Financial Parameters: The financial parameters for 2010-11 have shown outstanding improvement over previous years and in most of the cases, scaling new heights since inception of the shipyard in 1957, surpassing all previous records.

Value of Production: During the financial year 2010-11, the Company has achieved highest value of production of Rs.990.32 crore as compared to Rs.866.48 crore in the previous year which works out to 114.29% of the previous year value.

MOU Rating: In terms of parameters laid down in the Memorandum of Understanding signed with the Government for the year 2010-11, the Company is expected to be rated "Excellent" in its performance during 2010-11, for fifth consecutive year.

Profit: During the year 2010-11, your Company has earned highest ever Profit before Tax of Rs.264.79 crore as against Rs.197.23 crore in the previous year, an increase of 34.25% and made Net Profit after Tax of Rs.176.13 crore against Rs.130.72 crore in the previous year. This is an increase of 34.73% over the last year.

After reviewing the profits for the year & financial position of the Company and in terms of Govt. guidelines in vogue, the Board of Directors is pleased to recommend Dividend of 122% on the Paid up Share Capital of Rs.2910 lakh for the year 2010-11 as against 90% in the previous year. This is the highest ever dividend proposed to be paid by the Company.

The paid-up share capital of the Company as on 31^st March, 2011 was Rs.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 Rs.21721 lakh and the earning in foreign exchange was Rs.16 lakh.

The financial position of the Company as on 31^st March, 2011 and as on 31^st March, 2010 is shown below:-

The Company's contribution to the Central Exchequer during 2010-11 was Rs.11392 lakh (Rs.9866 lakh last year), which includes Rs.7584 lakh by way of Corporate Tax (Rs.6432 lakh last year), Rs.435 lakh by way of Tax on Distributed Profit (Rs.282 lakh last year), Rs.1338 lakh towards dividend (Rs.847 lakh last year), Rs.881 lakh by way of Value Added Tax (Rs.770 lakh last year) and Rs.1154 lakh by way of Central Sales Tax (Rs.1535 lakh last year).

The second 90M Offshore Patrol Vessel designed and built in-house was delivered to Indian Coast Guard on 17th November, 2010 and the same was commissioned by Hon'ble Raksha Rajya Mantri, Sri M. M. Pallam Raju on 11^th December, 2010.

The keel for the fourth 105M. Naval Offshore Patrol Vessel - Yard 1211 was laid on 28.04.2010 by RAdm. Sudhir Pillai, NM, Flag Officer Commanding Goa Area & Naval Aviation, and subsequently the said vessel was launched on 6^th December, 2010 by Smt. Shiela Singh, wife of Shri R. K. Singh, Secretary Defence Production. The second Sail Training Ship, Yard 1210 was launched on 25^th January, 2011 by Smt. Letha Sushil, wife of VAdm. K. N. Sushil, PVSM, AVSM, NM, ADC, Flag Officer Commanding-in-Chief (Southern Naval Command).

The indigenously manufactured 23 Nos. 5T and 28 Nos. 12T Glass Reinforced Plastic (GRP) boats have been delivered to various State Coastal Security Police under Coastal Security Scheme of Ministry of Home Affairs. The construction of all 116 GRP boats ordered by MHA for distribution to Coastal Security Police of various States and Union Territories has been completed two months ahead of schedule. The police teams of these States & Union Territories have also been trained for operation/maintenance of these boats.

The ship repair activities which had been suspended due to demolition of the old slipways under modernization programme, have now commenced with the operationalisation of new shiplift system in the last quarter of the year. The Company has started bidding for refits/repairs of Naval, Coast Guard and Commercial vessels. It is proposed to sign an MOU with CGHQ, Indian Navy and other shipping companies to undertake repair/refit their fleet of vessels on continuous basis and also to provide berthing/docking facility. The ship repair business is expected to increase in the years to come.

As on 31^st March 2011, the net value of outstanding work against orders received for Ship Construction, Ship Repair/Refit work and General Engineering Services amounted to Rs.1187 crore (approximately). The Company received an export business order from Royal Navy of Oman, Ministry of Defence, Sultanate of Oman, for training of personnel in CPP Stern Gear System.

Despite lean order book position, the Company has set challenging targets for Value of Production of Rs. 825 crore and Net Profit of Rs.170 crore for the year 2011-12, as per the MOU signed by the Company with the Government. The Company is confident of achieving these targets. The Company's order book position is expected to improve during the current year.

The Company continues to make strenuous 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 dignitaries of various countries involved in decision making for future acquisition plans. As part of the efforts to market our products abroad, the Company has also contacted the High Commissioners / Defence Attaches of some Indian Embassies in South East Asian countries, Gulf region, etc. and has requested to facilitate the Company's interaction with the appropriate authorities in the respective country for exporting our products.

In order to publicize our expertise and improve our exposure in the international market, the Company participated in International Exhibitions, such as Africa Aerospace & Defence (AAD-10) held in Cape Town, South Africa from 21^st to 25^th September, 2010 and Naval Defence Exhibition (NAVDEX-2011) held in Abhu Dhabi,UAE from 20^th to 24^th February, 2011.

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 Tender of four Patrol Vessels for Royal Navy of Oman. Further to the submission of Techno-Commercial Offer for this project, the Company was short listed for the next stage of tender evaluation process along with two other international shipyards. After a series of meetings and discussions with Ministry of Defence, Sultanate of Oman, the Company has submitted 'Best and Final Offer' (BAFO) and is awaiting further response from Ministry of Defence, Sultanate of Oman.

Government of India, Ministry of Defence, has conveyed the sanction of the Government for supply of one Offshore Patrol Vessel by the Company to Sri Lanka through a Line of Credit. In this regard, GSL Team visited Sri Lanka for technical discussions with Sri Lankan authorities from 21^st to 24^th December, 2010. The Company submitted its Techno-Commercial Proposal for design, construction and supply of 105 M. Offshore Patrol Vessel to Sri Lankan Navy, to Ministry of External Affairs and Ministry of Defence, Government of India and contract is expected to be signed in due course.

A delegation led by Chairman & Managing Director of the Company attended 'Offshore Patrol Vessels - 2010' conference in Cadiz, Spain, from 27th to 30th September, 2010. GSL was branding sponsor at this event, which provided the Company an opportunity to publicize its capability and products. It also provided GSL an opportunity to network & discuss its product range & capability with important delegates at this event to market our products abroad.

In order to get a foothold in the Nigerian market, a delegation led by Chairman & Managing Director visited Nigeria on 24th & 25th November, 2010 and presentations were made to Nigerian Maritime Administration and Safety Agency (NIMASA), Chief of Naval Staff and IG Police, Nigeria.

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, 2011, the Company had on its roll 210 Officers, 09 Management Trainees, 115 Yard Supervisors, 50 Technical Supervisors, 85 Ministerial Supervisors, 1119 Workmen, 02 Diploma Trainees and 76 Workmen/Supervisors on Fixed Term/Contract basis, which include 15 Executive and 89 Non-Executive women employees.

The position regarding representation of SCs/STs and women employees in various categories as on 01.01.2010 and 01.01.2011 is given in Annexure 'A'. The particulars Recruitment of SCs/STs and women personnel during the calendar year 2010 are given in Annexure 'B'.

The reservation of three percent for recruitment of Persons with Disabilities (PWD) has been provided in Group 'A', 'B', 'C', & 'D' categories in compliance with the Person 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.

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 with budget provision of ` 2 lakh (approx.). The Company also continues to provide financial assistance to celebrate the birth anniversary of Bharat Ratna, Dr. B.R. Ambedkar and to a social organisation called "Dalit Sanghatana" for undertaking welfare activities such as distribution of scholarship awards, providing books and notebooks to SC/ST students.

During the year, the Company observed Public Sector Day on 10th April 2010, Anti-terrorism Day on 21.05.2011, Sadbhavana Diwas on 20.08.2010 and Quami Ekta Week/ Communal Harmony week from 19th to 25th November, 2010.

The Company continues to accord the utmost importance to Safety while carrying out various jobs. The Company is preparing for implementation of BS OHSAS 18001.2007 and ISO 14001:2004 and training has been imparted to some officers in Occupational Health and Safety Management Systems.

The Company has evolved stringent regulations for Personal Safety and Personal Protective Equipment (PPE). The Safety Cell carries out regular inspections for implementation of Safety regulations. The Company has evolved Height Work Permit System, Hot Work Permit System while fuel onboard, General Work Permit System and Man Entry Permit System for all personnel working in the Yard. "Safety, Health & Environment Policy", "Safety Manual" & "Safety Handbook" brought out by the management has resulted in a structured approach in disseminating the Company's Safety, Health & Environment objectives and focused efforts with the participation of all employees. The Company has been conducting regular Safety Training and Awareness Programmes for its employees to improve further the Safety standard. On the occasion of "National Safety week" observed in GSL, the importance of safety was highlighted through display of Safety Banners/Posters, administering Safety Pledge, distribution of Safety Badges, organizing competitions on Safety Slogan, mass awareness programs on Work Place Safety training, First aid training and arranging fire fighting demonstration. The Contractors and sub-Contractors personnel are also being trained and made aware of Safety while carrying out the jobs entrusted to them.

The Safety Committee Meetings are regularly held to work out and implement Preventive and Corrective Action Plans. The yard 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. The efforts of the Company have resulted in reduction of reportable and non-reportable accidents over the years.

The Company received "Gomant Suraksha Puraskar", instituted by Green Triangle Society, Panaji, Goa, at the hands of Smt.Agatha Sangma, Union Minister of State for Rural Development.

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 Official Language Implementation Committee of the Company held quarterly meetings regularly to review the progress made in implementation of the Official Language and appropriate steps were taken for further improvement. The Company has surpassed the prescribed targets set as per the Annual Programme issued by the Ministry.

First day of the every month is observed as Hindi day in the Company. All the important activities, events, orders, retirements, obituaries etc. are displayed in Hindi as well as in other local languages on electronic display for the information of the employees.

During the year, various in-house training programmes, viz. Functional Hindi Workshop, Personal Contact Programme, Advanced Training Programme for paperless office with the help of computer software on Unicode System in Windows were organized for maximizing use of Hindi in official correspondence. As per the instruction of Technical cell, Govt. of India, Ministry of Home Affairs, Deptt. of Official Language, 5 days Basic Hindi Computer Training Programme was conducted by the Company in MPT Training Centre from 22nd to 26th November, 2010 under the auspices of National Thermal Power Training Institute, Faridabad in which 22 employees from different Central Govt. Offices participated.

Hindi Translators were nominated for All India Level Official Language Seminar cum Conference organised by of Bharatiya Bhasha Evam Sanscruti Kendra, New Delhi. Two employees were also nominated to participate in the Advanced Hindi Computer Training Programme conducted at National Institute of Oceanography, Dona Paula from 11th to 17^th March, 2011. The Company procured Hindi Books on interesting subjects worth Rs.24851/- during the year.

With a view to motivate and create awareness amongst the employees' children in learning Hindi, under the scheme appreciable amount was distributed to the GSL Employees' Children who stood Ist & IInd in Hindi subject in Classes X and XII. In addition incentives for doing maximum Noting Drafting in Official Language Hindi and Best article/poem awards for "Goayard Visheshank" were distributed to eligible employees, as in the past. Similarly, Rolling Shield was presented to Heads of Departments for securing first and second place in enhancing and maintaining the percentage of Hindi correspondence.

Hindi Month was observed from 14th September to 13th October, 2010, for the first time. As a part of celebration, events such as All Goa level Hindi Debate, Noting and Drafting Competition, Essay Competition, Extempore Speech Competition, Handwriting Competition for Apprentices, Signature Competition for Company's employees, Poetry Competition (self written) for staff, Functional Workshop on Official Language for Yard supervisors, Refresher training programme in Hindi Typing and Stenography, series of lectures on Official Language were conducted in Hindi and Documentary Film show on different aspects of Official Language were organised. The third annual edition of "Goayard Samachar" an in-house magazine in Hindi was released in the concluding session held on 15th October, 2010.

The Company has been awarded the prestigious Indira Gandhi Rajbhasha Sheild adjudging third place in region 'C' for Public Sector undertakings of Government of India, for outstanding performance & efforts in implementing Hindi effectively for the year 2008-09. Hon'ble Vice President of India Shri Hamid Ansari presented the award to RAdm. (Retd.) Vineet Bakhshi, VSM, Chairman & Managing Director on 14th September, 2010 at Vigyan Bhawan, New Delhi. This is the fifth occasion the Company is the recipient of Indira Gandhi Rajbhasha Award. The Company has also been awarded Special Rajbhasha Rolling Shield for the sixth time on 19th November, 2010 for excellent performance in implementation of Official Language during 2009-10 by the Town Official Language Implementation Committee South Goa.

The Company, as an active member of Town Official Language Implementation Committee, played a major role in success of Zonal Official Language Felicitation function and Colloquium of Department of Official Language, Ministry of Home Affairs organized at National Institute of Oceanography, Dona Paula on 21^st January, 2011, which was graced by His Excellency, Dr. S. S. Sidhu, the Governor of Goa, and Sushri Veena Upadhaya, Secretary, Department of Official Language.

45 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 and Appellate Authority for the purpose of implementation of the Right to Information Act in the Company. The particulars of the organisation functions and the duties, powers and 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 35 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 Rs.10 lakh. An amount of Rs.115.64 lakh was spent on foreign travel by the Company's executives/employees for the purpose of technology transfer, production and export promotion.

The thrust during the year, as in the past, has been on preventive vigilance and creating awareness all around. A number of regular inspections and surprise checks have been carried out in various areas with the aim of intervening in time to preclude lapses and violations, if any, of instructions and guidelines of the Central Vigilance Commission (CVC) and to suggest measures for streamlining systems and procedures. The newly joined management trainees and officers were made aware of vigilance set up in Goa shipyard and its functions. Vigilance Awareness Week was observed from 25th October to 1st November, 2010, during which besides administering customary vigilance pledge, various competitions were arranged for the employees and banners were displayed in the city to demonstrate the Company's commitment to acceptance of vigilance as an essential ingredient of management function and organizational practice.

The overall objective of vigilance has been to encourage transparency in the organization and instill confidence amongst the citizens in the dealings of the organization as a Public Sector Enterprise in pursuit of healthy corporate governance. As per the directions of CVC, the Company has been making extensive use of its website to meet the objective.

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 27.05.2011 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. The Company has already laid down 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:

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.

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, 2011 and of the profit of the Company for the year ended 31^st March, 2011.

The Government appointed Prof. Debashis Chatterjee as a Part-time Non-Official Director (Independent Director) and Cmde. P.K.S. Shrivastava, as Director (Corporate Planning, Projects and Business Development) with effect from 19.01.2011 and 28.04.2011 respectively. The Board welcomed their appointments.

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 GSL. 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 2009-10. The Directors recommend to the members of the Company to consider fixation of the remuneration of Rs. 75,000/- plus Service Tax plus TA/DA for Auditors of the Company to be appointed by the C&AG for FY 2011-12.

The Comments of the C&AG u/s 619(4) of the Companies Act, 1956, on the Accounts of the Company for FY 2010-11 will be appended on receipt. The Review of Accounts by the C&AG, if any, will be appended on receipt as Annexure 'E' hereto.