DIRECTORS REPORT – 2007 - 08
Garden Reach Shipbuilders & Engineers Limited
1. Your Directors have great pleasure in presenting the 92 nd Annual Report on the
working of the Company for the financial year 2007 - 08.
2. The audited Profit & Loss Account for the financial year 2007-08 and the Balance
Sheet, as on 31 Mar 08, 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
SIGNIFICANT ACHIEVEMENTS DURING THE YEAR
3. INS KESARI ( Landing Ship Tank – Large ), the second of the series of LST-L
Project of three ships, was delivered to Indian Navy on 21 Feb 08. The Vessel was
subsequently commissioned at the Eastern Naval Command Base at
Visakhapatnam on 05 Apr 08 by Shri Narayan Datt Tiwari, His Excellency the
Governor of Andhra Pradesh.
4. The Ministry of Home Affairs has placed an order on GRSE on 29 Mar 08 for
the manufacture and supply of 78 Nos. FRP Interceptor Boats valued at Rs.134.70
crores for coastal patrolling and surveillance of the eastern coast of India by the
Coastal Police of the States.
5. The Bailey Bridge Department of the Engineering Division has exported
Portable Steel Bridges worth Rs.2.13 crores during the year. The Department also
successfully delivered and erected 650 ft. DDR Bridge for NHAI in May 07. Trial
assembly of the indigenously developed 30 ft DSR Double Lane Portable Steel
Bridge was completed in November 07. Erection of the same bridge of span 120 ft
DDR by launching method is nearing completion.
OPERTATING RESULTS - PERFORMANCE HIGHLIGHTS :
Value of Production & Sales
6. During the financial year 2007-08, the Company achieved Value of Production
and Sales amounting to Rs.573.47 crores and Rs 556.65 crores respectively as
against Rs.641.66 crores and Rs. 713.74 crores respectively during the previous
7. The comparative VOP for three main Divisions is as follows :
Rs. in crores
Ship Engineering Engine Others
Division Division Division
Year 2007-08 519.42 40.34 11.89 1.82
Year 2006-07 547.65 44.81 45.79 3.41
8. The Value Added during the financial year under review was Rs.280.75 crores
as against Rs 260.21 crores during the previous year. The Value Added per
Employee was Rs.5.65 lakhs as compared to Rs.5.08 lakhs during the previous year.
Thus the wealth creation by the employees has gone up by 11.22% from
the last year.
9. The Company recorded a Profit Before Tax of Rs.110.40 crores as against
Rs.175.04 crores in the previous year. The Net Profit amounted to Rs.74.47
crores as compared to Rs.120.14 crores in the previous year.
10. The year under review witnessed a leap forward with the Company‟s Net Worth
going up to Rs.484.12 crores from Rs.438.16 crores in 2006-07, registering an
increase of 10.49%.
11. In November, 2007, the Directors had declared and paid an Interim Dividend of
Rs.10.00 crores @ 8.08 % of the Company‟s paid up equity capital of Rs.123.84
crores. Considering the financial performance of the Company in the year 2007-08,
the Directors are pleased to recommend a final dividend of 11.92 % which will be
paid after approval in the Annual General Meeting. With this, the total dividend will
be Rs.24.77 crores @ 20% of the paid up capital of the Company, for the second
Contribution to Exchequer
12. Your Company's contribution to the national exchequer during the financial
year 2007 - 08 amounted to Rs.59.93 crores as detailed below:
(Rs In Crores)
(a) Income Tax & PBT etc. 40.46
(b) Customs Duty 0.33
(c) Excise Duty 2.02
(d) Sales Tax 16.68
(e) Service Tax 0.14
Note : The above figures are inclusive of Education Cess, but exclusive of the
Excise Duty & Taxes included in the purchase prices of the inputs and Tax on
13. The Authorised Capital of the Company as on 31 Mar 08 was Rs 125 crores.
During the year under review, the Government of India did not make any fresh
investment in the Share Capital of the Company. The Paid-up Capital as on 31 Mar
08, therefore, remained at Rs 123.84 crores.
Loans from the Government
14. Company neither had any outstanding loan to the Government at the beginning
of the year nor did it take any fresh loan during the year under review.
ICD to Hindustan Cables Ltd.
15. An amount of Rs. 457.75 lakhs (Rs. 200 lakhs as Principal and Rs. 257.75
lakhs as interest) was outstanding as on 31 March 02 from M/s. Hindustan Cables
Ltd. (HCL), which is a sick PSU. As the case had been registered by BIFR, full
provision was made in the Accounts of 2003-04. Various agencies, including M/s.
Tata Consultancy Services, had studied and submitted their reports to BRPSE, who
opined that the earlier studies on HCL had failed to present an integrated approach.
Accordingly BRPSE directed that a comprehensive holistic study be conducted
through IIT, Kharagpur regarding feasibility of diversification of product lines of the
said Company. Accordingly IIT, Kharagpur was engaged by HCL as a Consultant on
17 Jan 07. The Scheme submitted by the Consultant was put up before Department
of Heavy Industry and BRPSE as also to BIFR. HCL have confirmed that GRSE‟s
dues would be taken care in the Revival Scheme of the Company.
Grading vide Memorandum of Understanding
16. The performance of the Company for the year 2006-07 had been rated as
“Very Good” in terms of the Memorandum of Understanding (MoU) signed with the
Government of India. The rating for the year 2007-08 is under evaluation. As per the
internal assessment, the performance of the Company is expected to be adjudged
as “Very Good”.
17. The Comptroller & Auditor General of India, under Section 619(2) of the
Companies Act, 1956, appointed M/s. Sen & Ray, Chartered Accountants, Kolkata,
as the Statutory Auditors for the Company and M/s. B. D. Shah & Co, Chartered
Accountants, Ranchi (Jharkhand) as Branch Auditors for the Diesel Engine Plant,
Ranchi, for the year 2007-08.
18. A Report on Corporate Governance is given in Annexure-I forming part of this
Report together with Compliance Certificate thereon.
Board of Directors
19. The Board acknowledges the valuable services rendered by the following
Directors, who ceased to be members on the Board of the Company :
VAdm B.S.Randhawa, AVSM, VSM, IN
Controller of Warship Production & Acquisition
Shri Alok Perti
Joint Secretary (Shipyard)
RAdm T.S. Ganeshan, NM, VSM, IN (Retd)
Chairman & Managing Director
20. The Board places on record its deep appreciation for the valuable
contributions made by the outgoing Directors.
21. The Board welcomed the appointment of the following new Directors :
VAdm Dilip Deshpande, AVSM, VSM, IN
Controller of Warship Production & Acquisition
Shri Gyanesh Kumar
Joint Secretary (Shipyard)
RAdm K. C. Sekhar, VSM, IN (Retd)
Chairman & Managing Director
Directors' Responsibility Statement
22. Pursuant to the requirement under Section 217(2AA) of the Companies Act,
1956, with respect to the Directors‟ Responsibility Statement, following is hereby
(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 08 and the profit of the Company for the year ended 31 Mar 08.
(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
Performance of Ship Division
23. During the financial year 2007-08, the Ship Division of the Company
achieved a Value of Production of Rs.519.42 crores as against Rs. 547.65 crores in
the previous year.
24. The constraints of late / non-receipt of equipment and accessories, coupled
with failure / delay in receipt of equipment (developed indigenously) continued to
affect the on-going shipbuilding activities, especially the LST-L and WJ FAC
Projects. Repeated failures of Main Engine Clutch System and Oil Distribution (OD)
Box for Controllable Pitch Propeller (CPP) System for second Landing Ship Tank
(Large) of Shardul class adversely affected the delivery schedule. In addition,
the rate of outsourced block fabrication did not come up to the required level as
there has been delays in setting up the required infrastructure. This has affected
Project Cardinal Schedules of Projects 3017 and 3018. All these resulted in lower
25. Notwithstanding the above, the Yard is striving hard to progress towards
meeting the cardinal dates. Two 65 men Passenger Ferry Craft on completion
of River Trials at Kolkata, sailed off for Anandaman & Nicobar Islands in
June, 08 and completed Sea Trials there on 2 nd and 3rd July 08. Handing over of the
Vessels has been scheduled on 21 July 08. Similarly, the two 100 men
Passenger Ferry Crafts, which have completed River Trials in end June / early
July 08 are scheduled to sail off for Anandaman & Nicobar Islands by end July 08.
26. Apart from start-production of various ships, viz. third to sixth Water Jet FACs
(Yard Nos. 2059 – 62), third ASW Corvette (Yard No. 3019), the following major
events were achieved during the financial year :
Ship Yard Date
3rd & 4th Water Jet FACs 2059 – 60 29 Aug 07
2nd ASW Corvette 3018 27 Sep 07
Ship Yard Date
1st Ferry (65 Pax) 2067 26 Oct 07
2nd Ferry 65 Pax) 2068 28 Oct 07
1st WJ FAC 2057 23 Nov 07
2nd Ferry (100 Pax) 2070 26 Nov 07
2nd WJ FAC 2058 27 Nov 07
1st Ferry (100 Pax) 2069 28 Nov 07
Ship Yard Sea/River Delivery
2nd LST- 3015 31 Aug 07 21 Feb 08
1st Ferry (65 Pax) 2067 27 Mar 08 24 Jun 08*
2nd Ferry (65 Pax) 2068 26 Mar 08 24 Jun 08*
*sailed off from Kolkata
27. During the year under review, the Company undertook the repair / refit work
amounting to Rs.9.56 crores (VoP) as against Rs.5.04 crores in the previous year.
With a view to optimize concentration of the scarce resources of the Shipyard to
progress new construction orders, the Ship Repair / Refit activities have been kept at
28. The Order Book position of the Ship Building Division amounted to Rs.3755.80
crores, excluding Base & Depot Spares (Rs.512.13 crores) and Ship Repair (Rs.7.50
crores) as on 31 Mar 08.
29. Your Company is fully committed to building quality ships for the Indian Navy
and Coast Guard. With the take over of the nearby Raja Bagan Dockyard of M/s.
CIWTC, Kolkata in mid 2006, the Company has become the biggest Defence
Shipyard in India with substantial growth potential. 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. Along with
limited induction of fresh blood for revamping the aging man power base, the
company has already embarked upon an all out effort on modernization, not only for
layout of plant / machinery / dock & berth facilities, but also for technology
upgradation in planning software, design tools, etc. to achieve higher productivity in
the coming years. At the same time, the Shipyard is also developing the outsourcing
base with proper quality assurance for hull fabrication, plumbing, cabling, hull outfit
etc. to strengthen the Company efforts for customer satisfaction.
30. The Company has undertaken modernisation of its Shipbuilding facility, broadly
consisting of a Dry Dock of size 29 M x 180 M (to cater to maximum vessel weight of
10,000 ton and size 25 M x 172 M ), an Inclined Berth of size 23 M x 180 M ( to cater
to maximum vessel weight of 3,000 ton and size 18 M x 130 M ), a 250 ton capacity
Goliath Crane, a Module Hall of size 29.4 M x 99 M with allied facilities and services,
keeping in view the perspective acquisition plan of the Indian Navy, at an estimated
cost of Rs.403 crores.
31. Detailed design / engineering and preparation of tender documents for the
Works Contract have been completed. Ordering of major contract packages is in
progress. The modernization is expected to be completed by end 2010. Timely
completion of the modernization will enable the Company‟s ship production capacity
as well as the productivity to enhance considerably.
32. The Value of Production achieved by the Engineering Division during the year
under review amounted to Rs. 40.34 crores as compared to Rs 44.81 crores during
the previous year.Sales registered during 2007 – 08 were Rs.39.39 crores as
against Rs. 47.57 crores last year. The Bailey Bridge Department exported a 360 ft
Bailey Suspension Bridge worth Rs.2.13 crores to Punatsagchhu-I Hydro Electric
Project at Bhutan. This export sales is not only the highest ever made by the
Company, but also surpassed the export target.
33. The Division secured a few prestigious orders during the year under review.
The order book position of the Division as on 31 Mar 08 stood at Rs.44.56 crores,
including an export order worth Rs.3.62 crores for supply of two more Bailey
Suspension Bridges to Bhutan. In addition, orders worth Rs.20.00 crores are in the
34. The Deck Machinery Department of this Division completed successful load
trial of the first Prototype of Common Hello Traversing System with loaded Helicopter
Mock up in presence the Naval team in Nov 07. The complete design activities were
indigenously undertaken by the Department. This system will enable Indian Navy /
Coast Guard to reconfigure safe embarkation of Helicopters at sea without loss of
35. The Value of Production achieved by the Engine Division during the year 2007-
08 amounted to Rs.11.89 crores as compared to Rs. 45.79 crores during the
previous year. Sales registered during 2007-08 were Rs.11.93 crores as against
Rs. 46.29 crores in the last year.
36. During the year, fifteen Nos. of MTU 4000 Engines required for WJ FAC were
assembled, tested and delivered in time. Apart from this, two similar Engines were
also supplied to Indian Navy after assembly and testing. The Diesel Engine Plant
has considerable spare capacity in its Machine Shop. In order to utilize the available
capacity jobs are being in-sourced from customers like M/s. Usha Martin, TISCO,
Conservation of Energy
37. The cost of energy input during the year under review was 1.23 % of the total
Value of Production as against 1.17 %, an average of last five years (i.e. from
2002-03 to 2006-07). Power factor of the system is consistently maintained at
optimum level. Measures like installation of electronic ballasts, extensive use of CFL
and EF T5 lamps, maximum use of translucent sheets in shop floors to combine day
light with artificial lights for absolute utilization of natural lights, arrest of loss in
distribution system of compressed air and water etc. have been adopted as a part of
conservation of energy.
Technology Absorption, Adoption and Innovation
38. On completion of its modernization programme, the Shipyard has
decided to adopt Modular Concept in Ship Production with a view to
increase the outfitting activities to 60-80% at pre-launch stage and thereby reducing
the build period.
39. The successful assembly / erection trial of the 30 ft span of „Double Lane
Portable Steel Bridge‟, designed by the Portable Steel Bridge Department of the
Engineering Division, for which Patent was awarded to the Company, was conducted
in Nov 07. Manufacturing of all components has been completed and the final
assembly and launching trial of complete 120 ft span Bridge is expected to be
completed by the end of July ‟08.
40. In recognition of its efforts, the Company was invited by the MoD (DGQA) to
present a paper in the “Innovation” category to the Screening Committee for the
“Award for Excellence for OFB & DPSUs for the year 2006-07”. The results are
41. In the last year‟s report it was informed that the Company is pursuing for total
integration of all activities under ERP. Substantial work has been progressed in this
direction. The Company has appointed M/s. Wipro as Consultant for mapping the
entire Company for smooth migration from the existing mixed system to the ERP
environment by the year 2009-10. It is planned that up gradation / retraining of the
employees will be undertaken, specially for those who will be covered in the second
phase of the ERP system.
42. On the basis of the recommendations of the Consultant, the SAP ERP
solution has been evolved and Tender enquiry has been floated. Tender enquiry
has also been floated for the procurement of software and implementation of
mail messaging, work flow and DMS solution.
Foreign Exchange Earnings & outgo
43. The information in respect of Foreign Exchange Earnings and Outgo is
contained in Schedule – 23.
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44. During the year under review, the Deck Machinery Department of the
Engineering Division successfully overhauled, with indigenously developed spares,
the imported Hello Traversing System supplied by SOFMA, France and installed on
board INS Godavari. The Department is now self sufficient to provide technical
solution and support to Indian Navy.
45. The Pump Department of the Engineering Division has made a strategic shift in
its business model. It is now fully concentrating on indigenisation of pumps of
Russian origin fitted in Naval Ships and Submarines. Ten types of most
commonly used Pumps have already been developed and successfully tried on
board. Repeat orders worth Rs.1.00 crore have been received from the Eastern
Naval Command. A few more types pumps are presently at advanced stages of
Composite Vendor Policy
46. The Company‟s Composite Vendor Policy, consisting of Vendor Assessment &
Re-assessment, Registration & revalidation, Gradation, Tender Holiday etc. was
hoisted in GRSE Website on 25 Mar 08. The Policy has been evolved to ensure,
consistency, fair play and transparency in selection of vendors, who are quality
conscious and maintain specification requirement for the end product.
47. e-procurement has been identified by the Company as a key component and
mission mode project under national e-governance plan.
48. The Module adopted by the Company is Enterprise Procurement System
(EPS) Services under Facility Management Services. E-procurement has been
introduced both for two part tenders and single part tenders with vendors having
digital certificates. While 29 vendors have already obtained digital certificates, 32
other vendors have applied for the same.
49. To leverage the technological innovation for transparency and efficiency, e-
auction has been initiated by the Company in Jan 08 on a trial basis. Long term
agreement is under negotiation with MSTC for conducting e Auction on behalf of the
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Development of Vendors for Outsourcing Jobs
50. In line with the policy of outsourcing labour intensive activities, the Company
has been developing vendors for hull fabrication. Although it took some time,
sustained effort in the area of training, technology and quality by the Company, the
vendors have now come up to the required quality standards of shipbuilding.
Because of the outsourcing, the shipbuilding capacity of the Shipyard has gone up
considerably and also this has given the required flexibility to deploy the in-house
manpower for more important tasks in an efficient manner.
Quality Circle Activities
51. GRSE has attached significant importance to improve quality through Quality
Circle activities. Grass-root level workmen are participating in solving work related
problems and improving working conditions, culture and quality through group
activities. So far, more than 208 QC Groups have been formed covering more than
40% of workmen strength.
52. The performance of QC teams of the Company in various competitions (viz.
Chapter Convention and National Convention) organized by Quality Circle Forum of
India is as follows :
Level of No. of Performance grade achieved by QC Teams
Convention QC Par Excellent Distinguishe Meritorious
Teams Excellence d
Chapter 10 1 4 4 1
National 9 - 2 6 1
Safety at Work
53. The first edition of GRSE Safety Manual was released on 16 Jan 08. National
Safety Week was observed in all the Units of the Company from 04 March 08 to
10 March 08 when safety banners were displayed. Various safety competitions were
conducted and prizes awarded. Safety Shield and trophies were awarded to the best
performing Units for adherence to safety norms and procedures on 37th National
Safety Day on 04 Mar 08. Fire and Safety Training programmes were conducted
periodically in all the Units for all categories of employees to inculcate safety
awareness. Union representatives participated in Workers‟ Development Programme
on Occupational Health, First Aid and Personnel Protective Equipments.
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HUMAN RESOURCE & ADMINISTRATION
54. Industrial Relations :
(a) Industrial Relations during the period under review across all Units of
the Company continued to be peaceful and harmonious.
(b) With the promulgation of the Policy for the Seventh Round of Wage
Negotiation for Unionized Workers in Central Public Sector Enterprises, giving
a guideline on the periodicity of the agreement, the Company has taken
initiative for starting negotiation.
(c) In the West Bengal based Units of the Company, election / recognition
of a Union as Bargaining Agent pertaining to Operatives category of
employees was held on 10 July 08. The election was conducted under the
aegis of the Registrar of Trade Unions as per the statute. The GRSE Ltd.
Workmen‟s Union (SSC) emerged as the Sole Bargaining Agent (SBA) by
securing 56.27% of valid votes.
(d) There has been a long felt need to formulate codified Promotion Rules
in GRSE pertaining to the operatives category of Workmen. After protracted
deliberations, articulated Promotion Rules have been framed and
55. The total manpower strength under permanent category in the Company as on
31 Mar 08 was 4651 including 484 officers. A total of 289 employees including 13
officers are working in the Company under contractual service. Further 31
Management Trainees were engaged by the Company as on 31 Mar 08. Statement
showing the representation of SC / ST etc. as on 31 Dec 07 as well as the total
recruitment made during the calendar year 2007 are given at Appendices “A” & “B”.
Particulars of Employees
56. The Company has no employee covered under Section 217(2A) of the
Companies Act, 1956 and the Rules framed there under.
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Welfare Activities :
57. The Hot Meal Canteen at the Main Yard has been equipped with modern
gadgets to provide wholesome and hygienic food to employees. The canteen
facilities in other Units have also been upgraded. Canteen Committees with equal
participation of Management and Employees‟ Representatives, have been
constituted to oversee the quality of meals provided in the Hot Meal Canteens of all
CORPORATE SOCIAL RESPONSIBILITY
58. The Company attaches a great deal of importance to its social responsibilities
towards the local community and the society at large. Keeping in mind the social
fabric of the local community, the Company had adopted multi- dimensional approach
to fulfill its social responsibilities. Activities undertaken during the year under review
are briefly enumerated in succeeding paragraphs :-
59. General Health Camp was organised in association with a local Nursing Home
for local women and children. One local physically handicapped girl was provided
with a wheel chair to enable her to lead her life with dignity and self-reliance. Certain
facilities and appliances provided to Lioness East Vidya Mandir, a local school.
School bags, note books and a desk jet printer were donated to Kolkata Anath
Ashram Primary School.
60. Bichali Ghat, which is located on the banks of Ganges adjacent to GRSE is a
prominent landmark in the locality. The Ghat is extensively used by the local
community for bathing and multifarious socio-religious purposes. The Ghat (bathing
steps) was in a damaged and dilapidated condition. GRSE has renovated the Bichali
Ghat as a step towards improving the quality of life of the local community.
61. Blood donation camps were organized for thallaesemia patients. Company
sponsored transport was provided during the Annual Children‟s Treat organized by
Rotary Club for street children.
CSR for Sustainable Development
62. With an intent to translate the objective of sustainable development in villages,
fortyfour villages in Murshidabad District of West Bengal were identified for the
following infrastructural development projects:
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(a) To combat the drinking water problem, it was decided to construct at
least one tubewell in each village. Out of the fortyfour villages, tubewells have
already been installed in eighteen villages.
(b) GRSE has taken the initiative to train eightysix local women from the
identified fortyfour villages of Murshidabad District, in basic mid-wifery course.
This initiative will serve the dual purpose of empowering local women socially
and economically and make available the services of trained mid-wives
hitherto unavailable in these villages. Each woman trained in mid-wifery
course has been provided with a basic surgical and obstetric kit by GRSE.
(c) It has been decided to construct one Multipurpose Building with an
adjoining children‟s park in each of the three Gram Panchayats in
Murshidabad District for use by the Community. The project is being
progressed through the local administration
63. To improve awareness of employees on lifestyle related diseases and assist
them in leading a healthy life, health awareness programmes are held regularly in
various units of GRSE.
64. Painting competition is held annually for the employee‟s children. To
encourage employee‟s children, Merit Awards were given to thirtythree employee‟s
children for outstanding academic performance during 2007.
65. The “GRSE Day” was celebrated on 19 Apr 08. On this occasion, the first
ever compiled GRSE History Book containing 125 years of glorious journey was
released. Exemplary Awards were conferred on employees in recognition of their
outstanding performance. Shri A.P. Nair, Structural Fitter, Shipbuilding Shop was
conferred with „GRSE Shri‟, while sixtyfour employees received „CMD‟s
Commendation‟ and eighty- two employees received „CMD‟s Letter of Appreciation‟.
Training & Development
66. During the year 2007-08, the Corporate HR Department conducted around
eighty programmes, which were attended by 415 participants. These include
workshops, seminars, and regular programmes of medium duration and thematic
short programmes. Regular programmes of medium duration which were conducted
during this period covered General Management subjects, Right To Information Act –
2005, Total Quality Management, Production and Productivity enhancement
programmes, Corporate Governance etc. Training Programmes were also organized
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in different functional areas like welding technology, vibration analysis, calibration
management, Hydraulic System, Welding Process, Welding Defects – cause and
remedy, Maintenance of Electrical systems, Electrical Fitting, Electrical Safety,
Mechanical Fitting, Structural Fitting and fabrication etc. With an object to introduce
the process of e-procurement, cyber related training programmes were held at
regular intervals like cyber security, ERP, e-procurement etc.
Progressive Use of Hindi
67. During the year under review, efforts were initiated to promote and encourage
the use of Hindi in the official work. Meetings of Official Language Implementation
Committee are being held regularly. Hindi Workshops and a Computer Workshop
were conducted in various Units. Out of the eight GRSE Units, seven Units have
been notified in the Gazette of India under Rule 10 (4) of OL Rule, as more than 80%
employees in these Units are having working knowledge of Hindi.
68. As per Govt. directives an incentive scheme has also been promulgated to
encourage use of Hindi by the employees. .
69. For the last five years company is being awarded “Rajbhasha Shield” by Town
Official Language Implementation Committee, (TOLIC) (PSU), Kolkata. Hindi
Fortnight was observed from 01 to 14 Sep 07, wherein various competitions were
conducted and participants were given Cash Awards. The second edition of
Company‟s Hindi Magazine „Rajbhasha Jagriti‟ was awarded Second Prize by
TOLIC (PSU), Kolkata. Company‟s website is available in bilingual form.
Publicity & Public Relations
70. During the year, as part of business promotion activities, the Company had
participated in four International level Exhibitions (two in India and two abroad) and a
number of National Trade Fairs and Exhibitions. The Company‟s role in defence
preparedness of the country has been communicated to the people of India and
abroad through wide media coverage, covering important events like launching and
commissioning of warships.
Expenditure on Entertainment & Foreign Travel
71. Expenditure on business promotion and entertainment during the year were
Rs.15.39 lakh and Rs.3.21 lakh respectively. An amount of Rs.25.69 lakh was spent
on foreign travel by the Company‟s Executives for export promotion and for business
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Implementation of RTI Act
72. Necessary guidelines, procedures and structure to facilitate implementation of
the RTI Act, 2005 (RTI) have been evolved. A Central Public Information Officer (PIO)
has been appointed for due compliance of the Government directives. Necessary
information has also been posted on the website of the Company.
73. Preventive vigilance is the hallmark of Vigilance activities at GRSE. The main
thrust has been given on transparency in procedures relating to tendering, payment
to vendors, registration of vendors and in all other areas where public dealings are
involved. Thrust is also being given on adopting a transparent procedure for
recruitment of personnel.
74. Many system improvement measures have been introduced based on the
observations / recommendations of the Vigilance Department. It has been ensured
that all guidelines issued by CVC from time to time are complied with. All complaints
received from various sources have been dealt with utmost promptness.
75. Vigilance Awareness Week was observed from 12 th Nov to 16 Nov 07. On this
occasion, Shri Harish Chandra Singh, Joint Director, Eastern Zone, CBI / Kolkata
delivered a lecture on various aspects of corruption and the steps required to be
taken to check such social menace.
76. Your Directors express their deep appreciation and place on record their
gratitude to the Department of Defence Production and other Departments in the
Ministry of Defence for their continued assistance and guidance. The Directors also
express their sincere thanks to the Ministry of Surface Transport, Govt. of India as
also the Governments of West Bengal, Jharkhand and various other States, for their
continued co-operation and valuable support. Your Directors are particularly grateful
to the Naval and Coast Guard Headquarters, Naval Physical & Oceanographic
Laboratory, Ordnance Factory Board, Kolkata Port Trust, Public Works Departments
of various State Governments, Oil & Natural Gas Corporation Ltd., National Thermal
Power Corporation Ltd. and other valued customers as well as business associates
for the confidence reposed by them in the Company.
77. The Directors acknowledge with thanks the valuable advice rendered by, and
co-operation received from the Principal Director, Commercial Audit as also the
Officers of the Comptroller & Auditor General of India, Controller of Defence
Accounts (Navy), Registrar of Companies, Company Law Board and the Department
of Public Enterprises.
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78. The Directors wish to place on record their appreciation to employees at all
levels for their hard work, dedication and commitment. The enthusiasm and
unstinted efforts of the employees have enabled the Company to remain at the
forefront of the industry despite increased competition from several existing and new
For and on behalf of the Board of Directors
Kolkata, Rear Admiral K.C. Sekhar, IN (Retd)
Dated, 14th July, 2008 Chairman & Managing Director
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APPENDIX – A
STATEMENT SHOWING REPRESENTATION OF
SC/ST, EX-SERVICEMEN, PHYSICALLY CHALLENGED AND WOMEN EMPLOYEES
AS ON 31.12.2007 UNDER PREMANENT & CONTRACT CATTEGORIES
Group/Category Total SCs STs Ex- Physically Women
Strength Servicemen Challenged Employee
Group “A” 514 57 10 56 2 19
Group “B” 18 2 1 6 1 -
Group “C” 3380 542 196 50 23 54
Group “D” 1040 214 56 133 16 94
Group “D” 96 85 - - 2 -
Total 5048 900 263 245 44 169
APPENDIX – B
DETAILS OF RECRUITMENT DURING 2007 UNDER PERMANENT CATEGORY,
CONTRACTUAL CATTEGORIES AND MANAGEMENT TRAINEES
Group/ Total Total Reservation made Recruitment made during the
Category Vacan- Recruit- during the Year Year
Released made SC ST Ex- Physi SC ST Ex- Physi- Women
ser cally ser- cally Employe
vic Chall vice- Chal- es
e- en- men lenge
me ged d
Group “A” 54 54 10 2 3 2 10 2 3 2 9
Group “B” 3 3 - - 1 - - - - 1 -
Group “C” 141 141 46 5 - 2 46 5 - 2 6
Group “D” 182 182 46 5 - 2 46 5 - 2 10
Group “D” - - - - - - - - - - -
TOTAL 380 380 96 17 56 10 96 17 56 10 25
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Annexure I to the Directors‟ Report
REPORT ON CORPORATE GOVERNANCE
1. As per the guidelines issued by the Department of Public Enterprises,
Government of India, a Report on compliance of the provisions on Corporate
Governance is given below:
Philosophy of the Company on Corporate Governance
2. It is the constant endeavour of the Company to adopt and maintain the highest
standards of ethics in all spheres of business activities. The Company‟s philosophy
of Corporate Governance is based on the principles of honesty, integrity,
accountability, adequate disclosures and legal / statutory compliances, to protect,
promote and safeguard the interests of all its stakeholders. It strives for maximum
level of transparency in decision making and shall avoid conflicts of interest. It also
accords importance to adherence of adopted corporate values and objectives and
discharging social responsibilities as a responsible corporate citizen.
3. In keeping with its professional approach, the Company is implementing the
precepts of Corporate Governance in letter and spirit.
4. The Company‟s activities are monitored by several external agencies like
Statutory Auditors, Comptroller & Auditor General of India, the Central Vigilance
Commission, Ministry of Defence, Department of Defence Production etc.
Board of Directors
5. The composition of the Board of Directors of the Company had been re-
structured by the Government of India with nine members : four Whole Time
Directors, including the Chairman & Managing Director, two Part Time Government
Directors and three Part
Time Non-official Independent Directors. The details of the members of
the Board during the year ended 31 Mar 08 are given below :
- 20 -
Name of the Directors Period No. of other No. of Committee position
Directorship held in other Companies
Whom Time Directors
RAdm T S Ganeshan, IN (Retd) 01.04.07 to - - -
Chairman & Mg. Director 31.03.08
Shri Ranjan Chakraborty 01.04.07 to - - -
Director (Finance) 31.03.08
Shri Vinod Kumar 01.04.07 to - - -
Director (Shipbuilding) 31.03.08
Cmde H.K Verma, IN (Retd) 01.04.07 to - - -
Director (Personnel) 31.03.08
Part time Government Directors
VAdm B S Rabndhawa 01.04.07 to - - -
Shri Alok Perti 01.04.07 to - - -
VAdm Dilip Deshpande 26.12..07 to - - -
Shri Gyanesh Kumar 01.04.07 to 2 - 3
Part time Independent Directors
Dr. N R Banerjea 01.04.07 to 3 - -
Shri Ashoke K Dutta 01.04.07 to 7 4
Shri B B Chakrabarti 01.04.07 to - - -
6. Brief Resume of the Directors appointed during the year, nature of their functional
areas etc. are furnished below :
VAdm Dilip Deshpande, AVSM, VSM, IN
VAdm Dilip Deshpande was born on 2nd October, 1949. He obtained a Degree in
Mechanical Engineering from the University of Bangalore. He was commissioned in
the Indian Navy on 18 Sep 1969.
During his illustrious career spanning of 38 years he has held a number of important
appointments in various capacities i.e. Air Engineer Officer of Air Squadron 561,
Production Department Head of Naval Air Craft Yard (Kochi), Head of Base
Maintenance Facility (Goa), Captain Superintendent of NSRY and Officer in charge,
FMU (mb). He also handled various appointments at NHQ including DNAM.
As a Flag Officer, VAdm Deshpande was Chief Staff Officer, Technical at Western
and Eastern Naval Commands and was the Admiral Superintendent, Naval Dockyard
(Visakhapatnam) prior to taking over as the ACOM (D&R). He is an alumni of the
Naval War College and the National Defence College and has been awarded with
Ati Vishist Seva Model and Vishist Seva Model for his meritorious service.
At present he is Controller of Warship Production & Acquisition in Indian Navy.
He is a creative thinker, and extremely IT savvy and keeps himself abreast with latest
VAdm Dilip Deshpande was appointed as Part time Government Director of the
Company by the Ministry of Defence, Department of Defence Production on 26 Dec
Shri Gyanesh Kumar, IAS
Shri Gyanesh Kumar was born on 26th January, 1964. He obtained B.Tech Degree
in Civil Engineering from the Indian Institute of Technology, Kanpur. He has also
obtained a Diploma in Business Management from ICFAI, Hyderabad and completed
a Course in Environmental Economics from HIDD Workshop, Harward University.
Shri Gyanesh Kumar joined the Indian Administrative Service (Kerala Cadre) in 1988
and has held various senior appointments from time to time. Presently he is the Joint
Secretary (Shipyard) in the Department of Defence Production, Ministry of Defence,
Government of India.
Shri Gyanesh Kumar has been appointed as Part-time Official Director of the
Company by the Ministry of Defence, Department of Defence Production on 31 Dec
7. Details of his Directorships and Committee Membership are as under:
(a) Garden Reach Shipbuilders & Engineers Limited –
Part-time Official Director and Member of Audit Committee and Procurement
(b) Bharat Electronics Limited –
Part-time Official Director and Member of Audit Committee
(c) Mazgaon Duck Limited -
Part-time Official Director and Member of Audit Committee and Procurement
8. The number of Directorship and Committee positions indicated above are as notified by
the Directors and it is confirmed that no Director has been a member of more than 10
Committees or acted as Chairman of more than five Committees across all companies in
which he is a Director.
9. Details of Directors‟ attendance at the Board Meetings and Annual General
Meeting are given below :
Name of the Directors Board Meetings Attendance at
No. of Meetings No. of the last Annual
held during Meetings General
respective attended Meeting
Whole Time Directors
RAdm T.S. Ganeshan, IN (Retd) 7 7 Attended
Chairman & Managing. Director
Shri Ranjan Chakraborty, 7 7 -do-
Shri Vinod Kumar 7 7 -do-
Cmde H.K Verma, IN (Retd.| 7 6 -do-
Part Time Government Directors
VAdm B S Randhawa 6 4 Attended
Shri Alok Perti 6 4 -do-
VAdm Dilip Deshpande 1 - Not
Shri Gyanesh Kumar 1 1 -do-
Part Time Independent Directors
Dr. N R Banerjea 7 7 Attended
Shri Ashoke K Dutta 7 7 -do-
Shri B B Chakrabarti 7 3 -do-
10. During the year 2007-08, 7 (seven) Board Meetings were held on 07 Apr 07, 23
Jun 07, 24 Jul 07, 21 Aug 07, 27 Sep 07, 23 Nov 07 and 20 Feb 08. The maximum
interval between any two Board Meetings was 88 days.
11. Board meetings are held at least once in every quarter, and more often if
considered necessary, focusing on formulations of policies, strategies, exercising
control, delegation of powers, reviewing performance of the Company, approving
contracts for high value items, half yearly/periodical results, annual accounts, annual
operating plan and budgets and for considering statutorily required matters. The
Company believes that a carefully planned agenda note is pivotal for effective Board
Meetings. The agenda notes are backed by comprehensive background information
to enable the Board to take decisions. Agenda Notes are generally circulated
well in advance to the members of the Board. The Board Members, in consultation with the
Chairman, may bring up any important issue for the consideration of the Board. As and
when required, Senior Executives of the Company are also invited to attend Board Meetings
and provide clarifications. The Part Time Directors play an important role in the deliberations
at the Board Meetings and bring to the Company their wide experience in the fields of
technology, finance, marketing, public policy and operations.
Remuneration of Whole Time Directors
12. The remuneration of the Whole Time Directors is fixed by the Government as the
Company is a “Government Company” within the meaning of Sec. 617 of the Companies Act,
Remuneration of Part Time Directors
13. Part Time Government Directors are not eligible for Sitting Fees for the meetings
attended by them. The Part Time Independent Directors are paid Sitting Fees as per the
provisions of the Companies Act, 1956 for attending each meeting of the Board /
Committee(s) of the Board and reimbursed actual expenditure for attending the meeting of
Board / Board Committee(s).
Code of Business Conduct and Ethics for Board Members and Senior Management
14. As per guidelines issued by the Department of Public Enterprises, the Company has
formulated “Code of Business Conduct and Ethics for Board Members and Senior
Management” for better Corporate Governance and fair / transparent practices. A copy of
the same has been circulated to all concerned and posted at Company‟s website. The Board
members and senior management personnel to whom the said Code is applicable have
affirmed compliance of the same for the year ended 31 Mar 08.
15. The Audit Committee of the Board was formed on 04 April 2001 and re-constituted from
time to time. The present Committee was re-constituted consisting of the following members
of the Board with effect from 20 Feb 08, to fall in line with the guidelines issued by the
Department of Public Enterprises, Government of India :
Shri B.B. Chakrabarti Chairman
Part Time Independent Director
Shri Gyanesh Kumar Member
Part Time Government Director
Shri Ashok Kumar Dutta Member
Part Time Independent Director
16. The terms of reference of the Audit Committee are as specified in Sec. 292A
of the Companies Act, 1956 and the guidelines issued by the Department of Puiblic
Enterprises. The primary function of the Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing the financial reports;
the Company‟s systems of internal controls regarding finance, accounting and legal
compliance that management and the Board have established; and the Company‟s
auditing, accounting and financial reporting process generally.
17. The Audit Committee reviews reports of the Internal Auditors, meets Statutory
Auditors and discusses their findings, suggestions and other related matters and
reviews major accounting policies followed by the Company. The Audit Committee
reviews the half yearly and annual financial statements before their submission to the
18. The Chairman of the Audit Committee apprises the Board about the
observations of the Audit Committee during the Board Meetings. The Minutes of the
Audit Committee Meetings are placed before the Board in their subsequent meetings
and taken note of.
19. During the financial year 2007-08, five meetings of the Audit Committee were
held on 22 Jun 07, 21 Aug 07, 23 Nov 07, 15 Jan 08 and 22 Feb 08.
20. The attendance of the members of the Audit Committee during the financial
year 2007-08 is given below :
Name of the Directors Meeting held No. of Meetings
during respective attended
Shri Alok Perti 3 3
Shri B B Chakrabarti 5 5
RAdm T S Ganeshan 3 3
Shri Gyanesh Kumar 2 2
Shri Ashoke K Dutta 2 2
21. The Procurement Committee of the Board constituted for approving for
procurement of high value items met on 22 June 07 and 24 July 07. The meetings
were attended by all the members of the Committee. The Minutes of the meetings of
the Committee are placed before the Board in their subsequent meetings and taken
Annual General Meetings
22. The details of the last three Annual General Meetings of the Company are given
Year Date Time Venue
2004-05 24 Sep 05 1230 hrs “Taj Bengal” Hotel, Kolkata
2005-06 14 Aug 06 1230 hrs “The Park” Hotel, Kolkata
2006-07 21 Aug 07 1245 hrs Registered Office of the Company at
43/46, Garden Reach Road.
Kolkata- 700 024
(i) During the year 2007-08, the Company has not entered into any transactions with the
Directors that may have potential conflict with the interest of the Company at large. The
members of the Board, apart from receiving Directors‟ remuneration (wherever applicable),
do not have any material pecuniary relationship or transaction with the Company which, in
the judgement of the Board, may affect independence of judgement of the Directors.
(ii) During the last three years, there has been no instance of non-compliance by the
Company on any matters related to Companies Act, 1956 or any Industrial Law. However,
during the year 2007-08, based on CESTAT‟s Orders on the Company‟s Appeals, minor
penalties amounting to Rs.10,000/- and Rs.5,000/- were levied by the Central Excise
Authorities for violation of Central Excise Rules, in respect of transactions relating to the
years 1990-91 and 1993-94 respectively.
(iii) Regarding “whistle blower” mechanism, the guidelines issued by the Government of
India have been complied with. The mechanism, inter alia, contains a provision enabling
any Personnel to approach the Chairman of the Audit Committee in exceptional cases.
(iv) The guidelines issued by the Department of Public Enterprises, Government of India
have been complied with.
(v) A Presidential Directive was issued by the Department of Defence Production,
Ministry of Defence, Government of India, vide Order No. 2(18)/2005/GRSE/D(SY) dated
11Sep 06, under the provisions contained in Article No. 189 of the Articles of Association of
the Company for the appointment of Shri Humayun Ao, Ex-Director (Personnel) to the Below
Board level post of Chief General Manager, in relaxation of the provisions of GRSE Officers‟
Recruitment Rules, 2006, having considered the Officer‟s representation and the
circumstances surrounding his ailment and other factors. Shri Humayun Ao was
subsequently appointed as Chief General Manager, Technical Training Center of the
Company with effect from 11 Sep 06.
(vi) The Company has not incurred any expenditure which is not for the purpose of
the Company‟s business, nor has the Company incurred any expenditure which are
personal in nature for the Board of Directors and top management.
(vii) Details of Administrative and Office expenses as a percentage of total
expenses vis-à-vis financial expenses are furnished below :
Sl. Particulars 2007-08 2006-07
(a) Total Expenditure (Other than 29,324.42 24,638.00
(b) Administrative & Office Expenses 674.41 660.75
(c) Percentage of (b) on (a) 2.30 2.68
It will be seen that Administrative & Office expenses during 2007-08 has been
reduced to 2.31% from 2.68% in 2006-07
(i) The Whole Time Directors of the Company, including the Chairman &
Managing Director are appointed by the Government of India and are being paid
remuneration as per the terms of their appointment. The Company, therefore, has
not constituted any Remuneration Committee to decide the policy for the Directors‟
(ii) The Company has a Website (www.grse.nic.in) which provides information on
GRSE management, products, financial information under Ten Years at a Glance,
Annual Reports and Audited Accounts, Vendor registration procedure,
details of tenders, payment status of suppliers‟ bills etc. The performance of the
Company, including unaudited / provisional financial results are communicated to the
Administrative Ministry every month. The results are not published in any newspaper.
(iii) The Company continuously strives to ensure unqualified financial statements.
During the last eight years (1999-2000 to 2006-2007) there have been no audit
qualifications. The Company has also received “Nil” comments from the CAG during
(iv) Need based Training Programmes are formulated from time to time. .
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