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M/s. Nisar & Kumar Page
Chartered Accountants
Notice of AGM 2
A-17, Everest Building,
156, Tardeo Road, Mumbai - 400 034. Directors’ Report 7
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ABG Shipyard Limited Annual Report 2011-2012
NOTICE
Notice is hereby given that the 27th Annual General Meeting of the Members of ABG Shipyard Limited will be held at the Registered
Office of the Company Near Magdalla Port, Dumas Road, Surat-395 007 on Thursday the 27th of September, 2012 at 12.00
noon, to transact the following business:
Ordinary Business:
1. To receive, consider and adopt the Audited Accounts for the year ended 31st March 2012 and the Reports of the Directors and
the Auditors thereon.
2. To appoint a Director in place of Shri. Ashwani Kumar, who retires by rotation and being eligible, offers himself for re-
appointment.
3. To appoint a Director in place of Shri. Rishi Agarwal, who retires by rotation and being eligible, offers himself for re-appointment.
4. To appoint M/s. Nisar & Kumar, Chartered Accountants as Auditors of the Company to hold office from the conclusion of
this Annual General Meeting of the Company until conclusion of the next Annual General Meeting and to authorize the Board of
Directors to fix their remuneration.
Special Business:
1. To consider and, if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution :-
“RESOLVED that pursuant to the provisions of Section 81(1A) and other applicable provisions, if any, of the Companies Act,
1956, the provisions of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,
2009 (the “SEBI ICDR Regulations”), the provisions of the Foreign Exchange Management Act, 1999, and rules and
regulations made hereunder, including the Foreign Exchange management (Transfer and Issue of Securities by a person
Resident outside India) Regulation, 2000, if applicable, the provisions of Issue of Foreign Currency Convertible Bonds and
Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and subject to any other applicable law or laws,
rules and regulations (including any amendment thereto or reenactment thereto or reenactment thereof for the time being in
force) and subject to enabling provisions in the Memorandum and Articles of Association of the Company and Listing
Agreements, entered into by the Company with the Stock Exchanges where the shares of the company are listed and subject to
any approval, consent, permission and/or sanction of the members of the Company by way of special resolution, Government
of India, Reserve Bank of India, Stock Exchanges, Registrar of Companies, Securities and Exchange Board of India and /or any
other competent authorities, institutions or bodies, within or outside India, and subject to such conditions and modifications as
may be prescribed by any of them while granting such approvals, permissions, consents and sanctions and which may be
agreed by the Board of Directors (hereinafter referred to as “Board” which term shall include any committee thereof, whether
constituted or to be constituted), approval of the Company is hereby accorded to the Board to create, offer, issue and allot in one
or more tranch(es), in the course of domestic and / or international offerings and /or Qualified Institutional Placements
(“QIP”), with or without an over allotment/ green shoe issue option, in one or more foreign markets or domestic markets, to
domestic institutions, foreign institutions, non-resident Indians, Indian public, companies, corporate bodies, mutual funds,
banks, insurance companies, pension funds, individuals, qualified institutional buyers or other persons or entities, whether
shareholders of the Company or not, through a public issue and/or on a private placement basis and/or qualified institutional
placement within the meaning of Chapter VIII of the SEBI ICDR Regulations and /or preferential issue and/or other kind of public
issue and /or private placement or through a combination of the foregoing as may be permitted under applicable law from time to
time, with or without an 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 or not (hereinafter referred to as “Securities”) for a value of upto Rs. 1,000/- crores (Rupees One
Thousand Crores), whether to be listed on any stock exchange inside India or any international stock exchanges outside India,
through an offer document and/or prospectus and/or offer letter, and/or offering circular, and/or on public and/or private or
preferential basis, whether rupee denominated in foreign currency at such time or times, at such price or prices in such manner
and on such terms and conditions including security, rate of interest etc, as may be decided by and deemed appropriate by the
board as per applicable law, including the discretion to determine the categories of Investors to whom the offer, issue and
allotment shall be made, considering, the prevailing market conditions and other relevant factors wherever necessary in
consultation with its advisors, as the Board in its absolute discretion may deem fit and appropriate.
RESOLVED FURTHER that in addition to all applicable Indian laws, the securities issued in pursuance of this resolution shall
also be governed by all applicable laws and regulations of any jurisdiction outside India where they are listed or that may in any
other manner apply to such securities or provided in the terms of their issue.
RESOLVED FURTHER that any securities that are not subscribed in issues mentioned above, may be disposed off by the
board in its absolute discretion in such manner, as the board may deem fit and as permissible by the law.
RESOLVED FURTHER that in case of a Qualified Institutional Placement pursuant to Chapter VIII of the SEBI ICDR
Regulations, the allotment of specified securities shall only be to Qualified Institutional Buyers within the meaning of Chapter
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ABG Shipyard Limited Annual Report 2011-2012
VIII and the relevant date for the determination of the price of the equity shares to be issued or issued pursuant to conversion,
shall be the date on which the board decides to open the issue of securities or such other time as may be allowed by SEBI ICDR
Regulations from time to time and allotment of specified securities shall be completed within twelve months from the date of this
resolution.
RESOLVED FURTHER that in case of an issuance of FCCBs/ADRs/GDRs, the relevant date for the determination of the issue
price of the securities offered, shall be determined in accordance with the Issue of Foreign Currency Convertible Bonds and
Ordinary shares (through Depository Receipt Mechanism) Scheme, 1993 as may be amended from time to time.
RESOLVED FURTHER that the issue of Securities shall be subject to the following terms and conditions:
(a) The Securities shall be subject to the provisions of Memorandum and Articles of Association of the Company and in
accordance with the terms of the issue; and
(b) The number and/or price of the Securities shall be appropriately adjusted for corporate actions such as bonus issue, rights
issue, stock split, merger, demerger, transfer of undertaking, sale of division or any such capital or corporate restructuring.
RESOLVED FURTHER THAT for the purpose of giving effect to the above resolutions, the Board be and is hereby authorized to
do all such acts, deeds, matters and things including but not limited to determining the form and manner of the issue, including
the class of investors to whom the Securities are to be issued and allotted, number of Securities to be allotted, execution of
various transaction documents, creation of mortgage/ charge in accordance with Section 293(1)(a) of the Act, in respect of any
Securities as may be required either on pari-passu basis or otherwise, as it may in its absolute discretion deem fit and to settle
all questions, difficulties or doubts that may arise in regard to the issue, offer or allotment of Securities and utilization of the issue
proceeds as it may in its absolute discretion deem fit without being required to seek any further consent or approval of the
members or otherwise to the end and intent that the members shall be deemed to have given their approval thereto expressly
by the authority of this resolution.
RESOLVED FURTHER that the Board be and is hereby authorized to form a committee or delegate all or any of its powers to
any Directors (s) or Committee of Directors or other persons authorized by the Board to give effect to the aforesaid resolutions.
RESOLVED FURTHER that subject to the applicable laws the Board and/or the Committee authorized by the Board be and is
herby 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;
(d) Finalization of the allotment of the securities on the basis of the subscriptions received;
(e) Finalization of, signing of and arrangement for the submission of the preliminary and final offering circulars/
prospectus(es)/offer document(s), and any amendments and supplements thereto, along with supporting papers needed
to be filed for seeking listing approval with any applicable government and regulatory authorities, institutions or bodies as
may be required;
(f) Deciding the pricing and terms of the securities, and all other related matters, including taking any action on two-way
fungibility for conversion of underlying equity shares into FCCBs/ GDRs/ ADRs, as per applicable laws, regulations or
guidelines;
(g) Appoint, in its absolute discretion, managers (including lead manager), Investment Bankers, Merchant Bankers,
underwriters, guarantors, financial and /or legal advisors, depositories, custodians, principal paying/transfer/conversion
agents, listing agents, registrars, trustees and all other agencies, whether in India or abroad, entering into or execution of
all such agreements/ arrangements/ MoUs/ documents with any such agencies, in connection with the proposed offering
of the securities;
(h) Approval of the Deposit Agreements(s), the Purchase/Underwriting Agreement(s), the Trust Deed(s), the Indenture(s), the
Master/Global GDRs/ADRs/FCCBs/other securities, letters of allotment, listing application, engagement letter(s),
memoranda of understanding and any other agreements of documents, as may be necessary in connection with the
issue/offering (including amending, varying or modifying the same, as may be considered desirable or expedient), in
accordance with all applicable laws, rules, regulations and guidelines;
(i) Settle all questions, difficulties or doubts that may arise in regards to the issue, offer or allotment of securities and utilization
of the proceeds of the issue in such manner and to do all such acts, deeds, matters and things as it may in its absolute
discretion deem fit.
RESOLVED FURTHER the Board and/or the Committee authorized by the Board be and is hereby authorized to accept any
modifications in the proposals as may be required by the authorities involved in such issues but subject to such conditions as
the SEBI/GoI/RBI or such other appropriate authorities may impose at the time of their approval and as agreed to by the Board;
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ABG Shipyard Limited Annual Report 2011-2012
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.”
NOTES :
1. A Member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself and the proxy
need not be a member of the Company.
2. Proxies in order to be effective should be duly completed, stamped and signed and must be deposited at the Registered Office
of the Company not less than 48 hours before the meeting.
3. The details under clause 49 of the Listing Agreement with the Stock Exchange(s) in respect of the directors proposed to be re-
appointed at the Annual General Meeting is annexed hereto.
4. The Register of Members and Share transfer books of the Company will remain closed from 22nd September, 2012 to
27th September, 2012 (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, etc. to their respective depository participant (DP).
6. Members are requested to bring their copy of Annual Report to the meeting.
7. Members/Proxies are requested to bring the attendance slip duly filled in.
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 (IEPF) set up by the Government of India and no payments shall be made by IEPF, in respect of any claims.
Members who have not yet encashed their dividend warrants for the financial year ended March 31, 2006 and subsequent
years are requested to make their claims directly to the Company’s Registrar and Share Transfer Agent, Link Intime India
Private Ltd., without any delay. It may be noted that the unclaimed dividend for the financial years 2005-06 to 2010-11 are due
for transfer to the IEPF as per table given below:
Pursuant to section 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 closure of IPO 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 unclaimed money laying in IPO refund accounts after the said amount is transferred
to the fund. The Unclaimed IPO refund money is due for transferred to IEPF on 9th December, 2012. Members who have not yet
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ABG Shipyard Limited Annual Report 2011-2012
claimed their refund of share application money, are requested to make their claim without any delay to the Company's
Registrar and Transfer Agents, Link Intime India Private Limited.
10. All statutory registers are open for inspection at the Registered Office of the Company on all working days, from the date hereof
upto the conclusion of this meeting between 10.00 a.m. and 5.00 p.m.
11. Corporate Members intending to send their authorized representatives to attend the Annual General Meeting are requested to
send a duly certified copy of the Board Resolution authorizing their representatives to attend and vote at the Meeting.
12. 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.
The Company proposes to raise funds to the tune of Rs. 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.
Taking into account the performance and positive outlook of the Company, the Company proposes to raise long term capital by
issue of further securities to cater its fund requirements for expansion of its activities, finance, additional working capital
requirements and general corporate purpose.
2. Pricing
In case of an issue of the Securities to Qualified Institutional Buyers pursuant to Chapter VIII of the SEBI ICDR
Regulations, the issue price of Securities shall be at a price, being not less than the price calculated in accordance with
Chapter VIII of SEBI ICDR Regulations as may be amended from time to time and the Relevant Date in this regard shall be the
date on which the board decides to open the issue of securities or such other time as may be allowed by SEBI ICDR Regulations
from time to time.
In case of a Qualified Institutional Placement pursuant to Chapter VIII of the SEBI ICDR Regulations, the allotment of securities
shall be completed within twelve months from the date of passing of this resolution.
In case of issue of ADRs/GDRs the issue price shall be at a price, being not less than the price calculated in accordance with
applicable law including the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts
Mechanism) Scheme, 1993, as may be amended from time to time.
The detailed terms and conditions for the offer will be determined by the Board in consultation with Advisors, Lead
Manager/Book Runners, Underwriters and such other authority or authorities as may be required to be consulted by the
Company considering the prevailing market conditions and other relevant factors.
The issue/ allotment/ conversion would be subject to the availability of regulatory approvals, if any. The conversion of securities,
held by foreign investors, into shares would be subject to the applicable foreign investment limits.
The Special Resolution seeks to empower the Board and/or Committee authorized by the Board, to issue Securities in one or
more tranche or tranches, at such time / times, and to such person(s) as the Board may in its absolute discretion deem fit.
Section 81(1A) of the Companies Act, 1956 and the relevant clause of the Listing Agreement with the Stock Exchanges where
the Equity Shares of the Company are listed provides, inter alia, that when it is proposed to increase the issued capital of a
company by allotment of further shares, such further shares shall be offered to the existing shareholders of such company in the
manner laid down in Section 81 unless the shareholders in a general meeting decide otherwise. Since the Special Resolution
proposed in the business of the Notice results in the issue of shares of the Company otherwise than to the members of the
Company, consent of the shareholders is being sought pursuant to the provisions of Section 81(1A) and other applicable
provisions of the Companies Act, 1956 and the Listing Agreement.
The Special Resolution, if passed, will have the effect of allowing the Board and/or the Committee authorized by the Board to
issue and allot Securities to the investors who may or may not be the existing shareholders of the Company and the Board
and/or the Committee authorized by the Board will have the power to decide the date of opening of the Issue.
The Directors of the Company may be deemed to be concerned or interested in the above resolution only to the extent of shares
held by them in the Company.
The Board of Directors recommend the special resolution for your approval.
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ABG Shipyard Limited Annual Report 2011-2012
Experience and Has over 26 years of rich experience in Joined Indian Revenue Service in November
Expertise in Specific Shipbuilding, Ship Repairing and Shipping 1973, during the tenure, worked in various
functional area Industry. capacities and at various places like, Kolkata,
Jaipur, Bhopal, Jodhpur, Mumbai and retired as
Chief Commissioner of Income Tax from
Chennai in August, 2008.
Directorships held in ABG International Pvt Limited Western Indian Shipyard Limited
other companies Indian Register of Shipping J. Kumar Infraprojects Limited
ABG Cement Limited
ABG Energy (Gujarat) Ltd.
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ABG Shipyard Limited Annual Report 2011-2012
DIRECTORS' REPORT
TO THE MEMBERS,
Your Directors are pleased to present the Twenty Seventh Annual Report on the business and operations of your Company along
with the Audited Accounts for the year ended 31st March 2012.
1. FINANCIAL PERFORMANCE
(` in crores)
Particulars 2011-2012 2010-11
Sales and Other Income 2,432.86 2,082.66
Profit before Interest, Depreciation & Tax 604.92 505.39
Less: Interest (Net) 226.89 162.15
Profit before Depreciation & Tax 378.03 343.24
Less: Depreciation 99.25 63.03
Profit before Tax 278.78 280.21
Less: Provisions for Taxation 98.49 91.41
Net Profit after Tax 180.29 188.80
Balance brought forward from previous year 416.63 383.58
Profit available for appropriations 596.92 572.38
Appropriations
Transfer to Debenture Redemption Reserve 92.00 92.00
Transfer to General Reserve 16.00 40.00
Proposed Dividend Equity shares - 20.37
Corporate Dividend Tax - 3.38
Balance carried to Balance Sheet 488.92 416.63
* Figures regrouped wherever necessary.
2. OPERATIONS
Your company has successfully delivered 14 vessels during the financial year under review which has taken to the total sum to
152 vessels delivered so far by the Company.
Your Company has posted a turnover of ` 2432.86 crores, an increase of about 16.82% as compared to ` 2082.66 Crores in the
previous Financial Year. The Company recorded a net profit of ` 180.29 Crores, for the financial year under consideration.
EBIDITA for the Financial Year 2011-12 stood at ` 604.92 Crores with an increase of 19.69% as compared to ` 505.39 Crores in
the previous Financial Year.
The Government of India had provided for a Shipbuilding Subsidy Scheme, for both export and domestic orders to all the Indian
Shipyards, which was expired in August, 2007 and The Government had issued modified guidelines dated 25th March 2009, for
liquidation of the liability for the payment of subsidy for ongoing eligible contracts entered upto 14th August 2007, by virtue of the
same, your company has received an amount of ` 16.08 Crores towards subsidy in the Financial Year 2011-12.
During the Financial Year 2011-12, your company has bagged a prestigious order of USD 101.14 Mio from Shipping
Corporation of India (SCI) for construction of 6 Nos. of 63.4 meters Twin Screw Diesel Engine driven 2000DWT 80T Bollard Pull
AHTS Vessels.
3. DIVIDEND
Considering the Capital expansion plans coupled with working capital requirement and needs of general corporate purposes,
the Board believes that the Company needs to conserve its resources to pursue aforesaid purposes. In view of the same, the
Board has not recommended any payment of dividend for the year.
4. OUTLOOK
Economic Survey for 2012- 13 estimated the Indian GDP at 7.6% for the financial year 2012- 2013 as against a growth of 6.9%
for the financial year 2011-2012. The Survey indicates that the Indian Economy is likely to get back on track from this fiscal year
due to changes in interest rates, greater savings and capital formations.
Currently, majority of the new-build orders at Indian private shipyards are from foreign ship owners. Also, Indian private
shipyards cater almost entirely to the commercial shipping segment. However, due to the shipping downturn as well as the
global economic scenario, the future of the shipbuilding industry beyond 2012 seems uncertain. Even though shipyards
globally had managed to run profitably till 2011, they started taking measures to cut costs in anticipation of a lull in business then
after. In view of the looming crisis, these shipyards are on a hunt to find other avenues of demand for new ships.
Nearly 70% of new-builds in Indian commercial order book are export oriented. It reflects the notion that Indian fleet owners
prefer acquiring ships from outside India. During the boom time, Indian shipyards benefited from spill over of orders from the
overbooked foreign yards. But now, they will have to attract domestic ship owners as the world demand has slowed down.
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ABG Shipyard Limited Annual Report 2011-2012
There are a total of around 900 vessels under the Indian flag and almost all of them are Indian owned. The average age of the
fleet is 24 years. Within the next 5 years - 10 years, a large number of these ships will need to be replaced, and it is important that
these shipbuilding orders go to Indian Shipyards.
The Government has been encouraging PPP (Public Private Partnership) in the ports sector to infuse funds, to induct latest
technology and improved management practices, and above all for addition of capacity, 100% Foreign Direct investment under
the automatic route is permitted for port development projects. 100% income tax exemption is also available for a period of ten
years. The proposed investment during the next ten years is expected to be ` 2.77 lakh cr. out of which `1.09 lakh cr. for Major
Ports and ` 1.68 lakh cr. for non-major ports. The budgetary allocation, towards subsidy required for the development of
Shipping Industry, for the year 2012-2013 is ` 400 crore.
Regarding the perspective plan “Maritime Agenda 2020” prepared by the Shipping Ministry, the Agenda encompasses
development of 12 major ports functioning under the Union Government and also the 176 notified non-major ports. The
objective of the Agenda inter alia includes creation of port capacity of around 3200 million MT to handle the expected traffic of
about 2500 million MT by 2020. The Government of India has given top priority to the modernization of ports through various
expansion/upgradation projects for berths, construction of new berths/terminals, installation of new and modern equipment,
upgradation/replacement through higher capacity of cargo handling equipment's, mechanization of cargo handling operations,
deepening of channels/berths etc. along with schemes for quicker evacuation of cargo through road and rail connectivity. Under
National Maritime Development Programme (NMDP), 276 projects have been identified for mechanization and 69 have been
completed.
The Indian Navy could be the saviour of the Indian shipbuilding industry. In the interest of national security, before private
participation was invited, the naval orders were usually awarded to domestic public sector shipyards. The Public Sector
shipyards were allowed to make joint ventures with private sector shipyard to cater the requirements of Indian Navy, which are
highly attractive because of long delivery time allowed, absorption of price increase due to cost overruns by the Government
besides very little chance of an order being cancelled. However, a private shipyard needs to obtain a license to build naval
ships, for which it needs to satisfy technical requirements. Amongst very few other shipyards, your Company has obtained this
license and successfully entered into the segment. With the Government of India's aim to make Indian Navy as “Blue Water
Navy” by 2020 coupled with substantial estimated allocation/expenditure in this sector, the potential in the shipbuilding sector
seems enormous.
The current commercial shipbuilding order book of Indian shipyards values at ` 280 billion till 2012, which translates into
approximately ` 70 billion per year. Riding on the assumption that the Indian Navy will be spending ` 950 billion, starting in 2013
up to 2030, the Indian shipping industry would see an annual spending of ` 53 billion per year. However, the defence segment
alone cannot help sustain the current performance of Indian shipyards. Hence, another alternative needs to be considered is
Shipbuilding for offshore sector.
5. SUBSIDIARIES.
Your Company has three (3) subsidiaries i.e. Western India Shipyard Limited (a BSE listed Company), ABG Shipyard
Singapore Pte Limited and ABG FPSO Private Limited as at the end of financial year. In view of the General exemption granted
by The Ministry of Corporate Affairs, under Sec. 212 of the Companies Act, 1956, vide General Circular no. 2/2011 dated 8th
February, 2011, from the requirement of attaching the Balance Sheet, Profit & Loss Account, etc of its subsidiaries to its
accounts, your Company has decided to take the benefit of the said exemption.
The consolidated financial statement is forming part of this Annual Report.
Your Company undertakes that the annual accounts of the subsidiary Companies and the related detailed information will be
made available to the members on request. Further, the annual accounts of the subsidiary Companies will also be kept at the
registered office of the Company and of its subsidiary Companies for inspection by any member.
6. DIRECTORS
In accordance with Section 255 & 256 of the Companies Act, 1956 read with Article 190 of the Articles of Association of the
Company, Shri. Ashwani Kumar and Shri. Rishi Agarwal are liable to retire by rotation at the ensuing Annual General Meeting
and are eligible for re-appointment. Your Directors recommend the re-appointment of Shri. Ashwani Kumar and Shri. Rishi
Agarwal as directors.
None of these directors is disqualified as per the provisions of Section 274 (1) (g) of the Companies Act, 1956, to be re-
appointed as directors of your Company.
7. AUDITORS
M/s. Nisar & Kumar, Chartered Accountants, Statutory Auditors of the Company hold office till the conclusion of the ensuing
Annual General Meeting and have consented for their re-appointment.
Your Directors recommend their appointment as the Auditors of the Company for the current year and fix their remuneration.
8. ISSUE OF SECURITIES
Taking into account the performance and positive outlook of the Company, the Company proposes to raise long term capital by
issue of further securities including but not limited to Convertible Bonds, Preference Shares, Equity Shares and other securities
whether convertible or not, etc., upto Rs. 1000/-Crs. (Rupees One Thousand Crores) to cater its fund requirements for
expansion of its activities, finance, additional working capital requirements and general corporate purpose.
Accordingly the resolution mentioned in the Notice of meeting is commended for your approval.
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ABG Shipyard Limited Annual Report 2011-2012
9. DEPOSITS
The Company has not accepted deposits by way of invitation to the public and therefore, provisions of Section 58A of the
Companies Act, 1956 are not applicable to the Company.
10. CORPORATE GOVERNANCE
Your Company believes in implementing the corporate governance practice that go beyond just meeting of letter of law.
Corporate Governance is a way of life, rather than a mere legal compliance. It further inspires and strengthens investor's
confidence and commitment to the Company, Your Company is committed to adhering to good corporate governance practices
to effectively meet its Statutory, Financial and Social obligations. Your company has not only adopted practices mandated in the
clause 49 of the Listing Agreement, but also incorporated some of the non-mandatory recommendations to uphold its core
values of Customer Focus, Community, Performance, Leadership, Innovation and Quality.
A detailed report on compliance of Corporate Governance and Management's Discussion and Analysis as stipulated in Clause
49 of the Listing Agreement is enclosed and forms part of this Report.
In line with the applicable provisions, the Company has obtained requisite Certificate from the Auditors of the Company, which is
annexed and forms part of this Report.
11. DIRECTORS' RESPONSBILITY STATEMENT
As stipulated in Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:
i in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper
explanation relating to material departures;
ii. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates
that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit or loss of the company for that period;
iii. the Directors have taken proper and sufficient care of the maintenance of adequate accounting records in accordance with
the provisions of this Act for safeguarding assets of the Company and for preventing and detecting fraud and other
irregularities;
iv. the Directors have prepared the annual accounts on a going concern basis.
12. 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, are required to
be annexed to the Directors' Report. Having regard to the provisions of Section 219 (1)(b)(iv) of the said Act, the annual report
excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member
interested in obtaining such particulars may write to the Company Secretary at the Corporate Office of 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 given in the annexure to this Report.
14. INDUSTRIAL RELATIONS
The Industrial relations at the manufacturing facilities of your Company have been cordial during the year.
Your directors would like to express their sincere thanks and appreciation to all the employees for their commendable teamwork
and exemplary contribution to the operations and performance of the company and looks forward to their continued co-
operation and support.
15. APPRECIATION
Your Company's Board and employees are inspired by their vision of sustaining ABG's position as one of the India's most
admired and valuable Shipyard through world-class performance, creating enduring value for all stakeholders and the Indian
Society.
The directors wish to place on record their profound sense of appreciation to the employees at all levels of the Company for their
dedication and commitment throughout the year.
The directors would also like to express their sincere appreciation for assistance and co-operation from the Bankers, Financial
Institutions, Government Authorities, Business Associates and Company's Shareholders/Members for their contribution in
enhancing the esteem of the Company.
9
ABG Shipyard Limited Annual Report 2011-2012
ANNEXURE - A
Information Pursuant to the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
A. Conservation of energy:
At Dahej Yard:
Energy Saver System introduced in more than 150 Nos. Welding Machines.
500 Nos. Electronic Chock base 1 x 28W tube light is being installed in Staff colony at Bharuch. 250 Nos. 18W CFL
light replaced with 60W lamp.
100 KVAR capacitor panel installed improving PF from AVG 0.97 to 0.98 at Dahej Yard.
2 Nos. 950 CFM compressor installed with VFD drive in TTS Area at Dahej yard.
100 KVAR capacitor panel installed in Staff Colony.
2 Nos. 15 tonne and 1 No. 30 tonne cranes erected with VFD drive.
Replacement of Electromagnetic lifting system with permanent magnetic lifting system.
At Surat Yard:
Energy Saver System introduced in 75 Nos. Welding Machines which leads total 400 Nos. installations in Welding
Machines.
200 Nos. Electronic Chock base 1 x 28W tube light is being installed in Labor Colony at Surat Yard.
2500 KVAR capacitor panel Maintained for to Keep PF AVG 0.998 to 0.999.
1 No. 30 tonne and 1 No. 80 tonne cranes erected with VFD drive.
1 No. VFD installed in mobile Air Compressor In place of Star Delta Starter.
(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 300 Welding machines.
Additional installation of Capacitor Panels to improve power factor to 0.99.
At Surat Yard:
Auto cut off for welding machine and energy saver for 100 Welding machines.
Additional installation of VFD Drive In mobile Air Compressor.
Additional Installation of inverter base 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.
30% power saving on lighting for worker colony.
20% power saving on welding machine i.e 300KW.
15% power saving on lighting for staff colony of total 150KW.
8% Energy saving of total 264KW power required for compressors.
At Surat Yard
20 % power saving on welding machine.
30% power saving on lighting for worker colony.
20% power saving on Crane operation.
10
ABG Shipyard Limited Annual Report 2011-2012
B. Technology absorption:
Expenditure on R&D:
The Company incurred capital expenditure on various integrated software covering areas of production and manpower
planning, co-ordination, costing, personnel, inventory and Accounts Management, as a strategic part of its business.
(a) Efforts, in brief made towards technology absorption, adaptation and innovation
(b) Benefits derived as a result of the above efforts, e.g. Product improvement, cost reduction, product development,
import substitution, etc.
The aforesaid mention technology gives faster output & safe working environment at heighted locations.
(c) In case of imported technology (imported during the last 5years reckoned from beginning of the financial year:
Technology imported NIL
Years of import NA
Has technology been fully absorbed? NA
If not fully absorbed, areas where this not taken place, reasons therefore and future plans of action NA
11
ABG Shipyard Limited Annual Report 2011-2012
ANNEXURE-B
REPORT ON CORPORATE GOVERNANCE
{In compliance with Clause 49 of the Listing Agreement entered into with the Bombay Stock Exchange Ltd. (BSE) and
the National Stock Exchange of India Ltd (NSE)}
Corporate Governance forms the core of all business endeavors. Corporate Governance helps to serve corporate purpose by
providing a framework within which stakeholders can pursue the objectives of the organization most effectively. The Company
advocates transparency in all its business transactions and activities. Management and Employees of the Company stand
committed to the core principles of transparency, honesty and integrity.
Clause 49 of the Listing Agreement with the Stock Exchanges has set the benchmark compliance rules for all listed companies, ABG
not only adheres to the prescribed compliance rules of Clause 49 but is constantly striving to adopt growing excellent practices
worldwide.
ABG is respected in the Industry for its professional style of management and best business practices. Its core values are
based on integrity, emphasis on product quality and transparency in its dealings with all stakeholders. ABG believes that good
governance generates goodwill among business partners, customers and investors, earns respect from society, brings about a
consistent sustainable growth for the Company and generates competitive returns for the investors. The Company, through its
Board and Committees, endeavors to strike and deliver the highest governing standards for the benefit of its stakeholders.
Through the Governance mechanism in the Company, the Board along with its Committees undertake its fiduciary
responsibilities to all its stakeholders by ensuring transparency fair play and independence in its decision making.
ABG believes Corporate Governance is a way of life, rather than a mere legal compulsion. It further inspires and strengthens
investor's confidence and commitment to the Company, ABG is committed to adhering to good corporate governance
practices to effectively meet its Statutory, Financial and Social obligations. ABG believes in implementing the corporate
governance practice that go beyond just meeting of letter of law, ABG has not only adopted practices mandated in the clause
49 of the Listing Agreement, but also incorporated some of the non-mandatory recommendations to uphold its core values of
Customer Focus, Community, Performance, Leadership, Innovation and Quality.
The Board of Directors provides strategic direction and thrust to the maneuver of the Company.
As on 31st March, 2012, Your Company's Board of Directors comprises of Seven (7) Directors with considerable
professional experience in varied fields who supervises the overall management of the Company. The Board is headed by
Non-Executive Chairman, Mr. Rishi Agarwal. The day-to-day affairs of the Company are managed by Shri. R. S. Nakra,
Managing Director, assisted by Major Arun Phatak, Executive Director and Shri Dhananjay Datar, Whole time Director &
CFO, subject to the superintendence and control by the Board. Board comprises of 3 independent directors Shri. Ashok R.
Chitnis, Shri. Shahzaad Dalal and Shri. Ashwani Kumar. During the last Financial Year Shri. Nainesh Jaisingh and Shri.
Saket Agarwal have resigned as directors of the Company w.e.f. 29th July 2011. Further, Shri. Dhananjay Datar, Chief
Financial Officer of the Company has been appointed as Whole Time Director w.e.f. 29th July 2011 and Shri. Shahzaad
Dalal who was appointed as Nominee Director of the Company, was ceased to be Nominee of the IL&FS due the
disinvestment by IL&FS from Company. However, considering the credentials of Shri. Shahzaad Dalal in the field of
Finance, Management and Industry, he has been appointed as an Independent Director w.e.f. 29th July 2011.
The company has been in search of suitable, experienced independent director to induct on the Board of Directors in
compliance of Corporate Governance “Clause 49” of the Listing Agreement entered into with the Stock Exchanges,
Articles of Association of the Company and applicable laws.
The names and categories of the Directors on the Board, their attendance at Board Meeting during the year and at the last
Annual General Meeting, as also the number of Directorships and Committee Memberships held by them in other
companies as on 31st March, 2012, are set out below.
12
ABG Shipyard Limited Annual Report 2011-2012
# Directorships does not include alternate directorships, directorships of private limited companies and companies
incorporated outside the India, 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 (as specified in Clause 49 of the Listing Agreement) across all the companies in which he is a
Director. All the Directors have made necessary disclosures regarding their Directorship and Membership in the various
Board committee positions occupied by them in other Public Companies as at 31st March, 2012.
Five times, Board of Directors met during the financial year as per the details below, gap between any two consecutive
Board Meetings was not more than four months:
1. 30th May 2011
2. 29th July 2011
3. 10th August 2011
4. 14th November 2011
5. 14th February 2012
Agenda along with all information, including statutory information, relevant to the matters to be discussed is always sent,
well in advance, to the Directors. Where it is not practicable to attach any document to agenda, the same is tabled before
the meeting with specific reference in the agenda.
The Agenda for the Board Meetings and its Committee Meetings is drafted by the Managing Director and the Company
Secretary in consultation with the Chairman of the Board or the Committee as the case may be. The Members of the Board
can also suggest any Agenda item to the Chairman, which is taken as any other item after the circulated items. Detailed
presentations are made at the Board Meetings by the Managing Director and Chief Financial Officer on various strategic
and operational issues.
During the year, information as mentioned in Annexure 1A to clause 49 of the Listing Agreement has been placed before
the Board for its consideration.
None of the Non-executive Directors have any material pecuniary relationship or transactions with the Company.
Important decisions taken at the Board/Committee Meetings are promptly communicated to the concerned departments
for necessary actions.
13
ABG Shipyard Limited Annual Report 2011-2012
(iii) Profile of Directors seeking appointment / re-appointment in the 27th Annual General Meeting:
Experience and Has over 26 years of rich experience in Joined Indian Revenue Service in
Expertise in Specific Shipbuilding, Ship Repairing and November 1973, during the tenure,
functional area Shipping worked in various capacities and at
various places like, Kolkata, Jaipur,
Bhopal, Jodhpur, Mumbai and retired as
Chief Commissioner of Income Tax from
Chennai in August, 2008.
The Board has constituted committees of Directors to take informed decisions in the best interest of the Company. Currently
there are four Board Committees the Audit Committee, Nomination-cum-Remuneration Committee, the Compensation
Committee and the Share Transfer and Investors Grievance & Finance Committee.
A. AUDIT COMMITTEE
The Audit Committee of the Company is constituted in line with the provisions of Clause 49 of the Listing Agreement with
the Stock Exchanges read with Section 292A of the Companies Act, 1956
14
ABG Shipyard Limited Annual Report 2011-2012
The Audit Committee comprises of three Directors out of which two are independent Directors.
The composition of the Audit Committee and number of meetings attended by the members of the Audit Committee
are given below:
Name of the Director Status No. of Meeting Attended
Shri. Ashwini Kumar - Chairman I-NE 4
Major Arun Phatak NI-E 4
Shri. Ashok R. Chitnis I-NE 3
The Audit Committee invites such of the executives as it consider appropriate (particularly the heads of the
Operations) representatives of the Statutory Auditors and Internal Auditors to be present at its meetings. The Audit
Committee meetings are usually held at the Corporate Office of the Company. The Company Secretary acts as
Secretary of the Audit Committee.
Four Audit Committee Meetings were held during the financial year ended March 31, 2012, as per detailed below.
The Nomination cum Remuneration Committee met once during the last financial year as on 29th July 2011.
The Remuneration Committee has been constituted to recommend/ the overall remuneration structure of the
Executive Directors, based on their performance and defined assessment criteria. The remuneration, if any, of Non-
Executive Directors is decided by the Board of Directors.
The Company pays remuneration by way of salary, benefits, perquisites and allowances to its Executive Directors.
Annual increments are decided by the Remuneration Committee within the salary scale approved by the members.
The Company pays Sitting Fee per meeting to its Independent Directors for attending meetings of the Board and other
Committee Meetings.
15
ABG Shipyard Limited Annual Report 2011-2012
(iv) Details of Shares of the Company held by the Directors as on 31st March 2012, are as below:
Name No. of Shares % of Shareholding
Shri. Rishi Agarwal 1,40,625 0.28
Shri. Shahzaad Dalal 485 0.00
Major Arun Phatak 1,153 0.00
C. COMPENSATION COMMITTEE
The Company has a Compensation Committee with two Independent directors and one Non-independent Director as
members. The committee makes policies, takes decisions and forwards its directions to Human Resources Department of
the Company in order to attract and retain the best available talent and to reward its high performing employees. The
Company Secretary acts as Secretary of the Committee.
Name Status
Shri. Shahzaad Dalal - Chairman I - NE
Shri. Ashwani Kumar I - NE
Shri. Rishi Agarwal NI - NE
The committee met as on 29th July 2011 during the last financial year. In the meeting of the committee Shri Ashwani Kumar
has been appointed as Member of the committee substituting Shri Nainesh Jaisingh, who has resigned from the Board as
on 29th July 2011.
(i) Composition
The Composition of the Share Transfer and Investors Grievance & Finance Committee is given below:
Name Status
Shri. Shahzaad Dalal - Chairman I - NE
Shri. Rishi Agarwal NI - NE
Shri. R.S. Nakra NI - E
(NI-Non-Independent, I-Independent, NE- Non-Executive, E-Executive)
The Committee has Authorized Compliance Officer 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 & Finance Committee cover the matters
specified under Clause 49 of the Listing Agreement with the Stock Exchanges.
The Share Transfer and Investors Grievance & Finance Committee looks into the redressal of complaints of investors
such as transfer or credit of shares to demat accounts, non-receipt of shares or refund order / dividend / notices /
annual reports, etc., and also issue of duplicate certificates and review all other matters connected with securities.
The Committee oversees the performance of the Registrar and Share Transfer Agent.
As on 31st March 2012, no instruments of share transfer were pending.
16
ABG Shipyard Limited Annual Report 2011-2012
Investors' complaints received directly or through SEBI and Stock Exchanges during 1st April, 2011 to 31st March,
2012 and the status of said complaints as on 31st March, 2012 are given below:
Received from Received and Resolved during the FY 2011-12 Pending as at 31st March 2012
Investors 26 Nil
Through SEBI Nil Nil
Through Stock Exchanges 02 Nil
Total 28 NIL
The last three Annual General Meetings of the Company were held at the Registered Office of the Company at Near
Magdalla Port, Dumas Road, Surat-395 007, as per details below:
The Extra-ordinary General Meetings of the Company during last three years were held at the Registered Office of the
Company at Near Magdalla Port, Dumas Road, Surat-395 007, as detailed below:
2009-10 07.07.2009 12.00 noon 1. Issue of Securities (not exceeding 2,00,00,000 Shares) by way of a
Qualified Institutional Placement under chapter XIII A of SEBI
Guidelines and pursuant to Section 81 (1A) of the Companies Act,
1956.
2010-11 Nil NA
2011-12 Nil NA
During the Financial year 2011-12, the Company has passed resolutions under section 372A of the Companies Act, 1956
in accordance with provisions of Section 192A of the Companies Act, 1956 read with Companies (Passing of Resolution by
Postal Ballot) Rules, 2011, twice, as detailed below:
(i) The Postal Ballot notice dated 29.07.2011 was dispatched as on 20.08.2011, along with postal ballot form, the text of
resolutions to be passed through postal ballot for making investment, loan or giving guarantee or provide security
under Section 372A of the Companies Act, 1956 and the notice of postal ballot was also made available on the website
of the Company www.abgindia.com. The last date of receiving filled in Postal ballots from shareholders was
21.09.2011.
17
ABG Shipyard Limited Annual Report 2011-2012
Mrs. Kala Agarwal, Practicing Company Secretary was appointed as Scrutinizer for that purpose, and according to
her report total 92.65% votes were casted in favor of the proposed resolution.
The result was declared at the Annual General Meeting of the Company held as on 27.09.2011, which was informed to
Registrar of the Companies, both Stock Exchanges viz. NSE and BSE and was made available on the website of the
Company.
(ii) The Postal Ballot notice dated 14.02.2012 was dispatched as on 28.02.2012, along with postal ballot form, the text of
resolutions to be passed through postal ballot for making investment, loan or giving guarantee or provide security
under Section 372A of the Companies Act, 1956 and The notice of postal ballot was also made available on the
website of the Company www.abgindia.com. The last date of receiving filled in Postal ballots from shareholders was
30.03.2012.
Mrs. Kala Agarwal, Practicing Company Secretary was appointed as Scrutinizer for that purpose, and according to
her report total 97.67% votes were casted in favor of the proposed resolution.
The result was declared as on 4th April, 2012 which was informed to Registrar of the Companies, both Stock
Exchanges viz. NSE and BSE and was made available on the website of the Company.
(i) Materially Significant Related Party Transactions - There are no transactions of materially significant nature that have
been entered into by the Company with the Promoters, Directors, their relatives and the Management and in any company
in which they are interested, that may have potential conflict with the interest of the company.
(ii) Compliance - The Company has complied with the requirements of the Listing Agreements with the Stock Exchanges as
well as the Regulations and Guidelines prescribed by the Securities and Exchange Board of India. There were no
penalties or strictures imposed on the Company by any statutory authorities for non compliance on any matter related to
capital markets, during the last three years.
(iii) Code of Conduct - The Board of Directors of the Company has laid down a Code of Conduct for all Board members and
senior management personnel of the Company. The code of conduct is available on the website of the Company i.e.
www.abgindia.com.
The Company has adopted a Whistle Blower Policy and has established the necessary mechanism in line with Clause 7 of
Annexure I D to clause 49 of the Listing Agreement with the Stock Exchanges, for employees to report concerns about
unethical behavior. No person has been denied access to the Audit Committee.
To,
The Shareholders of ABG Shipyard Ltd.,
I hereby declare that all the Board Members and Senior Management personnel have affirmed compliance with the
code of conduct as adopted by the Board of Directors.
The Company has implemented the following Non-mandatory requirements recommended under Clause 49 of the Listing
Agreements with the Stock Exchanges.
b) The Company's statements are free from any qualifications by the Auditors of the Company.
(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.
18
ABG Shipyard Limited Annual Report 2011-2012
6. SECRETARIAL AUDIT
As a measure of good corporate governance practice, the Board of Director of the company appointed Mrs. Kala Agarwal,
practicing Company Secretary, to carry out a secretarial audit to reconcile the total admitted capital with National Securities
Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital.
The Secretarial audit confirms that the company has complied with all the applicable provisions of the Companies Act, 1956,
Depository Act, 1996, Listing Agreements with the Stock Exchanges, Securities Contracts (Regulation) Act, 1956 and all the
regulations of the SEBI as applicable to the Company and also confirms that the total issued / paid up capital is in agreement
with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.
7. MEANS OF COMMUNICATION
The quarterly, half yearly, yearly financial Results of the company and Notices of Board Meetings and General Meetings are
published normally in Economic Times (English & Gujarati), Gujarat Mitra. The quarterly results, half yearly results, Annual
results and Shareholding Pattern are also displayed on the Company's website at www.abgindia.com. Press releases made by
the Company from time to time are also displayed on the Company's website.
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.
The shareholders who wish to receive intimation, whenever new information is uploaded on www.abgindia.com are requested
to send their e-mail ID to seclegal@abgindia.com.
Day, Date & time : Thursday the 27th, September,2012 at 12.00 noon
The Company has paid annual listing fees to the above Stock Exchanges for the financial year 2012-13.
19
ABG Shipyard Limited Annual Report 2011-2012
Performance of ABG’s stock on BSE and NSE during the financial year 2011-12.
Month ABG High ABG Low Total Traded SENSEX High SENSEX Low
(`) (`) Quantity
460
440
420
Share Price
400
Low
380
360 High
340
320
300
1 1 11 1 11 1 1 11 11 12 12 2
r-1 ay-1 n- l -1 g- p -1
ct
-1 v- c- n- b- ar
-1
Ap M Ju Ju Au Se O No De Ja Fe M
18000
400
A BG
17500
380 SENSEX
17000
360 ABG
16500
16000 340
15500 320
15000 300
1 1 11 1 1 1 1 1 1 12 12 r-12
r- 1 ay
-1 n- l-1 g -1 p -1
ct
-1 v-1 c-1 n- eb -
Ap M Ju Ju Au Se O No D e Ja F M
a
20
ABG Shipyard Limited Annual Report 2011-2012
Month NSE High NSE Low Total Traded NIFTY High NIFTY Low
Low (`) (`) Quantity
400
380
High
360
Low
340
320
300
1 1 1 1 1 11 t-11 -11 11 -12 12 1 2
r -1 -1 -1 l -1 g-1 p- c- b- ar-
Ap ay Ju
n Ju Au Se
c
No
v
De Ja
n
M O Fe M
5900 460
5700 440
420
5500
NIFTY
ABG
400
5300
380 NSE
5100
360
ABG
4900 340
4700 320
4500 300
1 1 1 1 1 1 1 11 11 12 r-12
r-1 ay
-1 n -1 l-1 g -1 p -1
ct
-1 v- c- b-
Ap M Ju Ju Au Se O N o D e
Fe M
a
21
ABG Shipyard Limited Annual Report 2011-2012
Shareholders correspondence should be addressed to the Registrar and Share Transfer Agents of the Company at the
following Address:
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.
As of 31st March 2012, 50920788 equity shares representing 99.99% of the paid up equity capital of the company are in
dematerialized form with the following depositories:
During the year 2011-12 the Company has not received any application for rematerialization of shares by concerned
shareholders.
The Company has paid annual custodian charges for both NSDL and CDSL for the financial year 2012-13.
22
ABG Shipyard Limited Annual Report 2011-2012
Shareholding Pattern
Clearing Members
0.33% Individuals/ others
5.87%
Bodies Corporate
17.97%
FII
11.97% Promoters
61.83%
Insurance
Companies
2.23%
FI / Banks
0.08% MF/ UTI
0.17%
23
ABG Shipyard Limited Annual Report 2011-2012
(xiii) Details of unclaimed shares as on 31st March 2012 issued pursuant to Initial Public Offer (IPO) are as follows
(Pursuant to clause 5A of the Listing Agreement) -
(D) Aggregate Number of Shareholders and the outstanding Shares in the 14 490
suspense account at the end of the year i.e. 31.3.2012
The Voting Rights on the above mentioned shares in column (D) shall remain frozen till the rightful owner claims the
shares.
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)
for the financial year 2006-07 to 2010-11, are requested to make their claim without any delay to the Company's
Registrar and Transfer Agents, Link Intime India Private Limited.
The following table gives information relating to outstanding dividend accounts and the dates by which they need to be
transferred:
Pursuant to section 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 closure of IPO 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 unclaimed money laying in IPO refund
accounts after the said amount is transferred to the fund. The Unclaimed IPO refund money is due for transferred to IEPF
on 9th December, 2012. Members who have not yet claimed their refund of share application money, are requested to
make their claim without any delay to the Company's Registrar and Transfer Agents, Link Intime India Private Limited.
The Company has no outstanding GDRs/ ADRs/ Warrants or any convertible instruments.
Shipyard Shipyard
24
ABG Shipyard Limited Annual Report 2011-2012
MANAGING DIRECTOR (M.D.) AND CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION ISSUED IN
PURSUANCE OF CLAUSE 49 OF THE LISTING AGREEMENT.
To the Board of Directors,
ABG Shipyard Limited.
Sub: Managing Director (M.D.) and Chief Financial Officer (CFO) Certification
We have reviewed the financial statements, read with the cash flow statement of ABG Shipyard Limited for the year ended March 31,
2012 and that to the best of our knowledge and belief, we state that;
1. (a) These statements do not contain any materially untrue statement or omit any material fact or contain statements that may
be misleading,
(b) These statements present a true and fair view of the company's affairs and are in compliance with existing accounting
standards, applicable laws and regulations.
2. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are
fraudulent, illegal or in violation of the Company's code of conduct.
3. We accept the responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the
effectiveness of internal control systems of the Company pertaining to financial reporting and have disclosed to the Auditors
and Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and steps
taken or proposed to be taken for rectifying these deficiencies.
(a) Significant changes in the internal control over financial reporting during the year.
(b) Significant changes in accounting policies made during the year and that the same have been disclosed in the notes to the
financial statements; and
(c) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an
employee having a significant role in the Company's internal control system over financial reporting.
Yours sincerely,
25
ABG Shipyard Limited Annual Report 2011-2012
We have examined the compliance of Corporate Governance by ABG Shipyard Limited for the year ended on 31st March 2012, as
stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has been limited
to a review of the procedures and implementations thereof adopted by the Company for ensuring compliance with the conditions of
the Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the financial
statement of the Company.
In our opinion and to the best of our information and according to the explanations given to us, and based on the representations
made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate
Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.
We state that such compliance is neither an assurance as to the future viability of the Company, nor of the efficiency with which the
Management has conducted the affairs of the Company.
26
ABG Shipyard Limited Annual Report 2011-2012
ANNEXURE - C
According to CARE Research on Impact of Union Budget 2012-13, the Indian shipbuilders occupied 6th rank in the list of orderbook
by the builder country as on February 29, 2012 accounting for 1.36% of the global orderbook (in CGT). Correspondingly, the
orderbook of Indian shipbuilders aggregated 3.01 mn DWT with 168 vessels on order as on February 29, 2012. The Indian
shipbuilders specialise in the construction of offshore vessels. However, the size of the dry bulk vessels as against the offshore
vessels in terms of carrying capacity (i.e. DWT) being high, the former vessel category constituted approximately 87.5% of the Indian
orderbook on the said date. In terms of the number of vessels on order, the Offshore and Specialised vessels accounted for 38.7% of
the total orderbook as on February 29, 2012.
The vessels constructed by the shipyards can be broadly classified into: wet bulk, dry bulk, containerships, offshore and specialised
vessels. The shipbuilding industry is highly co-related with the developments in the global shipping industry therefore any slowdown
in the shipping industry adversely affects the prospects of the shipbuilding industry.
According to the study “Shipbuilding Industry in India : An overview”, by the Associated Chambers of Commerce (ASSOCHAM), the
Global Shipbuilding and Ship repair Industry is worth approximately ` 7.3 lakh crore and it is growing at a compounded annual
growth rate (CAGR) of about 24 per cent and is likely to reach ` 14 lakh crore by 2015 owing to rising global sea borne trade. Against
this, the Indian Shipbuilding and Ship repair Industry is growing at a CAGR of about 8 per cent and is likely to reach ` 9,200 crore from
the current level of just over ` 7,310 crore.
The Union Budget for 2012-13 has proposed to reduce the withholding tax from 20 per cent to 5 per cent on ECB related payments
will help ports raise low-cost foreign debt. There are positive opportunities that could arise for the Indian shipping industry from the
various initiatives announced for the power, steel and ports sectors. These initiatives will help the specific sectors in their ongoing
projects and growth plans. These sectors being substantial users of Indian shipping services.
The Indian Navy could be the saviour of the Indian shipbuilding industry, as the Public Sector shipyards are allowed to make joint
ventures with private sector shipyard to cater the requirements of Indian Navy, which are highly attractive because of long delivery
time allowed, absorption of price increase due to cost overruns by the Government besides very little chance of an order being
cancelled. A few Defence sector orders were bagged by some public as well as private sector yards during the year, Defence
shipbuilding is expected to meaningfully contribute to order book accretion in the coming years for the Indian shipbuilding
Companies.
India's shipping industry is governed by the Ministry of Shipping and thus is exposed to risks arising from political instability and
changes in government policies from time to time. The substantial upsurge in fuel costs globally in the past year has created a
hindrance in the growth of the profitability of the company since fuel forms a major part of operating costs for ships. Currently, there is
a large order book of vessels in most sectors which coupled with economic slowdown may affect the freight rates adversely but at the
same time with increased difficulty in obtaining finance for new building which are on order is matter of concern.
Post expiry of the 'Shipbuilding subsidy scheme' and with no announcement of the renewal of the said scheme, the Indian
Shipbuilding industry stands affected and the Indian shipyards are rendered cost ineffective as compared to their global peers. The
Indian Shipbuilding does not have status of 'infrastructure industry' which renders the industry in a disadvantageous situation as
compared to the major global shipbuilding nations such as S. Korea, China etc.
The shipping sector is already going through a down cycle. Now it has got a shocker from the Union Budget 2012-13. The shipping
industry unlike other industries attracts tonnage tax and the budget has proposed to increase the tonnage tax by more than 50% on
various class of tonnage effective from April 1, 2013. Under the tonnage tax scheme, the operating profit of a shipping company is
determined on the basis of tonnage capacity of its ships.
The total outlay for the Ministry of Shipping stands reduced by about ` 849.45 crore from ` 6,524.92 crore (Budget 2011-12) to
` 5675.47 crore in the current budget.
The Company has an adequate system of internal controls comprising authorization levels, supervision, checks and balances and
procedures through documented policy guidelines and manuals, which provide that all transactions are authorized, recorded and
reported correctly and compliance with policies and statutes are ensured. 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
27
ABG Shipyard Limited Annual Report 2011-2012
management have reviewed the adequacy of the internal control systems and suitable steps are taken to improve the same.
Your company has successfully delivered 14 vessels during the financial year under review which has taken to the total sum to 152
vessels delivered so far by the Company.
During the Financial Year under review, your company has received ` 16.08 Crores towards Subsidy from the Government of India.
Your Company has posted EBIDITA for the Financial Year 2011-12, ` 604.92 Crores with an increase of 19.69% as compared to
` 505.39 Crores in the previous Financial Year. The total Turnover of the Company stood at ` 2432.86 crores, reporting an increase
of about 16.82% as compared to ` 2082.66 Crores in the previous Financial Year.
The company continued to Invest in developing its human capita and establishing its brand on the market to attract and retain the
best talent.
The relationship between the management and the employees is very cordial and there are no outstanding industrial disputes. The
management also has well laid down HR Policies for its employees. Employees' welfare and health & safety of employees are high
priority areas. The Company considers its employees as partners in growth. They have played a significant role and enabled the
Company to deliver superior performance year after year
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.
28
ABG Shipyard Limited Annual Report 2011-2012
2. We conducted our audit in accordance with Auditing Standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the over all financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of
India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 of India, we enclose in the annexure a
statement on the matters specified in paragraphs 4 and 5 of the said order.
(i) 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;
(ii) 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;
(iii) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are
in agreement with the books of account;
(iv) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by
this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
(v) On the basis of written representations received from the directors, as on 31st March, 2012, and taken on
record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2012,
from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies
Act, 1956.
5. In our opinion and to the best of our information and according to the explanations given to us, the said accounts
together with the notes thereon and attached thereto, give in the prescribed manner the information required by the
Companies Act, 1956 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 31st March, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
M. N. Ahmed
Place: Mumbai (Partner)
Date: 29th May, 2012 M. No. 18380
29
ABG Shipyard Limited Annual Report 2011-2012
30
ABG Shipyard Limited Annual Report 2011-2012
x.) 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.
xi.) The Company is not a chitfund/ nidhi/ mutual benefit fund/ society, to which the provisions of special statute relating to chitfund
are applicable. Accordingly, paragraph 4 (xiii) of the Order is not applicable to the Company.
xii.) 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.
xiii.) According to the information and explanations given to us, the Company has given guarantees of Rs.2000.92 crores for credit
facilities taken by body corporates from banks and financial institutions, the terms and conditions whereof in our opinion are not
prima facie prejudicial to the interest of the Company.
xiv.) 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.
xv.) According to the information and explanations given to us and based on our examination of the books of account of the
Company, short term funds to the extent of approximately Rs. 131.52 crores have been used for long term purposes.
xvi.) 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.
xvii.)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.
xviii.)The Company has not raised any money by public issues during the year. Accordingly, paragraph 4(xx) of the Order is not
applicable.
xix.) 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.
M. N. Ahmed
Place: Mumbai (Partner)
Date: 29th May, 2012 M. No. 18380
31
ABG Shipyard Limited Annual Report 2011-2012
II ASSETS
1. Non-current Assets
a. Fixed assets 10
(i) Tangible assets 1,003.10 912.07
(ii) Intangible assets 2.69 3.31
(iii) Capital work-in-progress 1,417.39 1,052.41
2,423.18 1,967.79
b. Non-current investments 11 233.86 233.85
c. Long-term loans and advances 12 689.54 643.75
3,346.58 2,845.39
2. Current Assets
a. Inventories 13 3,260.83 2,444.25
b. Trade receivables 14 62.67 123.85
c. Cash and bank balance 15 363.52 643.57
d. Short-term loans and advances 16 1,336.27 1,001.18
e. Other current assets 17 516.75 522.69
5,540.04 4,735.54
8,886.62 7,580.93
Significant Accounting Policies & Notes to Financial Statements 1 - 39
As per our report of even date
For NISAR & KUMAR For and on behalf of the Board
Chartered Accountants
F. R. No. 107117W
M. N. Ahmed R.S.Nakra Major Arun Phatak
Partner Managing Director Director
M. No 18380
32
ABG Shipyard Limited Annual Report 2011-2012
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2012
Year ended Year ended
31.03.2012 31.03.2011
Note ` in Crores ` in Crores
INCOME
Revenue from operations 18 2,391.77 2,079.19
Other income 19 41.09 3.47
Total Revenue 2,432.86 2,082.66
EXPENSES
Consumption of raw materials & components 20 1,217.19 876.97
Purchase of traded goods 20 1.34 -
Changes in inventories of work-in-progress 21 29.72 274.35
Employee benefits expense 22 85.44 64.59
Finance costs 23 330.74 221.32
Depreciation & amortisation expense 10 99.25 63.03
Other expenses 24 390.40 302.19
Total Expenses 2,154.08 1,802.45
Profit before exceptional and extraordinary items and tax 278.78 280.21
Exceptional / Extraordinary items - -
Profit before tax 278.78 280.21
Tax Expense
Current tax for the year 57.19 58.41
Current tax for earlier years 13.41 1.03
MAT credit (entitlement)/utilised (35.10) (55.50)
Deferred tax 62.99 87.47
Profit after tax 180.29 188.80
33
2
ABG Shipyard Limited Annual Report 2011-2012
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012
Year ended Year ended
31.03.2012 31.03.2011
` in Crores ` in Crores
A. Cash Flow From Operating Activities :
Net Profit (Loss) before extraordinary items & taxation 278.78 280.21
Adjustments for :
Depreciation 99.25 63.03
Interest (net) 192.26 139.54
Dividend Income - (0.50)
Effect of exchange rate change 74.17 34.75
Loss / (Profit) on Sale of Assets (net) 0.17 0.15
Loss / (Profit) on Sale of Investments (1.90) 21.00
Operating Profit before working capital changes 642.73 538.18
Adjustments for :
Inventories (1,474.71) (1,032.86)
Trade Receivables 64.61 (51.00)
Loans and Advances* and other current assets (135.25) 66.29
Trade Payables and other current liabilites/provisions 84.46 144.18
Stage Payments from Customers (net) 464.47 1,893.87
Cash generated from/(used in) Operations (353.69) 1,558.66
Direct Taxes Paid (35.96) (64.55)
Cash Generated From/(Used in) Operating activities (389.65) 1,494.11
B. Cash Flow From Investing Activities:
Purchase of Fixed Assets including Capital Work in Progress (544.73) (356.74)
Sale of Fixed assets 1.92 0.73
Investment in Subsidary (0.01) (35.51)
Purchase of Investments (266.00) (4.61)
Sale of Investments 267.89 217.70
Dividend received on Investments - 0.50
Cash Used In Investing Activities (540.93) (177.93)
C. Cash Flow From Financing Activities:
Dividends paid (20.34) (20.34)
Tax on distributed profits (3.30) (3.46)
Proceeds from Long Term Borrowings 625.00 200.00
Repayments of Long Term Borrowings (211.78) (599.31)
Short Term Borrowings (net) 648.08 (104.33)
Loans/ deposits given (net) (195.77) (3.39)
Interest paid (net) (191.38) (160.44)
Cash (Used in) / from Financing Activities 650.51 (691.27)
Net (decrease) / Increase in cash and cash equivalents (A + B + C) (280.07) 624.91
Opening Balance of Cash & Cash Equivalents 643.57 27.86
Closing Balance of Cash & Cash Equivalents 363.50 652.77
Effect of Exchange rate changes 0.02 (9.20)
Closing Balance of Cash & Cash Equivalents as restated 363.52 643.57
* Includes current and non current
Notes :
1. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard -3 issued by the Institute
of Chartered Accountants of India.
2. Figures for previous year where ever necessary have been regrouped to conform to those of current year.
As per our report of even date
For NISAR & KUMAR For and on behalf of the Board
Chartered Accountants
F. R. No. 107117W
M. N. Ahmed R.S.Nakra Major Arun Phatak
Partner Managing Director Director
M. No 18380
Mumbai Ch. Rajashekhar Reddy Dhananjay Datar Praveen Kumar Bhandari
Dated : 29th May 2012 Company Secretary Whole Time Director & Vice President - Accounts &
Chief Financial Officer Taxation
34
ABG Shipyard Limited Annual Report 2011-2012
35
ABG Shipyard Limited Annual Report 2011-2012
36
ABG Shipyard Limited Annual Report 2011-2012
Authorised Capital
100000000 (P.Y. 100000000) Equity Shares of ` 10/- each 100.00 100.00
a) The Company has only one class of shares referred to as Equity Shares having par value of ` 10/-. Each holder of equity
share(s) is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be
entitled to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be
in proportion of the number of equity shares held by the shareholders.
b) None of the above shares are reserved for issue under options and contract / commitments for sale of shares or
disinvestment.
c) 31110594 (P.Y.30545594 ) Equity Shares of `10/- each are held by the holding company ABG International Pvt. Ltd.
d) Shares allotted , as fully paid up, pursuant to contract(s) without payment being effected in cash / bonus shares /bought
back / forfeited/ calls unpaid in the previous 5 years - NIL
e) Shareholders holding above 5% Equity Shares with voting rights in the company.
37
ABG Shipyard Limited Annual Report 2011-2012
(a) Debentures
Secured 233.33 266.67
From Others
Secured 0.13 0.18
1,251.19 785.38
38
ABG Shipyard Limited Annual Report 2011-2012
b) 12.30% 1000 Non Convertible Secured - First pari passu Payable in annual installments 33.33 33.33 66.67 33.33
Redeemable Debentures (NCD) of charge on the companys upto 15.12.2013
`100000/- each issued to Life immovable and movable fixed
Insurance Corporation of India (LIC) assets of Dahej plant
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
Rupee Term Loan - Consortium Secured - First pari-passu Payable in quarterly 150.67 64.16 199.84 64.84
charge on the company's Instalments upto March 2015
immovable & movable fixed
assets of Dahej plant present
and future
Rupee Term Loan Payable in quarterly 14.20 3.60 17.81 3.60
Instalments upto Jan.2017
Rupee Term Loan Payable in quarterly 192.80 42.88 206.66 42.88
Instalments upto June.,2017
Rupee Term Loan Secured - Subservient charge Payable in monthly instalments 200.00 - - -
on current and fixed assets of upto Oct 2013
the company at Dahej Yard
Rupee Term Loan Secured - Second charge by Payable in quarterly instalments 43.75 6.25 - -
way of hypothecation of entire upto Dec. 2014
movable fixed assets of Dahej
Shipyard and Rig yard of the
Company
Rupee Term Loan Secured - First pari-passu Payable in quarterly instalments 90.00 10.00 - -
charge on movable and upto March 2016
immovable fixed assets of the
Dahej Shipyard and Rigyard
and mortgage on GIDC and
private Land at Dahej
Rupee Term Loan Secured - Immovable and Payable in half yearly instalments - - - 86.00
movable assets excluding fixed
assets at Dahej Plant
Rupee Term Loan Unsecured- Pending creation Payable in quarterly instalments 247.50 27.50 - -
of security upto March 2016
Vehicle Loans
From Banks Secured - Hypothecation of Payable in monthly installments 0.24 0.17 0.16 0.09
individual assets financed upto Jan 2015
From Others Secured - Hypothecation of Payable in monthly installments 0.13 0.23 0.18 0.23
individual assets financed upto Dec 2014
1,017.86 184.03 518.71 223.15
39
ABG Shipyard Limited Annual Report 2011-2012
From Others:
a) Commercial Paper Unsecured 58.45 120.00
b) Inter Corporate Deposits Unsecured 23.00 -
c) Vehicle Loans Secured- Hypothecation of the individual 0.01 -
assets financed.
2,008.68 1,344.94
40
ABG Shipyard Limited Annual Report 2011-2012
The Company has no amounts due to suppliers under MSMED as at 31st March, 2012 (P. Y. Nil).
The information relates to such vendors identified as micro,small and medium enterprises as per
information available with the Company.
(i) Principal amount remaining unpaid to any supplier as at the end of the accounting year - -
(ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year - -
(iii) The amount of interest paid along with the amounts of the payment made to the supplier - -
beyond the appointed day
(iv) The amount of interest due and payable for the year - -
(v) The amount of interest accrued and remaining unpaid at the end of the accounting year - -
(vi) The amount of further interest due and payable even in the succeeding year, until such date - -
when the interest dues as above are actually paid
41
ABG Shipyard Limited Annual Report 2011-2012
At cost / Valuation
TANGIBLE ASSETS
LAND
LEASE HOLD LAND 6.49 1.22 - 7.71 0.28 0.08 - 0.36 7.35 6.21
FACTORY BUILDING 509.00 1.63 - 510.63 71.32 43.60 - 114.92 395.71 437.68
PLANT AND MACHINERY 403.07 167.53 2.08 568.52 100.72 48.54 0.24 149.02 419.50 302.35
OFFICE EQUIPMENT 5.00 0.74 - 5.74 1.74 0.52 - 2.26 3.48 3.26
FURNITURE & FIXTURES 3.56 0.45 - 4.01 1.89 0.36 - 2.25 1.76 1.67
VEHICLES 13.67 1.61 0.97 14.31 7.14 1.89 0.74 8.29 6.02 6.53
COMPUTERS 4.72 0.51 0.15 5.08 3.68 0.55 0.13 4.10 0.98 1.04
1,108.11 192.48 3.20 1,297.39 196.04 99.36 1.11 294.29 1,003.10 912.07
INTANGIBLE ASSETS
TOTAL 1,115.52 193.11 3.20 1,305.43 200.14 100.61 1.11 299.64 1,005.79 915.38
Previous Year 737.74 381.18 3.40 1,115.52 137.96 64.47 2.29 200.14 915.38
i) Certain part of the land is yet to be registered in the name of the Company.
31.03.2012 31.03.2011
` in crores ` in crores
ii) Depreciation & Amortisation relating to continuing operations
Depreciation & Amortisation for the year on tangible assets 99.36 63.32
Depreciation & Amortisation for the year on intangible assets 1.25 1.15
100.61 64.47
Less: Utilised from revaluation reserve 1.36 1.44
Depreciation & Amortisation on discontinuing operations - -
Depreciation & Amortisation relating to continuing operations 99.25 63.03
iv) 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.
v) Consequent to the revaluation there is an additional depreciation of ` 1.36 crores (Previous year ` 1.44 crores), which has been
withdrawn from Revaluation Reserves and credited to Statement of Profit and Loss.
42
ABG Shipyard Limited Annual Report 2011-2012
During the year, ` 129.85 crores ( P. Y. ` 341.02 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.
vii) The company has chosen to avail the option under AS-11 notification issued by Companies (Accounting Standard) Amendment
Rules 2011 GSR 913 (E) & 914 (E) dated 29.12.2011 issued by Ministry of Corporate Affairs. The company has exercised the
option with respect to foreign currency long term loan availed by it. The company has no other long term monetary Assets /
Liabilities.
Due to the exercise of aforesaid option, the impact on Statement of Profit & Loss for the year is a Gain of `14.20 crores (P.Y.
Loss ` 2.56 crores) due to foreign currency exchange loss (net) which has been capitalized with CWIP (P Y credited to CWIP) .
viii) Acquisition through business combinations / Assets reclassified as held for sale - Nil (P.Y. Nil)
43
ABG Shipyard Limited Annual Report 2011-2012
In Equity Shares
In subsidiary
177242875 (P. Y.177242875) Equity Shares in Western India Shipyard Ltd. of 35.45 35.45
` 2/- each fully paid up
Unquoted
In Equity Shares
In subsidiaries :
10000 (P.Y.10000) Equity Shares in ABG Shipyard Singapore Pte. Ltd. of SGD 1/- 0.03 0.03
each fully paid up
10000 (P.Y. Nil) Equity Shares in ABG FPSO Pvt Ltd of ` 10/- each fully paid up 0.01 -
In Others:
271002 (P.Y. 271002) Equity Shares in ABG Business Ventures Pte. Ltd., Singapore 0.92 0.92
of SGD 1/- each fully paid up
In Preference Shares
In subsidiaries :
4297100 (P.Y. 4297100) 1% Preference Shares in ABG Shipyard Singapore Pte. Ltd. 191.63 191.63
Of USD 1/- each fully paid up.
In Partnership Firm
Capital in partnership firm Vipul Shipyard 5.82 5.82
233.86 233.85
44
ABG Shipyard Limited Annual Report 2011-2012
13. INVENTORIES
(As taken, valued & certified by management)
Outstanding for more than six months from due date of payment 56.71 72.49
Others 5.96 51.36
62.67 123.85
45
ABG Shipyard Limited Annual Report 2011-2012
46
ABG Shipyard Limited Annual Report 2011-2012
47
ABG Shipyard Limited Annual Report 2011-2012
48
ABG Shipyard Limited Annual Report 2011-2012
(b) Contingencies provided for in accordance with AS 29 issued by the Institute of Chartered Accountants of India
Rs. in crores
Particulars 31st March 2012 31st March 2011
Carrying amount as at the beginning of the year 2.08 1.40
Provision (net of utilisation) during the year. 0.88 0.68
Unused amount reversed during the year. - -
Balance at the end of the year 2.96 2.08
The contingencies provided are in respect of estimated warranties on sold hulls.
27. 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.
28. The Company has made Application u/s 245 C of Income Tax Act 1961, before Hon’ble Settlement Commission, Mumbai for the
A.Y. 2004-05 to 2010-11. The Application for settlement has been admitted u/s 245 D(1) by Hon’ble Settlement Commission
vide order dated 14th February 2012. The company has paid taxes of ` 7.70 crores and utilised credit u/s 115JAA of the Income
Tax Act ,1961 to the extent of ` 20.67 crores. The tax expense and utilisation are included in Current Tax for earlier years and
MAT credit utilised, respectively. The proceedings are pending before the Hon'ble Commission. The ultimate tax liability,if any,
is dependent on the outcome of the proceedings and will be quantified only on the completion of the same .
29. Exchange fluctuation included in the Statement of Profit and Loss is a loss of ` 202.99 crores and gain of `117.87 crores
(P.Y.loss ` 100.54 crores , gain ` 90.05 crores). Out of this, a net loss of ` 36.00 crores (P Y. net ` 6.31 crores) is related to
material and included in consumption .
49
ABG Shipyard Limited Annual Report 2011-2012
The company has not remitted any amount in foreign currencies on account of dividends during the year and does not have
information as to the extent to which remittances, if any, in foreign currencies on account of dividends have been made by /
on behalf of non resident shareholders. The particular of dividend declared and paid to non resident shareholders during
the year are as under:-
` in crores
PARTICULARS 31st March 2012 31st March 2011
Non resident Shareholders (Nos.) 501 665
Equity shares held (Nos.) 5,295,751 6,089,258
Dividend paid relating to previous year (` in crores) 2.12 2.44
(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 24
33. Disclosure in accordance with 'AS -7 Accounting for Construction Contracts' issued by the Institute of Chartered Accountants
of India:
` in crores
PARTICULARS 31st March 2012 31st March 2011
a. Contract revenue recognized as revenue in the period 2,356.01 1,884.80
b. Contract cost incurred and recognized profits 6,435.53 4,977.21
c. Advances received from above customers 4,594.00 3,721.19
d. Gross amount due from customers for contract work 2,189.62 1,256.03
e. Gross amount due to customers for contract work 348.09 2,239.19
The Gross amount due from customers reflects the net amount for all contracts in progress for which cost incurred plus
recognised profit (less recognised losses) exceeds progress billing.
The Gross amount due to customers reflects the net amount for all contracts in progress where progress billing exceeds cost
incurred plus recognised profits (less recognised losses).
Out of the above, during the year, advances from customers to the extent of work done amounting to ` 4245.91 crores .(P.Y. `
3721.19 crores) is included in adjustment against Work in Progress in Note No 13. Advances received in excess of work done
and advances pending commencement of work are disclosed in Other Current Liabilities under Advances from Customers in
Note No 8.
50
ABG Shipyard Limited Annual Report 2011-2012
Contribution to Defined Contribution Plan, recognized are charged off for the year are as under:
` in crores
PARTICULARS 31st March 2012 31st March 2011
Employer’s Contribution to Provident Fund 3.00 2.47
Employer’s Contribution to Pension Scheme 0.73 0.62
The employees’ gratuity fund scheme managed by SBI Life Insurance is a defined benefit plan. The present value of obligation
is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as
giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The obligation for leave encashment is recognized in same manner as gratuity.
` in crores
Particulars Gratuity Leave Encashment
(Funded) (Unfunded)
st st st st
31 March 31 March 31 March 31 March
2012 2011 2012 2011
a. Reconciliation of opening and closing balances of
Defined Benefit obligation
Defined Benefit obligation at the beginning of the year 4.22 4.08 3.80 3.75
Current Service Cost 0.85 0.64 1.05 0.68
Interest Cost 0.34 0.33 0.30 0.30
Actuarial (gain) / loss 0.55 (0.34) 1.47 0.18
Benefits paid (0.26) (0.49) (0.56) (1.11)
Defined Benefit obligation at the year end 5.71 4.22 6.06 3.80
b. Reconciliation of opening and closing balances of
fair value of plan assets
Fair value of plan assets at beginning of the year 0.48 0.92 - -
Expected return on plan assets 0.04 0.07 - -
Actuarial gain/(loss) (0.01) (0.02) - -
Employer contribution - - - -
Benefits Paid (0.26) (0.49) - -
Fair value of plan assets at the year end 0.25 0.48 - -
c. Reconciliation of fair value of assets and obligations
Fair value of plan assets as at year end 0.25 0.48 - -
Present value of obligation as at year end 5.71 4.22 6.06 3.80
Amount recognised in Balance Sheet 5.46 3.74 6.06 3.80
d. Expenses recognised during the year
Current Service Cost 0.85 0.64 1.05 0.68
Interest Cost 0.34 0.33 0.30 0.30
Expected return on plan assets (0.04) (0.07) - -
Actuarial (gain) / loss 0.56 (0.32) 1.47 0.18
Net Cost 1.72 0.58 2.82 1.16
e. Investment Details % invested
As at 31st As at 31
st
51
ABG Shipyard Limited Annual Report 2011-2012
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 satisfies the threshold limit as per Accounting Standard -17, issued by Institute of Chartered
Accountants of India.
(a) Outstanding forward exchange contracts/ options entered by the company for the purpose of hedging its foreign currency
exposures are as under: In crores
Currency Cross Currency Buy Sell
31st March 31st March 31st March 31st March
2012 2011 2012 2011
EURO USD 0.02 1.32 - -
JPY USD 2.86 3.82 - -
USD - - - 11.50 -
(b) Notional value of interest rate swaps to hedge against fluctuation in interest rate is USD 0.90 crores.
(c) Currency swap to hedge against fluctuations in exchange rate and interest rate is USD 1.80 crores
(d) Foreign Currency exposure that is not hedged by derivative instruments is as under: In crores
Currency Payable / Receivable
31st March 2012 31st March 2011
AUD * 0.00 * 0.00
EURO 1.93 0.37
USD 27.16 19.85
NOK 11.90 8.93
SEK 4.31 0.48
JPY 1.71 2.64
AED - *0.00
GBP 0.01 -
SGD 0.10 0.17
* Amount less than 0.01 crores
(e) The Company has firm committments in foreign exchange as regards both its payables and receivables. The company has
applied the principle of hedge accounting contained in Accounting Standard 30 issued by the Institute of Chartered
Accountants of India for its net firm commitment in receivables and payables in foreign exchange. In view of the same,
52
ABG Shipyard Limited Annual Report 2011-2012
53
ABG Shipyard Limited Annual Report 2011-2012
54
ABG Shipyard Limited Annual Report 2011-2012
Notes :
1. Related Parties have been identified by the management and relied upon by the auditors.
3. Names of the Retaled Parties have been given in cases where the amount of transaction exceeds 10% of the total
related party transactions of the same type.
4. Guarantees taken / given comprise of guarantees given to third parties on behalf of the Company / related parties.
1 Revenue from Operations include Varada Marine Pte. Limited ` 64.81 crores (Previous Year ` 139.32 crores), PFS
Shipping (India) Limited ` Nil (Previous Year ` 71.32 crores), Global Bulk Carriers Pte. Limited ` 78.48 crores (Previous
Year N.A.)
2 Share of Loss in Partnership Firm include Vipul Shipyard ` 0.04 crores (Previous Year Loss ` 0.00 * crores)
3 Rent Expenses include Tirupati Landmark Private Limited ` 0.08 crores (Previous Year ` 0.08 crores), Jarrow Finance &
Trading Private Limited ` 0.09 crores(Previous Year ` 0.08 crores), Aries Management Services Private Limited ` 0.38
crores(Previous Year N.A.), ABG Power Private Limited ` 0.22 crores (Previous Year ` 0. 22 crores)
4 Hire Charges paid to ABG Infralogistics Limited ` 0.79 crores (Previous Year ` Nil )
5 Services Received from Western India Shipyard Limited ` Nil (Previous Year ` 0.07 crores), ABG Resources Private
55
ABG Shipyard Limited Annual Report 2011-2012
6 Payment to Key Management Personnel include to Shri R.S. Nakra ` 0.97 crores (Previous Year ` 0.96), Major Arun
Phatak ` 0.63 crores (Previous Year ` 0.53 crores), Shri Dhananjay Datar ` 0.31 crores (Previous Year N.A.), Shri Rishi
Agarwal ` Nil (Previous Year ` 0.62 crores)
7 Purchase of Fixed Assets include from ABG Cement Limited ` Nil (Previous Year ` 0.14 crores), ABG Infralogistics Limited
` 20.48 crores (Previous Year ` Nil)
8 Sale of Fixed Assets include to Western India Shipyard Limited ` 0.09 crores (Previous Year ` Nil), PFS Shipping (India)
Limited ` Nil (Previous Year ` 0.25 crores)
9 Investments include ABG FPSO Private Limited ` 0.01 crores (Previous Year N.A.), ABG Shipyard Singapore Pte. Limited
` Nil (Previous Year ` 191.63 crores)
10 Sale of Shares include Eleventh Land Developers Private Limited ` Nil (Previous Year ` 91.92 crores)
11 Stage Payment received include from PFS Shipping (India) Limited ` 82.19 crores (Previous Year ` 229.21 crores), Varada
Marine Pte. Limited ` 73.19 crores (Previous Year ` 339.09 crores), Global Bulk Carriers Pte. Limited ` 353.21 crores
(Previous Year N.A.)
12 Loans and Advances Given / Repaid include ABG International Private Limited ` 101.21 crores (Previous Year ` 12.43
crores), Western India Shipyard Limited ` 74.00 crores (Previous Year ` 16.13 crores), ABG Cement Holdco Private
Limited ` 61.56 crores (Previous Year ` Nil), ABG Engineering & Construction Private Limited ` 161.28 (Previous Year `
122.05 crores), ABG Resources Private Limited ` 35.53 crores (Previous Year ` 49.73 crores),
13 Loans and Advances Taken / Refunded include ABG International Private Limited ` 111.08 crores (Previous Year ` 1.89
crores), ABG Shipyard Singapore Pte. Limited ` Nil (Previous Year ` 176.44 crores), Western India Shipyard Limited `
47.09 crores(Previous Year ` 35.50 crores), ABG Cement Holdco Private Limited ` 61.56 crores-(Previous Year ` 0.00 *
crores), ABG Resources Private Limited ` 16.26 crores- (Previous Year ` 40.11 crores).
14 Deposits given to ABG Resources Private Limited ` 40.00 crores (Previous Year ` 30.00 crores)
15 Guarantees Taken from ABG International Private Limited ` 435.00 crores (Previous Year ` Nil )
16 Guarantees Given to ABG Shipyard Singapore Pte. Limited ` 408.96 crores (Previous Year ` Nil), ABG Business Ventures
Pte. Limited ` Nil (Previous Year ` 445.95 crores)
39. The figures for the previous year have been arranged/rearranged/regrouped wherever considered necessary.
56
ABG Shipyard Limited Annual Report 2011-2012
Statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary company
S.N. Particulars / Name of subsidiary Western India ABG Shipyard ABG FPSO
Shipyard Ltd. Singapore Pte. Ltd. Pvt. Ltd.
1 The financial year of the subsidiary ended on 31st March, 2012 31st March, 2012 31st March, 2012
2 Date from which it became subsidiary company 14th October, 2010 08th February, 2010 09th January, 2012
3 Number of shares in the subsidiary company held by
ABG Shipyard Ltd. As on 31st March 2012
Equity Shares 177242875 10000 10000
of the face value of the face value of of the face value
of Rs. 2/- each Singapore Dollar of Rs. 10/- each
fully paid up 1/- each fully paid up fully paid up
Preference Shares - 4297100
of USD 1 each
fully paid up.
4 Extent of holding by ABG Shipyard Ltd. 60.15% 100% 100%
5 The net aggregate amount of subsidiary company's
profit /(loss) so far as it concerns to member of holding
company
5.1 Not dealt with the holding company 's accounts : Rs.in crores Rs.in crores Rs.in crores
5.1.1. For the financial year ended 31st March 2012 7.50 (1.21) (0.42)
5.1.2. For the previous years since they became subsidiary 4.36 3.04 NA
* Amount less than 0.01 crore
5.2 Dealt with the holding company 's accounts :
5.2.1 For the financial year ended 31st March 2012 NIL NIL NIL
5.2.2. For the previous years since they became subsidiary NA NIL NIL
6 Change in interest of ABG Shipyard Ltd. in the subsidiary NA NA NA
between the end of financial year of subsidiary company
and end of ABG Shipyard Ltd.
7 Material change between the end of financial year of
subsidiary and end of ABG Shipyard Ltd. in respect of the
following :
ABG Shipyard Ltd. in respect of the following :
Fixed Assets NIL NIL NIL
Investments NIL NIL NIL
Money lent by the subsidiary company NIL NIL NIL
Money borrowed by the subsidiary company NIL NIL NIL
(other than current liabilities)
STATEMENT PURSUANT TO EXEMPTION RECEIVED UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956 RELATING TO
SUBSIDIARY COMPANY
Name of the Subsidiary Western India ABG Shipyard ABG FPSO
Shipyard Ltd. Singapore Pte. Ltd. Pvt. Ltd.
a. Capital 58.93 19.20 0.01
b. Reserves (35.57) 202.71 (0.42)
c. Total Assets 293.57 223.11 0.51
d. Total Liabilities 293.57 223.11 0.51
e. Details of Investments
5000 Shares in Janata Sahakari Bank Ltd. of Rs.100/- each. 0.05
434532.6111 (P.Y. 808500) Units in Emerging Markets 222.13
Diversified Fund of Standard Chartered Trust (Cayman)
Limited of Face Value USD 100 per unit.
f. Turnover 89.78 0.00 -
g. Profit before Taxation 12.29 (1.21) (0.42)
h. Provision Taxation 0.07 Nil Nil
i. Profit after Taxation 12.22 (1.21) (0.42)
j. Proposed Dividend Nil Nil Nil
* Amount less than 0.01 crore
57
CONSOLIDATED
FINANCIAL STATEMENTS
ABG Shipyard Limited Annual Report 2011-2012
Auditor's Report to the Board of Directors of ABG Shipyard Limited on the Consolidated
Financial Statements of ABG Shipyard Limited.
1. We have audited the attached Consolidated Balance Sheet of ABG Shipyard Limited (the Company) and its Subsidiaries
(together the Group) as at 31st March, 2012, the Consolidated Statement of Profit & Loss and the Consolidated Cash Flow
Statement for the year ended on that date annexed thereto. These Consolidated Financial Statements are the responsibility of
the Company's Management. Our responsibility is to express an opinion on these Financial Statements based on our audit.
2. We conducted our audit in accordance with Auditing Standards generally accepted in India. Those Standards require that we
plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free of material
misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the Financial
Statements. An audit also includes assessing the accounting principles used and significant estimates made by Management,
as well as evaluating the overall Financial Statement presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. We did not audit the financial statements of Western India Shipyard Limited, subsidiary of ABG Shipyard Limited, whose
financial statements reflect total assets of Rs. 293.57 crores as at 31st March, 2012, total revenue of Rs. 89.78 crores for the
year ended on that date, and net cash inflow amounting to Rs. 0.13 crores for the year ended on that date, as considered in the
consolidated financial statements. These financial statements have been audited by another auditor whose report has been
furnished to us and our opinion is so far as it relates to the amounts included in respect of Western India Shipyard Limited are
based solely on the report of another auditor.
4. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with requirements of
Accounting Standard 21, “Consolidated Financial Statements”, as notified under the Companies (Accounting Standards)
Rules, 2006.
5. Based on our audit and on consideration of the separate audit reports on the individual financial statements of the Company,
and the aforesaid subsidiaries and to the best of our information and according to the explanations given to us, we are of the
opinion that the attached Consolidated Financial Statements 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 31st March, 2012;
b) in the case of the Consolidated Statement of Profit and Loss, of the profit of the Group for the year ended on that date; and
C) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.
M. N. Ahmed
Place: Mumbai (Partner)
Date:29th May, 2012 ` M. No. 18380
58
ABG Shipyard Limited Annual Report 2011-2012
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2012
Year ended Year ended
31.03.2012 31.03.2011
Note ` in Crores ` in Crores
INCOME
Revenue from operations 21 2,472.48 2,135.94
Other income 22 43.71 8.06
Total Revenue 2,516.19 2,144.00
EXPENSES
Consumption of raw materials & components 23 1,264.64 884.66
Changes in inventories of work-in-progress 24 (22.35) 274.35
Employee benefits expense 25 99.07 72.89
Finance costs 26 343.06 227.73
Depreciation & amortisation expense 11 109.72 68.47
Other expenses 27 432.72 327.61
Total Expenses 2,226.86 1,855.71
Profit before exceptional and extraordinary items and tax 289.33 288.29
Exceptional / Extraordinary items - -
Profit before tax 289.33 288.29
Tax Expense
Current tax for the year 59.78 58.61
Current tax for earlier years 13.41 1.03
MAT credit (entitlement)/utilised (37.62) (55.70)
Deferred tax 62.99 87.47
Profit after Tax (before adjustment for Minority Interest) 190.77 196.88
Less: Minority Interest 4.97 2.89
Profit after tax 185.80 193.99
Earning per share in Rupees of face value of Rs.10 /- each
Basic 36.49 38.10
Diluted 36.49 38.10
Significant Accounting Policies & Notes to Financial Statements 1 - 39
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2012
Year ended Year ended
31.03.2012 31.03.2011
` in Crores ` in Crores
A. Cash Flow From Operating Activities :
Net Profit (Loss) before extraordinary items & taxation 289.33 288.29
Adjustments for :
Depreciation 109.72 68.47
Interest (net) 203.36 145.86
Dividend Income - (0.50)
Effect of exchange rate change 74.18 34.75
Loss / (Profit) on Sale of Assets (net) 0.24 0.21
Loss / (Profit) on Sale of Investments (1.90) 17.94
Operating Profit before working capital changes 674.93 555.02
Adjustments for :
Inventories (1,526.13) (1,055.79)
Trade Receivables 87.72 (54.14)
Loans and Advances* and other current assets (167.49) 66.19
Trade Payables and other current liabilities / provision 130.97 151.78
Stage Payments from Customers (net) 464.47 1,893.87
Cash generated from/(used in) Operations (335.53) 1,556.93
Direct Taxes Paid (35.96) (65.30)
Cash Generated From/(Used in) Operating activities (371.49) 1,491.63
B. Cash Flow From Investing Activities:
Purchase of Fixed Assets including Capital Work in Progress (558.33) (363.06)
Sale of Fixed assets 1.95 0.79
Consideration paid on acquisition of subsidiary - (33.26)
Purchase of Investments (266.00) (6.85)
Sale of Investments 267.90 391.06
Dividend received on Investments - 0.50
Advance for purchase of shares (0.50) -
Cash Used In Investing Activities (554.98) (10.82)
C. Cash Flow From Financing Activities:
Dividends paid (20.34) (20.34)
Tax on distributed profits (3.30) (3.46)
Proceeds from Long Term Borrowings 603.85 200.00
Repayments of Long Term Borrowings (211.78) (599.31)
Short Term Borrowings (net) 648.08 (104.33)
Loans/ deposits given (net) (168.31) (163.70)
Interest paid (net) (201.82) (166.75)
Issue of share Capital
Cash (Used in) / from Financing Activities 646.38 (857.89)
D. Effect of Exchange difference on translation of Foreign Currency 0.12 0.94
Net (decrease) / Increase in cash and cash equivalents (A + B + C+ D) (279.97) 623.86
Opening Balance of Cash & Cash Equivalents 644.73 30.07
Closing Balance of Cash & Cash Equivalents 364.76 653.93
Effect of Exchange rate changes 0.02 (9.20)
Closing Balance of Cash & Cash Equivalents as restated 364.78 644.73
*Includes current and non-current
Notes :
1. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard -3 issued by the Institute of
Chartered Accountants of India.
2. Figures for previous year where ever necessary have been regrouped to conform to those of current year.
As per our report of even date
For NISAR & KUMAR For and on behalf of the Board
Chartered Accountants
F. R. No. 107117W
M. N. Ahmed R.S.Nakra Major Arun Phatak
Partner Managing Director Director
M. No 18380
Mumbai Ch. Rajashekhar Reddy Dhananjay Datar Praveen Kumar Bhandari
Dated : 29th May 2012 Company Secretary Whole Time Director & Vice President - Accounts &
Chief Financial Officer Taxation
61
2
ABG Shipyard Limited Annual Report 2011-2012
1 Basis of Consolidation
The consolidated financial statements of ABG Shipyard Ltd. ("The Company") , its subsidiariies 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 financial statements are prepared under the Historical Cost Conventions on the basis of Going
Concern and as per applicable Indian Accounting Standards notified under section 211 (3C) of The Companies Act,
1956.
ii) In accordance with Accounting Standard (AS) 21 – ‘Consolidated Financial Statements’, the statements of ABG
Shipyard Ltd., Western India Shipyard Ltd., ABG Shipyard Singapore Pte. Ltd. and ABG FPSO Pvt Ltd. have been
combined line by line by adding items of Balance Sheet and Statement of Profit and Loss. The effect of Intra Group
transactions, balances and unrealised profits have been eliminated.
iii) Enterprise(s) where control is temporary are not considered for consolidation as per AS 21.
iv). The difference between the cost of investment in the subsidiary over the net asset value at the time of acquisition of
shares has been recognised in the financial statements as Goodwill or Capital Reserve, as the case may be.
v). Minority Interest in the net assets of consolidated subsidiaries consist of the amount of equity attributable to the
minority shareholders/partners at the dates on which investments are made by the Company in the subsidiaries and
further movements in their share in the equity, subsequent to dates of investments.
i) Use of estimates
The preparation of financial statements requires the management of the company to make estimates and
assumptions that affect the reported amount of assets and liabilities on the date of financial statements and the
reported amount of revenues and expenses during the reporting period. Difference, if any, between the actual results
and estimates is recognised in the year in which the results are known / materialized .
ii) Revenue
Revenue from Shipbuilding is recognized in accounts in accordance with Accounting Standard-7 ‘Accounting for
Construction Contracts' issued by Institute of Chartered Accountants of India. The method of recognition is on
percentage completion basis. Revenue is recognised under Percentage Completion Method on the basis of
proportion that contract costs incurred for work performed up to the reporting date bears to the estimated total
contract costs.
Revenue from ship repair is recognised on the basis of job completion on proportionate completion method.
Dividend from investments is accounted when the right to receive dividend is established. Interest income is
accounted on accrual basis.
Tangible Assets:
Fixed Assets are recorded at Cost. Cost is purchase cost and in the case of Freehold Land, includes development cost
incurred, together with all incidental costs of acquisition, borrowing costs and other related internal costs and is netted
of for Cenvat and Value Added Tax.
Profit/Loss on disposal of fixed assets is recognised in the Statement of Profit and Loss.
62
ABG Shipyard Limited Annual Report 2011-2012
Intangible assets are recognized and accounted at cost in accordance with Accounting Standard-26 ‘Intangible
Assets’ issued by Institute of Chartered Accountants of India.
All expenditure, relating to development of land, buildings, dry docks and plant & machinery etc. are accumulated and
shown as capital work-in-progress till the completion of such activities. Capital advances are presented under loans
and advances .
v) Investments
Long Term investments are stated at cost. Cost includes incidental expenses of acquisition. Decline in value of
investment other than of temporary nature is recognised in Statement of Profit and Loss.
Borrowing Costs attributable to the acquisition and construction of the Qualifying Assets, which take substantial
period of time to get ready for their intended use, are capitalized as part of the cost of respective assets up to the date
when such assets are ready for their intended use. Other Borrowing costs are charged to the Statement of Profit and
Loss.
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.
f) Intangible assets are stated at cost less accumulated amortisation and are amortised over a period of five years.
g) In the case of WISL, Depreciation on fixed assets is provided on straight-line method at the rates prescribed in
Schedule XIV to the Companies Act, 1956. However in case of “Ship Building Platform”, depreciation has been
calculated @ 8.33% based on remaining period of lease with Mormugao Port Trust. Depreciation on additions in
Floating Dry Dock on account of foreign exchange fluctuations and any major additions is amortised over the
remaining useful life of the asset.
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. The company
assesses at each Balance Sheet date whether there is any indication that any asset may be impaired and if such
indication exists, the carrying value of such asset is reduced to its recoverable amount and a provision is made for
such impairment loss in the Statement of Profit and Loss. The impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable amount.
Provident Fund: Provident Fund contributions are made as per a defined contribution scheme and the contribution of
company is charged to the Statement of Profit and Loss of the year when become due. The company has no other
obligation other than to contribute and deposit the contribution to respective authorities.
Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit
and Loss of the year in which the related service is rendered.
Long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the year in which
the employee has rendered services. The expense is recognized at the present value of the amount payable
determined using actuarial valuation techniques. Actuarial gains and losses in respect of long term benefits are
charged to the Statement of Profit and Loss.
63
ABG Shipyard Limited Annual Report 2011-2012
Inventories of spares, consumables, components are valued at lower of cost and net realisable value. Cost
represents purchase cost and other incidental costs, if any. Cost of inventories is computed on Weighted Average/
FIFO basis. Finished goods are valued at lower of cost and net realisable value.
Each construction contract is considered as a cost center and all costs directly identifiable to the Contract are charged
on actual basis. Indirect miscellaneous costs are also allocated to the various contracts using appropriate overhead
recovery method. Contract work-in-progress is valued at cost, including therein profit or loss arrived at in accordance
of Accounting Standard -7 ‘Accounting for Construction Contracts'.
Transactions in Foreign Currencies are recorded at the exchange rate prevailing on the date of the transactions.
Monetary assets and liabilities are translated at the year end using closing rate if remain unsettled at the year end.
Non monetary foreign currency items are carried at cost.
The resulting gain or loss on account of exchange difference either on settlement or on translation is recognised in the
Statement of Profit and Loss.
The Company has chosen to apply notification issued by Companies (Accounting Standard) Amendment Rules 2011
GSR 913 (E) & 914 (E) dated 29.12.2011 as regards monetary long term assets and liabilities. Consequently, the
resulting gain or loss on account of exchange difference on settlement or on translation is so far as they relate to
depreciable assets is added or deducted from the cost of the asset.
The Institute of Chartered Accountants of India has, in 2008, issued an announcement on ‘Accounting for Derivatives’
inter alia requiring provision for losses on all derivative contracts outstanding at the balance sheet date by marking
them to market keeping in view the principle of prudence, other than for derivative contracts to which Accounting
Standard (AS) 11- ‘The Effect of Change in Foreign Exchange Rates’ is applicable. The Company has entered into
Derivative Contracts to hedge a firm commitment or a highly probable forecast transaction to which AS-11 is not
applicable and hence, the Company has applied aforesaid announcement.
Government subsidy related to shipbuilding contracts are recognized on compliance with the relevant conditions and
is recognized in the Statement of Profit and Loss and presented under ‘Revenue from Operations’.
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets
are classified as operating leases. Operating lease payments / receipts are recognized as an expense / income in the
Statement of Profit and Loss on a straight-line basis over the lease term.
Provision for Current Tax is made on the basis of taxable income under the provision of the Income Tax Act, 1961.
Deferred Tax resulting from “timing differences” between book and taxable profit is accounted for using the tax rates
and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is
recognised and carried forward only to the extent that there is a reasonable certainty that the asset will be realised in
future.
In accordance with the guidance note issued by Institute of Chartered Accountants of India, the Company recognises
MAT Credit as an asset only to the extent ,the probability exists that the Company will become liable to pay normal
Income Tax during the specified period as per provision of the Income Tax Act, 1961.
A provision is made based on reliable estimate when it is probable that an outflow of resources embodying economic
benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed in notes forming part of
financial statements. Contingent Assets are not recognized/ disclosed.
64
ABG Shipyard Limited Annual Report 2011-2012
Authorised Capital
100000000 (P.Y. 100000000) Equity Shares of Rs.10/- each 100.00 100.00
a) The Company has only one class of shares referred to as Equity Shares having par value of Rs 10/-. Each holder of equity
share(s) is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be
entitled to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be
in proportion of the number of equity shares held by the shareholders.
b) None of the above shares are reserved for issue under options and contract / commitments for sale of shares or
disinvestment.
c) 31110594 (P.Y.30545594 ) Equity Shares of Rs.10/- each are held by the holding company ABG International Pvt. Ltd.
d) Shares alloted, as fully paid up, pursuant to contract(s) without payment being effected in cash / bonus shares /bought
back / forfeited/ calls unpaid in the previous 5 years - NIL
e) Shareholders holding above 5% Equity Shares with voting rights in the company.
65
ABG Shipyard Limited Annual Report 2011-2012
66
ABG Shipyard Limited Annual Report 2011-2012
b) 12.30% 1000 Non Convertible Secured - First pari passu Payable in annual 33.33 33.33 66.67 33.33
Redeemable Debentures (NCD) charge on the company’s Instalments upto 15.12.2013
of Rs.100000/- each issued to Life immovable and movable fixed
Insurance Corporation of India (LIC) assets of Dahej plant
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
Rs. in crores
Foreign Currency Loan Payable in half yearly 35.78 10.22 40.14 8.92
instalments upto Sep 2016
Foreign Currency Loan Payable in quarterly 42.79 19.02 53.92 16.59
instalments upto April 2015
Rupee Term Loan Secured - First pari-passu charge Payable in quarterly 90.00 10.00 - -
on movable and immovable fixed upto March 2015
assets of the Dahej Shipyard and
Rigyard and mortgage on GIDC
and private land at Dahej
Rupee Term Loan Secured - First parri passu legal Payable in quarterly instalments 15.19 3.02 17.83 0.66
mortgage/charge on fixed assets upto Oct 2018
of the WISL, hypothecation of
moveable assets
Rupee Term Loan Secured - First parri passu legal Payable in quarterly instalments 29.17 5.07 34.24 1.27
mortgage/charge on fixed assets upto Oct 2018
of the WISL, hypothecation of
moveable assets.
Rupee Term Loan Secured - Movable and Payable in half yearly instalments - - - 86.00
immovable assets excluding
fixed assets at Dahej Plant
Rupee Term Loan Unsecured- Pending creation Payable in quarterly 247.50 27.50 - -
of security upto March 2016
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ABG Shipyard Limited Annual Report 2011-2012
Vehicle loans
From banks Secured - Hypothecation of the Payable in monthly instalments 0.30 0.21 0.16 0.09
individual assets financed
From others Secured - Hypothecation of the Payable in monthly instalments 0.13 0.23 0.18 0.23
individual assets financed
4 B (iii) Details of Terms of repayment for Convertible Zero Coupon Loan and security provided
Rs. in crores
Particulars Terms of repayment As at 31.03.2012 As at 31.03.2011
Non Current Current Non Current Current
Convertible Zero Coupon Loan (CZC) The CZC Loan is interest free convertible into Equity Shares of 42.16 - 42.16 -
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
42.16 - 42.16 -
As at As at
31.03.2012 31.03.2011
` in Crores ` in Crores
5. DEFERRED TAX LIABILITY / ASSET
Tax effect of items constituting deferred tax liability
On account of timing difference of depreciation (net) - 13.46
On account of profit on Projects under completion 500.54 413.86
500.54 427.32
Tax effect of items constituting deferred tax asset
On account of gratuity and leave encashment liability 3.73 2.52
On account of expenses allowable on delivery of ships 17.15 21.50
On account of unabsorbed depreciation (net) 13.05 -
On account of disallowances u/s 40a(i) of the Income Tax Act, 1961 0.32 -
34.25 24.02
Deferred Tax Liability (net) 466.29 403.30
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ABG Shipyard Limited Annual Report 2011-2012
c) Export Packing Credit Secured - Assets both immovable and 683.14 521.02
movable excluding movable and Immovable
fixed assets of Dahej plant .
d) Cash Credit Secured- Assets both immovable and movable 444.43 178.87
excluding movable and Immovable fixed asets
of Dahej plant .
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ABG Shipyard Limited Annual Report 2011-2012
The Company has no amounts due to suppliers under MSMED as at 31st March, 2012 (P. Y. Nil).
The information relates to such vendors identified as micro,small and medium enterprises as per
information available with the Company.
(i) Principal amount remaining unpaid to any supplier as at the end of the accounting year - -
(ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year - -
(iii) The amount of interest paid along with the amounts of the payment made to the supplier - -
beyond the appointed day
(iv) The amount of interest due and payable for the year - -
(v) The amount of interest accrued and remaining unpaid at the end of the accounting year - -
(vi) The amount of further interest due and payable even in the succeeding year, until such date - -
when the interest dues as above are actually paid
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ABG Shipyard Limited Annual Report 2011-2012
TANGIBLE ASSETS
LAND
LEASE HOLD LAND 6.49 1.22 - 7.71 0.28 0.08 - 0.36 7.35 6.21
FACTORY BUILDING 527.79 1.63 - 529.42 80.75 44.23 - 124.98 404.44 447.04
PLANT AND MACHINERY 594.78 180.02 2.18 772.62 229.55 58.17 0.28 287.44 485.18 365.23
OFFICE EQUIPMENT 6.47 0.77 - 7.24 2.48 0.60 - 3.08 4.16 3.99
FURNITURE & FIXTURES 4.70 0.47 0.08 5.09 2.99 0.37 0.07 3.29 1.80 1.71
VEHICLES 14.43 1.78 1.22 14.99 7.60 1.96 0.99 8.57 6.42 6.83
COMPUTERS 6.00 0.55 1.23 5.32 4.82 0.58 1.17 4.23 1.09 1.18
1,324.77 205.23 4.71 1,525.29 338.08 109.83 2.51 445.40 1,079.89 986.69
INTANGIBLE ASSETS
TOTAL 1,365.44 205.86 4.71 1,566.59 342.18 111.08 2.51 450.75 1,115.84 1,023.26
Previous Year 737.74 631.22 3.52 1,365.44 137.96 206.51 2.29 342.18 1,023.26
i) Depreciation method and rates are different between parent and subsidiaries. No alignment of depreciation rates between parent and
subsidiaries have been done in these financial statements.
ii) Certain part of the land is yet to be registered in the name of the Company.
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ABG Shipyard Limited Annual Report 2011-2012
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. None of the assets have been revalued during the year.
v) Borrowing cost capitalised Rs.166.41 crores (P.Y Rs.145.81 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
Rs.10.90 crores and Rs. 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 Rs. 1.36 crores (P.Y. Rs. 1.44 crores), which has been withdrawn from
Revaluation Reserves and credited to Statement of Profit and Loss.
vii) The company has chosen to avail the option under AS-11 notification issued by Companies (Accounting Standard) Amendment Rules
2011 GSR 913 (E) & 914 (E) dated 29.12.2011 issued by Ministry of Corporate Affairs. The company has exercised the option with
respect to foreign currency long term loan availed by it. The company has no other long term monetary Assets / Liabilities.
Due to the exercise of aforesaid option, the impact on Statement of Profit & Loss for the year is a Gain of Rs.14.20 crores (P.Y. loss Rs.
2.56 crores) due to foreign currency exchange loss (net) which has been capitalized with CWIP (P Y credited to CWIP) .
viii) Acquisition through business combinations / Assets reclassified as held for sale - Nil (P.Y. Nil)
As at As at
31.03.2012 31.03.2011
` in Crores ` in Crores
12. NON-CURRENT INVESTMENTS
Non Trade - At cost
Unquoted
In Others:
In Equity Shares
271002 (P.Y. 271002) Equity Shares in ABG Business Ventures Pte. Ltd., Singapore 0.92 0.92
of SGD 1/- each fully paid up
5000 (P.Y. 5000) Equity Shares of Rs. 100/- each of Janata Sahakari Bank Ltd. 0.05 0.05
In Partnership Firm
Capital in partnership firm Vipul Shipyard 5.82 5.82
6.79 6.79
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ABG Shipyard Limited Annual Report 2011-2012
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ABG Shipyard Limited Annual Report 2011-2012
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ABG Shipyard Limited Annual Report 2011-2012
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ABG Shipyard Limited Annual Report 2011-2012
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ABG Shipyard Limited Annual Report 2011-2012
(b) Contingencies provided for in accordance with AS 29 issued by the Institute of Chartered Accountants of India
` in crores
Particulars 31st March 2012 31st March 2011
Carrying amount as at the beginning of the year 2.08 1.40
Provision (net of utilisation) during the year. 0.88 0.68
Unused amount reversed during the year. - -
Balance at the end of the year 2.96 2.08
The contingencies provided are in respect of estimated warranties on sold hulls.
30. 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.
31. The Company has made Application u/s 245 C of Income Tax Act 1961, before Hon’ble Settlement Commission, Mumbai for the
A.Y. 2004-05 to 2010-11. The Application for settlement has been admitted u/s 245 D (1) by Hon’ble Settlement Commission
vide order dated 14th February, 2012. The company has paid taxes of ` 7.70 crores and utilised credit u/s 115JAA of the
Income Tax Act ,1961 to the extent of ` 20.67 crores. The tax expense and utilisation are included in Current Tax for earlier years
and MAT credit utilised, respectively. The proceedings are pending before the Hon'ble Commission. The ultimate tax liability,if
any, is dependent on the outcome of the proceedings and will be quantified only on the completion of the same .
32. Disclosure in respect of Operating Leases (Assets taken on lease):
(a) ABG Shipyard Ltd has taken commercial / residential premises under cancellable operating leases. The lease agreements
are usually renewable by mutual consent on mutually agreeable terms.
WISL has taken land and water on licence from Murmugao Port Trust (MPT) , Goa. The future minimum payment is as
under:
` in crores
Particulars 31st March 2012 31st March 2011
Not later than one year 4.67 4.16
Later than 1 year but less than 5 years 28.24 19.14
More than 5 years - 5.99
(b) The expenses in respect of operating leases are accounted in Other Expenses under Note No 27
33. Disclosure in accordance with 'AS -7 Accounting for Construction Contracts' issued by the Institute of Chartered Accountants
of India:
` in crores
PARTICULARS 31st March 2012 31st March 2011
a. Contract revenue recognized as revenue in the period 2,356.01 1,884.80
b. Contract cost incurred and recognized profits 6,435.53 4,977.21
c. Advances received from above customers 4,594.00 3,721.19
d. Gross amount due from customers for contract work 2,189.62 1,256.03
e. Gross amount due to customers for contract work 348.09 2,239.19
The Gross amount due from customers reflects the net amount for all contracts in progress for which cost incurred plus
recognised profit (less recognised losses) exceeds progress billing.
The Gross amount due to customers reflects the net amount for all contracts in progress where progress billing exceeds cost
incurred plus recognised profits (less recognised losses).
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ABG Shipyard Limited Annual Report 2011-2012
34. The disclosures required under Revised Accounting Standard 15 ‘Employee Benefits’ notified in the Companies (Accounting
Standards) Rules 2006, are given below:
Contribution to Defined Contribution Plan, recognized are charged off for the year are as under:
` in crores
PARTICULARS 31st March 2012 31st March 2011
Employer’s Contribution to Provident Fund 4.50 3.62
Employer’s Contribution to Pension Scheme 1.04 0.91
The employees’ gratuity fund scheme is a defined benefit plan, managed by SBI Life Insurance for the company. The subsidiary,
WISL makes annual contribution to the Employees' Group Gratuity-cum-Life assurance Scheme of Metlife Insurance Co. Ltd.
The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which
recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation for leave encashment is recognized in same manner as gratuity.
` in crores
Particulars Gratuity Leave Encashment
(Funded) (Unfunded)
31st March 31st March 31st March 31st March
2012 2011 2012 2011
a. Reconciliation of opening and closing balances of
Defined Benefit obligation
Defined Benefit obligation at the beginning of the year 6.79 5.97 4.65 4.31
Current Service Cost 1.09 0.86 1.15 0.82
Interest Cost 0.55 0.48 0.37 0.34
Actuarial (gain) / loss 0.55 0.10 1.45 0.32
Benefits paid (0.39) (0.62) (0.61) (1.15)
Defined Benefit obligation at the year end 8.60 6.79 7.02 4.65
b. Reconciliation of opening and closing balances of
fair value of plan assets
Fair value of plan assets at beginning of the year 0.65 1.10 - -
Expected return on plan assets 0.05 0.11 - -
Actuarial gain/(loss) (0.01) * 0.00 - -
Employer contribution 0.04 0.10 - -
Benefits Paid (0.39) (0.62) - -
Fair value of plan assets at the year end 0.34 0.65 - -
c. Reconciliation of fair value of assets and obligations
Fair value of plan assets as at year end 0.34 0.65 - -
Present value of obligation as at year end 8.60 6.79 7.02 4.65
Amount recognised in Balance Sheet 8.26 6.14 7.02 4.65
d. Expenses recognised during the year
Current Service Cost 1.09 0.86 1.15 0.82
Interest Cost 0.55 0.48 0.37 0.34
Expected return on plan assets (0.05) (0.11) - -
Actuarial (gain) / loss 0.57 0.14 1.45 0.32
Net Cost 2.16 1.37 2.98 1.49
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ABG Shipyard Limited Annual Report 2011-2012
The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion
and other relevant factors including supply and demand in the employment market. The above information is certified by the
actuary and relied upon by auditors.
* Amount less than ` 0.01 crore
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ABG Shipyard Limited Annual Report 2011-2012
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ABG Shipyard Limited Annual Report 2011-2012
Sr. Nature of Transactions Holding Controlling Fellow Co. over Individuals Key Total
No. Company Stake Subsidiary which owning Manage-
Companies Directors / directly or ment
relatives indirectly Personnel
are able to an interest
exercise in the
control of voting
significant power that
influence gives them
control or
significant
influence
31st March 2012
4 Hire Charges 0.79 0.79
(0.00) (0.00)
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ABG Shipyard Limited Annual Report 2011-2012
Notes :
1. Related Parties have been identified by the management and relied upon by the auditors.
2. Previous Year figures are shown in brackets.
3. Names of the Related Parties have been given in cases where the amount of transaction exceeds 10% of the total related
party transactions of the same type.
4. Guarantees taken / given comprise of guarantees given to third parties on behalf of the Company / related parties.
1 Revenue from Operations include Varada Marine Pte. Limited. ` 64.81 crores (Previous Year ` 139.32 crores), PFS
Shipping (India) Limited ` Nil (Previous Year ` 71.32 crores), Global Bulk Carriers Pte. Limited. ` 78.48 crores-(Previous
Year N.A.)
2 Share of Loss in Partnership Firm include Vipul Shipyard ` 0.04 crores (Previous Year Loss ` 0.00 * crore)
3 Rent Expenses include Tirupati Landmark Private Limited ` 0.08 crores (Previous Year ` 0.08 crores), Jarrow Finance &
Trading Private Limited ` 0.09 crores(Previous Year ` 0.08 crores), Aries Management Services Private Limited ` 0.38
crores (Previous Year ` Nil), ABG Power Private Limited ` 0.22 crores (Previous Year ` 0.22 crores)
4 Hire Charges paid to ABG Infralogistics Limited ` 0.79 crores (Previous Year ` Nil )
5 Services Received from ABG Resources Private Limited ` 1.80 crores (Previous Year ` Nil), ABG Cranes Private Limited `
0.06 crores (Previous Year ` 0.14 crores)
6 Payment to Key Management Personnel include to Shri R.S. Nakra ` 0.97 crores (Previous Year ` 0.96 crores), Major Arun
Phatak ` 0.63 crores (Previous Year ` 0.53 crores), Shri Dhananjay Datar ` 0.31 crores(Previous Year N.A.), Shri Rishi
Agarwal ` Nil (Previous Year ` 0.62 crores), Cdr.Subhash Kumar Mutreja ` 0.74 crores (Previous Year ` 0.40 crores)
7 Purchase of Fixed Assets include from ABG Cement Limited ` Nil (Previous Year ` 0.14 crores), ABG Infralogistics Limited
` 20.48 crores (Previous Year ` Nil)
8 Sale of Fixed Assets include to PFS Shipping (India) Limited ` Nil (Previous Year ` 0.25 crores)
9 Investments include ABG Business Ventures Pte. Limited ` Nil (Previous Year ` 4.61 crores)
10 Sale of Shares include Eleventh Land Developers Private Limited ` Nil (Previous Year ` 91.92 crores)
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ABG Shipyard Limited Annual Report 2011-2012
12 Loan and Advances Given / Repaid include ABG International Private Limited ` 101.21 crores (Previous Year ` 12.43
crores), ABG Cement Holdco Private Limited ` 61.56 crores(Previous Year ` Nil), ABG Engineering & Construction Private
Limited ` 161.28 crores (Previous Year ` 122.05 crores), ABG Resources Private Limited ` 42.90 crores (Previous Year `
49.73 crores)
13 Loans and Advances Taken / Refunded include ABG International Private Limited ` 111.08 crores (Previous Year ` 1.89
crores), PFS Shipping (India) Limited ` 3.44 crores (Previous Year ` 3.07 crores), ABG Cement Holdco Private Limited `
61.56 crores (Previous Year ` 0.00 * crore), ABG Engineering & Construction Private Limited ` 14.79 crores (Previous Year
` Nil), ABG Resources Private Limited ` 16.26 crores (Previous Year ` 40.11 crores)
14 Deposits given to ABG Resources Private Limited ` 40.00 crores (Previous Year ` 30.00 crores)
15 Guarantees Taken from ABG International Private Limited ` 4.35 crores (Previous Year ` Nil )
16 Guarantees Given to ABG Shipyard Singapore Pte. Limited ` 408.96 crores (Previous Year ` Nil), ABG Business Ventures
Pte. Limited. ` Nil (Previous Year ` 445.95 crores)
38. The Company has firm committments in foreign exchange as regards both its payables and receivables. The company has
applied the principle of hedge accounting contained in Accounting Standard 30 issued by the Institute of Chartered
Accountants of India for its net firm commitment in receivables and payables in foreign exchange. In view of the same , Mark to
Market difference (gain) as on 31st March, 2012 of ` 7.30 crores (P. Y. Loss ` 6.21 crores) does not have any material impact
on the financial statements.
39. The figures for the previous year have been arranged/rearranged/regrouped wherever considered necessary.
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ABG Shipyard Limited Annual Report 2011-2012
NOTES
84
ABG Shipyard Limited Annual Report 2011-2012
NOTES
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ABG Shipyard Limited Annual Report 2011-2012
PROXY FORM
I/We _________________________________________________________________________________________________
S/o/W/o/D/o ___________________________________________________________________________________________
of _______________________ in the district of ____________________ being a member/members of the above named Company
hereby appoint Mr./Ms. ______________________________________ of ______________________________ or failing him/her
Mr./Ms. _________________________________ of ______________________ in the district of __________________________
as my/our proxy to vote for me/us on my behalf at the Annual General meeting of the Company to be held on Thursday 27th
September, 2012 at the Registered Office of the Company at Near Magdalla Port, Dumas Road, Surat-395007 at 12.00 noon and at
any adjournment thereof.
Signature _______________________________________________________
Affix
L.F. No./Client ID No. ______________________________________________ `1
Revenue
DP ID No.: _______________________________________________________ Stamp
No. of Share(s) held _______________________________________________
Notes:
1. A Member entitled to attend and vote, is entitled to appoint a proxy to attend and vote instead of himself.
2. A proxy need to be a member of the Company.
3. The proxy form duly completed should be deposited at the Registered Office of the Company at Near Magdalla Port, Dumas
Road, Surat-395007 or Corporate Office of the Company at 4th/5th Floor, Bhupati Chambers, 13, Mathew Road, Mumbai-
400004 at least 48 hours before the meeting.
4. In order to save time, members are requested to come to venue with the duly filled-in attendance slip.
ATTENDANCE SLIP
I hereby record my presence at the Annual General Meeting to be held on 27th September, 2012 at the Registered Office of the
Company at Near Magdalla Port, Dumas Road, Surat-395007 at 12.00 noon.
DP ID No.: _____________________________________________________________________________________________