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Chowgule Steamships Ltd.

BSE: 501833 Sector: Infrastructure
BSE 00:00 | 10 Aug 11.00 -0.50






NSE 05:30 | 01 Jan Chowgule Steamships Ltd
OPEN 10.93
VOLUME 12503
52-Week high 23.75
52-Week low 8.56
P/E 21.15
Mkt Cap.(Rs cr) 40
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 10.93
CLOSE 11.50
VOLUME 12503
52-Week high 23.75
52-Week low 8.56
P/E 21.15
Mkt Cap.(Rs cr) 40
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Chowgule Steamships Ltd. (CHOWGULSTM) - Director Report

Company director report


The shareholders

Your directors present the fifty seventh annual report and the audited accounts for theyear ended 31st march 2021.

1. Financial results

Standalone Consolidated
As on 31st march 2021 As on 31st march 2020 As on 31st march 2021 As on 31st march 2020
Profit / (loss) before financial charges depreciation 476.35 769.66 1676.40 1640.02
Impairment exceptional items & tax
Financial charges (45.39) (190.73) (1033.69) (3073.63)
Depreciation (62.32) (72.63) (943.03) (2237.39)
Impairment (2909.76)
Loss before exceptional item 368.64 506.30 (300.32) (6580.76)
Exceptional items 1102.26 1102.26
Profit / (loss) before tax 1470.90 506.30 801.94 (6580.76)
Provision for tax (net) (452.34) (150.53) (452.34) (150.53)
Profit / (loss) after tax 1018.56 355.77 349.60 (6731.29)
Other comprehensive income 8.35 1.53 262.02 (865.08)
Total comprehensive income 1026.91 357.30 611.62 (7596.37)
Brought forward from previous year 1136.74 779.44 (21018.04) (13421.67)
Surplus / (deficit) in the statement of profit and loss 2163.65 1136.74 (20406.42) (21018.04)

2. Management discussion & analysis / operations report company's performance

the spread of covid-19 has severely impacted businesses around the globe includingindia. There has been severe disruption to regular business operations due to lock-downsdisruptions in transportation supply chain travel bans quarantines social distancingand other emergency measures. Shipping industry was struggling since last few years andsuffered more as compared to other industries due to this covid 19 pandemic. Consequent tothe government advisories issued for controlling the spread of covid 19 the operations ofcompany were suspended from 23rd march 2020. The company resumed the operations partiallysince 4th may 2020 in line with the regular lockdown relaxation measures issued byministry of home affairs. As a result of lockdown operations have been impacted to someextent.

the net worth of the group as on 31.03.2021 is negative and current liabilities exceedits total assets by rs 1601.33 lacs. The management will take appropriate steps toimprove operations further the market value of the assets held by group would sufficientlycover shortfall if any. Hence the accounts have been prepared on a going concerns basis.

N i ternal financial control system

the company has effective systems of internal controls which are periodically reviewedby the audit committee of the board of directors. Based on its evaluation (as defined insection 177 of companies act 2013 and clause 18 of sebi (lodr) regulations 2015) ouraudit committee has concluded that as of 31st march 2021 our internal financial controlswere adequate and operating effectively.

government policies

the indian economy and many developed countries continue to make effort for speedyeconomic recovery. As part of overall strategy however the governments in variouscountries continue to give priority for development of overall infrastructure. This bodeswell for overall trade.

Industrial relations

the industrial relations during the year were very cordial and there were no industrialdisputes.

threats risks & concerns

freight risks: the charter income is subject to freight rate risks and thereforethe company at group level follows the policy of mixture of short period and long periodtime charter contracts with first class charters to mitigate volatility in freight rates.

interest rate risk: with a view to avoid uncertainty in the interest rate thenecessary forward cover is taken at regular intervals wherever necessary.

forex risk: as major portion of the group's revenues is generated frominternational business in the us dollar terms the same creates a natural hedge againstforeign exchange exposures. The company reviews rupee - us dollar parity on regular basisto protect itself from currency fluctuation risks.

at the company standalone level there is very limited forex risk for the company.

counter party risks: the company engages into charter contracts with the reputedcharters to avoid the risks to the freight earnings.

government policies: the company regularly reviews the changes in the applicablegovernment policies affecting operations of the company. Human resources: there isa scarcity of floating staff. In view of outsourcing of crew management the company getsthe benefit of having efficient and cost effective floating staff from the ship manager'spool.

3. Dividend

considering the liquidity and the cash flow position of the company the board ofdirectors did not recommend any dividend for the financial year under review.

4. Reserves

during the financial year under review the company was not required to transfer anyamount to any reserves.

5. Share capital

the paid-up equity share capital of the company as on 31st march 2021 was rs 3630.84lakhs comprising of 36308425 shares of rs 10/- each. During the year under review therehas been no change in the capital structure of the company.

6. Subsidiaries

as on 31st march 2021 the company has five overseas subsidiaries which includes onewholly owned subsidiary and four step-down subsidiaries. The four step down subsidiarieshad vessel on bareboat charter under each step-down subsidiary. During the year threevessels were returned to the owners. Two step-down subsidiaries are in the process ofliquidation. The board of directors of the company reviews the affairs of the subsidiariesperiodically.

in accordance with section 129(3) of the companies act 2013 the company has preparedconsolidated financial statements of the company and all its subsidiaries which form partof the annual report. Further a statement containing the salient features of thefinancial statement of the subsidiaries in the prescribed format aoc-1 is attached asannexure 1 the company will make available these documents / details upon request byany member of the company. However pursuant to accounting standard as-21 of the companies(accounting standards) rules 2016 consolidated financial statements presented by thecompany include the financial information of its subsidiaries. The company does not haveany other joint venture/associate company in which it has significant influence.

7. Insurance

the fleet of the company has been adequately insured against marine and war risks.

8. Directors and key managerial personnnel

mr. Aditya chowgule managing director and mr. Darshan karekar company secretary hadbeen designated as key managerial personnel in accordance with provisions of section 203of the companies act 2013. However mr. Aditya chowgule managing director and chieffinancial officer has resigned on 18th january 2021.

further ms. Padma chowgule who was appointed as a chairman of the company has tenderedher resignation on 13th january 2021.

the company has received declarations from all the independent directors of the companyconfirming that they meet the criteria of independence prescribed under section 149(6) ofthe companies act 2013 and the sebi (listing obligations and disclosure requirements)regulations (hereinafter to be referred as "sebi listing regulations"). Therehas been no change in the circumstances affecting their status as independent directors ofthe company.

mr. Rahul lotlikar and ms. Mala bhojwani independent directors of the company hasresigned on 25th january 2021 and 18th january 2021 respectively. Mr. Vijay chowgule andmr. Ramesh chowgule were appointed as additional directors of the company through circularresolution dated 14th january 2021. Further mr. Ramesh chowgule has already attainted theage of 75 years and his appointment will be ratify in this ensuring annual general meetingof the company as per the requirement of regulation 17(1a) of the listing regulations. Onrecommendation of the nomination and remuneration committee mr. Amit khandelwal and mr.Sadashiv shet were appointed as additional directors designated as independent directorthrough circular resolutions dated 16th january 2021 subject to the approval of theshareholders. The company has devised a policy for performance evaluation of the boardcommittees and other individual directors (including independent directors) which includescriteria for performance evaluation of non-executive directors and executive directors.The evaluation process inter-alia considers attendance of the directors at the board andthe committee meetings effective participation domain knowledge compliance with code ofconduct vision and strategy etc.

during the year under review the non-executive directors of the company had nopecuniary relationship or transactions with the company other than sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the board/committee of the company.

9. Corporate governance

in terms of the listing agreement with the bse ltd. the corporate governance report isannexed hereto and forms a part of this report.

10. Code of conduct

the board of directors has laid down a code of conduct for all the board members andsenior management of the company. The said code has been hosted on the website of thecompany. All the board members and senior management have affirmed compliance to the code.

11. Board evaluation

pursuant to the provisions of the companies act 2013 and the listing regulations theboard has carried out an annual performance evaluation of its own performance thedirectors individually as well as the evaluation of the working of its audit nomination& remuneration and other committees. A) observations of board evaluation carried outfor the year - there were no observations in the board evaluation carried for the year b)previous year's observations and actions taken - there were no observations of the boardevaluation for the last financial year c) proposed actions based on current yearobservations - not applicable the manner in which the evaluation has been carried out hasbeen given in the corporate governance report.

12. Remuneration policy

the board has on recommendation of the nomination & remuneration committee frameda policy for selection and appointment of directors senior management and theirremuneration. The details of remuneration policy are stated in the corporate governancereport.

13. Meetings

during the year 5 board meetings and 5 audit committee meetings were convened and held.The details of the same are given in the corporate governance report which is part of thisreport. The intervening gap between the meetings was within the period prescribed underthe act.

14. Audit committee

the composition of the audit committee is in line with the provisions of section 177 ofthe act read with regulation 18 of sebi listing regulations. The chairman of the auditcommittee is an independent director. The details of the composition of the auditcommittee are given in the corporate governance report which is part of this report.During the year all the recommendation of the audit committee were accepted by the board.

15. Stakeholders relationship committee

the composition of the stakeholders relationship committee (src) is in line with thesection 178 of the act read with regulation 20 of sebi listing regulations.

16. Nomination and remuneration committee

the composition of the nomination and remuneration committee (nrc) is in line with thesection 178 of the act read with regulation 19 of sebi listing regulations. The details ofmeetings and their attendance are included in the corporate governance report.

17. Corporate social responsibility

as the company does not full fill criteria laid down in section 135 of the companiesact 2013 the provisions of corporate social responsibility are not applicable to thecompany.

18. Extract of annual return

in accordance with section 134 (3) (a) of the companies act 2013 an extract of annualreturn in form is available on the company's website the‘investor information' section.

19. Directors' responsibility statement

pursuant to section 134(5) of the act the board of directors to the best of itsknowledge and ability hereby state and confirm that: a) in the preparation of annualaccounts the applicable accounting standards have been followed and that no materialdepartures have been made from the same. B) appropriate accounting policies have beenselected and applied consistently and judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany as at 31st march 2021 and the profit of the company for that period. C) properand sufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the act for safeguarding the assets of the company andfor preventing and detecting fraud and other irregularities. D) the annual accounts havebeen prepared on a ‘going concern' basis. E) proper internal financial controls werein place and that the financial controls were adequate and were operating effectively. F)that systems to ensure compliance with the provisions of all applicable laws were in placeand were adequate and operating effectively.

20. Auditors

statutory auditors

the shareholders at their fifty fourth annual general meeting held on 21st july 2017approved appointment of m/s cnk & associates llp chartered accountants (firmregistration no. 101961w) for a term of consecutive five years from conclusion of 55thannual general meeting to conclusion of the 59th annual general meeting. The auditorsbeing eligible have given their consent for appointment.

the notes on financial statement referred to in auditors report are self-explanatoryand do not call for any further comments. The auditors report does not contain anyqualification reservation or adverse comment.

secretarial auditors

pursuant to the provisions of section 204 of the companies act 2013 and rules madethereunder g d s & associates company secretaries has been appointed as thesecretarial auditor to conduct the secretarial audit for the financial year 2020-21. Asecretarial audit report in form given by the secretarial auditor has beenprovided in an annexure which forms part of the directors report.

secretarial auditors' observation(s) in secretarial audit report and directors'explanation thereto– a) regulation 17 read with regulation 25 of the securities andexchange board of india (listing obligations and disclosure requirements) regulations2015 and section 149 of the companies act2013 read with companies (appointment andqualification of directors ) rules 2014 it is clarified that considering the stressedsituation of the company it was difficult to find suitable persons as independentdirectors and the company is in search of an appropriate candidate to appoint a person asan independent director of the company b) regulation 18 19 and 20 of the securities andexchange board of india (listing obligations and disclosure requirements) regulations2015 due to resignation of two independent directors who were also audit committeemembers nomination & remuneration committee members and stakeholders relationshipcommittee members the composition of the said committees was not in compliance ofregulation 18 of the listing regulations during september 2020 quarter. Withreconstitution of audit committee nomination & remuneration committee andstakeholders relationship committee w.e.f. 2nd november 2020 this non-compliance hasbeen rectified. C) regulation 17(1a) of the securities and exchange board of india(listing obligations and disclosure requirements) regulations 2015 it was clarified thatmr. Ramesh chowgule who has attained the age of seventy-five years was appointed as anadditional director of the company pursuant to section 161(1) of the companies act 2013to hold office until the conclusion of next annual general meeting of the company on 14thjanuary 2021. His appointment will be ratified in the upcoming annual general meeting ofthe company along with shareholder approval as per the sebi (lodr) regulation 2015requirements.

section 161 of the companies act 2013 also states that a person can be appointed asan additional director in any board meeting and can be regularised as a director in thenext annual general meeting (agm) with the approval of shareholders. D) section 203 of thecompanies act 2013 read with the companies (appointment and remuneration) rules2014 itwas clarified that mr. Aditya chowgule was a managing director & chief financialofficer (cfo) of the company. He resigned on 18th january 2021. Further the company is insearch of deserving person who can serve company as a managing director and cfo. Due tocovid outbreak it is difficult to get the deserving person.

21. Material changes and commitments affecting financial position

there have been no material changes and commitments which have occurred between the endof financial year and the date of this report which can have impact on financial positionof the company.

22. Loans investment and guarantees etc

during the year the company has given a loan of about us $ 0.200 million to itssubsidiary company viz. Chowgule steamships overseas limited which is outstanding.

further the company had a loan from chowgule and company private limited amounting tors 1913.98 lakhs (including interest accrued of rs 143.98 lakhs up to march 2020). Duringthe year the company provided interest on the said loan up to 31st december 2020 as perthe terms then attached. A memorandum of family settlement (mofs) dated 11th january 2021has been executed between the members of chowgule family (promoters of the company) todivide the businesses and other matters mentioned therein. Mofs provides that theaforementioned loan is not to be "repaid". Accordingly the company has writtenback the said loan together with interest as a liability to repay no longer existed.

23. Also an amount of rs 811.72 lakhs was due from a party to whom the company hadsold a vessel. The party has dishonored the advance cheques issued at the time of sale andhas also not made good the default. The party has claimed that the vessel is not beingoperated and hence no further payments would be made. Accordingly the company has writtenoff the amount due from this party as irrecoverable

24. The companies (accounts) rules 2014

in accordance with the requirements of rule 8 (a) of the companies (accounts) rules2014 a statement annexed hereto gives the particulars as required under the said rulesand forms part of this report (annexure 2).

25. Statement of particulars of appointment and remuneration of managerial personnel

the information required under section 197 of the act read with rule 5(1)(i) of thecompanies (appointment and remuneration of managerial personnel) rules 2014 in respect ofemployees of the company and directors is enclosed as "annexure - 3" tothis report.

26. The company has formulated a policy on materiality of related partytransactions for dealing with such transactions in line with the requirements of listingregulations. The policy on related party transactions is available on the company'swebsite viz. During the year there were no related parties asreferred to in section 188 of the companies act 2013. 27. The risk managementpolicy of the company evaluates various risks surrounding the business of the company andits subsidiaries and seeks to review and upgrade its risk management process. The board ofdirectors formulates strategies and takes necessary steps

28. Acknowledgements

directors place on record their appreciation for the continuing support andco-operation from the customers vendors dealers distributors resellers bankersshareholders state industries electricity and other government departments. The directorsalso take this opportunity to thank the employees for their dedicated service throughoutthe year in mitigating these risks.

For chowgule steamships limited
Place : goa Vijay chowgule
Date : 8th june 2021 Chairman