TO THE MEMBERS,
 
 The Directors have great pleasure in presenting this Twenty Sixth
 Annual Report on the business and operations of your Company with
 theAuditedStatementofAccountsfortheyearended31st March 2011.
 
 1.  FINANCIAL PERFORMANCE
 
 Particulars                                ( Rs. incrores )
 
                                                 2010-11    2009-10
 
 Sales and Other Income                          2081.04    1822.54
 
 Profit before Interest, Depreciation &Tax        482.71     516.60
 
 Less: Interest (Net)                             139.47     150.61
 
 Profit before Depreciation &Tax                  343.24     365.99
 
 Less: Depreciation                                63.03      38.69
 
 Profit before Tax                                280.21     327.30
 
 Less: Provisions for Taxation                     91.41      98.38
 
 Net Profit after Tax                             188.80     228.92
 
 Balance brought forward from previous year       383.58     323.49
 
 Profit available for appropriations              572.38     552.41
 
 Appropriations
 
 Transfer to Debenture Redemption Reserve          92.00      25.00
 
 Transfer to General Reserve                       40.00     120.00
 
 Proposed Dividend Equity shares                   20.37      20.37
 
 Corporate Dividend Tax                             3.38       3.46
 
 Balance carried to Balance Sheet                 416.63     383.58
 
 * Figures regrouped wherever necessary.
 
 2.  OPERATIONS
 
 During the financial year under review, your Company has successfully
 delivered 16 vessels taking to the total up to 138 vessels delivered so
 far by the Company.
 
 Your Company has posted a turnover of Rs.2081.04 crores, an increase of
 about 14.18% as compared to Rs. 1822.54 Crores in the previous
 Financial Year. The Company recorded a net profit of Rs. 188.80 Crores.
 
 During the year, the construction of Jetty (27 metre wide x 231 metre
 long), a Slip dock (40 metre wide and 450 metre long) and a Heavy duty
 Ship Transfer system capable of lifting and moving 27,000 MT were
 completed and commissioned at Dahej yard.
 
 During the year, your Company has notched another milestone with the
 delivery of a 32,000 DWT, Double Hull, Bulk Carrier, first to be built
 in India with CSRand PSPC Compliances, to Precious Shipping Public Co.
 Ltd, Thailand.
 
 During the year your Company has bagged the first of its kind order
 from Indian Navy for the construction of 2 (two) Cadet Training Ships
 and a prestigious order for the construction of 2 Jack-up rigs from
 Drilling & Offshore Pte Limited, Singapore.  With state of the art
 infrastructure in place at Dahej and Surat yards, your Company is now
 fully geared to build and repair all kinds of ships, rigs and offshore
 structures/ platforms for its wide range of customers and defense
 sector.
 
 3.  DIVIDEND
 
 Considering the profitability for the year under consideration and
 thefuture capital requirements of the Company, your Directors
 recommended a Dividend of f 4/- per Equity Share of Rs. 107- each (i.e.
 40%) for the year ended 31st March 2011 and seek your approval for the
 same.
 
 4.  OUTLOOK
 
 By virtue of a long coastline of about 7517 km, coupled with 190 major
 and non-major ports, India is considered a major maritime nation.
 Approximately 90% of the country''s trade by volume and 70% by value is
 moved through maritime transport. In view of its importance, the Indian
 Government has recognised the need to promote the quality of the
 shipping and ocean resources, ports, harbours and the new technologies
 to be developed in this emerging scenario.
 
 Cargo handled at Indian ports more than quadrupled from 180 million
 tonnes in 1993-94 to 850 million tonnes in 2009-10, while the growth in
 Indian tonnage has been slow compared to burgeoning merchandise trade
 volumes. As much as 40% of Indian ships will need to be replaced over
 the next 5 years owing to more than 20 years of age and mandatory IMO
 regulations for phasing out single hull tankers. At present domestic
 shipping companies rely heavily on foreign yards for acquisition or
 repairs.
 
 The current capacity of all shipbuilding yards in India is approx.
 5,00,000 DWT. The Indian shipbuilding industry, which had only about
 0.1% share of the world shipbuilding in 2002, expanded over 10 fold to
 claim 1 % share by 2008.
 
 The Ministry of Shipping had envisaged, under the National Maritime
 Development Programme (NMDP), to set up two international size
 shipyards, one on the west coast and the other on the east coast.
 Recently, it has been decided by the Ministry that since the private
 sector has come up with setting up of two international size shipyards
 one on the east coast and another on the west coast, the Government may
 not pursue the matter regarding setting up of two international size
 shipyards and may act only as a facilitator.
 
 The National Manufacturing Competitive Council (NMCC) has emphasised
 the need for a shipbuilding policy to enable Indian shipyards to
 compete effectively on both domestic and export markets to help build a
 strong shipbuilding sector in the country, given its potential for
 employment generation and its strategic importance. Towards this
 direction, NMCC has recommended that the shipbuilding industry in India
 needs to be granted Infrastructure status and be declared as a
 strategic sector. In order to achieve the coveted goal of transforming
 Indian ports into world class facilities suited to the requirements of
 future economy of India, the Government of India has formulated
 Maritime Agenda 2010-2020, with a target, inter alia, of achieving a
 global shipbuilding market share of 5% by 2020 with strong R&D
 facilities and design capabilities forthe commercial shipbuilding.
 
 With the Government of India''s decision to open the Defence sector
 contracts for private participation and given the size of defence
 sector contracts, a new area of opportunity with great potential
 togrowhas been created for ship building Companies in private sector.
 
 The Government had earlier announced the Subsidy Scheme, in order to
 give boost to the shipbuilding Companies, for both domestic and export
 orders. This Subsidy Scheme had expired in August 2007. The momentum
 created by the boom conditions and subsidy support has been lost by the
 discontinuation of the scheme and recession post 2007 and as a result
 the Indian shipyards have been languishing for major orders. In order
 to revive the momentum in the shipbuilding sector, the Government has
 been reportedly considering reviving the subsidy scheme with some
 changes.
 
 5.  SUBSIDIARIES
 
 Your Company has two (2) subsidiaries i.e. Western India Shipyard
 Limited (a BSE listed Company) and ABG Shipyard Singapore Pte Limited
 as at the end of financial year. In view of the General exemption
 granted by The Ministry of Corporate Affairs, under Sec. 212 of the
 Companies Act, 1956, vide General Circular no. 2/2011 dated 8*
 February, 2011, from the requirement of attaching the Balance Sheet,
 Profit & Loss Account, etc. of its subsidiaries to its accounts, your
 Company has decided to take the benefit of the said exemption.
 
 The consolidated financial statement is forming part of this Annual
 Report.
 
 Your Company undertakes that the annual accounts of the subsidiary
 Companies and the related detailed information will be made available
 to the members on request. Further, the annual accounts of the
 subsidiary Companies will also be kept at the registered office of the
 Company and of its subsidiary Companies for inspection by any member.
 
 6.  SCHEME OF COMPROMISE AND ARRANGEMENT
 
 Pursuant to the order of Hon''ble Bombay High Court at Goa passed in the
 matter concerning the Scheme of Compromise and Arrangement between
 Western India Shipyard Limited and its Secured Lenders & Shareholders
 with your company as a confirming party, your Company has acquired
 60.26% shareholding in Western India Shipyard Limited (WISL).
 
 WISL is a BSE listed company located at Goa port, which is on the west
 coast of India. It has a modern state-of-the-art floating dry dock that
 enables it to repair various types of vessels up to 60,000 DWT.
 Acquisition of Western India Shipyard Limited has added rig and ship
 repairing expertise to coexisting business.
 
 7.  DIRECTORS
 
 In accordance with Section 255 & 256 of the Companies Act, 1956 read
 with Article 190 of the Articles of Association of the Company, Shri.
 Ashok Chitnis and Major Arun Phatak are liable to retire by rotation at
 the ensuing Annual General Meeting and are eligible for re-appointment.
 Your Directors recommend the appointment/ re-appointment of Shri. Ashok
 Chitins and Major Arun Phatak as directors.
 
 Mr. Nainesh Jaisingh and Mr. SaketAgarwal have resigned as directors of
 the Company with effectfrom 29th of July 2011. The Directors record
 their appreciation of the valuable services rendered by Mr. Nainesh
 Jaisingh and Mr. SaketAgarwal. Further, Mr. Dhananjay Datar, Chief
 Financial Officer of the Company has been appointed as Whole-time
 Director with effect from 29th July 2011. Considering the vast
 experience and skills in finance, management, taxation and industry,
 your directors recommend his appointment for your approval. IL&FS
 Investment Managers Limited (IL&FS) which had nominated Mr.  Shahzaad
 Dalai to the Board of Directors of the Company has divested its
 investment in the Company. Consequent upon this, IL&FS withdrew its
 nominee Directorfrom the Board. However, considering the credentials of
 Mr. Shahzaad Dalai in the fields of Finance, Management and Industry,
 the Board of Directors had appointed Mr. Shahzaad Dalai as an
 Additional Director of the Company, who holds the office of Director up
 to the date of the ensuing Annual General Meeting of the Company. Your
 Company has received a notice under Section 257 of the Companies Act
 1956 from a member signifying his intention to propose the appointment
 of Mr. Shahzaad Dalai as a Director of the Company, liable to retire by
 rotation. Your Directors recommend his appointment for your approval.
 
 None of these directors is disqualified as per the provisions of
 Section 274 (1) (g) of the Companies Act, 1956, to be re-appointed or
 appointed as directors of your Company.
 
 The details of the Directors being recommended for appointment/
 re-appointment are contained in the accompanying notice of the
 forthcoming Annual General Meeting.
 
 8.  AUDITORS
 
 M/s. Nisar& Kumar, Chartered Accountants, Statutory Auditors of the
 Company hold office till the conclusion of the ensuing Annual General
 Meeting and have consented for their re-appointment.
 
 Your Directors recommend their appointment as the Auditors of the
 Company for the current year and fix their remuneration.
 
 9.  DEPOSITS
 
 The Company has not accepted deposits by way of invitation to the
 public and therefore, provisions of Section 58A of the Companies Act,
 1956 are not applicable to the Company.
 
 10.  CORPORATE GOVERNANCE
 
 Your Company is committed to adhering to good corporate governance
 practices to effectively meet its Statutory, Financial and Social
 obligations. We believes that good corporate governance is vital to our
 success in business, create long term shareholder value as also an
 important component of our commitment to our shareholders, customers
 and employees.
 
 A detailed report on compliance of Corporate Governance and
 Management''s Discussion and Analysis as stipulated in Clause 49 of the
 Listing Agreement is enclosed and forms part of this Report, as
 Annexure B & C respectively
 
 In line with the applicable provisions, the Company has obtained
 requisite Certificate from the Auditors of the Company, which is annexed
 and forms part of this Report.
 
 11.  DIRECTORS RESPONSBILITYSTATEMENT
 
 As stipulated in Section 217(2AA) of the Companies Act, 1956, your
 Directors confirm that:
 
 i in the preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures;
 
 ii. the Directors have selected such accounting policies and applied
 them consistently and made judgements and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year and of the profit or
 loss of the company for that period;
 
 iii. the Directors have taken proper and sufficient care of the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 iv.  the Directors have prepared the annual accounts on a going concern
 basis.
 
 12.  STATUTORY INFORMATION
 
 The particulars of employees as required under Section 217 (2A) of the
 Companies Act, 1956 read with the Companies (Particulars of Employees)
 Rules, 1975, and Companies (Particulars of Employees) Amendment Rules,
 2011, are required to be annexed to the Directors'' Report. Having
 regard to the provisions of Section 219 (1)(b)(iv) of the said Act, the
 annual report excluding the aforesaid information is being sent to all
 the members of the Company and others entitled thereto. Any member
 interested in obtaining such particulars may write to the Company
 Secretary at the Corporate Office of the Company.
 
 13 ENERGY CONSERVATION.TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGSAND OUTGO
 
 Information relating to the conservation of energy, technology
 absorption and foreign exchange earnings and outgo required under
 Section 217(1) (e) of the Companies Act, 1956 read with Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988, as amended, is given in the Annexure -A to this Report.
 
 14.  INDUSTRIAL RELATIONS
 
 The Industrial relations at the manufacturing facilities of your
 Company have been cordial during the year. Your Directors wish to place
 on record the commitment and involvement of the employees at all levels
 and looks forward to their continued co- operation and support.
 
 15.  APPRECIATION
 
 The directors wish to place on record their deep sense of appreciation
 to the employees at all levels of the Company for their dedication and
 commitment throughout the year.
 
 The directors would also like to express their appreciation for
 assistance and co-operation from the bankers, trustees, financial
 institutions, Government Authorities, business associates and Company''s
 shareholders/members.
 
                                For and on behalf of the Board
 
 Place: Mumbai                  R.S. Nakra         Major Arun Phatak
 
 Date :29th July 2011           Managing Director  Executive Director