Garden Reach Shipbuilders & Engineers Ltd

Dear Shareholders,

Your Board of Directors is delighted to present the Annual Report on the performance of your Company and its Audited Financial Statements for the Financial Year ended 31^st March 2024, along with the Reports of the Statutory Auditors and the Comptroller & Auditor General of India (C&AG) thereon.

FINANCIAL PERFORMANCE

The financial performance of your Company has been exceptional during the financial year 2023-24. During the year, the Company has registered an improvement in Revenue from Operation by 40%, by registering 3,592.64 crore against 2,561.15 crore in the previous year. Furthermore, EBIDTA and PAT experienced robust growth, increasing by 52% and 57%, respectively, underscoring our strong operational performance and profitability.

The financial highlights for the financial year 2023-24 and 2022-23 are summarized below: ( in crore)

The financial position of your Company as on 31 March 2024 and 31 March 2023 is appended below: ( in crore)

Value of Production

Your company has achieved a record Value of Production (‘VoP') of

3,588.46 crore as against 2,547.84 crore during the previous year. The comparative VoP for the three Divisions of the Company are as follows: ( in crore)

Net Worth

During the year under review, your Company reported a Net worth of 1,673.44 crore as on 31 March 2024 against 1,413.82 crore as reported on 31 March 2023.

Value Addition

The Value added during the financial year under review was 1,335.21 crore as against 953.81 crore during the previous year. The Value added per employee rose to 80.97 lakh compared to 54.60 lakh in the previous year.

Appropriations

Considering the financial performance of your Company in the year 2023-24, the Board of Directors are pleased to recommend the following appropriations from the disposable surplus: ( in crore)

Contribution to the Exchequer

During the financial year 2023-24, your Company contributed 53.41 crore to the National Exchequer by way of Income Tax and GST.

Dividend Distribution Policy

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Board of Directors of the

Company has formulated a Dividend Distribution Policy keeping in view the provisions of SEBI Listing Regulations, the Companies Act, 2013 and Guidelines issued by the Department of Public Enterprises (DPE) and the Department of Investment and Public Asset Management (DIPAM). The Policy is available on the Company's website at https:// grse.in/wp-content/uploads/2022/04/GRSE-Dividend-Distribution-Policy.pdf.

Dividend

Pursuant to the approval of the Board of Directors on 13 February 2024, your Company has paid an interim dividend of 7.92/- per equity share of face value of 10/- each to Shareholders who were on the Register of Members as on 23 February 2024, being the record date fixed for this purpose. Further, the Board, at its meeting held on 22 May 2024 has recommended final dividend of 1.44/- per equity share of face value of 10/- each for the financial year 2023-24. Thus, the total dividend for the financial year 2023-24, if approved by the Shareholders, would be 9.36/- per equity share.

MOU Rating

Your Company achieved "Excellent" rating with a score of 90 out of 100 for FY 2022-23 under MoU Evaluation by the Department of Public Enterprises. Further, on the basis of actual achievements vis-?-vis parameters laid down in the MoU signed with the Government of India, your Company is expected to maintain "Excellent" rating once again for its performance during the FY 2023-24.

Directors' Report

A. SHIPBUILDING

The Company has achieved a total shipbuilding income of 3,373.22 crore during 2023-24 as against 2,454.89 crore in 2022-23. Notably, the Company delivered a Survey Vessel (Large) to Indian Navy on 04 Dec 2023, which was commissioned on 03 Feb 2024 at Vizag. Further, the details of vessels under construction in your Company as on 31 Mar 2024 are as follows:

Technical Acceptance of NG Ferry for Govt. of West Bengal was successfully completed on 22 Mar 24. The Shipyard also completed major milestones on various projects during the financial year as follows:

Commissioning

Delivery

Launching

Keel Laying

Start Production

B. SHIP REPAIR

The Ship Repair Division of your Company has effectively utilised all the three dry-docks taken from Syama Prasad Mukherjee Port (SPMK), Kolkata and successfully completed docking of 18 Ships and Crafts at SPMK, Kolkata and Okha during the FY 2023-24. Additionally, it successfully conducted refits for 12 ships and Crafts, amounting to a total order value of 91.20 crore. The revenue from Ship Repair activities surged to 92.89 crore in the year 2023-24 from 33.98 crore in the year 2022-23, reflecting substantial growth and operational efficiency.

C. ENGINEERING DIVISION

The Value of Production (VoP) achieved by the Engineering Division during the financial year 2023-24 amounted to 167.17 crore in comparison to 69.82 crore in financial year 2022-23.

Portable Steel Bridge Unit

During the financial year 2023-24, the Bailey Bridge unit has achieved a Value of Production (VoP) totalling 140.24 crore, marking a significant increase from 69.30 crore in the previous year. This included the production of 90 bridges totalling 6,750 MT, compared to 78 bridges totalling 5,850 MT in the preceding year.

In addition, the Company exported seven sets of 80-feet single-lane modular bridges to the Bangladesh Army under DLOC, amounting to

8.92 crore. Furthermore, one set of 120-feet double-lane modular bridge was delivered to Project Dantak (BRO) in Bhutan during the fiscal year 2023-24.

During the year, your Company swiftly delivered 12 sets of various spans of Bailey Bridges to PWD, Himachal Pradesh in a short span of only two months to restore immediate and critical geo-connectivity in the flood affected regions of Himachal Pradesh.

Your Company also achieved a commendable milestone by delivering 26 sets of double-lane MSBs to BRO under the MoU with DGBR (BRO). Notably, GRSE successfully launched 25 double-lane MSBs across various projects in remote areas of Arunachal Pradesh and the Union Territory of Ladakh.

Additionally, the Company delivered three sets of Bailey Suspension bridges and two sets of 200-feet single-lane modular bridges to Project Swastik (BRO) under the MoU with DGBR (BRO). These strategic installations significantly contributed to the restoration of geo-connectivity in flash flood-affected areas in North Sikkim.

Under its R&D initiatives, the Bailey Bridge Unit of your Company has successfully conducted Load Testing of a 5.30 M Carriageway 200-feet

Single Lane Modular Bridge at Belur, under the supervision of CSIR-SERC, Chennai. This bridge, a first of its kind in India, complies with the requirements of IRC: 6 provisions.

Deck Machinery Unit

Deck Machinery Unit of your Company specialises in manufacturing and supplying various Deck Machinery equipment such as Anchor Capstan, Anchor Windlass, Mooring Capstan, Dock Capstan, General Purpose Davits, Ammunition Davit, Electric Boat Davits, Electro-Hydraulic Boat Davits, Survey Motor Boat Davits, Hydrographic Davits, Oceanographic Winch, Anchor cum General Purpose Winches for beaching operations, Helicopter Traversing System (Both Rail based and Rail Less type), etc. Also, the unit is providing product support for all deck machinery equipment under exploitation by the customers and furnishing spares apart from refurbishment of equipment based on the requirements of Indian Navy and Indian Coast Guard. In FY 2023-24, the Deck Machinery Unit achieved a Value of Production (VoP) amounting to 26.93 crore which was 0.52 crore last year. During the year, total of thirty-four (34) Nos. of different types of deck machinery equipment have been supplied to various new construction yards and operational ships of the Indian Navy. The division has achieved certain major firsts to its credit which are highlighted in the succeeding paragraphs.

Major Evolutions

The Rail Less Helicopter Traversing System (RLHTS) has been successfully indigenised and proven on twin hangar platform (P15B vessel INS Imphal). This pioneering achievement is a first of its kind in a Naval platform across the globe with indigenous Ground Support Equipment (GSE) fabricated suitably for ALH MK-I helicopters. The success has been noteworthy as the Sea Acceptance Tests (SATs) were completed without any observations and has earned accolades from the agencies of Indian Navy. Notably, the Telescopic Helicopter Hangar, complete with hangar doors originally planned for import from overseas firms, has been designed, developed, manufactured, and validated in-house by way of Factory Acceptance Trials (FATs) followed by successful trials at harbour and sea to the satisfaction of Indian Navy. GRSE DKMC takes pride in design, development, manufacturing and providing product support of the largest shipboard mooring capstan of 15T capacity. A contract for three years has been put in place for providing unhindered support to this equipment. The development of a 3-ton Deck Crane with telescopic capabilities, boasting a maximum reach of 13 meters, for the Survey Vessel Large (SVL) project has been completed successfully. This crane has been validated on the first two SVL vessels, with installation on the remaining two ships currently in progress.

D. ENGINE DIVISION

The Diesel Engine Plant (DEP) of your Company at Ranchi has achieved successful completion of Factory Acceptance Trials and delivery of fourteen (14) in number 1 MW Diesel Alternators (DAs) during the year for the P17A project.

DEP Ranchi has also delivered two (02) MTU 4000 series engines to the Indian Coast Guard following the completion of W6 routines and successful Factory Acceptance Trials.

The Engine division achieved a notable Value of Production of 47.90 crore during the financial year 2023-24 in comparison to 22.97 crore last year.

Bailey Bridge Components are also being manufactured at DEP unit at Ranchi, where Bailey Bridge Division of DEP Unit achieved a VoP of approx. 22.56 crore and production of 1573 MT during the financial year 2023-24.

DEP Ranchi is also executing a running rate contract with NSRY Karwar for the W5 routines of 4000 Series MTU engines.

ORDER BOOK POSITION

The total order book position of your Company for the three (3) divisions as on 31 Mar 2024 is as follows: ( in crore)

NEW INITIATIVES

To foster long-term business growth and embrace new technologies, your company has taken up the following major initiatives through signing of Memoranda of Understanding (MoUs) during FY 2023-24: (a) Lloyd's Register Marine and Offshore India LLP, Mumbai, Maharashtra for collaboration in the Design & Development of Hydrogen Fuel Cell Ferry.

(b) M/s Syama Prasad Mookerjee Port, Kolkata, West Bengal to design and construct Green Vessels that meet the specific operational and environmental requirements of the Port Authority (SMPK).

(c) M/s Border Roads Organization (BRO) for manufacture, supply, transport, launch and erection of 10 sets of 400 feet span Bailey Suspension Bridges (40T Single Vehicle) reinforced with Timber Decking and Galvanized Finish.

(d) M/s Steel Authority of India (SAIL) for availability of raw materials like special grade DMR steel in time for GRSE.

(e) M/s. KONGSBERG Maritime Sweden AB for license production with localization of the Kongsberg waterjets to support the indigenous content / Indigenous Assembly of Water Jets. (f) M/s Caterpillar Inc., USA for Transfer of Technology regarding development of a Medium Speed Marine Diesel Engine – 6 MW for Indian Navy.

(g) Individual License Agreement with M/s Rolls-Royce Solutions GmbH, 88040 Friedrichshafen, Germany, as a part of the Framework License Agreement for Diesel Engine defining the business relationship, included products, conditions, duties, and responsibilities of the Parties.

(h) M/s Crawley & Ray (F & E) Pvt. Ltd for collaboration in design and manufacture of type tested marine valves under the brand name of GRSE.

(i) M/s. Artson Engineering Ltd. Mumbai and M/s. Vishwakarma Salvage Pvt. Ltd., Porbandar, Gujarat to undertake ship repair / refit and allied activities at GRSE / GRSE-KPDD / elsewhere in India as ship repair associate.

(j) M/s Syama prasad Mookerjee Port, (SMPK), Kolkata for Establishment of Portal to provide repair services to vessels calling at ports of Kolkata & Haldia.

(k) Modest Infrastructure Private Limited of the Ultimate Holding Company V S DEMPO HOLDINGS PVT. LTD., Panaji, Goa for ‘Cooperation in Shipbuilding on West Coast'.

(l) Naval Group SA, France for Collaboration in design for warship construction.

(m) Hooghly Cochin Shipyard Ltd. (HCSL), Kolkata, West Bengal for collaboration in resource utilisation (engineering, procurement) and construction of ships by GRSE. (n) M/s Seatech Solutions International (S) PTE Ltd. & Shift Clean Solutions Ltd. and American Bureau of Shipping for collaboration on development and construction of the 50T BP Electric Tug – E-VOLT 50 ("Vessel").

(o) M/s Rudram Infotech, Ahmedabad, Gujarat for the purpose of Business Development and marketing of GRSE products.

(p) M/s Maritime Tactical Systems Inc., Florida, USA to define the rights and obligations of the Parties with respect to the use, handling, protection, and safeguarding of proprietary Information which is disclosed by MARTAC to GRSE.

(q) MoU with Indian Register of Shipping (IRS) for collaboration to jointly pursue and execute contracts for the development of autonomous and green energy vessels, leveraging the complementary capabilities of GRSE and IRS.

(r) MoU with Eurotech Pivot Solutions Pvt Ltd., Coimbatore for collaboration on the Development of Air Cushion Vehicles.

Next Generation Electric Ferry: Your Company has developed the design for a fully electric, battery-operated ferry for passenger transportation in the inland waters. This 24m long catamaran hull aluminium vessel with FRP superstructure shall have a max speed of 8 Knots and a capacity to carry up to 150 passengers. This pioneering effort promotes green technologies in the inland water transportation sector, marking a significant step towards replacing diesel ferries and reducing environmental pollution. The Company has successfully built and delivered one vessel to the Government of West Bengal as a pilot project.

Unmanned Surface Vessel (USV): Your Company has developed a 5m USV prototype called ‘SWADHEEN'. The potential roles of the USV are bathymetric survey and mine-hunting. The remote-control capabilities have been successfully demonstrated, and the prototype is being enhanced further with collision avoidance capabilities with required payloads for defined potential roles. In September, 2023, GRSE received an order from NSTL, DRDO for the design and development of USV to communicate between various submerged vehicles. Your company has also been issued a project sanction order under Make II project ASV MCM by Indian Navy in Nov 23 for the design and development of Autonomous Surface Vessel – Mine

Counter Measure (ASV MCM) which will play a critical role in securing maritime territories by effectively countering the threat of sea mines.

Autonomous Underwater Vehicle (AUV): GRSE has developed an Autonomous Underwater Vehicle of length 2.15m for Mine Counter Measure operations, Reusable ASW training target, and passive acoustic monitoring. Integration of payloads is under progress.

Unmanned Aerial Vehicle (UAV): Technology for UAVs (Drones) which can be successfully launched and recovered by ships at sea is still in a nascent stage. GRSE in association with M/s Tunga Aerospace is in the process of developing Indigenous Ship Based Aerial Unmanned Drones (UAV) in the country, which will be of great use to the Navy, Coast Guard as well as Coastal Police. This UAV is designed to operate seamlessly offering round-the-clock surveillance capabilities from a ship. One of the key features of this UAV is its ability to autonomously recover on the ship's deck, further enhancing its operational efficiency. The UAV will transmit real-time surveillance video feeds to a ground control station located on the mother ship, allowing for quick and informed decision-making during missions. With its autonomous capabilities and mission-driven design, this UAV represents a significant leap in technological innovation for maritime operations.

MAKE IN INDIA INITIATIVES

Your Company has implemented the "Make in India and Indigenisation" Policy whereby indigenous vendors are encouraged to quote with maximum indigenisation content through Licensed production with collaboration, Licensed production by way of Transfer of Technology (ToT), Co-production, Assembling, Design and Manufacture in India with ToT. Your Company has developed in-house capabilities to design & build most modern warships in the country and has achieved over 80% indigenisation for the recently completed and ongoing shipbuilding projects (Landing Craft Utility (LCU) Ships, Anti-Submarine Warfare Corvettes, Anti-Submarine Shallow Water Craft (ASW-SWC), Survey Vessel Large (SVL) and P-17A Stealth Frigate ) for Indian Navy, which is a major step towards achieving self-reliance in state-of-the-art warship design and construction. Ministry of Defence through Department of Defence Production (DDP) published 04 Positive Indigenisation List (PIL) and through Department of Military Affairs (DMA) published 05 PILs respectively for which there would be an embargo on the import beyond the timeline indicated against them. This is a big step towards self-reliance in defence. This offers a great opportunity to the Indian defence industry to manufacture these items using own design and development capabilities to meet the requirements of the Armed Forces. GRSE has identified total 62 items (37 items from DDP-MoD List & 25 items from DMA-MoD list) for indigenisation. GRSE has already indigenised 27 items out of 37 items specified in 04 PILs promulgated by MoD-DDP and indigenization of rest 10 items are scheduled to be completed by year 2027.

GRSE has uploaded 58 items for Public View (37 PIL Items, 17 Non-PIL items and 4 items proposed for PIL-5 of DDP-MoD) at SRIJAN Defence Portal for public view, which were earlier imported or indigenous vendors not available. GRSE has successfully indigenized 35 items of this list (27 are PILs and 08 are non-PILs). GRSE has identified 17 Non-PIL items and of them 08 Non-PIL items are already indigenised. The Make-II framework (Industry funded prototype development) was implemented at GRSE on 09 Jul 22. As on date, GRSE has 08 items identified under Make-II project, of which 04 are non-PIL and 04 are PIL items. 02 non-PIL and 01 PIL items have already been indigenised, whereas, indigenization / development of rest 05 items scheduled to be completed by Dec 2027.

With regard to Innovations for Defence Excellence (iDEX), GRSE has identified 04 iDEX projects, namely, (a) Active Roll Stabilization System (IDEX DISC-05), (b) AI Enable Welding Helmet (IDEX DISC-06), (c) Implementing Industry 4.0 for shipyard without Wi-Fi connectivity (IDEX DISC-09), and (d) Heavy Duty Non-Slip Epoxy Wearing Surface for Modular Steel Bridge Decks (IDEX DISC-10). The contract for manufacturing and supply of 30 mm Naval Surface Guns worth 248.50 crore for the Ministry of Defence (MoD) / Indian Navy was signed on 24 May 23 as a step towards indigenisation of weapon system for Indian Armed Forces Self-reliance in defence manufacturing is a crucial component of effective defence capability to maintain national sovereignty and achieve military superiority. As a part of these initiatives, a framework, the "Mission Raksha Gyan Shakti" was instituted in 2018 by the Ministry of Defence. This impetus from Ministry has become key driver, stimulating innovation as well as ingenuity in the GRSE ecosystem. GRSE has filed 143 IPRs (139 IPRs post MRGS launching) out of which

95 IPRs are granted/ registered (15 Patents, 64 Copyrights & 16 Trademarks) as on date. GRSE trained around 1385 personnel (own employees as well as vendors personnel) with an objective to imbibe technology and innovation driven work culture. Further, to promote and encourage employees towards innovation "Employee Innovation Scheme" has been promulgated at the company level in Jan 2019 which includes monetary and career encouragement benefits.

GRSE Accelerated Innovation Nurturing Scheme – 2023 (GAINS 2023): In pursuance of ‘Make in India' and ‘Start-up India' initiatives of the Government of India, your company has taken an initiative of identifying and encouraging development of innovative solutions, as part of the shipyard's technology development efforts, by leveraging the vast Start-up ecosystem created in the country. The GRSE Accelerated Innovation Nurturing Scheme (GAINS) is envisaged as a means to leverage this eco system for addressing present and emerging challenges in the ship design and construction industry, while also achieving the objectives of ‘Atmanirbharata'. GAINS 2023, an Open Innovation Challenge, was launched by the Honourable Minister of State for Skill Development, Entrepreneurship, Electronics & IT, Shri Rajeev Chandrashekar on 22 May 23. Artificial Intelligence, Renewable/ Green Energy, and Energy Efficiency and Efficiency Enhancement, which are key focus areas for GRSE were the thematic areas for this challenge. This open challenge received an overwhelming response from innovators all across the country, from which six promising proposals were selected for detailed evaluation in Stage II and paid incentives of upto 4 Lakh each for their efforts. After a rigorous down selection process, following proposals received from M/s Smart Machines and Structures (MSME) and M/s Bodkin Technologies Pvt Ltd (Start-up) were declared winners of GAINS 2023 on 29 Sep 23 and shall be funded by GRSE. Development orders to GAINS 2023 winners were handed over on 26 Mar 24 during the "GAINS-2023 Funding Award Ceremony".

EXPORT INITIATIVES

Your Company is the first Indian shipyard to export a warship, an Offshore Patrol Vessel to Mauritius in 2014. GRSE also exported a Fast Patrol Vessel ‘SCG PS Zoroaster' to the Govt. of Seychelles and completed its Guarantee Refit & Dry Docking (GRDD) on 31 Mar 22. Your Company also exported 01 No. Ocean Going Vessel (OGV) to Republic of Guyana at a value of 12.73 Million USD.

Your Company has taken initiatives to export Naval ships to the friendly foreign countries and has identified SAARC, ASEAN, African & Latin American countries. Countries such as Bangladesh, Guyana, Philippines, Seychelles, Malaysia, Mauritius, UAE, Vietnam, etc. are in focus.

GRSE regularly supplies Portable Steel Bailey Bridges and its components to the neighboring countries such as Nepal, Bhutan, and Bangladesh. Efforts are on to further enhance the export of Bailey Bridges and their components to other friendly foreign countries as well. During FY 2023-24, your Company has generated revenue of

46.90 crore from export orders which includes 33.60 crore from Shipbuilding and 13.30 crore from the Bailey Bridges.

Your Company is presently executing the following Export Orders: (a) Supply of 06 Patrol/ Surveillance Boats for Govt. of Bangladesh for a value of 1.82 Million USD. (b) Short Refit of Fast Patrol Vessel (FPV) ‘SCG PS Zoroaster' of the Govt. of Seychelles (Basic Refit Cost 23 crore received on 22 Mar 2024) to be completed by 06 months. (c) 02 Nos. Pre-Fabricated Portable Steel Bridge worth 1.82 crore of Nepal and 01 No. Pre-Fabricated Portable Steel Bridge worth 0.09 crore of Bhutan.

INFRASTRUCTURE AND TECHNOLOGICAL MODERNIZATION

In continuation of thrust on infrastructure modernisation & technological upgradation in line with the functional & production necessities, the Company has spent 50 crore as a part of CAPEX investment during the year 2023-24. Some of the major facilities created/modernised during FY 2023-24 and currently in progress are as under: (a) Upgradation of Main Unit (i) Installation of Robotic Welding M/C at Ship Building Shop: Installed Robotic Welding M/C at Bay-4 for continuous automatic welding of flat panel to enhance production capacity. (ii) Renewal of Groundways of Building Berth-1: Renewal of Old existing groundways for launching of ship is under completion. (iii) DA Manifold & piping network of Building Berth-1:

Complete revamping of DA Manifold & Piping Network to facilitate production effectively has been completed.

(iv) Tower Cranes: Case for installation of Tower Crane on Jetty at Main & RBD Unit is underway to facilitate outfitting work of ships.

(b) Upgradation of DEP Unit: The test bed No.1 is being upgraded for testing MTU engine upto 4500 KW at 3000 engine speed. Under this upgradation, Hydraulic Pressure Controlled Dynamometer has been procured and is under installation along with installation of other accessories required for testing of the engines. The total estimated cost towards upgradation is 6.00 crore.

(c) Rooftop Solar Plant: As a part of green energy initiative for reducing the impact of atmospheric climate change, 300 KWp roof top solar power plant has been commissioned in this year at RBD Unit. With this, the total capacity of rooftop solar plant of the Company is now 2250 KW i.e. 2.25 MW, which is more than 50% of total agreement load.

(d) New Steel Stockyard at RBD Unit: Construction of a new steel stockyard at RBD with relocation of a portal crane is in progress.

(e) Concrete Hardstand at RBD Unit: About 4,000 sqm of area has been developed at RBD Unit with concrete hardstand for production support, storage of ship materials & hull blocks.

(f) Retrofitting of Old Buildings at Main & 61-Park: Retrofitting & structural refurbishment/repair of old building of Main (Security Building, ES Building & Time Office) and 61-Park (Block-D & Block-A partially) has been completed.

(g) Refurbishment of Shops & Stores - Refurbishment of major Shops & Stores at RBD, 61-Park & Taratala Units is under completion by replacing old asbestos sheet with metal sheet, structural strengthening and allied jobs.

FUTURE OUTLOOK

A strong order book for design and construction of 18 warships for Indian Navy at this juncture holds exciting times ahead for GRSE. With all the policy initiatives taken by the Government of India in the recent times for encouraging & supporting ‘Atmanirbharta', the overall scenario for warship building looks quite positive in coming years. The defence shipbuilding segment continues to look promising on account of ambitious acquisition plan of the Indian Navy and Indian Coast Guard which is quite encouraging for the Indian Shipbuilders and the entire eco-system. A number of Request for Proposals (RFPs) for various shipbuilding projects have been floated by the MoD during last one year and some more are expected to come out in the near future. Further, the MoD plan to increase export of defence products to 3.59 Billion USD by end of 2024-25 augurs well for all of us. GRSE also plans to enter in to the highly competitive commercial shipbuilding segment in order to address domestic as well as global demands for ships. A dedicated Commercial Shipbuilding Department headed by one CGM level officer has been constituted to explore the vast opportunities prevalent in this sector. Your company has identified Ocean going Ferry (Cargo + Passenger), Tugs, Dredger, Barges, and E-Ferry as targeted non-defence products to promote Export Market in Friendly Foreign Countries (FFCs).

It is a good opportunity for the company to become part of global value chain to meet our vision of becoming global player in Shipbuilding. Our willingness to adopt latest technologies and modern tools in various areas of operations would play a significant role in improving efficiency, quality and productivity of the Company. The company has taken steps to adopt Industry 4.0 practices in its core areas of functioning such as ‘Design', ‘Planning', ‘Production' and ‘Supply Chain Management'. GRSE has strengthened its green energy footprint with inauguration of another 300 kWp capacity of solar power at RBD Unit on 04 Apr 2024. The total capacity of rooftop solar plants at GRSE is now 2250 kWp which is 56% of agreement load of 4MW. GRSE plans to install new Roof-Top Solar Plants of 300 kWp capacity at 61 Park Unit and 200 kWp capacity at Taratala Unit during FY 2024-25. GRSE has plans to further enhance the solar power plant capacity as part of its Green initiatives.

Technical Acceptance of India's largest "Fully Electric 150 Passenger Catamaran Ferry" built by GRSE for Government of West Bengal was signed on 22 Mar 24. This zero-emission ferry is poised to revolutionise passenger transport across River Hooghly as well as National Waterways – 1 and other Metro waterways of the country. GRSE also received a Letter of Intent on 09 Nov 2023 towards construction and delivery of an Ocean Research Vessel for National Centre for Polar & Ocean Research (NCPOR) Goa, under the Ministry of Earth Sciences. The contract value is Rs 839.55 crore. The newly formed "Innovation & New Technology" department at GRSE is also working on several projects incorporating new technologies such as Unmanned Surface Vessel, Autonomous Underwater Vessel, Ship based drones, Green platforms etc.

GRSE has a glorious past and the company's credentials and achievements are unmatched in the Indian Warship building arena. GRSE presently has a world class infrastructure and amongst the best talent that is needed to scale newer heights in shipbuilding. Presently, the company is at the cusp of transformation to embark upon an unprecedented growth trajectory. This entails a mindset change, coupled with efficient project management, strategic partnerships, new technology adaptation and most importantly effective management of resources. GRSE has set its aspirations on "Upgradation as a "Navaratna" Company by 2030 and be Globally recognized as the Best Indian Shipyard".

Your Company's major future plans for steady business growth and stability are as follows: (a) To become a Global player by increasing export footprint by looking at the entire operations from the view point of cost, delivery time, quality & credibility. In this regard, GRSE is actively pursuing all avenues to increase geo-strategic reach for exports of defence as well as commercial ships to friendly foreign countries. (b) Your Company believes that innovation in the production processes coupled with enhanced efficiency and optimum utilisation of resources is the key to reduce production costs. The Company intends to leverage its design, engineering and manufacturing capabilities to improve its procurement and production processes.

(c) Continuous endeavour towards assessment of tentative & likely opportunities from the Indian Navy, Indian Coast Guard, Indian Army, BRO, Ministry of Home Affairs, Ministry of Earth Sciences, National Centre for Polar and Ocean Research, Naval Physical and Oceanographic Laboratory, Inland Waterways Authority of India, Kochi Water Metro, Government of West Bengal and other State Governments over the next five Years.

(d) Your Company is targeting orders from the Indian Navy, Indian Coast Guard, Ministry of Home Affairs, Govt. of West Bengal, Odisha and Tamil Nadu for AMC & Refits of GRSE built vessels & vessels of other companies, and has plans to further strengthen and expand the refit & repair business verticals. (e) Towards diversification, growth of the Engineering and Engine business segments is also being aggressively pursued.

VENDOR DEVELOPMENT WITH IMPETUS TO MICRO, SMALL AND MEDIUM ENTERPRISES

Our vendor base has played a pivotal role in achieving sustainable growth of GRSE and your company is in constant endeavour to strengthen the MSME footprints in different aspect of business growth through various vendor meets, seminars, webinars, etc. organized by various important fora like CII, BCCI, MSME, etc. In the post pandemic chapter too, webinars are being continued to be leveraged for identifying capable entrepreneurs to the GRSE fold. In post Covid19 scenario, when resurgence with time was a real challenge throughout the world, GRSE has continued their production excellency with the delivery of warships within a very short interval. It was only possible when the organization is equipped with world class commercial and best industrial practises and a robust vendor base. The close monitoring of the major vendor's performance, introduction of vendor grievance redressal system, and online performance rating system for the vendors are the other major verticals of such performance. Further, the development of online vendor registration for new vendor has been undertaken in order to improve ease of registration process and minimise the registration cycle time.

In order to develop vendor base, your Company is in constant search for competent vendors including MSMEs through organizing & participating in various Vendor Meets, Seminars, Webinars, etc., organized by various important fora like; BCC (Bharat Chamber of

Commerce), MSME-DFO (MSME-Development & Facilitation Office), NSIC-NSSHO (National Small Industries Corporation-National SC ST Hub office), EEPC (Engineering Export Promotion Council of India), MCCI (Merchants' Chamber of Commerce & Industry), SIDBI (Small Industries Development Bank of India). As a special initiative, your Company had organised an event, "Vendors Meet 2023" - An interactive session with Business Partners for detailed interaction with stakeholders. Several business partners participated in the programme, making it a grand success. Your company has made significant improvement in production with effective execution of contract management on the outsourced jobs, engagement of good capable service & supply vendor, maintaining proper vendor relation and monitoring vendor performance. Your Company has been providing increased thrust on enhancing procurement from Micro and Small Enterprises (MSEs) and has strictly adhered to the restriction/preference on MSME vendors wherever applicable in line with MSMED Act, and same are being strictly followed and monitored closely. Your Company extends technical guidance and requisite support to these industries wherever required by regularly conducting MSE Vendor Development programmes in association with CII and MSME Ministry, Government of West Bengal. In order to meet the requisite quality standard of the product, our quality control personnel are visiting these industries to assist them.

During the financial year 2023-24, your Company procured items worth 987.50 crore from the MSEs, which is approx. 73.76% of the total annual procurement value (considering exclusions as applicable for MSEs). The list of items reserved for procurement from MSEs is available on your Company's website at https://grse.in/policies-for-msme/. Your company is continuously increasing the permanent vendor base after due assessment as per laid down company policy & procedure abiding by directive of MSME Public Procurement Policy. Being a DPSU, your Company has on-boarded on TReDS Platform and MSME Sambandh & MSME Samadhaan portals complying with Government guidelines/ directives.

GOVERNMENT e-MARKETPLACE (GeM)

Since inception of the Government e-Market (GeM) (from 2017), Your company has consistently achieved highest procurement volume on GeM amongst all the shipyards. During the financial year 2023-24, your Company has recorded GeM procurement volume of 572.00 crore.

INFORMATION TECHNOLOGY

Your company has prioritized SAP implementation and IT initiatives extensively across its operations. This includes establishing a robust IT infrastructure with a state-of-the-art on-premise Data Centre in Kolkata and a Disaster Recovery Centre in Mumbai. Since 2010, key business processes such as Supply Chain, Finance, HR, Payroll, Vendor Management, and Plant Maintenance have seamlessly integrated into SAP ERP. Moreover, the company employs advanced technologies like AVEVA CAD, VR LAB, and PDM-PLM to enhance design operations. Cyber Security remains a top priority with a well-defined organizational structure overseen by the Chief Information Security Officer (CISO). The company has implemented AIR-GAP and ILL-based internet LAN across all units, conducted comprehensive Cyber Security Enhanced Awareness Training, and centralized SAP-ERP management to optimize IT infrastructure efficiency. Innovations in Product Data Management (PDM) and Product Lifecycle Management (PLM) software are set to revolutionize operations, particularly in modular construction for P17A ships. Additionally, the company facilitates remote work through secure VPN access and high-end Video Conferencing solutions. The Company also has company-wide comprehensive CCTV surveillance system ensuring effective monitoring, control and enhancing safety and security measure.

Manpower

The total Manpower strength in the roll of the Company as on 31 Mar 2024 was 1,649 including 473 Board level & below Board level Officers on regular roll, 11 Officers and 60 Supervisors on Fixed Term contract. Statements showing the representation of SC/ ST/ OBC / PWD / Women, etc., as on 31 Dec 2023 as well as the total recruitment made during the period from January to December 2023 are given at Appendices "A & B" of this report. Further, in accordance with Ministry of Corporate Affairs Notification dated 05 Jun 2015, Government Companies are exempted from the provisions of Section 197 of the Companies Act, 2013 and its rules thereof.

Industrial Relations

Industrial relations during the period under review across all Units of the Company including DEP, Ranchi remained more or less peaceful. The Management and GRW Mazdoor & Staff Union signed a Memorandum of Understanding on Promotion policy for operative category of employees on 16 May 23 upon receipt of Board approval, Memorandum of Settlement in the same matter was signed on 29 May 23.

The Management and 03 Unions representing Unionized employees of DEP, Ranchi signed a Memorandum of Settlement on Promotion policy for operative category of employees on 03 June 23.

Human Resource Development

The Company is nurturing and developing a well-balanced workforce of talented individuals who can contribute towards enhancing organization's growth trajectory. The Company has undertaken various initiatives to enhance the efficiency of the workforce in an atmosphere that encourages pursuit of individual excellence and cohesive teamwork. In FY 2023-24, your company has prepared and implemented a well-defined Annual Training Plan covering technical, leadership, managerial effectiveness, functional, cross-functional and behavioural competencies development topics for all categories of employees. During the year, 3,860 training man-days (approx.) were achieved through various training programmes. Training programmes were conducted by nominating participants in various online and offline workshops/conferences/webinars organized by external agencies/training providers in India. In-house training programmes were also conducted by inviting faculty/ trainers from reputed institutions/agencies, as well as through in-house faculty.

Employee Engagement Initiatives (A) GRSE DAY CELEBRATION:

The 65^th GRSE Day was celebrated on 22 Apr 2024. ‘GRSE Shri' and ‘CMD's Commendation' were conferred to employees for their outstanding performance in the year 2023. GRSE Merit Awards were given to the employees' children who excelled in their academic performance in the year 2022-23. ‘GRSE Varta 2024', an Annual In-House Journal was released on this occasion. Employees who retired between 01 April 2023 to 31 March 2024 and completed 40 years of service were also felicitated. Taratala Unit was adjudged as cleanest unit and conferred Swachh Unit Award. Prizes for Group Events of the Annual Sports viz Cricket & Volleyball were given to the Runners-up and Winner teams during the event. Employees staged cultural programme which was appreciated by all.

(B) CELEBRATION OF GRSE FAMILY DAY "AHOBAN'

AHOBAN is a day filled with joy and gaiety for recreation of the entire GRSE family. The family members eagerly wait for this annual event. This year AHOBAN was held on 14 Jan 2024 with well thought-out events for each and every family member of GRSE employees. Around 1000 employees and their family members participated in this event. Cultural event was performed by the in-house talents.

(C) VANITA 2024: INTERNATIONAL WOMEN'S DAY

GRSE celebrated International Women's Day in a creative and thoughtful manner. A day-out programme filled with fun and frolic was organized for all the female employees of the company on 06 March 2024. The programme comprised of various activities and scintillating cultural performances by employees.

Keeping in view the organizational requirement, HR policies are reviewed for talent acquisition, talent management, welfare and career progression of employees. The Company has formulated policies for engagement of project-based manpower on contractual basis, re-designation of senior officers as General Manager In-charge, absorption of Fixed term Supervisors in permanent roll and Child adoption leave. In addition, a number of existing policies such as Compensation package scheme, Recruitment and promotion Rules for various category of employees, Foreign TA/DA rules for non-executives, leave entitlement for new joinees were reviewed and revised as per organizational requirement.

Internal induction was conducted for career upgradation of deserving employees of GRSE from non-executive category working in permanent roll of the company under ‘Abhyudaya Scheme for Career Advancement of Non-Executives Category of Employees' in 2023. As per the scheme, selection process consists of knowledge test, skill test and personal interview.

(F) LEADERSHIP DEVELOPMENT PROGRAMMES

Orientation Programme for Capacity Building of Functional Directors of CPSEs was conducted for Officers in Senior Management Level. It aimed to enhance the skills of Functional Directors in fields of corporate governance, finance, risk management, strategic management etc.

(G) MID-CAREER TRAINING PROGRAM

Mid-Career Training Program on "Leading and Managing in the 21st Century" was conducted for Managers and Senior Managers coming in the zone of promotion. It aimed to develop and sharpen the managerial and leadership skills of mid-level managers.

(H) MANAGEMENT DEVELOPMENT PROGRAM

Management Development Program was conducted for newly inducted Assistant Managers in which the officers were groomed in areas of Personality Development, Managerial Skills, Soft skills, Teambuilding etc.

(I) SAFETY TRAINING

Safety Training was conducted for employees as per MoU directives through GST– K in which around 350 employees were trained.

(J) SKILL UPGRADATION AND CERTIFICATION TRAINING PROGRAM

Skill Upgradation and Certification Training Program in various technical trades was conducted in order to improve the efficiency of the operatives in which around 130 employees were trained and certified.

(K) Apprentice Training

The company has trained 210 apprentices during FY 2023-24. Apprentices were engaged under Trade Apprentice, Graduate Apprentice and Technician Apprentice categories and their total strength was approx. 13% of total manpower strength.

The company has a dedicated Apprentice Training Department named Technical Training Centre for conducting Apprenticeship training at Taratala Unit. Apart from the technical training, various development programmes were conducted for overall personality development of the apprentices. Safety awareness training sessions were conducted for all apprentices before they were placed for on-job-training in the yard.

PERSONS WITH DISABILITIES (PWD)

The Company extended all necessary relaxations /concessions to the employees with disabilities as per the Statute / Govt. directives.

EMPOWERMENT OF WOMEN

The women representation is 5.2% of the total strength in the Company at the end of FY 2023-24. During 2023, out of total recruitment of 51 employees 05 were female employees which is 9.8%.

SAFETY AT WORK

The Shipyard has strived to ensure safe working environment at the company, and in order to achieve the goal, systematic approach to safety management has been adopted through close monitoring and implementation of safety norms and procedures at work place. Your company has achieved a safety frequency rate of 1.24 (for permanent workers) and 0.66 (for contractor workers) during the year 2023-24.

In order to maintain high safety standard, your Company has imparted system-based Safety Training to all employees including contractor employees through Group Safety Training Kiosk (GSTK), where more than 167 batches of Safety Awareness Programme on different topics like Material Handling, Hot Work, Electrical Safety, Painting Activity, Height Work Activity, Work at Confined Space etc. have been organized. As a promotional measure, different safety competitions were conducted like drawing competition, picture composition competition and safety quiz competition by arrangement of mobile safety display van

INDUSTRIAL SECURITY

GRSE is a Public Sector Undertaking functioning under the administrative control of the Ministry of Defence, Govt of lndia. The shipyard has been declared a "Prohibited Place" under the Indian Official Secret Act 1923. Sec-2 clause 8 sub clause (a) published under Govt. of West Bengal Gazette Notification Bo. 2145/ (I) (7)-P dated 30th Mar 2004. It is also placed in Category ‘A' i.e. "Highly Sensitive" from security point of view by the IB, Ministry of Home Affairs. The physical security of the production units of our Company has been entrusted to the Armed Guards of Central Industrial Security Force (CISF). Further, twenty-four hours water-front patrolling with armed personnel and a robust CCTV system covering all critical and important locations are in place. The Entry / Exit of all Employees is being done through Facial Recognition System. The Police Clearance Certificate of all Contractor Labourers are being obtained before issue of the Gate Pass.

OFFICIAL LANGUAGE

GRSE is committed to adhere to the Official Language (OL) policy of the Government of India (GoI). During the year 2023-24, the Company has achieved the various targets prescribed in the Annual Programme 2023-24 issued by Dept. of OL, Ministry of Home Affairs (MHA), GoI to transact official work in Hindi. The efforts made towards implementation of Official Language include: (a) Hindi Month Celebrations: Hindi Month and Hindi Day was observed during September-October month in all the Units and Offices of the Company. During the Hindi month, employees of the Company participated enthusiastically in various programs and competitions.

(b) Official Language Implementation Committee: Official Language Implementation Committee (OLIC) meetings were conducted on quarterly basis under the chairmanship of Chairman & Managing Director, to review the progress made by various departments.

(c) Incentives: Incentive Schemes are propagated among all employees and number of employees who took part in these schemes were awarded with cash prize.

(d) Hindi competitions in local schools to encourage the use of Hindi: Use of Official Language is not restricted within the four walls of GRSE but is also publicized outside the Company, by conducting Hindi competitions in Schools. Hindi Essay competition was conducted on 17^th October 2023 in Brahma Hindi Primary School and Hindi Quiz competition was organized on 11^th December 2023 in Fatehpur Hindi Nagri Pracharak Vidyalaya and prizes distributed to best three participants. (e) Hindi competition under the aegis of TOLIC: GRSE organized Hindi Essay competition under the aegis of Town Official Language Implementation Committee on 20^th December 2023. Nominated employees of more than 30 PSUs of Kolkata including GRSE participated in this competition. (f) Rajbhasha Awards:

(i) TOLIC RAJBHASHA SHIELD: Rajbhasha Shield has been awarded to GRSE for the year 2022-23 for Excellence in Implementation of Official Language in the company by Town Official Language Implementation Committee (PSU), KOLKATA. The award presented by Honourable Chairman of TOLIC was received by Director (Personnel) of GRSE at a grand ceremony held at Kolkata on 25^th August, 2023.

(ii) Certificate of appreciation by MHA-OL : GRSE was awarded a certificate of appreciation by Smt. Anshuli Arya, IAS, Secretary, Official Language Department, MHA-OL in the presence of Union Minister of State for Home Affairs, Shri Nishith Pramanik. This recognition was given to the Company for its special contribution in the successful organization of Joint Regional Official Language Conference of East and North-Eastern Regions, organized by the Department of Official Language, Ministry of Home Affairs in Siliguri (West Bengal) on March 08, 2024. (iii) TOLIC Active Participation Award: Active Participation Award has been awarded to GRSE for the year 2023-24 by The Town Official Language Implementation Committee. The Award presented by Honourable Chairman of TOLIC was received by Director (Personnel) of GRSE at a ceremony held at Kolkata on 31^st January 2024.

(iv) Prizes in Various Inter-PSU Hindi Competitions: Our GRSE employees have made us proud by winning 04 different prizes in Various Hindi Competitions organized during the year 2023 by different PSUs under the aegis of TOLIC (PSU), KOLKATA. (v) Manager (OL) has been awarded appreciation letter by TOLIC for Excellence in Implementation of Official Language in the GRSE on 25 Aug 2023.

AWARDS & RECOGNITIONS

During the year, your Company has received various awards and recognitions. Some of the important accolades conferred to the Company are as under:

(a) Governance Now 10^th PSU Award for "Communication Outreach", "Nation Building" and "Reskilling of Employees (Training & Development)" on 22 Mar 24.

(b) "Sakriya Sahbhagita Samman" from the Town Official Language Implementation Committee for the year 2023-24 on 31 Jan 24. (c) 91^st SKOCH Awards for "Unique Transfer & Loading of Fully Built 250 T Goliath Crane" on 27 May 23.

(d) Durga Bharat Param Samman on 18 Oct 23.

(e) PRSI National Awards 2023 for "Coffee Table Book", "Best PSU for Implementing CSR", "Best PSU for Childcare Project", "Best Organisational Effort for Atmanirbhar Bharat" and "New R&D Efforts in Defence Sector" on 25 Nov 23.

(f) 13^th ICC PSE Excellence Award 2023 for "Company of the Year", "Contribution of Women &/ Differently Abled in PSEs", "CSR

& Sustainability", "Operational Performance Exscellence" and "Corporate Governance" on 20 Dec 23.

(g) "Best Strategic Central Public Sector Enterprise of India – Defence (Naval & Shipbuilding)" at 6^th IPSE Awards 2024 on 10 Feb 24. (h) WIPS Award 2024 in the Category "Best Performing Enterprise 2024" on 12 Feb 24.

(i) Cmde PR Hari, IN (Retd), CMD GRSE recognized with ‘CEO of the Year Award' at the 22^nd Global Edition - Business Leader of the Year 2024 & the ‘CEO with HR Orientation Award' at the World HRD Congress 2024 on 26 Feb 24.

(j) CII AI Award in the Project "AI Enabled NDT" on 26 Feb 24.

Directors' Report

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of corporate governance in all spheres of business activity carried out by your Company and continues to lay strong emphasis on transparency, accountability and integrity. Your Company complies with the applicable regulations under the Companies Act, 2013, the SEBI Listing Regulations and also the Guidelines on Corporate Governance for CPSEs issued by Department of Public Enterprises (DPE), except with respect to the composition of Board of Directors viz. appointment of Independent Directors including a Woman Director. GRSE being a Government Company, the power to appoint Directors vests with the Government of India and the Company has made necessary intimations to the Administrative Ministry for filling up the post of Independent Directors including that of a Woman Director. The Company also strives to comply with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Further, DPE Guidelines on Corporate Governance for CPSEs provide that CPSEs would be graded on the basis of their compliance with the Guidelines. DPE has graded GRSE as "Excellent" for the year 2023-24. In terms of Regulation 34 of the SEBI Listing Regulations and DPE Guidelines, a Report on Corporate Governance along with Compliance Certificate issued by M/s. Maheshwari R & Associates, Company Secretaries forms part of this Annual Report.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of your Company comprises a total of ten (10) directors which includes four (4) Whole-Time Directors, five (5) Part-Time Non-Official (Independent) Directors including one (1) Woman Director, and one (1) Government Nominee Director. During the year 2023-24, the following changes took place in the Board of Directors and of Key Managerial Personnel (KMP) of your Company:

DIRECTORS RETIRING BY ROTATION

Pursuant to Section 152(6) of the Companies Act, 2013 and Article 206 and 207 of Article of Association of the Company, Shri Ramesh Kumar Dash, Director (Finance), who has served on the Board of Directors and the longest amongst the retiring directors, is liable to retire by rotation, and being eligible, offers himself for reappointment.

DECLARATION AND MEETING OF CRITERIA BY INDEPENDENT DIRECTORS

During the financial year 2023-24, the Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013, the Guidelines on Corporate Governance for CPSEs issued by the Department of Public Enterprises and the SEBI Listing Regulations. Further, in the opinion of the Board, the Independent Directors fulfil the conditions prescribed under the

SEBI Listing Regulations and are independent of the management of the Company. The Independent Directors of the Company have confirmed that they have registered themselves with the Indian Institute of Corporate Affairs (IICA), and have included their name in the databank of Independent Directors within the statutory timeline and they will also appear for the online proficiency test within the prescribed time, wherever applicable.

MEETINGS OF INDEPENDENT DIRECTORS

During the year 2023-24, a separate meeting of Independent Directors was held on 20 Jan 2024 in which all the Independent Directors were present.

MEETINGS OF THE BOARD

Nine (09) meetings of the Board of Directors were held during the year. For further details, please refer to the ‘Report on Corporate Governance'.

REMUNERATION POLICY & EVALUATION OF BOARD'S PERFORMANCE

Your Company is a Government of India company under the Ministry of Defence. The Directors of the Company are appointed by the President of India and their remuneration is fixed in accordance with the DPE Guidelines by the Administrative Ministry. The Article 194 and 216 of the Articles of Association of your Company also states that the President of India will appoint Directors and determine their remuneration. Since, the Board level appointments are made by President of India, the evaluation of performance of such appointees is also done by the Government of India.

AUDIT COMMITTEE

During the year, the Audit Committee had proper composition in accordance with Section 177 of the Companies Act, 2013, the DPE Guidelines on Corporate Governance for CPSEs, 2010 and the SEBI Listing Regulations. For further details, please refer the ‘Report on Corporate Governance'.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) and 134(5) of the Companies Act, 2013, your Directors hereby confirm that:-(a) In the preparation of the Annual Accounts for the year ended 31 March, 2024, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013, had been followed and there are no material departures; (b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31 March, 2024 and of the profit of your Company for the year ended on that date; (c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(d) The Directors have prepared the Annual Accounts on a ‘going concern' basis; (e) The Directors have laid down internal financial controls to be followed by your Company and such internal financial controls are adequate and were operating effectively; and (f) The Directors had devised proper systems to ensure compliance with the provisions of all the applicable laws and that such systems are adequate and operating effectively.

STATUTORY AUDITORS

Your Company being a CPSE, the Comptroller & Auditor General of India (C&AG) has, under Section 139(5) of the Companies Act, 2013, appointed M/s. Guha, Nandi & Co., Chartered Accountants, Kolkata, as the Statutory Auditors of the Company for the financial year 2023-24.

The Comments of the C&AG u/s 143(6) of the Companies Act, 2013 on the Financial Statements of the Company for financial year 2023-24 form part of this Report.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 and the Companies (Cost Record and Audit) Rules, 2014, the Board of Directors of your Company has appointed M/s. Chatterjee & Co., Cost Accountants, Kolkata, as the Cost Auditors of your Company for the financial year 2023-24 to conduct audit of cost records maintained by your Company.

SECRETARIAL AUDITOR

In terms of Section 204(1) of the Companies Act, 2013, the Board of your Company has appointed M/s. Mehta & Mehta, Company Secretaries to conduct Secretarial Audit of the Company for the FY 2023-24. The Secretarial Audit Report of M/s. Mehta & Mehta, Company Secretaries is placed at Appendix - "C" to this Report. The Secretarial Audit Report has no adverse remarks. However, the other observations and clarifications made by the Secretarial Auditor in their Secretarial Audit Report are self-explanatory. Pursuant to the SEBI circular no. CIR/CFD/ CMD1/27/2019 dated February 8, 2019, the Company has obtained an Annual Secretarial Compliance Report for the year 2023-24 from M/s. Mehta & Mehta, Company Secretaries, confirming compliance of SEBI Regulations / Circulars / Guidelines issued thereunder and applicable to the Company and the said report was filed with the National Stock Exchange of India Limited and BSE Ltd. There are no adverse remarks in the said report.

INTERNAL AUDITOR

The Board of your Company has appointed M/s. S Guha & Associates, Chartered Accountants for carrying out Internal Audit of the Company for the financial year 2023-24.

DETAILS OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143 OF THE COMPANIES ACT, 2013

Nil

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the year under review, your Company did not enter into any contract / arrangement / transaction with related parties in pursuance of section 188 of the Companies Act, 2013 and the rules framed thereunder and Regulation 23 of the SEBI Listing Regulations. Your Directors draw attention of the Members to Note 32 to the financial statements which sets out related party disclosures as per Indian Accounting Standard 24. The Form AOC-2 on details of related party transactions has been attached as Appendix – "D" to this Report, as required under section 134(3)(h) of the Companies Act, 2013. The Company has a Policy on Related Party Transactions, which can be accessed at https://grse.in/policies/GRSE_Policy_for_Related_Party_ Transactions.pdf

PARTICULARS OF LOAN, GUARNATEES OR INVESTMENTS

During the year under Report, your Company has not: (a) given any loan to any person or other body corporate;

(b) given any guarantee or provided security in connection with a loan to any other body corporate or person; nor (c) acquired by way of subscription, purchase or otherwise, the securities of any other body corporate, as prescribed under Section 186 of the Companies Act, 2013.

VIGIL MECHANISM

As a part of its vigil mechanism, your Company has adopted a Whistle Blower Policy to provide appropriate avenues to the employees of your Company to report to the management, instances of unethical behaviour, actual or suspected fraud or violation of your Company's Code of Conduct. As per the Whistle Blower Policy, a whistle blower can send written communications to the Chairman & Managing Director of your Company (or any person to whom he has delegated his power). Alternatively, the whistle blower may send such Protected Disclosure directly to the Chairman, Audit Committee. Once a Protected Disclosure is received, a Screening Committee comprising the Chairman & Managing Director of your Company, a Functional Director as nominated by C&MD and the Chairman, Audit Committee, will be constituted to investigate into the matter. All employees are encouraged to use this whistle blowing mechanism and voice their concerns to the Management. Further, all employees have been given access to the Chairman, Audit Committee. The Whistle Blower Policy can be accessed on your Company's website at https://grse.in/wp-content/uploads/2022/04/Whistle-Blower-Policy-1.pdf.

ANNUAL RETURN

In accordance with the Companies Act, 2013, the Annual Returns in the prescribed format (Form MGT-7) will be available on your Company's website at https://grse.in/annual-returns/.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion & Analysis Report as required under the SEBI Listing Regulations and the DPE Guidelines on Corporate Governance for CPSEs forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social responsibility is an integral part of GRSE's Corporate strategy. Fulfilment of social and environmental responsibilities are accorded equal importance alike business operations.

GRSE continuously endeavours to align its CSR initiatives with national mission and Sustainable Development Goals. The CSR initiatives were primarily implemented in the areas surrounding the production units with the aim to improve the quality of life and bring about inclusive growth for the marginalised segment.

The CSR projects are carefully selected to address the concerns of the communities residing in the vicinity and is in consonance with the social fabric of the local community.

GRSE's CSR initiatives have played a significant role in mainstreaming the differently abled children, holistic development of underprivileged and vulnerable children, empowering the youth by providing employment oriented vocational trainings, health camps for the disadvantaged segment etc. These initiatives have played significant role in socioeconomic development of the vast stretch of underprivileged segment. The detailed outline of the Annual Report on CSR initiatives undertaken during the FY 2023-24 has been annexed at "Appendix- E" RISK MANAGEMENT

Pursuant to Regulation 21 of SEBI Listing Regulations, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference, Risk Management Policy etc. are set out in the Corporate Governance Report and a detailed note on Risk Management is provided in the Management Discussion and Analysis Report, which forms part of this report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Securities and Exchange Board of India (SEBI) has mandated inclusion of Business Responsibility and Sustainability Report (BRSR) as part of the Annual Report for the top 1000 listed entities based on market capitalisation. Regulation 34(2)(f) of SEBI Listing Regulations stipulates that the annual report shall include a Business Responsibility and Sustainability Report in the format specified by the SEBI. Accordingly, the Business Responsibility and Sustainability Report for the year 2023-24 has been drawn up and appended to this Report.

INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls with reference to financial statements. A detailed note on Internal Financial Controls is provided in the Management Discussions and Analysis Report, which forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company being a Government Company engaged in producing defence platforms, the disclosure of information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo under the provisions of Section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is not required as the MCA vide its notification GSR No.680 (E) dated 04 Sept 2015 has granted exemption to Defence Public Sector Undertakings.

IMPLEMENTATION OF RTI ACT

RTI matter are being executed as per the provisions of the Right to Information Act, 2005 and Rules made therein. During the year 2023-24, a net total of 144 number RTI requests through online/ offline mode were received to provide ‘information', while opening balance number from previous year was brought forwarded as 12 in number. A total of 128 number of RTI applications were replied to during the year and 01 RTI application transferred to other concerned public authority and remaining 27 number of RTI applications were taken as "carried forward" to the year 2024-25.

13 No. of RTI First Appeals were received during 2023-24 through online/offline mode and 02 No. First Appeal was carried forward as "opening balance" from previous year. A total of 14 number of RTI First Appeals were decided and replied and remaining 01 of RTI First appeal were taken as ‘carried forward' to the year 2024-25.

In this financial Year 2023-24, No RTI Second Appeal were filed with Central Information Commission (CIC), while opening balance from previous year was brought forwarded as 01 in number. The said second appeal has since been heard and decided on 24 Apr 2024. The Quarterly Returns are being uploaded on the CIC's website as well as on the DOPT website. Proactive Disclosures of Information were updated on the website of GRSE under RTI link as directed by CIC. In compliance with the provision of section 26 of the RTI Act, 2005, an in-house Awareness programme on RTI Act was conducted during the year 2023-24.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

In pursuance of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013, the Internal Committee was reconstituted on 31^st August, 2023 comprising of 10 members for West Bengal based units. A separate Internal Committee is in existence for DEP Unit, Ranchi. The Internal Committee of DEP was reconstituted on 29 Mar 23 comprising of 5 members. In accordance with Section 21 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013 and the Rules framed thereunder, the following details are submitted:

PUBLIC GRIEVANCES

In order to facilitate resolution of grievances in a transparent and time bound manner, the Department of Administrative Reforms & Public Grievances, Ministry of Personnel, Public Grievance & Pensions, Government of India has initiated a web-based monitoring system at www.pgportal.gov.in (PG Portal).

During the year 2023-24, a total of 19 number of Public Grievance Petitions through online/offline mode were received and no grievance was brought forward as "opening balance' from previous year. Total 13 number of Public Grievance were resolved and remaining 06 number of Public Grievance Petitions are under different stages of action and carried forward to the year 2024-25.

VIGILANCE ACTIVITIES

Your Company has a well-established vigilance department headed by Chief Vigilance Officer (CVO). The main thrust of the Vigilance Department is to ensure transparency, fairness & probity in all spheres of activities of the Company. Towards this, focus of the department was on Surveillance & Detection as well as Punitive & Preventive vigilance. To make preventive vigilance function more effective, the Department has given thrust to leverage technology. During the year, many spheres of activities were taken up and various processes were carefully observed, analysed and scrutinised to ensure that the systems of checks & balances are working as per the required parameters. In certain cases, the management was advised for systemic improvements. Apart from the above, the following activities were also carried out by the Vigilance Department during the year:

(a) CTE Type Intensive Examinations were conducted in the FY 2023-24 (b) An awareness cum sensitization program for all Officers and Supervisors on filing of Annual Property Return was conducted in Jan 2024.

(c) Several Preventive Vigilance Measures were undertaken as below: (i) Files were randomly picked and scrutinized; (ii) CVC's Online complaint handling mechanism is linked with GRSE Web Site in addition to the GRSE's own online Complaint handling system; (iii) Complaint boxes are installed in all units of GRSE; (iv) During Vigilance Awareness Week (VAW) 2023 following activities were conducted:

• Integrity Pledge was taken by all employees.

• Gram Sabha was held at Gosaba Village.

• CBI Kolkata conducted an awareness session on Preventive Vigilance.

• Different awareness activities involving GRSE Employees and their family members were conducted.

• Vendor's Meet was conducted wherein Vendors participated.

(v) Periodic/ surprise rounds by CVO & Vigilance officials at different locations of GRSE were conducted.

(d) Investigations were conducted on the complaints received from various sources and appropriate actions were taken.

(e) Scrutiny of 20 % of the Annual Property Returns (APR) have been completed for the Year 2023.

(f) Inputs on the vigilance status/ Clearance of officers below board level were conveyed for around 1,515 cases. The inputs on the vigilance profile of the Board level officers were also conveyed as desired by the Ministry. (g) Several System Improvements were suggested for the interest of the organization.

(h) Structured meetings were conducted between CVO and C&MD in every quarter.

(i) Sensitive posts have been reviewed and identified.

(j) The following Vigilance Activities have been made and/or continuing online: (i) Submission of Annual Property Return (ii) Processing of Vigilance Clearance of employees

INTEGRITY PACT

One of the initiatives of the Central Vigilance Commission (CVC) to eradicate corruption in procurement activity is the purpose for introduction of Integrity Pact in large value contracts. In line with the directives from Ministry of Defence and the CVC, your Company has adopted Integrity Pact with all vendors / suppliers / contractors / service providers for all Orders / Contracts of value 2 crore and above and only those vendors/bidders, who commit themselves to IP with the Company would be considered competent to participate in the bidding process.

The Integrity Pact essentially envisages an agreement between the prospective vendors/bidders and the principal (GRSE), committing the persons/officials of both sides, not to resort to any corrupt practices in any aspect/stage of the contract. Only those vendors/bidders, who commit themselves to such a Pact with the principal, would be considered competent to participate in the bidding process. Integrity Pact, in respect of a particular contract, would be operative from the stage of invitation of bids till the final completion of the contract. Any violation of the same would entail disqualification of the bidders and exclusion from future business dealings.

As recommended by the CVC, the Company has appointed Shri Bam Bahadur Singh and Shri Pidatala Sridhar, IRS (Retd.) as Independent External Monitors (IEMs) for a period of three years from 26 Dec 2021 for monitoring implementation of Integrity Pact in the Company. During the Financial Year 2023-24, the IEMs monitored 162 contracts and held quarterly meetings with commercial department and half yearly structured meetings with the Chairman & Managing Director.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: (a) Detailed reasons for any voluntary revision of financial statement or Board's Report in the relevant financial year in which the revision is made.

(b) Details relating to deposits covered under Chapter V of the Companies Act, 2013.

(c) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(d) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and future operations of your Company.

ACKNOWLEDGEMENTS

Your Directors express their deep appreciation and place on record their gratitude to the Department of Defence Production and other Departments in the Ministry of Defence for their continued support, assistance and guidance. The Directors also express their sincere thanks to the Government of India and also to the Governments of West Bengal, Jharkhand and various other States, for their continued co-operation and valuable support. Your Directors are particularly grateful to the Indian Navy, Indian Army and Indian Coast Guard Headquarters, Border Road Organisation (BRO), Ministry of Home Affairs, Kolkata Port Trust, Public Works Departments of various State Governments, Police Department of West Bengal & Kolkata and other valued customers as well as business associates for the confidence reposed by them in your Company. We will fail in our duty if we do not acknowledge the cooperation and positive approach of the Warship Production Superintendent, Coast Guard Refit Production Superintendent and their dedicated teams under whose oversight our ships are being built/ refitted. Also, we thank all classification societies, in particular, IRS & ABS, who have ensured quality and adherence to the required standards.

The Directors acknowledge with thanks the valuable advice rendered by, and co-operation received from the Comptroller and Auditor General of India, the Principal Director of Commercial Audit, Ex-officio Member of the Audit Board, Bengaluru, Principal Controller of Defence Accounts (Navy), Mumbai, Controller of Defence Accounts (Navy), Kolkata, Registrar of Companies, the Department of Public Enterprises, the Securities Exchange Board of India, the National Stock Exchange of India Limited and BSE Limited.

The Directors wish to place on record their appreciation to its Statutory, Cost, Internal and Secretarial Auditors, Company's Bankers, Trade Unions and all Officers and Employees at various levels of the organisation for their hard work, dedication and commitment. The enthusiasm and unstinted efforts of the employees have enabled your Company to remain at the forefront of the industry despite increased competition from several existing and new players.