Dear Shareholders,
 
 It gives me great pleasure to share with you that your Company has
 seized the initiative and made significant progress to emerge as the
 key national player in the opportunity provided by the Indian defenses
 sector.
 
 Following the adoption of its new identity as Pipavav Defense and
 Offshore Engineering Company Limited (PDOC), your Company actively
 pursued the openings in the country''s defenses, heavy engineering and
 offshore oil & gas exploration and production assets construction
 space.
 
 This was in the backdrop of a year that saw many of the challenges of
 last year continuing. The Eurozone debt crisis required emergency
 support across several countries, uprisings across the Middle East and
 oil prices affected the global economy. The world economy grew by just
 under 4% in 2011, due to a serious slowdown in the developed world and
 prospects for global growth remain muted this year as well.
 
 India''s economic growth too was impacted by a combination of factors,
 both external and internal.
 
 Despite a gloomy global environment and a challenging Indian one, we
 have made progress and aim to continue to grow and build PDOC into
 India''s finest defenses enterprise.
 
 The financial year 2011-12 has been an eventful year as your Company
 delivered Panamax vessels of 74,500 DWT each, the largest vessels of
 their class ever built in India and for the first time, a private sector
 company i.e. your Company was awarded the contract for construction of
 five Naval Offshore
 
 Patrol Vessels for the Indian Navy. Your Company has also performed
 reasonably well on the profitability front and is on a growth trajectory
 to emerge as an integrated defenses, heavy engineering and of shore oil
 and gas assets construction player.
 
 We believe that creating an environment where public and private sector
 grow together will enable defence capabilities of our nation to grow
 faster. With the collaboration between public and private companies,
 India is enhancing its capabilities, thereby contributing to realize
 India''s goal of attaining self-reliance in defence production and
 moving a step further towards achieving maximum indigenization. The
 Government is shifting gears and welcoming private sector
 participation. With a view to furthering the objective of achieving
 substantive self-reliance in the defence sector, the Government of
 India issued Guidelines for establishing Joint Venture companies by
 Defence Public Sector Undertakings.
 
 In accordance with these guidelines, your Company was selected by
 Mazagon Dock Limited, Defence Public Sector Undertaking owned by
 Government of India (''MDL), as a Joint Venture partner, on the basis of
 its world-class infrastructure, state of the art engineering facilities
 and its inherent strengths.  Your Company has signed the Shareholders''
 Agreement with MDL for forming a joint venture company for the purpose
 of building surface warships for the Indian Navy. This is a landmark
 achievement for your Company. The joint venture company will complement
 the activities of MDL in the years to come.
 
 Your Company expects in addition to present and direct defence orders,
 sizable orders from MDL through the JV company mechanism.
 
 Your Company also marked its impression in Repairs Segment by
 undertaking repair/refurbishment of jack-up rigs owned by global majors
 in Of shore Oil & Gas Exploration and Production sector.
 
 Your Company''s of shore yard has been qualified by ONGC for fabrication
 and load out of of shore oil and gas modules like jackets, bridges and
 topsides such as decks, process gas compressor modules, gas turbine
 generator modules, living quarter modules, d-oxy tower, heli deck
 modules and of shore cranes etc. Armed with this, your Company is
 actively following up opportunities in heavy engineering and of shore
 oil and gas exploration sector at a brisk pace.
 
 Going forward, the ultra modern engineering facilities of your Company
 will also be optimally utilized for customers in heavy engineering
 industry such as BHEL, Nuclear Power Corporation etc.
 
 As I look at these developments, I see PDOC at an inflection.  I
 envision a rising order book with a strong defence flavor.
 
 I also for see our execution capabilities getting strengthened and our
 capacity getting further increased post construction of the second dry
 dock. This all would mean a growing order book, enhanced revenues and
 increased margins.
 
 During the financial year 2011-12, as stated earlier, your Company has
 built and delivered Panamax vessels of 74,500 DWT each, the largest
 vessels of their class ever built in India.  Capacity utilization of
 our infrastructure will keep increasing as we build momentum of our
 operations. Going forward, we see sustainable expansion of both
 revenues and profits.
 
 We are dedicated to generate distinction and value for all our
 stakeholders. We possess the advanced capabilities and strategic
 advantages to harness domestic and global opportunities. We continue to
 form formidable partnerships to enhance our core competence, technical
 know how and gain access to international markets.
 
 I would like to congratulate the Government of India for the continuous
 improvement in the Defence Procurement Policy and an effective Offset
 Policy, both of which are positives for the domestic industry for
 producing military hardware indigenously.
 
 On behalf of the Company, I take this opportunity to thank you - our
 valued shareholders, every government agency, our employees, our
 bankers, our partners and vendors - for the continued support.
 
 Thank you once again.
 
 Look forward to welcoming you at the 15th Annual General Meeting of
 your Company.
 
 Yours Sincerely,
 
 Nikhil Gandhi
 
 Chairman