Scindia Steam Navigation Company Ltd. के अकाउंट के लिये नोट

Mar 31, 2010

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 againstthe Company, not acknowledged as debts-

(i) in respect of sale deficit claim made by Mumbai Port Trust of Rs. 7.81 lacs,

(ii) in respect of short landing/damage to cargo claimed by Food Corporation of India amounting to Rs. 6.08 lacs.

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. 3388 lacs (previous year Rs. 3388 lacs) from erstwhile SDFC/Government of India (Gol), 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.3388 lacs (previous year Rs. 3388 lacs) is due to Gol as on 31.03.2010 in respect of loan instalments which fell due to erstwhile SDFC/Gol from May 1982 to date. Interest outstanding as at 31.03.2010 is Rs. 15485lacs(previousyearRs. 14408 lacs).

(b) The outstanding balance as at 31.03.2010 under guarantee obligations is Rs. 972 lacs (previous year Rs. 972 lacs). Interest amounting to Rs. 6010 lacs (previous year Rs. 5705 lacs) for the period up to March 2010 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. 4043 lacs (previous year Rs. 3749 lacs) for the period up to March 2010 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. 29898 lacs (previous year Rs. 28222 lacs) 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. 2384 lacs (Rs. 2058 lacs as at March 31, 2009) has been shown as unsecured as the facility does not have any security against the said balance.

Againstthe above cash credit facility, Bank of India was having a second equitable charge on the Companys property Scindia Colony at Andheri. 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. Despite continued losses, eYosion of equity and suspension of the main activities. i.e. shipping activities of the Company, 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 lacs 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 lacs.

The Company has also sanctioned a loan of Rs. 2200 lacs (amount outstanding as at March 31,2010 Rs. 1938 lacs, as at March 31,2009 Rs. 1921 lacs).

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 Honble High Court has passed an order for additional compensation of Rs. 211 lacs. 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 has been admitted.

In regard to Rs. 211 lacs lying in the Court, after due consultation with the legal Counsel, a notice of motion for withdrawal was filed in the Bombay High Court.

While our motion was allowed by the Division Bench, the amount of Rs. 211 lacs was not received up to March 31, 2010. Therefore, the effect of the order has not been considered in the accounts of the Subsidiary. Interest on the outstanding loan has not been charged for the year.

7. No provision for taxation has been made in view of no assessable income (previous year Rs. nil).

8. Managerial remuneration paid to Chairman & Managing Director:

9. Information pursuant to Para 4D of Part II of Schedule VI to the Companies Act, 1956:

10. The office of Company Secretary has been vacant since October 1993. In the circumstances, authentication by Company Secretary does not appear in the Accounts

11. 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.

12. As the Companys 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.

13. The interest expense for the year of Rs. 2003 lacs (previous year Rs. 1932 lacs) includes Rs. 1676 lacs (previous year Rs. 1650 lacs) on Gol outstanding balance, and Rs. 327 lacs (previous year Rs. 282 lacs) on outstanding balance in C. C. account with Bank of India. The interest expense on Gol 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.

14. The Company has unabsorbed business loss of Rs. 78 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.

15. Related Party Disclosures:

(a) Listof Related Parties and Relationship Party Relationship

(i) ScindiaWorkshopLtd. 100% subsidiary

(ii) ShriD.A.Biwalkar Chairman & Managing Director

(b) Related Party Transactions

16. Figures for the previous year have been regrouped or re-arranged wherever necessary and practicable.