1994
CHOWGULE STEAMSHIPS LIMITED
CHAIRMANS SPEECH
TO THE SHAREHOLDERS
Ladies & Gentlemen,
I have great pleasure in extending to you all a warm welcome to this tirty-
tirst Annual General Meeting of your Company.
Statement of Accounts:
The Notice of this Meetlng together wlth the Audited Accounts and the
Directors report for the year ended 31 st March 1994 have been wlth you tor
some time and therefore with your permission, I take them as read.
Dividend:
The pertormance of your Company for the financial year ended 31st March 1994
has been a matter of great satistactlon. Pronts atter Tax (incluslve of
Profit on Sale of the Ship) has been Rs. 25.99 Crores - a growth of over 116
3rcent compared to the previous year. view ot this your Directors have
commended an increase in Dividend in 20% to 25%.
Review of the Financial Year:
There had been several adverse conditions affecting the Shipping market in
general dunng the year under view.
The economies -
particularly those ot the industrialised nations such as the U.S.A. Japan and
the EC - tailed to make a substantial recovery. This in turn affected trade
and consequently demand tor shipping. The seaborne traffic of bulk
commodities such as iron ore coal and grain did not see any significant
increase during the period.
Nevertheless freight earnings of your Company were maintained by a prudent
mix ot short-term and long-term charters and by taking advantage ot
tavourable spot market rates whenever posslble. With caretul planning
expenditure tor repalr and maintenance of ships was kept within reasonable
limit.
Future Prospects:
According to the torecasts there will be higher economic growth in
industrlallsed natlons such as Japan and Western Europe in 1994-95 which is
bound to have a healthy impact on the dry cargo market.
Other Asian countries are also likely to register conslderable growth in
their economles. Higher activity in the international grain trade and
stronger demand for raw materials wlll therefore serve to improve the
shipping treight market. The successtul conclusion of GATT will act as a turther catalyst to this.
Expansion:
Your Company will be taking dellvery of a Mlni Bulk Carrier ot about 2000 DWT
from an Indian Shipyard betore the end ot September 1994. A Panamax Bulk
Carrier ot 71,200 DWT under construction at Namura Shipyard Japan is
scheduled tor delivery during the current financial year.
Your Company proposes to embark on a turther tleet expansion programme by
acquiring one new Panamax Bulk Carrier and one new Handimax Bulk Carrier or
two secondhand Handimax Bulk Carriers. The expansion programme is expected to
cost about Rs. 189 crores which will be flnanced by internal accruals the
proceeds of the Rights issue and term loans trom the International Finance
Corporation Washington.
With the emerging trends your Company is expected to do well and improve
turther on its past pertormance.
IFC Equity Investment:
I have great pleasure in informing you that the International Flnance
Corporation - a Member ot the World Bank Group - has decided to Invest In the
Equity upto 10 percent ot the enhanced Share Capital of your Company clearly
demonstrating its taith in the management and tuture growth prospects of your
Company.
Rights Issue:
As approved by the Members ot the Company at the Extraordlnary General
Meeting held on 1 8th June 1994 the Company Is comlng out with a Rights Issue
of 96,89,325 Equity Shares to
existing Shareholders at a price of Rs. 40/- per Share In the ratio of 3 New
Equity Shares for every 4 Equity Shares held. The Paid-up Share Capital of
your Company will thereby increase to Rs. 22.61 crores. The Issue will open
for subscrlptlon on 17th October 1994 and will close on 16th November 1994.
A word of thanks:
I am grateful to the various Ministeries Departments of Government, the
Director General ot Shipping and SCICI Ltd. tor their full co-operation
sympathetic conslderation and guidance.
I also take this opportunity to convey my sincere thanks to the Company's
Bankers especially the State Bank of India the Bankers abroad and our Agents
both in India and abroad for their unstinted co-operation and etficient
service. I also convey my personai gratitude to my Colleagues on the Board
tor their co-operation and guidance.
I must express my hearty appreciation of the loyal and dedicated services of
the Companys officers and staff both ashore and afloat.
Thank you
V.D. CHOWGULEChairman
BOMBAY, SEPTEMBER 23, 1994