Dear Shareholders,
The Directors present the Ninety second Annual Report on the company
with Audited Statement of Accounts for the year ended March 31, 2011.
1. (a) The financial results for the year ended March 31, 2011 show
loss of Rs. 2099 lacs compared to loss of Rs. 2019 lacs for the last
year.
Results are summarized below:
(Rs. Lacs)
2010-11 2009-10
Freight & Charter Hire - -
Other Income 14 8
Sub total 14 8
Less: Administrative Expenses 33 24
Profit ( )/Loss (-) before Interest and
Depciation - 19 -16
Less: Interest 2080 2003
Depreciation (Rs, 677) - -
Profit/Loss before taxation -2099 -2019
Tax provision (excess tax provision
Rs. 58,285 written back) - -
Profit/Loss for the year -2099 -2019
(b) The company could not undertake any shipping/shipping related
activity since April 1997. Operations during the year related primarily
to compliance of various statutes and regulatory bodies on an on-going
basis and resolving of pending issues. As mentioned above, the
operations for the year resulted in loss of Rs, 2099 lacs compared to
loss of Rs. 2019 lacs in the last year. The accumulated loss is Rs. 343
crores. The outstanding balance to Government of India is Rs. 314
crores. There is an increase of Rs. 77 lacs in interest expenses - Rs.
25 lacs increase in interest on Government of India outstanding
balances and Rs. 52 lacs increase in interest on Bank of India/ASREC
(India) outstanding balance. Interest on Government of India balances
are provided based on loan covenants i.e. interest on principal loan
balance and also interest on normal interest outstanding balances.
(c) The company at present has only three contract officers for
attending to day to day work.
2. There is no public deposit unclaimed or outstanding as on March 31,
2011.
3. The code of corporate governance was reviewed by the Audit
Committee comprising three Directors. A report on corporate governance
is annexed to this Report.
4. The company has no employee covered under Section 217 (2A) of the
Companies Act, 1956.
5. The entire share related work has been outsourced to M/s. Sharex
Dynamic (India) Pvt. Ltd., a SEBI registered Transfer Agent. The
arrangement is operative from October 21, 2009.
6. As you are aware, the Members at the last AGM held on July 28, 2010
passed a resolution for initiating winding up of the company.
Accordingly, the winding up petition was filed on February 28, 2011 in
the High Court at Bombay and it is numbered as C. P. 150 of 2011,
7. Having no manufacturing activity, there is nothing to report
regarding Conservation of Energy and Technology Absorption. During the
year, no foreign exchange was spent or received.
8. Directors' declaration:
As per the requirement under Section 217 (2AA) of the Companies Act,
1956, it is hereby stated:
(a) that in the preparation of the Annual Accounts, the applicable
accounting standards have been followed and that no material departures
have been made from the same;
(b) that the accounting policies have been selected and applied
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 financial year and of the loss of the
company for the year under review;
(c) that proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities; and
(d) that annual accounts have been prepared on a "going concern" basis.
9. Observations of Auditors:
In respect of observations made by the Auditors in their Report, the
same are self-explanatory and apart from what has been stated in the
Report and in the Notes to the Accounts, do not require any further
clarification.
10. The company has a 100% subsidiary company - Scindia Workshop
Limited (SWL).
(a) The land and buildings were acquired by the State Government in
1988 for expansion of Mazagon Dock Ltd. Hence, thereafter there has
been no ship-repair activity.
As per order dated October 20, 2005 passed by the Single Judge, Bombay
High Court, additional compensation of Rs. 211 lacs plus interest is
receivable. The subsidiary collected the total sum of Rs. 290 lacs from
the High Court during July / August 2010 and it was accounted in its
books.
(b) Based on legal advice received, appeal for enhancement of
compensation was filed before the Division Bench of the High Court at
Bombay and it was heard.
The Division Bench passed an Order on Januaryl 1, 2011 directing the
subsidiary to approach the High Powered Committee of Government of
India as all parties involved in the appeal are Government or
Government undertakings in view of Supreme Court judgment in the case
of ONGC & Another v/s Collector of Central Excise. However, on February
17, 2011 in Civil Appeal no. 1883 of 2011 of ECIL V/S Union of India &
Others, the Larger Bench of the Supreme Court observed that the High
Powered Committee has not achieved the results for which it was
constituted and in fact led to delays in litigation and loss of
revenue, and in the circumstances, the Larger Bench decided to recall
its earlier order and disbanded the High Powered Committee.
In view of the above developments, the subsidiary will have to file
review application before the Division Bench of the High Court to once
again hear the matter on merits.
(c) The company has applied to the Ministry of Corporate Affairs,
Government of India, New Delhi for approval under section 212 (8) of
the Companies Act, 1956 and approval is awaited. Last year the approval
was received. Based on the approval letter received, the information of
financial results of the subsidiary is annexed. In line with the
Accounting Standard 21 (AS 21) issued by the Institute of Chartered
Accountants of India, the consolidated financial results of the
company, duly incorporating the financial results of the subsidiary are
annexed. Any shareholder desiring a copy of the accounts of the
subsidiary may write to the company.
(11) Since July 2002 the company was occupying office at Scindia
Colony, Building No. Ill, Sir M. V. Road, Andheri (East), Mumbai 400
069. The mortgagee, the Government of India sold the said property in
August 2006 to M/s. Export Credit Guarantee Corporation of India
Limited (ECGC). The company is thankful to the ECGC management for
permitting it to utilize the premises up to March 31, 2011. Since they
required the property for development, the company shifted its
Registered Office to the new premises from May 20, 2011. The
Shareholders are requested to kindly note the new address of the
company.
12. (a) Item No. 3 of the Notice pertains to re-appointment of Shri D.
A.
Biwalkar as Chairman & Managing Director for a period of one year from
March 26, 2011 on the same terms and conditions as approved by the
Members at the last AGM held on July 28, 2010. The Board recommends the
item for your approval.
(b) As per the provisions of the said Act, nothing in the Companies
Act, 1956, or the Articles of Association of the company, in so far as
it relates to holding any share qualification, age limit, restriction
on number of Directors or Directorships, retirement by rotation or
removal from office in respect of Director appointed under the said
Act, is applicable to such Director. Since your Directors are appointed
pursuant to the provisions of Section 10 of the said Act, the above
provisions of the Companies Act, including retirement by rotation, are
not applicable to them.
(c) further, under Section 14 of the said Act, the Shareholders of the
company, on whose Board, Directors are appointed under Section 10 of
the said Act, do not have the right to nominate or appoint any person
to be a Director of the company and no Resolution passed at any meeting
of the Shareholders can be given effect to unless approved by the
Central Government.
13. Your Directors wish to thank the Members, Ministry of Finance,
Ministry of Shipping, ICICI Bank Ltd., (Designated Person), company's
bankers, M/s. ECGC Ltd., employees, etc., for their assistance,
support and co-operation.
14. Messrs K. S. Aiyar & Co., the Auditors of the company, hold office
until conclusion of the ensuing Annual General Meeting. They have given
their consent to continue as Auditors. The Board recommends the
resolution for adoption.
On behalf of the Board of Directors
For The Scindia Steam Navigation Co. Ltd.
D. A. Biwalkar
Chairman & Managing Director
Mumbai,
June 17, 2011
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