SCINDIA STEAM NAVIGATION COMPANY LIMITED
ANNUAL REPORT 2010-2011
THE MEMBERS OF
SCINDIA STEAM NAVIGATION COMPANY LTD.
Your 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:
Freight & Charter Hire - -
Other Income 14 8
Sub total 14 8
Less: Administrative Expenses 33 24
Profit (+)/Loss (-) before Interest and Depreciation -19 -16
Less: Interest 2080 2003
Depreciation (Rs.677) - -
Profit/Loss before taxation -2099 -2019
Tax provision (excess tax provision
Rs.58285 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
(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,
3. The code of corporate governance was reviewed by the Audit Committee
comprising three Directors. A report on corporate governance is annexed to
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
(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
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
The Division Bench passed an Order on January 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
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
(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
(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
(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
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
On behalf of the Board of Directors
For The Scindia Steam Navigation Co. Ltd.
Chairman & Managing Director
June 17, 2011.