Chowgule Steamships Ltd Directors Report.

To

The shareholders,

Your directors present the fifty seventh annual report and the audited accounts for the year 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 1,676.40 1,640.02
Impairment, exceptional items & tax
Financial charges (45.39) (190.73) (1,033.69) (3,073.63)
Depreciation (62.32) (72.63) (943.03) (2,237.39)
Impairment (2,909.76)
Loss before exceptional item 368.64 506.30 (300.32) (6,580.76)
Exceptional items 1,102.26 1,102.26
Profit / (loss) before tax 1,470.90 506.30 801.94 (6,580.76)
Provision for tax (net) (452.34) (150.53) (452.34) (150.53)
Profit / (loss) after tax 1,018.56 355.77 349.60 (6,731.29)
Other comprehensive income 8.35 1.53 262.02 (865.08)
Total comprehensive income 1,026.91 357.30 611.62 (7,596.37)
Brought forward from previous year 1,136.74 779.44 (21,018.04) (13,421.67)
Surplus / (deficit) in the statement of profit and loss 2,163.65 1,136.74 (20,406.42) (21,018.04)

2. Management discussion & analysis / operations report companys performance

the spread of covid-19 has severely impacted businesses around the globe, including india. There has been severe disruption to regular business operations due to lock-downs, disruptions in transportation, supply chain, travel bans, quarantines, social distancing and other emergency measures. Shipping industry was struggling since last few years and suffered more as compared to other industries due to this covid 19 pandemic. Consequent to the government advisories issued for controlling the spread of covid 19, the operations of company were suspended from 23rd march, 2020. The company resumed the operations partially since 4th may, 2020 in line with the regular lockdown relaxation measures issued by ministry of home affairs. As a result of lockdown, operations have been impacted to some extent.

the net worth of the group as on 31.03.2021 is negative and current liabilities exceed its total assets by rs 1,601.33 lacs. The management will take appropriate steps to improve operations further the market value of the assets held by group would sufficiently cover 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 reviewed by the audit committee of the board of directors. Based on its evaluation (as defined in section 177 of companies act 2013 and clause 18 of sebi (lodr) regulations 2015), our audit committee has concluded that, as of 31st march, 2021 our internal financial controls were adequate and operating effectively.

government policies

the indian economy and many developed countries continue to make effort for speedy economic recovery. As part of overall strategy however, the governments in various countries continue to give priority for development of overall infrastructure. This bodes well for overall trade.

Industrial relations

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

threats, risks & concerns

freight risks: the charter income is subject to freight rate risks and therefore the company, at group level, follows the policy of mixture of short period and long period time 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, the necessary forward cover is taken at regular intervals wherever necessary.

forex risk: as major portion of the groups revenues is generated from international business in the us dollar terms, the same creates a natural hedge against foreign exchange exposures. The company reviews rupee - us dollar parity on regular basis to 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 reputed charters to avoid the risks to the freight earnings.

government policies: the company regularly reviews the changes in the applicable government policies affecting operations of the company. Human resources: there is a scarcity of floating staff. In view of outsourcing of crew management, the company gets the benefit of having efficient and cost effective floating staff from the ship managers pool.

3. Dividend

considering the liquidity and the cash flow position of the company, the board of directors 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 any amount to any reserves.

5. Share capital

the paid-up equity share capital of the company as on 31st march, 2021 was rs 3,630.84 lakhs comprising of 36,308,425 shares of rs 10/- each. During the year under review, there has 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 one wholly owned subsidiary and four step-down subsidiaries. The four step down subsidiaries had vessel on bareboat charter under each step-down subsidiary. During the year, three vessels were returned to the owners. Two step-down subsidiaries are in the process of liquidation. The board of directors of the company reviews the affairs of the subsidiaries periodically.

in accordance with section 129(3) of the companies act, 2013, the company has prepared consolidated financial statements of the company and all its subsidiaries, which form part of the annual report. Further, a statement containing the salient features of the financial statement of the subsidiaries in the prescribed format aoc-1 is attached as annexure 1 the company will make available these documents / details upon request by any member of the company. However, pursuant to accounting standard as-21 of the companies (accounting standards) rules 2016, consolidated financial statements presented by the company include the financial information of its subsidiaries. The company does not have any 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 had been designated as key managerial personnel in accordance with provisions of section 203 of the companies act, 2013. However, mr. Aditya chowgule, managing director and chief financial officer has resigned on 18th january, 2021.

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

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

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

during the year under review, the non-executive directors of the company had no pecuniary relationship or transactions with the company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the board/committee of the company.

9. Corporate governance

in terms of the listing agreement with the bse ltd., the corporate governance report is annexed 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 and senior management of the company. The said code has been hosted on the website of the company. 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, the board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its audit, nomination & remuneration and other committees. A) observations of board evaluation carried out for the year - there were no observations in the board evaluation carried for the year b) previous years observations and actions taken - there were no observations of the board evaluation for the last financial year c) proposed actions based on current year observations - not applicable the manner in which the evaluation has been carried out has been given in the corporate governance report.

12. Remuneration policy

the board has, on recommendation of the nomination & remuneration committee framed a policy for selection and appointment of directors, senior management and their remuneration. The details of remuneration policy are stated in the corporate governance report.

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 this report. The intervening gap between the meetings was within the period prescribed under the act.

14. Audit committee

the composition of the audit committee is in line with the provisions of section 177 of the act read with regulation 18 of sebi listing regulations. The chairman of the audit committee is an independent director. The details of the composition of the audit committee 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 the section 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 the section 178 of the act read with regulation 19 of sebi listing regulations. The details of meetings 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 companies act, 2013 the provisions of corporate social responsibility are not applicable to the company.

18. Extract of annual return

in accordance with section 134 (3) (a) of the companies act 2013, an extract of annual return in form is available on the companys website www.chowgulesteamhsips.co.in the ‘investor information section.

19. Directors responsibility statement

pursuant to section 134(5) of the act, the board of directors, to the best of its knowledge and ability, hereby state and confirm that: a) in the preparation of annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same. B) appropriate accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st march, 2021 and the profit of the company for that period. C) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. D) the annual accounts have been prepared on a ‘going concern basis. E) proper internal financial controls were in 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 place and were adequate and operating effectively.

20. Auditors

statutory auditors

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

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

secretarial auditors

pursuant to the provisions of section 204 of the companies act, 2013 and rules made thereunder, g d s & associates, company secretaries has been appointed as the secretarial auditor to conduct the secretarial audit for the financial year 2020-21. A secretarial audit report in form no.mr-3 given by the secretarial auditor has been provided 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 and exchange board of india (listing obligations and disclosure requirements) regulations, 2015 and section 149 of the companies act,2013 read with companies (appointment and qualification of directors ) rules, 2014 it is clarified that considering the stressed situation of the company, it was difficult to find suitable persons as independent directors and the company is in search of an appropriate candidate to appoint a person as an independent director of the company b) regulation 18, 19 and 20 of the securities and exchange board of india (listing obligations and disclosure requirements) regulations, 2015 due to resignation of two independent directors who were also audit committee members, nomination & remuneration committee members and stakeholders relationship committee members, the composition of the said committees was not in compliance of regulation 18 of the listing regulations during september, 2020 quarter. With reconstitution of audit committee, nomination & remuneration committee and stakeholders relationship committee w.e.f. 2nd november, 2020, this non-compliance has been rectified. C) regulation 17(1a) of the securities and exchange board of india (listing obligations and disclosure requirements) regulations, 2015 it was clarified that mr. Ramesh chowgule, who has attained the age of seventy-five years was appointed as an additional director of the company, pursuant to section 161(1) of the companies act, 2013 to hold office until the conclusion of next annual general meeting of the company on 14th january, 2021. His appointment will be ratified in the upcoming annual general meeting of the company along with shareholder approval as per the sebi (lodr) regulation, 2015 requirements.

section 161 of the companies act, 2013, also states that a person can be appointed as an additional director in any board meeting and can be regularised as a director in the next annual general meeting (agm) with the approval of shareholders. D) section 203 of the companies act 2013 read with the companies (appointment and remuneration) rules,2014 it was clarified that mr. Aditya chowgule was a managing director & chief financial officer (cfo) of the company. He resigned on 18th january, 2021. Further the company is in search of deserving person who can serve company as a managing director and cfo. Due to covid 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 end of financial year and the date of this report which can have impact on financial position of the company.

22. Loans, investment and guarantees etc

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

further the company had a loan from chowgule and company private limited amounting to rs 1913.98 lakhs (including interest accrued of rs 143.98 lakhs up to march 2020). During the year the company provided interest on the said loan up to 31st december 2020 as per the terms then attached. A memorandum of family settlement (mofs) dated 11th january 2021 has been executed between the members of chowgule family (promoters of the company) to divide the businesses and other matters mentioned therein. Mofs provides that the aforementioned loan is not to be "repaid". Accordingly, the company has written back 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 had sold a vessel. The party has dishonored the advance cheques issued at the time of sale and has also not made good the default. The party has claimed that the vessel is not being operated and hence no further payments would be made. Accordingly, the company has written off 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) rules 2014, a statement annexed hereto gives the particulars as required under the said rules and 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 the companies (appointment and remuneration of managerial personnel) rules, 2014 in respect of employees of the company and directors is enclosed as "annexure - 3" to this report.

26. The company has formulated a policy on materiality of related party transactions for dealing with such transactions in line with the requirements of listing regulations. The policy on related party transactions is available on the companys website viz. Chowgulesteamships.co.in. During the year there were no related parties as referred to in section 188 of the companies act 2013. 27. The risk management policy of the company evaluates various risks surrounding the business of the company and its subsidiaries and seeks to review and upgrade its risk management process. The board of directors formulates strategies and takes necessary steps

28. Acknowledgements

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

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