1.1 Reserved Shares
The Convertible Share Warrant Holders have the option to convert their
share warrants into 2,05,00,000 Equity Shares (Previous Year
2,52,21,612) of Rs. 10/- each at the terms and conditions as referred in
note no. 4.2
1.2 Terms and Rights attached to Equity Shares
The Company has only one class of Equity Share having a par value of Rs.
10 per share. Each shareholder is eligible for one vote per share held.
In the event of liquidation of the Company, the equity shareholders
will be entitled to receive any of the remaining assets of the Company,
after distribution of all preferential amount. The distribution will be
in proportionate to the number of equity shares held by the
Note - 2
MONIES RECEIVED AGAINST CONVERTIBLE SHARE WARRANTS
2.1 2,52,21,612 Convertible Share Warrants were issued by the Company
in the Financial Year 2010-11 on preferential basis to one of the
promoter Company. Subsequently on the due date warrant holder didn''t
exercise the option against said warrants, accordingly Rs. 6,254.96 Lacs
being the amount received against these Convertible Share Warrants has
been forfeited by the Company and credited to the Capital Reserve.
2.2 As approved by the Shareholders in the Annual General Meeting held
on October 5, 2011, the Company has alloted 1,05,00,000 Convertible
Warrants to individual investors and 1,00,00,000 Convertible Warrants
to a promoter Group Company @ Rs. 78 each. Each Warrant is convertible
into one fully paid-up equity share of the Company of Rs. 10 each at a
premium of Rs. 68 per equity share at any time prior to 18 months from
the date of allotment of warrants. Against the above warrants the
Company has received Rs. 3,997.50 Lacs being 25% of the total
consideration as at March 31, 2012, which has been fully utilised for
the purpose for which they have been issued.
3.1 Rupee Term loan from Banks and Financial Institutions referred to
above and Rs. 28,479.48 Lacs included in current maturities of long term
debt in note no. 10 are secured as under:
i) Rs. 101,456.38 Lacs by way of First charge & mortgage on all the
immovable properties, both present & future & hypothecation of all
movable properties, both present and future.
ii) Rs. 5,500 Lacs by way of subservient charge on Fixed Assets, both
present & future.
iii) Rs. 11,672.00 Lacs by way of subservient charge on Fixed Assets and
iv) Rs. 10,000 Lacs by way of first pari-passu charge on entire moveable
and immoveable properties, both present & future, second pari-passu
charge on Current Assets of the Company.
3.2 Repayment Terms:
i) The above Rupee Term Loans including Rs. 28,479.48 Lacs included in
current maturities of Long Term Debts carry an interest rate ranging
from 11.00% to 14.25%. Out of the above Rupee Term Loan Rs. 44,018.63
Lacs are repayable in 40 equal quarterly instalments commencing from
1st April 2010 to 1st January 2020, Rs. 20,535 Lacs in 40 quarterly
structured instalments commencing from 31 August 2005 to 28th February
2017, Rs. 4,500 Lacs in 40 equal quarterly instalments commencing from
1st October 2009 to 1st July 2019, Rs. 30,777.75 Lacs in 36 equal
quarterly instalments commencing from 1st April 2011 to 1st January
2020, Rs. 1,625 Lacs in 32 quarterly equal instalments commencing from
1st October 2010 to 1st July 2018 , Rs. 5,500 Lacs in 4 quarterly equal
instalments commencing from 29th September 2012 to 29th June 2013, Rs.
11,672 Lacs in 6 quarterly equal instalments commencing from 1st July
2012 to 1st December 2013 and Rs. 10,000 Lacs in 20 equal half yearly
instalments commencing from 20th February 2015 to 31 August 2024.
3.3 All Rupee Term Loans are guaranteed by a promoter group Company and
rupee Term Loan of Rs. 1,11,456.38 Lacs are further secured by pledge of
133,999,994 shares of the Company held by the promoters.
3.4 Rupee Term Loans of Rs. 97,850.63 Lacs (Previous Year: Rs. 79,773.49
Lacs ) are also guaranteed by some of the directors in their personal
3.5 Lenders in respect of secured loans aggregating to Rs. 1,01,456.38
Lacs (Previous Year: Rs. 1,08,237.83 Lacs) have right to convert the
loans at their option into fully paid-up equity shares of the Company
if the Company is in default for a period more than what is specified
in the respective loan agreements.
3.6 Vehicle Loans referred to above are secured by the hypothecation of
the specific vehicles financed. The loans are repayable in monthly
equal instalments (including interest) as per repayment schedule
starting from 1st May, 2010 to 1st April, 2015.
3.7 As on March 31, 2012, the Company has overdue ofRs. 1,437.59 Lacs and
Rs. 948.77 Lacs being the loan amount and interest thereon respectively.
4.1 Secured Loans from Banks referred to above includes:
i) Rs. 5,000 Lacs secured by way of first charge on the current assets of
the Company and second charge on Fixed Assets of the Company.
ii) Rs. 20,000 Lacs secured by way of subservient charge on fixed assets
and current assets of the Company both present and future.
iii) Rs. 20,000 Lacs secured by way of first pari-passu charge on fixed
assets both present and future of the Company with existing lenders.
iv) Rs. 32,355.30 Lacs secured by way of first pari-passu charge on
entire current assets of the Company, second pari-passu charge on the
entire fixed assets of the Company.
v) Rs. 5,482.76 Lacs secured by way of hypothecation of stock and
vi) Rs. 2,529.88 Lacs secured by way of hypothecation of entire stock of
raw materials, stock in process, finished goods, consumables, stores
and spares, inward RR''s/GR''s receivables and all other current assets
of the borrower on pari-passu basis with other consortium banks.
4.2 Secured loans of Rs. 42,500.21 Lacs are further guaranteed by a
promoter group Company and some of the directors in their personal
4.3 As on March 31, 2012, the Company has overdue of Rs. 4,561.05 Lacs
and Rs. 417.90 Lacs being the loan amount and interest thereon
4.4 In accordance with the Accounting Standard (AS - 28) on
Impairment of Assets the Management during the year carried out an
exercise of identifying the assets that may have been impaired in
respect of each cash generating unit. On the basis of this review
carried out by the Management, there was no impairment loss on Fixed
Assets during the year.
5.1 Cenvat / VAT recoverable represents the Cenvat/VAT/Central Sales
Tax paid on the purchase of goods and services for the project and
operations. The Company has been legally advised that such amounts are
recoverable. Any unrealized amounts will be added back to the cost of
the project or charged off to the statement of Profit and Loss, as the
case may be in the year of settlement.
5.2 Presently the Company is liable to pay Minimum Alternate Tax (MAT)
under section 115JB of the Income Tax Act, 1961 (the Act) and the
amount paid as MAT is allowed to be carried forward for being set off
against the future tax liabilities computed in accordance with the
provisions of the Act, other than section 115JB, in next ten years.
Based on the future projection of the performances, the Company will be
liable to pay the Income Tax as per provisions, other than under
section 115JB, of the Act. Accordingly as advised in Guidance Note on
Accounting for credit available in respect of Minimum Alternate Tax
under the Income Tax Act, 1961 issued by The Institute of Chartered
Accountants of India, Rs. 1,471.30 Lacs (Previous Year: Rs. 1,127.65 Lacs)
being the excess of tax payable under section 115JB of the Act over tax
payable as per the provisions other than section 115JB of the Act has
been considered as MAT credit entitlement and credited to statement of
Profit and Loss. The aggregate MAT credit entitlement available to the
Company as on March 31, 2012 isRs. 2,091.44 Lacs. (Previous Year: Rs.
1,127.65 Lacs) net of reversal of excess provision of Rs. 507.51 Lacs
made in previous year.
6.1 As per the Revised Guidelines for the Shipbuilding Subsidy issued
by the Government of India on 25th March 2009, the Company is eligible
for subsidy at the rate of 30% of the contract price, in respect of the
export order received for vessels for which the contracts with the
customers were signed on or before 14th August 2007. Accordingly
Government Subsidy of Rs. 12,753.54 Lacs for the year ended March 31,
2012 (Previous Year Rs. 7,494.13 Lacs) has been recognised as revenue
including in respect of Ships under construction on proportionate
6.2 The Company has order for building several panamax sister vessels.
The Company has initiated arbitration proceedings as per terms of
contract for four panamax vessels & subsequently, the Company has
received alleged cancellation notices for these vessels. The Company is
of the view that it has a strong case. However, since most of the
panamax vessels are sister vessels, the Company can deliver these
vessels against orders for balance panamax vessels. Therefore the
Company continues to recognise the revenue on these vessels and during
the year the Company has recognised revenue of Rs. 29,047.63 Lacs
(Previous Year: Rs. 9,792.32 Lacs) on these vessels and subsidy of Rs.
8,714.29 Lacs (Previous Year: Rs. 2,937.70 Lacs).
6.3 Employee Benefits
As per Accounting Standard 15 Employee Benefits, the disclosure of
employee benefits as defined in the accounting standards are given
7.1 CONTINGENT LIABILITIES
(No Cash Outflow is expected except stated otherwise)
Rs. in lacs
a) Guarantees given by Company''s Bankers
i) Refund Bank Guarantees given to
customers 14,815.31 17,539.84
(Net of liabilities accounted for)
ii) Other Bank Guarantees 22,842.57 9,065.85
(Bank Guarantees are provided under
Contractual/ Legal obligations.)
b) Demands not acknowledged as Debts
i) Income Tax 1,116.81 397.32
(The Company has deposited under
protest Rs. 321.51 Lacs
(Previous Year Rs. 288.67 Lacs)
out of total demand)
ii) Service Tax and Excise Duty 71.83 58.45
(Relates to disallowance of CENVAT
Credit taken by the Company)
iii) Other Claims 220.35 192.10
(Relates to claims of suppliers and
demand raised by vendor for
Service Tax etc.)
c) Letters of Credit opened in
favour of suppliers 1,308.97 23,388.51
(Cash Flow is expected on receipt
of materials from Suppliers)
a) Estimated amount of contracts
remaining to be executed on Capital 91,862.47 3,377.20
Accounts and not provided for
(Net of Advances).
(Cash flow is expected on execution of
such Capital Contracts on
b) Other Commitments 159.24 -
(for investment in an Associate)
Note - 8
In the opinion of the management, Current Assets, Loans and Advances
are of the value stated, if realized in the ordinary course of
Note - 9
The Company has issued, a Bond cum legal undertaking for Rs. 44,400 Lacs
(Previous Year: Rs. 24,400 Lacs) in favour of President of India acting
through Development Commissioner of Kandla Special Economic Zone for
setting up a SEZ unit for availing exemption from payment of duties,
taxes or cess or drawback and concession etc, a General Bond in favour
of the President of India for a sum of Rs. 15,300 Lacs (Previous Year : Rs.
15,300 Lacs) as Security for compliance of applicable provisions of the
Customs Act, 1962 and the Excise Act, 1944 for EOU unit.
Note - 10
The Company has received thirteen show cause notices in its 100% EOU
unit from the Office of the Commissioner of Central Excise, Bhavnagar
and Directorate of Revenue Intelligence which mainly relates to wrong
availment of Cenvat/ Customs Duty/Service Tax Credit availed on
inputs/services used for Construction of Dry Dock and Goliath Cranes
and non-submission of original evidences/documents and some procedural
non-compliances. The Company does not for see any losses on this
Note - 11
On October 12, 2011 the Income Tax Authorities carried out search and
seizure operations at the Company premises. Given the information
provided so far and the investigation carried out at the time of this
operation, the Company believes that there will be no material tax
liability for the year. The amount of tax liability, if any shall be
determined upon completion of the process by the Tax Authorities.
Note - 12 Segment Reporting
A. Segment information as per Accounting Standard - 17 on Segment
Information provided in respect of revenue items for the year ended
March 31, 2012 and in respect of assets / liabilities as at March 31,
B Segment Identification, Reportable Segments and definition of each
I Primary / Secendary Segment Reporting Format:
The risk - return profile of the Company''s business is determined
predominantly by the nature of its products. Accordingly, the business
segment constitute the Primary Segments for disclosure of segment
II Reportable Segments:
Segments have been identified and reported taking into account the
differing risks and returns, nature of products, the organisational
structure and the internal reporting system of the Company.
III Segment Composition:
Shipbuilding and Repairs comprises of Ship-Building and Repair
activities carried out by the Company at or from its Shipyard located
at Pipavav, Gujarat.
Trading includes steel trading activities carried out by the Company.
Note - 13
Related Party Disclosures
a) List of Related parties
1. Subsidiary Company
E Complex Private Limited
SKIL Infrastructure Limited
Conceptia Software Technologies Pvt. Ltd.
3. Key Managerial Personnel
Mr. Nikhil P. Gandhi
Mr. Bhavesh P. Gandhi
Mr. M. Jitendran (upto September 2011)
Mr. Jigar Shah
4. Enterprises in which key managerial personnel or their relatives
are able to exercise significant influence (Other Related Parties)
Awaita Properties Private Limited
Grevek Investments and Finance Private Limited
Note - 14
Disclosure pursuant to Accounting Standard - 7 (AS-7 Accounting for
Construction Contracts) as notified by Companies Accounting Standards
Note - 15
Previous year figures have been reworked, regrouped, rearranged and
reclassified, wherever necessary to make them comparable with those of
the current year.