The Hindu Business Line : India Steamship net up on higher charter rates

BUOYANCY in tanker charter rates is helping India Steamship Company (ISS), with a fleet size of two tankers, to post good performance. The charter's hire income so far has gone up by about 40 per cent. With the result, ISS has recorded a net profit of Rs 4.27 crore and a satisfactory return of 18.98 per cent pre-tax profit in the quarter ended June 30, 2003.

"We are confident of maintaining healthy cash flows and profits from current operations," said Mr Ashok Kak, Managing Director of ISS, while talking to presspersons at the end of the company's annual general meeting here on Thursday.

According to him, ISS has plans to acquire shortly a third tanker, Aframax type, and later a bulk carrier and LPG/ammonia and chemical carriers. "The long-term business plan is being formulated and the investments under the plan will focus on the areas of core competence such as tankers, bulk carriers and specialised vessels for captive use by group companies", he said.

The acquisition of "Ratna Shalini", a Japanese-built (1987) Aframax vessel (89,960 dwt) in April this year, increased the fleet strength to two tankers with a combined tonnage of 150,685 dwt. The funding of the third tanker estimated to cost around Rs 60 crore depending on the age and the capacity, to be largely by way of loans and partly from internal resources, should pose no problem, Mr Kak felt. "We are already repaying loans raised for the acquisition of "Ratna Shalini", he said.

Earlier, a section of shareholders wanted to know when would the company return to the dividend list. This year being the 75th year, the shareholders were particularly insisting on "something" from the company by way of celebration. ISS, it might be noted, has not been paying dividends for many years.

Mr Kak, who presided over the AGM, said it might be difficult to declare dividend till the carry forward losses had been taken care of. He expressed the view that the acquisition of "Ratna Shalini" was the biggest gift to the shareholders on the Platinum Jubilee year.

At least one shareholder suggested that ISS be merged with any of the other group companies like Zuari or Chambal as its shipping division. Having a separate subsidiary, ISS Holdings, with no activity was also questioned. Mr Kak replied that the situation with regard to ISS Holdings might not be the same at the time of next AGM.

Some shareholders forced the management to hold poll on four resolutions relating to the appointment of auditors, appointment of Mr Kak as the Managing Director of the company, his remuneration and enhancement of the remuneration of Mr K.K. Palit, the Executive Director. Since the promoters through their group companies held 78 per cent of the equity of the company, the holding of the poll made no difference. Only two out of 11 board members were present at the meeting.

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