Annual Report FY 2010-11 - Pipavav Shipyard

Annual Report 2010-11
6. The Company has issued, a Bond-cum-Legal Undertaking for Rs. 24,400 Lacs (Previous Year Rs. 24,400 Lacs) in favour
of President of India acting through Development Commissioner of Kandla Special Economic Zone for setting up a SEZ
unit for availing exemption from payment of duties, taxes or cess or drawback and concession etc, and a General Bond in
favour of the President of India for a sum of Rs. 15,300 Lacs (Previous Year. Rs. 15,300 Lacs) a security for compliance of
applicable provisions of the Customs Act, 1962 and the Excise Act, 1944 for EOU unit.
7. In the opinion of the management, Current Assets, Loans and Advances are of the value stated, if realized in the ordinary
course of business.
8. As per the Revised Guidelines for the Shipbuilding Subsidy issued by the Government of India on March 25, 2009, the
Company is eligible for subsidy at the rate of 30% of the contract price, in respect of the export order received for vessels
for which the contracts with the customers were signed on or before August 14, 2007. Accordingly Government Subsidy
of Rs. 7,494.13 Lacs for the year (Previous Year Rs. 8,814.91 Lacs) has been recognised as revenue in respect of Ships
under construction on proportionate completion basis.
9. Advances recoverable in cash or in kind or for the value to be received in Schedule 11 includes Rs. 5,906.85 Lacs (Previous
Year Rs. 4,309.18 Lacs), being the Cenvat/VAT/Central Sales Tax paid on the purchase of goods and services for the
project. The company has been legally advised that such amounts are recoverable. Any unrealized amounts will be added
back to the cost of the project or charged off to the profit & loss account, as the case may be in the year of settlement.
10. The company has received two show cause notices in its 100% EOU unit from the Office of the Commissioner of Central
Excise, Bhavnagar and Directorate of Revenue Intelligence which mainly relates to availment of Cenvat/Customs Duty/
Service Tax Credit availed on inputs/services used for Construction of Dry Dock and Goliath Cranes and Non-submission
of original evidences/documents. The company has also received five show cause notices in its SEZ Unit from the Office of
the Assistant Commissioner of Service Tax, Bhavnagar, mainly relates to non submission of original evidence / documents.
The company does not forsee any losses on this account.
11. Managerial Remuneration:
a) Remuneration to the Director
Particulars 2010 - 2011
(Rs. in Lacs)
2009 - 2010
Salaries 390.00* 264.60
Contribution to Provident Fund 7.20 7.20
Perquisites and other allowances 0.40 0.40
Total 397.60 272.20
b)
* include Rs. 150 Lacs provided subject to prior approval of Central Government.
Liability for Gratuity and Leave Encashment is provided on actuarial basis for the Company as a whole, the amounts
pertaining to the Director is not ascertainable and therefore not included above.
The computation of net profit for the purpose of directors remuneration under section 349 of the Companies Act
1956 have not been enumerated since no commission has been paid to any of the directors. Fixed Managerial
Remuneration has been paid to the whole time director.
12. Auditors Remuneration:
Particulars 2010 - 2011
(Rs. in Lacs)
2009 - 2010
Audit Fees 35.00 30.00
Tax Audit Fee 5.00 5.00
Certification Charges and Other Matters 16.60 50.95*
Total 56.60 85.95
�������������
*Includes Rs. 45 Lacs adjusted against Securities Premium.
67