011-12. The trophy for “Best Performing Shipyard” for the year 2011-12 was handed over by the Hon’ble Raksha Mantri on 25th Nov 2013. 1. Rajbhasha Puraskar : GRSE has been awarded the Second Prize (Region-C) of the Prestigious Indira Gandhi Rajbhasha Puraskar for the year 2011-12. The trophy was handed over by the Honourable President of India on14 Sep 2013. 2. CSR Award : In recognition to the CSR & Sustainability efforts of the company, GRSE has been conferred PSE Excellence Award 2013 for CSR & Sustainability by DPE-ICC. 3. QA Award : GRSE has been awarded the “Certificate of Appreciation” in the “Large & Medium Scale Industries Section”, under the category of “Model TQM Company”, in the CII Eastern Region Quality Awards 2013. 8. DELIVERY : During the year under review the company has effected following deliveries : Ship Division : Sl. No.TypeNos. (i)Inshore Patrol Vessel (IPV)2 Engineering Division : Sl. No.ProductNos. (i)Bailey Bridge33 (ii)Deck Machinery & Pump57 Engine Division : Sl. No.ProductNos. (i)Engines & Machinery5 SIGNIFICANT ACHIEVEMENTS DURING FY 2013-14 : 9. During the year, GRSE has delivered last 02 Inshore Patrol Vessels of “Rajshree” class of ships to Indian Coast Guard. ICGS “Rajveer” & ICGS “Rajdhwaj” the seventh & eighth ships have been delivered on 16 Jul 13 & 30 Oct 13 respectively. With this delivery GRSE has completed all the deliveries under the IPV project of Coast Guard. 10. Successful completion of sea trials of yard 3017 in Feb 14 is a great achievement for GRSE, being the first ship of Anti Submarine Warfare Corvette (ASWC) class being made first time in the country. 11. GRSE is currently building its first ever export order of OPV for Government of Mauritius. During the year, the ship was launched with a grand ceremony from newly built Inclined Berth of the Main Unit facilitated with modern technologies by Mrs. K O Fong Weng – Poorun, Senior Chief Executive, PMO, Govt. of Mauritius on 02 Aug 13. 12. First ship of Landing Craft Utility (LCU) MK-IV class of ships, Yard 2092 was launched from Inclined Berth of the Main Unit on 12 Mar 14 by Dr. Priti Gupta, Wife of Shri Ashok Kumar Gupta, IAS, Additional Secretary (Defence Production) in the august presence of distinguish dignitaries. 13. Keel of first two LCUs for Indian Navy was laid on 24 Apr 13 at the old Inclined Berth whereas Keel for the next two was laid on 30 Aug 13 at newly built Inclined Berth facilitated with modern technologies. Keel laying of the first Follow-On Water Jet Fast Attack Craft (FO-WJ FAC) for Indian Navy was also done in this Financial Year (FY) at Building Berth-2 in Raja Bagan Dockyard Unit. 14. This year GRSE has started production of 08 ships. Production (Plate cutting) of 4th& 5th ships of LCU MK-IV series commenced in 1st quarter where as 1st two Follow-On WJFACs & last two LCUs commenced in 2nd quarter for Indian Navy of this FY. Last two FO-WJFACs commenced in last quarter of this financial year. OPERTATING RESULTS : 15. The summarized operating results for the year 2013-14 and 2012-13 are given below: (` in crore) 2013-142012-13 Value of Production1611.671529.15 Sales308.19464.21 Profit Before Depreciation, Interest and Tax209.93208.04 Interest0.630.98 Depreciation22.0713.91 Profit Before Tax187.23193.15 Provision for Tax65.7761.61 Profit After Tax121.46131.54 16. The financial position of the Company as on 31 March, 2014 and that of the previous year is shown below: (` in crore) 2013-142012-13 Capital Employed916.67759.07 Gross Block533.87427.32 Net Block365.48279.79 Working Capital551.19479.28 Net Worth953.73860.94 Value Added504.63496.00 Ratios: (%) % Profit before interest and tax : Capital Employed (%)20.4925.57 Profit after tax : Net Worth (%)12.7415.28

Value of Production & Sales - (VOP Up by 5% as compared to previous year) : 17. During the financial year under review, the Company achieved the highest ever Value of Production of `1611.67 crore as against `1529.15 crore during the previous year. The Sales for the year amounted to `308.20 crore as against `464.34 crore during the previous year. 18. The comparative VOP for the three main Divisions is as follows : (` in Crore) YearShip DivisionEngineering DivisionEngine Division Total 2013-141560.4447.403.831611.67 2012-131346.6954.37128.091529.15 2011-121189.7955.2047.541292.53 . 19. The comparative Sales for three main Divisions is as follows : (` in Crore) YearShip DivisionEngineering DivisionEngine Divisi3on Total 2013-14263.6941.942.56308.19 2012-13356.1486.0622.01464.21 2011-12442.3255.2047.54545.06 Profit Before Tax : 20. The Company earned a Profit Before Tax of `187.23 crore and recorded Net Profit of `121.46crore. Net Worth - (Increase by 11% as compared to previous year) : 21. The year under review witnessed a leap forward with the Company’s Net Worth going up to `953.74crore from `860.94crore in 2012-13, representing an increase of 11% over the previous year. Value Addition : 22. The Value Added during the financial year under review was `504.63 crore as against `496.00crore during the previous year. The Value Added per Employee was `16.11 lakh as compared to `14.21lakh during the previous year registering a growth of 13%. Appropriations & Dividend : 23. Considering the financial performance of the Company in the year 2013-14, the Directors are pleased to recommend the following appropriations from the disposable surplus: (` in crore) Net Profit After Tax121.46 Less : Transfer to General Reserve12.15 Dividend of 20% on the Paid-up Capital24.77 Dividend Tax4.21 Balance retained in Profit & Loss Account80.33 The Dividend of 20% on paid up capital includes an interim dividend of 10% on the paid-up capital amounting to ` 12.38 crore which was declared by the Board at its Meeting held on 29 Jan 14. Contribution to Exchequer : 24. Your Company has made a contribution of `80.96crore to the national exchequer during the financial year 2013-14 as detailed below: (` in crore) (a)Income Tax & Wealth Tax.50.51 (b)Customs Duty0.12 (c)Excise Duty2.33 (d)Sales Tax (Including Entry Tax)24.57 (e)Service Tax3.43 TOTAL80.96 Note : The above figures are inclusive of Education Cess, but exclusive of the Excise Duty & Taxes included in the purchase prices of the inputs.

Appropriations & Dividend : 23. Considering the financial performance of the Company in the year 2013-14, the Directors are pleased to recommend the following appropriations from the disposable surplus: (` in crore) Net Profit After Tax121.46 Less : Transfer to General Reserve12.15 Dividend of 20% on the Paid-up Capital24.77 Dividend Tax4.21 Balance retained in Profit & Loss Account80.33 The Dividend of 20% on paid up capital includes an interim dividend of 10% on the paid-up capital amounting to ` 12.38 crore which was declared by the Board at its Meeting held on 29 Jan 14.

Conservation of Energy : 70. The shipyard continued its endeavour towards optimum utilization of various energy inputs. GRSE became the first Ship Building Industry in the country and the first DPSU to get accreditation on Integrated Management System harmonizing ISO 14001:2004 (Environment Management System), BS OHSAS 18001:2007 (Occupational Health & Safety Assessment Standard), and EN ISO 50001:2011 (Energy Management System) by world renowned certification body TUV NORD, Germany. 71. Energy audit is conducted in all the units of shipyard to optimize consumption of all type of energies in use i.e. coal, electricity, petroleum etc. Real time Power factor correction of the power distribution system is consistently maintained in the shipyard through implementation of thyristor based automatic power factor correction mechanism with intelligent reactive power management system in the substation. 72. In accordance with the recommendation of energy audit report the shipyard implemented the followings energy conservation measures: (i) The luminous efficacy and colour rendering index of metal halide lamp being much better than the conventional HPMV lamp, 250 watt metal halide luminaries are introduced in the yard replacing 400 watt HPMV luminaries resulting energy conservation to the tune of 22% approximately. (ii) The shipyard is increasingly replacing T8(36 watt) lamp by energy efficient T5 (28 watt) lamp as the luminous efficacy of the later is almost double compared to T8 lamps ensuring 23% reduction in energy consumption. (iii) The shipyard has replaced conventional energy inefficient pumps by energy efficient mono-block pumps resulting 34% reduction in energy consumption without compromising the demand of existing fresh water requirement of the yard. 73. Use of Bureau of Energy Efficiency accredited star rated window air conditioners have extensively been adopted in the yard. Renewable energy in the form of solar is constantly being used by the yard for general illumination which resultantly ensures ecologically sustainable growth of India’s energy security challenge. 74. Consistent effort to minimize distribution loss in compressed air and water supply system has been adopted as part of conservation of energy. Use of aluminium, termed as eco-friendly green metal, as roofing and cladding sheets, in shops replacing asbestos has been adopted which reduces direct greenhouse gas emission to the extent of 14%. 75. Holistic approach like introduction of battery operated material handling equipment, ensuring proper voltage profile at every level in lighting distribution network, extensive use of translucent sheets in shop floors to allow plenty of natural light in shop floor etc have been adopted as part of energy conservation initiatives. The cost of energy input during the year under review was 0.60% of the total value of production as against 0.71% that of last year, despite 9% increases in the power tariff in the intervening period. During financial year 2013-14, a reduction of 17.49% in energy consumption has been recorded in the shipyard. 76. This shipyard has been rated as excellent in MoU criteria in financial year 2012-13 under “Sustainable Development” category.

Technology Adoption, Absorption and Innovation : 77. Lighting energy saver has been introduced in the shipyard as a pilot project to limit excess voltage build up across gas discharge lamps which resultantly reduced energy consumed by the lamps. Thus the energy conservation to the tune of 25% has been achieved and a recurring saving of ` 4.4 lakhs per annum of the energy bill. This initiative prevented premature failure of lamps & ballasts also considerably. 78. Advanced energy saver for air conditioners has been introduced in the shipyard also as another pilot project to ensure reduction of energy consumption by 26.66% approximately and a recurring saving of ` 73 lakhs per annum of the energy bill.

Compliance of Accounting Principles: The Company continuously strives to maintain accounts in transparent, true and fair manner in conformity with the accounting principles generally accepted in India. During the last thirteen years (1999-2000 to 2012-13) there have been no audit qualifications. The Company has also received “Nil” comments from the CAG during these years.

The ambitious modernization project in its Main Yard, with an outlay of approximately `530 crore has been completed. With completion of this Integrated Shipbuilding Facility, the Company now in a position to meet the challenges and be competitive in domestic and global markets. The Raja Bagan Dock (RBD) Unit, acquired from CIWTC in Jul 2006, is also being renovated and upgraded. Acquisition of this Unit has led to considerable enhancement of the Company’s shipbuilding capacity. 13. The Company have successfully got verified the design of our in-house developed Portable Steel Bridge for Single & Double Lane with a higher load carrying capacity. This would be the launch pad for new segment of GRSE Bridges on proprietary basis. 42. The Company has taken following actions in this direction :- (a) Effluent treatment plants of combined capacity 6.5 Cu Mtrs per day installed in the yard to prevent water pollution is in operation round the clock to treat the automobile waste. (b) Fume filtration system for CNC air plasma plate cutting machine have been introduced to reduce air pollution in an effort to provide a healthy and safe working environment for our employees, business associates, personnel visiting the yard and neighbours. (c) Fume extraction system for extraction of fumes generated during welding process is instituted in structural shops as well as on board ships. (d) Open blasting that used to cause air pollution has been discontinued; instead vacuum blasting process has been adopted. (e) Chipping operation that generates high level of noise is being carried out during off working hours and ear plugs are provided to the all the employees who are involved in this activities. Arc gouging is being carried out to the extent possible in lieu of chipping. (f) Afforestation activity in the shipyard is vigorously followed to provide green and clean environment. A lush green belt in and around the factory is an example of Company's commitment to pollution control, Safety, Health Protection and Environment. At an average 300 saplings are planted every year in the yard. (g) Guard walls and diaphragm walls along the bank of river Hooghly have been constructed to prevent land erosion. Trees are also planted in a systematic, planned and organized manner along the coast line to reduce soil erosion. (h) Operation of foundry has been discontinued to reduce air pollution. (i) Galvanising operation has been discontinued. (j) Battery operated material handling equipments are introduced to reduce noise and air pollution as also for fuel conservation. (k) Translucent sheets in workshops are extensively used as a routine activity to utilize natural lighting to the maximum extent possible to reduce energy consumption and in turn CO2 emission indirectly. (l) Aluminium roofing and cladding sheets recognized worldwide as green material is used as roofing material in shops. (m) The average power factor of this yard has so far been recorded as 99.70, the maximum and minimum being 99.87 and 99.04 respectively during the present financial year. Performance is being constantly monitored to maintain the optimum power factor and consumption of power to reduce demand and emission of GHG indirectly. (n) Other energy conservation measures like installation of electronic ballasts, compact fluorescent lamps, TL5 luminaires, LED luminaires, Solar powered street lighting system, VVVF type control systems, Bureau of Energy Efficiency accredited star rated window AC machines, solid state control system and energy efficient compressors, solar water heating systemsetc have been taken in the yard to reduce CO2 emission indirectly. 45. With the commissioning of modernisation facilities at Main Yard, shipbuilding capacity of the Company has been doubled. MOPV, Yard 3021 has already been launched from the new Inclined Berth and undocked from new Dry Dock after successful completion of post launch out-fitting work. New Dry Dock is now being used for post launch out-fitting work of the first LCU. 53. Consistent with the acquisition of the additional facilities, the Company is endeavoring to obtain further orders for Naval and Coast Guard Ships for optimization of capacity utilization. The company is also targeting Export Order for light Frigates LSTs, FACs & FIBs etc. The Company has participated in a tender of Philipines for delivery of 2 Nos. Light Frigate for Philipines Navy and has been short listed on the basis of capability. Further discussions are being proposed and efforts are being made to bag the order.

CORPORATE SOCIAL RESPONSIBILITY (CSR) 94. Corporate Social Responsibility (CSR) is an integral part of Garden Reach Shipbuilders and Engineers Ltd. (GRSE) corporate philosophy. GRSE CSR activities aim to benefit the marginalized sections of the local community through different projects that enhance income through creation of sustainable livelihood opportunities and improving the quality of life. The GRSE CSR Policy focuses on the following thrust areas : (i) Health Care. (ii) Education & Skill Development. (iii) Community Development. 95. Modalities / Mechanism of CSR implementation : Baseline Surveys are conducted in the vicinity of our factories to identify the needs and areas of concern of the local community and other stakeholders primarily in the surrounding areas of the factories. A Board Level Committee on CSR & Sustainability headed by an Independent Director monitors the progress of various CSR & Sustainability projects. 96. Towards creating CSR awareness among employees : (i) CSR training is imparted to executives entrusted with implementing CSR and Sustainability projects. (ii) In house training programmes are organized for the employees in association with National CSR Hub. (iii) CSR initiatives and events are highlighted in the Company’s House Magazine. 97. Major CSR Projects Undertaken : (i) Skill Development / Vocational training – An initiative for harnessing human resource and empowering youth : GRSE has entered into Tripartite MoU on 09 Jan 14, with Indian Institute of Engineering Science and Technology (IIEST, former Bengal Engineering and Science University (BESU) and Kolkata Police to provide vocational training. Vocational training has been imparted to about 755 local unemployed youth during the year. During the training period, the trainees were given an amount of `70/- for each day of attendance to defray their travelling and Tiffin expenses. Placement assistance is provided to all trainees on completion of training. Vocational training was imparted in various modules which included (a) AC Repair & Maintenance, (b) Food & Beverage, (c) Plumbing, (d) Electrical, (e) Carpentry, (f) Media & Entertainment &(g) Automobile Service Technician. Event on signing of Tripartite MoU on Vocational Training between GRSE, BESU and Kolkata Police on 09 Jan 14 . (ii) Women Empowerment through Vocational Training : (a) GRSE has made a humble beginning towards empowerment of women by partnering with Sri Sarada Math – Rasik Bhita in setting up a computer laboratory and theory room and sponsoring vocational training of 35 girl students from economically disadvantaged families. This facility will be used for imparting special carrier oriented training to the girl students. (b) GRSE has supported annual expenditure for 6 nuns of Ladakh Nun’s Association (LNA) for school education, tutoring where required, training in traditional Tibetan medicine, food, school fees etc. which will enable the young nuns not only to improve their quality of life but also to provide basic health services to the local community where they reside. (iii) Cataract surgery for the poor and needy people of Metiabruz, Kolkata : 131 nos. of cataract surgeries were conducted conforming with the All India Ophthalmology Society (AIOS) Guidelines. Pre-operative check-up with investigations and post-operative check-up with medicines, consumables were provided upto 6 weeks from the date of surgery. Spectacles were provided after proper binocular refractive correction. (iv) Monthly Health Camp : GRSE is working towards providing basic healthcare facilities to the local community who are unable to bear medical expenses. Monthly health check-up camps/ clinics are held in our 61 Park Unit on the last Saturday of every month in which on an average, 190– 200 patients were examined and provided medicines. (v) Improvement in infrastructural facilities in local high schools : (a) Construction of Toilet Blocks : Lack of toilet facilities was identified as one of the reasons for lower participation of girl students in school education particularly at upper primary level. GRSE has facilitated construction of toilet blocks in 9 local High Schools to mitigate this problem. (b) Providing Fire Extinguishers : 100 standard fire extinguishers were provided to 20 local schools as a fire prevention mechanism and to improve the safety standard in the schools. (c) Construction of Shed for Sports Gallery at Matiaburj High School (HS) : GRSE had facilitated construction of a concrete sports gallery in the playground of Matiaburz High School (HS) which is extensively used by the school children and the people of the locality for hosting various sports events. A shed has been constructed to provide more comfort to the viewers. (vi) Empowering Differently Abled Children : Rehabilitation and support to differently-abled children was also a major area of intervention. GRSE supports Indian Institute of Cerebral Palsy’s (IICP) 3 classes in their Centre for Special Education which comprise of approx 40 children who have severe multiple impairments. These children do not have functional speech and use augmented communication methods. Students aged between 14 – 18 years are imparted pre-vocational skill training. The vocational training in addition to empowerment and income generation also increases self esteem and confidence of these students and thereby helps in mainstreaming these children. (vii) Relief and support to Uttarakhand flood victims : The unprecedented floods in Uttarakhand resulted in enormous damage to life and property. GRSE as a part of CSR initiative contributed ` 1 crore to the Chief Minister’s Relief Fund, Uttarakhand for relief and rehabilitation activities in the flood affected areas of Uttarakhand. GRSE has always come forward in support of the people of the nation in time of need. 98. CSR Accolade : GRSE has been conferred PSE Excellence Award 2013 for Corporate Social Responsibility & Sustainability under Mini Ratna & Others Category by Department of Public Enterprises, GoI & Indian Chamber Of Commerce on 16 Dec 13. Corporate Social Responsibility and Sustanable Development (CSR & SD) Committee : 27. The Board of Directors of the Company has approved the CSR Policy formulated as per the Guidelines of the Department of Public Enterprises (DPE). A CSR & SD committee under the Chairmanship of an Independent Director has been constituted for planning, implementation and monitoring the CSR & SD activities of the Company. 28. During the financial year 2013-14, the Committee met 31 Oct 13, 26 Dec 13 and 25 Jan 14. All the Members of the Committee were present at all the Meeting. 29. Corporate Social Responsibility : 30. 31. 50. Corporate Social Responsibility (CSR) is an integral part of GRSE’s corporate philosophy, integrating business processes with social processes. Garden Reach Shipbuilders and Engineers Ltd. (GRSE) is committed towards CSR and has a CSR Policy in place to guide its CSR activities. In terms of the policy, GRSE focuses on the following thrust areas for its CSR projects: 32. 33. (i) Health Care. 34. (ii) Education & Skill Development. 35. (iii) Community Development. 36. 37. 51. In accordance with the Guidelines on Corporate Social Responsibility for CPSEs 2010 issued by Government of India, Ministry of Heavy Industries & Public Enterprises, Department of Public Enterprises, New Delhi, the Company has incorporated its CSR activities in the MOU for FY 2013-14 and budgetary provision has been made for enhanced CSR activities. 38. 39. 52. Details of CSR activities undertaken by the Company during the year are furnished in the Directors’ Report. 40. 41. Corporate Social Responsibility: Corporate Social Responsibility (CSR) is an integral part of the Company’s corporate philosophy. CSR activities aim to benefit the marginalized sections of the local community through different projects that enhance income through creation of sustainable livelihood opportunities and improving the quality of life. The GRSE CSR Policy focuses on the following thrust areas : 42. (i) Health Care. 43. (ii) Education & Skill Development. 44. (iii) Community Development.

As far as maintenance of machines and other facilities are concerned, the calculation and monitoring of machine availability vis-?is the quality of work performed by them is very important. TPM initiative has started by IE&P Department in large three shops - Ship Building Shop, Plate Preparation Shop and Modern Hull Shop of Main unit of the organization. Calculation of Overall Equipment Effectiveness (OEE) of certain vital work stations have been under taken, which may serve as the main purpose of a Quality Index for the Organization.

21. GRSE with a view to expand the horizon of shipbuilding activities has also embarked upon business promotion through direct correspondence with foreign countries for acquiring orders from overseas market as well as by participation in various exhibitions occurring at difference places of the world. 29.4 Russian (USSR) deferred State Credit An inter-governmental agreement between Russian Federation and Government of India was reached for restructuring of Russian deferred state credit in Rouble in connection with procurement of weapon systems for cost-plus P25 ships built and delivered by the Company to Indian Navy. As per the said agreement, the outstanding debt in Rouble as on 01.04.1992 was converted to Indian Rupees at the difference in Rupee-Rouble exchange rate between 1.4.90 and 01.04.1992 and such amount of exchange rate difference was rescheduled by Government Of India under a deferred rupee payment arrangement payable over 45 years till 2037. These rescheduled payments are also reimbursable by Indian Navy. Such amount is accordingly held as Foreign Suppliers Deferred Credit as at 31.03.2014 and aggregated to Rs 2512.08 lakhs (Previous year Rs 2295.50 lakhs). b) Service Tax Authorities have raised a demand of Rs. 121.30 lakhs (Previous Year Rs. 121.30 lakhs) against imposition of Service Tax on technical fees paid to foreign technicians prior to 18.04.2006. Since the company has made appeal before the CESTAT, EZB, Kolkata against the impugned demand with due approval of CoD, the same has not been acknowledged as debt and accordingly not provided for in the accounts. c) 29.23 Expenditure in Foreign currency (Rs. in lakhs) ParticularsYear ended 31st March, 2014Year ended 31st March, 2013 1. Consultation / Service Fees2,113.49173.90 2. Deferred payment to foreign suppliers109.2295.65 2,222.71269.55 VI. VARIATION IN FOREIGN EXCHANGE RATES : (1) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. (2) Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using exchange rate at the date of the transaction. Advances paid to foreign suppliers for material / services are treated as non-monetary assets and consequently are reported using exchange rate on the date of transaction. . (3) Exchange Difference Exchanges Differences arising on the settlement of monetary items or on reporting a company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise. Expenditure on entertainment and foreign Travel : 30. Expenditure on business promotion during the year was `42 lakh. An amount of `24 lakh was spent on foreign travel by the Company’s Executives for export promotion and for business visits. Foreign Exchange Earnings & Outgo : 31. The information in respect of Foreign Exchange Outgo is contained in Note 29.23 of the Annual Accounts. There is no Foreign Exchange earrings during the year. Publicity & Public Relations : 108. GRSE’s trust worthy brand equity has enriched while the Shipyard again received The Best Performing Defence Shipyard award 2013 by Hon’ble Raksha Mantri. Regional and National Media support has been increased in terms of quantity and quality during various events happened in and around the nation. Participation in foreign Exhibitions was appreciated across the continent. In National and International Scenario, consistent productivity news turned the Company’s image to a greater height. The most remarkable publicity took place while first prestigious order of Offshore Patrol Vessel for Government of Mauritius was launched during the month of Aug13.Strategic participation in the regional exhibition like Disha 2013 in Bhubaneswar did also help the shipyard to not only showcasing its product spectrum, but also to connect with neighbouring states in a business relationship. Strategic publicity steps thus accelerate the growth path of the company.

1. The first Anti-Submarine Warfare Corvette (ASWC), “INS Kamorta” was delivered to Indian Navy on 12th July 2014. The ASW Corvette is a frontline warship with anti-submarine warfare capability with advanced stealth features including very low signature radiated under water noise. The successful construction of ASWC by your company show cases the capability of the shipyard to build most complex and most advanced frontline warship for the nation. I am happy to inform that, the ship was commissioned on 23 Aug 2014 by Hon’ble Raksha Mantri Shri Arun Jaitley in the august presence of Admiral R K Dhowan, Chief of Naval Staff and other distinguished guests. 2. Export Initiatives: Over the last one year the GRSE Team has aggressively focussed on undertaking various Export Initiatives including participation in prestigious exhibitions. During this year, the GRSE team has been actively pursuing for export orders from countries such as Vietnam, Philippines, Venezuela Peru, and Peru for products ranging from Landing Ship Tanker Large, Light Frigates to Fast Patrol Boats and Bailey Bridges. 3. SIGNIFICANT ACHIEVEMENTS DURING FY 2013-14 : 4. 5. 9. During the year, GRSE has delivered last 02 Inshore Patrol Vessels of “Rajshree” class of ships to Indian Coast Guard. ICGS “Rajveer” & ICGS “Rajdhwaj” the seventh & eighth ships have been delivered on 16 Jul 13 & 30 Oct 13 respectively. With this delivery GRSE has completed all the deliveries under the IPV project of Coast Guard. 6. 7. 10. Successful completion of sea trials of yard 3017 in Feb 14 is a great achievement for GRSE, being the first ship of Anti Submarine Warfare Corvette (ASWC) class being made first time in the country. 8. 9. 11. GRSE is currently building its first ever export order of OPV for Government of Mauritius. During the year, the ship was launched with a grand ceremony from newly built Inclined Berth of the Main Unit facilitated with modern technologies by Mrs. K O Fong Weng – Poorun, Senior Chief Executive, PMO, Govt. of Mauritius on 02 Aug 13. 10. 11. 12. First ship of Landing Craft Utility (LCU) MK-IV class of ships, Yard 2092 was launched from Inclined Berth of the Main Unit on 12 Mar 14 by Dr. Priti Gupta, Wife of Shri Ashok Kumar Gupta, IAS, Additional Secretary (Defence Production) in the august presence of distinguish dignitaries. 12. 13. 13. Keel of first two LCUs for Indian Navy was laid on 24 Apr 13 at the old Inclined Berth whereas Keel for the next two was laid on 30 Aug 13 at newly built Inclined Berth facilitated with modern technologies. Keel laying of the first Follow-On Water Jet Fast Attack Craft (FO-WJ FAC) for Indian Navy was also done in this Financial Year (FY) at Building Berth-2 in Raja Bagan Dockyard Unit. 14. 15. 14. This year GRSE has started production of 08 ships. Production (Plate cutting) of 4th& 5th ships of LCU MK-IV series commenced in 1st quarter where as 1st two Follow-On WJFACs & last two LCUs commenced in 2nd quarter for Indian Navy of this FY. Last two FO-WJFACs commenced in last quarter of this financial year. 16. Bonus Share : 17. 18. 26. The Board of Directors at their meeting held on 12 Dec 12 resolved that bonus shares will be issued to the Government of India capitalizing an amount of `61,92,00,000/- (61,92,000 equity shares of `100/- each)from free reserves in the ratio of 1:2 and accordingly approval was sought from the MoD. The MoD accorded approval on 25 Oct 13. 19. Future Outlook : 20. 21. 48. Modernisation facilities at Main Yard have enhanced facilities for Integrated Construction which will result in considerable reduction in build period of ships. GRSE intends to adopt Integrated Construction Technology for construction of last 04 ships of LCU project using in-house knowhow. Contract for P-17A ships is being finalised with the concept of Integrated Construction technology in order to improve quality and reduction in build period for future warships. 22. 23. 49. GRSE is fully committed to build quality ships for Indian Navy, Coast Guard & export orders. With takeover of Rajabagan Dockyard (RBD), the company has become the biggest Defence Shipyard in India. RBD has been refurbished / converted into a full fledged shipyard from where number of ships had already been delivered to Indian Navy & Indian Coast Guard and more ships will roll out in future. In RBD, the production line for construction of IPV / WJFAC class of ships have been streamlined and fine-tuned with an aim of delivering one ship at every two months interval. With this, GRSE is the only DPSU shipyard established with two independent production lines for big ships as well as small ships. 24. 25. 26. 50. At the same time, the Shipyard is also developing the outsourcing base with adequate quality assurance coverage for hull fabrication, plumbing, cabling, hull outfit etc, to strengthen the Company efforts for meeting demand delivery schedules and customer satisfaction. To meet the demand of P-17A ships, steel throughput needs to be increased considerably. Accordingly, new sub-contractors for fabrication and erection of hull blocks are being developed to meet the demand. Use of latest technology for in-house fabrication and erection of blocks is being adopted to increase productivity. 27. 28. 29. 51. To facilitate construction of future project including of P-17A by Integrated Construction technology and also to cater to significant increased demand of steel through put, The Company is considering a proposal of creation of a new Hull Block fabrication facility with suitable EOT cranes and other infrastructure facilities for fabricating atleast 04 blocks (each weighing up to 65 tons) at a time. The facility will also cater to all needs pertaining to outfitting jobs in these blocks. The facility may be set up at Raichak site and adoption of PPP model is being considered at ship stands. The fabricated & outfitted blocks will be transported through river route to Main Yard. 30. 31. 52. The Company has started induction of fresh blood for revamping the aging man power base. The Company has also embarked upon new measures for modernisation, not only for layout of plant, machinery, dock & berth facilities, but also for technology up-gradation in planning software, design tools, Networking & e-mailing software etc. to achieve higher productivity in the coming year. 32. 33. 53. Consistent with the acquisition of the additional facilities, the Company is endeavouring to obtain further orders for Naval and Coast Guard Ships for optimization of capacity utilization. The company is also targeting Export Order for light Frigates LSTs, FACs & FIBs etc. The Company has participated in a tender of Philipines for delivery of 2 Nos. Light Frigate for Philipines Navy and has been shortlisted on the basis of capability. Further discussions are being proposed and efforts are being made to bag the order. 34. 35. 54. The Company has entered into an MoU with Hindustan Shipyard Limited (HSL) has been signed between HSL & GRSE on 19 Apr14 intending to explore future co-operation opportunities in ship building & ship repair. The first project in consideration is 05 Nos Fleet Support Ship for Indian Navy for which a consortium is being formed between GRSE & HSL. 36. 37. 55. Considering the increase in requirement of owners with respect to more definitive validations of new designs at tender stage, and as well as to cope up with the requirement of various specialized design analysis for the on-going projects viz. LCU, MOPV and future projects including P17A, ASW-SWC, Fleet Support Ship etc.The Company has entered into an MoU on 14 Dec 2012 to undertake specialized analysis / validation with IIT KGP, being a premier institute in the country and is reckoned with as the most prolific centre for developmental research in Naval Architecture. The MoU will facilitate development of R&D projects, generation of in-house design data and strengthen in-house capability for design of advanced shipbuilding projects.

Research & Development and Technology Absorption, Adaptation & Innovation : 12. The Company continues its efforts in the field of development of design of war ships as also development of its engineering products. The core strength of the Company lies in its own in-house design capability. Recently the Company has given an impetus to Research and Development (R & D) activities in indigenous shipbuilding by successfully inducting Water Jet Fast Attack Crafts in the service of Indian Navy. In the area of Ship Design, the Company has made major contribution to the design of ASW Corvettes being built for the Indian Navy. 13. The Company have successfully got verified the design of our in-house developed Portable Steel Bridge for Single & Double Lane with a higher load carrying capacity. This would be the launch pad for new segment of GRSE Bridges on proprietary basis. XIV. RESEARCH AND DEVELOPMENT: Capital expenditure on research and development is included in fixed assets and revenue expenditure on research and development is charged as expenditure in the year in which it is incurred. Considering the increase in requirement of owners with respect to more definitive validations of new designs at tender stage, and as well as to cope up with the requirement of various specialized design analysis for the on-going projects viz. LCU, MOPV and future projects including P17A, ASW-SWC, Fleet Support Ship etc.The Company has entered into an MoU on 14 Dec 2012 to undertake specialized analysis / validation with IIT KGP, being a premier institute in the country and is reckoned with as the most prolific centre for developmental research in Naval Architecture. The MoU will facilitate development of R&D projects, generation of in-house design data and strengthen in-house capability for design of advanced shipbuilding projects. Our in-house R&D team is in the final stages of live load testing of an upgraded version of Portable Steel Bridges with the use of improved “Panel 10’x7’ size”. Design of this upgraded version of bridges was verified by CSIR-Structural Engineering Research Centre, Chennai.

HUMAN RESOURCE & ADMINISTRATION 93. Industrial Relations : (i) Industrial Relations during the period under report across all the units were peaceful and harmonious. (ii) The wage settlement in respect of Operatives and Office Assistants have since expired on 31.12.2011. Fresh wage settlement is due from 01.01.2012 and negotiation is in progress. (iii) GRSE Ltd. Workmen’s Union staged demonstration / dharna claiming employment for dependents of died-in-harness cases. . Welfare Activities : (i) Celebration of GRSE Day : The 55th GRSE Day was celebrated on 19 Apr 14.The main function was held in front of Administrative Building of GRSE Main Unit. The function started with welcome song, lighting of lamp by CMD, Directors, CVO and Presidents of Associations and Unions, followed by musical soiree by GRSE employees. The retired employees of GRSE who had served the Company for 40 years or more were felicitated on this occasion. Chairman’s Safety Shield was presented to Main Unit. As in every year, the GRSE Excellence/Exemplary Awards for individual achievement and group activities were conferred on employees for their excellent performance during 2013. GRSE Shri was conferred on 05 employees. On this auspicious occasion, a High Tea was organized at Ordnance Club on 19 April 14. The event was graced by His Excellency Hon’ble Governor of West Bengal, Shri M. K. Narayanan. The Governor praised GRSE’s achievement in bagging the prestigious ‘Best Performing Shipyard’ Trophy for two years in a row, awarded by Raksha Mantri, in 2010 – 11 and 2011 – 12 and encouraged the young officers to continue their endeavour in pursuit of excellence in shipbuilding strengthen indigenization and defence preparedness of the country. (ii) Merit Awards : GRSE Merit Awards were conferred on 19 Apr 14 by CMD and Directors to 45 employees’ children for their outstanding academic performance in 2013. (iii) Sports : (a) Annual Sports Meet : Participation in sports was actively encouraged to ensure healthy work-life balance as well as relieve stress and monotony of everyday life. Annual Sports Meet was conducted for the employees of our Company in following five events : (i) Football (ii) Volleyball (iii) Chess (iv) Table Tennis (v) Musical Chair (Exclusively for lady employees) (b) Participation in National and State Tournaments : (i) Football : The GRSE Football Team had put up a commendable performance in the All India Public Sector Football Tournament and were runners-up in the tournament conceding defeat to Air India. The team also participated in Corporate Games and Kolkata Office League Tournament. (ii) In addition to football, the employees also participated in the following events in Corporate Games – 2013 held in New Delhi : (a) Volley Ball (b) Table Tennis (c) Chess Training & Development : (i) Training & Development activities of Human Resource Department is designed with an aim to develop and nurture the most valuable assets of the company i.e. the Human Resource, keeping pace with the changing industrial environment- nationally and globally. HRD interventions through training programmes, workshops and awareness programmes were conducted during the year 2013-14 with a view to nurture core competencies commensurate with Corporate Strategy & organizational Objectives. (ii) A brief of some of the HRD interventions conducted during the year is enumerated below: (a) HR as “Heart of Change”: HRD intervention on building culture, team work and belongingness has been initiated through Diagnostic Dialogue between external consultant and members of top management. Based on the Diagnostic Report, a Workshop “HR as a heart of change” has been organised so that HR Department can steer the process of culture change throughout the organization. (b) Effective Management of Contractor Labour : A two day residential workshop on Labour Laws at XLRI was conducted with participation of executives from Defence shipyard including GRSE for effective contractor labour management. HR officers as well as Line Managers from various departments deliberated on practical issues and challenges. (c) Human Values & Ethics for professional excellence : In order to motivate our executives for high performance and sustained commitment to ethical conduct, workshops on Human Value and Ethics for Professional Excellence were conducted for senior executives of GRSE. (d) Nutritional Awareness programme for employees : In order to provide guidance and counselling on healthy life-style and proper diet, nutrition awareness programme by noted dietician and nutrition expert was conducted for employees across the units. Around 200 employees attended the programme. (iii) A brief of some of the training & development programmes conducted for GRSE employees is enumerated below: (a) Technical Training programmes : To keep pace with the evolving technological changes, Skill Development training programmes were organized for operatives in Welding, Electrical, Fitting, Pipe Fitting and Machinist trades at Advance Training Institute, Kolkata. Supervisors from Ship Division were sent for Advanced Welding courses at Trichy. Officers were sent to NIRDESH, SODET and other reputed institutes/organizations for courses on Warship Design, Non-Destructive Examination, Advanced Welding, EMI/EMC in Defence Systems, role of Classification Agencies, corrosion control, SAP, cyber security. (b) Management Development programmes : To equip Officers and Supervisors with functional and leadership skills so that they can administer the organization in the right direction, professional development programmes on HR, Finance, Material Management disciplines were conducted both in-house by reputed experts of the subject as well as outside institutes. A two day programme on Risk Management for senior officers which was one of the HRM MOU (2013-14) target was organized at IIM Calcutta in December 2014. Training programmes on Lead Auditors, QMS Documentation for ISO 9001:2008 implementation in the shipyard were conducted for employees. Also, workshops on Reservation and Labour Laws were also conducted for officers. (c) Employee Development programmes : During the year 2013-14, a six day Induction training programme for newly joined officers and a Mid-Career Development programme on building and leading high performance teams for Managers and Senior Managers were organized at management institutes. Also, Supervisor Development Programmes for non-unionized supervisors and motivational and attitudinal transformation workshops for operative category of employees were conducted during the year with a view to prepare them for changing organizational and business environment. (d) Awareness programmes on Health, Safety and SAP/DMS : A series of monthly awareness programmes on Health, Safety and Fire fighting issues were conducted for all employees. 10 day Yoga training by experts from Ramakrishna Yogashram has been conducted for all categories of employees. In-house SAP/DMS hands-on training for employees were also organised department-wise during the year. (iv) During the year 2013-14, GRSE personnel have participated in CII Workskills Competition in various trades. In the 25th National Workskills Competition held in June 2013, GRSE participants have won first prize in COPA (below 22 yrs.), Carpentry (below 22 yrs.) and Carpentry (above 22 yrs.) trade events. In the 26thRegional Workskills Competition held in Feb 2014, GRSE participants have won first prize in Carpentry (below 22 yrs.) and both first and second prize in Carpentry (above 22 yrs.) trade events. (v) As a whole, HR Department through various training programmes and HRD interventions conducted during the year 2013-14 facilitated growth opportunities of employees and fostering of team spirit and commitment of employees towards the organizational goals. All these efforts culminated in achievements of MOU targets for the year 2013 – 14 and development achievement “Excellent” rating for the shipyard. Incentive Schemes: To enhance the use of Hindi and to motivate the employees towards its use, following incentive schemes are in vogue and employees as well as departments were given cash prizes on Hindi Day ceremony. (i) Incentive for doing original work in Hindi - 22employees were given cash awards, during the year. (ii) Inter Unit Rajbhasha Shield - Inter Unit Rajbhasha Shield for the year was awarded to TTC Baranagar unit for doing maximum work in Hindi during the year. (iii) Inter Departmental Annual Incentive Scheme to encourage Hindi correspondence / Hindi Noting/Drafting - Cash awards were given to Security, Medical, Finance and Yard Modernization Departments. (iv) Incentive to encourage Hindi writing - 08 Cash prizes for best entries in Rajbhasha Jagriti were given. (i) Incentive Scheme for English Steno-Typists for doing Hindi Typing work – As per the directives of Min. of Home Affairs, Department of Official Language, incentive scheme has been introduced. (ii) Inter departmental incentive to encourage Hindi correspondence/Hindi Noting/Drafting – Under Inter departmental quarterly incentive scheme to encourage Hindi correspondence/Hindi Noting/Drafting, cash awards to 03 Service Departments, 03 Production Departments and 03 Production support Departments were given on the basis of their quarterly reports regarding progressive use of Hindi in the Official Language Implementation Committee meetings. (iii) Hindi competitions in local schools to encourage the use of Hindi. Use of Official Language is promoted by GRSE not only in yard but also in the adjoining areas/localities. Under which Hindi Essay competitions were conducted on 15 Jul13, 04 Dec13 and 26 Mar 14in local schools and prizes distributed to three successful students from each school. (a) Fume filtration system for CNC air plasma plate cutting machine have been introduced to reduce air pollution in an effort to provide a healthy and safe working environment for our employees, business associates, personnel visiting the yard and neighbours. (b) (e) Chipping operation that generates high level of noise is being carried out during off working hours and ear plugs are provided to the all the employees who are involved in this activities. Arc gouging is being carried out to the extent possible in lieu of chipping. (c) 29.26 DPE had issued a guideline for creation and contribution to a corpus fund to the extent of not more than 1.5% of PBT to cater to the medical and other emergency needs of employees retired prior to 01.01.2007. No provision has, however, been made in the Accounts as the related DPE guideline is subject to directive / guideline from the concerned Administrative Ministry, i.e. MoD and no guideline / directive for mechanism and operation of the scheme has been received from MoD (d) (ii) Gratuity: (e) (f) Gratuity Fund, a defined benefit scheme, is administered through duly constituted independent Trust and yearly contributions based on actuarial valuation as determined by LIC are charged to revenue. Any additional provision as may be required, is provided for on the basis of acturial valuation as per Accounting Standard -15 on Employee Benefits. Actuarial gains and losses in respect of such benefits are recognised in the Statement of Profit and Loss. STATEMENT SHOWING REPRESENTATION OF SC/ST/OBC, EX-SERVICEMEN, PHYSICALLY CHALLENGED AND WOMEN EMPLOYEES AS ON 31 DEC 13 UNDER PERMANENT & CONTRACT CATEGORIES Group / CategoryTotal StrengthSCsSTsOBCsEx-ServicemenPhysically ChallengedWomen Employees Group “A”46081207463727 Group “B”15115-11 Group “C”2203430113111552237 Group “D” (Excluding Safaiwalas)4681132748602067 Group “D”(Safaiwalas)6055----- Total320668016123817850132 DETAILS OF RECRUITMENT MADE DURING 2013 UNDER PERMANENT & CONTRACT CATEGORIES Group / CategoryTotal StrengthSCsSTsOBCsEx-ServicemenPhysically ChallengedWomen Employees Group “A”226173-- Group “B”------- Group “C”1------ Group “D” (Excluding Safaiwalas)------- Group D”(Safaiwalas)------- Total236173-- Value Addition : 22. The Value Added during the financial year under review was `504.63 crore as against `496.00crore during the previous year. The Value Added per Employee was `16.11 lakh as compared to `14.21lakh during the previous year registering a growth of 13%.

Directors' Responsibility Statement : 42. Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors’ Responsibility Statement, following is hereby confirmed: (a) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. (b) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 Mar 14 and the profit of the Company for the year ended 31 Mar 14. (c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. (d) That the Directors have prepared the annual accounts on a going concern basis.