Bit surprised that Navy wasn't upgradeable from the get go, it seems kind of obvious.
Naval upgrades don't work well with the tech-model adopted by HoI3. A Queen Elizabeth class Battleship upgraded with 16" guns doesn't become a Nelson class after that.
Modernisation.
9. Japan is modernising all her capital ships, and it is anticipated that all 9 ships will have been modernised before the end of 1937.
10. France is modernising the 3 ships of the Bretagne class which were completed in 1915 and 1916. The 3 ships of the Jean Bart class (completed 1913 and 1914) were extensively refitted in 1929, though it is not considered that they can be regarded as "modernised" ships. The Diderot class (completed, in 1911) have not been modernised and are considered to be of small fighting value. It is possible that they may be scrapped on completion of the new ships, and they have not been included in the comparison of numbers.
11. Italy is modernising her 2 ships of the Giulio Cesare class and greatly increasing their speed.
12. Of the British Fleet, Nelson, Rodney and Hood are post-war ships that do not require modernisation. Warspite, Queen Elizabeth and Renown will be completely modernised. Bar ham, Malaya, Royal Oak, and Repulse have been or are now in hand for partial modernisation, but they will not be re-engined, nor will they have improvements to main armament mountings or such increased A / A armaments and aircraft. They cannot be counted as " modernised " ships. The remaining 4 ships of the Royal Oak class and Valiant axe not being modernised at all.
13. It is desired to emphasise once again that "modernisation" is not a substitute for a proper replacement programme. As was pointed out in the Appendix to N.C. (M) (35) 1, whatever rate of replacement (within practical limits) is adopted, the extreme age to which some of our ships will necessarily have to last must give cause for the greatest anxiety. The present modernisation programme is designed to make the older ships reasonably able to carry out their functions for the period that they must remain in service; it does not make them comparable to new ships. This especially applies to the partly modernised ships.