1. Summary Information

		Country	India
Company Name	PIPAVAV DEFENCE AND OFFSHORE ENGINEERING COMPANY LIMITED	Principal Name 1	Mr. Nikhil Prataprai Gandhi
Status	Satisfactory	Principal Name 2	Mr. Ramaswamy Muthu Venkataraman
		Registration #	04-033193
Street Address	Pipavav Port, Post Ucchaya, Via Rajula, Rajual – 365560, Gujarat
Established Date	17.10.1997	SIC Code	--
Telephone#	91-2794-286200 / 201 / 661000	Business Style 1	Engaged in Commercial Shipbuilding, Ship Repair, Offshore Fabrication and Servicing and Naval Shipbuilding and Repair.
Fax #	91-2794-286373 / 661100	Business Style 2	--
Homepage	www.pipavavshipyard.com	Product Name 1	--
# of employees	3000 (Approximately)	Product Name 2	--
Paid up capital	Rs.6,657,984,000/-	Product Name 3	--
Shareholders	Shareholding of Promoter and Promoter –% Public shareholding –%	Banking	Union Bank of India
Public Limited Corp.	YES	Business Period	15 Years
IPO	YES	International Ins.	-
Public Enterprise	YES	Rating	Ba (48)
Related Company
Relation	Country	Company Name	CEO
Subsidiary :	--	E Complex Private Limited	--
Note	-

2. Summary Financial Statement

Balance Sheet as of	31.03.2011		(Unit: Indian Rs.)
Assets		Liabilities
Current Assets	15,482,177,000	Current Liabilities	6,632,239,000
Inventories	2,453,479,000	Long-term Liabilities	20,207,518,000
Fixed Assets	12,249,948,000	Other Liabilities	1,091,159,000
Deferred Assets	0,000	Total Liabilities	27,930,916,000
Invest& other Assets	15,171,451,000	Retained Earnings	10,250,156,000
		Net Worth	17,426,139,000
Total Assets	45,357,055,000	Total Liab. & Equity	45,357,055,000
Total Assets (Previous Year)	38,891,557,000
P/L Statement as of	31.03.2011		(Unit: Indian Rs.)
Sales	8,599,308,000	Net Profit	397,715,000
Sales(Previous yr)	6,293,826,000	Net Profit(Prev.yr)	(488,205,000)

MIRA INFORM REPORT

Report Date :

17.07.2012

IDENTIFICATION DETAILS

Name :	PIPAVAV DEFENCE AND OFFSHORE ENGINEERING COMPANY LIMITED (w. e. f. 29.09.2011)
Formerly Known As :	PIPAVAV SHIPYARD LIMITED (w. e. f. 19.04.2005) PIPAVAV SHIP DISMANTLING AND ENGINEERING LIMITED
Registered Office :	Pipavav Port, Post Ucchaya, Via Rajula, Rajual – 365560, Gujarat
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	17.10.1997
Com. Reg. No.:	04-033193
Capital Investment / Paid-up Capital :	Rs.6657.984 Millions
CIN No.: [Company Identification No.]	L35110GJ1997PLC033193
TAN No.: [Tax Deduction & Collection Account No.]	mump27060F
PAN No.: [Permanent Account No.]	AABCP1491L
Legal Form :	Public Limited Liability Company. The company shares are listed to the stock exchange.
Line of Business :	Engaged in Commercial Shipbuilding, Ship Repair, Offshore Fabrication and Servicing and Naval Shipbuilding and Repair.
No. of Employees :	3000 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (48)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 69000000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. There appears some accumulated losses recorded by the company. However, with some improvement in profit the company can wipe off those losses in near future. Trade relations are reported as fair. Business is active. Payments are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	Pipavav Port, Post Ucchaiya, Via Rajula, District Amreli, Rajual – 365560, Gujarat, India
Tel. No.:	91-2794-286200 / 201 / 661000
Fax No.:	91-2794-286373 / 661100
E-Mail :	contact@pipavavshipyard.com careers@pipavavshipyard.com company.secretary@pipavavshipyard.com nileshkmehta@gmail.com
Website :	www.pipavavshipyard.com
Corporate office :	SKIL House, 209, Bank Street Cross Lane, Fort, Mumbai – 400023, Maharashtra
Tel. No.:	91-22-66199126 / 6619 9000
Fax No.:	91-22-67158099 / 2269 6022 / 2265 9939
SEZ Units :	Village Rampara –II, Taluka Rajula and Village Lunsapur, Taluka Jafrabad, District – Amreli – 365560, Gujarat, India

DIRECTORS

AS ON 31.03.2011

Name :	Mr. Nikhil Prataprai Gandhi
Designation :	Chairman
Address :	38, Sagar Villa, Bhulabahai Desai Road, Mumbai – 400026, Maharashtra
Date of Birth/Age :	25.04.1958
Qualification :	B.Com
Date of Appointment :	17.10.1997
Name :	Mr. Ramaswamy Muthu Venkataraman
Designation :	Nominee Director, EXIM Bank, Independent Director
Address :	1504, Wallace Apartment, Sleater Road, Grant Road, Mumbai – 400007
Date of Birth/Age :	16.07.1946
Date of Appointment :	19.12.2003
Date of Ceasing :	25.04.2011
Name :	Mr. Venkiteshwaran Subramanian
Designation :	Independent Director
Address :	A/7 and 2, Lloyds Garden, 7^th Floor, Appasaheb Marthe Marg, Prabhadevi, Worli, Mumbai-400025, Maharashtra, India
Date of Birth/Age :	22.01.1941
Qualification :	B.Sc. with Physics and Mathematics – 1960, Bombay University. LL.B, Bombay University.
Date of Appointment :	18.09.2007
Directorships held on other companies :	· Dolphin Offshore Enterprises (India) Limited. (also Vice Chairman of the · company) · Dolphin Offshore Shipping Limited. · Indian Register of Shipping · Mahagujarat Chamunda Cements Company Private Limited. · Mundra Port And Special Economic Zone Limited. · National Securities Clearing Corporation Limited. · The Clearing Corporation of India Limited. · Pandi Correspondents Private Limited.
Name :	Mr. Ramunni Menon Premkumar
Designation :	Independent Director
Address :	101, Praneet, Dr. Jayant Palkar Marg, Worli, Mumbai-400030, Maharashtra, India
Date of Birth/Age :	16.08.1945
Date of Appointment :	15.07.2008
Name :	Mr. Ajai Vikram Singh
Designation :	Independent Director
Address :	Bafhsuri House, Jaipur Road, Ajmer-305001, Rajasthan, India
Date of Birth/Age :	04.07.1945
Date of Appointment :	15.07.2008
Name :	Mr. Samar Ballav Mohapatra
Designation :	Independent Director
Address :	C-15, DGS Co-Operative Housing Society, Plot No. 6, Sector 22, Dwarka, Delhi-110075, India
Date of Birth/Age :	18.06.1944
Date of Appointment :	15.07.2008
Name :	Mr. Bhavesh Prataprai Gandhi
Designation :	Executive Vice Chairman
Name :	Mr. David Rasquinha
Designation :	Nominee Director, EXIM Bank, Independent Director
Date of Appointment :	25.04.2011

KEY EXECUTIVES

	Audit Committee
Name :	Mr. Ramunni Menon Premkumar
Designation :	Chairman
Name :	Mr. Ajai Vikram Singh
Designation :	Member
Name :	Mr. Bhavesh Prataprai Gandhi
Designation :	Member
Name :	Mr. David Rasquinha
Designation :	Member
Name :	Ramaswamy Muthu Venkataraman
Designation :	Member
Name :	Mr. Venkiteshwaran Subramanian
Designation :	Member
Name :	Mr. Samar Ballav Mohapatra
Designation :	Member
	Shareholder’s and Investors’ Grievances Committee
Name :	Mr. Nikhil Prataprai Gandhi
Designation :	Chairman
Name :	Mr. Bhavesh Prataprai Gandhi
Designation :	Member
Name :	Mr. Venkiteshwaran Subramanian
Designation :	Member
	Remuneration Committee
Name :	Mr. Venkiteshwaran Subramanian
Designation :	Chairman
Name :	Mr. Nikhil Prataprai Gandhi
Designation :	Member
Name :	Mr. Ramunni Menon Premkumar
Designation :	Member
Name :	Mr. Samar Ballav Mohapatra
Designation :	Member
Name :	Mr. Ajit Dabholkar
Designation :	Company Secretary and Compliance officer
Address :	D/801, pearl Drop, Great Eastern Gardens, LBS Marg, Kanjurmarg (West), Mumbai – 400 078, Maharashtra
Date of Birth/Age :	19.06.1965
Date of Appointment :	21.03.2007

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.03.2012

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Bodies Corporate	299,576,180	43.34
Sub Total	299,576,180	43.34
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	299,576,180	43.34
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	12,506,684	1.81
Financial Institutions / Banks	31,201,922	4.51
Insurance Companies	21,942,696	3.17
Foreign Institutional Investors	53,037,037	7.67
Foreign Venture Capital Investors	10,000,000	1.45
Sub Total	128,688,339	18.62
(2) Non-Institutions
Bodies Corporate	179,143,693	25.92
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	20,418,600	2.95
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	18,870,730	2.73
Any Others (Specify)	44,500,846	6.44
Clearing Members	890,164	0.13
Trusts	34,300	-
Non Resident Indians	675,882	0.10
Foreign Corporate Bodies	42,900,000	6.21
Foreign Nationals	500	-
Sub Total	262,933,869	38.04
Total Public shareholding (B)	391,622,208	56.66
Total (A)+(B)	691,198,388	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	691,198,388	-

BUSINESS DETAILS

Line of Business :

Engaged in Commercial Shipbuilding, Ship Repair, Offshore Fabrication and Servicing and Naval Shipbuilding and Repair.

GENERAL INFORMATION

No. of Employees :

3000 (Approximately)

Bankers :

• Union Bank of India
• Industrial Finance Branch, Nariman Point, Mumbai – 400021, Maharashtra, India,
• Industrial and Development Bank of India
• Export Import Bank of India
• Centre One, World Trade Centre, Cuffe Parade, Mumbai – 400005, Maharashtra, India
• Housing and Urban Development Corporation Limited, Guru Nirman, 4th Floor, Ahmedabad
• Punjab National Bank, Ashram Road Branch
• State Bank of India, Overseas Branch, Worli Trade Centre, Port Box No. 46094, Cuffe Parade, Mumbai – 400 005
• State Bank of India, Overseas Branch, Gujarat

Facilities :

Particulars	31.03.2011 Rs. in Millions	31.03.2010 Rs. in Millions
Secured Loans
Term Loan
From banks	6901.701	5703.509
From Financial Institutions	3922.082	4078.225
Short Term Loan
From banks	4265.000	950.000
From Financial Institutions	0.000	550.000
Vehicle Loans	4265.000	4.785
Interest Accrued and Due	8.117	24.240
Total	15096.900	11310.759

Notes:

1) The term loan from Banks and Financial Institutions referred to above are secured by way of first charge and mortgage on all the immovable properties of the Company, both present and future and hypothecation of all movable properties of the Company, both present and future, except book debts and stocks which are subject to the prior charge to secure working capital requirements.

2) Short Term Loans from Banks referred to above includes:

a) Rs. 10,00.000 Millions secured by way of subservient charge on current assets of the company,

b) Rs. 20,00.000 Millions secured by way of subservient charges on Fixed assets of the Company,

c) Rs. 5,00.000 Millions secured by way of first charge on the current assets of the company and second charge on Fixed Assets of the company.

d) Rs. 7,65.000 Millions secured against FDR's pledged by the Company.

3) All term loans and short term loans of Rs. 25,00.000 Millions are guaranteed by a promoter group company.

4) Term Loans of Rs. 79,77.349 Millions and short term loans of Rs. 35,00.000 Millions are guaranteed by some of the directors in their personal capacity.

5) Vehicle Loans are secured by Hypothecation of the specific vehicles financed.

Unsecured Loans	31.03.2011 Rs. in Millions	31.03.2010 Rs. in Millions
Debentures
25,400,000 (Previous Year: NIL) 10% Compulsorily and Mandatorily Convertible Debentures of Rs. 70/- each	177.800	0.000
Short Term
From Banks	3332.618*	1988.395*
Total	5110.618	1988.395

* Includes Rs. 31,91.100 Millions (Previous Year: Rs. 8,85.180 Millions) for operations and Rs. 1,41.518 Millions (Previous Year: Rs.1,03.215 Millions) relating to discounting of letter of credits / buyers credit for the project.

Note:

Each Compulsorily and Mandatorily Convertible Debenture will be converted into one fully paid up Equity share of the company of Rs. 10/- each on completion of one year from the date of allotment i.e. May 19, 2010.

Banking Relations :

--

Auditors :

Name 1:

M. A. Shah and Company

Chartered Accountants

Address :

A-1, Sindhi Niwas, Sitaladevi Temple Road, Mahim, Mumbai – 400016, Maharashtra, India

Statutory Auditors :

Name 2:

Chaturvedi and Shah

Chartered Accountants

Address :

912-913, Tulsiani Chambers, 212, Nariman point, Mumbai – 400 021, Maharashtra

Subsidiary :

E Complex Private Limited

Associates :

SKIL Infrastructure Limited

CAPITAL STRUCTURE

After 05.10.2011

Authorised Capital : Rs.8000.000 Millions

Issued, Subscribed & Paid-up Capital : Rs. 6911.894 Millions

AS ON 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
800000000	Equity Shares	Rs.10/-each	Rs.8000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
665798388	Equity Shares	Rs.10/- each	Rs. 6657.984 millions

Note:

25,400,000 Equity shares of Rs. 10/- each fully paid up will be alloted to the holders of 10% Compulsorily and Mandatorily Convertible Debentures on the conversion of these debentures and 25,221,612 Equity shares of Rs. 10/- each fully paid up will be alloted on the exercise of the option by the equity share warrant holders.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		6657.984	6657.984	5803.481
2] Share Application Money		625.496	0.000	0.000
3] Reserves & Surplus		10250.156	10365.001	6747.284
4] (Accumulated Losses)		(107.497)	(506.457)	0.000
NETWORTH		17426.139	16516.528	12550.765
LOAN FUNDS
1] Secured Loans		15096.900	11310.759	7745.899
2] Unsecured Loans		5110.618	1988.395	3790.142
TOTAL BORROWING		20207.518	13299.154	11536.041
DEFERRED TAX LIABILITIES		79.420	0.000	0.000
TOTAL		37713.077	29815.682	24086.806
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		12249.948	10482.814	419.885
Capital work-in-progress		14751.799	13883.821	21560.191
INVESTMENT		419.652	267.569	665.505
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2453.479	1330.232	3182.929
	Sundry Debtors	2049.933	70.180	0.000
	Cash & Bank Balances	4256.256	6400.908	6617.999
	Other Current Assets	4344.718	3484.350	0.000
	Loans & Advances	4831.270	2971.683	2550.927
Total Current Assets		17935.656	14257.353	12351.855
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1942.986	1563.767	1998.692
	Current Liabilities	4689.253	6026.070	8790.422
	Provisions	1011.739	1486.038	121.516
Total Current Liabilities		7643.978	9075.875	10910.630
Net Current Assets		10291.678	5181.478	1441.225
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		37713.077	29815.682	24086.806

PROFIT & LOSS ACCOUNT

	PARTICULARS			31.03.2011	31.03.2010	31.03.2009
	SALES
			Income	8599.308	6293.826	0.000
			Other Income	633.651	675.066	617.780
			TOTAL (A)	9232.959	6968.892	617.780
Less	EXPENSES
			Purchase of Traded Goods	2575.880	947.715	0.000
			Raw Materials Consumed	2828.320	1693.191	0.000
			Manufacturing Expenses	911.537	1634.619	0.000
			Payments to and provisions for Employees	273.993	216.285	76.769
			Administrative, Selling and Other Expenses	260.685	738.809	313.967
			Increase/(Decrease) in Inventories	223.506	1129.430	0.000
			TOTAL (B)	7073.921	6360.049	390.736
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)			2159.038	608.843	227.044
Less	FINANCIAL EXPENSES (D)			1190.063	729.992	129.580
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)			968.975	(121.149)	97.464
Less/ Add	DEPRECIATION/ AMORTISATION (F)			487.326	365.473	1.525
	PROFIT BEFORE TAX (E-F) (G)			481.649	(486.622)	95.939
Less	TAX (I)			83.934	1.583	46.700
	PROFIT AFTER TAX (G-I) (J)			397.715	(488.205)	49.239
Add	PRIOR PERIOD ITEMS (NET)			1.245	(20.735)	(5.001)
Add	BALANCE BROUGHT FORWARD			(506.457)	2.483	(41.755)
	BALANCE CARRIED TO BALANCE SHEET			(107.497)	(506.457)	2.483
	IMPORTS
		Raw Materials		3922.810	660.192	2201.170
		Stores and Spares		30.156	25.516	-
		Capital Goods		94.156	86.067	2329.831
	TOTAL IMPORTS			4047.122	771.775	4531.001
	Earnings Per Share (Rs.)			0.60	(0.82)	0.08

QUARTERLY RESULTS

PARTICULARS	30.06.2011	30.09.2011	31.12.2011	31.03.2012
	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Net Sales	3383.380	4498.300	4613.860	6181.220
Total Expenditure	2717.030	3486.040	3526.040	4876.390
PBIDT (Excl OI)	666.350	1012.260	1087.820	1304.830
Other Income	65.660	65.380	99.190	61.260
Operating Profit	732.010	107764	1187.010	1366.090
Interest	430.410	627.360	690.720	828.330
Exceptional Items	0.000	0.000	0.000	0.000
PBDT	301.600	450.280	496.290	537.760
Depreciation	179.290	292.280	295.140	292.210
Profit Before Tax	122.300	158.000	201.150	245.540
Tax	42.870	63.900	61.370	373.700
Provisions and contingencies	0.000	0.000	0.000	0.000
Profit After Tax	79.430	94.110	139.780	(128.160)
Extraordinary Items	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000
Net Profit	79.430	94.110	139.780	(128.160)

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	4.31	(7.00)	7.97
Net Profit Margin (PBT/Sales)	(%)	5.60	(7.73)	NA
Return on Total Assets (PBT/Total Assets}	(%)	1.60	(1.97)	0.75
Return on Investment (ROI) (PBT/Networth)		0.03	(0.02)	0.00
Debt Equity Ratio (Total Liability/Networth)		1.60	1.35	1.78
Current Ratio (Current Asset/Current Liability)		2.35	1.57	1.13

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report (Yes / No)
1) Year of Establishment	Yes
2) Locality of the firm	Yes
3) Constitutions of the firm	Yes
4) Premises details	No
5) Type of Business	Yes
6) Line of Business	Yes
7) Promoter's background	Yes
8) No. of employees	Yes
9) Name of person contacted	No
10) Designation of contact person	No
11) Turnover of firm for last three years	Yes
12) Profitability for last three years	Yes
13) Reasons for variation <> 20%	--
14) Estimation for coming financial year	No
15) Capital in the business	Yes
16) Details of sister concerns	Yes
17) Major suppliers	No
18) Major customers	No
19) Payments terms	No
20) Export / Import details (if applicable)	No
21) Market information	--
22) Litigations that the firm / promoter involved in	--
23) Banking Details	Yes
24) Banking facility details	Yes
25) Conduct of the banking account	--
26) Buyer visit details	--
27) Financials, if provided	Yes
28) Incorporation details, if applicable	Yes
29) Last accounts filed at ROC	Yes
30) Major Shareholders, if available	No

change of address:

The Registered Office of the company was 904, Shukan Tower, Near Judges Bunglow, police Chowky, Bodakdev, Ahmedabad – 380 009, Gujarat change to present registered address w.e.f 27.10.2006.

OPERATIONS

During the year, the Company has recorded total income of Rs. 9232.900 Millions, showing an increase of 32.49% as compared to the income of Rs. 6968.900 Millions during the previous financial year. The Company earned profit before tax of Rs. 481.600 Millions, as against loss of Rs. 486.600 Millions for previous year.

During the year the Company completed construction of its two new built 74,500 DWT Panamax Vessels. The detailed information on all business activities of the Company is provided in the Management Discussion and Analysis Report.

CONVERTIBLE WARRANTS

Pursuant to the special resolution passed by the Members of the Company at the Extraordinary General Meeting held on September 7, 2010, the Company has issued 2,52,21,612 convertible Warrants on preferential basis to SKIL Infrastructure Limited, promoters of the Company, at a price of Rs. 99.10, for raising funds to meet the capex requirement of the Company and for general corporate purposes. Each warrant is convertible into one fully paid-up equity share of face value of Rs.10/- each, at any time prior to 18 months from the date of allotment of warrants.

SUBSIDIARIES

The Company has one wholly owned subsidiary namely E Complex Private Limited (“ECPL”). This subsidiary is in the business of development of Special Economic Zones (“SEZ”). ECPL has developed a sector specific SEZ for engineering goods/ sector at Village Rampara II, District Amreli, in the State of Gujarat.

During the financial year 2010-11, ECPL has earned revenue of Rs. 119.700 Millions and posted net profit (after tax) of Rs. 39.600 Millions.

General Exemption:

The Ministry of Corporate Affairs has granted general exemption vide its General Circular No. 2/ 2011 dated February 8, 2011 under Section 212(8) of the Companies Act, 1956 (“the Act”) to companies from not attaching the accounts and related documents of subsidiaries in their Annual Report, subject to fulfillment of certain conditions prescribed therein. The Company has complied with all the conditions mentioned in the said circular. Accordingly, the Balance Sheet, Profit and Loss Account, Directors’ Report and Auditor’s Report of its subsidiary company have not been attached to this Report.

Pursuant to Accounting Standard 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial information of its subsidiary company. A statement of key financials of the subsidiary company is also included in this Annual Report.

Further, the Annual Accounts of its subsidiary company will be made available upon written request by any Member of the Company. The Annual Accounts of the subsidiary company will be made available at the Company’s website and will also be available for inspection at the Registered Office of the Company and its subsidiary.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS

The industry in which the Company operates can be broadly sub-classified into the following segments viz. (a) Defence Shipbuilding, (b) Offshore Oil and Gas Exploration and Production Assets Construction, (c) Commercial Shipbuilding and Repairs, (d) Defence hardware and services required by Indian Armed Forces, and (e) Heavy Engineering.

Defence Shipbuilding

Global aspirations of economically strong India, with ever increasing geopolitical challenges have made the Indian Government realize the imperative need to strengthen its defence capabilities. The Government through its Defence and to create an indigenous network of suppliers. The opportunities that the DPP presents to the domestic players are vast and domestic companies that meet the necessary demands of the Indian Navy will benefit the most.

India sits in a prime position in the Indian Ocean, with over 7,517 kms. of coastline. Indian sea trade accounts for approximately 90% of volume and 77% of value of India’s aggregate trade. Maritime interests are crucial for establishing a secure tomorrow, as the economy is dependent on the sea for sectors such as Oil and Gas exploration and production, Commercial trade, etc. Protecting maritime assets is an imperative for the Indian Navy and Coast Guard. The Government is continuously making efforts to ensure naval security in the Indian Ocean, which ultimately will lead to demand for better quality defence vessels.

The present fleet of Indian Navy has approximately 171 ships on active duty with an additional 36 ships in the process of being built. The Indian Navy needs over 100 ships of diverse variety, including submarines, destroyers, patrol vessels, etc. over the next two decades, according to reports available in public domain. There is a need for domestic players to demonstrate technologically advanced capabilities and utilize effective cost rationalization methods which will open up a huge opportunity for them. The DPP encourages private domestic players to bid for acquisition programmes of defence vessels. In line with the DPP you would be glad to know that the company became the first private sector company post independence to enter this sector when it was awarded with the contract for construction of 5 warships viz. Naval Offshore Patrol Vessels worth Rs. 2,9750.000 Millions by the Indian Navy.

The theme of the DPP is “Buy Indian, Make Indian”. The DPP will continue to provide a tremendous boost to domestic players in this segment and will ensure that the Country becomes self sufficient in all its defence requirements. It will also ensure, over a period of time, the acquisition and transfer of advanced technology to Indian companies further reducing our dependence on imports.

The Union Budget presented in Parliament by the Finance Minister, Pranab Mukherjee, highlights the importance of defence and increased allocation to the sector to Rs. 1644150.000 Millions. The allocation represents a growth of 11.9% year-on-year basis. In terms of capital expenditure, the Navy will utilize approximately Rs. 146570.000 Millions. The growth of 11.9% year-on-year in the defence budget has shown the Government’s desire to strengthen the nation’s armed forces, particularly with regard to the modernization of facilities and equipment.

Offshore Oil and Gas Exploration and Production Assets Construction

Demand for petroleum and liquid fuels will reach 95 million barrels per day by 2015 and 118 million barrels a day by 2030 from the current level of 84 million barrels per day. Emerging markets demonstrating strong economic growth will contribute significantly to oil demand. Investment in the development of the offshore oil and gas exploration and production assets is expected to reach USD 45 billion in 2011. National oil companies have leaned towards developing offshore assets to meet oil and gas demands. Rising crude oil prices, exacerbated by the crisis in the Middle East, will subsequently lead to greater exploration activity and establishment of more offshore assets in the coming decade.

To prevent the country from becoming dependent on foreign oil subject to volatile fluctuations in the global market, the development of offshore oil and gas facilities has been made a priority by the Indian Government.

The Government is exploring opportunities to meet the domestic demand of oil through domestic supply by encouraging the development of modern offshore assets.

The energy demand is expected to grow fourfold in the next two decades. The Government is stepping up its offshore oil and gas programme. The inability of aging offshore structures i.e. rigs and platforms to operate in deeper water posts an advantage for businesses that can create new generation efficient offshore structures. Heavy Engineering companies with access to waterfront will be better suited to develop modern offshore structures. Globally, more than 75% of rigs were constructed before 1985, which indicates that most rigs will need to be replaced in the next decade. As it becomes more expensive to purchase such offshore structures in Middle East and East Asian countries, economies have been considering low cost destinations like India and many orders may be diverted to Indian builders. Lastly, the demand for supply vessels to offshore structures is increasing significantly. Close to 50% of the Indian offshore support fleet is over 20 years old and is not capable of servicing requirement of deep water rigs and platforms. With the advent of deep water offshore structures, the safety and technological capacity of existing offshore supply vehicles will need to be improved.

All in all, greater demand for oil and gas from emerging markets like India has resulted in the need to develop domestic sources of supply of energy and curtail the dependency on foreign markets for imports, thus preserving the country’s security.

Commercial Shipbuilding and Ship Repair

Global Scenario

While the global shipbuilding outlook until 2011 looked subdued, it is expected that the commercial shipbuilding industry will turnaround by FY 2012-13.

Global trends show a demand for larger vessels as the pursuit of economies of scale drives businesses to demand both bigger and fuel efficient ships. Since ships that can carry larger cargoes translate into lower cost of transport, companies that are able to deliver large vessels will benefit. There is also a demand in niche sectors. For example, increased requirements for dredging have translated into demand for dredgers. Similarly the emergence of LNG as a substitute for coal is resulting in a demand for LNG Carriers. Increased spending on infrastructure and subsea pipelines is resulting in greater demand for Heavy Lift Vessels. Companies like the capable of manufacturing these specialised vessels would gain from this demand.

Indian Scenario

According to the Maritime Agenda 2011, there are currently 27 prominent shipyards in the country, of which 8 are in the public sector. India advanced from 0.1% of the world share of shipbuilding in 2002 to approximately 1.5% in

2010. With respect to the shipbuilding and ship repair industry, the Government of India’s vision is:

“To have a well developed shipbuilding and ship repair industry of international standard in India which will be self-sufficient in building and repairing commercial vessels required by the country by 2020 and generate huge investment and employment opportunities.”

The Ministry of Shipping has set several targets that they wish to meet by 2020, which include gaining 5% of the global market share of commercial shipbuilding, developing a strong ancillary industry, strong research and development facilities, to be self-sufficient in any domestic repair requirements and become a prominent ship repair center in the Indian Ocean.

The goals to which the Government is aspiring provide a myriad of opportunities for the Indian maritime companies that will inevitably translate into greater profitability.

Labour cost accounts for relatively 10% of shipbuilding cost. India boasts availability of trained manpower in heavy engineering and shipbuilding sector with a strong base of intellectual capital. India commands a natural advantage in terms of skilled labour and technological capacity for shipbuilding business and oil and gas assets, a benefit it has over other countries that may have lower labour costs but lack in quality technology and infrastructure.

Globalization has led to the wide dispersal of technology to emerging markets from developed countries. The Company’s infrastructure is in line with Korean and Japanese counterparts in terms of quality. Secondly, as foreign companies are eager to enjoy the benefits of operating in a low cost country like India, the potential for strategic partnerships has never been greater leading to further improvement and construction of quality vessels.

India enjoys a strategic location in the Indian Ocean. India’s long coastline provides suitable locations for setting up ship-repair facilities. India’s prominence in the region as an emerging power strengthens India’s position in commercial shipbuilding and ship repair.

Defence Hardware and Services for the Indian Armed Forces

As mentioned earlier, the opportunities in the defence segment are vast and the Company looks forward to capture all the opportunities offered in this space. The Company is in the process of augmenting its reach through entire defence segment and establishing itself as a significant player.

Heavy Engineering

The heavy engineering sector offers huge potential for growth. The Government of India is going to great lengths to develop and strengthen the industry as well as build up and maintain a robust infrastructure network.

The prospects for the aerospace segment, robotics, wartime machinery such as tanks, and demands to modernize and contextualize the armed forces for the 21st century create great opportunities for heavy engineering segment.

OPPORTUNITIES AND THREATS

OPPORTUNITIES

Defence Procurement Policy:

Indian’ category in its Defence Procurement Policy. It is aimed at promoting production of defence equipment by capable Indian companies. Shortlisted Indian companies can arrange co-production and/ or technology transfers with foreign companies. The company is ideally positioned to gain from the Government’s emphasis on self reliance in the defence production sector.

Rising demand for naval defence:

In view of global aspirations of economically strong India, ever increasing geo-political challenges and the need for antipiracy operations in the Indian Ocean, the Indian Navy and Coast Guard are being modernized for safeguarding our maritime interests. Moreover, the scope of naval defence is further widened by providing support to maritime neighbors during natural disasters. This will require a massive as well as rapid expansion of our Naval and Coast Guard fleet.

There is a huge replacement/ refurbishment demand for defence vessels. There can be no substitute for meeting these requirements locally. It is towards this end the Company has commissioned India’s most technologically advanced infrastructure geared for construction/ repair of the most sophisticated warships including aircraft carriers, submarines, landing platform docks, patrol vessels and other naval products.

Large replacement demand:

About 40% of the commercial fleet is more than 20 years old and Indian ship owners are expected to spend approx. USD 4 billion to replace these during FY 2010-2015. The ageing fleet of shipping companies in India is another factor energizing prospects for the commercial shipbuilding and repair market in the country.

Huge demand in the offshore oil and gas sector:

In India, the demand for high-end offshore facilities such as drill ships and floating production storage platforms amounts to approximately USD 20-40 billion. With the oil prices on a rise, the importance of this sector is building up. The increase in the demand for offshore assets would lead to consequential increase in demand of Offshore Supply Vessels (“OSVs”) required to service them. Furthermore, higher production cost of OSVs in other countries such as Japan may result in diversion of orders to India, consequently creating huge prospects for the Company. The Company has established itself in this area through its current construction programme of OSVs.

Inorganic opportunities:

The Company is looking for acquisitions, strategic partnerships, tie-ups with overseas companies catering to the Oil and Gas and Defence sectors. The huge opportunities in these sectors increase the scope of tie-ups between Indian and overseas players, as foreign players look to combine their technology with cost effective Indian partners.

Threats

Fluctuations in the raw materials costs:

The volatility in the prices of raw materials may weigh on profitability of the Company.

Subsidy:

In the past the Indian Government had encouraged participation of Indian companies in the commercial shipbuilding sector by providing subsidies of 30% of the price of the vessel to the shipbuilders. The Government is considering extension of the shipbuilding subsidy scheme. However, in the event the Government of India decides not to notify a new subsidy scheme, it could affect the profitability of this segment.

No Steady Order Flow and probable Order Cancellations:

The Company has an outstanding order book of around USD 1.5 billion. In view of the difficult economic conditions worldwide the momentum of orders being sustained is a concern. The possibility of orders cancellation can not be denied.

Shortage of specialized labour in the Maritime Sector:

Increasing sophistication of vessels and associated equipment as well as stringent pollution prevention norms in the maritime sector have led to greater importance on a well-designed education system for the maritime sector. Lack of such maritime institutes imparting the necessary knowledge creates a shortage of skilled technical force in India.

OUTLOOK

The financial year 2010-11 was a year of milestones for the Company. In November 2010, the Company was awarded the Warship Production License by the Department of Policy and Promotion, Ministry of Commerce and Industry, Government of India. The Company is the first Indian Company to have been awarded the license. The Company entered into strategic partnerships with SAAB Dynamics, Northrop Grumman and Babcock group. These tie-ups will allow the Company to use their technical expertise to indigenously produce defence equipment, hardware and develop aeronautical technology.

Going forward, the FY 2011-12 will mark the progress of the Company after all the key pillars have been established. As the Company has received the Warship Production License, the Company is ready for a new and exciting year of growth. Two Panamax vessels built by the Company are ready for delivery.

The Company will continue to develop global standards in capabilities, technology and size. The order book is expected to grow multi-fold on the back of increasing defence demand, greater demand for offshore assets, and the significant need for repair for vessels visiting/ passing through Indian waters. The Company is also well-poised with modern heavy engineering facilities to undertake both civil and non-civil heavy engineering projects, whether be the construction of civil nuclear reactors or land based heavy defence machinery such as tanks. With offshore activities shifting to deeper waters and increasing demand from the naval sector, Indian industry will undergo a dynamic change in the coming years.

Having invested in state of the art facilities and having developed a world-class heavy engineering infrastructure with attached dry dock, the Company stands at the forefront of private sector companies ready to capitalize on increased opportunities provided in the defence and offshore oil and gas assets space and is set to experience robust growth and profitability going forward.

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31^ST MARCH 2012

				Rs in Millions	Rs in Millions	Rs in Millions
	Particulars			Quarter ended	Quarter ended	Year ended
				31.03.2012	31.12.2011	31.03.2012
				(Unaudited)	(Unaudited)	(Audited)
1	Net Sales/Income from Operations			6178.779	4613.574	18670.647
	Other Operating Income			2.438	0.281	6.099
	Total Income from operations (1+2)			6181.217	4613.855	18676.746
	Expenditure
	(a)		Cost Material consumed	1211.378	1058.583	4987.797
	(b)		Purchase of traded goods	2560.193	1082.557	5166.225
	©		Changes in inventories of finished goods and works-in-process	47.157	(14.280)	11.302
	(d)		Employee benefits expense	149.673	107.471	457.809
	(e)		Depreciation	292.211	295.140	1058.916
	(f )		Other Expenditure	907.990	1242.811	3928.809
2			Total Expenses	5168.602	3772.282	15610.858
3			Profit from operations before Other Income, Finance Costs & Exceptional Items (1-2)	1012.615	841.573	3065.888
4			Other Income	61.256	50.070	237.926
5			Profit from ordinary activities before Finance Costs and Exceptional Items (3+4)	1073.871	891.643	3303.814
6	Financial Costs			828.326	690.720	2576.818
7	Profit from ordinary activities after Finance Costs but before Exceptional Items (5-6)			245.545	200.923	726.996
8	Exceptional Items			0.000	0.000	0.000
9	Profit from Ordinary Activities before Tax (7+8)			245.545	200.923	726.996
10	Tax Expenses			373.704	61.370	541.838
11	Net Profit / (Loss) from Ordinary Activities after Tax (9-10)			(128.159)	139.553	185.158
12	Extraordinary items (Net of Tax Expenses)			0.000	0.000	0.000
13	Net Profit / (Loss) for the Period (11-12)			(128.159)	139.553	185.158
14	Share of profit /(loss) of Associates			0.000	0.000	0.000
15	Net Profit after Taxes and share of profit of Associate (13+14)			(128.159)	139.553	185.158
16	Paid up equity share capital (Face value per share of Rs.10/- each)			6911.984	6911.984	6911.984
17	Reserves(excluding revaluation reserve			0.000	0.000	0.000
18		Earning Per Share (not annualised) Basic and Diluted		(0.19)	0.21	0.27
19		Public Shareholding
		Number of Shares		391622208	391622208	391622208
		Percentage of Shareholding		56.66%	56.66%	56.66%
20		Promoters and Promoter group
		a) Pledged/Encumbered
		Number of shares		291471179	291471179	291471179
		Percentage of Shares (as a % of the total shareholding of promoter and promoter group)		97.29%	97.29%	97.29%
		Percentage of Shares (as a % of the total share capital of the Company)		42.17%	42.17%	42.17%
		b) Non-encumbered
		Number of shares		8105001	8105001	8105001
		Percentage of Shares (as a % of the total shareholding of promoter and promoter group)		2.71%	2.71%	2.71%
		Percentage of Shares (as a % of the total share capital of the Company)		1.17%	1.17%	1.17%

STATEMENT OF ASSETS AND LIABILITIES

	PARTICULAR	31.03.2012
I	Equity and Liabilities
	1) Shareholders Funds
	a) Share Capital	6911.984
	b) Reserves and Surplus	12477.373
	c) Monies received against Convertible Share Warrants	399.750
	Sub-total-Shareholders' funds	19789.107
	2) Non – Current Liabilities
	a) Long term Borrowing	10017.722
	b) Deferred tax liabilities (Net)	624.633
	c) Other Long term liabilities	1943.659
	d) Long-term provisions	0.000
	Sub-total - Non-current liabilities	12586.014
	3) Current Liabilities
	a) Short term borrowing	17231.958
	b) Trade payable	4309.062
	c) Other current liabilities	5423.199
	d) Short term provision	250.134
	Total	27214.353
	Total	59589.474
II	Assets
	1) Non – Current Assets
	a) Fixed assets	27694.818
	b) Goodwill on Consolidation	0.000
	c) Non – current Investment	205.026
	d) Long term loans and advance	6160.476
	Total	34060.320
	2) Current Assets
	a) Current Investment	90.000
	b) Inventories	3391.019
	c) Trade receivables	9094.209
	d) Cash and cash equivalents	2782.525
	e) Short term loans and advance	3395.406
	f) Other current assets	6775.995
	Total	25529.154
	Total	59589.474

Report of Segment wise Revenue, Results and Capital Employed, under Clause 41 of the Listing Agreement:

	Rs in Millions	Rs in Millions	Rs in Millions
Particulars	Quarter ended	Quarter ended	Year ended
	31.03.2012	31.12.2011	31.03.2012
	(Unaudited)	(Unaudited)	(Audited)
1. Segment Revenue
a) Ship-building & Ship-repairs	3592.796	3519.086	13437.055
b) Trading	2585.983	1094.488	5233.592
Total	6178.779	4613.574	18670.647
Less : Inter-segment Revenue	0.000	0.000	0.000
Sales/Income from Operations (Net)	6178.779	4613.574	18670.647
2. Segment Results (Segment Revenue - Segment Expenses)
a) Ship-building & Ship-repairs	1563.735	1295.524	3918.114
b) Trading	25.790	11.931	67.367
Total	1589.525	1307.455	3985.481
Less : i) Finance Costs	828.326	690.720	2576.818
ii) Unallocated Corporate Expenses	569.582	466.163	915.927
Add : Unallocated Income	53.928	50.351	234.260
Total Profit Before Tax	245.545	200.923	726.996
Capital Employed (Segment Assets - Segment Liabilities)
a) Ship-building & Ship-repairs	45798.716	43113.309	45798.716
b) Trading	1150.459	935.085	1150.459
c) Unallocated (Assets - Liabilities)	(27160.068)	(24132.009)	(27160.068)
Total	19789.107	19916.385	19789.107

Notes:

Segments have been identified in line with the Accounting Standard on Segment Reporting (AS 17).

Ship Building and Ship Repair comprises of Ship-Building and Repair activities carried out by the Company at or from its Shipyard located at Pipavav, Gujarat.

Notes:

1. The above results have been reviewed by the Audit Committee and taken on record by the Board of Directors at its meeting held on May 30, 2012, and approved for release.

2. As per the Revised Guidelines for the Shipbuilding Subsidy issued by the Government of India on March 25, 2009, the Company is eligible for subsidy at the rate of 30% of the contract price, in respect of the export order received for vessels for which the contracts with the customers were signed on or before August 14, 2007. Accordingly, Government Subsidy of Rs. 230.458 Millions for the quarter ended March 31, 2012 and Rs. 1275.354 Millions for the year ended March 31, 2012 has been recognised as revenue in respect of Ships under construction on proportionate completion basis.

3. 2,52,21,612 Convertible Share Warrants (Warrants) were issued by the company during the Financial Year 2010 -11 on preferential basis. On or before the due date, warrant holder did not exercise the option against said warrants accordingly Rs. 625.496 Millions being the amount received against said Warrants has been forfeited by the company and credited to the Capital Reserve.

4. The Company has order for building several panamax sister vessels. The Company has initiated arbitration proceedings as per terms of contract for four panamax vessels and subsequently, the Company has received alleged cancellation notices for these vessels. The Company is of the view that it has a strong case. However, since most of the panamax vessels are sister vessels, the Company can deliver these vessels against orders for balance panamax vessels. Therefore the Company continues to recognise the revenue on these vessels.

5. The Company has been chosen as a partner for formation of Joint Venture to build warships for Indian Navy by Mazagon Dock Limited, the premier Defence Shipyard of the Ministry of Defence, Government of India, pursuant to the Joint Venture guidelines issued by the Ministry of Defence, Government of India, for establishing joint venture companies by Defence Public Sector Undertakings (DPSUs).

6. The Consolidated accounts have been prepared in accordance with Accounting Standards (AS) 21, on Consolidated Financial Statements and AS 23 on Accounting for Investments in Associates in Consolidated Financial Statements.

7. The figures for the corresponding previous period have been restated/regrouped wherever necessary, to make them comparable. The figures of the quarter ended March 31, 2012, are the balancing figures between the audited figures in respect of full financial year and the published year to date figures upto the third quarter of the current financial year.

Fixed Assets:-

· Plant and Machinery

· Computers

· Office Furniture and Equipments

· Vehicles

· Lease Hold Land

· Software

PRESS RELEASES

Pipavav, Airbus to start MRO unit the parent company of Airbus, will hold 26-49% equity in the joint venture while Pipavav will hold a 51% stake

Sep 28, 2011

Mumbai:Pipavav Defence and Offshore Engineering Company Limited and Airbus SAS have agreed to jointly start an aircraft maintenance, repair and overhaul (MRO) unit in India.

EADS NV, the parent company of Airbus, will hold 26-49% equity in the joint venture, Pipavav said in a filing to stock exchanges on Wednesday. Pipavav will hold a 51% stake.

“The first-phase MRO facilities and associated infrastructure are likely to cost $100 million (Rs. 4890.000 Millions),” Pipavav said in its filing. “The MRO facilities and associated infrastructure will be used for civilian and military applications.”

Mint could not immediately contact EADS for comment.

A person familiar with the matter said the MRO facility will also have spare parts and logistics units.

“The name, necessary approvals, agreements and equity structure would be finalized in the next three months. The company would also induct a technical partner to run the aircraft repair facility,” this person said, adding the deal will help Pipavav, until recently known as Pipavav Shipyard, position itself in the aerospace sector.

Five places are shortlisted for the MRO unit—Cochin International Airport in Kerala, old Bangalore international airport, a small airport site in Maharashtra and two other sites near private airports, he added, requesting anonymity.

Pipavav shares rose 2.7% to end trading at Rs. 79.90 on BSE on Wednesday. The Sensex shed 0.47%.

As India’s aviation sector grows, the MRO market is expected to more than double revenue to $1.06 billion by 2015 from $499 million in 2009, according to a 2009 report by business research firm Frost and Sullivan. MRO service requirements in the country are expected to grow annually at a compounded rate of 13.5% in the same period.

“Labour costs in India are around $30-35 per man hour, compared with $55-60 in South-East Asia and the Middle East and even higher in the US and Europe,” Frost and Sullivan analysts Chethan Kambi and Arun Narayanan wrote in the report. “Therefore, India has potential to service not just Indian aircraft but also those from neighbouring regions.”

India’s MRO sector has been gathering pace in recent years.

In November, the aeronautical division of Europe’s largest airline, Air France-KLM group, entered India’s aircraft component repair market by acquiring a 26% stake in Mumbai-based MRO company Max AeroSpace and Aviation Limited for an undisclosed amount.

Mumbai-based Air Works Engineering, which began repairing aircraft 59 years ago, started an MRO facility in Hosur, Tamil Nadu, and acquired European aircraft refurbishing and painting firm Air Livery for an undisclosed amount in 2010. Engineering firm Punj Lloyd Limited and US-based private equity firm Global Technology Investment each hold a 33% stake in Air Works.

Airport developer GMR Group is in the process of starting an MRO facility with Malaysian Aerospace Engineering Sdn Bhd at the Hyderabad airport, and Air India is building an MRO with Boeing Company

Panel for opening up submarine construction to private sector

May 23, 2011

The committee has said that with private sector setting up capacity in the country there is no need to import submarines in future thus opening up the Rs 500000.000 Millions markets for Indian companies like L and T and Pipavav Shipyard. India at present has 14 submarines in its fleet.

L and T, which is constructing a shipyard in Ennore in Tamil Nadu, and Pipavav Shipyard, which has an existing shipyard in Gujarat, have been recommended by the panel to build submarines in partnership with government owned companies as joint venture projects. With this, Pipavav and L and T will join a select group of four companies that have the capability to submarines. "The report has been submitted to the government last week and an announcement is expected soon," said a source with direct knowledge of the panel's report.

"If this space is opened up, it will be a big opportunity for private players. And there is no doubt that Indian private players are fully equipped to manufacture submarines' Nikhil Gandhi. CMD of Pipavav told ET NOW.

It was in 1999, the defence ministry had prepared a 30-year plan to acquire 24 submarines. As per the plan, first six submarines were to be delivered in 2005 and to be completed by 2015. The rest of the 18 Submarines were to be delivered between 2015 and 2029.

The government gave the orders for the first six submarines to Mazgaon Docks in collaboration with French Ministry of Defence Yard. But due to lack infrastructure, the project has met with serious delay. In fact, all the submarines will now be delivered only by 2022 instead of 2015.

Indian private players have been continuosly exploring opportunities to enter various segments of the Indian defence and aerospace sector. Earlier this year Tata group formed a joint venture with Lockheed Martin to make aerostructures for Lockheed's C-130 aircraft in India. L and T also has a joint venture with Cassidian, a division of European Aerospace And Defence (EADS) Group, for defence electronics. It has also worked in close cooperation with the Defence Research and Development Organisation (DRDO) on several projects.The Mahindra group also has a joint venture with UK-based BAE Systems for production of manufacture mine-proof vehicles.

The Indian defence sector would need investments of $200 bn to $300 bn in military and aerospace according to the defence ministry.The defence ministry is looking at signing offset contracts of more than Rs 100000.000 Millions in the 11th plan ending this year. Twelve offset contracts valuing Rs 99430.000 Millions have been signed with Indian private industries and defence PSU so far.

.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.91
UK Pound	1	Rs.85.46
Euro	1	Rs.67.15

INFORMATION DETAILS

Report Prepared by :

KVT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	Yes
--LITIGATION	YES/NO	No
--OTHER ADVERSE INFORMATION	YES/NO	No
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	No
--EXPORT ACTIVITIES	YES/NO	No
--AFFILIATION	YES/NO	No
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	Yes
TOTAL		48

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.