ABG Shipyard Limited Annual Report

Transcription

1

2

3 ABG Shipyard Limited Annual Report CORPORATE INFORMATION Corporate Identi cation Number (CIN) L61200GJ1985PLC Board of Directors Mr. Rishi Agarwal Chairman Mr. Syed Abdi Managing Director and CEO Mr. Dhananjay Datar Executive Director (upto ) Mr. S. Muthuswamy Executive Director Mr. Ashwani Kumar Independent Director Mrs. Ranjitha Godbole Nominee Director (IDBI Bank) Mr. Sushil Agarwal Independent Director Mr. Ravi Nevatia Independent Director Auditors M/s. Nisar & Kumar Chartered Accountants, A-17, Everest Building, 156, Tardeo Road Mumbai Bankers Andhra Bank Bank of Baroda Bank of India Indian Overseas Bank Laxmi Vilas Bank Ltd. Oriental Bank of Commerce 31 st Annual General Meeting Day : Monday Date : 19 th September, 2016 Time : A.M. Venue : At the Registered Of ce of the Company Near Magdalla Port, Dumas Road, Surat , Gujarat Contents Page No. Notice of AGM 2 Directors Report 11 Management Discussion & Analysis 19 Corporate Governance Report 32 Independent Auditor s Report 49 Balance Sheet 56 Statement of Pro t and Loss 57 Cash Flow Statement 58 Notes forming part of the Financial Statements 59 Attendance Slip 85 Proxy Form 87 Canara Bank Central Bank of India Dena Bank Deutsche Bank Development Credit Bank Ltd. Export- Import Bank of India ICICI Bank Limited IDBI Bank IFCI Limited Indian Bank Punjab and Sindh Bank Punjab National Bank SICOM Limited The South Indian Bank Ltd. Standard Chartered Bank State Bank of India State Bank of Patiala State Bank of Travancore Syndicate Bank Yes Bank Limited Registered Of ce Near Magdalla Port, Dumas Road, Surat , Gujarat Tele: , Fax: Website: shipyard@abgindia.com Corporate Of ce Registrar & Share Transfer Agent Link Intime India Private Ltd. C-13, Pannalal Silk Mills Compound, L.B.S Marg, Bhandup West, Mumbai Tele : , Fax : rnt.helpdesk@linkintime.co.in 2 nd Floor, Bhupati Chambers 13, Mathew Road, Mumbai Phone: Fax : Website: shipyard@abgindia.com 1

4 ABG Shipyard Limited Annual Report NOTICE Notice is hereby given that the 31 st Annual General Meeting of the Members of ABG Shipyard Limited will be held on Monday, 19 th September, 2016 at 11:30 AM at the Registered Office of the Company at Near Magdala Port, Dumas Road, Surat , Gujarat, to transact the following business: Ordinary Business: 1. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended March 31, 2016, together with the Reports of the Board of Directors and the Auditor s Report thereon. 2. To appoint a Director in place of Mr. S. Muthuswamy (DIN ), who retires by rotation and being eligible, offers himself for re-appointment. 3. To appoint Auditors and x their remuneration and for the purpose to pass the following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to the provision of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time and upon recommendations of the Audit Committee, M/s. GMJ & Co., Chartered Accountants, (Firm Registration No W) be and are hereby appointed as Auditors of the Company to hold of ce from the conclusion of 31 st Annual General Meeting till the conclusion of 36 th Annual General Meeting of the Company, subject to rati cation of their appointment by members at every Annual General Meeting, at such remuneration as may be xed by Board of Directors/ Audit Committee of the Company. Special Business: 4. To consider and, if thought t, to pass with or without modi cation(s), the following resolution as a Special Resolution:- RESOLVED THAT In supersession to the Special Resolution passed by Members of the Company at the 29 th Annual General Meeting held on 31st September 2014 and pursuant to the provisions of Section 41, 42, 62 and 71 and other applicable provisions, if any, of the Companies Act, 2013, the provisions of Securities and Exchange Board Of India (Issue Of Capital And Disclosure Requirements) Regulations, 2009 (the SEBI ICDR Regulations ), the provisions of the Foreign Exchange Management Act, 1999, and rules and regulations made hereunder, including the Foreign Exchange management (Transfer and Issue of Securities by a person Resident outside India) Regulation, 2000, if applicable, the provisions of Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and subject to any other applicable law or laws, rules and regulations (including any amendment thereto or reenactment thereto or reenactment thereof for the time being in force) and subject to enabling provisions in the Memorandum and Articles of Association of the Company and Listing Agreements, entered into by the Company with the Stock Exchanges where the shares of the company are listed and subject to any approval, consent, permission and/or sanction of the members of the Company by way of special resolution, Government of India, Reserve Bank of India, Stock Exchanges, Registrar of Companies, Securities and Exchange Board of India and /or any other competent authorities, institutions or bodies, within or outside India, and subject to such conditions and modi cations as may be prescribed by any of them while granting such approvals, permissions, consents and sanctions and which may be agreed by the Board of Directors (hereinafter referred to as Board which term shall include any committee thereof, whether constituted or to be constituted), approval of the Company is hereby accorded to the Board to create, offer, issue and allot in one or more tranch(es), in the course of domestic and / or international offerings and /or Quali ed Institutional Placements ( QIP ), with or without an over allotment/ green shoe issue option, in one or more foreign markets or domestic markets, to domestic institutions, foreign institutions, non-resident Indians, Indian public, companies, corporate bodies, mutual funds, banks, insurance companies, pension funds, individuals, quali ed institutional buyers or other persons or entities, whether shareholders of the Company or not, through a public issue and/or on a private placement basis and/or quali ed institutional placement within the meaning of Chapter VIII of the SEBI ICDR Regulations and /or preferential issue, promoters contribution into equity and/or other kind of public issue and /or private placement or through a combination of the foregoing as may be permitted under applicable law from time to time, with or without an overallotment/ green shoe option, equity share, secured or unsecured debentures, bonds or any other securities whether convertible into equity share or not, including, but not limited to, Foreign Currency Convertible Bonds ( FCCBs ), Optionally Convertible Debentures ( OCD ), Bonds with share warranted attached, Global Depositary Receipts ( GDRs ), American Depositary Receipts ( ADRs ) or any other equity related instrument of the Company or a combination of the foregoing including but not limited to a combination of equity shares with bonds and/or any other securities whether convertible into equity shares or not (hereinafter referred to as securities ) for a value of upto Rs. 2,000/- crores (Rupees Two Thousand Crores), whether to be listed on any stock exchange inside India or any international stock exchanges outside India, through an offer document and/or prospectus and/or offer letter, and/or offering circular, and/or on public and/or private or preferential basis, whether rupee denominated in foreign currency at such time or times, at such price or prices in such manner and on such terms and conditions including security, rate of interest etc, as may be decided by and deemed appropriate by the board as per applicable law, including the discretion to determine the categories of Investors to whom the offer, issue and allotment shall be made, considering, the prevailing market conditions and other relevant factors wherever necessary in consultation with its advisors, as the board in its absolute discretion may deem t and appropriate. 2

5 ABG Shipyard Limited Annual Report RESOLVED FURTHER THAT in addition to all applicable Indian laws, the securities issued in pursuance of this resolution shall also be governed by all applicable laws and regulations of any jurisdiction outside India where they are listed or that may in any other manner apply to such securities or provided in the terms of their issue. RESOLVED FURTHER THAT any securities that are not subscribed in issues mentioned above, may be disposed off by the board in its absolute discretion in such manner, as the board may deem t and as permissible by the law. RESOLVED FURTHER THAT in case of a Quali ed Institutional Placement pursuant to Chapter VIII of the SEBI ICDR Regulations, the allotment of speci ed securities shall only be to Quali ed Institutional Buyers within the meaning of Chapter VIII and the relevant date for the determination of the price of the equity shares to be issued or issued pursuant to conversion, shall be the date on which the board decides to open the issue of securities or such other time as may be allowed by SEBI ICDR Regulations from time to time and allotment of speci ed securities shall be completed within twelve months from the date of this resolution. RESOLVED FURTHER THAT in case of an issuance of FCCBs/ADRs/GDRs, the relevant date for the determination of the issue price of the securities offered, shall be determined in accordance with the Issue of Foreign Currency Convertible Bonds and Ordinary shares (through Depository Receipt Mechanism) Scheme, 1993 as may be amended from time to time. RESOLVED FURTHER THAT the issue of Securities shall be subject to the following terms and conditions (a) (b) The Securities shall be subject to the provisions of Memorandum and Articles of Association of the Company and in accordance with the terms of the issue; and The number and/or price of the Securities shall be appropriately adjusted for corporate actions such as bonus issue, rights issue, stock split, merger, demerger, transfer of undertaking, sale of division or any such capital or corporate restructuring. RESOLVED FURTHER THAT for the purpose of giving effect to the above resolutions, the Board be and is hereby authorized to do all such acts, deeds, matters and things including but not limited to determining the form and manner of the issue, including the class of investors to whom the Securities are to be issued and allotted, number of Securities to be allotted, execution of various transaction documents, creation of mortgage/ charge in accordance with Section 180(1)(a) of the Act, in respect of any Securities as may be required either on pari-passu basis or otherwise, as it may in its absolute discretion deem t and to settle all questions, dif culties or doubts that may arise in regard to the issue, offer or allotment of Securities and utilization of the issue proceeds as it may in its absolute discretion deem t without being required to seek any further consent or approval of the members or otherwise to the end and intent that the members shall be deemed to have given their approval thereto expressly by the authority of this resolution. RESOLVED FURTHER THAT the Board be and is hereby authorized to form a committee or delegate all or any of its powers to any Directors (s) or Committee of Directors or other persons authorized by the Board to give effect to the aforesaid resolutions. RESOLVED FURTHER THAT subject to the applicable laws, the Board and/or the Committee authorized by the Board be and is hereby authorized to do such acts, deeds and things as the Boards in its absolute discretion deems necessary or desirable in connection with the issue of the securities, including, without limitation of the following; (a) (b) (c) (d) (e) (f) (g) (h) Decide the date for the opening of the issue of securities Decide the price band for the issue Finalization of the Issue Price Finalization of the allotment of the securities on the basis of the subscriptions received. Finalization of, signing of and arrangement for the submission of the preliminary and nal offering circulars/prospectus(es)/ offer document(s), and any amendments and supplements thereto, along with supporting papers needed to be led for seeking listing approval with any applicable government and regulatory authorities, institutions or bodies as may be required; Deciding the pricing and terms of the securities, and all other related matters, including taking any action on two-way fungibility for conversion of underlying equity shares into FCCBs/ GDRs/ ADRs, as per applicable laws, regulations or guidelines; Appoint, in its absolute discretion, managers (including lead manager), Investment Bankers, Merchant Bankers, underwriters, guarantors, nancial and /or legal advisors, depositories, custodians, principal paying/transfer/conversion agents, listing agents, registrars, trustees and all other agencies, whether in India or abroad, entering into or execution of all such agreements/ arrangements/ MoUs/ documents with any such agencies, in connection with the proposed offering of the securities; Approval of the Deposit Agreements(s), the Purchase/Underwriting Agreement(s), the Trust Deed(s), the Indenture(s), the Master/Global GRDs/ADRs/FCCBs/other securities, letters of allotment, listing application, engagement letter(s), memoranda of understanding and any other agreements of documents, as may be necessary in connection with the issue/offering (including amending, varying or modifying the same, as may be considered desirable or expedient), in accordance with all applicable laws, rules, regulations and guidelines; 3

6 ABG Shipyard Limited Annual Report (i) Settle all questions, dif culties or doubts that may arise in regards to the issue, offer or allotment of securities and utilization of the proceeds of the issue in such manner and to do all such acts, deeds, matters and things as it may in its absolute discretion deem t. RESOLVED FURTHER THAT the Board and/or the Committee authorized by the Board be and is hereby authorized to accept any modi cations in the proposals as may be required by the authorities involved in such issues but subject to such conditions as the SEBI/GoI/RBI or such other appropriate authorities may impose at the time of their approval and as agreed to by the Board; RESOLVED FURTHER THAT without prejudice to the generality of the foregoing, issue of the securities may be done upon all or any terms or combination of terms in accordance with international practices relating to the payment of interest, additional interest, premium on redemption, prepayment or any other debt service payments and all such terms as are provided customarily in an issue of securities of this nature. RESOLVED FURTHUR THAT The Company may enter into any arrangement with any agency or body authorized by the Company for the issue off depository receipts representing the underlying equity shares issued by the Company with such features and attributes as are prevalent in international capital markets for instruments of this nature and to provide for the tradability of free transferability thereof as per international practices and regulations (including listing on one or more stock exchange(s) inside or outside India) and under the forms and practices prevalent in the international markets. 5. To consider and, if thought t, to pass with or without modi cation(s), the following resolution as a Special Resolution:- RESOLVED THAT pursuant to the provisions of Section 42, 62 and other applicable provisions, if any, of the Companies Act, 2013, the provisions of Securities and Exchange Board Of India (Issue Of Capital And Disclosure Requirements) Regulations, 2009 (the SEBI ICDR Regulations ), and subject to any other applicable law or laws, rules and regulations (including any amendment thereto or reenactment thereto or reenactment thereof for the time being in force) and subject to enabling provisions in the Memorandum and Articles of Association of the Company, SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Listing Agreements, entered into by the Company with the Stock Exchanges where the shares of the company are listed and subject to any approval, consent, permission, and/or sanction of the members of the Company by way of special resolution, Government of India, Reserve Bank of India, Stock Exchanges, Registrar of Companies, Securities and Exchange Board of India and /or any other competent authorities, institutions or bodies, within or outside India, and subject to such conditions and modi cations as may be prescribed by any of them while granting such approvals, permissions, consents and sanctions and which may be agreed by the Board of Directors (hereinafter referred to as Board which term shall include any committee thereof, whether constituted or to be constituted), approval of the Company be and is hereby accorded to the Board for allotment of such number of Equity Shares of the face value of Rs. 10/- each (Rupees Ten each) on preferential basis to the Promoters (hereinafter referred to as Promotors which term shall include individuals, person acting in concert, bodies corporate and Promotors Group) of the Company which shall not exceed Rs. 300 Crores the amount of the Promoter s contribution outstanding at a price determined as per SEBI ICDR Regulations as may be amended from time to time and Rs (rate of conversion of 0.01% Compulsorily Convertible Preference Shares into Equity Shares allotted to CDR lenders) whichever is higher on exercise of the option to convert the whole or part of the outstanding promoter s contribution in the Company. RESOLVED FURTHER THAT the equity shares to be so allotted to the Promoters pursuant to the exercise of the right of conversion shall rank pari passu in all respects with the existing equity shares in the Company and be listed on the stock exchange(s) where the existing equity shares of the Company are listed. RESOLVED FURTHER THAT for the purpose of giving effect to the above resolutions, the Board be and is hereby authorized to do all such acts, deeds, matters and things as may be necessary and desirable or expedient in relation thereto. RESOLVED FURTHER THAT the Board be and is hereby authorized to form a committee or delegate all or any of its powers to any Directors (s) or Committee of Directors or other persons authorized by the Board to give effect to the aforesaid resolutions. 6. To consider and, if thought t, to pass with or without modi cation(s), the following resolution as a Special Resolution:- RESOLVED THAT pursuant to the provisions of Sections 42, 62(1)(c) and other applicable provisions, if any, of the Companies Act, 2013 and all other applicable laws (including any statutory modi cation(s) or re-enactment there of for the time being in force) and in accordance with the provisions of the memorandum of association ( Memorandum of Association ) and articles of association ( Articles of Association ) of the Company, the listing agreements entered into by the Company with the stock exchanges, where the shares of the Company are listed, provisions of the Master Circular on Prudential norms on Income Recognition, Asset Classi cation and Provisioning pertaining to Advances bearing reference no. DBR.No.BP. BC.2/ / dated July 1, 2015 ( RBI Circular ) as issued by the Reserve Bank of India ( RBI ) (including any amendments there to), the applicable rules, noti cations, guidelines issued by various authorities including but not limited to the Government of India, the Securities and Exchange Board of India( SEBI ),the RBI and subject to the approvals, permissions, sanctions and consents as may be necessary from such regulatory and other appropriate authorities (including but not limited to the SEBI, RBI, the Government of India, Joint Lenders Forum ( JLF ), etc.) and subject to such conditions and modi cations as may be prescribed by any of them while granting such approvals, permissions, sanctions and consents and all such other approvals (including approvals of the existing lenders of the Company), which may be agreed to by the Board of Directors of the Company (hereinafter referred to as the Board, which term shall be deemed to include any committee which the Board has constituted or may constitute to exercise its powers, including the powers conferred by this resolution) and pursuant to the invocation of the provisions of strategic debt restructuring by the JLF (as approved in the meeting of the JLF held on December 23, 2015 in terms of the RBI Circular, the consent of the Company be and is hereby accorded to the Board to allot, in one or more tranches such number of equity shares of face value of Rs. 10/- (Indian Rupees Ten) each, fully paid up, at a price per equity share, as determined in accordance with the RBI Circular and as more particularly set out in the explanatory statement 4

7 ABG Shipyard Limited Annual Report attached hereto, to the lenders of the Company ( Lenders ) on preferential basis, in such manner and on such other terms and conditions, as the Board may, in its absolute discretion, think t, as may be mutually agreed between the Company and the JLF, so that all or part of the outstanding amounts to the extent of Rs. 16, Crores (Indian Rupees Sixteen Thousand Three Hundred Ninety Seven and Fifty Lakhs only ) payable to such Lenders by the Company is converted into equity shares of the Company resulting in the Lenders holding to be more than 51% in accordance with the RBI circular bearing reference DBR.BP.BC.No.101/ / dated June 08, 2015 and any amendments thereto ( RBI SDR Circular ). RESOLVED FURTHER THAT the equity shares to be so allotted to the Lenders pursuant to the exercise of the right of conversion shall rank pari passu in all respects with the existing equity shares in the Company and be listed on the stock exchange(s) where the existing equity shares of the Company are listed. RESOLVED FURTHER THAT for the purpose of giving effect to the aforesaid resolution(s), the Board be and is hereby authorised on behalf of the Company to take all actions and to do all such acts, deeds, matters and things and perform such actions as it may, in its absolute discretion, deem necessary, proper or desirable for such purpose, including to seek listing, apply for in principle listing approval of the equity shares to be issued and allotted to the Lenders upon conversion of their outstanding due amounts (or part thereof) and to modify, accept and give effect to any modi cations in the terms and conditions of the issue(s) as may be required by the statutory, regulatory and other appropriate authorities (including but not limited to the SEBI, RBI, JLF, etc.) and such other approvals (including approvals of the existing lenders of the Company) and as may be agreed by the Board, and to settle all questions, dif culties or doubts that may arise in the proposed issue, pricing of the issue, offer and allotment of the equity shares and to execute all such deeds, documents, writings, agreements, applications, including but not limited to share subscription agreements, in connection with the proposed issue as the Board may in its absolute discretion deem necessary or desirable without being required to seek any further consent or approval of the shareholders or otherwise with the intent that the shareholders shall be deemed to have given their approval thereto expressly by the authority of this resolution. RESOLVED FURTHER THAT pursuant to Sections 42, 62(1)(c) and all other applicable provisions, if any, of the Companies Act, 2013 and Rule 14 of Companies (Prospectus and Allotment of Securities) Rules, 2014 (including any statutory modi cation(s) or re-enactments thereof for the time being in force), Memorandum and Articles of Association of the Company, listing agreement entered into by the Company with stock exchanges where the Company s shares are listed and in accordance with the provisions of therbi Circular, Securities and Exchange Board of India (Issue of Capital and Disclosures Requirements) Regulations, 2009 ( ICDR Regulations ), and other applicable regulations of the SEBI, if any (for the time being in force) as may be applicable to the preferential allotment of equity shares, the applicable rules, noti cations, guidelines issued by various authorities including but not limited to the Government of India, SEBI, RBI and other competent authorities, and subject to the approval(s), consent(s), permission(s) and/or sanction(s) as may be required from the Central Government, RBI, SEBI and/or from any other appropriate authority, consent of the shareholders of the Company be and is hereby accorded to the Board, which term shall be deemed to include any committee which the Board has constituted or may constitute to exercise it s powers, including the powers conferred by this resolution to allot in one or more tranches to attain minimum 51% equity shares of face value of Rs. 10/- each on preferential basis, in such manner and on such price, terms and conditions as may be determined by the Board in accordance with the RBI Circular, the RBI SDR Circular, and other applicable law. RESOLVED FURTHER THAT the equity shares proposed to be allotted in terms of this resolution shall be subject to the following: a. Allotment shall only be made in dematerialized form; b. The reference date ( Reference Date ) for the purpose of determining the minimum price of the equity shares proposed to be allotted to the above mentioned allottee(s) is 23 rd December, 2015 i.e. being the date on which the JLF decided to undertake the strategic debt restructuring scheme ( SDR Scheme ); and c. The equity shares proposed to be issued shall rank pari-passu with the existing equity shares of the Company in all respects and that the equity shares so allotted during the nancial year shall be entitled to the dividend declared, if any, including other corporate bene ts, if any, for which the book closure or the record date falls subsequent to the allotment of equity shares. RESOLVED FURTHER THAT for the purpose of giving effect to the aforesaid resolutions, the Board be and is hereby authorised on behalf of the Company to take all actions and to do all such acts, deeds, matters and things and perform such actions as it may, in its absolute discretion, deem necessary, proper or desirable for such purpose, including to seek listing, apply for in principle listing approval of the equity shares to be allotted to the above mentioned allottee(s) upon conversion of all or part of their outstanding loan amounts and to modify, accept and give effect to any modi cations in the terms and conditions of the issue(s) as may be they deem t. RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers herein conferred, to any committee of directors or any one or more directors/ key managerial personnel/ of cers of the Company. By Order of the Board of Directors Date: 11 th August, 2016 Place: Mumbai Ashish Pandey Company Secretary 5

8 ABG Shipyard Limited Annual Report NOTES: 1. A Member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a member of the Company. A person can act as proxy on behalf of members not exceeding fty (50) and holding in the aggregate not more than ten percent (10%) of the total share capital of the Company. A member holding more than ten percent (10%) of the total share capital of the Company may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder. The Instrument of proxies in order to be effective should be duly completed, stamped and signed and must be deposited at the Registered Of ce of the Company not less than 48 hours before the meeting. 2. An Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 relating to the Special Businesses to be transacted at the Annual General Meeting is annexed hereto. 3. The details under clause 49 of the Listing Agreement with the Stock Exchange(s) in respect of the directors seeking appointment/ re-appointment at the Annual General Meeting are annexed hereto. 4. The Register of Members and Share transfer books of the Company will remain closed from Tuesday, 13 th September 2016 to Monday, 19 th September, 2016 (both days inclusive) in connection with the Annual General Meeting. 5. Members are requested to intimate all changes with respect to their bank details, nomination, power of attorney, change of address, change in name, register/change in IDs etc. to their respective depository participant (DP). 6. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit their PAN to their Depository Participants with whom they are maintaining their demat accounts. 7. Members/Proxies are requested to bring their copy of Annual Report and the attendance slip duly lled in. at the meeting 8. Members desirous of obtaining any information as regards accounts and operations of the Company are requested to write to the Company at least one week before the meeting, so that information required is made available at the meeting. 9. As per Section 205C of the Companies Act, 1956, the amount remaining unpaid or unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account of the Company shall be transferred to the Investor Education and Protection Fund (the fund) set up by the Government of India and no payments shall be made by the fund, in respect of any claims. Members who have not yet encashed their dividend warrants for the financial year ended March 31, 2008 and subsequent years are requested to make their claims directly to the Registrar and Share Transfer Agent, without any delay. It may be noted that the unclaimed dividend for the nancial years to are due for transfer to the IE PF fund as per table given below: Financial Year Due Date for Transfer nd October, st October, st October, th October, The Ministry of Corporate Affairs (MCA) on 10th May, 2012 noti ed the IEPF (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012 (IEPF Rules). The objective of the IEPF Rules is to help the shareholders ascertain status of the unclaimed amounts and overcome the problems due to misplacement of intimation thereof by post etc. The Company has uploaded the information in respect of the Unclaimed Dividends in respect of the nancial years to , as on the date of 29 th Annual General Meeting held on 31st September, 2014, on the website of the IEPF viz. Shareholders may kindly check the said information and if any dividend amount is appearing as unpaid against their name, they are requested to lodge their claim, duly supported by relevant document to the company before expiry of seven years. 11. All statutory registers are open for inspection at the Registered Of ce of the Company on all working days, from the date hereof upto the conclusion of this meeting between a.m. and 5.00 p.m. 12. Corporate Members intending to send their authorized representatives to attend the Annual General Meeting are requested to send a duly certi ed copy of the Board Resolution authorizing their representatives to attend and vote at the Meeting. 13. Members are requested to address all correspondence, including dividend matters, to the Registrar and Share Transfer Agent, M/s. Link Intime India Private Ltd., C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai Electronic copy of the Annual Report for is being sent to all the members whose IDs are registered with the Company/Depository Participants(s) for communication purposes unless any member has requested for a physical copy of the same. For members who have not registered their address, physical copies of the Annual Report for is being sent in the permitted mode. 6

9 ABG Shipyard Limited Annual Report Electronic copy of the Notice of the 31st Annual General Meeting of the Company inter alia indicating the process and manner of e-voting along with Attendance Slip and Proxy Form is being sent to all the members whose IDs are registered with the company/depository Participants(s) for communication purposes unless any member has requested for a physical copy of the same. For members who have not registered their address, physical copies of the Notice of the 31st Annual General Meeting of the Company inter alia indicating the process and manner of e-voting along with Attendance Slip and Proxy Form is being sent in the permitted mode. 16. Members may also note that the Notice of the 31st Annual General Meeting and the Annual Report for will also be available on the Company s website for download. The physical copies of the aforesaid documents will also be available at the Company s Registered Of ce for inspection during normal business hours on working days. Even after registering for e-communication, members are entitled to receive such communication in physical form, upon making a request for the same, by post free of cost. For any communication, the shareholders may also send requests to the Company s investor id: seclegal@abgindia.com 17. Pursuant to the provisions of Section 108 of the Companies Act, 2013 read with rule 20 of the Companies (Management and Administration) Rules, 2014 and the Clause 35B of the Listing Agreement, the Company is pleased to offer e- voting (Electronic Voting) facility to its members to cast their votes electronically on all resolutions set forth in this Notice convening the 31 st Annual General Meeting to be held on Monday, September 19, 2016, at 11:30 A.M. The Company has engaged the services of Central Depository Services Limited ( CDSL ) as the authorised agency to provide the e-voting facilities. The e-voting facility will be available during the following voting period: Commencement of e-voting From A.M. (IST) on 16 th September, 2016 End of e-voting 5.00 P.M. (IST) on 18 th September, 2016 The instructions for members for voting electronically are as under:- (i) (ii) (iii) (iv) (v) (vi) The shareholders should log on to the e-voting website Click on Shareholders tab. Now Enter your User ID a. For CDSL: 16 digits bene ciary ID, b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID, c. Members holding shares in Physical Form should enter Folio Number registered with the Company. Next enter the Image Veri cation as displayed and Click on Login. If you are holding shares in demat form and had logged on to and voted on an earlier voting of any company, then your existing password is to be used. If you are a rst time user follow the steps given below: PAN Bank Details OR Date of Birth (DOB) For Members holding shares in Demat Form and Physical Form Enter your 10 digit alpha-numeric PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders) Members who have not updated their PAN with the Company/Depository Participant are requested to use the rst two letters of their name and the 8 digits of the sequence number in the PAN eld. In case the sequence number is less than 8 digits enter the applicable number of 0 s before the number after the rst two characters of the name in CAPITAL letters. Eg. If your name is Ramesh Kumar with sequence number 1 then enter RA in the PAN eld. Enter the Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your demat account or in the company records in order to login. If both the details are not recorded with the depository or company please enter the member id / folio number in the Bank details eld. (vii) After entering these details appropriately, click on SUBMIT tab. (viii) Members holding shares in physical form will then directly reach the Company selection screen. However, members holding shares in demat form will now reach Password Creation menu wherein they are required to mandatorily enter their login password in the new password eld. Kindly note that this password is to be also used by the demat holders for 7

10 ABG Shipyard Limited Annual Report (ix) (x) (xi) voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password con dential. For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice. Click on the EVSN (Electronic Voting Sequence Number) for the ABG Shipyard Limited on which you choose to vote. On the voting page, you will see RESOLUTION DESCRIPTION and against the same the option YES/NO for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution. (xii) Click on the RESOLUTIONS FILE LINK if you wish to view the entire Resolution details. (xiii) After selecting the resolution you have decided to vote on, click on SUBMIT. A con rmation box will be displayed. If you wish to con rm your vote, click on OK, else to change your vote, click on CANCEL and accordingly modify your vote. (xiv) Once you CONFIRM your vote on the resolution, you will not be allowed to modify your vote. (xv) You can also take a print of the votes cast by clicking on Click here to print option on the Voting page. (xvi) If a demat account holder has forgotten the login password then Enter the User ID and the image veri cation code and click on Forgot Password & enter the details as prompted by the system. (xvii) Shareholders can also cast their vote using CDSL s mobile app m-voting available for android based mobiles. The m-voting app can be downloaded from Google Play Store. Apple and Windows phone users can download the app from the App Store and the Windows Phone Store respectively. Please follow the instructions as prompted by the mobile app while voting on your mobile. (xviii) Note for Non Individual Shareholders and Custodians Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to and register themselves as Corporates. A scanned copy of the Registration Form bearing the stamp and sign of the entity should be ed to helpdesk. evoting@cdslindia.com. After receiving the login details a Compliance User should be created using the admin login and password. The Compliance User would be able to link the account(s) for which they wish to vote on. The list of accounts linked in the login should be mailed to helpdesk.evoting@cdslindia.com and on approval of the accounts they would be able to cast their vote. A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same. (xix) In case Members have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions ( FAQs ) and e-voting manual available at under help section or write an to helpdesk.evoting@ cdslindia.com. Please note that: 1. The voting period begins on September 16, 2016 at A.M. and ends on September 18, 2016 at 5.00 pm. During this period shareholders of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date which is September 09, 2016, may cast their vote electronically. The voting rights of shareholders shall be in proportion to their shares in the paid up equity share capital of the Company as on this cut-off date. The e-voting module shall be disabled by CDSL for voting after 5.00 pm on September 18, In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions ( FAQs ) and e-voting manual available at under help section or write an to helpdesk.evoting@cdslindia.com. 3. Ms. Kala Agarwal, Practising Company Secretary (Membership No. F5976) has been appointed as the Scrutinizer to scrutinize the e-voting process in a fair and transparent manner. 4. The Scrutinizer shall within a period of not exceeding three (3) working days from the conclusion of the e-voting period, unblock the votes in the presence of at least two witnesses not in employment of the Company and forward his report of the votes cast in favour or against, to the Chairman or to any Director or Of cer who may be authorized by the Chairman for this purpose. 5. The Results shall be declared on or after the Annual General Meeting (AGM). The Results declared along with the Scrutinizer s Report shall be placed on the Company s website and on the website of CDSL within two (2) days of passing of the resolutions at the AGM of the Company and communicated to the Stock Exchanges. 8

11 ABG Shipyard Limited Annual Report EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 Item No. 4 The Company proposes to raise funds to the tune of Rs. 2,000/- crores (Rupees Two Thousand Crores), in one or more tranches through a public issues and/or on a private placement basis and/or QIP within the meaning of Chapter VIII of the SEBI ICDR Regulations and/or preferential issue and/or any other kind of public issue and/or private placement as may be permitted under applicable law from time to time. The resolution contained in the business of the Notice is regarding proposal to create, offer, issue and allot equity shares and/or such other Securities as stated in the Special Resolution (the Securities ) which seeks to empower the Board of Directors (hereinafter referred to as Board which include any Committee thereof, whether constituted or to be constituted) to undertake such issue or offer of securities. 1. Object of the issue In order to strengthen the Balance Sheet of the Company by repayment of its debt, and for general corporate purposes, the Company proposes to raise long term capital by issue of further securities. 2. Pricing In case of an issue of the Securities to Quali ed Institutional Buyers pursuant to Chapter VIII of the SEBI ICDR Regulations, the issue price of Securities shall be at a price, being not less than the price calculated in accordance with Chapter VIII of SEBI ICDR Regulations as may be amended from time to time and the Relevant Date in this regard shall be the date on which the board decides to open the issue of securities or such other time as may be allowed by SEBI ICDR Regulations from time to time. In case of a Quali ed Institutional Placement pursuant to Chapter VIII of the SEBI ICDR Regulations, the allotment of securities shall be completed within twelve months from the date of passing of this resolution. In case of issue of ADRs/GDRs the issue price shall be at a price, being not less than the price calculated in accordance with applicable law including the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts Mechanism) Scheme, 1993, as may be amended from time to time. 3. Terms and Conditions The detailed terms and conditions for the offer will be determined by the Board in consultation with Advisors, Lead Manager/ Book Runners, Underwriters and such other authority or authorities as may be required to be consulted by the Company considering the prevailing market conditions and other relevant factors. The issue/ allotment/ conversion would be subject to the availability of regulatory approvals, if any. The conversion of securities, held by foreign investors, into shares would be subject to the applicable foreign investment limits. The Special Resolution seeks to empower the Board and/or Committee authorized by the Board, to issue Securities in one or more tranche or tranches, at such time / times, and to such person(s) as the Board may in its absolute discretion deem t. Section 41, 42, 62 and 71 of the Companies Act, 2013 and the relevant clause of the Listing Agreement with the Stock Exchanges where the Equity Shares of the Company are listed provides, inter alia, that when it is proposed to increase the issued capital of a company by allotment of further shares, such further shares shall be offered to the existing shareholders of such company in the manner laid down in Section 62 unless the shareholders in a general meeting decide otherwise. Since the Special Resolution proposed in the business of the Notice results in the issue of shares of the Company otherwise than to the members of the Company, consent of the shareholders is being sought pursuant to the provisions of Section 41, 42, 62 and 71 and other applicable provisions of the Companies Act, 2013 and the Listing Agreement. The Special Resolution, if passed, will have the effect of allowing the Board and/or the Committee authorized by the Board to issue and allot Securities to the investors who may or may not be the existing shareholders of the Company and the Board and/or the Committee authorized by the Board will have the power to decide the date of opening of the Issue. The Directors or Key Managerial Personnel of the Company and their relatives, may be deemed to be concerned or interested in the above resolution only to the extent of shares held by them in the Company The Board of Directors recommend the special resolution for your approval. Item No. 5 Promoters of ABG Shipyard Limited has brought contribution into the Company as per terms and conditions of approved Corporate Debt Restructuring (CDR) Scheme and the same is lying in the form of unsecured loan in Company s books of account. CDR Lenders under the Corporate Debt Restructuring have accorded their approval for such conversion upto Rs. 300 crores at Monitoring Committee meeting held on 2 nd August, 2016 in terms of Master Restructuring Agreement dt. 28 th March, 2014 entered into between the Company and the CDR lenders. Such conversion will be at a price determined as per SEBI ICDR Regulations as may be amended from time to time and Rs (rate of conversion of 0.01% Compulsorily Convertible Preference Shares into Equity Shares allotted to CDR lenders) whichever is higher. 9

12 ABG Shipyard Limited Annual Report Board of Director at their meeting held on 11 th August, 2016 recommended the conversion of promoters contribution into Equity Shares of face value Rs. 10/- each subject to shareholders approval. The Board of Directors recommend the special resolution for your approval. Item No. 6 The Company has availed nancial assistance including secured term loans, external commercial borrowings, working capital, cash credit and non-fund based facilities from the Lenders for the purposes set forth in the respective nancing documents entered into amongst, inter alia, the Company and the Lenders and has subsequently entered into a Master Restructuring Agreement March 28, Owing to impact on the Company s operations, the Company has not been able to perform satisfactorily, leading to signi cant decline in the operating pro ts and liquidity in the Company and consequently, the Company has not been able to service its maturing liabilities. The account was referred to Corporate Debt Restructuring Cell (CDR) and the Lenders formed a JLF to formulate a corrective action plan ( CAP ) for the Company in terms of the RBI Circular in order to resolve the stress in the account of the Company. However, the Company did not perform satisfactorily under the CAP as milestones of performance set under CAP could not be met with by the Company and performances further deteriorated and therefore,the JLF has nally decided to invoke the provisions of Strategic Debt Restructuring in terms of the RBI Circular SDR Circular(de ned below). In terms of the RBI circular bearing reference DBR.BP.BC.No.101/ / dated June 08, 2015 ( RBI SDR Circular ), the Lenders, upon invoking the provisions of the SDR Scheme, have a right to convert whole or part of their outstanding due amounts into equity share capital of the Company so as to collectively hold 51% or more of the total equity share capital of the Company. Consequent to this, the Lenders have the right to divest their holdings in the equity of the Company in form of a new promoter. Details of the Directors seeking Appointment/ Re-appointment in the 31st Annual General Meeting Name of Director Mr. S. Muthuswamy Date of Birth 24/03/1956 Date of Appointment / Re-appointment 13/11/2013 Quali cation Experience and Expertise in Speci c functional area Directorship held in other Companies Committee Positions held in other Companies No. of Shares held in ABG Shipyard Limited M.Com, MBA Vast experience in corporate world over 37 years. He is associated with the Company and ABG Group since 1995 in various capacities. ABG Capital Ltd. ABG Motors Ltd. NIL NIL By Order of the Board of Directors Date: 11 th August, 2016 Place: Mumbai Ashish Pandey Company Secretary 10

13 ABG Shipyard Limited Annual Report TO THE MEMBERS, DIRECTORS REPORT The Board of Directors of your Company are pleased to present the 31 st Annual Report together with the Audited Financial Statements for the nancial year ended 31 st March FINANCIAL PERFORMANCE: Financial performance of the Company for Financial Year , on standalone basis is summarised below: (Rs. in Crores) Particulars Sales and Other Income Pro t/(loss) before Interest, Depreciation & Tax ( ) (361.82) Less: Interest (Net) Pro t/(loss) before Depreciation & Tax ( ) ( ) Less: Depreciation Pro t/(loss) before Tax ( ) ( ) Exceptional/Extraordinary Items Less: Provisions for Taxation (19.38) (288.19) Net Pro t/(net Loss) after Tax ( ) (897.70) * Figures regrouped wherever necessary. 2. FINANCIAL REVIEW During the nancial year ended 31 st March 2016, the Company reported revenue from operations of Rs Crores and EBDIT of Rs. ( ) Crores. Net loss after tax is Rs Crores. Major reasons for increased losses are low level of business activity resulting into low turnover, impairment of inventories and increased interest cost. Exceptional items include foreign exchange losses and reversal of pro ts on account of cancellation of contract / invocation of bank guarantees. The global economic slowdown has severally impacted the ship building industry. This has led to lower capacity utilization and adversely affected the operations of the Company. 3. DIVIDEND In view of the losses, your Directors do not recommend any dividend for the year under review. 4. SHARE CAPITAL During the Year under review, your Company has allotted total 1,91,279 nos. of Equity shares of face value of Rs. 10/- each at a price of Rs /- and total 7,65,52,717 nos. 0.01% Compulsorily Convertible Preference Shares (CCPS) of face value of Rs. 10/- each at par, to the Corporate Debt Restructuring Lenders (CDR Lenders) towards conversion of the Funded Interest Term Loan (FITL)/interest on FITL. As on 31 st March 2016, Authorised Capital was Rs. 17,000 Crores divided into 1500 Crores Equity Shares of Rs. 10/- each and 200 crores CCPS of Rs. 10/- each. Total paid up Capital of the Company as on 31 st March 2016 stood at Rs. 387,67,69,040/- divided into 5,40,30,848 equity shares of Rs. 10/- each and 33,36,46,056 CCPS of Rs. 10/- each. Last date for conversion of CCPS was 26 th March, 2016, but due to Honourable Delhi High Court order dated 29 th September 2015 in case of Stretegic Capital Pvt. Limited & Anr. Vs. Jaroli Viacom Pvt. Ltd. & Ors. restraining the Company from any change of capital structure, the conversion of CCPS could not be effected. 5. BUSINESS OPERATIONS AND OUTLOOK Your Company has strong footprint in ship building industry not only in India but also worldwide. The Company has State of the Art world class manufacturing facilities at Dahej and Surat in the State of Gujarat. Your Company is one of the India s largest private sector shipyards and has expertise in building Specialized and Sophisticated vessels like Interceptor Boats, Battle Practice Target, Cadet Training Ship, Self-Loading and Discharging Bulk Cement Carriers, Floating Cranes, Articouple Tugs and Flotilla, Split Barges, Bulk Carriers, Newsprint Carriers, Offshore Supply Vessels, Dynamic Positioning Ships, Anchor Handling Tug Supply Vessels, Multi-purpose Support Vessel, Diving Support Vessels, Pollution Control Vessel etc. for Government of India, leading companies in India and overseas. It has expertise in offshore Rig building also. 11

14 ABG Shipyard Limited Annual Report The manufacturing processes in the Shipyards are in line with world class standards and the Yards have been certi ed by DNV for ISO 9001:2008 (for Quality Management Standards), by IRS for ISO 14001:2004 (for Environment Management Systems) and OHSAS 18001:2007 (for Occupational Health & Safety Management Systems). Your Company has delivered a Pollution Control Vessel to the Indian Coast Guard, however, during the period under review, the Company could not deliver any other ship as its Dahej yard was closed from June, 2015 and Surat yard was partially operational. Progress of construction of vessels was affected due to the factors like unavailability of working capital etc. In Surat yard, ship repair activity is going on at present but with low volume. The Company has undertaken repair of Coast Guard Vessels and other commercial vessels in the period under review. Due to suspension of operations at Dahej yard and low key operation at Surat, losses have piled up over the period which has resulted into erosion of net worth of the Company. As on 31 st March, 2016, net worth of the Company is fully eroded. The Board of Directors in their meeting held on has decided that the Company may explore the possiblity of ling a reference to the Board for Industrial and Financial Reconstruction (BIFR) under Sick Industrial Companies (Special Provisions) Act, Indian Shipbuilding sector is facing crisis due to global downturn in ship building industry since last few years. Most of the shipyards in India are idle due to lack of orders, liquidity problem etc. Concerted efforts are required by all stakeholders like Banks, Govt., and other Industry participants to revive the Industry. Assets of the shipyards are of National importance and can t be left to remain idle for long time. To uplift the ship building sector, Govt. of India has also unfolded their hands and taken following measures to revive the ailing ship building industry: Infrastructure status has been provided to Shipbuilding Industry. This will make the Industry eligible to avail/restructure long term loans upto 25 years. Financial Assistance (Subsidy Scheme) to Shipbuilding Industry to the tune of Rs. 4,000 crores over 10 years. Policy for subcontracting from PSUs to Private Shipyards Rs. 50,000 crores. Preference to Indian built ships : Right of rst refusal for Indian make Indian Flag vessels. Setting up of National Infrastructure Investment Fund (NIIF) with a corpus of Rs. 20,000 crores. The idea is to revive commercially viable including stalled Infrastructure projects. Indirect Tax Exemptions announced - Excise Duty and Customs Duty. Development of Inland Waterways. A growing Indian economy, favorable Government policies and incentives framework, a long coastline and growing sea borne trade present a huge business opportunity within the Indian Shipbuilding and Ship Repair industry. Ship building industry as well as your Company is poised to come up in near future. 6. Financial Restructuring As you are aware that during the nancial year , your Company had undertaken a debt restructuring exercise under the CDR mechanism governed by the Corporate Debt Restructuring Scheme issued by Reserve Bank of India dated August 27, 2008 and the Corporate Debt Restructuring Guidelines formulated thereunder in consultation with its senior secured lenders. Pursuant thereto, the CDR Empowered Group at the meeting held on 24 th March 2014 has approved a restructuring package in terms of which the existing nancial assistance provided by the existing lenders of the Borrower as mentioned in the LOA (the CDR Lenders ) was restructured as set out in the letter of approval dated 27 th March 2014 issued by the Corporate Debt Restructuring Cell to the Borrower and the CDR Lenders (the LOA ) and in this regard the Company has entered into a Master Restructuring Agreement with the CDR Lenders (the Master Restructuring Agreement ) as on 28 th March 2014 as amended / modi ed from time to time. The salient features of the CDR Package are as follows : a) Cut-off date - 01 st August 2013; b) Total Debt rescheduled has funded interest ranging from 1 year 6 months to 3 years 7 months and loan is payable over a period of 10 years. c) Priority Debt sanctioned for meeting the immediate operational and capital requirement of the Company; d) Reduction in the rate of interest to 11% PA. e) Conversion of the FITL and further interest thereon into the Equity Shares/0.01% CCPS of the Company. On , CDR lenders in their meeting invoked Strategic Debt Restructuring (SDR) provisions in the Company. SDR invocation was approved by requisite majority of lenders. As per RBI guidelines, SDR process including both nalization of package and allotment of share was to be concluded within 210 days from the SDR reference date i.e. on 12

15 ABG Shipyard Limited Annual Report or before But, it could not be effected due to Hon ble Delhi High Court order restraining the Company not to alter its capital structure. On , the Court has issued order permitting the Company to alter its capital structure. The Company is working out to implement the same. The Company along with CDR lenders exploring the possibility of inducting a strategic investor who will infuse necessary funds in the Company to strengthen the operations of the Company. The lenders have disbursed total Rs Crores upto 31 st March 2016 towards the Priority Debts as per the terms of the MRA for meeting the immediate operational and capital expenditure requirement of the Company. 7. Issue of Equity Shares and 0.01% Compulsorily Convertible Preference Shares (CCPS) Issue of the Equity shares and CCPS to the CDR Lenders towards the conversion of the FITL and further interest thereon till 31 st March 2016, FITL/Interest on FITL amounting to Rs Crores has been converted into the Equity shares and CCPS of the Company. In order to strengthen the Balance Sheet of the Company by repayment of its debt and for general corporate purposes, the Company proposes to raise capital by issue of further securities including but not limited to Convertible Bonds, Preference Shares, Equity Shares and other securities whether convertible or not, etc., upto Rs. 2,000 Crores (Rupees Two Thousand Crores). Accordingly the enabling resolution mentioned in the Notice of Annual General Meeting is commended for your approval. 8. MANAGEMENT DISCUSSION AND ANALYSIS In terms of Regulation 34 of SEBI Listing Regulations, 2015, Management Discussion and Analysis Report elaborating detailed Industry Review, Outlook etc. is presented in a separate section forming part of this Report as Annexure B. 9. NUMBER OF MEETINGS OF THE BOARD The Board of Directors of your Company met four times during the year. Details of the Meetings are elaborated in the Corporate Governance section of this report 10. DECLARATION OF INDEPENDENCY: All Independent Directors have given declarations that they meet the criteria of independence as laid down under section 149 (6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations BOARD EVALUATION AND SEPARATE INDEPENDENT DIRECTORS MEETINGS The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual Directors pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations A structured questionnaire was prepared after considering the various criteria such as Board functioning, composition, committee culture and their directions and governance. The process evaluation was completed and the Board expressed the satisfaction over the evaluation process. The Independent Directors meet at least once in a half year, without the presence of Executive Directors or Management representatives. They also have a separate meeting with the Non-Executive Chairman, to discuss issues and concerns, if any. The Independent Directors met twice during the Financial Year ended 31st March, 2016 on 13 th August, 2015 and 11 th February, FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS The Company proactively keeps its Directors informed about the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. 13. SUBSIDIARIES Your Company has three (3) subsidiaries i.e. Western India Shipyard Limited (a BSE listed Company), ABG Shipyard Singapore Pte. Limited (Singapore based Wholly Owned Subsidiary) and ABG FPSO Private Limited and two Joint Ventures i.e. ABG Business Ventures Pte. Ltd and Varada Seven Pte. Ltd at the end of the nancial year Financial results of Western India Shipyard Limited are not available to prevailing unavoidable circumstances i.e. labour unrest in the yard. There was no access of books of account and other documents, hence, audited accounts could not get ready. Financial results of other subsidiaries and Joint Ventures are not consolidated because of their unavailability. Therefore, statement containing salient features of nancial statements of subsidiaries and JVs are not being attached to this report as required under section 129(3) of the Companies Act,

16 ABG Shipyard Limited Annual Report DIRECTORS AND KEY MANAGERIAL PERSONNEL In terms of the Section 152 and 160 of the Companies Act, 2013 read with Article 190 of the Articles of Association of the Company, Mr. S. Muthuswamy is liable to retire by rotation at the ensuing Annual General Meeting and eligible for reappointment. During the period under review, Mr. Syed Abdi Managing Director and CEO of the Company has resigned from the Company w.e.f. 30 th April 2016, due to personal reasons. During the period under review, Mr. Dhananjay Datar, Director liable to retire by rotation, retired from the Directorship of the Company from the date of last Annual General Meeting dt. 30th September, A brief resume of the Director being re-appointed at the ensuing AGM, nature of expertise in speci c functional areas and names of the Companies in which he holds directorship and/ or membership/ chairmanships of Committees of the respective Boards, shareholding and relationship between Directors inter se as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, is given in the notice of Annual General Meeting forming part of this Annual Report. None of these Directors is disquali ed as per the provisions of Section 164 of the Companies Act, 2013, to be re-appointed as directors of your Company. Mr. Dheeraj Sharma, Company Secretary has resigned from the Company w.e.f. 20 th January, AUDITORS M/s. Nisar & Kumar, Chartered Accountants, Statutory Auditors of the Company was appointed at the last AGM till conclusion of the 32 nd AGM subject to rati cation by the Shareholders at every Annual General Meeting. But, they expressed their unwillingness to be re-appointed as a Statutory Auditors of the Company. Therefore, M/s GMJ & Co., Chartered Accountants has been appointed as a Statutory Auditors of the Company by the Board of Directors at their meeting held on 11 th August, M/s GMJ & Co., Chartered Accountants have consented for their appointment in terms of section 139 of the Companies Act, 2013 and also provided a certi cate to the effect that if they are appointed, it would be in accordance with Section 141 of the Companies Act, Your Directors propose the appointment of the M/s. GMJ & Co. Chartered Accountants as a Statutory Auditors of the Company from the conclusion of ensuing AGM to conclusion of 36 th AGM. The Auditors have marked Quali cations/ Matter of Emphasis on the nancial statements for the FY Explanations of the Management towards the same are as follows: Independent Auditors Quali cations and Management s Replies: 1. Carrying value of Plant Assets at Dahej Shipyard: Dahej yard is shut down for last one year, hence the physical veri cation and study for impairment if any, could not be carried out. The Management believes that the Assets and Assets under construction are of such nature as not to deteriorate or lose its value in such duration. The Management is striving its best to resume production/ completion of capitalisation at yard which is likely to happen shortly. 2. Loans, Advances and Receivables from Related Parties: All loans, advances and receivables are either to operating entities or having business plans or possessing corresponding value. Some recoveries have been made during the year and for the balance, Management is taking steps. 3. Subsidy receivable from Government of India: The subsidy has been accounted for, strictly in accordance with the Subsidy Scheme of Government of India and relevant Accounting Standards. Currently, owing to low scale activities at its yards, the Company is not able to complete the ships and deliver them.the Management is con dent about recoverability of the subsidy from the Government, once the eligible ships are constructed and delivered. 4. Going Concern: The Company has sizable and marketable inventory, ready/ under construction state of the art xed assets. With potential business, supportive lending bankers and favourable Government initiatives and policies, the Management is of rm belief that the Company does not cease to be a Going Concern. Emphasis of Matters: 1. Investment in Subsidiaries: The Management has evaluated the investments in all related entities / subsidiaries, which is strategic and of long term nature. It believes that there is not permanent diminution in values of the investments, so as to warrant for provisioning Impairment of Inventory: The Management has carried out a technical valuation and accounted the impairment. For some ships and Rigs the valuation process shall be taken in due course. 2.2 Rig Work in progress and Advances: This is only for information. 3. Advances to certain suppliers/ contractors: The advances given to suppliers / contractors are for material / services of long gestation period and represent part advance in most of the cases. Once the production activities are normalized and material 14

17 ABG Shipyard Limited Annual Report is required, the Company shall be paying the balance and obtaining the material. The Management has taken special efforts to obtain con rmation / refund in some cases. 4. Non Provision of Managerial Remuneration: The Management is taking legal advise on this matter. 5. Compensation Payable in lieu of Banks Sacri ce: This is only for information. 6. Non Availability of some con rmations/ statements from banks / institutions: This is only for information. However the Company has accounted for all the transactions based on the material / evidences available with it. 7. Legal proceedings by some authorities / creditors: Management believes that this is in normal course of business and dealing with the matter legally. Annexure A to the Independent Auditors Report: 1.& 2 Physical Veri cation of xed assets and inventory at Dahej yard: Due to closure of the Dahej yard, the physical veri cation of xed assets and inventory could not be carried out this year. The Management believes that the xed assets and inventory has sound physical safeguard and effective custodial accountability. Advance of Rs lacs as such does not represent any immovable property and it needs to be allocated over existing lands. Efforts are on to obtain documents from the vendor/ agent to account the same appropriately. 3. Pending updating of Register under Section 189 of the Companies Act, 2013: the updation has been done. 4. Non Charging of interest to certain parties: The charging of interest is not expedient, considering the relationship of the Company with these parties. 5. Maintenance of Cost records: The Company has been maintaining appropriate cost records since years consistently; however the Management is engaging Professionals to make the records more compliant. 6. Delays and defaults in depositing Statutory Dues: The delays and defaults are owing to lack of cash ows. As the Company is under Corporate Debt Restructuring, its Cash ows are controlled by monitoring institution of consortium of banks / institutions. However with the available Cash ows, the Management is endeavouring to deposit the dues in small tranches/ installments. 7. Fraud by the Company/ Its Employees: The Management reiterates that there is no fraud committed either by the Company or its employee. Due to non-payments of outstanding to certain creditors the company has received notices alleging fraud, which Company is dealing legally. The DRI has certain issues relating the valuation of certain assessed and cleared imports by the Company and thus have made few employees as parties also. The matter is under adjudication. Secretarial Audit Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Mrs. Kala Agarwal, a rm of Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure C The report does not contain any quali cation save and except updation of Company s website as regard of Secretarial compliances and not ling of statutory forms. The website is not updated due to technical problem. Non availability of requisite staff is the major cause for other non compliances, which are been complied with now. 16. EXTRACT OF ANNUAL RETURN: The extract of the annual return as provided under sub-section (3) of section 92 of Companies Act, 2013 in the prescribed Form MGT-9 is forming part of this report as Annexure D 17. DEPOSITS/FIXED DEPOSITS The Company has not accepted deposits by way of invitation to the public and therefore, provisions of Section 73 of the Companies Act, 2013 are not applicable to the Company. 18. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FORIEGN EXCHANGE EARNINGS & OUTGO Information required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is included in Annexure A. 19. CORPORATE GOVERNANCE The Company consistently emphasises its commitment towards a healthy corporate governance policy and adherence of the same that de nes and drives organisation performance as per its cherished values and commitments to every stakeholder. A detailed report on compliance of Corporate Governance in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, is presented in a separate section forming part of this Report as Annexure E. 15

18 ABG Shipyard Limited Annual Report The Statutory Auditors certi cate on compliance with Corporate Governance by the Company is attached to the report on Corporate Governance. 20. DIRECTORS RESPONSBILITY STATEMENT In pursuance of section 134(5) of the Companies Act, 2013, the Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, con rm that: I. In the preparation of the annual accounts, the applicable accounting standards have been followed. II. III. IV. The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the nancial year and of the pro t or loss of the Company for the year under review. The directors have taken proper and suf cient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. The directors have prepared the annual accounts on a going concern basis. V. The directors had laid down internal nancial controls to be followed by the company and that such internal nancial controls are adequate and were operating effectively. VI. The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. 21. PARTICULARS OF LOAN, GUARANTEE OR INVESTMENT: Particulars of the outstanding loans or guarantees covered under the provisions of Section 186 of the Act as on March 31, 2016 have been elaborated in note no. 40 to the Financial Statements. During the Financial Year , the Company has not given any Guarantee/Loan or provided Security under the provisions of Section 186 of the Companies Act, PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered Of ce of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. 23. PREVENTION OF INSIDER TRADING The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have con rmed compliance with the Code. 24. INDUSTRIAL RELATIONS Your Company has maintained healthy, cordial and harmonious industrial relations at all levels at the of ces and yards of the Company throughout the year. 25. CORPORATE SOCIAL RESPONSIBILITY In compliance with the requirement of Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee. A report on CSR Activities of the Company is attached with this Directors Report as Annexure F. 26. NOMINATION AND REMUNERATION POLICY The Board of Directors of the Company have Nomination and Remuneration Committee in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations The Board has placed the Nomination and Remuneration Policy in terms of Section 178 of the Companies Act, Composition of the Nomination and Remuneration Committee and Nomination and Remuneration Policy are elaborated in the Corporate Governance Report annexed to this Report. 16

19 ABG Shipyard Limited Annual Report WHISTLE BLOWER POLICY/VIGIL MECHANISM A Whistle Blower Policy/Vigil Mechanism policy is framed and has established the necessary vigil mechanism in line with SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Section 177 (9) of the Companies Act, 2013, for the directors and employees to report concerns about unethical behaviour. No person has been denied access to the Audit Committee. However, no instances of fraud or other irregularities have been observed, which need to be reported to the Board/ Audit Committee. 28. RISK MANAGEMENT POLICY The Board of Directors has constituted a Risk Management Committee. The Committee is responsible for reviewing the risk, managing plan and ensuring its effective ness. Major risks identi ed by the busineses and functions are systematically addressed through mitigating actions on a continuing basis. The Company has developed a Risk Management Policy detailing the risk management system, process and procedure. Composition of the Risk Management Committee and Terms of reference thereof is described in the Corporate Governance Report annexed to this Report. 29. INTERNAL CONTROL SYSTEM The details of internal control system and its adequacy are included in Management Discussion and Analysis Report which forms part of this report. 30. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES Particulars of contracts or arrangements with related parties referred to in section 188 of the Companies Act, 2015 are given in the prescribed form AOC-2, refer Annexure G. 31. APPRECIATION Your Directors wish to extend their sincere gratitude to all the Customers, Suppliers, Bankers, Financial Institutions, Trustees, Government Authorities/Of cials, Business Associates, Shareholders and Debenture Holders of the Company for their continuous guidance and support to the Company and their continued con dence in the management of the Company. Further, the Company and its Board of Directors wish to express admiration and acknowledge the understanding, support and services of the employees at all levels which have largely contributed to ef cient operations and management of the Company during the year under review and make the Company con dent to come out from the tough business span of the Company. Place: Mumbai For and on behalf of the Board Date: 11 th August, 2016 Ashwani Kumar Director S. Muthuswamy Executive Director 17

20 ABG Shipyard Limited Annual Report Annexure A to Directors Report Information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) rules, 2014 A. Conservation of energy: (a) Steps taken or impact on conservation ofenergy: At Dahej Yard: 60 Nos. Electronic Chock base 1 x 28 W tube light installed in Staff colony at Bharuch KVAR capacitor panel Maintained to keep power factor from Auto cut off for welding machine and energy saver for welding machines. Due to no load, yard power was kept on standby thus generating only minimum bill. Saving Rs 36 L pa At Surat Yard Energy Saver System maintained for 200 No s installation in Welding Machines. 100 Nos. Electronic Chock base 1 x 28 W tubes light is being maintained in Labor Colony At Surat Yard KVAR capacitor panel Maintained for to Keep PF AVG to Saving maintained in monthly electricity bill by revising electrical power demand with state electricity board Auto cut off for welding machine and energy saver for 75 welding machines. Additional installation of VFD Drive In mobile Air Compressor. Additional Installation of inverter base Welding machine. Additional Installation of Auto Welding Unit for co2 welding purpose. (b) Steps taken for utilizing Alternate source of energyduring the year: NIL (c) Capital Investment on energy conservation equipments during the year: NIL B. Technology absorption: (i) Efforts, in brief made towards technology absorption, adaption and innovation Continues Usage of scaffolding staging system for hull out t & painting for faster & safe production and for ships under repair. Usage of telescopic man lifter to reduce time. (ii) Bene ts derived as a result of the above Technology Absorption and R&D Cost Saving. Safety. More Productivity. Speedy Production. Expenditure on R&D: During the year under review, there was no speci c expenditure on Research and Development. Your Company usually incurred capital expenditure for setting up as well as up-gradation of technologies used in designing, production, manpower and account management as a part of its business strategy. In case of imported technology (imported during the last 3 years reckoned from beginning of the nancial year) Technology imported Years of import Has technology been fully absorbed? If not fully absorbed, areas where this not taken place, reasons therefore and future plans of action C. Foreign Exchange Earnings and Outgo (` in Crs.) NIL NA NA NA Earnings NIL NIL Outgo Place: Mumbai Date: 11 th August, 2016 For and on behalf of the Board Ashwani Kumar S. Muthuswamy Director Executive Director 18

21 ABG Shipyard Limited Annual Report INDUSTRY OVERVIEW AND OUTLOOK Annexure-B to Directors Report MANAGEMENT DISCUSSION AND ANALYSIS REPORT The ship-building industry is currently on a downturn with excess capacities globally. The Indian Shipbuilding and Ship Repair industry primarily comprises rms that develop, build and repair - ships, underwater equipment and naval architectures for the shipping industry, shing industry, naval defence and extraction of ocean resources. India currently has around 28 major shipyards, with 6 under the Central Government, 2 under State Governments, and the remaining under the private sector. In India, private players hold the majority of the Shipbuilding capacity has the required infrastructure and capacity to build large vessels. Private Shipyards, other than ABG Shipyard Limited and few others are mostly restricted in terms of the capacity and size of ships that they can build. A growing Indian economy, favorable government policies and incentives framework, a long coastline and growing sea borne trade present a huge business opportunity within the Indian Shipbuilding and Ship Repair industry. Bulk carriers (within large sea going vessels segment) and offshore vessels (within medium size specialized vessels segment) hold maximum demand as per the current order book of the major Indian Shipbuilding companies. The growth drivers for this sector include low labor cost, availability of a skilled workforce, robust domestic demand and a growing steel industry in the country. The Indian Shipbuilding industry is of strategic importance to the Indian economy and plays an important role in employment generation, development of manufacturing and related industries and national security. The Government of India has set ambitious plans for the Shipbuilding and Ship Repair Industry in the country. It has taken several positive initiatives like Ease of doing Business, Make in India and changes in defence procurement policy to encourage Indigenization of defence and requirements including offset policy. These initiatives will open up a huge opportunity for Indian Shipbuilding Industry. Followings are the key points of Govt. s initiatives taken in the last year: Infrastructure status has been provided to Shipbuilding Industry. This will make the Industry eligible to avail/restructure long term loans upto 25 years. Financial Assistance (Subsidy Scheme) to Shipbuilding Industry to the tune of Rs.4000 crores over 10 years Policy for subcontracting from PSUs to Private Shipyards Rs crores Preference to Indian built ships : Right of rst refusal for Indian make Indian Flag vessels Setting up of National Infrastructure Investment Fund (NIIF) with a corpus of Rs crores. The idea is to revive commercially viable including stalled Infrastructure projects. Indirect Tax Exemptions announced - Excise Duty and Customs Duty OPPORTUNITIES & THREATS Indian Ship Building market has high potential and consequent bene ts to the economy. India s hinterland connectivity is mainly based on road and rail with domestic waterways, both coastal shipping and inland waterways playing a limited role. India has an extensive network of inland waterways in the form of rivers, canals, backwaters and creeks. Of the total navigable length of 14,500 km, 5200 km of the river and 4000 km of canals can be used by mechanized crafts. Freight transportation by waterways is highly under-utilized in the country as compared to countries and regions like the United States, China and the European Union. India has recognized 106 waterways of which 6 are declared as national waterways. Economic viability of a waterway to carry traf c as an alternative to rail and road depends on its length which should be a minimum 500 km and 250 km for both cases respectively. Apart from this, it should have a large hinterland coverage area and potential in order to generate enough traf c on routes. Globally domestic waterways are found to be cost effective as well as environmentally friendly means of transporting freight. This is also true in India for instance, the cost of moving coal via coastal shipping is one-sixth of the cost of moving it by the currently preferred means of railways. Government initiative to develop inland waterways is big business opportunity for Indian Ship Building Industry in the form of future order of building dredgers, small bulk carriers vessels etc. India s crude oil import expected to increase by ~90MMTPA by driven by re nery capacity expansion of HPCL, IOCL & other petroleum companies and higher fuel demand in the economy. The Indian oil companies are estimated to require ~57Mn DWT eet to meet 2025 import projections; hence current eet capacity would need to increase by ~1.8x by PSU re ners plan to add ~23 million tonnes of re ning capacity in the next 10 years. Products exports from India are expected to grow by mt by 2025 with Australia, Latin America and Europe being the key long haul export destinations. India s imports of LNG have grown 12% over last decade. The momentum is expected to be sustained with5-7% YoY growth driven by power and fertilizer industries. 43 LNG projects with capacity of ~300 MTPA is under construction. This will create demand for ~ new vessels. 19

22 ABG Shipyard Limited Annual Report Indian LPG imports in last decade have grown rapidly and are expected to grow in the future as well. Offshore sector is an increasingly important market segment for the ship building industry. There is high level of correlation between supply of offshore vessel and the oil price. In the last few years, there was a decrease in offshore vessel deliveries driven by falling oil prices. But, with the recent increase in oil price, demand for offshore vessel will have upward trend. Detailed offshore vessel demand medium to long-term forecasts by market segment ( ) Offshore support vessel (OSV). The anchor handling tug supply (AHTS) market is driven by a combination of large assets supporting deep water drilling and smaller multi-purpose service vessels. The Platform supply vessel (PSV) market is expected to see the strongest growth out of all offshore support vessel types as a result of increased demand for oating production systems and drillships. The Emergency Response and Rescue Vessel (ERRV) market is less subjected to industry cyclicality given the greater exposure to longer term life of eld contracts and a relatively consolidated supply chain. Mobile Offshore Drilling Unit (MODU). Signi cant growth is expected in the shallow water jackup drilling market before stabilization between 2020 and Demand for drillships is expected to see robust growth, driven by the deepwater triangle West Africa, Latin America and North America. Floating production unit (FPU). The oating production, storage and of oading (FPSO) market is project-driven. Asian yards are expected to continue supplying oating storage and of oading (FSO)s. Construction vessel demand. The increasing volume of subsea installations and of Inspection, Repair & Maintenance (IRM) activities is expected to drive demand for subsea vessels particularly from Latin America and Africa. Subsea, Umbilicals, Risers, Flowlines (SURF) vessels are expected to bene t from the increasing volume of subsea installations, particularly in Africa and Latin America. Increasing water depth and size of wind turbines is expected to drive higher requirements for larger cranes and deeper operational capabilities. Ship Repair business is linked with healthy shipbuilding industry. Ship repair is even more labor intensive and pro table than shipbuilding. India, with its labor advantage and its ideal position on international trade route, is well placed to wrest this business from competitors, once the shipbuilding industry is developed. This can create additional revenue and employment opportunities with marginal increase in investment. Finally, domestic shipbuilding industry would also provide the much needed domestic capability which can be accessed for future needs of the Navy and Coast Guard and help realize the goal of indigenization in defence production. RISK AND CONCERNS In India, ship building and ship repair industry is governed by Ministry of Shipping. The shipbuilding industry seems to take off in near future majorly because of Government. support. Thus, political instability and changes in Government. policies would be a cause of concern. Other challenges include: Overcapacity & lower realization Financing of new orders Changing ship economics, ship design and regulations Reduction in crude oil price Changes on statutory levies Increased nancing cost Sales Tax, Customs Duty, Octroi etc. are some of the levies applicable to shipyards. Several shipbuilding nations have relaxed these levies to encourage shipyards. Finance costs assume greater signi cance in ship building. Shipyards are required to provide bank guarantees to protect ship buyer. These guarantees comprise performance guarantee (for timely delivery), refund guarantee (for stage payments) and post construction guarantee (towards defects). Cost of bank guarantees is higher. Typically, shipyard requires a working capital of around percent of cost of the ship during the entire construction period. Interest rate on working capital is 11% on an average. If comparison is made with other countries in ship building like China, the China Government. provides sovereign refund guarantees for certain class of vessels, thus removing any related burden on shipyard. Interest rates on working capital presently offered to overseas ship building yards are signi cantly lower like in Korea and China. Indian shipyards face systemic disadvantages in several area which negate their natural competitiveness and adversely impact their chances of succeeding in a globalized shipbuilding industry. INTERNAL CONTROL SYSTEM The Company has in place an adequate system of internal control commensurate with its size and nature of its business and ensures proper safeguarding of assets, maintaining proper accounting records and providing reliable nancial statements. The nancial statements are audited by an Independent Statutory Auditors on quarterly and annual basis with regard to nancial effectiveness of operations, nancial reports, taxation, accounting standards, statutory compliance etc. The Audit Committee reviews the nancial reports and the internal control systems with the Management and the auditors and suggests improvement for strengthening the systems. The nance and accounts functions of the Company are well staffed with quali ed and experienced professionals. 20

23 ABG Shipyard Limited Annual Report The Company s effective control system is supported by an Enterprise Resources Planning (ERP) platform i.e. SAP for its main business processes. FINANCIAL AND OPERATING PERFORMANCE Financial performance of the Company for the FY is as under: (Rs. in Crores) Particulars Sales and Other Income Pro t/(loss) before Interest, Depreciation & Tax ( ) (361.82) Less: Interest (Net) Pro t/(loss) before Depreciation & Tax ( ) ( ) Less: Depreciation Pro t/(loss) before Tax ( ) ( ) Exceptional/Extraordinary Items Less: Provisions for Taxation (19.38) (288.19) Net Pro t/(net Loss) after Tax ( ) (897.70) During the nancial year ended 31 st March 2016, the Company reported revenue from operations of Rs Crores and EBDIT of Rs. ( ) Crores. Net loss after tax is Rs Crores. Major reasons for increased losses are low level of business activity resulting into low turnover, impairment of inventories and increased interest cost. Exceptional items include foreign exchange losses and reversal of pro ts on account of cancellation of contract / invocation of bank guarantees. Your Company has delivered a Pollution Control Vessel to the Indian Coast Guard, however, during the period under review, the Company could not deliver any other ship as its Dahej yard was closed from June, 2015 and Surat yard was partially operational. Progress of construction of vessels was affected due to the factors like unavailability of working capital etc. In Surat yard, ship repair activity is going on at present but with low volume. The Company has undertaken repair of Coast Guard Vessels and other commercial vessels in the period under review. HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS The Company recognizes the Human Resources as its most important assets and is constantly engaged in enriching the value and developing competencies of Human Resources through various development strategies. The relationship between the management and the employees is very cordial and there are no outstanding industrial disputes. The management also has well laid down HR Policies for its employees. Welfare and health & safety of employees are high priority areas. INTELLECTUAL PROPERTY RIGHTS Innovation is an on-going process in the Company. It is the endeavor of Company to encourage inventions of new products and processes in order to increase IP Assets of the Company. The Company has developed an effective internal system to protect its Intellectual Property Rights. CAUTIONARY STATEMENT The report may contain certain statements that the Company believes are, or may be considered to be forward looking statements that describe our objectives, plans or goals. All these forward looking statements are subject to certain risks and uncertainties, including but not limited to, government action, economic development and risks inherent in the Company s growth strategy and other factors that could cause the actual results to differ materially from those contemplated by the relevant forward looking statements. 21

24 ABG Shipyard Limited Annual Report To, Annexure-C to Directors Report FORM MR- 3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED ON 31 ST March, 2016 [Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] The Members, ABG SHIPYARD LTD. Magdala Village, Dumas Road, Surat , Gujarat. We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and adherence to good corporate practices by M/s. ABG SHIPYARD LTD (hereinafter called the Company ). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon. Based on our veri cation of M/s ABG SHIPYARD LTD s books, papers, minute books, forms and returns are led and other records are maintained by the Company and also the information provided by the Company, its of cers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the nancial year ended on 31 st March, 2016, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns led and other records maintained by the Company for the nancial year ended on 31 st March, 2016, according to the provisions of: (i) (ii) (iii) (iv) The Companies Act, 2013 (the Act) and the rules made thereunder: The Securities Contracts (Regulation) Act, 1956 ( SCRA) and the rules made thereunder; The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;\ Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (v) Reserve Bank of India Act, 1934 (vi) The Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ( SEBI Act ) viz.:- (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) (c) (d) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations,2015; The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; including Amendments thereof The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; (e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations. 2008; (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009: and (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (vii) Other laws as may be applicable speci cally to the company as identi ed by the management, that is to say: a) Factories Act, 1948 b) Industrial Disputes Act,

25 ABG Shipyard Limited Annual Report c) Payment of Wages Act, 1936 d) The Minimum Wages Act, 1948 e) Employees State Insurance Act, 1948 f) The Employees Provident Fund and Miscellaneous Provisions Act, 1952 g) The Payment of Bonus Act, 1965 h) Payment of Gratuity Act, 1972 i) The Contract Labour (Regulation and Abolition) Act, 1970 j) The Maternity Bene t Act, 1961 k) The Child Labour (Prohibition and Regulation) Act, 1986 l) The Industrial Employment (Standing Orders) Act, 1946 m) The Employees Compensation Act, 1923 (earlier known as Workmen s Compensation Act, 1923) n) Equal Remuneration Act, 1976 o) The Employment Exchange (Compulsory Noti cation of Vacancies) Act, 1956 p) The Environment (Protection) Act q) The Hazardous Wastes (Management, Handling And Transboundary Movement) Rules, 2008 r) The Water (Prevention & Control of Pollution) Act, 1974, [Read with Water (Prevention & Control of Pollution) Rules, 1975) s) The Air (Prevention & Control of Pollution) Act, 1981, [Read with the Air (Prevention & Control of Pollution) Rules, 1982 t) Customs Act, 1962 u) Gratuity Act, 1972 v) Gujarat Maritime Board Act-1981 w) Indian Ports Act 1908 We have also examined compliance with the applicable clauses of the following: (i) (ii) Secretarial Standards issued by The Institute of Company Secretaries of India. The Listing Agreements entered into by the Company with Bombay Stock Exchange (BSE) & National Stock Exchange (NSE). During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except to the extent as mentioned below: 1. The Company has not led Form MGT-14 with Registrar of Companies for Adoption of Annual Accounts and Board s Report under section 179 of the Companies Act, The Company has not led Annual Performance Report (APR) in Form ODI part II with Reserve Bank of India as per RBI// /374 A.P. (DIR Series) Circular No The Company has not given advertisement in newspaper regarding Board Meetings held on 13/08/2015, 06/11/2015 and 11/02/ As per the explanation and information provided by the Management, the Company has obtained Compliance Certi cate duly signed by both Compliance Of cer and authorized representative of RTA regarding maintenance of physical & electronic transfer facility under Regulation 7 (3) of the Securities and Exchange Board of India (Listing Obligations and Disclouser Requirements) Regulations, for the half year ended , however, due to unavailability of records, we were not been able to verify the same. 5. The Company has not posted Share Capital Audit Report and Statement of Investor s Complaints for the quarter ended 30/09/2015, Shareholding Pattern and Corporate Governance Report for the quarter ended 31/03/2016 on its website. 6. The Company has not posted Mandatory policies such as Code of Conduct, Policy on Insider Trading and Whistle Blower Policy on its web site. 23

26 ABG Shipyard Limited Annual Report We further report that, the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non- Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act, except our observations mentioned above. Adequate notice is given to all Directors to schedule the board meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clari cations on the agenda items before the meeting and for meaningful participation at the meeting. We further report that, there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. Kala Agarwal Place: Mumbai Practising Company Secretary Date: 10 th August, 2016 FCS No.: 5356 Note: This report is to be read with our letter of even date which is annexed as ANNEXURE A and forms an integral part of this report. To, The Members, ABG SHIPYARD LTD Magdala Village, Dumas Road, Surat Gujarat. Our report of even date is to be read along with this letter. Annexure A 1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The veri cation was done on test basis to ensure that correct facts are re ected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. 3. We have not veri ed the correctness and appropriateness of nancial records and Books of Accounts of the company. 4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc. 5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the veri cation of procedures on test basis. 6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the ef cacy or effectiveness with which the management has conducted the affairs of the company. Kala Agarwal Place: Mumbai Practising Company Secretary Date: 10 th August, 2016 FCS No.:

27 ABG Shipyard Limited Annual Report Annexure - D to Directors Report FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN As on Financial Year ended on 31 st March Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, I. REGISTRATION & OTHER DETAILS: 1 CIN L61200GJ1985PLC Registration Date 03/15/ Name of the Company ABG Shipyard Ltd 4 Category/Sub-category of the Company Public Company 5 Address of the Registered of ce & contact details Magdala Village, Off Dumas Road, Surat, Gujarat Tel website: 6 Whether listed company Listed 7 Name, Address & contact details of the Registrar & Transfer Agent, if any. II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY Link Intime India Private Ltd. C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup West, Mumbai (All the business activities contributing 10 % or more of the total turnover of the company shall be stated) S. No. Name and Description of main products / services NIC Code of the Product/service % to total turnover of the company 1. Building of Ships and Floating structures % III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES S. No. Name and address of the Company 1 ABG International Private Limited Bhupati Chambers,13, Mathew Road, Opera House, Bombay 4. 2 Western India Shipyard Limited P B No 21, Mormugao Harbour, Mormugao, Goa CIN/GLN Holding/ Subsidiary/ Associate % of shares held Applicable Section U99999MH1993PTC Holding 32.57% 2(87)(ii) L35111GA1992PLC Subsidiary 53.14% 2(87)(ii) 3 ABG Shipyard Singapore Pte. Ltd. 371, Beach Road, #22-01, Keypoint Singapore (199597) 4 ABG FPSO Private Limited 5Th Floor, Bhupati Chambers, 13 Mathew Road, Mumbai NA Subsidiary 100% 2(87)(ii) U11100MH2012PTC Subsidiary 100% 2(87)(ii) 25

28 ABG Shipyard Limited Annual Report IV. SHARE HOLDING PATTERN (Equity share capital breakup as percentage of total equity) (i) Category-wise Share Holding Category of Shareholders No. of Shares held at the beginning of the year A. Promoters Demat Physical Total % of Total Shares A. Promoters "No. of Shares held at the end of the year Demat Physical Total % of Total Shares % Change during the year (1) Indian a) Individual/ HUF 375, , % 375, , % 0.00% b) Central Govt % % 0.00% c) State Govt(s) % % 0.00% d) Bodies Corp. 31,211,040-31,211, % 17,596,602-17,596, % % e) Banks / FI % % 0.00% f) Any other % % 0.00% Sub Total (A) (1) 31,586,040-31,586, % 17,971,602-17,971, % % (2) Foreign a) NRI Individuals % % 0.00% b) Other Individuals % % 0.00% c) Bodies Corp % % 0.00% d) Any other % % 0.00% Sub Total (A) (2) % % 0.00% TOTAL (A) 31,586,040-31,586, % 17,971,602-17,971, % % B. Public Shareholding 1. Institutions a) Mutual Funds % % 47.97% b) Banks / FI 3,625, ,946 3,944, % 4,218,772-4,218, % 6.96% c) Central Govt % % 0.00% d) State Govt(s) % % 0.00% e) Venture Capital Funds % % 0.00% f) Insurance Companies 300, , % 300, , % 0.00% g) FIIs 3,443,909-3,443, % % % h) Foreign Venture % % 0.00% Capital Funds i) Others (Foreign 263, , % 1,424,125-1,424, % % Portfolio Investor (Corporate)) Sub-total (B)(1):- 7,632, ,946 7,951, % 5,943,298-5,943, % % 2. Non-Institutions a) Bodies Corp. i) Indian ,873, % ,282, % 95.73% ii) Overseas % % 0.00% b) Individuals i) Individual shareholders holding nominal share capital upto Rs. 2 lakh ii) Individual shareholders holding nominal share capital in excess of Rs 2 lakh ,018 2,132, % ,568, % % , % ,431, % % 26

29 ABG Shipyard Limited Annual Report c) Others (specify) , % 0.00% Non Resident Indians , % , % % Overseas Corporate Bodies % % 0.00% Foreign Nationals % 0.00% 0.00% Clearing Members , % ,249, % % Trusts % % 0.00% Of ce Bearers , % , % 0.00% Foreign Bodies - D R % % 0.00% Sub-total (B)(2):- 14,300,727 1,018 14,301, % 30,115, ,115, % % Total Public (B) 21,933, ,964 22,253, % 36,059, ,059, % 62.04% C. Shares held by % % 0.00% Custodian for GDRs & ADRs Grand Total (A+B+C) 53,519, ,964 53,839, % 54,030, ,030, % 18.94% (ii) Shareholding of Promoter Sr. No. Shareholder s Name Shareholding at the beginning of the year No. of Shares % of total Shares of the company % of Shares Pledged/ encumbered to total shares 27 Shareholding at the end of the year No. of Shares % of total Shares of the company % of Shares Pledged/ encumbered to total shares % change in shareholding during the year 1 ABG International Pvt. Ltd 31,211, % 95.57% 17,596, % 99.85% % 2 Rishi Agarwal 281, % 100% 281, % 100% 0.00% 3 Kamlesh Kumar Agarwal 93, % 0% 93, % 0% 0.00% 31,586, % - 17,971, % % (iii) Change in Promoters Shareholding (please specify, if there is no change) Sr No. Particulars ABG INTERNATIONAL PVT. LTD. Shareholding at the beginning of the year Cumulative Shareholding during the year No. of shares % of total shares No. of shares % of total shares 1 At the beginning of the year 31,211, % Changes during the year (13,614,438) (25.29%) At the end of the year 17,596, % 17,596, % The change in shareholding was due to invocation of pledge by the lenders on various dates. (iv) Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs): Sr. For each of the Top 10 shareholders Shareholding at the beginning of the year Shareholding at the End of the Year No. No. of shares % of total shares No. of shares % of total shares NAME 1 Strategic Credit Capital Private Limited % 13,233, % 2 Syndicate Bank % 1,149, % 3 Bakulesh Trambaklal Shah % 1,100, % 4 Stock Holding Corporation of India - A/c % 1,051, % Nse Derivatives 5 Life Insurance Corporation of India 1,000, % 1,000, % 6 Citi Bank N. A ,28, % 7 Nippon Investment and Finance 1,371, % 8,21, % Company Pvt Ltd. 8 Polus Global Fund % 761, % 9 The South Indian Bank Ltd % 720, % 10 Bank of Baroda % 679, % The change in the shareholding in the above shareholders was due to buying/selling of shares by the shareholders on various dates

30 ABG Shipyard Limited Annual Report (v) Shareholding of Directors and Key Managerial Personnel: Sr. No. Shareholding of each Directors and each Key Managerial Personnel Date Reason Shareholding at the beginning of the year Cumulative Shareholding during the year No. of shares % of total shares No. of shares % of total shares 1 Mr. Rishi Agarwal At the beginning of the 01/04/ , % 281, % year Changes during the year % % At the end of the year 31/03/ , % 281, % V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment. Particulars Secured Loans excluding deposits Indebtedness at the beginning of the nancial year (Rs in Lacs) Unsecured Loans Deposits Total Indebtedness i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii) Change in Indebtedness during the nancial year * Addition * Reduction Net Change Indebtedness at the end of the nancial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii) VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager: Sr.No. Particulars of Remuneration Total Amount (Rs in Lac) 1. Name : Mr. Syed Abdi Mr. Dhananjay Datar Designation : Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Pro ts in lieu of salary under section 17(3) Income- tax Act, 1961 Managing Director & CEO Executive Director Mr. S. Muthuswamy Executive Director included in the above included in the above included in the above Stock Option Sweat Equity

31 ABG Shipyard Limited Annual Report Sr.No. Particulars of Remuneration Total Amount (Rs in Lac) 4. Commission as % of pro t others, specify Others, please specify B. Remuneration to other Directors Total (A) Overall Ceiling as per the Act * Sr.No Particulars of Remuneration Total Amount (Rs in Lac) 1 Independent Directors Mr. Ashwani Kumar Fee for attending Board / committee meetings Mr. Ravi Nevatia Mr. Ashok Chitnis Mrs. Ranjitha Godbole, Nominee Director Commission Others, please specify Total (1) Other Non-Executive Directors Fee for attending board committee meetings Commission Others, please specify Total (2) Total (B)=(1+2) Total Managerial Remuneration (A+B) C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD Overall Ceiling as per the Act * Sr.No Particulars of Remuneration Name of Key Managerial Personnel Total Amount (Rs in Lac) Designation Mr. Hasmukh- Daftary, CFO Mr. Dheeraj Sharma, CS (upto ) 1 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 b) Value of perquisites u/s 17(2) Income-tax Act, 1961 included in the above included in the above included in the above (c) Pro ts in lieu of salary under section 17(3) Income- tax Act, Stock Option Sweat Equity Commission as % of pro t others, specify Others, please specify Total * * Since the Company is having losses, the Company has paid Managerial Remuneration in accordance with the provision of Section 196 and 197 of the Companies Act, 2013 read with schedule V and rules made thereunder. 29

32 ABG Shipyard Limited Annual Report VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Type Section of the Companies Act Brief Description Details of Penalty / Punishment/ Compounding fees imposed Authority [RD / NCLT/ COURT] Appeal made, if any (give Details) A. COMPANY Penalty NIL NIL NIL NIL NIL Punishment NIL NIL NIL NIL NIL Compounding NIL NIL NIL NIL NIL B. DIRECTORS Penalty NIL NIL NIL NIL NIL Punishment NIL NIL NIL NIL NIL Compounding NIL NIL NIL NIL NIL C. OTHER OFFICERS IN DEFAULT Penalty NIL NIL NIL NIL NIL Punishment NIL NIL NIL NIL NIL Compounding NIL NIL NIL NIL NIL 30

33 ABG Shipyard Limited Annual Report Annexure-E to Directors Report THE ANNUAL REPORT ON CSR ACTIVITIES FOR THE FY As per the provision of Section 135 & Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy), Rule, 2014, and forming part of the Directors Report for the year ended 31 st March, i. Brief Outline: The Board of Directors of the Company in compliance of the provisions of the Companies Act 2013, has formulated the CSR Policy. The Board shared its vision to actively help / assist the weaker sections of the Society peoples, mainly in and around the geographical areas where Company s Yard are located, while constituting its CSR Policy. The major focus area of CSR Policy are: Promoting Education. Skill Development. Promoting Research and Development Shipbuilding and technology. Promoting medical help / assistance to the needy. Empowering women Undertake environmental friendly measures. ii. Composition: Chairman Mr. Syed Abdi E-NI Members Mr. S. Muthuswamy E-NI Mr. Ashwani Kumar NE-NI iii. Average net pro t of the Company for last three nancial years Rs. Nil. iv. Prescribed CSR Expenditure Rs. Nil. v. Details of CSR spent during the nancial year a. Total amount to be spent for the nancial year Rs. Nil b. Amount unspent, if any Nil c. Manner in which the amount spent during the nancial year: NA vi. vii. The Board of Directors had taken on record and approved the CSR Policy as recommended by the CSR Committee. The Company could not spend any amount as per section 135 of the Companies, Act, 2013 during the year due to the liquidity crunch faced during the nancial year under review and due to downturn in the shipbuilding industry, the Company has referred to CDR and at present working under the CDR framework. Responsibility Statement of the CSR Committee: Pursuant to the provisions of Section 135 & Schedule VII of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy), Rule, 2014, the CSR Committee con rms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and the Policy of the Company. Place: Mumbai Date: 11 th August, 2016 For and on behalf of the Board Ashwani Kumar S. Muthuswamy Director Executive Director 31

34 ABG Shipyard Limited Annual Report Annexure-F to Directors Report CORPORATE GOVERNANCE REPORT Effective Corporate Governance practices constitute the strong foundation on which successful commercial enterprise are built to last. The Company s philosophy on Corporate Governance oversees business strategies and ensures scal accountability, ethical behavior and fairness to all stakeholders. It brings into focus the duciary and trusteeship role of the Board to align and direct the actions of the organization towards creating wealth and shareholder value. 1. COMPANY S PHILOSOPHY ON CORPORATE GOVERNANCE The Company has strong legacy of fair, transparent and ethical governance practices. The Company believes in implementing the corporate governance practice that go beyond just meeting of letter of law, ABG has not only adopted practices mandated in the clause 49 of the Listing Agreement, but also incorporated some of the non-mandatory recommendations. The Company advocates transparency in all its business transactions and activities. Management and Employees of the Company stand committed to the core principles of transparency, honesty and integrity. Corporate Governance forms the core of all business endeavors. 2. COMPOSITION OF BOARD AND PARTICULARS OF DIRECTORS (i) Board Composition: Composition of the Board of Directors of your company as at 31 st March 2016 was total Seven (7) Directors comprising One Non-executive Chairman Mr. Rishi Agarwal, One (1) Managing Director Mr. Syed Abdi, one (1) Executive Director Mr. S. Muthuswamy, Three (3) Independent Directors viz Mr. Ashwani Kumar, Mr. Ravi Nevatia, Mr. Sushil Agarwal and One (1) Nominee Director Mrs. Ranjitha Godbole (Nominated by IDBI Bank Ltd.). During the period under review, Mr. Dhananjay Datar, Director liable to retire by rotation, retired from the Directorship of the Company from the date of last Annual general Meeting dt. 30 th September, The names and categories of the Directors on the Board, their attendance at Board Meeting during the year and at the last Annual General Meeting, as also the number of Directorships and Committee Memberships held by them in other companies as on 31 st March, 2016, are set out below: Name Category* Attendance Number of Directorship, Committee membership and Chairmanship # Board Meeting Last AGM Directorship Committee Membership Committee Chairmanship Mr. Rishi Agarwal Chairman NI-NE 1 No Mr. Syed Abdi Managing Director and CEO NI-E 4 Yes Mr. Dhananjay Datar, Executive Director NI-E - No Mr. S. Muthuswamy Executive Director NI-E 4 Yes Mr. Ashwani Kumar I-NE 4 Yes Mr. Sushil Kumar I-NE 4 No Mrs. Ranjitha Godbole, Nominee Director I-NE 4 No Mr. Ravi Nevatia I-NE 3 No *(NI Non-Independent, I Independent, NE- Non-Executive, E Executive) # Directorships does not include alternate directorships, directorships of private limited companies and companies incorporated outside the India and Companies under section 8 of the Companies Act, Chairmanships / Membership of Board Committees include only Audit Committee and Stakeholders Relationship Committee of Indian Public Limited Companies. None of the Directors is a Director in more than 20 Companies and Member of more than 10 Committees or Chairman of more than 5 Committees across all the companies in which he is a Director. Necessary disclosures regarding Directorship and Membership in the various Board committee positions occupied by the Directors of the Company as at 31 st March, 2016 have been made. None of the Directors are related to each other. 32

35 ABG Shipyard Limited Annual Report (ii) Board Meetings: Board of Directors of the Company met four times during the nancial year , as per the below details, the gap between two successive Board Meetings was not more than one hundred and twenty days: 1 26 th May, th August, th November, th February, 2016 Agenda along with all information as per the Annexure IA of the Clause 49 of the Listing Agreement including statutory information, relevant to the matters to be discussed is always sent to the Directors, well in advance, where it is not practicable to attach any document to agenda, the same is tabled before the meeting with speci c reference in the agenda. The Board has unfettered and complete access to any information within the Company which includes information speci ed in Annexure IA to the Clause 49 of the Listing Agreement. Agenda specifying the matters to be discussed at the Board Meetings and Committee meetings is drafted in consultation with the Chairman of the Company. The Managing Director/Executive Directors/Chief Financial Of cer briefs the Board at every Meeting on the overall performance of the Company. The Board of the Company reviews all the major decisions of the Company. None of the Non-executive Directors have any material pecuniary relationship or transactions with the Company. During the year, two meetings of Independent Directors were held on and The Independent Directors, inter-alia, reviewed the performance of non-independent Directors and the Board as a whole. Post meeting follow up mechanism: Important decisions taken at the Board/Committee Meetings are promptly communicated to the concerned departments to act thereon accordingly. (iii) Pro le of Directors seeking appointment / re-appointment in the 31 th Annual General Meeting: Detailed pro le is appended in the Notice of Annual General Meeting forming part of the Annual Report. 3. COMMITTEES OF THE BOARD As on 31 st March 2016, your Company has seven Committees of Board, namely; Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Finance & Operation Committee, Security Issue Committee, Corporate Social Responsibility (CSR) Committee and Risk Management Committee. A. AUDIT COMMITTEE Audit Committee is constituted in line of the provisions SEBI Listing Regulatations, 2015 read with Section 177 of the Companies Act, (i) Composition, Name of Members, Details of the Meetings and Attendance Details of the Committee members, number of meetings attended by them are tabled below: Name of the Director Status No. of Meeting Attended Mr. Ashwani Kumar Chairman I NE 4 Mr. Syed Abdi NI E 4 Mr. Sushil Agarwal* I NE 4 (NI Non-Independent, I Independent, NE Non-Executive, E Executive) The Audit Committee meetings are usually held at the Corporate Of ce of the Company. The Audit Committee invites such of the executives as it consider appropriate (particularly the heads of the Operations), representatives of the Statutory Auditors and Internal Auditors to be present at its meetings. The Company Secretary acts as Secretary of the Audit Committee. During the nancial year ended March 31, 2016, Four Audit Committee meetings were held with requisite quorum on the dates tabled below; th May, th August, th November, th February,

36 ABG Shipyard Limited Annual Report (ii) Terms of reference of the Audit Committee are broadly as under: Term of Reference of the Audit Committee would be as under: Oversight of the company s nancial reporting process and the disclosure of its nancial information to ensure that the nancial statement is correct, suf cient and credible; Recommendation for appointment, remuneration and terms of appointment of auditors of the company; Approval of payment to statutory auditors for any other services rendered by the statutory auditors; Reviewing, with the management, the annual nancial statements and auditor s report thereon before submission to the board for approval, with particular reference to: Matters required to be included in the Director s Responsibility Statement, to be included in the Board s report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, Changes, if any, in accounting policies and practices and reasons for the same. Major accounting entries involving estimates based on the exercise of judgment by management. Signi cant adjustments made in the nancial statements arising out of audit ndings. Compliance with listing and other legal requirements relating to nancial statements. Disclosure of any Related Party transactions. Quali cations in the audit report. Reviewing, with the management, the quarterly nancial statements before submission to the Board for approval; Reviewing, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter; Review and monitor the auditor s independence and performance, and effectiveness of audit process; Approval or any subsequent modi cation of transactions of the company with related parties; Valuation of undertakings or assets of the company, wherever it is necessary; Evaluation of internal nancial controls and risk management systems; Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems; Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staf ng and seniority of the of cial heading the department, reporting structure coverage and frequency of internal audit; Discussion with internal auditors of any signi cant ndings and follow up there on; Reviewing the ndings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board; Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern; To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors; To review the functioning of the Whistle Blower mechanism/vigil Mechanism and appoint Whistle Of cer; Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the nance function or discharging that function) after assessing the quali cations, experience and background, etc. of the candidate; Carrying out any other function as mentioned in the terms of reference of the Audit Committee. B. NOMINATION AND REMUNERATION COMMITTEE # (i) Composition, Details of the Meetings and Attendance Details of the Committee members as on 31 st March 2016 are tabled below*: Name of the Director Mr. Rishi Agarwal Mr. Ashwani Kumar Mr. Sushil Kumar 34 Status NI NE I NE I NE There was one meeting of Nomination and Remuneration Committee held on 25 th July, 2015 during the nancial year

37 ABG Shipyard Limited Annual Report (ii) Terms of Reference: The Board has approved and adopted the revised terms of reference of Nomination and Remuneration Committee as per section 178 of the Companies Act, 2013 and SEBI Circular dated April 17, 2014 for amendment to Equity Listing Agreement (which is effective from October 1, 2014) at their meeting held on 30 th May 2014, which are as follows: Formulation of the criteria for determining quali cations, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees; Formulation of criteria for evaluation of Independent Directors and the Board; Devising a policy on Board diversity; Identifying persons who are quali ed to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal. Recommend to the board sitting fees payable to the Directors for attending Board and Audit Committee Meeting. (iii) Remuneration Policy The Company pays remuneration by way of salary, perquisites and allowances to its Managing Director/Executive Directors. Annual increments, if any, are decided by the Committee within the salary scale approved by the members and within the limits stipulated by the applicable laws. The Company pays Sitting Fee per meeting to its Independent Directors for attending meetings of the Board and Audit Committee. Other than the above and as shareholders, Non-Executive Directors have no other pecuniary relationships or transactions with the Company. (iv) Details of Remuneration for the year Name of Director Sitting Fees Salaries & Perquisites Commission Stock Option Mr. Rishi Agarwal Mr. Dhananjay Datar Rs. 6,160,200/ Mr. S. Muthuswamy Rs. 5,651,200/ Mr. Syed Abdi Rs. 18,598,809/ Mr. Ashwani Kumar Rs. 88,000/ Mr. Sushil Kumar Rs. 88,000/ Mrs. Ranjitha Godbole 3 Rs. 22,000/ Mr. Ravi Nevatia Rs. 44,000/ (v) Details of Shares/ convertible instruments of the Company held by the Directors as on 31 st March 2016, are as below: Name No. of Shares % of Share capital Mr. Rishi Agarwal 2,81, C. STAKEHOLDER RELATIONSHIP COMMITTEE # (i) Composition, Details of the Meetings and Attendance The Composition of the Stakeholder Relationship Committee as on 31 st March 2016, is given below: Name Mr. Ashwani Kumar - Chairman Mr. S. Muthuswamy Mr. Syed Abdi Status I NE NI - E NI - E (NI Non-Independent, I Independent, NE Non-Executive, E Executive) The Committee has not met during the nancial year The Committee has Authorized Compliance Of cer of the Company to look after the Investor Grievances and Share transfer requests. 35

38 ABG Shipyard Limited Annual Report (ii) Terms of reference The terms of reference of the Share Transfer and investors Grievance Committee / Stakeholder Relationship Committee cover the matters speci ed under Clause 49 of the Listing Agreement and Section 178 of the Companies Act, The Share Transfer and Investors Grievance committee / Stakeholder Relationship Committee looks into the redressal of complaints of investors such as transfer or credit of shares to demat accounts, non-receipt of shares or refund order / dividend / notices / annual reports, etc., and also issue of duplicate certi cates and review all other matters connected with securities. The Committee oversees the performance of the Registrar and Share Transfer Agent. As on 31 st March 2016, no instruments of share transfer was pending. (iii) Name, designation and address of the Compliance of cer (w.e.f. 6 th July, 2016) Mr. Ashish Pandey Company Secretary & DGM (Finance & Accounts) ABG Shipyard Limited 4 th Floor, Bhupati Chambers 13 Mathew Road, Mumbai Tel: Fax: ashish.pandey@abgindia.com (iv) Details of Investors complaints Investors complaints received directly or through SEBI and Stock Exchanges during 1 st April, 2015 to 31 st March, 2016 and the status of said complaints as on 31 st March, 2016 are given below: Received from Received and Resolved during the FY Pending as at 31 st March 2016 Investors 11 Nil Through SEBI 00 Nil Through Stock Exchanges 00 Nil Total 11 NIL D. FINANCE AND OPERATION COMMITTEE (i) Composition The Finance and Operation Committee, comprises 4 (Four) members of the Board as on 31 st March 2016, as follows: Name Mr. Syed Abdi Mr. Dhananjay Datar* Mr. S. Muthuswamy Mr. Ashwini Kumar Status NI E NI E NI E I NE The Committee invites Chief Finance Of cer and such of the executives as it consider appropriate (particularly the heads of the Finance and Operations) to be present at its meetings. (ii) *Mr. Dhananjay Datar ceased to be member with effect from 30 th September, Terms of reference The Board has set out detailed terms of reference which includes but not limited to the followings: 36

39 ABG Shipyard Limited Annual Report Finance; Review the Company s nancial policies, risk assessment and minimisation procedures, strategies and capital structure, Investment management, working capital and cash ow management and take necessary action, make such reports and recommendations to the Board with respect thereto as it may deem advisable. Review, alter, make, amendments in banking arrangements and cash management. Exercise all powers to borrow moneys (otherwise than by issue of debentures), including but not limited to working capital nance, terms loans, temporary overdraft facilities, commercial papers, fund/non-fund based, whether secured, unsecured, etc. within the limits approved by the shareholders of the Company as per the provisions of of the Companies Act, 2013 from time to time. Operations: Review, manage, act on day to day business operation and affairs of the Company and take necessary action, make such reports and recommendations to the Board with respect thereto as it may deem advisable. To approve, enter, execute, amend into Shipbuilding Contracts, Novation Agreement, Vessels Delivery order and to do all acts deeds and things as may be necessary in this regard. Purchase or Acquire movable and immovable assets (tangible and intangible) from domestic or foreign markets and including but not limited to competitive pricing, auction, barter trading, Hire purchase, lease or any other manner as may be deem t in the ordinary course of the business. Authorize any executive, authorised representative in any legal proceeding for and on behalf of the Company The Committee met 2 times on and during the nancial year E. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR COMMITTEE) (i) Composition Name of Members, Details of the Meetings and Attendance The Board of Directors has constituted CSR Committee in line with the provisions of Section 135 of the Companies Act, Constitution of the said Committee is as under: Name of the Director Mr. Syed Abdi- Chairman Mr. Ashwani Kumar Mr. S. Muthuswamy Status NI-E I-NE NI-E (ii) Terms of reference Terms of Reference of the CSR Committee are as under: 1) To formulate and recommend to the Board a Corporate Social Responsibility Policy in line with the activities mentioned in Schedule VII of the Companies Act, 2013; 2) To recommend the amount of expenditure to be incurred in furtherance of its Corporate Social Responsibility Policy as well as its mission and vision; 3) To institute a transparent monitoring mechanism for the implementation of the Policy from time to time and, 4) To institute an appropriate communications policies to effectively build and protect the Group s reputation both internally and externally (iii) Meeting: The Committee has not met during the nancial year F. SECURITY ISSUE COMMITTEE (i) Composition, Details of the Meetings The Security Issue Committee comprises of four Members of the Board as on 31 st Match, 2016, as follows: Name of the Director Mr. S. Muthuswamy Mr. Syed Abdi Mr. Dhananjay Datar* Mr. Ashwani Kumar** Status NI-E NI-E NI-E I-NE 37

40 ABG Shipyard Limited Annual Report *Mr. Dhananjay Datar ceased to be member with effect from 30 th September, ** Mr. Ashwani Kumar as a member of the Committee w.e.f The Security Issue Committee has been constituted to look after the allotment of the Securities to the CDR Lenders for conversion of Loans/FITL/Interest on FITL as per the terms of the MRA and for other issues/allotment in future as may be delegated to the Committee. The Committee meets periodically upon receipt of applications from the Lenders for allotment of shares. The Board has xed the terms of references for the company which may be altered for ease of the performance of the committee in the interest of the company and stakeholders. During the year under review, the Committee met six (6) times for speci c agenda of allotment of the Securities to the CDR Lenders st June, 2015, th June, st July, th August, nd September, th September, 2015 G. RISK MANAGEMENT COMMITTEE: (i) (ii) Composition The Risk Management Committee comprises of Three (3) members of the Board as on 31 st March, 2016, as follows: Name Status Designation Mr. Syed Abdi NI E Managing Director and Chief Executive Of cer Mr. S. Muthuswamy NI E Executive Director Mr. Hasmukh Daftary CFO Terms of reference: To assess risks in the operation of yards of the Company, to mitigate and minimise risks in the operations of the yard, Periodic monitoring of risks and other matters delegated to the committee by the board of Directors of the Company from time to time. 4. GENERAL BODY MEETINGS (i) Location and time of last three Annual General Meetings The last three Annual General Meetings of the Company were held at the Registered Of ce of the Company, as detailed below: Details Date & Time Venue Special Resolutions Passed 28 th AGM th AGM th AGM noon noon noon Registered Of ce of the Company at Near Magdalla Port, Dumas Road, Surat Issue of Securities for a value of upto Rs. 1000Crs. by way of a domestic / international offering/ Quali ed Institutional Placement under chapter VIII of SEBI (ICDR) Regulations and pursuant to Section 81 (1A) of the Companies Act, Issue of Securities for a value of upto Rs. 1000Crs. by way of a domestic / international offering/ Quali ed Institutional Placement under chapter VIII of SEBI (ICDR) Regulations and pursuant to Section 81 (1A) of the Companies Act, Approval of the payment of the Remuneration as Minimum Remuneration to Mr. Dhanajay Datar - Executive Director of the Company in case of no pro ts/ inadequate pro ts for remaining tenure of his appointment upto 28 th July Approval of the payment of the Remuneration as Minimum Remuneration to Mr. S. Muthuswamy - Executive Director of the Company in case of no pro ts/ inadequate pro ts for remaining tenure of his appointment upto 28 th July Issue of Securities for a value of upto Rs. 2000Crs. by way of a domestic / international offering/ Quali ed Institutional Placement under chapter VIII of SEBI (ICDR) Regulations and pursuant to provisions of the Companies Act, Approval of upward revision of remuneration of Mr. Syed Abdi, Managing Director and CEO of the Company in case of no pro t/inadequate pro ts for remaining tenure of his appointment. 38

41 ABG Shipyard Limited Annual Report (ii) Extra-ordinary General Meetings held during last three years Details of the Extra-ordinary General Meeting of the Company held during last three years are as follows. Details Date & Time Venue Special Resolutions Passed Extra Ordinary General Meeting (EGM) noon Registered Of ce of the Company at Near Magdalla Port, Dumas Road, Surat Amendment to the Articles of association of the Company For Increase in Authorised Capital to Rs ,00,00,000/-. 2. Authority to Board of Directors for borrowings upto 20,000/- crs. - u/s 180 (1) (c) of the Companies Act, Authority to Board of Directors for creation of charges on the movable and immovable assets of the Company as security upto the extent of 20,000/- crs. - u/s 180 (1) (a) of the Companies Act, Approval of appointment of Mr. Syed Waheed Zafar Abdi as Managing Director and Chief Executive Director. 5. Approval of appointment of Mr. S. Muthuswamy as Executive Director. The Company has not passed any Resolutions through Postal Ballot during the nancial year DISCLOSURES AND OTHER INFORMATION: (i) (ii) Materially Signi cant Related Party Transactions There are no transactions of materially signi cant nature that have been entered into by the Company with the Promoters, Directors, their relatives and the Management and in any company in which they are interested, that may have potential con ict with the interest of the company. Transactions with related parties are disclosed in Note no. 40 to the Accounts in Annual Report. Compliance The Company has complied with the requirements of the Listing Agreements with the Stock Exchanges as well as the Regulations and Guidelines prescribed by the Securities and Exchange Board of India. There were no penalties or strictures imposed on the Company by any such statutory authorities for non compliance on any matter related to capital markets, during the last three years. (iii) Code of Conduct The Board of Directors of the Company, in line with the sub clause II E of the Clause 49 of the Listing Agreement, has laid down a Code of Conduct for all Board members and senior management personnel of the Company. The code of conduct is available on the website of the Company i.e. The declaration signed by Executive Director to this effect is as below: To, The Shareholders of ABG Shipyard Ltd., Sub: Compliance with Code of Conduct. I hereby declare that all the Board Members and Senior Management personnel have af rmed compliance with the code of conduct as adopted by the Board of Directors. Place: Mumbai Date: 11 th August, 2016 For ABG Shipyard Limited S Muthuswamy Executive Director (iv) Prohibition of Insider Trading The Company has framed its Insider Trading Regulation wherein rules for the preservation of price sensitive information, pre-clearance of trade, monitoring and implementation are framed. This code is applicable to all Directors and to such employees of the company who are incidental to have access to unpublished price sensitive information (UPSI) relating to the Company. Transaction for dealing in the prescribed time requires prior approval from the Company. (v) Whistle blower policy/vigil Mechanism - The Company has adopted a Whistle Blower Policy/Vigil Mechanism and has established the necessary vigil mechanism in line with sub clause II - F of clause 49 of the Listing Agreement with the Stock Exchanges as noti ed by SEBI Circular dated April 17, 2014 and Section 177 (9) of the Companies Act, 2013, for the directors and employees to report concerns about unethical behavior. No person has been denied access to the Audit Committee. However, no instances of fraud or other irregularities have been observed, which need to be reported to the Board/Audit Committee. The Company has implemented following Non-Mandatory Requirements as prescribed by Annexure XIII of the Listing Agreement: (i) The Board A non-executive Chairman is maintaining a Chairman s of ce at the company s expense. 39

42 ABG Shipyard Limited Annual Report (ii) Separate posts of Chairman and CEO The company has appointed separate persons to the post of Chairman and Managing Director/CEO. (iii) Reporting of Internal Auditor The Internal auditor may report directly to the Audit Committee. 6. SECRETARIAL AUDIT The Board of Director of the company has appointed Mrs. Kala Agarwal, practicing Company Secretary, to carry out a Reconciliation of Share Capital Audit Report in line with the Clause 55A of the Listing Agreement for reconciliation of the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. The Reconciliation of Share Capital Audit Report con rms that the company has complied with all the applicable provisions of the Companies Act, 2013, Depository Act, 1996, Listing Agreements with the Stock Exchanges, Securities Contracts (Regulation) Act, 1956 and all the regulations of the SEBI as applicable to the Company and also con rms that the total issued / paid up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL. 7. MEANS OF COMMUNICATION The quarterly, half yearly, yearly nancial Results of the company and Notices of Board Meetings and General Meetings etc. are published normally in The Free Press Journal, Navshakti, Gujarat Mitra, Dhabkar, Times of India (Gujarat) etc. The quarterly results, half yearly results, Annual results and Shareholding Pattern are also displayed on the Company s website at which is updated at regular intervals. The quarterly results, half yearly results, Annual results and Shareholding Pattern are forwarded to Stock Exchanges from time to time, where the Company s shares are listed. In addition to the above, the Company also regularly provides information to the stock exchanges as per the requirements of the Listing Agreement/SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and updates the same on the Company s website periodically to include information on new developments and business opportunities of the Company. 8. GENERAL SHAREHOLDERS INFORMATION (i) Annual General Meeting: (ii) Day, Date & time: Venue: Financial Calendar: 19 th September, 2016 at A.M. At the Registered Of ce of the Company at: Near Magdalla Port, Dumas Road, Surat Financial year 1 st April to 31 st March I st Quarter Results On or before 14 th of August II nd Quarter Results III rd Quarter Results IV th Quarter Results (iii) Book Closure: On or before 14 th of November On or before 14 th of February On or before 30 th of May 13 th September, 2016 to 19 th September, 2016 (both days inclusive) (iv) Listing at Stock Exchanges: Name & Address of Stock Exchange Stock Code Code on Screen The Bombay Stock Exchange Limited (BSE) Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai Phone : National Stock Exchange of India Limited (NSE) Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai Phone : ABGSHIP ABGSHIP ABGSHIP Series EQ The Company has paid annual listing fees to the above Stock Exchanges for the nancial year

43 ABG Shipyard Limited Annual Report (v) Market Price Data A. Bombay Stock Exchange (BSE) Month ABG High (Rs.) ABG Low (Rs.) BSE Sensex High BSE Sensex Low Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

44 ABG Shipyard Limited Annual Report B. National Stock Exchange (NSE) Month ABG High (Rs.) ABG Low (Rs.) NIFTY High NIFTY Low Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

45 ABG Shipyard Limited Annual Report (vi) Registrar and Share Transfer Agent Shareholders may address all correspondences to the Registrar and Share Transfer Agents of the Company at the following Address: Link Intime India Private Ltd. (formerly Intime Spectrum Registry Limited) C-13, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup West, Mumbai Tele: Fax : rnt.helpdesk@linkintime.co.in (vii) Share Transfer System 100% of the Equity shares (except 18 no. of equity shares belong to public) of the Company are in electronic form. Transfer of these shares is done through the depositories without involvement of the company. As regards transfer of shares in physical form the transfer document can be lodged with the Registrar & Share Transfer Agent at address mentioned in above point no. (vii) Transfer of Shares in physical form is normally processed by the Registrar and Share Transfer Agent and approved by Share Transfer and Investors Grievance & Finance Committee of the Board which meets at regular intervals. (viii) Dematerialization of Shares As of 31 st March 2016, equity shares representing around 100% of the paid up equity capital of the company are in dematerialized form with the following depositories: Description ISIN No. Depositories Fully Paid INE067H01016 National Securities Depository Ltd (NSDL) Trade World, A Wing, 4 th oor, Kamala Mills Compound, Lower Parel, Mumbai Fully Paid INE067H01016 Central Depository Services (India) Ltd. (CDSL) Phiroze Jeejeebhoy Towers, 17 th Floor, Dalal Street, Fort, Mumbai During the year the Company has not received any application for dematerialization / rematerialization of shares by shareholder. The Company has paid annual custodian charges for both NSDL and CDSL for the nancial year (ix) Distribution of shareholding (Shares) as on Range Shareholding of Shares No. of Shareholders % of Shareholders Number of Shares % of Shareholding & above Total (x) Shareholding pattern as on (A) Category of Shareholder Shareholding of Promoter and Promoter Group 1 Indian 43 Number of shares Percentage of shareholding (a) Individuals/ Hindu Undivided Family (b) Bodies Corporate Total Shareholding of Promoter and Promoter Group

46 ABG Shipyard Limited Annual Report (B) B1 Public shareholding Institutions (a) Mutual Funds/ UTI (b) Financial Institutions / Banks (c) Insurance Companies (d) Foreign Institutional Investors (e) Foreign Portfolio Investor (Corporate) Sub-Total (B)(1) B2 Non-institutions (a) Bodies Corporate (b) Individuals I Individual shareholders holding nominal share capital up to Rs 1 lakh ii Individual shareholders holding nominal share capital in excess of Rs. 1 lakh (c) Any Other (specify) (c-i) Clearing Member (c-ii) NRI (c-iii) Of ce bearers Sub-Total (B)(2) (B) Total Public Shareholding (B) = (B)(1)+(B)(2) TOTAL (A)+(B) (xi) Shareholders holding more than 1% of the share capital as on Sr. No. Name of Sharehoder No. of shares % of total shares 1 ABG International Pvt. Ltd. 17,596, % 2 Strategic Credit Capital Private Limited 13,233, % 3 Syndicate Bank 1,149, % 4 Bakulesh Trambaklal Shah 1,100, % 5 Stock Holding Corporation of India - A/c Nse Derivatives 1,051, % 6 Life Insurance Corporation of India 1,000, % 7 Citi Bank N. A. 8,28, % 8 Nippon Investment and Finance Company Pvt Ltd. 8,21, % 9 Polus Global Fund 761, % 10 The South Indian Bank Ltd 720, % 11 Bank of Baroda 679, % 12 India Max Investment Fund Ltd. 6,08, % 13 Andhra Bank 5,58, % 44

47 ABG Shipyard Limited Annual Report (xii) Details of unclaimed shares as on nancial year ended 31 March, 2016 issued pursuant to Initial Public Offer (IPO) are as follows (Pursuant to clause 5A of the Listing Agreement) - Sr. No. (A) (B) (C) (D) Particulars Cases No. of Shares Aggregate Number of Shareholders and the outstanding Shares in the suspense account lying at the beginning of the year i.e Number of Shareholders who approached for transfer of Shares from suspense account during to Number of Shareholders to whom Shares were transferred from suspense account during to Aggregate Number of Shareholders and the outstanding Shares in the suspense account at the end of the year i.e NIL NIL NIL NIL The Voting Rights on the above mentioned shares in column (D) shall remain frozen till the rightful owner claims the shares. (xiii) Unclaimed / Unpaid Dividend Pursuant to section 205A and 205C of the Companies Act, 1956 and other applicable provisions, if any, of the Companies Act, 1956, the amount remaining unclaimed/unpaid for a period of seven years from the date of transfer of dividend to the Unpaid Dividend Account of the Company shall be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government. No claim shall lie against the Company or IEPF, in respect of dividend amounts that have been transferred to IEPF. Members who have not yet en-cashed their dividend warrant(s) are requested to make their claim without any delay to the Company s Registrar and Transfer Agents, i.e. Link Intime India Private Limited The following table gives information relating to outstanding dividend accounts and the last dates for making claims and by which they need to be transferred: Period of the Dividend Percentage of Dividend Last date for making claim Due Date of Transfer to IEPF th October, nd October, th October, th October, th October, th October, th October, th October, NIL NA NA NIL NA NA NIL NA NA NIL NA NA NIL NA NA 45

48 ABG Shipyard Limited Annual Report (xiv) Unclaimed/Unpaid Dividend amount transferred to IEPF There was no Unclaimed/unpaid dividend money was due for transfer to IEPF. (xv) Outstanding GDRs/ ADRs/ Warrants or any convertible instruments The Company has no outstanding GDRs/ ADRs/ Warrants or any convertible instruments. (xvi) Shipyards Location Surat Shipyard Near Magdalla Port Dumas Road Surat , Gujarat (xvii) Address for Correspondence Dahej Shipyard Village Jageshwar Near Dahej, Tal Vagra Dist. Bharuch, Gujarat Legal & Secretarial Department 2 nd, Floor, Bhupati Chamber, 13, Mathew Road Mumbai Tele: Fax: seclegal@abgindia.com Place: Mumbai Date: 11 th August, 2016 For and on behalf of the Board Ashwani Kumar S. Muthuswamy Director Executive Director Annexure G to Directors Report FORM NO. AOC -2 (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in Section 188 (1) of the Companies Act, 2013 including certain arms length transaction under third proviso thereto. 1. Details of contracts or arrangements or transactions not at Arm s length basis: Name (s) of the related party & nature of relationship Nature of contracts/ arrangements/ transaction Duration Salient terms including the value, if any Nil Justi cation Date of approval by the Board Amount paid as advances, if any Date on which the special resolution was passed in General meeting as required under rst proviso to section Details of contracts or arrangements or transactions at Arm s length basis: Name (s) of the related party & nature of relationship Nature of contracts/ arrangements/ transaction Duration Nil Salient terms including the value, if any Date of approval by the Board Amount paid as advances, if any Place: Mumbai Date: 11 th August, 2016 For and on behalf of the Board Ashwani Kumar S. Muthuswamy Director Executive Director 46

49 ABG Shipyard Limited Annual Report CEO AND CFO CERTIFICATION To, The Board of Directors, ABG Shipyard Limited. Sub: CEO and CFO Certi cation We hereby certify that we have reviewed the nancial statements and the cash ow statement of ABG Shipyard Limited for the year ended March 31, 2016 and that to the best of our knowledge and belief, we state that; 1. (a) these statements do not contain any materially untrue statement or omit any material fact or contain statements that may be misleading, (b) these statements present a true and fair view of the company s affairs and are in compliance with existing accounting standards, applicable laws and regulations. 2. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or in violation of the Company s code of conduct. 3. We accept the responsibility for establishing and maintaining internal controls for nancial reporting. We have evaluated the effectiveness of internal control systems of the Company pertaining to nancial reporting and have disclosed to the Auditors and Audit Committee, de ciencies in the design or operation of such internal controls, if any, of which we are aware and steps taken or proposed to be taken for rectifying these de ciencies. 4. We have indicated to the Auditors and the Audit Committee; (a) (b) (c) signi cant changes in the internal control over nancial reporting during the year. signi cant changes in accounting policies made during the year and that the same have been disclosed in the notes to the nancial statements; and instances of signi cant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a signi cant role in the Company s internal control system over nancial reporting. Yours sincerely, S. Muthuswamy Hasmukh Daftary Executive Director Chief Financial Of cer Place: Mumbai Date: 11 th August,

50 ABG Shipyard Limited Annual Report INDEPENDENT AUDITOR S COMPLIANCE CERTIFICATE To The Members of ABG Shipyard Limited 1. We have examined the compliance of conditions of Corporate Governance by ABG Shipyard Limited (the Company), for the year ended March 31, 2016, as stipulated in: Clause 49 (excluding clause 49(VII)(E)) of the Listing Agreements of the Company with stock exchanges for the period from April 01, 2015 to November 30, Clause 49(VII)(E) of the Listing Agreements of the Company with the stock exchanges for the period from April 01, 2015 to September 01, Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) for the period from September 02, 2015 to March 31, 2016 and Regulations 17 to 27 (excluding regulation 23(4)) and clauses (b) to (i) of regulation 46(2) and paragraphs C, D and E of Schedule V of the SEBI Listing Regulations for the period from December 01, 2015 to March 31, The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring compliance with the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. 3. We have examined the relevant records of the Company in accordance with the Generally Accepted Auditing Standards in India, to the extent relevant, and as per the Guidance Note on Certification of Corporate Governance issued by the Institute of the Chartered Accountants of India. 4. In our opinion and to the best of our information and according to our examination of the relevant records and the explanations given to us and the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreements and Regulation 17 to 27 and clauses (b) to (i) of Regulation 46(2) and paragraphs C, D and E of Schedule V of the SEBI Listing Regulations for the respective periods of applicability as specified under paragraph 1 above, during the year ended March 31, We state that such compliance is neither an assurance as to the future viability of the Company n or the efficiency or effectiveness with which the Management has conducted the affairs of the Company. For Nisar & Kumar Chartered Accountants Firm No W Place: Mumbai Date: 11 th August, 2016 M.N.Ahmed Partner M. No

51 ABG Shipyard Limited Annual Report INDEPENDENT AUDITOR S REPORT To The Members of ABG Shipyard Limited Report on the Standalone Financial Statements We have audited the accompanying standalone nancial statements of ABG Shipyard Limited ( the Company ), which comprise the Balance Sheet as at March 31 st, 2016, and the Statement of Pro t and Loss and Cash Flow Statement for the year then ended, and a summary of signi cant accounting policies and other explanatory information. Management s Responsibility for the Standalone Financial Statements The Company s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 2013 (the Act ) with respect to the preparation of these standalone nancial statements that give a true and fair view of the nancial position, nancial performance and cash ows of the Company in accordance with the Accounting principles generally accepted in India including the Accounting Standards speci ed in section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these standalone nancial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We have conducted our audit in accordance with the Standards on Auditing speci ed under section 143 (10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the nancial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal nancial control relevant to the Company s preparation and fair presentation of the nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company s Directors, as well as evaluating the overall presentation of the nancial statements. We believe that the audit evidence we have obtained is suf cient and appropriate to provide a basis for our quali ed audit opinion. Basis for Quali ed Opinion 1. Note No. 11 to the nancial statements. Due to prolonged suspension of construction activities of some of the Plant Assets in Dahej Shipyard facilities, expenses incurred and capitalized so far on those assets, related advances given to suppliers and contractors, the physical condition of these assets under construction require technical evaluation to determine impairments or write off, if any. However, in the view of the management, the suspension of construction activities of these assets is temporary in nature and assets under construction are not obsolete, and the company will be able to resume construction activities in the near future and hence no provision is required to be made. Management has informed us that the recoverable amount of Assets within the meaning of Accounting Standard 28 is more than their carrying value and as such no amount needs to be recognized in the nancial statements for impairment loss. We have not been able to validate this assertion in the absence of internal exercise or external valuation report of an independent agency and the uncertainty of resumption of future operations/results of operations thereafter. Further, in absence of physical veri cation of Fixed Assets and capital work in progress at Dahej Shipyard, we are unable to comment on the carrying value of Plant Assets at Dahej Shipyard. 2. Note No. 17 (c) to the nancial statements which details various loans, advances and receivables from related parties. In respect of these loans, advances and receivables the deliverables and receipts are outstanding for a long time. Absence of recoveries from these parties since several years indicates the existence of material uncertainty that may cast doubts on the recoverability of the loans and advances. However, in the view of the management no provision is required considering that these entities are related parties and as such the balances are considered good and recoverable by the management. As such loans are interest free, and 49

52 ABG Shipyard Limited Annual Report there is no stipulation of repayment date we consider that, prima facie, the terms and conditions of such loans are prejudicial to the interest of the Company. We are unable to comment on the recoverability of loans and advances and ascertain the impact, if any, on the nancial statements. 3. Note No.18 to the nancial statements, regarding subsidy receivable. The Company had recognised for subsidy under Ship Building Subsidy Scheme in earlier years, out of which subsidy of Rs. 49, Lacs is still receivable as on 31st March, The receipt of aforesaid Subsidy is dependent upon completion of vessels and compliance with other terms and conditions of the Ship Building Subsidy Scheme of the Government of India. In view of the uncertainty involved with respect to availability of working capital as required for completion of vessels and continuing default in CDR terms as well as low key operations at Surat and no operation at Dahej, there is a material uncertainty of completion of vessels and realization of the subsidy. The Company has not made provision for the possible impact of the irrecoverability of the same. 4. Note No. 39 to the nancial statements. The Financial statements have been prepared assuming that the company will continue as a going concern. The Company has defaulted in repayment of loans and covenants of the CDR scheme of lenders. There has been suspension of operations at Dahej unit and low key operation at Surat unit. Further, there are civil and criminal proceedings pending before Judicial Authorities seeking compensations, liquidation of the Company and punishment to Directors/ Of cers of the company. The company has suffered recurring losses and its net worth has eroded. All these conditions indicate a signi cant doubt about the going concern. The Financial statements do not include any adjustments that might result from the outcome of this uncertainty. Quali ed Opinion In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Quali ed Opinion paragraph above, the aforesaid nancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March, 2016, and its loss and its cash ows for the year ended on that date. Emphasis of matters We draw attention to: 1. Note No. 12(d) to the nancial statements. The Company has investments in subsidiaries and related parties amounting to Rs. 22, Lacs as on the balance sheet date. In absence of availability of the audited nancial statements of the investee companies, we are unable to ascertain or quantify whether any provision is required to be made for the impairment of these investments. In the view of the management the investments are long term in nature and there is no permanent diminution in the value of investments requiring adjustment to the nancial statements. 2. i) Note No. 14(b) to the nancial statements. The company follows accounting practice of recognizing revenue under Accounting Standard 7 on the basis of estimated cost, cost so far incurred and estimated pro t or loss out of shipbuilding contracts. The cost estimates are done by company and we have relied on the same. A technical evaluation was carried out by the Company, of the inventory of Ships and Rigs under construction and the valuation of Work in progress recognized as per AS 7 as well as for the future foreseeable losses in the current economic scenario. The technical evaluation has been done in phases and is not completed for rigs and certain ships. Hence, we are unable to comment on further impairment, if any, which may pertain to the values of rigs and certain ships as appearing in books of Accounts as Work in Progress. In the view of the management, adequate provision for estimated future foreseeable losses is provided in the books of accounts. ii) Note No. 14(c) to the nancial statements. The Company has concluded Rig building contract with respect to two rigs. The Company is in the process of negotiating the nal settlement with these customers. Pending settlement, company continues to show a sum of Rs 175, Lacs as inventory of rigs under the head Work in Progress and as advance received under Progress Money from customers. The impact of this, on the net current asset is Nil. 3. Note No. 17 (d) to the nancial statements which details various advances to certain parties that are outstanding for a long time. In respect of these advances, no materials or services have been received by the company. Reduction of company s activity, aged outstandings, and absence of balance con rmation of outstandings from these parties, indicates the existence of material uncertainty that may cast doubts on the recoverability of these advances or deliverables against the same. However, in the view of the management, no provision is required to be done as such balances are considered good and recoverable. 4. Note No. 40(2) to the nancial statements. The Company has not provided Managerial Remuneration for the managing director after October 2015 as it would then exceed the provision of section 197 read with Schedule V to the Companies Act, The company has defaulted in repayment of loans and covenants of CDR schemes of lenders. As regards contingency related to compensation payable in lieu of Bank Sacri ce the outcome is materially uncertain and cannot be determined in terms of its monetary impact on the nancial statements. The Company s Management is of the view that the company is an operative Company and such contingency may not arise 6. Loan statements pertaining to certain Loans from some banks and nancial institutions representing book balances of Rs 89,

53 ABG Shipyard Limited Annual Report Lacs, have not been received and reconciled. Further, due to pending clari cation and con rmation from some banks for certain current/cash credit accounts, entries have not been reconciled. Hence the effect, if any, of such pending reconciliations, on nancial statements remains unascertained. 7. Some customers, creditors as well as Statutory Authorities have initiated legal proceedings against the company, which may result in compensation, interest and penalties. The possible impact of the same on nancial result cannot be ascertained, pending such outcome. Our opinion is not quali ed in respect of these matters. Report on Other Legal and Regulatory Requirements: 1. As required by the Companies (Auditor s Report) Order, 2016( the Order ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure A, a statement on the matters speci ed in paragraphs 3 and 4 of the Order, to the extent applicable. 2. As required by section143(3) of the Act, we report that: a) Except for the matters described in the basis for quali ed opinion paragraph above, we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit, b) Except for the effects of the matter described in the basis for quali ed opinion paragraph above, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books c) The Balance Sheet, Statement of Pro t and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account. d) Except for the effects of the matter described in the Basis for Quali ed Opinion paragraph above, in our opinion, the aforesaid standalone nancial statements comply with the accounting standards speci ed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, e) The matters described in the Basis for Quali ed Opinion and the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company. f) On the basis of written representations received from the directors, except one director, as on March 31, 2016 and taken on record by the Board of Directors, none of the directors is disquali ed as on March 31, 2016, from being appointed as a director in terms of section 164 (2) of the Act. We are unable to comment on the eligibility of the one director from whom the written representation has not been received. g) With respect to the adequacy of the internal nancial controls over nancial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure B. h) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014: i) The Company has disclosed the impact of pending litigations on its nancial position in its nancial statements as referred to in Note No. 28 to the Financial Statements. ii) iii) Subject to our comment in Emphasis of Matter paragraph, point no. 2 the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long- term contracts including derivative contracts. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. For Nisar & Kumar Chartered Accountants Firm No W Place: Mumbai Date: 30 th May, 2016 M.N.Ahmed Partner M. No

54 ABG Shipyard Limited Annual Report Annexure A to the Independent Auditor s Report Annexure referred to in paragraph 1 Our Report of even date to the members of ABG Shipyard Limited on the nancial statement of the Company for the year ended 31st March, 2016 On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that: i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets; ii. iii. iv. (b) (c) The Fixed Assets of the company are substantially located in two Shipyards i.e., Surat and Dahej. Fixed Assets situated at Surat, have been physically veri ed in a phased manner by the management during the year as per the program of veri cation. As informed to us, no material discrepancies were noticed between book records and physical veri cation at Surat. In our opinion, the veri cation at Surat was reasonable having regard to the size of the Company and nature of its Asset. However we were informed that no physical veri cation of Fixed Assets has been carried out at Dahej. Such Assets at Dahej constitutes approx 84% of the Total Gross Block of xed assets, hence we are unable to comment whether there exists any material discrepancies between the physical balance and book balance. The title deeds of immovable properties are held in the name of the Company, except for certain freehold lands at Dahej having gross block value of Rs Lacs and net book value of Rs Lacs is yet pending registration with concerned authorities. We have not been provided with information regarding status of pending registration of immovable properties at Surat & Kolkata, hence we are unable to comment on same. According to the information and explanations given to us, the inventory has been physically veri ed during the year by the management at its Surat Shipyard. The frequency of veri cation is reasonable and adequate in relation to the size of the Company and the nature of its business and on the basis of the records of inventory. However as the physical veri cation had not been carried out during the year under reporting at Dahej Shipyard and inventories lying with Customs Authorities/ Bonded Warehouse, we are unable to make any comment on the same as to whether any discrepancy exists between book balance and physical balance of those inventories. The Company has not updated register under section 189 of the Companies Act, 2013 hence we cannot rely on the same. The company has given interest free loans to various group companies and attention is drawn to note no. 17 of the Financial Statements. As such loans are interest free, and there is no stipulation of repayment date, we consider that prima facie the terms and conditions of such loans are prejudicial to the interest of the Company. As there is no stipulation as to repayment date of principal amount, hence clause (iii) (b) & (c) of the order are not commented on. According to the information and explanations given to us, the Company has not given loans covered under section 185. The Company had loans to certain parties covered under section 186 of the Companies Act, 2013, in respect of which no interest has been charged, which is not in compliance with section 186 of the Companies Act, v. In our opinion and according to the information and explanations given to us, there are no deposits accepted from the public, hence paragraph 3(v) of the Order is not applicable. vi. We could not review the cost records maintained by the Company pursuant to the Section 148(1) of the Companies Act, 2013 due to non availability of such records for our review, and hence we are unable to give our opinion as to prima facie, whether the prescribed cost records have been maintained. vii. (a) According to the records of the Company, there has been instances of inordinate delays and defaults during the nancial year in depositing with appropriate authorities, the undisputed statutory dues including Provident Fund, Income-tax, Tax Deducted at Source, Sales-tax, Wealth-tax, Service tax, Profession Tax, Custom duty, Excise duty, Cess and other statutory dues applicable to it. The following undisputed statutory dues are outstanding for a period of more than six months as on March 31, 2016, from the date they became payable: Name of the Statue Nature of Dues Financial Year Amount in Rs. lacs The Income Tax Act, 1961 Income Tax to (Assessment by 4, Settlement Commission), & The Income Tax Act, 1961 Tax Deducted at Source, , & Tax Collected at Source, interest thereon. The Finance Act, 1994 Service Tax Gujarat Vat Act, 2003 Gujarat VAT & Employees Provident Provident Fund Funds & Miscellaneous Provisions Act, 1952 Profession Tax Act, 1975 Profession Tax , , &

55 ABG Shipyard Limited Annual Report (b) viii. ix. According to information and explanation given to us, the following dues have not been deposited by the Company on account of disputes: Name of the Statute Nature of Dues Financial Year Amount in Rs. Lacs The Finance Act, 1994 Service Tax to , CESTAT Income Tax Act, 1961 Income Tax CIT (Appeal) Employees Provident Funds & Miscellaneous Provisions Act, 1952 Forum where dispute is pending Provident Fund Assistant Provident Fund Commissioner & Recovery Of cer According to the information and explanation given to us and as per the books of account, the Company has defaulted in respect of dues to nancial institutions, bank, Government or debenture holders during the nancial year. The period and the amount of defaults are as under: Particulars i) Name of the lenders Banks : Amount of defaults as at the balance sheet date (in Lacs) Period of defaults (days) Andhra Bank Bank of Baroda 1, Bank of India 3, Canara Bank Central Bank of India Dena Bank 1, Deutsche Bank 9, Development Credit Bank 4, Exim Bank 1, ICICI Bank 15, IDBI Bank Indian Bank Indian Overseas Bank Lakshmi Vilas Bank Oriental Bank of Commerce 1, Punjab and Sind Bank Punjab National Bank 2, Royal Bank of Scotland 3, South Indian Bank State Bank of Patiala State Bank of Travancore Standard Chartered Bank 1, Syndicate Bank 2, Yes Bank Financial Institution : Industrial Finance Corporation Of India Limited 1, SICOM Limited 14, ii) Debentures Life Insurance Corporation of India 6, No independent speci c con rmation from lenders of above defaults has been provided to us the management. The Company has not raised money by way of initial public offer, further public offer or debt instruments during the year. Due to invocation of certain bank guarantees, the loans and overdrafts from banks have been increased which were utilized for meeting commitments under such guarantees. 53

56 ABG Shipyard Limited Annual Report x. In our opinion and on the basis of information and explanations provided by the Management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. However some creditors have issued notices and commenced legal proceedings against the Company alleging fraud for hypothecation of inventory with lenders, without clear title due to non clearance of their dues. Further, Directorate of Revenue Intelligence, Mumbai has also alleged fraud by the Company s employees pertaining to certain imports and issued a showcase as to why penalty should not be levied on the Company. The management is of the view that no fraud has been noticed by the Company or has been done on the Company. xi. xii. xiii. xiv. xv. The Company has paid/provided for managerial remuneration in accordance with requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company, hence paragraph 3(xii) of the Order is not applicable In our opinion and according to the information and explanation given to us, as the register under section 189 has not been updated, we are unable to comment on compliance by the company with section 177 and Section 188 of the Companies Act, 2013 with respect to transactions with the related parties. Details of related party transaction have, however, been disclosed in the Financial Statements as required by the Accounting Standard 18. The Company has made preferential allotment or private placement of shares during the year under audit as per the Corporate Debt Restructuring agreement by converting funded interest term loan, and no fresh amounts were raised. The requirements of section 42 of the Companies Act 2013 have been complied with in respect of such allotments. In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with them. xvi. According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, For Nisar & Kumar Chartered Accountants Firm No W Place: Mumbai Date: 30 th May, 2016 M.N.Ahmed Partner M. No Annexure B to the Independent Auditor s Report to the members of ABG Shipyard Limited Report on the Internal Financial Controls under Clause (f) of Sub-section 3 of Section 143 of the Companies Act, 2013 ( the Act ) We have audited the internal nancial controls over nancial reporting of ABG Shipyard Limited ( the Company ) as of March 31, 2016 in conjunction with our audit of the standalone nancial statements of the Company for the year ended on that date. Management s Responsibility for Internal Financial Controls The Company s management is responsible for establishing and maintaining internal nancial controls based on the internal control over nancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal nancial controls that were operating effectively for ensuring the orderly and ef cient conduct of its business, including adherence to company s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable nancial information, as required under the Companies Act, Auditors Responsibility Our responsibility is to express an opinion on the Company s internal nancial controls over nancial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal nancial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal nancial controls over nancial reporting was established and maintained and if such controls operated effectively in all material respects. 54

57 ABG Shipyard Limited Annual Report Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal nancial controls system over nancial reporting and their operating effectiveness. Our audit of internal nancial controls over nancial reporting included obtaining an understanding of internal nancial controls over nancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the nancial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is suf cient and appropriate to provide a basis for our audit opinion on the Company s internal nancial controls system over nancial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company s internal nancial control over nancial reporting is a process designed to provide reasonable assurance regarding the reliability of nancial reporting and the preparation of nancial statements for external purposes in accordance with generally accepted accounting principles. A company s internal nancial control over nancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly re ect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company s assets that could have a material effect on the nancial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal nancial controls over nancial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal nancial controls over nancial reporting to future periods are subject to the risk that the internal nancial control over nancial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion According to the information and explanation given to us and based on our audit the following material weakness has been identi ed as the adequacy and operative effectiveness of the Company s internal nancial controls over nancial reporting as at 31 st March The Company s internal controls on with regard to timeliness and in consolidating the information from remote location and reconciliation of accounts were not operating effectively. 2. The Company had no internal audit department which could carry on internal audit and risk assessment functions. 3. The Company lacks trained personal for their secretarial and legal compliance which could potentially result in failure to comply with laws and regulations in a timely manner. A material weakness is a de ciency, or a combination of de ciencies, in internal nancial control over nancial reporting such that there is a reasonable possibility that a material misstatement of the company s annual or interim nancial statements will not be prevented or detected on a timely basis. In our opinion, except for the possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal nancial control over nancial reporting and such internal nancial control over nancial reporting were operating effectively as of 31 st March, 2016, based on the internal control over nancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. We have considered the material weaknesses identi ed and report above in determining the nature, timing, and extent of audit test applied in our audit of the 31 st March, 2016 standalone nancial statements of the Company and this material weaknesses do not affect our opinion on the standalone nancial statements of the Company. For Nisar & Kumar Chartered Accountants Firm No W Place: Mumbai Date: 30 th May, 2016 M.N.Ahmed Partner M. No

58 ABG Shipyard Limited Annual Report BALANCE SHEET AS AT 31 ST MARCH, 2016 Note As at ` in Lacs As at ` in Lacs I EQUITY AND LIABILITIES 1. Share Holders' Funds a. Share capital 2 38, , b. Reserves & surplus 3 (320,989.08) 49, (282,221.39) 80, Non-current Liabilities a. Long-term borrowings 4 501, , b. Deferred tax liabilities (Net) 5-1, c. Long-term provisions , , Current Liabilities a. Short-term borrowings 7 371, , b. Trade payables 8 39, , c. Other current liabilities 9 473, , d. Short-term provisions 10 5, , , , ,109, ,235, II ASSETS 1. Non-current Assets a. Fixed assets 11 (i) Tangible assets 67, , (ii) Intangible assets (iii) Capital work-in-progress 194, , , , b. Non-current investments 12 22, , c. Long-term loans and advances 13 23, , , , Current Assets a. Inventories , , b. Trade receivables 15 8, , c. Cash and bank balance 16 9, , d. Short-term loans and advances , , e. Other current assets 18 58, , , , ,109, ,235, Signi cant Accounting Policies & Notes to Financial Statements 1-41 As per our report of even date For NISAR & KUMAR Chartered Accountants F. R. No W For and on behalf of the Board S. Muthuswamy Ashwani Kumar Executive Director Director M. N. Ahmed, Partner M. No Mumbai Dated: 30 th May, Hasmukh Daftary Chief Financial Of cer Praveen Bhandari Vice - President (Accounts & Taxation) 56

59 ABG Shipyard Limited Annual Report STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 ST MARCH, 2016 INCOME Note Year Ended ` in Lacs Year Ended ` in Lacs Revenue from operations 19 3, , Other income Total Revenue 3, , EXPENSES Consumption of raw materials & components 21 12, , Purchase of traded goods Changes in inventories of work-in-progress 22 36, , Employee bene ts expense 23 4, , Finance costs 24 85, , Depreciation & amortisation expense 11 8, , Other expenses , , Total Expenses 278, , Pro t/(loss) before exceptional and extraordinary items and tax (274,953.52) (118,589.05) Exceptional / Extraordinary items 26 97, Pro t/ (Loss) before tax (372,409.29) (118,589.05) Tax Expense Current tax for earlier years MAT credit (entitlement)/utilised - 11, Deferred tax (1,938.05) (40,798.57) Pro t/ (Loss) after tax (370,471.24) (89,770.13) Earning per share in Rupees of face value of `10 /- each Basic (686.55) (172.91) Diluted (686.55) (172.91) Signi cant Accounting Policies & Notes to Financial Statements 1-41 As per our report of even date For NISAR & KUMAR Chartered Accountants F. R. No W For and on behalf of the Board S. Muthuswamy Ashwani Kumar Executive Director Director M. N. Ahmed, Partner M. No Mumbai Dated: 30 th May, Hasmukh Daftary Chief Financial Of cer Praveen Bhandari Vice - President (Accounts & Taxation) 57

60 ABG Shipyard Limited Annual Report CASH FLOW STATEMENT FOR THE YEAR ENDED 31 ST MARCH 2016 Year ended ` in Lacs Year ended ` in Lacs A. Cash Flow From Operating Activities : Net Pro t (Loss) before taxation and after exceptional item (372,409.29) (118,589.05) Adjustments for : Depreciation 8, , Finance charges including exceptional items being nance charges 183, , Impairement of Inventory 103, Provision for Loss making yards Irrecoverable Advances Written off/ provided 11, , Bad Debts Written off - 4, Prepaid Expenes charged off 16, Interest income (278.89) (253.53) Effect of exchange rate change (8,406.77) (396.56) Loss /on Sale of Assets (net)/impairement , Provision for Contingencies (285.50) - Loss / (Pro t) on Sale of Investments - (15.29) Operating Pro t before working capital changes (57,132.71) (19,796.42) Adjustments for : Inventories 73, (24,806.00) Trade Receivables (321.47) Loans and Advances* and other current assets , Trade Payables and other current liabilities / provisions** 9, (50,962.90) Stage Payments from Customers (net) (93,759.96) (41,614.81) Cash generated from Operations (67,942.08) (85,135.03) Direct Taxes Paid (141.32) (2,204.63) Cash Used in Operating activities (68,083.40) (87,339.66) B Cash Flow From Investing Activities: Purchase of Fixed Assets including Capital Work in Progress and capital advances (269.39) (1,657.37) Sale of Fixed assets Proceeds from Sale / Redemption of Non Current Investments In bank deposits having maturity more than 12 months and other earmarked accounts (2,452.60) (1,245.91) Loans / deposits given (net) (34,789.34) (43,272.42) Interest income (140.66) Cash Used In Investing Activities (37,427.44) (45,827.24) C. Cash Flow From Financing Activities: Proceeds from Issue of Share Capital 8, , Proceeds from Long Term Borrowings 99, , Repayments of Long Term Borrowings (13,077.31) (27,825.28) Short Term Borrowings (net) 145, , Finance charges paid including exceptional items (132,186.53) (75,065.03) Cash Generated from Financing Activities 107, , Net (decrease) / Increase in cash and cash equivalents (A + B + C) 1, (14,415.56) Cash & Cash Equivalents at the beginning of the year 3, , Cash & Cash Equivalents at the end of the year 5, , * Includes current and non current ** Includes short term and long term Notes : 1. Cash ow statement has been prepared under the indirect method as set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India. 2. Figures for previous year where ever necessary have been regrouped to conform to those of current year. As per our report of even date For NISAR & KUMAR Chartered Accountants F. R. No W M. N. Ahmed, Partner M. No Mumbai Dated: 30 th May, For and on behalf of the Board S. Muthuswamy Executive Director Hasmukh Daftary Chief Financial Of cer Ashwani Kumar Director Praveen Bhandari Vice - President (Accounts & Taxation) 58

61 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, SIGNIFICANT ACCOUNTING POLICIES i) Basis of Accounting ii). iii). iv). v). vi). The nancial statements are prepared under the Historical Cost Conventions on the basis of Going Concern and as per applicable Indian Accounting Standards noti ed under relavant provisions of The Companies Act, Use of estimates The preparation of nancial statements requires the management of the company to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of nancial statements and the reported amount of revenues and expenses during the reporting period. Difference, if any, between the actual results and estimates is recognised in the year in which the results are known / materialized. Revenue Revenue is recognized in accounts in accordance with Accounting Standard-7 Accounting for Construction Contracts. The method of recognition is on percentage completion basis. Revenue is recognised under Percentage Completion Method on the basis of proportion that contract costs incurred for work performed up to the reporting date bears to the estimated total contract costs. Revenue from ship repair is recognised on the basis of job completion. Dividend income on investment is accounted for in the year in which the right to receive the payment is established. Interest income is recognised on the time proportion basis. Fixed Assets Tangible Assets: Fixed Assets are recorded at Cost. Cost is purchase cost and in the case of Freehold Land, includes development cost incurred, together with all incidental costs of acquisition, borrowing costs and other related internal costs and is netted of for Cenvat and Value Added Tax. Pro t/loss on disposal of xed assets is recognised in the Statement of Pro t and Loss. Intangible Assets: Intangible assets are recognized and accounted at cost in accordance with Accounting Standard-26 Intangible Assets. Capital Work In Progress All expenditure, relating to development of land, buildings, dry docks and plant & machinery etc. are accumulated and shown as capital work-in-progress till the completion of such activities. Capital advances are presented under loans and advances Investments Long Term investments are stated at cost. Cost includes incidental expenses of acquisition. Decline in value of investment other than of temporary nature is recognised in Statement of Pro t and Loss. vii). Borrowing costs Borrowing Costs attributable to the acquisition and construction of the Qualifying Assets, which take substantial period of time to get ready for their intended use, are capitalized as part of the cost of respective assets up to the date when such assets are ready for their intended use. Other Borrowing costs are charged to the Pro t and Loss account. viii). Depreciation and Amortisation ix). x). a) Freehold land is not depreciated Leasehold land is amortised equally over the period of lease. b) Dry Docks (included in Plant & Machinery) and Dry Docks Civil Works (included in Factory Building) and Jetty are depreciated on Straight Line Method as per estimated useful life of the asset prescribed in Schedule II to the Companies Act, c) Other assets are depreciated on Written Down Value Method as per estimated useful life of the asset prescribed in Schedule II to the Companies Act, d) Depreciation on additions / deletions to Fixed Assets made during the year is provided on pro-rata basis from or up to date of such additions / deletions as the case may be. e) Depreciation on amounts added on revaluation is recouped from Revaluation Reserve f) Intangible assets are stated at cost less accumulated amortisation and are amortised over a period of ve years. Impairment of Assets An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. The company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired and if such indication exists, the carrying value of such asset is reduced to its recoverable amount and a provision is made for such impairment loss in the pro t and loss account. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount Employees Bene ts Provident Fund: Provident Fund contributions are made as per a de ned contribution scheme and the contribution of company is charged to Pro t and Loss account of the year when become due. The company has no other obligation other than to contribute and deposit the contribution to respective authorities. 59

62 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, 2016 Short term employee bene ts are recognized as an expense at the undiscounted amount in the Statement of Pro t and Loss of the year in which the related service is rendered. xi). Long term employee bene ts are recognized as an expense in the Statement of Pro t and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of long term bene ts are charged to the Pro t and Loss account. Valuation of Inventory Inventories of spares, consumables, components are valued at lower of cost and net realizable value. Cost represents purchase cost and other incidental costs, if any. Cost of inventories is computed on Weighted Average/ FIFO basis. Finished goods are valued at lower of cost and net realisable value. xii). Work in Progress and Cost Allocation Each construction contract is considered as a cost center and all costs directly identi able to the Contract are charged on actual basis. Indirect miscellaneous costs are also allocated to the various contracts using appropriate overhead recovery method. Contract work-in-progress is valued at cost, including therein pro t or loss arrived at in accordance of Accounting Standard -7 Accounting for Construction Contracts xiii). Foreign Currency Transactions Transactions in Foreign Currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary assets and liabilities are translated at the year end using closing rate if remain unsettled at the year end. Non monetary foreign currency items are carried at cost. The resulting gain or loss on account of exchange difference either on settlement or on translation is recognised in the Statement of Pro t and Loss. The Company has w.e.f. 07th December,2006 chosen to apply noti cation issued by Companies (Accounting Standard) Amendment Rules 2011 GSR 913 (E) & 914 (E) dated as regards monetary long term assets and liabilities. Consequently, the resulting gain or loss on account of exchange difference on settlement or on translation is so far as they relate to depreciable assets is added or deducted from the cost of the asset. xiv). Derivative Accounting The Institute of Chartered Accountants of India has, in 2008, issued an announcement on Accounting for Derivatives inter alia requiring provision for losses on all derivative contracts outstanding at the balance sheet date by marking them to market keeping in view the principle of prudence, other than for forward contracts to which Accounting Standard (AS) 11- The Effect of Change in Foreign Exchange Rates is applicable. xv). Government Subsidy Government subsidy related to shipbuilding contracts are recognized on compliance with the relevant conditions and is recognized in the Statement of Pro t and Loss and presented under Revenue from Operations. xvi). Operating Leases Leases where the lessor effectively retains substantially all the risks and bene ts of ownership of the leased assets are classi ed as operating leases. Operating lease payments / receipts are recognized as an expense / income in the Statement of Pro t and Loss on a straight-line basis over the lease term. xvii) Provisions for Current and Deferred Tax Provision for Current Tax is made on the basis of taxable income under the provision of the Income Tax Act, Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quanti ed using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets relating to unabsorbed depreciation/business losses are recognized and carried forward to the extent there is virtual certainty that suf cient future taxable income will be available against which such deferred tax assets can be realized. Other deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that suf cient future taxable income will be available against which such deferred tax assets can be realised. Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of Pro t and Loss as current tax. The company recognizes MAT credit available as an asset only to the extent there is convincing evidence that the company will pay normal income tax during the speci ed period, i.e., the period for which MAT Credit is allowed to be carried forward. In the year in which the Company recognizes MAT Credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961, the said asset is created by way of credit to the statement of Pro t and Loss and shown as MAT Credit Entitlement. The Company reviews the MAT Credit Entitlement asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the suf cient period. xviii). Provisions, Contingent Liabilities and Contingent Assets A provision is made based on reliable estimate when it is probable that an out ow of resources embodying economic bene ts will be required to settle an obligation. Contingent liabilities, if material, are disclosed in notes forming part of nancial statements. Contingent Assets are not recognized/ disclosed. 60

63 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, SHARE CAPITAL Authorised Capital AS AT AS AT ` in Lacs ` in Lacs (P.Y ) Equity Shares of `10/- each 1500, , (P.Y ) 0.01 % Compulsorily Convertible Preference Shares (CCPS) of `10/- each 200, , Issued,Subscribed and Paid up Reconciliation: No of shares a) Equity Shares of `10/- each fully paid up , , As per last Balance Sheet , , Issued during the year As at the end of the year , , b) 0.01 % Compulsorily Convertible Preference Shares of ` 10/- each fully paid up. As per last Balance Sheet , Issued during the year , , As at the end of the year , , , , i) The Company has two classes of shares referred to as Equity Shares and Compulsorily Convertible Preference Shares (CCPS) having par value of Rs 10/- respectively. Each holder of equity share(s) is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the company after distribution of all preferential amounts. ii) iii) iv) Pursuant to the scheme of CDR, the company has alloted total 3,109,047 equity shares of Rs. 10 /- each at a premium of Rs per equity shares to the CDR lenders towards conversion of the Funded interest Term Loan (FITL) / Interest on FITL till date. Pursuant to the scheme of CDR, the Company has allotted total 33,36,46,056 of 0.01 % Compulsorily Convertible Preference Shares (CCPS) of Face Value Rs.10/- each and have been issued to CDR lenders towards conversion of the Funded interest Term Loan (FITL) / Interest on FITL,if any till date. These CCPS were to be converted in Equity Shares by 26th March, 2016 being last entitlement date but due to restraint by High Court Order dated 29th September, 2015 from altering Capital Structure, the same were not converted. None of the above shares are reserved for issue under options and contract / commitments for sale of shares or disinvestment. v) During the year, the company ceased to be a subsidiary of ABG International Pvt. Ltd. vi) vii) Shares alloted, as fully paid up, pursuant to contract(s) without payment being effected in cash / bonus shares /bought back / forfeited/ calls unpaid in the previous 5 years - NIL Shareholders holding above 5% Equity Shares with voting rights in the company. Sr No Name of the shareholder No of equity shares held % No of equity shares held 1 ABG International Private Ltd. * Strategic Credit Capital Private Ltd Religare Finvest Ltd * Includes shares pending registration % 61

64 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, RESERVES AND SURPLUS (i) Capital Reserve AS AT AS AT ` in Lacs ` in Lacs Opening balance 3, , Added / Utilised / Transferred during the year - - Closing balance 3, , (ii) Securities Premium Account Opening balance 31, , Added / Utilised / Transferred during the year , Closing balance 31, , (iii) Debenture Redemption Reserve Opening balance 6, , Added / Utilised / Transferred during the year - - Closing balance 6, , (iv) Revaluation Reserve Opening balance 3, , Less: Utilised to set off against depreciation Less: Reserve on Impaired assets transfered to surplus in Pro t and loss Closing balance 3, , (v) General Reserve Opening balance 64, , Added / Utilised / Transferred during the year - - Closing balance 64, , (vi) Surplus in Statement of Pro t and Loss Opening balance (60,674.92) 29, Add: Loss for the year (370,471.24) (89,770.13) Revaluation Reserve on Impaired assets transfered to surplus in Pro t and loss (431,146.16) (60,168.34) Less: Transitional impact of change in useful life of assets Closing balance (431,146.16) (60,674.92) (320,989.08) 49, A. LONG TERM BORROWINGS (a) Debentures (Secured) - 1, (b) Term Loans (Secured) From Banks 459, , From Others 12, , (c) Loan from related parties (Unsecured) [refer note 40] 30, , , ,

65 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, 2016 B (i) Details of Debentures issued by the Company Particulars Security Terms of repayment a) 12.30% 1000 Non Convertible Redeemable Debentures of Rs /- each issued to Life Insurance Corporation of India (LIC) Secured - First pari passu charge on the company s immovable and movable xed assets of Dahej Plant. Payable in 13 quarterly instalments commencing quarter ending 30th Nov, 2013 upto 30th Nov, Rs in lacs As at As at Non Current Current Non Current Current - 6, , , , , , Rs in lacs B (ii) Details of Terms of repayment for other long term borrowings and security provided in respect of the secured other long-term borrowings As at As at Particulars Security Terms of repayment Non Current Current Non Current Current A) Term Loans from Banks Loans under Corporate Debt Restructuring (CDR) 1) Foreign Currency Loans Foreign Currency Loan 2. Rupee Term Loans Rupee Term Loan Rupee Term Loan Rupee Term Loan Rupee Term Loan Rupee Term Loan Rupee Term Loan Rupee Term Loan Secured - First pari passu charge over the Pooled Assets : All movable (both xed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders. Secured - First pari passu charge over the Pooled Assets : All movable (both fixed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders. Secured - First pari passu charge over the Pooled Assets : All movable (both fixed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders. Secured - First pari passu charge over the Pooled Assets : All movable (both fixed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders. Secured - First pari passu charge over the Pooled Assets : All movable (both fixed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders. Secured - First pari passu charge over the Pooled Assets : All movable (both fixed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders. Secured - First pari passu charge over the Pooled Assets : All movable (both xed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders. Secured - First pari passu charge over the Pooled Assets : All movable (both xed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders. As per CDR Scheme dated 27th March 2014 the maximum repayment term is upto quarter ending 30th June Refer note 4 D As per CDR Scheme dated 27th March 2014 the maximum repayment term is upto quarter ending 30th June Refer note 4 D As per CDR Scheme dated 27th March 2014 the maximum repayment term is upto quarter ending 30th June Refer note 4 D As per CDR Scheme dated 27th March 2014 the maximum repayment term is upto quarter ending 30th June Refer note 4 D As per CDR Scheme dated 27th March 2014 the maximum repayment term is upto quarter ending 30th June Refer note 4 D As per CDR Scheme dated 27th March 2014 the maximum repayment term is upto quarter ending 30th June Refer note 4 D As per CDR Scheme dated 27th March 2014 the maximum repayment term is upto quarter ending 30th June Refer note 4 D As per CDR Scheme dated 27th March 2014 the maximum repayment term is upto quarter ending 30th June Refer note 4 D 63 54, , , , , , , , , , , , , , , , , , , , , , , ,

66 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, 2016 Rs in lacs B (ii) Details of Terms of repayment for other long term borrowings and security provided in respect of the secured other long-term borrowings Particulars Security Terms of repayment As at As at Non Current Current Non Current Current 3) Rupee Term Loan where scheme implementation is pending Rupee Term Loan Secured - First pari-passu charge on the company's movable & immovable xed assets of Dahej plant, present and future. Payable upto March , , NON CDR Foreign Curency Loan Secured - First pari passu charge over the Pooled Assets : All movable (both xed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders. Rupee Term Loan Secured - First pari-passu charge on the assets of third party. Corporate guarantee of third party. Pledge of shares of the third party and non disposal undertaking on unpledged shares in the share capital of third parties. Rupee Term Loan Secured - First charge on the assets of third party Subservient charge on all immovable and movable xed assets of the Dahej yard and personal and corporate guarantee of third party. Payable in quarterly instalments upto April 2015 Payable in quarterly instalments upto Dec 2017 Payable in quarterly instalments upto March 2018 Rupee Term Loan Unsecured Payable in quarterly instalments upto Oct, , , , , , , A) Term Loans from Banks 459, , , , B) From Others CDR Rupee Term Loan Rupee Term Loan NON CDR Rupee Term Loan Holding Company ("Promoter's Contribution") Secured - First pari passu charge over the Pooled Assets : All movable (both fixed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders. Secured - First pari passu charge over the Pooled Assets : All movable (both fixed and current assets) & immovable assets of the Company excluding assets exclusively charged to respective lenders. Secured - First pari passu charge on the movable and immovable xed assets at Dahej Plant. Exclusive charge on immovable property at Dahej of the company. Interim security by way of rst charge on immovable assets of third party. Corporate Guarantee of holding company ABG International Pvt. Ltd. Unsecured - Subordinated to CDR facilities As per CDR Scheme dated 27th March 2014 the maximum repayment term is upto quarter ending 30th June Refer note 4 D As per CDR Scheme dated 27th March 2014 the maximum repayment term is upto quarter ending 30th June Refer note 4 D Payable in 6 quarterly instalments commencing 30th Jan, 2014 and ending 30th April, , , , , , Payable only after full repayment 30, , of Restructured Facilities of the CDR Lenders B) From Others 42, , , , C) Vehicle loans From banks Secured- Hypothecation of the Payable in monthly instalments individual assets nanced. upto May, From others Secured- Hypothecation of the Payable in monthly instalments individual assets nanced. upto April, C) Vehicle loans , , , , GRAND TOTAL 501, , , ,057.74

67 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, C. The Company has defaulted in repayment of loans and interest in respect of the following Rs in lacs Particulars As at As at Non Current Current Non Current Current Debentures issued to LIC Principal 5, , Interest 1, , Foreign Currency Loans Principal 3, , Interest Rupee Term Loan Principal 21, , Interest 34, , The above debentures were falling due for repayment till 31st March 2016 amounting to Rs. 6, lacs subsequent to restructuring terms of repayment by the debenture holders. In view of sec 71 of the Companies Act, 2013 read with Rule 18 of the Companies (Share Capital and Debentures) Rule, 2014, the Company was required to invest 15% of the said amount in speci ed securities. Due to liquidity constraints, the company has not deposited the 15% amount. 4. D. Corporate Debt Restructuring As approved by the Corporate Debt Restructuring Cell ( CDR Cell ), the company has restructured its Term and working capital debts due to consortium of banks(cdr lenders) with cut off date 1st August, A Master Restructuring Agreement (MRA) has been executed between the company and the CDR Lenders and thus the restructured facilities are governed by the provisions speci ed therein. The Key feature/status of the CDR Proposal are as follows: 1 Repayment of Restructured Term Loans ( RTL ) after moratorium of 2 years from cut off date in 32 structured quarterly instalments commencing from quarter ending 30th September 2015 to 30th June Conversion of various irregular/outstanding/devolved nancial facilities into Working Capital Term Loan ( WCTL ) Repayment of WCTL after moratorium of 3 years 6 months from cut off date in 26 structured quarterly instalments commencing from Quarter ending 31st March 2017 to 30th June 2023, subject to mandatory prepayment obligation on realisation of proceeds from certain asset sale and capital infusion. 3 Restructuring of existing fund based and non fund based nancial facilities, subject to renewal and reassessment every year.priority loans shall be sanctioned for meeting the immediate operational and capital requirements of the company. The Priority Debt disbursed by the lenders is Rs. 55, lacs till 31st March The interest payable on RTL and WCTL during moratorium period of 2 years and 3 years 6 months respectively from cut off date are also converted to Funded Interest Term Loan (FITL). Out of Total FITL facility amounting to Rs lacs an an amount aggregating to Rs. 1,00000 lacs shall be compulsorily converted into equity shares or 0.01% Compulsorily Convertible Preference Shares (CCPS) before 31st March Pursuant to the scheme of CDR, the Company has allotted total 3336,46,056 Nos. of 0.01 % Compulsorily Convertible Preference Shares (CCPS) of Face Value Rs.10/- each and 31,09,047 nos. of equity shares of Rs. 10 /-each at a premium of Rs per equity shares to CDR lenders towards conversion of the Funded interest Term Loan (FITL)/Interest on FITL upto 31st March, The rate of interest of RTL, WCTL, FITL and fund based working capital facilities is base rate +1% for initial two years and thereafter with annual reset option in accordance with MRA. 6 Right of Recompense to CDR Lenders for the relief and sacri ce extended, subject to provisions of CDR Guideliners and MRA, in lieu of which contribution of Rs lacs in the Company is infused by promoters. 7 In case of nancial facilities availed from the non-cdr Lenders, the terms and conditions shall continue to be governed by the provisions of the existing nancing documents. 8 Additional Security for the CDR debt - Personal Gurantee of Promoter, Pledge of Promoter s entire shareholding of ABG Shipyard Limited and Corporate Guarantee of ABG International Pvt Ltd. (Holding company) 9 Due to extreme nancial constraints and limited operations, the company has delayed and/or defaulted in the payment of interest as per the CDR Scheme. The defaults are reported in Note no 4C above. 10 The company has defaulted in repayment of loans and covenants of CDR schemes of lenders. As regards contingency related to Compensation payable in lieu of Bank Sacri ce the outcome is materially uncertain and cannot be determined in terms of monetary impact on the nancial results. The company is of the view that the company is an operative company and such contingency may not arise. 65 AS AT AS AT ` in Lacs ` in Lacs 5. DEFERRED TAXES Tax effect of items constituting deferred tax Liabilities On account of depreciation - 1, , Tax effect of items constituting deferred tax assets , The company has reversed Deferred Tax Liability created in previous nancial years on account of lower depreciation allowable under the Income Tax Act,1961 as compared to the depreciation debited to Pro t and Loss account. 6. LONG TERM PROVISIONS Provision for Gratuity Provision for Leave Encashment

68 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, A - SHORT TERM BORROWINGS From Banks: Security a) Short term loans Rupee Short Term Loan As at ` in Lacs As at ` in Lacs Secured- Charge on immovable property at Dahej. 3, , Corporate Guarantee of third party. Unsecured b) Export Packing Credit Secured - First pari passue charge over the 19, , c) Cash Credit Pooled Assets : All moveable (both fixed 259, , and current assets) & immoveable assets of d) Others - payable on demand the Company excluding assets exclusively charged to respective lenders. Partly Secured against properties of Group Companies 79, , From Others: 16% - 17% Inter Corporate Deposits Unsecured 8, , , , B. The Company has defaulted in repayment of loans and interest in respect of the following Particulars As at As at ` in Lacs Period of default ` in Lacs Period of default in days in days Loans from banks Principal 3, , Interest 1, Cash Credit and Others - payable on demand Principal 1, , Interest 12, Inter Corporate Deposits Principal 8, , Interest 2, , TRADE PAYABLES (i) Sundry Creditors for Goods & Expenses 39, , (ii) Acceptances - bank , , The amounts due to suppliers under MSMED as at 31st March, 2016 is as below. The information relates to such vendors identi ed as micro,small and medium enterprises as per information available with the Company. (i) Principal amount remaining unpaid to any supplier as at the end of the accounting period (ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting period (iii) The amount of interest paid along with the amounts of the payment made to the supplier - - beyond the appointed day (iv) The amount of interest due and payable for the period (v) The amount of interest accrued and remaining unpaid at the end of the accounting period (vi) The amount of further interest due and payable even in the succeeding year, until such date when the interest dues as above are actually paid

69 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, 2016 As at ` in Lacs As at ` in Lacs 9. OTHER CURRENT LIABILITIES (i) Current Maturities of long-term debt - [Refer note 4B] a. Non Convertible Redeemable Debentures (NCD) 6, , b. Term Loans - from Banks 49, , c. Vehicle loans From Banks From Others (ii) Payables on purchase of xed assets 4, , (iii) Interest accrued & due on borrowings 53, , (iv) Interest accrued but not due on borrowings 1, (v) Advance from customers 352, , (vi) Other Advances including related parties [Refer Note 40] 3, , (vii) Unclaimed Dividends * (viii) Other Payables - Statutory remittances 1, , Trade / security deposits received Others , , * To be transfered to Investor and Protection Fund, when due 10. SHORT TERM PROVISIONS Provision for employee bene ts: Gratuity Leave Encashment Income Tax (Net of prepaid taxes) 4, , Provision for warranties , ,

70 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, FIXED ASSETS ` in Lacs PARTICULARS GROSS BLOCK At cost / Valuation DEPRECIATION/ AMORTISATION/ IMPAIRMENT NET BLOCK TANGIBLE AS- SETS AS AT ADDITIONS DURING THE YEAR DELE- TIONS/ ADJUST- MENTS DURING THE YEAR AS AT AS AT ADDITIONS DURING THE YEAR ADDITION ADJUST- MENT DELE- TIONS/ ADJUST- MENTS DURING THE YEAR AS AT AS AT AS AT LAND FREE HOLD LAND LEASE HOLD LAND FACTORY BUILDING ADMIN BUILDING PLANT AND MACHINERY OFFICE EQUIPMENT FURNITURE & FIXTURES 8, , , , , , , , , , , , , , , , , , , , , , , , VEHICLES 1, COMPUTERS INTANGIBLE ASSETS 131, , , , , , , SOFTWARE T O T A L 132, , , , , , , Previous Year 134, , , , , , , CWIP 196, , , i) Certain part of the land is yet to be registered in the name of the Company. ii) Depreciation, Amortisation & Impairment relating to continuing operations: ` in Lacs ` in Lacs Depreciation, Amortisation & Impairment for the year on tangible assets 8, , Depreciation, Amortisation & Impairment for the year on intangible assets , , Less: Utilised from revaluation reserve Depreciation & Amortisation on discontinuing operations - - Depreciation, Amortisation & Impairment relating to continuing operations 8, , iii) Impairment charges of Rs.Nil (P.Y. Nil) iv) No amounts were written off due to reduction of capital / written off on revaluation or were added to assets on revaluation during the previous 5 years. v) Borrowing cost capitalised Rs. Nil (P.Y Rs lacs). Due to suspension of capitalisation at sites, no borrowing cost is capitalised during the year. vi) On the basis of the report of Chartered Engineers and Government approved Valuers, the Company had revalued the Freehold Land, Factory Building,Other Building and Dry Docks on 30th June,1994 and again on 30th June 2002 and consequently an amount of Rs lacs and Rs lacs respectively being the differences between the amount of fair market value of the same and depreciated value as per books as on those dates, have been added to the value of Fixed Assets and corresponding credit shown as Revaluation Reserve. Consequent to the revaluation there is an additional depreciation of Rs lacs (P. Y Rs lacs), which has been withdrawn from Revaluation Reserves and credited to Statement of Pro t and Loss. 68

71 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, 2016 AS AT AS AT ` in Lacs ` in Lacs vii) Details of Capital work in progress (CWIP) : Land, Building and Site development 17, , Plant & Machinery : * Main Plant & Machinery 88, , Cranes 3, , Jetty Others Sub Total 109, , Preoperative expenses (Pending Allocation) : Rent Travelling & Conveyance Finance Charges 82, , Personnel Expenses 1, , Communication Expenses Professional & Technical Fees Depreciation 1, , Other Site Expenses Sub Total 87, , Total 196, , Less: Capitalised/Adjusted during the year 2, # 2.55 Grand Total 194, , # Includes an amount of Rs lacs in respect of exchange loss of foreign loans which is debited to the Pro t and Loss a/c during the year. Due to suspension in Project construction, no further capitalisation has been done during the year in accordance with Accounting Standard AS 10. viii) The company had chosen to avail the option under AS-11 noti cation issued by Companies (Accounting Standard) Amendment Rules 2011 GSR 913 (E) & 914 (E) dated issued by Ministry of Corporate Affairs. The company has exercised the option with respect to foreign currency long term loan availed by it. The company has no other long term monetary Assets / Liabilities. Due to the exercise of aforesaid option, the impact on Statement of Pro t and Loss for the year is Rs.Nil (P.Y. Gain Rs lacs) due to foreign currency exchange loss (net) which has been capitalized with CWIP. ix) Acquisition through business combinations / Assets reclassi ed as held for sale - Nil (P.Y. Nil) x)the company has been constructing shipyard facilities at Dahej shipyard to increase the shipbuilding capacities. Due to nancial constraints there has been a prolonged suspension of construction activities. The management considers such suspensions as temporary in nature.the physical condition of these assets under construction is good and further construction would resume on availability of funds. At such time, the management will assess any increase in cost, replacement etc. in view of the management the recoverable amount within the meaning of AS-28 is more than carrying value and as such no amount needs to be recognised in the nancial statement as impairment loss. 69

72 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, 2016 AS AT AS AT ` in Lacs ` in Lacs 12. NON-CURRENT INVESTMENTS Non Trade - At cost Quoted In Equity Shares In subsidiary (P. Y ) Equity Shares in Western India Shipyard Ltd. of Rs. 2/- each fully paid up 3, , Unquoted In Equity Shares In subsidiaries : (P.Y.10000) Equity Shares in ABG Shipyard Singapore Pte. Ltd. of SGD 1/- each fully paid up (P.Y ) Equity Shares in ABG FPSO Pvt Ltd of Rs. 10/- each fully paid up In Others: (P.Y ) Equity Shares in ABG Business Ventures Pte. Ltd., Singapore of SGD 1/- each fully paid up (P.Y. 1000) Equity Shares in Varada Seven Pte. Ltd. of USD 1/- each fully paid up In Preference Shares In subsidiaries : (P.Y ) 1% Preference Shares in ABG Shipyard Singapore Pte. Ltd. of USD 1/- each fully paid up. 18, , , , a) Aggregate amount of quoted investments Rs lacs (P.Y Rs lacs). Aggregate market value of quoted investments Rs lacs (P.Y. Rs lacs) b) Aggregate amount of unquoted investments Rs lacs (P.Y. Rs lacs) c) (P.Y ) Equity shares of the subsidiary - Western India Shipyard Ltd. have been pledged with banks in respect of facilities availed by such subsidiary company from the banks. d) As the investments are in operating companies, considering the economic scenerio and the underlying assets of such companies, the manangement does not consider diminution in value, if any, to be other than temporary in nature. 13. LONG-TERM LOANS AND ADVANCES Capital Advances , Security Deposits: [Refer note 40] 13, , Due from Government authorities MAT Credit Entitlement 8, , Less: Utilised - 11, , , Service tax credit - receivable - deferred , ,

73 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, INVENTORIES Raw Material and Components In stock 49, , In transit 10, , , , Work in Progress On Percentage completion basis 740, (Contract costs & recognised pro t) Less: Progress Money from Customers 299, , , Finished goods - 7, , , a. The Company had undergone Corporate Debt Restructuring with its lenders in Financial Year During the year the company has made efforts to revive its operations but progress of construction of the vessels was affected due to factors such as unavailability of working capital nance resulting into non availability of required materials, reduced production levels at various yards, etc. The company is in the process of completing the pending work on few identi ed vessels only. Due to such exceptional circusmtances, the manufacturing process over the remaining vessels is suspended. Hence, overhead absorption over such vessels has also been suspended. Accordingly, overhead and interest absorption had been done only over ongoing vessels. b. A technical evaluation of the inventory of Ships and Rigs under construction (contractual/own) and for the future foreseeable losses in the current economic scenario, was carried on by the Company. The technical evaluation has been done in phases and is not completed for certain ships and rigs. On the basis of such evaluation an impairment of Rs lacs in the inventory of Work in Progress, Rs lacs in Raw Material & Components and Rs lacs of loss in Goods in Transit, aggregating to Rs lacs has been considered. The said amount has been given effect in the following manner by way of : Decrease in value of closing stock [Refer note 22] 42, lacs Loss on impairement of Inventory - other expenses [Refer note14 above and note 25] 62, lacs c. The Company has concluded Rig building contract with respect to two rigs. The Company is in the process of negotiating the nal settlement with the said customer. Pending settlement, company continues to show inventory of rigs under the head Work in Progress and Advance received under Progress Money from customers. The effect on Work in Progress due to these Rigs is Rs Lacs. 15. TRADE RECEIVABLES (Unsecured, Considered good) [Refer note 40] Due for more than six months from due date of payment 7, , Others 1, , , Less: Provision for doubtful receivables 1, , , CASH AND BANK BALANCE a. Cash & Cash Equivalents i) Cash in hand ii) Balances with Banks: In Current Accounts 4, , In Fixed Deposits* b. Other Bank Balances AS AT AS AT ` in Lacs ` in Lacs i) In Fixed Deposits * , ii) In Earmarked Accounts Unclaimed dividend accounts Balances with banks held as margin money against guarantee and in collection accounts. 3, , , Out of the above : Fixed deposit with maturity of more than twelve months , *Fixed deposit with bank held as security against short term borrowing 1, ,

74 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, SHORT-TERM LOANS AND ADVANCES (Unsecured, Considered good) Loans and Advances to related parties: [Refer note 40] Advance for supplies / services 29, , Loans to Subsidiary 18, , Other loans 127, , , , Others: Advance to suppliers 45, , Prepaid Expenses , Employee Advances Inter Corporate Deposits 1, , Other advances Balance with Government Authorities Service Tax Refundable / Credit Vat credit Income Tax Custom Duty Others 4, , Provision for Receivables/Advances (4,459.92) - 49, , (Unsecured, Considered doubtful) Employee Advances Less: Provision for Doubtful Advances (126.00) (126.00) 224, , Notes : a. Details of Loans and Advances in the nature of loan to subsidiaries ` in Lacs Sr. No. Name of the Company As at As at Maximum amount outstanding during the year Amount outstanding AS AT AS AT ` in Lacs ` in Lacs Maximum amount outstanding during the year Amount outstanding 1 Western India Shipyard Ltd. 8, , , , ABG FPSO Pvt Ltd ABG Shipyard Singapore Pte. Ltd. 15, , , , , , The above loans are given for business purposes b. Details of Other Loans ` in Lacs Sr. No. Name of the Company Nature of Relationship Amount outstanding As at As at Varada Seven Pte. Ltd. Joint Venture 42, , Vipul Shipyard Erstwhile Firm 8, , ABG Resources Pvt. Ltd. Associate Company 10, , Banal Investment & Trading Pvt.Ltd. Associate Company 32, , ABG Business Ventures Pte. Ltd. Joint Venture 14, , Varada Ventures Pte Ltd Joint Venture 12,

75 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, 2016 AS AT AS AT ` in Lacs ` in Lacs 7 ABG Energy Himachal Pradesh Ltd Associate Company 3, Drilling & Offshore Pte Ltd Associate Company 3, Eleventh Land Developers Pvt.Ltd. Common management - 3, The above loans are given for business purposes c. Loans, advances and receivables amounting to Rs lacs (P.Y. Rs lacs) are outstanding from related parties. Out of these, due from Private companies/ rm in which directors are directors/members/partner amounts to Rs lacs (P. Y Rs lacs). The management is of the view, that considering the relationship of the company with the related parties, charging of interest is not expedient. Further in view of the Managment even though these outstandings are old, they are considered good and recoverable. d. There are advances to other parties that are outstanding for a long time. In view of reduction in activities, the materials and services could not be called from such parties.the management considers that no provision is required to be done and these are considered good and recoverable. 18. OTHER CURRENT ASSETS (Unsecured, Considered good) Subsidy 49, , Interest accrued Fixed Deposits with Bank Inter Corporate Deposits Others 4, , Insurance Claims Receivable Others Receivables on sale of xed assets Non Trade Receivables 2, , , , The Company has recognised subsidy under Ship Building Subsidy Scheme as on 31st March, Rs lacs (P.Y. Rs lacs). The receipt of aforesaid Subsidy is dependent upon completion of vessels and compliance with other terms and conditions of the Ship Building Subsidy Scheme of the Government of India. The completion of vessels depends on availablity of working capital as well as ship owners capability to make progress payment and to take delivery of these vessels in a depressed shipping market economic scenario. The management believes that it will be able to get funds to complete the vessels and deliver the same. 73

76 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, 2015 Year Ended Year Ended ` in Lacs ` in Lacs 19. REVENUE FROM OPERATIONS Manufacturing Ships 2, , Rigs - 1, Trading Services - Ship Repair , Other operating Revenue Subsidy Excise and duty refunds Sale of scrap , , OTHER INCOME Interest on: Fixed deposits with banks Inter corporate deposit Others Pro t on Sale of Investments Other Non operating Income : Insurance Claims Sundry balances written back Rent Received Miscellaneous Receipts A. CONSUMPTION OF RAW MATERIALS & COMPONENTS Steel Other Items 12, , , , [Consumption of raw materials includes exchange difference due to translation as per AS 11, of Rs lacs (P.Y. Rs lacs)] B. PURCHASE OF TRADED GOODS Steel CHANGES IN INVENTORIES - WORK IN PROGRESS (Included in work in progress on percentage completion basis) Opening Work In Progress 65, , Adjustments (Net) 142, , , , Closing Work In Progress [net of impairement - [Refer note 14(b)] 170, , Decrease / (Increase) in Work in Progress 36, , Adjustments in Opening Work in Progress pertain to value of inventory of two Rig contracts which have been cancelled and have become own inventory. Reversal of pro t recognised in the past on such contacts is included in Exceptional items. (Refer note no 26) 23. EMPLOYEE BENEFITS EXPENSE Salaries Wages and other bene ts 3, , Contribution to Provident Fund Staff Welfare Expenses , , ,

77 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, 2016 Year Ended Year Ended ` in Lacs ` in Lacs 24. FINANCE COST Interest Expense on borrowings 80, , Other Interest Guarantee Commission 3, , Difference in Exchange on foreign currency transaction / translation (net) , Other Borrowing Costs 1, , , , OTHER EXPENSES Consumption of stores Contractors Charges , Power and Water Repairs & Maintenance - Plant & Machinery Buildings Others Other Manufacturing Expenses Inspection and Survey Expenses Of ce Expenses Rent Rates & Taxes 1, Insurance Printing & Stationery Postage Telephone & Telex Travelling & Conveyance Professional Charges 1, , Payment to Auditors Donations & Charities Prior Years Expenses Selling & Distribution Expense 2, , Prepaid Expenes charged off 16, Loss/ (Pro t) on Sale of Assets (net) , Reversal of Pro t on cancelled Vessels Subsidy Written off - 6, Doubtful Debtors & Advances 32, Bad Debts and Advances Written off 10, , Recognition (AS 7) of loss on vessels in progress , Loss on Impairement of Inventory [Refer note 14(b)] 62, Miscellaneous Expenses , , Exceptional Items represent reversal of pro t, on account of cancellation of all rig building contracts and Foreign exchange loss on Invocation of guarantees on account of such cancellation. [Refer note 14 (c) ] 75

78 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH, Capital commitment on contracts remaining to be executed on capital account and not provided for, are estimated at ` in Lacs Particulars 31st March st March 2015 Tangible Assets 12, , , , (a) Contingent liability not provided for ` in Lacs Particulars 31st March st March 2015 In respect of Performance/ Delivery Guarantees given by banks to the buyers 10, , Corporate guarantees to banks in respect of facilities granted to group companies. 148, , Other bank guarantees 2, , Claims against the company not acknowledged as debts 20, , Claims in respect of indirect taxes 1, , In respect of Claims against the company not acknowledged as debts, the Company has received claims from certain customers / creditors, wherein such customers/creditors have led petition for winding up pending clearance of dues for penal interest and charges. Some statutory authorities have also initiated recovery proceedings against the Company. The Company is con dent of arbitration with such parties and does not recognise the payable over and above the liability already recognised in the books. The liability of the Company is contingent on the outcome of such petitions and the amount is not quanti able as on 31st March, The Company is currently constructing various vessels ordered from international customers as well as domestic customers including Government of India - Ministry of Defence. As per the international trade practice, the Company has issued refund bank guarantees to customers against various advance stage payment received by the company. Considering the accute nancial crisis and delay, probability exists of future invocations of the bank guarantees. As per the Company s policy, the loss on invocation, if any, is contingent upon, and will be quanti ed and accounted only on the happening of the event. (b) Contingencies provided for in accordance with AS 29 Provisions. Contingent Liabilities & Contingent Assets. ` in Lacs Particulars 31st March st March 2015 Carrying amount as at the beginning of the year Utilised during the year Provision during the year Balance at the end of the year The contingencies provided are in respect of estimated warranties on sold ships. 29. In the opinion of the management, Current Assets, Loans and Advances have value in realisation in the ordinary course of business at least equal to the amount at which they are stated. 30 i) Value of goods imported on C.I.F. basis (including goods in transit) : ` in Lacs ii) Particulars 31st March st March 2015 a) Capital Goods b) Raw Materials Steel c) Components and Others Consumption of Steel and Components during the year: Particulars 31st March st March 2015 Raw Materials (Steel) : ` In Lacs % ` In Lacs % a) Imported b) Indigenous Components & Spare Parts : a) Imported 8, , b) Indigenous 4, ,

79 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH, 2016 iii) Earnings/ expenditure in foreign exchange (on accrual basis): ` in Lacs Particulars 31st March st March 2015 Earnings - - Expenditure: Legal & Professional Fee Advertisement and Business Promotion Interest & Other Charges , Travelling and Other Matters , iv) No Dividend has been given in Foreign Currency 31. Auditors Remuneration: (excluding service tax ) ` in Lacs Particulars 31st March st March 2015 Audit Fee (Including consolidation) Taxation matters Certi cation and other Professional Services Disclosure in respect of Operating Leases (Assets taken on lease): (a) The company has taken commercial / residential premises under cancellable operating leases or leave and licence. These are usually renewable by mutual consent on mutually agreeable terms. (b) The expenses in respect of operating leases are accounted in Other Expenses under Note No 25 ` in Lacs Particulars 31st March st March 2015 Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years Disclosure in accordance with AS -7 Accounting for Construction Contracts. ` in Lacs Particulars 31st March st March 2015 a. Contract revenue recognized as revenue in the year 1, , b. Contract cost incurred and recognized pro ts 569, , c. Advances received from above customers 392, , d. Gross amount due from customers for contract work 277, , e. Gross amount due to customers for contract work 100, , The Gross amount due from customers re ects the net amount for all contracts in progress for which cost incurred plus recognised pro t (less recognised losses) exceeds progress billing. The Gross amount due to customers re ects the net amount for all contracts in progress where progress billing exceeds cost incurred plus recognised pro ts (less recognised losses). During the year, advances from customers to the extent of work done amounting to Rs lacs.(p.y.rs lacs) is adjusted against Work in Progress in Note No 14. Advances received in excess of work done and advances pending commencement of work are disclosed in Current Liabilities under Advances from Customers in Note No 9. The company follows accounting practice of recognizing revenue under Accounting Standard 7 on the basis of estimated cost, cost so far incurred and estimated pro t or loss out of shipbuilding contracts.a technical evaluation of the inventory of Ships and Rigs under construction, the valuation of Work in progress recognized as per AS 7 and for the future foreseeable losses in the current economic scenario, was carried on by the Company. The technical evaluation has been done in phases and is not completed for certain ships and rigs. Adequate provision for estimated future foreseeable losses is provided in the books of accounts. The WIP includes contracts with the related parties amounting to Rs lacs (P.Y Rs lacs) 77

80 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH, The disclosures as per Accounting Standard 15 Employee Bene ts. De ned Contribution Plan Contribution to De ned Contribution Plan, recognized are charged off for the year are as under: ` in Lacs Particulars 31st March st March 2015 Employer s Contribution to Provident Fund Employer s Contribution to Pension Scheme De ned Bene t Plan The employees gratuity fund scheme managed by SBI Life Insurance is a de ned bene t plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee bene t entitlement and measures each unit separately to build up the nal obligation. The obligation for leave encashment is recognized in same manner as gratuity. ` in Lacs Particulars Gratuity (Funded) Leave Encashment (Unfunded) 31st March st March st March st March 2015 a. Reconciliation of opening and closing balances of De ned Bene t obligation De ned Bene t obligation at the beginning of the year Current Service Cost Interest Cost Actuarial (gain) / loss (95.85) (108.43) (42.68) (78.43) Bene ts paid (4.55) (40.00) - (106.80) De ned Bene t obligation at the year end b. Reconciliation of opening and closing balances of fair value of plan assets Fair value of plan assets at beginning of the year Expected return on plan assets Actuarial gain/(loss) Employer contribution Bene ts Paid (4.55) (40.00) - - Fair value of plan assets at the year end c. Reconciliation of fair value of assets and obligations Fair value of plan assets as at Year End Present value of obligation as at Year end Amount recognised in Balance Sheet d. Expenses recognised during the year Current Service Cost Interest Cost Expected return on plan assets (0.30) (0.27) - - Actuarial (gain) / loss (96.49) (148.46) (42.68) (78.43) Net Cost (1.11) e. Investment Details % Invested SBI Group Gratuity (Cash Accumulation) Policy f. Actuarial Assumptions (Ultimate) (Ultimate) Mortality Table (L.I.C) Discount rate (per annum) 8.00% 8.00% 8.00% 0.08 Expected rate of return on plan assets (per annum) 8.00% 8.00% N.A N.A Rate of escalation in salary (per annum) 5.00% 5.00% 5.00%

81 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31st MARCH, 2016 The estimates of rate of escalation in salary considered in actuarial valuation, take into account in ation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certi ed by the actuary and relied upon by auditors. The expected rate of return of Plan Assets is determined considering several applicable factors, mainly the composition of Plan Assets held, assessed risks, historical returns on Plan Assets and the Company s policy on Plan Assets Management. Particulars Gratuity 31 st March st March st March st March st March 2012 g. Amounts recognised in current year and previous four years De ned Bene t obligation at the year end Fair value of plan assets at the year end (Surplus) / De cit in the plan Actuarial (gain) / loss in plan obligation (95.85) (108.43) (158.72) (57.87) Actuarial gain/(loss) on plan assets (0.04) (1.47) (1.05) 35. Calculation of Earning per share (EPS) Particular 31st March st March 2015 Net pro t as per Statement of Pro t & Loss (Rs. In lacs)) (370,471.24) (89,770.13) Weighted Avarage number of Equity shares of Rs. 10/- each fully paid up 53,961,677 51,918,632 Earning per Equity Share of Rs. 10/- each fully paid up. (Rupees) (686.55) (172.91) (Basic & Diluted) 36. The company primarily operates in one business segment only i.e. Construction & Repair of ships and Rigs which is the only reportable segment. There is no other segment which satis es the threshold limit as per Accounting Standard -17. Secondary segment (Geographical Segments): ` in Lacs Particular Domestic Overseas Total 31st March st March st March st March st March st March 2015 Revenue [as per AS 7 (revised)] 3, , , , , Information on Foreign Currency Exposure: (a) (b) Outstanding forward exchange contracts/ options entered by the company for the purpose of hedging its foreign currency exposures is Nil (P Y Nil) Notional value of Interest Rate Swaps to hedge against uctuation in interest rate is Nil (P.Y Nil) (c) Currency swap to hedge against uctuations in exchange rate and interest rate is Nil (P. Y Nil ) (d) Foreign Currency exposure that is not hedged by derivative instruments is as under: Currency Payable Receivable 31st March st March st March st March 2015 USD 1, , , , EURO GBP SGD AUD NOK AED * Amount less than Rs lacs 38. Corporate Social Responsibity. As the Company has incurred a loss in average of last three years, provisions of Sec 135 of the Companies Act 2013, read with Companies (Corporate Social Responsibility Policy) Rules, 2014,are not applicable to the company. 39. The Company has defaulted in repayment of loans and covenants of the CDR scheme of lenders. There has been suspension of operations at Dahej yard and low key operation at Surat yard and the net worth has eroded. However, the management plans to resume normal activities in the company, and hence the nancial statements have been prepared assuming that the company will continue as a going concern 79

82 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, Related Parties Disclosure as per Accounting Standard (AS) 18: A. LIST OF RELATED PARTIES Subsidiaries / Controlling stake Companies over which directors / relatives are able to exercise control or signi cant in uence Western India Shipyard Limited ABG Shipyard Singapore Pte. Limited ABG FPSO Private Limited ABG International Private Limited (Ceased to be holding Company w.e.f ) PFS Shipping (India) Limited Varada One Pte. Ltd. ABG Solar Project Private Limited ABG Energy Limited ABG Energy (MP) Limited Varada Marine Pte. Limited (Along with its SPV's) PFS Offshore Pte. Ltd. ABG Infralogistics Limited ABG Cement Limited ABG Cement Holdco Private Limited ABG Energy (Gujarat) Limited ABG Power Private Limited Tusker Crane Private Limited (Formerly ABG Crane Private Limited) ABG Foods Private Limited ABG Acquafarm Private Limited ABG Glass Private Limited BABA Gangaram Investment Services Private Limited ABG Engineering & Construction Limited Tirupati Landmark Private Limited Tirupati Management & Investment Services Private Limited (Formerly ABG Mercantile & Investment Services Pvt Ltd ) Eleventh Land Developers Private Limited ABG Resources Private Limited (Formerly Second Land Developers Private Limited) ABG Motors Limited Banal Investment & Trading Private Limited Jarrow Finance & Trading Private Limited Onaway Industries Limited Agbros Leasing & Finance Private Limited Aries Management Services Private Limited G.C. Property Private Limited Gold Croft Property Private Limited Somerset Estate Private Limited ABG Enterprises & Trading Private Limited (Formerly Nibodh Trading Private Limited) ABG Energy Himachal Pradesh Limited Vipul Shipyard ( Partnership Firm) ABG Business Ventures Pte. Limited Drilling & Offshore Pte. Limited Drilling & Offshore One Pte. Limited Drilling & Offshore Two Pte. Limited Global Bulk Carriers Pte. Limited Varada Ventures Pte. Limited Varada Drilling One Pte. Limited Varada Drilling Two Pte. Limited Varada Two Pte. Limited 80

83 ABG Shipyard Limited Annual Report NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31 st MARCH, 2016 Companies over which directors / relatives are able to exercise control or signi cant in uence Individuals owning directly or indirectly an interest in the voting power that gives them control or signi cant in uence Key management personnel Varada Three Pte. Limited Varada Four Pte. Limited Varada Five Pte. Limited Varada Six Pte. Limited Varada Seven Pte. Limited Varada Nine Pte. Limited Varada Ten Pte. Limited Varada Eleven Pte. Limited Varada Twelve Pte. Limited Varada Global Pte. Limited Varada Fourteen Pte. Limited Shri. Rishi Agarwal Shri. Syed Abdi Shri. Dhananjay Laxman Datar (ceased w.e.f ) Shri. S.Muthuswamy B.TRANSACTIONS WITH RELATED PARTIES Sr. no. Nature of Transactions Subsidiaries / Controlling stake Companies over which directors / relatives are able to exercise signi cant in uence 81 Individuals owning directly or indirectly an interest in the voting power that gives them control or signi cant in uence Key management personnel Rs. In Lacs 1 Revenue from Operations (119.58) (119.58) 2 Balance Written back (88.47) - - (88.47) 3 Balance Write off - 3, , Rent Expenses (13.48) (151.72) - - (165.21) 5 Hire Charges (2.11) - - (2.11) 6 Services Received Interest/ Guarantee Commission/ Other Income Charged - (30.00) - - (30.00) (64.21) - - (64.21) 8 Finance Charges Paid Payment to Key Management Personnel3 (556.11) (272.70) - - (828.81) (381.50) (381.50) 10 Purchase of Fixed Assets (0.26) - - (0.26) 11 Sale / Transfer of Fixed Assets Stage Payment Received / Transfer / Novation 13 Stage Payment Refunded / Transfer / Novation (55.89) (2.24) - - (58.12) - 21, , (23,267.78) - - (23,267.78) - 188, , (16,411.00) - (16,411.00) Total

84 ABG Shipyard Limited Annual Report B.TRANSACTIONS WITH RELATED PARTIES Sr. no. Nature of Transactions Subsidiaries / Controlling stake 14 Loans and Advances Given / Repaid 15 Loans and Advances Taken / Refunded Companies over which directors / relatives are able to exercise signi cant in uence Individuals owning directly or indirectly an interest in the voting power that gives them control or signi cant in uence Key management personnel Rs. In Lacs , , (20,940.51) (59,681.34) (0.48) - (80,622.33) 5, , (5,667.41) (48,414.99) - - (54,082.40) 16 Deposit Given (6,000.00) - - (6,000.00) 17 Deposit Received Back - 5, , Adjustment by way of assignment to interested parties Notes : Outstanding Balances 31st March 2016 as on , , Receivables , , (645.55) (13,908.42) - - (14,553.97) Payables (5,555.53) (221.73) (25.20) - (5,802.46) Advance from Customers - 640, , (732,720.80) - - (732,720.80) Loans and Advances Given 18, , , (23,533.27) (189,654.86) - - (213,188.12) Loans and Advances Taken - 33, , (33,238.77) - - (33,238.77) Deposits Given - 12, , (18,300.00) - - (18,300.00) Guarantees Taken 2-1,714, ,714, (1,714,516.00) - - (1,714,516.00) Guarantees Given 2 3, , , (3,360.00) (215,476.00) - - (218,836.00) a. Guarantees taken / given comprise of guarantees given to third parties on behalf of the Company / related parties. b. The Company has not provided Managerial Remuneration for the managing director after October 2015 as it would then exceed the provision of section 197 read with Schedule V to the Companies Act, c. Related Parties have been identi ed by the management and relied upon by the auditors. d. Previous Year gures are shown in brackets. Notes on Financial Statements for the Year ended 31st March, 2016 Disclosure in respect of Related Party transactions during the year: 1 Revenue from Operations include Western India Shipyard Limited Rs. Nil (Previous Year Rs lacs) 2 Balance Written back Includes Tusker Cranes Private Limited Rs. Nil (Previous Year Rs lacs) 3 Balance Written off Includes Eleventh Land Developers Private Limited Rs lacs (Previous Year Rs. Nil ) 4 Rent Expenses include Aries Management Services Private Limited Rs lacs (Previous Year Rs lacs). 5 Hire Charge Received from ABG Infralogistices Limited Rs Nil (Previous Year Rs lacs). 6 Services Received from ABG Resources Private Limited Rs. Nil (Previous Year Rs lacs). 7 Interest/ Guarantee Commission/ Other Income Charged to Vipul Shipyard Rs. Nil (Previous Year Rs lacs). 8 Finance Charges Paid to Western India Shipyard Limited Rs. Nil (Previous Year Rs lacs), Varada Marine Pte Ltd Rs. Nil (Previous Year Rs lacs). Total 82

85 ABG Shipyard Limited Annual Report Payment to Key Management Personnel include to Syed Abdi Rs lacs (Previous Year Rs lacs), Shri. Dhananjay Datar Rs lacs (Previous Year Rs lacs), Shri. S. Muthuswamy Rs lacs (Previous Year Rs lacs). 10 Purchases of Fixed Assets include to ABG Motors Limited Rs. Nil (Previous Year Rs lacs ). 11 Sale of Fixed Assets include to ABG Resources Private Limited Rs lacs (Previous Year Rs.Nil ), Western India Shipyard Limited Rs. Nil (Previous Year Rs lacs) 12 Stage Payment Received include from Varada Four Pte. Limited Rs lacs (Previous Year Rs lacs),varada Nine Pte. Limited Rs lacs (Previous Year Rs lacs),varada Eleven Pte. Limited Rs lacs (Previous Year Rs lacs),drilling & Offshore Two Pte. Limited Rs lacs (Previous Year Rs lacs),varada Twelve Pte. Ltd. Rs lacs (Previous Year Rs lacs ). 13 Stage Payment Refunded include Drilling & offshore Pte Ltd Rs lacs (Previous Year Rs. Nil ) 14 Loans and Advances Given/ Repaid include ABG International Private Limited Rs lacs (Previous Year Rs lacs), Western India Shipyard Limited Rs lacs (Previous Year Rs lacs), ABG Shipyard Singapore Pte. Limited Rs. Nil (Previous Year Rs lacs), ABG Business Venture Pte.Limited Rs lacs (Previous Year Rs lacs),banal Investment & Trading Private Limited Rs lacs (Previous Year Rs lacs), Varada Seven Pte. Limited Rs. Nil (Previous Year Rs lacs). 15 Loans and Advances Taken/ Refunded include ABG International Private Limited Rs lacs (Previous Year Rs lacs), ABG Resources Private Limited Rs lacs (Previous Year Rs lacs), Western India Shipyard Limited Rs lacs (Previous Year Rs lacs ) 16 Deposit Given to ABG Resources Private Limited Rs. Nil (Previous Year Rs lacs ) 17 Deposit Received Back from G.C. Property Private Limited Rs lacs (Previous Year Rs. Nil ), Gold Croft Property Private Limited Rs lacs (Previous Year Rs. Nil), Somerset Estate Private Limited Rs lacs (Previous Year Rs. Nil ) 18 Sett off of stage payment / advances includes Varada Marine Pte. Ltd Rs lacs (Previous Year Rs. Nil ),Global Bulk Carriers Pte Ltd Rs lacs (Previous Year Rs. Nil ). Note : Name of the Related Parties have been given in cases where the amount of transaction exceeds 10% of the total related party transaction of the same type 41. The gures for the previous year have been arranged/rearranged/regrouped wherever considered necessary. As per our report of even date For and on behalf of the Board For NISAR & KUMAR Chartered Accountants F. R. No W Mumbai Dated: 30 th May, 2016 S. Muthuswamy Executive Director Hasmukh Daftary Chief Financial Of cer Ashwani Kumar Director Praveen Bhandari Vice - President (Accounts & Taxation) 83

86 ABG Shipyard Limited Annual Report NOTES 84

87 ABG Shipyard Limited Annual Report ABG SHIPYARD LIMITED Registered Of ce: Near Magdalla Port, Dumas Road, Surat , Gujarat Corp. Of ce: 2 nd Floor, Bhupati Chambers, 13, Mathew Road, Mumbai , Tel Fax.: Website: - seclegal@abgindia.com, CIN: L61200GJ1985PLC ATTENDANCE SLIP I hereby record my presence at the 31 st Annual General Meeting to be held on Monday, the 19 th September, 2016 at the Registered Of ce of the Company at Near Magdalla Port, Dumas Road, Surat at A.M. Full name of the Shareholder (in Block Letters) Ledger Folio number/ Client ID and DP ID No. No. of Equity Shares held Signature of the Shareholder or Proxy attending 85

88 ABG Shipyard Limited Annual Report

89 ABG Shipyard Limited Annual Report PROXY FORM [Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014] CIN: L61200GJ1985PLC Name of the Company: ABG SHIPYARD LIMITED Registered Of ce: Near Magdalla Port, Dumas Road, Surat , Gujarat Corp. Of ce: 2 nd Floor, Bhupati Chambers, 13, Mathew Road, Mumbai Name of the member (s) Registered address ID Folio No/ Client ID/DP ID : : : : I/We, being the Member(s) of shares of ABG Shipyard Limited hereby appoint, 1. Name : ID Address : : Signature : or failing her/him; 2. Name : ID Address : : Signature : or failing her/him; 3. Name : ID Address Signature : : : as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 31 st Annual General Meeting of the Company, to be held on Monday the 19 th September, 2016 at A.M. at the Registered Of ce of the Company and at any adjournment thereof in respect of such resolutions as are indicated below: Item Resolution No. 1. Adoption of the Audited Financial Statements, Report of the Board of Directors and Auditors thereon, for the nancial year ended on 31 st March, To appoint a Director in palce of Mr. S Muthuswamy who retires by rotation an been eligible, offer himself for reappointment. 3. To appoint M/s GMJ & Co., Chartered Accountants as Statutory Auditors of the Company and x their remuneration. 4. Special Resolution for issue of securities for a value of upto ` 2,000/- Crores (` Two Thousand Crores). 5. Special Resolution for issue of Equity Shares on conversion of promotor s contribution upto Rs. 300 Crore in the Company. 6. Special Resolution for issue of Equity Shares to CDR Lenders on conversion of their Outstanding loans to the extent of Rs. 16, Crores upon invocation of provision of SDR Scheme Signed this day of 2016 Af x 1 ` Revenue Stamp Signature of Proxy holder(s) Signature of shareholder Notes: 1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Of ce of the Company, not less than 48 hours before the commencement of the Meeting. 87

90 ABG Shipyard Limited Annual Report

91

92