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Essar Shipping Ltd.

BSE: 533704 Sector: Infrastructure
BSE 00:00 | 18 Jun 17.65 -0.25






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OPEN 17.55
52-Week high 35.85
52-Week low 16.00
Mkt Cap.(Rs cr) 365
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Sell Price 0.00
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OPEN 17.55
CLOSE 17.90
52-Week high 35.85
52-Week low 16.00
Mkt Cap.(Rs cr) 365
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Essar Shipping Ltd. (ESSARSHPNG) - Director Report

Company director report


The Members of

Essar Shipping Limited

Your Directors are pleased to present the Seventh Annual Report and Audited FinancialStatements of the Company for the financial year ended March 31 2017.


The Company's financial performance for the year ended March 31 2017 is summarizedbelow:

Rs. in Crore



Particulars For the year ended 31-03-2017 For the Year ended 31-03-2016 For the year ended 31-03-2017 For the Year ended 31-03-2016
Total Income 2125.38 1918.40 812.00 825.49
Total Expenditure 1814.73 1441.06 438.86 523.45
EBITDA 310.65 477.34 373.14 302.04
Less: Interest & Finance charges 466.98 541.60 352.63 342.65
Less: Provision for Depreciation 390.50 463.94 137.14 153.69
Less: Exceptional Item - - - -
Profit/(Loss) before Tax (546.84) (528.22) (116.63) (194.31)
Less: Provision for Tax (37.85) (21.94) (2.65) (3.39)
Profit/(Loss) for the year before share of profit of associate (584.69) (550.16) (119.28) (197.70)
Add: Share of profit of associate 1.24




Add: Other Comprehensive Income/ loss (0.38) (8.54) (0.38) (8.54)
Profit/(Loss) for the year (583.83) (558.71) (119.66) (206.24)


In view of loss during the year 2017 -18 the Board of Directors has not recommendedany dividend for the year under review.


Overview of the World Economy & Shipping Industry

Maritime transport is the backbone of globalization and lies at the heart ofcross-border transport networks that support supply chains and enable international trade.An economic sector in its own right that generates employment income and revenue.Transport-including maritime transport-is cross-cutting and permeates other sectors andactivities. Maritime transport enables industrial development by supporting manufacturinggrowth; bringing together consumers and intermediate and capital goods industries; andpromoting regional economic and trade integration. Falling short of expectations and belowthe pre financial crisis levels growth in world GDP expanded by 2.5 per cent in 2016 thesame rate as in 2014. Developing country trade was particularly weak in 2016 with exportand import volumes respectively expanding at the marginal rate of 0.4 per cent asignificant drop from growth in previous years

After a continued lackluster outturn in 2016 economic activity is projected to pick uppace in 2017 and 2018 especially in emerging market and developing economies. Growth rateis expected to be 3.6 percent in 2017 as estimated by International Monetary Fund thelong-term growth prospects for seaborne trade and maritime businesses are positive. Thereare ample opportunities for developing countries to generate income and employment andhelp promote foreign trade.

The world shipping fleet grew by 3.5 per cent in 2016. This is the lowest growth ratesince 2003 yet still higher than the 2.8 per cent growth in demand leading to acontinued situation of global overcapacity.

Maritime business

The largest shipbuilding countries are China Japan and the Republic of Koreaaccounting for 91.4 per cent of gross tonnage. Most demolitions take place in Asia; fourcountries-Bangladesh India Pakistan and China-accounted for 95 per cent of shipscrapping gross tonnage. The largest suppliers of seafearers are China Indonesia and thePhilippines.

China's economy has slowed over the past few years although it is still growing at arelatively high rate; GDP growth decelerated from 7.2 per cent in 2014 to 6.9 per cent in2015. China may be said to be growing at two speeds with its manufacturing sector facingovercapacity and limited growth while its consumer-driven services sector is growing at arapid pace (The Economist Intelligence Unit 2016). China accounted for about 20 per centof the slowdown in import growth of developing economies and countries with economies intransition in 2014-2015 (United Nations Department of Economic and Social Affairs 2016).

Dry cargo shipments account for 70.7 per cent of total seaborne trade volumes whilethe remaining share is made up of tanker trade including crude oil petroleum productsand gas.

The slowdown in construction and infrastructure investment by China and the decline insteel output have affected iron ore trade which accounted for 13.6 per cent of totalseaborne trade in 2017.

Minor bulk commodities (agribulks metals and minerals and manufactures) many of whichare also linked to steel production are estimated to have increased by 1.5 per centsupported in particular by growing exports of steel products from China. The tankersector experienced one of its best performances since 2008. Cumulatively gross petroleumimport bill increased 16.55 per cent to $35.9 billion in the first five months of 2017-18fiscal as compared to the corresponding period last year adding pressure on the country'scurrent account deficit which ballooned to $14.3 billion (2.4 per cent of GDP) in thefirst quarter ended June.

Developing countries continued to contribute larger shares to the total volumes ofinternational seaborne trade. Their contribution with regard to global goods loaded isestimated at 60 per cent and their import demand as measured by the volume of goodsunloaded increased reaching 62 per cent.

Overview of the Indian Economy

Notwithstanding the current situation the longer term outlook for the industry remainsgood. India's population continues to expand and emerging economies will continue toincrease their requirements for the goods and raw materials that shipping transports sosafely and efficiently. Emerging economies such as India have undertaken severalinitiatives such as development of coastal shipping advanced technology ports incentivesto the domestic ship repair and ship building industry port led development revival ofthe manufacturing sector & infrastructure development of the country as a whole.Amongst the developing economies IMF expects India to report the highest GDP growth of6.7% in 2017-18.

As per the latest Global Economic Prospects (GEP) report by World Bank India isleading the World Bank's growth chart for major economies. India's maritime trade isexpected to grow at a CAGR of 9.6% increasing India's share to the global sea borne tradeto 17% by 2025. Thus leading to an opportunity to increase cargo handling capacity from1Bn MTPA to 2.5 Bn MTPA.


Freight rates and Maritime trade by Cargo type

In 2016 most shipping segments except for tankers suffered historic low levels offreight rates and weak earnings triggered by weak demand and oversupply of new tonnage.The tanker market remained strong mainly because of the continuing and exceptional fallin oil prices. The crude oil and product tanker markets enjoyed strong freight ratesthroughout mainly triggered by a surge in seaborne oil trade and supported by a lowsupply of crude tanker fleet capacity. The same was not the case with dry bulk freightmarket which was affected by the substantial slowdown in seaborne dry bulk trade and theinflux of excess tonnage. Rates fluctuated around or below vessels' operating costs acrossall segments.

(a) Tanker trade

In 2016 oil remained the leading fuel accounting for one third of global energyconsumption. Global oil consumption was supported by demand among members of theOrganization for Economic Cooperation.

Global crude oil trade reversed the 2015 trend and expanded by 3.8 per cent in 2016with total volumes reaching an estimated 1.77 billion tons. Global seaborne oil tradeexpanded faster than underlying oil demand suggesting that end-user oil demand was notthe only factor at play. Ample oil supply low oil price levels additions to refinerycapacity improved refinery margins and stock-building activity all contributed to therise in crude oil volumes which in turn led to infrastructure bottlenecks delays andgreater demand for oil storage.

India-the third largest importer of crude oil after the United States andChina-increased its imports while increasingly diversifying sources of supply includingLatin America and Western Africa.

All tanker segments performed well benefiting from strong freight rates and low bunkerprices which resulted in strong tanker earnings. Overall average tanker earnings pervessel rose to an average of $31036 per day an increase of 73 per cent over 2014 thehighest level since 2008 (Clarksons Research 2016). The largest gains were observed inthe very large crude carrier segment.

(b) Dry cargo trade: Major and minor dry bulk commodities and other dry cargo

Dry bulk freight rates plunged to a record low as weakening demand and strong supplycreated a high imbalance in market fundamentals. The dry cargo market was mainly affectedby a substantial slowdown in seaborne dry bulk trade with volumes contracting by 0.2 percent as a result of limited growth in the iron ore trade and declining coal volumes. Theincrease in cancellation and scrapping activities helped to limit overall fleet growth toits slowest pace in 15 years (Clarksons Research 2016) but it was not enough to bridgethe gap between supply and demand and bring the sector back into balance. Given thesechallenging market conditions the Baltic Exchange Dry Index reached several low levels.Earnings in the capsize segment staggered near $ 8208/day which merely could meet averageOPEX.

The concentrated growth both in China and in two key commodities-iron ore andcoal-heightened the vulnerability of shipping and seaborne trade to fluctuations affectingdemand and to developments in China's economy. This became evident in 2016 when China'ssteel output which accounted for nearly half of global output declined (by 2.3 per cent)for the first time since 1981 (World Steel Association 2016). Reduced steel production inChina compressed the country's demand for imports of iron ore as well as other relatedcommodities and metals.

(c) Structure of the world fleet

The world fleet in terms of dwt grew by 3.6 per cent in the 12 months to January 2017.This growth rate is the same as 2015 yet still higher than the 3 per cent growth indemand leading to a continued situation of global overcapacity.

As at January 2017 the top five ship owning economies in terms of dwt are GreeceJapan China Germany and Singapore while the top five economies by flag of registrationwere Panama Liberia the Marshall Islands Hong Kong (China) and Singapore. Despiteuncertainties the long-term growth prospects for seaborne trade and maritime businessesare positive.

In total as at January 2017 the world commercial fleet consisted of 22400 vesselswith a combined tonnage of 1.8 billion dwt.

In 2017 91.3 per cent of shipbuilding by gross tonnage took place in only threecountries namely China (36.1 per cent) the Republic of Korea (34.3 per cent) and Japan(20.9 per cent)

(d) Opportunities

In 2016 world seaborne trade volumes surpassed 10 billion tons-the first time in therecords of UNCTAD (United Nations Conference of Trade & Development). The tanker tradesegment recorded its best performance since 2008 while growth in the dry cargo sectorincluding bulk commodities and containerized trade in commodities fell short ofexpectations. While a slowdown in China is bad news for shipping other countries have thepotential to drive further growth. South- South trade is gaining momentum and plannedinitiatives such as the One Belt One Road Initiative and the Partnership for QualityInfrastructure as well as the expanded Panama Canal and Suez Canal all have thepotential to affect seaborne trade reshape world shipping networks and generate businessopportunities. In parallel trends such as the fourth industrial revolution big data andelectronic commerce are unfolding and entail both challenges and opportunities forcountries and maritime transport.

(e) Outlook

The outlook for seaborne trade remains uncertain and subject to downside risksincluding weak global demand and investment political uncertainties such as the ongoingmigration crisis doubts about the future pace and direction of European integration and afurther loss of momentum in developing economies. While a slowdown in China is bad newsfor shipping developing countries other than China are increasingly entering the shippingscene and have the potential to drive further growth. The lifting of some sanctions on theIslamic Republic of Iran is expected to stimulate crude oil trade as well as non-oilsectors.

Oilfields Services Business Offshore Segment:

Since 2014 low crude oil prices reduced spending on exploration and production andincreased efficiencies in the drilling industry has resulted in a huge number of drillingrigs out of work. This in turn has dramatically decreased asset values particularly theoffshore drilling sector. Time to time production cuts by OPEC has also failed to controlthe falling oil prices which means that offshore drilling rig sector hurt by low oilprices and overcapacity is not set for a quick recovery in 2017. However the distressedassets do offer opportunities to acquire world class offshore drilling assets at lucrativerates.

Crude Oil Price projections remain unpredictable given the current market scenario.Although the markets may improve marginally in 2017 but most improvement will be focusedon certain asset classes or regions. Since September 2014 rig utilization globally hasfallen by 31 percent and rig day rates have followed suit falling by more than 50 percentin some cases. The rig day rates have almost bottomed to the lowest commercial level andno further deterioration in day rates is expected.

According to the recent updates the international offshore active rig count for March2017 was 197 down almost 6.6% since March 2016. The rig count is expected to risemarginally by 4% by the year end however if the oil prices drop further the active rigcount may further reduce to adjust for the loss in revenue.

Onshore Segment:

The onshore drilling services market in India is mainly driven by PSU majors such asONGC Oil India Limited and Indian Oil Corporation Limited. In February 2017 theGovernment of India has approved award of 31 contract areas to highest ranked bidders aspart of the Discovered Small Field (DSF) Bid Round 2016. Twenty three out of the thirtyone contracts awarded are located onshore and are expected to commence operations by thebeginning of the next year. The fields awarded in DSF round along with upcoming OpenAcreage Licensing Policy (OALP) of the Government are expected to generate lot ofopportunities for utilizing the drilling rigs and associated services. Alternatively PSUslike ONGC and Oil India Limited are also expected to make substantial investments inexploration and development activities. Opportunities for deployment of the land rigs atoverseas locations also needs to be considered. It is crucial to exploit the opportunitiesthat are expected to come for ensuring long term cash flows to the company. As the gasbased infrastructure of the country is improving demand for natural gas is rising whichwill lead to boost the Shale gas and CBM drilling activities providing furtheropportunities for deployment of land rigs.


As on March 31 2017 your Company has four direct subsidiaries and four indirectsubsidiaries. Essar Oilfields Services Limited Mauritius; Energy TransportationInternational Limited Bermuda; Energy II Limited Bermuda; and Essar Shipping DMCC aredirect subsidiaries of the Company. Essar Oilfield Services India Limited India StarBitOilfields Services India Limited Essar Oilfield Middle East DMCC Dubai UAE and CosmicDrilling Services Limited are step down subsidiary of the Company.

A report on the performance and financial position of each of the subsidiaries andassociates companies as per the Companies Act 2013 is provided as Annexure to this reportand hence not repeated here for the sake of brevity. The Policy for determining materialsubsidiaries is available on Company's website


In accordance with the Companies Act 2013 and Indian Accounting Standard (IND-AS)-110on Consolidated Financial Statements read with IND-AS-28 on Accounting for Investments inAssociates the audited Consolidated Financial Statements are provided in the AnnualReport. The audited Consolidated Financial Statements together with Auditors' Reportthereon form part of the Annual Report.


Your Company believes that employee competence and motivation are necessary to achieveits business objectives. Your Company has undertaken many training initiatives to enhancetechnical and managerial competence of the employees and to further leverage theircapabilities to enhance their performance. The Company has taken a series of initiativesto enhance emotional and intellectual engagement of employees. During the year underreview the Company held many employees engagement programs at the Company premises andoutside. Families of employees were invited and attended these programs.

The Company has policies on conduct sexual harassment of women at workplace whistleblower corporate governance insider trading etc. guiding the human assets of theCompany. For the year under review there was no instance of the sexual harassmentreported pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.


In accordance with the provisions of the Companies Act 2013 and the Article ofAssociation of the Company Mr. P K Srivastava retires by rotation at the ensuing AnnualGeneral Meeting and being eligible has offered himself for re-appointment. The Company hasreceived requisite notice in writing from a member proposing Mr. P K Srivastava forappointment as Director.

In accordance with the provisions of section 149 and 152 of the Companies Act 2013 andRules made thereunder Mr. N. Srinivasan and Capt. Bhupindar Singh Kumar IndependentDirectors of the Company are completing their term at the ensuing Annual General Meetingand are being proposed for the re-appointment.

The brief resume of the Director(s) being re-appointed the nature of their expertisein specific functional areas names of companies in which they hold directorships theirshareholding etc. are provided in the Notes to the Notice of the ensuing Annual GeneralMeeting. Your Directors recommend their re-appointment at the ensuing Annual GeneralMeeting.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013 and under Regulation 16 (b) (iv)of SEBI (LODR) Regulations 2015.

The information on policy for performance evaluation of Independent Directors BoardCommittees and other individual directors; separate meeting of Independent Directors;familiarization programme for Independent Directors etc. is provided under CorporateGovernance Report annexed with this Report and the relevant policies are also available onthe website of the Company


During the year ended on March 31 2017 Seven (7) meetings of the Board were held onMay 25 2016 June 23 2016 September 08 2016 September 22 2016 December 13 2016February 14 2017 and March 27 2017.


Your Directors state that:

(a) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards have been followed and there are no material departuresfrom the same;

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2017 and of the loss ofthe Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) the Directors have prepared the annual accounts on a going concern basis. TheStatutory Auditors have expressed an emphasis of matter on Going Concern in theirConsolidated Audit Report relating to a stepdown subsidiary.

(e) the Directors have laid down internal financial controls followed by the Companyand that such internal financial controls are adequate and were operating effectively asendorsed by Statutory Auditor in their separate report annexed to the Annual Report

(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


Your Company has a Risk Management Policy that outlines the framework and procedures toassess and mitigate the impact of risks and to update the Board and the senior managementon a periodical basis on the risk assessed actions taken for mitigation and efficacy ofmitigation measures. With efficient Risk Management Framework your Company is able tomanage:

(a) Economic Risks by entering into long term contracts with reputed global majors ineach of its divisions thereby ensuring long term profitability of the Company and assuredcash flows;

(b) Interest Rate Risk by undertaking suitable hedging strategies to overcome anyadverse interest rate risks. It has formulated internal target rates at which any openinterest rate risk can be hedged;

(c) Control over the operational matrix of various vessels to reduce cost and reducedowntime of vessels; and

(d) Control over various OPEX cost of the organization.

As per LODR Regulation 2015 Compliance related with Risk Management Committee isrequired to be done by top 100 Companies as per list released by NSE since our Companydoesn't fall in that category hence the Compliance of Risk Management was not needed butour Company do believe in mitigation/minimisation of risk therefore the management had putits best effort to minimise/mitigate the risk.


Your Company has a well-established framework of internal operational and financialcontrols including suitable monitoring procedures systems which are adequate for thenature of its business and the size of its operations. The detailed report is given inCorporate Governance Report.


The Company has complied with all mandatory provisions of SEBI (LODR) Regulations 2015relating to Corporate Governance. A separate report on Corporate Governance as stipulatedunder the SEBI (LODR) Regulations 2015 forms part of this Report. The requisitecertificate from the Auditors of the Company regarding compliance with the conditions ofcorporate governance is attached to the report on Corporate Governance.


The Company has in compliance with Section 177 of the Companies Act 2013 hasestablished Vigil Mechanism by adopting the ‘Whistle Blower Policy' for Directorsand Employees. The Whistle Blower Policy provides for adequate safeguards againstvictimization of persons who use such mechanism and have provision for direct access tothe Chairperson of the Audit Committee in appropriate cases. A copy of the Whistle BlowerPolicy is available on the website of the Company


The Corporate Social Responsibility Committee comprises Captain B. S. Kumar-Chairman;Mr. Ranjit Singh; and Ms. Neelam Kapoor (Appointed w.e.f. July 31 2017 in place of Ms. SGayathri who has resigned on May 24 2017).

Since the Company has incurred losses in proceeding three financial years hence it isnot required to spend on CSR Activities.


The Company has implemented the "Essar Shipping Employees Stock OptionScheme-2011" ("Scheme") in accordance with the Securities and ExchangeBoard of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines 1999 ("the SEBI Guidelines"). The Nomination and RemunerationCommittee of the Board of Directors of the Company administers and monitors the Scheme.The applicable disclosures as stipulated under the SEBI Guidelines as at March 31 2017are provided in the Annexure-B to this Report.


Your Company's Statutory Auditor M/s. CNK & Associates LLP (Registration No.101961W) was appointed at 5th AGM of the Company for a period of 5 years.

The Board of Directors of the Company recommend M/s CNK & Associates LLP CharteredAccountants Mumbai (Registration No.101961W) for ratification of re-appointment asStatutory Auditors of the Company by the Members at the ensuing Annual General Meeting.The Company has received letter from M/s CNK & Associates Chartered AccountantsMumbai to the effect that if their appointment is made would be within the prescribedlimits laid down under Section 141 (3)(g) of the Companies Act2013 and they are notdisqualified for such appointments under the provisions of applicable laws.


Further with regard to the observations made in Annexure A to the Auditors' Report themanagement explanation is as under:

a) TDS & Service Tax dues:

The Company is making all efforts to clear outstanding statutory dues at earliest.

b) Regarding the dues to the Bank/FI/Debenture-holders

The Company is continuing its negotiation with lenders to refinance the existing loanswith balance useful life of its asset in view of depressed market conditions in theshipping industry.

The delay in repayment of instalments and Interest has been unavoidable due to cashflow mismatch and efforts are being made to avoid the recurrence thereof.


The Board has appointed M/s. Martinho Ferrao & Associates Practising CompanySecretaries to conduct Secretarial Audit for the financial year 2016-17. The SecretarialAudit Report for the financial year ended March 31 2017 is annexed herewith marked asAnnexure-C to this Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.


The Board of Directors on recommendation of the Nomination & Remuneration Committeehas adopted a policy for appointment of Directors remuneration of Directors KeyManagerial Personnel and other employees. The brief details on the above are provided inCorporate Governance Report and the policy is available on the website of the The details of remuneration as required to be disclosed pursuant to theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexedas Annexure-D to this Report.


In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules togetherwith disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the Annexure-E to thisReport.


All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had entered into one or morecontract/arrangement/transaction with Essar Steel India Limited a Fellow Subsidiary whichcould be considered material in accordance with the policy of the Company on materialityof related party transactions.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's The information on each of the transactions with the related party as perthe Companies Act 2013 is provided in note 28 of notes forming part of the financialstatement and hence not repeated. The disclosure required pursuant to clause (h) ofsub-section (3) of Section 134 of the Companies Act 2013 and Rule 8(2) of the Companies(Accounts) Rules 2014 in Form AOC-2 is annexed herewith as Annexure-F to this Report.


The extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure-G tothis Report.


Particulars of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the financial statements.


There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.


Conservation of energy and Technology absorption

Your company is committed for continual environmental improvement. The Company hastaken several initiatives towards conservation of energy. The Company initiated theprocess of monitoring carbon emissions as per IMO GHG Guidelines and also exploredopportunities to improve energy efficiency onboard the ships. Due to the nature of thebusiness (transportation) fuel and lubricants are necessary to deliver the services.

Following are few steps taken towards conservation of energy and use of alternatesource of energy:

Ship Energy Efficient Management Plan (SEEMP):

In line with current guidelines that have been established by IMO this plan has beenimplemented all across fleet vessels. The capturing and monitoring of the data on regularbasis prompts to take appropriate corrective measures on a timely basis. Onboardperformance monitoring systems will give a holistic approach to ship operations with theaim of reducing fuel consumption and emissions while achieving optimum vessel performance.The Company have already completed energy efficiency evaluation on our assets and are nowin the process of implementing fuel efficiency measures. These include trim speedreduction and weather routing. These fuel efficiency measures will not only reduce energyconsumption but also benefit customers through lower fuel cost where applicable.

Alternate source of energy:

In order to reduce fuel consumption the Company's vessels utilize shore power duringrepair lay-up period and thereby reduce carbon foot print. Periodical cleaning of ship'shull and propellers apart from routine dry-docking of floating assets is another stepwhich has been taken towards conservation of energy with insignificant investment orexpenses.

Technology Absorption

The Company has successfully implemented SAP in its financial and budget managementsystems. The Company has also now implemented various methods of automation so as to havegreater visibility and control over its assets and further improve the turnaround timethereby increasing asset utilisation and profitability.

Planned maintenance and purchase management system of all the vessels are now beingintegrated with SAP in order to have uniform platform. The Company has implemented arobust Document Management System thus improving the availability of critical informationin e-mode thereby reducing the use of paper. Ship-staff payroll system has been developedand implemented successfully.

In-house developed software EIS system has now been upgraded to monitor all the aboveenergy conservation measures and is now available online. Various energy and cargo relateddata are available in e-mode and helps in close monitoring and control of energyconservation related matters. Due to in-house developed software your company has notonly saved on investment towards purchase of third party software but also reduceddependency on third party service provide.

Foreign Exchange Earnings and Outgo

The details of Foreign Exchange Earnings and Outgo during the year are as follows:

Foreign Exchanged Earned (including loan receipts sale of ships freight charter hireearnings interest income etc.)

: Rs. 791.36 Crore
Foreign Exchanged cost of acquisition Operating
Used (including of ships loan repayments interest expenses etc.) : Rs. 1207.86 Crore


Your Company has not accepted any public deposits under section 73 of the CompaniesAct 2013 during the Financial Year under report.


Your Directors express their appreciation of commendable teamwork of all employees.Your Directors express their thanks to all the offices of the Ministry of ShippingDirectorate General of Shipping Ministry of Petroleum and Natural Gas Indian NavyIndian Coast Guard Mercantile Marine Department State Government and Central GovernmentClassification societies Oil Companies and Charterers creditors Banks and FinancialInstitutions for the valuable support help and co-operation extended by them to theCompany.

Your Directors also thanks its other business associates including the Members of theCompany for their continued co-operation and support extended towards the Company.

For and on behalf of the Board
Ranjit Singh P.K. Srivastava
Executive Director &CEO Chairman
November 14 2017