Chowgule Steamships Ltd Directors Report

To

The Shareholders,

Chowgule Steamships limited,

Your directors present the Sixty First Annual Report and the Audited Accounts for the year ended 31st March, 2024.

1. FINANCIAL RESULTS

(R in lakhs)

	31st March, 2024	31st March, 2023
Profit before financial charges, depreciation, impairment, exceptional items & tax	450.76	57.42
Financial charges	(54.24)	(51.74)
Depreciation	(45.23)	(50.27)
Profit / (Loss) before exceptional item	351.29	(44.59)
Exceptional Items	400.00	–
Profit / (Loss) before tax	751.29	(44.59)
Provision for tax (net)	10.51	79.99
Profit / (Loss) after tax	740.78	35.40
Other comprehensive income	–	–
Total comprehensive income	740.78	35.40
Brought forward from previous year	(7,128.95)	(7,164.35)
Surplus/(Deficit) in the statement of profit and loss	(6,388.17)	(7,128.95)

Since 100% wholly owned subsidiary has gone under liquidation before the reporting date the Consolidated financial statements have not been prepared

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

During the year under review, the Company has recovered an amount of Rs 400.00 lakhs from one of the debtor which was written off in earlier years. The revenue from operations increased by Rs 151.87 lakhs since the Company has given its property on lease and existing lease agreements have been renewed at incremental rates. The Company has received interest on loan given to related party and interest on deposit kept with Dolphin Investments Ltd of Rs 178.50 lakhs. This all has resulted in increase in the net profit after tax by Rs 705.38 lakhs as compared to previous year.

The Company has huge experience of operating ships on international cross trade as well as on Indian coast and therefore looking for appropriate opportunities in such trade. The Company is exploring possibility of acquiring vessels / tugboats at appropriate time.

INTERNAL FINANCIAL CONTROL SYSTEM

The company maintains effective internal control systems, which are regularly reviewed by the Audit Committee of the Board of Directors. Based on the evaluation criteria defined in Section 177 of the Companies Act 2013 and Clause 18 of the SEBI (LODR) Regulations 2015, the Audit Committee has concluded that as of March 31, 2024, our internal financial controls were adequate and functioning effectively.

GOVERNMENT POLICIES

The Indian economy, alongside many developed nations, continues to strive for a rapid economic growth. As part of their comprehensive strategies, governments worldwide are prioritizing infrastructure development, which augurs well for global trade dynamics.

INDUSTRIAL RELATIONS

Throughout the year, industrial relations remained exceptionally harmonious with no reported disputes or conflicts.

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 Group’s 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 Manager’s 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 : 2.40:1 (ii) Inventory Turnover : Not Applicable (iii) Interest Coverage Ratio : Not Applicable (iv) Current Ratio : 3.58 (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. Refer to Note No. 38 of Financial Statements.

2. 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.

3. RESERVES

Throughout the financial year under review, the Company did not need to allocate any funds to reserves.

4. SHARE CAPITAL

The paid-up equity shares capital of the Company as on 31st March, 2024 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.

5. SUBSIDIARIES

Chowgule Steamships Overseas Ltd (CSOL), a wholly owned subsidiary of Chowgule Steamships Limited (CSL) registered in Guernsey, United Kingdom, has entered insolvent liquidation. On March 13, 2024, a resolution passed by CSOL’s shareholders initiated the company’s winding up and liquidation process. Leonard Curtis and Sophie Smith have been appointed as joint liquidators to oversee this process.

Pursuant to Section 395(2) of the Companies (Guernsey) Law 2008, as amended (the "Law"), the appointment of a liquidator results in the cessation of all powers of the directors, unless the liquidator authorizes their continuation.

Given that CSOL is under liquidation as of the reporting period ending March 31, 2024, financial statements for CSOL as of that date have not been prepared. Consequently, consolidated financial statements for CSL have also not been prepared.

However, as of the liquidation date, March 13, 2024, CSOL’s financial position was as follows and has been submitted to the liquidators.

Statement of Profit & Loss as on 13th March 2024.

Particulars	Amount in USD	Amount in Rs Lakhs
Total Income	–	–
Operating expenses	(118,245)	(98.58)
Loss before interest	(118,245)	(98.58)
Interest	(58,556)	(48.82)
Net Loss for the period	(176,801)	(147.40)

Balance Sheet as on 13th March 2024.

Particulars	Amount in USD	Amount in Rs Lakhs
Assets
Cash & Bank Balance	135,885	113.29
Accumulated Losses	30,671,500	25,570.83
Total	30,807,385	25,684.12
Equity & Liabilities
Called up share capital	9,200,000	7,670.04
Convertible Redeemable Shares	18,500,000	15,423.45
Unsecured loan with interest thereon	3,092,480	2,578.20
Other liabilities	14,905	12.43
Total	30,807,385	25,684.12

Conversion rate 1 USD = INR 83.37

The provision for the impairment of the value of investment made in the 100% wholly owned subsidiary has already been provided in earlier years and the value of investment is being carried forward at nil value. Hence, there is no impact on the statement of profit & loss as well as on balance sheet.

6. INSURANCE

The fleet of the Company has been adequately insured against Marine and War Risks.

7. DIRECTORS AND KEY MANAGERIAL PERSONNNEL

On the recommendation of the Nomination and Remuneration Committee (NRC), the Board of Directors, during their meeting on May 12, 2023, considered and approved the appointment of Mr. Deepak Jadhav as an Additional Independent Director. Mr. Jadhav officially assumed office on July 7, 2023. His appointment was subsequently regularized and ratified by the shareholders at the Annual General Meeting on August 11, 2023.

The Company has established a comprehensive Policy for the performance evaluation of the Board, its committees, and individual Directors, including both Independent and Executive Directors. This policy outlines specific criteria for assessing the performance of Non-Executive and Executive Directors. The evaluation process considers various factors such as attendance at Board and Committee meetings, active participation, expertise in relevant domains, adherence to the code of conduct, and contributions to the company’s vision and strategy.

During the year under review, the non-executive directors of the Company maintained no financial relationships or transactions with the Company, aside from receiving sitting fees, commissions, and reimbursements for expenses incurred while attending Board or Committee meetings.

8. 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.

9. 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.

10. 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 year’s 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.

11. 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. The Remuneration policy is annexed to this Directors Report

12. MEETINGS

During the year 6 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.

13. 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.

14. 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.

15. 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.

16. CORPORATE SOCIAL RESPONSIBILITY

During the financial year 2023-24, the company did not meet the criteria outlined in Section 135 of the Companies Act, 2013; therefore, the provisions for Corporate Social Responsibility (CSR) were not applicable.

However, these provisions will apply for the financial year 2024-2025. Thus, the company has established a Corporate Social Responsibility committee and formulated a corresponding policy, in compliance with Section 135.

17. EXTRACT OF ANNUAL RETURN

In accordance with Section 134 (3) (a) of the Companies Act 2013, annual return form is available on the Company’s website www.chowgulesteamhsips.co.in the ‘Investor Information’ section.

18. 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, 2024 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.

19. AUDITORS

Statutory Auditors

Pursuant to the Section 139 of Companies Act, 2013 and other applicable rules there under, M/s. M. N. Chokshi & Co. LLP., Chartered Accountants (Firm Registration No. FRN 101899W/W100812) were appointed as Statutory Auditor of the Company for 5 consecutive financial years commencing 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.

Accordingly, M/s. M. N. Chokshi & Co. LLP., Chartered Accountants (Firm Registration No. FRN 101899W/W100812) shall continue to be the Statutory Auditors of the Company for F.Y 2024-2025. The notes on financial statement referred to in Auditors Report are self-explanatory and do not call for any further comments. The Auditor’s 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 Mr. Pranay Vaidya from Dipesh Pranay and Co. LLP as Secretarial Auditors of the Company for the Financial Year 2023-2024. 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.No.	Observations	Comments
(i)	The Company has delayed or defaulted in filing forms and with the Ministry of Corporate Affairs.	The delay caused was due to technical issues and glitches on the MCA website.
(ii)	The Company has delayed in filing Annual Returns with the Registrar of Companies	The Company is compliant in informing the same to the Bombay Stock Exchange and had no intentions to withhold the information
(iii)	The Company has delayed in filing 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.	The delay caused was due to technical issues and glitches on the MCA website.
		The Company is compliant in informing the same to the Bombay Stock Exchange and had no intentions to withhold the information
(iv)	During the year under review the company has not incurred any contravention to the provisions of Section 185 of the Companies Act, however we reserve our opinion of opening balance of outstanding balances of such loans	The company had placed the same before the shareholders for their approval in the in the 60th Annual General Meeting held in August 2023 and passed the necessary resolutions.
(v)	The Company had not appointed an Independent Director in compliance the Regulation 17 which disturbed the composition of the Board of Directors and was in Non-Compliance until July 07, 2023.	The Company had during the time frame provided by the regulations to appoint an Independent Director after the demise of the erstwhile director had taken appropriate steps to appoint the incoming Director i.e. Mr. Deepak Jadhav.
		However due to technical issues in the MCA website the DIN number could not be procured in spite of various attempts, this caused the delay in effecting the official appointment of Mr. Deepak Jadhav
(vi)	The company had delayed the filing of Related party Transactions for March 2023 as per Regulation 23 of SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015	The company has then filed the necessary report and paid the requisite fines with the Stock Exchange
(vii)	There was delay in filing Secretarial Compliance Report in compliance of Regulation 24 A	The company has then filed the necessary report and paid the requisite fines with the Stock Exchange

20. 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.

21. LOANS, INVESTMENT AND GUARANTEES ETC

During the year under review, the Company has not advanced any loans or made any investments. The balance of Outstanding loans and advances are depicted in Note No. 05 and Note No. 40 of the Standalone Financial Statements forming integral part of the balance sheet

22. 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).

23. 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. The Company do not have employees drawing remuneration in excess of limits prescribed under Section 197 read with rules framed thereunder.

24. 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 Company’s website viz. chowgulesteamships.co.in. The details of Related party Transaction as required as is Annexed to this Directors Report.

25. 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

26. 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. During the year under review the company has received notices intimating penalties from the stock exchanges for contravention of certain regulations of SEBI (LODR) Regulations 2015. The company has paid the penalties as levied by the authorities.

27. 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.

28. 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

29. 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.

30. DEPOSITS (SECTION 73 OF THE COMPANIES ACT 2013):

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

31. 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.

32. 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

33. AGREEMENTS:

The Agreements as per SEBI (LODR) Regulations, 2015 entered into by the Company are annexed to this Directors Report.

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. a. 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 : Mumbai	Vijay Chowgule
Date : May 14, 2024	Chairman
	DIN: 00018903