Bharati Defence & Infrastructure Ltd

On behalf of BHARATI DEFENCE AND INFRASTRUCTURE LIMITED, and the Bharati family, we would like to express our deepest gratitude to all the stake holders for their continued support and belief during these troubled and turbulent times. Unfortunately, your Company continues to be under financial stress inspite of making relentless efforts to fight against the odds arising due to the continuing global downturn in the world economy in general and shipping and shipbuilding industry in particular – this is the worst slump ever to be seen in this industry.

Unfortunately earlier, the Banks had not released the required working capital facilities despite the CDR EG approval and this in turn resulted in the Company getting financially stressed. Edelweiss Asset Reconstruction Company (EARC) is currently acting as the lead lender on account of assignment of majority of the debt by the Company’s Lenders. Till recently Edelweissm (I.B. Division), had taken the exclusive right to raise funds and/or to find a strategic and /or financial Investor for your Company. A sum of Rs. 30.0 crores was also released by M/s. Edelwiess (Finance Division), but your Company could not get any other funds or any strategic / financial investors. The Company and its Promoters now, (since the exclusivity period is over), are exploring multiple options for funding of its partly completed projects and though it is a challenge in these difficult times, we are hopeful of a positive outcome within the next 8/9 months.

With a view to tide over the present difficult situation, Bharati has been making duel efforts viz; on the one hand we have been striving towards growth of revenue and on the other hand efforts are being made for reduction of outflow of funds by judicious utilization of resources.

Because of its expertise not only in shipbuilding but also in Fabrication of Offshore structure, Rig Building and other Ocean Engineering Products, Bharati has an edge over its peers but on account of constant decrease in the global oil demand and prices, the demand has not been up to the expectations. Bharati is the proud owner of two large shipyards located in Dabhol and Mangalore with state-of-the art infrastructure. As informed earlier your Company has also got the industrial license for manufacturing Warships, Frigates, Sub-marines and Petrol Boats etc. from the Ministry of Defence and the Government of India and in order to correctly reflect the true nature of its business activities the name of the Company had been changed to

BHARATI DEFENCE AND INFRASTRUCTURE LIMITED from BHARATI SHIPYARD LIMITED. Presently with the Governments avowed objective of "Make in India" and the Ministry of Defence Policy statement to build all their requirements indigenously as also to give repair work to the private shipyards, your Company expects to get large value orders in the future once their operations are stabilized.

Presently the Company is working at low capacity utilization for want of working capital but as stated above we are hopeful of resolving this issue in the next 8/9 months.

The Bharati has however, successfully delivered 2 (two) vessels in the past year to Coast Guard.

Because of the commitment of its employees and the support from all of you, we are confident that we will be able to face the future more confidently.

Concluding, I would reiterate that we are extremely thankful to our investors, customers, bankers, employees and the Bharati family for their continuous support throughout these very challenging times.