Proxy Advisory Report

Proxy Advisory Report
Great Eastern Shipping Company Limited

BSE Code: 500620 | NSE Code: GESHIP | ISIN: INE017A01032
Sector: Shipping | Meeting Type: Annual General Meeting
e-Voting Platform: NSDL
e-Voting Period: From 08th August, 2015 to 11th August, 2015
Meeting Date: 12th August, 2015 at 3:00 PM
Meeting Venue: Rama and Sundri Watumull Auditorium, K. C. College,
Churchgate, Mumbai 400020
Notice: Click here | Annual Report: FY 2014-15
Company Email: shares@greatship.com
Company Phone: +91 22 6661 3000 | Company Fax: +91 22 2492 5900
Company Registered Office: Ocean House, 134/A, Dr. Annie Besant Road, Worli,
Mumbai 400018
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Great Eastern Shipping Co Ltd

www.greatship.com
Meeting Date: 12th August, 2015
Meeting Type : AGM
SES RECOMMENDATIONS
TABLE 1 - AGENDA ITEMS AND RECOMMENDATIONS
S. No.
1
Resolution
Adoption of Accounts
Type
O
Recommendation
FOR
2
3
Declaration of dividend
Re-appointment of Mr. K.M. Sheth as director
O
O
FOR
FOR
4
5
6
Ratification of appointment of Auditors

Appointment of Mrs. Rita Bhagwati as Independent Director
Appointment of Mr. Farrokh Kavarana as Independent Director
O
O
O
FOR
FOR
FOR
7
8
Appointment of Dr Shankar Acharya as Independent Director

Re-appointment of Mr. Bharat K. Sheth as a Wholetime Director
O
S
9
10
11
12
Appointment of Mr. G. Shivakumar as a Director

Appointment of Mr. G. Shivakumar as a Wholetime Director
Payment of commission to Non-Wholetime Directors
Issue of non-convertible debentures
O
S
O
S
FOR
FOR
FOR
FOR
FOR
FOR
Focus
O - Ordinary Resolution; S - Special Resolution
RESEARCH ANALYST: ANUBHAV GOYAL

#Focus Terminology
C - Compliance: The Company has not met statutory compliance requirements
F - Fairness: The Company has proposed steps which may lead to undue advantage of a particular class of shareholders and can have
adverse impact on non-controlling shareholders including minority shareholders
G - Governance: SES questions the governance practices of the Company. The Company may have complied with the statutory
requirements in letter. However, SES finds governance issues as per its standards.
T - Disclosures & Transparency: The Company has not made adequate disclosures necessary for shareholders to make an informed
decision. The Company has intentionally or unintentionally kept the shareholders in dark.
KEY ISSUES
Adoption of Accounts: Shareholders may note that the Company is seeking shareholders approval for adoption of
standalone accounts and consolidated accounts in the same resolution. SES is of the opinion that these are two different
items and the shareholders should be given the choice/ right to consider these items independent of each other,
separately. SES does not consider bunching of resolution as a good governance practice.
Payment of commission to Non-Wholetime Directors: The resolution seeks approval of shareholders for perpetuity,
providing unfettered power to the Board to determine the commission to each NED. (View Details)
2012 | Stakeholders Empowerment Services | All Rights Reserved

Report Release Date:
2 | PAGE

www.greatship.com
Meeting Type : AGM
COMPANY BACKGROUND
TABLE 2 - MARKET DATA (As on 30th July, 2015)
Price (`)
344.10
M Cap (` Cr.)
5,188.24
Shares*
15,07,77,065
PE Ratio"
Standalone Data ; Source: Capitaline
* As on 31st March, 2015
TABLE 3: FINANCIAL INDICATORS (STANDALONE)
TABLE 4: PEER COMPARISON (2014)
(In ` Crores)
2015
Revenue
2014
2013
16.35
"Based on EPS for FY 15
S C I Ltd
ABG Shipyard Ltd
1,734.08
1,492.58
1,735.19
4,310.97
392.16
278.61
287.67
298.60
276.65
9.52
2,012.69
1,780.25
2,033.79
4,587.62
401.68
PBDT
656.73
568.69
520.59
1,046.29
-1,086.75
Net Profit
317.30
204.68
146.26
200.93
-897.70
EPS (`)
21.04
13.50
9.60
4.31
-172.91
Dividend per share (`)
11.00
9.00
7.50
##
##
Dividend Pay-Out (%)
60.77
77.49
90.80
##
##
OPM (%)
48.92
52.57
42.05
28.43
-71.89
NPM (%)
18.30
13.71
8.43
4.66
Other Income
Total Income
-228.91
30th
Dividend pay-out includes Dividend Distribution Tax. Source: Capitaline
## Dividend data not available for FY 15 as on
TABLE 5: MAJOR PUBLIC SHAREHOLDERS (JUN' 15)
TABLE 6: MAJOR PROMOTERS (JUN' 15)
July, 2015
Nalanda India Equity Fund Ltd
6.98%
Bharat Kanaiyalal Sheth
9.83%
ICICI Prudential Life Insurance Company Ltd
3.65%
Ravi Kanaiyalal Sheth
9.53%
Fidelity Puritan Trust
3.18%
Laadki Trading & Investment Ltd
3.07%
ICICI Prudential Dynamic Plan
2.31%
Asha Vasant Sheth
1.41%
Kanaiyalal Maneklal Sheth
1.37%
General Insurance Corporation of India
2.3%
ICICI Prudential Value Discovery Fund
1.99%
Sachin Mulji
0.77%
UTI Dividend Yield Fund
1.68%
Jyotsna Kanaiyalal Sheth
0.77%
SHAREHOLDING PATTERN (%) (JUNE)
DISCUSSION
27.74
28.56
29.30
31.62
18.98
15.44
16.72
16.03
22.87
25.50
24.12
22.49
30.41
30.50
29.86
29.86
2015
2014
2013
Others
DII
FII
Graph 1: Yearly Shareholding Pattern
2012
Promoter
Domestic Institutional Investors shareholding in

the Company has increased from 15.44% as on 1st
July, 2014 to 18.98% as on 30th June, 2015.
Foreign Institutional Investors shareholding in
the Company has decreased from 25.50% to
22.87% during the said period. No new equity
shares were issued by the Company during this
period. Promoters shareholding decreased from
30.50% to 30.41% as Mr. Siddharth G Sheth & Mr.
Bharat K Sheth, promoters of the Company sold
1,07,740 & 9,000 equity shares respectively
during the said period.

3 | PAGE

www.greatship.com
Meeting Type : AGM
BOARD OF DIRECTORS
TABLE 7 - BOARD PROFILE
Classification
Company
SES
Director
Expertise/Specialization
Tenure
(Year)
[2]
[1]
Directorship
Committee
Membership
Pay(`
Lakh)
K. M. Sheth
NEDP(R)(C)
NEDP(R)(C)
General Management
45
1(1)
232.06
Ravi K. Sheth
NEDP(R)
NEDP(R)
General Management
3(4)
1(0)
**0.00
Cyrus Guzder
ID
NID
General Management
12
4(18)
3(2)
18.70
Shankar Nath Acharya
ID
ID
Economics and Finance
2(2)
2(1)
2.76
Vineet Nayyar
ID
NID
Administration
11
5(11)
1(0)
12.15
Berjis Minoo Desai
ID
ID
Legal
10(15)
7(2)
14.90
Farrokh Kavarana
ID
ID
Accountancy
2(4)
2(0)
8.39
Rita Bhagwati
ID(W)
ID(W)
Banking
2(2)
1(0)
5.01
Bharat K. Sheth
MDP
MDP
Strategic Management
26
3(3)
1(0)
802.34
Tapas Icot
ED(R)
ED(R)
Finance
1(1)
192.46
G. Shivakumar
ED(R)
ED(R)
Finance
1(2)
1(0)
206.60
Reference: ED - Executive Director, NED- Non-Executive Director, ID - Independent Director, NID- Non-Independent Director, P- Promoter, W - Woman
Director, R- Liable to retire by Rotation, U- Up for Re-appointment, N- New Appointment, MD- Managing Director, C- Chairman, CMD- Chairman and
Managing Director
[1] Directorships show Directorships in Public Companies (Total Directorships which include Directorships in both Public and Private Companies)
[2] Committee memberships include committee chairmanships
Note: Directorships, committee membership and committee chairmanship includes such positions in Great Eastern Shipping Company Limited
Items deserving attention due to contentious or governance issues
Mr. K. M. Sheth, Whole Time Director and Executive Chairman of the Board of Directors relinquished the office of the Whole Time
Director and accordingly ceased to be the WTD of the Company w.e.f. September 01, 2014. Mr. Sheth has been associated with the
Company since 1952 in various capacities as MD, Deputy Chairman and Executive Chairman and has contributed to the growth and
progress of the Company for more than 6 decades. Mr. K. M. Sheth is now serving as the Non-Executive Chairman of the Company.
**Considering the time and efforts spent by Mr. Ravi K. Sheth for the business of Greatship (India) Limited (GIL) and its subsidiaries,
entire remuneration to Mr. Ravi K. Sheth is paid by GIL.
GRAPH 2 - BOARD PROFILE

7
6
5
4
3
2
1
0
80.00%
63.64%
54.55%
60.00%
6
4
44.45%
20.00%
1
Retiring
40.00%
36.36%
Non Retiring
0.00%
ID
SES
Company
ID
NID
Graph 3: Board Composition
Graph 2: Liable to retire by rotation (As per Company)

As per provisions of Section 149 and 152 of the Companies Act,
2013 Independent Directors shall not be liable to retire by rotation
and unless provided by the Articles of the Company at least 2/3rd of
the Non-Independent Directors should be liable to retire by
rotation. In the Board, 4 out of 5 non-independent directors are
liable to retire by rotation. Thus, the Board is compliant with the
provisions of law.
As per Clause 49(ii)(A) of the Listing Agreement, the Company

should have at least 50% Independent Directors, as the
Chairman of the Board is an Promoter Director. However, as per
SES classification, the Board is 36.36% independent as 2
independent directors (Mr. Vineet Nayyar and Mr. Cyrus
Guzder) have been associated with the Company for more than
10 years and cant be classified as independent directors.

4 | PAGE

www.greatship.com
Meeting Type : AGM
TABLE 8 - BOARD COMMITTEE PERFORMANCE

Committees
Audit
Stakeholders' Relationship
Nomination & Remuneration
CSR
Risk Management
#
4
3
4
3
3
Chairman's Classification
Company
SES
ID
NID
ID
NID
ID
NID
ID
NID
ND
ND
Overall Independence
Company
SES
100%
75%
33%
0%
100%
75%
67%
33%
0%
0%
Number of
Meetings
5
2
5
ND
ND
Attendance < 75%

ND
ND
Reference: ED - Executive Director, NED- Non-Executive Director, ID - Independent Director, NID- Non-Independent Director, P- Promoter, C- Chairman, #Number of Members, ND- Not Disclosed
TABLE 9 - BOARD GOVERNANCE TABLE (AS PER SES)

Criteria
What is the percentage of Independent Directors on the Board?
How many Independent Directors have tenure greater than 10 years?
How many Independent Directors have Shareholdings > ` 1 Cr?
Is the Chairman Independent?
Is there a Lead Independent Director?
How many Independent Directors are ex-executive of the Company?
Have all directors been elected by the Company's shareholders?
Are any directors on the Board related to each other?
How many promoter directors are on the Board?
Did Independent Directors meet atleast once without management?
Score

Response
36%
2
0
No
No
0
Yes
Yes
3
Yes
Score
0
7
5
0
0
10
10
0
8
10
Maximum
10
10
5
10
10
10
10
10
15
10
50
100
5 | PAGE

www.greatship.com
Meeting Type : AGM
REMUNERATION ANALYSIS
TABLE 10 - EXECUTIVE DIRECTORS' REMUNERATION
In ` Crore
Bharat K. Sheth
G. Shivakumar
Tapas Icot
P
NP
NP
2015
Fixed Pay
Total Pay
3.52
8.02
1.74
2.07
1.40
1.92
2014
2013
Fixed Pay
Total Pay
Fixed Pay
Total Pay
2.83
6.16
3.01
5.89
Not Applicable
Not Applicable
Ratio
242:1
62:1
58:1
Note: Fixed pay includes basic pay, perquisites & allowances. P- Promoter, NP- Non- Promoter, Ratio- Ratio of ED's remuneration to Median
Remuneration of Employees, ND- Not Disclosed
The Ratio of remuneration of Promoter Executive Director to Non-Promoter Executive Directors is almost 4. While this
indicates skewed remuneration structure, SES is not raising any concern as Non-Promoter Executive Director is on the
Board for last one year as compared to 26 years in case of Promoter Executive Director.
100
126.48
92.11
89.86
5.78
5.60
50
10
8
84.01
5.89
138.67
8.02
6.16
6
4
2
0
2011
2012
2013
2014
2015
MD (RHS)
Indexed TSR (LHS)
Graph 4: Executive Compensation vs. Total Shareholders Return
10.00
8.02
8.00
In Crores
Indexed TSR
150
Director Remuneration
DISCUSSION - INDEXED TSR vs. EXECUTIVE REMUNERATION
6.00
4.00
2.00
2.00
1.16
0.10
0.00
Executive
Non-Executive
Promoter
Non-Promoter
Graph 5: Average Director Remuneration
Note: Indexed TSR (Total Shareholders Return) represents the value of ` 100 invested in the Company at beginning of a 5-year period starting 1st April,
2011. One period return is calculated as (Final Price - Initial Price + Dividend) / Initial Price.
The remuneration paid to managing director of the Company is reasonable given the size and performance of the
Company. It can be inferred from the graph that the growth in total shareholders' return is almost aligned with the
growth in remuneration of Mr. Bharat K Sheth (Managing Director) as CAGR of his remuneration is 8.53% whereas CAGR TSR is 10.76%.

6 | PAGE

www.greatship.com
Meeting Type : AGM
DISCLOSURES
DISCLOSURE REQUIRED IN DIRECTOR'S REPORT
The Companies Act, 2013 requires the listed companies to make certain disclosures in Board's Report. The table below
shows the status of compliance of such some important requirements, by the Company
Content of Corporate Social Responsibility Policy in
prescribed format (if applicable)
Extract of the Annual Return as per Form No. MGT 9
Company's policy on appointment of directors and
criteria for determining qualifications, positive
attributes, directors independence
Policy on remuneration of Directors, KMP and other
employees
Statement on performance evaluation of Board,

Committees and Directors
Related Party Transactions as per Form No.
AOC.2
Ratio of the remuneration of executive director
to the median employees remuneration
Secretarial Audit Report
Statement on declaration by Independent Directors
Directors Responsibility Statement
Particulars of loans, guarantees or investments
Details of establishment of Vigil Mechanism
Statement indicating development and

implementation of a risk management policy
*Comments on qualifications made by Statutory

Auditors/ CS
* Not applicable as no qualifications were made by the Auditors

7 | PAGE

www.greatship.com
Meeting Type : AGM
RESOLUTION ANALYSIS
RESOLUTION 1: ADOPTION OF ACCOUNTS
Adoption of audited standalone and consolidated financial statements for the financial year ended March 31, 2015, the
reports of the Board of Directors and Auditors thereon
SES RATIONALE
Unqualified Accounts, Compliant with Accounting Standards
SES RECOMMENDATION
No concern has been identified. The Auditors have not made any qualifications in their Report. SES recommends that
shareholders vote FOR the resolution.
SES ANALYSIS
Note: Detailed analysis of the accounts is not within the scope of SES activities. SES accepts the Report of the Directors and the Auditors
to be true and fair representation of the companys financial position. The analysis below is aimed at enabling shareholders engage in
discussions with the Board/ Management during the AGM.
AUDIT QUALIFICATIONS
The Auditors have not made any qualifications in their Report.
AUDITORS COMMENTS ON STANDALONE ACCOUNTS
The Auditors have stated that financial statements give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as at 31 st March, 2015, and its profit and its cash flows
for the year ended on that date.
AUDITORS COMMENTS ON CONSOLIDATED ACCOUNTS
The Auditors have stated that consolidated financial statements give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its
profit and its cash flows for the year ended on that date.
ACCOUNTING POLICIES
The financial statements have been prepared and presented under the historical cost convention on an accrual basis of
accounting, and in accordance with the Generally Accepted Accounting Principles (GAAP) in India. The accounting policies
adopted in the preparation of the financial statements are consistent with those followed in the previous year.
FINANCIAL INDICATORS
FY 14/15
FY 13/14
Shift
Companys Discussion
Debtors Turnover
12.95
34.87
-62.87%
No discussion by the Company
Inventory Turnover
32.82
20.90
57.08%
Interest Coverage Ratio
4.33
3.63
19.12%
Current Ratio
1.74
1.73
0.63%
Debt Equity Ratio
0.52
0.58
-10.73%

8 | PAGE

www.greatship.com
Meeting Type : AGM
FY 14/15
FY 13/14
Shift
Companys Discussion
Operating Profit Margin (%)
48.92
52.57
-6.94%
Net Profit Margin (%)
18.30
13.71
33.43%
Operating Cash Flow/ Sales (%)
30.57
28.77
6.25%
Source: Companys Annual Reports
SES is of the opinion that board should take note of structural shift (positive and negative both) in various financial parameters which
have a bearing on companys future performance and positioning in market place and disclose an analysis of the same to shareholders.
SES believes that 25% change either way should be the threshold for triggering analysis and disclosure requirements.
CONTINGENT LIABILITIES
(All figures in ` Crore)
FY 14/15
Total contingent liabilities

Net worth of the Company
Contingent liabilities as a percentage of net worth
FY 13/14
122.07
219.49
4,930.76
4,806.32
2.47%
4.57%
Major portion of contingent liabilities is constituted by Guarantees given by banks counter guaranteed by the Company.
RELATED PARTY TRANSACTIONS
FY 14/15
FY 13/14
Receivables
0.15
0.36
-58.33%
From Greatship (India) Ltd. (Wholly owned Subsidiary)
Payables
1.39
0.64
117.18%
To subsidiaries of the Company
Outstanding (` Crore)
Comments
Shift
STANDALONE VS CONSOLIDATED ACCOUNTS

Standalone Accounts
(In Crore)
Revenue
FY
14/15
FY
13/14
From Subsidiaries etc.
FY
12/13
FY
14/15
FY
13/14
FY
12/13
Consolidated Accounts
FY
14/15
FY
13/14
FY
12/13
1,734
1,493
1,735
1,704
1,599
1,272
3,438
3,092
3,007
317
205
146
431
369
392
748
574
538
Total Assets
9,336
9,390
9,745
6,200
4,987
4,704
15,535
14,377
14,449
Net Worth
4,931
4,806
5,001
2,500
1,967
1,341
7,431
6,773
6,342
Net Profit Margin (%)
18.30
13.71
8.43
25.29
23.09
30.79
21.76
18.56
17.89
ROA (%)
3.40
2.18
1.50
6.95
7.41
8.32
4.82
3.99
3.72
RONW (%)
6.44
4.26
2.92
17.24
18.78
29.20
10.07
8.47
8.48
Net Profit
Profitability and Return Ratios of subsidiaries are better compared to operations at Standalone accounts.

9 | PAGE

www.greatship.com
Meeting Type : AGM
RESOLUTION 2: DECLARATION OF DIVIDEND

Declaration of Dividend
SES RATIONALE
Compliant with law. The Company has sufficient cash to pay the dividend
SES RECOMMENDATION
No concern has been identified. The Company has sufficient cash to pay the dividend. SES recommends that shareholders
vote FOR the resolution.
SES ANALYSIS
25
20
90.80%
13.50
15
10
77.49%
7.50
9.60
21.04
60.77%
11.00
9.00
100%
80%
60%
40%
20%
0
2013
Dividend (LHS)
Dividend payout ratio
Dividend and EPS (Rs)
Dividend and Earnings
0%
2014
2015
EPS (LHS)
Payout (RHS)
Graph 6: Dividend Payout and EPS
During the year, the Board declared and paid an interim

dividend of ` 4/- per share, resulting in an outflow of ` 67.31
crores (inclusive of tax on dividend), and recommend a final
dividend of ` 7/- per share resulting in an outflow of ` 127.03
crores (inclusive of tax on dividend). The aggregate outflow
on account of the equity dividend for the year would be `
194.34 crores (inclusive of tax on dividend).
The Companys Cash & Bank Balances as on 31st March, 2015
is ` 1,716.96 crores. Additionally, the Current Ratio of the
Company is more than 1. The Company has sufficient cash to
pay the dividend.

10 | PAGE

www.greatship.com
Meeting Type : AGM
RESOLUTION 3: REAPPOINTMENT OF DIRECTOR

#3: Re-appointment of Mr. K.M. Sheth as Director of the Company liable to retire by rotation
SES RATIONALE
Appointment Compliant with Law, No negative issue observed
SES RECOMMENDATION
No concern has been identified regarding the profile, time commitments & performance of Mr. K M Sheth. SES
recommends that shareholders vote FOR the resolution.
SES ANALYSIS
DIRECTORS PROFILE
Criteria
Current full-time position
Education
Past Experience
Committee positions in the Company
Retirement by rotation?
Part of promoter group?
SES Recommendation
K. M. Sheth
None
B.Com
Served as the Executive Chairman for more than 20 years of Great
Eastern Shipping Co Ltd
None
Yes
Yes
FOR
DIRECTORS TIME COMMITMENTS

Criteria
Public Directorships (Total Directorships)
Total Committee memberships
Total Committee Chairmanship
Full time role/ executive position
Mr. K. M. Sheth
1
0
0
0
Note: committee memberships include committee chairmanships
DIRECTORS PERFORMANCE
Attendance record
Last 3 AGMs
Board meetings held last year
Board meetings in last 3 years (avg.)
Mr. K. M. Sheth
3/3
100%
100%
No concern has been identified with respect to profile, time commitments and performance of Mr. K M Sheth.

11 | PAGE

www.greatship.com
Meeting Type : AGM
RESOLUTION 4: APPOINTMENT OF AUDITORS

Ratification of appointment of M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai as Auditors of the Company
SES RATIONALE
Appointment Compliant with the law, No negative Issue observed
SES RECOMMENDATION
The current auditors, M/s. Kalyaniwalla & Mistry, have been associated with the Company for 17 years. Provisions of the
Companies Act 2013 state that auditors should not have tenure of over 10 years. However, the Companies Act 2013 and
the Rules there under provide a transition period of 3 years. M/s. Kalyaniwalla & Mistry were appointed for a term of
three years in the AGM held last year on 25th September, 2014 subject to ratification by the shareholders every year. SES
had raised concern with respect to appointment of the Auditors in the report for the AGM held last year. However since
the Auditors were appointed by the shareholders, no concern has been identified regarding the ratification of the
Appointment of Auditors. Therefore, SES recommends that shareholders vote FOR the resolution.
SES ANALYSIS
DISCLOSURES
Name of the auditor up for appointment
Auditors' eligibility for appointment
Auditors' independence certificate
Disclosed in Notice and Annual Report

Not disclosed
Not disclosed
AUDITORS' INDEPENDENCE
Auditors
M/s. Kalyaniwalla & Mistry
17 years
Audit Partners
Daraius Z. Fraser
6 years
Daraius Z. Fraser is associated with 6 years. SES is of the opinion that the audit partner should be rotated on a regular
basis. As per Section 139(3) of the Companies Act, 2013 shareholders may resolve to provide that the auditing partner
and his terms shall be rotated at regular intervals.
Section 139(3) Subject to the provisions of this Act, members of a company may resolve to provide that
(a) in the audit firm appointed by it, the auditing partner and his team shall be rotated at such intervals as may be
resolved by members; or
(b) the audit shall be conducted by more than one auditor
TERM OF APPOINTMENT
The provisions of the Act are effective from 1st April, 2014. Section 139 of the Companies Act, 2013 and the Rules made
thereunder, provide for the appointment and rotation of auditors. As per this section, a company can appoint a firm as
auditors for maximum two terms of five consecutive years each. An audit firm which has completed its term of 10
consecutive years shall not be eligible for re-appointment as auditors in the same company for 5 years from the
completion of such term. For the purpose of calculating period of 10 consecutive years, the period for which the auditor
firm has held office prior to the commencement of the Act (i.e. 1st April, 2014), shall be taken into consideration.
However, a transition period of 3 years from the commencement of the Act has been prescribed to comply with the
provisions of rotation of auditors.

12 | PAGE

www.greatship.com
Meeting Type : AGM
The current Auditors, M/s. Kalyaniwalla & Mistry were appointed for a term of three years in the AGM held last year on
25th September, 2014 subject to ratification by the shareholders every year. SES is not raising any concern as the
Auditors were appointed by the shareholders.
AUDITORS' REMUNERATION
Auditors' Remuneration
0%
FY14/15
0%
43%
34%
66% 57%
FY13/14
Audit fee (in Cr)
Remuneration components
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
0.75
0.62
0.62
0.46
0.38
0.00
FY 12/13
Audit
Audit-Related
Non Audit
Graph 7: Remuneration Components
0.46
Audit Fee
0.00
FY 13/14
Audit Related Fee
0.00
FY 14/15
Non Audit Fee
Graph 8: Historical Trends in Auditors' Remuneration

13 | PAGE

www.greatship.com
Meeting Type : AGM
RESOLUTION 5, 6 & 7: APPOINTMENT OF INDEPENDENT DIRECTORS

#5: Appointment of Mrs. Rita Bhagwati as Independent Director of the Company
for a term of five years with effect from November 14, 2014
#6: Appointment of Mr. Farrokh Kavarana as Independent Director of the Company
for a term of five years with effect from November 14, 2014
#7: Appointment of Dr. Shankar Acharya as Independent Director of the Company
for a term of five years with effect from February 05, 2015
SES RATIONALE
#5, #6 & #7: Appointment compliant with the law. No Governance Issues Observed.
SES RECOMMENDATION
#5, #6 & #7: No concern has been identified with respect to the profile and time commitments of Mrs. Rita Bhagwati, Mr.
Farrokh Kavarana & Dr Shankar Acharya. SES recommends that shareholders vote FOR all three resolutions.
SES ANALYSIS
COMPLIANCE
Is Company complying with the retirement policy?
Has the Company disclosed the Independence Certificate provided by the Independent Directors?
Has the Company disclosed the terms of appointment of Independent Directors?
Has the Company disclosed Board evaluation and Directors Evaluation Policy?
Did Independent Directors meet at least once without the Management?
Yes
Yes
Yes
Yes
Yes
DIRECTORS PROFILE
Criteria
Current full-time position
Rita Bhagwati
None
Farrokh Kavarana
None
MA in Economics, MBA
B.Com. (Hons.), MBA, CA
More than 35 years of work

experience in India and the
US in the central bank, in
commercial and
multilateral banking
Joined Tata Group in 1975;

held key positions with
McKinsey & Co. Inc. and
The Bowater Corporation.
Audit (Member)
Audit (Member)
FOR
FOR
Education
Past Experience
Committee positions in the

Company
SES Recommendation
Shankar Acharya
None
B.A. (Hons.), Ph.D.
(Economics)
Years of experience in
various fields of
economics and finance
Nomination &
Remuneration (Member)
FOR
DIRECTORS INDEPENDENCE
Criteria
Current tenure/association
Directorships at group companies
Relationships with the Company
Nominee director
Shareholding / ESOPs
Remuneration (` Lakhs)
SES Classification
Rita Bhagwati
9 months
None
None
No
Nil
5.01
Independent
Farrokh Kavarana
9 months
None
None
No
3,153 equity shares
8.39
Independent

Shankar Acharya
6 months
None
None
No
Nil
2.76
Independent
14 | PAGE

www.greatship.com
Meeting Type : AGM

Criteria
Rita Bhagwati
2(2)
1
0
0
Farrokh Kavarana
2(4)
2
0
0
Shankar Acharya
2(2)
2
1
0
No concern has been identified with respect to the profile and time commitments of the directors.

15 | PAGE

www.greatship.com
Meeting Type : AGM
RESOLUTION 8: REAPPOINTMENT OF EXECUTIVE DIRECTOR

#8: Re-appointment of Mr. Bharat K. Sheth as a Wholetime Director of the Company designated as Deputy Chairman &
Managing Director
for a period of 5 years with effect from April 01, 2015
SES RATIONALE
Proposed Remuneration reasonable. No governance Issues Observed.
SES RECOMMENDATION
No concern has been identified with respect to re-appointment and remuneration of Mr. Bharat K Sheth. SES
recommends that shareholders vote FOR the resolution.
SES ANALYSIS
DIRECTORS PROFILE
Current full time position
Education
Past Experience
SES Recommendation
Mr. Bharat K. Sheth

Managing Director at GE Shipping Co Ltd
B.Sc (Economics)
Yes
Inducted onto GE Shipping's Board as an Executive Director on July 1, 1989 and
became Managing Director of GE Shipping on April 1, 1999
SR (M), CSR (M), RM (M)
FOR
SR Stakeholders Relationship Committee, CSR Corporate Social Responsibility Committee, RM Risk Management Committee, M
Member
PAST REMUNERATION OF THE DIRECTOR

In ` Crore
FY 14/15
Executive Director
Fixed Pay
Bharat K. Sheth
3.52
FY 13/14
Total Pay
Fixed Pay
8.02
FY 12/13
Total Pay
2.83
Fixed Pay
6.16
Total Pay
3.01
5.89
Bharat K Sheth
Company
GE Shipping Co
Ltd
Promoter
Yes
A K Gupta
Shipping
Corporation of
India
No
Remuneration
(` Cr) (A)
8.02
0.27
Net Profits
(` Cr) (B)
317.30
-274.66
A/B*100
2.52%
NA
10
9
8
7
6
5
4
3
2
1
0
ED Remuneration (` Crore)
Director
200
126.48
92.11
89.86
138.67
84.01
150
100
50
-19.82
-32.67
-63.78 -63.04
-48.28
0
-50
FY10/11 FY11/12 FY12/13 FY13/14 FY14/15
Indexed TSR & Net Profit
Executive Remuneration Peer Comparison
-100
MD
Indexed TSR
Indexed Net Profit
Graph 8: Executive compensation vs. Total shareholders return

16 | PAGE

www.greatship.com
Meeting Type : AGM

Criteria
Mr. Bharat K. Sheth

3(3)
1
0
1
DIRECTORS PERFORMANCE
Attendance record
Last 3 AGMs
Board meetings held last year
Board meetings in last 3 years (avg.)
Stakeholders Relationship Committee meetings held last year
Mr. Bharat K. Sheth

2/3
100%
93%
100%
REMUNERATION PACKAGE
Component
Basic Pay
Perquisites/
Allowances
Proposed Remuneration
Proposed salary: ` 330 lakhs p.a. to ` 485 lakhs p.a.
Comments
-
All perquisites clearly defined: Yes
Cap placed on perquisites: No
Variable Pay
Yes (not exceeding three times the annual

Consolidated Salary)
Performance criteria disclosed: No

Cap placed on variable pay: Yes
Notice Period/
Severance Pay
Not Disclosed
Minimum
Remuneration
In the event of absence or inadequacy of profit in

any financial year, Mr. Bharat K Sheth, shall be paid
above remuneration as a minimum remuneration,
subject to the approval of the Central Government
Within limits prescribed: No

Includes variable pay: No
Shareholders should note that the Company has disclosed that in case of inadequate profits, the Company will pay the
entire fixed remuneration to the director subject to approval of central government if required.

17 | PAGE

www.greatship.com
Meeting Type : AGM
RESOLUTION 9 & 10: REAPPOINTMENT AND APPOINTMENT OF EXECUTIVE DIRECTORS

#9: Appointment of Mr. G. Shivakumar as Director of the Company liable to retire by rotation
#10: Appointment of Mr. G. Shivakumar as a Wholetime Director of the Company designated as Executive Director
for a period of 5 years with effect from November 14, 2014

SES RATIONALE
Proposed Remuneration reasonable. No governance Issues Observed.
SES RECOMMENDATION
#9 & 10: No concern has been identified with respect to the profile, time commitments and remuneration of Mr. G
Shivakumar. SES recommends that shareholders vote FOR the resolution.
SES ANALYSIS
DIRECTORS PROFILE
Current full time position
Education
Past Experience
SES Recommendation
Mr. G. Shivakumar
Whole-time director at Great Eastern Shipping Company Limited
B.Com, Post Graduate in Management from IIM Ahmedabad
Yes
Joined Great Eastern Shipping Co. Ltd as a management trainee in 1990 and
associated with the Company since then
Stakeholders Relationship (Member)
FOR

Criteria
Total Directorships
Mr. G. Shivakumar
1(2)
1
0
1
REMUNERATION PACKAGE
Component
Basic Pay
Perquisites/
Allowances
Proposed Remuneration
Proposed salary: ` 120 lakhs p.a. to ` 195 lakhs p.a.
Comments
-
All perquisites clearly defined: Yes
Cap placed on perquisites: No
Variable Pay
Yes (not exceeding one time the annual Consolidated Salary)
Performance criteria disclosed: No

Cap placed on variable pay: Yes
Notice Period/
Severance Pay
Notice Period: 3 months

Severance Pay: Not Disclosed
Mr. G. Shivakumar shall be paid above remuneration as a
Minimum
Within limits prescribed: No
minimum remuneration, subject to the approval of the Central
Remuneration
Includes variable pay: No
Government
Shareholders should note that the Company has disclosed that in case of inadequate profits, the Company will pay the
entire fixed remuneration to the director subject to approval of central government if required.
18 | PAGE

www.greatship.com
Meeting Type : AGM
RESOLUTION 11: PAYMENT OF COMMISSION TO NON-EXECUTIVE DIRECTORS

Payment of commission to Non-Wholetime Directors at a rate not exceeding 1% of net profits of the Company for every
financial year
SES RATIONALE
Resolution seeks approval for perpetuity, provides unfettered power to the Board.
SES RECOMMENDATION
The resolution seeks approval of shareholders for perpetuity, providing unfettered power to the Board to determine the
commission to each NED. Such resolutions defeat the purpose of shareholder approval, and provide unfettered power to
the Board of Directors, even in a situation when the Companys performance changes in future in any manner. However,
since the Company has disclosed the objective criteria for determining the quantum of commission payable to individual
NEDs and it has been fair in remunerating its directors in the previous years, SES recommends that shareholders vote FOR
the resolution. SES further recommends that the Company should seek shareholders approval for a fixed term or on a
yearly basis.
SES ANALYSIS
COMMISSION PAYABLE
Remuneration Limits: Not exceeding 1% of net profits of the Company
Commission distribution criteria: Not Disclosed
Directors covered under the resolution: Non-Wholetime Directors
As per the resolution, the Board (including the NEDs) will have the discretion to determine the amount of commission to
be paid for each financial year to each NED within the limit of 1% of the net profits. Objective criteria for determining the
quantum of commission payable to individual NEDs has been disclosed by the Company.
DISTRIBUTION OF COMMISSION
Average Commission (` Lakhs)

1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Total Commission (` Lakhs)
1.16
0.10
Promoter NED
Independent
Directors
0.00
Other NEDs
Graph 9: Average commission paid to NEDs
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
63.10
50.00
43.25
50.45
FY12/13
FY 13/14
36.25
FY10/11
FY11/12
FY 14/15
Graph 10: Historical trend in NED commission
Mr. K. M. Sheth, Whole Time Director and Executive Chairman of the Board of Directors relinquished the office of the
Whole Time Director and accordingly ceased to be the WTD of the Company w.e.f. September 01, 2014. Mr. K. M. Sheth
is now serving as the Non-Executive Chairman of the Company. Promoter NED average commission in the graph is more
because of the remuneration of Mr. K M Sheth.
The Company has proposed the resolution in supersession of the earlier resolution passed at the AGM held on 29th July,
2010 for payment of commission to non-executive directors a sum not exceeding 1% of the net profit of the Company for
19 | PAGE

www.greatship.com
Meeting Type : AGM
a period of 5 years from the financial year 2010-11. By superseding the earlier resolution passed at the AGM held in 2010,
the Company is seeking fresh approval of shareholders for payment to non-executive directors, in accordance with
Section 197 of the Companies Act, 2013, in order to continue the payment of commission to NEDs for each year,
commencing from the financial year 2015-2016.
SES VIEW
Shareholders may note that the proposed resolution seeks approval of shareholders for payment of commission to NEDs
for perpetuity, without any requirement for further approval of the shareholders. SES believes that as owners of the
Company, shareholders have full right to approve or disapprove payment of remuneration/ commission to directors of
the Company. Such resolutions with perpetual approval provide unfettered power to the Board of Directors, even if the
Companys performance changes in future in any manner. Therefore, SES believes that as a good governance practice,
the Company must take such approval of the shareholders on yearly basis. However, since the Company has disclosed the
objective criteria for determining the quantum of commission payable to individual NEDs and it has been fair in
remunerating its directors in the previous years, SES is not raising any concern.

20 | PAGE

www.greatship.com
Meeting Type : AGM
RESOLUTION 12: ISSUE OF NON-CONVERTIBLE DEBENTURES

Issue of secured/unsecured redeemable non-convertible debentures aggregating up to ` 500 crores
SES RATIONALE
No dilution to shareholders, proposed Issue is in accordance with law
SES RECOMMENDATION
This is an enabling resolution and since the securities to be issued are non-convertible in nature, these will cause no
dilution to the existing shareholders. Hence, SES recommends that shareholders vote FOR the resolution.
SES ANALYSIS
OBJECTIVE OF THE ISSUE
Pursuant to Section 42 of the Companies Act, 2013 and Rule 14 of the Companies (Prospectus and Allotment of
Securities) Rules, 2014, a Company cannot make private placement of its securities unless the proposed offer of securities
has been previously approved by the shareholders of the Company by a Special Resolution. In case of offer or invitation
to offer NCDs, the Company is required to a pass a Special Resolution once in a year for all offers or invitations for such
debentures to be made during the year. The Company therefore, seeks an enabling authorisation to borrow funds by
offer of NCDs on private placement basis for an amount not exceeding ` 500 Crore in order to augment long term
resources for financing, inter alia, the ongoing capital expenditure and for general corporate purposes.
DETAILS OF THE ISSUE
Securities to be issued: Secured / unsecured redeemable non-convertible debentures
Issue Type: Private Placement Issue
Size: up to ` 500 Crores
CONFLICT OF INTERESTS
There will be no dilution to the shareholders as the securities proposed to be issued are non-convertible in nature.
CONFLICT OF INTERESTS
None of the Directors and Key Managerial Personnel of the Company and their relatives is, in any way concerned or
interested, financially or otherwise, in the resolution.

21 | PAGE

www.greatship.com
Meeting Type : AGM
DISCLAIMERS
Sources
Company Information
Only publicly available data has been used while making the report. Our data
sources include: BSE, NSE, SEBI, Capitaline, Moneycontrol, Businessweek, Reuters,
Annual Reports, IPO Documents and Company Website.
Analyst Certification
The analysts involved in development of this report certify that no part of any of
the research analysts compensation was, is, or will be directly or indirectly
related to the specific recommendations or views expressed by the research
analyst(s) in this report.
CAUTIONARY STATEMENT
The recommendations made by SES are based on publicly available information
and conform to SES's stated Proxy-Advisory Guidelines. Further, SES analysis is
recommendatory in nature. SES understands the different investment needs of
our clients. Therefore, SES expects that the clients will evaluate the effect of their
vote on their investments independently and diligently and will vote accordingly.
Subscribers may also carry out an impact analysis of their votes and keep the
same as an addendum for their records. In our opinion, Institutional investors are
positioned significantly differently from other shareholders due to their ability to
engage the board and the management to bring out desired result. As a firm, it is
our endeavour to improve the level of corporate governance while not causing
any disruption in company's proceedings and therefore we respect the
independence of investors to choose alternate methods to achieve similar results.
SEBI Reg. No. INH000000016
This Report or any portion hereof

may not be reprinted, sold,
reproduced or redistributed without
the written consent of Stakeholders
Empowerment Services
Contact Information
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Services
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Malad East,
Mumbai 400 097
Disclaimer
While SES has made every effort and has exercised due skill, care and diligence in
compiling this report based on publicly available information, it neither
guarantees its accuracy, completeness or usefulness, nor assumes any liability
whatsoever for any consequence from its use. This report does not have any
approval, express or implied, from any authority, nor is it required to have such
approval. The users are strongly advised to exercise due diligence while using this
report.
This report in no manner constitutes an offer, solicitation or advice to buy or sell
securities, nor solicits votes or proxies on behalf of any party. SES, which is a notfor-profit Initiative or its staff, has no financial interest in the companies covered
in this report except what is disclosed on its website. The report is released in
India and SES has ensured that it is in accordance with Indian laws. Person
resident outside India shall ensure that laws in their country are not violated while
using this report; SES shall not be responsible for any such violation.
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Great Eastern Shipping Company Limited

Great Eastern Shipping Co Ltd

Meeting Type : AGM

Ratification of appointment of Auditors

Appointment of Dr Shankar Acharya as Independent Director

Appointment of Mr. G. Shivakumar as a Director

O - Ordinary Resolution; S - Special Resolution

RESEARCH ANALYST: ANUBHAV GOYAL

2012 | Stakeholders Empowerment Services | All Rights Reserved

Great Eastern Shipping Co Ltd

Meeting Type : AGM

Standalone Data ; Source: Capitaline

* As on 31st March, 2015

TABLE 3: FINANCIAL INDICATORS (STANDALONE)

TABLE 4: PEER COMPARISON (2014)

"Based on EPS for FY 15

ABG Shipyard Ltd

Dividend per share (`)

Dividend Pay-Out (%)

Dividend pay-out includes Dividend Distribution Tax. Source: Capitaline

## Dividend data not available for FY 15 as on

TABLE 5: MAJOR PUBLIC SHAREHOLDERS (JUN' 15)

TABLE 6: MAJOR PROMOTERS (JUN' 15)

Nalanda India Equity Fund Ltd

Bharat Kanaiyalal Sheth

ICICI Prudential Life Insurance Company Ltd

Ravi Kanaiyalal Sheth

Fidelity Puritan Trust

Laadki Trading & Investment Ltd

ICICI Prudential Dynamic Plan

Asha Vasant Sheth

Kanaiyalal Maneklal Sheth

General Insurance Corporation of India

ICICI Prudential Value Discovery Fund

UTI Dividend Yield Fund

Jyotsna Kanaiyalal Sheth

SHAREHOLDING PATTERN (%) (JUNE)

Domestic Institutional Investors shareholding in

2012 | Stakeholders Empowerment Services | All Rights Reserved

Great Eastern Shipping Co Ltd

Meeting Type : AGM

Shankar Nath Acharya

Economics and Finance

Berjis Minoo Desai

GRAPH 2 - BOARD PROFILE

Graph 2: Liable to retire by rotation (As per Company)

As per Clause 49(ii)(A) of the Listing Agreement, the Company

2012 | Stakeholders Empowerment Services | All Rights Reserved

Great Eastern Shipping Co Ltd

Meeting Type : AGM

TABLE 8 - BOARD COMMITTEE PERFORMANCE

Attendance < 75%

TABLE 9 - BOARD GOVERNANCE TABLE (AS PER SES)

2012 | Stakeholders Empowerment Services | All Rights Reserved

Great Eastern Shipping Co Ltd

Meeting Type : AGM

DISCUSSION - INDEXED TSR vs. EXECUTIVE REMUNERATION

2012 | Stakeholders Empowerment Services | All Rights Reserved

Great Eastern Shipping Co Ltd

Meeting Type : AGM

Statement on performance evaluation of Board,

Statement on declaration by Independent Directors