Financial Parameters: During the financial year 2011-12, the Company has earned Gross Profit before Depreciation, Interest and Prior Period Adjustment of 159.37 crore.

Value of Production: During the financial year 2011-12, the Company has achieved value of production
of 676.43 crore.

MOU Rating: In terms of parameters laid down in the Memorandum of Understanding signed with the Government for the year 2011-12, the Company is expected to be rated “Very Good” in its performance during 2011-12.

Profit: During the year 2011-12, your Company has earned Profit before Tax of 126.03 crore as against
264.79 crore in the previous year and made Net Profit after Tax of 82.76 crore against 176.13 crore in the previous year.

After reviewing the profits for the year & financial position of the Company and in terms of Government guidelines in vogue, the Board of Directors is pleased to recommend Dividend of 59% on the Paid up Share Capital of 2910 lakh for the year 2011-12 as against 122% in the previous year.

The paid-up share capital of the Company as on 31st March, 2012 was 2910 lakh. The Company neither had any outstanding loans nor has taken any fresh loan from the Government during the year.

The foreign exchange outgo during the year was 9501 lakh and the earning in foreign exchange was 30 lakh.

The financial position of the Company as on 31^st March, 2012 and as on 31^st March, 2011 is shown below:-

The Company’s contribution to the Central Exchequer during 2011-12 was 8175 lakh (11392 lakh last year), which includes 3619 lakh by way of Corporate Tax (7584 lakh last year), 590 lakh by way of Tax on Distributed Profit (435 lakh last year), 1814 lakh towards dividend (1338 lakh last year), 586 lakh by way of Value Added Tax (881 lakh last year), 1438 lakh by way of Central Sales Tax (1154 lakh last year) and 128 lakh by way of Service Tax.

The third Naval Offshore Patrol Vessel was launched on 21.05.2011 by Smt. Elizabeth Antony, wife of Shri A K Antony, Hon’ble Raksha Mantri.

One 5 Ton Glass Reinforced Plastic Boat was delivered to Sardar Sarovar Nigam Limited, Gujarat on 09.06.2011. The Sail Training Ship “SUDARSHINI” was delivered to Indian Navy on 24.11.2011 and the same was commissioned by VAdm. K. N. Sushil, PVSM, AVSM, NM, ADC, Flag Officer Commanding-in-Chief (Southern Naval Command) on 27.01.2012. The Damage Control Simulator at Kochi was handed over to Indian Navy on 30^th March, 2012.

The ship repair activities which had been suspended due to demolition of the old slipways under the modernization programme has been restarted with the operation of new Shiplift system commissioned by Shri A K Antony, Hon’ble Raksha Mantri, on 21.05.2011. The Company has started bidding for refits/repairs of Naval, Coast Guard and Commercial vessels and during the year the Company undertook docking and repair of 20 vessels such as tugs, offshore supply vessels, mini bulk carriers, casino ships, etc. The ship repair business is expected to increase in the years to come.

As on 31^st March 2012, the net value of outstanding work against orders received for Ship Construction, Ship Repair/Refit work and General Engineering Services amounted to .340 crore (approximately). The Company received an export business order in November, 2011 from Royal Navy, Sultanate of Oman for training of personnel on Remote Control system of propulsion machinery and CPP Stern Gear System. Order for construction of Pontoons and Service barges for INS Vikramaditya was received from DGNP, Mumbai under stiff competition with private shipyards. The Company competed with small time boat builders to get orders for supply of 3 in no. 6.5m RIBS and 3 in no. 7.3m RIBS for P15A from MDL. The Company has signed a Contract with Ministry of Defence in May, 2012 to build six Nos. 105M Offshore Patrol Vessels for Indian Coast Guard amounting to .1979.62 crore, which has improved the Order Book Position during the current year.

Despite lean order book position, the Company has set challenging targets of Value of Production of .560 crore and Gross Margin of .105 crore for the year 2012-13, as per the MOU signed by the Company with the Government.

The Company continues to make efforts for exporting its products, specially the in-house designed range of Patrol Vessels and the FRP High Speed Interceptor Crafts by participating in various exhibitions, seminars and giving presentations on shipbuilding ability of the Yard and interacting with potential customers of various countries. In order to publicize our expertise and improve our exposure in the international market, the Company participated in International Exhibitions, such as Latin America Aero & Defence (LAAD-11) Exhibition held from 12th to 15th April 2011 in Rio de Janeiro, Brazil, Defence & Security Equipment International (DESi-11) held from 13th to 16th September, 2011in London, United Kingdom, 4th INDEXPO MUSCAT 2011 held from 20th to 22nd September, 2011 in Muscat, LIMA-2011 held from 6th to 10th December, 2011 in Malaysia. Further, the Company participated along with three other yards under the banner of Indian Defence Yards (IDS) in DEFEXPO-12 Exhibition held from 29th March to 1st April, 2012 in New Delhi. The delegations from Senegal, South Africa, Seychelles, Cameroon, Djibouti, Malaysia, Mozambique, Brunei, Thailand, Sultanate of Oman, Brazilian Navy and Maldives visited GSL stall and evinced keen interest in the Company’s Patrol Vessels range. In addition, some of the international shipbuilding companies showed keen interest in co-operating with GSL.

The Company also participated in INDEXPO -11 Exhibition held in Muscat from 20th to 22nd September, 2011. Coinciding with this exhibition, Federation of Indian Chambers of Commerce & Industry (FICCI) organized a visit of Indian business delegation to Doha, Qatar, in addition to Muscat, wherein Seminars and Business to Business (B2B) meetings were organized with Qatari and Omani companies. GSL delegation, led by Director (CPP&BD), was part of the Indian business delegation to Doha and Muscat.

A Nigerian delegation led by the Chairperson Senate Committee on Navy, Distinguished Senator Chis N.D. Anyanwu, visited the Company in March, 2012. The Company’s capability to design & construct Patrol Vessels was presented to the delegation. The Nigerian delegation expressed satisfaction and was convinced of Company’s capability to design and deliver modern Patrol Vessels for deployment in their Naval service for various purposes. The Company, the only Indian Shipyard, was invited by Ministry of Defence, Sultanate of Oman, along with other globally reputed shipyards to participate in the Tenders for Manufacture & Supply of FRP Work Boats and Damage Control Simulator for Royal Navy of Oman.

The Company also participated in tenders for supply of dredgers alongwith associated crafts for various Bangladesh tenders issued under line of credit facility by Govt of India. GSL was L1 in tenders for BIWTA, however the same has been retendered. Fresh bids have been submitted for BWDB tenders and same are under evaluation. The Company signed an MOU for indigenous construction of Amphibious Roll on Roll off System in collaboration with M/S INSTASOL of USA. Presentations were made to Korean Navy during visit by GSL team and to the Korean authorities at Delhi during Indo Korean Defence Cooperation meetings.

The Company's Quality Management System is certified for “Design, Construction and Repairs of Ships and Craft and providing General Engineering Services” in accordance with the requirements of the international standard ISO 9001: 2008 by Indian Register of Quality System (IRQS). The present certificate is valid upto 19th November, 2012 and the same is being maintained by conducting periodic surveillance audits by IRQS.

As on 31^st March, 2012, the Company had on its roll 210 Officers, 14 Management Trainees, 102 Yard supervisors, 50 Technical Supervisors, 82 Ministerial Supervisors, 1079 Workmen and 65 Workmen/Supervisors on Fixed Term basis, which include 16 Executive and 84 Non-Executive women employees. The position regarding representation of SCs/STs and women employees in various categories as on 01.01.2011 and 01.01.2012 is given in Annexure ‘A’. The particulars of Recruitment of SCs/STs and women personnel during the calendar year 2011 are given in Annexure ‘B’. The reservation of 3% for recruitment of Persons with Disabilities (PWD) has been provided in Group ‘A’, ‘B’, ‘C’ and ‘D’ categories in compliance with the Persons with Disabilities (Equal Opportunity Protection of Right and Full Participation) Act, 1995. The Company has no employee covered under Section 217(2A) of the Companies Act, 1956.

The Company continues to give due importance to Welfare, Health and Safety measures of employees. Constant and conscious efforts are being made to improve the welfare of employees and their families. To promote a sense of discipline, an award is being given to employees for 15 years and 25 years of clean record of service. Recreational facilities such as indoor games, reading room with newspapers and magazines, soft music tracks are provided for employees during lunch & off duty hours. The Company provides accident cover and better medical assistance to employees through various Group Insurance Schemes and also contributes towards the Employees’ Death Benefit cum Welfare Fund Scheme.

Incentives for promotion of family welfare scheme, higher education and Self-development in related skills, etc., are provided on a continuing basis. The Company also encourages the employees to actively participate in various sports/tournaments through GSL Sports Club. Scholarship is awarded to the employees’ children as an incentive for pursuing higher education. During the year, the Company undertook various welfare activities for employees & their families and observed Quami Ekta Week celebration from 19th to 25th November, 2011.

In order to encourage, assist and uplift the deserving SC/ST students in Goa, the Company provides every year scholarships to pursue Technical/Non–Technical Diploma & Degree Courses including Medical Courses. The Company also celebrates the birth anniversary of Bharat Ratna, Dr. B.R. Ambedkar.

The Company continues to accord importance to Safety while carrying out various jobs. The Company has evolved stringent regulations for Personal Safety and use of Personal Protective Equipment (PPE) and carries out regular inspections for implementation of the Safety regulations. The Company has evolved various Permit Systems for Height work, Hot work while fuel onboard, General work and Entry of men working in the Yard. The “Safety, Health & Environment (SHE) Policy”, “Safety Manual” & “Safety Handbook” formulated by the Company have helped in a structured approach to disseminate the SHE objectives enabling focused efforts with participation of all employees.

The Company has been regularly conducting Safety Committee Meetings to work out and implement both Preventive and Corrective Action Plans. The Company has been organizing Safety Training & Awareness Programmes for its employees to improve the Safety Standards. The personnel are constantly encouraged to carry out self-inspection and root cause analysis in order to identify appropriate corrective/preventive measures for achieving continual improvement. As a result, reportable accidents in the Company have come down considerably.

An External Safety Audit was carried out in November, 2011, through Central Labour Institute, Mumbai. The 41st National Safety Day/Week observed by the Company from 4th to 10th March, 2012. On the occasion, mass awareness programs on work place safety training and fire fighting demonstration were arranged for employees of GSL as well as Contractors/ Sub-contractors. The importance of safety was highlighted through display of Safety Banners/ Posters, administering Safety Pledge, distribution of Safety Badges, organizing competitions on Safety Slogan, etc.

During the year, the following Parliamentary Committees visited GSL/Goa and held discussions with the Management:

The Company was honoured yet again for its continued pursuance of excellence, focus on customer satisfaction, enhanced productivity, employee participation, sustained research & development, effective cost reduction strategies, promoting human resource development and quality conscious approach in the ‘Best Performing Shipyard’ category when the Hon’ble Raksha Mantri’s Awards for Excellence was bestowed upon GSL for “BEST PERFORMING SHIPYARD” and “Excellence for Design Effort” for the year 2009-10. The award for excellence in the design effort was in recognition of GSL’s persistent efforts at in-house Design & Development of Propulsion System Integration and Integrated Machinery Control System (IMCS) for OPV Project. The coveted awards were presented to GSL by Shri A K Antony, Hon’ble Raksha Mantri, Govt. of India, at an impressive function held at DRDO Bhawan, New Delhi on 14th Nov., 2011. GSL had earlier received the “BEST PERFORMING SHIPYARD” award consecutively for the years 2005-06 and 2006-07 and Excellence in Design Effort for the year 2006-07.

The Company continues to give utmost importance to implementation of the Official Language Policy of Govt. of India for transacting the Official Policy of the Union in Hindi and various directives/instructions issued by the Ministry of Home Affairs, Department of Official Language, from time to time. The Company has achieved the targets as laid down in the Annual Programme for transacting the official work in Hindi and special attention has also been given to comply with the instructions of Dept. of Official Language, Ministry of Defence, regarding use of Hindi in official work.

Pursuant to the directives of Government of India to promote “UNICODE” applications on all computers, three workshops were organised to acquaint officers and employees with its applications. Five days Advance Computer Training Programme was organised by the company under the auspices of National Thermal Power Training Institute, Faridabad. Three Functional Hindi workshops, including workshops for Chief Executives/Senior Officers, were also organised for officers and employees to further motivate them to do their work in Hindi. Total 195 officers and employees were trained through these workshops.

During the year, the Company has been awarded first prize/rolling shield for excellent performance in implementation of Official Language during 2010-11 by Town Official Language Implementation Committee (TOLIC), South Goa. The ministerial staff of the Company also won All India level prizes at various Hindi Essay competitions organised on the occasion of Hindi Divas under the aegis of TOLIC, Vadodara and All Goa level prizes under TOLIC, South Goa. The Company successfully organized various competitions under the auspices of Kendriya Sachivalya Hindi Parishad, New Delhi.

The Chairman & Managing Director of the Company has taken over as the Chairman of TOLIC, South Goa with effect from. 14th November, 2011 as per the instructions received from Government of India, Ministry of Home Affairs, Department of Official Language, New Delhi. TOLIC, South Goa has been adjudged third for promoting the use of Official Language Hindi during the year 2010-11 by the Govt. of India, Ministry of Home Affairs, Department of Official Language, New Delhi.

Under the Right to Information (RTI) Act, 2005, to facilitate provision of information to the citizen requesting for the same, the Company has evolved necessary structure by designating Officers as Public Information Officer, Assistant Public Information Officer, Appellate Authority and Transparency Officer for the purpose of implementation of the Right to Information Act in the Company. The particulars of the organisation functions, powers & duties of the officers, norms, etc., as prescribed under Section 4 of the Right to Information Act have been posted on the website of the Company, www.goashipyard.com . The Company received 52 applications from the citizens which were appropriately replied/attended and wherever required the information has been provided to the general public.

Expenditure on business promotion during the year was 34.85 lakh. An amount of 116.32 lakh was spent on foreign travel by the Company’s executives/employees for the purpose of technology transfer, production and export promotion.

As in the previous year, the Company continued to give thrust on participative vigilance and creating awareness amongst all in GSL including stakeholders. Inspections and surprise checks have been carried out across different departments and functions as a routine so as to encourage the practice of “Participative Vigilance”. All new recruits are made aware of the functions and role Vigilance Department.

During the year, Vigilance Awareness Week was observed from 31^st October, 2011 to 5^th November, 2011 wherein various competitions were organized with wide publicity to encourage more participation. Vigilance related posters, banners and stickers were displayed at prominent locations across Company’s premises. On the concluding day, prizes were awarded to the winning participants.

Pursuant to Section 292A of the Companies Act, 1956, and DPE Guidelines on Corporate Governance for CPSEs 2010, the Company has reconstituted the Audit Committee of Directors on 23.11.2011 which is as follows:

The Company has implemented the Guidelines on Corporate Governance for CPSEs 2010 issued by Department of Public Enterprises (DPE) vide OM No.18(8)/2005-GM dated 14.05.2010. During the year, the Company reviewed and revised the Code of Business Conduct & Ethics for all Board members and Senior Management. The Management Discussion & Analysis Report and Corporate Governance Report along with Compliance Certificate from the Auditors of the Company, as required under the said Guidelines, are placed at Annexures ‘C’ and ‘D’ hereto, respectively.

The information on Conservation of Energy and Technology Absorption is provided in the Management Discussion & Analysis Report placed at Annexure ‘C’ hereto.

To the best of their knowledge and belief and according to the information and explanations obtained by them, the Directors make the following Statement pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any.

ii) That such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year ended 31st March, 2012.

The Government of India appointed Prof. (Dr.) R. Venkata Rao as Part-time Non-Official Director (Independent Director) and VAdm. M. P. Muralidharan as Part-time Official Director of the Company with effect from 20.09.2011 and 03.01.2012, respectively. The Board welcomed their appointments.

VAdm. Anil Chopra, AVSM, ceased to be Part-time Official Director of the Company with effect from 29.10.2011 consequent to his relinquishing the charge of Director General Indian Coast Guard. The Board has placed on record its appreciation of the valuable services rendered by VAdm. Anil Chopra, as a Director of the Company.

In accordance with Article 117(2) of the Articles of Association of the Company, the under mentioned Directors shall retire from office on the day of the Annual General Meeting and are eligible for re-appointment:-

The Chairman & Managing Directors of the other two sister Defence Shipyards, viz., Mazagon Dock Limited, Mumbai and Garden Reach Shipbuilders & Engineers Limited, Kolkata, continued as Special Invitees to the meetings of the Board of Directors of the Company. Shri Gyanesh Kumar, Joint Secretary (NS), Ministry of Defence, also continued as a Permanent Special Invitee on the Board of Directors of the Company.

M/s. U.N. Bene & Co., Chartered Accountants, Margao, Goa, were appointed by the Comptroller & Auditor General of India (C&AG) as Auditors of the Company for FY 2011-12. The Directors recommend to the members of the Company to consider fixation of the remuneration of 75,000/- plus Service Tax plus TA/DA for Auditors of the Company to be appointed by the C&AG for FY 2012-13.

The Comments of the C&AG u/s 619(4) of the Companies Act, 1956, on the Accounts of the Company for FY 2011-12 will be appended on receipt. The Review of Accounts by the C&AG, if any, will be appended on receipt as Annexure ‘E’ hereto.