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Notes to Accounts of Western India Shipyard Ltd.

Mar 31, 2015

1. Corporate information

Western India Shipyard Limited ("the Company") incorporated under the provision of the Companies Act, 1956. The Company is engaged in the industrial activities of Shiprepairs and Shipbuilding as it manufactures a variety of spare parts The Company has the required infrastructure like a Floating Dry Dock of 60000 DWT capacity, 4 wet repair berths, heavy duty machine shops, paint/valve and pipe shops, fabrication yards, portal and mobile cranes, captive gensets, electrical sub-station, to cater to Indian and foreign vessels like cargo and passenger vessels, tankers, dredgers, Offshore support vessels, navy and Coast Guard vessels, trawlers, barges, operating on the coastal and international sea routes and Jack Up Oil Rigs on East and West Coast.

2. Basis of preparation Accounting Convention

The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention method as a "Going Concern Concept" and in accordance with Generally Accepted Accounting Principles in India (Indian GAAP).

3. The Company follows the mercantile system of accounting and recognizes Income and Expenditure on accrual basis except Medical Reimbursements, Leave Travel Allowances, Insurance Claims, Ex-gratia and Scrap Sale which are on cash basis. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

4. Balances under the head current liabilities, debtors and loans & advances are subject to confirmation. However, in the opinion of the management, realizable value of current assets, loans & advances in the ordinary course of business will not be less than the amount which is stated in the Balance Sheet.

5. The Company has been granted sales tax exemption by the State Government, Directorate of Industries and Mines, Government of Goa vide its letter No. IND/Devi/I M/495/93/3543 dated 19.8.1997 for a period of 12 years w.e.f. 01.01.1996 on ship-repairs. However the Sales Tax Officer has denied the exemption and has levied sale tax at the applicable rates on the sales turnover. The Company has filed appeals before the Commissioner of Commercial Taxes (Appeals), Panjim, against sales tax liability of Rs. 837.91 lacs for the financial years from 1995-96 upto 2004-05. The Company's second appeal before the Administrative Tribunal, Panjim in respect of FY 1995-96 has been remanded back to the Asst. Commissioner of Commercial Taxes, Panjim to decide the appeal with reasons. The appeals are sub-judice .

6. The Goa Value Added Tax Act, 2005 is applicable to assesses in the State of Goa w.e.f 2005-06. Hence the Company had obtained registration and filed its returns for the quarters ended 30.06.2010 and 30.09.2010. The Company had sought the 75% benefit under the Goa Value Added Tax Deferment-cum-Net Present Value Compulsory Payment Scheme, 2005 to which it is entitled. However, the Asst. Commissioner of Commercial Taxes has denied the benefit of the said scheme and passed assessment order-cum-demand notice for financial years 2005-06, 2006-07 and 2007-08 for a sum of Rs. 515.78 lacs. The Company has filed appeals before the Addl. Commissioner of Commercial Taxes, Goa and the appeals are sub-judice.

7. Disclosures in accordance with Revised Accounting Standard-15 on "Employee Benefits"

Define Contribution Plans

Defined Benefit Plan

The employees' gratuity fund scheme managed by PNB MetLife Insurance Co. Pvt. Ltd. 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 recognised in the same manner as gratuity.

8. Related Party Disclosures

(A) List of Related parties (as identified and certified by the Management)

Holding Company ABG Shipyard Limited

Ultimate Holding Company ABG International Pvt. Ltd. (Holding Company of

ABG Shipyard Limited)

Associate Companies ABG Resources Private Ltd.

Companies over which Directors 1. ABG Shipyard Limited /relatives are able (Shri. Ashwani Kumar, to exercise Significant Influence Shri. Ashok Chitnis and Shri. S. Muthuswamy (Common Directors)

2. PFS Shipping (India) Private Limited (Shri. A.K. Agarwal (Common Directors)

Key Management Personnel Cdr. Subhash Kumar Mutreja, Whole Time Director & Chief Executive Officer (Till 21.11.2014) Shri. S. Muthuswamy, Chief Financial Officer

9. Deferred Tax Asset in accordance with the Accounting Standard - 22 "Accounting for Taxes on Income" has not been recognised even after availability of unabsorbed depreciation and carried forward losses under the Income Tax Act as, in the opinion of the management, sufficient future taxable income will not be available for this purpose.

10. Contingent Liabilities

2014-15 2013-14

(a) Income Tax Liability:

Income Tax Liability for financial year 2005-06 for which the Company 15.95 5.67 has filed appeal before CIT (Appeals)

(b) Guarantees given by Banks 623.39 492.32

(c) Bonds executed in favour of Excise Authorities 15.00 15.00

(d) Sales Tax:

Sales Tax liability for the financial years from 1995-96 to 2004-05 for 837.91 837.91 which the Company has filed appeal & stay petition against the same.

(e) Value Added Tax (VAT):

Value Added Tax (VAT) liability for the financial years from 2005-06 515.78 515.78 to 2007-08 for which the Company has filed appeal & stay petition against the same.

VAT Assessment for FY 2010-11 for which the Company is yet to file appeal 39.84 39.84

(f) Service Tax:

Assessed Service Tax Liability for the financial year 2001-02 to 2003-04. The 712.18 712.18 Central Excise & Service Tax Appellate Tribunal (CESTAT) has allowed the Company's appeal on the ground that it does not render port services being a registered factory. The Department has filed an appeal in the High Court of Bombay, Goa Bench at Panaji. The Company has contested the appeal. The appeal has been transferred to the High court of Bombay at Mumbai to be heard along with other similar appeals.

(g) Legal Cases pending against the Company (net of provision) 3929.25 3,368.62

(h) Custom Appeal:

Custom Appeal / show cause notice for capital goods/spare and build- 868.51 760.12 ing of JUB for which the Company has filed an appeal.

11. Lease Obligations and Other Commitment

The Company has taken land and water on license from Mormugao Port Trust (MPT) and license fees amounting to Rs. 623.39 lacs (Previous year Rs. 467.47 lacs) has been debited to profit and loss account. The future minimum payment is as under :

Not later than one year 623.39 623.39

Later than one year but less than five years 1,371.46 1,994.85

12. Networth of the Company has been fully eroded due to heavy losses. During the current year, the operations of the Company were severally affected due to factors such as non availability of working capital finance resulting in material & labour issues.Owing to suboptimal level of activities in the yard, the overhead of the company could not be absorved resulting into higher losses Net Worth of the company is fully eroded. However, Management is hopeful to get better results in next financial year.

13. Dues to Micro, Small and Medium Enterprises

The Company has compiled this information based on the current information in its possession. As at 31st March 2015, no supplier has intimated the Company about its status as a Micro or Small Enterprise or its registration with the appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006.

14. Previous year figure has been rearranged / regrouped wherever considered necessary


Mar 31, 2014

Corporate information

Western India Shipyard Limited ("the Company") incorporated under the provision of the Companies Act, 1956. The Company is engaged in the industrial activities of Shiprepairs and Shipbuilding as it manufactures a variety of spare parts The Company has the required infrastructure like a Floating Dry Dock of 60000 DWT capacity, 4 wet repair berths, heavy duty machine shops, paint/valve and pipe shops, fabrication yards, portal and mobile cranes, captive gensets, electrical sub-station, to cater to Indian and foreign vessels like cargo and passenger vessels, tankers, dredgers, Offshore support vessels, navy and Coast Guard vessels, trawlers, barges, operating on the coastal and international sea routes and Jack Up Oil Rigs on East and West Coast.

1. SHARE CAPITAL

1.1. 19,65,82,990/- (PY : 19,65,82,990) Equity Shares out of the issued, subscribed and paid up share capital were alloted on conversion / surrender of Debentures and conversion of Term Loans in earlier years.

1.2. 17,44,48,852 (PY: 17,70,01,303) Equity Shares out of the issued, subscribed and paid up capital held by ABG Shipyard ltd holding 59 21% (PV 60 07%) of the paid up capital

2. LONG-TERM BORROWINGS

2.1. Payment of ICICI Term Loan and others (other than IFCI Ltd) are to be made in 28 equal instalments commencing from 15.01.2012

The above loans are secured by first parri passu legal mortgage/charge on Fixed Assets of the Company, hypothecation of moveable assets.

2.2. Payment to IFCI is as follows :-

a. Rs. 275.00 Lacs each per quarter commencing from June, 2011 to March, 2012.

b. Rs. 412.50 Lacs each per quarter commencing from June, 2012 to March, 2013.

c. Rs. 687.50 Lacs each per quarter commencing from June, 2013 to March, 2014.

The above Loan is secured by a Corporate Guarantee Facility given by ABG International Pvt. Ltd. and pledge of Equity Shares of ABG Shipyard Limited and Deed of Hypothecation of parripassu charge on immovable and moveable assets of the Company, both present and future.

2.3. Convertible Zero Coupon Loan (CZC Loan)

In terms of the Scheme, the CZC Loan is interest free. The same to be converted into Equity Shares of the Company, in accordance with applicable law and pricing regulations, at the option of the lenders commencing from second anniversary of the effective date namely, 28.01.2012 and ending on the day preceeding the seventh anniversary of the effective date. To the extent that the loan has not been converted into equity shares, the same shall be convertible compulsorily on the seventh anniversary of the effective date namely, 28.01.2017. Upto the period ended 31.03.2014, the company has not received any letter exercising the option from the secured lenders for conversion of the said loans or part thereof into Equity shares.

2.4. During the financial year 2012-13, IFCI has recalled entire loan outstanding principal along with interest of Rs. 4624.11 Lacs on December 20, 2012. The Company has so far paid Rs. 3834.11 lacs and balance of Rs. 790.00 lacs is outstanding.

3. SHORT-TERM BORROWINGS

Secured

3.1. The above Short Term Borrowings are Secured as floating charge on Current Assets of the Company includ- ing but not limited to Stock of raw materials, Work In Progress, Consumables, Stocks, Spares, Book Debts, Bills wherever situated, documents both present and future and Corporate Guarantee of ABG Shipyard Limited for Rs. 33.60 Crores.

4. OTHER NON CURRENT ASSETS

4.1 Long Term Trade Receivable includes Rs. 2394.16 Lac (PY Rs. 1831.63 Lac) recoverable from PFS Shipping (India) Ltd, associate of Holding Company.

5. SHORT TERM LOANS AND ADVANCES

5.1 The Company has paid Rs. 1310.42 Lac (PY Rs. 1233.94 Lac) to ABG Resources Private Ltd, an associate of Holding Company against future Services to be undertaken by Company. Out of the above Rs. 1200.00 lacs (PY- Rs. 1200.00 lacs) kept as Security Deposit

6. Balances under the head current liabilities, debtors and loans & advances are subject to confirmation. However, in the opinion of the management, realizable value of current assets, loans & advances in the ordinary course of business will not be less than the amount which is stated in the Balance Sheet.

7. The Company has been granted sales tax exemption by the State Government, Directorate of Industries and Mines, Government of Goa vide its letter No. IND/Devi/I M/495/93/3543 dated 19.8.1997 for a period of 12 years w.e.f. 01.01.1996 on ship-repairs. However the Sales Tax Officer has denied the exemption and has levied sale tax at the applicable rates on the sales turnover. The Company has filed appeals before the Commissioner of Commercial Taxes (Appeals), Panjim, against sales tax liability of Rs. 837.91 lacs for the financial years from 1995-96 upto 2004-05. The Company''s second appeal before the Administrative Tribunal, Panjim in respect of FY 1995-96 has been remanded back to the Asst. Commissioner of Commercial Taxes, Panjim to decide the appeal with reasons. The appeals are sub-judice.

The Goa Value Added Tax Act, 2005 is applicable to assesses in the State of Goa w.e.f 2005-06. Hence the Company had obtained registration and filed its returns for the quarters ended 30.06.2010 and 30.09.2010. The Company had sought the 75% benefit under the Goa Value Added Tax Deferment-cum-Net Present Value Compulsory Payment Scheme, 2005 to which it is entitled. However, the Asst. Commissioner of Commercial Taxes has denied the benefit of the said scheme and passed assessment order-cum-demand notice for financial years 2005-06, 2006-07 and 2007-08 for a sum of Rs. 515.78 lacs. The Company has filed appeals before the Addl. Commissioner of Commercial Taxes, Goa and the appeals are sub-judice.

8. Disclosures in accordance with Revised Accounting Standard-15 on "Employee Benefits"

Defined Benefit Plan

The employees'' gratuity fund scheme managed by PNB MetLife Insurance Co. Pvt. Ltd. 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 recognised in the same manner as gratuity.

9. Acturial Assumptions

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.

The expected rate of return on plan assets is determined considering several applicable factors., mainly the composition of Plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for plan assets management.

10. Deferred Tax Asset in accordance with the Accounting Standard - 22 "Accounting for Taxes on Income" has not been recognised even after availability of unabsorbed depreciation and carried forward losses under the Income Tax Act as, in the opinion of the management, sufficient future taxable income will not be available for this purpose.

11. Contingent Liabilities

2013-14 2012-13

(a) Income Tax Liability:

Income Tax Liability for financial year 2005-06 for which the Company has filed appeal before CIT (Appeals) 5.67 5.67

(b) Guarantees given by Banks 492.32 456.04

(c) Bonds executed in favour of Excise Authorities 15.00 15.00

(d) Sales Tax: Sales Tax liability for the financial years from 1995-96 to 2004-05 for which the Company has filed appeal & stay petition against the same. 837.91 837.91

(e) Value Added Tax (VAT): Value Added Tax (VAT) liability for the financial years from 2005-06 to 2007-08 for which the Company has filed appeal & stay petition against the same. 515.78 515.78

VAT Assessment for FY 2010-11 for which the Company is yet to file appeal 39.84 -

(f) Service Tax: Assessed Service Tax Liability for the financial year 2001-02 to 2003-04. The Central Excise & Service Tax Appellate Tribunal (CESTAT) has allowed the Company''s appeal on the ground that it does not render port services being a registered factory. The Department has filed an appeal in the High Court of Bombay, Goa Bench at Panaji. The Company has contested the appeal. The appeal has been transferred to the High court of Bombay at Mumbai to be heard along with other similar appeals. 712.18 712.18

(g) Legal Cases pending against the Company (net of provision) 3,368.62 6,959.64

(h) Custom Appeal: Custom Appeal / show cause notice for capital goods/spare and building of JUB is Rs. 760.12 lacs for which the Company is filed an appeal. 760.12 760.12

12. Networth of the Company has been fully eroded during the current financial year due to heavy losses. It is primarily due to the bad market and economic scenario of the Country for which orders were not being floated by the Ship / Vessel Owners. The management of the Company is quite hopeful to get orders in the coming years and there will be an improvement in profit. This will not make any impact on going concern as the management is trying for collection of receivables so that currents payments can be made.

13. During the current year, IFCI has sold certain mortgaged shares belonging to ABG Shipyard Limited and adjusted against outstanding loan of the Company. In the absence of any information from IFCI Limited, average selling price has been considered on sale of shares. Confirmation regarding outstanding loan is awaited from IFCI Limited.

14. During the current year, the Company has made settlement with Oil and Natural Gas Commission (ONGC) in line with the Arbitration Award. Accordingly, bad debts amounting to Rs. 424.66 lacs has been charged to revenue.

15. Dues to Micro, Small and Medium Enterprises

The Company has compiled this information based on the current information in its possession. As at 31st March 2014, no supplier has intimated the Company about its status as a Micro or Small Enterprise or its registration with the appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006.

16. Previous year figure has been rearranged / regrouped wherever considered necessary.


Mar 31, 2013

1. Corporate information

Western India Shipyard Limited ("the Company") incorporated under the provision of the Companies Act, 1956. The Company is engaged in the industrial activities of Shiprepairs and Shipbuilding as it manufactures a variety of spare parts The Company has the required infrastructure like a Floating Dry Dock of 60000 DWT capacity, 4 wet repair berths, heavy duty machine shops, paint/valve and pipe shops, fabrication yards, portal and mobile cranes, captive gensets, electrical sub-station, to cater to Indian and foreign vessels like cargo and passenger vessels, tankers, dredgers, Offshore support vessels, navy and Coast Guard vessels, trawlers, barges, operating on the coastal and international sea routes and Jack Up Oil Rigs on East and West Coast.

2. Basis of preparation

Accounting Convention :

The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention method as a "Going Concern Concept" and in accordance with Generally Accepted Accounting Principles in India (Indian GAAP).

The Company follows the mercantile system of accounting and recognizes Income and Expenditure on accrual basis except Medical Reimbursements, Leave Travel Allowances, Insurance Claims, Ex-gratia and Scrap Sale which are on cash basis. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1. Revenue is being recognized as per percentage completion contract method. However inthe previous year, sales have been shown as per invoices raised and balance shown as work in progress. In the current year, Previous year figure has been reclassified to conform to the current year results.

2. Balances under the head current liabilities, debtors and loans & advances are subject to confirmation. However, in the opinion of the management, realizable value of current assets, loans & advances in the ordinary course of business will not be less than the amount which is stated in the Balance Sheet.

3. The Company has been granted sales tax exemption by the State Government, Directorate of Industries and Mines, Government of Goa vide its letter No. IND/Devi/I M/495/93/3543 dated 19.8.1997 for a period of 12 years w.e.f. 01.01.1996 on ship-repairs. However the Sales Tax Officer has denied the exemption and has levied sale tax at the applicable rates on the sales turnover. The Company has filed appeals before the Commissioner of Commercial Taxes (Appeals), Panjim, against sales tax liability of Rs. 837.91 lacs for the financial years from 1995-96 upto 2004-05. The Company''s second appeal before the Administrative Tribunal, Panjim in respect of FY 1995-96 has been remanded back to the Asst. Commissioner of Commercial Taxes, Panjim to decide the appeal with reasons. The appeals are sub-judice.

The Goa Value Added Tax Act, 2005 is applicable to assesses in the State of Goa w.e.f 2005-06. Hence the Company had obtained registration and filed its returns for the quarters ended 30.06.2010 and 30.09.2010. The Company had sought the 75% benefit under the Goa Value Added Tax Deferment–cum-Net Present Value Compulsory Payment Scheme, 2005 to which it is entitled. However, the Asst. Commissioner of Commercial Taxes has denied the benefit of the said scheme and passed assessment order–cum-demand notice for financial years 2005-06, 2006-07 and 2007-08 for a sum of Rs. 515.78 lacs. The Company has filed appeals before the Addl. Commissioner of Commercial Taxes, Goa and the appeals are sub-judice.

4. The Company has made representation before the Ministry of Shipping for refund of advance made to Mormugao Port Trust in earlier years. The Company representation along with officials from Ministry of Shipping and Mormugao Port Trust concluded for the recovery of Rs.3,30,84,835 and interest Rs.3,92,15,163. Accordingly balance receivable on account of interest has shown as ''Interest on Other'' under head ''Other Income''.

5. In the arbitration proceeding with Dredging Corporation of India, award was passed in the year 2004 and remained unexecuted. In the current year, Dredging Corporation of India executed the same and recovered the amount along with interest, which has been shown as ''Customer Claim'' under head ''Other Expenses''.

6. The Company has taken land and water on license from Mormugao Port Trust (MPT) and license fees amounting to Rs. 428.91lacs (Previous year Rs. 416.05lacs) has been debited to profit and loss account. The future minimum payment is as under :

Deferred Tax Asset in accordance with the Accounting Standard – 22 "Accounting for Taxes on Income" has not been recognised even after availability of unabsorbed depreciation and carried forward losses under the Income Tax Act as, in the opinion of the management, sufficient future taxable income will not be available for this purpose.

7. Related Party Disclosure:- A. Related Parties Disclosure as per Accounting Standard (AS) - 18 :- Holding Company ABG Shipyard Limited

Ultimate Holding Company

ABG International Pvt. Ltd. (Holding Company of ABG Shipyard Limited)

Associate Companies

ABG Resources Private Ltd. PFS Shipping (India) Ltd.

Companies over which Directors/relatives are able to exercise Significant Influence

ABG Shipyard Limited

(Shri. Ashwani Kumar and Shri. Ashok Chitnis

(Common Directors)

Key Management Personnel

Cdr. Subhash Kumar Mutreja (Retd.),

Whole Time Director & Chief Executive Officer

Disclosure in respect of Material Related Party Transactions during the year:- 1. Revenue from operations includes Rs.2004.94 lacs (Rs. 4397.36 lacs) from ABG Shipyard Ltd

2. Revenue from operations includes Rs. 729.97 lacs (Rs. Nil) from PFS Shipping (I) Ltd.

3. Service charge Rs. 60.00 lacs (Rs. 60 lacs) to ABG Resources Pvt. Ltd.

4. Trade advances received Rs. Nil lacs (Rs. 1272.00 lacs) from ABG Shipyard Ltd.

5. Trade advances received Rs. Nil lacs (Rs. 736.50 lacs) from ABG Resources Private Ltd

6. Purchase of Fixed Assets includes Rs. Nil (Rs. 177.04 lacs) from ABG Shipyard Ltd

7. Other loans and advances repaid Rs. 70.00 lacs (Rs. 2431.26 lacs) to ABG Shipyard Ltd

8. Corporate Guarantee Rs. Nil lacs (Rs. 3360.00 lacs) by ABG Shipyard Ltd towards short terms borrowings from Bank

Notes:

- Related Parties have been identified by the Management and relied upon by the Auditors.

- Previous year''s figures are shown in Italics.

8. CONTINGENT LIABILITIES :

- Guarantees given by Banks: Rs. 456.04 lacs (Rs. 483.78 lacs).

- Letters of Credit outstanding: Rs. Nil lacs (Rs. 699.57 lacs).

- Bonds of Rs. 15.00 lacs (Rs.15.00 lacs) executed in favour of Excise Authorities.

Sales tax liability for the financial years from 1995-96 to 2004-05 is Rs. 837.91 lacs. The Company has filed appeal & stay petition against the same.

- Income Tax liability for financial year 2005-06 is Rs. 5.67 lacs.

Value Added Tax (VAT) liability for the financial years from 2005-06 to 2007-08 is Rs. 515.78 lacs. The Company has filed appeal & stay petition against the same.

Service Tax liability for the financial year 2001-02 to 2003-04 is assessed at Rs.712.18 lacs. The Central Excise & Service Tax Appellate Tribunal (CESTAT) has allowed the Company''s appeal on the ground that it does not render port services being a registered factory. The Department has filed an appeal in the High Court of Bombay, Goa Bench at Panaji. The Company has contested the appeal. The appeal has been transferred to the High court of Bombay at Mumbai to be heard along with other similar appeals.

- Legal cases pending against the Company (net of provision) is Rs. 6959.64 lacs (Rs. 7391.01 lacs). Custom Appeal / show cause notice for capital goods/spare and building of JUB is Rs. 760.12 lacs. The Company is yet to file appeal.

9. COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and others and not provided for: i. ABG International Pvt. Ltd. - Rs. Nil lac (PY Rs. 3500.00 lac) towards procurement of Capital Equipment. ii. License fees to MPT in terms of License agreement Rs. 2823.54 Lac (PY Rs. 3291.02 lac).

10. Previous year figure has been rearranged / regrouped wherever considered necessary.

1.1 Payment of ICICI Term Loan and others (other than IFCI Ltd) are to be made in 28 equal instalments commencing from 15.01.2012 and is secured by first parri passu legal mortgage/charge on Fixed Assets of the Company, hypothecation of moveable assets.

1.2 Payment to IFCI is as follows :- a. Rs. 275.00 Lacs each per quarter commencing from June, 2011 to March , 2012.

b. Rs. 412.50 Lacs each per quarter commencing from June, 2012 to March, 2013.

c. Rs. 687.50 Lacs each per quarter commencing from June, 2013 to March, 2014.

The above Loan is secured by a Corporate Guarantee Facility given by ABG International Pvt. Ltd. and pledge of Equity Shares of ABG Shipyard Limited and Deed of Hypothecation of parripassu charge on immovable and moveable assets of the Company, both present and future.

1.3 Convertible Zero Coupon Loan(CZC)

In terms of the Scheme, the CZC Loan is interest free. The same to be converted into Equity Shares of the Company, in accordance with applicable law and pricing regulations, at the option of the lenders commencing from second anniversary of the effective date namely, 28.01.2012 and ending on the day preceeding the seventh anniversary of the effective date. To the extent that the loan has not been converted into equity shares, the same shall be convertible compulsorily on the seventh anniversary of the effective date namely, 28.01.2017. Upto the period ended 31.03.2013, the company has not received any letter exercising the option from the secured lenders for conversion of the said loans or part thereof into Equity shares.

1.4 During the year, IFCI has recalled entire loan outstanding principal along with interest of Rs. 4624.11 Lacs on December 20, 2012. The Company has paid Rs. 411.11 lacs before March 31,2013 and Rs. 2476.21 lacs paid subsequently.

2.1 The above Short Term Borrowings are Secured as floating charge on Current Assets of the Company including but not limited to Stock of raw materials, Work In Progress, Consumables, Stocks, Spares, Book Debts, Bills wherever situated, documents both present and future and Corporate Guarantee of ABG Shipyard Limited for Rs. 33.60 Crores.

3.1 The Company has paid Rs. 1233.94 Lac (PY Rs. 932.50 Lac) to ABG Resources Private Ltd, an associate of Holding Company against future Services to be undertaken by Company. Out of the above Rs. 1200.00 lacs (PY- Rs. 900.00 lacs) kept as Security Deposit

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.

The expected rate of return on plan assets is determined considering several applicable factors., mainly the composition of Plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for plan assets management.


Mar 31, 2012

1. Corporate information

Western India Shipyard Limited ("the Company") incorporated under the provision of the Companies Act, 1956. The Company is engaged in the industrial activities of Shiprepairs and Shipbuilding as it manufactures a variety of spare parts The Company has the required infrastructure like a Floating Dry Dock of 60000 DWT capacity, 4 wet repair berths, heavy duty machine shops, paint/valve and pipe shops, fabrication yards, portal and mobile cranes, captive gensets, electrical sub-station, to cater to Indian and foreign vessels like cargo and passenger vessels, tankers, dredgers, Offshore support vessels, navy and Coast Guard vessels, trawlers, barges, operating on the coastal and international sea routes and Jack Up Oil Rigs on East and West Coast.

2. Basis of preparation Accounting Convention:

The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention method as a "Going Concern Concept" and in accordance with Generally Accepted Accounting Principles in India (Indian GAAP).

The Company follows the mercantile system of accounting and recognizes Income and Expenditure on accrual basis except Medical Reimbursements, Leave Travel Allowances, Insurance Claims, Ex-gratia and Scrap Sale which are on cash basis. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1. Balances under the head current liabilities, debtors and loans & advances are subject to confirmation. However, in the opinion of the management, realizable value of current assets, loans & advances in the ordinary course of business will not be less than the amount which is stated in the Balance Sheet.

2. The Company has been granted sales tax exemption by the State Government, Directorate of Industries and Mines, Government of Goa vide its letter No. IND/Devi/I M/495'93/3543 dated 19.8.1997 for a period of 12 years w.e.f. 01.01.1996 on ship-repairs. However the Sales Tax Officer has denied the exemption and has levied sale tax at the applicable rates on the sales turnover. Ti e Company has filed appeals before the Commissioner of Commercial Taxes (Appeals), Panjim, against sales tax liability of Rs. 837.91 lacs for the financial years from 1995-96 upto 2004-05. The Company's second appeal before the Administrative Tribunal, Panjim in respect of FY 1995-96 has been remanded back to the Asst. Commissioner of Commercial Taxes, Panjim to decide the appeal with reasons. The appeals are sub-judice.

The Goa Value Added Tax Act, 2005 is applicable to assesses in the State of Goa w.e.f 2005-06. Hence the Company had obtained registration and filed its returns for the quarters ended 30.06.2010 and 30.09.2010. The Company had sought the 75% benefit under the Goa Value Added Tax Defermentcum-Net Present Value Compulsory Payment Scheme, 2005 to which it is entitled. However, the Asst. Commissioner of Commercial Taxes has denied the benefit of the said scheme and passed assessment ordercum-demand notice for financial years 2005-06, 2006-07 and 2007-08 for a sum of Rs. 515.78 lacs. The Company has filed appeals before the Addl. Commissioner of Commercial Taxes, Goa and the appeals are sub-judice.

3. The Company has taken land and water on license from Mormugao Port Trust (MPT) and license fees amounting to Rs. 416.05 lacs (Previous year Rs. 351.08 lacs) has been debited to profit and loss account.The future minimum payment is as under:

Deferred Tax Asset in accordance with the Accounting Standard 22 "Accounting for Taxes on Income" has not been recognised even after availability of unabsorbed depreciation and carried forward losses under the Income Tax Act as, in the opinion of the management, sufficient future taxable income will not be available for this purpose.

Disclosure in respect of Material Related Party Transactions during the year

1. Revenue from operations includes Rs. 4397.36 lacs (Rs. 387.55 lacs) from ABG Shipyard Ltd

2. Service charge Rs. 60.00 lacs (Rs. Nil) to ABG Resources Pvt. Ltd.

3. Trade advances received Rs. 1272.00 lacs (Rs. 7272.00/acs) from ABG Shipyard Ltd.

4. Trade advances received Rs. 736.50 lacs (Rs. 250.00 lacs) from ABG Resources Private Ltd

5. Purchase of Fixed Assets includes Rs. 177.04 lacs (Rs. /V/'/) from ABG Shipyard Ltd

6. Other loans and advances Rs. 2431.26 (Rs. 1323.99 lacs) from ABG Shipyard Ltd

7. Corporate Guarantee Rs. 3360.00 lacs (Rs. 5500.00 lacs) by ABG Shipyard Ltd towards short terms borrowings from Bank

Notes:

i) Related Parties have been identified by the Management and relied upon by the Auditors.

ii) Previous year's figures are shown in Italics.

iii) The Whole Time Director & CEO has been re-appointed for a period of three (3) years w.e.f. 17.07.2010 and same has been approved by the Ministry of Corporate Affairs (MCA). His remuneration has been increased by a special resolution passed by the shareholders at the 19th AGM of the Company. The approval for the increase is pending before the MCA.

4. CONTINGENT LIABILITIES:

i) Guarantees given by Banks: Rs. 483.78 lacs (Rs. 398.25 lacs).

ii) Letters of Credit outstanding: Rs. 699.57 lacs (Rs. 29.38 Lacs).

iii) Bonds of Rs. 15.00 lacs (Rs. 15.00 lacs) executed in favour of Excise Authorities.

iv) Sales tax liability for the financial years from 1995-96 to 2004-05 is Rs. 837.91 lacs. The Company has filed appeal & stay petition against the same.

v) Value Added Tax (VAT) liability for the financial years from 2005-06 to 2007-08 is Rs. 515.78 lacs. The Company has filed appeal & stay petition against the same.

vi) Service Tax liability for the financial year 2001-02 to 2003-04 is assessed at Rs.712.18 lacs. The Central Excise & Service Tax Appellate Tribunal (CESTAT) has allowed the Company's appeal on the ground that it does not render port services being a registered factory. The Department has filed an appeal in the High Court of Bombay, Goa Bench at Panaji. The Company has contested the appeal. The appeal has been transferred to the High court of Bombay at Mumbai to be heard along with other similar appeals.

vii) Legal cases pending against the Company (net of provision) is Rs. 7391.01 lacs (Rs. 6929.06 lacs).

5. COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and others and not provided for:

i. ABG International Pvt. Ltd. Rs. 3500.00 lac (PY Rs. 3500.00 lac) towards procurement of Capital Equipment.

ii. License fees to MPT in terms of License agreement Rs. 3291.02 Lac (PY Rs. 2928.99 lacs).

6. Till the year ended 31 March 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification.

1.1 29,65,82,990/- (PY: 29,65,82,990) Equity Shares out of the issued, subscribed and paid up share capital were alloted on conversion/surrender of Debentures and conversion of Term Loans in earlier years.

1.2 17,72,42,785 (PY: 17,72,42,785) Equity Shares out of the issued, subscribed and paid up capital held by ABG Shipyard Ltd, holding 60.15% (PY: 60.15%) of the paid up capital

2.1 Payment of ICICI Term Loan and others, (other than IFCI Ltd) are to be made in 28 equal instalments commencing from 15.01.2012 and is secured by first parri passu legal mortgage/charge on Fixed Assets of the Company, hypothecation of moveable assets.

2.2 Payment to IFCI is as follows

a. Rs. 275.00 Lacs each per quarter commencing from June, 2011 to March ,2012.

b. Rs. 412.50 Lacs each per quarter commencing from June, 2012 to March, 2013.

c. Rs. 412.50 Lacs each per quarter commencing from June, 2013 to March, 2014.

The above Loan is secured by a Corporate Guarantee Facility and pledge Equity Shares of ABG Shipyard Limited and Deed of Hypothecation of parripassu charge on immovable and moveable assets of the Company, both present and future.

2.3 Loan from Shareholders represents Loan taken from ABG Shipyard Limited and interest free. The same is being kept as per terms and conditions laid down in "Scheme of Compromise and arrangement with Secured Lenders and Shareholders.

2.4 Convertible Zero Coupon Loan(CZC)

In terms of the Scheme, the CZC Loan is interest free. The same to be converted into Equity Shares of the Company, in accordance with applicable law and pricing regulations, at the option of the lenders commencing from second anniversary of the effective date namely, 28.01.2012 and ending on the day preceding the seventh anniversary of the effective date. To the extent that the loan has not been converted into equity shares, the same shall be convertible compulsorily on the seventh anniversary of the effective date namely, 28.01.2017. Upto the period ended 31.03.2012, the company has not received any option from the secured lenders for conversion of the said loans or part thereof into Equity shares.

3.1 The above Short Term Borrowings are Secured as floating charge on Current Assets of the Company including but not limited to Stock of raw materials, Work In Progress, Consumables, Stocks, Spares, Book Debts, Bills wherever situated, documents both present and future and Corporate Guarantee of ABG Shipyard Limited for Rs. 33.60 Crores.

3.2 Cash Credit from Bank represents Rs. 1701.18 Lacs (PY Rs. Nil) taken from ICICI Bank Ltd against Sanctioned Limit of Rs. 1500.00 Lacs 11.1 Loans and advances include a sum of Rs. 575.63 Lacs (Rs. 575.63 Lacs) due from certain companies under escrow agreements against which the original certificates for 84,69,711 equity shares of the face value of Rs. 21- aggregating to Rs. 169.39 Lacs had been deposited as security by such companies for repayment of advances. The market value of these shares as on 31.03.2012 is Rs. 569.16 Lacs based on the closing price of Rs. 6.72 per equity share of the face value of Rs. 21- each fully paid up listed on the Bombay Stock Exchange Limited.

4.1 Fixed Deposits with Banks include Rs. 33.00 Lac (PY Rs. 33.00 Lac) with Maturity more than twelve months

The employees' gratuity fund scheme managed by MetLife Insurance Co. Pvt. Ltd. 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 recognised in the same manner as gratuity.

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.

The expected rate of return on plan assets is determined considering several applicable factors., mainly the composition of Plan assets held, assessed risks, historical results of return on plan assets and the Company's policy for plan assets management.

6.1 The Company announced a Voluntary Separation Scheme (VSS) for the employees during the year. A sum of Rs.1,70,5131- (PY Rs. 2,14,434/-) has been paid during the year and debited to Statement of Profit and Loss under the head "Employee Benefits Expenses.


Mar 31, 2010

1. Scheme of Arrangement

The Company has implemented Scheme of Arrangement as per the Scheme approved by High Court of Bombay, Goa Bench on 15.01.2010. Accordingly, all secured loans have either been restructured as per Option -I or full & final settlement made as per Option -II. Effect on account of the same has been accounted for in the books of account. Principal waiver has been charged to Capital Reserve Account and waiver of interest has been transferred to Revenue Account.The Company has issued 17,75,50,000 equity shares of the face value of Rs. 21- each fully paid up to ICICI Bank Limited aggregating to Rs. 35.51 crores pursuant to the Option -1 of the Scheme of Arrangement exercised by the Bank.

The Company has applied for permission for listing and trading in these shares on the Bombay Stock Exchange Limited. The issue of the said shares are subject to the requirements of the SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009 with regard to lock in and pricing condition.

The Company has received Rs. 45.00 crores from ABG Shipyard Limited as per the Scheme of Arrangement and the same has been shown as Unsecured Loan in the Books of Account.

2. Secured Loan

i) Convertible Zero Coupon Loan

It is to be converted to Equity Shares commencing from second anniversary of the effective date i.e. 20.03.2012 and ending on the day preceding the seventh anniversary of the effective date.

ii) Term Loan on account of Scheme of ArrangementTerm loan is to be paid in 28 equal quarterly installments starting from second anniversary of the effective date i.e. 20.03.2012

iii) IFCI Loan

Payable in 12quarterly installments as under :-

a. Rs. 2.75 crores each per quarter commencing from 15th month upto 24th month from the date of disbursementb.

b. Rs. 4.125 crores each per quarter commencing from 27th month upto 36th month from the date of disbursementc.

c. Rs. 6.875 crores each per quarter commencing from 39th month upto 48th month from the date of disbursement

3. i) Balances under the head current liabilities, debtors and loans & advances are subject to confirmation.

However, in the opinion of the management, realizable value of current assets, loans & advances in the ordinary course of business will not be less than the amount which is stated in the Balance Sheet.

ii) Loans and advances include a sum of Rs. 575.63 lacs (Rs. 1749.57lacs) due from certain companies under escrow agreements against which the original share certificates for 84,69,710 equity shares of the face value of Rs. 2/-aggregating to Rs. 169.39 lacs had been deposited as security by such companies for repayment of advances. The market value of these shares as 31.03.2010 is Rs. 1200.16 lacs based on the closing price of Rs. 14.17 each per equity share on the Bombay Stock Exchange Limited.

iii) The Company deposits amounting to Rs. 123.95 lacs (Rs. 17.06 lacs) are kept in lien with the Banks towards margin money etc. for Bank Guarantees and Overdrafts.

4. i) The Company has been granted sales tax exemption by State Government, under Schedule II (entry 85) of the Goa Sales Tax Act for a period of 12 years. The Directorate of Industries and Mines, Government of Goa vide letter No. IND/Devi/I M/495/93/3543 dated 19.8.1997 has also granted the said exemption for a period of 12 years w.e.f. 1.1.1996 on ship-repairs. However the Assessment Officer has denied the exemption and has levied sale tax at the applicable rates on the sales turnover. The Company has filed appeals before the Commissioner of Commercial Taxes (Appeals), Panjim, against sales tax liability of Rs. 837.91 lacs for the financial years upto 2004-05. The appeals are sub-judice.ii) The Goa Value Added Tax Act, 2005 is applicable to assessees in the State of Goa w.e.f. 2005-06. Hence the Company has obtained registration and filed its returns for 2005-06 and 2006-07 and sought the 75% benefit under the Goa Value Added Tax Deferment-cum-Net Present Value Compulsory Payment Scheme, 2005 to which it is entitled. However, the Asst. Commissioner of Commercial Taxes has denied the benefit of the said scheme and passed assessment order-cum- demand notice for financial year 2005-06 & 2006-07 for a sum of Rs. 436.56 lacs. The Company has filed appeals before the Addl. Commissioner of Commercial Taxes, Goa and the appeals are sub-judice.

5. Employee Benefits:

a) The Company has adopted the revised Accounting Standard AS-15 - Employee Benefits with effect from April 1, 2008.

b) Defined Contribution Plans - Provident Fund:

The contribution made by employe1- and employee, together with interest, are payable at the time of separation from service or retirement, whichever is earlier.

c) Defined Benefit Plans - Gratuity:

The Company makes annual contribution to the Employees Group Gratuity-cum-Life Assurance Scheme of Metlife Insurance Co. Ltd., a funded defined benefit plan for qualifying employees. Gratuity is payable to all eligible employees on death or on separation/termination in terms of the provisions of the Payment of Gratuity (Amendment) Act, 1997 or as per the Companys scheme whichever is more beneficial to the employees.

d) Basis Used to Determine Expected Rate of Return on Assets"

The expected return on plan assets of 8% has been considered based on the current investment pattern in Government securities.

6. Related Party Disclosure

i) List of Related Party - Key Management Personnel - Cdr. S. K. Mutreja, Whole Time Director & CEO ii) Transactions with Related Party - Remuneration Paid - Rs. 33.37 lacs

7. CONTINGENT LIABILITIES :

i) Guarantees given by Banks: Rs.447.20 lacs (Rs. 364.10 lacs).

ii) Letters of Credit outstanding: Rs 121.52 Lacs (Rs. Nil).

iii) Bonds of Rs. 15.00 lacs (Rs. 15.00 lacs) executed in favour of Excise Authorities.

iv) Sales tax liability for the financial years from 1995-96 to 2004-05 is Rs. 837.91 lacs. The Company has filed appeal & stay petition against the same.

v) Value Added Tax (VAT) liability for the financial years from 2005-06 to 2006-07 is Rs. 436.56 lacs. The Company has filed appeal & stay petition against the same.

vi) Service Tax liability for the financial year 2001-02 to 2003-04 is assessed at Rs.712.18 lacs. The Central Excise & Service Tax Appellate Tribunal (CESTAT) has allowed the Companys appeal on the ground that it does not render port services being a registered factory. The Department has filed an appeal in the High Court of Bombay, Goa Bench at Panaji. The Company has contested the appeal.

vii) Legal cases pending against the Company (net of provision) is Rs.3320.15 lacs (Rs. 2902.39 lacs).

8. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at the Balance Sheet date. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

9. In view of brought forward business losses and unabsorbed depreciation, no income tax on account of Minimum Alternate Tax has been provided for in the current year.

10. The previous years figures have been regrouped, rearranged wherever considered necessary.

 
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