chowgule steamships ltd Directors report

To

The Shareholders,

Your directors present the Fifty Ninth Annual Report and the Audited Accounts for the year ended 31st March, 2022.

1. FINANCIAL RESULTS

	Standalone	Consolidated
	31st March, 2022	31st March, 2021	31st March, 2022	31st March, 2021
Profit before financial charges, depreciation,	237.16	476.35	5,640.42	1,676.40
impairment, exceptional items & tax Financial charges	(47.75)	(45.39)	(494.94)	(1,033.69)
Depreciation	(55.22)	(62.32)	(498.63)	(943.03)
Profit / (Loss) before exceptional item	134.19	368.64	4,646.85	(300.32)
Exceptional Items	(9,549.59)	1,102.26	-	1,102.26
Profit / (Loss) before tax	(9,415.40)	1,470.90	4,646.85	801.94
Provision for tax (net)	87.32	(452.34)	87.32	(452.34)
Profit / (Loss) after tax	(9,328.08)	1,018.56	4,734.17	349.60
Other comprehensive income	0.08	8.35	(290.66)	262.02
Total comprehensive income	(9,328.00)	1,026.91	4,443.51	611.62
Brought forward from previous year	2,163.65	1,136.74	(20,406.42)	(21,018.04)
Surplus/(Deficit) in the statement of profit and loss	(7,164.35)	2,163.65	(15,962.91)	(20,406.42)

2. MANAGEMENT DISCUSSION, ANALYSIS / OPERATIONS REPORT AND PERFORMANCE OF THE COMPANY

During the year under review, at consolidated level, the freight earnings and other income amounted to ? 6,967.46 lakhs as against ? 4,105.40 in the corresponding previous year showing an increase of ? 2,862.94 lakhs. The BDI which started the year at 2,072 in April 2021 was increased to 2,358 by March 2022 an increase of about 14% on year-on-year basis. The Company under its wholly owned step-down subsidiaries had only one vessel in operation for part of the year. Considering age of the vessel and the financial constraints the vessel was sold in the month of October 2021 and consequently all the step-down subsidiaries have been closed.

The Companys Wholly Owned Subsidiary (WOS) viz Chowgule Steamships Overseas Limited (CSOL) does not have any vessel. CSOL has no revenue but has accumulated losses. Also taking into consideration negative net worth CSOLs financials have been prepared not on going concern basis. Considering the fact that the Company is unlikely to recover its investment in its WOS a provision of ? 9,549.59 has been made by the Company in the standalone financials for impairment of the investment.

The Company has experience of operating coastal vessels and therefore always looking for opportunities in such trade. The Company hopes that Indian Governments boost to infrastructure and maritime sector will brighten the scope of coastal shipping.

INTERNAL 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, 2022 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.

Ratios:

details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

(i) Debtors Turnover : Not Applicable

(ii) Inventory Turnover : Not Applicable

(iii) Interest Coverage Ratio : Not Applicable

(iv) Current Ratio : 17.75

(v) Debt Equity Ratio : Not Applicable

(vi) Operating Profit Margin (%) : Not Applicable

(vii) Net Profit Margin (%) or sector-specific equivalent ratios, as applicable : Not Applicable details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

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 shares capital of the Company as on 31st March, 2022 was INR 3,630.84 lakhs comprising of 36,308,425 shares of INR 10/- each. During the year under review, there has been no change in the capital structure of the Company.

6. SUBSIDIARIES

During the year, the Company had three overseas subsidiaries which includes one wholly owned subsidiary and two step- down subsidiaries. One of the step-down subsidiaries had a vessel on bareboat charter. During the year, the same was returned to the owner. Both the step-down subsidiaries were liquidated and dissolved during the period under review. As on 31st March 2022, the Company has only one subsidiary Company viz. Chowgule Steamships Overseas Limited. 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. Darshan Karekar has tendered his resignation from the post of Company Secretary & Compliance Officer of the Company with effect from 10th July, 2021.

On the recommendation of the Nomination and Remuneration Committee ("NRC"), the Board of Directors at its meeting held on 10 February, 2022, has considered and approved appointment of Mr. Jitendra Patil, as a Company Secretary and Compliance Officer of the Company pursuant to the provisions of Section 203 of the Companies Act 2013 and Compliance Officer under Regulation 6(1) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). He shall also act as Nodal Officer under the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 w.e.f. 10 February, 2022.

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.

Mr. Jitendra Patil, Company Secretary had tendered resignation vide his letter dated May 09th, 2022 which was accepted by the Board on May 23rd, 2022. The Board of Directors, on recommendation of the Nomination and remuneration Committee, on August 05th, 2022 has appointed Ms. Rinky A. Gupta as Company Secretary and Compliance Officer.

The Board has proposed its members in this Annual General meeting to change the designation of Mr. Vjay Chowgule from NonExecutive Non-Independent Director to Whole time Director (Promoter). Also, in order to comply with the Corporate Governance Regulations and to enhance the functioning of the Board the Board of Directors have proposed the appointment of Mr. Mangesh Sawant as Non-Executive Independent Director. Both the appointments are proposed in the 59th Annual General Meeting, the Notice of which is an integral part of the Annual Report. Both the said appointments are recommended by the Nomination and Remuneration Committee in their meeting held on August 25, 2022.

Further the Board of Directors in their meeting held on August 25, 2022, on recommendation of Nomination and Remuneration Committee through their meeting held on even date have appointed Mr. Vikram Deshpande as Chief Financial Officer 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 4 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, annual return 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, 2022 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 Board at their Board Meeting to be held on 5th August,2022 have proposed appointment of, M/s. M. N. Chokshi & Co. LLP., Chartered Accountants (Firm Registration No. FRN 101899W/W100812) for a term of consecutive five years from conclusion of 59th Annual General Meeting to conclusion of the 64th Annual General Meeting. i.e. to audit the accounts for the period commencing from 2022-2023 until 2026-2027. 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 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, the Board at their Board Meeting to be held on 5thAugust,2022 have proposed appointment of G D S & Associates, Company Secretaries has been appointed as the secretarial auditor to conduct the secretarial audit for the financial year 2022-23. 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-

Sr. Observations No.	Comments
1. Company has passed special resolution for shifting of the Registered Office of the Company outside the city limits but within the State pursuant to the provisions of Section 12 of the Companies Act, 2013. Copy of Special Resolutions in Form MGT 14 and Form INC 22 - intimating the Change of Registered Office address was not filed with Registrar of Companies	The Company shall file MGT 14 to the earliest, however the administration has only obtained approval of the members to change the Registered Office and shall change on future date, if deemed necessary
2. Whereas in terms of the provisions of Section 203 of the Companies Act, 2013, the Company was required to have certain Key Managerial Personnel. However, the Company has not appointed a Managing Director / Chief Executive Officer, and a Chief Financial Officer and its a continued non-compliance since FY 2020-21.	The Company has proposed the appointment of Mr. Vijay Chowgule as Whole Time Director of the Company. Also, the company has appointed a Mr. Vikram Deshpande as Chief Financial Officer of the Company with effect from August 25, 2022.
3. Whereas Company was required to file copies of certain Board Resolutions with the Registrar of Companies pursuant to the provisions of Section 117(3) read with Section 179(3) of the Companies Act, 2013, Copies of such resolutions and relevant forms filed with Registrar of Companies were not made available for scrutiny	The Company shall file MGT 14 to the earliest.
4. Company has granted unsecured loans to its related parties during the year. Special Resolutions passed pursuant to the provisions of Section 185 and Section 186 of the Companies Act, 2013 and forms filed with Registrar of Companies in this regard were not made available for scrutiny. Hence we are unable to opine on its compliance.	The Company had advanced loan approved pursuant to resolution passed on Friday July 25, 2008. The board resolution advancing such loan passed in the month of February 2022 shall be uploaded at the earliest.
5. Whereas in terms of the provisions of Section 203 of the Companies Act, 2013 and Regulation 6(1) of The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Company was required to appoint a qualified Company Secretary as its Compliance Officer, However, Company did not have a qualified Company Secretary as its Compliance Officer during the period from 10.07.2021 To 09.02.2022. Company has also received notice of penalty in this regard from the Stock Exchange.	The company secretary had resigned in the month of July 2021 and the fine was levied in the month of December 2021, i.e. before the cooling period. On an enquiry made with a BSE it was observed that the quarterly filings i.e. Regulation 76 had not covered the appointment of previous Company Secretary. That is whether the appointment of previous CS was not mentioned therein. Therefore, the BSE was under notion that the Company was without Company Secretary and Compliance Officer for more than six months, then. We shall be making an application for wavier with the SE after the revised Reg 76 in XBRL format is filed
6. Whereas in terms of Regulation 13(3) of The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Company was required to submit the Investors Complaints Redressal Report for Quarter Ended 31.03.2022 with Stock Exchange within 21 days from the end of the quarter. However, it was submitted beyond the prescribed time limit. Company has also received notice of penalty in this regard from the Stock Exchange.	Filed on 08.07.22 and Fine of ? 95,000 paid
7. The Composition of the Board of Directors was not in Compliance with Regulation 17 of The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.	The Company has proposed the appointment of Mr. Mangesh Sawant as an Independent Director of the Company
8. Company has passed special resolutions pursuant to Regulation 17(1A) of The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for appointment of two additional directors who have attained the age of 75 years. Copy of Special Resolutions in Form MGT 14 was not filed with Registrar of Companies	The Company shall file the necessary e-forms at the earliest
9. Company has delayed in submitting to the Stock Exchange disclosures pertaining to Related Party Transactions for the half year ended 31.03.2022 as required under Regulation 23(9) of The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Company has also received notice of penalty in this regard from the Stock Exchange	Filed on 25.07.2022 and Fine of ? 3,05,000 paid
10. Company has delayed in submitting to the Stock Exchange the shareholding pattern of the Company for the Quarter ended 31.03.2022 as required under Regulation 31 of The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Company has also received notice in this regard from the Stock Exchange	Filed on 08.07.22 and Fine of ? 95,000 paid
11. Company has delayed in submitting to the Stock Exchange, copy of the Annual Report to the Shareholders for FY 2020-21 as required under Regulation 34 of The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Company has also received notice of penalty in this regard from the Stock Exchange.	As there was a delay of 8 days for filing the same with BSE the company has humbly paid the fine of ? 16,000/-

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 INR 1500Lakhs to Angre Port Private Limited and a loan of INR1250Lakhs to Dolphin Investment Limited.

23. CONVERSATION OF ENERGY, Technology ABSORPTION AND FOREIGN EARNING AND OUTGO

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).

24. STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

The information required under section 197 of the Act read with Rule 5(1)0) 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. The Company do not have employees drawing remuneration in excess of limits prescribed under Section 197 read with rules framed thereunder.

25. 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. The details of Related party Transaction as required as is Annexed to this Directors Report.

26. 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

27. SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS:

There were no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

28. internal control SYSTEMS and their ADEQUACY:

The Company has in place adequate internal controls commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditors report to the Chairman of the Audit Committee of the Board. Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.

29. WHISTLE BLOWER POLICY/VIGIL Mechanism:

Company has established a Vigil Mechanism for enabling the Directors and Employees to report genuine concerns.

The Vigil Mechanism provides for: -

(a) Adequate safeguards against victimization of persons who use the Vigil Mechanism; and

(b) Direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases. The Audit Committee of the Board has been entrusted with the responsibility of overseeing the Vigil Mechanism.

The Whistle Blower Policy is available on the website of the Company viz www.chowgulesteamships.co.in

30. PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE:

The Company as an organization is committed to provide a healthy environment to all employees and thus does not tolerate any discrimination and/or harassment in any form. The Company ensures that there is healthy and safe atmosphere for every employee at the workplace. There was no case pertaining to any harassment filed during the year.

31. DEPOSITS (Section 73 of the Companies act 2013):

The Company has not accepted any deposits during the period under review.

32. SECRETARIAL STANDARDS:

The Directors state that applicable Secretarial Standards with regard to Meeting of Board of Directors (SS-1) and General Meetings (SS-2) as well as the Report on Board of Directors (SS-4) issued by The Institute of Company Secretaries of India, have been duly followed by the Company.

33. INSIDER TRADING:

In compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, your Company has constituted a comprehensive Code, which lays down guide lines and advises the Directors and Employees of the Company on procedures to be followed and disclosures to be made while dealing in securities of the Company.

The said policy can be viewed on our website: www.chowgulesteamships.co.in

34. GENERAL:

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

a. Issue of equity shares with differential rights as to dividend, voting or otherwise;

b. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees;

c. No fraud has been reported by the Auditors to the Audit Committee or the Board.

d. There are no shares lying in demat suspense account/unclaimed suspense account. Hence no disclosure is required to be given for the same

35. DETAILS OF APPLICATION MADE OR PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016:

During the year under review there were no application made or any proceedings were pending under insolvency and Bankruptcy Code, 2016.

36. DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE-TIME SETTLEMENT AND VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS:

During the year under review there were no instances of One-Time Settlements.

37. Acknowledgments:

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: August 5, 2022	Chairman