scindia steam navigation co ltd Auditors report
SCINDIA STEAM NAVIGATION COMPANY LIMITED
ANNUAL REPORT 2010-2011
AUDITORS REPORT
To
The Members of
SCINDIA STEAM NAVIGATION COMPANY LIMITED
Report on the Accounts for the year ended on 31st March, 2011 in compliance
with Section 227 (2) of the Companies Act, 1956
We have audited the attached Balance Sheet of The Scindia Steam Navigation
Company Limited as at 31st March, 2011 and also the Profit and Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
As required by the Companies (Auditors Report) Order, 2003 as amended by
the Companies (Auditors Report) (Amendment) Order, 2004 issued by the
Central Government in terms of provisions of Section 227(4A) of the
Companies Act, 1956, we enclose in the annexure a statement on the matters
specified in paragraphs 4 and 5 of the said order.
Further to our comments in the annexure referred to above, we report that:
a) We have obtained all the information and the explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those books.
c) The Balance Sheet, Profit & Loss account and Cash Flow Statement dealt
with by this report are in agreement with the Companys books of account.
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report comply with the Accounting Standards
referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;
e) We are informed that in terms of clarification issued by Ministry of
Finance, Justice and Company Affairs, Department of Company Affairs,
Government of India vide General circular No.8 dated 22nd March, 2002 , the
directors of the Company are not subject to any disqualification under
section 274(1)(g) of the Companies Act, 1956, as their appointment is made
by the Government of India;
f) The shipping operations of the company stand suspended. The company has
continuously incurred losses and thereby net worth of the company has been
totally eroded and a substantial loss is carried forward as at 31 March,
2011. The company has filed a petition with the High Court of Bombay on
February 28, 2011 to wind up the company by Order of the court under the
relevant provisions of the Companies Act, 1956. In view of these facts, the
company will no longer be a Going Concern. Despite this, the accounts of
the company have been prepared on a Going Concern Basis in the absence of
adequate data and information for its compilation on an alternative basis.
Consequently, no adjustments are made in accounts relating to the
recoverability of recorded asset amounts and in respect of recorded
liabilities and contingent liabilities that might devolve on the company.
(Refer note no. 5 of notes forming part of accounts)
g) The Company has granted a loan to Scindia Workshop Limited, the
Subsidiary Company. Outstanding amount of such loan with accrued interest
as at 31st March, 2011 is Rs.1707 Lakhs (Previous year Rs.1938 Lakhs). The
recoverability of this amount is, in our opinion, dependent on outcome of
the review application to be made before the Division Bench of the High
Court of Bombay by the Subsidiary for further enhancement of compensation
for the land and buildings acquired by the Government of Maharashtra (Refer
note no. 6 of notes forming part of accounts)
We further report that subject to f and g above, the effect of which could
not be quantified, in our opinion and to the best of our information and
according to the explanations given to us, the said accounts read together
with the notes thereon give the information required by the Companies Act,
1956, in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011; and
(ii) in the case of the Profit and Loss Account, of the Loss of the Company
for the year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
For K.S. AIYAR & CO.
Chartered Accountants
Firm Regn. NO.100186W
RAGHUVIR M. AIYAR
Partner
Membership No: 38128
Mumbai
20th June, 2011.
ANNEXURE TO THE AUDITORS REPORT (REFERRED TO IN PARAGRAPH 3 OF OUR REPORT
OF EVEN DATE)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management at
reasonable intervals and no discrepancies were noticed on such
verification.
(c) The Company has already disposed off substantial part of its fixed
assets. (Also refer point f of our main report.)
(ii) Since the Company does not hold any stock during the year, the
requirement of clauses 4 (ii) (a), (b), (c) of the Order are not applicable
to the company.
(iii) The Company has not granted or taken any loans, secured or unsecured
to/from companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956 except for a loan
of Rs.1707 Lakhs to its Subsidiary namely Scindia Workshop Limited (SWL).
In respect of loan granted to subsidiary company there is no stipulation as
regards repayment. Interest charged up to the financial year 1995-96 is
also not recovered. The recovery of the principal and interest due from the
said subsidiary is dependent on the outcome of the appeal filed for
enhancement of compensation as detailed in note no 6 to the accounts.
(iv) On the basis of checks carried out in course of our audit and
according to the information given to us, we are of the opinion that there
are adequate internal control systems commensurate with the size of the
Company and the nature of its business although there are no purchase of
fixed assets, sale of goods and services.
(v) As informed to us, there are no transactions of purchase of goods,
materials and services and sale of goods, material and services with the
parties stated in the register maintained as per section 301 of the
Companies Act 1956.
(vi) During the year the Company has not accepted any deposits from the
public, therefore the provisions of Section 58A, 58AA or other relevant
provisions of the Companies Act, 1956 and the Companies (Acceptance of
Deposit) Rules 1975 are not applicable to the Company.
(vii) In our opinion, the Companys present internal audit system, though
not formal, is generally commensurate with the size and nature of its
business.
(viii) The maintenance of cost records under section 209(1)(d) of the
companies Act, 1956 is not applicable to the Company.
(ix) (a) According to the records of the Company, the company has been
generally regular in depositing undisputed statutory dues including
Investor Education and Protection Fund, Income Tax, Wealth Tax, Service
Tax, Custom Duty, Cess and other material statutory dues with the
appropriate authorities. Based on our audit procedures and according to the
information and explanations given to us, there are no arrears of statutory
dues which remained outstanding as at 31st March, 2011 for a period of more
than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company, there are no dues of sales tax, custom duty, income
tax, wealth tax, service tax, excise duty/cess which have not been
deposited on account of any dispute.
(x) The Companys accumulated losses, as on 31st March 2011 is more than
fifty percent of its net worth. The Company has incurred cash losses in the
financial year covered by this report and has also incurred cash losses in
the immediately preceding financial year.
(xi) As per the books of the Company and as per the information and
explanations given to us, the Company has defaulted in payment of dues to a
bank on Cash credit account and the total amount due including interest
thereon up to 31.03.2011 is Rs.2763 Lakhs (P.Y.2384 Lakhs).
(xii) The Company has not granted loans and advance on the basis of the
security by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund and nidhi/mutual benefit funds/
societies and therefore the requirements of clauses 4 (xiii) are not
applicable to the company.
(xiv) The Company does not deal or trade in shares, securities, debentures
and other investments. Accordingly, the provisions of clause 4 (xiv) of the
Order are not applicable to the Company.
(xv) According to the information and explanations given to us, the Company
has not given guarantee for loans taken by others from bank or financial
institutions.
(xvi) There are no term loans obtained by the Company during the year.
(xvii) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that
funds raised on short-term basis have not been used to finance long term
investments.
(xviii) The Company has not made any preferential allotment of shares to
parties or companies covered under section 301 of the Companies Act, 1956.
(xix) During the year Company has not issued any debentures.
(xx) The Company has not raised any money through a public issue during the
year.
(xxi) Based upon the audit procedure and the information and explanation
given to us, we report that there are no frauds on or by the Company
noticed or reported during the year.
For K.S. AIYAR & CO.
Chartered Accountants
Firm Regn. No.100186W
RAGHUVIR M. AIYAR
Partner
Membership No: 38128
Mumbai
20th June, 2011.