Scindia Steam Navigation Company Ltd. के निदेशक की रिपोर्ट

Mar 31, 2010

The Directors present the Ninety first Annual Report on the company with Audited Statement of Accounts for the year ended March 31,2010.

1. (a) The financial results for the year ended March 31, 2010 show. loss of Rs. 2,019 lacs compared to loss of Rs. 1,945 lacs for the last year. Results are summarised below:

(Rs. Lacs)

2009-10 2008-09

Freight & Charter Hire 0 0

Other Income 8 14

Subtotal 8 14

Less: Administrative Expenses 24 27

Profit (+)/Loss (-) before Interest (-) 16 (-)13 & Depreciation

Less: Interest 2003 1932

Depreciation (Rs. 791) 0 0

Profit/Loss before taxation (-)2019 (-)1945

Tax provision 0 0

Profit/Loss for the year (-)2019 (-)1945



(b) The company since April 1997 could not undertake any shipping/shipping related activity. 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. 2019 lacs compared to loss of Rs. 1945 lacs in the last year. The accumulated loss is Rs. 322 Crores. The outstanding balance to Government of India is Rs. 299 Crores. There is an increase of Rs. 71 lacs in interest expenses - Rs. 26 lacs increase on Government of India outstanding balances and Rs. 45 lacs increase 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 31,2010.

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 October21,2009. The item No. 4 of the Notice relates to this matter. The Board recommends passing of the resolution foryourapproval.

6. Since the sale of last ship in March 1997, the shipping activity was not operational. All the five real estate properties mortgaged to Gol were also sold. Still it owes a huge liability of Rs. 299 Crores to Gol. In view of no operating income, it has been incurring losses and accumulated loss is Rs. 322 Crores.

The company received a letter from ICICI Bank Ltd., - Designated

Person on behalf of Government of India under the provisions of SDFC (Abolition) Act, 1986 inter alia directing the company to initiate steps for winding up under the provisions of the Companies Act, 1956. The company does not have any tangible asset but huge liability and huge accumulated loss. The Board deliberated this matter at the Meeting held on March 30, 2010 and considered winding up of the company by the Court under the relevant provisions of the Companies Act, 1956. The item No. 5 of the Notice relates to this matter. The Board recommends passing of the resolution for your approval.

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. Directorsdeclaration:

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 judgements 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). 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 is receivable. Notice of motion for withdrawal of the said amount was filed and was allowed. However, it has not been received till the date of this Report. The effect of the said amount will be considered by SWL in its accounts on receipt and it will be offered for tax accordingly. Appeal filed before the Division Bench for enhancement of compensation is admitted and pending.

The company has received approval from the Ministry of Corporate Affairs, Government of India, New Delhi under Section 212 (8) of the Companies Act, 1956. Based on the approval letter, the information of financial results of the subsidiary is annexed. In line with the Accounting Standard 21 (AS21) 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. (a) During the year under review, the Government of India in terms of the provisions of the S. D. F. C.(Abolition) Act, 1986 (the said Act) appointed Shri J. S. Phaugat as Director on the Board of the company in place of Shri Makaradhwaj Sahu. He was inducted on the Board on and from August 18,2009. Brief information about Shri J. S. Phaugat is: He is Under Secretary to the Government of India in Ministry of Finance, Department of Financial Services, New Delhi. He does not hold any share in the company. He is a Member of the Audit Committee of the Board of Directors of the company. He does not hold Directorship of any other company.

(b) 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, 2010 on the same terms and conditions as approved by the Members at the last AGM held on August 18,2009. The Board recommends the item for your approval.

(c) 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.

(d) 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.

12. Your Directors wish to thank the Members, Ministry of Finance, Ministry of Shipping, ICICI Bank Ltd., (Designated Person), companys bankers, M/s. ECGC Ltd., owners of Sgindia Colony property, employees, etc., for their assistance, support and co- operation.

13. 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, May 28, 2010