PDF processed with CutePDF evaluation edition · ABG Shipyard Limited Annual Report 20132014 2...

PDF processed with CutePDF evaluation edition www.CutePDF.com

http://www.cutepdf.com

ABG Shipyard Limited Annual Report 2013-2014

1

Corporate Identifi cation Number (CIN)

L61200GJ1985PLC007730

Board Of Directors

Mr. Rishi Agarwal – Chairman

Mr. Syed Abdi – Managing Director and CEO

(since 9th January, 2014)

Mr. Dhananjay Datar – Executive Director

Mr. S. Muthuswamy – Executive Director

(since 13th November, 2013)

Mr. Ashok R. Chitnis – Independent Director

Mr. Ashwani Kumar – Independent Director

Mr. Aloke Sengupta – Nominee Director

(since 14th August, 2013)

Mr. David Resquinha – Nominee Director

(since 30th May, 2014)

Auditors

M/s. Nisar& Kumar, Chartered Accountants

A-17, Everest Building,156- Tardeo Road

Mumbai-400 034.

Bankers

Andhra Bank Indian Overseas Bank

Bank of Baroda Laxmi Vilas Bank Ltd.

Bank of India Oriental Bank of Commerce

Canara Bank Punjab and Sindh Bank

Central Bank of India Punjab National Bank

Dena Bank SICOM Limited

Deutsche Bank The South Indian Bank Ltd.

Development Credit Bank Ltd. Standard Chartered Bank

Export- Import Bank of India State Bank of India

ICICI Bank Limited State Bank of Patiala

IDBI Bank Limited State Bank of Travancore

IFCI Limited Syndicate Bank

Indian Bank Yes Bank Limited

Corporate Offi ce

4th/5th Floor, Bhupati Chambers,13, Mathew Road,

Mumbai-400 004. Tele: 91-22-66563000

Fax : 91-22-66223050,

Contents Page No.

Notice of AGM 2

Directors’ Report 15

Corporate Governance Report 22

Management Discussion & Analysis 38

Auditors’ Report 41

Balance Sheet 46

Statement of Profi t and Loss 47

Cash Flow Statement 48

Notes forming part of the Financial

Statements49

Statement pursuant to Section 212

of the Companies Act, 195674

Consolidated Financial Statements 75

Proxy Form & Attendance Slip 103

Registrar & Share Transfer Agent

Link Intime India Private Ltd.

C-13, Pannalal Silk Mills Compound

L.B.S Marg, Bhandup West

Mumbai-400 078.

Tele : 91-22-25946970, Fax : 91-22-25946979

E-mail : [email protected]

CORPORATE INFORMATION

29th Annual General Meeting

Day : Tuesday

Date : 30th September,2014

Time : 12.00 noon

Venue : At the Registered Offi ce of the Company

Near Magdalla Port, Dumas Road,

Surat-395 007, Gujarat

Registered Offi ce

Near Magdalla Port

Dumas Road,

Surat-395 007, Gujarat

Tele: 91-261-2725191, Fax: 91-261-3048243

Website:www.abgindia.com

E-mail:[email protected]

Annual Report 2013-2014ABG Shipyard Limited

2

NOTICE

Notice is hereby given that the 29th Annual General Meeting of the Members of ABG Shipyard Limited will be held on Tuesday

the 30th of September, 2014 at 12.00 noon at the Registered Office of the Company at Near Magdalla Port, Dumas Road,

Surat-395 007, to transact the following business:-

Ordinary Business:

1. To receive, consider and adopt the audited Balance Sheet as at March 31, 2014, the Statement of Profi t 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. Rishi Agarwal (DIN 00162615), who retires by rotation and being eligible, offers himself

for re-appointment.

3. To appoint Auditors and fi x their remuneration and for the purpose to pass the following resolution as an Ordinary Resolution :

“RESOLVED THAT pursuant to the provision of Section 139 and other applicable provisions, if any, of the Companies Act,

2013, and upon recommendations of the Audit Committee, M/s. Nisar & Kumar, Chartered Accountants, (Firm Registration

No. 107117W) be and is hereby re-appointed as Joint Statutory Auditors of the Company to hold offi ce from the conclusion

of 29th Annual General Meeting till the conclusion of 32nd Annual General Meeeting of the Company subject to ratifi cation by

members at every Annual General Meeting held after this Annual General Meeting on such remuneration to be decided by

the Board of Directors in consultation with the said Auditors.”

Special Business:

4. To consider and, if thought fi t, to pass with or without modifi cation(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provision of Section 139 and other applicable provisions, if any, of the Companies Act,

2013, and upon recommendations of the Audit Committee,M/s. GMJ & Co., Chartered Accountants, (Firm Registration No.

103429W) be and is hereby appointed as Joint Statutory Auditors of the Company in addition to the existing Statutory Auditors

M/s. Nisar & Kumar, Chartered Accountants, (Firm Registration No. 107117W), Mumbai of the Company to hold offi ce from

the conclusion of 29th Annual General Meeting till the conclusion of the next Annual General Meeting of the Company on such

remuneration to be decided by the Board of Directors in consultation with the said Auditors.”

5. To consider and, if thought fi t, to pass with or without modifi cation(s), the following resolution as a Special Resolution:

“RESOLVED THAT In supersession to the Special Resolution passed by Members of the Company at the 28th Annual

General Meeting held on 27th September, 2013 and pursuant to the provisions of the Companies Act, 2013, (to the extent

notifi ed) and the Companies Act, 1956 (to the extent valid), 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 re-enactment 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 modifi cations 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 Qualifi ed 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,

qualifi ed 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 qualifi ed 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 over allotment/

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


3

or not (hereinafter referred to as “securities”) for a value of upto ` 1,000/- crores (` 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 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 fi t 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 fi t and as permissible by the law.

RESOLVED FURTHER THAT in case of a Qualifi ed Institutional Placement pursuant to Chapter VIII of the SEBI ICDR

Regulations, the allotment of specifi ed securities shall only be to Qualifi ed 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 specifi ed 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 180(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 fi t and to settle all questions, diffi culties 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 fi t 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 fi nal offering circulars/prospectus(es)/

offer document(s), and any amendments and supplements thereto, along with supporting papers needed to be fi led 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, fi nancial and /or legal advisors, depositories, custodians, principal paying/transfer/conversion

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;


4

(h) Approval of the Deposit Agreements(s), the Purchase/Underwriting Agreement(s), the Trust Deed(s), the Indenture(s),

the Master/Global GRDs/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, diffi culties 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 fi t.

RESOLVED FURTHER THAT the Board and/or the Committee authorized by the Board be and is hereby authorized to

accept any modifi cations 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 FURTHUR 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.”


“RESOLVED THAT pursuant to provisions of Section 149, 152 and other applicable provisions if any, of the Companies Act,

2013 and the Rules made thereunder, (including any statutory modifi cation(s) or re-enactment thereof for the time being in

force) read with Schedule-IV of the Companies Act, 2013, Mr. Ashwani Kumar (DIN: 02863328), Non-Executive Director of

the Company, who has submitted a declaration that he meets the criteria for independence as provided in Section 149(6) of

the Act and who is eligible for appointment, be and is hereby appointed as an Independent Director to hold offi ce for 5 (fi ve)

consecutive years for a term up to the conclusion of the 34th Annual General Meeting of the Company in the calendar year

2019 and he is not liable to retire by rotation.”


“RESOLVED THAT pursuant to provisions of Section 149, 152 and other applicable provisions if any, of the Companies Act,

2013 and the Rules made thereunder, (including any statutory modifi cation(s) or re-enactment thereof for the time being in

force) read with Schedule-IV of the Companies Act, 2013, Mr. Ashok R. Chitnis (DIN: 00793751), Non-Executive Director of

the Company, who has submitted a declaration that he meets the criteria for independence as provided in Section 149(6) of

the Act and who is eligible for appointment, be and is hereby appointed as an Independent Director to hold offi ce for 5 (fi ve)

consecutive years for a term up to the conclusion of the 34th Annual General Meeting of the Company in the calendar year

2019 and he is not liable to retire by rotation.”


“RESOLVED THAT Mr. S. Muthuswamy (DIN: 01062192 ), who was appointed as an additional Director of the Company,and

who in terms of provisions of Section 161 of the Companies Act, 2013 and the Rules made thereunder (including any statutory

modifi cation(s) or re-enactment thereof for the time being in force), hold offi ce up to the date of this Annual General Meeting,

in respect of whom the Company has received a notice in writing from a member under Section 160 of the Companies Act,

2013 signifying his intention to propose Mr. S. Muthuswamy as a candidate for the offi ce of Director of the Company, be and

is hereby appointed as a Director of the Company, whose period of offi ce shall be liable to determination by retirement of

director by rotation.”


“RESOLVED THAT Mr. Syed Abdi, (DIN: 06754340 ), who was appointed as an additional Director of the Company,and who

in terms of provisions of Section 161 of the Companies Act, 2013 and the Rules made thereunder (including any statutory

modifi cation(s) or re-enactment thereof for the time being in force), hold offi ce up to the date of this Annual General Meeting,

in respect of whom the Company has received a notice in writing from a member under Section 160 of the Companies Act,

2013 signifying his intention to propose Mr. Syed Abdi as a candidate for the offi ce of Director of the Company, be and is

hereby appointed as a Director of the Company, whose period of offi ce shall be liable to determination by retirement of

director by rotation.”

10. To consider and, if thought fi t, to pass with or without modifi cation(s), the following resolution as Special Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 197 and 198 read together with Schedule V and the Rules

framed thereunder and other applicable provisions, if any, of the Companies Act, 2013 (hereinafter referred to as the “Act”),

(including any statutory modifi cation(s) or re-enactment thereof for the time being in force) and subject to the approval of

the Central Government and subject to such conditions and modifi cations as may be prescribed or imposed by the Central


5

Government while granting such approval, the approval of the Members be and is hereby accorded to the payment of the

following remuneration as Minimum Remuneration to Mr. Dhananjay Datar, Executive Director (DIN: 01685012) in case of no

profi ts or inadequacy of profi ts in any fi nancial year commencing from April 1, 2014 for remaining tenure of his appointment i.e.

Up to 28th July, 2016:-

Mr. Dhananjay Datar shall be entitled to the following Salary, Perquisites & Allowances and Bonus:

` Per Month ` Per Annum

Salary Perquisites & Allowance Bonus

1,95,000 1,79,325 2,92,500

The perquisites and allowances, as aforesaid, shall include accommodation (furnished or otherwise) and / 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 modifi cation(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.

RESOLVED FURTHER THAT pursuant to the provisions of Section 197 and the Rules framed thereunder, read together with

Schedule V and other applicable provisions, if any of the said Act, and subject to the approval of the Central Government, the

Members do hereby ratify and confi rm the remuneration paid under the provisions of Sections 198, 309 read together with

Schedule XIII of the Companies Act, 1956 amounting upto ` 41,86,500/- (Rupess Forty One Lacs Eighty Six thousand Five

Hundred only) to the Executive Director for the Financial Year ended March 31, 2014 and waive the recovery of the above

mentioned sum from him, being the remuneration agreed to be paid to him, as per the terms approved by the Members.

RESOLVED FURTHER THAT the Board of Directors or a Committee thereof of the Board be and is hereby authorized to

take such steps as may be necessary for obtaining necessary approvals - statutory, contractual or otherwise, in relation to the

above and to settle all matters arising out of and incidental thereto and to sign and execute deeds, applications, documents

and writings that may be required, on behalf of the Company and generally to do all such other acts, deeds, matters and things

as may be necessary, proper, expedient or incidental for giving effect to this Resolution.”

11. To consider and, if thought fi t, to pass with or without modifi cation(s), the following resolution as Special Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 197 and 198 read together with Schedule V and the Rules framed

thereunder and other applicable provisions, if any, of the Companies Act, 2013 (hereinafter referred to as the “Act”), (including

any statutory modifi cation(s) or re-enactment thereof for the time being in force) and subject to the approval of the Central

Government and subject to such conditions and modifi cations as may be prescribed or imposed by the Central Government

while granting such approval, the approval of the Members be and is hereby accorded to the payment of the following

remunerations as Minimum Remuneration to Mr. S. Muthuswamy, Executive Director in case of no profi ts or inadequacy of

profi ts in any fi nancial year commencing from April 1, 2014 for remaining tenure of his appointment i.e. Up to 12th November

2016:-

Mr. S. Muthuswamy shall be entitled to the following Salary, Perquisites, Allowances and Bonus:

` Per Month ` Per Annum

Salary Perquisites & Allowance Bonus

2,00,000 1,73,150 3,00,000

The perquisites and allowances, as aforesaid, shall include accommodation (furnished or otherwise) and / 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 modifi cation(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.

The Board may increase/revise remuneration not exceeding 40% on present remuneration during the tenor of such appointment,

in such manner as may be deem fi t by the Board in the best interests of the Company and as may be permissible by law.

RESOLVED FURTHER that pursuant to the provisions of Section 197 and the Rules framed thereunder, read together with

Schedule V and other applicable provisions, if any of the said Act, and subject to the approval of the Central Government, the


6

Members do hereby ratify and confi rm the remuneration paid under the provisions of Sections 198, 309 read together with

Schedule XIII of the Companies Act, 1956 amounting upto 15,95,740 (Rupess Fifteen Lacs Ninety Five Thousands Seven

Hundred Forty only) to the Executive Director for the period commencing from November 13, 2013 and ended on March 31,

2014 and waive the recovery of the above mentioned sum from him, being the remuneration agreed to be paid to him, as per

the terms approved by the Members.”

“RESOLVED FURTHER THAT the Board of Directors or a Committee thereof of the Board be and is hereby authorized to

take such steps as may be necessary for obtaining necessary approvals - statutory, contractual or otherwise, in relation to the

above and to settle all matters arising out of and incidental thereto and to sign and execute deeds, applications, documents

and writings that may be required, on behalf of the Company and generally to do all such other acts, deeds, matters and

things as may be necessary, proper, expedient or incidental for giving effect to this Resolution.”

By Order of the Board of Directors

Place: Mumbai Sunil Agarwal

Date: 14th August, 2014. 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. A person can act as proxy on behalf of members not exceeding fi fty (50) and

holding in the aggregate not more than ten percent (10%) of the total share capital of the Company. A member holding more

than ten percent (10%) of the total share capital of the Company may appoint a single person as proxy and such person shall

not act as a proxy for any other person or shareholder.

The Instrument of proxies in order to be effective should be duly completed, stamped and signed and must be deposited

at the Registered Offi ce of the Company not less than 48 hours before the meeting.

2. An Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 relating to the Special Businesses to be

transacted at the Annual General Meeting is annexed hereto.

3. The details under clause 49 of the Listing Agreement with the Stock Exchange(s) in respect of the directors seeking

appointment/ re-appointment at the Annual General Meeting are annexed hereto.

4. The Register of Members and Share transfer books of the Company will remain closed from Tuesday, 23rd September, 2014

to Tuesday 30th September, 2014 (both days inclusive) in connection with the Annual General Meeting.

5. 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).

6. 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.

7. Members/Proxies are requested to bring their copy of Annual Report and the attendance slip,duly fi lled in at the meeting.

8. Members desirous of obtaining any information as regards accounts and operations of the Company are requested to

write to the Company at least one week before the meeting, so that information required is made available at the meeting.

9. 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

Protection Fund (the fund) set up 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, 2007 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 fi nancial years 2006-07 to 2010-11 are due for transfer to the IE PF fund

as per table given below:

Financial Year Due Date for Transfer

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

10. The Ministry of Corporate Affairs (MCA) on 10th May, 2012 notifi ed 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


7

shareholders 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

fi nancial years 2006-07 to 2010-2011, as on the date of 28th Annual General Meeting held on 27th September, 2013, 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 to the

company before expiry of seven years.

11. All statutory registers are open for inspection at the Registered Offi ce 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.

12. Corporate Members intending to send their authorized representatives to attend the Annual General Meeting are requested to

send a duly certifi ed copy of the Board Resolution authorizing their representatives to attend and vote at the Meeting.

13. 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.

14. Members may also note that the Notice of the 29th Annual General Meeting and the Annual Report for 2013 – 14 will also be

available on the Company’s website www.abgindia.com for download. The physical copies of the aforesaid documents will

also be available at the Company’s Registered Offi ce for inspection during normal business hours on working days. Even after

registering for e-communication, members are entitled to receive such communication in physical form, upon making a request

for the same, by post free of cost. For any communication, the shareholders may also send requests to the Company’s investor

email id: [email protected]

15. Pursuant to the provisions of section 108 of the Companies Act, 2013 read with rule 20 of the Companies (Management

and Administration) Rules, 2014 and the Clause 35B of the Listing Agreement, the Company is pleased to provide e- voting

(Electronic Voting) facility to its members to cast their votes electronically on all resolutions set forth in this Notice convening

the 29th Annual General Meeting to be held on Tuesday, 30th September, 2014, at 12.00 noon. The Company has engaged the

services of Central Depository Services Limited (“CDSL”) as the authorised agency to provide the e-voting facilities.

The e-voting facility will be available during the following voting period:

Commencement of e-voting

From 09.00 a.m. (IST) on 24th September, 2014

End of e-voting

5.00 p.m. (IST) on 26th September, 2014

The instructions for members for voting electronically are as under:-

(i) Log on to the e-voting website www.evotingindia.com

(ii) Click on “Shareholders” tab.

(iii) Now, select the Electronic Voting Sequence Number - “EVSN” along with “COMPANY NAME” i.e. ABG SHIPYARD LIMITED

from the drop down menu and click on “SUBMIT”.

(iv) Now Enter your User ID: − For CDSL: 16 digits benefi ciary ID; − For NSDL: 8 Character DP ID followed by 8 Digits Client ID;

− For Members holding shares in Physical Form: Please enter Folio Number registered with the Company and then enter the

Captcha Code as displayed on the screen; Then Click on Login.

(v) If you are holding shares in Demat form and had logged on to www.evotingindia.com and casted your vote earlier for EVSN

of any company, then your existing password is to be used. In case you have forgotten your password then enter the User ID

and Captcha Code as displayed on the screen and click on Forgot Password and then enter the details as prompted by the

system.

(vi) Otherwise, if you are a fi rst time user or if you are holding shares in physical form, please follow the steps given below:

a) Please fi ll the following details in the appropriate boxes (this is applicable to members holding shares in demat form or

physical form):

1. Primary Level Enter your 10 digit alpha-numeric PAN issued by Income Tax Department. Please enter in CAPITAL LETTE`

This must tally with the PAN registered by you with the Company / Depository Participant. Please note that Members who have

not registered their PAN with the Company / Depository Participant, will have to use use the fi rst two letters of their name and

the last 8 digits of the demat account/folio number in the PAN fi eld.

2. Secondary Level Enter the Date of Birth as recorded in your demat account or in the Company’s records for the said demat

account or folio in dd/mm/yyyy format. OR Enter the Bank Account Number as registered by you in your demat account or in

the Company’s records in respect of your shares in the said demat account or folio. OR In case neither your Date of Birth nor

Bank Account details are recorded in your demat account or in the Company’s records, as aforesaid, then please enter your

demat account number (client id) or your folio number in the Bank Account fi eld. b) After entering these details appropriately,

click on “SUBMIT” tab.

(vii) Members holding shares in physical form will then directly reach the EVSN selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login


8

password in the new password fi eld. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confi dential.

(viii) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

(ix) Click on the ABG SHIPYARD LIMITED on which you choose to vote.

(x) On the voting page, you will see Resolution Description and against the same the option “YES/NO” for voting. Select the option “YES” or “NO” as desired. The option “YES” implies that you assent to the Resolution and option “NO” implies that you dissent to the Resolution.

(xi) Click on the “Resolution File Link” if you wish to view the entire Resolution.

(xii) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confi rmation box will be displayed. If you wish to confi rm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xiii) Once you “CONFIRM” your vote on the resolution, you will not be allowed to change your vote subsequently.

(xiv) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xv) Institutional shareholders (i.e. other than Individuals, HUF, NRI etc.) are required to log on to https://www.evotingindia.co.in and register themselves as Corporates. After receiving the login details they have to link the account(s) which they wish to vote on and then cast their vote. They should upload a scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, in PDF format in the system for the scrutinizer to verify the same.

Please note that:

1. The voting period begins on September 24, 2014 at 09.00 am and ends on September 26, 2014 at 5.00 pm. During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date which is September 22, 2014, may cast their vote electronically. The voting rights of shareholders shall be in proportion to their shares in the paid up equity share capital of the Company as on this cut-off date. The e-voting module shall be disabled by CDSL for voting after 5.00 pm on September 26, 2014.

2. In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.co.in under help section or write an email to [email protected].

3. Ms. Kala Agarwal, Practising Company Secretary (Membership No. F5976) has been appointed as the Scrutinizer to scrutinize the e-voting process in a fair and transparent manner.

4. The Scrutinizer shall within a period of not exceeding three (3) working days from the conclusion of the e-voting period, unblock the votes in the presence of at least two witnesses not in employment of the Company and forward her report of the votes cast in favour or against, to the Chairman or to any Director or Offi cer who may be authorized by the Chairman for this purpose.

5. The Results shall be declared on or after the Annual General Meeting (AGM). The Results declared along with the Scrutinizer’s Report shall be placed on the Company’s website www.abgindia.com and on the website of CDSL within two (2) days of passing of the resolutions at the AGM of the Company and communicated to the Stock Exchanges.

EXPLANTORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

Item 4

Upon advice of the lenders of the company, your Board of Directors proposes to appoint M/s. GMJ & Co.,Chartered Accountants, (Firm Registration No. 103429W) as Joint Statutory Auditors of the Company to hold offi ce from the conclusion of 29th annual General Meeting till the conclusion of next Annual General Meeting of the Company.

The Company has received the Consent from M/s. GMJ & Co.,Chartered Accountants, along with certifi cate certifying that their appointment, if made would be within the compliance of the conditions as specifi ed under Section 139 of the Companies Act, 2013 as applicable.

Existing Statutory Auditor M/s. Nisar & Kumar, Chartered Accountants, (Firm Registration No. 107117W), have conveyed their consent for the same.

Your Board of Directors recommend passing of the resolution as set out at item no. 4 of the notice.

None of the Directors, key managerial personnel of the Company, and any relatives of such director, key managerial personnel are in any way concerned or interested in this Resolution except to the extent of their shareholding in the Company, If any.

Item no. 5

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

constituted) to undertake such issue or offer of securities.


9

1. Object of the issue

In order to strengthen the Balance Sheet of the Company by repayment of its debt and for general corporate purposes, the

Company proposes to raise long term capital by issue of further securities.

2. Pricing

In case of an issue of the Securities to Qualifi ed 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 Qualifi ed 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 fi t.

Provisions of the Companies Act, 2013 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 62 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 the Companies Act, 2013

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 or Key Managerial Personnel of the Company and their relatives, 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.

Item No. 6 & 7

Mr. Ashwani Kumar (Din: 02863328 ) and Mr. Ashok R Chitnis (Din: 00793751) are directors of the Company whose period of offi ce

was liable to retirement by rotation. In terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Mr.

Ashwani Kumar and Mr. Ashok R. Chitnis being eligible, offer themselves for appointment as Independent Directors on the Board

of the Company. The Company has received the declaration of independence from the aforesaid directors in accordance with the

provisions of the Companies Act, 2013. In line with the requirements of the Companies Act, 2013, it is therefore proposed to appoint

Mr. Ashwani Kumar and Mr. Ashok R. Chitnis as Independent Directors on the Board of the Company for a term upto fi ve consecutive

years, commencing from 30th September, 2014 pursuant to the provisions of the Companies Act, 2013.

A brief profi le of proposed Independent Directors, including nature of their expertise, is annexed to this notice.

Notices have been received from Members proposing candidature of the above Directors for the offi ce of Independent Director of

the Company together with the deposit of `1/- Lac each as prescribed under the applicable provisions of the Companies Act 2013. In

the opinion of the Board, Mr. Ashwani Kumar and Mr. Ashok R. Chitnis, fulfi l the conditions specifi ed in the Companies Act, 2013 and

the Rules made thereunder for appointment as Independent Directors of the Company. A copy of the draft Letter of Appointment for

Independent Directors, setting out the terms and conditions of their appointment, is available for inspection at the Registered Offi ce

of the Company during business hours on any working day and is also available on the website of the Company.

None of the Directors or Key Managerial Personnel of the Company and their relatives, other than Independent Directors for their

respective appointment, are concerned or interested, fi nancially or otherwise, in the resolutions set out at item nos. 6 to 7. The Board

recommends the Ordinary Resolutions as set out at item nos. 6 to 7 for approval of the Members.


10

Item No. 8 & 9

At the Meeting of the Board of Directors of the Company, held on 13th November, 2013, Mr. S. Muthuswamy (DIN 01062192) was

appointed as an Additional Director and designated as Executive Directors of the Company and holds the offi ce as an additional

director upto the date of the ensuing Annual General Meeting in terms of Section 161 of the Companies Act, 2013 (“the Act”).

Further, the Board of Directors of the Company vide its circular resolution dated 21st January, 2014 appointed Mr. Syed Abdi (DIN

06754340) as an Additional Director and designated as Managing Director and CEO of the Company and entitled to hold the offi ce

as an additional director upto the date of the ensuing Annual General Meeting in terms of Section 161 of the Companies Act, 2013

(“the Act”).

Mr. S. Muthuswamy and Mr. Syed Abdi are not disqualifi ed from being appointed as Director in terms of section 164(2) of the Act

Notices have been received from Members proposing candidature of the above Directors for the offi ce of Director of the Company

together with the deposit of `1/- lac each as prescribed under the applicable provisions of the Companies Act 2013. A brief profi le

of proposed Directors, including nature of their expertise, is annexed to this notice.

None of the Directors or Key Managerial Personnel of the Company and their relatives, other than Directors for their respective

appointment, are concerned or interested, fi nancially or otherwise, in the resolutions set out at item nos. 8 to 9. The Board

recommends the Ordinary Resolutions as set out at item nos. 8 to 9 for approval of the Members.

Item No. 10 &11

The Members at their Annual General Meeting held on 27th September, 2011 had by way of Ordinary Resolution approved the

appointment of Mr. Dhananjay Datar (DIN 01685012)as Executive Director of the Company for a period of 5 years with effect from

July 28, 2011 on terms and conditions, including remuneration payable to him.

Further, The Members at their Extra Ordinary General Meeting held on 29th March, 2014 had by way of Special Resolution approved

the appointment of Mr. S. Muthuswamy as Executive Director for a period of 3 years commencing from 13th November, 2013 on

terms and conditions, including remuneration payable to the Executive Director.

In case of no profi ts or inadequacy of profi ts in any Financial Year, the terms of appointment of Executive Directors also provide for

payment of said remuneration as Minimum Remuneration during the currency of their respective tenures as per details mentioned

in the Resolutions.

In respect of Financial Year 2013-14, the Ministry of Corporate Affairs (“MCA”) have vide General Circular No.08/2014 dated April

4, 2014 clarifi ed that the provisions pertaining to maintenance of books of accounts, preparation, adoption and fi ling of fi nancial

statements and other documents required to be attached to the Annual Report shall be governed by the relevant provisions,

schedules, rules of the Companies Act, 1956. Pursuant to the provisions of Sections 198 and 309 read together with Schedule

XIII (“Schedule XIII”) of the Companies Act, 1956, in case of no profi ts or inadequacy of profi ts calculated under Section 349 and

350 of the Companies Act, 1956, the Company may pay remuneration by way of salary, dearness allowance, perquisites and any

other allowances (excluding commission) upto the ceiling limits as specifi ed in Schedule XIII subject to Members’ approval by way

of Special Resolution and compliance of disclosure requirements and other conditions as stated therein. Any sums paid without

compliance of conditions stated therein, become refundable to the Company and until such sums become refundable, are held

in trust for the Company, unless the Company waives recovery of the said amount by way of a Special Resolution passed by the

Members and such waiver is approved by the Central Government. The payment of managerial remuneration for the said fi nancial

year is in accordance with the Companies Act, 1956 and the various MCA circulars in force at that time.

Pursuant to the provisions of Section 197 read together with Schedule V of the Act, in respect of the payment of managerial

remuneration in case of no profi ts or inadequacy of profi ts as calculated under Section 198 of the Act, the Company may pay such

remuneration upto the ceiling limits as specifi ed in Schedule V in compliance of terms as mentioned in the said schedule and the

Members’ approval by way of a special resolution has been obtained for payment of remuneration for a period not exceeding 3

years. In case of non compliance of any terms of said schedule and / or any remuneration paid/to be paid to the Executive Directors

in excess of the prescribed limits,the same shall be subject to the approval of the Central Government.

Taking into consideration the above and the terms of appointment and remuneration (including minimum remuneration) agreed

with Executive Directors, it is proposed to obtain Members approval by way of Special Resolutions, as stated herein above, to the

payment of minimum remuneration, where the Company has no profi ts or its profi ts are inadequate, to Mr Dhananjay Datar and

Mr S. Muthuswamy for remaining tenure of their appointment and the waiver of the recovery of remuneration paid/payable by the

Company upto March 31, 2014.

The Nomination and Remuneration Committee of the Board and the Board have on 14th,August 2014, respectively accorded their

approvals to the above and in the interest of the Company have recommended the aforesaid resolutions as set out in this Notice

for approval of the Members.

Except the Directors concerned, None of the Directors, Key Managerial Personnel of the Company and their respective relatives is

in any way concerned or interested, in Resolution at Item Nos. 10 and 11 of the Notice respectively.


11

THE STATEMENT CONTAINING ADDITIONAL INFORMATION AS REQUIRED IN SCHEDULE V OF THE ACT.

I. General Information:

(1) Nature of industry:

ABG Shipyard Limited (ABGSL) was incorporated in the year 1985 as Magdalla Shipyard Pvt. Ltd. with the main objective of carrying out shipbuilding and ship repair activities. In a span of more than two decades, ABGSL has achieved the status of one of the largest private sector shipbuilding yard in India having customers across the world. ABGSL’s shipyards are located at Dahej and Surat, in the state of Gujarat.

(2) Date or expected date of commencement of commercial production

ABGSL was incorporated on March 15, 1985. The Company had since commenced its business.

(3) In case of new companies, expected date of commencement of activities as per project approved by fi nancial institutions appearing in the prospectus.

Not applicable.

(4) Financial performance based on given indicators

` in Crores

Particulars FY 2013-14 FY 2012-13 FY 2011-12

Gross Revenue 1603.41 2149.33 2432.69

Profi t (Loss) after tax for the period (199.30) 107.13 180.29

(On standalone basis)

Global shipbuilding industry is impacted very badly due to lack of demand and economy slow down. This resulted in cancellation

of bulk carrier order book in piling up of inventory and Work In Progress in the Company. This has also resulted in paucity

of working capital and caused signifi cant increase in the operating cycle, thereby aggravating the liquidity position. Due to

combination of all the factors mentioned above, the fi nancial position of the company has weakened.

(5) Foreign investments or collaborators, if any. The Company has not entered into any material foreign collaboration and no direct capital investment has been made in the Company. Small Foreign investors are holding shares of the Company mainly on account of secondary market purchases.

II. Information about the appointee:

(1) Background details

Mr. Dhananjay Datar is a member of the Institute of Chartered Accountant of India. He has over 25 years of rich experience in decisive leadership, strategic planning, fi nancial management, operations and corporate fi nance in sectors such as chemicals, textiles, pharmaceuticals, telecom, steel and ship building. He has worked with various prestigious companies viz. Man Industries (India) Limited, Telecil Group Mauritius & South Affrica, Shri Dinesh Mills Limited, Beta Nepthol Limited. His last assignment was with Man Industries (India) Limited as Vice President- Corporate Affairs and Finance

Mr. S. Muthuswamy is a Master of Commerce and MBA with vast experience in corporate world for over 35 years. He is associated with the Company since 1995 and occupying various senior positions in the Organisation before his said appointment.

(2) Past remuneration (last two years): (`in lakhs)

Particulars Mr. Dhananjay Datar Mr. S. Muthuswamy*

FY 2013-14 FY 2012-13 FY 2013-14 FY 2012-13

Salary 23.40 23.40 9.2 -

Perquisites & Allowance 15.54 20.71 6.76 -

Bonus 2.92 2.92 - -

* w.e.f. 13th November, 2013

The perquisites and allowances, as aforesaid, shall include accommodation (furnished or otherwise) and / 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 modifi cation(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. Includes leave encashment\

3) Recognition or awards:

Under the leadership and guidance of the Executive Directors, the Company was awarded by Certifi cate of the “Highly Commended” Shipyard of the Year, at the prestigious Lloyd’s List Middle East and Indian Subcontinent Awards 2013.


12

(4) Job profi le and his suitability

Taking into consideration their above said qualifi cations and varied experience, the Board has bestowed the above responsibilities to Mr. Dhananjay Datar and Mr. S. Muthuswamy.

(5) Remuneration proposed

Mr. Dhananjay Datar and Mr. S. Muthuswamy shall be entitled to the remunerations including Salary, Perquisites, Allowances and Bonus as per the details mentioned in the resolutions.

(6) Comparative remuneration profi le with respect to industry, size of the company, profi le of the position and person (in case of expatriates the relevant details would be with respect to the country of his origin).

The remuneration of the Executive Directors were commensurate with remuneration of expatriates appointed at CEO/ED levels of similar sized multinationals. The remuneration of the EDs is commensurate with remuneration of Board level positions in similar sized domestic companies, taking into consideration the responsibilities shouldered by them.

(7) Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any

Besides the remuneration paid/payable to Mr. Dhannajay Datar / Mr. S. Muthuswamy, they do not have any other pecuniary relationship with the Company or with the managerial personnel.

III. Other information:

(1) Reasons of loss or inadequate profi ts:

The Performance of the Company has been adversely impacted due to the following reasons

1) The global crisis has impacted the shipping industry severely due to fall in commodity demand & prices and subsequent fall in cargo demand. The fall in freight rates has resulted in fall/cancellation in new ship/vessel orders impacting the company`s business;

2) Further, due to global economic downturn, the fi nances available to ship owners have also dried up. Due to global liquidity crunch and impact on shipping industry, banks have reduced fi nancing to the ship building business, which results in to higher borrowing cost;

3) Lower demand of vessels resulted the Dahej Shipyard, which was built primarily for meeting the demand for Rigs and large size bulkers, has very low capacity utilization;

4) Ship Building Subsidy scheme introduced by the Government of India to survive Indian shipbuilding industry has come to an end for orders placed before August 2007, thereafter Govt. has not introduced any support to the industry, which adversely affected to competitive advantage of the Company to Asian Shipyard protected by their Government.

(2) Steps taken or proposed to be taken for improvement:

During the year under review, your Company had taken a decision to undertake a debt restructuring exercise under the CDR mechanism that is governed by the Corporate Debt Restructuring Scheme issued by Reserve Bank of India dated 27th August, 2008 and the Corporate Debt Restructuring Guidelines formulated thereunder in consultation with its senior secured lenders. Pursuant thereto, the CDR Empowered Group at the meeting held on 24th March 2014 has approved a restructuring package in terms of which the existing fi nancial assistance as mentioned in the LOA (the “LOA”) is restructured as set out in the letter of approval dated 27th March 2014 issued by the Corporate Debt Restructuring Cell to the Company and the CDR Lenders (the “CDR Lenders”) and in this regard the Company has entered into a Master Restructuring Agreement with the CDR Lenders (the “Master Restructuring Agreement”) as on 28th March, 2014 as amended / modifi ed from time to time.

The key features of the CDR Package are elaborated at Note No 4D under Notes to Financial Statements forming part of this Annual Report.

(3) Expected increase in productivity and profi ts in measurable terms.

With the help of debt restructuring mechanism and positive economy and industry outlook, it is expected that the

Company will overcome from such fi nancial positions. .

Details of the Directors seeking Appointment/ Re-appointment in the 29th Annual General Meeting

Name of

Director

Mr.

Rishi Agarwal

Mr.

Ashwani Kumar

Mr.

Ashok Chitnis

Mr.

Syed Abdi

Mr.

S. Muthuswamy

Mr.

Dhananjay Datar

Date of Birth 03/09/1966 15/08/1948 15/02/1943 10/01/1957 24/03/1956 22/12/1962

Date of

Appointment

/ Re-

appointment

27/09/2013 27/09/2012 27/09/2013 09/01/2014 13/11/2013 29/07/2011


13

Qualifi cation MBA

(Finance)

from Purdue

University,

USA.

Post Graduate

in Political

Science from

Allahabad

University

Mr. Chitnis is a Marine

Engineer and holds a

certifi cate from the

Marine Engineering

College of the

Directorate of Marine

Engineering Training

as well as a First

Class Competency

Certifi cate (Steam

and Motor) from the

Ministry of Transport,

Government

DMET (Marine

Eng ineer ing

Research In-

stitute), Chief

Engineer (Au-

gust 1983),

from Ministry

of transport,

India.

Master of Com-

merce (M’COM)

and Masters of

Business Admin-

istration (MBA)

He is a Chartered

A c c o u n t a n t ,

qualifi ed in year

1989 and Fellow

Member of

Institute of

C h a r t e r e d

Accountants of

India & Commerce

Graduate from

University of Indor.

Experience

a n d

E x p e r t i s e

in Specifi c

f u n c t i o n a l

area

Mr. Rishi

A g a r w a l

has over 28

years of rich

experience in

Shipbuilding,

S h i p

R e p a i r i n g

and Shipping

Industry.

Mr. Ashwani

Kumar Joined

Indian Revenue

Service in the

year November

1973, During the

tenure, worked

in various

c a p a c i t i e s

and at various

places like,

Kolkata, Jaipur,

Bhopal, Jodhpur,

Mumbai and

retired as Chief

Commiss ioner

of Income Tax

from Chennai in

the year August,

2008.

Mr. Ashok Chitnis

has over Forty years

of experience in the

maritime sector. He

is a Fellow of the

Institute of Marine

Engineers (India)

from its inception in

1980 and has served

a full two year term

as the President

of the Institute. He

has worked with

the Scindia Steam

Navigation Company

Ltd., and has held

the position of Chief

Engineer for three

years during his

tenure. Thereafter,

he joined the Indian

Register of Shipping

(IRS) as a fi eld

surveyor in 1976.

He was in charge

of the IRS Mumbai

fi eld offi ce for over

four years. He was

Chief Surveyor, IRS

for over 9 years until

his superannuation

in 2003. As Chief

Surveyor, he was in

charge of the Indian

Register Quality

Systems.

He is a qualifi ed and

experienced lead

auditor for QMS

Audits with respect to

ISO 9000 standards

and has conducted

a large number of

audits at companies

in various industrial

sectors.

Mr. Syed Abdi

has 35 years

of Manage-

ment ex-

perience in

Shipbuilding

Industry. Mr.

Syed Abdi

worked in se-

nior capacities

with various

Ship build-

ing and Ship-

ping Industry

in India and

abroad. His

last assign-

ment was Dry-

dock World

– Dubai as

an Executive

Director of the

Company.

Mr. S. Muth-

uswamy has

vast experience

in corporate

world for over

35 years. He is

associated with

the Company

and ABG Group

since 1995 in

various capaci-

ties and was

designated as

Vice President

(Finance) of the

Company at the

time of said ap-

pointment.

He has over

25 years of

rich experience

in decisive

l e a d e r s h i p ,

s t r a t e g i c

planning, fi nancial

m a n a g e m e n t ,

operations and

corporate fi nance

in sectors such

as chemicals,

t e x t i l e s ,

pharmaceuticals,

telecom, steel

and ship building.

He has worked

with various

p r e s t i g i o u s

companies viz.

Man Industries

(India) Limited,

Telecil Group

Mauritius &

South Affrica,

Shri Dinesh

Mills Limited,

Beta Nepthol

Limited. His

last assignment

was with Man

Industries (India)

Limited as Vice

P r e s i d e n t -

Corporate Affairs

and Finance


14

Directorship

held in other

Companies

• ABG Inter-

national Pri-

vate Ltd.

• ABG Ce-

ment Ltd.

• ABG Energy

( G u j a r a t )

Ltd.

• Indian Reg-

ister of Ship-

ping.

• Western Indian

Shipyard Lim-

ited

• J Kumar Infra-

projects Limited

Western Indian

Shipyard Limited

NIL • ABG Capital

Limited

• ABG Interna-

tional Private

Ltd.

• Oblique Trad-

ing Private Ltd.

• Jarrow Fi-

nance & Trad-

ing Private Ltd.

• Banal Invest-

ment & Trading

Private Ltd.

• ABG Foods

Private Ltd.

• ABG Acqua-

farm Private

Ltd..

• G.C. Property

Ltd.

• ABG Motors

Ltd.

• Somerset Es-

tate Private

Ltd.

• Eleventh Land

D e v e l o p e r s

Private Ltd.

• Tirupati Land-

mark Private

Ltd.

• Gold Croft

Property Pri-

vate Ltd.

• ABG Resourc-

es Private Ltd.

• ABG Enterpris-

es & Trading

Private Ltd.

• ABG Cement

Ltd.

• Onaway Indus-

tries Ltd.

• ABG Energy Hi-

machal Pradesh

Ltd.

• ABG Energy

(Gujarat) Ltd.

• ABG Energy

(MP) Ltd.

• Essar Cement

Ltd.

• ABG Anchor Ma-

rine (India) Pri-

vate Ltd

• Man Industries

(India) Ltd.

Commit tee

P o s i t i o n s

held in other

Companies

Western India

Shipyard Ltd.

• Audit Committee

NIL NIL NIL ABG Cement Ltd.

• Audit Committee

• Remunera t ion

Committee

No. of Shares

held in ABG

S h i p y a r d

Limited

281250 NIL NIL NIL NIL NIL


15

DIRECTORS’ REPORT

TO THE MEMBERS,

The Board of Directors of your Company are pleased to present the Twenty Ninth Annual Report together with the Audited Accounts

for the fi nancial year ended 31st March, 2014.

1. FINANCIAL PERFORMANCE

Financial performance of the Company for Financial Year 2013-14 is summarised below:

( ` in crores)

Particulars 2013-14 2012-13

Sales and Other Income 1,603.41 2119.35

Profi t before Interest, Depreciation & Tax 338.84 565.29

Less: Interest (Net) 543.23 287.88

Profi t before Depreciation & Tax (204.39) 277.41

Less: Depreciation 91.78 103.71

Profi t before Tax (296.17) 173.70

Less: Provisions for Taxation (96.87) 66.57

Net Profi t after Tax (199.30) 107.13

Balance brought forward from previous year 495.05 488.92

Profi t available for appropriations 295.75 596.05

Appropriations

Transfer to Debenture Redemption Reserve - 91.00

Transfer to General Reserve - 10.00

Balance carried to Balance Sheet 295.75 495.05

* Figures regrouped wherever necessary.

2. OPERATIONS REVIEW

On a standalone basis, the Company has recorded total revenue of Rs 1,603.41 Crores and EBIDITA of Rs 338.84 Crores as

against Rs 2,149.33 Crores and Rs 565.29 Crores respectively in the previous year. Net loss after tax is Rs 199.30 Crores as

compared to net profi t after tax of Rs 107.13 Crores in the previous year. The decrease in revenue and increase in fi nance cost

are reasons affecting the performance of the Company.

3. BUSINESS OPERATIONS

Global shipbuilding industry is impacted very badly due to lack of demand and economy slow down. This lead to cancellation of

bulk carrier order book with piling up of inventory and Work In Progress in the Company. This has resulted in paucity of working

capital and caused signifi cant increase in the operating cycle, thereby aggravating the liquidity position. Due to combination of

all the factors mentioned above, the fi nancial position of the company has weakened.

During the year under review, your Company had taken a decision to undertake a debt restructuring exercise under the

CDR mechanism that is governed by the Corporate Debt Restructuring Scheme issued by Reserve Bank of India dated

27th August, 2008 and the Corporate Debt Restructuring Guidelines formulated thereunder in consultation with its senior

secured lenders. Pursuant thereto, the CDR Empowered Group at the meeting held on 24th March 2014 has approved a

restructuring package in terms of which the existing fi nancial assistance as mentioned in the LOA (the “LOA”) is restructured

as set out in the letter of approval dated 27th March 2014 issued by the Corporate Debt Restructuring Cell to the Company and

the CDR Lenders (the “CDR Lenders”) and in this regard the Company has entered into a Master Restructuring Agreement

with the CDR Lenders (the “Master Restructuring Agreement”) as on 28th March, 2014 as amended / modifi ed from time to

time.

The salient features of the CDR Package are as follows

a) Cut-off date is 01st August, 2013;

b) Total Debt rescheduled has funded interest ranging from 1 year 6 months to 3 years 7 months and loan is payable over

a period of 10 years.

c) Priority loan sanctioned for meeting the immediate operational and capital requirement of the Company;


16

d) Reduction in the rate of interest to the Bank rate of the Monitering Institution plus spread of 1% (one percent) per annum

as may be reset from time to time in accordance with the terms of CDR LOA.

The key features of the CDR Package are elaborated at Note No 4D under Notes to Financial Statements forming part of this

Annual Report.

Shipbuilding facilities of your Company are located at Surat and Dahej in Gujarat. Since inception, your Company has

successfully built and delivered One Hundred and Sixty One (161) 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 manufacturing process in the Shipyards are in line with world class standards and the Yards have been certifi ed by

DNV for ISO 9001:2008 (for Quality Management Standards), by IRS for ISO 14001:2004 (for Environment Management

Systems) and OHSAS 18001:2007 (for Occupational Health & Safety Management Systems).

4. 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.

5. AWARDS AND ACCOLADES

F “Highly Commended” Shipyard of the Year Certifi cate at the prestigious Lloyd’s List Middle East and Indian Subcontinent

Awards 2013

F “Certifi cate of Excellence – Star Performer Award 2012-13 at the 45th EEPC India National Awards for Export Excellence

2012-13 in the Product Group - Miscellaneous Transport Equipment and Parts, Large Enterprise.

F Recognition as Finalist for The Ship Repair/Shipyard Award in the Seatrade Middle East & Indian Subcontinent Awards

2013

6. DIVIDEND

In view of the above results, your Directors do not recommend any dividend for the year under review.

7. SUBSIDIARIES

At the end of the fi nancial year 2013-14, 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.

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 Profi t and Loss and other documents of the subsidiary

companies are not attached with the Balance Sheet of the Company. The 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 offi ce of the Company

and of its subsidiary Companies for inspection by any member.

In accordance with the Accounting Standard AS-21 issued by The Institute of Chartered Accountants of India (ICAI) on

consolidated Financial Statements, the consolidated fi nancial statements are forming part of this Annual Report. The

Consolidated Financial Statements have been prepared in line with the provisions of Clause 32 of the Listing Agreement

entered with the stock exchanges.

8. DIRECTORS

In terms of the Section 152 and 160 of the Companies Act, 2013 read with Article 190 of the Articles of Association of

the Company, Mr. Rishi Agarwal is liable to retire by rotation at the ensuing Annual General Meeting and is eligible for


17

re-appointment. Your Directors recommend the re-appointment of Mr. Rishi Agarwal (DIN 00162615) as Director. Upon his

re-appointment as a director, Mr. Rishi Agrawal shall continue to hold offi ce as the Non-Executive Chairman of the Company.

During the year under review, your Company has appointed Mr. S. Muthuswamy (DIN 01062192) and Mr. Syed Abdi (DIN

06754340) as Additional Director and designated as Executive Director w.e.f. 13th November, 2013 and as Managing Director

and CEO w.e.f. 9th January, 2014 respectively. In terms of Section 161 of the Companies Act, 2013, Mr. S. Muthuswamy (DIN

01062192) and Mr. Syed Abdi (DIN 06754340) holds offi ce only upto the date of the ensuing Annual General Meeting. The

Company has received requisite notice in writing from members proposing their name for the offi ce of the Director.

During the year Mr. Shahzaad Dalal (DIN 00011375) – Independent Director, has resigned from the Board due to his relocation

abroad w.e.f. 13th November, 2013 and Major Arun Phatak (DIN 00019062) – Executive Director of the Company has resigned

from the Company w.e.f. 31st December, 2013, due to ill health and old age.

ICICI Bank Ltd. has withdrawn the nomination of Mr. Loknath Mishra (DIN 01030405) from the Board w.e.f. 14th August, 2013

and IDBI Bank Ltd has nominated Mr. Aloke Sengupta (DIN 00064934) on the Board of the Company on 14th August, 2013.

Further, Export Import Bank of India (EXIM) has nominated Mr. David Rasquinha (DIN 01172654) on the Board on 30th May,

2014.

As per section 149 of the Companies Act, 2013 (Act), which came into effect from 1st April, 2014, every listed public company

is required to have at least one-third of the total number of directors as Independent Directors. These Independent Directors

are not liable to retire by rotation. Accordingly, it is proposed to appoint Mr. Ashok Chitnis (DIN 00793751) and Mr. Ashwani

Kumar (DIN 02863328) as Independent Directors, in accordance with the provisions of section 149 of the Act, to hold offi ce as

per their tenure of appointment mentioned in the Notice of the Annual General Meeting of the Company.

The Company has received declarations from the said Independent Directors of the Company confi rming that they meet the

criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under the

said Clause 49. In accordance with the provisions of Section 149(4) and proviso to Section 152(5) of the Companies Act, 2013,

these Directors are being appointed as Independent Directors to hold offi ce as per their tenure of appointment mentioned in

the Notice of the forthcoming AGM of the Company.

A brief resume of the Director retiring by rotation at the ensuing AGM, nature of expertise in specifi c 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 disqualifi ed as per the provisions of Section 164 of the Companies Act, 2013, to be re-appointed as

directors of your Company.

9. AUDITORS

M/s. Nisar & Kumar, Chartered Accountants, Statutory Auditors of the Company hold offi ce till the conclusion of the ensuing

Annual General Meeting is proposed to be re-appointed as joint Statutory Auditors of the Company from the conclusion of

ensuing Annual General Meeting till the conclusion of 32nd Annual General Meeting subject to ratifi cation by members at every

Annnual General Meeting of the Company.

M/s. GMJ and Co. Chartered Accountants is proposed to be appointed as joint Statutory Auditors of the Company from the

conclusion of ensuing Annual General Meeting till the conclusion of next Annual General Meeting of the Company.

Joint Statutory Auditors have consented for their re-appointment in terms of the Section 139 of the Companies Act 2013 and

also provided a Certifi cate confi rming the satisfaction of conditions prescribed under the Companies (Audit and Auditors)

Rules, 2014 and Section 141 of the Companies Act, 2013.

Your Directors on the recommendation of the Audit Committee propose the appointment of Statutory Auditors at such

remuneration to be decided by the Board of Directors in consultation with the said Auditors.

10. CAPITAL

During the period under review, the Authorised Capital of the Company have been increased to ` 170,00,00,00,000/-

(` Seventeen Thousand Crores Only) divided into 15,00,00,00,000 (One Thousand Five Hundred Crore) equity shares of

`10/- (` Ten Only) each aggregating to ` 150,00,00,00,000/- (` Fifteen Thousand Crores Only) and 200,00,00,000 (Two

Hundred Crores) Compulsory Convertible Preference Shares of `10/- (` Ten Only) each aggregating to ` 20,00,00,00,000/-

(` Two Thousand Crores Only).


18

11. ISSUE OF SECURITIES

In order to strengthen the Balance Sheet of the Company by repayment of its debt and for general corporate purposes, 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. (` One Thousand Crores).

Accordingly the enabling resolution mentioned in the Notice of meeting is commended for our approval.

12. DEPOSITS

The Company has not accepted deposits by way of invitation to the public and therefore, provisions of Section 73 of the Companies Act, 2013 are not applicable to the Company.

13. 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”.

14. CORPORATE GOVERNANCE

ABG believes in ethical conduct of business and understands that 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.

A detailed report on compliance of Corporate Governance in terms of Clause 49 of the Listing Agreement is presented in a separate section forming part of this Report as “Annexure B”. The Auditors’ certifi cate on compliance with Corporate Governance by the Company is attached to the report on Corporate Governance.

15. DIRECTORS’ RESPONSBILITY STATEMENT

As stipulated in Section 217(2AA) of the Companies Act, 1956, your Directors confi rm 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 fi nancial year and of the profi t or loss of the company for that period;

iii. the Directors have taken proper and suffi cient 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.

16. 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 Offi ce of the Company.

17. INDUSTRIAL RELATIONS

Your Company maintained healthy, cordial and harmonious industrial relations at all levels at the offi ces and yards of the Company throughout the year.

18. CORPORATE SOCIAL RELATIONS

In compliance with the requirement of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee.

Details on various initiatives in this regard are described in the Report of Corporate Governance and forms part of this report.

19. APPRECIATION

Your Directors wish to acknowledge the understanding, support and services of the employees at all levels which have largely

contributed to effi cient operations and management of the Company during the year under review.


19

Your Directors also take this opportunity to express their deep sense of gratitude to all the Customers, Suppliers, Bankers,

Financial Institutions, Trustees, Government Authorities/Offi cials, Business Associates, Shareholders and Debenture Holders

of the Company for their continuous guidance and support to the Company and their continued confi dence in the management

of the Company.

For and on behalf of the Board

Place: Mumbai Syed Abdi Dhananjay Datar

Date: 14th August, 2014 Managing Director & CEO Executive Director


20

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:

• 120 Nos. Electronic Chock base 1 x 28 W tube light installed in Staff colony at Bharuch

• 3000 KVAR capacitor panel Maintained to keep power factor 0.998 from 0.97

• Installed 02 Nos. Elevator VFD based in staff colony

At Surat Yard

• Energy Saver System maintained for 400 No’s installation in Welding Machines.

• 200 Nos. Electronic Chock base 1 x 28 W tube light is being maintained in Labor Colony At Surat Yard.

• 2000 KVAR capacitor panel Maintained for to Keep PF AVG 0.998 to 0.999

• ` 3.0 Lac saving done in monthly electricity bill by revising electrical power demand with state electricity board

(DGVCL).

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy;

At Dahej Yard:

• Auto cut off for welding machine and energy saver for welding machines.

• Installation of Electronic Choke based 1x28 watts tube light fi ttings.

At Surat Yard:

• Auto cut off for welding machine and energy saver for 75 welding machines.

• Additional installation of VFD Drive In mobile Air Compressor.

• Additional Installation of inverter based Welding machine.

• Additional 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:

• 20% power saving on welding machine

• 15% power saving on lighting for staff colony

At Surat Yard

• 20% power saving on welding machine

• 25% power saving on lighting for worker colony.

• 18% power saving on Crane operation

• 20% (` 3.0 Lac Per month) saving done in monthly electricity bill by revising electrical power demand with state

electricity board (DGVCL).

B. Technology absorption:

Research & Development (R&D)

a) Specifi c areas in which R&D carried out by the Company

At Dahej Yard:

• Ship repair facility up to 2000 DWT vessel through the slipway developed and implemented.

• 500 m³/ hour capacity portable cleaning system developed for slipway cleaning.

At Surat Yard

• 50 Nos. Co2 welding machine being continuously used in hull erection purpose with ceramic backing strips in place of

arc welding for improving welding quality & more productivity.


21

• 4 Nos. Auto welder unit being continuously used with Co2 welding machine at ABG-II .

• At ABG-I Liquid Oxygen storage tank installed and distribution of Oxygen Gas for cutting purposes through pipeline

installed at new users 300 points located at different places which was earlier supplied in 6 M2 cylinders in huge quantity

of cylinders.

• Distribution of potable water for employees at ABG – I is now arranged through underground pipeline in whole yard

area and labour colony. This water was earlier brought from some distant places through tankers now we have taken

connection from GWSSB (Gujarat Water Supply Sewage Board) who supplies potable water at Govt. Rates.

(b) Benefi ts derived as a result of the above R&D

• Cost Saving.

• Safety.

• More Productivity.

• Speedy Production.

(c) Future plan of action

• Basic and detail engineering of cadet training ship for India Navy.

• Development of painting system for Mega blocks.

• Procurement and installation of energy saving device on electrical Equipments.

• Modifi cations on old panel line to have common welding wire to reduce inventory levels.

• Installation of panel transfer system between two panel lines to improve productivity levels.

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, adoption and innovation

(a) Efforts, in brief made towards technology absorption, adaption and innovation

• Continuous Usage of scaffolding –staging system for hull outfi t & painting for faster & safe production

• Usage of telescopic manlifter to reduce time.

(b) Benefi ts derived as a result of the above efforts, e.g. product improvement, cost reduction, product development,

import substitution, etc.

• The aforesaid mentioned technology gives faster output & safe working environment at heighted locations.

In case of imported technology (imported during the last 5 years reckoned from beginning of the fi nancial year

Technology imported

Years of import

Has technology been fully absorbed?

If not fully absorbed, areas where this not taken place, reasons therefore and future plans of

action

NIL

NA

NA

NA

C. Foreign Exchange Earnings and Outgo

(` in crs.)

2013-14 2012-13

Earnings 596.69 643.95

Outgo 534.12 1400.87


22

Annexure – B

CORPORATE GOVERNANCE REPORT

{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)}

Corporate Governance is the combination of voluntary practices and compliance with laws and regulations leading to effective

control and management of the organisation. Good Corporate Governance leads to long-term shareholder value and enhances

interests of all stakeholders. It brings into focus the fi duciary and trusteeship role of the Board to align and direct the actions of the

organisation towards creating wealth and 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 good governing standards for the benefi t of

its stakeholders. ABG 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.

1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE

ABG‘s corporate vision is to ensure a sustainable business that thrives to maintain the market leadership position and

positively enhances the value of its stakeholders. To achieve this, your Company has undertaken systematic and planned

efforts considering core values and business ethics of corporate environment.

Your Company consistently emphasises its commitment towards creation, monitoring and continuous updation of a

healthy corporate governance network that will defi ne and drive organisation performance as per its cherished values and

commitments to every stakeholder.

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.

2. COMPOSITION OF BOARD AND PARTICULARS OF DIRECTORS

(i) Composition of the Board

The Board of Directors of your company as at 31st March 2014 comprises of Seven (7) Directors which includes One (1)

Non-executive Chairman Mr. Rishi Agarwal, One (1) Managing Director Mr. Syed Abdi, Two (2) executive directors viz.

Mr. Dhananjay Datar and Mr. S. Muthuswamy, Two (2) Independent Directors viz. Mr. Ashok R. Chitnis and Mr. Ashwani

Kumar and One (1) Nominee Director Mr. Aloke Sengupta (Nominated by IDBI Bank Ltd.).

Non-Executive Chairman, Mr. Rishi Agarwal heads the Board, Mr. Syed Abdi – Managing Director & CEO, Mr.

Dhananjay Datar and Mr. S. Muthuswamy, Executive Directors 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, your Company has appointed Mr. S. Muthuswamy as Executive Director w.e.f. 13th

November, 2013 and Mr. Syed Abdi – Managing Director and CEO w.e.f. 9th January 2014. Also during the year Mr.

Shahzaad Dalal – Independent Director has resigned from the Company due to his relocation abroad w.e.f. 13th

November, 2013 and Major Arun Phatak – Executive Director of the Company has resigned from the company w.e.f.

31st December, 2013, due to ill health and old age. Further, ICICI Bank Ltd has withdrawn its nomination of Mr. Loknath

Mishra vide its letter dated 15th July 2013 whereas IDBI Bank Ltd has nominated Mr. Aloke Sengupta on the Board of

the Company as on 14th August 2013.

The details of the Directors on the Board, their attendance at Board Meeting during the year and at the last Annual

General Meeting, number of Directorships and Committee Memberships of the directors in other companies as on 31st

March, 2014, are set out below.


23

Name Category* AttendanceNumber of Directorship, Committee

membership and Chairmanship#

Board

Meeting

Last AGM Directorship Committee

Membership

Committee

Chairmanship

Mr. Rishi Agarwal – Chairman NI-NE 1 No 3 1 -

Mr. Dhananjay Datar, Executive

Director

NI-E 4 No 8 1 1

Mr. Ashok R. Chitnis I-NE 3 Yes 1 2 -

Mr. Ashwani Kumar I-NE 3 Yes 2 5 3

Mr. Aloke Sengupta – Nominee

Director (since 14th August, 2013

I-NE 1 NA - -

Mr. S. Muthuswamy – Executive

Director (since 13th November, 2013)

NI-E 2 NA 2 3 -

Mr. Syed Abdi – Managing Director

and CEO (since 9th January, 2014)

NI-E 1 NA - 4 1

Mr. Shahzaad Dalal (upto 13th

November, 2013)

I-NE - No - - -

Mr. Loknath Mishra (upto 15th July,

2013)

I-NE - No - - -

Major Arun Phatak –Executive

Director (upto 31st December, 2013)

NI-E 3 Yes - - -

*(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 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, 2014 have

been made.

(ii) Board Meetings held and details thereof

During the fi nancial year 2013-14, Board of Directors met four times as per the details mentioned below, the gap between

two successive Board Meetings was not more than one hundred and twenty days.

1 30th May, 2013

2 14th August, 2013

3 13th November, 2013

4 14th February, 2014

Agenda along with all information as per the Annexure IA of the Clause 49, including statutory information, relevant to

the matters to be discussed is always sent to the Directors, well in advance, Where it is not practicable to attach any

document to agenda, the same is tabled before the meeting with specifi c reference in the agenda.

The Agenda specifying the matters to be discussed at the Board Meetings and Committee meetings is drafted in

consultation with the Chairman of the Company. The Managing Director/Executive Directors/Chief Finance Offi cer briefs

the Board at every Meeting on the overall performance of the Company. The Board of the Company reviews all the major

decisions of the Company.

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) Profi le of Directors seeking appointment / re-appointment in the 29th Annual General Meeting: Detailed profi le is

appended in the Notice of Annual General Meeting forming part of the Annual Report.


24

3. COMMITTEES OF THE BOARD

As on 31st March 2014, your Company has four Committees of the Board, namely; Audit Committee, Nomination-cum-

Remuneration Committee, Share Transfer and Investors Grievance Committee and Finance & Operation Committee.

A. AUDIT COMMITTEE

Audit Committee is constituted in compliance of the provisions of Clause 49 of the Listing Agreements with the Stock

Exchanges read with Section 292A of the erstwhile Companies Act, 1956 and Section 177 of the Companies Act, 2013

(i) Terms of reference

Ø Oversight of the company’s fi nancial reporting process and the disclosure of its fi nancial information to

ensure that the fi nancial statement is correct, suffi cient and credible;

Ø Recommendation for appointment, remuneration and terms of appointment of auditors of the company;

Ø Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

Ø Reviewing, with the management, the annual fi nancial statements and auditor’s report thereon before

submission to the board for approval, with particular reference to:

• Matters required to be included in the Director’s Responsibility Statement, to be included in the Board’s

report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013

• Changes, if any, in accounting policies and practices and reasons for the same.

• Major accounting entries involving estimates based on the exercise of judgment by management.

• Signifi cant adjustments made in the fi nancial statements arising out of audit fi ndings.

• Compliance with listing and other legal requirements relating to fi nancial statements.

• Disclosure of any related party transactions.

• Qualifi cations in the draft audit report.

Ø Reviewing, with the management, the quarterly fi nancial statements before submission to the board for

approval;

Ø Reviewing with the management, the statement of uses / application of funds raised through an issue

(public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than

those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency

monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations

to the Board to take up steps in this matter;

Ø Review and monitor the auditor’s independence and performance, and effectiveness of audit process;

Ø Approval or any subsequent modifi cation of transactions of the company with related parties;

Ø Scrutiny of inter-corporate loans and investments;

Ø Valuation of undertakings or assets of the company, wherever it is necessary;

Ø Evaluation of internal fi nancial controls and risk management systems;

Ø Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal

control systems;

Ø Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit

department, staffi ng and seniority of the offi cial heading the department, reporting structure coverage and

frequency of internal audit;

Ø Discussion with internal auditors of any signifi cant fi ndings and follow up there on;

Ø Reviewing the fi ndings 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;

Ø Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well

as post-audit discussion to ascertain any area of concern;

Ø To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,

shareholders (in case of non-payment of declared dividends) and creditors;

Ø To review the functioning of the Whistle Blower mechanism/Vigil Mechanism and appoint Whistle Offi cer;

Ø Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the


25

fi nance function or discharging that function) after assessing the qualifi cations, experience and background,

etc. of the candidate;

Ø Carrying out any other function as mentioned in the terms of reference of the Audit Committee.

(ii) Composition, Name of Members, Details of the Meetings and Attendance

Details of the Committee members, number of meetings attended by them are tabled below:

Name of the Director Status No. of Meeting Attended

Mr. Ashwani Kumar – Chairman I – NE 3

Mr. Ashok R. Chitnis I – NE 3

Major Arun Phatak* NI – E 3

Mr. Syed Abdi* NI – E 1

(NI – Non-Independent, I – Independent, NE – Non-Executive, E – Executive)

*During the Financial Year, Major Arun Phatak was ceased to be member of Committee due to his resignation

from the Board w.e.f 31st December, 2013 and Mr. Syed Abdi was appointed as a member of the Committee at the

meeting of Board held on 14th February, 2014.

The Board has approved and adopted the revised terms of reference of Audit Committee as per requirement of the

Companies Act, 2013 and SEBI Circular dated 17th April, 2014 for amendment to Equity Listing Agreement (which

is effective from 1st October, 2014) ,at their meeting held on 30th May, 2014.

The Audit Committee meetings are usually held at the Corporate Offi ce of the Company. 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 Company Secretary acts as

Secretary of the Audit Committee.

Four Audit Committee meetings were held during the fi nancial year ended 31st March, 2014, with requisite quorum

on the dates tabled below;

1 30th May, 2013

2 14th August, 2013


4 14th February, 2014

B. NOMINATION AND REMUNERATION COMMITTEE#

(i) Composition, name of members, meetings and attendance

Details of the Committee members as on 31st March 2014 are tabled below#:

Name of the Director Status

Mr. Ashok R. Chitnis I – NE

Mr. Ashwani Kumar I – NE

Mr. S. Muthuswamy NI – E

* The Board of Directors have appointed Mr. Ashwani Kumar –Independent Director, as a member of the Committee

at their meeting held on 30th May, 2013 and Mr, S. Muthuswamy was appointed as a member of Committee by the

Board at their meeting held on 13th November, 2013 in place of Mr. Shahzaad Dalal, who has resigned from the

Board w.e.f. 13th November, 2013.

#The Board of Directors at their meeting held on 30th May, 2014 has changed Nomenclature of the Committee from

the Nomination – cum – Remuneration Committee to Nomination and Remuneration Committee, in compliance

of the Section 178 of the Companies Act, 2013 and SEBI Circular dated 17th April, 2014 for amendment to Equity

Listing Agreement (which is effective from 1st October, 2014) ,and has appointed Mr. Rishi Agarwal –Non Executive

Director of the Company in place of Mr. S. Muthuswamy.

Compensation Committee of the Board was merged into the Nomination – cum – Remuneration Committee w.e.f.

30th May 2013.


26

The Nomination and Remuneration Committee met three times during the fi nancial year 2013-14, as on the dates

tabled below:

1 30th May, 2013


3 6th January, 2014

(ii) Terms of Reference:

Ø Formulation of the criteria for determining qualifi cations, positive attributes and independence of a director

and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel

and other employees;

Ø Formulation of criteria for evaluation of Independent Directors and the Board;

Ø Devising a policy on Board diversity;

Ø Identifying persons who are qualifi ed to become directors and who may be appointed in senior management

in accordance with the criteria laid down, and recommend to the Board their appointment and removal.

Ø Recommend to the board sitting fees payable to the Directors for attending Board and Audit Committee

Meeting.

*The Board has approved and adopted the revised terms of reference of Nomination and Remuneration

Committee as per section 178 of the Companies Act, 2013 and SEBI Circular dated 17th April, 2014 for

amendment to Equity Listing Agreement (which is effective from 1st October, 2014) at their meeting held on

30th May 2014.

(iii) Remuneration Policy

The Company pays remuneration by way of salary, perquisites and allowances to its Managing Director/Executive

Directors. Annual increments, if any, are decided by the Committee within the salary scale approved by the

members and within the limits stipulated by the applicable laws.

The Company pays Sitting Fee per meeting to its Independent Directors for attending meetings of the Board and

Audit Committee. Other than the above and as shareholders, Non-Executive Directors have no other pecuniary

relationships or transactions with the Company.

(iv) Details of Remuneration paid for the year 2013-14

Name of the Director Sitting Fees Salaries & Perquisites Commission Stock Option

Mr. Rishi Agarwal ----- ----- ----- -----

Mr. Dhananjay Datar ----- ` 41,86,500/- ----- -----

Mr. Shahzaad Dalal1 ----- ----- ----- -----

Mr. Ashok Chitnis ` 66,000/- ----- ----- -----

Major Arun Phatak2 ----- ` 45,88,200/- ----- -----

Mr. Ashwani Kumar ` 77,000/- ----- ----- -----

Mr. Girish Nayak3 ----- ----- ----- -----

Mr. Loknath Mishra4 ` 11,000/- ----- ----- -----

Mr. Alok Sengupta5 ` 11,000/- ----- ----- -----

Mr. S. Muthuswamy6 ----- ` 15,95,740/- ----- -----

Mr. Syed Abdi7 ----- ` 27,55,645/- ----- -----

1Upto 13th November, 2013, 2Since 31st December, 2013, 3upto 30th May, 2013, 4Upto 14th August, 2013

5Since 14th August, 2013, 6Since 13th November, 2014, 7Since 9th January, 2014.

In view of the losses incurred by the Company for the year ended 31st March, 2014, the remuneration payable

to Managing Director and Executive Directors is subject to the approval of the Central Government under the

provisions of the Companies Act, 2013.


27

(v) Details of Shares/ convertible instruments of the Company held by the Directors as on 31st March 2014, are

as below:

Name No. of Shares % of Share capital

Mr. Rishi Agarwal 2,81,250 0.56

C. SHARE TRANSFER AND INVESTORS GRIEVANCE#

(i) Composition

The Composition of the Share Transfer and Investors Grievance as on 31st March 2014, is given below:

Name of the Members Status

Mr. Ashwani Kumar - Chairman I – NE

Mr. S. Muthuswamy NI - E

Mr. Syed Abdi NI - E

(NI – Non-Independent, I – Independent, NE – Non-Executive, E – Executive)

* The Board of Directors has appointed Mr. Ashwani Kumar –Independent Director, as a member of the Committee

at their meeting held on 30th May, 2013. Mr. Shahzaad Dalal ceased to be a member of the Committee due to his

resignation from the Board w.e.f. 13th November, 2013 and Mr. S. Muthuswamy was appointed as a member of the

Committee by the Board of Directors at their meeting held on 13th November, 2013. The Board of Directors has

appointed Mr. Syed Abdi in place of Mr. Rishi Agarwal at their meeting held on 14th February, 2014.

#The Committee has been renamed as Stakeholder Relationship Committee, w.e.f. 30th May, 2014.

The Committee has not met during the fi nancial year 2013-14.

The Committee has Authorized Compliance Offi cer of the Company to look after the Investor Grievances and

Share transfer requests

(ii) Terms of reference

The terms of reference of the Share Transfer and investors Grievance cover the matters specifi ed under Clause 49

of the Listing Agreement and Section 178 of the Companies Act, 2013.

The Share Transfer and Investors Grievance 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 certifi cates and review all other matters connected with securities

The Committee oversees the performance of the Registrar and Share Transfer Agent.

As on 31st March 2014, no instruments of share transfer were pending.

(iii) Name, designation and address of the Compliance offi cer

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]

(iv) Details of Investors’ complaints

Investors’ complaints received directly or through SEBI and Stock Exchanges during 1st April, 2013 to 31st March,

2014 and the status of said complaints as on 31st March, 2014 are given below:

Received from Received and Resolved during the FY 2013-14 Pending as at 31st March 2014

Investors 08 Nil

Through SEBI 00 Nil

Through Stock Exchanges 00 Nil

Total 08 NIL


28

D. FINANCE AND OPERATION COMMITTEE

The Board of Directors, at their meeting held on 14th August, 2013, constituted a Finance and Operation Committee,

comprising 3 (three) members of the Board for the operational convenience and effi ciency and defi ned their term of

reference in the said meeting. As on 31st March, 2014, composition of committee was as follows:


Mr. Dhananjay Datar NI - E

Mr. S. Muthuswamy NI - E

Mr. Ashwani Kumar I – NE

The Committee invites Chief Finance Offi cer and such of the executives as it consider appropriate (particularly the

heads of the Finance and Operations) to be present at its meetings.

*The Board of Directors at their meeting held on 30th May, 2014 has appointed Mr. Syed Abdi as member in the Finance

and Operation Committee.

E. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR COMMITTEE)

The Board of Directors at their meeting held on 30th May 2014 constituted CSR Committee in line with the provisions of

Section 135 of the Companies Act, 2013. Constitution of the said Committee is as under:


Mr. Syed Abdi- Chairman NI/E

Mr. Ashwani Kumar I/NE

Mr. S. Muthuswamy I/NE

Terms of Reference of the CSR Committee are as under:

1) To formulate and recommend to the Board a Corporate Social Responsibility Policy in line with the activities

mentioned in Schedule VII of the Companies Act, 2013;

2) To recommend the amount of expenditure to be incurred in furtherance of its Corporate Social Responsibility

Policy as well as its mission and vision;

3) To institute a transparent monitoring mechanism for the implementation of the Policy from time to time and

4) To institute an appropriate communications policies to effectively build and protect the Group’s reputation both

internally and externally.

4. GENERAL BODY MEETINGS

(i) Annual General Meetings

Details of last three Annual General Meetings of the Company are table be;ow:

Details Date & Time Venue Special Resolutions Passed

26th AGM

2010-11

27.09.2011

12.00 noon

Registered Offi ce

of the Company at

Near Magdalla Port,

Dumas Road, Surat-

395 007

Nil

27th AGM

2011-12

27.09.2012

12.00 noonIssue of Securities for a value of upto ` 1000Crs. by way of a

domestic / international offering/ Qualifi ed Institutional Placement

under chapter VIII of SEBI (ICDR) Regulations and pursuant to

Section 81 (1A) of the Companies Act, 1956.

28th AGM

2012-13

27.09.2013

12.00 noonIssue of Securities for a value of upto ` 1000Crs. by way of a

domestic / international offering/ Qualifi ed Institutional Placement

under chapter VIII of SEBI (ICDR) Regulations and pursuant to

Section 81 (1A) of the Companies Act, 1956.


29

(ii) Extra-ordinary General Meetings

Details of the Extra-ordinary General Meeting of the Company held during last three years are as follows.

Details Date & Time Venue Special Resolutions Passed

Extra

Ordinary

General

Meeting

(EGM)

29.03.2014

12.00 noon

Registered Offi ce

of the Company

at Near Magdalla

Port, Dumas

Road, Surat-

395 007

1. Amendment to the Articles of association of the Company –

For Increase in Authorised Capital to ` 17000,00,00,000/-

2. Authority to Board of Directors for borrowings upto ` 20,000/-

crs. - u/s 180 (1) (c) of the Companies Act, 2013

3. Authority to Board of Directors for creation of charges on the

movable and immovable assets of the Company as security

upto the extent of ` 20,000/- crs. - u/s 180 (1) (a) of the

Companies Act, 2013

4. Approval of appointment of Mr. Syed Waheed Zafar Abdi as

Managing Director and Chief Executive Director.

5. Approval of appointment of Mr. S. Muthuswamy as Executive

Director.

The Company has not passed any Resolutions through Postal Ballot during the fi nancial year 2013-14.

5. DISCLOSURES AND OTHER INFORMATION:

(i) Materially Signifi cant Related Party Transactions – There are no transactions of materially signifi cant 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 confl ict with the interest of the company.

Transactions with related parties are disclosed in Note No. 38 under Notes to Financial Statements.

(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 such 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, in line with the sub clause II – E of the Clause 49 of the Listing Agreement, 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 declaration signed by Managing 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 affi rmed compliance with the code of conduct as adopted by the Board of Directors.

For ABG Shipyard LimitedPlace: Mumbai Syed AbdiDate:14th August, 2014 Managing Director & CEO

(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.

(v) Whistle blower policy/Vigil Mechanism - The Company has adopted a Whistle Blower Policy/Vigil Machanism and has established the necessary vigil mechanism in line with sub clause II - F of clause 49 of the Listing Agreement with the Stock Exchanges as notifi ed by SEBI Circular dated April 17, 2014 and Section 177 (9) of the Companies Act, 2013, 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.


30

The Company has implemented following Non-Mandatory Requirements as prescribed by Annexure XIII of the

Listing Agreement:

(i) The Board

A non-executive Chairman is maintaining Chairman’s offi ce at the company’s expenses.

(ii) Separate posts of Chairman and CEO

The company has appointed separate persons to the post of Chairman and Managing Director/CEO.

(iii) Reporting of Internal Auditor

The Internal auditor may report directly to the Audit Committee.

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 confi rms 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 confi rms 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 fi nancial Results of the company and Notices of Board Meetings and General Meetings etc. 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.

8. GENERAL SHAREHOLDERS INFORMATION

(i) Annual General Meeting:

Day, Date & time : Tuesday the 30th September, 2014 at 12.00 noon

Venue: At the Registered Offi ce 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 : 23rd September, 2014 to 30th September, 2014

(both days inclusive)

(iv) Listing at Stock Exchanges:

Name & Address of Stock Exchange Stock Code Code on Screen

The Bombay Stock Exchange Limited (BSE)

Phiroze Jeejeebhoy Towers, Dalal Street,

Mumbai 400001

Phone : 91 - 22 - 22721233

532682 ABGSHIP

National Stock Exchange of India Limited (NSE)Exchange Plaza, Bandra Kurla Complex,Bandra (East), Mumbai – 400 051Phone : 91 - 22 - 26598236

ABGSHIP ABGSHIP Series – EQ

The Company has paid annual listing fees to the above Stock Exchanges for the fi nancial year 2014-15.


31

(v) Market Price Data

A. Bombay Stock Exchange (BSE)

Month ABG

High (Rs.)

ABG

Low (`)

Sensex High Sensex Low

Apr-13 337.15 311.20 19,622.68 18,144.22

May-13 325.90 258.00 20,443.62 19,451.26

Jun-13 312.00 265.00 19,860.19 18,467.16

Jul-13 304.80 246.20 20,351.06 19,126.82

Aug-13 298.00 228.50 19,569.20 17,448.71

Sep-13 357.00 227.00 20,739.69 18,166.17

Oct-13 347.90 287.00 21,205.44 19,264.72

Nov-13 296.85 258.00 21,321.53 20,137.67

Dec-13 280.00 251.55 21,483.74 20,568.70

Jan-14 327.30 254.00 21,409.66 20,343.78

Feb-14 311.20 245.25 21,140.51 19,963.12

Mar-14 268.35 241.85 22,467.21 20,920.98

380.00

360.00

340.00

300.00

260.00

240.00

AB

G

Share price on BSE during the Year 2013-14

High

Low280.00

320.00

200.00

220.00

400.00

Apr-13

Jun-1

3

Aug-13

Sep-13

Oct

-13

Nov-

13D

ec-13

Jan-1

4Feb-1

4M

ar-14

May-

13

Jul-1

3

ABG VS. SENSEX during the year 2013-14

400.00

350.00

300.00

250.00

200.00

20000.00

22000.00

24000.00

18000.00

16000.00

Apr-13

Jun-1

3

Aug-13

Sep-13

Oct

-13

Nov-

13D

ec-13

Jan-1

4Feb-1

4M

ar-14

May-

13

Jul-1

3

ABG

SENSEX


32

B. National Stock Exchange (NSE)

Month NSE High (`) NSE Low (`) NIFTY High NIFTY Low

Apr-13 337.85 311.20 5962.30 5477.20

May-13 325.50 252.00 6229.45 5910.95

Jun-13 311.70 265.00 6011.00 5566.25

Jul-13 302.00 248.00 6093.35 5675.75

Aug-13 289.90 246.00 5808.50 5118.85

Sep-13 356.80 228.00 6142.50 5318.90

Oct-13 348.00 283.50 6309.05 5700.95

Nov-13 297.40 256.00 6342.95 5972.45

Dec-13 280.60 252.05 6415.25 6133.00

Jan-14 327.40 254.50 6358.30 6027.25

Feb-14 312.00 245.10 6282.70 5933.30

Mar-14 268.80 241.45 6730.05 6212.25

450.00

6500.00

6000.00

5500.00

5000.00

4500.00

Apr-13

Jun-1

3

Aug-13

Sep-13

Oct

-13

Nov-

13D

ec-13

Jan-1

4Feb-1

4M

ar-14

May-

13

Jul-1

3

400.00

350.00

300.00

250.00

200.00

7000.00

ABG VS. NIFTY during the year 2013-14

NIFTY

ABG

Share price on BSE during the Year 2013-14

400

380

360

340

320

300

280

260

240

220

200

AB

G

Apr-13

Jun-1

3

Aug-13

Sep-13

Oct

-13

Nov-

13D

ec-13

Jan-1

4Feb-1

4M

ar-14

May-

13

Jul-1

3

High

Low


33

(vi) Registrar and Share Transfer Agent

Shareholders may address all correspondences to the Registrar and Share Transfer Agents of the Company at the following Address:

Link Intime India Private Ltd.

C-13, Pannalal Silk Mills CompoundL.B.S. Marg, Bhandup West, Mumbai-400 078.Tele: 91-22- 25946970 Fax : 91-22-25946969e-mail: [email protected]

(vii) 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.

(viii) Dematerialization of Shares

As of 31st March 2014, 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 fl oor,

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 2013-14 the Company has not received any application for dematerialization / rematerialization of shares by

shareholder.

The Company has paid annual custodian charges for both NSDL and CDSL for the fi nancial year 2014-15.

(ix) Distribution of shareholding (Shares) as on 31st March, 2014

Range – Shareholding

of Shares

No. of Shareholders % of Shareholders Number of Shares % of Shareholding

1 – 500 19735 96.44 1140932 2.24

501 – 1000 313 1.52 245190 0.48

1001 – 2000 170 0.83 244932 0.48

2001 – 3000 55 0.26 136824 0.27

3001 – 4000 26 0.12 93146 0.18

4001 – 5000 24 0.11 109617 0.22

5001 – 10000 41 0.20 291458 0.57

10001 & above 88 0.52 48659702 95.56

Total 20452 100.00 50921801 100.00

(x) Shareholding pattern as on 31st March, 2014

Category of Shareholder Number

of shares

Percentage of

shareholding

(A) Shareholding of Promoter and Promoter Group

(a) Individuals/ Hindu Undivided Family 375000 0.74

(b) Bodies Corporate 34212057 67.19

Total Shareholding of Promoter and Promoter Group 34587057 67.92

(B) Public shareholding


34

B1 Institutions

(a) Mutual Funds/ UTI 306 0.00

(b) Financial Institutions / Banks 1161838 2.28

(c) Insurance Companies 300000 0.59

(d) Foreign Institutional Investors 2307008 4.53

Sub-Total (B)(1) 3769152 7.40

B2 Non-institutions

(a) Bodies Corporate 9204118 18.08

(b) Individuals

i Individual shareholders holding nominal share capital up to ` 1 lakh 1582011 3.11

ii Individual shareholders holding nominal share capital in excess of ` 1 lakh. 1095627 2.15

(c) Any Other (specify)

(c-i) Clearing Member 597933 1.17

(c-ii) NRI 73418 0.15

(c-iii) Offi ce bearers 8485 0.02

(c-iv) Trust 4000 0.01

Sub-Total (B)(2) 12565592 24.68

(B) Total Public Shareholding (B) = (B)(1)+(B)(2) 16334744 32.08

TOTAL (A)+(B) 50921801 100.00

(xi) Shareholders holding more than 1% of the share capital as on 31st March, 2014

Sr. No. Name No. of Shares % of share held

1 ABG International Private Limited 34212057 67.19

2 Religare Finvest Ltd 5186866 10.19

3 Orange Mauritius Investments Limited 1230000 2.42

4 Nippon Investment And Finance Company Private Ltd. 1031816 2.03

5 Life Insurance Corporation Of India 1000000 1.96

6 Bakulesh Shah 896857 1.76

TOTAL 43557596 85.53

Shareholding pattern of ABGSL as on 31 March, 2014st

Individuals/others33529896.58%

Clearing Members8485

0.02%

Bodies Corporate920411818.08%

FII23070084.53%

InsuranceCompanies

3000000.59%

FI/Banks11618382.28%

Mutual Fund/UTI3060%

Promoter3458705767.92%

(xii) Details of unclaimed shares as on fi nancial year ended 31st March, 2014 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 in the suspense account lying at the beginning of the year i.e. 01.04.2013

14 490


35

(B) Number of Shareholders who approached for transfer of Shares from suspense account during 01.04.2013 to 31.03.2014

NIL NIL

(C) Number of Shareholders to whom Shares were transferred from suspense account during 01.04.2013 to 31.03.2014

NIL NIL

(D) Aggregate Number of Shareholders and the outstanding Shares in the suspense account at the end of the year i.e. 31st March, 2014

14 490

The Voting Rights on the above mentioned shares in column (D) shall remain frozen till the rightful owner claims the shares.

(xiii) Unclaimed / Unpaid Dividend

Pursuant to section 205A and 205C of the Companies Act, 1956 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

2006-2007 15 26th October, 2014 27th October, 2014

2007-2008 20 21th October, 2015 22nd October, 2015




2011-2012 NIL NA NA

2012-2013 NIL NA NA

2013-2014 NIL NA NA

(xiv) Unclaimed/Unpaid Dividend amount transferred to IEPF

The Unclaimed/unpaid dividend money amounting to ` 39,662/- was due for transfer to IEPF on 17th September, 2013. Your company has transferred the unpaid dividend amount to the IEPF accordingly.

(xv) Outstanding GDRs/ ADRs/ Warrants or any convertible instruments

The Company has no outstanding GDRs/ ADRs/ Warrants or any convertible instruments.

(xvi) Shipyards’ Location

Surat Shipyard Dahej Shipyard

Near Magdalla PortDumas RoadSurat-395 007, Gujarat

Village JageshwarNear Dahej, Tal – VagraDist. – Bharuch, Gujarat

(xvii) Address for Correspondence

Legal & Secretarial Department

4th 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


Date : 14th August, 2014 Managing Director & CEO Executive Director


36

CEO/EXECUTIVE DIRECTORS’ CERTIFICATION ISSUED IN PURSUANCE OF CLAUSE 49 OF THE LISTING AGREEMENT.

To,

The Board of Directors,

ABG Shipyard Limited.

Sub: CEO/Executive Directors’ Certifi cation

We hereby certify that we have reviewed the fi nancial statements and the cash fl ow statement of ABG Shipyard Limited for the year ended 31st March, 2014 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 fi nancial reporting. We have evaluated the effectiveness of internal control systems of the Company pertaining to fi nancial reporting and have disclosed to the Auditors and Audit Committee, defi ciencies 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 defi ciencies.

4. We have indicated to the Auditors and the Audit Committee;

(a) signifi cant changes in the internal control over fi nancial reporting during the year.

(b) signifi cant changes in accounting policies made during the year and that the same have been disclosed in the notes to the fi nancial statements; and

(c) instances of signifi cant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a signifi cant role in the Company’s internal control system over fi nancial reporting.

Yours sincerely,


Date : 14th August, 2014 Managing Director & CEO Executive Director


37

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 2014, 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 fi nancial 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 effi ciency 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, 2014 M. No. 18380


38

Annexure-C

MANAGEMENT DISCUSSION ANALYSIS REPORT

MARKET TRENDS & ECONOMY

The global economic conditions continued to remain suboptimal during fi nancial year 2013-14. According to the IMF’s World Economic Outlook published in the month of April 2014, the world output grew at a moderate 3.0 per cent in 2013 compared to 3.2 per cent in the year 2012.

The Indian economy registered a GDP growth of 4.9% in FY’14 against 4.5% in FY’13. Key issues that weighed down growth in the Indian economy were nagging infl ation and a weakening currency. Both these issues forced the central bank to keep monetary policy tight and interest rates high throughout the year, resulting in high input costs as well as high costs of fi nance all through the year. The Indian rupee plummeted to a low of 68.85 in the month of August 2013, driven by alarming current account defi cit.

As per initial sign, the global recovery continues but at an uneven pace, and that downside risks remain. For the global economy, IMF has forecast GDP growth to 3.4 per cent for 2014

The International Monetary Fund (IMF) has maintained its 5.4 per cent economic growth projection for Indian economy for the ongoing fi scal 2014-15, as per its latest World Economic Outlook survey update.

However, long term prospects for the Indian economy; continue to remain bright, given the favorable demographics and the directional commitment towards liberalization. Outlook for the current fi scal with infl ation now well within tolerance level, appears better than the previous year. Additionally, softening of global commodity prices should help to reduce the imported infl ation in domestic economy.

INDUSTRY OVERVIEW AND OUTLOOK

The global Shipbuilding industry is worth approximately ` 73.00 tn ($1.3tn) with India accounting only 1% of it, according to the study titled ‘Shipbuilding Industry in India: An overview’.

A Compounded Annual Growth Rate (CAGR) of about 24% is seen in the worldwide Shipbuilding and Ship-repairing industry, which is likely to reach ` 140tn ($2.6tn) by 2015 due to increase in global sea borne trade, according to the study found by Industrial body, Associate Chambers of Commerce (ASSOCHOM).

According to study done by Shipyards Association of India, while Shipbuilding in countries like China, South Korea and Japan continue to account for more than 80% of the global shipbuilding market. 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 fl ood the market, depressing it further.

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 ASSOCHAM. Still Indian Shipbuilding industry accounts for less than 1 percent of global market share.

Globally the commercial vessel categories which have primarily contributed to growth at various yards are cargo and offshore vessels. Global fl eet comprises of around 80,000 vessels (excluding tugs and other smaller vessels). Among these vessels the top fi ve vessels categories by number are tankers, Offshore, Bulkers, Containers and Passenger vessels. These categories comprise around 57% of the worlds global fl eet.

The types of vessels ordered at Indian Yards include primarily Offshore and bulk vessels Around 1,000 vessels have been built by Indian shipyards. Among these vessels the top vessels categories by number are offshore, general cargo and bulk vessels. On an average India produces around 20 ships in a year while developed shipbuilding markets make 70 -100 ships a year. 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 thr ough 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.

The Government has a key role to improve the effi ciency 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 signifi cant fi llip/ 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.

OPPORTUNITIES & THREATS

Union budget 2013-14 has provided a slight relief to domestic Shipbuilding industry by removing excise duty burden of 6% to the


39

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.

In order to protect the domestic Shipbuilding Industry, the Shipping Ministry has initiated discussions with fi nancial institutions to

extend low-cost loans to Shipbuilders. The Shipbuilding Development Fund will form a key part of a policy being drafted by the

Shipping Ministry to promote local Shipbuilding. Features of the policy could include granting Special Economic Zone (SEZ) status to

Shipyards and declaring it as a strategic sector with attendant fi scal incentives. Indian shipyards are outbid by Chinese and Korean

shipyards due to cost differentials arising from lack of support for the industry in India.

The key factors which are driving growth in the offshore support vessel market are global oil & gas demand, growing exploration and

production activities and increase in the number or offshore platforms. Offshore support vessel is a moderately developing market

with no other substitutes available currently which makes it backbone of offshore industry. Consequently, the market is expected to

continue the steady growth rate in future. Growing demand of oil & gas and other offshore activities with increasing investment in

modernization of infrastructure of oil platform and wells is expected to drive the offshore support vessel market. It is estimated to

reach $91,228.8 million by 2018, with a CAGR of 5.7% from 2013 to 2018.

The Indian defence industry is one of the fastest-growing global defence markets. India‟s defence capital expenditure, which refers

to the part of the defence budget that is spent on the acquisition of all types of military hardware and technology, has grown at

a CAGR of 12.25% over the period. In 2010, India was allocated US$13.1 billion for defense capital expenditure in the budget.

Defense expenditure is expected to record a CAGR of 13.08% to reach an annual expenditure of US$67.8 billion by 2016. This is

primarily due to the country‟s ageing naval hardware and technology which is in need of replacing, and demands for defence against

domestic insurgencies and hostility from neighboring countries.

NMCC/ National Security Advisory recognizes strategic Importance of Industry- “Indian Built share of Indian Flag” should be around

35-40%” from national security perspective – currently a minsicule~7%

The strong growth in the industry is attracting foreign original equipment manufacturers (OEMs) and leading companies from the

domestic private sector to enter the market.

Liquefi ed Natural Gas market is growing at a compounded annual growth rate (CAGR) of 2.8% from 2013 and will extend up to 2019

when total market value will rise to US$196.4 mn from $161.4 mn in 2012, according to a new report titled “Liquefi ed Naturla Gas

Market: Global Industry Analysis, size, share, growth, trends and forecast, 2013-19”. More over GAIL has received a directive from

the ministry to consider building LNG Ships at indigenous yards promoting Shipbuilding industry here.

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.

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.

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 fi gure 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 signifi cantly behind the countries with their own shipbuilding

industries.

INTERNAL CONTROL SYSTEM

The Company has in place an adequate systems of internal control commensurate with its size and nature of its business and ensure

proper safeguarding of assets, maintaining proper accounting records and providing reliable fi nancial statements. The Company

has an in-house team in internal audit department supported by external consultant advice to help the Company to strengthen the

internal audit and risk management functions. The fi nance and accounts functions of the Company are well staffed with qualifi ed

and experienced members.

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.


40

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 believes that through its strong set of values and cohesive work-culture, the employees will be able to achieve their potential not only on the professional level, but also in their personal lives. The Company recognizes the Human Resources as its most important assets and is constantly engaged in enriching the value and developing competencies of Human Resources through various development strategies.

The Board of Directors and the Management wish to place on record their appreciation of the efforts put in by all employees at all levels.

INTELLECTUAL PROPERTY RIGHTS

Invention is an on-going process in the Company. It is the endeavor of Company to encourage inventions of new products and processes in order to increase IP Assets of the Company.

The Company has developed an effective internal system to protect its Intellectual Property Rights.

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.


41

Independent Auditor’s Report to the members of ABG SHIPYARD LIMITED

Report on the Financial Statements

We have audited the accompanying fi nancial statements of ABG Shipyard Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profi t and Loss and the Cash Flow Statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows 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”) which shall continue to apply in respect of section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fi nancial 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 fi nancial 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 fi nancial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the fi nancial 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 fi nancial 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 fi nancial statements.

Emphasis of matter

Without qualifying our report we draw attention to:

Note no. 4D wherein as explained Corporate Debt Restructuring (CDR) scheme has been approved by the Corporate Debt Restructuring Empowered Group (CDR EG) on March 24, 2014 and applicable with effect from August 1, 2013. The CDR proposal has been partly implemented as on March 31, 2014. The outstanding liabilities of the Company have been substantially restructured under the aegis of CDR Scheme, which extends till June 2023.

Foot note no. 3 of note no. 38 whereby managerial remuneration paid by the Company exceeds the limits prescribed under Schedule XIII of the Companies Act, 1956 and the same is subject to approval from Central Government. The Company is yet to apply to the Central Government for seeking such approval.

Opinion

In our opinion and to the best of our knowledge and according to the information and explanations given to us, 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, 2014;

(ii) in the case of the Statement of Profi t and Loss, of the loss of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash fl ows 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 specifi ed in paragraphs 4 and 5 of the Order.

2. 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;


42

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 Profi t 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 Profi t 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 which shall continue to apply in respect of section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 issued by the Ministry of Corporate Affairs.

e. on the basis of written representations received from the directors, as on March 31, 2014, and taken on record by the Board of Directors, we report that none of the Directors is disqualifi ed as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Act.

For Nisar & Kumar


F. R. No. 107117W

M. N. Ahmed

Place: Mumbai (Partner)

Date: 30th May, 2014 M. No. 18380


43

Annexure to Independent Auditor’s Report

(Referred to in paragraph 8 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 specifi ed 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 fi xed

assets;

(b) The fi xed assets have been physically verifi ed in a phased manner by the management during the year as per the

program of verifi cation 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 verifi cation;

(c) During the year, the Company has not disposed off any substantial part of fi xed assets, which would affect the going

concern of the Company.

ii.) (a) The inventory has been physically verifi ed during the year by the management. In our opinion, the frequency of verifi cation

is reasonable;

(b) The procedures of physical verifi cation 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 verifi cation.

iii.) (a) As informed, during the year under audit the Company has granted interest free unsecured loan to two Companies

covered under section 301 of the Companies Act, 1956. The year-end balance of loan granted to such companies was

` 239.91 crores. Maximum balance outstanding during the year was ` 296.22 crores.

(b) As the loan is interest free, and there is no stipulation of repayment date prima facie the terms and conditions are

prejudicial to the interest of the Company.

(c) As there is no stipulation as to repayment date of principal amount, hence clause 4(iii)(c) and (d) of the Order does not

apply.

(d) As informed, during the year under audit the Company has taken interest free unsecured loan from two Companies

covered under section 301 of the Companies Act, 1956. The year-end balance of loan taken from such companies was

` 113.15 crores. Maximum balance outstanding during the year was ` 172.53 crores

(e) In our opinion the terms and conditions of such loans are not prima facie pre judicial to the interest of the Company.

(f) As there is no stipulation as to repayment date of principal amount, hence clause 4(iii)(g) of the Order does not apply.

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, fi xed 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.


44

ix.) (a) According to the records of the Company, the Company has been generally late during the fi nancial year in depositing with

appropriate authorities undisputed statutory dues including Provident Fund, Income-tax, Tax Deducted at Source, Sales-tax,

Wealth-tax, Service tax, Profession Tax, Custom duty, Excise duty, Cess and other statutory dues applicable to it.

The following undisputed statutory dues are outstanding for a period of more than six months as on March 31, 2014, from the

date they became payable:

Name of the Statute Nature of Dues Financial Year Amount in ` Crores

The Income Tax Act, 1961 Income Tax (incl. interest) 2011-12 & 2012-13 59.20

The Income Tax Act, 1961 Tax Deducted at Source 2012-13 & 2013-14 7.21

Employees’ Provident Fund and Miscellaneous Provisions Act, 1952

Provident Fund 2012-13 & 2013-14 3.87

Profession Tax Act, 1975 Profession Tax 2012-13 & 2013-14 0.09

(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 Year Amount in ` Crores Forum where dispute is pending

The Finance Act, 1994 Service Tax 2004-05 to 2010 -11

13.50 Appellate Tribunal

The Customs Act, 1962 Custom Duty 2012-13 14.43 Appellate Tribunal

The Income Tax Act, 1961 Income Tax 2003-04 to 2005-06

3.24 Commissioner of Income Tax (Appeal)

x.) The Company does not have accumulated losses at the end of the fi nancial year. The Company has incurred cash loss during

the fi nancial year covered by our audit. The Company has not incurred cash loss during the immediately preceding fi nancial

year.

xi.) Instances of delay between 1 to 567 days were noticed in repayment of principal and interest to banks, fi nancial institutions

and debenture holders during the year amounting to ` 1,915.68 crores and ` 214.95 crores respectively.

During the year Company has undergone a debt restructuring process for its outstanding debts, the same being approved by

the Corporate Debt Restructuring Empowered Group (CDR EG) on March 24, 2014 and applicable with effect from August

1, 2013. The CDR proposal has been partly implemented as on March 31, 2014. Accordingly the defaults mentioned exclude

the defaults incurred by the Company after the cut-off date of August 1, 2013 upto March 31, 2014.

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 chit fund/ nidhi/ mutual benefi t fund/ society, to which the provisions of special statute relating to chit

fund 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 ` 2,275.76 crores for credit

facilities taken by body corporates from banks and fi nancial 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 an overall examination of the fi nancial statements of

the Company, in our opinion, funds raised on short term basis have not been used for long-term purpose.


45

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


F. R. No. 107117W

M. N. Ahmed

(Partner)

M. No. 18380

Place: Mumbai

Date: 30th May, 2014


46

BALANCE SHEET AS AT MARCH 31, 2014

AS AT AS AT 31.03.2014 31.03.2013 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 1,318.93 1,519.46

1,369.85 1,570.38

2. Non-current Liabilities

a. Long-term borrowings 4 2,900.26 762.63

b. Deferred tax liabilities (Net) 5 427.36 526.11

c. Long-term provisions 6 7.92 9.12

3,335.54 1,297.86

3. Current Liabilities

a. Short-term borrowings 7 1,977.27 2,470.24

b. Trade payables 8 848.81 1,324.27

c. Other current liabilities 9 4,591.58 3,914.94

d. Short-term provisions 10 64.79 54.22

7,482.45 7,763.67

12,187.84 10,631.91

II ASSETS

1. Non-current Assets

a. Fixed assets 11

(i) Tangible assets 889.51 1,007.54

(ii) Intangible assets 1.38 1.64

(iii) Capital work-in-progress 1,939.39 1,728.71

2,830.28 2,737.89

b. Non-current investments 12 223.70 230.03

c. Long-term loans and advances 13 456.19 464.83

3,510.17 3,432.75

2. Current Assets

a. Inventories 14 4,351.24 4,352.32

b. Trade receivables 15 129.93 55.30

c. Cash and bank balance 16 182.55 25.55

d. Short-term loans and advances 17 3,415.18 2,285.62

e. Other current assets 18 598.77 480.37

8,677.67 7,199.16

12,187.84 10,631.91

Signifi cant 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 AccountantsF. R. No. 107117W

M. N. Ahmed Syed Abdi Dhananjay Datar Partner Managing Director Executive Director M. No 18380

Mumbai, S. Muthuswamy Sunil Agarwal Dated : 30th May, 2014 Executive Director Company Secretary


47

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2014

Year ended Year ended 31.03.2014 31.03.2013 Note ` in Crores ` in Crores

INCOME

Revenue from operations 19 1,594.52 2,099.65

Other income 20 40.38 41.43

Total Revenue 1,634.90 2,141.08

EXPENSES

Consumption of raw materials & components 21 1,014.19 1,103.68

Purchase of traded goods 21 - 10.28

Changes in inventories of work-in-progress 22 (287.84) (118.98)

Employee benefi ts expense 23 69.30 85.90

Finance costs 24 608.93 401.30

Depreciation & amortisation expense 11 91.78 103.71

Other expenses 25 362.58 381.49

Total Expenses 1,858.94 1,967.38

Profi t / (Loss) before exceptional and extraordinary items and tax (224.04) 173.70

Exceptional / Extraordinary items 37 72.13 -

Profi t / (Loss) before tax (296.17) 173.70

Tax Expense

Current tax for the year - 36.46

Current tax for earlier years - 5.04

MAT credit (entitlement)/reduced 13 1.87 (34.75)

Deferred tax (98.74) 59.82

Profi t / (Loss) after tax (199.30) 107.13

Earning per share in Rupees of face value of `10 /- each

Basic (39.14) 21.04

Diluted (39.14) 21.04






48

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2014

Year ended Year ended 31.03.2014 31.03.2013 ` in Crores ` in Crores

A. Cash Flow From Operating Activities : Net Profi t (Loss) before taxation and after exceptional item (296.17) 173.70 Adjustments for Depreciation 91.78 103.48 Provision for Impairment - 0.23 Provision for Contingencies 0.74 0.68 Provision for doubtful receivables 2.15 - Finance charges Including exceptional items being fi nance charges 681.06 401.30 Interest income (31.49) (21.73) Effect of exchange rate change (21.63) (49.12) Loss / (Profi t) on Sale of Assets (net) 16.66 (8.25) Loss / (Profi t) from Partnership fi rm - 1.20 Loss / (Profi t) on Sale of Investments 0.05 (0.03) Operating Profi t before working capital changes 443.15 601.46 Adjustments for : Inventories (658.55) (1,554.48) Trade Receivables (76.13) 4.86 Loans and Advances* and other current assets (1,035.06) (666.61) Trade Payables and other current liabilities / provisions** (574.17) 280.04 Stage Payments from Customers (net) 1,670.56 1,289.89 Cash generated from Operations (230.20) (44.84) Direct Taxes Paid (2.28) (28.52) Cash Used in Operating activities (232.48) (73.36)B. Cash Flow From Investing Activities: Purchase of Fixed Assets including Capital Work in Progress and capital advances (248.70) (214.79) Sale of Fixed assets 18.97 13.63 Purchase of Investments - (0.01) Proceeds from Sale of Current Investments - 0.01 Proceeds from Sale / Redemption of Non Current Investments 6.28 3.87 Loans / deposits given (net) (136.75) (228.16) Interest income 29.56 47.46 Inter Corporate Deposits - (2.00) Cash Used In Investing Activities (330.64) (379.99)C. Cash Flow From Financing Activities: Proceeds from Long Term Borrowings 2,446.67 175.78 Repayments of Long Term Borrowings (588.74) (152.07) Short Term Borrowings (net) (492.97) 477.61 Finance charges paid (644.84) (385.93) Cash Generated from Financing Activities 720.12 115.39 Net (decrease) / Increase in cash and cash equivalents (A + B + C) 157.00 (337.96) Opening Balance of Cash & Cash Equivalents 25.55 363.52 Closing Balance of Cash & Cash Equivalents 182.55 25.56 Effect of Exchange rate changes # 0.00 (0.01) Closing Balance of Cash & Cash Equivalents as restated 182.55 25.55




* Includes current and non current ** Includes short term and long term # Amount less than ` 0.01 crore

Notes : 1. Cash fl ow 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.


49

NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH, 2014

1. SIGNIFICANT ACCOUNTING POLICIES

i). Basis of Accounting

The fi nancial statements are prepared under the Historical Cost Conventions on the basis of Going Concern and as per applicable Indian Accounting Standards notifi ed under section 211 (3C) of The Companies Act, 1956.

ii). Use of estimates

The preparation of fi nancial 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 fi nancial 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. Profi t/Loss on disposal of fi xed assets is recognised in the Statement of Profi t 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 Profi t 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 Profi t 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 fi ve 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 profi t 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


50


x). Employees’ Benefi ts

Provident Fund: Provident Fund contributions are made as per a defi ned contribution scheme and the contribution of company is charged to Profi t 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 benefi ts are recognized as an expense at the undiscounted amount in the Statement of Profi t and Loss of the year in which the related service is rendered.

Long term employee benefi ts are recognized as an expense in the Statement of Profi t 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 benefi ts are charged to the Profi t 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 identifi able 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 profi t 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 Profi t and Loss.

The Company has w.e.f. 07th December,2006 chosen to apply notifi cation 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 fi rm 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 Profi t and Loss and presented under ‘Revenue from Operations’.

xvi). Operating Leases

Leases where the lessor effectively retains substantially all the risks and benefi ts of ownership of the leased assets are classifi ed as operating leases. Operating lease payments / receipts are recognized as an expense / income in the Statement of Profi t 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 profi t 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 specifi ed 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 outfl ow of resources embodying economic benefi ts will be required to settle an obligation. Contingent liabilities, if material, are disclosed in notes forming part of fi nancial statements. Contingent Assets are not recognized/ disclosed.


51


AS AT AS AT 31.03.2014 31.03.2013

` in Crores ` in Crores

2. SHARE CAPITAL

Authorised Capital

17000000000 (P.Y. 100000000) Equity Shares of `10/- each 17,000.00 100.00

Issued Subscribed and Paid up No of shares

Reconciliation: 31.03.2014 31.03.2013

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) During the year the company has increased its authorised capital vide shareholder resolution in Extra Ordinary General Meeting held on 29th March 2014. Registration of the same with the Registering authority is pending.

b) 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.

c) None of the above shares are reserved for issue under options and contract / commitments for sale of shares or disinvestment.

d) 34212057 (P.Y.33648204 ) Equity Shares of `10/- each are held by the holding company ABG International Pvt. Ltd, as per dematerialised holding statement and includes shares pending for registration. 31605002 equity shares are pledged with lenders

e) 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

f) Shareholders holding above 5% Equity Shares with voting rights in the company.

Sr No Name of the shareholder 31.03.2014 31.03.2013

No of equity

shares held

% No of equity shares held

%

1 ABG International Private Ltd. *34,212,057 67.19 33,648,204 66.08

2 Religare Finvest Ltd. 5,186,866 10.19 5,197,281 10.21

* Includes shares pending registration.

3. RESERVES AND SURPLUS

(i) Capital Reserve

Opening balance 31.87 31.87

Added / Utilised / Transferred during the year - -

Closing balance 31.87 31.87

(ii) Securities Premium Account




(iii) Debenture Redemption Reserve


Added / Utilised / Transferred during the year - 91.00

Less:Transferred to General Reserve during the year 200.28 -



52


AS AT AS AT 31.03.2014 31.03.2013


(iv) Revaluation Reserve


Less: Utilised to set off against depreciation 1.23 1.29


(v) General Reserve


Add: Transferred from Surplus in Statement of Profi t and Loss - 10.00

Add: Transferred from Debenture Redemption Reserve 200.28 -


(vi) Surplus in Statement of Profi t and Loss


Add: Profi t / (Loss) for the year (199.30) 107.13

295.75 596.05

Less:

Transferred to Debenture Redemption Reserve - 91.00

Transferred to General Reserve - 10.00


1,318.93 1,519.46

4. A. LONG TERM BORROWINGS

(a) Debentures

Secured 36.39 -

(b) Term Loans

From Banks

Secured 2,653.44 721.79

Unsecured 17.41 40.62

From Others

Secured 125.00 -

(c) Vehicle loans

From Banks

Secured 0.01 0.12

From Others

Secured - 0.10

(d) Loan from related parties [Refer Note 38] 68.01 -

2,900.26 762.63


53


4 B (i) Details of Debentures issued by the Company

` In Crores

Particulars Security Terms of repayment As at 31.03.2014 As at 31.03.2013

Non Current Current Non Current Current

a) 12.30% 1000 Non Convertible Redeemable Debentures (NCD) of `100000/- each issued to Life Insurance Corporation of India (LIC)

Secured - First pari passu charge on the company’s immovable and movable fi xed assets of Dahej Plant.

Payable in 13 quarterly instalments commencing quarter ending 30th Nov, 2013 upto 30th Nov, 2016. During the year the debenture terms had undergone restructuring and accordingly current and non current amount have been classifi ed.

36.39 30.00 - 66.67

b) 11.40% 2000 Non Convertible Redeemable Debentures (NCD) of `100000/- each issued to

ICICI Bank Ltd. Secured - Residual charge on the company’s immovable and movable fi xed assets of Dahej plant

Closed during the year - - - 160.00

Tata Capital Ltd. Closed during the year - - - 40.00

36.39 30.00 - 266.67

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



A) Term Loans from Banks

Loan under Corporate Debt

Restructuring (CDR)

1) Foreign Currency Loan

Foreign Currency Loans Secured - First pari passu charge over the Pooled Assets : All moveable (both fi xed and current assets) & immoveable assets of the Company excluding assets exclusively charged to respective lenders.

As per CDR Scheme dated 27th March 2014 the maximum repayment term is upto quarter ending 30th June 2023. Refer note 4 D

181.30 -

2) Rupee Term Loan

Rupee Term Loans Secured - First pari passu charge over the Pooled Assets : All moveable (both fi xed and current assets) & immoveable assets of the Company excluding assets exclusively charged to respective lenders.


2,255.61 - 240.38 53.80

Rupee Term Loan Residual Charge over Pooled Assets.


4.69 - - -

Rupee Term Loan Secured - First Pari Passu Charge over all moveable assets (including current assets) pertaining to Drilling Offshore Pte Ltd (DOPL) Rigs.


0.73 - - -

3) Rupee Term Loan where scheme

implementation is pending

Rupee Term Loan - Consortium Secured - First pari-passu charge on the company’s movable & immovable fi xed assets of Dahej plant, present and future.

Payable in quarterly installments upto March 2015

- 88.66 74.36 58.82

Rupee Term Loan Secured - First pari-passu charge on the company’s movable & immovable fi xed assets of Dahej plant, present and future.

Payable in quarterly installments upto June 2017

107.03 64.32 149.92 39.88

Rupee Term Loan Secured - First pari-passu charge on movable and immovable fi xed assets of the Dahej Shipyard land at Dahej. Corporate Guarantee of holding company.


- 84.35 80.00 15.00

NON CDR

Foreign Curency Loan Secured - First pari passu charge over the Pooled Assets : All moveable (both fi xed and current assets) & immoveable assets of the Company excluding assets exclusively charged to respective lenders.

Payable in half yearly instalments upto Sep 2016

18.02 12.01 27.19 16.32

Foreign Curency Loan Payable in quarterly instalments upto April 2015

5.59 39.10 25.29 20.23

Rupee Term Loan Secured - First pari-passu charge on the assets of third party. Corporate guarantee of third party. Pledge of shares of the third party and non disposal undertaking on unpledged shares in the share capital of third parties.

Payable in quarterly instalments upto Dec 2017

20.47 0.53 20.90 0.11


54

Rupee Term Loan Secured - First charge on the

assets of third party Subservient

charge on all immoveable and

moveable fi xed assets of the Dahej

yard and personal and corporate

guarantee of third party.

Payable in quarterly instalments upto

March 2018

60.00 - 85.00 -

Rupee Term Loan Secured - Subservient charge on

current and fi xed assets of the

company at Dahej Yard.

Payable in monthly installments upto

Oct 2013

- - - 200.00

Rupee Term Loan Secured - Second charge by way

of hypothecation of entire movable

fi xed assets of Dahej Shipyard and

Rigyard of the company.

Payable in quarterly installments upto

Dec. 2014

- - 18.75 31.25

Rupee Term Loan Unsecured Payable in quarterly instalments upto

Oct, 2015

17.41 46.43 40.62 29.02

B) From Others 2,670.85 335.40 762.41 464.43

CDR

Rupee Term Loan Secured - First pari passu charge

over the Pooled Assets : All

moveable (both fi xed and current

assets) & immoveable assets of

the Company excluding assets

exclusively charged to respective

lenders.

As per CDR Scheme dated 27th

March 2014 the maximum repayment

term is upto quarter ending 30th June

2023. Refer note 4 D

125.00 - - -

NON CDR

Rupee Term Loan Secured - First pari passu charge

on the movable and immovable

fi xed assets at Dahej Plant.

Exclusive charge on immovable

property at Dahej of the company.

Interim security by way of fi rst

charge on immovoble assets of

third party. Corporate Guarantee of

holding company ABG International

Pvt. Ltd.

Payable in 6 quarterly instalments

commencing 30th Jan, 2014 and

ending 30th April, 2015

- 90.00 - -

125.00 90.00 - -

C) Vehicle loans

From banks Secured- Hypothecation of the

individual assets fi nanced.

Payable in monthly instalments upto

May, 2015.

0.01 0.11 0.12 0.21

From others Secured- Hypothecation of the

individual assets fi nanced.

Payable in monthly instalments upto

April, 2015.

- 0.09 0.10 0.12

0.01 0.20 0.22 0.33

D) From related parties

Holding Company (“Promoter’s

Contribution”)

Unsecured - Subordinated to CDR

facilities

Payable only after full repayment of

Restructured Facilities of the CDR

Lenders

68.01 - - -

68.01 - - -

2,863.87 425.60 762.63 464.76

4 C The Company has defaulted in repayment of loans and interest in respect of the following

Particulars As at 31.03.2014

` In Crores

As at 31.03.2014

Period in days

As at 31.03.2013

` In Crore

As at 31.03.2013

Period in days

Debentures issued to LIC

Principal 10.00 32-122 33.33 107

Interest 3.97 17-168 - -

Foreign Currency Loans

Princiipal 16.76 69-253 5.44 19

Interest 1.49 1-253 0.35 19

Rupee Term Loan

Princiipal 96.40 1-365 37.19 1-182

Interest 30.06 1-347 13.54 1- 91



55


4 D. Corporate Debt Restructuring

ABG Shipyard Limited is hereinafter referred to as the ‘Borrower’, who has availed various fi nancial facilities from the secured

lenders.

At the request of the Borrower, the Corporate Debt Restructuring Proposal (‘CDR Proposal’) of the Borrower was referred to

Corporate Debt Restructuring Cell (“CDR Cell”) by the consortium of senior lenders led by the ICICI Bank. The CDR Proposal as

recommended by ICICI Bank Ltd., the lead lender and approved by CDR Empowered Group (‘CDR EG’) on 24th March 2014 and

communicated vide Provisional Letter of Approval dated 27th March 2014, as amended/modifi ed from time to time. The cut off date

for CDR Proposal was 1st August 2013.

The Master Restructuring Agreement (‘MRA’) between the Borrower and the CDR Lenders has been executed, by virtue of which

the restructured facilities are governed by the provisions specifi ed in the MRA having cut off date of 1st August 2013.

For all the loans restructured under the above Corporate Debt Restructuring Scheme, creation of security is pending at registering

authority.

The CDR proposal is partly implemented as at 31st March 2014.

The Key features of the CDR Proposal are as follows:

1 Restructuring of existing fund based and non fund based fi nancial facilities, subject to renewal and reassessment every year.

2 Repayment of Restructured Term Loans (‘RTL’) after moratorium of 2 year from cut off date in 32 structured quarterly instalments

commencing from Quarter ending 30th September 2015 to 30th June 2023.

3 Conversion of various irregular/outstanding/devolved fi nancial facilities into Working Capital Term Loan (‘WCTL’) Repayment

of WCTL after moratorium of 3 years 6 months from cut off date in 26 structured quarterly instalments commencing from

Quarter ending 31st March 2017 to 30th June 2023, subject to mandatory prepayment obligation on realisation of proceeds

from certain asset sale and capital infusion.

4 “The interest payable on RTL and WCTL during moratorium period of 2 years and 3 years 6 months respectively from cut off

date also be converted to Funded Interest Term Laon (FITL). Out of Total FITL facility amounting to Rs 1,561 crore an an

amount aggregating to Rs. 1,000 crore shall be compulsorily converted into equity shares or 0.01% Compulsorily Convertible

Preference Shares (CCPS) befor 31st March 2016.

5 The rate of interest of RTL, WCTL, FITL and fund based working capital facilities shall be 11% for initial two year and thereafter

with annual reset option in accordance with MRA.

6 Contribution of Rs. 300 Crore in the Company by promoters in lieu of bank sacrifi ce in the form of equity shares / CCPS.

7 In case of fi nancial facilities availed from the non-CDR Lenders, the terms and conditions shall continue to be governed by the

provisions of the existing fi nancing documents.

8 Additional Security for the CDR debt - Personal Gurantee of Promoter Mr. Rishi Agarwal, Pledge of Promoter’s entire

shareholding of ABG shipyard Limited and Corporate Gurantee of ABG International Pvt Ltd. (Holding company)

AS AT AS AT 31.03.2014 31.03.2013


5. DEFERRED TAXES

Tax effect of items constituting deferred tax Liabilities

On account of profi t on Projects under completion 693.60 593.99

693.60 593.99

Tax effect of items constituting deferred tax assets

On account of gratuity liability and leave encashment liability 3.18 3.87

On account of expenses allowable on delivery of ships 6.06 24.84

On account of unabsorbed depreciation and losses (net) 220.54 38.27

On account of disallowances 36.46 0.90

266.24 67.88

427.36 526.11


56


AS AT AS AT 31.03.2014 31.03.2013


6. LONG TERM PROVISIONS

Provision for Gratuity 4.41 4.79

Provision for Leave Encashment 3.51 4.33

7.92 9.12

7. A - SHORT TERM BORROWINGS Security

From Banks:

a) Short term loans

Rupee Short Term Loan Secured- Charge on immovable property at Dahej 30.00 30.00

Corporate Guarantee of third party.

Rupee Short Term Loan Secured-Subservient charge on the current assets - 68.58

and movable fi xed assets Dahej Shipyard & Rigyard.


of the company, present and future.

Rupee Short Term Loan Unsecured - 95.31

b) Export Packing CreditSecured - First pari passu charge over the Pooled Assets : All movable (both fi xed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders.

233.64 654.33

c) Cash Credit 931.53 1,227.79

d) Others - payable on demand

28.20 69.29

e) Others - payable on demand

Unsecured 669.40 282.99

From Others:

Inter Corporate Deposits Unsecured 84.50 12.95

1,977.27 2,470.24

7 B. The Company has defaulted in repayment of loans and interest in respect of the following

Particulars As at 31.03.2014` in Crores

As at 31.03.2014Period of default

in days

As at 31.03.2013 ` in Crores


in days

Loans from banks

Principal 30.00 339 135.08 35-63

Interest 5.17 1-305 3.60 1-52

Others - payable on demand

Principal 208.20 365 69.29 2-61

Interest 0.62 47 - -

Inter Corporate Deposits

Principal 12.50 25-386 11.95 4-161

Interest 6.26 1-26 - -


57


AS AT AS AT 31.03.2014 31.03.2013


8. TRADE PAYABLES

(i) Sundry Creditors for Goods & Expenses [Refer Note 38] 834.66 359.82

(ii) Acceptances - banks 14.15 964.45

848.81 1324.27

The Company has no amounts due to suppliers under MSMED as at 31st March, 2014 (P. Y. Nil). The information relates to such vendors identifi ed 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 period

- -

(ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting period

- -

(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 period - -

(v) The amount of interest accrued and remaining unpaid at the end of the accounting period - -

(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) 30.00 266.67

b. Term Loans - from Banks 425.40 464.43

c. Vehicle loans

From banks 0.11 0.21

From others 0.09 0.12

(ii) Payables on purchase of fi xed assets

- Acceptances - banks 10.60 215.70

- Others 41.87 42.74

(iii) Interest accrued & due on borrowings 51.20 18.74

(iv) Interest accrued but not due on borrowings 4.83 12.45

(v) Advance from customers 3,888.73 2,877.79

(vi) Other Advances including Related Parties [Refer Note 38] 102.39 -

(vii) Unclaimed Dividends * 0.12 0.12

(viii) Other Payables

- Statutory remittances 31.20 10.64

- Trade / security deposits received 4.70 5.18

- Reimbursable Expenses 0.34 0.15

* To be transfered to Investor and Protection Fund, when due 4,591.58 3,914.94

10. SHORT TERM PROVISIONS

Provision for employee benefi ts:

Gratuity 1.38 1.42

Leave Encashment 0.98 1.33

Income Tax (Net of prepaid taxes) 58.05 47.83

Contingencies 4.38 3.64

64.79 54.22


58


11. FIXED ASSETS

PARTICULARS Gross BlockAt cost / Valuation

DEPRECIATION/ AMORTISATION/ IMPAIRMENT

NET BLOCK

AS AT 01.04.2013

ADDITIONS DURING

THE YEAR

DELETIONS/ ADJUSTMENTS

DURING THE YEAR

AS AT 31.03.2014

AS AT 01.04.2013

ADDITIONS DURING

THE YEAR

DELETIONS/ ADJUSTMENTS

DURING THE YEAR

AS AT 31.03.2014

AS AT 31.03.2014

AS AT

31.03.2013

TANGIBLE ASSETS

LAND

FREE HOLD LAND 83.32 *0.14 - 83.46 - - - - 83.46 83.32

LEASE HOLD LAND 7.71 - - 7.71 0.44 0.08 - 0.52 7.19 7.27

FACTORY BUILDING 528.92 30.54 21.23 538.23 154.28 30.45 - 184.73 353.50 374.64

BUILDING 122.43 4.93 - 127.36 17.18 5.32 - 22.50 104.86 105.25

PLANT AND MACHINERY

632.57 12.97 88.08 557.46 205.27 54.28 35.23 224.32 333.14 427.30

OFFICE EQUIPMENT 5.60 0.02 0.05 5.57 2.69 0.40 0.02 3.07 2.50 2.91

FURNITURE & FIXTURES

3.60 0.01 - 3.61 2.06 0.28 - 2.34 1.27 1.54

VEHICLES 14.10 - 1.47 12.63 9.47 1.20 1.22 9.45 3.18 4.63

COMPUTERS 5.06 0.01 0.01 5.06 4.38 0.28 0.01 4.65 0.41 0.68

1,403.31 48.62 110.84 1,341.09 395.77 92.29 36.48 451.58 889.51 1,007.54

INTANGIBLE ASSETS

SOFTWARE 8.13 0.46 - 8.59 6.49 0.72 - 7.21 1.38 1.64

8.13 0.46 - 8.59 6.49 0.72 - 7.21 1.38 1.64

T O T A L 1,411.44 49.08 110.84 1,349.68 402.26 93.01 36.48 458.79 890.89 1,009.18

Previous year 1,305.44 113.77 7.78 1,411.43 299.64 105.00 2.40 402.25 1,009.18

Capital work in progress 1,728.71 273.98 63.30 **1,939.39 1,939.39

* Stamp duty and Registration Charges ** Refer note 11 (vii ) below

i) Certain part of the land is yet to be registered in the name of the Company.

31.03.2014

` in crores

31.03.2013 ` in crores

ii) Depreciation, Amortisation & Impairment relating to continuing operations:Depreciation, Amortisation & Impairment for the year on tangible assets 92.29 103.87 Depreciation, Amortisation & Impairment for the year on intangible assets 0.72 1.13

93.01 105.00 Less: Utilised from revaluation reserve 1.23 1.29 Depreciation & Amortisation on discontinuing operations - - Depreciation, Amortisation & Impairment relating to continuing operations 91.78 103.71

iii) Impairment charges of `Nil (P.Y. 0.24 crores)

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 `185.03 cores (P.Y `176.14 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 ` 1.23 crores (P. Y ` 1.29 crores), which has been withdrawn from Revaluation Reserves and credited to Statement of Profi t and Loss.


59


vii) Details of Capital work in progress (CWIP) :

Particulars 31st March 2014 31st March 2013

` In crores ` In crores

Ship and Rig Yard 209.02 232.29

Land , Building and Site development

Plant & Machinery : *

Main Plant & Machinery 882.81 812.12

Cranes 35.32 66.77

Jetty 3.28 2.98

Others 1.05 1.66

Sub Total 1,131.48 1,115.82

Preoperative expenses (Pending Allocation) :

Rent 2.97 3.16

Travelling & Conveyance 6.49 6.78

Finance Charges 818.70 659.57

Personnel Expenses 18.97 18.86

Communication Expenses 0.31 0.33

Professional & Technical Fees 6.90 7.36

Depreciation 13.44 14.33

Other Site Expenses 3.44 3.67

Sub Total 871.22 714.06

Total 2,002.70 1,829.88

Less: Capitalised during the year 45.81 101.17

Less: Transferred 17.50 -

Grand Total 1,939.39 1,728.71

* Includes Goods In Transit - Nil (P.Y. ` 66.05 crores)

As a consequence of Settlement Commission Order dated 18th April 2013, an amount of ` 38.72 crores has been debited to ABG Resources Pvt Ltd, a related party, the impact of which is as under -

- Deletion in building ` 21.23 crores Corresponding effect of depreciation of ` 5.72 crores has been adjusted from depreciation for the year.

- Deduction in CWIP ` 17.49 crores

During the year, ̀ 45.81 crores ( P. Y. 101.17 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 notifi cation 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 Profi t and Loss for the year is a Gain of `9.49 crores (P.Y. Gain ` 6.68 crores) due to foreign currency exchange loss (net) which has been capitalized with CWIP.

ix) Acquisition through business combinations / Assets reclassifi ed as held for sale - Nil (P.Y. Nil)


60


AS AT AS AT 31.03.2014 31.03.2013


12. NON-CURRENT INVESTMENTS

Non Trade - At cost

Quoted

In Equity Shares

In subsidiary

174448852 (P. Y.177001303) Equity Shares in Western India Shipyard Ltd. of ` 2/- each fully paid up

34.89 35.40

Unquoted

In Equity Shares

In subsidiary

10000 (P.Y.10000) Equity Shares in ABG Shipyard Singapore Pte. Ltd. of SGD 1/- each fully paid up

0.03 0.03

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 of SGD 1/- each fully paid up

0.92 0.92

1000 (P.Y. 1000) Equity Shares in Varada Seven Pte. Ltd. of USD 1/- each fully paid up

0.01 0.01

In Preference Shares

In subsidiaries :

4212100 (P.Y. 4212100) 1% Preference Shares in ABG Shipyard Singapore Pte. Ltd.of USD 1/- each fully paid up.

187.84 187.84

In Partnership Firm

Capital in partnership fi rm Vipul Shipyard - 5.82

223.70 230.03

1) Aggregate amount of quoted investments ` 34.89 crores (P.Y `35.40 crores)

Aggregate market value of quoted investments `27.39 crores (P.Y. ` 48.68 crores)

2) Aggregate amount of unquoted investments `188.81 crores (P.Y. `194.63 crores)

3) 169671177 (P.Y 172223628 ) 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.

4) As the investment are in the operating companies, considering the economic scenerio the manangement does not consider diminution in value, if any, to be permanent in nature.

5) During the year the company has retired as partner from partnership fi rm w.e.f. 1st July 2013. Details of Partners, capital and shares in the fi rm till dated 1st July 2013 are as under. As on 31st March 2014 balances of partner share are recoverable from fi rm.

Details of Investment in partnership fi rm Vipul Shipyard , Surat

01/07/2013 31/.3/2013

Capital Account 5.82 5.82

Current Account 28.55 27.79

Total Capital of Vipul Shipyard 5.84 5.84

Partners details Share in profi ts/ losses

ABG Shipyard Ltd. 98.00%

Onaway Industries Ltd 1.00%

Mr. Damador Prasad Gupta 0.60%

Others 0.40%


61


AS AT AS AT 31.03.2014 31.03.2013


13. LONG-TERM LOANS AND ADVANCES

(Unsecured, considered good)

Capital Advances 56.08 63.27

Security Deposits [Refer Note 38] 129.98 128.64

Due from Government authorities

MAT Credit Entitlement 200.40 165.65

Added during the year - 34.75

Less: Utlised / Reduced 1.87 -

198.53 200.40

Note: MAT credit utilised / reduced is a consequence of Settlement Commission Order pertaining to earlier years.

Service tax credit - receivable - deferred 11.60 12.52

Loans and advances to related parties [Refer Note 38] 60.00 60.00

456.19 464.83

14. INVENTORIES

(As taken, valued & certifi ed by management)

Raw Material and Components

In stock 452.00 496.44

In transit 330.64 570.99

782.64 1,067.43

Work in Progress

On Percentage completion basis 8,991.49

(Contract costs & recognised profi t)

Less: Progress Money from Customers 5,501.93 3,489.56 3,205.85

Finished goods 79.04 79.04

4,351.24 4,352.32

Finished goods represents completed ship where invoicing and protocol of acceptance is pending

15. TRADE RECEIVABLES


Outstanding for more than six months from due date of payment [Refer Note 38] 78.88 46.86

Others [Refer Note 38] 53.20 8.44

132.08 55.30

Less: Provision for doubtful receivables 2.15 -

129.93 55.30

16. CASH AND BANK BALANCE

Cash in hand 0.05 0.11

Balances with Banks:

i) In Current Accounts 178.40 19.23

ii) In EEFC Accounts 0.01 0.08

iii) In Fixed Deposits 3.97 6.01

iv) In Earmarked Accounts

Unclaimed dividend accounts 0.12 0.12

182.55 25.55 Out of the above :

All fi xed deposits with banks are held as security against short term borrowing including fi xed deposit with maturities of more than twelve months ` 0.26 Crores (Previous Year - Nil)

3.97 6.01


62


AS AT AS AT 31.03.2014 31.03.2013


17. SHORT-TERM LOANS AND ADVANCES

(Unsecured, Considered good)

Loans and Advances to related parties: [Refer note 38]

Current Account in Partnership Firm - 27.79

Advance for supplies / services 1,190.56 726.60

Loans to Subsidiary 46.91 26.18

Other loans and advances 605.88 387.46

1,843.35 1,168.03

Others:

Advance to suppliers 1,344.75 789.88

Prepaid Expenses 164.19 300.16

Employee Advances 6.60 6.25

Inter Corporate Deposits 17.00 17.00

Other advances 34.00 -

Balance with Government Authorities

Service Tax Refundable / Credit 4.98 4.01

Vat credit 0.29 0.27

Income Tax 0.02 0.02

5.29 4.30

1,571.83 1,117.59

3,415.18 2,285.62

Details of Loans and Advances in the nature of loan to subsidiaries

Sr No Name of the shareholder As at 31.03.2014 As at 31.03.2013

Amount outstanding

Maximum amount outstanding during

the year

Amount outstanding

Maximum amount outstanding during

the year

1 Western India Shipyard Ltd. 25.00 25.00 25.00 25.00

2 ABG FPSO Pvt Ltd. 2.09 3.03 1.18 1.18

3 ABG Shipyard Singapore Pte. Ltd. 19.82 19.82 *0.00 0.00

* Amount less than ` 0.01 crore.

18. OTHER CURRENT ASSETS


Subsidy 566.30 455.79

Interest accrued

Fixed Deposits with Bank 0.06 0.01


Insurance Claims Receivable 4.53 5.58

Others [Refer Note 38]

Receivables on sale of fi xed assets 0.67 0.67

Others 22.45 15.45

598.77 480.37


63


Year ended Year ended 31.03.2014 31.03.2013


19. REVENUE FROM OPERATIONS

Manufacturing

Ships 1,289.45 1,463.80

Rigs 168.31 481.48

Trading - 11.41

Services - Ship Repair 11.11 86.83

Other operating Revenue

Subsidy 119.43 50.50

Excise and duty refunds 6.22 5.63

1,594.52 2,099.65

20. OTHER INCOME

Interest on:

Fixed deposits with banks 0.87 4.59

Inter corporate deposit 2.10 1.94

Others 28.52 15.20

Net Profi t/( loss) on sale of non current Investments - 0.03

Other Non operating Income :

Insurance Claims 1.57 2.66

Sundry balances written back 0.04 11.56

Miscellaneous Receipts 7.28 5.45

40.38 41.43

21. A. CONSUMPTION OF RAW MATERIALS & COMPONENTS

Steel 28.40 181.17

Other Items 985.79 922.51

1,014.19 1,103.68

21. B. PURCHASE OF TRADED GOODS

Steel - 10.28

- 10.28

22. CHANGES IN INVENTORIES - WORK IN PROGRESS

(Included in work in progress on percentage completion basis)

Opening Work In Progress 345.54 226.56

Adjustments (Net) 87.71 -

433.25 226.56

Closing Work In Progress 721.09 345.54

Decrease in Work in progress (287.84) (118.98)

Note: Adjustments (Net) include adjustment due to transfer of opening work in progress of cancelled contracts and adjustment due to steel credit as per Settlement Commission Order dated 14th February 2012.

23. EMPLOYEE BENEFITS EXPENSE

Salaries Wages and other benefi ts 53.50 63.39

Contribution to Provident Fund 3.13 3.89

Staff Welfare Expenses 12.67 18.62

69.30 85.90


64




24. FINANCE COST

Interest Expense on borrowings 544.22 272.20

Other Interest 30.50 37.41

Guarantee Commission (net) 3.40 42.67

Difference in Exchange on foreign currency transaction / translation (net) (4.37) 4.98

Other Borrowing Costs 35.18 44.04

608.93 401.30

25. OTHER EXPENSES

Consumption of stores 21.11 47.46

Contractors Charges 50.26 149.65

Power and Water 8.20 13.90

Repairs & Maintenance

- Plant & Machinery 1.54 3.41

- Buildings 0.12 0.27

- Others 1.00 1.17

Other Manufacturing Expenses 2.87 7.64

Inspection and Survey Expenses 5.51 5.13

Offi ce Expenses 4.89 8.00

Rent Rates & Taxes 5.65 5.77

Insurance 14.03 24.89

Printing & Stationery 0.18 0.30

Postage Telephone & Telex 0.88 1.13


Professional Charges 8.75 14.26

Payment to Auditors 0.88 1.00

Donations & Charities 8.35 4.44

Prior Years Expenses - 0.11

Selling & Distribution 160.42 42.05

Forward Cover Loss/ (Gain) (net) 5.78 49.91

Loss from Partnership Firm - 1.20

Loss/ (Profi t) on Sale of Assets (net) 16.66 (8.25)

Loss on Sale of Non Current Investments 0.05 -

Loss on cancelled contracts 37.44 -

Provision for Doubtful Debtors 2.15 -

Miscellaneous Expenses 0.01 0.03

362.58 381.49


65


26. Capital commitment on contracts remaining to be executed on capital account and not provided for, are estimated at

` in Crores


Tangible Assets 91.50 213.32

91.50 213.32

27. (a) Contingent liability not provided for

` in Crores


In respect of Performance/ Delivery Guarantees given by banks to the buyers. 59.39 163.20

Corporate guarantees to banks in respect of facilities granted to group companies. 1,412.38 1,305.06

Other bank guarantees 37.72 42.40

Claims against the company not acknowledged as debts 2.56 2.29

Claims in respect of indirect taxes 26.59 10.23

Claims in respect of direct taxes 3.24 -

(b) Contingencies provided for in accordance with AS 29 issued by the Institute of Chartered Accountants of India

` in Crores


Carrying amount as at the beginning of the year 3.64 2.96

Provision during the year. 0.74 0.88

Unused amount reversed during the year - -

Balance at the end of the year 4.38 3.64

The contingencies provided are in respect of estimated warranties on sold ships.

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. Exchange fl uctuation included in the Statement of Profi t and Loss is a loss of ` 741.30 crores and gain of ` 192.31 crores

(P.Y.loss `170.15 crores gain `123.14 crores).Out of this, a net loss of `553.36 crores (P Y.net `42.03 crores) is related to

material and included in consumption.

30 i) Value of goods imported on C.I.F. basis (including goods in transit) :

` in Crores


a) Capital Goods 74.54 133.24

b) Raw Materials Steel 0.95 13.60

c) Components and Others 178.72 1,141.61

ii) Consumption of Steel and Components during the year:


` In Crores % ` In Crores %

a) Imported 19.70 1.94 141.70 12.84

b) Indigenous 8.70 0.86 39.47 3.58

Components & Spare Parts :

a) Imported 974.00 96.04 762.90 69.12

b) Indigenous 11.79 1.16 159.61 14.46


66


iii) Earnings/ expenditure in foreign exchange (on accrual basis):` in Crores


Earnings:

Export Sales on FOB basis 562.14 559.81

Other Income 34.55 84.14

Expenditure:

Legal & Professional Fee 1.03 0.58


Interest & Other Charges 97.98 72.83

Travelling and Other Matters 49.07 24.45

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.

31. Auditors’ Remuneration: (excluding service tax )

` in Crores


Audit Fee (Including consolidation) 0.41 0.41

Tax / Transfer Pricing audit fees and taxation matters 0.30 0.30

Certifi cation and other Professional Services 0.07 0.18

32. 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

33. Disclosure in accordance with ‘AS -7 Accounting for Construction Contracts’ issued by the Institute of Chartered Accountants of India:

` in Crores


a. Contract revenue recognized as revenue in the year 1,438.53 1,784.59

b. Contract cost incurred and recognized profi ts 8,270.41 7,702.62

c. Advances received from above customers 6,078.13 5,025.78

d. Gross amount due from customers for contract work 3,170.13 3,103.79

e. Gross amount due to customers for contract work 977.86 426.95

The Gross amount due from customers refl ects the net amount for all contracts in progress for which cost incurred plus recognised profi t (less recognised losses) exceeds progress billing.

The Gross amount due to customers refl ects the net amount for all contracts in progress where progress billing exceeds cost incurred plus recognised profi ts (less recognised losses).

During the year, advances from customers to the extent of work done amounting to Rs 5100.27 crores .(P.Y.Rs 4598.83 crores) is adjusted against Work in Progress in Note No 14. Advances received in excess of work done and advances pending commencement of work are disclosed in Current Liabilities under Advances from Customers in Note No 9.


67


34. The disclosures required under Revised Accounting Standard 15 ‘Employee Benefi ts’ notifi ed in the Companies (Accounting Standards) Rules 2006, are given below

Defi ned Contribution Plan

Contribution to Defi ned Contribution Plan, recognized are charged off for the year are as under: ` in Crores

Particular 31st March 2014 31st March 2013

Employer’s Contribution to Provident Fund 2.44 3.09

Employer’s Contribution to Pension Scheme 0.69 0.80

Defi ned Benefi t Plan

The employees’ gratuity fund scheme managed by SBI Life Insurance is a defi ned benefi t 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 benefi t entitlement and measures each unit separately to build up the fi nal obligation. The obligation for leave encashment is recognized in same manner as gratuity.

` in Crores

Particular Gratuity (Funded) Leave Encashment (Unfunded)

31st March 2014 31st March 2013 31st March 2014 31st March 2013

a. Reconciliation of opening and closing balances of

Defi ned Benefi t obligation

Defi ned Benefi t obligation at the beginning of the year 6.26 5.71 5.67 6.06

Current Service Cost 0.67 0.88 0.58 0.96

Interest Cost 0.50 0.46 0.45 0.48

Actuarial (gain) / loss (1.59) (0.58) (1.33) (0.67)

Benefi ts paid (0.02) (0.21) (0.87) (1.16)

Defi ned Benefi t obligation at the year end 5.82 6.26 4.49 5.67

b. Reconciliation of opening and closing balances of

fair value of plan assets

Fair value of plan assets at beginning of the year 0.05 0.25 - -

Expected return on plan assets *0.00 0.02 - -

Actuarial gain/(loss) *(0.00) (0.01) - -

Employer contribution - 0.01 - -

Benefi ts Paid (0.02) (0.21) - -

Fair value of plan assets at the year end 0.03 0.05 - -

c. Reconciliation of fair value of assets and

obligations

Fair value of plan assets as at Year End 0.03 0.05 - -

Present value of obligation as at Year end 5.82 6.26 4.49 5.67

Amount recognised in Balance Sheet 5.79 6.20 4.49 5.67

d. Expenses recognised during the year


Interest Cost 0.50 0.46 0.45 0.48

Expected return on plan assets *(0.00) (0.02) - -


Net Cost (0.42) 0.76 (0.29) 0.77

e. Investment Details % Invested

SBI Group Gratuity (Cash Accumulation) Policy 100 100

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%

*Amount less than Rs. 0.01 crore


68

NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH, 2014The estimates of rate of escalation in salary considered in actuarial valuation, take into account infl ation, seniority, promotion

and other relevant factors including supply and demand in the employment market. The above information is certifi ed by the

actuary and relied upon by auditors.

35. Calculation of Earning per share (EPS)


Net profi t as per Statement of Profi t & Loss (` In crores) (199.30) 107.13

Weighted Avarage number of Equity shares of ` 10/- each fully paid up 50,921,801 50,921,801

Earning per Equity Share of ` 10/- each fully paid up. (Rupees) (39.14) 21.04

(Basic & Diluted)

36. The Company primarily operates in one business segment only i.e. manufacturing which is the only reportable segment.

There is no other segment which satisfi es the threshold limit as per Accounting Standard -17, issued by Institute of Chartered

Accountants of India.

Secondary segment (Geographical Segments): ` in Crores

Particular Domestic Overseas Total

31st March 2014 31st March 2013 31st March 2014 31st March 2013 31st March 2014 31st March 2013

Revenue [as per AS 7 (revised)] 262.11 457.73 1,332.41 1,641.92 1,594.52 2,099.65

37 Exceptional item of Rs. 72.13 crores represents commision on stage paymant refund / performance guarantee predebited by

banks

38. Related Parties Disclosure as per Accounting Standard (AS) 18:

A. LIST OF RELATED PARTIES

Holding company ABG International Private Limited

Subsidiaries / Controlling stake Western India Shipyard Limited

ABG Shipyard Singapore Pte. Limited

Vipul Shipyard ( Partnership Firm) (upto 30th June 2013)

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.

Vardha one Pte. Limited

Companies over which directors / relatives are able to exercise control or signifi cant infl uence

ABG Infralogistics Limited

ABG Power Private Limited

ABG Cranes Private Limited

ABG Foods Private Limited

ABG Acquafarm Private Limited

ABG Glass Private Limited

ABG Engineering & Construction Limited

Tirupati Landmark Private Limited

Tirupati Management & Investment Services Private Limited (Formerly ABG Mercantile & Investment Services Private Limited )

Eleventh Land Developers Private Limited

ABG Resources Private Limited (Formerly Second Land Developers Private Limited)

ABG Motors Limited

Banal Investment & Trading Private Limited

Jarrow Finance & Trading Private Limited

Onaway Industries Limited

Agbros Leasing & Finance Private Limited

Aries Management Services Private Limited


69

NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH, 2014G.C. Property Private Limited

Gold Croft Property Private Limited

Somerset Estate Private Limited

ABG Enterprises & Trading Private Limited (Formerly Nibodh Trading Private Limited

ABG Energy Himachal Pradesh Limited

Vipul Shipyard ( Partnership Firm) (w.e.f 1st July 2013)

ABG Business Ventures Pte. Limited

Drilling & Offshore Pte. Limited

Drilling & Offshore One Pte. Limited

Drilling & Offshore Two Pte. Limited

Global Bulk Carriers Pte. Limited

Varada Ventures Pte. Limited

Varada Drilling One Pte. Limited

Varada Drilling Two Pte. Limited

Varada Two Pte. Limited

Varada Three Pte. Limited

Varada Four Pte. Limited

Varada Five Pte. Limited

Varada Six Pte. Limited

Varada Seven Pte. Limited

Varada Nine Pte. Limited

Varada Ten Pte. Limited

Varada Eleven Pte. Limited

Varada Twelve Pte. Limited

Individuals owning directly or indirectly an interest in the voting power that gives them control or signifi cant infl uence

Shri. Rishi Agarwal

Key management personnel Shri. Syed Abdi (w.e.f. 9th January 2014 )

Shri. Dhananjay Laxman Datar

Major Arun Phatak (upto 31st December 2013)

Shri. S.Muthuswamy (w.e.f. 13th November 2013 )


70

NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH, 2014 ` in Crores

Sr. no.

Nature of Transactions Holding company

Subsidiaries/Controlling

stake

Fellow subsidiary companies

Co over which directors / relatives are able to exercise signifi cant infl uence

Individuals owning

directly or indirectly

an interest in the

voting power that gives them

control or signifi cant

infl uence

Key management personnel

Total

31st March 2014

1 Revenue from Operations 0.00 1.12 0.00 143.20 - - 144.32

(5.40) (0.42) (87.77) (152.62) - - (246.21)

2 Rent Expenses - 0.07 - 1.38 - - 1.45

- (0.00) - (1.20) - - (1.20)

3 Hire Charges - - - 0.00 - - 0.00

- - - (0.57) - - (0.57)

4 Services Received - - - 0.72 - - 0.72

- (95.54) - (1.20) - - (96.74)

5 Interest/ Guarantee Commission/ Other Income Charged

- - 0.40 57.72 - - 58.12

- - (21.99) (51.90) - - (73.89)

6 Finance Charges Paid - 5.56 - 3.19 - - 8.75

- (0.00) - (0.00) - - (0.00)

7 Payment to Key Management Personnel3

- - - - - 1.75 1.75

- - - - - (2.59) (2.59)

8 Purchase of Fixed Assets - - - 0.53 - - 0.53

- - - (7.12) - - (7.12)

9 Sale of Fixed Assets 0.00 - - *0.00 - - 0.00

(12.96) - - (0.00) - - (12.96)

10 Sale of Shares - - - 0.00 - - 0.00

- - - (0.01) - - (0.01)

11 Stage Payment Received - - 132.40 4,726.97 - - 4,859.37

- - (207.49) (635.02) - - (842.51)

12 Stage Payment Refunded - - 163.18 323.34 - - 486.52

- - (60.51) (35.39) - - (95.90)

13 Loans and Advances Given / Repaid

84.71 58.61 216.08 696.98 0.05 - 1,056.43

(199.66) (60.78) (162.31) (628.23) (0.12) - (1,051.10)

14 Loans and Advances Taken / Refunded

182.84 21.39 79.37 328.41 0.05 - 612.06

(208.58) (33.90) (1.44) (15.43) (0.36) - (259.72)

15 Deposit Refund Received - - - 0.00 - - 0.00

- - - (110.00) - - (110.00)

16 Guarantees Taken 2 16,176.66 - - - - - 16,176.66

(618.00) - - - - - (618.00)

17 Guarantees Given 2 - - 0.00 0.00 - - 0.00

- - (25.00) (435.12) - - (460.12)


71

NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH, 2014 ` in Crores

Sr. no.


Controlling stake



Individuals owning


an interest in the



infl uence

Key manage

ment personnel

Total

31st March 2014

Outstanding Balances as on 31st March 2014

Receivables 0.67 4.64 45.67 44.75 - - 95.73

(0.67) (3.37) (45.66) (14.15) - - (63.85)

Payables - 18.50 *0.00 29.73 0.26 - 48.49

- (31.67) *(0.00) (10.55) (0.26) - (42.48)

Advance from Customers - - 1164.88 6291.05 - - 7,455.93

- - (1152.61) (1902.02) - - (3,054.63)

Loans and Advances Given

- 46.91 378.48 1,477.96 - - 1903.35

- (26.18) (208.52) (993.33) - - (1,228.03)

Loans and Advances Taken

98.12 0.00 33.25 15.02 - - 146.40

(0.00) (0.00) (0.00) (0.00) - - (0.00)

Deposits Given - - - 123.00 - - 123.00

- - - (123.00) - - (123.00)

Guarantees Taken 2 17229.66 - - - - - 17229.66

(1,053.00) - - - - - (1,053.00)

Guarantees Given 2 - 88.60 1,106.08 1,081.08 - - 2,275.76

- (88.60) (1,046.02) (979.02) - - (2,113.64)

* Amount less than Rs. 0.01 crore

Notes :

1. 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

2. Guarantees taken / given comprise of guarantees given to third parties on behalf of the Company / related parties.

3. Managerial Remuneration as detailed in point 7 below exceeds limits prescribed under Schedule XIII of the Companies Act, 1956 and the same is subject to approval from Central Government..

4. Related Parties have been identifi ed by the management and relied upon by the auditors.

5. Previous Year fi gures are shown in brackets.


72


Disclosure in respect of Related Party transactions during the year:

1 Revenue from Operations include Varada Marine Pte. Limited Rs. Nil (Previous Year Rs. 76.58 crores), Varada Three Pte.

Limited Rs 143.20 crores (Previous Year Rs.152.62 crores)

2 Rent Expenses include Aries Management Services Private Limited Rs. 0.54 crores (Previous Year Rs. 0.46 crores), G.C.

Property Private Limited Rs. 0.15 crores (Previous Year Rs. 0.12 crores), Gold Croft Property Private Limited Rs. 0.15 crores

(Previous Year Rs. 0.12 crores), Somerset Estate Private Limited Rs. 0.15 crores (Previous Year Rs. 0.12 crores)

3 Hire Charges paid to ABG Infralogistics Limited Rs. Nil (Previous Year Rs. 0.57 crores)

4 Services Received from Western India Shipyard Limited Rs. Nil (Previous Year Rs.95.54 crores ), ABG Resources Private

Limited Rs. 0.72 crores (Previous Year Rs. 1.20 crores)

5 Interest / Guarantee Commission / Other Income Charged to Varada Marine Pte. Limited (along with its SPVs) Rs. 0.40

crores (Previous Year Rs. 21.99 crores ), ABG Engineering & Construction Limited Rs. Nil (Previous Year Rs. 32.00 crores),

ABG Business Ventures Pte. Limited Rs. 5.41 crores (Previous Year Rs. 4.90 crores), Varada Seven Pte. Limited Rs. 28.47

crores (Previous Year 15.00 crores ) ABG Resources Private Limited Rs. 15.00 crores (Previous Year Rs. Nil), Global Bulk

Carriers Pte. Limited Rs. 8.84 crores (Previous Year Rs. Nil)

6 Finance Charges Paid to Western India Shipyard Limited Rs. 5.56 crores (Previous Year Rs Nil ), ABG Infralogistics Limited

Rs. 2.33 crores (Previous Year Rs. Nil)

7 Payment to Key Management Personnel include to Syed Abdi Rs. 0.30 crores (Previous Year N.A.) Major Arun Phatak Rs.

0.78 crores (Previous Year Rs.0.75 crores ), Shri. Dhananjay Datar Rs. 0.48 crores (Previous Year Rs. 0.64 crores ), Shri. S.

Muthuswamy Rs. 0.19 crores (Previous Year N.A.), Shri. R.S. Nakra Rs. Nil (Resigned w.e.f. 1st December, 2012) ( Previous

Year Rs. 1.20 crores)

8 Purchase of Fixed Assets include from ABG Cranes Private Limited Rs. 0.53 crores (Previous Year Rs.7.12 crores )

9 Sale of Fixed Assets include to ABG International Private Limited Rs. Nil (Previous Year Rs.12.96 crores ), ABG Infralogistics

Limited Rs. *0.00 crores (Previous Year Rs.Nil)

10 Sale of Shares to ABG Mercantile & Investment Services Private Limited Rs. Nil (Previous Year Rs. 0.01 crores )

11 Stage Payment Received include from Varada Marine Pte. Limited (along with its SPVs) Rs.Nil (Previous Year Rs. 165.10

crores ), Global Bulk Carriers Pte. Limited Rs. Nil (Previous Year Rs. 187.61 crores ), Varada Three Pte. Limited Rs. 6.60

crores (Previous Year Rs. 170.54 crores ), Varada Five Pte. Limited Rs. Nil (Previous Year Rs. 170.77 crores ), Varada

Four Pte. Limited Rs. 619.28 crores (Previous Year Rs. Nil),Varada Nine Pte. Limited Rs.778.41 crores (Previous Year Rs.

Nil),Varada Drilling One Pte. Limited Rs 876.11 crores (Previous Year Rs.Nil),Varada Drilling Two Pte. Limited Rs 876.11

crores (Previous Year Rs. Nil), Drilling & Offshore Two Pte. Ltd. Rs. 778.05 crores (Previous Year Rs.Nil)

12 Stage Payment Refunded include Varada Marine Pte. Limited (along with its SPVs) Rs. 163.18 crores (Previous Year Rs.

Nil), Global Bulk Carriers Pte. Limited Rs. 228.44 crores (Previous Year Rs. Nil ) Varada Five Pte. Limited Rs. 94.90 crores

(Previous Year Rs. Nil ),Varada Seven Pte. Limited Rs. Nil (Previous Year Rs. 35.39 crores )

13 Loans and Advances Given / Repaid include ABG International Private Limited Rs. 84.71 crores (Previous Year Rs. 199.66

crores ), PFS Shipping (India) Limited Rs. 214.70 crores (Previous Year Rs. 161.00 crores ), ABG Engineering & Construc-

tion Limited Rs. 38.58 crores (Previous Year Rs. 250.48 crores ), ABG Resources Private Limited Rs. 198.27 crores (Previ-

ous Year Rs. 130.67 crores ), Varada Seven Pte. Limited Rs. Nil (Previous Year Rs. 225.25 crores ).

14 Loans and Advances Taken/ Refunded include ABG International Private Limited Rs. 182.84 crores (Previous Year Rs.

208.58 crores ), Western India Shipyard Limited Rs. 20.45 crores (Previous Year Rs. 33.90 crores ), ABG Engineering &

Construction Limited Rs. 89.34 crores (Previous Year Rs. *0.00 crores ), ABG Resources Private Limited Rs. 122.39 crores

(Previous Year Rs.0.81 crores )


73


15 Deposit Refund Received from ABG Resources Private Limited Rs. Nil (Previous Year Rs. 110.00 crores )

16 Guarantees Taken from ABG International Private Limited Rs. 16,176.66 crores (Previous Year Rs. 618.00 crores )

17 Guarantees Given to Varada Ventures Pte. Limited Rs.Nil (Previous Year Rs. 435.12 crores )

39. Information on Foreign Currency Exposure:

(a) Outstanding forward exchange contracts/ options entered by the company for the purpose of hedging its foreign currency exposures is Nil (P Y Nil) In view of the same Mark to market difference as on 31st March, 2014 is Nil. (P.Y loss Rs.3.36 crores)

(b) Notional value of Interest Rate Swaps to hedge against fl uctuation in interest rate is Nil (P.Y USD 0.80 crores)

(c) Currency swap to hedge against fl uctuations in exchange rate and interest rate is Nil (P. Y Nil )

(d) Foreign Currency exposure that is not hedged by derivative instruments is as under:

Currency Payable Receivable


AUD *0.00 *0.00 - -

EURO 2.31 2.99 0.03 -

USD 11.47 25.55 10.59 8.72

NOK 1.18 2.58 - -

JPY - 6.10 - -

GBP 0.01 0.01 - -

AED *0.00 v0.01 - -

SGD 0.08 0.10 - -

* Amount less than ` 0.01 crore

40. The fi gures for the previous year have been arranged/rearranged/regrouped wherever considered necessary.





74

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT , 1956 RELATING TO SUBSIDIARY COMPANY

S.N. Particulars / Name of subsidiary Western India

Shipyard Ltd.

ABG Shipyard

Singapore Pte. Ltd.

ABG FPSO

Pvt. Ltd.

1 The fi nancial year of the subsidiary ended on 31st March, 2014 31st March, 2014 31st March, 20142 Date from which it became subsidiary company 14th October, 2010 08th February,2010 09th January, 20123 Number of shares in the subsidiary company held

by ABG Shipyard Ltd. ason 31st March 2014 Equity Shares 174448852

of the face valueof ` 2/- eachfully paid up

10000of the face value of

Singapore Dollar 1/-each

fully paid up

10000of the face value

of ` 10/- eachfully paid up

Preference Shares - 4212100 - of USD 1 each fully

paid up.

4 Extent of holding by ABG Shipyard Ltd. 59.21% 100% 100%5 The net aggregate amount of subsidiary

company’s profi t /(loss) so far as it concerns to member of holding company

5.1 Not dealt with the holding company 's accounts : ìn crores ìn crores ìn crores5.1.1. For the fi nancial year ended 31st March 2014 (26.90) (0.46) (0.32)5.1.2. For the previous years since they became subsidiary 5.71 1.82 (1.13)

5.2 Dealt with the holding company ‘s accounts :5.2.1 For the fi nancial year ended 31st March 2014 NIL NIL NIL5.2.2. For the previous years since they became subsidiary NA NIL NIL

6 Change in interest of ABG Shipyard Ltd. in the subsidiary between the end of fi nancial year of subsidiary company and end of ABG Shipyard Ltd.

NA NA NA

7 Material change between the end of fi nancial year of subsidiary and end of ABG Shipyard Ltd. in respect of the following :

NA NIL NIL

ABG Shipyard Ltd. in respect of the following :Fixed Assets NIL NIL NILInvestments NIL NIL NILMoney lent by the subsidiary company NIL NIL NILMoney borrowed by the subsidiary company (other than current liabilities)

NIL NIL NIL

STATEMENT PURSUANT TO EXEMPTION RECEIVED UNDER SECTION 212(8) OF THE COMPANIES ACT , 1956 RELATING

TO SUBSIDIARY COMPANY

S.N. Name of subsidiary Western India

Shipyard Ltd.

ABG Shipyard

Singapore Pte. Ltd.

ABG FPSO

Pvt. Ltd.

a. Capital 58.93 18.82 0.01b. Reserves (72.29) 236.31 (1.45)c. Total Assets 198.89 281.98 12.20 d. Total Liabilities 198.89 281.98 12.20 e. Details of Investments. 5000 Shares in Janata Sahakari Bank Ltd. of

`100/- each. 0.05

434645.8558 (P.Y. 434645.8558) Units in Emerging Markets Diversifi edFund of Standard Chartered Trust (Cayman) Limited of Face ValueUSD 100 per unit.

261.05

f. Turnover 39.14 - 8.33 g. Profi t before Taxation (26.58) (0.07) (0.32)h. Provision Taxation 0.32 0.40 Nil i. Profi t after Taxation (26.90) (0.46) (0.32)j. Proposed Dividend Nil Nil Nil


75

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 fi nancial 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, 2014, the Consolidated Statement of Profi t and Loss and the Consolidated Cash Flow Statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation of these consolidated fi nancial statements that give a true and fair view of the consolidated fi nancial position, consolidated fi nancial performance and consolidated cash fl ows of the Group in accordance with accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated fi nancial 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 fi nancial 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 fi nancial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated fi nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated fi nancial 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 fi nancial 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 fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient 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 fi nancial 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, 2014;

b) in the case of the consolidated Statement of Profi t and Loss, of the loss of the Group for the year ended on that date; and

c) in the case of the consolidated Cash Flow Statement, of the cash fl ows of the Group for the year ended on that date.

Emphasis of Matter

1. Note no. 4D wherein as explained Corporate Debt Restructuring (CDR) scheme has been approved by the Corporate Debt Restructuring Empowered Group (CDR EG) on March 24, 2014 and applicable with effect from August 1, 2013. The CDR proposal has been partly implemented as on March 31, 2014.The outstanding liabilities of the Company have been substantially restructured under the aegis of CDR Scheme, which extends till June 2023.

Footnote no. 3 of note no. 36 whereby managerial remuneration paid by the Company exceeds the limits prescribed under Schedule XIII of the Companies Act, 1956 and the same is subject to approval from Central Government. The Company is yet to apply to the Central Government for seeking such approval

Our opinion is not qualifi ed in respect of the above matter.

2. We draw a specifi c attention to the subsidiary’s auditor’s comment wherein he has drawn attention to Note no 36 of the fi nancial statements stating that ‘regarding the fi nancial statements prepared on going concern basis notwithstanding the fact that its net worth is completely

eroded. The appropriateness of the said basis is inter-alia dependent on the company’s ability to infuse requisite funds for meeting its

obligations for payment of debt and generate more business. Our opinion is qualifi ed in respect of the above matter.’

Our opinion is qualifi ed in respect of the above matter.

Other Matters

1. We did not audit the fi nancial statements of a subsidiary, whose fi nancial statements refl ect total assets of Rs. 198.89 crores as at March 31, 2014, total revenue of Rs. 45.19 crores for the year ended on that date and net cash infl ow amounting to Rs. 0.28 for the year ended on that date, as considered in the consolidated fi nancial statements. These fi nancial statements have been audited by another auditor whose report has been furnished to us and our opinion in so far as it relates to the amounts included in respect of the subsidiary is based solely on the report of another auditor.

2. We have relied on the unaudited fi nancial statements of a foreign subsidiary, whose fi nancial statements refl ect total assets of Rs. 281.98 crores as at March 31, 2014, total revenue of Rs. 0.003 crores for the year ended on that date and net cash infl ow amounting to Rs. 0.002 crores for the year ended on that date, as considered in the consolidated fi nancial statements. The unaudited fi nancial statements as approved by the Board of Directors of the subsidiary has been furnished to us by the management and our report in so far as it relates to the amount included in respect of the subsidiary is based solely on such approved unaudited fi nancial statements.

Our opinion is not qualifi ed in respect of the above matters

For Nisar & Kumar


F. R. No. 107117W

M. N. Ahmed

(Partner)

M. No. 18380

Place: Mumbai

Date: 30th May, 2014 `


76

CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2014

AS AT AS AT 31.03.2014 31.03.2013 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 1,365.72 1,564.82

1,416.64 1,615.74

2. Minority Interest - 5.70

3. Non-current Liabilities

a. Long-term borrowings 4 2,982.92 1,076.32

b. Deferred tax liabilities (Net) 5 427.36 526.11

c. Long-term provisions 6 11.87 13.11

3,422.15 1,615.54

4. Current Liabilities

a. Short-term borrowings 7 2,007.38 2,498.55

b. Trade payables 8 863.95 1,313.31

c. Other current liabilities 9 4,648.10 3,972.12

d. Short-term provisions 10 65.50 54.62

7,584.93 7,838.60

12,423.72 11,075.28

II ASSETS

1. Non-current Assets

a. Fixed assets 11

(i) Tangible assets 940.41 1,078.50

(ii) Intangible assets 34.11 34.85

(ii) Capital work-in-progress 1,959.07 1,744.57

2,933.59 2,857.92

b. Non-current investments 12 0.98 0.98

c. Long-term loans and advances 13 494.74 720.91

d. Other non current assets 14 30.58 33.47

3,459.89 3,613.28

2. Current Assets

a. Current Investments 15 261.05 236.40

b. Inventories 16 4,366.29 4,360.01

c. Trade receivables 17 134.67 65.70

d. Cash and bank balance 18 183.87 26.23

e. Short-term loans and advances 19 3,410.97 2,285.97

f. Other current assets 20 606.98 487.69

8,963.83 7,462.00

12,423.72 11,075.28






77

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2014

Year ended Year ended 31.03.2014 31.03.2013 Note ` in Crores ` in Crores

INCOME

Revenue from operations 21 1,640.85 2,091.15

Other income 22 40.87 55.69

Total Revenue 1,681.72 2,146.84

EXPENSES

Consumption of raw materials & components 23 1,018.70 1,043.47

Purchase of traded goods 23 - 10.28

Changes in inventories of work-in-progress 24 (287.84) (118.97)

Employee benefi ts expense 25 82.98 100.73

Finance costs 26 611.74 414.54

Depreciation & amortisation expense 11 104.93 117.14

Other expenses 27 402.63 419.93

Total Expenses 1,933.14 1,987.12

Profi t / (Loss) before exceptional and extraordinary items and tax (251.42) 159.72

Exceptional / Extraordinary items 35 72.13 (3.05)

Profi t / (Loss) before tax (323.55) 162.77

Tax Expense

Current tax for the year - 36.46

Current tax for earlier years 0.72 5.15

MAT credit (entitlement)/reduced 13 1.87 (34.75)

Deferred tax (98.74) 59.82

Profi t after Tax (before adjustment for Minority Interest) (227.40) 96.09

Less: Minority Interest (5.40) (3.93)

(222.00) 100.02

Earning per share in Rupees of face value of `10 /- each

Basic (43.60) 19.64

Diluted (43.60) 19.64






78

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2014

Year ended Year ended 31.03.2014 31.03.2013 ` in Crores ` in Crores

A. Cash Flow From Operating Activities : Net Profi t (Loss) before taxation and after exceptional item (323.55) 162.77 Adjustments for Depreciation 104.93 116.91 Provision for Impairment - 0.24 Provision for Contingencies 0.74 0.68 Goodwill written off 0.48 0.05 Provision for doubtful receivables 2.15 - Finance charges including exceptional items being fi nance charges 683.22 414.54 Interest income (25.97) (22.13) Effect of exchange rate change (21.53) (49.10) Loss / (Profi t) on Sale of Assets (net) 16.66 (8.25) Loss / (Profi t) on Sale of Investments 0.05 0.41 Operating Profi t before working capital changes 437.18 616.12 Adjustments for : Inventories (665.49) (1,465.33) Trade Receivables (64.92) 5.43 Loans and Advances* and other current assets (1,042.45) (699.61) Trade Payables and other current liabilities / provisions** (548.80) 225.65 Stage Payments from Customers (net) 1,670.56 1,289.89 Cash generated from Operations (213.92) (27.85) Direct Taxes Paid (2.68) (28.12) Cash Used in Operating activities (216.60) (55.97)B. Cash Flow From Investing Activities: Purchase of Fixed Assets including Capital Work in Progress and capital advances (252.58) (189.41) Sale of Fixed assets 18.97 13.63 Purchase of Investments - (0.01) Proceeds from Sale of Current Investments - 0.06 Proceeds from Sale / Redemption of Non Current Investments 6.28 0.08 Loans / deposits given (net) 109.13 (454.26) Interest income 29.60 47.85 Inter Corporate Deposits - (2.00) Cash Used In Investing Activities (88.60) (584.06)C. Cash Flow From Financing Activities: Proceeds from Long Term Borrowings 2,446.67 410.20 Repayments of Long Term Borrowings (844.24) (187.32) Short Term Borrowings (net) (486.97) 476.20 Finance charges paid including exceptional items (652.57) (397.52) Contribution towards Capital in Partnership fi rm (net) - # 0.00 Cash Generated from Financing Activities 462.89 301.56 D. Effect of Exchange difference on translation of foreign currency 0.01 (0.83) Net (decrease) / Increase in cash and cash equivalents (A + B + C + D) 157.70 (339.30) Opening Balance of Cash & Cash Equivalents 26.23 364.78 Adjustment due to ceased subsidiary (0.06) 0.76 Closing Balance of Cash & Cash Equivalents 183.87 26.24 Effect of Exchange rate changes # 0.00 (0.01) Closing Balance of Cash & Cash Equivalents as restated 183.87 26.23

* Includes current and non current ** Includes short term and long term # Amount less than ` 0.01 crore

Notes : 1. Cash fl ow 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.





79

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS AS AT 31st MARCH, 2014

1. SIGNIFICANT ACCOUNTING POLICIES

i). Basis of Consolidation

The consolidated fi nancial statements of ABG Shipyard Ltd. (“The Company”) , its subsidiaries Western India Shipyard Ltd. (WISL) , ABG Shipyard Singapore Pte. Ltd and ABG FPSO Pvt. Ltd. together referred to as “The Group” have been prepared on the following basis.

i) The consolidated fi nancial statements are prepared under the Historical Cost Conventions on the basis of Going Concern and as per applicable Indian Accounting Standards notifi ed 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 Limited, Western India Shipyard Limited , ABG Shipyard Singapore Pte. Ltd.and ABG FPSO Pvt. Ltd. have been combined line by line by adding items of Balance Sheet and Statement of Profi t and Loss. The effect of Intra Group transactions, balances and unrealised profi ts 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 fi nancial 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

No

Name of the shareholder Country of

Incorporation

Date since

Subsidiary

Type of Entity Percentage

ownership

Interest

1 ABG Shipyard Singapore Pte. Ltd. Singapore 08.02.2010 Company 100%

2 Western India Shipyard Ltd. India 14.10.2010 Company 59.21%

3 ABG FPSO Pvt. Ltd. India 09.01.2012 Company 100%

4 Vipul Shipyard India Ceased w.e.f 01.07.2013

Partnership Firm N.A.

vii) The consolidated results for the year ended 31st March 2014 are not comparable with the previous year as Vipul Shipyard has ceased to be subsidiary of the company w.e.f. 01.07.2013 and has not been included in the consolidated fi nancial statements.

2 Other Signifi cant Accounting Policies

i). Use of estimates

The preparation of fi nancial 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 fi nancial 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 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.

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.

Profi t/Loss on disposal of fi xed assets is recognised in the Statement of Profi t 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.


80


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 Profi t 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 Profi t and Loss account.

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 fi ve years.

g) In the case of WISL, Depreciation on fi xed 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 fl uctuations 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 profi t 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

ix). Employees’ Benefi ts

Provident Fund: Provident Fund contributions are made as per a defi ned contribution scheme and the contribution of company is charged to Profi t 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 benefi ts are recognized as an expense at the undiscounted amount in the Statement of Profi t and Loss of the year in which the related service is rendered.

Long term employee benefi ts are recognized as an expense in the Statement of Profi t 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 benefi ts are charged to the Profi t and Loss account.

x) 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.

xi) Work in Progress and Cost Allocation

Each construction contract is considered as a cost center and all costs directly identifi able to the Contract are charged on actual basis. Indirect miscellaneous costs are also allocated to the various contracts using appropriate


81


overhead recovery method. Contract work-in-progress is valued at cost, including therein profi t 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 Profi t and Loss.

The Company has w.e.f. 07th December,2006 chosen to apply notifi cation 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 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 fi rm 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 Profi t and Loss and presented under ‘Revenue from Operations’.

xv). Operating Leases

Leases where the lessor effectively retains substantially all the risks and benefi ts of ownership of the leased assets are classifi ed as operating leases. Operating lease payments / receipts are recognized as an expense / income in the Statement of Profi t 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 profi t 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 specifi ed 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 outfl ow of resources embodying economic benefi ts will be required to settle an obligation. Contingent liabilities, if material, are disclosed in notes forming part of fi nancial statements. Contingent Assets are not recognized/ disclosed.


82


AS AT AS AT 31.03.2014 31.03.2013


2. SHARE CAPITAL

Authorised Capital

17000000000 (P.Y. 100000000) Equity Shares of `10/- each 17,000.00 100.00

Issued Subscribed and Paid up No of shares

Reconciliation: 31.03.2014 31.03.2013

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) During the year the company has increased its authorised capital vide shareholder resolution in Extra Ordinary General Meeting held on 29th March 2014. Registration of the same with the Registering authority is pending.

b) 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.

c) None of the above shares are reserved for issue under options and contract / commitments for sale of shares or disinvestment.

d) 34212057 (P.Y.33648204 ) Equity Shares of `10/- each are held by the holding company ABG International Pvt. Ltd, as per dematerialised holding statement and includes shares pending for registration. 31605002 equity shares are pledged with the lenders.

e) 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

f) Shareholders holding above 5% Equity Shares with voting rights in the company.

Sr No Name of the shareholder 31.03.2014 31.03.2013

No of equity

shares held

% No of equity shares held

%

1 ABG International Private Ltd. *34,212,057 67.19 33,648,204 66.08

2 Religare Finvest Ltd. 5,186,866 10.19 5,197,281 10.21

* Includes shares pending registration.

3. RESERVES AND SURPLUS

(i) Capital Reserve




(ii) Securities Premium Account




(iii) Debenture Redemption Reserve


Added / Utilised / Transferred during the year - 91.00

Less:Transferred to General Reserve during the year 200.28 -



83


AS AT AS AT 31.03.2014 31.03.2013


(iv) Capital Redemption Reserve Opening balance 0.46 - Add: Transferred from Surplus in Statement of Profi t and Loss - 0.46 Closing balance 0.46 0.46

(v) Revaluation Reserve Opening balance 42.22 43.51 Less: Utilised to set off against depreciation 1.23 1.29 Closing balance 40.99 42.22

(vi) General Reserve Opening balance 448.65 438.65 Add: Transferred from Surplus in Statement of Profi t and Loss 10.00 Add: Transferred from Debenture Redemption Reserve 200.28 - Closing balance 648.93 448.65

(vii) Surplus in Statement of Profi t and Loss Opening balance 498.16 499.60 Add: Profi t/(Loss) for the year (222.00) 100.02

276.16 599.62

Less: Transferred to Debenture Redemption Reserve - 91.00 Transferred to Capital Redemption Reserve - 0.46 Transferred to General Reserve - 10.00


(viii) Foreign Currency Translation Reserve Opening balance 41.79 28.42 Added during the year 24.13 13.37 Closing balance 65.92 41.79

1,365.72 1,564.82

4. A. LONG TERM BORROWINGS

(a) Debentures

Secured 36.39 -

(b) Term Loans

From Banks

Secured 2,688.71 758.81


From Others

Secured 125.00 -

Unsecured 0.10 0.07

(c) Vehicle loans

From Banks

Secured 0.01 0.15

From Others

Secured *0.00 0.10

(d) Loan from related parties [Refer note 36]


(e) Convertible zero Coupon Loan (CZC)

Secured 42.15 42.15

* Amount less than ` 0.01 crores 2,982.92 1,076.32


84


4 B (i) Details of Debentures issued by the Company

` In Crores



a) 12.30% 1000 Non Convertible Redeemable Debentures (NCD) of `100000/- each issued to Life Insurance Corporation of India (LIC)

Secured - First pari passu charge on the companys immovable and movable fi xed assets of Dahej Plant.

Payable in 13 quarterly instalments commencing quarter ending 30th Nov, 2013 upto 30th Nov, 2016. During the year the debenture terms had undergone restructuring and accordingly current and non current amount have been re-presented.

36.39 30.00 - 66.67

b) 11.40% 2000 Non Convertible Redeemable Debentures (NCD) of `100000/- each issued to

ICICI Bank Ltd. Secured - Residual charge on the company’s immovable and movable fi xed assets of Dahej plant

Closed during the year - - - 160.00

Tata Capital Ltd. Closed during the year - - - 40.00

36.39 30.00 - 266.67

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



A) Term loans from Banks

Loans under Corporate Debt

Restructuring (CDR)

1) Foreign Currency Loan

Foreign Currency Loans Secured - First pari passu charge over the Pooled Assets : All moveable (both fi xed and current assets) & immoveable assets of the Company excluding assets exclusively charged to respective lenders.


181.30 - - -

2) Rupee Term Loan

Rupee Term Loan - Consortium Secured - First pari passu charge over the Pooled Assets : All moveable (both fi xed and current assets) & immoveable assets of the Company excluding assets exclusively charged to respective lenders.


2,255.61 - 240.38 53.80

Rupee Term Loan Residual Charge over Pooled Assets.


4.69 - - -

Rupee Term Loan Secured - First Pari Passu Charge over all moveable assets (including current assets) pertaining to Drilling Offshore Pte Ltd (DOPL) Rigs.


0.73 - - -

3) Rupee Term Loan where scheme

implementation is pending

Rupee Term Loan - Consortium Secured - First pari-passu charge on the company’s movable & immovable fi xed assets of Dahej plant, present and future.


- 88.66 74.36 58.82

Rupee Term Loan Secured - First pari-passu charge on the company’s movable & immovable fi xed assets of Dahej plant, present and future.

Payable in quarterly installments upto June 2017

107.04 64.32 149.92 39.88

Rupee Term Loan Secured - First pari-passu charge on movable and immovable fi xed assets of the Dahej Shipyard land at Dahej. Corporate Guarantee of holding company.


- 84.35 80.00 15.00

NON CDR

Foreign Curency Loan Secured - First pari passu charge over the Pooled Assets : All moveable (both fi xed and current assets) & immoveable assets of the Company excluding assets exclusively charged to respective lenders.

Payable in half yearly instalments upto Sep 2016

18.02 12.01 27.20 16.32

Foreign Curency Loan Payable in quarterly instalments upto April 2015

5.59 39.10 25.29 20.23

Rupee Term Loan Secured - First pari-passu charge on the assets of third party. Corporate guarantee of third party. Pledge of shares of the third party and non disposal undertaking on unpledged shares in the share capital of third parties.

Payable in quarterly instalments upto Dec 2017

20.48 0.52 20.90 0.11


85


Rupee Term Loan Secured - First charge on the assets of third party Subservient charge on all immoveable and moveable fi xed assets of the Dahej yard and personal and corporate guarantee of third party.

Payable in quarterly instalments upto March 2018 till March 2018

60.00 - 85.00 -

Rupee Term Loan Secured - Subservient charge on current and fi xed assets of the company at Dahej Yard.

Payable in monthly installments upto Oct 2013

- - - 200.00

Rupee Term Loan Secured - Second charge by way of hypothecation of entire movable fi xed assets of Dahej Shipyard and Rigyard of the company.

Payable in quarterly installments upto Dec. 2014

- - 18.75 31.25

Rupee Term Loan Unsecured Payable in quarterly instalments upto Oct, 2015

17.41 46.43 40.62 29.02

Rupee Term Loan Secured - First parri passu legal mortgage/charge on fi xed assets of the WISL, hypothecation of movable assets.

Payable in quarterly installments upto Sep, 2018.

10.24 2.66 10.48 2.63

Rupee Term Loan Secured - First parri passu legal mortgage/charge on fi xed assets of WISL, hypothecation of movable assets.


19.02 5.07 26.54 5.07



6.00 - - -

B) From Others 2,706.13 343.12 799.44 472.13

CDR

Rupee Term Loan Secured - First pari passu charge over the Pooled Assets : All moveable (both fi xed and current assets) & immoveable assets of the Company excluding assets exclusively charged to respective lenders.


125.00 - - -

NON CDR

Rupee Term Loan Secured - First pari passu charge on the movable and immovable fi xed assets at Dahej Plant. Exclusive charge on immovable property at Dahej of the company. Interim security by way of fi rst charge on immovoble assets of third party. Corporate Guarantee of holding company ABG International Pvt. Ltd.

Payable in 6 quarterly instalments commencing 30th Jan, 2014 and ending 30th April, 2015

- 90.00 - -

Rupee Term Loan from fi nancial institution Secured - Corporate Guarantee Facility and pledged Equity shares of WISL held by the company and Deed of hypothecation of parripassu charge on immovable and movable assets of WISL, both present and future.


7.90 - 35.75



0.10 - 0.07 0.03

125.10 97.90 0.07 35.78

C) Vehicle loans

From banks Secured- Hypothecation of the individual assets fi nanced.

Payable in monthly installments 0.01 0.13 0.15 0.24

From others Secured- Hypothecation of the individual assets fi nanced.

Payable in monthly installments *0.00 0.09 0.10 0.12

0.01 0.22 0.25 0.36

D) From related parties [Refer note 36]

Holding Company (“Promoter’s Contribution”)

Unsecured Payable only after full repayment of Restructured Facilities of the CDR Lenders

68.01 - - -

Rupee Term Loan Unsecured 5.14 - 234.42 -

73.15 - 234.42 -

2,904.39 441.24 1,034.18 508.27

4 B (iii) Details of Terms of repayment for Convertible Zero Coupon Loan and security provided ` In Crores

Name of bank Terms of repayment As at 31.03.2014 As at 31.03.2013


Convertible Zero Coupon Loan (CZC)

The CZC Loan is interest free convertible into Equity Shares of Western India Shipyard Ltd at the option of the lenders commencing from 28.01.2014 and ending on the day 27.01.2019 compulsorily convertible on or before 28.01.2017.

42.15 - 42.15 -

42.15 - 42.15 -


86


4 C The Group has defaulted in repayment of loans and interest in respect of the following

Particulars As at 31.03.2014

` In Crores

As at 31.03.2014

Period in days

As at 31.03.2013

` In Crore

As at 31.03.2013

Period in days

Debentures issued to LIC

Princiipal 10.00 32-122 33.33 107

Interest 3.97 17-168 - -

Foreign Currency Loans

Princiipal 16.76 69-253 5.44 19

Interest 1.49 1-253 0.35 19

Rupee Term Loan

Princiipal 104.30 1-366 72.94 1-182

Interest 30.12 1-347 14.54 1- 91

4 D. Corporate Debt Restructuring

ABG Shipyard Limited is hereinafter referred to as the ‘Borrower’, who has availed various fi nancial facilities from the secured

lenders.

At the request of the Borrower, the Corporate Debt Restructuring Proposal (‘CDR Proposal’) of the Borrower was referred to

Corporate Debt Restructuring Cell (“CDR Cell”) by the consortium of senior lenders led by the ICICI Bank. The CDR Proposal as

recommended by ICICI Bank Ltd., the lead lender and approved by CDR Empowered Group (‘CDR EG’) on 24th March 2014 and

communicated vide Provisional Letter of Approval dated 27th March 2014, as amended/modifi ed from time to time. The cut off date

for CDR Proposal was 1st August 2013.

The Master Restructuring Agreement (‘MRA’) between the Borrower and the CDR Lenders has been executed, by virtue of which

the restructured facilities are governed by the provisions specifi ed in the MRA having cut off date of 1st August 2013.

For all the loans restructured under the above Corporate Debt Restructuring Scheme, creation of security is pending at registering

authority.

The CDR proposal is partly implemented as at 31st March 2014.

The Key features of the CDR Proposal are as follows:

1 Restructuring of existing fund based and non fund based fi nancial facilities, subject to renewal and reassessment every year.

2 Repayment of Restructured Term Loans (‘RTL’) after moratorium of 2 year from cut off date in 32 structured quarterly

instalments commencing from Quarter ending 30th September 2015 to 30th June 2023.

3 Conversion of various irregular/outstanding/devolved fi nancial facilities into Working Capital Term Loan (‘WCTL’) Repayment

of WCTL after moratorium of 3 years 6 months from cut off date in 26 structured quarterly instalments commencing from

Quarter ending 31st March 2017 to 30th June 2023, subject to mandatory prepayment obligation on realisation of proceeds

from certain asset sale and capital infusion.

4 “The interest payable on RTL and WCTL during moratorium period of 2 years and 3 years 6 months respectively from cut off

date also be converted to Funded Interest Term Laon (FITL). Out of Total FITL facility amounting to Rs 1,561 crore an an

amount aggregating to Rs. 1,000 crore shall be compulsorily converted into equity shares or 0.01% Compulsorily Convertible

Preference Shares (CCPS) befor 31st March 2016.

5 The rate of interest of RTL, WCTL, FITL and fund based working capital facilities shall be 11% for initial two year and

thereafter with annual reset option in accordance with MRA.

6 Contribution of Rs. 300 Crore in the Company by promoters in lieu of bank sacrifi ce in the form of equity shares / CCPS.

7 In case of fi nancial facilities availed from the non-CDR Lenders, the terms and conditions shall continue to be governed by

the provisions of the existing fi nancing documents.

8 Additional Security for the CDR debt - Personal Gurantee of Promoter Mr. Rishi Agarwal, Pledge of Promoter’s entire

shareholding of ABG shipyard Limited and Corporate Gurantee of ABG International Pvt Ltd. (Holding company)


87

5. DEFERRED TAXES

Tax effect of items constituting deferred tax Liabilities

On account of profi t on Projects under completion 693.60 593.99

693.60 593.99

Tax effect of items constituting deferred tax assets

On account of gratuity liability and leave encashment liability 3.18 3.87

On account of expenses allowable on delivery of ships 6.06 24.84

On account of unabsorbed depreciation and losses (net) 220.54 38.27

On account of disallowances 36.46 0.90

266.24 67.88

427.36 526.11

6. LONG TERM PROVISIONS

Provision for Gratuity 7.47 7.84

Provision for Leave Encashment 4.40 5.27

11.87 13.11

7. A - SHORT TERM BORROWINGS Security

From Banks:

a) Short term loans

Rupee Short Term Loan Secured- Charge on immovable property at Dahej yard 30.00 30.00

Corporate Guarantee of third party.

Rupee Short Term Loan Secured-Subservient charge on the current assets and - 68.58

movable fi xed assets Dahej Shipyard & Rigyard.


of the company, present and future.

Rupee Short Term Loan Unsecured - 95.31

b) Export Packing Credit Secured - First pari passu charge over the Pooled Assets :All moveable (both fi xed and current assets) & immoveableassets of the Company excluding assets exclusively charged to respective lenders.

233.64 654.33

c) Cash Credit Secured - First pari passu charge over the Pooled Assets : All moveable (both fi xed and current assets) & immoveable assets of the Company excluding assets exclusively charged to respective lenders.

931.53 1,227.79

Secured - Floating charge on Current Assets of 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 `33.60 crores.

23.02 25.90

Secured - Exclusive fi rst charge by way of hypothecation of entire raw material , stock in process, fi nished goods and stores and other material and book debts of Vipul Shipyard

- 0.74

Secured - First pari passu charge on specifi c assets of third party.

6.00 1.67


AS AT AS AT 31.03.2014 31.03.2013 ` in Crores ` in Crores


88

d) Others - payable on demand Secured - First pari passu charge over the Pooled Assets : All moveable (both fi xed and current assets) & immoveable assets of the Company excluding assets exclusively charged to respective lenders.

28.20 69.29

Unsecured 669.40 282.99

From Others:

a) Inter Corporate Deposits Unsecured 84.50 12.95

b) Others Unsecured 1.09 *0.00

2,007.38 2,498.55 * Amount less than ` 0.01 crores

7 B. The Company has defaulted in repayment of loans and interest in respect of the following

Particulars As at 31.03.2014` In Crores


in days

As at 31.03.2013 ` In Crores


in days

Loans from banks

Principal 30.00 339 135.08 35-64

Interest 5.17 1-305 3.60 1-52

Others - payable on demand

Principal 208.20 364 69.29 2-61

Interest 0.62 47 - -

Inter Corporate Deposits

Principal 12.50 25-386 11.95 4-161

Interest 6.26 1-26 - -


AS AT AS AT 31.03.2014 31.03.2013



89


AS AT AS AT 31.03.2014 31.03.2013


8. TRADE PAYABLES

(i) Sundry Creditors for Goods & Expenses [Refer Note 36] 849.80 348.86

(ii) Acceptances - banks 14.15 964.45

863.95 1,313.31

The Company has no amounts due to suppliers under MSMED as at 31st March, 2014 (P. Y. Nil). The information relates to such vendors identifi ed 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 period

- -

(ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting period

- -

(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 period - -

(v) The amount of interest accrued and remaining unpaid at the end of the accounting period - -

(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) 30.00 266.67

b. Term Loans

From banks 433.12 472.13


c. Vehicle loans

From banks 0.13 0.24


(ii) Payables on purchase of fi xed assets

- Acceptances - banks 10.60 215.70

- Others 41.87 42.74

(iii) Interest accrued & due on borrowings 51.29 19.79

(iv) Interest accrued but not due on borrowings 5.12 13.07

(v) Advance from customers 3,889.37 2880.21

(vi) Other Advances including Related Parties [Refer Note 36] 102.39 -

(vii) Unclaimed Dividends * 0.12 0.12

(viii) Other Payables

- Statutory remittances 39.09 15.60

- Trade / security deposits received 4.70 5.24

- Others 32.31 4.71

* To be transfered to Investor and Protection Fund, when due 4,648.10 3,972.12

10. SHORT TERM PROVISIONS

Provision for employee benefi ts:

Gratuity 1.98 1.99

Leave Encashment 1.09 1.46

Income Tax (Net of prepaid taxes) 58.05 47.53

Wealth Tax *0.00 *0.00

Contingencies 4.38 3.64

65.50 54.62



90


11. FIXED ASSETS

PARTICULARS Gross BlockAt cost / Valuation

DEPRECIATION/ AMORTISATION/ IMPAIRMENT

NET BLOCK

AS AT 01.04.2013

ADDITIONS DURING

THE YEAR

DELETIONS/ ADJUSTMENTS/

ELIMINATION DURING

THE YEAR

AS AT 31.03.2014

AS AT 01.04.2013

ADDITIONS DURING

THE YEAR

DELETIONS/ ADJUSTMENTS/

ELIMINATION DURING

THE YEAR

AS AT 31.03.2014

AS AT 31.03.2014

AS AT 31.03.2013

TANGIBLE ASSETS

LAND

FREE HOLD LAND 89.02 10.14 5.34 83.82 - - - - 83.82 89.02

LEASE HOLD LAND 7.71 - - 7.71 0.44 0.08 - 0.52 7.19 7.27

FACTORY BUILDING 547.84 30.54 21.35 557.03 165.06 31.07 0.09 196.04 360.99 382.78

BUILDING 123.58 4.93 - 128.51 17.56 5.34 - 22.90 105.61 106.02

PLANT AND MACHINERY

839.42 13.01 90.57 761.86 356.90 66.62 36.11 387.41 374.45 482.52

OFFICE EQUIPMENT 7.12 0.04 0.05 7.11 3.57 0.47 0.02 4.02 3.09 3.55

FURNITURE & FIXTURES

4.68 0.01 - 4.69 3.10 0.29 - 3.39 1.30 1.58

-

VEHICLES 14.78 - 1.47 13.31 9.80 1.25 1.22 9.83 3.48 4.98

COMPUTERS 5.33 0.02 0.01 5.34 4.55 0.32 0.01 4.86 0.48 0.78

1,639.48 48.69 118.79 1,569.38 560.98 105.44 37.45 628.97 940.41 1,078.50

INTANGIBLE ASSETS

SOFTWARE 8.12 0.46 - 8.58 6.48 0.72 - 7.20 1.38 1.64

GOODWILL ON CONSOLIDATION

33.21 - 0.48 32.73 - - - - 32.73 33.21

41.33 0.46 0.48 41.31 6.48 0.72 - 7.20 34.11 34.85

T O T A L 1,680.81 49.15 119.27 1,610.69 567.46 106.16 37.45 636.17 974.52 1,113.35

Previous year 1,566.59 122.07 7.85 1,680.81 450.75 119.12 2.41 567.46 1,113.35

Capital work in progress(CWIP)

1,959.07 1,744.57

1Stamp duty and Registration Charges

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 fi nancial statements.

ii) Certain part of the land is yet to be registered in the name of the Company.

31.03.2014

` in crores

31.03.2013 ` in crores

iii) Depreciation, Amortisation & Impairment relating to continuing operations:

Depreciation, Amortisation & Impairment for the year on tangible assets 105.44 117.30

Depreciation, Amortisation & Impairment for the year on intangible assets 0.72 1.13

106.16 118.43

Less: Utilised from revaluation reserve 1.23 1.29

Depreciation & Amortisation on discontinuing operations - -

Depreciation, Amortisation & Impairment relating to continuing operations 104.93 117.14

Depreciation method and rates are different between parent and subsidiary. No alignment of depreciation rates between parent and subsidiary have been done in these fi nancial statements.

iv) Eliminaton represents effect of ceased subsidiary Vipul Shipyard

v) Impairment charges of ̀ Nil. (P. Y ̀ 0.24 crores) ie on Offi ce Equipment Nil (P.Y ̀ 0.14 crores) and on Software -Nil (P.Y ̀ 0.10 crores) has been included in Depreciation, Amortisation & Impairment expense in the Statement of Profi t and Loss

vi) 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.

vii) Borrowing cost of the company capitalised `185.03 crores (P.Y `176.14 crores) is included in Fixed assets and CWIP. In the case of WISL borrowing cost is included in CWIP.

viii) 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 `1.23 crores (P. Y ` 1.29 crores), which has been withdrawn from Revaluation Reserves and credited to Statement of Profi t and Loss.


91


ix) The company has chosen to avail the option under AS-11 notifi cation 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 Profi t and Loss for the year is a Gain of `9.49 crores (P.Y. Gain `.6.68 crores) due to foreign currency exchange loss (net) which has been capitalized with CWIP.

x) As a consequence of Settlement Commission Order dated 18th April 2013, an amount of ` 38.72 crores has been debited to ABG Resources Pvt Ltd, a related party, the impact of which is as under -

- Deletion in building ̀ 21.23 crores. Corresponding effect of depreciation of ̀ 5.72 crores has been adjusted from depreciation for the year.

- Deduction in CWIP ` 17.49 crores

xi) Acquisition through business combinations / Assets reclassifi ed as held for sale - Nil (P.Y. Nil)

AS AT AS AT 31.03.2014 31.03.2013


12. NON-CURRENT INVESTMENTS

Non Trade - At cost

Unquoted

In Equity Shares

In Others:

271002 (P.Y. 271002) Equity Shares in ABG Business Ventures Pte. Ltd., Singapore of SGD 1/- each fully paid up

0.92 0.92

1000 (P.Y. 1000) Equity Shares in Varada Seven Pte. Ltd. of USD 1/- each fully paid up

0.01 0.01

5000 (PY: 5000) Equity Shares in Janata Sahakari Bank Ltd.of Rs. 100/ each. fully paid up.

0.05 0.05

0.98 0.98

13. LONG-TERM LOANS AND ADVANCES


Capital Advances 56.08 63.27

Security Deposits 130.49 129.28

Due from Government authorities

MAT Credit Entitlement 203.05 168.31

Added during the year - 34.75

Less: Utlised / Reduced 1.87 -

201.18 203.06

Note: MAT credit utilised / reduced is a consequence of Settlement Commission Order pertaining to earlier years.

Service tax credit - receivable - deferred 11.60 12.52

Loans and advances to related parties [Refer Note 36] 60.00 286.83



494.74 720.91


92


AS AT AS AT 31.03.2014 31.03.2013


14. OTHER NON CURRENT ASSETS

Long Term Trade Receivables

i) Unsecured, considered good 24.53 24.18

ii) Doubtful 1.60 7.73

26.13 31.91

Less: Provision for Doubtful Debt - -

Sales Tax Deducted at Source 1.54 0.42

Other Non Current Assets 2.91 1.14

30.58 33.47

15. CURRENT INVESTMENT

In Units of Mutual Fund

434645.8558 (P.Y. 434645.8558) Units in Emerging Markets Diversifi ed Fund 261.05 236.40

of Standard Chartered Trust (Cayman) Limited of Face Value USD 100 per unit.

261.05 236.40

16. INVENTORIES

(As taken, valued & certifi ed by management)

Raw Material and Components

In stock 453.99 499.84

In transit 330.64 570.99

784.63 1,070.83

Work in Progress

On Percentage completion basis 9,004.55 8,052.44

(Contract costs & recognised profi t)

Less: Progress Money from Customers 5,501.93 4,842.30

3,502.62 3,210.14

Finished goods 79.04 79.04

4,366.29 4,360.01

Finished goods represents completed ship where invoicing and protocol of acceptance is pending

17. TRADE RECEIVABLES


Outstanding for more than six months from due date of payment 76.38 53.32

Others 60.44 12.38

136.82 65.70

Less: Provision for doubtful receivables 2.15 -

134.67 65.70

18. CASH AND BANK BALANCE

Cash in hand 0.11 0.16

Balances with Banks:

i) In Current Accounts 179.00 19.37

ii) In EEFC Accounts 0.01 0.08

iii) In Fixed Deposits 4.63 6.50

iv) In Earmarked Accounts

Unclaimed dividend accounts 0.12 0.12

183.87 26.23


93


AS AT AS AT 31.03.2014 31.03.2013


19. SHORT-TERM LOANS AND ADVANCES


Loans and Advances to related parties: [Refer note 36]

Advance for supplies / services 1,190.56 738.94


1,817.09 1,154.78

Others:

Advance to suppliers 1,358.47 799.90

Prepaid Expenses 164.41 300.48

Employee Advances 6.67 6.31


Other Loan and advances 34.00 -

Balance with Government Authorities

Service Tax Refundable / Credit 4.98 4.01

Vat credit 0.29 0.27

Income Tax 0.02 0.02

5.29 4.30

Other Advance:

Considered good 7.83 2.99

Considered doubtful 0.21 0.21

3,410.97 2,285.97

20. OTHER CURRENT ASSETS


Subsidy 566.29 455.79

Interest accrued

Fixed Deposits with Bank 0.06 0.01


Insurance Claims Receivable 4.53 5.58

Income Tax Deducted at Source 0.09 0.81

Deferred Revenue Expenditure 0.48 0.38

Others [Refer Note 36]

Receivables on sale of fi xed assets 0.67 0.67

Others 30.10 21.57

606.98 487.69


94




21. REVENUE FROM OPERATIONS

Manufacturing

Ships 1,288.30 1,463.80

Rigs 168.32 481.48

Trading - 10.99

Services

- Ship Repair 49.89 77.79

- Charter Hire 8.33 -

Other operating Revenue

Subsidy 119.43 50.50

Scrap Sales 0.36 0.96

Excise and duty refunds 6.22 5.63

1,640.85 2,091.15

20. OTHER INCOME

Interest on:

Fixed deposits with banks 0.91 4.89

Inter corporate deposit 2.10 1.94

Others 28.52 19.22

Net Profi t/( loss) on sale of current Investments - *0.00

Net Profi t/( loss) on sale of non current Investments - 0.03

Profi t on Sale of Assets (net) - 8.25

Other Non operating Income :

Insurance Claims 1.57 3.23

Sundry balances written back 0.22 12.42

Miscellaneous Receipts 7.55 5.58

Difference in Exchange - 0.09

Prior year adjustments - 0.04

* Amount less than Rs.0.01 crore 40.87 55.69

23. A.CONSUMPTION OF RAW MATERIALS & COMPONENTS

Steel 28.40 182.85

Other Items 990.30 860.62

1,018.70 1,043.47

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 345.53 226.56

Adjustments (Net) 87.71 -

433.24 226.56

Closing Work In Progress 721.08 345.53

Decrease in Work in progress (287.84) (118.97)

Note: Adjustments (Net) include adjustment due to transfer of opening work in progress of cancelled contracts and adjustment due to steel credit as per Settlement Commission Order dated 14th February 2012.


95




25. EMPLOYEE BENEFITS EXPENSE

Salaries Wages and other benefi ts 65.97 77.09

Contribution to Provident Fund 4.05 4.83

Staff Welfare Expenses 12.96 18.81

82.98 100.73

26. FINANCE COST

Interest Expense on borrowings 551.96 284.95

Other Interest 24.94 37.41

Guarantee Commission (net) 3.40 42.67

Difference in Exchange on foreign currency transaction / translation (net) (4.06) 4.98

Other Borrowing Costs 35.50 44.53

611.74 414.54

27. OTHER EXPENSES

Consumption of stores 21.11 47.46

Contractors Charges 55.83 159.37

Power and Water 10.86 16.90

Repairs & Maintenance

- Plant & Machinery 1.94 4.24

- Buildings 0.58 0.95

- Others 1.29 2.21

Other Manufacturing Expenses 8.26 8.35

Inspection and Survey Expenses 5.55 5.50

Offi ce Expenses 7.07 10.18

Charter Hire Out 8.14 -

Rent Rates & Taxes 9.89 10.17

Insurance 14.55 25.65

Printing & Stationery 0.25 0.41

Postage Telephone & Telex 1.16 1.41


Professional Charges 9.06 14.85

Payment to Auditors 1.02 1.17

Donations & Charities 8.35 4.44

Prior Years Expenses 0.13 (0.00)


Forward Cover Loss/ (Gain) (net) 5.78 49.91

Profi t on Sale of Assets (net) 16.66 -

Loss on Sale of Non Current Investments 0.05 -

Loss on Sale of Current Investment - 0.44

Loss on cancelled contracts 37.44 -

Provision for Doubtful Debtors 2.15 -

Dredging Expenses 0.47 0.38

Discount on ship repair 0.02 1.07

Bad Debts 5.37

Goodwill written off 0.48 0.05

Miscellaneous Expenses 1.65 2.50

402.63 419.93

* Amount less than ` 0.01 crores


96


27. (a) Contingent liability not provided for ` in Crores


In respect of Performance/ Delivery Guarantees given by banks to the buyers. 59.39 163.20

Corporate guarantees to banks in respect of facilities granted to group companies. 1,412.38 1,305.06

Other bank guarantees 42.80 47.11

Claims against the company not acknowledged as debts 36.24 71.89

Claims in respect of indirect taxes 56.59 10.29

Claims in respect of direct taxes 3.29 28.26

(b) Contingencies provided for in accordance with AS 29 issued by the Institute of Chartered Accountants of India

` in Crores


Carrying amount as at the beginning of the year 3.64 2.96

Provision during the year. 0.74 0.68

Unused amount reversed during the year - -

Balance at the end of the year 4.38 3.64

The contingencies provided are in respect of estimated warranties on sold ships.

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. Disclosure in respect of Operating Leases (Assets taken on lease):

(a) The 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 license from Murmugao Port Trust (MPT) , Goa. The future minimum payment is as under :

` in Crores


Not later than one year 6.23 4.67

Later than 1 year but less than 5 years 19.95 23.56

(b) The expenses in respect of operating leases are accounted in Other Expenses under Note No 27

31. Disclosure in accordance with ‘AS -7 Accounting for Construction Contracts’ issued by the Institute of Chartered Accountants of India:

` in Crores


a. Contract revenue recognized as revenue in the year 1,438.53 1,784.59

b. Contract cost incurred and recognized profi ts 8,270.41 7,702.62

c. Advances received from above customers 6,078.13 5,025.78

d. Gross amount due from customers for contract work 3,170.13 3,103.79

e. Gross amount due to customers for contract work 977.86 426.95

The Gross amount due from customers refl ects the net amount for all contracts in progress for which cost incurred plus recognised profi t (less recognised losses) exceeds progress billing.

The Gross amount due to customers refl ects the net amount for all contracts in progress where progress billing exceeds cost incurred plus recognised profi ts (less recognised losses).

During the year, advances from customers to the extent of work done amounting to Rs 5100.27 crores (P.Y.Rs 4598.83 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 Current Liabilities under Advances from Customers in Note No 9.


97

NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH, 201432. The disclosures required under Revised Accounting Standard 15 ‘Employee Benefi ts’ notifi ed in the Companies (Accounting

Standards) Rules 2006, are given below

Defi ned Contribution Plan

Contribution to Defi ned Contribution Plan, recognized are charged off for the year are as under: ` in Crores


Employer’s Contribution to Provident Fund 3.00 3.71

Employer’s Contribution to Pension Scheme 0.89 0.80

Defi ned Benefi t Plan

The employees’ gratuity fund scheme managed by SBI Life Insurance is a defi ned benefi t plan. The subsidiary WISL makes annual contribution to the Employees’ Group Gratuity-cum-Life assurance scheme of PNB Metlife Insurance Co. Pvt. 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 benefi t entitlement and measures each unit separately to build up the fi nal obligation. The obligation for leave encashment is recognized in same manner as gratuity.

` in Crores

Particular Gratuity (Funded) Leave Encashment (Unfunded)


a. Reconciliation of opening and closing balances of

Defi ned Benefi t obligation

Defi ned Benefi t obligation at the beginning of the year 9.88 8.60 6.74 7.02


Interest Cost 0.79 0.71 0.54 0.57


Benefi ts paid (0.09) (0.23) (0.87) (1.22)

Defi ned Benefi t obligation at the year end 9.48 9.88 5.49 6.74

b. Reconciliation of opening and closing balances of

fair value of plan assets

Fair value of plan assets at beginning of the year 0.13 0.34 - -

Expected return on plan assets 0.01 0.03 - -

Actuarial gain/(loss) (0.01) (0.01) - -

Employer contribution - 0.01 - -

Benefi ts Paid (0.09) (0.23) - -

Fair value of plan assets at the year end 0.04 0.13 - -

Actual return on plan assets *0.00 0.01 - -

c. Reconciliation of fair value of assets and

obligations

Fair value of plan assets as at year end 0.04 0.13 - -

Present value of obligation as at year end 9.48 9.88 5.49 6.74

Amount recognised in Balance Sheet 9.44 9.76 5.49 6.74

d. Expenses recognised during the year


Interest Cost 0.79 0.71 0.54 0.57

Expected return on plan assets (0.01) (0.03) - -


Net Cost (0.31) 1.50 (0.38) 0.94

% invested

e. Investment Details

SBI Group Gratuity (Cash Accumulation) Policy 100 100

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%

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%

Western India Shipyard Ltd

Discount rate (per annum) 9.10% 8.00% 9.10% 9.10%

Expected rate of return on plan assets (per annum) 8.50% 9.25% Unfunded Unfunded

Rate of escalation in salary (per annum) 7.00% 7.00% 7.00% 7.00%* Amount less than Rs. 0.01 crore


98


The estimates of rate of escalation in salary considered in actuarial valuation, take into account infl ation, seniority,

promotion and other relevant factors including supply and demand in the employment market. The above information is

certifi ed by the actuary and relied upon by auditors.

33. Calculation of Earning per share (EPS)


Net profi t as per Statement of Profi t & Loss (` In crores) (222.00) 100.02

Weighted Avarage number of Equity shares of ` 10/- each fully paid up 50921801 50921801

Earning per Equity Share of ` 10/- each fully paid up (Rupees). (43.60) 19.64

(Basic & Diluted)

34. The group primarily operates in one business segment only i.e. manufacturing which is the only reportable segment. The

subsidiary , WISL and ABG FPSO Pvt. Ltd. is carrying out ship repairing and ship chartering activities respectively. However,

revenue does not satisfy the threshold limit as far as Group is concerned, as Accounting Standard - 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

Particular Domestic Overseas Total

31st March 2014 31st March 2013 31st March 2014 31st March 2013 31st March 2014 31st March 2013

Revenue 308.44 449.23 1,332.41 1,641.92 1,640.85 2,091.15

35. Exceptional item of ` 72.13 crores /- represents commission on stage payment refund / performance guarantees predebited

by banks .

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 30th June 2013)

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. Ltd.

Varada One Pte. Limited


99


Companies over which directors / relatives are able

to exercise control or signifi cant infl uence ABG Infralogistics Limited

ABG Power Private Limited

ABG Cranes Private Limited

ABG Foods Private Limited

ABG Acquafarm Private Limited

ABG Glass Private Limited

ABG Engineering & Construction Limited

Tirupati Management & Investment Services Private Limited (Formerly ABG Mercantile & Investment Services Private Limited)

Eleventh Land Developers Private Limited

ABG Resources Private Limited (Formerly Second Land Developers Private Limited)

ABG Motors 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

ABG Enterprises & Trading Private Limited (Formerly Nibodh Trading Private Limited)

ABG Energy Himachal Pradesh Limited

Vipul Shipyard ( Partnership Firm) (w.e.f 1st July 2013)

ABG Business Ventures Pte. Limited

Drilling & Offshore Pte. Limited

Drilling & Offshore One Pte. Limited

Drilling & Offshore Two Pte. Limited

Global Bulk Carriers Pte. Limited

Varada Ventures Pte. Limited

Varada Drilling One Pte. Limited

Varada Drilling Two Pte. Limited

Varada Two Pte. Limited

Varada Three Pte. Limited

Varada Four Pte. Limited

Varada Five Pte. Limited

Varada Six Pte. Limited

Varada Seven Pte. Limited

Varada Nine Pte. Limited

Varada Ten Pte. Limited

Varada Eleven Pte. Limited

Varada Twelve Pte. Limited

Individuals owning directly or indirectly an interest in the voting power that gives them control or signifi cant infl uence Shri. Rishi Agarwal

Key management personnel Shri. Syed Abdi (w.e.f. 9th January 2014 )

Shri. Dhananjay Laxman Datar

Major Arun Phatak (upto 31st December 2013)

Shri. S.Muthuswamy (w.e.f. 13th November 2013 )

Cdr. Subhash Kumar Mutreja


100


` in Crores

Sr. no.


SubsidiariesControlling

stake



Individuals owning


an interest in the



infl uence

Key manage

ment personnel

Total

31st March 2014

1 Revenue from Operations 0.00 9.10 143.20 - - 152.30

(5.40) (95.07) (152.62) - - (253.09)

2 Rent Expenses - - 1.38 - - 1.38

- - (1.09) - - (1.09)

3 Hire Charges - - - 0.00 - - 0.00

- - - (0.57) - - (0.57)

4 Services Received - 8.14 0.96 - - 9.10

- (0.00) (1.80) - - (1.80)

5 Interest/ Guarantee Commission/ Other Income Charged

- - 0.40 57.72 - - 58.12

- - (21.99) (51.90) - - (73.89)

6 Finance Charges Paid - - 3.19 - - 3.19

- - (0.00) - - (0.00)

7 Payment to Key Management Personnel3

- - - - - 2.38 2.38

- - - - - (3.22) (3.22)

8 Purchase of Fixed Assets - - - 0.53 - - 0.53

- - - (7.12) - - (7.12)

9 Sale of Fixed Assets 0.00 - *0.00 - - 0.00

(12.96) - (0.00) - - (12.96)

10 Sale of Shares - - - 0.00 - - 0.00

- - - (0.01) - - (0.01)

11 Stage Payment Received - - 132.40 4,726.97 - - 4,859.37

- - (207.49) (635.02) - - (842.51)

12 Stage Payment Refunded - - 163.18 323.34 - - 486.52

- - (60.51) (35.39) - - (95.90)

13 Loans and Advances Given / Repaid

111.68 246.88 697.98 0.05 - 1,056.58

(199.66) (389.14) (630.75) (0.12) - (1,219.67)

14 Loans and Advances Taken / Refunded

182.84 82.83 328.41 0.05 - 594.12

(208.59) (1.44) (248.41) (0.36) - (458.80)

15 Deposit Refund Received - - - 0.00 - - 0.00

- - - (110.00) - - (110.00)

16 Guarantees Taken 2 16,176.66 - - - - - 16,176.66

(618.00) - - - - - (618.00)

17 Guarantees Given 2 - - 0.00 0.00 - - 0.00

- - (25.00) (435.12) - - (460.12)

18 Capital Received From Partner

0.00 0.00

(0.01) (0.01)


101


` in Crores

Sr. no.


Controlling stake



Individuals owning


an interest in the



infl uence

Key manage

ment personnel

Total

31st March 2013

Outstanding Balances as on 31st March 2014

Receivables 0.67 69.62 44.75 - - 115.04

(0.67) (70.18) (14.15) - - (85.00)

Payables 26.96 4.27 29.73 0.26 - 61.22

(0.00) *(0.00) (10.55) (0.26) - (10.81)

Advance from Customers - - 1,164.88 6,291.05 - - 7,455.93

- - (1,152.61) (1,902.02) - - (3,054.63)

Loans and Advances Given

0.00 656.30 1,479.06 - - 2,135.36

(14.15) (435.34) (992.12) - - (1,441.61)

Loans and Advances Taken

98.13 33.26 273.88 - - 405.26

(0.00) (0.00) (234.42) - - (234.42)

Deposits Given - - - 123.00 - - 123.00

- - - (123.00) - - (123.00)

Guarantees Taken 2 17,229.66 - - - - - 17,229.66

(1,053.00) - - - - - (1,053.00)

Guarantees Given 2 - 88.60 1,106.08 1,081.08 - - 2,275.76

- (88.60) (1,046.02) (979.02) - - (2,113.64)


Notes :

1. 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.

2. Guarantees taken / given comprise of guarantees given to third parties on behalf of the Company / related parties.

3. Managerial Remuneration as detailed in point 7 below exceeds limits prescribed under Schedule XIII of the Companies Act, 1956 and the same is subject to approval from Central Government.

4. Related Parties have been identifi ed by the management and relied upon by the auditors.

5. Previous Year fi gures are shown in brackets.

Disclosure in respect of Related Party transactions during the year:

1 Revenue from Operations include Varada Marine Pte. Limited Rs. Nil (Previous Year Rs. 76.58 crores), Varada Three Pte. Limited Rs 143.20 crores (Previous Year Rs.152.62 crores)

2 Rent Expenses include Aries Management Services Private Limited Rs. 0.54 crores (Previous Year Rs. 0.46 crores), G.C. Property Private Limited Rs. 0.15 crores (Previous Year Rs. 0.12 crores), Gold Croft Property Private Limited Rs. 0.15 crores (Previous Year Rs. 0.12 crores), Somerset Estate Private Limited Rs. 0.15 crores (Previous Year Rs. 0.12 crores)

3 Hire Charges paid to ABG Infralogistics Limited Rs. Nil (Previous Year Rs. 0.57 crores)

4 Services Received from PFS Shipping (India) Limited Rs. 8.14 crores (Previous Year Rs. Nil) ABG Resources Private Limited Rs. 0.96 crores (Previous Year Rs. 1.80 crores).


102


5 Interest/ Guarantee Commission/ Other Income Charged to Varada Marine Pte. Limited (along with its SPVs) Rs. 0.40 crores (Previous Year Rs. 21.99 crores ), ABG Engineering & Construction Limited Rs. Nil (Previous Year Rs. 32.00 crores), ABG Business Ventures Pte. Limited Rs. 5.41 crores (Previous Year Rs. 4.90 crores), Varada Seven Pte. Limited Rs. 28.48 crores (Previous Year 15.00 crores ) ABG Resources Private Limited Rs. 15.00 crores (Previous Year Rs. Nil), Global Bulk Carriers Pte. Limited Rs. 8.84 crores (Previous Year Rs. Nil)

6 Finance Charges Paid to ABG Infralogistics Limited Rs. 2.33 crores (Previous Year Rs. Nil) ABG Cranes Private Limited 0.86 crore (Previous year Rs. Nil)

7 Payment to Key Management Personnel include to Syed Abdi Rs. 0.30 crores (Previous Year N.A.) Major Arun Phatak Rs. 0.78 crores (Previous Year Rs.0.75 crores ), Shri. Dhananjay Datar Rs. 0.48 crores (Previous Year Rs. 0.64 crores ), Shri. S. Muthuswamy Rs. 0.19 crores (Previous Year N.A.), Shri. R.S. Nakra Rs. Nil (Resigned w.e.f. 1st December, 2012) ( Previous Year Rs. 1.20 crores), Cdr.Subhash Kumar Mutreja Rs. 0.63 crores (Previous Year Rs . 0.63 crores)

8 Purchase of Fixed Assets include from ABG Cranes Private Limited Rs. 0.53 crores (Previous Year Rs.7.12 crores )

9 Sale of Fixed Assets include to ABG International Private Limited Rs. Nil (Previous Year Rs.12.96 crores ), ABG Infralogistics Limited Rs. *0.00 crores (Previous Year Rs.Nil)

10 Sale of Shares to ABG Mercantile & Investment Services Private Limited Rs. Nil (Previous Year Rs. 0.01 crores )

11 Stage Payment Received include from Varada Marine Pte. Limited (along with its SPVs) Rs.Nil (Previous Year Rs. 165.10 crores ),Global Bulk Carriers Pte. Limited Rs. Nil (Previous Year Rs. 187.61 crores ),Varada Three Pte. Limited Rs. 6.60 crores (Previous Year Rs. 170.54 crores ), Varada Five Pte. Limited Rs. Nil (Previous Year Rs. 170.77 crores ), Varada Four Pte. Limited Rs. 619.28 crores (Previous Year Rs. Nil),Varada Nine Pte. Limited Rs.778.41 crores (Previous Year Rs. Nil),Varada Drilling One Pte. Limited Rs 876.11 crores (Previous Year Rs.Nil),Varada Drilling Two Pte. Limited Rs 876.11 crores (Previous Year Rs. Nil), Drilling & Offshore Two Pte. Ltd. Rs. 778.05 crores (Previous Year Rs.Nil)

12 Stage Payment Refunded include Varada Marine Pte. Limited (along with its SPVs) Rs. 163.18 crores (Previous Year Rs. Nil), Global Bulk Carriers Pte. Limited Rs. 228.44 crores (Previous Year Rs. Nil ) Varada Five Pte. Limited Rs. 94.90 crores (Previous Year Rs. Nil ),Varada Seven Pte. Limited Rs. Nil (Previous Year Rs. 35.39 crores )

13 Loans and Advances Given/ Repaid include ABG International Private Limited Rs. 111.68 crores (Previous Year Rs. 199.66 crores ), PFS Shipping (India) Limited Rs. 225.68 crores (Previous Year Rs. 161.00 crores ), ABG Engineering & Construc-tion Limited Rs. 38.58 crores (Previous Year Rs. 250.48 crores ), ABG Resources Private Limited Rs. 199.27 crores (Pre-vious Year Rs. 134.22 crores ), Varada Seven Pte. Limited Rs. Nil (Previous Year Rs. 225.25 crores ), PFS Offshore Pte. Limited Rs. 7.81 crores (Previous Year Rs. 226.82 crores ).

14 Loans and Advances Taken/ Refunded include ABG International Private Limited Rs. 182.84 crores (Previous Year Rs. 208.59 crores ), ABG Engineering & Construction Limited Rs. 89.34 crores (Previous Year Rs. *0.00 crores ), ABG Re-sources Private Limited Rs. 122.39 crores (Previous Year Rs.0.81 crores ), Varada Seven Pte. Limited Rs. Nil (Previous Year Rs.234.42 crores)

15 Deposit Refund Received from ABG Resources Private Limited Rs. Nil (Previous Year Rs. 110.00 crores )

16 Guarantees Taken from ABG International Private Limited Rs. 16,176.66 crores (Previous Year Rs. 618.00 crores )

17 Guarantees Given to Varada Ventures Pte. Limited Rs.Nil (Previous Year Rs. 435.12 crores )

18 Capital Received from Partner includes ABG Resources Private Limited Rs. Nil (Previous Year Rs. 0.01 crores)


37. Outstanding forward exchange contracts/ options entered by the company for the purpose of hedging its foreign currency exposures is Nil (P Y Nil). In view of the same , Mark to Market difference as on 31st March, 2014 is Rs Nil (P. Y. loss Rs.3.36 crores)

38. The fi gures for the previous year have been arranged/rearranged/regrouped wherever considered necessary.





103

PROXY FORMForm No. MGT-11

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

CIN: L61200GJ1985PLC007730

Name of the Company: ABG SHIPYARD LIMITEDRegistered Offi ce: Near Magdalla Port, Dumas Road, Surat-395007, Gujarat

Corp. Offi ce: 4th Floor, Bhupati Chambers, 13, Mathew Road, Mumbai-400 004.

Name of the member (s) :___________________________________________________________________________________

Registered address :___________________________________________________________________________________

E-mail ID :___________________________________________________________________________________

Folio No/ Client ID/DP ID :___________________________________________________________________________________

I/We, being the Member(s) of _________________ shares of Patel Integrated Logistics Limited hereby appoint,

1. Name :___________________________________________________________________________________

Email ID :___________________________________________________________________________________

Address :___________________________________________________________________________________

Signature :_____________________________ or failing her/him;

2. Name :___________________________________________________________________________________

Email ID :___________________________________________________________________________________

Address :___________________________________________________________________________________

Signature :_____________________________ or failing her/him;

3. Name :___________________________________________________________________________________

Email ID :___________________________________________________________________________________

Address :___________________________________________________________________________________

Signature :_____________________________

P.T.O.

ABG SHIPYARD LIMITEDRegistered Offi ce: Near Magdalla Port, Dumas Road, Surat-395007, Gujarat

Corp. Offi ce: 4th Floor, Bhupati Chambers, 13, Mathew Road, Mumbai-400 004, Tel. 022 - 66563000 Fax.: 022 - 66223050

Website: www.abgindia.com, Email- [email protected], CIN: L61200GJ1985PLC007730

ATTENDANCE SLIP

I hereby record my presence at the Annual General Meeting to be held on Tuesday the 30th day of September, 2014 at the Registered Offi ce of the Company at Near Magdalla Port, Dumas Road, Surat-395007 at 12 Noon.

Full name of the Shareholder

(in Block Letters)

Ledger Folio number/ Client ID

and DP ID No.

No. of Equity Shares held

Signature of the Shareholder or Proxy attending


104

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 29th Annual General Meeting of the Company, to be held on Tuesday, 30th September, 2014 at 12.00 Noon. at the Registered Offi ce of the Company and at any adjournment thereof in respect of such resolutions as are indicated below:

Item

No.

Resolution

1. Adoption of the Audited Financial Statements, Report of the Board of Directors and Auditors thereon, for the fi nancial year ended on 31st March, 2014.

2. Re-appointment of Mr. Rishi Agarwal, who retires by rotation, as the Director of the Company.

3. Re-Appointment of M/s. Nisar & Kumar as joint statutory auditors of the Company, for a period of three years (subject to ratifi cation of their appointment at every AGM) and to fi x their remuneration.

4. Appointment of M/s. GMJ & Co., Chartered Accountants, as joint statutory auditors of the Company, till the conclusion of the next Annual General Meeting and to fi x their remuneration.

5. Special Resolution for issue of securities for a value of upto ` 1,000/- crores (` One Thousand Crores).

6. Appointment of Mr. Ashwani Kumar, as an Independent Director.

7. Appointment of Mr. Ashok R. Chitnis, as an Independent Director.

8. Appointment of Mr. S. Muthuswamy, as a Director.

9. Appointment of Mr. Syed Abdi, as a Director.

10. Approval of Remuneration of Mr. Dhananjay Datar.

11. Approval of Remuneration of Mr. S. Muthuswamy.

Signed this_______ day of ______________2014

________________________ ________________________ Signature of Proxy holder(s) Signature of shareholder

Notes:1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Offi ce of the Company, not less than 48

hours before the commencement of the Meeting.

Affi x1 `

RevenueStamp

PDF processed with CutePDF evaluation edition · ABG Shipyard Limited Annual Report 20132014 2...

Documents

Transcript of PDF processed with CutePDF evaluation edition · ABG Shipyard Limited Annual Report 20132014 2...