1. Contingent Liabilities:
a. As a member of Indian Register of Shipping, a Company Limited by
Guarantee. Rs. 1,000 {Previous Year Rs. 1,000).
b. Claims against the Company, not acknowledged as debts -
(i) In respect of sale deficit claim made by Mumbai Port Trust of Rs.
7,80,747.44 (previous year Rs. 7,80,747.44),
(ii) In respect of 15 suits filed by Mumbai Port Trust in High Court at
Bombay amounting to Rs. 101,40,648.44 (previous year NIL) and
(iii) In respect of short landing/damage to cargo claimed by Food
Corporation of India amounting to Rs. 6,08,010.05 (previous year Rs.
6,08,010.05).
2. The Shipping Development Fund Committee (SDFC) has been abolished
in terms of the Shipping Development Committee (Abolition) Act, 1986.
During the pendency of the loan of Rs. 33,88,07,286/- (previous year
Rs. 33,88,07,286) from erstwhile SDFC/Government of India (GOI), they
have the option and power to convert the whole or any part of the loan
as may be outstanding at any time, into Equity Shares at par or at the
rates as may be determined at their sole discretion.
3. (a) A sum of Rs.33,88,07,286 (previous year Rs. 33,88,07,286) is
due to GOI
as on 31.03.2011 in respect of loan installments which fell due to
erstwhile SDFC/GOI from May 1982 to date. Interest outstanding as at
31.03.2011 is Rs. 165,84,55,849 (previous year Rs. 154,85,38,678).
(b) The outstanding balance as at 31.03.2011 under guarantee
obligations is Rs. 971,61,740 (previous year Rs. 971,61,740). Interest
of Rs. 219,61,696 was paid to Government of India during the year.
Balance interest amounting to Rs. 60,98,53,060 (previous year Rs.
60,09,50,553) for the period up to March 2011 on the above borrowings
though charged in the accounts has not been paid
(c) In respect of working capital loan principal amount outstanding is
Nil (previous year Nil). No interest has been paid during the year
(previous year Nil).Balance interest amounting to Rs. 43,37,07,371
(previous year Rs. 40,43,10,307) for the period up to March 2011 though
charged in the accounts, has not been paid.
4. (i) The immovable properties mortgaged to Government of India
having been
sold, the loans of Rs. 313,79,85,306 (previous year Rs. 298,97,68,564)
outstanding to the Government of India have been shown as unsecured
loans. (ii) The outstanding balance against cash credit facility from
a Bank amounting to Rs. 27,62,81,639 (Rs. 23,84,41,224 as at March 31,
2010) has been shown as unsecured as the facility does not have any
security against the said balance.
Against the above cash credit facility, Bank of India was having a
second equitable charge on the Company's property - Scindia Colony at
Andhefi. The Government of India, the first charge-holder as mortgagee
sold the said property after obtaining necessary consent of Bank of
India and the charge created earlier was vacated. Form No. 17 dated
19.02.2007 duly signed by the Bank and the Company was filed with the
Registrar of Companies. However, the Company has received a certificate
of registration modifying the charge based on an Assignment agreement
dated 31.12.2008 executed between the Bank and ASREC (India) Ltd. In
fact, the Company has not entered into any such mortgage/assignment
agreement with ASREC (India) Ltd. Therefore, the Company is contesting
the said modification with ASREC (India) Ltd., Bank of India and the
Registrar of Companies.
5. Shipping operations of the company stand suspended, the net worth
of the company is totally eroded and substantial loss of Rs.
342,57,18,160 is carried forward in the books. The shareholders at the
last AGM held on July 28, 2010 passed a resolution for winding up of
the company, and winding up petition was filed in the High Court at
Bombay on February 28, 2011. Despite this, the Accounts are continued
to be prepared on a 'going concern basis' in the absence of adequate
necessary data for compilation on an alternative basis. Consequently,
no adjustments are made in the accounts relating to the recoverability
of recorded asset amounts and in respect of recorded liabilities and
contingent liabilities that might devolve on the Company, for
compilation of accounts on an alternative basis.
6. The Company has an investment in the form of Equity Share Capital
of Rs. 24,00,000 in its subsidiary company, Scindia Workshop Ltd.
Provision has been made in the Accounts for the probable permanent
diminution in the said Investment of Rs. 24,00,000. The Company has
also sanctioned a loan of Rs. 2200 lacs (amount outstanding as at
March 31, 2011 Rs. 17,07,01,479, as at March 31, 2010 Rs.
19,37,93,744).
The recoverability of the investment and the loan, in our opinion, is
dependent on the outcome of the Reference made under Section 18 of the
Land Acquisition Act, 1894, against the Award given by the Special Land
Acquisition Officer (MHADA) for the land and buildings acquired by the
Government of Maharashtra. In the reference filed, the Hon'ble High
Court has passed an order for additionai compensation of Rs.
211,91,542.80 plus interest. The subsidiary, as per legal advice, has
filed an appeal before the Division Bench of the Bombay High Court for
enhancement of compensation. The appeal was admitted. The Division
Bench directed the subsidiary to approach the High Powered Committee of
Government of India by Order dated January 11, 2011 as all parties
involved in the appeal are Government or Government undertakings in
view of Supreme Court judgment in the case of ONGC and 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 under 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 to once
again hear the case on merits.
\n regard to the additional compensation plus interest thereon lying in the
Court, a sum of Rs. 290,27,965 inclusive of interest was collected by
the subsidiary during July/August 2010. Based on the tax advice
received, tax provision of Rs. 58,14,000 was made by the subsidiary in
its books, and paid Rs. 57,25,000 as advance tax before March 15, 2011.
Further sum of Rs. 40,000 was paid as self assessment tax during May
2011. 7. (a) No provision for taxation has been made in view of no
assessable income (previous year Rs. nil).
11. The office of Company Secretary has been vacant since October
1993. In the circumstances, authentication by Company Secretary does
not appear in the Accounts.
12. As per the information available with the company, it does not
have any outstanding dues to Undertakings registered under Micro, Small
and Medium Enterprises Development Act, 2006.
13. As the company's shipping activities have been suspended, the
company does not have any reportable Segment. Therefore, Accounting
Standard 17 - Segment Reporting issued by the Institute of Chartered
Accountants of India is not applicable.
15. The interest expense for the year of Rs. 20,80,33,636 (previous
year Rs. 20,02,60,865) includes Rs. 17,01,78,438 (previous year Rs.
16,75,90,280) on GOI outstanding balance, and Rs. 3,7855,198 (previous
year Rs. 3,26,70,585) on outstanding balance in C. C. account with Bank
of India. The interest expense on GOI outstanding balance is continued
to be charged as per loan covenants i.e. as interest on outstanding
principal amount and as additional interest on outstanding interest
amounts.
16. The Company has unabsorbed business loss of Rs. 117 crores and
unabsorbed depreciation of Rs. 85 crores as per Income Tax assessment.
However, in view of suspension of shipping activity and uncertainty of
future operations, no deferred tax asset has been recognized in the
books of account as prescribed under Accounting Standard 22, Accounting
for Taxes on Income, issued by the Institute of Chartered Accountants
of India.
17. The company received claim for payment of gratuity from seamen.
Since the Fund with the Gratuity Trust created earlier got exhausted,
the gratuity amount of Rs. 63,362 was paid by the company and is
included in the office expenses.
18. Related Party Disclosures:
(a) List of Related Parties and Relationships
Party Relationship
(i) Scindia Workshop Ltd. 100 % subsidiary
(ii) Shri D.A.Biwalkar Chairman & Managing Director
(b) Related Party Transactions
(i) During the year net receipt Rs. 230,92,265 (previous year paid
Rs. 17,16,770), (ii) Debit balance outstanding as on 31.03.2011
Outstanding Receivable Rs. 17,07,01,479 {as at 31.03.2010
Rs. 19,37,93,744),
(iii) Remuneration payable to Chairman & Managing Director Rs. 573,885
(salary Rs. 3,51,000, perquisite Rs.145,000 plus gratuity provision
Rs. 77,885), (previous year Rs. 5,04,550).
19. Figures for the previous year have been regrouped or re-arranged
wherever necessary and practicable.
|