notice of agm western india shipyard limited milestones ... · pdf fileannual general meeting...

Western India Shipyard Limited

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Board of Directors : Shri. R. S. Nakra

Shri. Ashwani Kumar

Shri. Ashok R. Chitnis

Shri. T. Asokraj (Nominee of ICICI Bank Ltd)

Cdr. S. K. Mutreja (Retd) WholeTimeDirector&ChiefExecutiveOfficer

Company Secretary : Shri. J. C. F. Sequeira

Statutory Auditors : M/s. V. V. Kale & Co,

Chartered Accountants

Financial Institutions & Banks : ICICI Bank Limited

IFCI Limited

HDFC Bank Limited

Oriental Bank of Commerce

Federal Bank Limited

Syndicate Bank

Regd. Office & Shipyard : P. B. No. 21, Mormugao Harbour, Mormugao, Goa – 403 803 Phone: 0091 832 2520252–57 Fax: 0091 832 2520258. E-mail: [email protected] Website: www.wisl.co.in

Registrars : Link Intime India Pvt. Ltd. C – 13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (W), Mumbai – 400 072. Tel: 91 22 25946970 Fax: 91 22 25946969 Email: [email protected]

Contents Page No.1. Notice of AGM 012. Western India Shipyard Limited Milestones 073. Directors’ Report 094. Report on Corporate Governance 155. Certificates 256. Management Discussion & Analysis 277. Auditors’ Report 308. Balance Sheet 349. ProfitandLossAccount 35

10. Cash Flow Statement 3611. Schedules 1 to 17 3712. BalanceSheetAbstract&GeneralBusinessProfile 5213. Attendance Slip & Proxy Form 53

19th Annual Report 2010-2011

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NOTICEThe 19th Annual General Meeting of the members of Western India Shipyard Limited will be held at the RegisteredOffice&ShiprepairYardatP.B.No.21,MormugaoHarbour,Mormugao,Goa-403803,onthe Friday, 23rd day of September, 2011 at 11.00 a.m. to transact the following business:

ORDINARY BUSINESS:

1. Toreceive,considerandadopttheauditedProfitandLossAccountforthefinancialyearended31st March 2011 and the Balance Sheet as at that date together with the Reports of the Directors and Auditors.

2. To appoint a Director in place of Shri Ashwani Kumar, who retires by rotation and being eligible, offers himself for re-appointment.

3. Toconsiderandifthoughtfittopass,withorwithoutmodification(s),thefollowingresolutionsasanOrdinary Resolution:

“RESOLVED that pursuant to Sections 224 and other applicable provisions of the Companies Act 1956, M/s. V. V. Kale & Co, Chartered Accountants from whom the necessary consent letter has been received u/s. 224(1-B) of the said Act, be and is hereby re-appointed as the Statutory Auditors oftheCompany,toholdofficefromtheconclusionofthismeetinguntiltheconclusionofthenextAnnual General meeting of the Company with statutory audit fees of Rs. 6,00,000/- plus service tax and out of pocket expenses on actual basis in connection with the audit of the Company for the year ended March 31, 2012.”

SPECIAL BUSINESS :

4.Toconsiderandifthoughtfittopass,withorwithoutmodification(s),thefollowingresolutionasanOrdinary Resolution:

“RESOLVED that Shri Ram Swaroop Nakra, who was appointed as an Additional Director of the Company by theBoard ofDirectors of theCompany andwhoholds office upto the date of theensuing Annual General meeting and who is eligible for appointment as a director, and in respect of whom the Company has received a notice in writing under section 257 of the Companies Act, 1956 proposinghiscandidaturefortheofficeofdirector,beandisherebyappointedasaDirectoroftheCompany liable to retire by rotation.”

5.Toconsiderandifthoughtfittopass,withorwithoutmodification(s),thefollowingresolutionasaSpecial Resolution:

“RESOLVED that pursuant to Sections 267, 268, 269, 309, 311, Schedule XIII and other applicable provisions of the Companies Act, 1956, and subject to the approval of Central Government, as may be required, the consent of the members in general meeting be and is hereby granted for the increase in the remuneration of Cdr. Subhash Kumar Mutreja (Retd), Whole Time Director & Chief ExecutiveOfficeroftheCompanytoanAnnualRemunerationofRs.63,00,600/-(CosttoCompany)or Rs. 5,25,050/- per month, w.e.f. 17.07.2010, payable as under:


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1. Salary: Rs. 1,80,000/- per month.

2. House Rent Allowance: The Whole Time Director & CEO shall be entitled to perquisites including rent-free furnished accommodation or house rent allowance of 60% of basic salary. He shall also be entitled to Additional HRA/House Upkeep Re-imbursement of Rs. 22,000/- per month (on actuals upto a limit of Rs. 25,000/- p.m.)

3. Ex-gratia: Rs. 22,500/- per month.

4. Cafeteria reimbursement upto a limit of Rs. 1,44,200/- per month (at actuals).

5. Perquisites: (i) Gas, electricity, water, furnishings, medical reimbursements and leave travel concessions for

self and family, club fees, medical and personal accident insurance, etc. in accordance with the rules of the Company. The perquisites shall be computed as per the Income Tax Rules as applicable.

(ii) The Whole Time Director & CEO shall be entitled to Company’s contribution to Provident Fund uptotaxexemptlimit,benefitsofGratuity,earnedleaveandencashmentofearnedleaveatthe end of the tenure and long service awards, as per the rules of the Company and these shall not be included in the computation of perquisites.

(iii) Car for use on Company’s business, telephone and other communication facilities at residence will not be considered as perquisites.

(iv) The total value of the perquisites shall not exceed Rs. 45,650/- per month.

6. The Company shall reimburse to the Whole Time Director & CEO the traveling and entertainment expenses, and other expenses incurred by him for the business of the Company.

7. The Whole Time Director & CEO, so long as he functions as such, shall not be paid any sitting fees for attending meetings of the Board of Directors or committee thereof.

8. The Company shall have right to terminate the agreement with one (1) month’s notice or pay in lieu thereof.

9. In theeventof lossor inadequacyofprofits inanyfinancialyear, theremunerationbywayofsalaryandperquisitespayabletotheWholeTimeDirector&CEOshallnotexceedthelimitsfixedunder the provisions of the Companies Act, 1956.

Resolved further that pursuant to Section 269 (2) read with Part III of Schedule XIII of the Act, the necessaryreturnbefiledwiththeRegistraroftheCompanies.”

Date:10.08.2011Place: Mormugao, Goa

By the Order of the BoardFor Western India Shipyard Limited Sd/-

J. C. F. SequeiraV. P. (Corp. Affairs)

& Company Secretary


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EXPLANATORY STATEMENTThe Explanatory Statement u/s. 173 (2) of the Companies Act, 1956 for item Nos. 4 & 5 of the Notice are as under:

Item No. 4: Appointment of Shri R. S. Nakra as DirectorShri. Ram S. Nakra is the Managing Director of ABG Shipyard Limited, the Holding Company. He was appointed as Additional Director of the Company w.e.f. 10th February, 2011. He will retire at the ensuing AnnualGeneralMeetingoftheCompany.YourCompanyhasreceivedanoticefromamemberunderSec. 257 of the Companies Act, 1956 signifying his intention to propose the appointment of Shri. R. S. Nakra as Director of the Company. Considering his skills as a naval architect & vast experience in the Maritime Industry, your Directors recommend his appointment.

Item No. 5: Increase in the managerial remuneration of Cdr. S. K. Mutreja, Whole Time Director & CEO

The Shareholders of the Company had approved the managerial remuneration of Rs. 3,55,850/- per month plus other perquisites to Cdr. Subhash Kumar Mutreja, Whole Time Director and Chief Executive OfficeroftheCompanyforatermofthree(3)years.TheMinistryofCorporateAffairs,GovernmentofIndia has approved the payment of remuneration to Cdr. S. K. Mutreja, upto Rs. 42,70,200/- per annum plus usual perks w.e.f.17.07.2010 vide letter dated 28.03.2011.

On the recommendation of the Remuneration & Compensation Committee, the Board has approved the increase in his annual remuneration (CTC) to Rs. 63,00,600/-) per annum, w.e.f. 17.07.2010, at the Board meeting on 09.08.2011, subject to the approval of the shareholders and the Central Government, if necessary, as per the provisions of the Companies Act, 1956.

Cdr. Mutreja is entrusted with the day to day operations and management of the Company under the superintendence & control of the Board. He has over 43 years of experience in the Indian Navy and in the Shipbuilding, Rig repair and Shiprepair Industry in the public and private sectors in India. The General information on the Company is as under:

1. Nature of the Ship Repair Industry: The Ship Repair Industry caters to the Shipping Industry consisting of Indian and foreign vessels such as passenger vessels, cargo and product carriers and tankers, and vessels from the Indian Navy, Coast Guard, Port craft, Dredgers, Offshore Support vessels and Oil Rigs which require periodical dry docking and wet repairs at its dry docking and wet repair facilities at Mormugao Harbour, Goa.

2. Financial Performance: The Company is engaged in the business of shiprepairs since 01.01.1996 atMormugaoPort,Goa,onthewestcoastofIndia.YourCompanyhasrepairedover500vesselsofalltypesand10deepwaterOilRigsatitsfacilities.YourCompanyearnsandsavesvaluableforeignexchangefortheCountrydetailsofwhichappearintheNotestotheAccounts.Thefinancialperformances of your Company over last 3 years, is as under:

FYYear Turnover(Rs. In crore)

NetProfit/(loss)(Rs. In crore)

2008-09 75 (21)2009-102010-11

77114

116


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3. Cdr. S. K. Mutreja (I.N Retd.) was born on 24.09.46 at Muzafargarh (Punjab). He served in the Indian Navy and at the time of leaving service held the post of Commander (I. N.). Cdr. Mutreja joined WISL as Whole Time Director and CEO on 17.07.2007. He is a B.E (Mech) and has undergone extensive courses in ISO 9000 quality systems, Shipyard Management, Production Planning and Control. He is 63 years with more than 42 years of experience in the Indian Navy and 22 years in the public and private sector with Goa Shipyard Limited. His last employment was in ABG Shipyard Limited. His focusisonnewbusinessdevelopmentoftheCompany.HispreviousremunerationforFY2010-11wasRs.40.26lacsforFY.

4. The remuneration of Cdr. Mutreja is comparable to other shipyards in the private and public sector considering the nature, size and business of the Company, his expertise and position in the Company. He has no pecuniary relationship directly or indirectly other than his remuneration. He is not entitled to sitting fees for attending meetings of the Board /Committees.

5. TheCompanyhasachieveditshighestsalesturnoverofRs.113.66croreforFY2010-11(growthof48%)andnetprofitaftertaxofRs.15.34crore(growthof1500%)ascomparedtoFY2009-10.

The Board recommends the special resolution for increase in the managerial remuneration payable to Cdr. S. K. Mutreja, Whole time Director & CEO of the Company as set out in the notice.

Except Cdr. S. K. Mutreja, no other Director of the Company is in any way concerned or interested in the said resolution. A copy of the resolutions passed by the Remuneration & Compensation Committee and the Board and other material documents, are open for inspection of the members at the Registered OfficeoftheCompanyonallworkingdaysduringworkinghoursuptothedateofthemeeting.

Date:10.08.2011Place: Mormugao, Goa

By the Order of the BoardFor Western India Shipyard Limited Sd/-

J. C. F. SequeiraV. P. (Corp. Affairs)

& Company Secretary

Notes:1. The Explanatory Statement pursuant to section 173(2) of the Companies Act, 1956 in respect of Item 4 & 5 set

out in the notice and details of directors proposed to be appointed/re-appointed at the AGM in terms of clause 49 of the Listing Agreement with the Stock Exchanges, is annexed hereto.

2. AMEMBERENTITLEDTOATTENDANDVOTEISENTITLEDTOAPPOINTAPROXYTOATTENDANDVOTEONAPOLLINSTEADOFHIMSELF.SUCHAPROXYNEEDNOTBEAMEMBEROFTHECOMPANY.PROXIES, IN ORDER TO BE VALID AND EFFECTIVE, MUST BE DELIVERED AT THE REGISTERED OFFICE OFTHECOMPANYNOTLESSTHANFORTY-EIGHTHOURSBEFORETHEMEETINGCOMMENCES.

3. Corporatememberswhointendtoattendthemeeting,arerequestedtosendacertifiedtruecopyoftheBoardresolution authorizing their representative to attend and vote at the meeting on their behalf.

4. The Register of Members and Share Transfer Books of the Company will remain closed from 15.09.2011 to 23.09.2011 (both days inclusive) to enable the Company’s records to be updated for sending the notices of the AGM to their registered addresses.

5. Members holding shares in physical form are requested to send their change of address, to the Company.6. Members are requested to note that the Company’s equity shares are under compulsory demat trading subject

to the provisions of SEBI Circular No. 21/99 dated 08.07.1999. The members are requested to dematerialize their shares to avoid inconvenience.


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7. Members are requested to avail of the nomination facility under sec. 109A of the Companies Act, 1956.8. The Company’s Annual Report circulated to the members of the Company will be made available on the

Company’s website at www.wisl.co.in.9. Members holding shares in dematerialized form, are requested to inform their change of address, nomination,

bank mandate, PAN number and email details to their respective Depository Participant (DP) and not to the Company.

10. Pursuant to clause 49 of the Listing Agreement with BSE, the information about the directors proposed to be re-appointed at the AGM is given in the annexure to the notice.

11. The Company has implemented the “Green Initiative in Corporate Governance” as per Circular No. 18/2011 dated: 29.4.2011 issued by the Ministry of Corporate Affairs, to permit electronic delivery of notices /documents and annual reports to shareholders. Hence, members holding demat accounts are requested to inform their email addresses to their Depository Participants (DPs). In case of physical holding, e-mail addresses may be sent to the Company.

12. All documents referred to in the Notice and the Explanatory Statement will be available for inspection at the RegisteredOfficeoftheCompanyonallworkingdaysbetween10.00amto12.00pmuptothedateofthemeeting.

ANNEXURE Details of Directors seeking appointment/re-appointment in the 19th Annual General Meeting pursuant to Clause 49 (G) (I) of the BSE Listing Agreement:

Name of Director Ashwani Kumar Ram Swaroop Nakra

Date of Birth 15.08.1948 07.06.1938

Date of Appt./Re-appt.as Director

28.05.2010 10.02.2011

Qualification Post Graduate in Political Science from Allahabad University.

B. Tech (Hons.) I.I.T(Kharagpur)

Experience & Expertise in Specificfunctionalarea

35 years of experience with Indian Revenue Service. Retired as Chief Commissioner of Income Tax.

Shri. R. S. Nakra is a naval architect with over 45 years of experience in designing & building large ships and floating craft. He is closelyassociated with the development of Shipbuilding Industry in India. He is the Managing Director of ABG Shipyard Ltd.

Directorships held in other Companies

2 1

Committee positions held in other Companies

1 -

No. of Shares held in WISL NIL 10,000


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WISL Milestones

01.05.1992 Western India Shipyard Limited (WISL) was incorporated as a public limited Company for ship repair, ship building and ship breaking.

30.06.1992 WISLobtainedtheCertificateforCommencementofBusiness.

05.03.1993 License agreement for shiprepair and shipbuilding facility signed with Mormugao Port Trust for 25 years.

12.11.1993 WISLobtainsShipRepairUnitregistrationcertificatefromD.G.Shipping.

28.08.1995 Company has its IPO of Rs. 70.70 crore.

25.12.1995 WISL is formally inaugurated.

01.01.1996 WISL commences commercial operations with its first dry docking of vessel M. V.Maratha Convoy (3108 DWT).

07.01.1997 WISL is registered as a Factory under the Factories Act, 1948.

05.01.1999 TheIRQSgrantstheQualityCertificateISO9002:1994forShipRepairs.

30.11.2000 WISLexecutesitsfirstONGCJackUpOilRigJURSagarJyoti.

13.04.2002 IRQSupgradestheQualityCertificateISO9001:2000forShipRepairs.

18.04.2002 BVQIgrantstheQualityCertificateISO9001:2000forShipRepairs.

23.06.2006 The High Court of Bombay at Goa sanctions the Scheme of Arrangement with the holders of 846,100 -12% secured redeemable non-convertible debentures and the dues are settled.

29.06.2007 WISL received the order of the High Court of Bombay at Goa sanctioning the Reduction of Equity Share Capital from Rs. 108.54 crore to Rs. 21.71 crore by reduction of face value from Rs. 10/- each to Rs. Rs. 2/- each.

12.09.2007 The Company’s Board approves a Scheme of arrangement and Compromise with the securedlenderswithABGShipyardLimitedasconfirmingParty.


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01.04.2008 BVQI extends the Quality Certificate ISO 9001: 2000 to ‘Repair, Maintenance,Refurbishment of Ships & Rigs’.

15.01.2010/22.01.2010

The High Court of Bombay at Goa sanctions by order the Scheme of Arrangement and CompromisewiththesecuredlenderswithABGShipyardLimitedasconfirmingPartyandsameisfiledwiththeROCatGoaon28.01.2010andtheduesaresettled.

06.05.2010 BVQI upgrades the Quality Certificate ISO 9001:2008 for Repair, Maintenance,Refurbishment of Ships & Rigs.

09.10.2010 The Company receives its largest order from Indian Navy for repair of INS Sujata

31.03.2011 The Company crosses Rs. 100 crore with Sales Turnover of Rs. 111.41 crore and Net ProfitafterTaxofRs.16.46crore.

29.04.2011 The Company receives its largest Oil Rig repair order (No. 10) namely, Aban III.

17.08.2011 The Company completes its 519th vessel M. V. Maratha Deep.


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DIRECTORS’ REPORT

Dear Members,

YourDirectorshavegreatpleasureinpresentingtheir19th Annual Report on the business and operations of your Company together with the Audited Accounts for the year ended March 31, 2011.

1. Financial highlights

Particulars 31.03.2011( ` In Lacs)

31.03.2010( ` In Lacs)

Sales and other Income ProfitbeforeInterest,Depreciation&TaxLess: InterestProfitbeforeDepreciation&TaxLess: DepreciationProfitbeforeTaxLess: Provision for TaxationNetProfitaftertaxPrior period expenses Extraordinary items (income)NetProfitfortheyear

11366.073908.751183.972724.781078.451646.34

-1646.34

111.86-

1534.48

7651.391833.47625.56

1207.911069.83138.07

-138.07320.03

5160.224978.26

2. Operations

YourDirectorsarepleased to report that yourCompanyachieveda significantmilestonewithhighest everShiprepair revenue of `11,366.07 lacs as against ` 7,651.39 lacs in the previous year, an increase of 48.55%. YourCompanymadecashprofitof` 3,908.75 lacs for the year an increase of 113.19% as against `1,833.47 lacsofthepreviousyear.Thenetprofitaftertaxfortheyearis`1,646.34 lacs, an increase of 1092.40% as compared to `138.07 lacsof thepreviousyear.Thenetprofitafterpriorperiodadjustments&extraordinaryitems is `1534.48 lacs.

During the year, your Company became a subsidiary of ABG Shipyard Limited, one of the biggest shipyards in the private sector in India, on acquisition of major shareholding in the Company. As an ABG group company, yourCompany isassuredof continuousship repair technology, flowof repair orders,marketing&financialsupportforachievinghigherrevenueandprofitability.YourCompanyhasrepaired39vesselsuptomax.34000DWT.YourCompanyisexecutingtwomajorrepairordernamely,repairofINSSUJATAoftheIndianNavyandABAN III, a deep water Oil Rig of Aban Lloyd Offshore Ltd. The Company has a healthy order book position of `4081.76lacsason31.03.2011.YourCompanyhasoperatedintheShiprepairsegmentonlyuntilitsshipbuilding facility commences operations.

YourCompany has taken a number of significantmeasures during the year to achieve higher growth andprofitabilitysuchaspreventivemaintenanceandrepairofvitalinfrastructureliketheFloatingDrydock,portalrailcranes and heavy workshop equipment to about 95% operating capacity; capital expenditure for modernization; planning and monitoring of operations; strategic alliances with specialist contractors for Shiprepairs and Rig Repairs.Your Company’sQuality Certificate has been upgraded to ISO 9001:2008whichwill enable yourCompany to attract more foreign Ship Owners. Your Company is the only dedicated shipyard in India forcomposite industrial shiprepair activities and is well placed geographically on the west coast close to the major shipping lanes and Bombay High which is seeing expansion in Oil Exploration.


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Your Board places on record its sincere thanks toABGShipyard Limited for the continuous technical andmarketing expertise extended to your Company, including the timely provision of bank guarantees and funding arrangementswhichhaveresultedinimprovedfinancialperformance.

3. Dividend

YourBoardisunabletorecommendanydividendtotheshareholders inviewoftheaccumulatedlosses,toconserve its resources.

4. Outlook in India for developments of Port Sector, Shipping, Ship Building and Shiprepairs

TheShippingIndustrycontinuestobetheworld’smostefficientandcheapestmeansoftransportation.With7517 km of coastline spread over the east and west coast, Shipping forms one of the important natural resources of India’s trade.

The Maritime Agenda 2010-20 was released in January, 2011 by the Union Minister for Shipping. It will have significant long term impact on the IndianMaritime Industry. TheMinistry has envisaged an investment of`1,65,000 crore in the Shipping Sector by the year 2020 to increase the share of Indian shipping in the EXIM tradeintermsoftonnageundertheIndianflagtoenableIndiatoincreaseitsshareinglobalShipbuildingfrom1% at present to 5%. The agenda also proposes a total investments in major and non-major ports of about `2,87,000 crores by 2020 with the objectives to bring Indian ports on par with the best international ports in terms of performance and capacity; creation of Port capacity of around 3200 mn. tonnes to handle the expected trafficofabout2500mn.tonnesby2020andtoimproveemploymentofIndianseafarersintheglobalShippingIndustry from 6-7% to about 9% by 2015. The agenda also seeks to promote coastal shipping as an alternate to the road transport under a new Coastal Shipping policy.

The Ports act as an interface between ocean transport and land transport. India has 12 major ports viz. Kolkata (including Dock complex at Haldia), Paradip, Vishakapatnam, Chennai, Ennore, Tuticorin, Cochin, New Mangalore, Mormugao, Jawaharlal Nehru at Nhava, Mumbai, and Kandla, and 187 minor ports. The massive investmentespeciallythroughthePPProuteisexpectedtoseehighergrowthinseabourntrafficatports.

ThenewMaritimeAgendawillbenefittheCountrysubstantiallyaslargervesselswillcallattheexistingportsplus two new major ports which are proposed to be developed, one each on east and west coasts, and two hub ports one each on the east and west coast at Mumbai (JNPT), Kochi, Chennai and Visakhapatnam. For this purpose, the drafts in major ports to be increased to not less than 14 metres and hub ports to 17 metres to cater to the larger vessels. The agenda also seeks to introduce Ro-Ro Ferry service in Gulf of Kutch, Gulf of Cambay etc. The agenda will also introduce the new Shipbuilding Subsidy Scheme to the Shipbuilding Industry & grant them the Infrastructure Status.

There was a global slowdown in the Shipping Industry in 2008 and 2009 which is evident from the movement of the Baltic Dry Index (BDI), a leading indicator of global economic shipping activity showing the daily weighted average of prices for shipping bulk cargo such as iron ore, coal, and grains. The BDI has moved downward from USD 2300 in mid-November, 2010 to USD 1320 in mid-May, 2011.

The Global Shiprepair market is estimated to be worth US $ 10 billion to US $ 12 billion, with Singapore’s share of 20%. India has only a share of about US $100 million. There are 35 SRUs registered with the Director General of Shipping, Government of India. Since India is located strategically on the international trade route, the country can offer shiprepair and maintenance services to ships plying along the east and west coast. Currently, shiprepair is primarily undertaken in Dubai dry docks, Singapore, Bahrain and Colombo dockyards. The Shiprepair Industry in India gets business mainly from the Indian Shipping Industry, which has about 50% of ships owned, older than 20 years. (Source: Exim Bank Report on Indian Shipping Industry: A catalyst for growth).

Indian shipyards have many advantages over shipyards in developed nations with a large pool of technical workers, with low labour costs as compared to most other countries. Shipyards acts as a catalyst for overall industrial growth due to spin offs to other industries, including steel, engineering equipment, port infrastructure,


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and the shipping trade. The potential of the Shipbuilding and Shiprepair Industry in employment generation and contribution to GDP is therefore tremendous. The dynamics of India’s economic growth will continue to create increasing demand for new ships, ship-building and shiprepair capacity within the Country which needs to be augmented to cater to this growing demand, with spillover effects on other associated/ ancillary sectors and generation of employment.

5. Directors

Shri. Ashwani Kumar retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. ShriR.S.NakrawillceasetoholdofficeasanAdditionalDirectoroftheCompanyattheensuingAGMbut,being eligible, he has offered himself for appointment as a director. The Company seeks the approval of the shareholders at the ensuing AGM for increase in the remuneration of Cdr. S. K. Mutreja, Whole Time Director & ChiefExecutiveOfficeroftheCompany.TheBoardrecommendstheresolutionstothemembers.

6. Directors’ Responsibility Statement

As required by sub-sec. 217 (2AA) of the Companies Act, 1956 your Directors state:

(a) that in the preparation of the annual accounts for the year ended 31st March 2011, the applicable accounting standards have been followed alongwith proper explanation relating to material departures;

(b) that the directors have selected such accounting policies in consultation with the statutory auditors, applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true andfairviewofthestateofaffairsoftheCompanyattheendofthefinancialyearandoftheprofitoftheCompany for that period;

(c) that thedirectorshave takenproperand sufficient care for themaintenanceof adequateaccountingrecords in accordance with the provisions of this Act for safeguarding assets of the company, and for preventing and detecting fraud and other irregularities;

(d) that the annual accounts have been prepared on a going concern basis.

7. Statutory Disclosures

(a) During the year, no employee of the Company was in receipt of remuneration of more than `60 lacs per annum or more than `5 lacs for part of the year. Hence the information as required under sub-sec. (2A) of Sec. 217 of the Companies Act, 1956 & the Companies (Particulars of Employees) Rules, 1975 as amended, has not been furnished.

(b) 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 the Companies (DisclosureofParticularsintheReportofBoardofDirectors)Rules,1988isgiveninAnnexure‘A’tothisreport.

(c) A Cash Flow Statement for the year 2010-11 is attached to the Balance Sheet & audited accounts.

(d) Directors’ Responsibility Statement as required by section 217 (2AA) of the Companies Act, 1956 appears at item 6 of this report.

8. Corporate Governance

The Corporate Governance report, in terms of Clause 49 of the Listing Agreement with the Stock Exchange, is atAnnexure‘B’.AcertificatefromtheAuditorsofthecompanyregardingcomplianceofconditionsofcorporategovernance is annexed to this report.

9. Auditors

M/s. V. V. Kale &Co., CharteredAccountants, the StatutoryAuditors of the company hold office upto theconclusion of the ensuing Annual General Meeting. The auditors consent u/s. 224 (1B) of the Companies Act,


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1956 has been received for their re-appointment. The Board recommends the re-appointment and remuneration as set out in the notice.

10. Deposits

The Company has not accepted deposits from the public and therefore the provisions of Section 58A of the Companies Act, 1956 are not applicable to the Company.

11. Industrial relations

The Company signed a wage settlement with its unionized workmen covering the period from 01.10.2009 to 30.09.2013. The Company introduced a Voluntary Retirement Scheme for its employees for reduction in long term employee cost. Industrial relations at the Company’s shipyard during the year, continued to be cordial.

12. Auditors’ Report

YourDirectorsstatethatthenecessarycommentsontheAuditors’Reporttothemembers,havebeenmadeinNote 15 & 16 in the Notes to the Accounts and the same is self-explanatory.

13. Corporate Social Responsibility (‘CSR”)

The Company believes in Social Responsibility as its operations have an impact on all stakeholder including the local community and society. The Management has prepared a calendar of actions towards this end and encourages its employees at all levels to participate and ensure a positive impact and commitment towards corporate social responsibility.

The following CSR Programs were attended by a large number of employees:

(a) Factory Safety Committee meetings on 14.06.2010, 27.11.2010 and 12.02.2011 to look into safety issues of the shipyard.

(b) Health Camp for employees on 10.12.2010 in association with Wockhardt Hospitals Limited for lifestyle problems like diabetes & BP.

(c) Dental Health Camp for employees on 10/12.03.2011 in association with Lions Club of Vasco, Goa.

(d) Health Awareness Seminar for employees on Stress Management & Naturopathy on 14.03.2011 in association with VIKALP, a NGO.

(e) NationalFireWeekwasheldfrom14.04.2011to20.04.2011withdisplayof livefiredrillswithfire-fightingapparatus.

(f) Fire Safety manual and Disaster Management Plan to meet emergencies.

(g) Meet on World Population day.

14. Acknowledgements

YourDirectorsconveytheirgratitudetoitsbankers,businessassociatesandclassificationsocietiesfortheircontinued support. The directors also thank the Central & State Government and in particular the Ministry of Shipping and the Mormugao Port Trust, for their support at all times.

Place: Mormugao, GoaDate: 10.08.2011

For & on behalf of the Board of DirectorsSd/-

Cdr. S. K. Mutreja (Retd.) Whole Time Director

&ChiefExecutiveOfficer


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ANNEXURE ‘A’ TO THE DIRECTORS’ REPORT:

Information pursuant to Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

A) Conservation of Energy:

(a)

•

•

•

•

•

•

•

•

•

Energy conservation measures continued during the year :

Improvement in the Power load Factor from 0.61 to 0.98 for better performance.

Use of environmental friendly green gas fuel for gas cutting operations.

Generating air pressures only when needed by installation of constant pressure systems on compressors,

mainly in blasting and painting facilities.

Minimized idle running of equipment like gensets, pumps, lights and machinery.

Preventivemaintenanceofcranesandothermachinerytoattainmaximumefficiencyandcostsavings.

Usingmixofweldinggeneratorswithrectifierstoimprovethequalityofthewelding.

Saving energy by drawing low voltage on the lighting circuit.

Conduct of regular awareness programs among employees.

(b)

•

Additional investments and proposals for reduction of consumption of energy:

New Electrical sub-station has been tested and commissioned.

(c)

•

Impact of above measures for reduction of energy consumption & consequent impact on the cost of production of goods.

The measures taken have resulted in substantial savings in the cost of operation.

B) Technology Absorption

1. Research and Development (R & D) :

SpecificareasinwhichR&DcarriedoutbytheCompany

• Shiprepairtechnologyhasaprocessofcontinuoustestingandcertificationofproductsandprocessesbyin-houseQCandaccreditedCertificationAgenciestoconformtoInternationalStandards.

• Continuous development of new processes, methods & procedures for Shiprepair & Rig repair.

• Fabricationoftools,typicaljigsandfixturestoimprovetheexistingstandardsforcosteffectivenessand faster results.

• Development of Coffer Dam technology for repair of FDD/ship side shell without dry docking.

• Use of High lift facilities for Oil Rig Repairs.

2. BenefitsderivedasaresultofaboveR&D

• Cost reductions / better utilization of material and energy.

• Import substitutions.

• System standardization and upgradation.

• Improvement in Quality and Customer Service, including Customer Satisfaction.

• Minimizing environment pollution.


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• Faster delivery and turnaround time for vessels.

• Improved customer presentations.

3. Future Plan of Action.

• Improvement of systems and shiprepair /Rig repair methodology.

• Introduction of new products and processes for better results.

• Improving interaction with Research agencies involved with Shiprepair and Rig repair technology.

4. Expenditure on R & D.The use of fully integrated software covering areas of production and manpower planning, co-ordination, commercial costing, personnel, inventory and Accounts Management using customized software, are a strategic part of the Company’s capital expenditure.

Technology Absorption, Adaptation and Innovation :

1. Efforts in brief made towards Technology Absorption, adaptation & innovation :

• Use of trained and experienced personnel from technical institutions/ shipbuilding institutions, for keeping them abreast with the changing technologies and methodology of Ship repair and ship building.

• Participation in national and international conferences, seminars and exhibition.

• Imparting Training to Direct / Indirect / Contractor Staff employed for ship repairs.

• Technology absorption through interaction with experts.

• Feedback Analysis from customers.

2. BenefitsderivedasaresultoftheaboveeffortsEg. Product improvements, Cost reduction, etc.

• Improvement in existing systems, Quality Assurance, Safety and Customer Satisfaction.

• Cost reduction in production.

3. InformationregardingTechnologyimportedduringthelastfiveyears.

Technology imported YearofImport Status

Nil N.A N.A

C) Foreign Exchange Earnings and Outgo:During the year ended 31.03.2011, your Company’s earned foreign exchange of `2071.80 lacs (Previous year `2075.99 lacs). There was no foreign exchange expenditure during the year (Previous year ̀ 204.74 lacs). The detailsofthesameareplacedinthe‘NotestotheAccounts’.

Place : Mormugao, GoaDated : 10.08.2011

For & on behalf of the Board of DirectorsSd/-

Cdr. S. K. Mutreja (Retd.) Whole Time Director



15

ANNEXURE ‘B’

CORPORATE GOVERNANCE REPORT(As required under Clause 49 of the Listing Agreement with the Bombay Stock Exchange Ltd)

1. Company’s Philosophy on Corporate Governance:

The Company, an ABG Group Company, is committed to the principles of good Corporate Governance in line with the provisions of the law and those of the Listing Agreement with the Stock Exchange. It encourages the participation of all stakeholders, namely the secured lenders, the Ship Owners, the Management, employees and the shareholders. The Company’s Philosophy is that change is vital in an economic and competitive environment like shiprepairs with high degree of adaptability to changing standards and productivity norms. Towards this philosophy, your Company has set out its corporate vision and budgets to reach its business goals of Quality, Cost and Timely deliveries.

The Company also stresses that its personnel should operate in a manner that is transparent, professional, andefficientusingfairbusinesspractices,prudentjudgmentsandestimates,withaccountabilityatalllevels.This will help the Company to ensure a planned and stable growth that is sustainable in the long term and create value for the stakeholders and the national economy.

2. Board of Directors

(a) Size & Composition:

The Board of Directors exercise superintendence and control over the management of the Company. TheWholeTimeDirector&ChiefExecutiveOfficerof theCompany looksafter theday todayaffairs.The Board comprises of 5 directors of which 4 are Independent and Non-executive directors and one is a nominee director representing ICICI Bank Limited. The composition of the Board is in conformity with the Companies Act, 1956 and clause 49 of the listing agreement. None of the directors are related to one another in terms of sec. 6 of the Companies Act, 1956. Based on the disclosures made by the Directors, the following information has been furnished:

Name of Director Category No. of other Director ships

No. of other Board Committees (other than WISL) on which member/ Chairman.

Attendance

Board AGM

Shri. R. S. Nakra I, NE 1 1 3 No

Shri. T. Asokraj I, NE - - 2 No

Shri. Ashwani Kumar(since 28.05.2010)

I, NE 1 1 4 Yes

Shri. Askok R. Chitnis(Since 28.05.2010)

I, NE 1 1 4 No

Cdr. S. K. Mutreja NI, E - - 4 Yes

Note: I - Independent, NE - Non-Executive, E - Executive, NI - Non-Independent.

(b) Board meetings:

The Board appoints a Chairman for each Board meeting. The information in terms of Annexure -1A to clause 49 of the BSE listing agreement has been placed before the Board for consideration. The important decisions of the Board are communicated to the Management of the Company. The Board held four (4) meetings during the year namely, 28.05.2010, 30.07.2010, 29.10.2010 and 10.02.2011. None of the non-executive Directors had any material pecuniary relationship or transactions with the Company.


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(c) ProfileofDirectorsseekingappointment/re-appointmentatthe19thAGM:

Name of Director Shri. Ashwani Kumar Shri. R. S. NakraDate of Birth 15.08.1948 07.06.1938Date of Appointment/ Re-appointment as Director

28.05.2010 10.02.2011

Qualification Post Graduate in Political Science from Allahabad University.

B. Tech (Hons.) I.I.T(Kharagpur)

ExperienceandExpertiseinSpecificfunctional area

35 years of experience with Indian Revenue Service. Retired as Chief Commissioner of Income Tax. He is a director of ABG Shipyard Ltd.

Naval Architect with over 45 years of experience in designing & building large vessels. He is closely associated with the development of Shipbuilding Industry in India. He is the Managing Director of ABG Shipyard Ltd

Directorships held in other Companies

2 1

Committee positions held in other Companies

1 2

No. of Shares held in WISL NIL 10000

3. Audit Committee

The Audit Committee is constituted in line with clause 49 of the Listing Agreement read with sec. 292A of the Companies Act, 1956. The Audit Committee comprised of 3 independent directors. The Committee has a nomineedirectorfromICICIBankLimitedwhohaswideexperiencebanking,lawandfinance.TheCompanySecretary is the Secretary of the Committee.

(i) Terms of Reference:

TheCommittee reviews the Company’s financial reporting process and the disclosure of its financialinformation, recommends the appointment of the internal auditors, re-appointment of statutory auditors and theChiefFinancialOfficer,fixesaudit fees, reviews thequarterlyandannualfinancialstatementswith primary focus on accounting policies and practices, compliance with accounting standards and legal requirementsconcerningfinancialstatements,reviewstheadequacyandcomplianceofinternalcontrolsystems,internalauditfunctions,reviewstheCompany’sfinancial&riskmanagementpolicies,reviewsthereportsfurnishedbytheinternalauditorsandstatutoryauditorsandfindingsandsuitablefollowupthereon,findingsofinternalinvestigations,reasonsforanysubstantialdefaults,compliancewithregardto company’s Whistle Blower Policy, etc.

(ii) Composition, names of members, meetings and attendance:

The Committee appoints the Chairman at each meeting. The Committee held four (4) meetings during the year namely, 28.05.2010, 30.07.2010, 29.10.2010 and 10.02.2011 with the requisite quorum. The minutes have been reviewed by the Board.

Name Position No. of meetings attendedShri. T. Asokraj I, NE 2

Shri. Ashok R. Chitnis(Since 28.05.2010)

I, NE 4

Shri. Ashwani Kumar(since 28.05.2010)

I, NE 4

Note: I- Independent, NE- Non-Executive, E - Executive, NI - Non-Independent.


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4. Remuneration & Compensation Committee:

(i) Composition, names of members, meetings and attendance :

The Committee comprises of 3 independent directors. The Committee reviews and recommends to the Board the terms and conditions of service and the remuneration package payable to the Executive Director & CEO of the Company. The Committee was reconstituted by the Board on 28.05.2010. The Committee held one (1) meeting on 09.08.2011 during the year with the requisite quorum.

Name Position No. of meetings attended

Shri. R. S. Nakra I, NE 1

Shri. T. Asokraj I, NE 1


I, NE 1

Note: I- Independent, NE- Non-Executive, E-Executive, NI-Non-Independent

(ii) Remuneration Policy:

The Company pays remuneration to its Whole Time Director & CEO by way of salary, allowances and perquisites as recommended by the Remuneration & Compensation Committee, subject to the approval of the Board, the General Meeting and the Central Government. The appointment is subject to the conditions stipulated in Schedule XIII and other applicable provisions of the Companies Act, 1956. The Company pays sitting fees to non-executive directors for attending each meeting of the Board /Committee. No commission is paid to the Executive Director.

(iii) Remuneration of Directors:

Name Sitting Fees (Rs.) Salary (Rs.) Commission(Rs)

Total (Rs.) Terms

Shri. T. Asokraj 30000 Nil - 30000 Nominee Director

Shri. R. S. Nakra 24000 Nil - 24000 NE, I


54000 Nil - 54000 -do-

Shri. Ashwani Kumar(Since 28.05.2010)

54000 Nil - 54000 -do-

Cdr. S. K. Mutreja, Whole Time Director & CEO

Nil 4026000 - 4026000 Contractual

Note: (a) I - Independent, NE - Non-Executive, E - Executive, NI - Non-Independent.

(b) The Ministry of Corporate Affairs, Government of India has approved the payment of remuneration to Cdr. S. K. Mutreja, upto Rs. 42,70,200/- per annum plus usual perks w.e.f.17.07.2010 vide letter dated 28.03.2011.

(iv) Details of shares of the Company held by Directors as on 31.03.2011:

Name No. of shares Percentage of shareholding

Shri. R. S. Nakra 10000 0.003Cdr. S. K. Mutreja 6000 0.0002


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5. Share Transfer & Investor Grievance Committee:

(i) Composition, names of members, meetings and attendance :

The Share Transfer & Investor Grievance Committee held 12 meetings during the year on 03.04.2010, 10.05.2010, 23.06.2010, 23.07.2010, 20.08.2010, 30.9.2010, 09.11.2010, 16.12.2010, 19.01.2011, 16.02.2011, 04.03.2011 and 17.03.2011.

Name Position No. of meetings attended

Cdr. S. K. Mutreja (Retd.), Whole Time Director & CEO

NI, E 12

Shri. J. C. F. Sequeira, Company Secretary Company Secretary

12

Note: I- Independent, NE- Non-Executive, E-Executive, NI-Non-Independent.

(ii) Terms of Reference:

The terms of reference of the Share Transfer & Investor Grievance Committee covers the matters specifiedinclause49oftheListingAgreement,namely,thesharetransfersandtransmissions,issueofduplicatesharecertificates,shareallotments,investorgrievanceslikenon-receiptofannualreports,dividends,dematrequests,physicalsharecertificates,etc.TheCommitteereviewstheperformanceofthe Share Registrars.

(iii) Name,DesignationandAddressoftheComplianceOfficer:

Shri. J. C .F. Sequeira,Vice President (Corp. Affairs) & Company Secretary.Western India Shipyard Limited(RegisteredOfficeandShipyard)Post Box No. 21, Mormugao Harbour, Mormugao, Goa – 403 803. Phone: 0091 832 2520252–57. Fax: 0091 832 2520258.E-mail: [email protected] Website: www.wisl.co.in

(iv) DetailsofInvestorComplaintsreceived&resolvedduringFYended31.03.2011:

Type Received Resolved Pending on 31.03.2011

Non-receipt of Annual Reports 9 9 NilNon-receipt of share Certs. 11 11 NilNon-receipt of dividends**No dividend has been declared till date.

5 5 Nil

Total 25 25 Nil

6. General Body Meetings

(i) Date, time and venue of the last three Annual General Meetings.

Year Date Time Venue

2007-08 31.10.2008 4.30 p.m. Mormugao Harbour, Mormugao, Goa – 403 803

2008-09 26.09.2009 11.00 a.m -do-2009-10 25.09.2010 11.00 a.m -do-


19

(ii) Special Resolutions passed in General Meetings:

Date of Meeting Subject matter of special resolution31.10.2008 1. Re-appointmentofCdr.S.K.MutrejaasWholeTimeDirectorandChiefExecutiveOfficer

of the company for a period of one year on monthly remuneration of Rs. 2,60,274/- plus other perquisite.

2. Alteration of Authorised Share Capital of Rs. 150 Crores. 3. Preferentialallotmentof37,20,500equitysharesofRs.2/-eachatpremiumtoSpecified

Undertaking of UTI (SUUTI) under the terms of their sanction for restructuring of liabilities.26.09.2009 1. Re-appointmentofCdr.S.K.MutrejaasWholeTimeDirectorandChiefExecutiveOfficer

of the company for a period of one year on monthly remuneration of Rs. 2,60,274/- plus other perquisite.

25.09.2010 1. Appointment of Shri. Ashwani Kumar as ordinary director.2. Appointment of Shri. Ashok Chitnis as ordinary director.3. Re-appointment of M/s. V. V. Kale & Co, as StatutoryAuditors to hold office till the

conclusion of the next AGM on annual remuneration of Rs. 5 lacs plus out of pocket expenses, pursuant to Sec. 224A of the Companies Act, 1956.

4. Re- appointment of Cdr. S. K. Mutreja as Whole Time Director and Chief Executive Officerofthecompanyforaperiodof3yearsonmonthlyremunerationofRs.3,55,850/-plus other perquisite.

Note:DuringtheFinancialYear2010-11,noresolutionwasputthroughpostalballotastheprovisionsof Sec. 192A of the Companies Act, 1956 did not apply to the same.

7. Disclosures

a) Materially significant Related Party transactions: None of the transactions with any of the Related PartieswereinconflictwiththeinterestoftheCompany.TheRelatedPartytransactionsaredisclosedinSchedule 16: Notes to the Accounts at Item no. 7, forming part of this Annual Report. The Related Party transactions are generally with the Holding Company and group Companies. They are based on business and operational requirements and the Group’s need for capital resources to maintain synergy and liquidity. The Related Party transactions are at arms’ length to further the interests of the Group.

b) Compliances: The Company has complied with the requirements of the Listing Agreements with the Stock Exchanges including the mandatory requirements mentioned in Annexure IC of clause 49 relating to Corporate Governance, and the SEBI Regulations. No penalties or strictures have been imposed on the Company by any statutory or regulatory authorities for non-compliance on any matter related to capital markets during the last 3 years ended upto 31.03.2011.

c) Code of Conduct: The Board of Directors of the Company have laid down a Code of Conduct for all Board members and senior management of the Company. The same has been put on the Company’s website.

d) Whistle Blower Policy: The Company has adopted a Whistle Blower Policy and has established the necessary mechanism to enable employees to report unethical behavior if any in line with clause 7 of Annexure 1D of clause 49 on Corporate Governance. No person has been denied access to the Audit Committee.

e) Non-mandatory requirements: The Company has implemented the following non-mandatory requirements recommended by clause 49 of the Listing Agreement with the stock exchanges:

(i) Constitution of Remuneration Committee.

(ii) TheCompanyismovingtoaregimeofunqualifiedfinancialstatements.

(iii) The Complemented has implemented a Whistle Blower Policy.


20

8. Secretarial Audit

As a measure of good Corporate Governance, the Company has appointed Ms. Kala Agarwal, Practicing Company Secretary, to carry out the secretarial audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) with the total issued & listed capital.The secretarial audit confirms that the total issued /paid up capital of theCompany is inagreement with the total number of shares issued in physical form and in dematerialized mode with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL).

9. Means of Communication

The Company’s quarterly, half yearly and annual results are regularly submitted to the stock exchanges where the Company’s shares are listed and displayed on the Company’s web site www.wisl.co.in for the information of investors. The said results are normally published by way of Press notes in the Economic Times, Navhind Times andHerald.Thedetailsofpressnotes,financialresultsandshareholdingpatternsalsoappearinthewebsitewww.corpfiling.co.inmaintainedjointlybyBSEandNSEafterdiscontinuanceoftheSEBIEDIFARsite.

The Ministry of Corporate Affairs has issued a Circular No. 18/2011 dated: 29.4.2011 as part of its Green Initiative in Corporate Governance, permitting the service of notice/documents including Annual Reports to be sent by email to members. Members desiring to avail this facility have to inform their email addresses to the Depository in case of demat holding, and to the Company in case of physical holding.

10. General Shareholders’ Information

(i) Annual General Meeting:

Date and time : 23.09.2011 at 11.00 a.m.

Venue : RegisteredOffice&Shipyard Mormugao Harbour, Goa - 403 803

(ii) Financial Calendar:

Financial reporting for the quarterEnding June 30, 2011 : Mid-Aug. 2011Ending September 30, 2011 : Mid-Nov. 2011Ending December 31, 2011 : Mid-Feb.2012Ending March 31, 2012 : Mid-May, 2012

(iii) Book Closure : 15.09.2011 to 23.09.2011 (both days inclusive)

(iv) Dividend payment date : Nil

(v) Listing on Stock Exchanges:

Name of Stock ExchangeThe Bombay Stock Exchange LtdPhiroze Jeejeebhoy Towers, Dalal Street, Mumbai -400001Delhi Stock Exchange Assn. LtdDSE House, 3/1, Asaf Ali Road, New Delhi - 110 002Ahmedabad Stock Exchange Limited, Kamadhenu Complex, Opp.Sahajanand College, Panjara Pole, Ahmedabad - 380 015The Calcutta Stock Exchange Ltd7Lyons Range, Kolkata 700001.Madras Stock Exchange Ltd.StockExchange Bldg. P.B. No. 11, Second Line Beach Road, Chennai - 600 001


21

Note: The Company’s Stock Code is WESTE/531217. The Company is listed on the Bombay Stock Exchange Limited being the Principal Stock Exchange. The Company has paid the listing fees of Bombay StockExchangeLimitedforFY2011-2012.TheCompanyhassubmittedtheapplicationsforde-listingfromthe Stock Exchanges at Ahmedabad, Delhi, Kolkata and Chennai as the shares are thinly and infrequently traded, pursuant to the special resolution passed by its shareholders. The arrears of listing fees will be paid at the time of delisting. The Company has claimed refund of the security deposit of Rs. 35 lacs with Delhi Stock Exchange (DSE), against its public issue, which is pending.

(vi) Share Price Movement and its comparison with BSE Sensex:

WISL SHARESVolume at BSE BSE Sensex

Month High LowApr-10 16.39 13.90 42,08,864 17,558.71 May-10 14.75 11.60 25,26,009 16,944.63 Jun-10 13.80 12.22 25,37,773 17,700.90 Jul-10 14.23 11.49 41,61,989 17,868.29 Aug-10 14.04 11.13 34,12,978 17,971.12 Sep-10 14.31 11.35 64,90,967 20,069.12 Oct-10 18.90 12.68 2,77,43,410 20,032.34 Nov-10 18.00 12.95 69,12,840 19,521.25 Dec-10 14.49 11.75 19,78,193 20,509.09 Jan-11 14.05 10.87 13,31,562 18,327.76 Feb-11 12.30 9.39 15,40,594 17,823.40 Mar-11 11.50 9.91 15,61,904 19,445.22


22

(vii) Stock Price Performance:

(viii) Registrars :The Registrar’s address for correspondence is mentioned below:Link Intime India Pvt. Limited, C – 13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (W),Mumbai – 400 072. Phone No. 91-22-25946970. Fax.91-22-25946969 e-mail: [email protected].

(ix) Share Transfer System:

TheCompany’sshareshavebeennotifiedbySEBIforcompulsorytradingindematerializationmodethrough the depository system. The share transfer requests in physical form are processed by the Companyandregisteredwithin30daysfromthedateofreceipt.Thedematrequestsareconfirmedtothe Depository Participants (DP) within 15 days from the date of receipt.

(x) Dematerialization of shares:

The Company’s shares have been dematerialized with the following depositories to the extent of 94.91% as on 31.03.2011:

Name of Depositories Paid up value ISIN No.

National Securities Depository Ltd (NSDL)Trade World, 4th Floor,Kamala Mills Compound,Senapati Bapat Marg,Lower Parel,Mumbai – 400 013.

Fully paid

Rs. 2/-

INE382C01028

Central Depository Services (India) Ltd (CDSL)Phiroze JeeJeebhoy Towers,27 – 28th Floors, Dalal Street,Mumbai – 400 023.

Fully paid

Rs. 2/-

INE382C01028

The Company has paid the Annual Custodial fees to NSDL and CDSL for the year 2011-2012.


23

(xi) Distribution of Shareholding as on 31.03.2011:

Nominal Value of shareholding in Rs.

Number of Shareholders

% of share holders

Number of shares held

% of shareholding.

1 - 5000 51356 88.65 20425673 6.935001 – 10000 3120 5.39 6184042 2.1010001 – 20000 1491 2.57 6028456 2.0520001 – 30000 685 1.18 2646985 0.9030001 – 40000 203 0.35 2165024 0.7340001 – 50000 362 0.62 2081201 0.7150001 – 100000 412 0.71 5230882 1.78100001 & above 302 0.52 249881827 84.81Total 57931 100.00 294644090 100.00Physical modeElectronic mode

26076 31855

45.0154.99

14976621279667469

5.0994.91

Total 57931 100.00 294644090 100.00(xii) Outstanding ADRs /GDRs /Warrants or any convertible instruments

The Company has not issued any ADRs /GDRs /Warrants or any convertible instruments.

(xiii) Shareholding Pattern as on March 31, 2011

Category No. of shares % of sharesPromoters’ Holding 177242875 60.15

Mutual Funds / UTI 3720500 1.26Financial Institutions/Banks 28492236 9.67Private Corporate Bodies 37470090 12.72

NRIs / OCBs 1376549 0.47

Indian Public 46341840 15.73Total 294644090 100.00

(xiv) Shareholders with more than 1% shareholding as on March 31, 2011:

Name of the shareholder No. of shares Percentage

ABG Shipyard Limited 17,72,42,875 60.15

ICICI Bank Limited 1,14,41,496 3.88

State Bank of India 91,20,000 3.10

Bank of India 66,87,600 2.27

Western India Industries Ltd. 41,56,000 1.41

AdministratorofSpecifiedUndertakingofUTISUUTI 37,20,500 1.26

Western Paques (India) Ltd. 31,83,710 1.08


24

(xv) Details of unclaimed shares issued pursuant to Initial Public Offer (IPO) pursuant to clause 5A of the Listing Agreement:

Sl. No. Particulars Cases No. of Shares(a) Aggregate number of shareholders and the outstanding shares

lying in the Unclaimed Suspense Account at the beginning of the year namely, 01.04.2010

171 75900

(b) Number of shareholders who approached the Company for transfer of shares from the Unclaimed Suspense Account during the year;

Nil Nil

(c) Number of shareholders to whom shares were transferred from the Unclaimed Suspense Account during the year;

Nil Nil

(d) Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the end of the year

171 75900

Note: The voting rights on the shares shall remain frozen until the rightful owner claims the shares. As per clause 5A (II) of the Listing Agreement, 3 reminders will be issued for the shares issued in physical form which remain unclaimed. These shares will be transferred into one folio in the name of “Unclaimed Suspense Account” in due course.

(xvi) Shipyard Location:

Western India Shipyard Limited(RegisteredOfficeandShipyard)Post Box No. 21, Mormugao Harbour, Mormugao, Goa – 403 803. Phone: 0091 832 2520252–57. Fax: 0091 832 2520258.E-mail: [email protected] Website: www.wisl.co.in


25

DECLARATION BY THE WHOLE TIME DIRECTOR & CHIEF EXECUTIVE OFFICER(under clause 49 of the Listing Agreement)

To, The Members ofWestern India Shipyard Limited

I,Cdr.S.K.Mutreja(Retd.)WholeTimeDirector&ChiefExecutiveOfficerofWesternIndiaShipyardLimiteddeclare that to the best of my knowledge and belief, all the members of the Board and senior management personnelhaveaffirmedtheirrespectivecomplianceswiththeapplicableCodeofConductoftheCompanyforthe year ended 31.03.2011.

Mormugao, GoaDated: 09.08.2011

For Western India Shipyard LimitedSd/-

Cdr. S. K. Mutreja (Retd) Whole Time Director & CEO

CERTIFICATE PURSUANT TO CLAUSE 49 OF THE LISTING AGREEMENTTo the Board of Directors,Western India Shipyard Limited

Wehavereviewedthefinancialstatements,readwiththecashflowstatementofWesternIndiaShipyardLimitedfor the year ended March 31, 2011 & to the best of our knowledge and belief, we certify 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 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. Weaccepttheresponsibilityforestablishingandmaintaininginternalcontrolsforfinancialreporting.WehaveevaluatedtheeffectivenessofinternalcontrolsystemsoftheCompanypertainingtofinancialreportingandhavedisclosedtotheAuditorsandAuditCommittee,deficienciesinthedesignoroperationofsuchinternalcontrols,ifany,ofwhichweareawareandstepstakenorproposedtobetakenforrectifyingthesedeficiencies.

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

(a) Significantchangesintheinternalcontroloverfinancialreportingduringtheyear.

(b) Significantchangesinaccountingpoliciesmadeduringtheyearandthatthesamehavebeendisclosedinthenotestothefinancialstatements;and

(c) Instancesof significant fraudofwhichwehavebecomeawareand the involvement therein, if any,ofthemanagementoranemployeehavingasignificantroleintheCompany’sinternalcontrolsystemoverfinancialreporting.

Yourssincerely,For Western India Shipyard Limited

Sd/-Dilip Vengurlekar

ChiefFinancialOfficer

Place: MumbaiDate: 09.08.2011

For Western India Shipyard LimitedSd/-

Cdr. S K Mutreja (Retd) Whole Time Director



26

AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE

To,The Members Western India Shipyard Limited

We have examined the compliance of conditions of Corporate Governance by Western India Shipyard Limited, for the year ended on March 31, 2011 as stipulated in Clause 49 of 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 was limited to procedures and implementations thereof, adopted by the Company for ensuring compliance with the conditionsofcorporategovernance.Itisneitheranauditnoranexpressionofopiniononthefinancialstatementsof the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in clause 49 of the above mentioned Listing Agreement.

WestatethatsuchcomplianceisneitheranassuranceastothefutureviabilityoftheCompanynortheefficiencyor effectiveness with which the Management has conducted the affairs of the Company.

Place: MumbaiDated: 30.05.2011

For V. V. Kale & Co.Chartered Accountants

Sd/-Vijay V. Kale

Partner


27

MANAGEMENTDISCUSSIONANDANALYSISREPORT

I. Industry Structure and Developments:

Ship Repair Units (“SRU”) are in the nature of manufacturing units which are heavy engineering and capital intensive. SRUs are covered by the provisions of the Factories Act, 1948 and rules. The manufacturing process involves the manufacture of various ship parts like hull, deck, steel structural items, repair, refurbishment and renovation of parts of the vessel to enhance the life, operating performance, safety and value of the vessel. SRUs are therefore set up in and around the ports. SRUs are dependent on the Shipping and the non-shipping sectors like Dredgers, Indian Navy, Coast Guard Vessels, Offshore Support Vessels, Port craft and ONGC Rigs, for repair business.

TheShippingseabourntraffic,isaglobalindustrywhoseperformanceiscloselylinkedtotheseabourntrafficof bulk commodities like iron ore, fertilizer, grain, coal, petroleum products, cement with highly volatile patters of demand and supply, and the world economic growth. The global demand and supply trends and freight rates are likely to changes in the charter periods, terms and conditions. Even though the repair terms are settled in advance with the Ship owners and operators, there are inherent risks in the repair of vessels of old vintage, creditrisksofownersandoperatorsandriskofforexfluctuations.Theserisksleadtodelaysinredeliveryofvessels, disputes in work done and bill settlements and liquidated damages.

YourCompanyhasastateofartfacilitytotallydedicatedtocompositeshiprepairs,withafactorymanufacturinga wide range of ship parts. The Company has a Floating Dry Dock of 60000 DWT capacity, wet repair jetties, portal rail cranes of 35T and 50T capacity and multi-purpose shops, heavy duty workshops and fabrication centers. As a capital intensive industry, your Company has an annual budget for shiprepair operations, preventive maintenanceandcapitalexpenditureformodernizationforimprovementinproductivityandprofitability.

II. Opportunities and threats

During the year, your Company settled the dues of the secured creditors who had opted for the One Time Settlement under the Scheme ofArrangement and Compromise withABG Shipyard as confirming party.Subsequently, your Company became a subsidiary of ABG Shipyard Limited, who acquired about 60.15% of the Issued & Paid up equity share capital of the Company in October, 2010 under the said scheme. ABG Shipyard Limited is a market leader in the Shipbuilding Industry with orders of about `14,500 crore as on December31st,2010.ABGShipyardLimitedandyourCompanyhavefirmplanstoenterintothelucrativemarket for repair and upgrading defense vessels. As an ABG Group Company, your Company has continuous accesstothemarketing,technicalandfinancialsupportoftheABGGroup.

YourCompanyhasplansforpursuingthefollowingopportunitiesforhighervolumesofgrowthandprofitability:-

(a) Repair of defense vessels of the Indian Navy and Coast Guard on most competitive terms, in association with M/s. ABG Shipyard Limited.

(b) Repair of Oil Rigs of established Rig Operators like ONGC, Transocean, Nobel Sedco Forex and Aban Offshore Limited, where the Company is a market leader having repaired 10 large Oil Rigs rated for operations at depths of 300 meters.

(c) Repair of vessels of established Fleet Owners in the non-shipping sector like DCI, ONGC. Indian Navy and CoastGuardtoachievestableearnings,highervolumesandprofitability.

(d) RepairofvesselsofestablishedfleetownerslikeSCI,Reliance,PFSShipping,etc.

(e) Manufacture of small vessels at its Ship building-cum-slipway as per the market conditions.

(f) Acquisition of 2ndsmallerfloatingdrydockforrepairofsmallervesselsvisitingthePort

(g) Construction of pontoons using its existing workshop and infrastructure facilities.


28

(h) TheCompanyhasaglobal focus in sourcing vessels, rather thana countryor region specific focus,subject to competitive terms and prices.

YourCompanyhasconcentratedonimprovingitsexistinginfrastructuretofullratedcapacityespeciallytheperiodical repairs and maintenance of its Floating Dry dock of 20000 TLC or 60000 DWT and material handling equipment like portal rail cranes, EOT cranes, plant and machinery, new power sub-station, etc. The dredging of the dock pit area had been completed earlier for taking larger vessels of the desired capacity and dimensions inside thedrydock.Thiswillhelp theCompanytoachievesignificanteconomies inoperationswithhigherrepair volumesandprofitability.Theolderandbetterequipped foreignshipyards likeDubai,ColomboandChina, offer betters terms of payment and discounts to clients as compared to the Company. However, your Company’s prices, quality and timely redelivery enables it to achieve a better performance.

III. Segment-wise/product-wise performance:

The Company has operated in the Shiprepair segment only. The Company undertook and completed large value fabrication jobs successfully for Mazgaon Docks. The Company will focus more on wet repair jobs as its dry dock is fully utilized. The Company will also focus on supply of ship spares to its clients. Rig repairs does not involve the use of its dry dock and wet repair berths.

IV. Outlook for Ship repairs in India:

The Report of the Sub-group for Shipping, Director General of Shipping, constituted by the Government of India,statedthatason1.10.2006,theIndianShippingfleetconsistedof763shipsof8.39mn.GrossTonnage(GT). As per statistics projected by Indian National Ship Owners Association (INSA), 374 vessels of 3.79 mnGTwouldneedtobescrappedoverthenextfiveyearsforcrossing25yearsofageandalsobecausethesearesinglehullvesselswhichrequirescrappingasper thenormsfixedby the InternationalMaritimeOrganisation (IMO). This would therefore leave only 389 ships (51%) of 4.60 mn GT in India at the beginning of the 11th Plan.

The Sub-group for Shipping accordingly proposed 3 targets as under for acquisition of tonnage to meet the deficit&growthforIndianShippingduringthe11th5-YearPlan2007-2012:

Target GT (mn) No. of vessels Additional GT (mn) Additional investment(Rs. in crore)

10 mn 374 5.4 mn 35000 12 mn 404 6.16 mn 55000 15 mn 609 9.16 mn 80000

Total 1387 20.72 mn 170000

The Committee therefore recommended the retention of existing tonnage and encouragement of shore basedinfrastructuretomakeinvestmentinshippingasprofitableasotherserviceindustriestoattractnewinvestorsandgreaterinvestmentinviewoftheflowofIndianShipstoSingaporeandothertaxhavensandalso for removing several taxes which make Indian Shipping non-competitive. (Source: Economic Times dated 18.12.2006).

YourCompanyisverycompetitiveplaceddueitspresenceontheWestCoastofIndiaclosetothemajorseabourntrafficlanes,lowlaborcosts,availabilityofskilledworkforceanddutyfreeimportsforshiprepairs.Withthe growing requirements of strict environmental norms for pollution control, safety standards and regulations, yourCompany isexpected tohavesubstantialvolumesofshiprepairandprofitabilityover theyears.YourCompany also expects substantial orders for Rig repairs in view of the continuous growth in the Offshore oil explorationandproductionintheCountry.YourCompanyiswellequippedtomeetthechallengesthroughexcellence in quality, expertise & timely redeliveries and has repaired about 10 Oil Rigs.

V. Risks & Concerns:

YourCompanyhasa25yearlicenseagreementforshiprepairsandshipbuildingw.e.f.05.04.1993withtheMormugao Port Trust. The Port had issued several operational impediments which were reviewed by the High Powered Committee appointed by the Ministry of Shipping, Government of India and a report has been made.


29

A decision by the Ministry on the HPC Report is awaited. The Company will seek the renewal of the license agreement at the proper time.

VI. Internal control systems and their adequacy

YourCompanyhasan InternalAuditDepartment (IAD)headedbyan independentCharteredAccountant,reporting to theCEOof theCompany.TheCompanyhas fixed the termsof referenceandput intoplaceinternal control systems for its business processes, commensurate with the size and nature of the Company’s operations.TheIADmonitorstheneedslikefinancialeffectivenessofoperations,financialreports,statutorycompliance, whistle blower mechanism, etc. The Auditor submits the quarterly audit reports on the adequacy of internal controls and suggests improvements for strengthening them. The Audit Committee reviews the internal audit reports on quarterly basis and follow-up actions. The Board reviews the recommendations of the Audit Committee.

VII. Financial and Operating performance:

Your Company achieved a significantmilestone with highest ever Shiprepair revenue of `11,366.07 lacs as against `7,651.39 lacs in the previous year, an increase of 48.55%.YourCompanymade cash profitof `3,908.75 lacs for the year an increase of 113.19% as against `1,833.47 lacs of the previous year. The netprofitafter taxfor theyear is`1,646.34 lacs, an increase of 1092.40% as compared to`138.07 lacs of thepreviousyear.Thenetprofitafterpriorperiodadjustments&extraordinaryitemsis`1534.48 lacs. The financingchargeswashigherat̀ 1183.97 lacs during the year as compared to ̀ 625.56 lacs due to repayments of secured loans as per the commitments under the Scheme of Arrangement u/s. 391-394 of the Companies Act, 1956 and the fresh loan arrangements. Personnel expenses increased due to the wage settlement effective from 01.10.2009.

Duringtheyear,yourCompanyrepaired39vesselsuptomax.34000DWT.YourCompanysecuredtwomajorrepair order namely, repair of INS SUJATA of the Indian Navy and ABAN III, a deep water Oil Rig of Aban Lloyd OffshoreLtd.YourCompanyhasahealthyorderbookpositionof`4081.76 lacs as on 31.03.2011 and the repairs are progressing satisfactorily. As an ABG Company, your Company is assured of continuous marketing efforts,repairorders&financialsupportforachievingabetterperformance.YourCompanyhasoperatedintheShiprepair segment only until its ship building facility-cum-slipway is converted into the graving dock.

YourCompanyhas takenanumberofsignificantmeasuresduring theyear toachievehighergrowthandprofitability such as preventive maintenance and repair of vital infrastructure like the Floating Dry dock,portal rail cranes and heavy workshop equipment to about 95% operating capacity; capital expenditure for modernization; planning and monitoring of operations; strategic alliances with specialist contractors for shiprepairs; introduction of VRS scheme and wage settlements with its workmen upto Sept. 2013 for industrial peace.Your Company’sQuality Certificate has been upgraded to ISO 9001:2008which will enable yourCompany to cater to foreign Ship Owners.

VIII. Material developments in human resources / industrial relations front.

During the year, your Company signed a wage settlement with its unionized workmen on 30.12.2010 covering the period from 01.10.2009 to 30.09.2013. The Company introduced a Voluntary Retirement Scheme for its employees which will reduce employee cost in the long run. Relations with the Company’s workmen at its shipyard continue to be cordial.

CAUTIONARY STATEMENT

The statements made in this Management Discussion & Analysis Report relating to the Company’s objectives, projections, expectations, estimates, etc. may constitute “forward looking statements” within the meaning of applicablelawsandregulations.Actualresultsmaydifferfromsuchexpectations.Importantfactorsthatinfluencethe Company’s operations such as working capital, raw material availability, prices, Government policy and regulations, taxes, economic developments in India and abroad, market competition, natural calamities and industrial relations.


30

AUDITOR’S REPORTThe Members of Western India Shipyard Ltd.

1. We have audited the attached Balance Sheet of Western India Shipyard Ltd. as at 31stMarch,2011andProfit& Loss Account for the year ended on that date and the Cash Flow Statement for the year ended on that date, bothannexedthereto.ThesefinancialstatementsaretheresponsibilityoftheCompany’sManagement.

2. We conducted our audit in accordance with Auditing Standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsare freeofmaterialmisstatement. Anaudit includesexamining, ona test basis,evidence supporting the amounts anddisclosures in the financial statements. Anaudit also includesassessing theaccountingprinciplesusedandsignificantestimatesmadebymanagement, aswell asevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasis for our report.

3. As required by the Companies (Auditor’s Report) Amendment Order, 2004 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we annex hereto a statementonthemattersspecifiedinParagraphs4&5ofthesaidOrder.

4. Further to our comments in the Annexure referred to in para (1) above, we report that :

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of the books.

(c) TheBalanceSheet,Profit&LossAccountandCashFlowStatementdealtwithbythisreportarein agreement with the books of account.

(d) In our opinion, the Balance Sheet, Profit & LossAccount andCash FlowStatementmateriallycomply with the Mandatory Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956.

(e) On the basis of written representation received from the Directors as on 31st March, 2011 and taken onrecordbytheBoardofDirectors,wereportthatnoneoftheDirectorsaredisqualifiedason31st March, 2011 from being appointed as Directors in terms of clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes to accounts give the information required by the Companies Act, 1956, in the manner so required subject to the comments in paragraph (f) above , 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 the affairs of Company as at 31st March, 2011.

ii) inthecaseofProfit&LossAccount,oftheprofitoftheCompanyfortheyearendedonthatdate.

iii) inthecaseoftheCashFlowStatement,ofthecashflowsfortheyearendedonthatdate.

Place : MumbaiDate : May 30,2011


Firm Regd No- 000897NSd/-

Vijay V. KalePartner

M. No- 80821


31

ANNEXURE TO THE AUDITOR’S REPORT(Referred to in Paragraph (1) of our Report of even date)

1. i) As informed to us, the Company has maintained proper records showing full particulars including quantitative detailsandsituationoffixedassetsanditneedstobeupdated.

ii) Asinformedtous,alltheassetshavenotbeenphysicallyverifiedbythemanagementduringtheyearbutthereisaregularprogrammeofverificationwhich,inouropinion,isreasonablehavingregardtothesizeoftheCompanyandthenatureofitsbusiness.Nomaterialdiscrepancieswerenoticedonsuchverification.

iii) Asexplainedtous,nosubstantialpartofthefixedassetshavenotbeendisposedoffduringtheyear.

2. i) Asinformedtous,theManagementhasphysicallyverifiedtheinventoryduringtheyear.Inouropinion,thefrequencyofverificationisreasonable.

ii)Asexplainedtous, theprocedureofphysicalverificationof inventories followedby theManagementarereasonable and adequate in relation to the size of the Company and the nature of its business.

iii) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physicalstocks and the book stocks were not material.

3. a. According to the information and explanation provided to us the Company had taken loans from the companies covered in the register maintained under Section 301 of the Companies Act, 1956.

b. In our opinion the rate of interest and other terms and conditions of loans taken by the Company are prima-facie not prejudicial to the interest of the Company.

c. According to the information and explanation given to us, the payment of principal amount and interest are regular wherever applicable..

d. According to the information and explanation given to us, there is no over due amount pending for repayment.

4. According to the information and explanation given to us the Company has not granted any loans to companies/ parties etc. covered under register maintained under Section 301 of the Companies Act, 1956.

5. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchaseofinventory,fixedassetsandwithregardtothesaleofgoods.Duringthecourseofouraudit,nomajorweakness has been noticed in the internal controls.

6. Transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956:

a) Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 500,000/- in respect of any party during the year, have been made at prices which are reasonable, having regard to prevailing market prices at the relevant time.


32

7. According to the information and explanations given to us, the Company has not accepted any deposits from the public under the provisions of Sections 58A and 58AA of the Companies Act, 1956 or any other relevant provisions of the Act.

8. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business.

9. As explained to us, the Central Government has not prescribed for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 in respect of Company’s product and activity.

10. a) According to the records of the Company, the Company has deposited Provident Fund, Employees State Insurance and other undisputed statutory dues with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax including VAT, Service Tax, Customs duty, Excise duty, cess and otherstatutorydueswereoutstanding,asatthelastdayoffinancialyearforaperiodofmorethansixmonths from the date they became payable.

c) Dues against the Company as per Sales Tax and Service Tax assessment are contested by the Company. Details are as under :-

Nature of dues Name of the Statute Financial year

Amount (Rs.) Forum where dispute is pending

1. Sales Tax The Goa Sales Tax Act

1995-961996-971997-981998-991999-002000-012001-022002-032003-042004-05

1,43,82141,26,39962,07,88164,99,9768,14,406

89,49,59654,11,182

2,31,00,4782,11,58,350

73,79,288

Commissioner (Sales Tax)

2. Value Added Tax (VAT) The Goa Value Added Tax Act

2005-062006-07

2,20,77,2592,15,79,204

VATOfficer

3. Service Tax Central Excise and Customs Act

2001-022002-032003-04

1,88,11,5502,53,09,6802,69,92,343

Customs, Central Excise & Service

Tax Appellate Tribunal

4. Income Tax Demand The Income Tax Act 2005-06 5,67,138 CIT(Appeals)

11. Asper recordsof theCompany, theaccumulated lossesof theCompanyexceedfiftypercentof itsnetworth.However,theCompanyhasnotincurredcashlossesduringthecurrentfinancialyear.

12. According to the information and explanations given to us and based on the documents and records produced tous, theCompanyhasnotdefaulted in repaymentofdues toafinancial institution,bankordebenture holders.

13. As informed to us, the Company had given Rs. 575.63 lacs to certain companies under escrow agreements


33

againstwhichtheoriginalsharecertificatesofthefacevalueofRs.169.39lacs(MarketValueontheBalanceSheet date is Rs. 859.68 lacs) had been deposited with the Company.

14. As informed to us, the Company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

15. As informed to us, the term loans have been applied for the purpose for which they were raised.

16. As per the records, the Company has not made any preferential allotment of shares to parties and companies mentioned in the register maintained under Section 301 of the Companies Act, 1956 during the year.

17. As per the records of the Company, the Company has not raised any money by way of public issues during the year under audit.

18. As per information and explanations given by the Management, no fraud on or by the Company has been noticed or reported during the course of our audit.

19. Other clauses to the said Order are considered to be not applicable to the Company.


Firm Regd No- 000897NSd/-


M. No- 80821

Place : MumbaiDate : May 30,2011


34

The Schedules referred to above form an integral part of the Balance Sheet.

As per our report of even date attached. For & On Behalf Of The Board For V. V. Kale & Co.

Chartered AccountantsFirm Regd. No. 000897N

Sd/-Vijay V. Kale

PartnerM. No.- 080821

Sd/-R. S. Nakra

DirectorSd/-

Dilip VengurlekarChiefFinancialOfficer

Sd/- Cdr. Subhash Kumar Mutreja (Retd)

Wholetime Director & CEOSd/-

J. C. F. SequeiraVP (Corp Affairs) andCompany Secretary

Place : Mumbai Dated : May 30, 2011

BALANCE SHEET AS AT 31ST MARCH 2011PARTICULARS SCHEDULE AS AT 31-03-11 AS AT 31-03-10 Amount in Rs. Amount in Rs. SOURCES OF FUNDS1. SHARE HOLDERS’ FUND (a) Share Capital 1 589,288,180 589,288,180 (b) Reserves & Surplus 2 582,804,559 620,784,518 2. LOAN FUNDS (a) Secured Loans 3 1,512,855,192 1,119,662,123 (b) Unsecured Loan 100,000,000 450,000,000TOTAL FUNDS EMPLOYED 2,784,947,931 2,779,734,821 APPLICATION OF FUNDS1. FIXED ASSETS 4 (a) Gross Block 2,166,491,378 2,154,540,674 Less : Depreciation 1,420,252,074 1,312,791,629 Net Block 746,239,304 841,749,045 (b) Capital Work in Progress 57,262,520 2. INVESTMENTS 5 500,000 500,0003. (I) CURRENT ASSETS, LOANS & ADVANCES 6 (a) Inventories 452,632,006 272,226,307 (b) Sundry Debtors 415,794,416 334,731,051 (c) Cash & Bank Balances 10,579,649 48,124,665 (e) Loans & Advances 521,399,729 469,503,316 Total - (I) 1,400,405,801 1,124,585,339 (II) CURRENT LIABILITIES & PROVISIONS 7 (a) Current Liabilities 443,125,638 376,879,949 (b) Provisions 39,555,213 27,719,441 Total - (II) 482,680,851 404,599,390 Net Current Assets (I) - (II) 917,724,950 719,985,949 4. MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) Miscellaneous Expenses 2,495,875 3,326,500 5. PROFIT & LOSS ACCOUNT 8 1,060,725,282 1,214,173,327 TOTAL APPLICATION OF FUNDS 2,784,947,931 2,779,734,821SignificantAccountingPolicies 15 Notes to Accounts 16 -


35

TheSchedulesreferredtoaboveformanintegralpartoftheProfit&LossAccount

As per our report of even date attached. For & On Behalf Of The Board For V. V. Kale & Co.


Sd/-Vijay V. Kale


Sd/-R. S. Nakra

DirectorSd/-






PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED 31ST MARCH,2011

PARTICULARS SCHEDULE AS AT 31-03-11 AS AT 31-03-10 Amount in Rs. Amount in Rs.

INCOME

Sales & Services 9 1,114,102,111 751,573,791

Other Income 10 22,504,923 13,564,837

Total 1,136,607,034 765,138,628

EXPENDITURE

Direct Expenses 11 434,152,205 312,215,044

Personnel Expenses 12 135,806,107 99,512,358

Other Expenses 13 175,773,613 170,064,818

Interest 14 118,396,931 62,555,757

Depreciation 107,844,520 106,983,239

Total 971,973,376 751,331,216

Profit/(Loss)beforeTax&Adjustments 164,633,658 13,807,411

Provision For Taxation

Current Tax-MAT Liabilty 1,958,494 -

MAT Credit Entitlement (1,958,494) -

Profit/(Loss)beforeAdjustments 164,633,658 13,807,411

Prior Period Expenses 11,185,613 32,003,089

Interest Waiver on Settlement of Loan - 516,021,967

Profit/(Loss)fortheyear 153,448,045 497,826,289

Basic Earning per Share 0.52 1.69

SignificantAccountingPolicies 15

Notes to Accounts 16


36

As per our report of even date attached. For & On Behalf Of The BoardFor V. V. Kale & Co.


Sd/-Vijay V. Kale


Sd/-R. S. Nakra

DirectorSd/-






Note :- (1) The above Cash Flow Statement has been prepared by the Company in accordance with the Accounting

Standard-3issuedbyICAIandisbasedonandinagreementwiththecorrespondingProfitandLossAccount and Balance Sheet of the Company.

(2) Previousyearfigureshavebeenregrouped/rearrangedwhereverconsiderednecessary.

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2011PARTICULARS AS AT 31-03-11 AS AT 31-03-10 Amount in Rs. Amount in Rs. A. Cash Flow from Operating Activities Netprofitfortheyearbeforetaxandextraordinaryitems 164,633,658 13,807,411 Adjustments for : Depreciation 107,844,520 106,983,239 Prior Peroid Expenses (11,185,613) (32,003,089) Interest Income (1,101,994) (884,702) Interest Expense 118,396,931 62,555,757 Loss/(Profit)onSaleofFixedAssets 639,416 (299,915) W/off of Miscellaneous Expenses 830,625 826,625

Operatingprofitfortheyearbeforeworkingcapitalchanges 380,057,542 150,985,327 Adjustments for : Trade Receivables (81,063,365) 82,777,134 Other Receivables(Loan and Advance) (51,896,414) (314,789,948) Inventories (180,405,699) (106,391,107) Trade and Other Payables 78,081,461 44,404,302 Cash generated from Operations 144,773,525 (143,014,292)

Net cash from/ (used) in Operating Activities 144,773,525 (143,014,292)

B. Cash Flow from Investing Activities Sale of Fixed Assets 730,000 1,316,766 Purchase of Fixed Assets (13,704,194) (13,408,353) Addition to Capital Work in Progress (57,262,520) - Interest received 1,101,994 884,702 Net cash from/(used) in Investing Activities (69,134,720) (11,206,885)

C. Cash Flow from Financing Activities Issue of Equity Shares - 355,100,000 Proceeds / (Repayment) from Secured Loan 355,213,109 (847,570,700) Proceeds / (Repayment) of Unsecured Loan (350,000,000) 231,797,000 Interest Waiver on Long Term Loan - 516,021,967 Interest Expense (118,396,931) (62,555,757) Net cash from/(used) in Financing Activities (113,183,822) 192,792,511

Net Increase/(Decrease) in cash and cash equivalents (37,545,016) 38,571,333 Cash and cash equivalents as at Opening Cash and Balances with Banks 48,124,665 9,553,332 Cash and cash equivalents as at Closing Cash and Balances with Banks 10,579,649 48,124,665


37

SCHEDULE FORMING PART OF BALANCE SHEET

AS AT 31-03-11 AS AT 31-03-10 Amount in Rs. Amount in Rs. SCHEDULE “1” SHARE CAPITAL Authorised 75,00,00,000 Equity Shares of Rs. 2/- each 1,500,000,000 1,500,000,000 Issued and Subscribed 29,46,44,090 Equity Shares of Rs. 2/- each (Prev.Year-29,46,44,090EquityShares) 589,288,180 589,288,180 Paid Up 29,46,44,090 Equity Shares of Rs. 2/- each (Prev.Year-29,46,44,090EquityShares) 589,288,180 589,288,180 (Out of the above, a) 4,80,500 Equity Shares alloted for consideration other than cash b) 22,65,82,990 Equity Shares alloted on Conversion of Loan ) (17,72,42,875 Equity Shares is held by ABG Shipyard Ltd, Holding Company) TOTAL 589,288,180 589,288,180 SCHEDULE “2” RESERVES & SURPLUS Share Premium Account 38,655,995 38,655,995 Share Forfeiture Account 2,398,300 2,398,300 Debenture Redemption Reserve 4,815,175 4,815,175 Debt Reconstruction Reserve 536,935,089 574,915,048 TOTAL 582,804,559 620,784,518SCHEDULE “3” SECURED LOANSA. Convertible Zero Coupon Loan (a) ICICI Bank Ltd 420,800,000 414,414,000 (b) Others 756,000 756,000 Total - (A) 421,556,000 415,170,000 B. Term Loans (a) ICICI Bank Ltd. 540,000,000 153,306,041 (b) IFCI Ltd 550,000,000 550,000,000 (c) Others 1,044,000 1,044,000 (d) Interest Accrued & Due 255,192 142,082 Total - (B) 1,091,299,192 704,492,123

Gross Total (A + B) 1,512,855,192 1,119,662,123 Notes :i) Loan from IFCI Ltd is secured by a Corporate Guarantee Facility and pledge Equity Shares of ABG Shipyard

Limited and Deed of Hypothecation of parripassu charge on moveable assets of the Company.ii) LoanfromICICILtdandothersissecuredbyfirstparripassulegalmortgage/chargeonfixedassetsofthe

Company, hypothecation of moveable assets.iii) Out of the total Secured Loan Account, amount repayble within one year - Rs. 12,26,82,143/-


38

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39

AS AT 31-03-11 AS AT 31-03-10 Amount in Rs. Amount in Rs.

SCHEDULE “5”INVESTMENTS (AT COST)Long Term Investments (Unquoted)5000 Shares in Janata Sahakari Bank Ltd.of Rs.100/- each. 500,000 500,000 Total 500,000 500,000 SCHEDULE “6”CURRENT ASSETS, LOANS & ADVANCES (A) Inventories (Astaken,valued&certifiedbytheManagement) (a) Stores & Spares 44,455,475 30,979,199 (b) Jobs in Progress 408,176,531 241,247,108 Total - (A) 452,632,006 272,226,307 (B) Sundry Debtors (Unsecured and considered good) (a) Outstanding for a period exceeding six months 211,167,940 190,839,134 Less: Provision for Doubtful Debts - 20,565,078 211,167,940 170,274,056 (b) Other debts 204,626,477 164,456,995 Total - (B) 415,794,416 334,731,051

(Sundry Debtors include Rs. 4,09,87,441/- due from ABG Shipyard Ltd, Holding Company (C) Cash and Bank Balances (a) Cash in hand 115,296 112,315 (b) Balances with Scheduled Banks (i) In Current Account 1,340,943 35,617,317 (ii) In Deposit Account 9,123,410 12,395,034 Total - (C) 10,579,649 48,124,665 (D) Loans and Advances (Recoverable in cash or kind or for value to be received)

(a) Advances (Unsecured and Considered Good) 490,886,930 443,850,247 (b) Advances (Considered Doubtful) 57,562,696 57,562,696 548,449,627 501,412,943 Less : Provision for Doubtful Debts 57,562,696 57,562,696 490,886,930 443,850,247 (c) Advance to staff 717,665 1,248,197 (d) Deposits 4,610,987 6,265,987 (e) Income Tax Deducted at Source 15,470,658 10,475,474 (f) Sales Tax Deducted at Source 4,758,647 3,993,340 (g) Other Current Assets 2,996,347 3,670,071 (h) MAT Credit Entitlment 1,958,494 - Total - (D) 521,399,729 469,503,316

Gross Total - (A+B+C+D) 1,400,405,801 1,124,585,339


40


SCHEDULE “7”

CURRENT LIABILITIES & PROVISIONS

(A) Current Liabilities

(i) Sundry Creditors 244,263,818 218,083,520

(ii) Other Liabilities 55,573,918 74,132,657

(iii) Advance from Customer 143,287,901 84,663,773

Total - (A) 443,125,638 376,879,949

(B) Provisions

i) Gratuity 25,704,795 18,871,076

ii) Leave Encashment 8,527,576 5,641,794

iii) Wealth Tax 11,342 6,571

iv) Bonus 3,353,006 3,200,000

v) MAT Laibilty 1,958,494 -

Total - (B) 39,555,213 27,719,441

Gross Total - (A+B) 482,680,851 404,599,390

SCHEDULE “8”

PROFIT & LOSS ACCOUNT

Opening Balance 1,214,173,327 1,711,999,617

Add:Loss/(Profit)fortheyear (153,448,045) (497,826,289)

Total 1,060,725,282 1,214,173,327

SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT Year Year AS AT 31-03-11 AS AT 31-03-10 Amount in Rs. Amount in Rs.

SCHEDULE “9” SALES & SERVICES (a) Ship Repair Income 927,971,168 646,961,680 Add : Closing Jobs in Progress 408,176,531 241,247,108 Less : Opening Jobs in Progress 241,247,108 146,432,074 1,094,900,591 741,776,714 (b) Scrap Sales 19,201,520 9,797,077 1,114,102,111 751,573,791


41


SCHEDULE “10”

OTHER INCOME Interest on Short Term Deposits 1,101,994 884,702

Other Income 21,402,929 12,680,135

Total 22,504,923 13,564,837

SCHEDULE “11”

Opening Stock 30,979,199 19,403,126

Add : Purchases 180,159,438 118,398,685

Less : Closing Stock 44,455,475 30,979,199

Consumption 166,683,162 106,822,612

Customs & Clearing Charges 4,462,480 357,154

Power & Fuel 18,341,796 16,680,059

Piloting Expenses 576,000 382,000

Dredging Expenses - 395,938

Hire Charges - Machinery 7,729,703 13,142,492

Discount on Ship Repair 39,888,466 52,858,141

Repair & Maintenance - P&M 24,646,922 23,021,526

Safety Expenses 520,805 423,906

Testing & Survey Charges 1,176,069 917,771

Other Direct Expenses 17,534,730 7,526,237

Sub-Contractor Expenses 152,592,072 89,687,208

Total 434,152,205 312,215,044

SCHEDULE “12”

PERSONNEL EXPENSES

Salaries & Other Amenities 123,131,455 89,071,539

Contribution to Provident & Other Funds 8,617,952 7,373,542

Staff Welfare 3,961,224 2,994,972

Staff Recruitment & Training 95,476 72,305

Total 135,806,107 99,512,358


42


SCHEDULE “13” OTHER EXPENSESAdvertisement Expenses 539,943 252,733 Agency Commission 19,381,514 13,917,105 Bad Debts 46,804,072 20,565,078 Bank Charges & Commission 1,112,431 980,490 Business Promotion 1,652,912 2,079,428 Preliminary & Misc. Expenditure Written Off 830,625 826,625 Directors Sitting Fees 162,000 216,000 Fees & Dues 1,654,633 2,397,433 Foreign Exchange Fluctuation 5,499,495 620,750 Insurance 3,398,739 3,189,956 Lease Rent 35,108,400 35,108,400 Loan Processing Fees - 5,625,300 Loss on Sale of Fixed Assets 639,416 312,109 Custom Staff Salaries 4,012,210 3,955,644 Miscellaneous Expenses 3,987,974 3,444,395 Office&EstablishmentExpenses 7,430,729 4,374,505 Auditors’ Remuneration a) Statutory Audit Fees 661,800 551,500 b) Tax Audit & Income Tax Matter 220,600 220,600 c) Company Law Matter 165,450 165,450 d) Internal Audit Fees 95,130 250,415 e) Audit Expenses 318,093 318,865 Printing & Stationary 1,407,153 1,583,892 Professional Charges 4,059,699 12,406,866 Rent 77,000 77,000 Rates & Taxes 2,580,818 581,392 Repair&Maintainance-Yard 16,183,724 8,186,327 Repair & Maintainance - Building 3,282,113 226,475 Repair & Maintainance - Others 540,002 691,043 Service Provider Charges - 35,364,570 Telephone Charges 2,025,665 1,875,940 Travelling & Conveyance 11,929,933 9,691,962 Wealth Tax 11,342 6,571 Total 175,773,613 170,064,818 SCHEDULE “14”INTERESTOn Term Loans 116,428,180 61,211,735 On Others 1,968,751 1,344,022 Total 118,396,931 62,555,757


43

SCHEDULE ‘15’

SIGNIFICANT ACCOUNTING POLICIES :

1. Accounting Convention :

The accounts are drawn up in accordance with the historical cost convention method as a “Going Concern Concept” and are in accordance with Generally Accepted Accounting Principles and under relevant provisions of the Companies Act, 1956. The Company follows the mercantile system of Accounting and recognises Income and Expenditure on accrual basis except medical reimbursements, leave travel allowances, insurance claims and scrap sale which are on cash basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

2. Use of Estimates

The preparation of Financial Statements, in conformity with generally accepted accounting principles, requires the management to make estimates and assumptions that affect the reported amounts of assets andliabilitiesanddisclosureofcontingentliabilitiesatthedateofthefinancialstatementsandtheresultsofoperations during the reporting period end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates

3. Inventories :

Stores, Consumables & Spare parts are valued at cost, computed on the basis of Annual Weighted Average Method or Market Value, whichever is lower. Works-in-progress are valued as per Percentage Completion Method.

4. Investments :

Investments, being considered long term, are stated at cost.

5. Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. The cost of assets includes :

i) Cost of acquisition

ii) Expenses incurred on replacement and installation of assets and

iii) Incidental cost incurred to bring them into their present location and condition and making them ready to use.

6. Depreciation :

i. Depreciationonfixedassets isprovidedonstraight-linemethod in themannerandat the ratesprescribed 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, upto 04.04.2018.

ii. Depreciation on additions / deletions is calculated on pro-rata basis from / to the date of such additions / deletions.

iii. DepreciationonadditionsinFloatingDryDockonaccountofforeignexchangefluctuationsandanymajor additions is amortised over the remaining useful life of the asset.

iv. Assets costing less than Rs. 5,000/- are depreciated at 100% in the year of acquisition.

7. Revenue Recognition :

i) Revenue is recognised on proportionate completion method.

ii) Sales and Services are stated at net of trade discounts.


44

8. Foreign Currency Transaction :

i) Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.

ii) All current assets and current liabilities in foreign currency as on Balance Sheet date are restated at the exchange rate prevailing on that date. Any gain or loss arising out of such conversion is charged to revenue.

9. Provisions and Contingent Liabilities :

AsperAccountingStandard29,‘Provisions,ContingentLiabilitiesandContingentAssets’,theCompanyrecognizes provisions only when it has a present obligation as a result of a past event, it is probable that anoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligationandwhenareliable estimate of the amount of the obligation can be made.

No Provision is recognized for : –

A. Anypossibleobligationthatarisesfrompasteventsandtheexistenceofwhichwillbeconfirmedonlyby the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or

B. Any present obligation that arises from past events but is not recognized because

a) Itisnotprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettle the obligation; or

b) A reliable estimate of the amount of obligation cannot be made. Such obligations are recorded as Contingent Liabilities. These are assessed periodically and only that part of the obligation for whichanoutflowofresourcesembodyingeconomicbenefitsisprobable,isprovidedfor,exceptin the extremely rare circumstances where no reliable estimate can be made. Contingent Assets arenotrecognizedinthefinancialstatementssincethismayresultintherecognitionofincomethat may never be realized.

10. Retirement Benefits :

Short-term Employee benefits:

Allemployeebenefitspayablewhollywithintwelvemonthsofrenderingtheserviceareclassifiedasshorttermemployeebenefits.Benefitssuchassalaries,performance incentives,etc.,arerecognizedasanexpenseattheundiscountedamountintheProfitandLossAccountoftheyearinwhichtheemployeerenders the related service.

Post Employment Benefits:

Defined Contribution Plans:

PaymentsmadetoadefinedcontributionplansuchasProvidentFundarechargedasanexpenseintheProfitandLossAccountastheyfalldue.

Defined Benefit Plans:

Company’s liability towards gratuity to past employees is determined using the projected unit credit methodwhichconsiderseachperiodofserviceasgivingrisetoanadditionalunitofbenefitentitlementandmeasureseachunitseparately tobuildup thefinalobligation.Pastservicesare recognizedonastraightlinebasisovertheaverageperioduntiltheamendedbenefitsbecomevested.Actuarialgainandlossesarerecognizedimmediately inthestatementofProfitandLossAccountasincomeorexpense.Obligationismeasuredatthepresentvalueofestimatedfuturecashflowsusingadiscountedratethatis determined by reference to market yields at the Balance Sheet date on Government Securities where the currency and terms of the Government Securities are consistent with the currency and estimate terms of thedefinedbenefitobligations.During thecurrentyearend, theaccrued liability towardssuch fundis provided on actuarial basis as on the Balance Sheet date as per revised Accounting Standard AS-15 ‘EmployeeBenefits’asissuedbythe Institute of Chartered Accountants of India.


45

Other Long Term Employee Benefits:

OtherLongTermEmployeeBenefitsi.e.,leaveencashmentisrecognisedasanexpenseintheProfitandLoss Account as and when it accrues. The Company determines the liability as per the actuarial valuation carried out as at the Balance Sheet date.

ActuarialgainsandlossesinrespectofsuchbenefitsarechargedtotheProfitandLossAccount

11. Miscellaneous Expenditure :

Miscellaneous expenses are written off over a period of 10 years.

SCHEDULE ‘16’

NOTES TO THE ACCOUNTS

1. Scheme of Arrangement & Compromise

DuringFY2009-10, theCompanyhas implementedSchemeofArrangementandCompromisewith itssecured creditors (“Scheme”) as per the sanction received from the High Court of Bombay, Goa Bench byorderdated15.01.2010.TheschemebecameeffectiveonfilingoftheCourtorderwiththeRegistrarofCompanies on 28.01.2010 (“Effective Date”). Accordingly, all secured loans have either been restructured asperOption–Iorfull&finalsettlementmadeasperOption–II.Effectonaccountofthesamehasbeenaccounted 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.

2. (a) Secured Loan

i) Convertible Zero Coupon 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 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.

ii) Term Loan

ICICI Bank Ltd: Payable in 28 equal quarterly installments starting from 15.01.2012.

IFCI Loan : Payable in 12 quarterly installments as under :-

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

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

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

(b) Unsecured Loan

Unsecured Loan represent interest free loan received from ABG Shipyard Ltd., Holding Company, in terms of the Scheme.

3. i) Balancesunder theheadcurrent liabilities,debtorsand loans&advancesaresubject toconfirmation.


46

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. 575.63lacs) due from certain companies underescrowagreementsagainstwhichtheoriginalsharecertificatesfor84,69,710equitysharesoftheface 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 31.03.2011 is Rs. 859.68 lacs based on the closing price of Rs. 10.15 per equity share of the face value of Rs. 2/- each fully paid up listed on the Bombay Stock Exchange Limited.

iii) The Company deposits amounting to Rs.91.23 lacs (Rs.123.95 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 the State Government, Directorate of Industries and Mines, Government of Goa vide its letter No. IND/Devi/I M/495/93/3543 dated 19.08.1997 for a period of12yearsw.e.f.01.01.1996onship-repairs.HowevertheSalesTaxOfficerhasdeniedtheexemptionandhas leviedsale taxat theapplicable rateson thesales turnover.TheCompanyhasfiledappealsbefore the Commissioner of Commercial Taxes (Appeals), Panjim, against sales tax liability of Rs. 837.91 lacsforthefinancialyearsfrom1995-96upto2004-05.Theappealfor1995-96hasbeenrejected.TheCompanyhasfiledasecondappealbeforetheAdministrativeTribunal.Theappealsaresub-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 Companyhadobtainedregistrationandfileditsreturnsforthequartersended30.06.2010and30.09.2010.TheCompanyhadsoughtthe75%benefitundertheGoaValueAddedTaxDeferment–cum-NetPresentValue Compulsory Payment Scheme, 2005 to which it is entitled. However, the Asst. Commissioner of CommercialTaxeshasdeniedthebenefitofthesaidschemeandpassedassessmentorder–cum-demandnoticeforfinancialyears2005-06,2006-07and2007-08forasumofRs.515.78lacs.TheCompanyhasfiledappealsbeforetheAddl.CommissionerofCommercialTaxes,Goaandtheappealsaresub-judice.

5. Employee Benefits:

a) DefinedContributionPlans-ProvidentFund:

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

b) DefinedBenefitPlans-Gratuity:

The Company makes annual contribution to the Employees’ Group Gratuity-cum-Life Assurance SchemeofMetlifeInsuranceCo.Ltd.,afundeddefinedbenefitplanforqualifyingemployees.Gratuityis 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 Company’s scheme whichever is more beneficialtotheemployees.

c) 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.

d) Amounts Recognized as Expense

i) DefinedContributionPlan

Employer’s Contribution to Provident Fund amounting to Rs. 64,01,083/- has been included in Schedule -11 under Contribution to Provident and Other Funds.


47

ii) DefinedBenefitPlan

TheamountsrecognizedintheCompany’sfinancialstatementsasattheyearendareasunder: Amount (Rs.)

Particulars As at 31st March, 2011

As at 31st March, 2010

1 Components of Employer ExpensesCurrent service cost 21,90,800 18,98,553Interest cost 15,09,686 10,08,674Expected return on plan assets 3,56,153 1,60,982Net Actuarial (gain)/loss to be recognized 45,82,500 29,06,082Total expense recognized in the Statement of Profit & LossAccount

79,26,833 56,52,422

2 Actual Contribution & Benefit PaymentsActualBenefitPayments 12,44,513 5,11,195Actual Contribution 10,00,000 NIL

3 Net Asset / (Liability) recognized in Balance SheetLiability at the end of the year 2,57,04,795 1,88,71,076Fair value of plan assets at the end of the year 16,87,649 17,80,763Net Liability recognized in the Balance Sheet 2,40,17,146 1,70,90,313

4 Change in Defined Benefit Obligations (DBO)PresentValueofDBOatBeginningofYear 1,88,71,076 1,34,48,980

Interest Cost 15,09,686 10,08,674Current Service Cost 21,90,800 18,98,553BenefitsPaid (12,44,513) (5,11,195)Actuarial (Gain)/ Losses on obligations 43,77,746 30,26,064PresentValueofDBOattheendofYear 2,57,04,795 1,88,71,076

5 Change in Fair Value of Plan Assets during the yearPlanned assets at beginning of the year 17,80763 20,11,089Expected return on planned assets 3,56,153 1,60,887Contributions 10,00,000 NILBenefitpaid (12,44,513) (5,11,195)Actuarial gain/(loss) on plan assets (2,04,754) 1,19,982Fair value of plan assets at the end of the year 16,87,649 17,80,763

6 Defined benefit plan – Gratuity AssumptionsDiscount rate 8.10% 8.00%Salary Escalation Rate 7.00% 7.00%Rate of return on plan assets 7.00% 8.00%

Theestimatesof futuresalary increases, considered inactuarial valuation, takeaccountof inflation, seniority,promotion and other relevant factors, such as supply and demand in the employment market.


48

6. i) The Company is having one Segment i.e. Ship Repair Activities. Hence, separate segment reporting as required under Accounting Standard -17 is not applicable during the current year.

ii) 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 profitandlossaccount.Thefutureminimumpaymentisasunder:

2010-11 2009-10

Not later than one year Rs. 416.05 lacs Rs. 351.08 lacs

Later than 1 yr. but less than 5 yrs. Rs. 1913.83 lacs Rs. 1769.44 lacs

More than 5 years Rs. 599.11 lacs Rs. 1617.78 lacs

iii) 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 undertheIncomeTaxActas,intheopinionofthemanagement,sufficientfuturetaxableincomewillnot be available for this purpose.

7. Related Party Disclosure :-

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

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

Subsidiary (Controlling stake) NilFellow Subsidiary Companies ABG Shipyard Singapore Pte Ltd.

Vipul Shipyard (Partnership Firm)Companies over which Directors/relatives are able to exercise SignificantInfluence:

ABG Shipyard Limited,(Shri. R. S. Nakra/Shri. Ashwani Kumar and Shri. Ashok Chitnis (common directors)

Key Management Personnel Cdr. Subhash Kumar Mutreja, Whole Time Director &ChiefExecutiveOfficer.

B. Transactions with Related Parties: (Rs. In lacs)

Particulars Holding Co. Subsidiaries/ controlling

stake

Fellow Subsidiaries

Co. over which

directors/ relatives

have control

Key Management Personnel

Unsecured Loan Received

ABG Shipyard Ltd. 0.00 (4500.00)

- - - -

Unsecured Loan Repayment


- - - -


49

Advances given/repaid


- - - -

ABG International Pvt. Ltd.

0.00 (3500.00)

- - - -

Advances taken/ refunded


- - - -

Ship Repair IncomeABG Shipyard Ltd. 387.55

(419.87)- - - -

Expenses

ABG Shipyard Ltd. (Service Charges)

0.00 (487.40)

- - - -

Remuneration – CDR. Subhash Kumar Mutreja

- - - - 40.26 (33.37)

Stage Payments received:

ABG Shipyard Ltd. (against repair of INS Sujata)

1272.00 (0.00)

- - - -

Notes: RelatedPartieshavebeenidentifiedbytheManagementandrelieduponbytheAuditors.Previousyear’sfiguresareshowninbrackets.

(Rupees in lacs)8. i) Managerial remuneration CurrentYear PreviousYear

Salary 20.90 18.67HRA 11.97 9.33Medical reimbursement 1.29 1.47Soft furnishingEx-Gratia

0.39 1.91

0.19-

PF 2.51 2.24LTA 1.29 1.47Gross Total 40.26 33.37

Note:- Whole Time Director & CEO has been re-appointed for a period of three (3) years w.e.f. 17.07.2010 at the AGM held on 25.09.2010. The Company has received the approval letter dated 28.03.2011 from the Ministry of Corporate Affairs, Government of India, for payment of remuneration upto Rs. 42,70,200/- per annum plus usual perks.


50

(Rupees in Lacs)

i) Travelling and Conveyance include: CurrentYear PreviousYear

Directors travelling 0.39 0.99

ii) (a) Other liabilities include, amount due to CEO.(b) Maximum balance due during the year.

NIL

NIL

NIL

2.64

9. Additional information in pursuance to Part II of Schedule VI to the Companies Act, 1956 to the extent applicableisstatedastaken,valuedandcertifiedbytheManagement.

a) Capacities : CurrentYear PreviousYear1. Registered and installed Dry-dock 60,000 DWT 60,000 DWT2. Wet Repair Jetties 4 (various) 4 (various)3. Actual production (being Ship Repair Unit) N.A. N. A.

b) Particulars of Closing Stocks : (Rupees in lacs)Items CurrentYear PreviousYear

Qty.(MT) Amount Qty.(MT) Amount Steel Plates 247.74 117.75 93.79 45.02

Electrodes Various 36.08 Various 19.71 Others Various 290.72 Various 245.07

Total 444.55 309.80 c) Particulars of imported and indigenous raw material, stores & spares consumed:

(Rupees in lacs) Particulars CurrentYear PreviousYear

Amount % Amount % i) Raw Material: Imported : 30.97 3.28 198.95 63.97 Indigenous: 913.02 96.72 112.05 36.03

Total 943.99 100.00 311.00 100.00 ii) Stores & Spares: Imported : 133.67 18.49 49.67 6.56 Indigenous: 589.17 81.51 707.54 93.44

Total 722.84 100.00 757.21 100.00 d) Earnings in Foreign Exchange :ShiprepairincomereceivedinforeignexchangeduringthecurrentfinancialyearisRs.2071.80

lacs (Rs. 2075.99 lacs).

10. Earning per share is computed on the following:- Particulars Current year Previous yeara) Profit/(Loss)fortheyear(Rsinlacs)b) No. of equity shares considered for basic

earning per share

1535.58

294644090

4978.26

294644090


51

11. CONTINGENT LIABILITIES :

i) Guarantees given by Banks: Rs. 398.25 lacs (Rs. 447.20 lacs).

ii) Letters of Credit outstanding: Rs. 29.38 Lacs (Rs. 121.52 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. TheCompanyhasfiledappeal&staypetitionagainstthesame.

v) ValueAddedTax(VAT)liabilityforthefinancialyearsfrom2005-06to2007-08isRs.515.78lacs.TheCompanyhasfiledappeal&staypetitionagainstthesame.

vi) ServiceTaxliabilityforthefinancialyear2001-02to2003-04isassessedatRs.712.18lacs.TheCentral 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 hasfiledanappeal in theHighCourt ofBombay,GoaBenchatPanaji.TheCompanyhascontested the appeal. The appeal has been transferred to the High court of Bombay at Mumbai to be heard alongwith other similar appeals.

vii) Legal cases pending against the Company (net of provision) is Rs. 6929.06 lacs (Rs. 3320.15 lacs).

12. 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 identifiedonthebasisof informationavailablewiththeCompany.Thishasbeenrelieduponbytheauditors.

13. In view of brought forward business losses and unabsorbed depreciation, income tax on account of Minimum Alternate Tax has been provided on the basis of relevant provisions of the Income Tax Act.

14. Thepreviousyearsfigureshavebeenregrouped,rearrangedwhereverconsiderednecessary.

As per our Report of even date attached.

For and on Behalf of the Board


Sd/-Vijay V. Kale

Partner

Place : MumbaiDate : 30th May, 2011



Sd/-J. C. F. Sequeira

V. P. (Corp. Affairs) & Company Secretary

Sd/-R.S. Nakra

Director

Sd/-Cdr. S. K. Mutreja (Retd)

Whole Time Director & CEO


52

INFORMATION REQUIRED AS PER PART IV OF SCHEDULE VITO THE COMPANIES ACT,1956

(BalanceSheetAbstractandCompany’sGeneralBusinessProfile)

REGISTRATION DETAILS

Registration No. : 2 4 6 4 State Code: 2 4

Balance Sheet Date : 3 1 0 3 1 1

CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS.THOUSAND)

Public issue : NIL Bonus Issue : NIL

Right issue : NIL Private Placement : NIL

POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. THOUSANDS )

Total liabilities 2 7 8 4 9 4 8 Total assets : 2 7 8 4 9 4 8

SOURCES OF FUNDS

Paid-up-Capital 5 8 9 2 8 8 Reserve & Surplus: 5 8 2 8 0 5

Secured Loan 1 5 1 2 8 5 5 Unsecured Loan 1 0 0 0 0 0

APPLICATION OF FUNDS

Net Fixed Assets &CWIP 8 0 3 5 0 2 Net Current Assets 9 1 7 7 2 5

Misc. Expenditure 2 4 9 6 Investments 5 0 0

Accumulated Losses 1 0 6 0 7 2 5

PERFORMANCE OF THE COMPANY (AMOUNT IN RS.THOUSANDS)

Turn-over 1 1 3 6 6 0 7 Earning per Share 0 . 5 2

Total Expenditure 9 8 3 1 5 9 Dividend Rate N I L

Profit/LossBeforeTax 1 5 3 4 4 8 Profit/LossAfterTax 1 5 3 4 4 8

GENERIC NAMES OF PRINCIPAL PRODUCTS /SERVICES OF THE COMPANY

Item Code 8 9 0 6

Product Description S H I P R E P A I R

As per our report of even date attached. For & On Behalf Of The Board For V. V. Kale & Co.Chartered Accountants

Firm Regd. No. 000897NSd/-


M. No.- 080821

Sd/-R. S. Nakra

Director




Wholetime Director & CEO

Sd/-J. C. F. Sequeira

VP (Corp Affairs) andCompany Secretary


WESTERN INDIA SHIPYARD LIMITEDREGD. OFFICE : P. B. NO. 21, MORMUGAO HARBOUR MORMUGAO, GOA - 403803

ADMISSION SLIP(TO BE PRESENTED AT THE ENTRANCE)

I /we hereby record my / our presence at the 19th Annual General Meeting of Western India Shipyard Limited on Friday,23rddayofSeptember,2011at11.00a.m.atitsRegisteredOfficeandShipyardatP.B.No.21,MormugaoHarbour, Mormugao, Goa - 403803.

PARTICULARS TO BE FILLED BY MEMBER / PROXY

NAME _________________________________________________

FOLIO NO. _______________________________

DPID. ___________________________________

Client ID _________________________________

NO. OF SHARES HELD ____________________

_____________________________________ Signature of the person attending

ADMISSION SLIPS WITHOUT THIS INFORMATION WILL NOT BE ACCEPTED.

WESTERN INDIA SHIPYARD LIMITEDREGD. OFFICE : P. B. NO. 21, MORMUGAO HARBOUR MORMUGAO, GOA - 403803

PROXY FORM

I/We _____________________________________________________________ of _________________being

member/members of M/s. Western India Shipyard Limited hereby appoint ________________________ of

___________________ or failing of him______________________________ of _________________________

_______ as my/our proxy to vote for me/us and on my/our behalf at the 19th Annual General Meeting to be held

on Friday, 23rd day of September, 2011 at 11.00 a.m. or at any adjournment thereof.

Signed this ____ day of _____________, 2011

Note : The proxy in order to be effective should be duly stamped, completed and must be deposited at the RegisteredOfficeoftheCompanynotlessthat48hoursbeforethetimeforholdingtheaforesaidmeeting.Theproxy need not be a member of the Company.

AffixRevenueStamp

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