PDF processed with CutePDF evaluation edition www.CutePDF.com ABG Shipyard Limited Annual Report 2012-2013
CORPORATE INFORMATION
Board of Directors 28th Annual General Meeting Mr. Rishi Agarwal - Chairman Day : Friday
Date : 27th September, 2013 Major Arun Phatak - Executive Director Time : 12.00 Noon Mr. Dhananjay Datar - Whole-Time Director Venue : At the Registered Office of the Company Near Magdalla Port, Mr. Ashok R. Chitnis - Independent Director Dumas Road, Surat - 395007. Gujarat - India Mr. Shahzaad Dalal - Independent Director
Mr. Ashwani Kumar - Independent Director C O N T E N T S Mr. Aloke Sengupta - Nominee Director Page (from 14th August 2013) Notice of AGM 2
Auditors Directors’ Report 9 M/s. Nisar & Kumar Report on Corporate Governance 15 Chartered Accountants Management Discussion & Analysis 29 A-17, Everest Building, 156, Tardeo Road, Auditor’s Report 31 Mumbai - 400 034. Balance Sheet 34
Bankers Statement of Profit and Loss 35 ICICI Bank Ltd. Cash Flow Statement 36 State Bank of India Notes forming part of the Financial 37 Bank of Baroda Statements Bank of India Statement pursuant to Section 212 of the 60 IDBI Bank Ltd. Companies Act, 1956 Export-Import Bank of India Consolidated Financial Statements 61 Standard Chartered Bank Oriental Bank of Commerce Development Credit Bank Registered Office Indian Overseas Bank Near Magdalla Port, Dumas Road, Punjab National Bank Surat - 395007. Gujarat - India Andhra Bank Tele.: 91-261-2725191 Yes Bank Fax: 91-261-3048243
Registrar & Share Transfer Agent Corporate Office Link Intime India Pvt. Ltd. 4th/5th floor, Bhupati Chambers, C-13, Pannalal Silk Mills Compound, 13, Mathew Road, L.B.S. Marg, Bhandup (West), Mumbai-400 004. Mumbai - 400 078. Tel.: 91-22-66563000 Tel.: 91-22-25946970 Fax: 91-22-66223050 Fax: 91-22-25946979 Website: www.abgindia.com e-mail: [email protected] E-mail: [email protected]
1 ABG Shipyard Limited Annual Report 2012-2013
NOTICE
Notice is hereby given that the 28th Annual General Meeting of the Members of ABG Shipyard Limited will be held on Friday, the 27th of September, 2013 at 12.00 noon at the Registered Office of the Company at Near Magdalla Port, Dumas Road, Surat-395007, to transact the following business:-
ORDINARY BUSINESS:
1. To receive, consider and adopt the Audited Balance Sheet as at March 31, 2013, the Statement of Profit and Loss for the year ended on that date and the reports of the Board of Directors and Auditors thereon.
2. To appoint a Director in place of Mr. Shahzaad Dalal, who retires by rotation and being eligible, offers himself for re- appointment.
3. To appoint a Director in place of Mr.Ashok R. Chitnis, who retires by rotation and being eligible, offers himself for re- appointment.
4. To appoint M/s. Nisar & Kumar, Chartered Accountants as Auditors of the Company to hold office from the conclusion of this Annual General Meeting of the Company until conclusion of the next Annual General Meeting and to authorize the Board of Directors to fix their remuneration.
SPECIAL BUSINESS:
5. To consider and, if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:-
“RESOLVED THAT in terms of the Articles of Association of the Company and pursuant to the provisions of section 198, 269, 309, 310 and other applicable provisions, if any, read with schedule XIII of the Companies Act, 1956 as amended from time to time and all applicable guidelines for managerial remuneration issued by the Central Government from time to time and subject to such other approvals as may be necessary, Major Arun Phatak be and is hereby re-appointed as an Executive Director of the Company for a period of five years with effect from 10th June, 2013 on terms & conditions including remunerations as mentioned in explanatory statement to the resolution.”
6. To consider and, if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:-
“RESOLVED that In supersession to the Special Resolution passed by Members of the Company at the 27th Annual General Meeting held on 27th September 2012 and pursuant to the provisions of Section 81(1A) and other applicable provisions, if any, of the Companies Act, 1956, the provisions of Securities and Exchange Board Of India (Issue Of Capital And Disclosure Requirements) Regulations, 2009 (the “SEBI ICDR Regulations”), the provisions of the Foreign Exchange Management Act, 1999, and rules and regulations made hereunder, including the Foreign Exchange management (Transfer and Issue of Securities by a person Resident outside India) Regulation, 2000, if applicable, the provisions of Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and subject to any other applicable law or laws, rules and regulations (including any amendment thereto or reenactment thereto or reenactment thereof for the time being in force) and subject to enabling provisions in the Memorandum and Articles of Association of the Company and Listing Agreements, entered into by the Company with the Stock Exchanges where the shares of the company are listed and subject to any approval, consent, permission and/or sanction of the members of the Company by way of special resolution, Government of India, Reserve Bank of India, Stock Exchanges, Registrar of Companies, Securities and Exchange Board of India and /or any other competent authorities, institutions or bodies, within or outside India, and subject to such conditions and modifications as may be prescribed by any of them while granting such approvals, permissions, consents and sanctions and which may be agreed by the Board of Directors (hereinafter referred to as “Board” which term shall include any committee thereof, whether constituted or to be constituted),approval of the Company is hereby accorded to the Board to create, offer, issue and allot in one or more tranch(es), in the course of domestic and / or international offerings and /or Qualified Institutional Placements (“QIP”), with or without an over allotment/ green shoe issue option, in one or more foreign markets or domestic markets, to domestic institutions, foreign institutions, non-resident Indians, Indian public, companies, corporate bodies, mutual funds, banks, insurance companies, pension funds, individuals, qualified institutional buyers or other persons or entities, whether shareholders of the Company or not, through a public issue and/or on a private placement basis and/or qualified institutional placement within the meaning of Chapter VIII of the SEBI ICDR Regulations and /or preferential issue and/or other kind of public issue and /or private placement or through a combination of the foregoing as may be permitted under applicable law from time to time, with or without an overallotment/ green shoe option, equity share, secured or unsecured debentures, bonds or any other securities whether convertible into equity share or not, including, but not limited to, Foreign Currency Convertible Bonds (“FCCBs”), Optionally Convertible Debentures (“OCD”), Bonds with share warranted attached, Global Depositary Receipts (“GDRs”), American Depositary Receipts (“ADRs”) or any other equity related instrument of the Company or a combination of the foregoing including but not limited to a combination of equity shares with bonds and/or any other securities whether convertible into equity shares or not (hereinafter referred to as “securities”) for a value of upto Rs. 1,000/- crores (Rupees One Thousand Crores), whether to be listed on any stock exchange inside India or any international stock exchanges outside India, through an offer document and/or prospectus and/or offer letter, and/or offering circular, and/or on public and/or private or preferential basis, whether rupee denominated in foreign currency at such time or times, at such price
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or prices in such manner and on such terms and conditions including security, rate of interest etc, as may be decided by and deemed appropriate by the board as per applicable law, including the discretion to determine the categories of Investors to whom the offer, issue and allotment shall be made, considering, the prevailing market conditions and other relevant factors wherever necessary in consultation with its advisors, as the board in its absolute discretion may deem fit and appropriate.
RESOLVED FURTHER that in addition to all applicable Indian laws, the securities issued in pursuance of this resolution shall also be governed by all applicable laws and regulations of any jurisdiction outside India where they are listed or that may in any other manner apply to such securities or provided in the terms of their issue.
RESOLVED FURTHER that any securities that are not subscribed in issues mentioned above, may be disposed off by the board in its absolute discretion in such manner, as the board may deem fit and as permissible by the law.
RESOLVED FURTHER that in case of a Qualified Institutional Placement pursuant to Chapter VIII of the SEBI ICDR Regulations, the allotment of specified securities shall only be to Qualified Institutional Buyers within the meaning of Chapter VIII and the relevant date for the determination of the price of the equity shares to be issued or issued pursuant to conversion, shall be the date on which the board decides to open the issue of securities or such other time as may be allowed by SEBI ICDR Regulations from time to time and allotment of specified securities shall be completed within twelve months from the date of this resolution.
RESOLVED FURTHER that in case of an issuance of FCCBs/ADRs/GDRs, the relevant date for the determination of the issue price of the securities offered, shall be determined in accordance with the Issue of Foreign Currency Convertible Bonds and Ordinary shares (through Depository Receipt Mechanism) Scheme, 1993 as may be amended from time to time.
RESOLVED FURTHER that the issue of Securities shall be subject to the following terms and conditions:
(a) The Securities shall be subject to the provisions of Memorandum and Articles of Association of the Company and in accordance with the terms of the issue; and
(b) The number and/or price of the Securities shall be appropriately adjusted for corporate actions such as bonus issue, rights issue, stock split, merger, demerger, transfer of undertaking, sale of division or any such capital or corporate restructuring.
RESOLVED FURTHER THAT for the purpose of giving effect to the above resolutions, the Board be and is hereby authorized to do all such acts, deeds, matters and things including but not limited to determining the form and manner of the issue, including the class of investors to whom the Securities are to be issued and allotted, number of Securities to be allotted, execution of various transaction documents, creation of mortgage/ charge in accordance with Section 293(1)(a) of the Act, in respect of any Securities as may be required either on pari-passu basis or otherwise, as it may in its absolute discretion deem fit and to settle all questions, difficulties or doubts that may arise in regard to the issue, offer or allotment of Securities and utilization of the issue proceeds as it may in its absolute discretion deem fit without being required to seek any further consent or approval of the members or otherwise to the end and intent that the members shall be deemed to have given their approval thereto expressly by the authority of this resolution.
RESOLVED FURTHER that the Board be and is hereby authorized to form a committee or delegate all or any of its powers to any Directors (s) or Committee of Directors or other persons authorized by the Board to give effect to the aforesaid resolutions.
RESOLVED FURTHER that subject to the applicable laws, the Board and/or the Committee authorized by the Board be and is hereby authorized to do such acts, deeds and things as the Boards in its absolute discretion deems necessary or desirable in connection with the issue of the securities, including, without limitation of the following;
(a) decide the date for the opening of the issue of securities;
(b) Decide the price band for the issue;
(c) Finalization of the Issue Price;
(d) Finalization of the allotment of the securities on the basis of the subscriptions received;
(e) Finalization of, signing of and arrangement for the submission of the preliminary and final offering circulars/ prospectus(es)/ offer document(s), and any amendments and supplements thereto, along with supporting papers needed to be filed for seeking listing approval with any applicable government and regulatory authorities, institutions or bodies as may be required;
(f) Deciding the pricing and terms of the securities, and all other related matters, including taking any action on two-way fungibility for conversion of underlying equity shares into FCCBs/ GDRs/ ADRs, as per applicable laws, regulations or guidelines;
(g) Appoint, in its absolute discretion, managers (including lead manager), Investment Bankers, Merchant Bankers, underwriters, guarantors, financial and /or legal advisors, depositories, custodians, principal paying/transfer/conversion
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agents, listing agents, registrars, trustees and all other agencies, whether in India or abroad, entering into or execution of all such agreements/ arrangements/ MoUs/ documents with any such agencies, in connection with the proposed offering of the securities;
(h) Approval of the Deposit Agreements(s), the Purchase/Underwriting Agreement(s), the Trust Deed(s), the Indenture(s), the Master/Global GDRs/ADRs/FCCBs/other securities, letters of allotment, listing application, engagement letter(s), memoranda of understanding and any other agreements of documents, as may be necessary in connection with the issue/offering (including amending, varying or modifying the same, as may be considered desirable or expedient), in accordance with all applicable laws, rules, regulations and guidelines;
(i) Settle all questions, difficulties or doubts that may arise in regards to the issue, offer or allotment of securities and utilization of the proceeds of the issue in such manner and to do all such acts, deeds, matters and things as it may in its absolute discretion deem fit.
RESOLVED FURTHER the Board and/or the Committee authorized by the Board be and is hereby authorized to accept any modifications in the proposals as may be required by the authorities involved in such issues but subject to such conditions as the SEBI/GoI/RBI or such other appropriate authorities may impose at the time of their approval and as agreed to by the Board; RESOLVED FURTHER that without prejudice to the generality of the foregoing, issue of the securities may be done upon all or any terms or combination of terms in accordance with international practices relating to the payment of interest, additional interest, premium on redemption, prepayment or any other debt service payments and all such terms as are provided customarily in an issue of securities of this nature. RESOLVED FURTHER that the Company may enter into any arrangement with any agency or body authorized by the Company for the issue off depository receipts representing the underlying equity shares issued by the Company with such features and attributes as are prevalent in international capital markets for instruments of this nature and to provide for the tradability of free transferability thereof as per international practices and regulations (including listing on one or more stock exchange(s) inside or outside India) and under the forms and practices prevalent in the international markets.”
By Order of the Board of Directors
Place: Mumbai Sunil Agarwal Date : 14th August, 2013 Company Secretary
NOTES:
1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a member of the Company.
2. The Instrument of proxy in order to be effective should be duly completed, stamped and signed and must be deposited at the Registered Office of the Company not less than 48 hours before the meeting.
3. An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 relating to the Special Businesses to be transacted at the Annual General Meeting is annexed hereto.
4. The details under clause 49 of the Listing Agreement with the Stock Exchange(s) in respect of the directors proposed to be re- appointed at the Annual General Meeting is annexed hereto.
5. The Register of Members and Share transfer books of the Company will remain closed from Friday, 20th September, 2013 to Friday 27thSeptember, 2013 (both days inclusive) in connection with the Annual General Meeting.
6. Members are requested to intimate all changes with respect to their bank details, nomination, power of attorney, change of address, change in name, register/change in email Ids etc. to their respective depository participant(DP).
7. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit their PAN to their Depository Participants with whom they are maintaining their demat accounts.
8. Members/Proxies are requested to bring their copy of Annual Report and the attendance slip, duly filled in, at the meeting
9. Members desirous of obtaining any information as regards accounts and operations of the Company are requested to write to the Company atleast one week before the meeting, so that information required is made available at the meeting.
10. As per Section 205C of the Companies Act, 1956, the amount remaining unpaid or unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account of the Company shall be transferred to the Investor Education and
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Protection Fund (IEPF) setup by the Government of India and no payments shall be made by the fund, in respect of any claims. Members who have not yet encashed their dividend warrants for the financial year ended March 31, 2006 and subsequent years are requested to make their claims directly to the Registrar and Share Transfer Agent, without any delay. It may be noted that the unclaimed dividend for the financial years 2005-06 to 2010-11 are due for transfer to the IEPF as per table given below:
Financial Year Due Date for Transfer 2005-06 17th September, 2013 2006-07 27th October, 2014 2007-08 22nd October, 2015 2008-09 30th October, 2016 2009-10 30th October, 2017 2010-11 27th October, 2018
Unclaimed IPO refund Money
Pursuant to section 205C and other applicable provisions, if any, of the Companies Act, 1956, the amount remaining unclaimed/ unpaid for a period of seven years from the date of closure of IPO of the Company ` 10,79,000/- has been transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government on 09th December 2012. As per Section 205B of the Companies Act, 1956, no claim would lie against the Company or the said fund after the transfer.
11. The Ministry of Corporate Affairs (MCA) on 10th May, 2012 notified the IEPF (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012 (IEPF Rules). The objective of the IEPF Rules is to help the shareholders to ascertain status of the unclaimed amounts and overcome the problems due to misplacement of intimation thereof by post etc. The Company has uploaded the information in respect of the Unclaimed Dividends in respect of the financial years 2005-06 to 2010-11, as on the date of 27th Annual General Meeting held on 27th September, 2012, on the website of the IEPF viz. www.iepf.gov.in. Shareholders may kindly check the said information and if any dividend amount is appearing as unpaid against their name, they are requested to lodge their claim, duly supported by relevant document directly to the Resistrar and Transfer Agent (RTA) before expiry of seven years.
12. All statutory registers are open for inspection at the Registered Office of the Company on all working days, from the date hereof upto the conclusion of this meeting between 10.00 a.m. and 5.00 p.m.
13. Corporate Members intending to send their authorized representatives to attend the Annual General Meeting are requested to send a duly certified copy of the Board Resolution authorizing their representatives to attend and vote at the Meeting.
14. Members are requested to address all correspondence, including dividend matters, to the Registrar and Share Transfer Agent, M/s. Link Intime India Private Ltd., C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai – 400 078.
15. The Company has implemented the “Green Initiative” as per Circular Nos. 17/2011 dated April 21, 2011 and 18/2011 dated April 29, 2011 issued by the Ministry of Corporate Affairs (MCA) to enable electronic delivery of notices/documents and annual reports to shareholders. Henceforth, the e-mail addresses indicated in your respective depository participant accounts which will be periodically downloaded from NSDL/CDSL will be deemed to be your registered e-mail address for serving notices/documents including those covered under section 219 of the Companies Act, 1956. The Notice of AGM and the copies of audited financial statements, directors' report, auditors' report etc. will also be displayed on the website of the Company i.e. www.abgindia.com and the other requirements of the aforesaid MCA circular will be duly complied with. Members who holds shares in electronic mode and who have not registered their e-mail addresses, so far, are requested to register their email address and changes therein from time to time, with the Depository through their concerned Depository Participants.
However, we are happy to provide, free of cost, with a physical copy of the notice, balance sheet and all other documents required by law to be attached thereto including the profit & loss account and auditors' report etc., upon receipt of a written requisition from the members of the Company
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EXPLANTORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956
Item no. 5.
Major Arun Phatak was appointed as an Executive Director of the Company for a period of five years with effect from June 10, 2008.
The Board of Directors of the Company at its meeting held on May 30, 2013, re-appointed Major Arun Phatak, as an Executive Director of the Company with effect from June 10, 2013 for a further term of 5 years, subject to the approval of the members in the Annual General Meeting.
Part III of Schedule XIII of the Companies Act, 1956 provides that the appointment and remuneration of Managing Directors and Whole-time Directors, in accordance with part I and part II of the schedule shall be subject to the approval by resolution of the shareholders in a general meeting.
Major Arun Phatak shall be entitled to the following remuneration:
Salary, Perquisites, Allowances and Bonus: ` Per Month ` Per Annum Salary Perquisites & Allowance Bonus 2,70,000 2,33,100 4,05,000
The perquisites and allowances, as aforesaid, shall include accommodation (furnished or otherwise) or house rent allowance in lieu thereof; Special Allowance, medical reimbursement; leave travel concession for self and family including dependents. The said perquisites and allowances shall be evaluated, wherever applicable, as per the provisions of Income Tax Act, 1961 or any rules there under or any statutory modification(s) or re-enactment thereof; in the absence of any such Rules, perquisites and allowances shall be evaluated at actual cost. However, contribution to Provident Fund, Gratuity payable and encashment of Leave at the end of the tenure, as per the rules of the Company and to the extent not taxable under the Income Tax Law, shall not be included for the purpose of computation of the overall ceiling of remuneration. Further, employee stock options granted / to be granted, from time to time are not to be considered as perquisite and not to be included for the purpose of computation of the overall ceiling of remuneration.
Reimbursement of Expenses:
Reimbursement of expenses incurred for traveling, boarding and lodging during business trips, provision of car for use on the Company's business and telephone expenses at residence shall be reimbursed and not considered as perquisites.
The aggregate of the salary, special pay, allowances and perquisites in any financial year shall be subject to the limits prescribed from time to time under sections 198, 309 and other applicable provisions of the Companies Act, 1956 read with Schedule XIII to the said Act as may for the time being, be in force, or otherwise as may be permissible at law.
Where in any financial year, the Company has no profits or if its profits are inadequate, the foregoing amount of remuneration and perquisites shall be subject to the applicable provisions of the Companies Act, 1956.
Further, the Board of Directors of the Company be and are hereby authorized to vary, alter, increase, expand, enhance, enlarge or widen the scope of the remuneration and perquisites, including the monetary value thereof within the limits prescribed from time to time under sections 198, 309 and other applicable provisions of the Companies Act, 1956 read with Schedule XIII to the said Act as may for the time being, be in force, or otherwise as may be permissible at law.
Accordingly, the Resolution at item no.5 is proposed for the approval of the members for re-appointment of Major Arun Phatak, as Executive Director as specified in Part III of the Schedule XIII of the Companies Act, 1956, and other applicable provisions, if any.
The Board recommends the approval of the re-appointment of Major Arun Phatak as Executive Director of the Company.
Major Arun Phatak, Executive Director of the Company, is interested in the proposed Resolutions. None of the other directors of the company are interested in the proposed resolution.
This explanation together with the accompanying notice is and should be treated as an abstract of the terms of appointment of Major Arun Phatak, as Executive Director of the Company under section 302 of the Companies Act, 1956.
Item No. 6
The Company proposes to raise funds to the tune of ` 1,000/- crores (Rupees One Thousand Crores), in one or more tranches through a public issues and/or on a private placement basis and/or QIP within the meaning of Chapter VIII of the SEBI ICDR Regulations and/or preferential issue and/or any other kind of public issue and/or private placement as may be permitted under applicable law from time to time. The resolution contained in the business of the Notice is regarding proposal to create, offer, issue and allot equity shares and/or such other Securities as stated in the Special Resolution (the “Securities”) which seeks to empower the Board of Directors (hereinafter referred to as “Board” which include any Committee thereof, whether constituted or to be
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constituted) to undertake such issue or offer of securities.
1. Object of the issue
Taking into account the expansion plans and positive outlook of the Company, the Company proposes to raise long term capital by issue of further securities to cater its fund requirements for expansion of its activities, finance, additional working capital requirements and general corporate purpose.
2. Pricing
In case of an issue of the Securities to Qualified Institutional Buyers pursuant to Chapter VIII of the SEBI ICDR Regulations, the issue price of Securities shall be at a price, being not less than the price calculated in accordance with Chapter VIII of SEBI ICDR Regulations as may be amended from time to time and the Relevant Date in this regard shall be the date on which the board decides to open the issue of securities or such other time as may be allowed by SEBI ICDR Regulations from time to time.
In case of a Qualified Institutional Placement pursuant to Chapter VIII of the SEBI ICDR Regulations, the allotment of securities shall be completed within twelve months from the date of passing of this resolution.
In case of issue of ADRs/GDRs the issue price shall be at a price, being not less than the price calculated in accordance with applicable law including the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts Mechanism) Scheme, 1993, as may be amended from time to time.
3. Terms and Conditions
The detailed terms and conditions for the offer will be determined by the Board in consultation with Advisors, Lead Manager/Book Runners, Underwriters and such other authority or authorities as may be required to be consulted by the Company considering the prevailing market conditions and other relevant factors.
The issue/ allotment/ conversion would be subject to the availability of regulatory approvals, if any. The conversion of securities, held by foreign investors, into shares would be subject to the applicable foreign investment limits.
The Special Resolution seeks to empower the Board and/or Committee authorized by the Board, to issue Securities in one or more tranche or tranches, at such time / times, and to such person(s) as the Board may in its absolute discretion deem fit.
Section 81(1A) of the Companies Act, 1956 and the relevant clause of the Listing Agreement with the Stock Exchanges where the Equity Shares of the Company are listed provides, inter alia, that when it is proposed to increase the issued capital of a company by allotment of further shares, such further shares shall be offered to the existing shareholders of such company in the manner laid down in Section 81 unless the shareholders in a general meeting decide otherwise. Since the Special Resolution proposed in the business of the Notice results in the issue of shares of the Company otherwise than to the members of the Company, consent of the shareholders is being sought pursuant to the provisions of Section 81(1A) and other applicable provisions of the Companies Act, 1956 and the Listing Agreement.
The Special Resolution, if passed, will have the effect of allowing the Board and/or the Committee authorized by the Board to issue and allot Securities to the investors who may or may not be the existing shareholders of the Company and the Board and/or the Committee authorized by the Board will have the power to decide the date of opening of the Issue.
The Directors of the Company may be deemed to be concerned or interested in the above resolution only to the extent of shares held by them in the Company.
The Board of Directors recommend the special resolution for your approval.
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Details of Directors seeking appointment/re-appointment in the 28th Annual General Meeting
Name of Director Major Arun Phatak Mr. Shahzaad Dalal Mr. Ashok R. Chitnis
Date of Birth 31/10/1939 01/12/1958 15/02/1943
Date of Appointment / 10/06/2013 27/09/2011 27/09/2011 Re-appointment as Director
Qualification B.Sc through National Defence He has a master's degree in He is a Marine Engineer and also holds Academy and MBA from the University management from the Northeast a 1st Class Competency Certificate of Halifax, Canada Louisiana University, USA. (Steam & Motor) from the Ministry of Transport, Govt. of India.
Experience and Expertise He has vast experience of over 35 years Mr. Shahzaad Dalal is the Chairman & Mr. Ashok R. Chitnis has over Forty in Specific functional area in the Corporate Sector and is Chief Executive Officer of IL&FS years of experience in the maritime associated with ABG since the last 8 Investment Advisors LLC, a fully owned sector. He is a Fellow of the Institute of years subsidiary of IL&FS Investment Marine Engineers (India) from its Managers Ltd (IIML). He leads a highly inception in 1980 and has served a full competent team of 40 professionals two year term as the President of the involved in managing over 95 Institute. He has worked with the Scindia investments. Steam Navigation Company Ltd in various capacities. Thereafter, he joined He is also responsible for developing the the Indian Register of Shipping (IRS) in Infrastructure Business of IL&FS Group 1976. He was in-charge of the IRS in key international markets in sectors Mumbai field office for over 4 years He such as Roads, Power, Renewable was Chief Surveyor, IRS for over 9 years Energy, Ports, Logistics, Education and until his superannuation in 2003. As Waste Management. Prior to joining Chief Surveyor, he was in charge of the IIML, Mr. Dalal served as the Chief Indian Register Quality Systems, a Executive Officer of the Asset department of IRS engaged in Quality Management Business of IL&FS. Within Management System Certification for the IL&FS Group he has undertaken ISO 9000 standards. various responsibilities.. He has also headed the initiative for large value He is a qualified and experienced lead structured finance/ transactions in auditor for QMS Audits with respect to l e a s i n g , p r o j e c t f i n a n c e a n d ISO 9000 standards and has conducted privatizations a large number of audits at companies in various industrial sectors.
Directorships held in other 1. ABG Energy Ltd. 1. IL& FS Investment Managers Ltd. 1. Western India Shipyard Ltd. companies 2. ABG Cement Ltd. 2. SARA Fund Trustee Co. Pvt. Ltd. 3. Sheorey Digital Systems Ltd 3. IL & FS Financial Services Ltd. 4. Kathrein India Pvt. Ltd. 4. Shoppers Stop Ltd. 5. Meridian Inflatables Pvt. Ltd 5. Datamatics Global Services Ltd. 6. Filtrex Systems India Pvt. Ltd. 6. IG3 infra Ltd. 7. IL&FS Asian Infrastructure Managers Ltd. 8. IL&FS Milestone Realty Advisors Pvt. Ltd 9. DEN Networks Ltd. 10. Mumbai Business School Pvt. Ltd. 11. RamkyEnviro Engineers Ltd. 12. QVC Realty Pvt. Ltd. 13. Sterling Holiday Resorts (India) Ltd.
Shoppers Stop Limited: M/s. Western India Shipyard Ltd. Committee positions held Nil Audit Committee Audit Committee in other companies R e m u n e r a t i o n / C o m p e n s a t i o n Committee Datamatics Global Services Limited: Audit Committee Remuneration / Compensation Committee IG3 Infra Limited: Audit Committee A p p o i n t m e n t & R e m u n e r a t i o n Committee QVC Realty Private Limited: Project Committee DEN Networks Limited: Audit Committee IL&FS Financial Services Limited: Investment Portfolio Review Committee
No. of shares held in ABG 1153 485 - Shipyard Ltd.
8 ABG Shipyard Limited Annual Report 2012-2013
DIRECTORS' REPORT
TO THE MEMBERS,
Your Directors take pleasure in presenting the Twenty Eighth Annual Report on the business and operations of your Company together with the Audited Accounts for the financial year ended 31st March 2013.
1. FINANCIAL PERFORMANCE :
Financial performance of the Company for Financial Year 2012-13 is summarised below: (` in crores) Particulars 2012-2013 2011-2012 Sales and Other Income 2149.33 2432.69 Profit before Interest, Depreciation & Tax 565.29 570.29 Less: Interest (Net) 287.88 192.26 Profit before Depreciation & Tax 277.41 378.03 Less: Depreciation 103.71 99.25 Profit before Tax 173.70 278.78 Less: Provisions for Taxation 66.57 98.49 Net Profit after Tax 107.13 180.29 Balance brought forward from previous year 488.92 416.63 Profit available for appropriations 596.05 596.92 Appropriations Transfer to Debenture Redemption Reserve 91.00 92.00 Transfer to General Reserve 10.00 16.00 Proposed Dividend – Equity shares - - Corporate Dividend Tax - - Balance carried to Balance Sheet 495.05 488.92
* Figures regrouped wherever necessary.
Your Company has recorded a total revenue of ` 2149.33 crores, Net Profit after tax for the Financial Year stood at ` 107.13 crores and recorded an EBIDITA of ` 565.29 Crores, as standalone basis for the financial year under consideration.
2. BUSINESS OPERATIONS
Your Company is India's largest Shipbuilding and Ship repair Company in Private sector with satisfied customer base in India & abroad. The shipyards of the Company are located at Surat and Dahej in Gujarat. Since inception, your Shipyard has successfully built and delivered 157 (One Hundred Fifty Seven) ships including Specialized and Sophisticated vessels like Interceptor Boats, Self-Loading and Discharging Bulk Cement Carriers, Floating Cranes, Articouple Tugs and Flotilla, Split Barges, Bulk Carriers, Newsprint Carriers, Offshore Supply Vessels, Dynamic Positioning Ships, Anchor Handling Tug Supply Vessels, Multi-purpose Support Vessel, Diving Support Vessels, Pollution Control Vessel etc. for leading companies in India and overseas. Over 80% of the vessels built have been for foreign customers in Europe, South East Asia and Middle East. Around 50% of ABG's Order Book comprises of orders from repeat customers.
The difficult external environment has had a direct bearing on your company's financial results. There is considerable impact on the Financials of the Company due to adverse economic conditions.
The manufacturing processes in the Shipyards are in line with world class standards and the Yards have been certified by DNV for ISO 9001:2008 (for Quality Standards), by IRS for ISO 14001:2004 (for Environment Management Systems) and OHSAS 18001:2007 ( for Occupational Health & Safety Management Systems).
ABG Shipyard Ltd has a facility to construct all types of quality ships, offshore oil rigs and specialized vessel's needs, by demonstrating compliance to marine environment protection and initiatives towards conservation of natural resources.
During the Financial Year 2012-13, your company has bagged a prestigious repeat order for construction of 1 cadet training ship of ` 485 Crs from Indian Navy, Ministry of Defence.
The Government of India had provided for a Shipbuilding Subsidy Scheme, for both export and domestic orders to all the Indian Shipyards, which was expired in August, 2007 and The Government had issued modified guidelines dated 25th March 2009, for liquidation of the liability for the payment of subsidy for ongoing eligible contracts entered upto 14th August 2007, by virtue of the same, your company has received an amount of ` 68.62 Crores towards subsidy in the Financial Year 2012-13.
9 ABG Shipyard Limited Annual Report 2012-2013
3. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is presented in a separate section forming part of this Report as “Annexure C”.
The detailed Industry Review and Outlook are elaborated in the Management Discussion and Analysis Report.
4. AWARDS AND ACCOLADES
F“Shipbuilding Company of the Year 2012” by Dun & Bradstreet.
FAll India Trophy for Highest Exporter from the Government of India, in recognition of outstanding contribution in Engineering Export, for 8 years.
F“Certificate of MERIT & HONOUR” by Gujarat Safety Council.
F“Greentech Safety Silver Award - 2012” in Engineering Sector for outstanding achievements in Safety Management.
F“Appreciation Letter” by Director Industrial Safety & Health, Government of Gujarat for Best Work during Major Fire in Indian Oil Corporation, Hazira.
5. DIVIDEND
The Board has not recommended dividend for the year, considering the Capital expansion plans along with requirement of working capital funds and needs of general corporate purposes.
6. SUBSIDIARIES
Your Company has three (3) subsidiaries i.e. Western India Shipyard Limited (a BSE listed Company), ABG Shipyard Singapore Pte. Limited (Singapore based Wholly Owned Subsidiary) and ABG FPSO Private Limited at the end of the financial year 2012-13.
In accordance with the General Circular no. 2/2011 dated 8th February, 2011, issued by the Ministry of Corporate Affairs (MCA), Government of India (GOI), the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not attached with the Balance Sheet of the Company. Company undertakes to make available the copies of annual accounts of the subsidiary companies and related detailed information to the shareholders of the Company 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.
The consolidated financial statements are forming part of this Annual Report. As stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges, the attached Consolidated Financial Statements have been prepared in accordance with the Accounting Standards issued by The Institute of Chartered Accountants of India (ICAI).
7. DIRECTORS
In terms of the Section 255 & 256 of the Companies Act, 1956 read with Article 190 of the Articles of Association of the Company, Mr. Shahzaad Dalal and Mr. Ashok R. Chitnis are liable to retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment. Your Directors recommend the re-appointment of Mr. Shahzaad Dalal and Mr. Ashok R. Chitnis as Directors.
Your Board of Directors at their meeting held on May 30, 2013, re-appointed Major Arun Phatak, as an Executive Director of the Company, for a further term of 5 years with effect from June 10, 2013 subject to the approval of the members. Your Directors recommend the re-appointment of Major Arun Phatak as an Executive Director of your company.
During the period under review Mr. Ram Swaroop Nakra – Managing Director of the Company has resigned from the company w.e.f. 30th November 2012, due to ill health and old age.
Mr. Girish Nayak was nominated by ICICI Bank Ltd on the Board of the Company as on 14th November 2012, subsequently he was replaced by Mr. Loknath Mishra as on 30th May 2013. Further, ICICI bank has withdrawn the nomination of Mr. Loknath Mishra from the Board of the Company vide its letter dated 15th July 2013.
IDBI Bank Ltd has nominated Mr. Alok Sengupta on the Board of the Company w.e.f. 14th August 2013.
A brief resume of the Director retiring by rotation at the ensuing AGM, nature of expertise in specific functional areas and names of the Companies in which he holds directorship and/ or membership/ chairmanships of Committees of the respective Boards, shareholding and relationship between Directors inter se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is given in the notice of Annual General Meeting forming part of this Annual Report.
None of these directors is disqualified as per the provisions of Section 274 (1) (g) of the Companies Act, 1956, to be re- appointed as directors of your Company.
10 ABG Shipyard Limited Annual Report 2012-2013
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. ISSUE OF SECURITIES
Taking into account to expansion plan and positive outlook of the Company, the Company proposes to raise long term capital by issue of further securities including but not limited to Convertible Bonds, Preference Shares, Equity Shares and other securities whether convertible or not, etc., upto ` 1,000/-Crs. (Rupees One Thousand Crores) to cater its fund requirements for expansion of its activities, finance, additional working capital requirements and general corporate purpose.
Accordingly the enabling resolution mentioned in the Notice of meeting is commended for your approval, which is in supersession of all earlier resolutions passed in this regard.
10. 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.
11. CORPORATE GOVERNANCE
ABG believes that good governance generates goodwill among business partners, customers and investors, earns respect from society, brings about a consistent sustainable growth for the Company and generates competitive returns for the investors. Your Company, through its Board and Committees, endeavours to strike and deliver the highest governing standards for the benefit of its stakeholders.
Your Company not only adheres to the prescribed compliance rules of Clause 49 of the Listing Agreement but is constantly striving to adopt growing excellent practices worldwide.
An elaborated report on compliance of Corporate Governance as specified in Clause 49 of the Listing Agreement is presented in a separate section forming part of this Report as “Annexure B”.
12. DIRECTORS' RESPONSBILITY STATEMENT
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.
13. 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, forms part of this Report. In terms of the provisions of Section 219 (1)(b)(iv) of the Act, the annual report excluding the aforesaid information is being sent to all the members of the Company. Any member seeking such particulars may write to the Company Secretary at the Corporate Office of the Company.
14. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FORIEGN EXCHANGE EARNINGS AND 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 forming part of this Report as “Annexure A”.
15. INDUSTRIAL RELATIONS
The enthusiasm and determined efforts of employees have enabled the Company to remain at the leadership position in the Shipbuilding industry ranked as one of the India's most admired and valuable Shipyard. Your Company maintained healthy, cordial and harmonious industrial relations at all levels.
11 ABG Shipyard Limited Annual Report 2012-2013
16. APPRECIATION
Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment and express their sincere thanks and appreciation to all the employees for their continued commendable teamwork, exemplary contribution, support and co-operation to the operations and performance of the company.
The directors would also like to express their sincere appreciation for assistance and co-operation from the Bankers, Financial Institutions, Government Authorities, Business Associates and Company's Shareholders/Members for their contribution in enhancing the esteem of the Company.
For and on behalf of the Board
Place: Mumbai Major Arun Phatak Dhananjay Datar Date: 14th August 2013 Executive Director Whole Time Director
12 ABG Shipyard Limited Annual Report 2012-2013
ANNEXURE - A
Information Pursuant to the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
A. Conservation of energy: (a) Energy conservation measures taken: At Dahej Yard:
l490 Nos. of Electronic Chock base 1 x 28 W tube light installed in Staff colony at Bharuch.
l290 Nos. of 18 watt. Electronic Chock base 1 x 18 W tube light installed in Staff colony at Bharuch.
l3000 KVAR capacitor panel Maintained to keep power factor 0.993 from 0.975.
lInstalled 09 Nos. of Elevator VFD based in staff colony at Bharuch. At Surat Yard:
l25 Nos. of Energy Saver System introduced additionally which leads total 425 Nos. of installation in Welding Machines. l200 Nos. of Electronic Chock base 1 x 28 W tube light is being maintained in Labor Colony At Surat Yard.
l2500 KVAR capacitor panel Maintained for to Keep PF AVG 0.998 to 0.999 (b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy; At Dahej Yard:
l Auto cut off for welding machine and energy saver for 100 welding machines.
lInstallation of Electronic Choke based 1x28 watts tube light fittings. At Surat Yard:
lAuto cut off for welding machine and energy saver for 75 welding machines.
lAdditional installation of VFD Drive In mobile Air Compressor.
lAdditional Installation of inverter base Welding machine.
lAdditional Installation of Auto Welding Unit for Co2 welding purpose. (c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods. At Dahej Yard:
l20% power saving on welding machine.
l15% power saving on lighting for staff colony. At Surat Yard
l22% power saving on welding machine.
l30% power saving on lighting for worker colony.
l20% power saving on Crane operation. B. Technology absorption: Research & Development (R&D) a) Specific areas in which R&D carried out by the Company
lPanel transfer system installed between new panel line-1 & and old panel line-2 to maximize panel production Common welding wire feeder made for both osws machines of new panel line-1 & and old panel line-2 this is to reduce welding wire inventory.
lAdditional gear boxes provided on Shaw box and taymor cranes LT drives at fabrication shop bay-2&3, this is to reduce breakdown cost and improve safety.
lELC filtration unit used on machines for continues filtration of hydraulic oil. this is to minimize oil consumption and improve machines health.
l10000 MT bulk carriers shifted on ship transfer area with the help of transfer trollies.
13 ABG Shipyard Limited Annual Report 2012-2013
(b) Benefits derived as a result of the above R&D
l Faster output.
l More Productivity.
l Safe working environment.
(c) Future plan of action
l Basic and detail engineering of cadet training ship for India Navy to continue.
l Development of painting system for Mega blocks.
l Procurement and installation of more energy saving device on electrical Equipments.
l Mega Block joining through shiptransfer system
l Loadout arrangement for Rig
Expenditure on R&D: Your Company incurred capital expenditure for setting up as well as up-gradation of technologies used in designing, production, manpower and account management as a part of its business strategy. Technology absorption, adaption and innovation (a) Efforts, in brief made towards technology absorption, adaption and innovation
lUsage of telescopic manlifter to reduce time.
(b) Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc.
lThe aforementioned technology gives faster output & safe working environment at heighted locations.
In case of imported technology (imported during the last 5years reckoned from beginning of the financial year):
Technology imported NIL Years of import NA Has technology been fully absorbed? NA If not fully absorbed, areas where this not taken place, reasons therefore and future plans of action NA
C. Foreign Exchange Earnings and Outgo (` in crs.) 2012-13 2011-12 Earnings 643.95 845.93 Outgo 1400.87 1210.13
14 ABG Shipyard Limited Annual Report 2012-2013
ANNEXURE-B REPORT ON CORPORATE GOVERNANCE {In compliance with Clause 49 of the Listing Agreement entered into with the Bombay Stock Exchange Ltd. (BSE) and the National Stock Exchange of India Ltd (NSE)}
ABG Shipyard Limited (ABG) is committed to adhering to good corporate governance practices to effectively meet its Statutory, Financial and Social obligations.
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
The Company's philosophy of Corporate Governance, that of timely disclosures, transparent accounting policies and a strong and Independent Board, goes a long way in preserving Shareholders' interest, while maximizing long-term shareholder value. ABG is committed to uphold its core values of Customer Focus, Community, Performance, Leadership, Innovation and Quality. The Company, through its Board and Committees, endeavors to strike and deliver the highest governing standards for the benefit of its stakeholders. Through the Governance mechanism in the Company, the Board along with its Committees undertakes its fiduciary responsibilities to all its stakeholders by ensuring transparency fair play and independence in its decision making.
The good corporate governance is vital to success in business; create long term shareholder value as also an important component of commitment to the shareholders, customers and employees. ABG believes that good governance generates goodwill among business partners, customers and investors, earns respect from society, brings about a consistent sustainable growth for the Company and generates competitive returns for the investors. The Company advocates transparency in all its business transactions and activities. The Company through its Board of Directors, Senior Management and Employees, is committed to adhering to good corporate governance practices to effectively meet its Statutory, Financial and Social requirements.
ABG has not only adopted practices mandated in the clause 49 of the Listing Agreement, but also incorporated some of the non- mandatory recommendations to uphold its core values of Community, Performance, Customer Focus, Leadership, Innovation and Quality.
2. COMPOSITION OF BOARD AND PARTICULARS OF DIRECTORS
(i) Composition of the Board
Board of Directors of your Company represents an optimum mix of professionalism, knowledge and experience. The Company has a balanced combination of Executive and Non-executive Directors which is in conformity with Clause 49 of the Listing Agreement entered into with Stock Exchanges.
The Board of Directors of your Company as at 31st March 2013, comprises of Seven (7) Directors which includes One Non- executive Chairman Mr. Rishi Agarwal, Two (2) Executive Directors viz. Major Arun Phatak and Mr. Dhananjay Datar, Three (3) Independent Directors viz. Mr. Ashok R. Chitnis, Mr. Shahzaad Dalal and Mr. Ashwani Kumar and One (1) Nominee Director Mr. Girish Nayak (Nominated by ICICI Bank Ltd.).
Non-Executive Chairman, Mr. Rishi Agarwal heads the Board. Major Arun Phatak, Executive Director and Mr Dhananjay Datar, Whole time Director are managing the day-to-day affairs of the Company subject to the superintendence, Instructions and control of the Board of Directors.
During the period under review Mr. Ram Swaroop Nakra – Managing Director of the Company has resigned from the Company w.e.f. 30th November 2012, due to ill health and old age. Further, ICICI Bank Ltd has nominated Mr. Girish Nayak on the Board of the Company as on 14th November 2012.
The names and categories of the Directors on the Board, their attendance at Board Meeting during the year and at the last Annual General Meeting, as also the number of Directorships and Committee Memberships held by them in other companies as on 31st March, 2013, are set out in the appended table.
15 ABG Shipyard Limited Annual Report 2012-2013
Name Category* Attendance Number of Directorship, Committee Membership and Chairmanship#
Board Last Directorship Committee Committee Meeting AGM Membership Chairmanship
Mr. Rishi Agarwal - NI-NE 1 No 3 0 None Chairman Mr. Ram Swaroop Nakra - NI-E 2 No 1 1 None Managing Director (Upto 30th November 2012) Major Arun Phatak - NI-E 4 Yes 4 3 2 Executive Director Mr. Dhananjay Datar - NI-E 2 No 8 4 2 Whole Time Director & Chief Finance Officer Mr. Shahzaad Dalal I-NE 1 No 9 12 2 Mr. Ashok R. Chitnis I-NE 3 Yes 1 2 None Mr. Ashwani Kumar I-NE 4 Yes 2 3 1 Mr. Girish Nayak (Since 14th November 2012) I-NE 2 NA 0 0 0
*(NI – Non-Independent, I – Independent, NE- Non-Executive, E – Executive)
# Directorships does not include alternate directorships, directorships of private limited companies and companies incorporated outside the India and Section 25 companies. Chairmanships / Membership of Board Committees include only Audit Committee and Shareholders / Investors Grievance Committee of Indian Public Limited Companies.
None of the Directors is a Director in more than 15 Companies and Member of more than 10 Committees or Chairman of more than 5 Committees across all the companies in which he is a Director. Necessary disclosures regarding Directorship and Membership in the various Board committee positions occupied by the Directors of the Company as at 31st March, 2013 have been made.
(ii) Board Meetings held and details thereof
Board of Directors met four times during the year as on the dates mentioned below, the gap between two successive Board Meetings was less than four months: 1. 29th May 2012 2. 14th August 2012 3. 09th November 2012 4. 13th February 2013
Agenda is always sent, well in advance, to the Directors along with all information as per the Annexure IA of the Clause 49, including statutory information, relevant to the matters to be discussed. Where it is not practicable to attach any document to agenda, the same is tabled before the meeting with specific reference in the agenda.
The matters to be discussed at the Board Meeting are included in the Agenda in consultation with the Chairman of the Company. The Managing Director/Chief Finance Officer briefs the Board at every Meeting on the overall performance of the Company. All the major decisions of the company are reviewed by the Board of Directors.
None of the Non-executive Directors have any material pecuniary relationship or transactions with the Company.
Post meeting follow – up mechanism:
Important decisions taken at the Board/Committee Meetings are promptly communicated to the concerned departments to act thereon accordingly.
(iii) Profile of Directors seeking appointment / re-appointment in the 28th Annual General Meeting: Detailed profile is appended in the notice of Annual General Meeting forming part of this Annual Report.
16 ABG Shipyard Limited Annual Report 2012-2013
3. COMMITTEES OF THE BOARD
Your Company, as on 31st March 2013, has four Board Committees of Directors to take informed decisions in the best interest of the Company viz. Audit Committee, Nomination-cum-Remuneration Committee, Compensation Committee and Share Transfer and Investors Grievance & Finance Committee.
A. AUDIT COMMITTEE
Constitution of the Audit Committee is in line with the provisions of Clause 49 of the Listing Agreements with the Stock Exchanges read with Section 292A of the Companies Act, 1956. (i) Terms of reference of the Audit Committee are broadly as under:
lOversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
lRecommending to the Board, the appointment, reappointment and, if required, the replacement or removal of Statutory auditors, fixation of audit fee and also approval for payment for any other services.
lDiscussion with external auditors before the audit commences, of the nature and scope of audit as well as post- audit discussion to ascertain any area of concern.
lReviewing the financial statements and draft audit report, including quarterly / half yearly financial information and Limited Review Reports.
lReviewing with management the annual financial statements before submission to the Board, focusing primarily on : ÿMatters required to be included in Directors' Responsibility Statement in terms of Section 217(2AA) of the Companies Act, 1956. ÿChanges, if any, in accounting policies and practices and reasons for the same; ÿMajor accounting entries involving estimates, based on exercise of judgment by management; ÿQualifications in draft audit report; ÿSignificant adjustments made in the financial statements arising out of audit findings; ÿthe going concern assumption; ÿCompliance with accounting standards; ÿCompliance with stock exchanges and legal requirement concerning financial statements; ÿDisclosure of related party transactions, if any, as per Accounting Standard 18.
lReviewing the Company's financial and risk management policies.
lDisclosure of contingent liabilities.
lReviewing with the management, performance of statutory and internal auditors and adequacy of internal control systems.
lReviewing the adequacy of internal audit function, including the audit charter, the structure of the internal audit department, approval of the audit plan and its execution, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit.
lDiscussion with internal auditors of any significant findings and follow-up-thereon.
lReviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.
lLooking into the reasons for substantial defaults, if any, in payments to the debenture holders, shareholders, (in case of non-payment of declared dividends) and creditors.
lReviewing compliances as regards the Company's Whistle Blower Policy.
(ii) Composition, Name of Members, Details of the Meetings and Attendance
The composition of the Audit Committee and number of meetings attended by the members of the Audit Committee are given below:
17 ABG Shipyard Limited Annual Report 2012-2013
Name of the Director Status No. of Meeting Attended Mr. Ashwani Kumar - Chairman I-NE 4 Major Arun Phatak NI-E 4 Mr. Ashok R. Chitnis I-NE 3 (NI-Non-Independent, I-Independent, NE-Non-Executive, E-Executive) The Audit Committee invites such of the executives as it consider appropriate (particularly the heads of the Operations), representatives of the Statutory Auditors and Internal Auditors to be present at its meetings. The Audit Committee meetings are usually held at the Corporate Office of the Company. The Company Secretary acts as Secretary of the Audit Committee. Audit Committee met four times during the financial year ended March 31, 2013, as detailed below, all the meetings were held with requisite quorum.
1. 29th May 2012 2. 14th August 2012 3. 9th November 2012 4. 13th February 2013 B. NOMINATION-CUM- REMUNERATION COMMITTEE (i) Composition, name of members, meetings and attendance Nomination-cum-Remuneration Committee as on 31st March, 2013 constitutes as follows:
Name of the Director Status Mr. Shahzaad Dalal - Chairman I - NE Mr. Ashok R. Chitnis I - NE Mr. R. S. Nakra* NI - E * Mr. R.S. Nakra is ceased to be a member of Committee due to his resignation from the Board of Directors w.e.f. 30th November 2012. The Board of Directors has appointed Mr. Ashwani Kumar –Independent Director, as a member of the Committee at the meeting of the Board held on 30th May 2013. The Nomination – cum – Remuneration Committee has not met during the financial year 2012-13. (ii) Terms of Reference : The Nomination-cum-Remuneration Committee has been constituted to recommend the overall remuneration structure of the Executive Directors, based on their performance and defined assessment criteria. The remuneration, if any, of Non-Executive Directors is decided by the Board of Directors. (iii) Remuneration Policy The Company pays remuneration by way of salary, benefits, perquisites and allowances to its Executive Directors. Annual increments, if any, are decided by the Committee within the salary scale approved by the members/shareholders. The Company pays Sitting Fee per meeting to its Independent Directors for attending meetings of the Board and Audit Committee Meetings. (iv) Details of Remuneration for the year 2012-13
Name of Director Sitting Fees Salaries & Perquisites Commission Stock Option Mr. Rishi Agarwal ------Mr. Ram Swaroop Nakra* ----- Rs. 56,06,700/------Mr. Dhananjay Datar ----- Rs. 47,04,000/------Mr. Shahzaad Dalal Rs. 5,000/------Mr. Ashok Chitnis Rs. 59,000/------Major Arun Phatak ----- Rs. 64,42,200/------Mr. Ashwani Kumar Rs. 69,000/------Mr. Girish Nayak** Rs. 22,000/------*Upto 30th November 2012 *** Since 14th November 2012
18 ABG Shipyard Limited Annual Report 2012-2013
(iv) Details of Shares of the Company held by the Directors as on 31st March 2013, are as below: Name No. of Shares % of Shareholding Mr. Rishi Agarwal 2,81,250 0.56 Mr. Shahzaad Dalal 485 0.00 Major Arun Phatak 1,153 0.00
C. COMPENSATION COMMITTEE The Company has a Compensation Committee with two Independent directors and one Non-independent Director as members. The committee makes policies, takes decisions and forwards its directions to Human Resources Department of the Company in order to attract and retain the best available talent and to reward its high performing employees. The Company Secretary acts as Secretary of the Committee. Name Status Mr. Shahzaad Dalal - Chairman I - NE Mr. Ashwani Kumar I - NE Mr. Rishi Agarwal NI - NE The Compensation Committee has not met during the last financial year 2012-13.
th lThe Compensation Committee has merged with Nomination-cum-Remuneration Committee, w.e.f. 30 May 2013. D. SHARE TRANSFER AND INVESTORS GRIEVANCE & FINANCE COMMITTEE (i) Composition The Composition of the Share Transfer and Investors Grievance & Finance Committee as on 31st March, 2013 is given below: Name Status Mr. Shahzaad Dalal - Chairman I - NE Mr. Rishi Agarwal NI - NE Mr. R.S. Nakra* NI - E (NI-Non-Independent, I-Independent, NE- Non-Executive, E-Executive) *Mr. R.S. Nakra is ceased to be a member of Committee due to his resignation from the Board of Directors w.e.f. 30th November 2012. The Board of Directors has appointed Mr. Ashwani Kumar –Independent Director as a member of the Committee at the meeting of the Board held on 30th May 2013. The Committee has not met during the financial year 2012-13. The Committee has Authorized Compliance Officer of the Company to look after the Investor Grievances and Share transfer requests.
th lThe Committee has renamed as Share Transfer and Investor Grievance Committee, w.e.f. 30 May 2013. (ii) Terms of reference The terms of reference of the Share Transfer and investors Grievance & Finance Committee cover the matters specified under Clause 49 of the Listing Agreement with the Stock Exchanges. The Share Transfer and Investors Grievance & Finance Committee looks into the redressal of complaints of investors such as transfer or credit of shares to demat accounts, non-receipt of shares or refund order / dividend / notices / annual reports, etc., and also issue of duplicate certificates and review all other matters connected with securities. The Committee oversees the performance of the Registrar and Share Transfer Agent. As on 31st March 2013, no instruments of share transfer were pending. (iii) Name, designation and address of the Compliance officer
Mr. Sunil Agarwal Company Secretary & Senior Manager (Legal) ABG Shipyard Limited 4th Floor, Bhupati Chambers 13 Mathew Road, Mumbai-400 004 Tel: 022-66563000 Fax: 022-66223050 e-mail: [email protected]
19 ABG Shipyard Limited Annual Report 2012-2013
(iv) Details of Investors' complaints Investors' complaints received directly or through SEBI and Stock Exchanges during 1st April, 2012 to 31st March, 2013 and the status of said complaints as on 31st March, 2013 are given below:
Received from Received and Resolved during the FY 2012-13 Pending as at 31st March 2013 Investors 21 Nil Through SEBI 01 Nil Through Stock Exchanges 00 Nil Total 22 NIL 4. GENERAL BODY MEETINGS (i) Location and time of last three Annual General Meetings The last three Annual General Meetings of the Company were held at the Registered Office of the Company, as per details below:
Details Date & Time Venue Special Resolutions Passed
25th AGM 2009-10 30.09.2010 Registered Office of the Nil 12.00 noon Company at Near Magdalla Port, Dumas Road, Surat-395 007 26th AGM 2010-11 27.09.2011 Nil 12.00 noon
27th AGM 2011-12 27.09.2012 Issue of Securities for a value of upto Rs. 12.00 noon 1000Crs. by way of a domestic/ international offering/Qualified Institutional Placement under chapter VIII of SEBI (ICDR) Regulations and pursuant to Section 81 (1A) of the Companies Act, 1956.
(ii) Extra-ordinary General Meetings held during last three years During the last three years no Extra-ordinary General Meeting of the Company were held. 5. DISCLOSURES AND OTHER INFORMATION: (i) Materially Significant Related Party Transactions – There are no transactions of materially significant nature that have been entered into by the Company with the Promoters, Directors, their relatives and the Management and in any company in which they are interested, that may have potential conflict with the interest of the company. (ii) Compliance – The Company has complied with the requirements of the Listing Agreements with the Stock Exchanges as well as the Regulations and Guidelines prescribed by the Securities and Exchange Board of India. There were no penalties or strictures imposed on the Company by any statutory authorities for non – compliance on any matter related to capital markets, during the last three years. (iii) Code of Conduct – The Board of Directors of the Company has laid down a Code of Conduct for all Board members and senior management personnel of the Company. The code of conduct is available on the website of the Company i.e. www.abgindia.com. The Company has adopted a Whistle Blower Policy and has established the necessary mechanism in line with Clause 7 of Annexure I D to clause 49 of the Listing Agreement with the Stock Exchanges, for employees to report concerns about unethical behavior. No person has been denied access to the Audit Committee. However, no instances of fraud or other irregularities have been observed, which need to be reported to the Board/Audit Committee. The declaration signed by Whole time Director to this effect is as below: To, The Shareholders of ABG Shipyard Ltd., Sub: Compliance with Code of Conduct. I hereby declare that all the Board Members and Senior Management personnel have affirmed compliance with the code of conduct as adopted by the Board of Directors.
For ABG Shipyard Limited
Place: Mumbai Major Arun Phatak Date:14th August, 2013 Executive Director
20 ABG Shipyard Limited Annual Report 2012-2013
The Company has implemented the following Non-mandatory requirements recommended under Clause 49 of the Listing Agreements with the Stock Exchanges. a) Constitution of Remuneration Committee. b) The Company's statements are free from any qualifications by the Auditors of the Company. c) The Company has laid down a whistle blower policy. (iv) Prohibition of Insider Trading - The Company has framed its Insider Trading Regulation wherein rules for the preservation of price sensitive information, pre-clearance of trade, monitoring and implementation are framed. This code is applicable to all Directors and to such employees of the company who are incidental to have access to unpublished price sensitive information (UPSI) relating to the Company. Transaction for dealing in the prescribed time requires prior approval from the Company.
6. SECRETARIAL AUDIT As a measure of good corporate governance practice, the Board of Director of the Company appointed Mrs. Kala Agarwal, practicing Company Secretary, to carry out a secretarial audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. The Secretarial audit confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, Depository Act, 1996, Listing Agreements with the Stock Exchanges, Securities Contracts (Regulation) Act, 1956 and all the regulations of the SEBI as applicable to the Company and also confirms that the total issued / paid up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL. 7. MEANS OF COMMUNICATION The quarterly, half yearly, yearly financial Results of the Company and Notices of Board Meetings and General Meetings are published normally in The Free Press Journal, Gujarat Mitra, Navshakti, etc. The quarterly results, half yearly results, Annual results and Shareholding Pattern are also displayed on the Company's website at www.abgindia.com which is updated at regular intervals. The quarterly results, half yearly results, Annual results and Shareholding Pattern are forwarded to Stock Exchanges from time to time, where the Company's shares are listed. In addition to the above, the Company also regularly provides information to the stock exchanges as per the requirements of the Listing Agreement and updates the same on the Company's website periodically to include information on new developments and business opportunities of the Company. Green Initiative: Your Company, as a responsible corporate citizen welcomes and supports the green initiatives taken by the Ministry of Corporate Affairs, Government of India vide its Circular dated 21.04.2011 enabling electronic delivery of documents to the shareholders. Accordingly, your Company has initiated for sending communication / Annual Report and other documents through electronic mode to shareholders. It is hoped that with wide acceptance of the Green Initiative by the shareholders, the Company would be able to successfully implement the same, thereby contributing its mite to a greener environment. 8. GENERAL SHAREHOLDERS INFORMATION (i) Annual General Meeting:
Day, Date & time : Friday the 27th, September, 2013 at 12.00 noon
Venue : At the Registered Office of the Company at: Near Magdalla Port, Dumas Road, Surat-395 007
(ii) Financial Calendar : Financial year 1st April to 31st March Ist Quarter Results - On or before 14th of August IInd Quarter Results - On or before 14th of November IIIrd Quarter Results - On or before 14th of February IVth Quarter Results - On or before 30th of May
(iii) Book Closure : 20th September, 2013 to 27th September, 2013 (both days inclusive)
(iv) Listing at Stock Exchanges :
Name & Address of Stock Exchange Stock Code Code on Screen
The Bombay Stock Exchange Limited (BSE) 532682 ABGSHIP Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400001 Phone : 91 22 22721233
21 ABG Shipyard Limited Annual Report 2012-2013
Name & Address of Stock Exchange Stock Code Code on Screen
National Stock Exchange of India Limited (NSE) ABGSHIP ABGSHIP Exchange Plaza, Bandra Kurla Complex, Series EQ Bandra (East), Mumbai 400 051 Phone : 91 22 26598236 The Company has paid annual listing fees to the above Stock Exchanges for the financial year 2013-14. (v) Market Price Data Performance of ABG’s stock on BSE and NSE during the financial year 2012-13. A. Bombay Stock Exchange (BSE)
Month ABG High ABG Low SENSEX High SENSEX Low (`) (`) April 12 404.00 375.60 17,664.10 17,010.16 May 12 394.90 365.05 17,432.33 15,809.71 June 12 389.00 352.90 17,448.48 15,748.98 July 12 381.65 295.95 17,631.19 16,598.48 August 12 381.00 338.00 17,972.54 17,026.97 September 12 392.85 311.00 18,869.94 17,250.80 October 12 385.00 350.10 19,137.29 18,393.42 November 12 400.00 361.30 19,372.70 18,255.69 December 12 389.70 357.20 19,612.18 19,149.03 January 13 415.85 362.00 20,203.66 19,508.93 February 13 401.50 232.20 19,966.69 18,793.97 March 13 356.00 268.80 19,754.66 18,568.43
Share price on BSE during the Financial Year 2012-13 ABG HIGH/LOW AT BSE
450
400
350
300 High
Share Price Low 250
200
Jul-12 Apr-12 May-12 Jun-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13
ABG vs. SENSEX during the Financial Year 2012-13
ABG VS. SENSEX
21500 450
20500 400 19500 350 18500 300 BSE SENSEX 17500 ABG 16500 250
15500 200 Jul-12 Oct-12 Apr-12 Jun-12 Jan-13 Mar-13 Feb-13 Dec-12 Nov-12 Aug-12 Sep-12 May-12
22 ABG Shipyard Limited Annual Report 2012-2013
B. National Stock Exchange (NSE)
Month NSE High NSE Low NIFTY High NIFTY Low (`) (`) April 12 405.40 371.20 5378.75 5154.30 May 12 396.80 360.55 5279.60 4788.95 June 12 391.00 352.00 5286.25 4770.35 July 12 383.80 304.00 5348.55 5032.40 August 12 383.00 337.95 5448.60 5164.65 September 12 399.90 306.00 5735.15 5215.70 October 12 400.00 357.00 5815.35 4888.20 November 12 401.50 330.00 5885.25 5548.35 December 12 389.00 356.30 5965.15 5823.15 January 13 413.45 360.10 6111.80 5935.20 February 13 399.80 233.00 6052.95 5671.90 March 13 350.00 266.25 5971.20 5604.85
Share price on NSE during the Financial Year 2012-13
ABG HIGH LOW AT NSE
450
400
350
300 High
Share Price Low 250
200 Jul-12 Oct-12 Apr-12 Jun-12 Jan-13 Mar-13 Feb-13 Nov-12 Dec-12 Aug-12 Sep-12 May-12
ABG vs. NIFTY during the Financial Year 2012-13
ABG VS. NIFTY
6500 450
6000 400
5500 350
NIFTY 5000 300 ABG NSE 4500 250 ABG 4000 200 Jul-12 Oct-12 Apr-12 Jun-12 Jan-13 Mar-13 Feb-13 Nov-12 Dec-12 Aug-12 Sep-12 May-12
23 ABG Shipyard Limited Annual Report 2012-2013
(vi) Registrar and Share Transfer Agent
Shareholders may address all correspondences to the Registrar and Share Transfer Agent of the Company at the following Address:
Link Intime India Private Ltd. (formerly Intime Spectrum Registry Limited) C-13, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup West Mumbai-400 078. Tele: 91-22- 25946970 Fax : 91-22-25946969 e-mail: [email protected]
(viii)Share Transfer System
99.99% of the Equity shares of the Company are in electronic form. Transfer of these shares is done through the depositories without involvement of the Company. As regards transfer of shares in physical form the transfer document can be lodged with the Registrar & Share Transfer Agent at address mentioned in above point no. (vii)
Transfer of Shares in physical form is normally processed by the Registrar and Share Transfer Agent and approved by Share Transfer and Investors Grievance & Finance Committee of the Board which meets at regular intervals.
(ix) Dematerialization of Shares
As of 31st March 2013, 50920783 equity shares representing 99.99% of the paid up equity capital of the Company are in dematerialized form with the following depositories:
Description ISIN No. Depositories
Fully Paid INE067H01016 National Securities Depository Ltd (NSDL) Trade World, A Wing, 4th floor, Kamala Mills Compound, Lower Parel, Mumbai 400013
Fully Paid INE067H01016 Central Depository Services (India) Ltd. (CDSL) Phiroze Jeejeebhoy Towers, 17th Floor, Dalal Street, Fort, Mumbai 400 023.
During the year 2012-13 the Company has received one (1) application for rematerialization for five shares by concerned shareholder for which Company has issued Share Certificate accordingly. No applications were received for dematerialization by concerned shareholders.
The Company has paid annual custodian charges for both NSDL and CDSL for the financial year 2013-14.
(x) Distribution of shareholding (Shares) as on 31st March, 2013
Range - Shareholding No. of Shareholders % of Shareholders Number of Shares % of Shareholding of Nominal value (`) 1 – 500 19486 97.28 1020394 2.00 501 – 1000 247 1.23 191251 0.38 1001 – 2000 117 0.58 169993 0.33 2001 – 3000 41 0.21 106726 0.21 3001 – 4000 19 0.10 68372 0.13 4001 – 5000 16 0.08 74071 0.15 5001 – 10000 26 0.13 198728 0.39 10001 & above 79 0.39 49092266 96.41 Total 20031 100.00 50921801 100.00
24 ABG Shipyard Limited Annual Report 2012-2013
(xi) Shareholding pattern as on 31st March, 2013
Category of Shareholder Number Percentage of of shares shareholding (A) Shareholding of Promoter and Promoter Group (a) Individuals/ Hindu Undivided Family 375000 0.74 (b) Bodies Corporate 33648204 66.08 Total Shareholding of Promoter and Promoter Group 34023204 66.81 (B) Public shareholding B1 Institutions (a) Mutual Funds/ UTI 486 0.00 (b) Financial Institutions / Banks 1064853 2.09 (c) Insurance Companies 1196363 2.35 (d) Foreign Institutional Investors 2931548 5.76 Sub-Total (B)(1) 5193250 10.20 B2 Non-institutions (a) Bodies Corporate 9343507 18.35 (b) Individuals i Individual shareholders holding nominal share capital up to ` 1 lakh 1417434 2.78 ii Individual shareholders holding nominal share capital in excess of ` 1 lakh. 664434 1.31 (c) Any Other (specify) (c-i) Clearing Member 117445 0.23 (c-ii) NRI 150331 0.30 (c-iii) Office bearers 12196 0.02 Sub-Total (B)(2) 11705347 22.99 (B) Total Public Shareholding (B) = (B)(1)+(B)(2) 16898597 33.19 TOTAL (A)+(B) 50921801 100.00
(xii) Shareholders holding more than 1% of the share capital as on 31st March, 2013
1 ABG International Private Limited 33648204 66.08 2 Religare Finvest Ltd 5197281 10.21 3 Nippon Investment And Finance Company Private Ltd. 1239840 2.43 4 Orange Mauritius Investments Limited 1230000 2.42 5 Life Insurance Corporation of India 1000000 1.96 6 ICICI Prudential Life Insurance Company Ltd 896363 1.76 TOTAL 43211688 84.86
Share Holding Pattern FY 2012-13
Mutual Funds/ FI / Banks, UTI, 486 1064853 (0.00%) (2.09%) Promoters, Insurance 34023204 Companies, (66.81%) 1196363 (2.35%)
FII, 2931548 (5.76%)
Bodies Corporate, 9343507 (18.35%)
Individuals/others, Clearing Members, 2244395 117445 (4.41%) (0.23%)
25 ABG Shipyard Limited Annual Report 2012-2013
(xiii) Details of unclaimed shares as on financial year ended 31st March, 2013 issued pursuant to Initial Public Offer (IPO) are as follows (Pursuant to clause 5A of the Listing Agreement) -
Sr. No. Particulars Cases No. of Shares
(A) Aggregate Number of Shareholders and the outstanding Shares 14 490 in the suspense account lying at the beginning of the year i.e. 1.4.2012
(B) Number of Shareholders who approached for transfer of Shares from NIL NIL suspense account during 1.4.2012 to 31.3.2013
(C) Number of Shareholders to whom Shares were transferred from NIL NIL suspense account during 1.4.2012 to 31.3.2013
(D) Aggregate Number of Shareholders and the outstanding Shares in the 14 490 suspense account at the end of the year i.e. 31.3.2013
The Voting Rights on the above mentioned shares in column (D) shall remain frozen till the rightful owner claims the shares.
(xiv) Unclaimed / Unpaid Dividend
Pursuant to section 205A and 205C and other applicable provisions, if any, of the Companies Act, 1956, the amount remaining unclaimed/unpaid for a period of seven years from the date of transfer of dividend to the Unpaid Dividend Account of the Company shall be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government. No claim shall lie against the Company or IEPF, in respect of dividend amounts that have been transferred to IEPF. Members who have not yet en-cashed their dividend warrant(s) are requested to make their claim without any delay to the Company's Registrar and Transfer Agents, i.e. Link Intime India Private Limited.
The following table gives information relating to outstanding dividend accounts and the last dates for making claims and by which they need to be transferred:
Period of the Dividend Percentage of Dividend Last date for making claim Due Date of Transfer to IEPF 2005-2006 12 16th September, 2013 17th September, 2013 2006-2007 15 26th October, 2014 27th October, 2014 2007-2008 20 21th October, 2015 22nd October, 2015 2008-2009 20 29th October, 2016 30th October, 2016 2009-2010 40 29th October, 2017 30th October, 2017 2010-2011 40 26th October, 2018 27th October, 2018 2011-2012 NIL NA NA 2012-2013 NIL NA NA
(xv) Unclaimed IPO Refund Money
The Unclaimed IPO refund money amounting to ` 10,79,000/- was due for transfer to IEPF on 9th December, 2012. Your Company has transferred the unpaid IPO Refund amount to the IEPF accordingly.
(xvi) Outstanding GDRs/ ADRs/ Warrants or any convertible instruments
The Company has no outstanding GDRs/ ADRs/ Warrants or any convertible instruments.
(xvii) Shipyards' Location Shipyard Shipyard Near Magdalla Port, Village Jageshwar, Dumas Road, Near Dahej, Tal Vagra, Surat-395 007, Gujarat Dist. Bharuch, Gujarat
26 ABG Shipyard Limited Annual Report 2012-2013
(xviii) Address for Correspondence
Legal & Secretarial Department 4th / 5th Floor, Bhupati Chamber, 13, Mathew Road Mumbai-400 004. Tele: 91-22- 66563000 Fax: 91-22-66223050 E-mail: [email protected]
For and on behalf of the Board
Place: Mumbai Dhananjay Datar Date: 14th August 2013 Whole Time Director
EXECUTIVE DIRECTORS’ CERTIFICATION ISSUED IN PURSUANCE OF CLAUSE 49 OF THE LISTING AGREEMENT.
To, The Board of Directors, ABG Shipyard Limited.
Sub: Executive Directors’Certification
We have reviewed the financial statements, read with the cash flow statement of ABG Shipyard Limited for the year ended March 31, 2013 and that to the best of our knowledge and belief, we state that;
1. (a) these statements do not contain any materially untrue statement or omit any material fact or contain statements that may be misleading,
(b) these statements present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.
2. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or in violation of the Company's code of conduct.
3. We accept the responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and have disclosed to the Auditors and Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and steps taken or proposed to be taken for rectifying these deficiencies.
4. We have indicated to the Auditors and the Audit Committee;
(a) significant changes in the internal control over financial reporting during the year.
(b) significant changes in accounting policies made during the year and that the same have been disclosed in the notes to the financial statements; and
(c) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company's internal control system over financial reporting.
Yours sincerely,
Major Arun Phatak Dhananjay Datar Executive Director Whole Time Director
Date: 14th August 2013
27 ABG Shipyard Limited Annual Report 2012-2013
AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE
To The Members, ABG Shipyard Limited.
We have examined the compliance of Corporate Governance by ABG Shipyard Limited for the year ended on 31st March 2013, as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has been limited to a review of the procedures and implementations thereof adopted by the Company for ensuring compliance with the conditions of the Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the financial statement of the Company.
In our opinion and to the best of our information and according to the explanations given to us, and based on the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.
We state that such compliance is neither an assurance as to the future viability of the Company, nor of the efficiency with which the Management has conducted the affairs of the Company.
For Nisar & Kumar Chartered Accountants F. R. No. 107117W
M. N. Ahmed Place: Mumbai (Partner) Date: 30th May, 2013 M. No. 18380
28 ABG Shipyard Limited Annual Report 2012-2013
ANNEXURE - C MANAGEMENT DISCUSSION & ANALYSIS
MARKET TRENDS & ECONOMY Financial Year 2012-13 is a challenging year to the Global as well as Indian Economy. World output was down from 4% in 2011 to 3.2% in 2012. Emerging and developing economies output touched a low of 5.1%, reflecting a sharp drop from 6.4% in the previous year. The U.S. economy improved marginally, driven mainly by housing and the consumer sectors; however, capital investments remained sluggish. The Euro zone shrank by 0.6%. Among the Asian economies, China, going through a political transition, experienced considerably slower growth. During the Financial Year 2012-13, the Indian economy experienced a low growth rate of about 5-5.5%. Year-on-year GDP growth rate, in the 3rd quarter touched 4.5%, the second lowest in recent years. Industrial sectors, too, continued to reel under the severe slowdown. Going ahead, most market analysts expect GDP to be around 6% in the Financial Year 2013-14, assuming a normal monsoon. The Reserve Bank of India remains focused on containing inflation, and is expected to continue following a conservative policy on interest rates. Sluggish value of Indian rupees is also great concern to Indian Economy. However, long term prospects for the Indian economy, continue to remain bright, given the favorable demographics and the directional commitment towards liberalization. However, much work remains to be done to free up core sectors and restart growth. Outlook for the current fiscal with inflation now well within tolerance level, appears better than the previous year. Additionally, softening of global commodity prices should help to reduce the imported inflation in domestic economy. INDUSTRY OVERVIEW AND OUTLOOK Globally, Shipbuilding and Ship Repair industry is growing at a Compounded Annual Growth Rate (CAGR) of about 24 per cent and is likely to reach ` 14 lakh crore by 2015 owing to rising global sea borne trade, according to the study done by the Associate Chambers of Commerce (ASSOCHAM). During the year under review, Global Shipbuilding Industry experienced rapid decline in new shipbuilding orders as backlogs remained high and the global economic downturn adversely affected the demand for new ships or vessels. China, South Korea and Japan are leading shipbuilding nations and cater to over 80% of the global shipbuilding industry. The Chinese Government continues to give subsidies to the industry due to which the country enjoys over 35% of the global share. The Chinese Shipyards continue building ships which flood the market, depressing it further. India and Vietnam are seen as upcoming centers for global shipbuilding and have displayed enormous growth potential since 2000. However, India has not yet reached a stage where it can enjoy economies of scale like Korea or China. Still Indian Shipbuilding industry accounts for less than 1 percent of global market share. According to study done by Shipyards Association of India (SAI), while shipbuilding in countries like China, South Korea and Japan continue to account for more than 80 per cent of the global shipbuilding market. The Indian Shipbuilding and Ship repair Industry is likely to reach ` 9,200 crore by year 2015, growing at a Compounded Annual Growth Rate (CAGR) of about 8 per cent according to a study done by the ASSOCHAM. On an average India produces around 20 ships in a year while developed shipbuilding markets make 70 -100 ships a year. Due to this, almost 90% of equipment for manufacturing ships is sourced from overseas. With about an 8,000 kilometer long coastline there are about 27 shipyards, 12 major ports and 200 ports under states jurisdiction in India. Approximately 90% of the country’s trade by volume and 70% by value are moved through Maritime Transport. There is huge scope for development of the shipping sector. However, the country's opportunities in the maritime business have not been fully utilized. An authentic estimate is that the shipbuilding industry is likely to generate a revenue of ` 800 billion and an overall revenue of ` 3300.00 billion including associated sectors. Employment to the extent of 0.4 million new direct jobs in shipbuilding and around 2.4 million new jobs in shipbuilding, ship repairing and associated sectors can be generated. The Government has a key role to improve the efficiency and productivity of domestic shipbuilding companies to enable them to compete with their overseas counterparts. The Indian Government has been very supportive in the past which gave a significant fillip/ impetus to the industry. Although the Government had extended the Shipbuilding Subsidy Scheme from 2002 to 2007, which caused a temporary boom in the industry, however, the subsequent discontinuation of the scheme along with recession, had some negative impact on the industry. Various Industrial Bodies has recommend to revive of subsidy scheme, easing tax related regulations and declaring shipbuilding a status of strategic industry. The Indian government has mooted plans to develop ancillary units for the shipbuilding sector, which has the potential to create approx 2.4 million jobs. The government has taken various initiatives for up - gradation of infrastructure in ports which include expeditious implementation of various capacity addition and mechanization project. The initiatives include private sector participation in capacity augmentation/ up-gradation for which bid documents have been standardized, and 100% FDI being allowed under the automatic route, Income tax incentives are also available for investments made in port infrastructure. OPPORTUNITIES & THREATS Union budget 2013-14 has provided a slight relief to domestic shipbuilding industry by removing excise duty burden of 6% to the
29 ABG Shipyard Limited Annual Report 2012-2013
industry. For the domestic shipbuilders, the move could help in bringing some cost advantage as the cost of production of vessels in the country had risen since the past few years which led to a fall in the order book. However, removing 6.1% (approx) countervailing duty on imported ship by union budget will keep adverse impact on domestic shipbuilding industry. Offshore remains to be promising sector in coming years. Global Deep-water capex is forecasted to reach USD 62 billion in 2015 indicating a CAGR of 23%, driven by advancement in seismic and drilling technologies. In reversing the historical trend of low rate of scrapping in offshore, increase rate of scraping is also raising the hope of upward trend in Offshore sector. Opening of Defense sector to Qualified Private Ship Building Yard is another major step for future of Ship building industry in India. Driven by rising defense budget allocation of USD 14.3 billion by 2013 in capital expenditure with growing rate of CAGR 13.5%, out of which budget allocation to Indian Navy is USD 6.7 billon with growing rate of CAGR 17.6% Low cost of labour, world class engineers, availability of skilled workforce together with robust demand in the domestic market and a growing steel industry are certain factors that build up a strong case for shipbuilding sector in India. The high input costs and rising costs of raw materials and freight together with other duties being imposed resulted to a huge price differential of about 50% in building a ship in India and other countries. The Global depressed environment and uncertainty have affected the new business & existing Order Book in terms of delay/cancelation by the clients. RISK AND CONCERNS The nodal responsibility of the entire Shipbuilding and Ship-repair Industry vests with the Ministry of Shipping. The Ministry of Shipping encompasses within its fold shipping and port sectors which also include shipbuilding and ship repair, major ports and inland water transport. Thus risks arising from political instability as well as changes in government policy would be a cause of concern. The shipping sector is continuing with a down cycle. Total Plan allocation for the Ministry of Shipping during the year 2013-14 stands at ` 7087.30 crore, out of which the share of Gross Budgetary Support and Internal Extra Budgetary Recourses each is ` 852.00 crore in comparing to budget allocation of ` 6524.92 for the year 2011-12. In spite of the deterring factors, India has secured its position among the countries that build its own warships and submarines. The Indian shipbuilding industry has already touched a three figure capacity but the room for improvement is still huge as evident from the fact that in spite of our achievements in shipbuilding, we still lag significantly behind the countries with their own shipbuilding industries. INTERNAL CONTROL SYSTEM The Company has in place an adequate system of internal control commensurate with its size and nature of its business. These have been designed to provide reasonable assurance that all assets are safeguarded and protected against loss from unauthorised use or disposition and that all transactions are authorised, recorded and reported correctly and the business operations are conducted as per the prescribed policies and procedures of the Company. The Company's effective control system is supported by an Enterprise Resources Planning (ERP) platform i.e. SAP for its main business processes. The Audit committee and the management have reviewed the adequacy of the internal control systems and suitable steps are taken to improve the same. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFOMRMANCE Your company has successfully delivered 05 vessels during the financial year under review which has taken to the total sum to 157 vessels delivered so far by the Company. Your Company has recorded total revenue of ` 2149.33 crores, Net Profit after tax for the Financial Year stood at ` 107.13 crores and recorded an EBIDITA of ` 565.29 Crores, as standalone basis for the financial year under consideration. HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS In this era of globalisation, the industrial scenario is changing frequently, forcing the organization to develop its human resources and enable them to adapt to contemporary technological advancements to achieve the goals of the Organisation. Your Company firmly believes that its human resources are the key enablers for the growth of the Company and important asset. Hence, the success of the Company is closely aligned to the goals of the human resources of the Company. Taking into this account, your Company continued to Invest in developing its human capita and establishing its brand on the market to attract and retain the best talent. Employee relations during the period under review continued to be healthy, cordial and harmonious at all levels and your Company is committed to maintain good relations with the employees. CAUTIONARY STATEMENT The report may contain certain statements that the Company believes are, or may be considered to be "forward looking statements" that describe our objectives, plans or goals. All these forward looking statements are subject to certain risks and uncertainties, including but not limited to, government action, economic development and risks inherent in the Company's growth strategy and other factors that could cause the actual results to differ materially from those contemplated by the relevant forward looking statements.
30 ABG Shipyard Limited Annual Report 2012-2013
Independent Auditor's Report to the members of ABG SHIPYARD LIMITED Report on the Financial Statements We have audited the accompanying financial statements of ABG Shipyard Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation to the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India (i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; (ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor's Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. 2. Attention is drawn to Note no. 38 whereby the Company has applied the principles of Accounting Standard 30 issued by The Institute of Chartered Accountants of India. 3. As required by section 227(3) of the Act, we report that: a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; b. in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account; d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act. Attention is drawn to point no. 2 above whereby the Company has not adopted AS 30 fully but applied the principles of hedging as per AS 30 where there are firm commitments payable and receivable; e. on the basis of written representations received from the directors, as on March 31, 2013, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Act. For Nisar & Kumar Chartered Accountants F. R. No. 107117W
M. N. Ahmed Place: Mumbai (Partner) Date: 30th May, 2013 M. No. 18380 31 ABG Shipyard Limited Annual Report 2012-2013
Annexure to Independent Auditor's Report
(Referred to in paragraph 1 under the heading of “Report on Other Legal and Regulatory Requirements” of our report of even date)
As required by the Companies (Auditor's Report) Order, 2003 (as amended) (“the Order”) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, on the matters specified in paragraphs 4 and 5 of the said Order, we further report that: i.) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets;
(b) The fixed assets have been physically verified in a phased manner by the management during the year as per the program of verification which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. As informed to us, no material discrepancies were noticed between book records and physical verification;
(c) During the year, the Company has not disposed off any substantial part of fixed assets, which would affect the going concern of the Company. ii.) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable;
(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business;
(c) On the basis of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. iii.) As informed, during the year under audit the Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(b)(c)(d)(f) and (g) of the Order are not applicable. iv.) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control. v.) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the contracts or arrangements that need to be entered into the register maintained under section 301, of the Companies Act, 1956 have been so entered.
(b) The price at which such contract or arrangement is entered is reasonable compared to prevailing market price. vi.) The Company has not accepted any deposit from the public during the year. vii.) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. viii.) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether these are accurate or complete. ix.) (a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues applicable to it. However, instances of delay in deposit of Tax Deducted at Source and Employees Profession Tax have been noticed during the year under audit.
The following undisputed statutory dues are outstanding for a period of more than six months as on March 31, 2013, from the date they became payable:
Name of the Statute Nature of Dues Financial Year Amount in Rs. Crores
The Income Tax Act, 1961 Income Tax (incl. interest) 2011-12 21.87
The Income Tax Act, 1961 Tax Deducted at Source 2012-13 1.62
32 ABG Shipyard Limited Annual Report 2012-2013
(b) According to information and explanation given to us, the following dues have not been deposited by the Company on account of disputes:
Name of the Statute Nature of Dues Financial Amount in Rs. Forum where dispute is Year Crores pending The Finance Act, 1994 Service Tax 2004-05 to 2.58 Appellate Tribunal 2008-09 The Central Excise Act, Excise Duty 2004-05 7.65 Appellate Tribunal 1944 x.) The Company does not have accumulated losses at the end of the financial year. The Company has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year. xi.) Instances of delay between 1 to 182 days were noticed in repayment of principal and interest to banks during the year amounting to ` 952.68 crores and ` 199.92 crores respectively. xii.) Based on our examination of documents and records, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii.) The Company is not a chitfund/ nidhi/ mutual benefit fund/ society, to which the provisions of special statute relating to chitfund are applicable. Accordingly, paragraph 4 (xiii) of the Order is not applicable to the Company. xiv.) The Company is not engaged in dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company. xv.) According to the information and explanations given to us, the Company has given guarantees of ` 2113.64 crores for credit facilities taken by body corporates from banks and financial institutions, the terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the Company. xvi.) In our opinion and according to the information and explanations given to us, on the overall basis, term loans have been applied for the purposes for which they were obtained. xvii.) According to the information and explanations given to us and based on our examination of the books of account of the Company, short term funds to the extent of approximately ` 122.65 crores have been used for long term purposes. xviii.) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of paragraph 4(xviii) of the Order are not applicable to the Company. xix.) According to the information and explanations given to us and on the basis of records made available, we report that security has been created in respect of debentures issued. xx.) The Company has not raised any money by public issues during the year. Accordingly, paragraph 4(xx) of the Order is not applicable. xxi.) Based upon the information and explanations given by the management and audit procedures performed, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.
For Nisar & Kumar Chartered Accountants F. R. No. 107117W
M. N. Ahmed Place: Mumbai (Partner) Date: 30th May, 2013 M. No. 18380
33 ABG Shipyard Limited Annual Report 2012-2013
BALANCE SHEET AS AT 31ST MARCH 2013
As at As at 31.03.2013 31.03.2012 Note ` in Crores ` in Crores
I EQUITY AND LIABILITIES 1. Share Holders' Funds a. Share capital 2 50.92 50.92 b. Reserves & surplus 3 1,519.46 1,413.62 1,570.38 1,464.54 2. Non-current Liabilities a. Long-term borrowings 4 762.63 1,251.19 b. Deferred tax liabilities (Net) 6 526.11 466.29 c. Long-term provisions 5 9.12 8.96 1,297.86 1,726.44 3. Current Liabilities a. Short-term borrowings 7 2,470.24 2,008.68 b. Trade payables 8 1,324.27 1,083.14 c. Other current liabilities 9 3,914.94 2,563.45 d. Short-term provisions 10 54.22 40.37 7,763.67 5,695.64 10,631.91 8,886.62 II ASSETS 1. Non-current Assets a. Fixed assets 11 (i) Tangible assets 1,007.54 1,003.10 (ii) Intangible assets 1.64 2.69 (iii) Capital work-in-progress 1,728.71 1,417.39 2,737.89 2,423.18 b. Non-current investments 12 230.03 233.86 c. Long-term loans and advances 13 464.83 689.54 3,432.75 3,346.58 2. Current Assets a. Inventories 14 4,352.32 3,260.83 b. Trade receivables 15 55.30 62.64 c. Cash and bank balance 16 25.55 363.52 d. Short-term loans and advances 17 2,285.62 1,326.40 e. Other current assets 18 480.37 526.65 7,199.16 5,540.04 10,631.91 8,886.62 Significant Accounting Policies & Notes to Financial Statements 1 - 40
As per our report of even date For NISAR & KUMAR For and on behalf of the Board Chartered Accountants F. R. No. 107117W M. N. Ahmed Major Arun Phatak Dhananjay Datar Partner Executive Director Whole Time Director M. No 18380
Mumbai Sunil Agarwal Dated : 30th May 2013 Company Secretary
34 ABG Shipyard Limited Annual Report 2012-2013
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2013
Year ended Year ended 31.03.2013 31.03.2012 Note ` in Crores ` in Crores INCOME Revenue from operations 19 2,099.65 2,391.77 Other income 20 49.68 40.92 Total Revenue 2,149.33 2,432.69
EXPENSES Consumption of raw materials & components 21 1,103.68 1,217.19 Purchase of traded goods 21 10.28 1.34 Changes in inventories of work-in-progress 22 (118.98) 29.72 Employee benefits expense 23 85.90 85.44 Finance costs 24 401.30 330.74 Depreciation, Amortisation & Impairment expense 11 103.71 99.25 Other expenses 25 389.74 390.23 Total Expenses 1,975.63 2,153.91 Profit before exceptional and extraordinary items and tax 173.70 278.78 Exceptional / Extraordinary items - - Profit before tax 173.70 278.78 Tax Expense Current tax for the year 36.46 57.19 Current tax for earlier years 5.04 13.41 MAT credit (entitlement)/utilised (34.75) (35.10) Deferred tax 59.82 62.99 Profit after tax 107.13 180.29
Earning per share in Rupees of face value of `10 /- each Basic 21.04 35.41 Diluted 21.04 35.41
Significant Accounting Policies & Notes to Financial Statements 1 - 40
As per our report of even date For NISAR & KUMAR For and on behalf of the Board Chartered Accountants F. R. No. 107117W M. N. Ahmed Major Arun Phatak Dhananjay Datar Partner Executive Director Whole Time Director M. No 18380
Mumbai Sunil Agarwal Dated : 30th May 2013 Company Secretary
35 ABG Shipyard Limited Annual Report 2012-2013
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2013
Year ended Year ended 31.03.2013 31.03.2012 ` in Crores ` in Crores A. Cash Flow From Operating Activities : Net Profit (Loss) before extraordinary items & taxation 173.70 278.78 Adjustments for : Depreciation 103.48 99.25 Provision for Impairment 0.23 - Provision for Contingencies 0.68 0.88 Finance charges 401.30 330.74 Interest income (21.73) (34.63) Effect of exchange rate change (49.12) 73.64 Loss / (Profit) on Sale of Assets (net) (8.25) 0.18 Loss / (Profit) from Partnership firm 1.20 0.04 Loss / (Profit) on Sale of Investments (0.03) (1.90) Operating Profit before working capital changes 601.46 746.98 Adjustments for : Inventories (1,554.48) (1,474.71) Trade Receivables 4.86 64.63 Loans and Advances* and other current assets (666.61) (283.61) Trade Payables and other current liabilities / provisions** 280.04 88.04 Stage Payments from Customers (net) 1,289.89 461.19 Cash generated from Operations (44.84) (397.48) Direct Taxes Paid (28.52) (35.96) Cash Used in Operating activities (73.36) (433.44) B. Cash Flow From Investing Activities: Purchase of Fixed Assets including Capital Work in Progress and capital advances (214.79) (517.18) Sale of Fixed assets 13.63 1.92 Investment in Subsidiary - (0.01) Purchase of Investments (0.01) (266.00) Proceeds from Sale of Current Investments 0.01 267.90 Proceeds from Sale / Redemption of Non Current Investments 3.87 - Loans / deposits given (net) (228.16) (55.32) Interest income 47.46 26.23 Inter Corporate Deposits (2.00) (15.00) Cash Used In Investing Activities (379.99) (557.46) C. Cash Flow From Financing Activities: Dividends paid - (20.37) Tax on distributed profits - (3.30) Proceeds from Long Term Borrowings 175.78 625.47 Repayments of Long Term Borrowings (152.07) (212.14) Short Term Borrowings (net) 477.61 648.50 Finance charges paid (385.93) (327.33) Cash Generated from Financing Activities 115.39 710.83 Net (decrease) / Increase in cash and cash equivalents (A + B + C) (337.96) (280.07) Opening Balance of Cash & Cash Equivalents 363.52 643.57 Closing Balance of Cash & Cash Equivalents 25.56 363.50 Effect of Exchange rate changes (0.01) 0.02 Closing Balance of Cash & Cash Equivalents as restated 25.55 363.52 * Includes current and non current **Includes Short term and Long term Notes : 1. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India. 2. Figures for previous year where ever necessary have been regrouped to conform to those of current year. As per our report of even date For NISAR & KUMAR For and on behalf of the Board Chartered Accountants F. R. No. 107117W M. N. Ahmed Major Arun Phatak Dhananjay Datar Partner Executive Director Whole Time Director M. No 18380 Mumbai Sunil Agarwal Dated : 30th May 2013 Company Secretary
36 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
1. SIGNIFICANT ACCOUNTING POLICIES I). Basis of Accounting The financial statements are prepared under the Historical Cost Conventions on the basis of Going Concern and as per applicable Indian Accounting Standards notified under section 211 (3C) of The Companies Act, 1956. ii). Use of estimates The preparation of financial statements requires the management of the company to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference, if any, between the actual results and estimates is recognised in the year in which the results are known / materialized . iii). Revenue Revenue is recognized in accounts in accordance with Accounting Standard-7 ‘Accounting for Construction Contracts' issued by Institute of Chartered Accountants of India. The method of recognition is on percentage completion basis. Revenue is recognised under Percentage Completion Method on the basis of proportion that contract costs incurred for work performed up to the reporting date bears to the estimated total contract costs. Revenue from ship repair is recognised on the basis of job completion. iv). Fixed Assets Tangible Assets: Fixed Assets are recorded at Cost. Cost is purchase cost and in the case of Freehold Land, includes development cost incurred, together with all incidental costs of acquisition, borrowing costs and other related internal costs and is netted of for Cenvat and Value Added Tax. Profit/Loss on disposal of fixed assets is recognised in the Statement of Profit and Loss. Intangible Assets: Intangible assets are recognized and accounted at cost in accordance with Accounting Standard-26 ‘Intangible Assets’ issued by Institute of Chartered Accountants of India. v). Capital Work In Progress All expenditure, relating to development of land, buildings, dry docks and plant & machinery etc. are accumulated and shown as capital work-in-progress till the completion of such activities. Capital advances are presented under loans and advances . vi). Investments Long Term investments are stated at cost. Cost includes incidental expenses of acquisition. Decline in value of investment other than of temporary nature is recognised in Statement of Profit and Loss. vii). Borrowing costs Borrowing Costs attributable to the acquisition and construction of the Qualifying Assets, which take substantial period of time to get ready for their intended use, are capitalized as part of the cost of respective assets up to the date when such assets are ready for their intended use. Other Borrowing costs are charged to the Profit and Loss account. viii). Depreciation and Amortisation a) Freehold land is not depreciated. Leasehold land is amortised equally over the period of lease. b) Dry Docks (included in Plant & Machinery) and Dry Docks Civil Works (included in Factory Building) and Jetty are depreciated on Straight Line Method in accordance with Accounting Standard - 6 ‘Depreciation Accounting' of the Institute of Chartered Accountants of India at the rates prescribed in Schedule XIV to the Companies Act, 1956. c) Other assets are depreciated on Written Down Value Method at the rates prescribed in Schedule XIV to the Companies Act, 1956. d) Depreciation on additions / deletions to Fixed Assets made during the year is provided on pro-rata basis from or up to date of such additions / deletions as the case may be. e) Depreciation on amounts added on revaluation is recouped from Revaluation Reserve f) Intangible assets are stated at cost less accumulated amortisation and are amortised over a period of five years. ix). Impairment of Assets An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. The company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired and if such indication exists, the carrying value of such asset is reduced to its recoverable amount and a provision is made for such impairment loss in the profit and loss account. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount x). Employees’ Benefits Provident Fund: Provident Fund contributions are made as per a defined contribution scheme and the contribution of company
37 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
is charged to Profit and Loss account of the year when become due. The company has no other obligation other than to contribute and deposit the contribution to respective authorities. Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered. Long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of long term benefits are charged to the Profit and Loss account. xi). Valuation of Inventory Inventories of spares, consumables, components are valued at lower of cost and net realizable value. Cost represents purchase cost and other incidental costs, if any. Cost of inventories is computed on Weighted Average/ FIFO basis. Finished goods are valued at lower of cost and net realisable value. xii). Work in Progress and Cost Allocation Each construction contract is considered as a cost center and all costs directly identifiable to the Contract are charged on actual basis. Indirect miscellaneous costs are also allocated to the various contracts using appropriate overhead recovery method. Contract work-in-progress is valued at cost, including therein profit or loss arrived at in accordance of Accounting Standard -7 ‘Accounting for Construction Contracts' xiii). Foreign Currency Transactions Transactions in Foreign Currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary assets and liabilities are translated at the year end using closing rate if remain unsettled at the year end. Non monetary foreign currency items are carried at cost. The resulting gain or loss on account of exchange difference either on settlement or on translation is recognised in the Statement of Profit and Loss. The Company has w.e.f. 07th December,2006 chosen to apply notification issued by Companies (Accounting Standard) Amendment Rules 2011 GSR 913 (E) & 914 (E) dated 29.12.2011 as regards monetary long term assets and liabilities. Consequently, the resulting gain or loss on account of exchange difference on settlement or on translation is so far as they relate to depreciable assets is added or deducted from the cost of the asset. xiv). Derivative Accounting The Institute of Chartered Accountants of India has, in 2008, issued an announcement on ‘Accounting for Derivatives’ inter alia requiring provision for losses on all derivative contracts outstanding at the balance sheet date by marking them to market keeping in view the principle of prudence, other than for forward contracts to which Accounting Standard (AS) 11- ‘The Effect of Change in Foreign Exchange Rates’ is applicable. The Company has entered into Forward Contracts to hedge a firm commitment or a highly probable forecast transaction to which AS-11 is not applicable and hence, the Company has applied aforesaid announcement. xv). Government Subsidy Government subsidy related to shipbuilding contracts are recognized on compliance with the relevant conditions and is recognized in the Statement of Profit and Loss and presented under ‘Revenue from Operations’. xvi). Operating Leases Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments / receipts are recognized as an expense / income in the Statement of Profit and Loss on a straight-line basis over the lease term. xvii).Provisions for Current and Deferred Tax Provision for Current Tax is made on the basis of taxable income under the provision of the Income Tax Act, 1961. Deferred Tax resulting from “timing differences” between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the asset will be realised in future.
In accordance with the guidance note issued by Institute of Chartered Accountants of India, the Company recognises MAT Credit as an asset only to the extent ,the probability exists that the Company will become liable to pay normal Income Tax during the specified period as per provision of the Income Tax Act, 1961. xviii).Provisions, Contingent Liabilities and Contingent Assets
A provision is made based on reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed in notes forming part of financial statements. Contingent Assets are not recognized/ disclosed.
38 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 2. SHARE CAPITAL
Authorised Capital 100000000 (P.Y. 100000000) Equity Shares of ` 10/- each 100.00 100.00
Issued Subscribed and Paid up Reconciliation: No of shares 31.03.2013 31.03.2012 Equity Shares of `10/- each fully paid up. As per last Balance Sheet 50921801 50921801 50.92 50.92 Issued during the year - - As at the end of the year 50921801 50921801 50.92 50.92
a) The Company has only one class of shares referred to as Equity Shares having par value of `10/-. Each holder of equity share(s) is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion of the number of equity shares held by the shareholders.
b) None of the above shares are reserved for issue under options and contract / commitments for sale of shares or disinvestment.
c) 33648204 (P.Y.31110594 ) Equity Shares of `10/- each are held by the holding company ABG International Pvt. Ltd.
d) Shares allotted, as fully paid up, pursuant to contract(s) without payment being effected in cash / bonus shares /bought back / forfeited/ calls unpaid in the previous 5 years - NIL
e) Shareholders holding above 5% Equity Shares with voting rights in the company.
Sr. Name of the shareholder 31.03.2013 31.03.2012 No No of equity % No of equity % shares held shares held 1 ABG International Private Ltd. 33,648,204 66.08 31,110,594 61.09 2 Religare Finvest Ltd. 5,197,281 10.21 2,833,561 5.56
3. RESERVES AND SURPLUS
(i) Capital Reserve Opening balance 31.87 - Add: Transferred from Warrant Forfeiture Account - 31.87 Closing balance 31.87 31.87
(ii) Securities Premium Account Opening balance 235.00 235.00 Added / Utilised / Transferred during the year - - Closing balance 235.00 235.00
(iii) Debenture Redemption Reserve Opening balance 175.67 117.00 Add: Transferred from Surplus in Statement of Profit and Loss 91.00 92.00 Less: Transferred to General Reserve during the year - 33.33 Closing balance 266.67 175.67
39 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores (iv) Revaluation Reserve Opening balance 43.51 44.87 Less: Utilised to set off against depreciation 1.29 1.36 Closing balance 42.22 43.51
(v) General Reserve Opening balance 438.65 389.32 Add: Transferred from Surplus in Statement of Profit and Loss 10.00 16.00 Add: Transferred from Debenture Redemption Reserve - 33.33 Closing balance 448.65 438.65
(vi) Warrant Forfeiture Account Opening balance - 31.87 Less: Transferred to Capital Reserve during the year - 31.87 Closing balance - -
(vii) Surplus in Statement of Profit and Loss Opening balance 488.92 416.63 Add: Profit for the year 107.13 180.29 596.05 596.92 Less: Transferred to Debenture Redemption Reserve 91.00 92.00 Transferred to General Reserve 10.00 16.00 Closing balance 495.05 488.92 1,519.46 1,413.62
4 A. LONG TERM BORROWINGS
(a) Debentures Secured - 233.33
(b) Term Loans From Banks Secured 721.79 769.99 Unsecured 40.62 247.50
(c) Vehicle loans From Banks Secured 0.12 0.24
From Others Secured 0.10 0.13 762.63 1,251.19
40 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013 4 B (i) Details of Debentures issued by the Company ` in crores
Particulars Security Terms of repayment As at 31.03.2013 As at 31.03.2012 Non Current Current Non Current Current a) 11.40% 2000 Non Convertible Redeemable Debentures (NCD) of `100000/- each issued to
ICICI Bank Ltd Secured - Residual charge on the Payable on 09.05.2013 - 160.00 160.00 - company’s immovable and movable Tata Capital Ltd. fixed assets at Dahej plant Payable on 09.05.2013 - 40.00 40.00 - b) 12.30% 1000 Non Convertible Secured - First pari passu Payable on 15.12.2013 - 66.67 33.33 33.33
Redeemable Debentures (NCD) of charge on the companys `100000/- each issued to Life immovable and movable fixed Insurance Corporation of India (LIC) assets of Dahej plant - 266.67 233.33 33.33
4 B (ii) Details of Terms of repayment for other long term borrowings and security provided in respect of the secured other long-term borrowings ` in crores
Particulars Security Terms of repayment As at 31.03.2013 As at 31.03.2012 Non Current Current Non Current Current Term loans from banks Foreign Currency Loan Payable in half yearly 27.19 16.32 35.78 10.22
installments upto Sep 2016 Foreign Currency Loan Payable in quarterly 25.29 20.23 42.79 19.02 Installments upto April 2015 Rupee Term Loan - Consortium Secured - First pari-passu Payable in quarterly 84.14 67,94 150.67 64.16 charge on the company's Installments upto March 2015 immovable & movable fixed assets of Dahej plant present and future Rupee Term Loan Payable in quarterly 10.60 4.57 14.20 3.60 Installments upto Jan.2017 Rupee Term Loan Payable in quarterly 149.92 39.88 192.80 42.88 Installments upto June.,2017 Rupee Term Loan Secured - Subservient charge Payable in monthly installments - 200.00 200.00 - upto Oct 2013 on current and fixed assets of the company at Dahej Yard Rupee Term Loan Secured - Second charge by Payable in quarterly installments 18.75 31.25 43.75 6.25 way of hypothecation of entire upto Dec. 2014 movable fixed assets of Dahej Shipyard and Rig yard of the Company Rupee Term Loan Secured - First pari-passu Payable in quarterly installments 220.00 40.11 247.50 27.50 charge on movable and upto July 2015 immovable fixed assets of the Dahej Shipyard and Rigyard and mortgage on GIDC and private Land at Dahej Corporate Guarantee of holding company. Rupee Term Loan Secured - First pari-passu Payable in quarterly installments 80.00 15.00 90.00 10.00 charge on movable and upto March 2016 immovable fixed assets of the Dahej Shipyard and Rigyard and mortgage on GIDC and private Land at Dahej Corporate Guarantee of holding company. Rupee Term Loan Secured - First pari-passu charge Payable in quarterly installments 20.90 0.1 1 - - on the assets of third party. upto Dec 2017 Corporate guarantee of third party. Pledge of shares of the third party and nondisposal undertaking on unpledged shares in the share capital of third parties Rupee Term Loan Secured - First charge on the assets Payable in quarterly installments 85.00 - - - of third party Subservient charge on upto March 2018 all immoveable andmoveable fixed assets of the Dahej yard and personal and corporate guarantee of third party. Rupee Term Loan Unsecured- Pending creation Payable in quarterly installments 40.62 29.02 - - of security till Oct 2015 762.41 464.43 1,017.49 183.63
41 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
` in crores
Particulars Security Terms of repayment As at 31.03.2013 As at 31.03.2012 Non Current Current Non Current Current
Vehicle Loans From Banks Secured - Hypothecation of Payable in monthly installments 0.12 0.21 0.24 0.09 individual assets financed upto May 2015 From Others Secured - Hypothecation of Payable in monthly installments 0.10 0.12 0.13 0.23 individual assets financed upto April 2015
0.22 0.33 0.37 0.40 762.63 464.76 1,017.86 184.03
4 C. The Company has defaulted in repayment of loans and interest in respect of the following
Particulars As at 31.03.2013 As at 31.03.2013 As at 31.03.2013 As at 31.03.2013 As at 31.03.2012 As at 31.03.2012 Rs. in crores Period in days Rs. in crores Period in days Rs. in crores Period in days Principal Principal Interest Interest Principal/Interest Debentures issued to LIC 33.33 107 - - - - Foreign Currency Loans 5.44 19 0.35 19 - - Rupee Term Loan 37.19 1-182 13.54 1- 91 - -
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 5. DEFERRED TAX LIABILITY / ASSET
Tax effect of items constituting deferred tax liability On account of profit on Projects under completion 593.99 500.54
Tax effect of items constituting deferred tax asset 593.99 500.54 On account of gratuity liability and leave encashment liability 3.87 3.73 On account of expenses allowable on delivery of ships 24.84 17.15 On account of unabsorbed depreciation (net) 38.27 13.05 On account of disallowances 0.90 0.32 67.88 34.25 Deferred Tax Liability (net) 526.11 466.29
6. LONG TERM PROVISIONS
Provision for Employee benefits i) Provision for Gratuity 4.79 4.37 ii) Provision for Leave Encashment 4.33 4.59 9.12 8.96
7. A - SHORT TERM BORROWINGS Security From Banks: a) Short term loans Rupee Short Term Loan Secured-Subservient charge on the current assets 68.58 - and movable fixed assets Dahej Shipyard & Rigyard. Rupee Short Term Loan Secured-Subservient charge on the movable fixed - 33.31 assets Dahej Shipyard & Rigyard. Rupee Short Term Loan Secured-Subservient charge on the current assets 29.00 60.00 of the company, present and future. Rupee Short Term Loan Secured- Charge on immovable property at Dahej 30.00 - yard. Corporate Guarantee of third party. Rupee Short Term Loan Secured- Charge on current assets of the company. - 29.96 Rupee Short Term Loan Unsecured 95.31 320.00
42 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 7. A - SHORT TERM BORROWINGS Security b) Commercial Paper Unsecured - 248.60
c) Export Packing Credit Secured - Assets both immovable and movable 654.33 683.14 excluding movable and Immovable fixed assets of Dahej plant .
d) Cash Credit Secured- Assets both immovable and movable 1,227.79 444.43 excluding movable and Immovable fixed assets of Dahej plant .
e) Others - payable on demand Secured- Assets both immovable and movable 69.29 107.77 excluding movable and Immovable fixed assets of Dahej plant .
Unsecured 282.99 -
f) Vehicle Loans Secured - Hypothecation of the individual assets - 0.01 financed. From Others: a) Commercial Paper Unsecured - 58.45
b) Inter Corporate Unsecured 12.95 23.00 Deposits c) Vehicle Loans Secured- Hypothecation of the individual assets - 0.01 financed. 2,470.24 2,008.68
7 B. The Company has defaulted in repayment of loans and interest in respect of the following
Particulars As at 31.03.2013 As at 31.03.2013 As at 31.03.2012 As at 31.03.2012 ` in crores Period of default ` in crores Period of default in days in days
Loans from banks Principal 135.08 35-63 29.96 14 Interest 3.60 1-52 0.50 1
Others - payable on demand 69.29 2-61 54.51 7-24
Inter Corporate Deposits 11.95 4-161 - -
43 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 8. TRADE PAYABLES (i) Sundry Creditors for Goods & Expenses 359.82 281.60 (ii) Acceptances - banks 964.45 801.54 1,324.27 1,083.14
The Company has no amounts due to suppliers under MSMED as at 31st March, 2013 (P. Y. Nil). The information relates to such vendors identified as micro,small and medium enterprises as per information available with the Company. (i) Principal amount remaining unpaid to any supplier as at the end of the accounting year - -
(ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year - -
(iii) The amount of interest paid along with the amounts of the payment made to the supplier - - beyond the appointed day (iv) The amount of interest due and payable for the year - - (v) The amount of interest accrued and remaining unpaid at the end of the accounting year - - (vi) The amount of further interest due and payable even in the succeeding year, until such date - - when the interest dues as above are actually paid
9. OTHER CURRENT LIABILITIES (i) Current Maturities of long-term debt [Refer note 4B] a. Non Convertible Redeemable Debentures (NCD) 266.67 33.33 b. Term Loans - from Banks 464.43 183.63 c. Vehicle loans From Banks 0.21 0.17 From Others 0.12 0.23 (ii) Payables on purchase of fixed assets Acceptances - banks 215.70 180.86 Others 42.74 86.66 (iii) Interest accrued & due on borrowings 18.74 0.50 (iv) Interest accrued but not due on borrowings 12.45 23.51 (v) Advance from customers 2,877.79 2,045.97 (vi) Unclaimed Dividends* 0.12 0.12 (vii) Unclaimed Share Application Money* - 0.11 (viii) Other Payables Statutory remittances 10.64 3.61 Trade / security deposits received 5.18 4.63 Others 0.15 0.12 *To be credited to Investor Education and Protection Fund, when due 3,914.94 2,563.45
10. SHORT TERM PROVISIONS Provision for employees benefits Gratuity 1.42 1.09 Leave encashment 1.33 1.46 Income Tax (Net of prepaid taxes) 47.83 34.86 Provision for warranty 3.64 2.96 54.22 40.37
44 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013 11. FIXED ASSETS (` in crores)
PARTICULARS G R O S S B L O C K D E P R E C I A T I O N / A M O R T I S A T I O N / N E T B L O C K I M P A I R M E N T At cost / Valuation
AS AT ADDITIONS DELETIONS/ AS AT AS AT ADDITIONS DELETIONS/ AS AT AS AT AS AT 01.04.2012 DURING ADJUSTMENTS 31.03.2013 01.04.2012 DURING ADJUSTMENTS 31.03.2013 31.03.2013 31.03.2012 THE YEAR DURING THE YEAR DURING THE YEAR THE YEAR
TANGIBLE ASSETS
LAND
FREE HOLD LAND 86.05 1.97 4.70 83.32 - - - - 83.32 86.05
LEASE HOLD LAND 7.71 - - 7.71 0.36 0.08 - 0.44 7.27 7.35
FACTORY BUILDING 510.63 18.29 - 528.92 114.92 39.36 - 154.28 374.64 395.71
BUILDING 95.34 27.25 0.16 122.43 13.09 4.10 0.01 17.18 105.25 82.25
PLANT AND MACHINERY 568.52 65.39 1.34 632.57 149.02 57.25 1.00 205.27 427.30 419.50
OFFICE EQUIPMENT 5.74 0.08 0.22 5.60 2.26 0.63 0.20 2.69 2.91 3.48
FURNITURE & FIXTURES 4.01 0.14 0.55 3.60 2.25 0.35 0.54 2.06 1.54 1.76
VEHICLES 14.31 0.43 0.64 14.10 8.29 1.66 0.48 9.47 4.63 6.02
COMPUTERS 5.08 0.14 0.16 5.06 4.10 0.44 0.16 4.38 0.68 0.98
1,297.39 113.69 7.77 1,403.31 294.29 103.87 2.39 395.77 1,007.54 1,003.10
INTANGIBLE ASSETS
SOFTWARE 8.04 0.08 - 8.12 5.35 1.13 - 6.48 1.64 2.69
8.04 0.08 - 8.12 5.35 1.13 - 6.48 1.64 2.69
T O T A L 1,305.43 1 13.77 7.77 1,41 1.43 299.64 105.00 2.39 402.25 1,009.18 1,005.79
Previous Year 1,115.52 193.1 1 3.20 1,305.43 200.14 100.61 1.1 1 299.64 1,005.79
Capital Work-in-progress 1,417.39 412.49 101.17 1,728.71 i) Certain part of the land is yet to be registered in the name of the Company.
31.03.2013 31.03.2012 ` in crores ` in crores ii) Depreciation & Amortisation & Impairment relating to continuing operations: Depreciation & Amortisation & Impairment for the year on tangible assets 103.87 99.36 Depreciation & Amortisation & Impairment for the year on intangible assets 1.13 1.25 105.00 100.61 Less: Utilised from revaluation reserve 1.29 1.36 Depreciation & Amortisation on discontinuing operations - - Depreciation, Amortisation & Impairment relating to continuing operations 103.71 99.25 iii) Impairment charges of ` 0.24 crores (P.Y. Nil) i.e. on Office Equipment ` 0.14 crores and on Software ` 0.10 crores has been included in Depreciation, Amortisation & Impairment expense in the Statement of Profit and Loss. iv) No amounts were written off due to reduction of capital / written off on revaluation or were added to assets on revaluation during the previous 5 years. v) Borrowing cost capitalised `176.14 crores (P.Y `166.41 crores) vi) On the basis of the report of Chartered Engineers and Government approved Valuers, the Company had revalued the Freehold Land, Factory Building, Other Building and Dry Docks on 30th June, 1994 and again on 30th June 2002 and consequently an amount of `10.90 crores and ` 59.99 crores respectively being the differences between the amount of fair market value of the same and depreciated value as per books as on those dates, have been added to the value of Fixed Assets and corresponding credit shown as Revaluation Reserve.
Consequent to the revaluation there is an additional depreciation of `1.29 crores (P.Y. ` 1.36 crores), which has been withdrawn from Revaluation Reserves and credited to Statement of Profit and Loss.
45 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013 vii) Details of Capital work in progress: (CWIP)
Particulars 31.03.2013 31.03.2012 ` in Crores ` in Crores Ship and Rig Yard Land , Building and Site development 232.29 231.77
Plant & Machinery :* Main Plant & Machinery 812.12 662.80 Cranes 66.77 77.26 Jetty 2.98 63.22 Others 1.66 15.06 Sub Total 1,115.82 1,050.11 Preoperative expenses (Pending Allocation) : Rent 3.16 3.49 T ravelling & Conveyance 6.78 7.05 Finance Charges 659.57 441.95 Personnel Expenses 18.86 16.38 Communication Expenses 0.33 0.36 Professional & Technical Fees 7.36 8.10 Depreciation 14.33 15.80 Other Site Expenses 3.67 4.00 Sub T otal 714.06 497.13 T otal 1,829.88 1,547.24 Less: Capitalised/Adjusted during the year 101.17 129.85 Grand Total 1,728.71 1,417.39
*Includes Goods in transit of ` 66.05 crores (P. Y. ` 2.26 crores)
During the year, ` 101.18 crores (P. Y. ` 129.85 crores) pertaining to completed assets ready to be put to use has been capitalized along with proportionate expenditure. The capitalization of proportionate expenditure is based on technical evaluation of the project by an independent valuer. viii) The company has chosen to avail the option under AS-11 notification issued by Companies (Accounting Standard) Amendment Rules 2011 GSR 913 (E) & 914 (E) dated 29.12.2011 issued by Ministry of Corporate Affairs. The company has exercised the option with respect to foreign currency long term loan availed by it. The company has no other long term monetary Assets / Liabilities.
Due to the exercise of aforesaid option, the impact on Statement of Profit & Loss for the year is a Gain of ` 6.68 crores (P.Y. Gain ` 14.20 crores) due to foreign currency exchange loss (net) which has been capitalized with CWIP. ix) Acquisition through business combinations / Assets reclassified as held for sale - Nil (P.Y. Nil)
46 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores
12. NON-CURRENT INVESTMENTS
Non Trade - At cost Quoted
In Equity Shares In subsidiary 177001303 (P. Y.177242875) Equity Shares in Western India Shipyard Ltd. of 35.40 35.45 ` 2/- each fully paid up Unquoted In Equity Shares In subsidiaries : 10000 (P.Y.10000) Equity Shares in ABG Shipyard Singapore Pte. Ltd. of SGD 1/- 0.03 0.03 each fully paid up 10000 (P.Y. 10000) Equity Shares in ABG FPSO Pvt Ltd of ` 10/- each fully paid up 0.01 0.01
In Others: 271002 (P .Y . 271002) Equity Shares in ABG Business Ventures Pte. Ltd., Singapore 0.92 0.92 of SGD 1/- each fully paid up 1000 (P .Y . NIL) Equity Shares in Varada Seven Pte. Ltd. of USD 1/- each fully paid up 0.01 - In Preference Shares In subsidiaries : 4212100 (P.Y. 4297100) 1% Preference Shares in ABG Shipyard Singapore Pte. Ltd. 187.84 191.63 Of USD 1/- each fully paid up. In Partnership Firm Capital in partnership firm Vipul Shipyard 5.82 5.82 230.03 233.86
1) Aggregate amount of quoted investments ` 35.40 crores (P.Y ` 35.45 crores) 2) Aggregate market value of quoted investments ` 48.68 crores (P.Y. ` 119.11 crores) 3) Aggregate amount of unquoted investments `194.63 crores (` Rs.198.41 crores) 4) 172223628 (P.Y 172465200) Equity shares of the subsidiary - Western India Shipyard Ltd. have been pledged with banks in respect of facilities availed by such subsidiary company from the banks. 5) Details of Partners, capital and shares in the firm are as under:
Details of Investment in partnership firm Vipul Shipyard , Surat 31.03.2013 31.03.2012 Capital Account 5.82 5.82 Current Account 27.79 29.50 Total Capital of Vipul Shipyard 5.84 5.84
Partners details Share in Share in profits/losses profits/losses ABG Shipyard Ltd. 98.00% 1.00% ABG International Pvt. Ltd. and ABG Resources Pvt. Ltd. - 98.00% ABG International Pvt. Ltd. 1.00% - ABG Resources Pvt. Ltd. 0.60% - Others 0.40% 1.00%
47 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 13. LONG-TERM LOANS AND ADVANCES (Unsecured, considered good)
Capital Advances 63.27 271.80 Security Deposits [Refer Note 39] 128.64 239.57 Due from Government authorities MAT Credit Entitlement 165.65 130.55 Added during the year 34.75 55.77 Less: Utilised [Refer Note 29] - 20.67 200.40 165.65 Service tax credit receivable - deferred 12.52 12.52 Loans and advances to related parties [Refer Note 39] 60.00 - 464.83 689.54
14. INVENTORIES (As taken, valued & certified by management)
Raw Material and Components In stock 496.44 782.96 In transit 570.99 116.05 1,067.43 899.01 Work in Progress On Percentage completion basis 8,048.15 (Contract costs & recognised profit) Less: Progress Money from Customers 4,842.30 3,205.85 2,282.78
Finished goods 79.04 79.04 4,352.32 3,260.83
Finished goods represents completed ship where invoicing and protocol of acceptance is pending.
15. TRADE RECEIVABLES (Unsecured, Considered good)
Outstanding for more than six months from due date of payment 46.86 56.71 Others 8.44 5.93 55.30 62.64
16. CASH AND BANK BALANCE
Cash in hand 0.11 0.12 Balances with Banks: i) In Current Accounts 19.23 79.82 ii) In EEFC Accounts 0.08 0.14 iii) In Fixed Deposits 6.01 283.21 iv) In Eamarked Accounts Unclaimed dividend accounts 0.12 0.12 Unclaimed share application money accounts - 0.11 25.55 363.52 Out of the above : Fixed deposit with maturity of more than twelve months - 279.22 Fixed deposit with bank held as security against short term borrowing 6.01 -
48 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 17. SHORT-TERM LOANS AND ADVANCES (Unsecured, Considered good)
Loans and Advances to related parties: [Refer note 39] Current Account in Partnership Firm 27.79 29.50 Advance for supplies / services 833.40 356.61 Loans to Subsidiaries 26.18 25.92 Other Loans and advances 280.66 0.13 1,168.03 412.16 Others: Advance to suppliers 789.88 563.45 Prepaid Expenses 300.16 323.88 Employee Advances 6.25 5.81 Inter Corporate Deposits 17.00 15.00 Balance with Government Authorities Service Tax Refundable / Credit 4.01 2.04 Vat credit 0.27 4.04 Income Tax 0.02 0.02 4.30 6.10 1,117.59 914.24 2,285.62 1,326.40
Details of Loans and Advances in the nature of loan to subsidiaries: ` in crores Sr. No. Name of the Company As at 31.03.2013 As at 31.03.2012 Maximum amount Amount Maximum amount Amount outstanding during outstanding outstanding during outstanding the year the year 1 Western India Shipyard Ltd. 25.00 25.00 25.00 25.00 2 ABG FPSO Pvt. Ltd. 1.18 1.18 0.91 0.91 3 ABG Shipyard Singapore Pte. Ltd. * 0.00 0.00 * 0.00 0.00
*Amount less than ` 0.01 crore
18. OTHER CURRENT ASSETS (Unsecured, Considered good)
Subsidy 455.79 473.90 Interest accrued Fixed deposits with bank 0.01 27.49 Inter Corporate deposits 2.87 1.13 Insurance Claims Receivable 5.58 14.23 Receivables on sale of fixed assets 0.67 - Others 15.45 9.90 480.37 526.65
49 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
Year ended Year ended 31.03.2013 31.03.2012 ` in Crores ` in Crores 19. REVENUE FROM OPERATIONS Manufacturing Ships 1,463.80 1,063.04 Rigs 481.48 1,279.20 Trading Steel 11.41 - Crane - 1.68 Services - Ship Repair 86.83 1.32 Other operating Revenue Subsidy 50.50 39.05 Excise and duty refunds 5.63 7.48 2,099.65 2,391.77 20. OTHER INCOME Interest on: Fixed deposits with bank 4.59 31.85 Inter Corporate deposit 1.94 1.25 Others 15.20 1.53 Net Profit/(loss) on sale of current Investments - 1.90 Net Profit/(loss) on sale of non current Investments 0.03 - Profit on Sale of Assets (net) 8.25 (0.17) Other Non operating Income : Insurance Claims 2.66 1.35 Sundry balances written back 11.56 2.91 Miscellaneous Receipts 5.45 0.30 49.68 40.92
21. A. CONSUMPTION OF RAW MATERIALS & COMPONENTS
Steel 181.17 146.36 Components and others 922.51 1,070.83 1,103.68 1,217.19
21. B. PURCHASE OF TRADED GOODS Steel 10.28 - Crane - 1.34 10.28 1.34
22. CHANGES IN INVENTORIES - WORK IN PROGRESS (Included in work in progress on percentage completion basis) Opening Work In Progress 226.56 256.28 Closing Work In Progress 345.54 226.56 (Increase) / Decrease in Work in progress (118.98) 29.72
23. EMPLOYEE BENEFITS EXPENSE Salaries Wages and other benefits 63.39 63.19 Contribution to Provident and other funds 3.89 3.73 Staff Welfare Expenses 18.62 18.52 85.90 85.44
50 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
Year ended Year ended 31.03.2013 31.03.2012 ` in Crores ` in Crores 24. FINANCE COST Interest Expense on borrowings 272.20 226.80 Other Interest 37.41 0.09 Guarantee Commission (net) 42.67 27.04 Difference in Exchange on foreign currency transaction / translation (net) 4.98 49.11 Other Borrowing Costs 44.04 27.70 401.30 330.74
25. OTHER EXPENSES
Consumption of stores 47.46 53.72 Contractors Charges 149.65 147.32 Power and Water 13.90 12.26 Repairs & Maintenance - Plant & Machinery 3.41 8.84 - Buildings 0.27 0.06 - Others 1.17 2.13 Other Manufacturing Expenses 7.64 24.72 Inspection and Survey Expenses 5.13 6.88 Office Expenses 8.00 7.44 Rent Rates & Taxes 5.77 6.51 Insurance 24.89 32.25 Printing & Stationery 0.30 0.33 Postage Telephone & Telex 1.13 1.17 Travelling & Conveyance 8.02 13.53 Professional Charges 14.26 13.51 Payment to Auditors 1.00 0.87 Donations & Charities 4.44 4.63 Prior Years Expenses 0.11 0.27 Selling & Distribution 42.05 47.93 Forward Cover Loss/ (Gain) (net) 49.91 1.54 Loss from Partnership Firm 1.20 0.04 Miscellaneous Expenses 0.03 4.28 389.74 390.23
51 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
26. Capital commitments on contracts remaining to be executed on capital account and not provided for, are estimated at Rs. in crores Particulars 31st March 2013 31st March 2012 Tangible Assets 213.32 31.94 Intangible Assets - 0.10 213.32 32.04
27. (a) Contingent liabilities not provided for Rs. in crores Particulars 31st March 2013 31st March 2012 In respect of Performance/ Delivery Guarantees given by banks to the buyers 163.20 96.74 Corporate guarantees to banks in respect of facilities granted to group companies 1,305.06 1,038.26 Other bank guarantees 42.40 28.87 Claims against the company not acknowledged as debts 2.29 0.79 Claims in respect of indirect taxes 10.23 2.58
(b) Contingencies provided for in accordance with AS 29 issued by the Institute of Chartered Accountants of India Rs. in crores Particulars 31st March 2013 31st March 2012 Carrying amount as at the beginning of the year 2.96 2.08 Provision (net of utilisation) during the year. 0.88 0.88 Unused amount reversed during the year. - - Balance at the end of the year 3.64 2.96 The contingencies provided are in respect of estimated warranties on sold hulls.
28. In the opinion of the management, Current Assets, Loans and Advances have value in realisation in the ordinary course of business at least equal to the amount at which they are stated.
29. The Company has made Application u/s 245 C of Income Tax Act 1961, before Hon’ble Settlement Commission, Mumbai for the A.Y. 2004-05 to 2010-11. The Application for settlement has been admitted u/s 245 D (1) by Hon’ble Settlement Commission vide order dated 29th March 2012. The company has paid taxes of Rs.7.70 crores and utilised credit u/s 115JAA of the Income Tax Act ,1961 to the extent of Rs. 20.67 crores. The tax expense and utilisation are included in Current Tax for earlier years and MAT credit utilised, respectively.
30. Exchange fluctuation included in the Statement of Profit and Loss is a loss of Rs.170.15 crores and gain of Rs.123.14 crores (P.Y. loss Rs. 202.99 crores - gain Rs.117.87 crores). Out of this, a net loss of Rs.42.03 crores (P Y.net Rs.36.00 crores) is related to material and included in consumption.
31 i) Value of goods imported on C.I.F. basis : ` in crores PARTICULARS 31st March 2013 31st March 2012 a) Capital Goods 133.24 54.35 b) Raw Materials Steel 13.60 74.05 c) Components & Others 1,141.61 970.42 ii) Consumption of Steel and Components during the year:
PARTICULARS 31st March 2013 31st March 2012 ` in crores % ` in crores % Raw Materials (Steel) : a) Imported 141.70 12.84 114.90 9.44 b) Indigenous 39.47 3.58 31.46 2.58 Components & Spare Parts : a) Imported 762.90 69.12 1,004.45 82.52 b) Indigenous 159.61 14.46 66.38 5.46
52 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
iii) Earnings/ expenditure in foreign exchange (on accrual basis): ` in crores PARTICULARS 31st March 2013 31st March 2012 Earnings: Export Sales on FOB basis 559.81 845.87 Other Income 84.14 0.06 Expenditure: Legal & Professional Fee 0.58 4.01 Advertisement and Business Promotion 14.56 29.65 Interest & Other Charges 72.83 16.35 Travelling and Other Matters 24.45 11.53 iv) Remittance of dividend in foreign currency
The company has not remitted any amount in foreign currencies on account of dividends during the year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividends have been made by / on behalf of non resident shareholders. The particular of dividend declared and paid to non resident shareholders during the year are as under:- ` in crores PARTICULARS 31st March 2013 31st March 2012 Non resident Shareholders (Nos.) - 501 Equity shares held (Nos.) - 5,295,751 Dividend paid relating to previous year (` in crores) - 2.12
32. Auditors’ Remuneration: (excluding service tax ) ` in crores
PARTICULARS 31st March 2013 31st March 2012 Audit Fee 0.36 0.36 Taxation matters 0.20 0.20 Certification and other Professional Services 0.33 0.22
33. Disclosure in respect of Operating Leases (Assets taken on lease):
(a) The company has taken commercial / residential premises under cancellable operating leases. The lease agreements are usually renewable by mutual consent on mutually agreeable terms.
(b) The expenses in respect of operating leases are accounted in Other Expenses under Note No 25.
34. Disclosure in accordance with 'AS -7 Accounting for Construction Contracts' issued by the Institute of Chartered Accountants of India: ` in crores PARTICULARS 31st March 2013 31st March 2012 a. Contract revenue recognized as revenue in the year 1,784.59 2,356.01 b. Contract cost incurred and recognized profits 7,702.62 6,435.53 c. Advances received from above customers 5,025.78 4,594.00 d. Gross amount due from customers for contract work 3,103.79 2,189.62 e. Gross amount due to customers for contract work 426.95 348.09 The Gross amount due from customers reflects the net amount for all contracts in progress for which cost incurred plus recognised profit (less recognised losses) exceeds progress billing.
The Gross amount due to customers reflects the net amount for all contracts in progress where progress billing exceeds cost incurred plus recognised profits (less recognised losses).
Out of the above, during the year, advances from customers to the extent of work done amounting to Rs.4598.83 crores .(P.Y.Rs 4245.91 crores) is included in adjustment against Work in Progress in Note No 14. Advances received in excess of work done and advances pending commencement of work are disclosed in Other Current Liabilities in Note No 9.
53 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
35. The disclosures required under Revised Accounting Standard 15 ‘Employee Benefits’ notified in the Companies (Accounting Standards) Rules 2006, are given below:
Defined Contribution Plan
Contribution to Defined Contribution Plan, recognized are charged off for the year are as under: ` in crores PARTICULARS 31st March 2013 31st March 2012 Employer’s Contribution to Provident Fund 3.09 3.00 Employer’s Contribution to Pension Scheme 0.80 0.73
Defined Benefit Plan
The employees’ gratuity fund scheme managed by SBI Life Insurance is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in same manner as gratuity.
` in crores Particulars Gratuity Leave Encashment (Funded) (Unfunded) 31st March 31st March 31st March 31st March 2013 2012 2013 2012 a. Reconciliation of opening and closing balances of Defined Benefit obligation Defined Benefit obligation at the beginning of the year 5.71 4.22 6.06 3.80 Current Service Cost 0.88 0.85 0.96 1.05 Interest Cost 0.46 0.34 0.48 0.30 Actuarial (gain) / loss (0.58) 0.56 (0.67) 1.47 Benefits paid (0.21) (0.26) (1.16) (0.56) Defined Benefit obligation at the year end 6.26 5.71 5.67 6.06 b. Reconciliation of opening and closing balances of fair value of plan assets Fair value of plan assets at beginning of the year 0.25 0.48 - - Expected return on plan assets 0.02 0.04 - - Actuarial gain/(loss) (0.01) (0.01) - - Employer contribution 0.01 - - - Benefits Paid (0.21) (0.26) - - Fair value of plan assets at the year end 0.06 0.25 - - c. Reconciliation of fair value of assets and obligations Fair value of plan assets as at year end 0.05 0.25 - - Present value of obligation as at year end 6.26 5.70 5.67 6.06 Amount recognised in Balance Sheet 6.21 5.45 5.67 6.06 d. Expenses recognised during the year Current Service Cost 0.88 0.85 0.96 1.05 Interest Cost 0.46 0.34 0.48 0.30 Expected return on plan assets (0.02) (0.04) - - Actuarial (gain) / loss (0.56) 0.56 (0.67) 1.47 Net Cost 0.76 1.72 0.77 2.82 e. Investment Details % invested As at 31st As at 31st March 2013 March 2012 SBI Group Gratuity (Cash Accumulation) Policy 100 100
54 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
f. Actuarial Assumptions 1994-96 (Ultimate) 1994-96 (Ultimate) Mortality Table (L.I.C) Discount rate (per annum) 8.00% 8.00% 8.00% 8.00% Expected rate of return on plan assets (per annum) 8.00% 8.00% N.A N.A Rate of escalation in salary (per annum) 5.00% 5.00% 5.00% 5.00% The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary and relied upon by auditors. 36. Calculation of Earning per share (EPS) ` in crores PARTICULARS 31st March, 2013 31st March, 2012 Net profit as per Statement of Profit & Loss (` in crores) 107.13 180.29 Weighted Average number of Equity shares of ` 10/- each fully paid up 50921801 50921801 Earning per Equity Share of ` 10/- each fully paid up. 21.04 35.41 (Basic & Diluted) 37. The company primarily operates in one business segment only i.e. manufacturing which is the only reportable segment. There is no other segment which satisfies the threshold limit as per Accounting Standard -17, issued by Institute of Chartered Accountants of India. Secondary segment (Geographical Segments): ` in crores Segments Domestic Overseas Total 31st March 31st March 31st March 31st March 31st March 31st March 2013 2012 2013 2012 2013 2012 Revenue [as per AS 7 (revised)] 457.74 680.40 1,641.92 1,71 1.37 2,099.66 2,391.77
38. Information on Foreign Currency Exposure: (a) Outstanding forward exchange contracts/ options entered by the company for the purpose of hedging its foreign currency exposures are as under: In crores Currency Cross Currency Buy Sell 31st March 31st March 31st March 31st March 2013 2012 2013 2012 EURO USD - 0.02 - - JPY USD - 2.86 - - USD - - - - 1 1.50 (b) Notional value of interest rate swaps to hedge against fluctuation in interest rate is USD 0.80 crores (P.Y. USD 0.90 crores) (c) Currency swap to hedge against fluctuations in exchange rate is Nil (P.Y. USD 1.80 crores) (d) Foreign Currency exposure that is not hedged by derivative instruments is as under: In crores Currency Payable Payable / Receivable 31st March 2013 31st March 2012 31st March 2013 31st March 2012 AUD * 0.00 0.00* EURO 2.99 1.93 USD 25.55 22.23 8.72 4.92 NOK 2.58 11.90 SEK - 4.31 JPY 6.10 1.71 AED 0.01 0.01 GBP * 0.01 - SGD 0.10 0.10 * Amount less than 0.01 crores (e) The Company has firm commitments in foreign exchange as regards both its payables and receivables. The company has applied the principle of hedge accounting contained in Accounting Standard 30 issued by the Institute of Chartered Accountants of India for its net firm commitment in receivables and payables in foreign exchange. In view of the same , Mark to Market difference (loss) as on 31st March, 2013 of Rs 3.36 crores (P. Y. gain Rs. 7.30 crores) does not have any
55 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
material impact on the financial statements. 39. Related Parties Disclosure as per Accounting Standard (AS) 18: A. LIST OF RELATED PARTIES Holding Company ABG International Private Limited
Subsidiary / Controlling Stake Western India Shipyard Limited ABG Shipyard Singapore Pte. Ltd. Vipul Shipyard (Partnership Firm) ABG FPSO Private Limited
Fellow Subsidiary Companies ABG Cement Limited PFS Shipping (India) Limited ABG Cement Holdco Private Limited ABG Solar Project Private Limited BABA Gangaram Investment Services Private Limited ABG Energy Limited ABG Energy (Gujarat) Limited ABG Energy (MP) Limited Varada Marine Pte. Limited (Along with its SPV's) PFS Offshore Pte. Limited
Companies over which Directors / relatives ABG Infralogistics Limited are able to exercise control or significant ABG Power Private Limited influence ABG Cranes Private Limited ABG Foods Private Limited ABG Acquafarm Private Limited ABG Glass Private Limited ABG Engineering & Construction Limited Tirupati Landmark Private Limited ABG Mercantile & Investment Services Private Limited Eleventh Land Developers Private Limited ABG Resources Private Limited (formerly Second Land Developers Private Limited) ABG Motors Limited ABG Business Ventures Pte. Limited Banal Investment & Trading Private Limited Jarrow Finance & Trading Private Limited Onaway Industries Limited Agbros Leasing & Finance Private Limited Aries Management Services Private Limited G.C. Property Private Limited Gold Croft Property Private Limited Somerset Estate Private Limited Nibodh Trading Private Limited (w.e.f. 3rd September, 2012) ABG Energy Himachal Pradesh Limited Drilling & Offshore Pte. Limited Global Bulk Carriers Pte. Limited Varada Ventures Pte. Limited Varada Three Pte. Limited (w.e.f. 1st April, 2012) Varada Five Pte. Limited (w.e.f. 23rd August, 2012) Varada Six Pte. Limited (w.e.f. 24th August, 2012) Varada Seven Pte. Limited (w.e.f. 24th August, 2012)
Individuals owning directly or indirectly Shri. Rishi Agarwal an interest in the voting power that gives them control or significant influence
Key Management Personnel Major Arun Phatak Shri. Dhananjay Laxman Datar Shri. Ram Swaroop Nakra (upto 30th November, 2012)
56 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013 B. TRANSACTIONS WITH RELATED PARTIES (` in crores) Sr. Nature of Transactions Holding Subsidiaries/ Fellow Co. over Individuals Key Total No. Company Controlling Subsidiary which owning Manage- Stake Companies Directors / directly or ment relatives indirectly Personnel are able to an interest exercise in the control or voting significant power that influence gives them control or significant influence 31st March 2013
1 Revenue from Operations 5.40 0.42 87.77 152.62 246.21 (0.00) (1.68) (64.81) (78.48) (144.97)
2 Rent Expenses 0.11 1.09 1.20 (0.00) (1.04) (1.04)
3 Hire Charges 0.57 0.57 (0.79) (0.79)
4 Services Received 95.54 1.20 96.74 (0.00) (1.26) (1.26)
5 Interest/Guarantee Commission/ 21.99 51.90 73.89 Other Income Charged (0.00) (0.00) (0.00)
6 Payment to Key 2.59 2.59 Management Personnel ( 1.91) (1.91)
7 Purchase of Fixed Assets 0.00 7.12 7.12 (0.09) (20.48) (20.57)
8 Sale of Fixed Assets 12.96 0.00 12.96 (0.00) (0.09) ( 0.09)
9 Investments 0.00 0.00 (0.01) (0.01)
10 Sale of Shares 0.01 0.01 (0.00) (0.00)
11 Stage Payment Received (Net) 146.98 599.63 746.61 ( 155.38) (353.21) (508.59) 12 Loans and Advances Given / 199.66 61.81 162.31 627.20 0.12 1,051.10 Repaid ( 101.21 ) (78.38) (107.91) (212.64) (0.00) (500.14)
13 Loans and Advances Taken / 208.58 35.35 1.44 13.99 0.36 259.72 Refunded ( 1 1 1.08) (48.20) (77.05) (33.75) (0.00) (270.08)
14 Deposits Given 0.00 0.00 (42.00) (42.00) 15 Deposit Refund received 110.00 110.00 (0.00) (0.00) 16 Guarantees Taken 4 618.00 618.00 (435.00) (435.00)
17 Guarantees Given 4 0.00 25.00 435.12 460.12 (442.56) (0.00) (0.00) (442.56)
57 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
Sr. Nature of Transactions Holding Subsidiaries/ Fellow Co. over Individuals Key Total No. Company Controlling Subsidiary which owning Manageme Stake Companies Directors / directly or nt relatives indirectly Personnel are able to an interest exercise in the control or voting significant power that influence gives them control or significant influence 31st March 2013
Outstanding Balances as on 31st March 2013 Receivables 0.67 3.37 45.66 14.15 63.85 (0.00) (2.87) ( 53.51) (8.69) (65.07) Payables 31.67 *0.00 10.55 0.26 42.48 (0.00) (0.00) (28.90) (0.00) (28.90) Advance from customers 1,152.61 1,902.02 3,054.63 (1,060.02 ) (1,445.81) (2,505.83) Loans and Advances Given 53.97 208.52 965.54 1,228.03 (91.57) ( 48.09) (272.50) (412.16) Loans and Advances Taken 0.00 0.00 0.00 (3.43) (0.64) (4.07) Deposits Given 123.00 123.00 (233.00) (233.00) Guarantees Taken 4 1,053.00 1,053.00 (435.00) (435.00) Guarantees Given 4 88.60 1,046.02 979.02 2,113.64 (497.56) (992.16) (511.20) (2,000.92)
* Amount less than ` 0.01 crore
Notes : 1. Related Parties have been identified by the management and relied upon by the auditors. 2. Previous Years figures are shown in brackets. 3. Names of the Retaled Parties have been given in cases where the amount of transaction exceeds 10% of the total related party transactions of the same type. 4. Guarantees taken / given comprise of guarantees given to third parties on behalf of the Company / related parties. Disclosure in respect of Related Party transactions during the year: 1 Revenue from Operations include Varada Marine Pte. Limited ` 76.58 crores (Previous Year ` 64.81 crores), Global Bulk Carriers Pte. Limited Rs. Nil (Previous Year ` 78.48 crores), Varada Three Pte. Limited ` 152.62 crores (Previous Year N.A.) 2 Rent Expenses include Tirupati Landmark Private Limited ` 0.08 crores (Previous Year ` 0.08 crores), Jarrow Finance & Trading Private Limited ` 0.10 crores (Previous Year ` 0.09 crores), Aries Management Services Private Limited ` 0.46 crores (Previous Year ` 0.38 crores), G.C. Property Private Limited ` 0.12 crores (Previous Year ` 0.09 crores), Gold Croft Property Private Limited ` 0.12 crores (Previous Year ` 0.09 crores), Somerset Estate Private Limited ` 0.12 crores (Previous Year ` 0.09 crores), ABG Power Private Limited ` 0.09 crores (Previous Year ` 0.22 crores) 3 Hire Charges paid to ABG Infralogistics Limited ` 0.57 crores (Previous Year ` 0.79 crores) 4 Services Received from Western India Shipyard Limited ` 95.54 crores (Previous Year ` Nil), ABG Resources Private
58 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH 2013
Limited ` 1.20 crores (Previous Year ` 1.20 crores) 5 Interest/ Guarantee Commission/ Other Income Charged to Varada Marine Pte. Limited ` 21.99 crores (Previous Year ` Nil), ABG Engineering & Construction Limited ` 32.00 crores (Previous Year ` Nil), Varada Seven Pte. Limited ` 15.00 crores (Previous Year N.A.) 6 Payment to Key Management Personnel include to Major Arun Phatak ` 0.75 crores (Previous Year ` 0.64 crores), Shri. Dhananjay Datar ` 0.64 crores (Previous Year ` 0.31 crores), Shri. R. S. Nakra ` 1.20 crores (Previous Year ` 0.97 crores) 7 Purchase of Fixed Assets include from ABG Infralogistics Limited ` Nil (Previous Year Rs. 20.48 crores), ABG Cranes Private Limited ` 7.12 crores (Previous Year ` Nil) 8 Sale of Fixed Assets include to ABG International Private Limited Rs. 12.96 crores (Previous Year ` Nil), Western India Shipyard Limited Rs. Nil (Previous Year Rs. 0.09 crores) 9 Investments include ABG FPSO Private Limited ` Nil (Previous Year ` 0.01 crores) 10 Sale of Shares to ABG Mercantile & Investment Services Private Limited ` 0.01 crores (Previous Year ` Nil) 11 Stage Payment Received (Net) include from PFS Shipping (India) Limited ` 42.39 crores (Previous Year ` 82.19 crores), Varada Marine Pte. Limited ` 104.59 crores (Previous Year Rs. 73.19 crores), Global Bulk Carriers Pte. Limited ` 187.61 crores (Previous Year ` 353.21 crores), Varada Three Pte. Limited ` 170.54 crores (Previous Year N.A.), Varada Five Pte. Limited ` 170.76 crores (Previous Year N.A.) 12 Loans and Advances Given/ Repaid include ABG International Private Limited ` 199.66 crores (Previous Year ` 101.21 crores), Western India Shipyard Limited ` 60.51 crores (Previous Year ` 74.00 crores), PFS Shipping (India) Limited ` 161.00 crores (Previous Year ` 32.44 crores), ABG Cement Holdco Private Limited ` Nil (Previous Year ` 61.56 crores), ABG Engineering & Construction Limited ` 250.48 crores (Previous Year ` 161.28 crores), ABG Resources Private Limited ` 130.67 crores (Previous Year ` 35.53 crores), Varada Seven Pte. Limited ` 225.25 crores (Previous Year N.A.) 13 Loans and Advances Taken/ Refunded include ABG International Private Limited ` 208.58 crores (Previous Year ` 111.08 crores), Western India Shipyard Limited ` 34.00 crores (Previous Year ` 47.09 crores), ABG Cement Holdco Private Limited ` Nil (Previous Year ` 61.56 crores) 14 Deposits Given to ABG Resources Private Limited Rs. Nil (Previous Year ` 40.00 crores) 15 Deposit Refund Received from ABG Resources Private Limited ` 110.00 crores (Previous Year ` Nil) 16 Guarantees Taken from ABG International Private Limited ` 618.00 crores (Previous Year ` 435.00 crores)
17 Guarantees Given to ABG Shipyard Singapore Pte. Limited ` Nil (Previous Year ` 408.96 crores), Varada Ventures Pte. Limited ` 435.12 crores (Previous Year Rs. Nil)
40. The figures for the previous year have been arranged/rearranged/regrouped wherever considered necessary.
As per our report of even date For NISAR & KUMAR For and on behalf of the Board Chartered Accountants F. R. No. 107117W M. N. Ahmed Major Arun Phatak Dhananjay Datar Partner Executive Director Whole Time Director M. No 18380
Mumbai Sunil Agarwal Dated : 30th May 2013 Company Secretary
59 ABG Shipyard Limited Annual Report 2012-2013
Statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary company
S.N. Particulars / Name of subsidiary Western India ABG Shipyard ABG FPSO Shipyard Ltd. Singapore Pte. Ltd. Pvt. Ltd. 1 The financial year of the subsidiary ended on 31st March, 2013 31st March, 2013 31st March, 2013 2 Date from which it became subsidiary company 14th October, 2010 08th February, 2010 09th January, 2012 3 Number of shares in the subsidiary company held by ABG Shipyard Ltd. As on 31st March 2013 Equity Shares 172223628 10000 10000 of the face value of the face value of of the face value of Rs. 2/- each Singapore Dollar of Rs. 10/- each fully paid up 1/- each fully paid up fully paid up Preference Shares - 4212100 of USD 1 each fully paid up. 4 Extent of holding by ABG Shipyard Ltd. 60.07% 100% 100% 5 The net aggregate amount of subsidiary company's profit /(loss) so far as it concerns to member of holding company 5.1 Not dealt with the holding company 's accounts : Rs.in crores Rs.in crores Rs.in crores 5.1.1. For the financial year ended 31st March 2013 (5.90) (0.01) (0.72) 5.1.2. For the previous years since they became subsidiary 1 1.61 1.83 (0.42) * Amount less than 0.01 crore 5.2 Dealt with the holding company 's accounts : 5.2.1 For the financial year ended 31st March 2013 NIL NIL NIL 5.2.2. For the previous years since they became subsidiary NA NIL NIL 6 Change in interest of ABG Shipyard Ltd. in the subsidiary NA NA NA between the end of financial year of subsidiary company and end of ABG Shipyard Ltd. 7 Material change between the end of financial year of subsidiary and end of ABG Shipyard Ltd. in respect of the following : ABG Shipyard Ltd. in respect of the following : Fixed Assets NIL NIL NIL Investments NIL NIL NIL Money lent by the subsidiary company NIL NIL NIL Money borrowed by the subsidiary company NIL NIL NIL (other than current liabilities) STATEMENT PURSUANT TO EXEMPTION RECEIVED UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANY Name of the Subsidiary Western India ABG Shipyard ABG FPSO Shipyard Ltd. Singapore Pte. Ltd. Pvt. Ltd. a. Capital 58.93 18.82 0.01 b. Reserves (45.39) 212.65 (1.13) c. Total Assets 226.55 467.18 0.06 d. Total Liabilities 226.55 467.18 0.06 e. Details of Investments 5000 Shares in Janata Sahakari Bank Ltd. of Rs.100/- each. 0.05 434645.8558 (P.Y. 434532.6111) Units in Emerging Markets 236.40 Diversified Fund of Standard Chartered Trust (Cayman) Limited of Face Value USD 100 per unit. f. Turnover 72.96 - Nil g. Profit before Taxation (9.72) (0.00) (0.72) h. Provision Taxation 0.10 Nil Nil i. Profit after Taxation (9.82) (0.01) (0.72) j. Proposed Dividend Nil Nil Nil * Amount less than 0.01 crore
60 ABG Shipyard Limited Annual Report 2012-2013
Independent Auditor's Report to the Board of Directors of ABG Shipyard Limited on the Consolidated Financial Statements of ABG Shipyard Limited.
We have audited the accompanying consolidated financial statements of ABG Shipyard Limited (“the Company”) and its subsidiaries (collectively referred to as “the Group”), which comprise the Consolidated Balance Sheet as at March 31, 2013, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Consolidated Financial Statements Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with accounting principles generally accepted in India including Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group's preparation and fair presentation to the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India a) in the case of the consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2013; b) in the case of the consolidated Statement of Profit and Loss, of the profit of the Group for the year ended on that date; and c) in the case of the consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date. Other Matters We did not audit the financial statements of Western India Shipyard Limited, subsidiary of ABG Shipyard Limited, whose financial statements reflect total assets of Rs. 226.55 crores as at March 31, 2013, total revenue of Rs. 78.53 crores for the year ended on that date and net cash outflow amounting to Rs. 0.61 crores for the year ended on that date, as considered in the consolidated financial statements. These financial statements have been audited by another auditor whose report has been furnished to us and our opinion is so far as it relates to the amounts included in respect of Western India Shipyard Limited are based solely on the report of another auditor.
For Nisar & Kumar Chartered Accountants F. R. No. 107117W
M. N. Ahmed Place: Mumbai (Partner) Date: 30th May, 2013 ` M. No. 18380
61 ABG Shipyard Limited Annual Report 2012-2013
CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH 2013
As at As at 31.03.2013 31.03.2012 Note ` in Crores ` in Crores I EQUITY AND LIABILITIES 1. Share Holders' Funds a. Share capital 2 50.92 50.92 b. Reserves & surplus 3 1,564.82 1,452.72 1,615.74 1,503.64 2. Minority Interest 5.40 9.31 3. Non-current Liabilities a. Long-term borrowings 4 1,076.32 1,365.34 b. Deferred tax liabilities (Net) 5 526.11 466.29 c. Long Term Provisions 6 13.11 12.77 1,615.54 1,844.40 4. Current Liabilities a. Short-term borrowings 7 2,498.55 2,036.70 b. Trade payables 8 1,313.31 1,071.67 c. Other current liabilities 9 3,972.12 2,628.55 d. Short-term provisions 10 54.62 43.33 7,838.60 5,780.25 11,075.28 9,137.60 II ASSETS 1. Non-current Assets a. Fixed assets 11 (i) Tangible assets 1,078.50 1,079.89 (ii) Intangible assets 34.85 35.95 (iii) Capital work-in-progress 1,744.57 1,423.97 2,857.92 2,539.81 b. Non-current investments 12 0.98 6.79 c. Long-term loans and advances 13 718.25 725.09 d. Other Non Current Assets 14 33.47 30.38 3,610.62 3,302.07 2. Current Assets a. Current Investments 15 236.40 222.13 b. Inventories 16 4,360.01 3,357.52 c. Trade receivables 17 65.70 72.03 d. Cash and bank balance 18 26.23 364.78 e. Short-term loans and advances 19 2,285.97 1,287.98 f. Other current assets 20 490.35 531.09 7,464.66 5,835.53 11,075.28 9,137.60
Significant Accounting Policies & Notes to Financial Statements 1 - 38
As per our report of even date For NISAR & KUMAR For and on behalf of the Board Chartered Accountants F. R. No. 107117W M. N. Ahmed Major Arun Phatak Dhananjay Datar Partner Executive Director Whole Time Director M. No 18380
Mumbai Sunil Agarwal Dated : 30th May 2013 Company Secretary
62 ABG Shipyard Limited Annual Report 2012-2013
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2013
Year ended Year ended 31.03.2013 31.03.2012 Note ` in Crores ` in Crores INCOME Revenue from operations 21 2,091.15 2,524.55 Other income 22 55.69 43.49 Total Revenue 2,146.84 2,568.04
EXPENSES Consumption of raw materials & components 23 1,043.47 1,264.64 Purchase of traded goods 23 10.28 - Changes in inventories of work-in-progress 24 (118.97) 29.72 Employee benefits expense 25 100.73 99.07 Finance costs 26 414.54 343.06 Depreciation, Amortisation & Impairment expense 11 117.14 109.72 Other expenses 27 419.93 432.50 Total Expenses 1,987.12 2,278.71 Profit before exceptional and extraordinary items and tax 159.72 289.33 Exceptional / Extraordinary items (3.05) - Profit before tax 162.77 289.33 Tax Expense Current tax for the year 36.46 59.78 Current tax for earlier years 5.15 13.41 MAT credit (entitlement)/utilised (34.75) (37.62) Deferred tax 59.82 62.99
Profit after tax (before adjustment for Minority Interest) 96.09 190.77 Less: Minority Interest (3.93) 4.97 100.02 185.80 Earning per share in Rupees of face value of `10 /- each Basic 19.64 36.49 Diluted 19.64 36.49
Significant Accounting Policies & Notes to Financial Statements 1 - 38
As per our report of even date For NISAR & KUMAR For and on behalf of the Board Chartered Accountants F. R. No. 107117W M. N. Ahmed Major Arun Phatak Dhananjay Datar Partner Executive Director Whole Time Director M. No 18380
Mumbai Sunil Agarwal Dated : 30th May 2013 Company Secretary
632 ABG Shipyard Limited Annual Report 2012-2013
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2013
Year ended Year ended 31.03.2013 31.03.2012 ` in Crores ` in Crores A. Cash Flow From Operating Activities : Net Profit (Loss) before extraordinary items & taxation 159.72 289.33 Adjustments for : Depreciation 116.91 109.72 Provision for Impairment 0.24 - Provision for Contingencies 0.68 0.88 Goodwill written off 0.05 - Finance charges 414.54 343.06 Interest income (22.13) (34.66) Effect of exchange rate change (49.10) 73.64 Loss / (Profit) on Sale of Assets (net) (8.25) 0.24 Loss / (Profit) from Partnership firm - 0.04 Loss / (Profit) on Sale of Investments 0.41 (1.89) Exceptional Item 3.05 - Operating Profit before working capital changes 616.12 780.36 Adjustments for : Inventories (1,465.33) (1,526.13) Trade Receivables 5.43 87.74 Loans and Advances and other assets * (699.61) (303.11) Trade Payables and other current liabilities / provisions* * 225.65 131.47 Stage Payments from Customers (net) 1,289.89 461.19 Cash generated from Operations (27.85) (368.48) Direct Taxes Paid/(Refunded) (28.12) (35.96) Cash Used In Operating activities (55.97) (404.44) B. Cash Flow From Investing Activities: Purchase of Fixed Assets including Capital Work in Progress including capital advances (189.41) (530.77) Sale of Fixed assets 13.63 1.95 Purchase of Investments (0.01) (266.00) Proceeds from Sale of Current Investments 0.06 267.90 Proceeds from Sale / Redemption of Non Current Investments 0.08 - Advance for Purchase of Shares - (0.50) Loans / deposits given (net) (454.26) (39.40) Interest income 47.85 26.27 Inter Corporate Deposits (2.00) (15.00) Cash Used In Investing Activities (584.06) (555.55) C. Cash Flow From Financing Activities: Dividends paid - (20.37) Tax on distributed profits - (3.30) Proceeds from Long Term Borrowings 410.20 605.02 Repayments of Long Term Borrowings (187.32) (212.14) Short Term Borrowings (net) 476.20 648.50 Finance charges paid (397.52) (337.81) Contribution towards Capital in Partnership firm (net) 0.001 - Cash Generated from Financing Activities 301.56 679.90 D. Effect of Exchange difference on translation of Foreign Currency (0.83) 0.12 Net (decrease) / Increase in cash and cash equivalents (A + B + C + D) (339.30) (279.97) Opening Balance of Cash & Cash Equivalents 364.78 644.73 Adjustment due to new subsidiary 0.76 - Closing Balance of Cash & Cash Equivalents 26.24 364.76 Effect of Exchange rate changes (0.01) 0.02 Closing Balance of Cash & Cash Equivalents as restated 26.23 364.78 *Includes current and non-current ** Includes short term and long term 1 Amount less than Rs. 0.01 crore Notes : 1. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India. 2. Figures for previous year where ever necessary have been regrouped to conform to those of current year. As per our report of even date For NISAR & KUMAR For and on behalf of the Board Chartered Accountants F. R. No. 107117W M. N. Ahmed Major Arun Phatak Dhananjay Datar Partner Executive Director Whole Time Director M. No 18380 Mumbai Sunil Agarwal Dated : 30th May 2013 Company Secretary
642 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
1. SIGNIFICANT ACCOUNTING POLICIES
1 Basis of Consolidation
The consolidated financial statements of ABG Shipyard Ltd. ("The Company") , its subsidiaries Western India Shipyard Ltd. (WISL), ABG Shipyard Singapore Pte. Ltd., ABG FPSO Pvt. Ltd. and Vipul Shipyard (Partnership Firm) together referred to as "The Group" have been prepared on the following basis.
i) The consolidated financial statements are prepared under the Historical Cost Conventions on the basis of Going Concern and as per applicable Indian Accounting Standards notified under section 211 (3C) of The Companies Act, 1956.
ii) In accordance with Accounting Standard (AS) 21 – ‘Consolidated Financial Statements’, the statements of ABG Shipyard Ltd., Western India Shipyard Ltd., ABG Shipyard Singapore Pte. Ltd., ABG FPSO Pvt Ltd. and Vipul Shipyard (Partnership Firm) have been combined line by line by adding items of Balance Sheet and Statement of Profit and Loss. The effect of Intra Group transactions, balances and unrealised profits have been eliminated.
iii) Enterprise(s) where control is temporary are not considered for consolidation as per AS 21.
iv). The difference between the cost of investment in the subsidiary over the net asset value at the time of acquisition of shares has been recognised in the financial statements as Goodwill or Capital Reserve, as the case may be.
v). Minority Interest in the net assets of consolidated subsidiaries consist of the amount of equity attributable to the minority shareholders/partners at the dates on which investments are made by the Company in the subsidiaries and further movements in their share in the equity, subsequent to dates of investments.
vi). Details of Subsidiaries Sr. Name of the Subsidiary Country of Date since Type of Entity Percentage of No. Incorporation Subsidiary Ownership Interest 1. ABG Shipyard Singapore Pte. Ltd. Singapore 08.02.2010 Company 100.00% 2. Western India Shipyard Ltd. India 14.10.2010 Company 60.07% 3. ABG FPSO Pvt. Ltd. India 09.01.2012 Company 100.00% 4. Vipul Shipyard India 01.04.2012 Partnership Firm 98.00%
2. Other Significant Accounting Policies
i) Use of estimates
The preparation of financial statements requires the management of the company to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference, if any, between the actual results and estimates is recognised in the year in which the results are known / materialized .
ii) Revenue
Revenue from Shipbuilding is recognized in accounts in accordance with Accounting Standard-7 ‘Accounting for Construction Contracts' issued by Institute of Chartered Accountants of India. The method of recognition is on percentage completion basis. Revenue is recognised under Percentage Completion Method on the basis of proportion that contract costs incurred for work performed up to the reporting date bears to the estimated total contract costs.
Revenue from ship repair is recognised on the basis of job completion on proportionate completion method.
Dividend from investments is accounted when the right to receive dividend is established. Interest income is accounted on accrual basis.
iii) Fixed Assets
Tangible Assets:
Fixed Assets are recorded at Cost. Cost is purchase cost and in the case of Freehold Land, includes development cost incurred, together with all incidental costs of acquisition, borrowing costs and other related internal costs and is netted of for Cenvat and Value Added Tax.
Profit/Loss on disposal of fixed assets is recognised in the Statement of Profit and Loss.
65 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
Intangible Assets:
Intangible assets are recognized and accounted at cost in accordance with Accounting Standard-26 ‘Intangible Assets’ issued by Institute of Chartered Accountants of India.
iv) Capital Work In Progress
All expenditure, relating to development of land, buildings, dry docks and plant & machinery etc. are accumulated and shown as capital work-in-progress till the completion of such activities. Capital advances are presented under loans and advances .
v) Investments
Long Term investments are stated at cost. Cost includes incidental expenses of acquisition. Decline in value of investment other than of temporary nature is recognised in Statement of Profit and Loss.
vi) Borrowing costs
Borrowing Costs attributable to the acquisition and construction of the Qualifying Assets, which take substantial period of time to get ready for their intended use, are capitalized as part of the cost of respective assets up to the date when such assets are ready for their intended use. Other Borrowing costs are charged to the Statement of Profit and Loss.
vii) Depreciation and Amortisation
a) Freehold land is not depreciated. Leasehold land is amortised equally over the period of lease.
b) Dry Docks (included in Plant & Machinery) and Dry Docks Civil Works (included in Factory Building) and Jetty are depreciated on Straight Line Method in accordance with Accounting Standard - 6 ‘Depreciation Accounting' of the Institute of Chartered Accountants of India at the rates prescribed in Schedule XIV to the Companies Act, 1956.
c) Other assets are depreciated on Written Down Value Method at the rates prescribed in Schedule XIV to the Companies Act, 1956.
d) Depreciation on additions / deletions to Fixed Assets made during the year is provided on pro-rata basis from or up to date of such additions / deletions as the case may be.
e) Depreciation on amounts added on revaluation is recouped from Revaluation Reserve.
f) Intangible assets are stated at cost less accumulated amortisation and are amortised over a period of five years.
g) In the case of WISL, Depreciation on fixed assets is provided on straight-line method at the rates prescribed in Schedule XIV to the Companies Act, 1956. However in case of “Ship Building Platform”, depreciation has been calculated @ 8.33% based on remaining period of lease with Mormugao Port Trust. Depreciation on additions in Floating Dry Dock on account of foreign exchange fluctuations and any major additions is amortised over the remaining useful life of the asset.
viii) Impairment of Assets
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. The company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired and if such indication exists, the carrying value of such asset is reduced to its recoverable amount and a provision is made for such impairment loss in the Statement of Profit and Loss. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
ix) Employees’ Benefits
Provident Fund: Provident Fund contributions are made as per a defined contribution scheme and the contribution of company is charged to the Statement of Profit and Loss of the year when become due. The company has no other obligation other than to contribute and deposit the contribution to respective authorities.
Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.
Long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of long term benefits are charged to the Statement of Profit and Loss.
66 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
x) Valuation of Inventory
Inventories of spares, consumables, components are valued at lower of cost and net realisable value. Cost represents purchase cost and other incidental costs, if any. Cost of inventories is computed on Weighted Average/ FIFO basis. Finished goods are valued at lower of cost and net realisable value.
xi) Work in Progress and Cost Allocation
Each construction contract is considered as a cost center and all costs directly identifiable to the Contract are charged on actual basis. Indirect miscellaneous costs are also allocated to the various contracts using appropriate overhead recovery method. Contract work-in-progress is valued at cost, including therein profit or loss arrived at in accordance of Accounting Standard -7 ‘Accounting for Construction Contracts'.
xii) Foreign Currency Transactions
Transactions in Foreign Currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary assets and liabilities are translated at the year end using closing rate if remain unsettled at the year end. Non monetary foreign currency items are carried at cost.
The resulting gain or loss on account of exchange difference either on settlement or on translation is recognised in the Statement of Profit and Loss.
The Company has chosen to apply notification issued by Companies (Accounting Standard) Amendment Rules 2011 GSR 913 (E) & 914 (E) dated 29.12.2011 as regards monetary long term assets and liabilities. Consequently, the resulting gain or loss on account of exchange difference on settlement or on translation is so far as they relate to depreciable assets is added or deducted from the cost of the asset.
xiii) Derivative Accounting
The Institute of Chartered Accountants of India has, in 2008, issued an announcement on ‘Accounting for Derivatives’ inter alia requiring provision for losses on all derivative contracts outstanding at the balance sheet date by marking them to market keeping in view the principle of prudence, other than for derivative contracts to which Accounting Standard (AS) 11- ‘The Effect of Change in Foreign Exchange Rates’ is applicable. The Company has entered into Derivative Contracts to hedge a firm commitment or a highly probable forecast transaction to which AS-11 is not applicable and hence, the Company has applied aforesaid announcement.
xiv) Government Subsidy
Government subsidy related to shipbuilding contracts are recognized on compliance with the relevant conditions and is recognized in the Statement of Profit and Loss and presented under ‘Revenue from Operations’.
xv) Operating Leases
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments / receipts are recognized as an expense / income in the Statement of Profit and Loss on a straight-line basis over the lease term.
xvi) Provisions for Current and Deferred Tax
Provision for Current Tax is made on the basis of taxable income under the provision of the Income Tax Act, 1961.
Deferred Tax resulting from “timing differences” between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the asset will be realised in future.
In accordance with the guidance note issued by Institute of Chartered Accountants of India, the Company recognises MAT Credit as an asset only to the extent ,the probability exists that the Company will become liable to pay normal Income Tax during the specified period as per provision of the Income Tax Act, 1961.
xvii)Provisions, Contingent Liabilities and Contingent Assets
A provision is made based on reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed in notes forming part of financial statements. Contingent Assets are not recognized/ disclosed.
67 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 2. SHARE CAPITAL
Authorised Capital 100000000 (P.Y. 100000000) Equity Shares of Rs.10/- each 100.00 100.00
Issued Subscribed and Paid up 50.92 50.92 Reconciliation: No of shares 31.03.2013 31.03.2012 Equity Shares of Rs.10/- each fully paid up. As per last Balance Sheet 50921801 50921801 Issued during the year - - As at the end of the year 50921801 50921801 50.92 50.92
a) The Company has only one class of shares referred to as Equity Shares having par value of Rs 10/-. Each holder of equity share(s) is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion of the number of equity shares held by the shareholders.
b) None of the above shares are reserved for issue under options and contract / commitments for sale of shares or disinvestment.
c) 33648204 (P.Y. 31110594 ) Equity Shares of Rs.10/- each are held by the holding company ABG International Pvt. Ltd.
d) Shares alloted, as fully paid up, pursuant to contract(s) without payment being effected in cash / bonus shares /bought back / forfeited/ calls unpaid in the previous 5 years - NIL
e) Shareholders holding above 5% Equity Shares with voting rights in the company.
Sr. Name of the shareholder 31.03.2013 31.03.2012 No No of equity % No of equity % shares held shares held 1 ABG International Private Ltd. 33,648,204 66.08 31,110,594 61.29 2 Religare Finvest Ltd. 5,197,281 10.21 2,833,561 5.56
3. RESERVES AND SURPLUS
(i) Capital Reserve Opening balance 31.87 - Add: Transferred from Warrant Forfeiture Account - 31.87 Closing balance 31.87 31.87
(ii) Securities Premium Account Opening balance 235.00 235.00 Added / Utilised / Transferred during the year - - Closing balance 235.00 235.00
(iii) Debenture Redemption Reserve Opening balance 175.67 117.00 Added during the year 91.00 92.00 Less: Transferred during the year - 33.33 Closing balance 266.67 175.67
68 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores (iv) Capital Redemption Reserve Opening balance - - Add: Transferred from Surplus in Statement of Profit and Loss 0.46 - Closing balance 0.46 -
(v) Revaluation Reserve Opening balance 43.51 44.87 Added during the year - - Withdrawn for Depreciation for the year 1.29 1.36 Closing balance 42.22 43.51
(vi) General Reserve Opening balance 438.65 389.32 Added during the year 10.00 16.00 Transferred from Debenture Redemption Reserve - 33.33 Closing balance 448.65 438.65
(vii) Warrant Forfeiture Account Opening balance - 31.87 Transferred to Capital Reserve during the year - 31.87 Closing balance - -
(viii) Surplus in Statement of Profit and Loss Opening balance 499.60 421.80 Add: Profit for the year 100.02 185.80 599.62 607.60 Less: Transferred to Debenture Redemption Reserve 91.00 92.00 Transferred to Capital Redemption Reserve 0.46 - Transferred to General Reserve 10.00 16.00 Closing balance 498.16 499.60
(ix) Foreign Currency Transalation Reserve Opening balance 28.42 (0.06) Added during the year 13.37 28.48 Closing balance 41.79 28.42 1,564.82 1,452.72
69 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 4 A. LONG TERM BORROWINGS
(a) Debentures Secured - 233.33 (b) Term Loans From Banks Secured 758.81 814.35 Unsecured 40.62 247.50 From Others Secured 0.07 27.57 (c) Vehicle loans From Banks Secured 0.15 0.30 From Others Secured 0.10 0.13 (d) Loan from related parties Secured 234.42 - (e) Convertible Zero Coupon Loan (CZC) Secured 42.15 42.16 1,076.32 1,365.34
4 B (i) Details of Debentures issued by the Company ` in crores
Particulars Security Terms of repayment As at 31.03.2013 As at 31.03.2012 Non Current Current Non Current Current a) 11.40% 2000 Non Convertible Redeemable Debentures (NCD) of `100000/- each issued to
ICICI Bank Ltd Secured - Residual charge on the Payable on 09.05.2013 - 160.00 160.00 - company’s immovable and movable Tata Capital Ltd. fixed assets of Dahej plant Payable on 09.05.2013 - 40.00 40.00 - b) 12.30% 1000 Non Convertible Secured - First pari passu Payable on 15.12.2013 - 66.67 33.33 33.33
Redeemable Debentures (NCD) of charge on the companys `100000/- each issued to Life immovable and movable fixed Insurance Corporation of India (LIC) assets of Dahej plant
- 266.67 233.33 33.33
4 B (ii) Details of Terms of repayment for other long term borrowings and security provided in respect of the secured other long-term borrowings ` in crores
Particulars Security Terms of repayment As at 31.03.2013 As at 31.03.2012 Non Current Current Non Current Current Term loans from banks Foreign Currency Loan Payable in half yearly 27.19 16.32 35.78 10.22
installments upto Sep 2016 Foreign Currency Loan Payable in quarterly 25.29 20.23 42.79 19.02 Installments upto April 2015 Rupee Term Loan - Consortium Secured - First pari-passu Payable in quarterly 84.14 67,94 150.67 64.16 charge on the company's Installments upto March 2015 immovable & movable fixed assets of Dahej plant present and future Rupee Term Loan Payable in quarterly 10.60 4.57 14.20 3.60 Installments upto Jan.2017 Rupee Term Loan Payable in quarterly 149.92 39.88 192.80 42.88 Installments upto June.,2017
70 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
4 B (ii) Details of Terms of repayment for other long term borrowings and security provided in respect of the secured other long-term borrowings ` in crores
Particulars Security Terms of repayment As at 31.03.2013 As at 31.03.2012 Non Current Current Non Current Current Rupee Term Loan Secured - Subservient charge Payable in monthly installments - 200.00 200.00 - on current and fixed assets of upto Oct 2013 the company at Dahej Yard Rupee Term Loan Secured - Second charge by Payable in quarterly installments 18.75 31.25 43.75 6.25 way of hypothecation of entire upto Dec. 2014 movable fixed assets of Dahej Shipyard and Rig yard of the Company Rupee Term Loan Secured - First pari-passu Payable in quarterly installments 220.00 40.11 247.50 27.50 charge on movable and upto July 2015 immovable fixed assets of the Dahej Shipyard and Rigyard and mortgage on GIDC and private Land at Dahej Corporate Guarantee of holding company. Rupee Term Loan Secured - First pari-passu Payable in quarterly installments 80.00 15.00 90.00 10.00 charge on movable and upto March 2016 immovable fixed assets of the Dahej Shipyard and Rigyard.
Rupee Term Loan Secured - First pari-passu charge Payable in quarterly installments 20.90 0.1 1 - - on the assets of third party. upto Dec 2017 Corporate guarantee of third party. Pledge of shares of the third party and nondisposal undertaking on unpledged shares in the share capital of third parties Rupee Term Loan Secured - First charge on the assets Payable in quarterly installments 85.00 - - - of third party Subservient charge on upto March 2018 all immoveable andmoveable fixed assets of the Dahej yard and personal and corporate guarantee of third party. Rupee Term Loan Secured - First parri passu legal Payable in quarterly installments 10.48 2.63 15.19 3.02 mortgage/charge on fixed assets of upto Oct 2018 the WISL, hypothecation of movable assets. Rupee Term Loan Secured - First parri passu legal Payable in quarterly installments 26.54 5.07 29.17 5.07 mortgage/charge on fixed assets of upto Oct 2018 the WISL, hypothecation of movable assets.
Rupee Term Loan Unsecured Payable in quarterly installments 40.62 29.02 - - upto Oct 2015 799.43 472.13 1,061.85 191.72
Term loans from others Rupees Term Loan from Secured - Corporate Guarantee Payable in quarterly installments - 35.75 27.47 19.28 financial institution Facility and pledged Equity shares upto March 2014 of WISL held by the company and Deed of hypothecation of parripassu charge on immovable and movable assets of WISL, both present and future. Others Unsecured Payable in quarterly installments 0.07 0.03 0.10 - upto March 2014 0.07 35.78 27.57 19.28
Vehicle Loans From Banks Secured - Hypothecation of Payable in monthly installments 0.15 0.24 0.30 0.21 individual assets financed From Others Secured - Hypothecation of Payable in monthly installments 0.10 0.12 0.13 0.23 individual assets financed 0.25 0.36 0.43 0.44
Loan from related parties Unsecured Payable in annual installments 234.42 - - - [Refer Note 36] upto June 2016 234.42 - - -
1,034.17 508.27 1,089.85 211.44
71 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
` in crores 4 B (iii) Details of Terms of repayment for Convertible Zero Coupon Loan and security provided Name of bank Terms of repayment As at 31.03.2013 As at 31.03.2012 Non Current Current Non Current Current Convertible Zero Coupon Loan The CZC Loan is interest free convertible 42.15 - 42.16 - (CZC) into Equity Shares of Western India Shipyard Ltd at the option of the lenders commencing from 28.01.2014 and ending 28.01.2017.on the day 27.01.2019 compulsorily convertible on or before 28.01.2017 42.15 - 42.16
4 C. The group has defaulted in repayment of loans and interest in respect of the following
Particulars As at 31.03.2013 As at 31.03.2013 As at 31.03.2013 As at 31.03.2013 As at 31.03.2012 As at 31.03.2012 Rs. in crores Period in days Rs. in crores Period in days Rs. in crores Period in days Principal Principal Interest Interest Principal/Interest Debentures issued to LIC 33.33 107 - - - - Foreign Currency Loans 5.44 19 0.35 19 - - Rupee Term Loan 72.94 1-182 14.54 1- 91 - -
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 5. DEFERRED TAX LIABILITY / ASSET
Tax effect of items constituting deferred tax liability On account of profit on Projects under completion 593.99 500.54 593.99 500.54 Tax effect of items constituting deferred tax asset On account of gratuity liability and leave encashment liability 3.87 3.73 On account of expenses allowable on delivery of ships 24.84 17.15 On account of unabsorbed depreciation (net) 38.27 13.05 On account of disallowances 0.90 0.32 67.88 34.25 526.11 466.29
6. LONG TERM PROVISIONS Provision for employee benefits: i) Provision for Gratuity 7.84 7.39 ii) Provision for Leave Encashment 5.27 5.38 13.11 12.77
7. A - SHORT TERM BORROWINGS Security From Banks: a) Short term loans Rupee Short Term Loan Secured-Subservient charge on the current assets 68.58 - and movable fixed assets Dahej Shipyard & Rigyard. Rupee Short Term Loan Secured-Subservient charge on the movable fixed - 33.31 assets Dahej Shipyard & Rigyard. Rupee Short Term Loan Secured-Subservient charge on the current assets 29.00 60.00 of the company, present and future. Rupee Short Term Loan Secured- Charge on immovable property at Dahej 30.00 - yard. Corporate Guarantee of third party. Rupee Short Term Loan Secured- Charge on current assets of the company. - 29.96 Rupee Short Term Loan Unsecured 95.31 320.00
72 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 7. A - SHORT TERM BORROWINGS Security b) Commercial Paper Unsecured - 248.60 c) Export Packing Credit Secured - Assets both immovable and movable 654.33 683.14 excluding movable and Immovable fixed assets of Dahej plant . d) Cash Credit Secured- Assets both immovable and movable 1,227.79 444.43 excluding movable and Immovable fixed assets of Dahej plant . Secured - Floating charge on Current Assets of 25.90 17.01 WISL including but not limited to Stock of raw materials, Work In Progress Consumables, Stocks, Spares, Book Debts Bills wherever situated, documents both present and future and Corporate Guarantee of the company for Rs.33.60 crores. Secured - Exclusive first charge by way of 0.74 - hypothecation of entire raw material, stock in process, finished goods and stores and other material and book debts of Vipul Shipyard. Secured - First pari passu charge on all of 1.67 - Company’s current assets both present and future e) Bills Payable Secured - Floating charge on Current Assets of - 11.01 WISL including but not limited to Stock of raw materials, Work In Progress Consumables, Stocks, Spares, Book Debts Bills wherever situated, documents both present and future and Corporate Guarantee of the company for Rs.33.60 crores. f) Others - payable on demand Secured- Assets both immovable and movable 69.29 107.77 excluding movable and Immovable fixed assets of Dahej plant . Unsecured 282.99 - g) Vehicle Loans Secured - Hypothecation of the individual assets - 0.01 financed. From Others: a) Commercial Paper Unsecured - 58.45 b) Inter Corporate Deposits Unsecured 12.95 23.00
c) Vehicle Loans Secured- Hypothecation of the individual assets - 0.01 financed. d) Others Unsecured *0.00 - 2,498.55 2,036.70 *Amount less than ` 0.01 crore
7. B. The Company has defaulted in repayment of loans and interest in respect of the following Particulars As at 31.03.2013 As at 31.03.2013 As at 31.03.2012 As at 31.03.2012 Rs in crores Period of default Rs in crores Period of default in days in days
Loans from banks Principal 135.08 35-64 29.96 14 Interest 3.60 1-52 0.50 1 Others - payable on demand 69.29 2-61 54.51 7-24 Inter Corporate Deposits 11.95 4-161 - -
73 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 8. TRADE PAYABLES (i) Sundry Creditors for Goods & Expenses 348.86 270.13 (ii) Acceptances - banks 964.45 801.54 1,313.31 1,071.67
The Company has no amounts due to suppliers under MSMED as at 31st March, 2013 (P. Y. Nil). The information relates to such vendors identified as micro,small and medium enterprises as per information available with the Company. (i) Principal amount remaining unpaid to any supplier as at the end of the accounting year - -
(ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year - -
(iii) The amount of interest paid along with the amounts of the payment made to the supplier - - beyond the appointed day (iv) The amount of interest due and payable for the year - - (v) The amount of interest accrued and remaining unpaid at the end of the accounting year - - (vi) The amount of further interest due and payable even in the succeeding year, until such date - - when the interest dues as above are actually paid
9. OTHER CURRENT LIABILITIES (i) Current Maturities of long-term debt [Refer note 4B] a. Non Convertible Redeemable Debentures (NCD) 266.67 33.33 b. Term Loans From Banks 472.13 191.72 From Others 35.78 19.28 c. Vehicle loans From Banks 0.24 0.21 From Others 0.12 0.23 (ii) Payables on purchase of fixed assets Acceptances - banks 215.70 180.86 Others 42.74 86.66 (iii) Interest accrued & due on borrowings 19.79 0.54 (iv) Interest accrued but not due on borrowings 13.07 24.11 (v) Advance from customers 2,880.21 2,069.16 (vi) Unclaimed Dividends * 0.12 0.12 (vii) Unclaimed Share Application Money * - 0.11 (viii) Other Payables Statutory remittances 15.60 6.88 Trade / security deposits received 5.24 4.63 Others 4.71 10.71 3,972.12 2,628.55 *To be credited to Investor Education and Protection Fund, when due
10. SHORT TERM PROVISIONS Provision for employees benefits Gratuity 1.99 1.09 Leave encashment 1.46 1.64 Income Tax (Net of prepaid taxes) 47.53 37.64 Wealth Tax * 0.00 0.00 Provision for warranty 3.64 2.96 54.62 43.33 *Amount less than Rs. 0.01 crore
74 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013 11. FIXED ASSETS (` in crores)
PARTICULARS G R O S S B L O C K D E P R E C I A T I O N / A M O R T I S A T I O N / I M P A I R M E N T N E T B L O C K At cost / Valuation
AS AT ADDITIONS ADDITIONS DELETIONS/ AS AT AS AT ADDITIONS ADDITIONS DELETIONS/ AS AT AS AT AS AT 01.04.2012 DUE TO DURING ADJUSTMENTS 31.03.2013 01.04.2012 DUE TO DURING ADJUSTMENTS 31.03.2013 31.03.2013 31.03.2012 NEW THE YEAR DURING NEW THE YEAR DURING SUBSIDIARY THE YEAR SUBSIDIARY THE YEAR
TANGIBLE ASSETS
LAND
FREE HOLD LAND 86.41 5.34 1.97 4.70 89.02 - - - - 89.02 86.41
LEASE HOLD LAND 7.71 - - 7.71 0.36 0.08 - 0.44 7.27 7.35 FACTORY BUILDING 529.42 0.13 18.29 - 547.84 124.98 0.09 39.99 - 165.06 382.78 404.44
BUILDING 96.49 27.25 0.16 123.58 13.45 4.12 0.01 17.56 106.02 83.04
PLANT AND MACHINERY 772.62 2.47 65.67 1.34 839.42 287.44 0.60 69.86 1.00 356.90 482.52 485.18
OFFICE EQUIPMENT 7.24 0.12 0.24 7.12 3.08 0.70 0.21 3.57 3.55 4.16
FURNITURE & FIXTURES 5.09 0.15 0.56 4.68 3.29 0.36 0.55 3.10 1.58 1.80
VEHICLES 14.99 *0.00 0.43 0.64 14.78 8.57 *0.00 1.71 0.48 9.80 4.98 6.42
COMPUTERS 5.32 0.17 0.16 5.33 4.23 0.48 0.16 4.55 0.78 1.09
1,525.29 7.94 114.05 7.80 1,639.48 445.40 0.69 1 17.30 2.41 560.98 1,078.50 1,079.89
INTANGIBLE ASSETS SOFTWARE 8.04 0.08 - 8.12 5.35 1.13 - 6.48 1.64 2.69
GOODWILL ON CONSOLIDATION 33.26 - 0.05 33.21 - - - 33.21 33.26
41.30 - 0.08 0.05 41.33 5.35 - 1.13 - 6.48 34.85 35.95
T O T A L 1,566.59 7.94 114.13 7.85 1,680.81 450.75 0.69 118.43 2.41 567.46 1,113.35 1,115.84
Previous Year 1,365.44 205.86 4.70 1,566.59 342.18 111.08 2.51 450.75 1,1 15.84
Capital Work In Progress (CWIP) 1,744.57 1,423.97
* Amount less than 0.01 crores i) Depreciation method and rates are different between parent and subsidiaries. No alignment of depreciation rates between parent and subsidiaries have been done in these financial statements. ii) Certain part of the land is yet to be registered in the name of the Company. 31.03.2013 31.03.2012 ` in crores ` in crores iii) Depreciation & Amortisation & Impairment relating to continuing operations: Depreciation & Amortisation & Impairment for the year on tangible assets 117.30 109.83 Depreciation & Amortisation & Impairment for the year on intangible assets 1.13 1.25 118.43 111.08 Less: Utilised from revaluation reserve 1.29 1.36 Depreciation & Amortisation on discontinuing operations - - Depreciation, Amortisation & Impairment relating to continuing operations 117.14 109.72 iv) Impairment charges of ` 0.24 crores (P.Y. Nil) ie on Office Equipment ` 0.14 crores and on Software ` 0.10 crores has been included in Depreciation & amortisation expense in the Statement of Profit and Loss. v) No amounts were written off due to reduction of capital / written off on revaluation or were added to assets on revaluation during the previous 5 years. vi) Borrowing cost of the company capitalised ` 176.14 crores (P.Y ` 166.41 crores) is included in Fixed assets and CWIP. In the case of WISL borrowing cost is included in CWIP. vii) On the basis of the report of Chartered Engineers and Government approved Valuers, the Company had revalued the Freehold Land, Factory Building, Other Building and Dry Docks on 30th June, 1994 and again on 30th June 2002 and consequently an amount of ` 10.90 crores and ` 59.99 crores respectively being the differences between the amount of fair market value of the same and depreciated value as per books as on those dates, have been added to the value of Fixed Assets and corresponding credit shown as Revaluation Reserve.
75 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
Consequent to the revaluation there is an additional depreciation of ` 1.29 crores (Previous year ` 1.36 crores), which has been withdrawn from Revaluation Reserves and credited to Profit and Loss account. viii) The company has chosen to avail the option under AS-11 notification issued by Companies (Accounting Standard) Amendment Rules 2011 GSR 913 (E) & 914 (E) dated 29.12.2011 issued by Ministry of Corporate Affairs. The company has exercised the option with respect to foreign currency long term loan availed by it. The company has no other long term monetary Assets / Liabilities. Due to the exercise of aforesaid option, the impact on Statement of Profit and Loss for the year is a Gain of ` 6.68 crores (P.Y. Gain ` 14.20 crores) due to foreign currency exchange loss (net) which has been capitalized with CWIP. xi) Acquisition through business combinations / Assets reclassified as held for sale - Nil (P.Y. Nil)
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 12. NON-CURRENT INVESTMENTS Non Trade - At cost Unquoted In Others: In Equity Shares 271002 (P .Y . 271002) Equity Shares in ABG Business Ventures Pte. Ltd., Singapore 0.92 0.92 of SGD 1/- each fully paid up 1000 (P.Y. Nil) Equity Shares in Varada Seven Pte. Ltd. of USD 1/- each fully paid up 0.01 - 5000 (P.Y. 5000) Equity Shares in Janata Sahakari Bank Ltd. of Rs. 100/- each fully paid up 0.05 0.05 In Partnership Firm Capital in partnership firm Vipul Shipyard - 5.82 0.98 6.79
13. LONG-TERM LOANS AND ADVANCES (Unsecured, considered good)
Capital Advances 63.27 306.80 Security Deposits [Refer note 36] 129.28 240.12 Due from Government authorities MAT Credit Entitlement 165.65 130.55 Added during the year 34.75 55.77 Less: Utilised [Refer note 30] - 20.67 200.40 165.65 Service tax credit receivable - deferred 12.52 12.52 212.92 178.17 Loans and advances to related parties [Refer note 36] 286.83 - Other Advances 25.95 - (Unsecured, considered doubtful)
Loans and Advances - 5.76 Less: Provision for doubtful loans and advances - 5.76 - _ 718.25 725.09
76 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 14. OTHER NON CURRENT ASSETS Long Term Trade Receivable i) Unsecured, considered good 24.18 30.11 ii) Doubtful 7.73 0.27 31.91 30.38 Less: Provision for Doubtful Debt - - Sales Tax Deducted at Source 0.42 - Other Non Current Assets 1.14 - 33.47 30.38
15. CURRENT INVESTMENTS In Units of Mutual Fund 434645.8558 (P.Y. 434532.6111) Units in Emerging Markets Diversified Fund 236.40 222.13 of Standard Chartered Trust (Cayman) Limited of Face Value USD 100 per unit. 236.40 222.13
16. INVENTORIES (As taken, valued & certified by management) Raw Material and Components In stock 499.84 786.76 In transit 570.99 116.05 1,070.83 902.81 Work in Progress On Percentage completion basis 8,052.44 (Contract costs & recognised profit) Less: Progress Money from Customers 4,842.30 3,210.14 2,375.67 Finished goods 79.04 79.04 4,360.01 3,357.52
Finished goods represents completed ship where invoicing and protocol of acceptance is pending.
17. TRADE RECEIVABLES (Unsecured, Considered good) Outstanding for more than six months from due date of payment 53.32 57.82 Others 12.38 14.21 65.70 72.03
18. CASH AND BANK BALANCE Cash in hand 0.16 0.14 Balances with Banks: i) In Current Accounts 19.37 80.54 ii) In EEFC Accounts 0.08 0.14 iii) In Fixed Deposits 6.50 283.73 iv) In Eamarked Accounts Unclaimed dividend accounts 0.12 0.12 Unclaimed share application money accounts - 0.11 26.23 364.78 Out of the above : Fixed deposit with maturity of more than twelve months 0.33 279.54 Fixed deposit with bank held as security against short term borrowing 6.01 -
77 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
As at As at 31.03.2013 31.03.2012 ` in Crores ` in Crores 19. SHORT-TERM LOANS AND ADVANCES (Unsecured, Considered good)
Loans and Advances to related parties: [Refer note 36] Current Account in Partnership Firm - 29.50 Advance for supplies / services 845.74 327.55 Other loans and advances 309.04 0.13 1,154.78 357.18 Others: Advance to suppliers 799.90 573.06 Prepaid Expenses 300.48 328.92 Employee Advances 6.31 5.88 Inter Corporate Deposits 17.00 15.00 Balance with Government Authorities Service Tax Refundable / Credit 4.01 2.03 Vat credit 0.27 4.05 Income Tax 0.02 0.02 Sales Tax deducted at source - 0.42 4.30 6.52 Other Advances Considered good 2.99 1.42 Considered doubtful 0.21 - 2,285.97 1,287.98
20. OTHER CURRENT ASSETS (Unsecured, Considered good) Subsidy 455.79 473.90 Interest accrued on: Fixed deposits with bank 0.01 27.49 Inter corporate deposits 2.88 1.13 Insurance Claims 5.58 14.23 Receivables on sale of fixed assets 0.67 -
Income Tax Deducted at Source 0.81 2.26 MAT Credit Entitlement 2.66 2.72 Deferred Revenue Expenditure 0.38 - Other Current Assets 21.57 9.36 490.35 531.09
78 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
Year ended Year ended 31.03.2013 31.03.2012 ` in Crores ` in Crores
21. REVENUE FROM OPERATIONS Manufacturing Ships 1,463.80 1,063.04 Rigs 481.48 1,279.20 Trading - Steel 10.99 -
Services - Ship Repair 77.79 133.66 Other operating Revenue Subsidy 50.50 39.05 Excise and duty refunds 5.63 7.48 Scrap Sales 0.96 2.12 2,091.15 2,524.55
22. OTHER INCOME Interest on: Fixed deposits with bank 4.89 31.88 Inter Corporate deposit 1.94 1.25 Others 19.22 1.53 Net Profit/(loss) on sale of current Investments *0.00 1.90 Net Profit/(loss) on sale of non current Investments 0.03 - Profit on Sale of Assets (net) 8.25 (0.22) Other Non operating Income : Insurance Claims 3.23 1.35 Sundry balances written back 12.42 2.91 Miscellaneous Receipts 5.58 0.33 Difference in Exchange 0.09 - Prior year adjustments 0.04 2.56 55.69 43.49
* Amount less than 0.01 crores
23. A. CONSUMPTION OF RAW MATERIALS & COMPONENTS Steel 182.85 154.42 Components and Others 860.62 1,110.22 1,043.47 1,264.64
23. B. PURCHASE OF TRADED GOODS Steel 10.28 - 10.28 -
24. CHANGES IN INVENTORIES - WORK IN PROGRESS (Included in work in progress on percentage completion basis) Opening Work In Progress 226.56 256.28 Closing Work In Progress 345.53 226.56 (Increase) / Decrease in Work in progress (118.97) 29.72
79 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
Year ended Year ended 31.03.2013 31.03.2012 ` in Crores ` in Crores 25. EMPLOYEE BENEFITS EXPENSE Salaries Wages and other benefits 77.09 75.58 Contribution to Provident & Other Funds 4.83 4.68 Staff Welfare Expenses 18.81 18.81 100.73 99.07
26. FINANCE COST Interest expense on borrowings 284.95 237.24 Other Interest 37.41 0.10
Guarantee Commission (net) 42.67 28.23 Difference in Exchange on foreign currency transaction / translation (net) 4.98 49.11 Other Borrowing Costs 44.53 28.38 414.54 343.06
27. OTHER EXPENSES
Consumption of stores 47.46 53.72 Contractors Charges 159.37 175.30 Power and Water 16.90 14.17 Repairs & Maintenance - Plant & Machinery 4.24 9.45 - Buildings 0.95 0.64 - Others 2.21 3.30 Other Manufacturing Expenses 8.35 20.19 Inspection and Survey Expenses 5.50 7.12 Office Expenses 10.18 9.27 Rent Rates & Taxes 10.17 11.23 Insurance 25.65 32.93 Printing & Stationery 0.41 0.52 Postage Telephone & Telex 1.41 1.42 Travelling & Conveyance 9.28 14.92 Professional Charges 14.85 14.17 Payment to Auditors 1.17 0.99 Donations & Charities 4.44 4.63 Prior Years Expenses *0.0 0.27 Selling & Distribution 43.04 48.05 Forward Cover Loss/ (Gain) (net) 49.91 1.54 Loss from Partnership Firm - 0.04 Miscellaneous Expenses 2.50 6.43 Loss on Sale of Investment 0.44 - Dredging Expenses 0.38 0.20 Discount on ship repair 1.07 2.00 Goodwill written off 0.05 - 419.93 432.50
* Amount less than 0.01 crores
80 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
28. (a) Contingent liabilities not provided for ` in crores Particulars 31st March 2013 31st March 2012 In respect of Performance/ Delivery Guarantees given by banks to the buyers 163.20 96.74 Corporate guarantees to banks in respect of facilities granted to group companies 1,305.06 1,038.26 Other bank guarantees 47.11 40.85 Claims against the company not acknowledged as debts 71.89 74.70 Claims in respect of direct/indirect taxes 38.55 23.24 (b) Contingencies provided for in accordance with AS 29 issued by the Institute of Chartered Accountants of India ` in crores Particulars 31st March 2013 31st March 2012 Carrying amount as at the beginning of the year 2.96 2.08 Provision (net of utilisation) during the year. 0.68 0.88 Unused amount reversed during the year. - - Balance at the end of the year 3.64 2.96
The contingencies provided are in respect of estimated warranties on sold hulls. 29. In the opinion of the management, Current Assets , Loans and Advances have value in realisation in the ordinary course of business at least equal to the amount at which they are stated. 30. The Company has made Application u/s 245 C of Income Tax Act 1961, before Hon’ble Settlement Commission, Mumbai for the A.Y. 2004-05 to 2010-11. The Application for settlement has been admitted u/s 245 D (1) by Hon’ble Settlement Commission vide order dated 14th February, 2012. The company has paid taxes of ` 7.70 crores and utilised credit u/s 115JAA of the Income Tax Act ,1961 to the extent of ` 20.67 crores. The tax expense and utilisation are included in Current Tax for earlier years and MAT credit utilised, respectively. 31. Disclosure in respect of Operating Leases (Assets taken on lease): (a) ABG Shipyard Limited has taken commercial / residential premises under cancellable operating leases. The lease agreements are usually renewable by mutual consent on mutually agreeable terms. WISL has taken land and water on licence from Murmugao Port Trust (MPT) , Goa. The future minimum payment is as under : ` in crores PARTICULARS 31st March 2013 31st March 2012 Not later than one year 4.67 4.67 Later than 1 year but less than 5 years 23.56 28.24
(b) The expenses in respect of operating leases are accounted in Other Expenses under Note No 27
32. Disclosure in accordance with 'AS -7 Accounting for Construction Contracts' issued by the Institute of Chartered Accountants of India: ` in crores PARTICULARS 31st March 2013 31st March 2012 a. Contract revenue recognized as revenue in the year 1,784.59 2,356.01 b. Contract cost incurred and recognized profits 7,702.62 6,435.53 c. Advances received from above customers 5,025.78 4,594.00 d. Gross amount due from customers for contract work 3,103.79 2,189.62 e. Gross amount due to customers for contract work 426.95 348.09 The Gross amount due from customers reflects the net amount for all contracts in progress for which cost incurred plus recognised profit (less recognised losses) exceeds progress billing. The Gross amount due to customers reflects the net amount for all contracts in progress where progress billing exceeds cost incurred plus recognised profits (less recognised losses). During the year, advances from customers to the extent of work done amounting to ` 4598.83 crores. (P.Y. ` 4245.91 crores) is adjusted against Work in Progress in Note No 16. Advances received in excess of work done and advances pending commencement of work are disclosed in Other Current liabilities under Advances from Customers in Note No 9.
81 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
32. The disclosures required under Revised Accounting Standard 15 ‘Employee Benefits’ notified in the Companies (Accounting Standards) Rules 2006, are given below: Defined Contribution Plan Contribution to Defined Contribution Plan, recognized are charged off for the year are as under: ` in crores PARTICULARS 31st March 2013 31st March 2012 Employer’s Contribution to Provident Fund 3.71 4.50 Employer’s Contribution to Pension Scheme 0.80 1.04
Defined Benefit Plan
The employees’ gratuity fund scheme is a defined benefit plan, managed by SBI Life Insurance for the company. The subsidiary, WISL makes annual contribution to the Employees' Group Gratuity-cum-Life assurance Scheme of Metlife Insurance Co. Ltd. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in same manner as gratuity.
` in crores Particulars Gratuity Leave Encashment (Funded) (Unfunded) 31st March 31st March 31st March 31st March 2013 2012 2013 2012 a. Reconciliation of opening and closing balances of Defined Benefit obligation Defined Benefit obligation at the beginning of the year 8.60 6.79 7.02 4.65 Current Service Cost 1.17 1.09 1.07 1.15 Interest Cost 0.71 0.55 0.57 0.37 Actuarial (gain) / loss (0.37) 0.55 (0.70) 1.45 Benefits paid (0.23) (0.39) (1.22) (0.61) Defined Benefit obligation at the year end 9.88 8.60 6.74 7.02 b. Reconciliation of opening and closing balances of fair value of plan assets Fair value of plan assets at beginning of the year 0.34 0.65 - - Expected return on plan assets 0.03 0.05 - - Actuarial gain/(loss) (0.01) (0.01) - - Employer contribution 0.01 0.04 - - Benefits Paid (0.23) (0.39) - - Fair value of plan assets at the year end 0.13 0.34 - - Actual return on plan assets 0.01 0.01 - - c. Reconciliation of fair value of assets and obligations Fair value of plan assets as at year end 0.13 0.34 - - Present value of obligation as at year end 9.88 8.60 6.74 7.02 Amount recognised in Balance Sheet 9.76 8.26 6.74 7.02 d. Expenses recognised during the year Current Service Cost 1.17 1.09 1.07 1.15 Interest Cost 0.71 0.55 0.57 0.37 Expected return on plan assets (0.03) (0.05) - - Actuarial (gain) / loss 0.35 0.57 0.70 1.45 Net Cost 1.50 2.16 0.94 2.98 e. Investment Details % invested 31st March 31st March 2013 2012 SBI Group Gratuity (Cash Accumulation) Policy 100 100
82 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
f. Actuarial Assumptions 1994-96 (Ultimate) 1994-96 (Ultimate) Mortality Table (L.I.C) ABG Shipyard Ltd. Discount rate (per annum) 8.00% 8.00% 8.00% 8.00% Expected rate of return on plan assets (per annum) 8.00% 8.00% N.A N.A Rate of escalation in salary (per annum) 5.00% 5.00% 5.00% 5.00% Western India Shipyard Ltd. Discount rate (per annum) 8.00% 8.70% 8.00% 8.70% Expected rate of return on plan assets (per annum) 9.25% 7.00% Unfunded Unfunded Rate of escalation in salary (per annum) 7.00% 7.00% 7.00% 7.00%
The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary and relied upon by auditors. 34. Calculation of Earning per share (EPS) ` in crores
PARTICULARS 31st March, 2013 31st March, 2012 Net profit as per Statement of Profit & Loss (Rupees) 100.02 185.80 Weighted Average number of Equity shares of ` 10/- each fully paid up 50921801 50921801 Earning per Equity Share of ` 10/- each fully paid up. 19.64 36.49 (Basic & Diluted)
35. The group primarily operates in one business segment only i.e. manufacturing which is the only reportable segment. The subsidiary, WISL is carrying outship repairing activities. However, revenue does not satisfy the threshold limit as far as Group is concerned, as Accounting Standards -17, issued by Institute of Chartered Accountants of India, hence separate disclosure of business segment by activity is not given.
Secondary segment (Geographical Segments): ` in crores Segments Domestic Overseas Total 31st March 31st March 31st March 31st March 31st March 31st March 2013 2012 2013 2012 2013 2012 Revenue 449.23 813.18 1,641.92 1,711.37 2,091.15 2,524.55
During the year, subsidiary WISL has not operated in any Geographical segment outside india.
36. Related Parties Disclosure as per Accounting Standard (AS) 18: A. LIST OF RELATED PARTIES Holding company ABG International Private Limited Controlling stake Vipul Shipyard (Partnership Firm) (upto 31st March, 2012)
Fellow subsidiary companies ABG Cement Limited PFS Shipping (India) Limited ABG Cement Holdco Private Limited ABG Solar Project Private Limited BABA Gangaram Investment Services Private Limited ABG Energy Limited ABG Energy (Gujarat) Limited ABG Energy (MP) Limited Varada Marine Pte. Limited (Along with its SPV's) PFS Offshore Pte.Limited
83 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
Companies over which directors / ABG Infralogistics Limited relatives are able to exercise control or ABG Power Private Limited significant influence ABG Cranes Private Limited ABG Foods Private Limited ABG Acquafarm Private Limited ABG Glass Private Limited ABG Engineering & Construction Limited Tirupati Landmark Private Limited ABG Mercantile & Investment Services Private Limited Eleventh Land Developers Private Limited ABG Resources Private Limited (formerly Second Land Developers Private Limited) ABG Motors Limited ABG Business Ventures Pte. Limited Banal Investment & Trading Private Limited Jarrow Finance & Trading Private Limited Onaway Industries Limited Agbros Leasing & Finance Private Limited Aries Management Services Private Limited G.C. Property Private Limited Gold Croft Property Private Limited Somerset Estate Private Limited Nibodh Trading Private Limited (w.e.f. 3rd September, 2012) ABG Energy Himachal Pradesh Limited Drilling & Offshore Pte. Limited Global Bulk Carriers Pte. Limited Varada Ventures Pte. Limited Varada Three Pte. Limited (w.e.f. 1st April, 2012) Varada Five Pte. Limited (w.e.f. 23rd August, 2012) Varada Six Pte. Limited (w.e.f. 24th August, 2012) Varada Seven Pte. Limited (w.e.f. 24th August, 2012)
Individuals owning directly or indirectly Shri. Rishi Agarwal an interest in the voting power that gives them control or significant influence
Key management personnel Major Arun Phatak Shri. Dhananjay Laxman Datar Shri. Ram Swaroop Nakra (upto 30th November, 2012) Cdr. Subhash Kumar Mutreja
84 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013 B. TRANSACTIONS WITH RELATED PARTIES (` in crores) Sr. Nature of Transactions Holding Controlling Fellow Co. over Individuals Key Total No. Company Stake Subsidiary which owning Manage- Companies Directors / directly or ment relatives indirectly Personnel are able to an interest exercise in the control of voting significant power that influence gives them control or significant influence 31st March 2013 1 Revenue from Operations 5.40 95.07 152.62 253.09 (0.00) (64.81) (78.48) ( 143.29 )
2 Rent Expenses 1.09 1.09 (1.04) (1.04) 3 Hire Charges 0.57 0.57 (0.79) (0.79)
4 Services Received 1.80 1.80 (1.86) (1.86)
5 Interest/Guarantee Commission/ 21.99 51.90 73.89 Other Income Charged (0.00) (0.00) (0.00)
6 Payment to Key 3.22 3.22 Management Personnel (2.65) (2.65)
7 Purchase of Fixed Assets 0.00 7.12 7.12 (0.09) (20.48) (20.57)
8 Sale of Fixed Assets 12.96 12.96 (0.00) (0.00) 9 Sale of Shares 0.01 0.01 (0.00) (0.00)
10 Stage Payment Received (Net) 146.98 599.63 746.61 (155.38) (353.21) (508.59)
11 Loans and Advances Given / 199.66 0.00 389.14 630.75 0.12 1,219.67 Repaid ( 101.21 ) (2.27) (107.91) (220.01) (0.00) (431.39)
12 Loans and Advances Taken / 208.59 0.00 1.44 248.41 0.36 458.80 Refunded ( 1 1 1.08) (1.11) (77.05) (33.75) (0.00) (222.99)
13 Deposits Given 0.00 0.00 (42.00) (42.00)
14 Deposits Given 110.00 1 10.00 (0.00) (0.00)
15 Guarantees Taken 4 618.00 618.00 ( 435.00 ) (435.00) 16 Guarantees Given 4 0.00 25.00 435.12 460.12 (442.56) (0.00) (0.00) (442.56) 17 Capital Received from Parner 0.01 0.01 (0.00) (0.00)
85 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013 (` in crores) Sr. Nature of Transactions Holding Controlling Fellow Co. over Individuals Key Total No. Company Stake Subsidiary which owning Manage- Companies Directors / directly or ment relatives indirectly Personnel are able to an interest exercise in the control of voting significant power that influence gives them control or significant influence 31st March 2013 Outstanding Balances as on 31st March 2013 Receivables 0.67 70.18 14.15 85.00 (0.00) ( 71.92) (18.02) (89.94) Payables *0.00 10.55 0.26 10.81 (0.00) (28.90) (0.00) ( 28.90) Advance from customers 1,152.61 1,902.02 3,054.63 ( 1,060.02 ) ( 1,445.81 ) ( 2,505.83 ) Loans and Advances Given 14.15 0.00 435.34 992.12 1,441.61 (35.00) (29.50) (55.18) (272.50) (392.18)
Loans and Advances Taken 0.00 234.42 234.42 (3.43) ( 0.64) ( 4.07) Deposits Given 123.00 123.00 ( 233.00) ( 233.00) Guarantees Taken 4 1,053.00 1,053.00 ( 435.00 ) ( 435.00 ) Guarantees Given 4 88.60 1,046.02 979.02 2,113.64 ( 497.56 ) (992.16) ( 511.20) ( 2,000.92)
* Amount less than ` 0.01 crore
Notes : 1. Related Parties have been identified by the management and relied upon by the auditors. 2. Previous Year figures are shown in brackets. 3. Names of the Related Parties have been given in cases where the amount of transaction exceeds 10% of the total related party transactions of the same type. 4. Guarantees taken / given comprise of guarantees given to third parties on behalf of the Company / related parties.
Disclosure in respect of Related Party transactions during the year: 1 Revenue from Operations include Varada Marine Pte. Limited ` 76.58 crores (Previous Year ` 64.81 crores), Global Bulk Carriers Pte. Limited ` Nil (Previous Year ` 78.48 crores), Varada Three Pte. Limited ` 152.62 crores (Previous Year N.A.) 2 Rent Expenses include Tirupati Landmark Private Limited ` 0.08 crores (Previous Year ` 0.08 crores), Jarrow Finance & Trading Private Limited ` 0.10 crores (Previous Year ` 0.09 crores), Aries Management Services Private Limited ` 0.46 crores (Previous Year ` 0.38 crores), G.C. Property Private Limited ` 0.12 crores (Previous Year ` 0.09 crores), Gold Croft Property Private Limited ` 0.12 crores (Previous Year ` 0.09 crores), Somerset Estate Private Limited ` 0.12 crores (Previous Year ` 0.09 crores), ABG Power Private Limited ` 0.09 crores (Previous Year ` 0.22 crores) 3 Hire Charges paid to ABG Infralogistics Limited ` 0.57 crores (Previous Year ` 0.70 crores) 4 Services Received from ABG Resources Private Limited ` 1.80 crores (Previous Year ` 1.80 crores) 5 Interest/ Guarantee Commission/ Other Income Charged to Varada Marine Pte. Limited ` 21.99 crores (Previous Year ` Nil), ABG Engineering & Construction Limited ` 32.00 crores (Previous Year ` Nil), Varada Seven Pte. Limited ` 15.00
86 ABG Shipyard Limited Annual Report 2012-2013
NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH 2013
crores (Previous Year N.A.) 6 Payment to Key Management Personnel include to Major Arun Phatak ` 0.75 crores (Previous Year ` 0.64 crores), Shri. Dhananjay Datar ` 0.64 crores (Previous Year ` 0.31 crores), Shri. R. S. Nakra ` 1.20 crores (Previous Year ` 0.97 crores), Cdr. Subhash Kumar Mutreja ` 0.63 crores (Previous Year ` 0.74 crores) 7 Purchase of Fixed Assets include from ABG Infralogistics Limited ` Nil (Previous Year ` 20.48 crores), ABG Cranes Private Limited ` 7.12 crores (Previous Year ` Nil) 8 Sale of Fixed Assets include to ABG International Private Limited ` 12.96 crores (Previous Year ` Nil) 9 Sale of Shares to ABG Mercantile & Investment Services Private Limited ` 0.01 crores (Previous Year ` Nil) 10 Stage Payment Received (Net) include from PFS Shipping (India) Limited Rs. 42.39 crores (Previous Year Rs. 82.19 crores), Varada Marine Pte. Limited ` 104.59 crores (Previous Year ` 73.19 crores), Global Bulk Carriers Pte. Limited ` 187.61 crores (Previous Year ` 353.21 crores), Varada Three Pte. Limited ` 170.54 crores (Previous Year N.A.), Varada Five Pte. Limited ` 170.76 crores (Previous Year N.A.) 11 Loans and Advances Given/ Repaid include ABG International Private Limited ` 199.66 crores (Previous Year ` 101.21 crores), PFS Shipping (India) Limited ` 160.60 crores (Previous Year ` 32.44 crores), PFS Offshore Pte. Limited ` 226.82 crores (Previous Year ` Nil), ABG Cement Holdco Private Limited ` Nil (Previous Year ` 61.56 crores), ABG Engineering & Construction Limited ` 250.48 crores (Previous Year ` 161.28 crores), ABG Resources Private Limited ` 134.22 crores (Previous Year ` 42.90 crores),Varada Seven Pte. Limited ` 225.25 crores (Previous Year N.A.) 12 Loans and Advances Taken/ Refunded include ABG International Private Limited ` 208.59 crores (Previous Year ` 111.08 crores), ABG Cement Holdco Private Limited ` Nil (Previous Year ` 61.56 crores), Varada Seven Pte.Limited ` 2,34.42 crores (Previous Year ` Nil) 13 Deposits Given to ABG Resources Private Limited ` Nil (Previous Year ` 40.00 crores) 14 Deposit Refund Received from ABG Resources Private Limited ` 110.00 crores (Previous Year ` Nil) 15 Guarantees Taken from ABG International Private Limited ` 618.00 crores (Previous Year ` 435.00 crores) 16 Guarantees Given to ABG Shipyard Singapore Pte. Limited ` Nil (Previous Year ` 408.96 crores), Varada Ventures Pte. Limited ` 435.12 (Previous Year Rs. Nil) 17 Capital Received from Partner includes ABG Resources Private Limited ` 0.01 crores (Previous Year ` Nil)
37. The Company has firm committments in foreign exchange as regards both its payables and receivables. The company has applied the principle of hedge accounting contained in Accounting Standard 30 issued by the Institute of Chartered Accountants of India for its net firm commitment in receivables and payables in foreign exchange. In view of the same, Mark to Market difference (loss) as on 31st March, 2013 of ` 3.36 crore (P. Y. gain ` 7.30 crore) does not have any material impact on the financial statements.
38. The figures for the previous year have been arranged/rearranged/regrouped wherever considered necessary.
As per our report of even date For NISAR & KUMAR For and on behalf of the Board Chartered Accountants F. R. No. 107117W M. N. Ahmed Major Arun Phatak Dhananjay Datar Partner Executive Director Whole Time Director M. No 18380
Mumbai Sunil Agarwal Dated : 30th May 2013 Company Secretary
87 ABG Shipyard Limited Annual Report 2012-2013
NOTES
88 ABG Shipyard Limited Annual Report 2012-2013
NOTES
89 ABG Shipyard Limited Annual Report 2012-2013
NOTES
90 ABG Shipyard Limited Annual Report 2012-2013
ABG SHIPYARD LIMITED Regd. Office: Near Magdalla Port, Dumas Road, Surat-395007 Corporate Office: 4th/5th Floor, Bhupati Chambers, 13, Mathew Road, Mumbai - 400004 PROXY FORM
I/We ______S/o/W/o/D/o ______of ______in the district of ______being a member/members of the above named Company hereby appoint Mr./Ms. ______of ______or failing him/her Mr./Ms. ______of ______in the district of ______as my/our proxy to vote for me/us on my behalf at the Annual General meeting of the Company to be held on Friday 27th September, 2013 at the Registered Office of the Company at Near Magdalla Port, Dumas Road, Surat-395007 at 12.00 noon and at any adjournment thereof.
Signed this ______day of ______2013
Signature ______Affix L.F. No./Client ID No. ______` 1 Revenue DP ID No.: ______Stamp No. of Share(s) held ______
Notes: 1. A Member entitled to attend and vote, is entitled to appoint a proxy to attend and vote instead of himself. 2. A proxy need to be a member of the Company. 3. The proxy form duly completed should be deposited at the Registered Office of the Company at Near Magdalla Port, Dumas Road, Surat-395007 or Corporate Office of the Company at 4th/5th Floor, Bhupati Chambers, 13, Mathew Road, Mumbai- 400004 at least 48 hours before the meeting. 4. In order to save time, members are requested to come to venue with the duly filled-in attendance slip.
ABG SHIPYARD LIMITED Regd. Office: Near Magdalla Port, Dumas Road, Surat-395007 Corporate Office: 4th/5th Floor, Bhupati Chambers, 13, Mathew Road, Mumbai - 400004 ATTENDANCE SLIP
I hereby record my presence at the Annual General Meeting to be held on 27th September, 2013 at the Registered Office of the Company at Near Magdalla Port, Dumas Road, Surat-395007 at 12.00 noon.
L.F. No./Client ID No. ______
DP ID No.: ______
Full name of the Shareholder ______(In Block Letters)
Father’s/Husband’s Name ______
No.of Equity shares held ______
Signature of the Shareholder or Proxy attending ______