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We are a shipbuilding company in India under the administrative control of the MoD and primarily adhere to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard. In addition to our ship and warship building capabilities, we are engaged in engineering and engine production activities. As a part of our engineering division, we manufacture deck machinery items, pre-fabricated portable steel bridges and marine pumps. Our shipbuilding division contributes a significant majority of our revenue from operations. We have derived 94.14%, 90.13%, 92.19% and 94.76% of our gross revenue from operations in Fiscals 2018, 2017, 2016 and 2015 respectively from our shipbuilding division.

Our Company was incorporated in 1934 under the Indian Companies Act, 1913, and was later acquired by the Government of India from Macneill & Barry Limited on May 19, 1960. Shortly after becoming a CPSE in 1960, we built India’s first indigenous warship–the INS Ajay, in the year 1961.

Over the years, our Company has established capabilities for in-house design and shipbuilding and has made considerable contributions to the indigenous warship construction program of our country. Our shipbuilding product line spans from technologically sophisticated Frigates and Corvettes to Fast Patrol Vessels. In last five (5) decades, we have built and delivered ships ranging from small to large and advanced vessels including frigates, anti-submarine warfare corvettes, missile corvettes, landing ship tanks, landing craft utilities, survey vessels, fleet replenishment tankers, fast patrol vessels, offshore patrol vessels, inshore patrol vessels, WJ-FAC, hover crafts and fast interceptor boats to the Indian Navy, Indian Coast Guard, MHA and Governments of other countries. We have built and supplied more than seven hundred fifty (750) vessels to carry men and materials as well as for the surveillance of the coast line. Over the years, we have responded to the varied shipbuilding requirements of the Indian Defence Services and have evolved from building simpler vessels to building bigger and technically advanced warships.

Presently, we have three (3) separate facilities for shipbuilding, all of which are located in close vicinity of each other at Kolkata, India. We build our ships at the Main Works Unit and the Rajabagan Dockyard. Our third facility, the FOJ Unit is primarily used for fitting out and repair of ships. We acquired the Rajabagan Dockyard from Central Inland Water Transport Corporation Limited in the year 2006. Our DEP Unit is engaged in the testing and overhauling of marine propulsion engines and assembly of semi-knocked down units of diesel engines. Our Engineering segment is engaged in the manufacturing and fabrication of portable steel bridges, deck machineries of ships and marine pumps.

Over the years, our Company has been credited with many firsts in the Indian shipbuilding industry. For instance, we are the first Indian shipyard to integrate carbon composite superstructure with steel hull for the construction of our third ASW Corvette for the Indian Navy, which resulted in a reduction in weight and increase in stability of the ships. In 2000, we became the first and the only Indian shipyard to build and subsequently deliver a fleet tanker to the Indian Navy and to build and subsequently deliver a hovercraft to the Indian Coast Guard among others. These are in addition to pioneering works in supplying the first ever indigenous warship for Indian Navy (INS Ajay). (Source: ICRA Report)

On September 5, 2006, we were conferred with the status of Schedule B & Mini Ratna-Category I Company by the Department of Public Enterprises under the Ministry of Heavy Industries and Public Enterprises, Government of India. Our Company has also been conferred with several awards including the Defence Minister’s Trophy “Best Performing Shipyard Award” for four (4) consecutive years (Fiscal 2010-2011, 2011-2012, 2012-2013 & 2013-2014), from the Hon'ble Raksha Mantri; the Defence Minister’s Trophy “Best Inhouse Design Effort” on May 30, 2017 for Mauritius CGS Barracuda among others.

We have in the past and continue to associate with several technology firms in our industry like MTU and other international/ domestic entities for our different business segments such as diesel engines and deck machinery, which we believe has added to our credibility in the international market.

In Fiscal 2018, 2017 and 2016, our revenue from operations (gross) were ₹13,465.16 million, ₹9,293.22 million and ₹16,645.86 million. Our profit after tax for Fiscals 2018, 2017 and 2016 were ₹868.06 million, ₹114.65 million and ₹1,644.45 million respectively. As of July 31, 2018, our order book for all our product categories was ₹203,136.10 million, of which our shipbuilding order book consisted orders of thirteen (13) vessels with an aggregate outstanding revenue value of ₹200,294.20 million. Our order book only represents business that is considered firm. In addition to our firm order book, we have also been adjudged the lowest bidder for four (4) Survey Vessels (Large) and eight (8) Anti Submarine Warfare Shallow Water Craft (ASW SWC) from MoD and one (1) Ocean Going Passenger and Cargo Ferry Vessel, which presently does not form a part of our order book as letters of award have not been issued to us.

Competitive Strengths

We believe we benefit from the strengths listed below that together differentiate us from our competitors.

Modern Manufacturing Platform and Integrated Shipbuilding Facilities to deliver quality products

We believe that our modern infrastructure facilities available at our shipyard coupled with our vast expertise give us a significant edge over other domestic defence shipyard. Our Company has been taking steps to ensure simplification in the process and procedures, adopt modern practice and technology, enhance capacity and modernize infrastructure and improve on governance.

Our Company has undertaken major modernization of its infrastructure. In the year 2013, we developed a new integrated shipbuilding facility at the Main Works Unit that allows us to use modular construction when building warships, which enable us to reduce the shipbuilding period, improve quality through the implementation of integrated construction technology, and to construct ships in line with the global practices in the shipbuilding industry. Our facilities allow us to produce eight (8) large ships and twelve (12) medium/ small ships concurrently. In addition, we have constructed new hull Shop, module shop for mega block integration, dry dock and building berth. We believe our advanced modular construction technique enables us to simultaneously build a greater number of large warships in a more truncated time period at Main Works Unit. Our Main Works Unit is supported by our FOJ Unit, which is dedicated to fitting out and repair of ships. Fitting out follows the float-out of a vessel and precedes sea trials. Our Company’s in-house facilities are also augmented by hiring larger dry docks of the Kolkata Port Trust on as and when required basis. Our Company has also recently inaugurated modern pump test bed facility at Taratala unit on June 11, 2018 for testing the pumps we manufacture.

While we have been enhancing our infrastructure, in parallel, improvements and upgradation of design capabilities, new technology, methods and adoption of quality initiatives have also been undertaken and are underway. To further increase our construction capacity, we use Rajabagan Dockyard exclusively for the construction and fitting out of small and medium ships. The Rajabagan Dockyard facilities are further being upgraded for construction of more small and medium ships.

Further, we completed the moderisation of our DEP unit in Ranchi in 2016. The modernisation was intended to create a new, state-of-the-art diesel engine assembly shop that would enable carrying out overhaul and assembly of engines in a dust-and-moisture-proof environment. With commissioning of our “Modernised Diesel Engine Assembly Shop”, we believe our DEP unit is poised to take up work on next generation of marine diesel engines and also move ahead on to produce marine diesel engines under 'Make in India' initiatives.

We provide End-to-End Solutions

Our Company has a dedicated Central Design Office (“CDO”) undertaking design and research and development, which comprises of highly skilled workforce of one hundred (100) members as on date of the Red Herring Prospectus, majority of whom are engineers qualified from IIT and other premier institutes. Our CDO team uses various software ranging from Aveva Marine, NAPA for Naval Architectural design AutoCAD for drafting work and other softwares for structural analysis. With our dedicated CDO team, we have achieved innovative measures in carrying out complex warship designs work, some of which are landing craft utility mark IV, which is an in-house design product with 15 knots speed, which we believe to be unique for a vessel of this size and type. Additionally, our Company has also recently inaugurated Data Centre of CDO on June 1, 2018 and inaugurated a virtual reality lab of CDO on July 7, 2018 at 61 Park Unit.

We believe our ability to provide end-to-end solutions to our customers, ranging from product conceptualization, design, system integration and project management increases our capability to meet customer demands. When a customer has a project proposal, we utilize our resources to fulfill the entire project from the design stage to delivery of the finished product. This provides us an increased level of understanding with respect to meeting our customers’ needs. Also, we believe that designing the ship we deliver will allow us to gain a greater understanding of the ship we are expected to build and control over the manufacturing process. Because we manage the entirety of the project, as we have dedicated production lines for independently managing construction of small/ medium and large ships. We believe we gain efficiencies relative to some of our competitors who participate in the construction of ships, but do not participate in other stages of the project. Further, we believe we avoid a significant amount of reliance on third-parties to fulfill an order relative to our competitors.

Strong and Established Relationships with Indian Navy and Indian Coast Guard

We have long-standing relationships with the Indian Navy and Indian Coast Guard. Our relationship and experience with the Indian Navy is over five (5) decades, beginning when we delivered the INS Ajay, the first indigenous warship, to the Indian Navy in 1961. These relationships allow us to secure shipbuilding projects. We have delivered ninety six (96) ships to the Indian Navy and Indian Coast Guard on an aggregate basis. Both our historical operations and ongoing operations exhibit the level of satisfaction and depth of relationships we possess with respect to the Indian Navy and Indian Coast Guard.

We have historically delivered ships to the Indian Navy and Indian Coast Guard that no other indigenous shipbuilding companies have delivered to them. For instance, in 2000, we became the first and only Indian shipyard to build and subsequently deliver a fleet tanker to the Indian Navy and to build and subsequently deliver a hover craft to the Indian Coast Guard. Further, in 2009, we became the first and only Indian shipyard to build and subsequently deliver to the Indian Navy a landing ship. In 2017, we built and delivered to the Indian Navy, for the first time in our Company’s history, warships that have weapon and sensors trials completed which until then were undertaken at various Indian Navy facilities post delivery of warships. (Source: ICRA) Additionally, we built and delivered the INS Kiltan, an anti-submarine warfare stealth corvette and the first Indian warship with a superstructure made entirely of composite material, in 2017. We also have several ongoing projects with the Indian Navy and Indian Coast Guard. In the Fiscals 2018, 2017 and 2016, we have built and delivered a total of nine (9) ships to the Indian Navy.

Strong Order Book

Our aggregate order book as on July 31, 2018 was ₹203,136.10 million, comprising gross order value in the shipbuilding segment, engineering segment and the engine segment of ₹200,294.20 million, ₹851.70 million and ₹1,990.20 million, respectively. The aggregate value of our order book represents the total nominal value of the contracts that have not been completed, excluding the portion of revenue in respect of those orders that we have recognized as of such date.

We believe our current order book provides us with a deep pool of revenue-generating projects and that the revenue generated from our order book shall allow us to invest in our design capabilities and facilities in order to become more efficient and technologically sophisticated. We currently have contracts to deliver twenty (20) ships to the Indian Navy and Indian Coast Guard, out of which seven (7) ships have been delivered. A number of those ships are large, advanced vessels that deliver significant profit margins of the ships we construct. The shipbuilding contracts we enter into with our customers stipulate the agreed specifications of the vessel and classification of classification society with which the vessel is intended to be certified. Typically, we are permitted to subcontract any portion of the construction work of the vessel to subcontractors, other than few major sub-contract tasks such as the main hull structure and superstructures for which we require the prior approval of the client.

However, our order book information is only indicative of future revenues.

Make in India Initiative

We have an advantage over global shipyards in securing contracts to build vessels for the Indian Navy and Coast Guard because we qualify for the Make in India initiative under the DPP. The Make in India initiative grants indigenous manufacturers a competitive advantage when supplying to the domestic market. The MoD has given the highest priority to Indigenously Designed, Developed and Manufactured (“IDDM”) products for capital procurement. Our valued customers, the Indian Navy and Indian Coast Guard, constitute part of the domestic market and are therefore, required to give us preference over global shipyards in certain circumstances. As part of the Make in India initiative, internally we have put in considerable efforts in increasing the percentage of indigenization over the last few years. We have made significant progress in indigenization of our products in terms of value of production during the last year.

Business Diversification

Shipbuilding is our key product offering. In addition to our core manufacturing activities for shipbuilding, we offer diversified products and services to our customers including portable bridges, deck machinery items, pumps and engines. We produce bridges at our 61 Park Unit and Taratala Unit which enable us to counterbalance the cyclical nature of the shipbuilding income stream. We believe our product diversification allows us to rely on different product areas to generate revenue when the market conditions dictate a decrease in demand for shipbuilding.

Further, we are not aware of any other shipyard in India that has a dedicated deck machinery equipment facility or an engine assembling and testing facility, both of which, we believe, are important for the shipbuilding and testing process. In the absence of such facilities, our competitors approach third-parties to complete such tasks related to deck machinery and engine assembly and testing. We believe this vertical integration enables us to produce ships in a more time efficient manner because of our non-reliance on third-parties.

Experienced Workforce

We believe that our qualified and experienced senior management team and technically skilled employee base have contributed to the growth of our operations and the development of in-house processes and competencies. Our human resource policies are aimed towards enhancement of institutional knowledge and skills. Our human resource department has active initiatives to further develop the skills and knowledge of our employees.

Our senior management team consists of technically qualified and experienced professionals who bring with them extensive experience in shipbuilding, design and engineering, order management, operations, human resources, finance and after-sales services. We believe in high standards of ethical integrity and we ensure that all our business functions are carried out in a transparent manner. We believe our talented and motivated employees have been key to our success so far and will further enable us to capitalize on future growth opportunities.

HISTORICAL BCAKGROUND

Prior to our Company being initially incorporated as a limited company, we were engaged in the business of operating shipbuilding and repair workshops since 1884 as an unincorporated entity. We were incorporated as “Garden Reach Workshops Limited” on February 26, 1934 under the Companies Act, 1913 with the Registrar of Companies, Calcutta. Our Company changed its name to “Garden Reach Workshops Private Limited” on November 5, 1957. In the year 1960, our Company was acquired by the GoI and since then the share capital of our Company is wholly owned by the President of India along with its nominees from time to time. Thereafter, our Company changed its name to “Garden Reach Workshops Limited” on November 30, 1961 pursuant to the acquisition of our Company by the GoI. The name of our Company was again changed from “Garden Reach Workshops Limited” to “Garden Reach Shipbuilders & Engineers Limited” on December 31, 1976 pursuant to the certificate of incorporation issued by the Registrar of Companies, West Bengal. Our Company became a public company pursuant to a special resolution of the shareholders at an Annual General Meeting held on August 25, 2017.

Registered and Corporate Office

Garden Reach Shipbuilders & Engineers Limited

43/46, Garden Reach Road

Kolkata – 700 024

West Bengal, India

Tel: +91-33- 24698100-8113

Fax: +91-33-24698150

Email Id: This email address is being protected from spambots. You need JavaScript enabled to view it.

Website: www.grse.in

Corporate Identity Number: U35111WB1934GOI007891

Registration Number: 007891

 

Address of the Registrar of Companies

Our Company is registered with the RoC, West Bengal situated at Nizam Palace, 2nd MSO Building, 2nd floor, 234/4, A.J.C.B. Road, Kolkata – 700 020, West Bengal, India.

 

Board of Directors

The following table sets out the composition of our Board as on the date of this Red Herring Prospectus:

Name and Designation

DIN

Address

RAdm Vipin Kumar Saxena, IN (Retired)

Chairman & Managing Director

07696782

11, New Road, Alipore, Kolkata - 700 027, West Bengal, India

Sarvjit Singh DograDirector (Finance) & CFO (Whole Time Director)

07052300

27, Chetla Central Road, Flat 2B, 2nd Floor, Kolkata - 700 027, West Bengal, India

Asit Kumar Nanda Director (Personnel)         (Whole Time Director)

07506042

Shantikunj, P-374, Nalini Ranjan Road, New Alipore, Kolkata - 700 053, West Bengal, India

Cmde Sanjeev Nayyar, IN (Retired)             Director (Shipbuilding)                                     (Whole Time Director)

07973950

Flat No. 18D, Tower D (Cedar), South City Residence, 375, Prince Anwar Shah Road, Kolkata – 700 068 West Bengal, India

Ashwani Kumar Mahajan                         Government Nominee Director

07483427

D-09, Hudco Place Extension, Andrews Ganj, New Delhi – 110 049, India

Bharat Bhushan

Part-Time Non-Official (Independent) Director

00262278

C-11, Ahinsa Vihar, Sector 9, Rohini, Delhi - 110 085, India

Kanwaljit Deol                                                       Part-Time Non-Official (Independent) Director

03192289

A-78, NSG Society, P6, Gautama Buddhnagar, Greater Noida - 201 310, Uttar Pradesh, India

Dr. Ajai Bhandari                                                   Part-Time Non-Official (Independent) Director

00322233

Suraj Kunj Building, Sector-5, Shimla -171009, Himachal Pradesh, India

RAdm Inder Paul Singh Bali, IN (Retired)          Part-Time Non-Official (Independent) Director

07912223

C-1/11, Bapanagar, Zakir Hussain Marg, New Delhi – 110001, India

Dr. Biswapriya Roychoudhury                            Part-Time Non-Official (Independent) Director

08200896

Fulbari, Manaskamana Road, English Bazar, Malda, West Bengal-732101

 

Our Strategies

Looking at the future order of warship building for Indian Navy and the Indian Coast Guard, we believe that in the next decade, our existing customers alone can provide us with opportunities to have a robust order book with full capacity utilization. In addition, we are also focusing on order prospects from foreign countries. We are committed to continuing to increase our market share across our product verticals and to diversify our customer base and geographical footprint, thereby minimizing our exposure to particular sectors, markets and customers. Pursuant to the SEBI Exemption Letter-I, our Company, being an entity under the administrative control of the MoD has been exempted from disclosing its strategies since the same may compromise national interests. In relation to the same, we are setting out below some of our generic strategies, which we believe should not have a bearing on the national interests.

Further Strengthen our Relationship with Indian Navy and Indian Coast Guard

We intend to continue to further strengthen our strong relationships with the Indian Navy and Indian Coast Guard in order to generate revenue from their acquisition plan, which we believe aims to significantly expand the fleet ship size of the Indian Navy and Indian Coast Guard. Available information on the indigenous construction component of acquisition plans for the next decade indicate that the Indian Navy and Indian Coast Guard will acquire indigenous aircraft carrier, fleet support ships, frigates, mine counter measure vessels, fast attack crafts, patrol vessels, new-generation corvettes, survey vessels, fuel barges. We intend to focus on securing orders for the construction of major weapon vessel platforms (frigates and corvettes) to optimize the capacity utilization of our facilities.

Repair and Refitting of Indian Navy and Indian Coast Guard Vessels

We anticipate substantial market opportunities in the coming decade and beyond, in the area of maintenance, repairs, refits and upgrades of Indian Navy and Indian Coast Guard warships and considering that the Coast Guard is intending to augment their existing fleet by around twenty (20) to twenty-five (25) vessels over the next ten (10) to fifteen (15) years (Source: ICRA), we intend to ramp up our focus on repair and refitting of Indian Navy and Indian Coast Guard vessels. Further, the MoD in May 2017, released the “Strategic Partnership” framework for the Indian defence sector as a part of the DPP enabling multiple collaborations and partnerships between the Indian shipyards and foreign original equipment manufacturers and naval technology firms. This establishes a platform for a healthy exchange of technology and manufacturing know-how for the participants and we believe that this initiative would enable the domestic shipyards to eye global opportunities and lead to higher exports in the long run offering significant opportunities in the area of maintenance, repairs, refits and upgrades.

Upgrading Our Technological Capabilities and Facilities

We intend to advance and improve our technological capabilities and our facilities. In order to maintain our relationships with the Indian Navy and Indian Coast Guard, we must continually meet their shipbuilding requirements. From constructing ships on a shorter timeline, to the production of ships with greater technological capabilities, the Indian Navy and Indian Coast Guard require constant innovation and improvements in efficiency from shipbuilders. In 2013, we laid the foundation with respect to meeting the future requirements of the Indian Navy and Indian Coast Guard by modernizing our Main Works Unit to allow for modular construction, which we believe reduces costs and the shipbuilding period. Further, in 2016, we modernised our engine plant at Ranchi. Over the next two (2) years, we intend to augment the capabilities of the Rajabagan Dockyard and enhance our shipbuilding capabilities. We also plan to invest in our research and development capabilities to more completely meet the requirements of the Indian Navy and Indian Coast Guard.

As a part of our strategy, our Company continues to evolve and has developed (i) atmospheric-controlled dedicated facility at the Main Works Unit and at 61 Park Unit for construction of FRP boats; (ii) developed new designs for high-speed boats (25-30 meteres length and speed of 25-30 knots) to meet the future requirements of MHA; (iii) built and delivered eighty-eight (88) (58 numbers of 12 tonnes; and 30 numbers of 5 tonnes) fast interceptor boats to the MHA for coastal security.

Enhancing Our Research and Development Capabilities

We plan to invest a greater amount of capital as a percentage of our revenue with respect to research and development in order to augment our efforts in the development and design of warships along with the development of engineering products. We are currently developing new hull forms of warships with sizes from 65-115 M that are capable of speeds up to 25-35 knots. Also, we are designing a pontoon for the transportation of hull blocks and for inland cargo movement on national waterways. We are collaborating with leading academic institutes to develop and design such products. Additionally, our Company has also recently inaugurated Data Centre of CDO at 61 Park Unit on June 1, 2018 which has a capability multiplier essential for critical information technology operations, server availability, safety and security of design data and is mainly emphasized on promoting “Green Concept” thereby contributing to energy saving and inaugurated a virtual reality lab of CDO at 61 Park Unit on July 7, 2018 for undertaking line out inspection on the CAD model, user reviews of critical departments at a much earlier stage and marketing of future ship designs.

In order to meet certain customer’s requirements, we also designed a new landing ship with a low draft (1.7 M), high payload, and a max speed of almost 15 knots. This design is the largest landing ship utility in its category and we have verified the design through model testing.

We have designed and submitted to the Indian Navy against requests for proposals the following new concept designs:

  • New Generation Corvette
  • Survey Vessel (large)
  • Anti-Submarine Warfare-Shallow Water Craft

We have also designed and submitted to the Indian Coast Guard against a request for information for a Pollution Control Vessel.

Aligning Our Processes to Changing Market Environments

We plan on adjusting our processes in order to meet the requirements of shifting market environments. The competitive marketplace for shipbuilding is steadily moving from a nomination process to a competitive bidding process. Previously, we were typically nominated for projects and therefore able to avoid having to deliver bids to customers in order to secure contracts. An increasing percentage of projects are secured through a competitive bidding process. We must have the ability to properly scope and build bids that allow us to maintain proper financial performance. Also, the procurement process is moving to a bidding process to reduce costs for purchased component parts. We intend to develop strategies that allow us to compete in the bidding process for projects and the procurement of components. We also intend to implement other strategies to meet the current market environment including enhancing our inventory control and build strategy process, outsourcing our non-core works and services, and enhancing our quality control processes.

Pursuing New Market Opportunities

We intend to explore the global market for our products. We exported our first ship in 2014 and seek to substantially grow our sales from ship exports. We intend to market all vessel sizes for exportation in various geographic locations. However, we anticipate exporting small and medium sized warship and patrol vessels to South East Asia, west Asia, African countries and Latin America which provides us with opportunities to develop our export business. We are poised to supply vessels of improved quality while incurring a lesser capital cost in building our ships in order to compete in the global arena. In order to achieve the aforesaid strategy, we are in the process of upgrading our processes and products in line with latest technology to keep up with the demands of modern shipbuilding.

Our export strategy includes participating in the following opportunities in the coming years:

  • LST(L) for the United Arab Emirates;
  • OPV and Survey Vessels for Nigeria; and
  • Corevettes for Philippines.

Our endeavor is to increase our capacity for our other products, including ship repair, deck machinery, marine pumps, bridges and marine engines, in furtherance of which we have developed a new system of bridge design to increase capacity in order to increase penetration in newer markets and strengthen the existing markets, establishing additional production facilities at DEP for bridges, modernizing our facilities with respect to the production efficiency for engines.

OUR BUSINESS

We currently offer products in the following core verticals: (1) shipbuilding; (2) engineering; and (3) engine production.

Our shipbuilding division consist of the construction of vessels for clients engaged in the defence sector shipping industry. Vessels built by us include frigates, anti-submarine warfare corvette, missile corvette, landing ship tank, landing craft utility, survey vessel, fleet replenishment tanker, fast patrol vessel, offshore patrol vessel, inshore patrol vessel, WJ-FAC, hover craft and fast interceptor boat. For further details on our shipbuilding products please see “Our Products” on page 142.

Our engineering division develops and manufactures portable steel bridges, suspension type pre-fabricated steel bridges, marine pumps, rail-less helicopter traversing systems, boat davits, anchors, mooring and dock capstans, anchor windlass and winches.

Our engine division is our smallest division with respect to revenue. Our engine production division undertakes assembly, testing, servicing and repair of various models of diesel engines used for marine propulsion and power generation through collaboration with the MTU of Germany. We produce the following products through our engine division MTU 396-04, 4000, 1163, 538, and 183 series diesel engines, engine components, and accessories. We have recently entered into a memorandum of understanding with an engine production entity for producing small to medium capacity (50-500 Kw) engines.

Vast majority of the products we manufacture are supplied to Central and State Governments and entities owned and controlled by such Governments. Significant majority of our revenues are derived from sales of shipbuilding products to the Indian Navy and the Indian Coast Guard.

We have also entered into a MoU for promulgation of export business and cooperation on mutual interests for the supply of components, equipment and services related to Bailey type portable steel bridges with an entity outside India in March 2018, a MoU with Elbeit Systems Limited, Israel for indigenous production of unmanned surface vessels in April 2018 and a MoU to form collaboration with a ministry of defence of another jurisdiction for shipbuilding project on May 2018.

 

Our Products      

Shipbuilding

Brief descriptions of our shipbuilding products are specified below:

  • Frigate

Frigates manufactured by us are indigenously designed and has a tonnage of 3,650 tonnes. As of the date of the RHP we have supplied three (3) P-16A Brahmaputra Class frigates to the Indian Navy having names INS Brahmaputra, INS Betwa and INS Beas.

  • ASW Corvette

Our ASW (anti-submarine warfare) corvettes are indigenously designed having around 90% indigenous content and has a tonnage of 3250 tonnes. As of the date of the RHP we have delivered three (3) ASW corvettes to the Indian Navy. The P-28 class of ASW corvettes that that we have supplied to the Indian Navy consists of INS Kamorta, INS Kadmat and INS Kiltan. We delivered the INS Kiltan to the Indian Navy in October 2017, which is the first Indian warship with a superstructure entirely made of composite material.

  • Missile Corvette

Our missile corvettes are indigenously designed having a tonnage of 1,370 tonnes. We have delivered five (5) P-25 and P-25A class missile corvettes to the Indian Navy named as INS Kirpan, INS Khanjar, INS Kora, INS Kulish and INS Karmuk.

  • Landing Ship Tank

Our landing ship tanks are indigenously designed having a tonnage of 5,650 tonnes. It is a vehicle and troop carrier capable of beaching at beach gradient of 1 in 40 or steeper. As of the date of this RHP, we have supplied five (5) large ship tanks to the Indian Navy, INS Magar, INS Ghariyal, INS Shardul, INS Kesari and Airavat.

  • Landing Craft Utility

Our landing craft utility vessels are used to transport, deploy and recover troops and equipment from ship to shore and vice versa. Our landing craft utility are indigenously designed with over 90% indigenous content and has a tonnage of 910 tonnes. Presently, we have an order of eight (8) landing craft utility vessels from the Indian Navy, of which we have delivered four (4) (L-51, L-52, L-53 and L-54) and the balance are under different stages of construction.

  • Survey Vessel

Our survey vessels are indigenously designed having a tonnage of 1,929 tonnes. Survey vessels are capable of all types of oceanographic research and hydrographic survey. These vessels are in service with the Chief Hydrographer, Indian Navy and have also executed overseas assignments in the Middle East. As of the date of this RHP, we have supplied six (6) survey vessels to the Indian Navy named as INS Sandhyak, INS Nirdeshak, INS Nirupak, INS Investigator, INS Jamuna and INS Sutlej.

  • Fleet Replenishment Tanker

Our fleet replenishment tanker was designed by a German company with a tonnage of 24,600 tonnes. It is used in replenishing warships at sea with fuel, ammunition, fresh water, provisions, hospital facilities, and other essential items. As of the date of this RHP, we have supplied one (1) fleet replenishment tanker to the Indian Navy named INS Aditya.

  • Offshore Patrol Vessels

Our offshore patrol vessels are indigenously designed and these are capable of carrying multi-purpose roles. These are used by our defence forces for anti-piracy operations, search and rescue operation, anti-smuggling and anti-drug surveillance, anti-poaching operation of exclusive economic zones including fisheries protection, logistics support operations including transportation of dry cargo, fuel oil and fresh water and refrigerated fresh food, transportation of small detachment of troops/ personnel, helicopter operation, pollution response operation and external fire lighting. In 2011, we became the first Indian shipyard, to have received an export order for a warship from the Government of Mauritius for the construction of an Offshore Patrol Vessel and on December 20, 2014 we became the first Indian company to have built and exported—CGS Barracuda—to the Mauritian National Coast Guard. (Source: ICRA Report)

  • Inshore Patrol Vessels and Fast Patrol Vessel       

Our inshore patrol vessels and patrol vessels are indigenously designed having a tonnage of 280-304 tonnes. These are cost effective platforms suited for marine surveillance and rescue operation. These vessels allow its user to equip the vessels with armaments for use in combat, and this is suited for interception of fast moving surface craft and performs anti-smuggling, fishery protection and search and rescue operations. As of the date of this RHP, we have delivered eight (8) inshore patrol vessels and seventeen (17) patrol vessels to Indian Coast Guard. In addition, our Company has also delivered twenty (20) Patrol Vessels to Indian Navy.

  • Water Jet Fast Attack Craft

Our WJFAC are indigenously designed with a tonnage of 288 tonnes. It promises to transform naval shoreline operation by packing a powerhouse punch of agility and speed. These ships meet critical requirement of crafts with improved stealth at networking capabilities. These WJFACs are ideally suited for interception of fast moving surface craft and also performs surveillance activities like anti-smuggling, fishery protection and search and rescue operations. As of the date of this RHP, we have delivered fourteen (14) WJFACs to the Indian Navy.

  • Hover Craft

Our hover crafts are suitable for amphibious operations. Till the date of this RHP, we have delivered a total of six (6) hover crafts to the Indian Coast Guard, of which the first two (2) hover crafts were imported from UK in fully assembled condition. The remaining 4 hover crafts were imported in completely knocked down kit and we assembled them. Due to inadequate demand for hover crafts in the Indian market we decided to discontinue with further efforts to indigenize hover craft building. However, we have been providing assistance to Indian Coast Guard for repair and maintenance of these hovercrafts (through annual maintenance contracts), to keep them operational.

  • Fast Interceptor Boats

Our fast interceptor boats are indigenously designed having a tonnage of 5T and 12T. These can be used as day/ night surveillance-cum-investigation vessel, which operate in shallow water for coastal policing, anti-smuggling, fishery protection and search and rescue operations. As of the date of this RHP, we have built and delivered eighty-eight (88) (58 numbers of 12 tonnes and 30 numbers of 5 tonnes) fast interceptor boats to the Ministry of Home Affairs, Government of India for coastal security.

In addition to the aforesaid shipbuilding products, we have also supplied various boats, pontoons, barge, sailing dinghy, fishing trawler, fire float, tug, dredger, passenger ferry, motor cutter, deck whaler, launch etc. to various customers over the years.

Engineering

We offer portable bridges, deck machinery items and marine pumps as a part of our engineering division. Our engineering division was primarily set up in order to indigenize sophisticated deck machinery items in the year 1970.

  • Portable Bridges

Our portable bridges are designed to allow the bridge to be completely erected on rollers from one side of the gap to be bridged and then launched across without the use of any support within the gap. It is particularly of use in providing access in far-flung areas and hilly terrain and also provides quick restoration of communication where existing road or bridge connectivity has been destroyed by natural disasters. Portable bridges also augment the road network in connecting remote locations in difficult terrains, particularly in the hilly areas e.g. for initiation of project by Independent Power Producers in Hydro sector in North eastern part of the country. Through this product we intend to enhance export potential in countries like Bangladesh, Nepal, Bhutan, Sri Lanka, Myanmar among others. As a part of our portable bridges portfolio, we offer (i) standard width (3.32 m) single lane bridge; (ii) extra wide (4.25 m) single lane bridge (steel deck); (iii) extra wide (4.25 m) improvised single lane bridge using 10’x 7’ Panel; (iv) double lane bridge (steel deck) with 10’X 7’ panel; and (v) suspension bridge.

Our portable bridges confirm to Global AASHTO (American Association of State Highway Transportation Officials) Standards and are supplied in hot dip galvanized condition. We have entered into a memorandum of understanding for supply of galvanized portable steel bridges with the Government of Odisha, Government of Chhattisgarh and for Project Himank of the Border Roads Organisation. According to the ICRA Report, the total domestic market for portable bridges is estimated to be ₹2,000-2,500 million in revenue size. In terms of capacity, our Company, which has around 60% market share, manufactured around 4,800 metric tonnes in Fiscal 2017. The bridges are made to order as the configuration of the bridge varies according to the bridge span and the load carrying capacity of the bridge. The bridge, manufactured using mainly steel, is assembled on site and is therefore also known as a portable bridge. (Source: ICRA Report). The engineering division has supplied sixty-seven (67) portable bridges during the Fiscal 2018, seventy four (74) portable bridges during the Fiscal 2017 and seventy (70) portable bridges in the Fiscal 2016 which indicated a decline of about 15% in monetary terms in the Fiscal 2018 due to reduction in market demand.

Our Company holds patents for stiffened steel deck system for single lane bridges and manufacture of double lane portable steel bridges which were awarded to it in the year 2011 and 2007, respectively. Further, two (2) more patent applications pertaining to Improvised Single Lane Steel bridge system and Improvised Steel Decking system are under processing for certification. This unit has an in-house Design department involved in continuous upgradation of its products to meet the changing requirements of prospective customers and at present working on development of assault bridges, cable gripper for suspension bridges and walk way attachment for portable steel bridges. To meet what we believe to be increasing demand for our portable bridge products, we have created additional production facilities at DEP which is expected to supply about ten (10) bridges during the current fiscal year. We manufactured what we believe to be the highest modular steel bridge in the world, at Khardung-la, Ladakh in Jammu & Kashmir, which was erected at an altitude of 5,602 meters by the Border Road Organisation and was listed in the Guinness Book of World Records in 1990.

  • Deck Machinery Items

We have been developing, designing, manufacturing and supplying both electrohydraulic as well as electric deck machinery equipment meeting different class requirements. Our Engineering division has manufactured for the first time in India, a telescopic helicopter hangar for housing helicopters on-board naval vessels the first of which was installed on INS Investigator. Our deck machinery items product range include windlass/anchor capstan; dock capstans; deck cranes; boat davits; special purpose winches, steering gears, electro hydraulic deck crane, and specialised products like the rail-less and rail-based helo traversing system; designed and built to meet customer specific requirement to support individual vessel. We produce deck machinery items for the Indian Navy, Indian Coast Guard, public and private shipyards and our own shipbuilding division.

  • Marine Pumps

Our marine pump product under our engineering division undertook the development of indigenized centrifugal pumps in order to replace Russian origin pumps. We have designed our pumps in-house, and our designs have been vetted and verified by the Society of Turbo-Machinery for SNF/ SNM class Naval Ships and EKM type submarines for the Indian Navy, which are certified by Eastern Naval Command. On completion of our indigenization process, a total of one hundred fifty-five (155) marine pumps have been supplied to Indian Navy as on July 31, 2018. Our Company has supplied various types of pumps to the Indian Navy for replacement/refurbishment of various pumps onboard Naval Ships and has so far developed and delivered ten (10) types of pumps that were taken up for indigenization and development. Different models of our pumps can be utilized for supplying different ranges of pumps by making suitable modifications on operating parameters as may be required by our customers.

All of our marine pumps are made of non-ferrous components (“NAB”), which requires special type of casting, as per NES 747, BS1400 and the casting is done through out-sourcing. Machining of all the parts of pumps are being done through in-house/ out–sourced facilities, depending upon the urgency of the order. Bought out items like motor, control panel and mechanical seals etc. are procured through out-sourcing. Assembly of pumps are undertaken in-house to cater for the present existing orders. A modern test bed is under erection at our Taratala Unit.

Engine Production

We supply and overhaul MTU 396-04; MTU 4000; MTU 1163; and MTU 538 class diesel engines through our engine production division at DEP. We have recently modernized the assembly and testing facilities for marine engines unit at DEP with an investment of around ₹100 million. Consequent to this, a service partner agreement was signed with MTU (India) for undertaking W6 routines of MTU 4,000, MTU 538 and MTU 396 series engines. We also have a license agreement with MTU Germany for semi knocked down assembly of MTU 12V/ 16V 4000M90 engines and to produce parts of engines.

In relation to our DEP, our Company entered into several arrangements including for transfer of technology and licensing with MTU for the production of high speed and high power to weight ratio diesel engines for the naval vessels. In collaboration with MTU, our Company has supplied over one hundred forty-nine (149) engines of various configurations for marine applications and has also carried out overhaul and repair of over eighty-one (81) engines of various series. Further, we are in the process of indigenizing around 60% of engine parts over the next four (4) to five (5) years under the “Make in India” program.

Further, we have entered into a MoU for development of engines for marine applications with an engine manufacturer in October 2017. The scope of collaboration is to produce diesel engines for diesel alternators for marine applications for Indian Navy, Indian Coast Guard, inland waterways, boats of MHA, etc. vessels in the range 50-500 kW with an aim towards self-reliance and to promote “Make in India” initiatives. The vast majority of our engines are supplied to the Indian Navy and Indian Coast Guard.

 

ORDER BOOK

We define order book as anticipated revenues from the uncompleted portion of existing contracts as of a certain date. As of July 31, 2018, our order book is ₹203,136.10 million, which generally includes products to be manufactured and delivered. These orders are subject to cancellation and modification provisions contained in the various contracts. We do not include unexercised options or indefinite-quantity orders in our order book. If any of our contracts were to be terminated, our order book would be reduced by the expected value of the remaining terms of such contracts.

As of July 31, 2018, we have firm contracts for manufacturing and delivery of thirteen (13) ships comprising of (i) one (1) ASW corvettes; (ii) four (4) landing craft utility; (iii) five (5) fast patrol vessels; and (iv) three (3) P17-A class frigates. Additionally, our DEP has received an order for twenty-eight (28) 1 MW diesel alternators worth 2,250.00 million.

In addition to the above firm orders, our Company has also been declared L1 or L2 for certain other projects, for which contracts have not yet been signed, including construction and delivery of (i) four (4) survey vessels for the MoD; (ii) eight (8) anti-submarine warfare shallow water craft for the Indian Navy and (iii) one (1) Ocean Going Passenger and Cargo Ferry Vessel.

Our Facilities

We have separate facilities for each of our 3 core divisions - shipbuilding, engineering, and engine production. We also have a technical training facility.

Shipbuilding Facilities

We have three core shipbuilding facilities: (1) Main Works Unit; (2) Rajabagan Dockyard; and (3) FOJ Unit.  Main Works is our largest facility while the Rajabagan Dockyard is our most recently acquired facility.

Main Works

Main Works contains an Integrated Shipbuilding Facility occupying approximately 48 acres in Kolkata, India that includes:

  • One (1) Dry Dock measuring 180 X 29 X 10 M having 10,000 DWT launching capacity;
  • One (1) Inclined Berth measuring 180 X 23 M having 4,500 DWT launching capacity;
  • Portable Shelters over the Dry Dock and Inclined Berth;
  • Module Hall for building of large pre-outfitted blocks of up to 200 tonnes;
  • Blast and Paint Cell;
  • Two (2) additional River Jetties; and
  • Central Pier, Amenity Block, Pavements and other items.

Other existing structures on Main Works include:

  • Wet Basin and Dry Dock;
  • 80 X 25 X 8 M fully covered non-tidal wet basin with 2 X 10 tonnes EOT Cranes suited for all weather fitting-out of medium and small ships
  • 160 X 25 X 8 M dry dock with 2 X 40 tonnes Goliath Cranes suited for the construction and repair of ships
  • Building Berth;
  • Measures 180 X 25 M
  • Equipped with 2 X 40/10 tonnes Cranes and supporting fabrication shops
  • River Jetties; and
  • Two (2) River Jetties able berth vessels up to 60 M in length and
  • Suited for out-fitting/ repair of smaller vessels
  • Additional Facilities - Boat Shed for Manufacturing the Fast Interceptor Boat.
  • Two air-conditioned and humidity-controlled shops with six bays ranging from 18-40 M in length
  • Capable of building crafts up to 20 M

Our 250 Golaith Crane installed at the Main Works Unit collapsed on April 17, 2018 due to near cyclonic storm and was rendered unusable. For further discussion, please refer Risk Factors - 2 “Our 250 tonne Goliath Crane at Main Works Unit recently collapsed due to near cyclonic storm in Kolkata.” on page 23.

Rajabagan Dockyard

Rajabagan Dockyard is spread over 31.15 acres with a 550 M open river front in Kolkata, India and is capable of pre-launch activities of three (3) 50 M-sized ships and post-launch outfitting of four (4) ships at one time at open river. The facilities at Rajabagan Dockyard include one (1) dry docks which can accommodate ships having draft facility upto 4 M.

FOJ Unit

The Fitting Out Jetty Unit (“FOJ Unit”) is dedicated to fitting out and repair of ships, occupying 18 acres of land in Kolkata, India. The facilities at FOJ Unit include:

  • Naval Complex Jetty (229 X 10 X 8 M with one 25 tonnes tower crane); and
  • Finger Jetty (184.50 X 11.43 X 7 M with one 15 tonnes level luffing crane).

Our FOJ Unit is capable of fitting out small, medium and large ships, although it is primarily meant for large ships. The FOJ Unit is capable of fitting out up to four (4) large ships at one time.

Engineering Facilities

61 Park Unit

The 61 Park Unit is located on 11.07 acres of land located in Kolkata, India. The 61 Park Unit is our primary unit for portable steel bridge production. It also houses the ship design office, corporate planning and commercial.

Taratala Unit

We manufacture our deck machinery items at our Taratala Unit, which occupies 3.39 acres of land in Kolkata, India. The Taratala Unit is engaged in production, assembly, test and trials of all types of deck machinery equipment and naval pumps. The deck machinery unit is currently supplying the rail-less helo traversing system for larger ships of the Indian Navy and Coast Guard. Our Company has also recently inaugurated modern pump test bed facility at Taratala unit on June 11, 2018 for testing the pumps we manufacture.

 

Engine Production Facility

Diesel Engine Plant, Ranchi (“DEP”)

We assemble, test and overhaul marine engines at the DEP, which occupies 62 acres of land and is located at Ranchi, Jharkhand.

In addition to DEP, we also have the facilities for major overhaul (up to W6 Routines) for MTU 396, 4000 & 538 series engines.

Additional production facilities for portable steel bridges have been established at DEP at Ranchi during May 2016.

 

Training Facility

We have a Technical Training Centre (“TTC”) located on approximately 2.05 acres in Baranagar, Kolkata. The TTC is ISO 9001:2008 certified training institute and conducts Director General of Shipping (DGS), Government approved twelve (12) months pre-sea marine engineering training course for mechanical and naval architect engineering graduates with annual intake capacity of 100 cadets. TTC also conducts various technical and skill development training for our Company employees and apprentices in welding, fitting, pipe fitting, electrical and machinist trades.

 

Our Collaborations

We currently collaborate with MTU to produce MTU 396-04, 4000, 1163, 538, and 183 series diesel engines. Also, in 2016, we delivered 9 Engineering-Rail Less Helo Traversing Systems. The Rail Less Helo Traversing Systems were designed in collaboration with an international entity having the relevant expertise.

Further, we have entered into a MoU for development of engines for marine applications with an engine manufacturer in October 2017. The scope of collaboration is to produce diesel engines for diesel alternators for marine applications for Indian Navy and Indian Coast Guard vessels in the range 50-500 kW with an aim towards self-reliance and to promote “Make in India” initiatives.

We have also entered into a MoU for promulgation of export business and cooperation on mutual interests for the supply of components, equipment and services related to Bailey type portable steel bridges with an entity outside India in March 2018, a MoU with Elbeit Systems Limited, Israel for indigenous production of unmanned surface vessels in April 2018 and a MoU to form collaboration with a ministry of defence of another jurisdiction for shipbuilding project on May 2018.

Pursuant to the SEBI Exemption Letter-I, our Company, being a company under the administrative control of the MoD has been exempted by SEBI from disclosing the details of various technical collaborations that we have entered into as a result of national security related concerns.

Competition

Shipbuilding

We operate in a competitive environment and we expect to face greater competition from existing competitors located both in India and globally. We compete on the basis of our ability to fulfil our contractual obligations including the timely delivery of vessels constructed or repaired by us, our shipyard's capacity and capabilities and the price and quality of the vessels we construct. Some of our competitors have more resources than us, while certain competitors may have lower cost of operations. In addition, certain competitors may have competitive advantages in building or repairing certain types of vessels compared to us. Our competitors in defence shipbuilding are Mazagon Dock Shipbuilders Limited, Cochin Shipyard Limited, Goa Shipyard Limited, Hindustan Shipyard Limited, L&T Shipyard and Reliance Naval and Engineering Limited.

Engineering

We face competition from domestic and global public and private suppliers of deck machinery including Anjana Steel Industries Private Limited, Bridge and Roof Co. (India) Limited, Essen Fabricators Private Limited, Gourika India Limited, Lucky Engineering Company, Machine Works (International) Limited, Madnani Engineerings Works, Shiva Engineering Works, Tata Steel Limited, Titagarh Wagons Limited, Traco Enterprises, Vinayak Rail Track (India) Private Limited, Vishwa Traders, WIL. We face competition from domestic and global producers of bridges.

Engine Production         

We face competition from domestic and global public and private suppliers of marine engines, including Wartsila, Cummins, Caterpillar, KOEL and MAN.

Sales and Marketing

Each division has a dedicated business development team. Our sales and marketing teams receive assistance from other employees in each division when such assistance is needed. Our portable bridge business utilizes services of an agency to promote sales and marketing efforts.

Human Resources

We have a group of dedicated, committed and highly skilled personnel and staff. As of July 31, 2018, our Company employed a total workforce of 2,155 full-time employees, which comprised of 473 officers, 141 supervisors, 104 office assistants and 1437operatives in various departments. All our employees are based at our various facilities in Kolkata, Ranchi, Delhi, Mumbai and Visakhapatnam. As of July 31, 2018, around 3,285 contract labours were engaged by various contractors for execution of job contract placed on them by our Company. Our contract workforce strength undergoes regular change based on the necessity and work involved.

Operative and office assistant category of employees are unionized. We have separate Memorandum of Settlement (“MoS”) with operatives’ trade union recognized by the Company as the sole bargaining agent and office assistants’ union. We believe that the relationship between our management and our employees is generally cordial. Please see “Risk Factors - We are subject to stringent labour laws and our workmen are unionised under a number of trade unions.  Labour disputes could lead to lost production and increased costs” on page 37 for further details of labour unrest in the recent past. 

Employee Training

We recognize that our employees are an invaluable resource and that the competency and dedication of our employees has been instrumental to our success. To help ensure that our employees are equipped with the necessary skills and expertise, we conduct various training programs for our employees. Such training programs are either conducted in-house by our senior staff or external faculty and they involve both classroom lessons and on-the-job training by qualified instructors.

Properties

Our Registered Office is located at 43/46 Garden Reach Road, Kolkata – 700 024, West Bengal, India. We own or lease the following significant properties:

Name of Property

Location

Size

Main Works Unit

Kolkata, India

48 Acres

FOJ Unit

Kolkata, India

18 Acres

Rajabagan Dockyard

Kolkata, India

31.15 Acres

61 Park Facility

Kolkata, India

11.07 Acres

Taratala Unit

Kolkata, India

3.39 Acres

DEP, Ranchi*

Jharkhand, India

62 Acres

 

In addition to the aforesaid properties owned or leased by us, our Company has also taken several properties on lease or leave and license for commercial and residential purposes. Please refer to “Risk Factors - Certain of our immovable properties are leased. If we are unable to renew existing leases or relocate our operations on commercially reasonable terms, there may be an adverse effect on our business, financial condition and operations.

 Health, Safety and Environment

We believe that we have an effective risk management system with self-regulatory processes and procedures for ensuring that the business is conducted in a risk conscious manner. Under our risk management system, operational, contractual, financial, business and reputational risks arising are assessed by the respective risk owners and suitable mitigating measures are taken in advance.

We are committed to creating and maintaining a safe work environment on an ongoing basis. We are subject to extensive health, safety and environmental laws, regulations and production process safety and environmental technical guidelines which govern our processes and facilities. For further details, see “Regulations and Policies” on page 157. We have implemented a health and safety system to inform new employees of our work and safety policies. Our employees holding supervisory positions are required to ensure that all employees comply with these policies.

We also focus on raising safety awareness among our employees and subcontractors’ workmen through various in-house and onsite training programs.

 

Industrial Security

Our facilities qualify as ‘prohibited place’ under the Official Secrets Act, 1923, and therefore industrial security is of critical importance for our Company. The physical security of our facilities at Main Works, Rajabagan Dockyard and FOJ has been entrusted to Central Industrial Security Force, which is a central armed police force of the Government of India, who are responsible for providing integrated security cover to major critical infrastructure installations. As per the security arrangements, we have round-the-clock vigil, with armed personnel and wireless CCTV surveillance systems covering all critical locations and installations. We also have a biometric access control system for various categories of persons entering our shipyard. There is a visitor’s facilitation centre for the scrutiny and verification of the credentials of visitors to our Company.

 

Information Technology

Information technology is an essential element of our operations infrastructure. We invest in information technology as its use directly lowers cost, enables scalable operations, improves efficiency, reduces business continuity risks and enables a secure enterprise. Due to the sensitive nature of our business, we have implemented the IT Policy and Guideline, which sets out the security policy relating to administration of the information technology including for procurement of IT equipment, computer asset recording procedure, IT asset operation maintenance procedure, IT asset disposal procedure, change management policy and data back-up policy. To mitigate the risks from cyber threats, we have an operational replica-based disaster recovery data centre at Mumbai, to minimise the impact in case of any natural disaster. Additionally, our Company has also recently inaugurated Data Centre of CDO at 61 Park Unit on June 1, 2018 which has a capability multiplier essential for critical information technology operations, server availability, safety and security of design data and is mainly emphasized on promoting “Green Concept” thereby contributing to energy saving.

 

Awards and Accolades

We have a received number of awards over the years for work in the shipbuilding industry.

Certifications

We have several certifications and accreditations including the TUV Nord’s Certificate affirming that the Management Systems of the Company for manufacturing of ships are as per ISO 14001:2004 and BS-OHSAS 18001-2007 and the Indian Register Quality Systems Certificate affirming that the Management Systems of the 61 Park Unit are as per ISO 9002 – 1994/ EN ISO 9002 – 2014. We have also received ISO 9001:2008 or ISO 9001:2015 accreditation for all our facilities for quality management systems.

Intellectual Property

Our Company holds patents for stiffened steel deck system for single lane bridges and manufacture of double lane portable steel bridges which were awarded to it in the year 2011 and 2007, respectively. Further, two (2) more patent applications pertaining to Improvised Single Lane Steel bridge system and Improvised Steel Decking system are under processing for certification. We have not filed any application for registration of copyrights and/or trademarks including for our corporate logo.

Corporate Social Responsibility

We as a responsible corporate citizen are committed to take up different developmental projects, as part of our Corporate Social Responsibility (“CSR”) initiatives towards improving the quality of lives of the underprivileged sections of the society and other stakeholders, primarily around our factories. Our CSR strategies are aligned to national priorities to meet the basic needs of the local community.

Our CSR policy defines the frame work for implementing CSR activities in compliance with Section 135 of the Companies Act, 2013 and rules framed thereunder.

We are working toward improvement of quality of life of the marginalized segment through various initiatives like skill development initiatives in alignment with ‘Skill India Mission’, construction of toilets and training to school children under ‘Swachh Bharat Abhiyan’, empowering differently abled persons, heath related initiatives as also infrastructure and capacity building in local Anganwadis.

We have undertaken the following CSR projects in Fiscal 2018 towards fulfilment of national priority initiatives:

  1. Skill India Projects:
    1. GRSE has engaged approx. 400 apprentices for imparting skill development training, which is more than 10% of the company’s manpower strength.
    2. GRSE also supported ITI Tollygunge and Women ITI, Kolkata to upgrade their training facilities. Various activities like conducting industrial visits, awards to meritorious students, pre-placement and career guidance training, advanced training of trainers and sponsorship for participation in work-skills competition were conducted for the supported ITIs.
    3. GRSE has partnered with Indian Institute of Cerebral Palsy, since 2010-11 to provide comprehensive educational and rehabilitation services for children with cerebral palsy. A total of 43 children with severe multiple impairments are being annually supported by this project for the last eight (8) years.

  2. Swachh Bharat Mission
    1. GRSE has introduced multiple interventions under the broader ambit of Swachh Vidyalaya Abhiyan in different schools. GRSE has constructed a total of 65 toilets during the year in 10 local Govt. schools located in Metiabruz and Maheshtala areas.
    2. Maintenance of toilets is a new initiative of GRSE which has been highly appreciated by the students and school authorities. Sulabh international Social Service Organisation has been engaged to implement the project in 08 schools where GRSE has constructed toilets in last few years.
    3. Incinerators were installed to improve menstrual health of the adolescent girl students and overall hygiene of 04 local girls’ schools.
    4. Infrastructure development such as installation of water purifiers, child-friendly toilets, utensils, medicines etc. were facilitated in 04 new Anganwadi Centres. Capacity building training was provided to their workers and helpers.
    5. Intensive training was given for one year to 5000 school children on Water, sanitation and Hygiene (WASH) practices to inculcate long term behavioural change and equip these children to be the change agents in the society.
    6. GRSE has contributed ₹0.6 million towards Swachh Bharat Kosh and ₹0.4 million towards Clean Ganga Fund in compliance with MoD directives.
    7. GRSE also provided 76 numbers of green and blue coloured garbage bins to these schools to facilitate segregation of waste. This project has positive ramification for the overall sanitation conditions of the schools.
    8. The completed projects / activities of FY 2016-17 were evaluated by National CSR Hub- TISS, in order to measure the degree of success or failure of the projects.
  1. Other Projects
    1. GSRE partnered with Artificial Limbs Manufacturing Corporation of India (ALIMCO) for the provisioning and distribution of the aids/ assistive devices for differently abled persons at Ranchi, Jharkhand. The project was aimed at providing a wide range of aids and assistive devices which include wheelchairs, tricycles, axilla crutches for people with motor disabilities, hearing aids and MSIED kits and smart canes and braille kits for visually challenged people. A total of 249 differently abled persons from marginalized section of society were provided aids / appliances to improve their quality of life.
    2. Monthly health check-up camps / clinics are held in our 61 Park Unit on the last Saturday of every month in which on an average, 250-300 patients are examined and provided medicines.
    3. Blood donation camp was conducted in which employees donated blood for patients suffering from Thalassaemia, Haemophilia or the victims of road accident.

In Fiscal 2018, we incurred an expense of ₹26.68 million for the aforesaid initiatives.

Major events in our history

The table below sets forth the key events in the history of our Company:

Calender Year

Major Achievements

1961

Built the indigenous warship of the country INS Ajay, which was the first Naval ship built in the country after India's independence.

1980

Built the patrol vessel for Indian Coast Guard, CGS Rajhans (GRSE Yard 2003).

1981

Designed and built survey vessel for Indian Navy. This 1900-ton ship, INS Sandhayak was delivered on February 26, 1981.

1984

Designed in-house and built the first of class landing ship tank (large).

1992

The class ship of new design FPV, CGS Priyadarshini (our Company Yard 2031) was delivered to Indian Coast Guard on March 03, 1992.

1994

The class P-16A guided missile frigate “INS Brahmaputra” (our Company Yard 3009) was launched on January 26, 1994.

Built research vessel.  The ship was named as “Sagardhwani” which means 'Sound of Sea”.

1997

Designed & developed, portable steel bridges for the first time in India.

2000

Built and delivered the class fast attack craft (our Company Yard No. 2047) on September 11, 2000 after extensive trials.

2009

The two WJ-FAC, INS Carnicobar and INS Chetlat were delivered on January 09, 2009 to Indian Navy.

2011

Our Company signed the contract for building CGS Barracuda, a multi-role offshore patrol vessel for National Coast Guard of Mauritius on March 04, 2011 for export of a warship. CGS Barracuda also has the distinction of being the first ever ship to be built at the new integrated shipbuilding facility, created in our Company under modernization.

2014

The class ASW Corvette, INS Kamorta, was delivered to Indian Navy on July 12, 2014.

2016

The first of the four (4) follow-on WJ-FAC, INS Tarmugli (Yard No 2109) was delivered to the Indian Navy on April 16, 2016.

2016-2017

Two ships of the class new generation landing crafts have been delivered to Indian Navy on September 30, 2016 and July 20, 2017.

2017

The class ASW Corvette, INS Kiltan (Yard No 3019) was delivered to the Indian Navy on October 14, 2017.

2018

Delivery of fourth LCU ‘L-54’ to Indian Navy on April 6, 2018.

2018

Inaugration of Data Centre of Central Design Office at GRSE’s 61 Park Unit on June 1, 2018.

2018

Inaugratiion of modern Pump Test Bed Facility at GRSE’s Taratala unit on June 11, 2018.

2018

Inaugration of Virtual Reality Lab of Central Design Office at 61 Park Unit on July 7, 2018


Awards and Recognition

Our Company has received the following awards:

Year of Award

Award

2006

Accorded the status of Mini Ratna - Category I

2010-11

Best Performing Defence Shipyard

2010-11

Excellent grading under MoU signed with the GoI

2011-12

Best Performing Defence Shipyard

2011-12

Excellent grading under MoU signed with the GoI

2011-12

Indira Gandhi Rajbhasha Puraskar – 2nd prize in ‘C’ region for the implementation of official language Hindi in our Company

2012-13

Best Performing Defence Shipyard

2012-13

Indira Gandhi Rajbhasha Puraskar – 1st prize in 'C' region for implementation of official language Hindi under PSU category

2012-13

Excellent grading under MoU signed with the GoI

2013-14

Best Performing Defense Shipyard

2013-14

Excellent grading under MoU signed with the GoI

2014-15

National Talent Management Leadership Award 2015 in the Best Onboarding Program category from the World HRD Congress

2014-15

Most Caring Company Award at CSR Congress-2015

2014-15

Rajbhasha Kirti Puraskar – 2nd prize in ‘C’ region for excellence in implementation of official language policy under PSU category

2015-16

Raksha Mantri’s Award for in-house design effort of CGS Barracuda

2015-16

Rajbhasha Kirti Puraskar – 1st prize for excellence in implementation of official language in our Company.

2016

Quality leadership award by Quality Circle Forum of India

2016

Rajbhasha Kirti Puraskar – 2nd prize for excellence in implementation of official language

2016

Rajbhasha Kirti Puraskar – 2nd prize for the magazine ‘Rajbhasha Jagriti’

2017

Quality Leadership Award by Quality Circle Forum of India

2017

Runner-up in the category of ‘Contribution of Women in PSEs’ by ICC

2017

Runner-up in the category of ‘Human Resource Management’ by ICC

2017

Runner-up in the category of ‘CSR & Sustainability’ by ICC

2017

ICC PSE Excellence Award in the category of “Company of the Year”

2017

ICC PSE Excellence Award in the category of “Corporate Governance”

2017

SCOPE Corporate Communication Excellence Award 2017 in the category of Brand Building through Inclusive Growth Initiatives

2017

SCOPE Corporate Communication Excellence Award 2017 in the category of Best Corporate Communication Campaign/ Program (External)

2018

ET Bengal Corporate Award on Best CSR Idea - 2018 awarded by the Economic Times Group

 

Accreditations and Certifications

Our Company has received the following accreditations and certifications:

Certificate

Issued on

Valid Till

Particulars

Main Works Unit

ISO 14001:2004 - Management System

 July 30, 2017

September 14, 2018

TUV NORD CERT certified the management system of our Company in line with the standard of ISO 14001-2004 for the scope of manufacturing of ships

BS OHSAS 18001:2007 - Management System

July 30, 2017

July 29, 2020

TUV NORD CERT certified the management system of our company in line of the standards of BS OHSAS 18001:2007 for the scope of manufacturing of ships

ISO 9001:2015 - Quality Management System Standard

December 13, 2016

December 12, 2019

Indian Register Quality Systems certified the management system of Main Works Unit and Design Office to conform to the quality management system standard of ISO 9001:2015 for ship design, ship building and ship repair.

61 Park Unit

ISO 9001: 2015 - Quality Management System Standard

June 22, 2018

June 22, 2021

Indian Register Quality Systems certified the management system of our Company to conform to the quality management system standard of ISO 9001:2015 for design, manufacture and supply of portable steel bridges.

FOJ Unit       

ISO 9001:2015 - Quality Management System Standard

December 13, 2016

December 12, 2019

Indian Register Quality Systems certified the management system of our Company to conform to the quality management system standard of ISO 9001:2015 for ship design, ship building and ship repair.

Deck Machinery Taratala Unit

ISO 9001: 2015 - Quality Management System Standard

June 27, 2018

June 26, 2021

Indian Register Quality Systems certified the management system of our Company to conform to the quality management system standard of ISO 9001:2015 for design, development, manufacture, supply and service of Deck Machinery equipment and its accessories

Rajabagan Dockyard

ISO 9001: 2008 - Quality Management System Standard

January 30, 2016

September 14, 2018

Indian Register Quality Systems certified the management system of our Company to conform to the quality management system standard of ISO 9001:2008 for ship building, delivery of ships after sea trial and post delivery services.

Baranagar Training Centre Unit

ISO 9001: 2008 - Quality Management System Standard

 

January 6, 2016

September 14, 2018

Indian Register Quality Systems certified the management system of our Company to conform to the quality management system standard of ISO 9001:2008 for training of trade apprentices and marine engineers.

DEP, Ranchi Unit

ISO 9001:2008 - Quality Management System Standard

October 22, 2015

October 21, 2018

Indian Register Quality Systems certified the management system of our Company to conform to the quality management system standard of ISO 9001:2008 for manufacture and supply of diesel engines including assembly, testing and servicing of engines, fabrication and machining of general engineering items.

 

OUR MANAGEMENT

Board of Directors

Under the Articles of Association, our Company is required to have a minimum of three (3) Directors. We currently have ten (10) Directors, out of which five (5) are Part-Time Non-Official (Independent) Director, four (4) are Whole Time Directors and one (1) is Government Nominee Director.

The following table sets forth the details regarding the Board as of the date of this Red Herring Prospectus:

S.

No.

Name, Designation, Address, Occupation, Nationality, DIN and Term

Age

(in years)

Other Directorships

1.       

RAdm Vipin Kumar Saxena, IN (Retired)

Designation: Chairman & Managing Director

Address: 11 New Road, Alipore, Kolkata – 700 027, West Bengal, India

Occupation: Service

Nationality: Indian

DIN: 07696782

Term: Five (5) years with effect from March 01, 2017 (the date of assumption of charge) in the first instance or till the date of his superannuation or until further orders, whichever is the earliest.

56

 

Nil

2.       

Sarvjit Singh Dogra

Designation: Director (Finance) & CFO

Whole Time Director

Address: 27, Chetla Central Road, Flat 2B, 2nd Floor, Kolkata - 700 027, West Bengal, India

Occupation: Service

Nationality: Indian

DIN: 07052300

Term: Five (5) years with effect from December 31, 2014 (the date of assumption of charge) in the first instance or till the date of his superannuation or until further orders, whichever is the earliest.

58

Nil

3.       

Asit Kumar Nanda

Designation: Director (Personnel)

Whole Time Director

Address: Shantikunj, P-374, Nalini Ranjan Road, New Alipore, Kolkata - 700 053, West Bengal, India

Occupation: Service

Nationality: Indian

DIN: 07506042

Term: Five (5) years with effect from May 3, 2016 (date of assumption of charge) in the first instance or till the date of his superannuation or until further orders, whichever is the earliest.

58

Nil

4.       

Cmde Sanjeev Nayyar, IN (Retired)

Designation: Director (Shipbuilding)

  Whole Time Director

Address: Flat No. 18D, Tower D (Cedar), South City Residence, 375, Prince Anwar Shah Road, Kolkata – 700 068 West Bengal, India

Occupation: Service

Nationality: Indian

DIN: 07973950

Term: With effect from December 16, 2017 (date of assumption of charge) till the date of his superannuation or until further orders, whichever is earlier.

56

Nil

5.       

Ashwani Kumar Mahajan

Designation: Government Nominee Director

Address: D-09, HUDCO Place Extension, Andrews Ganj, New Delhi – 110 049, India

Occupation: Service

Nationality: Indian

DIN: 07483427

Term: With effect from April 2, 2016 till further orders from the Government.

55

Bharat Dynamics Limited (Director)

 

6.       

Bharat Bhushan

Designation: Part-Time Non-Official (Independent) Director

Address: C-11, Ahinsa Vihar, Sector-9, Rohini, New Delhi - 110 085, India

Occupation: Professional

Nationality: Indian

DIN: 00262278

Term: Three (3) years with effect from September 15, 2017 (date of notification of their appointment) or till further orders from the Government, whichever is earlier.

52

Nil

7.       

Kanwaljit Deol

Address: A-78, NSG Society, P6, Greater Noida – 201310, Uttar Pradesh, India

Designation: Part-Time Non-Official (Independent) Director

Occupation: Retired IPS Officer

Nationality: Indian

DIN: 03192289

Term: Three (3) years with effect from September 15, 2017 (date of notification of appointment) or till further orders from the Government, whichever is earlier.

63

Nil

8.       

Dr. Ajai Bhandari

Address: Suraj Kunj Building, Sector-5, Shimla -171009, Himachal Pradesh, India

Designation: Part-Time Non-Official (Independent) Director

Occupation: Retired IAS Officer

Nationality: Indian

DIN: 00322233

Term: Three (3) years with effect from March 9, 2018 (date of notification of their appointment) or till further orders from the Government, whichever is earlier.

64

Nil

9.       

RAdm Inder Paul Singh Bali, IN (Retired)

Address: C-1/11, Bapanagar, Zakir Hussain Marg, New Delhi-110 001, India

Designation: Part-Time Non-Official (Independent) Director

Occupation: Indian Navy Retired

Nationality: Indian

DIN: 07912223

Term: Three (3) years with effect from March 9, 2018 (date of notification of their appointment) or till further orders from the Government, whichever is earlier.

58

Nil

10.     

Dr. Biswapriya Roychoudhury

Address: Fulbari, Manaskamana Road, English Bazar, Malda, West Bengal-732101

Designation: Part-Time Non-Official (Independent) Director

Occupation: Doctor (Homeopathy)

Nationality: Indian

DIN: 08200896

Term: Three (3) years with effect from August 15, 2018 (date of allotment of DIN) or till further orders from the Government, whichever is earlier.

56

Nil

All the Directors of our Company are Indian nationals and none of the Directors are related to each other.

Brief Biographies of the Directors

Rear Admiral Vipin Kumar Saxena, IN (Retired)

RAdm Vipin Kumar Saxena, IN (Retired), aged fifty-six (56) years and having an experience of over thirty-three (33) years was appointed as the Chairman & Managing Director of our Company with effect from March 1, 2017 and is responsible for the overall management of our Company. Prior to joining our Company, he has put in over thrity-one (31) years of commissioned service in the Indian Navy since March 05, 1985 after completing Bachelor of Engineering (Electrical) from Jabalpur University. He also holds a Master of Science degree in Defence Studies from Madras University.He has varied experience and exposure of working in various organisations of the Indian Navy ranging from operational appointment on-board frontline warships, naval dockyards, warship acquisitions & construction programmes and project management at apex level for mega infrastructure project of the Indian Navy. As Principal Director (Ship Production) at Naval Headquarters, New Delhi he has handled various aspects of shipbuilding while managing multiple major contracts for construction of a number of warships both at Indian Shipyards (DPSUs & private) and foreign shipyards.

Sarvjit Singh Dogra

Sarvjit Singh Dogra, aged fifty-eight (58) years and having an experience of over thirty-two (32) years was appointed as Director (Finance) of our Company with effect from December 31, 2014 and heads the finance function of our Company. He is a qualified fellow member of the Institute of Costs Accountants of India. He has served in the Fertilizer Corporation of India Limited as Grade II - Accounts Officer. Thereafter, he has served in National Aluminum Company Limited, a Navratna CPSE under the Ministry of Mines, GoI, prior to joining our Company.

Asit Kumar Nanda

Asit Kumar Nanda, aged fifty-eight (58) years and having an experience of over thirty-three (33) years was appointed as Director (Personnel) of our Company with effect from May 03, 2016 and heads the human resource function of our Company. He holds a Bachelors’ Degree in Law from Sambalpur University and a Masters’ Degree in Social Work (Specialisation in Personnel Management & Industrial Relations) from Devi Ahilya Vishwavidhyalya, Indore. He is also credited with holding a Post-Graduate Diploma in human resource management from Indira Gandhi National Open University. He has worked for over three decades in the field of Human Resources Management in Central Public Sector Undertakings viz. ITI Limited, Hindustan Aeronautics Limited & BEML Limited both at the manufacturing & corporate level. Prior to joining our Company, he was working as CGM (HR) in BEML Limited.

Commodore Sanjeev Nayyar, IN (Retired)

Cmde Sanjeev Nayyar, IN (Retired), aged fifty-six (56) years and having an experience of over thirty-six (36) years, assumed charge as Director (Shipbuilding) of our Company with effect from December 16, 2017 and heads the shipbuilding division of our Company. Prior to joining GRSE, he has put in over thirty-five (35) years of commissioned service in the Indian Navy from July 1, 1982. He holds a Bachelor of Science and a Bachelor of Technology degree in Mechanical Engineering from Jawaharlal Nehru University, Delhi. He went on to obtain a Master of Technology degree in Design of Mechanical Equipment from IIT, Delhi, and a Master of Management Studies from Osmania University, Hyderabad.

Ashwani Kumar Mahajan

Ashwani Kumar Mahanjan, aged fifty-five (55) years and having an experience of over twenty-eight (28) years was appointed as a Government Nominee Director of our Company with effect from April 02, 2016. He holds a degree in Bachelor of Medicine and Bachelor of Surgery, from Medical College, Amritsar. He is a cadre of the Indian Revenue Service (IRS) and has previously worked in the Income Tax Department. Presently, he is working as Additional Financial Advisor & Joint Secretary, DDP.

Bharat Bhushan

Bharat Bhushan, aged fifty-two (52) years and having an experience of twenty-eight (28) years in the practice of chartered accountancy, was appointed as a Part-Time Non-Official (Independent) Director of our Company with effect from September 15, 2017. He holds a degree in Bachelor of Commerce from Punjabi University and is a Fellow Member of the Institute of Chartered Accountants of India. Presently, he is a Partner in Chandiwala Virmani & Associates since 2004. He also has post-qualification certification in Information Systems Audit.

Kanwaljit Deol

Kanwaljit Deol aged sixty-three (63) years and having an experience of thirty-eight (38) years was appointed as a Part-Time Non-Official (Independent) Director of our Company with effect from September 15, 2017. She holds a Masters Honours degree in Physics from Panjab University and a Bachelors’ degree in Law from University of Delhi. She was appointed into the Indian Police Service in 1977 and assigned to the Union Territories cadre. During thirty-eight (38) years of service in the police she has been posted in Delhi, Goa and Arunachal Pradesh, and has received training in various aspects of policing, vigilance, road traffic and transport, and human rights in India and abroad.

She also served as Additional Secretary in charge of Parliament Security in the Lok Sabha. In 2010 she headed the police force of the state of Arunachal Pradesh as its Director General of Police. In December 2012 she was appointed as Director General in charge of investigations with the National Human Rights Commission, New Delhi, until her retirement on October 31, 2014.

Dr. Ajai Bhandari

Dr.  Ajai Bhandari, Indian Administrative Services (Retired) aged sixty-four (64) years and having an experience of thirty-six (36) years in various executive capacities in middle and senior levels under the State Government of Himachal Pradesh. He was appointed as Part-Time Non-Official (Independent) Director of our Company with effect from March 9, 2018. He holds a Ph.D. in Life Sciences and Masters’ in Science (Botany) degree from the Himachal Pradesh University. He was Secretary to the State Government and held the Secretary level posts. He served as Managing Director and Chief Executive Officer of various Publice Sector Undertakings of the State. He also served in various positions in financial, power, legislative, developmental and other sectors in the State.

RAdm Inder Paul Singh Bali, IN (Retired)

Inder Paul Singh Bali, aged fifty-eight (58) years and having an experience of over thirty-four (34) years in the Indian Navy and Ministry of Defence, was appointed as a Part-Time Non-Official (Independent) Director of our Company with effect from March 9, 2018. During his career, he has held many positions at senior management level in administration, policy formulation & execution, technology evaluation & implementation, management of production work centers as well as management of marine infrastructure in the Navy. He holds a degree in Bachelor of Engineering (Electrical) from NITSRI and a Bachelor of Engineering degree in Industrial Engineering from the Institution of Electronics and Telecommunication Engineers, India. He is alumnus of Naval War College (Mumbai). He also holds a Master of Technology degree in Communication & Radar Engineering from IIT, Delhi. He was decorated with the prestigious Ati Vishisht Seva Medal (AVSM) and Vishisht Seva Medal (VSM) awards by the President of India for professional excellence and outstanding contribution to the Service.

Dr. Biswapriya Roychoudhury

Dr. Biswapriya Roychoudhury, aged fifty-six (56) years was appointed as a Part-Time Non-Official (Independent) Director of our Company for a term of three (3) years with effect from August 15, 2018. He is a homeopathic doctor by profession.


Corporate Governance

In addition to the applicable provisions of the Companies Act, 2013 and DPE Guidelines on Corporate Governance for Central Public Sector Enterprises with respect to corporate governance, provisions of the SEBI Listing Regulations will also be applicable to our Company immediately upon the listing of the Equity Shares on the Stock Exchanges.

Our Chairman & Managing Director is an executive Director. Our Company currently has ten (10) Directors, of which four (4) are executive Directors, one (1) is Government Nominee Director and five (5) are Part-Time Non-Official (Independent) Directors out of which one is a woman Director.

Pursuant to MCA notification dated June 5, 2015, the Central Government has exempted/ modified the applicability of certain provisions of the Companies Act, 2013 in respect of Government Companies. In accordance with this notification, the DPE Guidelines on Corporate Governance for CPSE and pursuant to our Articles, matters pertaining to, among others, appointment, remuneration and performance evaluation of our Directors are determined by the President of India. Further, our Statutory Auditor is appointed by the Comptroller and Auditor General of India. Accordingly, in so far as the aforestated matters are concerned, the terms of reference of our HR, Nomination and Remuneration Committee and Audit Committee only allow these committees to take on record the actions of the President of India or the Comptroller and Auditor General of India, as the case may be.

Other than as described above, our Company is in compliance with corporate governance norms prescribed under SEBI Listing Regulations, including in relation to the composition of its committees, such as the Audit Committee; Stakeholders Relationship Committee; HR, Nomination and Remuneration Committee; CSR & Sustainability Committee and Risk Management Steering Committee, policy on related party transactions, whistle blower policy (including setting up of vigil mechanism), policy on preservation of documents, familiarisation program for part-time non-official (independent) directors, policy on code of conduct and policy for determining materiality of an event/information for making adequate disclosure of such an event/ information before the stock exchanges and for identification of material subsidiaries.

The corporate governance framework is based on an effective independent Board, separation of the Board’s supervisory role from the executive management team and constitution of the Board Committees, as required under law.

The Board of Directors functions either as a full board or through various committees constituted to oversee specific operational areas. Our Company’s executive management provides the Board with detailed reports on its performance periodically.

The details of the Audit Committee, HR, Nomination & Remuneration Committee, Risk Management Steering Committee, CSR & Sustainability Committee and IPO Committee are given below:

In terms of the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, our Company has constituted/ reconstituted the following Board-level committees:

  • Audit Committee;
  • HR, Nomination and Remuneration Committee;
  • CSR & Sustainability Committee; and
  • Stakeholders Relationship Committee.


  1. Audit Committee

The Audit Committee was re-constituted pursuant to the circular resolution adopted on March 20, 2018. The Committee presently comprises of the following members:

Name of the Directors

Position in the Committee

Designation

Bharat Bhushan

Chairman

Part-Time Non-Official (Independent) Director

Kanwaljit Deol

Member

Part-Time Non-Official (Independent) Director

RAdm Inder Paul Singh Bali, IN (Retired)

Member

Part-Time Non-Official (Independent) Director

Cmde Sanjeev Nayyar, IN (Retired)

Member

Director (Shipbuilding)

Our Director (Finance) is a permanent special invitee on our Audit committee and our Company Secretary is the secretary of the Audit Committee.

Scope and terms of reference: The scope and function of the Audit Committee is in accordance with Section 177 of the Companies Act, 2013, Regulation 18(3) of the SEBI Listing Regulations and the guidelines on corporate governance on Central Public Sector Enterprises issued by the DPE.

Terms of reference for the Audit Committee are as follows:

  1. To assist the Board in its oversight functions relating to:
    1. quality and integrity of disclosures contained in the audited and unaudited financial statements;
    2. compliance with legal and regulatory requirements;
    3. qualifications, experience, performance and independence of external auditors;
    4. integrity of the internal controls established from time to time; and
    5. investments of our Company.
  2. To investigate into any matter in relation to the items specified in Section 177 of the Companies Act, 2013 or referred to it by the Board and for this purpose, shall have full access to information contained in the records of our Company and seek external professional advice, if necessary.
  3. To investigate any activity within its terms of reference.
  4. To seek information from any source including employees.
  5. To obtain outside legal or other professional advice, if necessary.
  6. To secure attendance of outsiders with relevant expertise, if it considers necessary.
  7. To protect whistle blowers.
  8. Overseeing our Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
  9. Reviewing with the management, the quarterly / half yearly financial statements before submission to the Board for approval.
  10. Reviewing with the management, annual financial statements and auditors report thereon before submission to the Board for approval, with particular reference to:
    1. Matters required to be included in the Directors’ Responsibility Statement to be included in the Board’s report in terms of clause (3)(c) of Section 134 of the Companies Act,2013;
    2. Changes, if any, in accounting policies and practices and reasons for the same;
    3. Major accounting entries involving estimates based on the exercise of judgment by management;
    4. Significant adjustments made in the financial statements arising out of audit findings;
    5. Compliance with accounting standards issued by the Institute of Chartered Accountants of India;
    6. Compliance with legal requirements relating to financial statements;
    7. Disclosure of any related party transaction; and
    8. Qualifications in the draft audit report.

  11. Audit(s)
    1. Internal Audit:
      1. Reviewing, with the management, performance of internal auditors (external firms) and adequacy of internal control systems.
      2. Reviewing the adequacy of internal audit (in house) function, if any, including the structure of internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of such audit.
      3. Discussion with internal auditors on any significant findings and follow up thereon.
      4. Recommending to the Board appointment and fixation of fees for Internal Auditors for Audit and other services if any.
    2. Statutory Audit & Branch Audit:
      1. Discussion with Statutory Auditors & Branch Auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.
      2. Discussion with Statutory Auditors & Branch Auditors on any significant findings and follow up thereon.
      3. Recommending to the Board the fixation of Statutory and Branch Audit Fees.
      4. Approval of payment to statutory auditors for any other services (other than audit) rendered by them.
    3. Cost Audit & Tax Audit:
      Recommending to the Board, the appointment, re-appointment and if required, replacement or removal of cost auditors and tax auditors and fixation of Audit fees and other terms of appointment. 
  12. Reviewing and monitoring the auditors’ independence and performance and effectiveness of audit process.
  13. Review the Cost Audit Report along with full information and explanation on every reservation or qualification contained therein and recommend the report to the Board for consideration
  14. Provide an open avenue of communication between the independent auditor, internal auditor and the Board of Directors.
  15. Review with the independent auditors the co-ordination of audit efforts to assure completeness of coverage, reduction of redundant efforts, and the effective use of all audit resources.
  16. Consider and review the following with the independent auditors and management:
    1. The adequacy of internal controls including computerized information system controls and security, and
    2. Related findings and recommendations of the Independent auditor and internal auditor, together with the management responses.
  17. Consider and review the following with the management, internal auditor and the independent auditor:
    1. Significant finding during the year, including the status of previous audit recommendations
    2. Any difficulties encountered during audit work including any restrictions on the scope of activities or access to required information.
  18. Government audit: To review the follow up action on the audit observations of the C&AG audit.
  19. Reviewing the findings of any internal investigations by the internal auditors/statutory auditors/other agencies into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.
  20. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.
  21. To review the functioning of the Whistle Blower Mechanism.
  22. To review the follow-up action taken on the recommendations of committee on public undertakings (COPU) of the Parliament.
  23. Review and pre-approve all related party transactions in our Company. For this purpose, the Audit Committee may designate a member who shall be responsible for pre-approving related party transactions.
  24. Review our Company’s financial policies, commercial policies and risk management policies.
  25. Evaluation of internal financial controls and risk management system.
  26. Reviewing with the management, the statement of uses/application of funds raised through an issue (public issue, right issue, preferential issue etc.), the statement of funds utilized for purposes other than those stated in this offer document/prospectus/notice, and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or right issue, and making appropriate recommendations to the Board to take up steps in this matter.
  27. Scrutiny of inter-corporate loans and investments.
  28. Valuation of undertakings or assets of our Company, wherever it is necessary.
  29. Approval or any subsequent modification of transactions of our Company with related parties.
  30. Review the following information:
    1. The management discussion and analysis of financial condition and results of operations;
    2. Statement of significant related party transactions (as defined by the Audit Committee), submitted by the management;
    3. Management letter / letters of internal control weaknesses issued by the statutory auditors;
    4. Internal audit reports relating to internal control weaknesses;
    5. The appointment, removal and terms of remuneration of internal auditors/chief internal auditor; and
    6. Certification / declaration of financial statements by the chief executive/chief finance officer.
  31. To call for comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board and to discuss any related issue with the internal and statutory auditors and the management of our Company.
  32. Carrying out such other functions as may be specifically referred to the Committee by our Company’s Board of Directors and/or other Committees of Directors.

b.  HR, Nomination and Remuneration Committee

The HR, Nomination and Remuneration Committee was re-constituted pursuant to a circular resolution adopted on March 20, 2018. It was renamed as HR, Nomination and Remuneration Committee by circular resolution adopted on November 01, 2017.

The Committee presently comprises of the following members:

Name of the Directors

Position in the Committee

Designation

Kanwaljit Deol

Chairman

Part-Time Non-Official (Independent) Director

Bharat Bhushan

Member

Part-Time Non-Official (Independent) Director

Dr. Ajai Bhandari

Member

Part-Time Non-Official (Independent) Director

Our Director (Personnel) is a permanent special invitee on the HR, Nomination and Remuneration Committee and our Company Secretary is the secretary of the HR, Nomination and Remuneration Committee.

Scope and terms of reference:                       

Terms of reference for the HR, Nomination and Remuneration Committee are as follows:

  1. To decide the annual bonus / variable pay pool Performance Related Pay (PRP) and policy for its distribution across the executives (including Board Level executives) and non-unionised supervisors within the prescribed limits for each financial year.
  2. To examine all the proposals related to HR issue and give its recommendations.
  3. The recommendations of the “HR, Nomination and Remuneration Committee” are placed before the Board of Directors for approval.

 c.  CSR & Sustainability Committee

The CSR & Sustainability Committee was re-constituted on February 9, 2018. It presently comprises of the following members:

Name of the Directors

Position in the Committee

Designation

Kanwaljit Deol

Chairman

Part-Time Non-Official (Independent) Director

Cmde Sanjeev Nayyar, IN (Retired)

Member

Director (Shipbuilding)

Asit Kumar Nanda

Member

Director (Personnel)

Our Company Secretary is the secretary of CSR & Sustainability Committee

Scope and terms of reference:

Terms of reference for the CSR & Sustainability Committee are as follows:

  1. Formulate and recommend to the Board, a Corporate Social Responsibility and Sustainability Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule - VII of the Companies Act, 2013.
  2. Recommend amount of expenditure to be incurred on CSR activities.
  3. Monitor the Corporate Social Responsibility and Sustainability Policy of the Company and its effective implementation from time to time.

d. Stakeholders Relationship Committee

The Stakeholders Relationship Committee was constituted pursuant to the Board Resolution passed on November 14, 2017. It presently comprises of the following members:

Name of the Directors

Position in the Committee

Designation

Bharat Bhushan

Chairman

Part-Time Non-Official (Independent) Director

Kanwaljit Deol

Member

Part-Time Non-Official (Independent) Director

Sarvjit Singh Dogra

Member

Director (Finance)

Asit Kumar Nanda

Member

Director (Personnel)

Scope and terms of reference:

The Committee shall consider and resolve the grievances of the security holders of the listed entity including complaints related to transfer of shares, non-receipt of annual report and non-receipt of declared dividends.

Apart from the abovementioned committees our Company has also constituted the following Committees:

  1. Risk Management Steering Committee

Pursuant to the Risk Management Policy of our Company approved vide a Board resolution dated August 25, 2014, the Risk Management Steering Committee was constituted vide C&MD’s Ty Order No. 19/15 dated May 5, 2015, which currently consists of:

Name of the Directors

Position in the Committee

Designation

Cmde Sanjeev Nayyar, IN (Retired)

Chairman

Director (Shipbuilding)

Asit Kumar Nanda

Member

Director (Personnel)

Sarvjit Singh Dogra

Member

Director (Finance)

Arun Ratan Pal

Member

CGM (ERP)

The terms of reference of the risk management steering committee of our Company include the following:

  1. Lead the Risk management initiative within the Company.
  2. Set standards for risk documentation and monitoring.
  3. Recommend training programs for staff with specific risk management responsibilities.
  4. Review and approve the risk management report including selection of critical risks to be put before the Board.
  5. The Risk Management Steering Committee shall be responsible for reviewing the risk appetite of the company on a yearly basis and revising the same based on changes in internal/ external business environment and stakeholder expectations.

b.  IPO Committee

In addition to above committees, our Board has also constituted an IPO Committee pursuant to a resolution dated November 14, 2017, which currently consists of

Name of the Directors

Position in the Committee

Designation

RAdm Vipin Kumar Saxena, IN (Retired)

Chairman

Chairman & Managing Director

Ashwani Kumar Mahajan

Member

Government Nominee Director

Sarvjit Singh Dogra

Member

Director (Finance)


The terms of reference of the IPO Committee of our Company include the following:

  1. Approve the Restated/ Audited Financial Statements for inclusion in the DRHP and/ or this RHP and/ or the Prospectus as the case may be in connection with this Offer.
  2. Approve, adopt and file the DRHP, RHP and the Prospectus for this Offer, with SEBI, the RoC, of the State in which the Corporate Office of the Company is located and/or the Stock Exchanges, as the case may be, and to make any corrections or alterations therein.
  3. Finalise, approve, execute and deliver or arrange the delivery of this Offer Agreement, Syndicate Agreement, Underwriting Agreement, Share Escrow Agreement, certificates, Registrar Agreement and all other documents, agreements and instruments as may be required or desirable in relation to this Offer and any amendments, supplements, notices or corrigenda thereto, together with any summaries thereto, as may be required or desirable in connection with this Offer of the Equity Shares by the Company;
  4. Open with the Bankers to this Offer such account as are required by the regulations issued by SEBI.
  5. Open and operate bank accounts of the Company in such name and style as may be decided for the handling/ collecting/ refund for this Offer and to authorize one or more officers of the CPSE to execute all documents/ deeds as may be necessary for this Offer;
  6. Make applications to the RBI and such other authorities as may be required for the purpose of Allotment of Equity Shares to Non-Resident Investors.
  7. Approve all actions required to dematerialize the Equity Shares of the Company;
  8. Do all such acts, deeds, matters and things and execute all such other documents etc. as it may, in its absolute discretion, deem necessary or desirable for such purpose, including without limitation, to Allot the Equity Shares to the successful Allottees as permissible in law, issue of share certificates in accordance with the relevant rules;
  9. Make applications for listing of the Equity Shares of the Company and to execute and to deliver or arrange the delivery of necessary documentation to the concerned Stock Exchange(s).
  10. Take all action as may be necessary or authorized in connection with this Offer;
  11. Seek the admission of the Company’s Equity Shares into the CDSL and the NSDL;
  12. Seek, if required, the consent of the Company’s lenders, parties with whom the Company has entered into various commercial and other agreements, all concerned Government and regulatory authorities in India or outside India, and any other consents that may be required in connection with the IPO.

 

ORGANIZATION STRUCTURE OF OUR COMPANY

 Key Management Personnel and Senior Management Personnel

The following persons are the Key Management Personnel of our Company:

  1. RAdm Vipin Kumar Saxena, IN (Retired), Chairman & Managing Director;
  2. Sarvjit Singh Dogra, Director (Finance) & CFO;
  3. Asit Kumar Nanda, Director (Personnel);
  4. Cmde Sanjeev Nayyar, IN (Retired), Director (Shipbuilding); and
  5. Sandeep Mahapatra, Company Secretary and Compliance

In addition to the persons mentioned above, the following persons are Senior Management Personnel of our Company:

  1. Arup Ratan Pal, CGM (ERP, YM)
  2. Dumpala Vijayam, CGM (Engineering, DEP)
  3. Cmde PR Hari, IN (Retired), CGM (PP & C)
  4. Dibyendu Maitra, CGM (Main Works Unit)
  5. Siddhartha Ray, GM (Finance)
  6. Captain Jagmohan, IN (Retired), GM (Design)
  7. Venkatesh Murthy, GM (Material)
  8. Abhaya Kumar Mahapatro, GM (HR & Administration)
  9. Commander Soumya Choudhury, IN (Retired) GM (FOJ)
  10. Commander Bhaskar Sengupta, IN (Retired), GM (QA, VD and IE&P)
  11. DIG (Retired) Subrato Ghosh, GM (Rajabagan Dockyard)
  12. Commander Bhubaneshwar Mishra, IN (Retired), AGM In-charge (Taratala Unit)

All Key Management Personnel and Senior Management Personnel are permanent employees of our Company.

For details of RAdm Vipin Kumar Saxena, IN (Retired), Sarvjit Singh Dogra, Asit Kumar Nanda and Cmde Sanjeev Nayyar, IN (Retired) see “Our Management – Brief biographies of the Directors” on page 175.

Sandeep Mahapatra

Sandeep Mahapatra was appointed as a Company Secretary of our Company with effect from November 23, 2007. He was designated as the Compliance Officer of the Company for the purposes of SEBI Listing Regulations with effect from July 21, 2017. He is a member of the Institute of Company Secretaries of India. He also holds a degree in Master of Commerce and Bachelor of Law from Utkal University, Bhubaneswar. Prior to joining our Company, he worked as the Company Secretary of Bilati (Orissa) Limited from February 1, 1996 to September 30, 2007. He holds an experience of more than twenty-one (21) years in the Secretarial and Legal functions.

Brief Profiles of our Senior Management Personnel

Arup Ratan Pal

Arup Ratan Pal is the CGM (ERP & YM) of our Company. He has been associated with our Company since March 6, 2006. He holds a bachelor’s degree in Electrical Engineering from Jadavpur University and Post Graduate Diploma in Information Technology and Management from All India Management Association. He has over twenty-two (22) years of experience and was in the past associated with Suzlon Windfarm Services Limited, Alstom Projects India Limited, ABB Limited and NTPC Limited.

Dumpala Vijayam

Dumpala Vijayam is the CGM (Engg. & DEP) of our Company. He has been associated with our Company since October 25, 2011. He holds a bachelor’s degree in Mechanical Engineering from Kakatiya University and a Post Graduate Diploma in Industrial Engineering from the National Institute of Industrial Engineering (formerly known as National Institute for Training in Industrial Engineering). He has over twenty-eight (28) years of experience and was in the past associated with BEML Limited, Bharat Dynamics Limited, Hindustan Aeronautics Limited and The General Electric Company of India Limited.

Cmde PR Hari, IN (Retired)

Cmde PR Hari is the CGM (PP & C) of our Company. He has been associated with our Company since December 31, 2016. He holds a Bachelors’ degree in Mechanical Engineering from Jawaharlal Nehru University, New Delhi, Degree of Master of Science in Defence and Strategic Studies from the University of Madras. He has over twenty-eight (28) years of experience and was in the past associated with the Indian Navy as a Cmde.

Dibyendu Maitra

Dibyendu Maitra is the CGM (Main Works) of our Company. He has been associated with our Company since April 13, 1982. He holds a Bachelors’ degree in Mechanical Engineering from the University of Calcutta. He is also an associate member of the Institute of Cost and Works Accountants of India.

Siddhartha Ray

Siddhartha Ray is the GM (Finance) of our Company. He has been associated with our Company since August 20, 2007. He holds Bachelors’ degree in Statistics from the University of Calcutta and he is also an associate member of the Institute of Cost and Works Accountants of India. He has over twenty-one (21) years of experience and was in the past was associated with TIL Limited, The Jay Engineering Works Limited, Tirupati Jute Industries Private Limited and Steinhaus (India) Private Limited.  

Captain Jagmohan, IN (Retired)

Captain Jagmohan is the GM (Design) of our Company. He has been associated with our Company since April 4, 2016. He holds Bachelors’ degree in Naval Architecture and Shipbuilding from the Cochin University of Science and Technology, a diploma in Naval Construction from the IIT, Delhi and holds Masters’ Degree in Ocean Engineering from the IIT, Kharagpur. He has over twenty-six (26) years of experience and was in the past associated with the Indian Navy as a Captain.   

Venkatesh Murthy

Venkatesh Murthy is the GM (Material) of our Company. He has been associated with our Company since May 9, 2016. He holds a Bachelors’ degree in Mechanical Engineering from the University of Mysore. He has over twenty-three (23) years of experience and in the past, was associated with BEML Limited.

Abhaya Kumar Mahapatro

Abhaya Kumar Mahapatro is the GM (HR & Administration) of our Company. He has been associated with our Company since May 11, 2016. He holds a Bachelor’s (Honours) degree in Chemistry Hons from Berhampur University, Masters’ degree in Arts from Berhampur University and a diploma in Training and Development from Indian Society for Training and Development. He has over twenty-six (26) years of experience and in the past, was associated with Ferro Scrap Nigam Limited, Heavy Engineering Corporation Limited and United Bank of India.

Commander Soumya Choudhury, IN (Retired)

Commander Soumya Choudhury is the GM (FOJ) of our Company. He has been associated with our Company since November 12, 2007. He holds a Bachelors’ degree in Electrical Engineering from the University of North Bengal and Post Graduate Diploma in Operations Management from India Management Association. He has over twenty-four (24) years of experience and in the past, has been associated with Indian Navy as a Commander.

Commander Bhaskar Sengupta IN (Retired)

Commander Bhaskar Sengupta is the GM (QA, VD and IE&P) of our Company. He has been associated with our Company since January 18, 2010. He holds a Bachelor (Honours) degree in Naval Architecture from IIT, Kharagpur, a Diploma in Naval Construction from the IIT, Delhi and a Certificate in Master of Business Administration (Part Time) from Faculty of Management Studies, University of Delhi. He has over twenty-one (21) years of experience and in the past, has been associated with Indian Navy as a Commander.

DIG (Retired) Subrato Ghosh

Subrato Ghosh is the GM (Rajabagan Dockyard) of our Company. He has been associated with our Company since October 3, 2016. He holds a Bachelors’ degree in Mechanical Engineering from Dayalbagh Educational Institute (Deemed University), Agra, a Masters’ degree in Engineering (Mechanical Marine Engineering) from the University of Pune and holds a Masters’ degree in Business Administration from Jamia Millia Islamia, New Delhi. He has over twenty-nine (29) years of experience and in the past, has been associated with Indian Coast Guard and NCCBM.

Commander Bhubaneshwar Mishra, IN (Retired)

Bhubaneshwar Mishra is the AGM In-charge (Taratala Unit) of our Company, having joined our Company on January 17, 2013. He is qualified in Basic Engineering course from the Naval College of Engineering, Lonavala. He holds a post graduate diploma in Management from Jamnalal Bajaj Institute of Management Studies, University of Mumbai in collaboration with college of Naval Warfare at Karanja in the year 2007. Prior to joining our Company, he was associated with the Indian Navy.

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Last Reviewed and Updated on 14 December 2018

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