THE GREAT EASTERN SHIPPING COMPANY LIMITED
ANNUAL REPORT 2011-2012
Your Directors are pleased to present the 64th Annual Report on the
business and operations of your Company and Audited Accounts for the
financial year ended March 31, 2012.
The financial results of the Company for the financial year ended March 31,
2012 are presented below:
Rs. in crores
Total Revenue 2016.23 1662.06
Total Expenses 1850.89 1366.85
Profit before tax 165.34 295.21
Less: Tax Expenses 22.00 28.75
Profit for the period 143.34 266.46
Add: Profit as per last Balance Sheet 2947.76 2886.73
- Transfer to Tonnage tax reserve 20.00 40.00
- Transfer to General reserve 14.50 27.00
- Transfer to Debenture redemption reserve 20.00 -
- Interim Dividend on Equity Shares 45.69 53.30
- Proposed Dividend on Equity Shares 53.30 68.53
- Dividend Distribution Tax 14.99 16.60
Balance Carried Forward 2922.62 2947.76
The total income for the year was recorded at Rs. 2016.23 crores as against
Rs. 1662.06 crores in the previous year and a Net Profit of Rs. 143.34
crores as against Rs. 266.46 crores in the previous year.
DIVIDEND ON EQUITY SHARES:
During the year, your Directors declared and paid interim dividend of
Rs.3/- per share resulting in an outflow of Rs. 53.10 crores (inclusive of
tax on dividend). Your Directors recommend a dividend of Rs. 3.50/- per
share. The dividend will be paid after your approval at the ensuing Annual
General Meeting. The aggregate outflow on account of the equity dividend
for the year would be Rs. 113.98 crores including tax on dividend. This
represents a payout ratio of 79.51% (previous year 51.95%).
THE GREAT EASTERN SHIPPING COMPANY LIMITED
ANNUAL REPORT 2011-2012
MANAGEMENT DISCUSSION AND ANALYSIS
In FY 11-12, the Company recorded total revenue of Rs. 2016.23 crores
(Previous year Rs. 1662.06 crores) and earned a PBIDT of Rs. 781.26 crores
(previous year Rs. 829.20 crores).
MARKET TREND AND ANALYSIS
Throughout the last financial year, the tanker market remained subdued.
Steady fleet growth, disruption of Libya`s crude supply, stagnant demand
from western economies and closure of some US & EU refineries were the main
factors, which reflected in the weak freight rates. Demand from the OECD
countries too got negatively impacted on back of high crude oil prices.
Some spurts in the tanker freight rates were witnessed due to increase in
OPEC production, long haul shipments, scrapping activities and jump in
seasonal demand, but new fleet addition capped any significant improvement
in the freight rates.
The world tanker fleet increased to 480.1 mn dwt at the end of the
financial year, about 5% higher than the 457.6 mn dwt at the beginning of
The tanker business accounted for around 75% of the Company`s net revenues
and 74% of the operating profits.
In FY 11-12, around 51% of the tanker earnings were derived from the period
market. Crude tankers, inclusive of `spot` and `period`, earned an average
TCY of $19,000/day (previous year $20,400/day). Product carriers, inclusive
of `spot` and `period`, earned an average TCY of $15,300/day (previous year
TANKER FLEET CHANGES:
The tanker fleet of your Company stood at 24 tankers aggregating 1.88 mn
dwt, with an average age of 9.36 years (as of 31st March 2012) as against
27 tankers aggregating 2.10 mn dwt with an average age of 9.81 years as on
31st March 2011.
During the year, your Company sold and delivered the following tankers:
- Suezmax crude carrier `Jag Lakshya` in Jun-11
- General Purpose product carrier `Jag Pari` in Oct-11
- Medium Range product carrier `Jag Pratap` in Dec-11
During the year, your Company also contracted to sell three New Building
Very Large Crude Carrier tankers. Two of the VLCCs viz. `Maneklal Ujamshi
Sheth` & `Ardeshir H Bhiwandiwalla` were delivered in Jan-12 & Feb-12
respectively. The third VLCC `Vasant J Sheth` will be delivered in Q1 FY13.
OUTLOOK FOR THE TANKER MARKET:
For 2012, IEA has anticipated a modest 0.9% growth in world oil demand to
89.9 mn bpd. This is on back of uncertain economic recovery, high crude oil
prices and weak demand scenario. Apart from these negatives, the key
macroeconomic factor to watch out closely will be the Western sanctions on
Iran. If the Iran dispute aggravates, it can have a significant impact on
the movement of oil, which can change the trade dynamics going forward. On
the supply side, newbuilding cancellations and delays are expected to
become more prevalent as the financing environment remains under stress.
The global tanker orderbook stands at about 78.2 million dwt or 16.3% of
the fleet at the end of March 2012.
DRY BULK BUSINESS:
MARKET TREND AND ANALYSIS
As projected, FY 11-12 proved to be the year of record new building
deliveries, which impacted the fleet utilization significantly. Increased
Chinese coastal trade, prolonged port congestions and excessive scrapping
augured well on the positive side, but the relentless fleet addition
overshadowed any improvement in the freight rates. Logistical disruptions
post Tsunami in Japan and weather related issues in the iron ore & coal
producing countries resulted in decline of imports. Sharp reduction in the
exports to European Union (EU) also resulted in lower tonnage utilization.
The world dry bulk fleet increased to 632.3 mn dwt at the end of FY 11-12,
about 15% higher than the 551.9 mn dwt at the beginning of the financial
The dry bulk fleet contributed around 25% of the Company`s net revenues and
26% of the operating profits.
In FY 11-12 the average TCY for dry bulk vessels, inclusive of `spot` and
`period`, was approximately $15,500/day as compared to $20,754/day in the
DRY BULK FLEET CHANGES:
The dry bulk fleet stood at 10 vessels aggregating 0.74 mn dwt, with an
average age of 7.9 years (as of 31st March 2012) as against 7 vessels
aggregating 0.52 mn dwt with an average age of 9.9 years on 31st March
During the year, your Company took delivery of the following new built
- Two Kamsarmax bulk carriers `Jag Aditi` in Apr-11 and `Jag Arya` in Sep-
- Supramax bulk carrier `Jag Rani` in Jul-11.
OUTLOOK FOR THE DRY BULK MARKET:
Even though, cancellations and delivery slippages are likely to remain at
very high levels due to volatile freight rates and tough financing
environment, it is expected that the market will experience significant
fleet growth resulting in depressed freight rates except for some short-
term seasonal fluctuations. On the demand side, global seaborne commodity
movement is expected to improve on back of increased imports in Asia. But a
possible `slowdown` in China or prolonged recession in Europe could
possibly result in downward revision of these demand forecasts, which can
have a negative impact on the cargo movement and freight rates.
The global dry bulk orderbook stands at about 191.5 mn dwt or 30.3% of the
fleet at the end of March 2012.
During FY 11-12 second-hand values for both modern crude tankers and dry
bulk carriers witnessed a drop of 20-30% vis-d-vis start of FY 11-12.
Second-hand values for modern product tankers also dropped albeit by 10%
during the same period. New building prices for tankers witnessed a drop of
5-10% during the year, while those for the dry bulk ships moved down by
about 15-20%. Your Company`s decision not to acquire assets during the year
therefore stands vindicated.
RISKS AND CONCERNS:
Economic risk: Shipping is a global business whose performance is closely
linked to the state of the global economy. Therefore, the earnings of your
Company could be impacted negatively if the global economic situation does
not improve over the longer term.
Volatility: Over and above the economic risks the shipping industry is
impacted by numerous short term and regional factors, like political
fallouts, weather changes etc. This results in great amount of volatility
in the freight market, which in turn impacts your Company`s earnings.
Your Company has attempted to hedge some of this risk by entering into time
charters for part of its fleet.
Shipboard personnel: Indian officers continue to be in great demand all
over the world. Given the unfavorable tax status conferred on a seafarer
sailing on Indian-flagged vessels, it is becoming increasingly difficult
for your Company to source officers capable of meeting the modern day
challenges of worldwide trading. This is more relevant for tanker personnel
and may become a hindrance to growth.
OPEC action: If the OPEC decides to cut output, this combined with
inventories and increased new building deliveries, could negatively impact
the demand for tankers.
European financial crisis: The growing European debt crisis can further
depress the already subdued demand in the Euro zone.
Chinese economy: As we have seen in the recent past that China has been the
main driving factor of the shipping demand, in case there is a major
downward shift in the Chinese economy, this along with increased new
building deliveries could have negative impact on shipping.
CONSOLIDATED FINANCIAL STATEMENTS:
The Consolidated Financial Statements have been prepared by your Company in
accordance with Generally Accepted Accounting Principles in India, the
Accounting Standards issued by The Institute of Chartered Accountants of
India and the provisions of the Companies Act, 1956 to the extent
applicable. The audited Consolidated Financial Statements together with
Auditors` Report thereon form part of the Annual Report.
The group recorded a consolidated net profit after prior period adjustment
of Rs. 316.55 crores for the year under review as compared to Rs. 468.70
crores for the previous year. The net worth of the group as on March 31,
2012 was Rs. 5997.19 crores as compared to Rs. 6030.66 crores for the
Greatship (India) Limited
Greatship (India) Limited (GIL) has completed 6th year of its successful
operations. The Company, now one of India`s largest offshore oilfield
services providers, has recorded steady financial performance for this
year, as in the last 5 years.
GIL has recorded a profit after tax of Rs. 90.19 crores on a standalone
basis and Rs. 220.23 crores on a consolidated basis for the year ended
March 31, 2012 as compared to Rs. 118.38 crores and Rs. 215.71 crores
respectively for the year ended March 31, 2011. The consolidated net worth
of GIL for financial year 2012 was Rs. 2457.03 crores as compared to
Rs.2031.56 crores for financial year 2011 on a consolidated basis.
Your Company has till date invested total of Rs. 1714.43 crores by
subscribing to 10.92 crores equity shares totaling in value to Rs. 1268.56
crores and 14.86 crores non-convertible preference shares totaling in value
to Rs. 445.87 crores. Your Company`s holding is 98.11% of the total equity
share capital of GIL.
GIL, alongwith its subsidiaries, is currently owning/operating 4 Platform
Supply Vessels (PSVs), 9 Anchor Handling Tug cum Supply Vessels (AHTSVs), 3
Multipurpose Platform Supply & Support Vessels (MPSSVs), 3 Multipurpose
platform support vessels capable of Remotely Operated Vehicles operations
(ROVSVs) and 2 Jack up Rigs. GIL and its subsidiaries also have an order
book of three ROVSVs and one 350 feet Jack up Rig. During the year, the
shipbuilding contracts for 2 Multipurpose Supply & Support Vessels were
During the year, GIL granted 189600 stock options (net of canceled/
forfeited) under various Employee Stock Options Schemes.
GIL has the following wholly owned subsidiaries:
a) Greatship Global Energy Services Pte. Ltd., Singapore
b) Greatship Global Offshore Services Pte. Ltd., Singapore
c) Greatship Global Holdings Ltd., Mauritius
d) Greatship Subsea Solutions Singapore Pte. Ltd., Singapore
e) Greatship Subsea Solutions Australia Pty. Limited, Australia
f) Greatship (UK) Limited, United Kingdom
g) Greatship Global Offshore Management Services Pte. Ltd., Singapore
Greatship DOF Subsea Projects Private Limited, Mumbai, erstwhile wholly
owned subsidiary of GIL was struck off from the Registrar of Companies
under the Fast Track Exit mode on 30.12.2011.
Apart from GIL and its subsidiaries, your Company has the following wholly-
a) The Great Eastern Shipping Co. London Ltd.
b) The Greatship (Singapore) Pte. Ltd.
c) The Great Eastern Chartering LLC (FZC).
Ministry of Corporate Affairs, vide General Circular No: 2/2011 dated
February 08, 2011, has granted a general exemption to companies under
Section 212(8) of the Companies Act, 1956. Pursuant to the said Circular,
the Board of Directors of your Company has, by passing a resolution, given
consent for not attaching the balance sheets, profit and loss accounts,
reports of the Board of Directors, reports of the Auditors, etc. of the
subsidiaries with the Balance Sheet of your Company as required under
Section 212 of the Companies Act, 1956.
Accordingly, copies of the balance sheets, profit and loss accounts,
reports of the Board of Directors, reports of the Auditors, etc. of the
subsidiary companies have not been attached to the Balance Sheet of your
Company as at March 31, 2012. As per the terms of the said Circular, a
statement containing brief financial details of the subsidiaries of the
Company for the year ended March 31, 2012 is included in the Annual Report.
The annual accounts of the subsidiary companies and the related detailed
information shall be made available to shareholders of the Company and
subsidiary companies seeking such information at any point of time. The
annual accounts of the subsidiary companies have been kept for inspection
by any shareholder at the registered office of the Company and of the
subsidiary companies concerned. The Company shall furnish a hard copy of
details of accounts of subsidiaries to any shareholder on demand.
DEBT FUND RAISING:
During the year, the Company raised funds of Rs. 452.57 crores towards
capital expenditure for building tangible assets and general corporate
purpose as against Rs. 410.62 crores in the previous year. As on March 31,
2012, the Company`s gross debt equity ratio was 0.76:1 and net (of cash)
debt: equity ratio was 0.17:1.
QUALITY, SAFETY, HEALTH & ENVIRONMENT:
To enhance fuel efficiency and reduce green house gas emission from your
vessels `Ship Energy Efficiency Management Plan` have been introduced on
board all vessels with effect from 1st July, 2011. Several initiatives have
been put in place to develop awareness among staff on this very important
tool for sustainable shipping viz. Senior Officers are being briefed on the
subject as a part of their pre-joining briefing, training CDs on the
subject have been developed and sent to vessels, posters on best management
practices have been developed and displayed on board.
Maritime Labour Convention:-
Maritime Labour Convention developed by International Labour Organization
for setting minimum standard of living and working conditions for seafarers
is scheduled to enter into force once condition for entry into force is
met. Your Company has proactively implemented the requirements since 1st
December 2011. Once flag administration issues their relevant specific
requirements, the same will be incorporated. Once the Convention enters
into force, each ship would require to be surveyed and certified.
To ensure high standard of medical care, a system of 24 x 7 Company doctor
accessible to all vessel Masters for consultation through phone and e-mail
has been put in place.
With continuing piracy incidents in Gulf of Aden & waters around Somalia
and Indian Ocean, your Company is continuously updating and strictly
enforcing Best Management Practices to mitigate the security risks of its
vessels transiting through these waters.
Rescue at Sea:-
Jag Lakshita, while proceeding from San Diego Lighterage Area, USA towards
the west coast of Africa, rescued 3 sailors` private sailing expedition
from their disabled sailing vessel off Cape Horn on 24th February, 2011.
The rescue had been carried out in coordination with MRCC Uruguay, MRCC
Puerto Belgrano and MRCC Rio De Janeiro. The weather at that time was
inclement, with gale force winds, rough seas and moderate swell. The
rescued sailors, 1 South African national and 2 British nationals, were
disembarked in good health at Cameroon.
Vice Admiral of Brazilian Navy commended the Master and Crew for their
gallant action with these words "I know that this rescue operation caused a
delay on the normal course of the M. V. Jag Lakshita, although it was for a
noble reason and it was done without any thought of recognition or reward.
The fast response and the professionalism of the Jag Lakshita`s crew
allowed all three crew members of Yacht Spraydust to be rescued alive in
good health conditions."
Jag Pushpa, during her voyage from Gizan, Saudi Arabia to Sikka, India on
30th June, 2011, deviated from her planned passage to rescue 13 crew
members, all Indian nationals of M.T. Pavit in Arabian Sea. The weather at
that time was severe, with gale force winds, rough seas and heavy swell.
However, to protect the lives of the 13 sailors on Pavit, Master of the
vessel decided to take all necessary precautions and proceeded to the
rescue. The vessel was immobilized with flooded machinery space. A UK Naval
helicopter from a British naval vessel in the region transferred the crew,
all of whom were safely disembarked at Sikka.
In view of availability of spare accommodation on board Jag Preeti, large
number of Cadets (27 nos.) have been placed on board the vessel and
facility for class room training has been arranged. Highly experienced
Cadet Training Officer has been placed onboard for achievement of training
objectives and monitoring of discipline and behavioural aspects of Cadets
in a systematic manner.
Anti Bribery Policy:-
During the year Anti Bribery Policy for fleet vessels has been introduced
in view of increasing importance of the subject and to work towards
compliance with international legislative requirements.
GREAT EASTERN INSTITUTE OF MARITIME STUDIES (GEIMS):
This year was the 6th year of operations of your Company`s training
Institute in Lonavala. During the year, there has been consolidation and
augmentation of infrastructure as well as enhancement in training being
imparted. During the year, the Institute admitted 3 batches of TNOC and 4
batches of GME totaling 278 cadets.
The Institute is the only Institute approved by DG Shipping, Government of
India to conduct the newly introduced pre sea Electro Technical Officers
course as mandated by IMO`s STCW 2010. During the year, the Institute in
addition to the TNOC and
GME cadets also trained 60 ETO cadets. This course was designed and
developed by the Institute as per IMO requirements. In addition, the
ongoing mandatory STCW safety and familiarisation courses for sea farers
have been conducted for batches of students who have passed out from the
As per the Company`s requirement the Institute designed a Special
"Performance Enhancement Course" for officers which were earlier conducted
by Germanischer Lloyd. The 18 day course for Nautical officers and
engineers is now being conducted by the faculty from Jan 2012. During the
year 2 such courses were conducted.
The additional hostel block of 23780 sq.feet was completed on 31st August,
2011. This block is being presently utilized for conducting post-sea
Full Mission Engine Room Stimulator which was ordered in August, 2010 has
been fully installed and is now functional for both pre-sea and post-sea
The installation of Slow Speed Two stroke main engine was completed in
October, 2011 alongwith the connected civil work. The availability of ships
main propulsion engine in operational condition has substantially enhanced
Institute`s training capabilities.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company has instituted internal control systems which are adequate for
the nature of its business and the size of its operations. In the beginning
of the year, the scope of the audit exercise and the key business processes
and selected risk areas to be audited are decided in consultation with the
Audit Committee. The Internal Audit is carried out by a firm of external
Chartered Accountants and covers all departments. All significant audit
observations and follow up actions thereon are reported to the Audit
Committee. The Audit Committee comprises of 3 Independent Directors with
the Chairman being a person well qualified and conversant with matters
pertaining to Accounts and Finance. The Audit Committee met 4 times during
In line with the strategy of aligning IT with Business, your Company has
completed the following initiatives this year:-
> Internet connectivity for 5 ships
* The ships are disconnected with shore and in today`s scenario it is
extremely difficult to manage something remotely. In order to bridge the
gap, the internet connectivity has been installed in 5 ships out of 34
fleet as part of phase I. The usage of Internet for communication as well
as to and fro data flow between shore and ship have increased considerably.
This will help to reduce significant amount of productivity loss by instant
on-line communication between ship and shore.
> New Software applications
* As part of various in-house software development and implementation, the
most significant software that has gone live is called `geNautical` which
captures day to day operational data and automatically integrates with
related software at shore. It has streamlined the data flow from ship to
> Class Approval for Planned Maintenance System (PMS)
* This year also your Company added Class approvals from different Groups
for its successful operations of PMS at ships which are as follows:
ABS Class - for 3 ships - total stands at 8
LRS Class - for 1 ship - total stands at 5
DNV Class - for 7 ships - total stands at 7
> First CLOUD initiative
* As a strategy of exploring the advantages of cloud computing, your
Company has introduced first initiative with its Institute, GEIMS for their
emailing service from Google cloud. It will be extended further in
Company`s IT area in future.
To remain at the leading edge of business and to be the best in the
Industry, your Company`s focus has been not only on business strategies but
also on developing and nurturing talent. Your Company strongly believes
that its people alone provide sustainable and competitive advantage. During
the period under review, your Company initiated several HR practices aimed
at people development and improving organizational health.
With support from an external consultancy firm, your Company carried out an
exercise titled `Organization Genome` to determine competencies critical
for business success of the two divisions. This was aligned with the 360
degree process `Talent Genome` to map competency profiles of senior and
middle level executives, resulting in feedback and individual development
plan for each employee. It is planned that the development progress will be
measured during the annual talent review and succession planning process.
Based on employee feedback, your Company incorporated few changes in HR
policy addressing diversity and flexibility needs of team members along
with annual compensation review. The Social Cafe initiatives continued to
focus on employee health, fitness and camaraderie. These initiatives have
ensured that your Company remains an employer of choice in shipping sector.
Your Company played an active role to facilitate a milestone NMB agreement
pertaining to shipping crew. This will help to optimize crew wages during
the time shipping industry is faced with many challenges and uncertainties.
The employee attrition stood at 6% compared to 5 % last year. Your Company
had employee strength of 195 on shore and 460 floating as on March 31,
In a cyclical and highly volatile business, risk management is an
imperative part of the functioning of the Company. In the last few years,
when the industry has trended consistently lower and lower, it is only the
strict adherence to its risk management strategy that has held the Company
in good stead. Every shipping company is exposed to the fluctuations in
freight rates, bunker prices and financial risks on account of interest
rate and foreign exchange.
For the Company, risk management and its consistent implementation has
helped it to tide through its operations in the tough years. The objective
of the risk management is to strike a balance between pursuing appropriate
business opportunities and the need to manage the sensitivity to the
cyclical conditions in freight markets.
The Company has identified risks into the following broad categories:
1) Technical or Operational risk: This is the risk associated with the
operation and safe running of the ships. These are managed by having
stringent measures for quality and safety of people and cargo on board.
Constant training and focused development to upgrade the skills on board is
done so that the employees are fully geared to meet all possible
2) Financial markets and liquidity risk: This is the risk associated with
the financial position and cash flows of the Company. This may arise on
account of exchange fluctuations, change in interest rates etc. In a bad
environment, liquidity risk may arise out of inability to meet financial
obligations including loan repayments and any other capital commitments.
This is met by keeping low levels of leverage and adequate liquidity at all
points in time. This not only helps to avoid stress on the balance sheet
but in fact also helps in future borrowings, if required. Since the
majority of the revenues of the Company are denominated in US dollars,
there is a translation risk as the Company has to report its financial
performance in INR. These risks are managed by actively hedging the net
open FX exposure along with interest rate liability.
3) Market risk: This relates to risk due to change in freight markets,
bunker prices and counterparty risk. While management of fluctuation in
freight rates is possible through long term charters, Contracts of
Affreightment, etc.; fluctuation in bunker prices can be offset through
paper trades or by taking fixed price contracts with suppliers.
Counterparty risk can be minimized by dealing with large, well reputed and
good credit names.
Risk Management Strategy of the Company:
- The Company has traditionally used a mix of long term time charters,
Contracts of Affreightments and spot charters to de-risk the revenues to
some extent. As of March 31, 2012, the Company had 44% of its revenues from
time charters and 56% from spot charters.
- As on March 31, 2012, the Company had fixed interest rate liability of
75% and floating rate liability of balance 25%.
- As on March 31, 2012, the Company`s gross debt to equity ratio was
0.76:1and net debt to equity ratio was 0.17:1.
- As on March 31, 2012, the Company had sold forward a total of USD 90
million for FY 2012-13.
- As on March 31, 2012, the Company had a total of cash and cash
equivalents of Rs. 2999.67 crores.
Mr. K. V. Kamath conveyed his inability to continue as Director of the
Company after taking over additional responsibility as Chairman of Infosys
Limited. Mr. Kamath resigned from the Board of Directors of the Company
with effect from November 11, 2011. Your Directors place on record their
appreciation for the valuable guidance and support extended by him during
his tenure as a Director.
Dr. Rajiv B. Lall was appointed as an Additional Director on the Board of
Directors of the Company with effect from February 10, 2012 as an
Independent Director. He ceases to be a Director on the date of the 64th
Annual General Meeting. Notice under section 257 of the Companies Act, 1956
has been received in respect of his appointment as Director on the Board.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. Cyrus Guzder and Mr. Berjis
Desai are liable to retire by rotation and being eligible, offer themselves
for re-appointment. Necessary resolutions for their re-appointment have
been included in the Notice convening the ensuing Annual General Meeting.
Your Company was Corporate Governance compliant much before SEBI stipulated
deadline in the year 2005. Your Company has complied with the mandatory
provisions of Clause 49 of the Listing Agreement, relating to Corporate
Governance. A separate section on Corporate Governance forms part of the
Directors` Report and the certificate from the Company`s Auditors
confirming the compliance of conditions on Corporate Governance is included
in the Annual Report. Your Company has also complied with the `Corporate
Governance -Voluntary Guidelines 2009` issued by the Ministry of Corporate
Affairs, to the extent disclosed in the Annual Report.
RISK MANAGEMENT PROCESS:
In accordance with requirements of Clause 49 of the Listing Agreement, your
Company has established a Risk Management mechanism for its business risks.
The program is built upon the foundation of the existing risk management
process and practices of the Company and has evolved a structured approach
for risk management to manage significant risks faced by your Company.
The Risk Management framework and reporting regime enables the Company to
assess and demonstrate whether its significant risks are properly
identified and controlled, and to potentially eliminate unnecessary control
The Risk Management framework involves risk identification, assessment,
treatment/action plan, review and reporting as a continuous process.
Your Directors believe that your Company has a sound risk assessment and
minimisation mechanism in place.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956
the Board of Directors hereby state that:
i. In preparation of the annual accounts, the applicable accounting
standards had been followed (alongwith proper explanation relating to
material departures) and that there are no material departures;
ii. They have, selected the accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit of the Company
for that period;
iii. The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;
iv. They have prepared the annual accounts on a going concern basis.
COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS)
Pursuant to Notification No. GSR 1029 dated 31.12.1988 your Company is not
required to furnish prescribed information regarding conservation of energy
and technology absorption, as Shipping Industry is not covered by the
schedule to the said rules. The details of Foreign Exchange Earnings and
Rs. in crores
(a) Foreign Exchange earned on account of freight,
charter hire earnings, etc. 2073.24
(b) Foreign Exchange used including operating expenses,
capital repayment, down payments for acquisition of
ships (net of loan), interest payment, etc. 2041.46
PARTICULARS OF EMPLOYEES:
Statement pursuant to Section 217(2A) of the Companies Act, 1956 (Act),
read with the Companies (Particulars of Employees) Rules, 1975, is annexed
to this Report. As contemplated by Section 219 of the Act, members are
provided with abridged accounts. Members desirous of receiving the
Statement pursuant of Section 217(2A) will be provided the same on receipt
of written request from them.
Messrs. Kalyaniwalla & Mistry, the Auditors of your Company, who hold
office until the conclusion of the forthcoming Annual General Meeting being
eligible, offer themselves for re-appointment.
Your Directors express their sincere thanks to all customers, charterers,
vendors, investors, shareholders, shipping agents, bankers, insurance
companies, protection and indemnity clubs, consultants and advisors for
their continued support throughout the year. Your Directors also sincerely
acknowledge the significant contributions made by all the employees for
their dedicated services to the Company. Your Directors look forward to
their continued support.
For and on behalf of the Board of Directors
Date : May 03, 2012