Chowgule Steamships Ltd Management Discussions.


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 couple of 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, the revenue for the month of March 2020 has been impacted to some extent. During quarter ended 31st March, 2020, the group estimate loss revenue i.e. upto 17% of targeted revenue.

The companys financial assets comprise of its exposure in its wholly owned subsidiary (WOS) as on 31st March 2020 amounting to Rs.12,115.67 lakhs consisting of investment in equity and convertible redeemable preference shares of Rs.9,549.59 lakhs and loan provided of Rs.2,566.07 Lakhs (against a net worth of Rs.11,849.07 lakhs). The WOS has incurred a loss during the year of Rs.7,085.05 lakhs and the networth of the WOS as on 31.3.2020 is negative. The Management of the WOS, on the basis of future operational plans, is confident of restructuring the operations to recoup the losses and arranging requisite financing as has been done in the past years also. Further the market value of the assets held by the Company would sufficiently cover shortfall if any. Hence the accounts have been prepared on a going concern basis.


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 Regulations 2015), our audit committee has concluded that, as of 31st March, 2020 our internal financial controls were adequate and operating effectively.


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.


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


Freight Risks: The Hire 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.

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, the Company is engaged in coastal trade, where income as well as expenses mostly is in rupee term. As such 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.