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RENEWED SPIRIT SUSTAINED COMMITMENT
ANNUAL REPORT 2011-12
Mercator Limited
RENEWED SPIRIT SUSTAINED COMMITMENT
ANNUAL REPORT 2011-12Mercator Limited
Mercator assumes new identity
as we move beyond shipping.
The picture depicts the new
logo while the old logo fades
away.
CONTENTSCOMPANY OVERVIEW Corporate Identity 02
Global Presence 06
Chairman’s Message 08
The Board 10
Key Executives 12
BUSINESS REVIEWFinancial Highlights 14
Operational Highlights 16
Divisional Analysis 18
Our Fleet 22
BOARD AND MANAGEMENT REPORTS Directors’ Report 24
Report on Corporate Governance 28
Management Discussion and Analysis Report 44
FINANCIAL STATEMENTSStandalone Financials 52
Consolidated Financials 88
Therefore, a renewed Mercator’s journey begins all over again!
In sequel to our sustained commitment and building further on our
core strength of shipping, Mercator has established its footprint
on the energy landscape. We are focusing on the energy-based
resources like Oil & Gas and Coal. Our significant presence across
energy logistics and infrastructure has enabled us to remain at
the forefront of the energy momentum.
Business segments other than shipping have already become
significant contributors to the company’s growth trajectory. No
longer just a shipping company, we are present right across the
energy value chain, from Coal (mining, procurement and logistics)
to Oil & Gas (onshore and offshore) augmented with expertise of
shipping of wet and dry bulk. Our marine infrastructure focus
continues to gain strengths by the dredging segment.
Going forward, Mercator will continue to stay innovative in finding
ways to make a positive impact on the global energy industry.
ENERGY MATTERS TO THE WORLD, MORE THAN EVER BEFORE.
CORE VALUES ‘Honouring Commitments‘ towards all the stakeholders consistent and constant growth
Ensuring that every employee feels pride in being called a ‘Mercatorian‘
Innovation...we believe in doing things differently!
CORE PURPOSECreating the best solutions and offering outstanding value and service to our customers
GOALTo become a dominant global player in the Energy Value Chain of Coal, Oil & Gas, and Marine Services & Infrastructure
COM
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MERCATOR
4
A TALE OF DIVERSITY AND DYNAMISMMercator Limited is a diversified organisation, operating across
the Coal, Oil & Gas, Shipping and Dredging verticals. Mercator
is strengthening its position as a prominent service provider
in the integrated energy value chain. Incorporated in 1983 as
a shipping organisation, Mercator is reinforcing its presence
across the energy domain with a sustained commitment. Such
a commitment may be demonstrated as:
One of the largest coal exporters of Indonesia.
India’s only company to have Engineered, Procured,
Constructed, Installed and Commissioned (EPCIC) a
Floating Production Unit (FPU) project.
Currently executing the prestigious Sagar Samrat project of
ONGC.
Mercator, its Singapore listed subsidiary and the Chairman
have been conferred with prestigious awards.
RENEWED MERCATOR!Mercator Lines Ltd. is now Mercator Limited!
It is more than opportune to assume new identity at this
juncture to reflect our repositioning in the integrated energy
value chain. Our identity is depicted by our new logo in red,
black and grey. These colours represent high energy, vitality,
positive change and progress. Mercator’s spirit of enterprise,
growth, hard work and commitment is captured in the spinning
lines. The new logo drew inspiration from cog wheels, which
indicate movement, efforts and energy.
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FACETS OF OUR BUSINESSMercator is present across the energy value chain, with
shipping and dredging providing end-to-end solutions to
clients, comprising storage, transportation, logistics and port
infrastructure. Our coal business contributes 62% to the top
line, while shipping accounts for less than 30%. Last year, we
had undertaken an energised transformation, and this year we
further strengthened our position in the energy domain. Over
the past four years, the revenue contribution from the shipping
segment has been constantly declining from 89% in 2008-09 to
COAL OIL & GAS SHIPPING DREDGING
E & P
Offshore Services
Mining
Procurement
Logistics
Dry bulk Carriers
Wet bulk Carriers
Capital Dredging
Maintenance Dredging
29% in 2011-12 due to adverse market conditions. In order to
maintain growth momentum, Mercator strengthened its energy
segments. Consequently, the revenue from these segments has
increased from 3% in 2008-09 to 68% in 2011-12.
During the year, we completed the acquisition of a coal mine
and won an EPC contract of Sagar Samrat. This has further
strengthened our footprint in the integrated value chain from
resources to delivery.
6
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MERCATOR
A GLIMPSE OF GLOBAL OPERATIONSOur global operations showcase a significant presence across
diverse markets and geographies. Mercator’s business verticals
complement each other, creating sustainable value.
The shipping business segment has helped supply wet and dry
energies across the globe. We are one of the prominent players
in Indonesian coal business. We have executed an Oil & Gas
project on EPCIC basis as well as various dredging projects.
Our subsidiary, Mercator Lines (Singapore) Limited at Singapore
operates the dry bulk carriers business. Mercator has a number
of subsidiaries in Singapore, Indonesia and Africa to help explore
business opportunities.
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Coal: Indonesia-India
Iron Ore: India-China
Nigeria
Oil & Gas FPU Project
Mozambique
Coal mine licence Singapore
Mercator Lines (Singapore)
and Mercator Offshore
headquarters
Indonesia
Coal mines
Procurement and
Logistics
Sri Lanka
Coal logistics contract
China
Client base
Indonesia-India – Coal
India –China – Iron Ore
India
Mercator
headquarters
Oil & Gas blocks
in Gujarat
Oil & Gas EPC
project
Dredging projects
8
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MERCATOR
CHAIRMAN’S MESSAGE
HAVING EXPERIENCED A
POSITIVE IMPACT OF NON-
SHIPPING BUSINESSES ON
OUR TOP LINE AND BOTTOM
LINE DURING 2010-11, WE
CONTINUED TO STAY FOCUSED.
TO BE A SIGNIFICANT SERVICE
PROVIDER IN THE INTEGRATED
ENERGY VALUE CHAIN.
9
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Dear Shareholders,
Global economic slowdown continued to haunt all industry
players during the year. Shipping being the pivotal industry
has historically been, unfortunately, at the receiving end
whenever markets slow down. We continued to face the same
set of challenges during the year. Energy is one sector that is
almost insulated from economic imbalances so far as demand
is concerned. Human survival as well as human endeavour
depends primarily on energy consumption. The energy demand
dynamics may keep changing from developed to emerging
economies or from western to eastern geographies but remain
firm. Enthused with this fact, we continue to believe that our
presence in energy value chain, howsoever humble it may be,
will remain promising.
Having experienced a positive impact of non-shipping businesses
on our top line and bottom line during 2010-11, we continued
to stay focused. To be a significant service provider in the
integrated energy value chain. Expansions in the Coal, Oil & Gas
segments therefore became a natural choice. The acquisition of
one more coal mine in Indonesia got concluded during the year,
thus adding to our mineable reserves further. Similar strategic
initiatives resulted in the award of prestigious ‘Sagar Samrat’—
Independent India’s maiden rig’s conversion project from ONGC.
The project is quite specialised involving the conversion of Mobile
Offshore Drilling Unit (MODU) into Mobile Offshore Processing
Unit (MOPU). This contract became a reality mainly due to the
experience gained during the successful commissioning of
MOPU in Nigeria in the recent past.
Apart from energy, another key driver for emerging economies
is infrastructure. India is gearing up to take on infrastructure
challenges right from shore based to marine based. The
demand for dredging services stays robust and continues to
present opportunities. The Dredging segment of our Company
added two more dredgers to its fleet.
I would like to reiterate, in view of the re-strengthening and
our renewed focus, it may have been opportune to assume a
new corporate identity, which is reflected in our new logo. We
remain as committed as ever, to growth and value creation to
our stakeholders.
At Mercator, we are confident to brave the future with more
determination and courage.
I earnestly thank all our stakeholders for their unflinching faith
and belief in us.
Thanks and warm regards,
H. K. Mittal
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MERCATOR
THE BOARD
1 2 3 4
1 Mr. H. K. MittalExecutive Chairman
Mr. H. K. Mittal, 62, has completed his Masters from the Indian
Institute of Technology (IIT), Roorkee. He ventured into business
with the production of Sulphuric Acid and Ferric Alum in 1975.
He expanded this business both vertically and horizontally. Apart
from the Sulphuric Acid production plant in North India, his other
business ventures include a shipbuilding yard in Mumbai and a
healthcare unit.
In 1988, Mr. Mittal acquired Mercator. His vision and strong
entrepreneurial acumen have been the driving force behind
Mercator’s expansions, success and growth. He is also the
Chairman of Board of Mercator Lines (Singapore) Ltd. (step-
down subsidiary listed on SGX), Mercator Offshore Ltd. (WOS,
Singapore), and Indian subsidiaries viz. Mercator Oil & Gas Ltd.,
Mercator FPSO Private Limited and Mercator Petroleum Ltd.
3 Mr. Manohar BidayeIndependent and Non-Executive Director
Mr. Manohar Bidaye, 48, is a Master of Commerce (M.Com)
from the University of Mumbai and has a Degree in Law (LLB -
Gen.). He is also a Senior Member of The Institute of Company
Secretaries of India. He has a rich experience in corporate
planning, strategy formulation, corporate laws and taxation,
finance and other related areas. He has been honoured with the
‘Yashashree 2008’ Award, and ‘Marathi Udyog Bhushan’ Award
recognising his achievements across various industry segments.
Mr. Bidaye is a Promoter and the Chairman of Zicom Electronic
Security Systems Limited, where he is involved with the overall
Corporate Planning, Strategy Forming and Implementation,
Financial Management, Banking, Accounts, Taxation and Legal
affairs.
4 Mr. M. G. RamkrishnaIndependent and Non-Executive Director
Mr. M. G. Ramkrishna, 68, is an M. A., L. L. B. and CAIIB and a
veteran banker. He has over 31 years of experience in various
segments of banking, such as commercial, investment and
international. He has worked as Group Head of a reputed
industrial group, managing the treasury functions. At present,
he is engaged as an advisor/consultant on financial matters. He
is also on the Board of several companies as an Independent
Director.
2 Mr. Atul J. AgarwalManaging Director
Mr. Atul J. Agarwal, 54, is a Chartered Accountant, with 29 years
of professional experience. He is associated with Mercator since
its inception. As a Chartered Accountant, Mr. Agarwal specialises
in the financial aspects of the business, and is responsible for
the financial and strategic planning and execution. He manages
the day-to-day operations of the organisation. He has also been
instrumental in the successful implementation of many of the
Company’s projects. Mr. Agarwal has been accredited with
memberships of various committees formed by the Government
for shipping reforms. He is on the Board of Directors of Indian
National Shipowners’ Association (INSA), Indian Register of
Shipping (IRS) Thirumalai Chemicals Ltd., Mercator Petroleum
Ltd., Mercator Oil & Gas Ltd. and other subsidiary companies.
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5 Mr. K. R. BharatIndependent and Non-Executive Director
Mr. K. R. Bharat, 50, is an MBA from the Indian Institute of
Management. He has been associated with the capital markets
for more than 27 years in various segments, such as Merchant
Banking, Equities and Investment Banking, Risk Management
and Research, among others.
He is on the Boards of Advent Advisory Services Pvt. Ltd., BSR
Advent Advisors Ltd., Maruti Koatsu Cylinders Ltd. and Vaitarna
Marine Infrastructure Pvt. Ltd. He has worked as the Managing
Director at Credit Suisse First Boston Securities (CSFB) India
and Peregrine Securities (India). He has also worked in Citi Bank
for more than a decade. Mr Bharat also had been a member of
the Market Advisory Committee of the Bombay Stock Exchange.
6 Mr. Kapil GargNon-Executive Director
Mr. Kapil Garg, 46, is a graduate in Chemical Engineering from
the Indian Institute of Technology, Roorkee. Mr. Garg has over
20 years of intensive management experience in both upstream
and downstream businesses with companies, such as ONGC,
Enron Oil and Gas India Ltd. (EOGIL), BG-Group, located in India
and in other nations of the world. He is also on the Board of
Mercator Petroleum Ltd., Mercator Oil & Gas Ltd., Oilmax Energy
Pvt. Ltd., Optimum Oil & Gas Pvt. Ltd. and Ivorene Oil Services
Nigeria Ltd.
7 Mr. M. M. AgrawalIndependent and Non-Executive Director
Mr. M. M. Agrawal, 62, is a Bachelor of Engineering from
Nagpur University. He has more than 35 years of experience in
the Banking and Finance industry, having worked with the State
Bank of Bikaner & Jaipur and Axis Bank Ltd (as Dy. Managing
Director). He is on the Board of many companies, such as Axis
Private Equity Ltd., Essar Power Ltd., Jaguar Overseas Ltd.,
Bombay Rayon Fashion Ltd., Bhoruka Cogen Power Private
Limited, Paragon Asset Reconstruction Private Ltd. BSCPL
Infrastructure Ltd.
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MERCATOR
KEY EXECUTIVES
1 2 3 4 5
1 Mr. Shalabh MittalManaging Director and CEO - Mercator Lines (Singapore) Ltd.
Mr. Shalabh Mittal, 33, completed Masters of Commerce from
the University of Mumbai. He holds a post-graduation diploma in
Business Administration from S.P. Jain Institute of Management
and Research. His primary role is to effectively manage and
supervise the day-to-day business operations of the Dry bulk
segment in accordance with the overall strategies and policies
as enumerated and approved by the Board. His principal duties
include improving, developing, extending, maintaining, advising
and promoting the business and to observe and comply with all
regulations.
2 Capt. Kowshik KuchrooPresident - Shipping
Capt. Kowshik, 48, is a Master Mariner with HND from UK. He is
also a qualified Ship Broker. He has around 30 years of experience
in Marine Industry (shore/ ashore) having worked with companies
like Maersk, Mundo Gas and involved with Chartering as well as
infrastructure projects in the Oil & Gas space. At Mercator he is
responsible for overall shipping business strategy; Chartering;
Compliances, Branding, Expansion and Industry interaction.
4 Mr. Prasad PatwardhanChief Financial Officer
Mr. Prasad Patwardhan, 46, is the Chief Financial Officer of
the Group. He holds a Bachelors degree in Commerce from
the University of Mumbai and is an Associate Member of The
Institute of Chartered Accountants of India. He has over 20
years of experience in Resource Mobilisation, Accounting and
Taxation. As the Chief Financial Officer, he is in charge of Group
Financial Reporting, Financial Strategy, Compliance, Taxation
and co-ordination of statutory and management reporting.
5 Mr. Atul MalhotraVice President - Coal & Logistics
Mr. Atul Malhotra, 40, a Commerce graduate started his career
with Mercator in 1995 setting up of the Coal Logistics Division.
A pioneer, he has been instrumental in commencing many
projects, such as coal handling at Dahanu Navlakhi and the
prestigious Tata Power Coal handling contract at Haji Bunder
among others. He has been heading Group’s Coal Marketing
division and has contributed immensely to the growth of the
division.
3 Mr. K. S. RahejaCountry Head - Indonesia
Mr. Raheja, 42, is B.Tech (Hons.) in Mining Engineering from
the Indian Institute of Technology, Kharagpur and has done his
Business Management, from XLRI Jamshedpur. He has around
20 years of experience in the field of Mining, Logistics, Shipping,
Trading and Strategy Formulation. His expertise lies in the areas
of Coal Mining, Coal Trading and Development of New Mining and
Port Related Projects. At Mercator, he is responsible for mining
existing coal blocks, developing new coal concession, trading
and logistics consolidation in Indonesia and development of coal
mining project in Mozambique. He is on the Board of group coal
companies.
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6 Mr. Ashutosh KumarExecutive Vice President - Oil & Gas
Mr. Ashutosh Kumar, 47, is B.E. (Electronics and Tele
communication). He started his career with ONGC as
Asst. Executive Engineer (E&I). He later joined Enron Oil &
Gas followed by British Gas where held various positions
such as Project Manager, General Manager-Operations
and then Project Director. At Mercator, he is responsible for
operational performance of assets and delivery of projects
within Oil & Gas division.
7 Capt. Arun NandaVice President - Tanker Operations
Capt. Nanda, 57, holds a Master’s Foreign Going Certificate
of Competency. With a career in shipping spanning across 35
years, Capt. Nanda held various roles at Shipping Corporation
of India where he served various responsibilities including
serving as Deputy General Manager- Tankers and Bulk Carriers
Division. He was also the Chief Executive Officer of Pratibha
Shipping Company Limited and General Manager Operations at
The Dredging Corporation of India prior to joining Mercator.
At Mercator, he is responsible for leading Mercator’s tanker
business that includes contracts, chartering, operations, and
business management.
9 Mr. Vijay AroraVice President - Technical
Mr. Arora, 45, Marine Engineer with 11 years of sailing experience
on oil tankers, holds a Bachelors in Marine Engineering from
DMET Kolkata. His major sailing carrier was with OMI Marine an
American company. Thereafter took shore job as superintendent
and subsequently for past 12 years been working ashore in
companies such as OMI Marine, Gulf Energy maritime UAE, W-O
Shipping/ OMCI Ship management in position such as Head of
Projects, Technical Manager, V.P Technical overseeing fleet of
oil, product, chemical tankers & dredgers. At Mercator he is
heading Technical department for Shipping and Dredging.
10 Mr. Vikram MadaneVice President - HR
Mr. Madane, 41, is a BSC and a post graduate in Management.
He has extensive Human Resources experience, with exposure
in managing change and transformation, building organisation
capability, global mobility and remuneration. At Mercator his
role is to formulate and manage Group HR policies, trainings
and development of employees.
8 Capt. M.S. WadhwaVice President - Fleet
Capt. Wadhwa, 48, is a Master Mariner has been with the
Mercator Group for the last 5 years. He completed his pre Sea
Training on board T.S. Rajendra (1982-83), and after his initial
stint with SCI as a cadet, served in various companies in different
ascending capacities and rose to become a Master.
Prior to joining Mercator, he was the India representative of
a Gulf based Ship owning company in Mumbai. Within the
Mercator Group, Capt. M.S. Wadhwa is associated with the Ship
Management, Coal Logistics, Operations and Special Projects.
BUSI
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MERCATOR
14
A SNAPSHOT OF OUR NUMBERS
Operating Income (` in Lakhs)
20
07
-08
20
07
-08
20
07
-08
20
07
-08
20
07
-08
20
07
-08
20
07
-08
20
07
-08
1,5
5,6
19
20
08
-09
20
08
-09
20
08
-09
20
08
-09
20
08
-09
20
08
-09
20
08
-09
20
08
-09
2,2
1,0
51
20
09
-10
20
09
-10
20
09
-10
20
09
-10
20
09
-10
20
09
-10
20
09
-10
20
09
-10
1,8
0,8
73
20
10
-11
20
10
-11
20
10
-11
20
10
-11
20
10
-11
20
10
-11
20
10
-11
20
10
-11
2,8
2,8
88
20
11
-12
20
11
-12
20
11
-12
20
11
-12
20
11
-12
20
11
-12
20
11
-12
20
11
-12
3,6
9,9
91
Total Income (` in Lakhs)
1,5
8,8
98
2,1
7,3
82
1,8
1,9
72
2,8
1,1
64
3,7
5,5
09
PROFIT BEFORE TAX (PBT) (` in Lakhs)
40
,93
5
47
,52
2
10
,92
5
9,9
39
5,2
37
NET PROFIT AFTER TAX (PAT) (` in Lakhs)
40
,03
3
46
,70
3
10
,42
1
9,4
00
2,0
56
Cash Profit (` in Lakhs)
56
,78
3
73
,57
4
44
,51
1
39
,25
2
41
,25
5
EBITDA (` in Lakhs)
72
,14
9
91
,02
4
65
,59
3
62
,12
9
63
,81
0
Fixed Assets (Gross Block) (` in Lakhs)
3,1
4,1
96
6,0
7,8
77
5,9
1,7
16
5,3
7,0
60
6,9
9,8
48
Debt Equity Ratio
1.0
1
1.5
7
1.4
5
1.6
7
1.4
4
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SEGMENTAL REVENUE BREAK-UP
FY 2011-12
4%
62%
29%
5%
Coal Oil & Gas Shipping Dredging Coal Oil & Gas Shipping Dredging
FY 2010-11
3%
49%
43%
5%
FLEET TONNAGE CAPACITY
20
10
-11
20
11
-12
21
,13
,69
1
21
,11
,14
8
Owned vessels (DWT in MT)
20
10
-11
20
11
-12
2,9
8,3
36
2,9
8,3
36
Chartered vessels (DWT in MT)
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MERCATOR
AN INSIGHT INTO OPERATIONS DURING THE YEAR
Mercator crossed a turnover
` 3,500 cr.
Achieved a cumulative volume
of 14 million MT coal export
from Indonesia in a short span
of 3 years.
The MOPU facility in Nigeria
commenced well and achieved
an excellent plant utilisation
rate. The Charterer awarded
additional block operations.
Acquired two dredgers
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Awarded an EPC contract by
ONGC Ltd. for the conversion
of their Mobile Offshore
Drilling Unit (MODU) ‘Sagar
Samrat’ into Mobile Offshore
Production Unit (MOPU) in
consortium with Abu Dhabi
based shipyard.
The Company changed
its name (from Mercator
Lines Limited to Mercator
Limited) and identity with the
introduction of a new logo.
Concluded the acquisition of
coal mine in Indonesia.
Oil blocks exploration is
progressing as per schedule.
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MERCATOR
AN OVERVIEW OF BUSINESS VERTICALS
COAL We are present across Coal mining, Coal procurement and
Coal logistics. We forayed into Coal logistics in 1998 and the
Coal mining and Coal procurement businesses in 2007. Our
coal mines are equipped with state-of-the-art infrastructure
facilities and are located very close to the port, providing us with
an edge over other miners. We also procure different qualities
and varieties of coal with planned asset-backed solutions from
miners to customers. We provide logistical solutions from load
port to the point of usage to a strong base of customers in India
and China.
Coal mines
Integrated value chain from mining to delivery
Coal Mining
& Procuring
Load Port
LogisticsMother
Vessel
Dry Bulk
Shipping
Discharge
Port LogisticsCustomer
PlantStock
Yard
1Coal mine in Mozambique, Africa
3Coal mines in Indonesia with an
estimated resources of 75 million MT
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OIL & GAS
The Oil & Gas value chain
Oil &
Gas Blocks ExplorationProduction /
ProcessingStorage Transportation
Mercator operates in the upstream segment of Oil & Gas
Exploration & Production (E&P). We commenced our journey
in 2004 with the chartering-out of an FSO to BG Group. This
was followed by two Oil & Gas blocks awarded to us in Cambay
Basin, Gujarat by the Indian government under the Seventh
New Exploration Licensing Policy (NELP-VII). We are currently
conducting exploration activities at these oil blocks.
We have been awarded a long-term contract to charter out a
Floating Production Unit (FPU) at an oil field in Nigeria. The FPU
is a combination of a Mobile Offshore Production Unit (MOPU)
and has been entirely Engineered, Procured, Constructed,
Installed and Commissioned by us.
We have been awarded an EPC contract by ONGC Ltd. for the
conversion of their Mobile Offshore Drilling Unit (MODU) ‘Sagar
Samrat’ into an MOPU in consortium with an Abu Dhabi based
shipyard. Mercator is currently executing this project.
Oil & Gas presence
2Oil & Gas Blocks at Cambay Basin, Gujarat
1FPU (1 MOPU + 1 FSO) in Nigeria
1EPC contract from ONGC
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SHIPPING
TANKERSWe forayed into wet bulk transportation in 1998 and commenced
crude oil transportation in 2003. Our tankers transport crude
oil and petroleum products between domestic and international
ports on spot contract basis (single-voyage) and period contract
basis (charter contracts).
Tanker fleet size
8 ships
Total capacity
7,60,189 DWT
Average age
13 years
Tanker fleet
Very Large Crude Carriers (VLCC)
Aframaxes
Product Tankers
Chemical Tanker
DRY BULK CARRIERSWe commenced coal and iron ore transportation in 2005. We
are majorly focused on the triangular route of Indonesia-India-
China. We transport coal from Indonesia into India and we
transport iron ore into China from India to cater to large thermal
plants and steel conglomerates based in India and China.
Dry bulk fleet size
18 ships
Total capacity
16,18,850 DWT
Average age
9 years
Dry bulk fleet
Very Large Ore Carrier (VLOC)
Panamaxes
Kamsarmaxes
Post Panamaxes
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DREDGINGWe entered into the dredging business in 2007. We undertake
both capital dredging and maintenance dredging projects on
both long-term and short-term basis in India and abroad.
Dredger fleet size
6
Total capacity
33,595 DWT
Average age
5 years
Dredger fleet
Trailer Suction Hopper Dredgers (TSHDs)
Cutter Suction Dredger (CSD)
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OUR FLEET
TANKERS
Sr. No. Name of the vessel Vessel type DWT/ capacity Ownership
1. M.T. Kamakshi Prem VLCC 299,235 Owned
2. M.T. Prem Pride Aframax 109,610 Owned
3. M.T. Prem Divya Aframax 109,227 Owned
4. M.T. Omvati Prem Aframax 90,607 Owned
5. M.T. Prem Mala MR Tanker 47,044 Owned
6. M.T. Harsha Prem MR Tanker 42,235 Owned
7. M.T. Vedika Prem MR Tanker 42,235 Owned
8. Royal Natura Chemical Tanker 19,996 Chartered In
DREDGERS
Sr. No. Name of the vessel Vessel type DWT/ capacity Ownership
1. Bhagvati Prem TSHD 8,556 Owned
2. Darshani Prem TSHD 8,538 Owned
3. Tridevi Prem TSHD 7,059 Owned
4. Omkara Prem TSHD 6,292 Owned
5. Uma Prem TSHD 3,150 Owned
6. Yukti Prem CSD Not applicable Owned
OIL & GAS (Offshore Services)
Sr. No. Name of the vessel Vessel type Capacity
1. Virini Prem FSO 1.2 mn barrels storage
2. Veer Prem MOPU 50,000 BOPD Processing
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DRY BULK CARRIERS
Sr. No. Name of the vessel Vessel type DWT/ capacity Ownership
1. M.V. Sri Prem Putli VLOC 2,79,022 Owned
2. M.V. Prem Poorva Panamax 69,286 Owned
3. M.V. Gaurav Prem Panamax 73,901 Owned
4. M.V. Sri Prem Aparna Panamax 73,461 Owned
5. M.V. Garv Prem Panamax 74,444 Owned
6. M.V. Garima Prem Panamax 74,456 Owned
7. M.V. Kesari Prem Panamax 69,186 Owned
8. M.V. Kanak Prem Panamax 69,221 Owned
9. M.V. Kalpana Prem Panamax 73,652 Owned
10. M.V. Gauri Prem Panamax 74,483 Owned
11. M.V. Aarti Prem Panamax 69,087 Owned
12. M.V. Sri Prem Varsha Kamsarmax 82,379 Owned
13. M.V. Sri Prem Vidya Kamsarmax 82,273 Owned
14. M.V. Sri Prem Veena Kamsarmax 82,459 Owned
15. M.V. Chitra Prem Post Panamax 93,200 Owned
16. M.V. Maria Laura Prem Post Panamax 91,800 Chartered In
17. M.V. Chaitali Prem Post Panamax 93,270 Chartered In
18. M.V. Chanchal Prem Post Panamax 93,270 Chartered In
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MERCATOR
Directors’ ReportTo
The Members,
Mercator Limited
We take pleasure in presenting Twenty-Eighth Annual Report of your
Company for the year ended on March 31, 2012.
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annual report 2011-12
FINANCIAL HIGHLIGHTS: (` in cr)
Particulars
Consolidated Standalone
Year ended Year ended
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
Income from operations 3699.91 2828.88 547.98 638.99
Total Income 3755.10 2811.64 595.87 639.15
Operating Profit 582.91 621.29 84.11 108.58
Interest 203.32 215.23 128.18 85.99
Depreciation 382.41 306.67 119.00 116.63
Profit before Tax & Minority Interest
Minority Interest
Taxes
-Current Year
-Deferred Tax
-Short provision of tax for earlier years
52.37
(9.58)
(24.95)
2.72
--
99.39
(39.01)
(15.74)
2.21
47.15
(115.17)
N.A.
(3.50)
--
--
(94.04)
N.A.
(4.00)
--
0.07
Net Profit/(Loss) After Tax 20.56 94.00 (118.67) (98.04)
Balance brought forward from last year 698.06 604.06 19.52 117.49
Balance carried to Balance Sheet 718.62 698.06 (99.15) 19.52
During the year under review, the income from operations
on a consolidated basis was ` 3700 cr as against ` 2829
cr in the previous year; registering a growth of 31%.
Significant ramp up in Coal operations increased Coal
revenues by 67% from ` 1388 cr last year to ` 2317 cr.
The consolidated operating profit for the year was ` 583
cr against ` 621 cr in the previous year. After providing
for the minority interest of ` 10 cr (previous year ` 39 cr);
the net profit after tax was ` 21 cr (` 94 in the previous
year).
On a standalone basis, the income from operations
for the year under review was ` 548 cr (` 639 cr in the
previous year). The Company suffered a loss of ` 119 cr
(` 98 cr in the previous year). A subdued shipping market
coupled with over supply of vessels adversely affected
the Charter rates and hence the overall performance.
CHANGE IN NAME OF THE COMPANY:
During the year, the name of your Company was changed
to Mercator Limited. The logo of your Company has
also been changed to reflect its diversified business
operations.
OPERATIONS:
During the year under review, Mercator successfully
completed the conversion of a Mobile Offshore Drilling
Unit (MODU) into Mobile Offshore Production Unit
(MOPU) as also conversion of a tanker into a Floating
Storage Offshore Unit (FSO); collectively called Floating
Production Unit (FPU) at a cost of USD 200 mn. The FPU
has been deployed on a nine year contract in Nigeria. The
FPU has since been operating successfully. The project
was funded by way of a mix of internal resources and
debt.
Mercator in consortium with an overseas shipyard,
has been awarded an EPC contract by M/s. Oil And
Natural Gas Corporation Limited (Navratna PSU) for
the conversion of a Mobile Offshore Drilling Unit into a
Processing Unit. This bodes well for the operations in
this segment with more such projects coming up in India
and elsewhere.
During the year Mercator concluded acquisition of 50%
stake in a mining concession located in Indonesia. The
mine has substantial coal reserves. The mine is expected
to commence operations this year and further boost
revenues.
One Trailer Suction Hopper Dredger (TSHD) and one
Cutter Section Dredger (CSD) were acquired by your
company during the year. The dredgers have been
gainfully deployed immediately upon their acquisition.
The dredgers have been funded by a mix of internal
resources and debt.
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In December, 2011, Prem Divya, an Aframax Tanker
suffered an accident near Fujairah Port. The vessel is
fully insured including for all third party liabilities. The
company is confident of early settlement of claims by the
insurance company. After restoration and repairs, the
tanker is expected to resume operations.
DIVIDEND:
In view of the losses suffered by your Company, your
Directors regret their inability to recommend any
dividend.
DIRECTORS:
In accordance with the provisions of the Companies Act,
1956 (the Act), and the Articles of Association of the
Company, Mr. Kapil Garg and Mr. M. G. Ramkrishna are
the Directors liable to retire by rotation at the ensuing
Annual General Meeting. Mr. Kapil Garg, being eligible,
has offered himself for re-appointment. Mr. M. G.
Ramkrishna aged 68 years retires as per the age policy
of the Company for the Directors. The Directors place on
record their sincere appreciation for the guidance and
valuable contributions by Mr. M. G. Ramkrishna during
his tenure.
A brief resume of Mr. Kapil Garg is included in the notice
of the ensuing Annual General Meeting scheduled to
be held on August 29, 2012. The Directors recommend
reappointment of Mr. Kapil Garg for the approval of
members.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:
During the year five subsidiaries were formed/ acquired.
As at March 31, 2012, your Company had 32 subsidiaries/
step-down subsidiaries. Audited consolidated financial
statements for the year ended on March 31, 2012;
together with Auditors’ Report thereon forming part of
this Annual Report includes financial information of all
the subsidiaries.
Pursuant to general exemption granted by the Ministry
of Corporate Affairs, Government of India, this Annual
Report is presented without attaching annual accounts
of the subsidiaries. A statement in respect of the said
subsidiaries pursuant to Section 212 of the Act, is
enclosed herewith as required. The annual reports
and accounts of subsidiaries will be made available for
inspection during working hours at the registered office
of the Company and also of the subsidiary companies
concerned. The same, along with related detailed
information will also be made available to the investors of
the Company as well as of subsidiaries, on request. The
brief financial details of the subsidiaries as prescribed
under the said notification have been disclosed in the
consolidated financial statements of the Company.
AUDITORS:
The Auditors of your Company, M/s. Contractor, Nayak
& Kishnadwala, Chartered Accountants, retires at the
ensuing Annual General Meeting and have confirmed
their eligibility for re-appointment under Section 224 (1-
B) of the Act.
The Directors recommend their re-appointment for
approval of the members.
PARTICULARS OF EMPLOYEES:
As required under the provisions of Section 217(2A) of the
Act, read with the Companies (Particulars of Employees)
Rules 1975 as amended, the requisite particulars with
respect to the employees of the Company, who were in
receipt of remuneration in excess of the limits specified
under the said section are set out in the annexure forming
part of this report. However, as per the provisions of
Section 219(b) (iv) of the Act, the report and the accounts
are being sent to all members of the Company excluding
this annexure of particulars of employees. Any member
interested in obtaining such particulars may write to the
Company at the registered office.
No ESOPs were issued during the year.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORT MARKET DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Conservation of Energy and Technology Absorption
under the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988, are not
applicable to your Company. However, the Directors
would like to assure you that every measure is taken to
save and conserve energy at all the stages of operating
the vessels, as well as, on shore activities. In its endeavor
to develop the export market, your Company has formed/
acquired subsidiaries abroad.
Your Company has not imported any technology during
the year. It has earned foreign exchange of ` 87.98 cr (as
against previous year’s earnings of ̀ 132.85 cr) and spent
` 223.69 cr (as against ` 312.16 cr for the previous year)
in foreign exchange, on account of acquisition of vessels,
charter hire, other vessel expenses, and interests etc.
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CORPORATE GOVERNANCE & SOCIAL RESPONSIBILITIES:
The Ministry of Corporate Affairs (MCA), India, has issued
voluntary guidelines on Corporate Governance and
Corporate Social Responsibilities. Mercator has already
been following many of the recommendations of the MCA
on Corporate Governance which is in consonance with
the Clause 49 of Listing Agreement of Stock Exchanges.
A separate report on Corporate Governance, along
with certificate from the Auditors of the Company;
including report on Corporate Social Responsibility is
annexed herewith forming a part of this Annual Report.
Management Discussion and Analysis Report is also
annexed herewith as part of this Report.
INSURANCE:
All properties of the Company are adequately insured.
FIXED DEPOSITS:
The Company has not accepted any public deposits falling
under the purview of section 58-A of the Companies Act,
1956.
DIRECTORS’ RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 217(2AA) of the
Companies Act, 1956, the Directors hereby confirm that:
(i) In preparation of the annual accounts, all applicable
accounting standards have been followed along with
proper explanation relating to material departures;
(ii) They have selected such accounting policies in
consultation with Statutory Auditors 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
loss for the year under review;
(iii) They have taken proper and sufficient care for the
maintenance of adequate accounting records in
accordance with the provision of the Companies Act,
1956, to safeguard the assets of the Company and to
prevent and detect fraud and other irregularities;
(iv) They have prepared the annual accounts on a going
concern basis.
ACKNOWLEDGEMENTS:
The Directors express their sincere thanks to all
customers, suppliers, service providers, regulators,
Governmental agencies and other statutory authorities
for their continued whole hearted support to the
Company during the year.
We also acknowledge the support lent and confidence
bestowed upon us by our bankers, stakeholders and all
Mercatorians.
For on behalf of the Board
For Mercator Limited
H. K. MittalExecutive Chairman
Regd. Office:
3rd Floor, Mittal Tower,
B-wing, Nariman Point,
Mumbai - 400 021.
Dated: May 25, 2012DI
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MERCATOR
Report on Corporate Governance(Forming part of Directors’ report for the year ended on March 31, 2012)
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COMPANY’S PHILOSOPHY
The Company strongly believes in ethical way of conducting business. The Company upholds its relationship with the
society and hence its social responsibility for environmental safety and human welfare.
Corporate governance to the company is not just a compliance issue but central guiding principle for everything it
does. It’s a way of thinking, way of conducting business and a way to steer the organisation to take on challenges for
now and for the future.
I. BOARD OF DIRECTORS:
As at the year end March 31, 2012, the Board of Directors of the Company comprised of seven Directors; Two
Executive Directors and five Non-Executive Directors out of which four are Independent Directors. Among the
two Executive Directors; one is the Executive Chairman and the other is Managing Director. The Company is
in compliance with the requirement of at least half of the Board comprising of Independent Directors as the
Chairman of the Board is an Executive Director and a Promoter.
There is no Nominee Director on the Board of the Company.
No Director of the Company is either member in more than ten committees and/ or Chairman of more than five
committees across all Companies in which he is Director; and necessary disclosures to this effect has been
received by the Company from all the Directors.
During the year, in all Five Board meetings were held i.e. on May 28, 2011; August 12, 2011, November 14, 2011;
December 15, 2011 and February 13, 2012. The time interval between any two meetings was not more than 4
months.
The details of Directors and their attendance record at Board Meetings held during the year, at last Annual
General Meeting and number of other Directorships and Chairmanships / membership of Committees is given
below:
Sr.No
Name of Director Category No. of Board
MeetingsAttended
Attendance at last AGM
No. of other Directorships
in Indian Public
Companies*
No. of committee
membership in other
Companies **
No. of committee
Chairmanship in other
Companies **
1 Mr. H. K. Mittal Executive Chairman
& Promoter
5 Yes 2 Nil Nil
2 Mr. Atul J. Agarwal Managing Director,
Executive-Promoter
5 Yes 3 1 Nil
3 Mr. Manohar Bidaye Non-Executive
Independent
3 Yes 2 1 1
4 Mr. M. G.
Ramkrishna
Non-Executive
Independent
4 Yes 2 1 1
5 Mr. K. R. Bharat Non-Executive
Independent
4 Yes 2 Nil Nil
6 Mr. Kapil Garg Non-Executive Non
Independent
4 Yes 2 Nil Nil
7 Mr. Anil Khanna
(upto 22/09/2011)
Non-Executive
Independent
Nil Yes 1 1 Nil
8 Mr. M. M. Agrawal Non-Executive
Independent
2 Yes 7 6 1
*Other directorships does not include Private Companies, Companies registered u/s 25 of the Companies Act,
1956, Alternate directorships and foreign Companies.
**In accordance with Clause 49 of the Listing Agreement, Memberships / Chairmanships of only the Audit
Committees and Shareholders’/ Investors’ Grievance Committees of all Public Limited Companies have been
considered.
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Mr. Anil Khanna retired by rotation at the previous Annual General Meeting of the Company held on September
22, 2011 and did not seek re-appointment. Other than him; none of the Independent Directors had resigned
or removed from the Board of the Company during the year and hence compliance in respect of replacement
thereof did not arise.
Mr. M. G. Ramkrishna a Director of the Company liable to retire by rotation; retires at the ensuing 28th Annual
General Meeting pursuant to age policy of the Company for Directors. Accordingly, he ceases to be member of the
Board and all the Board Committees in which he is a member, from the conclusion of Annual General Meeting
scheduled on August 29, 2012. The casual vacancy caused by resignation is not proposed to be filled up and
accordingly the Board and all these Committees will be deemed to be reconstituted.
All the information required to be furnished to the Board as mentioned in Annexure IA to Clause 49 was placed
before the Board.
The Board reviews compliance report presented by Managing Director at the meeting.
Code of Conduct:
The Board has laid down a Code of Conduct for all Board members and Senior Management personnel of the
Company, which has been posted on the website of the Company www.mercator.in
All Board members and Senior Management personnel have affirmed compliance with the code for the year
ended on March 31, 2012. Declaration to this effect signed by the Chief Executive Officer for the year ended on
March 31, 2012 has been included elsewhere in this annual report.
II. AUDIT COMMITTEE:
Composition:
Pursuant to the provisions of Section 292(A) of the Companies Act, 1956 and Clause 49 of the Listing Agreements,
the Company has a qualified and independent Audit Committee. As at March 31, 2012, the Committee comprised
of three Independent Non-Executive Directors and one Executive Promoter Director. Mr. Manohar Bidaye, Senior
member of Institute of Company Secretaries of India is the Chairman of the Committee; other members being
Mr. K. R. Bharat, MBA from Indian Institute of Management; Mr. M. G. Ramkrishna, a veteran from the banking &
finance industry; and Mr. Atul J. Agarwal, Fellow member of Institute of Chartered Accountants of India, a Head
of finance division and Managing Director of the Company having a sound accounting and financial background.
Chief Financial Officer as well as General Manager (Finance & Accounts) along with the Internal Auditors and
Statutory Auditors are always invitees to the Audit Committee Meeting. All other Functional Heads/Managers are
invited to attend the meeting, as and when necessary. Mr. Manohar Bidaye, Chairman of the Audit Committee was
present at the last Annual General Meeting to answer the shareholder queries. The Committee is vested, inter
alia, with following powers and terms of references as prescribed under relevant provisions of the Companies
Act, 1956 and Stock Exchanges Listing Agreement.
Powers:
a) To investigate any activity within its terms of reference.
b) To seek information from any employee.
c) To obtain outside legal or other professional advice.
d) To secure attendance of outsiders with relevant expertise, if it considers necessary.
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Terms of Reference:
The Audit committee reviews the reports of the Internal Auditors and the Statutory Auditors periodically and
discuss their findings and suggest the corrective measures. The role of the Audit Committee is as follows: -
1. Overview of the company’s financial reporting process and the disclosure of its financial information to
ensure that the financial statement is correct, sufficient and credible.
2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal
of the statutory auditor and the fixation of audit fees.
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
4. Reviewing, with the management, the annual/quarterly financial statements before submission to the board
for approval, with particular reference to:
(a) Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s
Report in terms of clause (2AA) of Section 217 of the Companies Act, 1956.
(b) Changes, if any, in accounting policies and practices and reasons for the same.
(c) Major accounting entries involving estimates based on the exercise of judgment by the management.
(d) Significant adjustments made in the financial statements arising out of the audit findings.
(e) Compliance with listing and other legal requirements relating to financial statements.
(f) Disclosure of any related party transactions.
(g) Qualifications in the draft audit report.
5. Reviewing, with the management, the quarterly financial statements before submission to the board for
approval.
5A. Reviewing, with the management, the statement of uses / application of funds raised through an issue
(public issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than
those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency
monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations
to the Board to take up steps in this matter.
6. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the
internal control systems.
7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure coverage and
frequency of internal audit.
8. Discussion with internal auditors on any significant findings and follow up there on.
9. Reviewing the findings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the
matter to the board.
10. Discussion with statutory auditors before the audit commences, about the nature and scope of audit, as well
as, post-audit discussion to ascertain any area of concern.
11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non payment of declared dividends) and creditors.
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12. To review the functioning of the Whistle Blower mechanism, in case the same is existing.
12A. Approval of appointment of CFO( i.e. the whole-time finance director or any other person heading the finance
function and discharging the function) after assessing the qualifications, experience & background etc. of
the candidate.
13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
The minutes of the Audit Committee meeting are circulated to the Board, discussed and taken note of.
Meetings:
During the year, in all four meetings of the Committee were held i.e. on May 26, 2011; August 12, 2011; November
14, 2011 and February 11, 2012. The time intervals between two meetings of the Committee were not more than
four months.
Attendance of each member at the audit Committee Meetings:
Name of Director No. of Meetings attended out of four held
Mr. Manohar Bidaye 3
Mr. Atul Agarwal 4
Mr. M. G. Ramkrishna 3
Mr. K. R. Bharat 2
Mr. Anil Khanna* 1
*Ceased to be Chairman/Member of Audit Committee w.e.f May 28, 2011.
Chief Financial Officer; Statutory Auditors and Internal Auditors attended all the four meetings. Other functional
heads attended the meetings as and when called for. The Company Secretary acted as the Secretary to the
Committee.
Review of Information:
The Audit committee was presented with and reviewed necessary information as required under Clause 49 of the
Listing Agreement.
There was no instance of management letter/letter of internal control weaknesses issued by the Statutory
Auditors during the financial year 2011-12.
Remuneration-Cum-Selection Committee:
The Company has Remuneration Committee comprising of three Non-executive Independent Directors. Mr.
Manohar Bidaye is the Chairman of the Committee with Mr. K.R. Bharat and Mr. M. G. Ramkrishna being other
members as at March 31, 2012. The committee, on behalf of the Board and the shareholders, determines, with
agreed terms of reference, the Company’s policy on specific remuneration packages for Executive Directors and
Senior Management personnel including pension rights and any compensation payment. This Committee also
acts as a Remuneration Committee under Schedule XIII and as Selection Committee under Section 314; of the
Companies Act, 1956.
Two meetings of Remuneration Committee were held during the year that were attended by all the Directors.
Expansion Committee:
The Company has Expansion Committee comprising of two Executive Directors viz. Mr. H. K. Mittal and Mr. Atul
Agarwal and one Non-executive Independent Directors viz. Mr. K.R. Bharat.
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The Committee is authorised to assess the business opportunities and take the decisions from time to time on
expansion/modernisation/diversification projects; means of finance and other related matters, within the limits
sanctioned by the Board. During the year five meetings were held, that were attended by all the Directors.
ESOP Compensation Committee:
The Company has ESOP Compensation Committee of Directors comprising of two Executive Directors viz. Mr. H.
K. Mittal & Mr. A. J. Agarwal and two Non-executive Independent Directors viz. Mr. Manohar Bidaye and Mr. M.
G. Ramkrishna, to implement the Employee Stock Option Scheme 2010 that was approved by the members of the
Company at their EOGM held on October 28, 2010 .
The Committee is authorized to formulate entire Employee Stock Option scheme; to carry out process of determining
eligibility criteria; to issue and allot the shares and to do all acts, deeds, things, matters as may be required in this
regard, in accordance with the provisions of SEBI (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999. However no ESOPS were issued and no meeting was held during the year.
III. SUBSIDIARY COMPANIES:
As at March 31, 2012 the Company had total 32 subsidiaries. The Indian Subsidiaries viz. Mercator Oil & Gas Ltd.,
Mercator Petroleum Limited, Oorja Resources India Private Limited and Mercator FPSO Private Limited were
neither listed nor material as at March 31, 2012.
The Audit Committee reviews the financial statements of all the subsidiary companies.
The Minutes/resolutions of the Board Meetings of all the subsidiary companies (including step down subsidiary
Companies) are placed before the Board periodically.
The Board periodically reviews a statement of all significant transactions, if any, entered into by any of the
subsidiary companies.
IV. DISCLOSURES:
(A) Basis of related party transactions:
i. A statement in summary form of transactions with related parties in the ordinary course of business is
placed periodically before the audit committee.
ii. Details of material individual transaction with related parties, are placed before the audit committee,
whenever applicable.
iii. During the year, there was no material individual transaction with related parties or others, that was not on
an arm’s length basis.
(B) Disclosure of Accounting Treatment:
In the preparation of financial statements for the year ended on March 31, 2012; there was no treatment
different from that prescribed in an Accounting Standard and applicable Laws and Regulations that had been
followed.
(C) Board Disclosures-Risk Management:
The Company has laid down procedures to inform Board members about the risk assessment and
minimisation procedures. These procedures are periodically reviewed to ensure that executive management
controls risk through means of properly defined framework.
(D) Proceeds from public issues, rights issues, preferential issues etc.:
During the year, the Company did not raise any funds through public/rights/preferential issues.
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(E) Remuneration of Directors:
The remuneration of non-executive Directors is decided by the Board/Shareholders.
Details of remuneration paid to Directors for the financial year ended March 31, 2012:
Executive Directors:
` in lakhs
Name Salary Perquisites Total
Mr. H. K. Mittal
Executive Chairman
37.53 10.47 48.00
Mr. A. J. Agarwal
Managing Director
38.94 9.06 48.00
The remuneration to the Executive Directors is governed by the agreements executed with them as approved
by the members of the Company in their General Meeting. As per the agreement, salary and perquisites are
a fixed component and the commission is based on the performance of the Company, i.e. on the net profit of
the year. However, aggregate remuneration shall not exceed 5% of net profit calculated as per the provisions
of the Companies Act, 1956; per Executive Director with payment of minimum remuneration to them in
case of loss or inadequacy of profit in any financial year during their tenure, subject however, to the ceiling
prescribed under the Companies Act, 1956; and approval of the Central Government, if required.
The Executive Directors were not issued any Stock Options during the year.
Appointment of the both the above Executive Directors are valid up to July 31, 2013 as approved by the
Members of the Company at their Annual General Meeting held on September 22, 2011. The appointments
can be terminated by either party by giving six moths’ notice in writing. There is no severance fees payable.
However, subject to provisions of Sec.318 and other applicable provisions of the Companies Act, 1956, both are
entitled by way of compensation for the loss of office in case of premature termination of the office, the amount
equivalent to the remuneration, which they would have earned if each of them would have been in office for the
unexpired residue of their respective term, or for three years, whichever is shorter, calculated as provided in their
respective agreements with the Company.
Promoter Directors and-or persons acting in concern (PAC) with them were holding 1,53,00,000 warrants of
Face value of ` 1 each as per the details given below as on March 31, 2012:
Name of the Promoter Director/PAC No of warrants held
AHM Investments Private Limited 14,250,000
Adip Mittal 10,000
Shalabh Mittal 10,000
Atul Agarwal 1,000,000
Manjuli Agarwal 10,000
Aayush Agarwal 10,000
Aarooshi Agarwal 10,000
All the above warrants held by promoters and person acting in concern with them have lapsed on expiry of
validity i.e on May 8, 2012 and May 12, 2012 respectively due to non-exercise of options by any of them. Entire
amount of application money paid on warrants has been forfeited as per the SEBI Regulations
Non-executive Directors:
The Board decides the payment of commission within the limits approved by members of the Company in
their Annual General Meeting not exceeding 1% of its net profit to Non-executive directors. However, in view
of inadequate profits for the year ended on March 31 2012; no commission was paid to the Non-executive
Directors.
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Remuneration by way of sitting fees for attending Board meetings and Audit Committee meetings are paid
to Non-executive Directors @ ` 20,000/- per such meeting attended by them. Details of sitting fees paid to
Non-executive Directors are as follows:
Name of the Director ` In lakhs
Mr. Manohar Bidaye 1.20
Mr. M.G. Ramkrishna 1.40
Mr. K.R. Bharat 1.20
Mr. Kapil Garg 0.80
Mr. Anil Khanna* 0.20
Mr. M. M .Agrawal 0.40
*Ceased to be Director w.e.f September 22, 2011
All the Non-executive Directors have disclosed their shareholdings as at March 31, 2012 to the Company.
Details of the same and of the warrants convertible into equivalent number of equity shares held by them as
on that date were as under:
Name of the Director No of equity shares held
No of warrants held
Mr. Manohar Bidaye
(Through Company in which Mr. Manohar Bidaye and his wife are
Directors and hold 100% shares)
97,500 5,00,000
Mr. M. G. Ramkrishna 15,000 10,000
Mr. K. R. Bharat
(Through Company in which Mr. K. R. Bharat and his wife are
Directors and hold 50% of shares.
Nil 25,00,000
Mr. Kapil Garg Nil 5,00,000
All the above warrants held by Non-executive Directors have lapsed on expiry of validity i.e. on May 8, 2012
and May 12, 2012 respectively due to non-exercise of options by any of them. Entire amount of application
money paid on warrants has been forfeited as per the SEBI Regulations
The Company did not have any pecuniary relationship or transaction with the Non-executive Directors.
No stock options were issued to the Non-executive Directors during the year.
(F) Management:
A Management Discussion and Analysis report forming part of this Directors’ report is attached herewith.
Based on the disclosures received from the Senior Management personnel, during the year, there was no
material financial and commercial transaction by any of the Senior Management Personnel that may have a
potential conflict with the interest of the Company at large.
(G) Shareholders:
(i) General Body Meetings:
Details of General Meetings held during last three years are given below:
Financial Year
Date Time Venue Special Resolution(s)
2011-12
(AGM)
22/9/2011 4.00P.M. C. K. Nayudu Hall,
The Cricket Club of India
Limited, Brabourne Stadium,
Churchgate, Mumbai-400020
1. Issue of securities
2. Change in Name of the Company to
Mercator Limited
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Financial Year
Date Time Venue Special Resolution(s)
2010-11
(EGM)
28/10/2010 4.30P.M. C. K. Nayudu Hall,
The Cricket Club of India
Limited, Brabourne Stadium,
Churchgate,
Mumbai-400020
1. Issue of Warrants convertible into
equity shares on Preferential Basis
to Promoters/Directors/their entities
2. Issue of Employee Stock Options
3. Appointment of Mr. Adip Mittal,
relative of Director as Business
Associate.
2010-11
(AGM)
07/09/2010 3.30P.M. C. K. Nayudu Hall,
The Cricket Club of India
Limited, Brabourne Stadium,
Churchgate, Mumbai-400020
1. Payment of Minimum Remuneration
to & Re-Appointment of Executive
Chairman and Managing Director
2009-10
(AGM)
24/09/2009 4.00P.M. C. K. Nayudu Hall,
The Cricket Club of India
Limited, Brabourne Stadium,
Churchgate, Mumbai-400020
1. Issue of securities
2. Issue of Redeemable cumulative
preference shares for an aggregate
amount of not exceeding ` 200 crores
Neither special resolution through postal ballot was passed last year; nor proposed at the ensuing
Annual General Meeting.
(ii) Disclosures:
During the year, there were no transactions of materially significant nature with the Promoters or
Directors or the Management or their subsidiaries or relatives etc. that had potential conflict with the
interest of the Company. However, the transactions entered into with the related parties are reported
as per Accounting Standard 18 at Note No. 4.5 of Notes forming part of the Accounts for the year under
review.
There were no instances of non-compliance and that no penalties or strictures were imposed on the
Company by any Stock Exchange or SEBI or any statutory authority on any matter related to capital
market during the past three years.
Presently the Company does not have any Whistle Blower Policy. However, no person has been denied
access to the Audit Committee on any matter.
(iii) Means of Communication:
Quarterly/yearly results are normally published into Financial Express and Mumbai Lakshadweep.
The audited annual accounts are posted to every member of the Company. Quarterly shareholding
distribution and quarterly/yearly results submitted to the Stock Exchanges are posted on the website
of the Company www. mercator.in. The Company also displays official news releases on its website i.e.
www.mercator.in. The Company has created an email id [email protected] to facilitate redressal of
investors’/ shareholders’ grievances.
The presentations if any, made to institutional investors/analysts through personal meetings are also
displayed on website of the Company and submitted to the Stock Exchanges simultaneously.
(iv) Annual General Meeting:
Twenty Eighth Annual General Meeting is scheduled to be held on Wednesday, August 29, 2012 at M.C.
Ghia Hall, 4th Floor, Bhogilal Hargovindas Building, 18/20, K. Dubhash Marg, Kala Goda, Mumbai-400001
at 2.30 pm
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(v) Re-Appointment of Directors:
Brief resume of Mr. Kapil Garg whose re-appointment is to be considered at the ensuing annual general
meeting along with his expertise in specific functional areas and names of the companies in which
he holds directorships and chairmanships/membership of Committees of the Board is provided in the
notice of the ensuing Annual General Meeting scheduled to be held on August 29, 2012.
(vi) Financial Calender For The Year 2012-13:
First Quarter Results (June, 30) Mid of August 2012
Mailing of Annual Reports By end of July 2012
Annual General Meeting August 29, 2012
Second Quarter Results (September, 30) Mid of November, 2012
Third Quarter Results (December, 31) Mid of February, 2013
Fourth Quarter/ Annual Results May 2013.
(vii) Dates of Book-Closure:
The Share Transfer Books and Register of Members of the Company will remain closed from Wednesday,
August 22, 2012 to Wednesday, August 29, 2012 (both days inclusive).
(viii) Dividend:
In view of the loss suffered during the year, the Board of Directors has not recommended any dividend
on Equity Shares of the Company.
(ix) Listing of Shares, Non-Convertible Debentures:
The Equity Shares of the Company are listed on Bombay Stock Exchange (Scrip Code 526235); National
Stock Exchange (Scrip Code MERCATOR) and the annual listing fees in respect of the year 2012-2013
have been paid to these exchanges.
The monthly high-low quotations of the equity shares of the Company on Bombay Stock Exchange (BSE)
and National Stock Exchange (NSE) during the financial year 2011-12 vis-à-vis Sensex performance of
Bombay Stock Exchange is given below:
BSE:
MonthShare Price (`) Sensex Performance
High Low High Low
April 2011 46.00 38.50 19811.14 18976.19
May 2011 41.40 35.40 19253.87 17786.17
June 2011 42.45 35.00 18873.39 17314.38
July 2011 42.30 35.70 19131.70 18131.86
August 2011 36.70 21.15 18440.07 15765.53
September 2011 27.75 23.40 17211.80 15801.01
October 2011 27.45 21.80 17908.13 15745.43
November 2011 27.10 20.45 17702.26 15478.69
December 2011 23.50 15.80 17003.71 15135.86
January 2012 25.50 16.10 17258.97 15358.02
February 2012 33.80 23.55 18523.78 17061.55
March 2012 31.35 23.40 18040.69 16920.61
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NSE:
MonthShare Price (`)
High Low
April 2011 46.10 38.50
May 2011 41.40 35.00
June 2011 42.50 34.80
July 2011 41.50 35.50
August 2011 36.70 21.05
September 2011 27.90 23.35
October 2011 27.50 21.60
November 2011 27.10 20.30
December 2011 22.95 15.60
January 2012 25.50 16.05
February 2012 33.75 23.85
March 2012 31.40 23.15
As at March 31, 2012; the Company had following series of listed Redeemable Non-Convertible
Debentures issued on private placement basis in dematerialised form:
Series No
No. of NCDs
Coupon rate
O/s. Face valueAs on 31/03/2012
Outstanding Amount
ISIN
VII-A 900 10.50% ` 1,25,000/- each ` 11.25 crores INE934B07066
IX-A 1500 11.90% ` 10,00,000/- each ` 150.00 crores INE934B07207
X- A 400 9.50% ` 10,00,000/- each ` 40.00 crores INE934B07215
X- A1 100 9.50% ` 10,00,000/- each ` 10.00 crores INE934B07249
X- B 400 9.50% ` 10,00,000/- each ` 40.00 crores INE934B07223
X- B1 100 9.50% ` 10,00,000/- each ` 10.00 crores INE934B07256
X- C 1200 9.50% ` 10,00,000/- each ` 120.00 crores INE934B07231
X- C1 300 9.50% ` 10,00,000/- each ` 30.00 crores INE934B07264
XI 1000 9.50% ` 10,00,000/- each ` 100.00 crores INE934B07272
OUTSTANDING GDRs/ADRs OR WARRANTS OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION
DATE AND LIKELY IMPACT ON EQUITY
2,77,80,000 warrants carrying an option/entitlement for equivalent number of equity shares `1/- each
in the Company were issued in November, 2010 on preferential/private placement basis to Promoters/
Directors/Entities in which directors were interested in accordance with SEBI Regulations for preferential
issue, as approved by shareholders in their meeting held on October 28,2010. The number of warrants
outstanding as at March 31, 2012 were 1,88,80,000. Subsequent to year end; the same lapsed on maturity
as warrant holders did not exercise the option. Consequently, the entire amount of application money
paid thereon was forfeited.
The Company had no outstanding GDR/ADR or other convertible instrument as on March 31, 2012.
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(x) Share Transfer:
Shareholders’/ Investors’ Grievances Committee:
The Company has Shareholders’/Investors’ Grievances Committee comprising of one Executive Director
and two Non-executive Directors to look after share transfer and other related matters, including
the shareholders’ grievances. Mr. Manohar Bidaye, is the Chairman of the Committee with the other
members being, Mr. Atul Agarwal and Mr. K. R. Bharat. The Committee normally meets fortnightly
and looks into the shareholder & investor grievances that are not settled at the level of the Company
Secretary/Compliance Officer and helps to expedite share transfers & related matters. The committee
has delegated power of transfer/transmission; dematerialisation/ rematerialisation of shares; issue
of duplicate/split/consolidated certificates to the Registrar and Transfer Agents to expedite relative
process.
Twenty four Meetings of the Committee were held during the year. All the members attended all the
meetings.
As at March 31, 2012; Ms. Suchita Shirambekar, Company Secretary and Mr. Deepak Dalvi - Assistant
General Manager – Secretarial were acting as Compliance Officers.
During the year, the Company received 19 complaints from the shareholders all of which were duly
resolved. No complaint was pending as on March 31, 2012.
Further, during the year requests for transfer of 8,000 equity shares; replacement of 1,500 Shares;
transmission of 5,500 equity shares and demat of 92,005 equity shares were received and processed.
Registrar and Transfer Agents and Share Transfer System:
Link Intime India Private Limited having their office at C-13, Pannalal Silk Mills Compound, LBS Road,
Bhandup (W), Mumbai - 400 078 (Tel No.91-22-25963838) are the Registrar and Transfer Agents (RTA) as
also the registrar for electronic connectivity. Entire functions of Share Registry, both for physical transfer,
as well as, dematerialization/ rematerialisation of shares, issue of duplicate / split / consolidation of
shares is being carried out by the RTA at their above address.
The correspondence regarding query of unpaid dividends shall be addressed to Compliance Officer at
the registered office of the Company.
(xi) Distribution of Shareholding as on March 31, 2012:
Shareholding of nominal value of
No. of Shareholders
% to total Shareholders
No. of Shares % to total Capital
UPTO 500 83697 78.65 14175872 5.79
501 - 1000 10443 9.81 8664159 3.54
1001 - 2000 5464 5.13 8477691 3.46
2001 - 3000 2659 2.50 6826882 2.79
3001 - 4000 829 0.78 3031805 1.24
4001 - 5000 970 0.91 4661071 1.90
5001 - 10000 1247 1.17 9376383 3.83
10001 AND ABOVE 1113 1.05 189678210 77.45
TOTAL 106422 100.00 244892073 100.00
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(xii) Shareholding Pattern as on March 31, 2012:
Sr. No
Category No. of Shares
% to Capital
No. of Holders
1 Promoters/Directors and their Relatives 98484066 40.22 12
2 Mutual Funds / UTI 403000 0.16 4
3 Banks; FIs etc. 2066880 0.84 5
4 FIIs 43108867 17.60 51
5 Private Corporate Bodies 17273572 7.05 1326
6 Indian Public 77576179 31.68 103141
7 NRIs /OCBs 3113874 1.28 1581
8 Non-promoter Independent Directors and their relatives 185250 0.08 4
9 Clearing members 2680385 1.09 298
Total 244892073 100 106422
(xiii) Dematerialisation of Securities:
The equity shares of the Company are under compulsory trading in demat form. Out of total capital of
24,48,92,073 equity shares; 24,22,09,062 equity shares representing 98.90% were held in demat form
and balance 26,83,011 equity shares representing 1.10% were in physical form as on March 31, 2012.
The ISIN of the equity shares of the Company is INE934B01028.
The shares are actively traded on BSE and NSE and the turnover data during the financial year 2011-12;
was as under:
Particulars BSE NSE Total
No of shares 7,97,44,360 30,07,26,552 38,04,70,912
Value (` in Cr) 239.35 907.52 1,146.87
V) CEO/CFO CERTIFICATION:
The necessary certification from Chief Executive Officer, Mr. H. K. Mittal and Chief Financial Officer, Mr. Prasad.
B. Patwardhan in respect of the financial year ended on March 31, 2012 has been annexed to this report.
VI) COMPLIANCE:
The Company has complied with all the mandatory requirements of Corporate Governance Clause 49 of the
Listing Agreement with Stock Exchanges. Further, the Company has also adopted Remuneration committee
requirements out of Non-mandatory requirements of the Clause.
A certificate from the Auditors of the Company regarding compliance of conditions of corporate governance is
annexed to the Directors’ Report.
VII) PLANT LOCATIONS:
The Company does not have any plant.
Address for correspondence:
Mercator Limited
3rd Floor, Mittal Tower, B-wing,
Nariman Point, Mumbai-400 021
Tel Nos: 91-22-66373333
Fax Nos: 91-22-66373344
E-mail: [email protected] / [email protected]
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CORPORATE SOCIAL RESPONSIBILITIES (CSR)
INITIATIVES:
Mercator strongly believes that Corporate Social Responsibility as a philosophy and approach can help bring together
different sector of the society and provide equal opportunities for development.
As a responsible Corporate; Mercator always endeavours to adopt responsible social business practices. Mercator
governance systems do not allow its business practices to be abusive, unfair, corrupt or anti-competitive.
Mercator has always been responsive towards all its stakeholders and is focussed and committed to protect all
stakeholders including society and environment. The following are the initiatives and activities under taken by
Mercator during the year ended March 31, 2012:
CSR TOWARDS SOCIETY:
Creating Career Opportunities, Aids to Weaker Section and Providing training & Education:
Mercator has extended support to the financially incapable candidates aspiring for career in Shipping by
providing financial support for completion of courses as well as securing placement after passing out. In
this direction, Mercator is also associated with Prem Punita Foundation, a platform created by its Chairman
Mr. H. K. Mittal to reach out to the weaker section of the society in the field of education. Prem Punita
Foundation is a registered charitable Trust. The Foundation aims at enhancing and actualising career
opportunities for the weaker section of the society in the ever-growing marine industry. Mr. H. K. Mittal
heads the Foundation as its Chief Trustee and is assisted by a senior Trustees.
The Foundation is presently developing an effective environment for nurturing minds for a career in the
marine industry.
Mercator has been regularly extending support to local social and charitable organisation for their
philanthropic, charitable and social activities, thereby participating in social celebration and good causes.
CSR TOWARDS ENVIRONMENT & ENERGY CONSERVATION:
On board of our vessels, we adopt strict HSSE Management System and Procedures to ensure safe, secure
and healthy working environment by training our staff continuously with the latest technology to ensure
high levels of maintenance. Regular audits and checks are held to ensure that our assets comply with
international regulations to protect the environment.
All our vessels are IMO Rules and Regulations compliant which ensures lesser consumption of energy and
water. On our FSO, we have installed Reverse Osmasis Plant for converting sea water into fresh water to
save scarce fresh water on shore. Using fuel with lesser sulphur content to minimise oxide of sulphur and
installing equipments to reduce Nitrogen Oxide (NOX)/Sulphur Oxide (SOX) are some of our majors initiatives
to protect environment. On shore; its our endeavour to protect environment and natural resources with
variuos ways such as putting ACs on 24o Celsius; using power saver lights; putting switches off whenever
not required etc.
CSR TOWARDS INVESTORS:
We aim to maintain high levels of transparency and disclosure through regular communication with our investors.
On a timely basis we disseminate our financial information through Stock Exchange in due compliance with Listing
agreement. We reach to our investors through news releases, tele conferences, one to one meeting etc. and provide
regular update on business performance. To facilitate better accessibility for investor queries; we have designated
e-mail ID and also provide our contact details in our website, annual reports etc. We are focussed to strengthen our
investor relations framework to better serve the needs of the investor community.
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MERCATOR
CSR TOWARDS EMPLOYEES:
Mercator always thrives towards care and betterment of its valuable Human Resources. We follow best possible human
resource policies and practices for the benefit and betterment of our employees. We provide equal opportunities to
all our employees without any prejudice based on their religion, caste, race, marital status, gender, disability, sexual
orientation, age, ethnic origin, nationality, etc. With this as a foundation, Mercator has incorporated developmental
HR policies to encourage talented and competent people through individual guidance, corporate training and well
defined career paths. We have a well defined Code of Conduct for our associates in consistent with our values and
ethics.
Mercator is committed to human rights of our employees and treat all employees with utmost dignity and ensuring a
work environment, free of any form of harassment. Our employee policies as well as our practices reflect our strong
ethical values and the respect and fairness to all employees. We strongly believe that our associates are our greatest
assets and the key to the success of our organisation.
CSR INITIATIVES AT GROUP LEVEL:
Our Singapore Stock Exchange (SGX) listed subsidiary Mercator Lines (Singapore) Ltd. has designated CSR Committee
and organises its own programmes as well as participates in other programmers’ in support of social causes.
For on behalf of the Board
For Mercator Limited
H. K. MittalExecutive Chairman
Regd. Office:
3rd Floor, Mittal Tower,
B-wing, Nariman Point,
Mumbai - 400 021.
Dated: May 25, 2012
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CEO/CFO Certification
To, The Board of Directors, Mercator Limited Mumbai
This is to certify that:
(a) We have reviewed financial statements for the financial year ended on March 31, 2012 and the cash flow statement for the year (consolidated and unconsolidated) and that to the best of their knowledge and belief:
(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
(ii) these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
(b) There are, to the best of their knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company’s code of conduct.
(c) We accept responsibility for establishing and maintaining internal controls and that we have evaluated the effectiveness of internal control systems of the company and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
(d) We have indicated to the auditors and the Audit committee
(i) significant changes in internal control during the year, whenever applicable;
(ii) that there were no significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and
(iii) that there were no instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company’s internal control system.
(e) We further declare that all Board members and Senior Management personnel have affirmed compliance with the Code of conduct for the current year.
For Mercator Limited For Mercator Limited
H. K. Mittal Prasad Patwardhan Executive Chairman & Designated Chief Executive Officer Chief Financial Officer Place: Mumbai
Dated: May 25, 2012
Auditors’ Certificate on Corporate GovernanceThe Members,MERCATOR LIMITED (Formerly known as MERCATOR LINES LIMITED)Mumbai
We have examined the compliance of conditions of corporate governance by Mercator Limited for the year ended on 31st March 2012, as stipulated in Clause 49 of the Listing Agreement of the said company with stock exchange.
The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedure and implementation thereof, adopted by the company for ensuring the compliance of the conditions of the corporate Governance. It is neither an audit nor an expression of the financial statement of the company.
We certify that the company has compiled with the conditions of corporate Governance as stipulated in the above mentioned Listing Agreement.
We state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or effectiveness with which the management has conducted the affairs of the company.
For and on behalf of Contractor Nayak & Kishnadwala Chartered Accountants Firm Registration No 101961W
[Himanshu Kishnadwala] Partner Membership No. 37391
Mumbai May 25, 2012
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MERCATOR
Management Discussion & Analysis Report(Forming part of Directors’ report for the year ended on March 31, 2012)
45
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Mercator is spread across multiple verticals: Coal Mining; Procurement and Logistics | Oil and Gas | Shipping
|Dredging
I. COAL:
Coal contributes significantly to the global energy mix, covering almost a third of global primary energy
consumption and over 40% of electricity production. Below graph shows pattern of energy sources:
Biomass
OtherSolar
Nuclear
Hydro
GAS
Oi l
Coal
Traditionalrenewables
100%
80%
60%
40%
20%
0%1850 1900 1950 2000 2050 2100
Source: World Coal Institute, www.wci-coal.org
Coal is the largest source of energy for the generation of electricity worldwide. India is the third largest coal
producing and consuming country of the world after China and USA. The Coal consumption is driven by energy
sector in India as most of the operating power plants (around 68%) depend on Coal as a fuel. During FY 2011-
12 production of electricity in India was 569 Tera Watt Hour Per year - Twh after China (2759 Twh) and in USA
(2266 Twh) therefore and Coal vital importance for Electricity generation. China and India together produced 40%
global electricity in FY 2011-12. (Source : World Coal Institute)
China Coal market:
China’s thermal coal supply scenario has altered radically in the last decade from a production base of about
1.4 billion MT in 2002 to over 3.2 billion MT in 2011-12. Despite this growth, it still cannot produce enough, as
consumption has grown over the same period from 1.3 billion MT in 2002 to over 3.45 billion MT in 2012. Imports
will continue to play a key role, but runaway growth will be limited by China’s ability to boost domestic output.
China has swung from a net exporter in 2008 to a net importer since 2009. (Source: Platts)
Indian Coal market:
Currently coal accounts for 68% of the India’s energy needs.
Commercial primary energy consumption in India has grown by about 700% in the last four decades. Considering
the limited reserve potentiality of petroleum & natural gas, eco-conservation restriction on hydel project and
geo-political perception of nuclear power, Coal will continue to occupy centre-stage of India’s energy scenario.
India’s per capita power consumption is almost one fourth of world average.
During the 11th Five year plan (2007-2012), India has added 100,000 MW of our out of which 77% is from Coal and
Lignite. The present installed generation capacity in India is more than 181,000 MW and over 80,000 MW of new
power capacity is under construction. The Twelfth plan aims at capacity addition of nearly 100,000 MW. Power
generating companies are entering into long term supply agreements especially for imported coal for secured
coal supply. (Source : Independant Power Producers’ Association of India)
India’s Coal import has touched 140 Mio MT in FY 12, representing a 50% jump over 86 Mio MT imported last
year. Of the total imports, 90 Mio MT would be Thermal Coal. The major share of thermal coal imports has come
through Indonesia and South Africa with other sources like US (high Sulphur coal) and Colombia chipping in from
time to time.
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Indonesian Coal:
Indonesia is world’s largest thermal coal exporter. Indonesian coal production has grown from 230 Mio MT in 2008
to 352 Mio MT in 2011. It is further expected to grow at a compounded annual growth rate of 13.7% and should
touch 480 Mio MT by 2014. Around 20% of the coal produced is consumed domestically and 80% is exported out of
Indonesia. The percentage is likely to remain similar till 2014 as per industry estimates. With its proximity to India
& China and with huge production base of Coal, Indonesia will continue to remain one of the largest exporter of
thermal coal. (Source : Indonesian Chamber of Commerce)
With owned coal mines as well as procurement and logistical expertise, in depth understanding of local coal
market; Mercator expect to achive higher business in this segments.
II. OIL & GAS:
The global oil demand for the year 2012 is estimated to be 90.7 mb/d. World oil demand will grow at a rapid
pace with a major share of this demand coming from emerging economies. In its annual forecast, the Energy
Information Administration pointed out that global oil demand would average about 105 million barrels per
day(BPD) in 2030 and almost 111 million bpd in 2035. Total global energy demand is expected to grow by 27
percent by 2035, with developing countries like China and India expected to account for most of that increase.
With strong economic growth projected for both these countries, combined energy use is forecasted to soar to
30% of world’s energy consumption.
1990 2005 2006 2010 2015 2020 2025 2030
41.4
25.3
56.640 43.4 47.8 52.2
34.5 35.8
49.5 49.2 46.3 47.2 48.1 48.9 50
OECD Consumption (In Mn bpd)Non OECD Consumption (In Mn bpd)120
100
80
60
40
20
0
CAGR (FY10- FY30) : 1.1%
Source: US Energy Information Administration
World Oil Supply Projections:
World oil supply rose by 1.0 mb/d in August 2011, i.e. from to 89.1 mb/d, with non-OPEC production up by 0.8 mb/d.
Non-OPEC supply has been revised lower to 52.8 mb/d in 2011 on outages in the Middle East and China, rising
to 53.8 mb/d in 2012. Over the last few months, oil supply has been tightening, with spare capacity down to 6% of
demand from a corresponding figure of 8% a year earlier. Oil production is slated to remain fairly stable over the
next few decades, with global oil production slated to reach 96 mb/d in 2035 based on an US Energy Information
Administration forecast. With an increase in demand for oil as envisaged, the demand-supply deficit is bound to
increase going forward.
Oil prices
140
120
100
80
60
106.07
2006 2007 2008 2009 2010 2011CLJI - WTI CRUDE FUTURE Apr11 G14 Daily 3/7/06 to 3/7/11 Copyright 2011 Bloomberg Finance L.P. 07-Mar-2011 09:32:46
CLJI – WTI CRUDE FUTURE Apr11Daily 3/7/06 - 3/7/11
Last Price 106.07
High on 07/14/08 143.06Average 80.41Low on 02/18/09 55.42
Source: World Bank Commodity price data
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Crude oil prices witnessed a sharp correction in late
2008 and first half of 2009, after reaching record
highs of nearly USD 140 per barrel. The oil prices
inched up and touched a 2 year high of USD 120 per
barrel in May 2011. With such a strong recovery in
oil prices, upstream oil companies have increased
their E&P investments. Of late, the oil prices have
corrected to some extent, but are well above the
2009 lows and are more or less stable at around
USD 80 per barrel. Going forward, looking at the
demand-supply outlook, the oil prices are expected
to go up or at least remain stable. Such a scenario
will spur both onshore and offshore E&P activities
globally.
India’s march from being a developing nation to
major economical power is going to be fuelled
by fossil fuel in which Oil & Gas will play a major
role. With rising prices of crude oil and our need to
fuel our growth, dependence on imported oil has
to be minimised. The Government is focussing on
indigenous crud to reduce dependence on expensive
import. ONGC has already commenced extracting
oil from marginal fields such as D-1; Cluster 7 etc.
Mercator has successfully completed first year of
operation at its EBOK facility at Nigeria and during
the year, secured a new EPC contract from ONGC
for converting Mobile Offshore Drilling Unit – Sagar
Samrat into Mobile Offshore Production Unit (MOPU).
Mercator is scouting for new opportunities in this
segment. Mercator E&P foray with two onshore
blocks in Cambay basin are also progressing well.
III. SHIPPING:
Wet Bulk Carriers:
The Baltic Clean Tanker Index opened at 900 points
in April 2011, and closed at 642 points on March 31,
2012 remaining range bound between 600 to 900
during the year.. The Baltic Dirty Tanker Index also
remained subdued during the year with opening at
900 points in April 2011 and closing at 818 points on
March 31, 2012.
Wet bulk fleet stood at about 5600 vessels comprising
DWT of 478 mn tonnes as on March 31, 2012 and the
order book was for 608 vessels for DWT of 72 mn
tonnes. In comparison, the fleet comprised 5500
vessels of 457 DWT mn tonnes and order book of
846 vessels of 102 mn DWT as at April 1, 2011 thus
increase in fleet size by 2% in number and 5% in DWT
during FY 2011-12. The order book has reduced by
29% in number as well as in DWT. (Source :SSY). The
supply side although seeing reduction in number; is
still a matter of concer. The shipping industry world
wide is witnessing a difficult phase with the freight
markets remaining subdued. We have seen a small
glimour of hope in the VLCC market where in the
month March/April 2012 the rates were closed to
50000 USD per day. This spike in tanker rates has
been due to discipline shown by VLCC owners e.g.
formation of pools; scrapping of assets as young
as 13 years old, slow steaming as low as 6 knots
from normal 14 knots to save on bunker cost etc. In
addition, Chinese imports have hit the record of 6mn
barrels per day in Feb 2012. This demand in China
was largely due to China supplementing its part of
second stage of Strategic Petroleum Reserve (SPR)
project.
Many large consumers of petroleum products have
developed emergency oil storage facilities to cover
their potential requirements and provide security
from global oil price fluctuations. The months in
which the crude oil inventories are increased caused
a spike in the freight market, otherwise the outlook
for the year appears flat.
Dry Bulk Carriers:
Dry bulk fleet stood at about 8900 vessels comprising
DWT of 627 mn tonnes as at March 31, 2012 and the
order book was for 2100 vessels for DWT of 180 mn
tonnes. In comparison, the fleet comprised 8200
vessels of 555 DWT mn tonnes and the order book
was 2800 vessels of 240 mn DWT as at April 1, 2011
thus increase in fleet size by 8% in number and 12%
in DWT. (Source: SSY). The order book has reduced
by 22% in number and 25% in DWT as on March 31,
2012.
The Baltic Dry Index sank to its lowest point since
past 25 years. This was largely due to the oversupply
of tonnage and partly due to reweighting of index
which took place in 2009. On the cargo side,
demand also eased up as export from places such
as Port Hedland. Brazil experienced force majoure.
Richards Bay showed a drop of 25% in coal export
and US department of agriculture cut around 10 mn
tonnes South America grain forecast. Going forward,
we expect production out of Richards Bay to improve
and import of Coal into India to increase with more
coal fired power plants coming online and deficit
of indigenous coal. These marginal positives will
support the Bulk carrier owners in coming years but
at the same times enormous tonnage surplus will
test its strength to survive.
A very challenging operating environment is
awaiting the shipping companies in the year 2012
as the world economy continues to reel under the
shadows of recession and debt crises hitting major
economies.
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However, the shipping industry needs to be viewed
from a long term perspective. Those who can sustain
the challenges of downturn will be the first to gain
advantages of upturn. Shipping is characterised
by peaks and trough and those who are resilient,
patient and perceptive players can stay on the
course. With its diversified fleet, Mercator would
benefit once shipping industry recovers.
IV. DREDGING:
Dredging activities are requisite across deepening
of channels in ports; construction of new ports;
reclamation of land; beach nourishment; sand
mining; shore protection – dykes; trenching –
pipeline laying; dredging canals and rivers; lakes;
reservoirs and intake water column for power
plants.
As more and more ports are coming up the
requirement to maintain them increases the
dredging activity. Also, upgradation / increasing
navigable depths of existing ports results in
increased dredging requirement. The rise of water
levels and the threat to low lying areas requires
dredging companies to put their fleet to reclaim
large tracts of land under threat to sustain the
coastal population.
Further, emerging trends in shipbuilding like ultra-
big ships is imperative for port developers and
operators to go for dredging to increase draft of the
channels.
The total dredging requirement between FY11-12
and FY15-16, including minor ports, is estimated
to be 996 million cum. Among this, maintenance
dredging alone is expected to account for 414 million
cum.
The Maritime Agenda 2010-20 of India envisages
increase in the draft in all major ports to a minimum
of 14 metres and in some ports to 17 metres.
Dredging projects worth over ` 200 billion have been
planned between now and the year 2020.
CHALLENGES, RISKS AND CONCERNS:
The Mercator Group has diversified sources of
revenue ranging from Coal; Oil & Gas; Shipping and
Dredging. Given the wide range of our operations and
the geographical spread, we are exposed to different
challenges and risks. The Group’s approach to identifying,
assessing, and managing risks is formalised through
an in depth process of market research, collection of
updated industry information and data and research
intelligence.
A major portion of our revenue as well expenditure is
in foreign currency and hence we are naturally hedged
against risks arising from exchange rate fluctuations.
We operate in different countries around the world and
hence are exposed to political and other risk arising
from our operations in these countries. The Company’s
successful track record, rich management experience,
and diversified portfolio of business segments, aids the
company in de-risking itself to a large extent.
Mercator continuously engages with strong counter
parties to avoid any counter party risk.
The vessels remained exposed to the risk of piracy while
transiting the Indian Ocean and the Gulf of Aden. As a
preventive measure the vessels embarked armed guards
and transited the Gulf of Aden under naval escort.
Shipping is a cyclical business. Global movement of
goods and commodities is linked directly to the level of
economic activity. A slow down or recession will have
adverse implications for the shipping business. The
management had taken strategic steps to diversify the
business by entering into the Coal and Oil & Gas, and
now more than 70% of revenue is from non-shipping.
Our vessels and other assets could be exposed to the risk
from accidents. The Company has insured all its assets,
and before embarking on any voyage, all the ships are
tested and scrutinised.
We are exposed to environmental risk like oil spillage
during transportation, drilling and exploration; pollution
while coal mining and transportation is extremely critical.
We strictly adhere to globally accepted environmental
regulations as preventive measures.
OPERATIONAL AND FINANCIAL PERFORMANCE:
Mercator Group has diversified operations with its own
fleet of Tankers, Bulk Carriers; Dredgers and a Floating
Production Units (FPU). Mercator also has coal minning
licences in Indonesia and Mozambique. Mercator has
signed Production Sharing Contract with Government of
India in respect of two oil blocks in the Cambay basin
in Western India awarded under NELP-VII. Mercator, in
consortium, has been awarded a contract from ONGC for
conversion of Mobile Offshore Drilling Unit (MODU) into
Mobile Offshore Production Unit (MOPU).
The consolidated income from the operations was ̀ 3700
cr for the year under review as compared to ` 2829 cr
in the previous year. The Profit After Tax and Minority
Interest was ` 21 cr against ` 94 cr in the previous year.
Coal Mining, Procurement and Logistics:
During the year one of our subsidiary Oorja Holdings Pte.
Ltd., Singapore completed acquisition of 50% stake in a
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new mining asset in East Kalimantan, Indonesia having
reserve of about 60 Million MT. The new coal mine is
expected to start production in Q-2 FY13-14.
There was an increase in coal procurement volume as
well; contributing to both top line and bottom line.
Overall, Mercator sold 7.35 mn MT (previous year 4.88
mn MT) of coal (both mining and procurement); a growth
of 51% over previous year. Total turnover of ` 2317 cr
(previous year ` 1388 cr) was achieved. This contributed
about 62% of the total operating income (previous year
49%). Mercator has successfully diversified its coal
selling market and during the year sold 1.76 mnMT coal
to China. India and China together contributed 93% of
the sales volume.
Oil & Gas:
Offshore performance:
Mercator owns one Mobile Offshore Production Unit
(MOPU) and one Floating Storage Offloading Unit (FSO)
which are deployed at EBOK field in Nigeria under
long term contract with UK listed oil major Afren Plc.
Both these MOPU and FSO collectively called Floating
Production Unit (FPU); have been commissioned
successfully during the year. MOPU has a processing
capacity of 50,000 barrels oil per day whereas FSO has
storage capacity of 1.2 mn barrels oil.
In November 2011, consortium of Mercator Oil & Gas
Ltd., and Mercator Offshore (P) Pte. Ltd. alongwith a
Abu Dhabi based shipyard viz. Gulf Piping Company was
awarded an EPC contract by ONGC Ltd. for conversion
of their Mobile Offshore Drilling Unit (“MODU”) ‘Sagar
Samrat’ into a Mobile Offshore Production Unit (“MOPU”).
The scope of work for this project includes Surveys,
Design, Engineering, Procurement, Fabrication,
Transportation, Jack up, Hook-up, Testing, Certification/
Inspection, Pre-commissioning, Start-up and
Commissioning of entire facilities including demolition
of existing Drilling equipment for the conversion of Sagar
Samrat to Mobile Offshore Production Unit (MOPU).
In this segment; Mercator achieved total turnover of ̀ 199
cr as compare to previous year turnover of `142 crore.
This has contributed about 5% of the total operating
income (previous year 5%).
Oil Blocks:
Mercator has Production Sharing Contracts with the
Government of India for exploration of Petroleum in two
blocks under the Seventh New Exploration Licensing
Policy round (NELP-VII). . The “S-Type” blocks are
situated onshore in the prolific Cambay Basin, Gujarat,
India and cover an area of about 180.22 Sq. Km. Mercator
has successfully acquired good quality seismic data for
both the blocks and currently processing & interpretation
work is going on. Mercator is planning to commence
exploratory drilling programme.
Tanker (Wet Bulk) performance:
Mercator’s tanker fleet consists of very Large Crude
Carrier (VLCC), Aframaxes, Product tankers and
Chemical tanker. Within the tanker segment, Mercator
has 7 own tankers of aggregate capacity of 740,193 DWT
since beginning of the year and 1 in-chartered chemical
tanker of 19,996 DWT. There was no change in tonnage
during the year under review. In December 2011, one
of tanker vessel M T Preme Divya had an accident. The
Management is endeavouring to repair the vessel and
put it into operation.
Mercator achieved a turnover of ` 290 cr as compared
to ` 463 cr in the previous year. The performance was
affected due to tanker market remaining soft throughout
the year in view of excessive tonnage capacity. The
numbers of operating days were reduced by about 2% to
2618 days (previous year 2.672 days). The time charter
equivalent (TCE) at USD 15884 increased marginally
by 1% from USD 15,728 in the previous year. Overall
contribution from the tanker division was 8% (previous
year 16%) of the total operating income.
Dry Bulk performance:
Mercator’s bulk carrier fleet comprises of Geared and
Gearless Panamaxes; Kamsarmaxes and Very Large
Ore Carrier (VLOC). Since beginning of the year, there
are 15 own bulk carriers aggregating to the tonnage of
1,340,510 DWT and 3 chartered-in bulk carriers with an
aggregate capacity of 278,340 DWT. There was no change
in tonnage during the year under review. Mercator
achieved a turnover of ` 733 cr (` 751 cr previous year).
Though vessel operating days increased by about 12%
over the last year to 6619 days (previous year 5,908 days)
TCE of USD 20,069 declined by 23% against previous year
of USD 25,997. This segment too was affected primarily
due to excessive supply of tonnage. This segment
contributed about 20% of the total operating income
(previous year 27%).
Dredging performance:
At the beginning of the year; Mercator had 4 dredgers
having Aggregate capacity of 23500 Cubic meter. During
the year, one 2004 built dredger of 2600 Cubic meter
capacity and one 2011 built Cutter Suction Dredger were
acquired by the company and thus as at March 31, 2012
Mercator had 6 dredgers. With 1349 operating days
(previous year 583), Mercator achieved a turnover of `
161 cr (previous year ` 85 cr). This segment contributed
about 4% of total operating income (previous year 3%).
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With a fleet of 5 Trailer Suction Hopper Dredgers &
1 Cutter Suction Dredger fitted with technologically
advanced machinery, Mercator is capable of providing
the best service to all ports for accelerating their
development initiatives.
REVIEW OF OPERATIONS OF SUBSIDIARIES:
Mercator International Pte. Ltd. (MIPL):
MIPL is an apex wholly owned subsidiary incorporated in
Singapore in January 2007. This company has multiple
subsidiaries and fellow subsidiaries in Singapore and
other countries. As at the beginning of the year; MIPL
had one in-chartered chemical tanker of 19,926 DWT on
standalone basis. There was no change in the tonnage
capacity during the year. During the year under review,
it achieved a turnover of about ` 121 cr equivalent of
USD 25.116 mn (as against ` 115 cr equivalent of USD
25.263 mn in the previous year) with a net profit of ` 51 cr
equivalent of USD 10.528 mn (previous year net net profit
of ` 47 cr equivalent of USD 10.365 mn) on standalone
basis; that is excluding contribution from its subsidiaries.
Oorja Holdings Pte. Ltd. (OHPL) and its subsidiaries:
OHPL is 100% Singapore based subsidiary of MIPL
established with the objective of exploring business
opportunities in commodity mining and trade. As at March
31, 2012, OHPL had six wholly owned subsidiaries of
which five are situated in Singapore and one in Indonesia.
OHPL had further nine step down subsidiaries holding
coal mining/trading licenses as well as equipments
situated in Indonesia; Singapore and Mozambique.
OHPL through its subsidiaries, has investments in
three coal mines in Indonesia and one in Mozambique.
According to the reserves and resource estimation
carried by independent agencies, the total coal resources
of the company currently stand at approx. 70 mn tonnes
in Indonesia and estimated coal deposits of 3 billion
tonnes in Mozambique. All of these mines are open pit, of
which 2 are operational, one will commence operations
by quarter 2 of FY13-14. A mine in Mozambique is in the
initial stage of development.
OHPL has further established itself in the coal
procurement and logistics business and has been
considered as a preferred and reliable coal supplier from
Indonesia. It has already handled over 14 mn tonnes of
coal in last 3 yrs with over 7.7 mn tonnes in FY 2012 and
enjoys about 7% share of Indonesian coal exports to
India.
OHPL, through PT Oorja Indo KGS (a Group Company),
domiciled in Indonesia holding a Coal Trader License,
procures coal from various miners in South and East
Kalimantan regions as well as Sumatra region in
Indonesia.
MCS, a WOS of OHPL, undertakes marketing for coal
from OHPL’s own mines as well as coal procured from
third parties. The Company exports coal to India, China,
Thailand, Pakistan, Srilanka, Philippines and other Asian
countries.
The contribution of the coal business in the overall
revenues has increased significantly over the past three
years. For FY12, the coal business contributed about
62% of the total revenues.
During the year; OHPL achieved consolidated turnover of
` 2220 cr equivalent of USD 461 mn (previous year ̀ 1338
cr equivalent of USD 293.424 mn) and earned profit of
` 99 cr equivalent of USD 21 mn (previous year profit of
` 69 cr equivalent of USD 15 mn). During the year, OHPL
and MCS each paid dividend of USD 15 mn.
Mercator Offshore (P) Pte. Ltd. (MOPPL):
This subsidiary based in Singapore has been awarded
a contract for charter out of Floating Production Unit
(FPU) comprising of Mobile Offshore Production Unit
(MOPU) and Floating Storage Offshore Unit (FSO) to the
UK listed Company Afren PLC through its subsidiary
for deployment in their EBOK field in Nigeria. During
the year; the FPU was commissioned successfully on
April 30, 2011. The Charter contract has been extended
for two more years from original period of seven years.
MOPPL has a subsidiary located in Nigeria by the name
of IVORENE Oil Services Ltd. to undertake local support
activities.
This was first year of commercial operation of MOPPL
which achieved turnover of ` 199 cr equivalent of USD
41 mn and earned profit of ` 26 cr equivalent of USD 5
mn.
Mercator Oil & Gas Ltd. (MOGL):
This is an Indian non-listed subsidiary.
During the year under review; MOGL in consortium
with MOPPL and a Abu Dhabi based shipyard; has been
awarded contract by ONGC for conversion of Mobile
Offshore Drilling Unit (MODU) into Mobile Offshore
Production Unit (MOPU). MOGL is a lead contractor. The
value of contract is apprx USD 155 mn and is expected to
be completed by May 2013
Mercator Petroleum Ltd. (MPL):
This is an Indian non-listed subsidiary. MPL has entered
into a Production Sharing Contract with the Government
of India in respect of two blocks allotted to it under
the Seventh New Exploration Licensing Policy round
(NELP-VII). MPL has initiated exploration activities and
undertaken surveys.
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Mercator Lines (Singapore) Ltd. (MLS):
This is a Singapore Stock Exchange listed subsidiary of
MIPL that owns 71.95% controlling interest in MLS. MLS
has five subsidiaries being ship owning/management
companies.
Consolidated fleet of MLS as at March 31, 2012,
comprised of 14 own vessels of aggregate capacity of
1,271,224 DWT and 3 in-chartered vessels of aggregate
capacity of 278,340 DWT. During the year, MLS achieved
a consolidated turnover of ` 712 cr equivalent of USD
147.737 mn (as against ̀ 708 cr equivalent of USD 155.360
mn in the previous year) and earned net profit after tax
of ` 38 cr equivalent to USD 7.837 mn (as against ` 142
cr equivalent to USD 31.100 in previous year). The Board
of Directors of MLS recommended dividend at 0.20
Singapore cents per share for year ended on March 31,
2012 which represents 25% of the profits. The Board of
Directors of wholly owned subsidiaries of MLS; namely
Varsha Marine; Vidya Marine and Chitra Prem declared
and paid interim dividends of USD 12.685 mn (pre. year
USD 3.000 mn); USD 4.883 mn (pre. year USD 4.90 mn)
and USD 2.540 mn (pre. year USD 0.2 mn).
None of above subsidiary’s Audit Report contains any
qualification.
(For the purpose of financial performances conversion
rate of per dollar has been taken as ` 48.19 for Profit
& Loss account (previous year ` 45.59); and ` 51.16 for
Balance Sheet items (previous year ` 44.65).
QUALITY, SAFETY & ENVIRONMENT:
For excellent business performance we have recognised
and imbibed safety, quality and environmental
conservation in our day to day operations. We follow
Health Safety Security Environment (HSSE) management
system which provides direction, education, support,
training and supervision to ensure that all employees
understand and follow the Company policy and
procedure. This has been achieved by having adequate
systems and procedures in place which safeguard the
health and safety of our people, the security of our
personnel, security of our physical assets and reputation
and the protection of the environment. Our fleet has
maintained the highest level of safety and cost effective
quality during the year, and are in compliance with the
international pollution and prevention protocols.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
Mercator’s internal control systems are adequate and
ensure that all corporate policies are strictly adhered
to and that transparency is maintained at all levels and
functions throughout the organisation. The Internal
Auditors ensure that adequate internal controls are
in place and all management policies are complied
with. The Audit Committee constituted by the Board
of Directors regularly assesses the financials as well
as administrative performance of the Company, in
consultation with internal and statutory auditors.
HUMAN RESOURCES POLICIES:
Mercator has always believed that Human Resources are
integral to the efficient functioning of the organisation.
This is reflected through our philosophy of ‘People First’.
Our key Management and HR focus during the year had
been to attract and retain the best talent along with
creation of a more positive employee workforce which
is vital for the long term competitive advantage of the
business. With this vision a set of employee engagement
initiatives and training programmes were organised
which aimed at contributing towards employee
development. We plan to elevate the same to the next
level in the coming years.
There has been an emphasis on execution of unilateral
and transparent set of policies which are market driven
and people oriented. We provide a work environment
in which employees are empowered, productive,
contributing and happy.
As on March 31, 2012 there were 121 employees with
Mercator India. Globally, Mercator group had 392
employees as on March 31, 2012.
CAUTIONARY STATEMENT:
The Statement in this Management Discussion and
Analysis Report describing the Company’s objectives,
projections, estimates, expectations or predictions may
be ‘forward looking statements’ within the meaning of
applicable laws and regulations. Actual results might
differ substantially or materially from those expressed
or implied. Important developments that could affect
the Company’s operations include demand-supply
conditions, changes in Government and International
regulations, tax regimes, economic developments within
and outside India and other factors such as litigation and
labour relations.
For on behalf of the BoardFor Mercator Limited
H. K. Mittal
Executive Chairman
Regd. Office:
3rd Floor, Mittal Tower,
B-wing, Nariman Point,
Mumbai - 400 021.
Dated: May 25, 2012
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Standalone Financial Statements
53
annual report 2011-12
Auditors’ ReportThe Members of
MERCATOR LIMITED (Formerly known as MERCATOR LINES LIMITED)
1. We have audited the attached Balance Sheet of MERCATOR LIMITED as at 31st March 2012, the related Statement
of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of
Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as considered appropriate and
according to the information and explanations given to us during the course of the audit, we enclose in the
Annexure hereto a statement on the matters specified in Paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in above paragraph, we report that:
a) We have obtained all the information and explanations, which to the best of our knowledge and belief were
necessary for the purposes of our audit;
b) In our opinion, proper books of account, as required by law have been kept by the Company so far as appears
from our examination of the books of the Company;
c) The Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement dealt with by the report are
in agreement with the books of account of the Company;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement comply with
the mandatory Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.
e) On the basis of written representations received from the directors of the Company as on 31st March 2012,
and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st
March 2012, from being appointed as a director in terms of Section 274(1) (g) of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to the explanations given to us, the said
accounts read together with the Significant Accounting Policies and notes thereon give the information
required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:
a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;
b. In the case of the Statement of Profit and Loss, of the loss for the year ended on that date,
c. In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that
date.
For and on behalf of Contractor Nayak & Kishnadwala Chartered Accountants
Firm Registration No 101961W
Himanshu Kishnadwala Partner,
Membership No 37391
Mumbai
May 25, 2012
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MERCATOR
Statement referred to in paragraph 3 of the Auditors’ Report of even date to the Members of MERCATOR LIMITED on the accounts for the year ended 31st March, 2012.
On the basis of such checks as considered appropriate and in terms of the information and explanations given to us,
we state as under:
1(a) The company has maintained proper records showing full particulars including quantitative details and
situation of the fixed assets.
1(b) As explained to us, the management at reasonable intervals carries out the physical verification of the fixed
assets. The discrepancies noticed on such verification, which were not material, have been appropriately dealt
with in the accounts.
1(c) In our opinion, there have been no significant disposals of fixed assets during the year which affect the going
concern assumption.
2(a) As explained to us, the inventories of bunker and lube have been physically verified during the year by the
management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical
verification is reasonable.
2(b) In our opinion and according to the information and explanations given to us, the procedures of physical
verification of the above mentioned inventory followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
2(c) In our opinion, the Company is maintaining proper records of inventory and no material discrepancies were
noticed on physical verification.
3(a) As per the information and explanations given to us, the Company has not granted any loans, secured or
unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the
Companies Act, 1956. Hence, provisions of clauses 3(b), 3(c), 3(d) are not applicable to the company.
3(e) During the year the company has taken interest free loan from a company covered in the register maintained
under section 301 of the Companies Act,1956 and there is no balance outstanding at the year end. The maximum
amount outstanding at any time during the year was ` 1,57,50,000.
3(f) The rate of interest and other terms and conditions of loan taken from a company covered in the register
maintained under section 301 of the Companies Act,1956 are not prima facie prejudicial to the interest of the
company.
3(g) The repayment of the principal amount for the aforesaid loan is regular.
4 In our opinion and as explained to us, there are adequate internal control procedures commensurate with the
size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and
for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the
internal control system and there is no continuing failure for the same.
5(a) As per information and explanations given by the management and based on the audit procedures applied by
us, during the year the company has not entered into any contracts or arrangements referred to in section 301
of the Act. Hence, clauses 5(a) and 5(b) are not applicable to the company
6 The Company has not accepted any deposits from public during the year.
7 In our opinion, the Company has an internal audit system commensurate with the size of the Company and the
nature of its business.
8 The maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d)
of the Companies act, 1956.
9(a) According to the information and explanations given to us and the records examined by us, the Company is
regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax,
custom duty, excise-duty, cess and other statutory dues and there are no undisputed statutory dues outstanding
as at 31st March, 2012, for a period of more than six months from the date they became payable.
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9(b) According to the information and explanations given to us, the disputed statutory dues that have not been
deposited on account of disputed matters pending before appropriate authorities are as under:
Name of the Statute Nature of the dues
Amount (` In lakhs)
Year/s to which the amount relates
Forum where dispute is pending
Service Tax under Finance Act,
1994
Service Tax 7,452.60 2006-07 to 2010-11 Commissioner of
Service tax
Income Tax Income Tax 3,508.13
597.47
3.70
46.44
2007-08
2006-07
2005-06
2002-03
Commissioner of
Income tax (Appeals)
Amounts paid under protest and not charged to Statement of Profit and Loss have not been included above.
[Also refer Notes 3.3 and 3.4]
10 The company does not have any accumulated losses as on 31st March, 2012 and has not incurred any cash
losses during the financial year and in the immediately preceding financial year.
11 Based on the information and explanations given to us, the Company has not defaulted in repayment of any
dues to financial institutions, banks or debenture holders.
12 Based on our examination of the records and as explained to us, the Company has not granted any loans and/
or advances on the basis of security by way of pledge of shares, debentures and other securities.
13 In our opinion, the company is not a chit fund, nidhi/mutual benefit fund/society. The provisions of clause 4(xiii)
are therefore not applicable to the company.
14 According to the information and explanations given to us, the Company has during the year no dealing or
trading in shares, securities, debentures and other investments.
15 According to the information and explanations given to us, the terms and conditions on which the Company has
given guarantees for loans taken by subsidiaries from banks and financial institutions are, considering the long
term involvement of the company in these entities, not prejudicial to the interests of the company.
16 According to the information and explanation given to us, term loans raised during the year were applied for
the purpose for which the loans were obtained.
17 As explained to us and on an overall examination of the balance sheet of the Company, in our opinion there are
no funds raised on short-term basis which have been used for long-term investment by the Company.
18 The company has not made any preferential allotment of shares to any parties covered in the register maintained
under section 301 of the Companies Act, 1956.
19 During the period covered by our audit, the company has not issued any secured debentures.
20 The Company has not raised any money by public issues during the period covered by our report.
21 Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial
statements and as per the information and explanations given by the management, we report that no fraud on
or by the company has been noticed or reported during the course of our audit.
For and on behalf of Contractor Nayak & Kishnadwala Chartered Accountants
Firm Registration No 101961W
Himanshu Kishnadwala Partner,
Membership No 37391
Mumbai
May 25, 2012
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MERCATOR
BALANCE SHEET AS AT MARCH 31, 2012` in Lakhs
Particulars Note As atMarch 31, 2012
As atMarch 31, 2011
A EQUITY AND LIABILITIES
1 Shareholder's funds
(a) Share capital 2.1 2,448.92 2,448.92
(b) Reserves and surplus 2.2 84,911.29 97,589.28
(c) Money received against share warrants 2.3 2,596.00 2,596.00
89,956.21 102,634.20
2 Non - current liabilities
(a) Long-term borrowings 2.4 92,205.71 105,768.87
(b) Other long term liabilities 2.5 4,671.48 3,656.84
(c) Long-term provisions 2.6 285.88 182.97
97,163.07 109,608.68
3 Current liabilities
(a) Short-term borrowings 2.7 4,296.94 11,363.33
(b) Trade payables 2.8 8,861.63 61,520.30
(c) Other current liabilities 2.9 27,737.14 21,619.06
(d) Short-term provisions 2.10 45.89 34.62
40,941.60 94,537.31
Total 228,060.88 306,780.19
B ASSETS
1 Non- current assets
(a) Fixed assets 2.11 163,482.93 169,968.93
(b) Non-current investments 2.12 425.49 462.18
(c) Long-term loans and advances 2.13 25,604.85 64,536.21
(d) Other non-current assets 2.14 0.48 0.30
189,513.75 234,967.62
2 Current assets
(a) Current investments 2.12 50.00 150.00
(b) Inventories 2.15 1,740.89 2,348.64
(c) Trade receivables 2.16 19,896.30 16,070.83
(d) Cash and bank balances 2.17 4,126.20 44,273.11
(e) Short-term loans and advances 2.18 11,528.71 8,030.00
(f) Other current assets 2.19 1,205.03 939.99
38,547.13 71,812.57
Total 228,060.88 306,780.19
Significant Accounting Policies 1
Notes forming part of the financial statements 2,3,4,5,6
As per our report of even date For and on behalf of the Board For Contractor, Nayak & Kishnadwala Chartered Accountants H. K. Mittal A. J. Agarwal Manohar Bidaye Executive Chairman Managing Director Director
Himanshu Kishnadwala Kapil Garg M. M. Agrawal K. R. Bharat Partner Director Director Director
Suchita Shirambekar
Company Secretery
Dated: May 25, 2012 Dated: May 25, 2012
Place: Mumbai Place: Mumbai
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STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2012` in Lakhs
Particulars Note
Year EndedMarch 31, 2012
Year EndedMarch 31, 2011
INCOME
(a) Revenue from operations 2.20 54,797.68 63,724.08
(b) Other income 2.21 7,268.52 6,516.66
1 Total Revenue 62,066.20 70,240.74
EXPENSES:
(a) Ship operating expenses 2.22 43,358.96 50,184.47
(b) Employee benefit expenses 2.23 1,705.73 1,261.91
(c) Finance cost 2.24 15,296.93 14,925.13
(d) Depreciation and amortisation expenses 11,899.61 11,662.55
(e) Other expenses 2.25 1,321.87 1,610.49
2 Total Expenses 73,583.10 79,644.55
3 Profit /(Loss) before taxes (1 - 2) (11,516.90) (9,403.81)
4 Tax expense:
(a) Current tax (350.00) (400.00)
(b) Short provision of tax for earlier years - 6.75
Profit /(Loss) for the period (3 - 4) (11,866.90) (9,797.06)
Earnings per share (Equity share of ` 1/- Each)
Basic and Diluted (In `) 4.7 (4.85) (4.12)
Significant Accounting Policies 1
Notes forming part of the financial statements 2,3,4,5,6
As per our report of even date For and on behalf of the Board For Contractor, Nayak & Kishnadwala Chartered Accountants H. K. Mittal A. J. Agarwal Manohar Bidaye Executive Chairman Managing Director Director
Himanshu Kishnadwala Kapil Garg M. M. Agrawal K. R. Bharat Partner Director Director Director
Suchita Shirambekar
Company Secretery
Dated: May 25, 2012 Dated: May 25, 2012
Place: Mumbai Place: Mumbai
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Cash Flow Statement for the year ended March 31, 2012` in Lakhs
Particulars March 31, 2012 March 31, 2011A Cash Flow from Operating Activities
Net (Loss) / Profit Before Tax (11,516.90) (9,403.81)
Adjustment for:
Depreciation 11,899.61 11,662.55
Interest Paid 12,817.80 8,599.03
(Profit)/Loss on Fixed Assets Scrapped / Sold (1.13) 3.24
(Profit)/Loss on Sale of Investment (25.22) (18.41)
Dividend Income (0.48) (31.39)
Operating profit before working capital changes 13,173.68 10,811.21
Adjustment for:
Trade and Other Receivables (5,219.86) (8,134.45)
Trade and Other Payables (53,035.53) (12,471.80)
Cash flow from / (used in) Operating activities (45,081.71) (9,795.04)
Direct Taxes Paid (350.00) (393.25)
Total cash from / (used in) operating activites (45,431.71) (10,188.29)
B Cash Flow from Investing Activities
Acqusition of Fixed Assets including Capital Work in Progress (5,418.73) (9,954.79)
Sale of Fixed Assets 6.24 9,212.78
(Increase) / Decrease in loans and advances 36,240.41 (2,223.64)
Proceed from sale of Investments 25.22 18.41
(Purchase)/sale of Investment 136.70 5,244.16
Dividend Income 0.48 31.39
Net Cash from Investing Activities 30,990.32 2,328.31
C Cash Flow from Financing Activities
Proceeds from Issue of Share Capital from conversion of Bonds and warrants - 2,685.00
Proceeds from Borrowings (13,005.79) (12,892.29)
Increase / Decrease in Reserves (811.10) 4,352.20
Interest Paid (12,817.80) (8,599.03)
Dividends Paid including tax thereon - -
Net Cash from Financing Activities (26,634.69) (14,454.12)
Net Increase / (decrease) in cash and cash equivalents (A + B + C) (41,076.08) (22,314.10) Cash and Cash Equivalents as at beginning of the year (As per Note 2.17) 45,213.40 5,730.18
Cash and Cash Equivalents as at end of the year (As per Note 2.17) 4,137.33 45,213.40
Cash and Cash Equivalents comprise of:
Cash and Bank Balances ( Refer Note 2.17) 4,126.20 44,273.12
Accrued Interest on fixed deposit with banks 11.13 940.28
Notes:
1) Figures in bracket represent outflows
2) Cash and cash equivalents include :
(a) Gain/(loss) on foreign exchange revaluation of ` 119.19 lakhs (P.Y. ` 86.84 lakhs).
(b) Fixed Deposit of ` 397.53 lakhs (P.Y. ` 36,019.50 lakhs) as margin deposit against acceptances and guarantees.
(c) Unclaimed dividend accounts of ` 68.06 lakhs (P.Y. ` 77.17 lakhs) which are not available for use by the company.
3) Previous Year’s figures have been recast / restated wherever necessary.
As per our report of even date For and on behalf of the BoardFor Contractor, Nayak & Kishnadwala Chartered Accountants H. K. Mittal A. J. Agarwal Manohar Bidaye Executive Chairman Managing Director Director
Himanshu Kishnadwala Kapil Garg M. M. Agrawal K. R. Bharat Partner Director Director Director
Suchita Shirambekar
Company Secretery
Dated: May 25, 2012 Dated: May 25, 2012
Place: Mumbai Place: Mumbai
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SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of Accounting
The financial statements are prepared under
the historical cost convention, on the accrual
basis of accounting and in conformity with
Generally Accepted Accounting Principles in India,
Accounting Standards as notified by the Companies
(Accounting Standards) Rules, 2006 and the other
relevant provisions of the Companies Act, 1956.
1.2 Use of Estimates
The preparation of financial statements in
conformity with Generally Accepted Accounting
Principles requires the management to make
estimates and assumptions that affect the reported
balances of assets and liabilities as of the date of
the financial statements and reported amounts
of income and expenses during the period. The
management believes that the estimates used
in the preparation of financial statements are
prudent and reasonable.
1.3 Fixed Assets
a) Fixed assets are stated at cost less
accumulated depreciation.
b) Cost includes cost of acquisition or
construction including attributable borrowing
cost, duties and other incidental expenses
related to the acquisition of the asset.
c) Operating costs and other incidental costs
including initial stores and spares of newly
acquired vessels till the port of first loading
are included in the cost of the respective
vessels.
d) Exchange differences arising on repayment
of foreign currency loans and year end
translation of foreign currency liabilities
relating to acquisition of depreciable assets
are, following option given by notification of
Ministry of Corporate Affairs (MCA) dated 29th
December 2011, adjusted to carrying cost of
the respective fixed assets.
e) Individual fixed assets costing up to ` 25,000
are fully written off.
1.4 Depreciation
a) Depreciation on all the vessels is computed
on Straight Line Method so as to write off
the original cost as reduced by the expected/
estimated scrap value over the balance useful
life of the vessels or the rates as prescribed
under the Schedule XIV of the Companies Act,
1956, whichever are higher. The said higher
rate ranges from 5% to 6% of the original cost
of the vessel.
b) Depreciation on all assets other than vessels is
computed on the Written Down Value method
in the manner and at the rates prescribed
under schedule XIV of the Companies Act,
1956.
c) On additions made to the existing vessels
depreciation is provided for the full year over
the remaining useful life of the ships.
d) Depreciation on furniture, fixtures and
electrical fittings installed at office premises
taken on lease is provided over the initial
period of lease.
1.5 Capital Work in Progress
All expenditure, including borrowings cost
incurred during the vessel acquisition period, are
accumulated and shown under this head till the
vessel is put to commercial use.
1.6 Retirement and Disposal of Ships
a) Profits on sale of vessels are accounted for on
completion of sale thereof.
b) Assets which are retired from active use and
are held for disposal are stated at the lower of
their net book value or net realisable value.
1.7 Inventories
Bunker and Lubes on vessels are valued at lower
of cost and Net Realisable Value ascertained on
First in First out basis.
1.8 Investments
a) Investments are classified into Long Term and
Current investments.
b) Long Term Investments are stated at cost of
acquisition and related expenses. Provision
for diminution, if any, in the value of such
investments is made to recognise a decline,
other than of a temporary nature.
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c) Current Investments are stated at cost of
acquisition including incidental / related
expenses or at fair value as at 31st March 2012,
whichever is less and the resultant decline, if
any, is charged to revenue.
d) Investment in shares of subsidiaries outside
India is stated at cost by converting at the rate
of exchange at the time of their acquisition.
1.9 Incomplete Voyages
Incomplete voyages represent freight received and
direct operating expenses on voyages which are
not complete as at the Balance sheet date.
1.10 Borrowing Costs
Borrowing costs incurred for the acquisition of
vessels are capitalised till first loading of cargo,
only if the time gap between date of Memorandum
of Agreement and “Date when vessel is ready for
use” is more than three months.
Incidental expenses related to borrowing are
amortised over the term of the said borrowings.
1.11 Revenue Recognition
a) Income on account of freight earnings is
recognised in all cases where loading of the
cargo is completed before the close of the
year. All corresponding direct expenses are
also provided.
b) Where loading of the cargo is not completed
before the close of the year, revenue is not
recognised and the corresponding expenses
are carried forward to the next accounting
year.
c) Income from charter hire and demurrage are
recognised on accrual basis.
d) Income from services is accounted on
accrual basis as per the terms of the relevant
agreement.
e) Dividend on investments is recognised when
the right to receive the same is established by
the balance sheet date.
f) Insurance claims are accounted on accrual
basis when there is a reasonable certainty of
the realisability of the claim amount.
1.12 Foreign Exchange Transactions
a) Monetary Current assets and liabilities
denominated in foreign currency outstanding
at the end of the year are valued at the rates
prevalent on that date.
b) Exchange differences arising on Long Term
Foreign Currency Monetary (LTFCM) items
are, following option given by notification of
MCA dated 29th December 2011, treated in the
following manner:
i. In respect of borrowings relating to or
utilised for acquisition of depreciable
capital assets, the same is adjusted to
the cost of the relevant capital asset and
depreciated over the balance life of the
said capital asset.
ii. In other cases, the same is accumulated
in a ‘Foreign Currency Monetary Item
Translation Difference Account’. The
amount so accumulated in this account
is amortised over the balance period of
such assets / liabilities or 31st March 2020,
whichever is earlier.
c) Differences in translation of other monetary
assets and liabilities and realised gains and
losses on foreign currency transactions are
recognised in the Statement of Profit and Loss.
d) Exchange differences arising on long term
foreign currency loans given to non integral
foreign operations is accumulated in Foreign
Currency Fluctuation Reserve. On disposal
of investment, the balance in the reserve is
transferred to statement of profit and loss.
1.13 Derivative instruments and Hedge Accounting
Pursuant to ICAI Announcement “Accounting for
Derivatives” on the early adoption of Accounting
Standard AS 30 “Financial Instruments:
Recognition and Measurement”, the company
has adopted the Standard, to the extent that the
adoption does not conflict with existing mandatory
accounting standards and other authoritative
pronouncements, Company Law and other
regulatory requirements.
The company classifies foreign currency
derivatives in respect of the identified transactions
at the inception of each contract meeting the
hedging criterion, as cash flow hedges. Changes
in the fair value of derivatives classified as cash
flow hedges are recognised directly in reserves
and surplus (under the head “Hedging Reserves”)
and are reclassified into the statement of profit and
loss upon occurrence of the hedged transaction.
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In respect of other derivative transactions which do
not meet the hedging criteria, the changes in their
value are recognised in the Statement of Profit and
Loss.
1.14 Employees Benefits
a) Short – term employee benefits
All employee benefits payable wholly within
twelve months of rendering the service
are classified as short term employee
benefits. Benefits such as salaries, wages,
performance incentives, etc. are recognised at
actual amounts due in the period in which the
employee renders the related service.
b) Post – employment benefits
i. Defined Contribution Plans
Payments made to defined contribution
plans such as Provident Fund are charged
as an expense as they fall due.
ii. Defined Benefit Plans
The cost of providing benefit i.e. gratuity
is determined using the Projected Unit
Credit Method, with actuarial valuation
carried out as at the balance sheet date.
Actuarial gains and losses are recognised
immediately in the Statement of Profit and
Loss.
c) Other Long – term employee benefits
i. Other Long – term employee benefit
viz. leave encashment is recognised as
an expense in the statement of profit
and loss as and when it accrues. The
company determines the liability using
the Projected Unit Credit Method, with
actuarial valuation carried out as at the
balance sheet date. The actuarial gains
and losses in respect of such benefit are
charged to the statement of profit and
loss.
1.15 Lease Accounting
a) In respect of operating lease agreements
entered into by the Company as a lessee, the
lease payments are recognised as expense in
the statement of profit and loss over the lease
term.
b) In respect of operating lease agreement
entered into by the Company as a lessor, the
initial direct costs are recognised as expenses
in the year in which they are incurred.
1.16 Earning per share:
The company reports basic and diluted earnings
per share (EPS) in accordance with Accounting
Standard – 20. The Basic EPS has been computed
by dividing the income available to equity
shareholders by the weighted average number of
equity shares outstanding during the accounting
year. The diluted EPS have been computed using
the weighted average number of equity shares and
dilutive potential equity shares outstanding at the
end of the year.
1.17 Provision for Taxation :
a) The company has opted for the Tonnage
Tax scheme and provision for tax has
been accordingly made under the relevant
provisions of the Income Tax Act, 1961.
b) Tax on incomes on which the Tonnage Tax is not
applicable is provided as per other provisions
of the Income Tax Act, 1961.
c) Deferred tax resulting from timing differences,
if any, between book and tax profits for income
other than that covered under Tonnage Tax
scheme is accounted for under the liability
method, at the current rate of tax, to the extent
that the timing differences are expected to
reverse in future.
1.18 Impairment of assets
The Company reviews the carrying values of tangible
and intangible assets for any possible impairment
at each balance sheet date. Impairment loss, if
any, is recognised in the year in which impairment
takes place.
1.19 Provisions and Contingent Liabilities:
Provisions are recognised in the accounts in respect
of present probable obligations, the amount
of which can be reliably estimated. Contingent
Liabilities are disclosed in respect of possible
obligations that arise from past events but their
existence is confirmed by the occurrence or non
occurrence of one or more uncertain future events
not wholly within the control of the Company.
1.20 Premium on redemption of Bonds / Debentures
Premium on redemption of bonds / debentures is
adjusted against Securities Premium Account.
1.21 Cash and Cash equivalents
Cash and cash equivalents for the purpose of the
cash flow statement comprise cash at bank and in
hand and short-term investments with an original
maturity of three months or less.
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MERCATOR
Notes forming part of the financial statements
2.1 Share Capital` in Lakhs
Particulars As atMarch 31, 2012
As atMarch 31, 2011
Authorised
35,00,00,000 Equity shares of ` 1/- par value. 3,500.00 3,500.00
200,00,000 Preference shares of ` 100/- par value. 20,000.00 20,000.00
23,500.00 23,500.00
Issued Capital
24,48,92,073 (24,48,92,073)Equity shares of ` 1/- each fully paid up 2,448.92 2,448.92
2,448.92 2,448.92
Subscribed and Paid Up Capital
Equity
24,48,92,073 (24,48,92,073) Equity shares of ` 1/- each fully paid up. 2,448.92 2,359.92
(a) Nil (89,00,000) shares of ` 1/- alloted on exercise of option of
conversion of 89,00,000 warrants issued on preferential basis during
the year.
-
89.00
2,448.92 2,448.92
Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period
Equity Shares
Particulars As atMarch 31, 2012
As atMarch 31, 2011
Number of shares at the beginning of the year 244,892,073 235,992,073
Add: Shares issued on exercise of option of conversion of warrants - 8,900,000
Number of shares at the end of the year 244,892,073 244,892,073
The company has two class of shares referred to as equity shares having a par value of ` 1/- and preference
shares having a par value of ` 100/-. Each holder of equity shares is entitled to one vote per share.
The Company declares and pays dividend in Indian rupees. The dividend whenever proposed by the Board of
Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the
remaining assets of the company, after distribution of all preferetial amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.
The aggregate number of bonus shares issued during the period of five years immediately preceeding the
balance sheet date is Nil (P.Y. 11,83,45,500 which were issued in the year 2005-06)
Details of each shareholder holding more than 5 percent shares in the company:
Name of the shareholder As at March 31, 2012 As at March 31, 2011
Equity shares of ` 1 each fully paid No of shares % of holding No of shares % of holding
H. K. Mittal 46,654,200 19.05 48,254,200 19.70
Archana Mittal 26,327,400 10.75 24,727,400 10.10
AHM Investments Private Limited 18,406,250 7.52 18,406,250 7.52
Lotus Global Investments Limited 14,229,669 5.81 14,350,000 5.86
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2.2 Reserves and Surplus ` in Lakhs
Particulars As atMarch 31, 2012
As atMarch 31, 2011
Capital Reserve
As per last Balance Sheet 1,693.49 1,693.49
Capital Redempetion Reserve
As per last Balance Sheet 4,000.00 4,000.00
Securities Premium Account
As per last Balance Sheet 36,456.57 31,765.21
Add: Received during the year on conversion of warrants - 4,806.00
Less: Premium paid on redemption of FCCBs - (91.39)
Less: Expenses on issue of shares pursuant to conversion of
warrants during the year
- (4.90)
Less: Premium on redemption of Unsecured debentures (81.65) (18.35)
36,374.92 36,456.57
Tonnage Tax Reserve (Utilised)
As per last Balance Sheet 17,524.83 17,524.83
Debenture Redemption Reserve
As per last Balance Sheet 21,332.50 26,970.00
Add/(Less):Transferred to/from General Reserve 4,230.00 (5,637.50)
25,562.50 21,332.50
General Reserve
As per last Balance Sheet 13,394.33 7,756.83
Add/(Less) : Transferred from/to Debenture Redemption Reserve (4,230.00) 5,637.50
9,164.33 13,394.33
Foreign Exchange Fluctuation Reserve
As per last Balance Sheet 1,235.60 1,574.76
Add/Less: Exchange fluctuation on Long Term Loans in relation to
non integral foreign operations (Net)
5,955.91 (631.76)
Add/Less: Transfer to Statement of Profit and Loss (6,187.00) 292.60
1,004.51 1,235.60
Hedging Reverse (Refer Note 1.13)
As per last Balance Sheet - -
Add/Less: For the year (498.35) -
(498.35) -
Surplus in Statement of Profit and Loss
As per last Balance Sheet 1,951.96 11,749.03
Net (Loss) after tax transferred from Statement of Profit and Loss (11,866.90) (9,797.06)
(9,914.94) 1,951.96
Closing 84,911.29 97,589.28
2.3 Money received against share warrants ` in Lakhs
Particulars As atMarch 31, 2012
As atMarch 31, 2011
Warrants against share capital
1,88,80,000 warrants of face value of ` 13.75 each 2,596.00 2,596.00
During the year ended 31.03.2011 2,77,80,000 warrants (each warrant carrying option / entitlement to subscribe 1 number of equity share of ` 1/- each) on or before May 2012 at a price of ` 55/- per share were allotted on preferential basis. Out of these option for conversion of 89,00,000 warrants was excercised during the year 2010-11, the balance 1,67,70,000 warrants lapsed on 8th May 2012 and 21,10,000 warrants on 12th May 2012 on maturity for non exercise of option.
2,596.00 2,596.00
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2.4 Long term borrowings Amount ` in Lakhs
Particulars As atMarch 31, 2012
As atMarch 31, 2011
Secured
(A) Debentures 45,000.00 51,125.00
(B) External commercial borrowings 10,295.25 8,818.38
(C ) Term loans from banks 36,910.46 45,825.49
92,205.71 105,768.87
Notes:
(i) Security details
a) Debentures referred in (A) above are secured by first mortgage on specified vessels of the company
on pari-passu basis with other lenders and first / pari-passu charge on the specified immovable
properties.
b) External Commercial Borrowings referred in (B) above are secured by exclusive charge on specified
vessels of the company of which ` 2,557.83 lakhs (P.Y. ` Nil) additonally secured by charge on loan
extended to subsidiary as well as charge on cash flows of specified vessels.
c) Term Loan refered in (C) above are secured by first charge on specified vessels, on pari passu basis
with other lenders and includes ` 13,500 lakhs (P.Y. ` 8,000 lakhs) additonally secured by charge on
loan extended to subsidiary as well as charge on cash flows of specified vessels.
(ii) Terms of repayment and interest are as follows:Loan from ROI* No. of instalments
left as on 31.03.2012
Year of maturity
Amount outstanding31.03.2012
Amount outstanding31.03.2011
Debentures 10.50% 1 2013 1,125.00 2,812.50
Debentures 9.50% 6 2015 25,000.00 25,000.00
Debentures 9.50% 1 2015 10,000.00 10,000.00
Debentures 11.90% 3 2019 15,000.00 15,000.00
Indian Banks 15.25% 8 2016 16,000.00 17,600.00
Indian Banks 11.40% 2 2013 2,499.20 4,999.20
Indian Banks 13.90% 11 2018 8,000.00 8,000.00
Indian Banks 14.50% 2 2013 7,500.00 15,000.00
Indian Banks 11.75% 2 2013 1,249.60 2,499.60
Indian Banks 14.10% 11 2018 5,500.00 -
Indian Banks 10.05% 9 2017 12,117.95 12,691.32
Indian Banks 3.42% 8 2016 10,103.41 9,488.13
Indian Banks 5.55% 13 2019 2,557.83 -
116,652.99 123,090.74 Less: Shown in current maturities of long term debt 24,447.27 17,321.87
Balance shown as above 92,205.71 105,768.87
* Applicable Rate of Interest as on 31.03.2012
2.5 Other long term liabilities ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Trade payable
Acceptances 4,189.72 3,656.84
Others
Liability towards cash flow hedges (Refer note 4.8) 481.76 -
4,671.48 3,656.84
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2.6 Long term provisions ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Provision for employee benefits
Gratuity 222.35 118.69
Compensated absences 63.53 64.28
285.88 182.97
2.7 Short term borrowings ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Secured
Loans repayable on demand
Working capital facilities from scheduled banks 2,320.72 1,363.33
Unsecured
1) Debentures
Nil (1000) - 10.25% Non convertible redeemable debentures of
` 10,00,000 each redeemed in January 2012 with 1% redemption
premium.
- 10,000.00
2) Working capital facilities from scheduled banks 1,976.22 -
4,296.94 11,363.33
Note:
Working capital facilities from Scheduled Banks are secured by second charge on specified vessels and 1st
charge on all receivables and other current assets of the company on pari-passu basis.
2.8 Trade payables ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Due to Micro, Small and Medium Enterprises (Refer Note 5.1) - -
Others 8,861.63 61,520.30
8,861.63 61,520.30
2.9 Other current liabilities ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Current maturities of long-term debt
1) Debentures (Refer Note 2.4 (ii) ( c) and (d)) 6,125.00 1,687.50
2) External commercial borrowings (Refer Note 2.4 (i)(b)) 2,365.99 669.75
3) Term loans from banks (Refer Note 2.4 (i) (c) and (d)) 15,956.29 14,964.62
Interest accrued and not due on borrowings 2,437.80 2,768.25
Unpaid dividend* 68.05 77.17
For Other liabilities
Salaries & wages payable 112.74 89.66
Statutory dues payables 554.99 914.61
Liability towards cash flow hedges (Refer Note 4.8) 16.60 -
Advance from customer - 165.66
Other payables** 99.68 281.83
27,737.14 21,619.06
* These figures do not include any amounts, due and outstanding, to be credited to Investor Education and
Protection Fund.
** Other payables includes uncompleted voyages net off income accrued but not due in the previous year.
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2.10 Short term provisions ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Provision for employee benefits
Gratuity 24.71 13.19
Compensated absences 21.18 21.43
45.89 34.62
2.11 Fixed Assets ` in Lakhs
Original Cost Depreciation/Amortisation Net Book Value
Net Book Value
Particulars As at April 1, 2011
Addition for the
year
Other Adjustments
Deduction for the
year
As at March 31,
2012
Upto March 31,
2011
Adjustment in respect of Assets
Sold/Discarded
/held for disposal
For the Year
Up to March 31,
2012
As at March 31,
2012
As at March 31,
2011
Tangible AssetsLand 11.31 – – – 11.31 – – – – 11.31 11.31
Office Premises
(Refer Note 1 , 2)
344.28 – – – 344.28 126.50 – 10.89 137.39 206.89 217.78
Vessels (Refer
Note 3)
212,288.68 3,087.39 2,317.04 – 217,693.11 42,794.48 – 11,794.76 54,589.24 163,103.87 169,494.19
Furniture and
Fixtures
314.57 – – – 314.57 246.00 – 49.00 295.00 19.57 68.56
Vehicles 254.62 – – 11.77 242.85 150.30 7.30 26.37 169.37 73.48 104.33
Office
Equipments
105.11 – – – 105.11 54.56 – 7.07 61.63 43.48 50.56
Computer
Equipments
115.22 14.30 – 1.10 128.42 93.03 0.46 11.52 104.09 24.33 22.20
Total 213,433.79 3,101.69 2,317.04 12.87 218,839.65 43,464.87 7.76 11,899.61 55,356.72 163,482.93 169,968.93Previous Year 222,009.09 9,954.78 (385.52) 18,144.54 213,433.81 41,116.39 9,314.06 11,662.55 43,464.88 169,968.93 180,892.69
Note
1) Includes cost of 10 shares of ` 50/- each fully paid in Mittal Tower Premises Co-op. Society Ltd.
2) Office premises having gross value ` 343.16 lakhs (P.Y. ` 343.16 lakhs) and accumulated depreciation
` 136.96 lakhs (P.Y. ` 126.11 /- lakhs) are given on operating Lease.
3) Other adjustments include exchange fluctation loss on Long term foreign currency Loans ` 2,317.04 lakhs
(P.Y. Exchange Fluctuation Gain ` 385.52 /- lakhs)
2.12 Investments ` in Lakhs
Particulars Nos As at March 31, 2012
Nos As at March 31, 2011
Non Current Investments – At cost
Trade investments (Unquoted)
Investment in Equity Instruments of Subsidiaries
Mercator Oil and Gas Limited 150,000 15.00 150,000 15.00
Mercator International Pte Limited 100,000 28.80 100,000 28.80
Mercator Offshore Holdings Pte. Limited ** 1 – 1 –
Mercator Petroleum Limited 89,000 8.90 89,000 8.90
Mercator Offshore (P) Pte Limited 13,992 4.57 13,992 4.57
Oorja Resources India Private Limited 25,000 2.50 – –
Mercator FPSO Private Limited 10,000 1.00 – –
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` in Lakhs
Particulars Nos As at March 31, 2012
Nos As at March 31, 2011
OthersInvestment in Equity InstrumentsMarg Swarnabhoomi Port Private Limited 1,250 0.13 1,250 0.13
Non trade investments (Unquoted)Investment in OthersUnits of Indian Real Opportunity Venture Capital Fund 36,459 364.59 40,479 404.78
Aggregate amount of Unquoted investments 425.49 462.18
Current Investments – at the lower of cost and fair valueQuotedInvestments in Mutual FundsAxis Equity Fund 500,000 50.00 500,000 50.00
SBI Magnum Insta Cash Fund Daily Dividend – – 597,004 100.00
(Market value of current investments on 31.3.12 is
` 51.75 lakhs (P.Y. ` 155.15 lakhs)
Aggregate amount of Quoted investments 50.00 150.00
Note: The Company has agreed to maintain its beneficial stake of 100% in its subsidiary viz. Mercator
International Pte. Ltd. and upto 51% in subsidiary/step down subsidiary viz. Mercator Offshore (P) Pte. Ltd.; and
Mercator Lines (Singapore) Ltd. to the respective lenders under their financial assistance.
** Cost ` 51/-
2.13 Long term loans and advances ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Unsecured, Considered Good
Loans and advances to related parties* 17,892.62 56,564.14
Capital Advances 940.00 940.00
Capital Advances to related parties** 4,199.96 4,199.96
Deposits
Deposits with government and semi government bodies 17.28 17.28
Other deposits 940.21 927.71
Other loans and advances
Unamortised finance charges 269.78 351.30
Prepaid expenses - 0.82
MAT credit available 1,345.00 1,535.00
25,604.85 64,536.21
* Loans and advances to related parties
Mercator FPSO Private Limited 196.46 -
Mercator International Pte Limited 14,576.62 35,601.86
Mercator Offshore (P) Pte Limited 1.89 20,542.85
Mercator Offshore Holding Pte Limited - 44.65
Mercator Oil & Gas Limited - 92.04
Mercator Petroleum Limited 2,052.14 282.74
Oorja Resources India Private Limited 1,065.51 -
17,892.62 56,564.14
** Capital Advances to related parties
Vaitarna Marine Infrastructure Private Limited 4,199.96 4,199.96
4,199.96 4,199.96
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2.14 Other non current assets ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Accrued interest on fixed deposit with banks 0.48 0.30
0.48 0.30
2.15 Inventories ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
At Cost
Bunker and lubes 1,740.89 2,348.64
1,740.89 2,348.64
2.16 Trade receivables ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Unsecured, Considered Good
Debts outstanding for a period exceeding six months from the date they
were due for payment
9,908.12 8,371.19
Others 9,988.18 7,699.64
19,896.30 16,070.83
2.17 Cash and bank balances ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Cash and cash equivalents
Cash in hand 3.02 3.31
Balances with banks 3,654.96 1,148.72
Deposits with banks with 3 months maturity 98.41 7,000.00
Others
Fixed Deposits with bank with maturity more than 3 months 369.81 36,121.08
4,126.20 44,273.11
Balances with banks in unpaid dividend accounts 68.06 77.17
Balances with banks includes amount in escrow account 4.90 4.90
Fixed Deposits with more than 12 months maturity 2.20 352.40
Balances with banks held as margin money deposits against guarantees 397.53 36,018.30
2.18 Short term loans and advances ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Unsecured, Considered Good
Loans and advances to related parties* 323.13 340.08
Others
Advance to employees 51.65 57.82
Advance to suppliers 3,940.27 4,087.36
Advances recoverable 0.46 -
Inter corporate deposits to related parties** 1,850.00 -
Inter corporate deposits to others 1,834.51 1,253.39
Advance payment of tax (net of provisions) 3,259.77 1,653.01
Service tax receivable 68.45 123.48
Unamortised finance charges 134.27 256.74
Prepaid expenses 66.20 258.12
11,528.71 8,030.00
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` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Loans and advances to related parties
MLL Logistics Private Limited 323.13 318.13
MCS Holdings Pte Limited - 21.95
323.13 340.08
Inter corporate deposits to related parties
MLL Logistics Private Limited 1,850.00 -
1,850.00 -
2.19 Other current assets ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Accrued interest on fixed deposit with banks 10.65 939.99
Income accrued but not due * 1,194.38 -
1,205.03 939.99
* Income accrued but not due includes uncompleted voyages
2.20 Revenue from operations ` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Freight 31,028.06 43,143.66
Charter hire 14,773.92 13,423.72
Dispatch and demurrage 349.67 1,999.50
Ship management fees - 168.38
Cargo handling services 8,646.03 4,988.82
54,797.68 63,724.08
2.21 Other income ` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Dividend received on current investments 0.48 31.39
Rent received 93.68 144.00
Net gain on foreign currency transactions/translation 4,506.08 -
Interest income 2,479.13 6,326.10
Gain on sale of current investments (net) 25.22 18.41
Gain on sale of assets (net) 1.13 (3.24)
Insurance claims received 137.24 -
Miscellaneous income* 25.57 -
7,268.52 6,516.66
* Miscellaneous income includes sundry balances written off/back.
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2.22 Ship operating expenses ` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Bunker consumed 14,098.59 14,284.87
Vessel /Equipment hire expenses 6,341.40 15,575.62
Technical services 4,443.30 4,342.85
Agency, Professional and service expenses 646.79 639.58
Crew expenses 2,666.97 2,050.16
Communication expenses 130.38 124.30
Miscellaneous expenses 517.50 808.02
Commission 67.12 351.08
Insurance 713.49 678.68
Port expenses 2,273.97 2,413.81
Repairs and maintenance 8,044.67 6,807.90
Stevedoring, transport and freight 3,414.78 2,107.60
43,358.96 50,184.47
2.23 Employee benefits expenses ` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Salaries, wages, bonus, etc. 1,576.52 1,147.32
Contribution to provident and other funds 62.33 49.21
Employee welfare expenses 66.88 65.38
1,705.73 1,261.91
2.24 Finance cost ` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Interest expense 14,898.57 13,751.12
Other borrowing costs 298.66 1,174.01
Applicable net gain/loss on foreign currency transactions/translation 99.70 -
15,296.93 14,925.13
2.25 Other expenses ` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Rent 412.37 407.47
Payment to auditors
As auditors 20.00 15.00
For Tax Audit 2.00 1.75
For Other services (certification and other matters) 16.00 15.60
Repairs to office premises and premises acquired on lease 74.83 69.93
Insurance 24.26 21.34
Net loss on foreign currency transaction/translation - 425.22
Legal, Professional and consultancy expenses 143.31 132.61
Donation 0.70 0.60
Communication expenses 56.52 46.95
Conveyance, car hire and travelling 212.94 206.77
Advertisement 9.26 4.29
Bad Debts and other amounts adjusted (Net) - 2.41
Miscellaneous expenses 349.68 260.55
1,321.87 1,610.49
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3. ADDITIONAL DISCLOSURES AS PER REVISED SCHEDULE VI
3.1 Contingent Liabilities not provided forCurrent Year(` in Lakhs)
Previous Year(` in Lakhs)
Counter guarantees issued by the Company for guarantees obtained from
bank (net of margin).
5,243.83 2,190.81
Counter guarantees issued by the Company for guarantees obtained from
bank on behalf of subsidiaries.
256.05 253.64
Corporate guarantees issued by the company on behalf of subsidiaries. 101,320.89 50,611.22
TOTAL 1,06,820.77 53,055.67
3.2 Letters of comfort issuedCurrent Year(` in Lakhs)
Previous Year(` in Lakhs)
Letters of comfort issued by the company on behalf of wholly owned / step
down subsidiaries.
6,906.13 29,384.17
3.3 The company received the Show Cause cum Demand notices from the Commissioner of service tax aggregating to
` 7,453 Lakhs for FY 2006-07 to FY 2010-11. The Company has filed its reply against the said notices. There is
no further communication for the same from the authorities. The company is advised that the said demand is
legally unsustainable and hence the Company does not expect any liability in the matter.
3.4 No provision has been made in respect of disputed demands from Income-tax Authorities to the extent of
` 5697.51 Lakhs Lakhs (` 645.14 Lakhs), since the company has reasons to believe that it would get relief at the
appellate stage as the said demands are excessive and erroneous. Against the above, the Company has already
paid ` 1,541.77 Lakhs (NIL).
3.5 Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of
advances) as at March 31, 2012 ` NIL (` NIL).
3.6 CIF value of Imports
Current Year(` in Lakhs)
On CIF basis during the accounting year in respect of:
Stores & Spares 718.63
Capital Goods (including CWIP) 3014.50
3.7 Value of Imported & Indigenous Spare Parts consumed
Current Year
(` in Lakhs) %
Imported Spares 718.63 40 %
Indigenous Spares 1096.83 60 %
3.8 Expenditure in foreign currency
Current Year(` in Lakhs)
On Repairs/Renovations and expenses of Vessels 8431.96
On Bunker 7621.07
On Freight 654.85
On Vessel Expenses 1684.96
On Travelling 89.54
On Interest 872.04
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3.9 Earnings in foreign currency on account of
Current Year(` in Lakhs)
Shipping Income 7170.13
Other Income 1627.46
Note: – For previous year figures refer point 5.6
3.10 Remittance in foreign currencies for dividends
The Company has not remitted any amount in foreign currencies on account of dividends during the year and
does not have information as to the extent to which remittance, if any, of foreign currencies on account of
dividends have been made by/on behalf of non-resident shareholders. The particulars of dividend payable to
non-resident shareholders declared during the year is as under:
Current Year Previous Year
i) Number of non-resident shareholders - 1,839
ii) Number of ordinary shares held by them - 4,74,55,857
iii) Gross amount of dividend - 94.91
4. DISCLOSURES AS PER ACCOUNTING STANDARDS NOTIFIED BY THE COMPANIES (ACCOUNTING STANDARDS) RULES, 2006.
4.1 The company has opted for accounting the exchange differences arising on reporting of long term foreign
currency monetary items in line with the notification of Ministry of Corporate Affairs (MCA) dated 31st March
2009/29th December 2011 on Accounting Standard (AS)-11. In line with the above notification, gains / losses
arising during the year from the effect of changes in foreign exchange rates on foreign currency loans relating
to acquisition of depreciable capital assets, are adjusted to the cost of the fixed assets. The addition to fixed
assets on account of the same is ` 2,317.04 Lakhs (Previous year deduction ` 385.53 Lakhs).
4.2 In view of long term interest of the company in its subsidiaries and step down subsidiaries no provision is
made for diminution in value of investment, if any, in these subsidiary companies and step down subsidiary
companies.
4.3 Disclosures in accordance with Revised Accounting Standard (AS) – 15 on “Employee Benefits”:
Disclosure as required by AS-15 is as under:
(A) Defined Contribution Plans:
The Company has recognised the following amounts in the Statement of Profit and Loss for the year:
(` In Lakhs)
Sr. No.
Current Year Previous Year
i Contribution to Employees’ Provident Fund 55.47 42.96
ii Contribution to Employees’ Family Pension Fund NIL NIL
iii Contribution to Employees’ Superannuation Fund NIL NIL
Total 55.47 42.96
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(B) Defined Benefit Plans:
(i) Changes in the Present Value of Obligation
(` In Lakhs)
Sr. No.
Particulars For the Year Ended March 31, 2012
For the Year Ended March 31, 2011
Gratuity Leave Encashment
Gratuity Leave Encashment
Present Value of Obligation as at April
1, 2011 (Opening)
131.88 85.70 87.28 58.56
Interest Cost 10.55 6.86 6.55 4.39
Past Service Cost NIL NIL NIL NIL
Current Service Cost 47.35 26.95 44.18 27.84
Curtailment Cost/ (Credit) NIL NIL NIL NIL
Settlement Cost/(Credit) NIL NIL NIL NIL
Benefits paid 5.90 19.35 4.89 18.34
Actuarial (Gain)/Loss 63.18 (15.45) (1.24) 13.25
Present Value of Obligation as at March
31, 2012
247.06 84.71 131.88 85.70
(ii) Expenses recognised in the Statement of Profit and Loss
(` In Lakhs)
Sr. No.
Particulars For the Year Ended March 31, 2012
For the Year Ended March 31, 2011
Gratuity Leave Encashment
Gratuity Leave Encashment
Current Service Cost 47.35 26.95 44.18 27.84
Past Service Cost NIL NIL NIL NIL
Interest cost 10.55 6.86 6.55 4.39
Curtailment Cost/ (Credit) NIL NIL NIL NIL
Settlement Cost/ (Credit) NIL NIL NIL NIL
Net Actuarial (Gain)/ Loss 63.18 (15.45) (1.24) 13.25
Employees’ Contribution NIL NIL NIL NIL
Total Expenses recognised in
Profit and Loss A/c
121.08 18.35 49.49 45.48
(ii) Following are the Principal Actuarial Assumptions used as at the balance sheet date:
Sr.No.
Particulars FY 2011-12Gratuity and Leave
Encashment
FY 2010-11Gratuity and Leave
Encashment
a Discount Rate 8.00% 7.5%
b Salary Escalation Rate –
Management
12% 12%
c Staff Turnover Rate 10% to 2% p.a. age related
on graduated scale
11%
d Mortality Table LIC (1994-96) Ultimate LIC (1994-96) Ultimate
The estimates of future salary increases considered in actuarial valuation takes into account inflation,
seniority, promotion and other relevant factors.
4.4 Segment Reporting
In accordance with paragraph 4 of Accounting Standard (AS) 17 ‘Segment Reporting’, the company has disclosed
segment result on the basis of Consolidated Financial Statements. The same are therefore not disclosed for
stand alone Financial Statements.
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4.5 Related Party Disclosures:
A List of Related Parties
I Subsidiaries – Fellow/ Step down subsidiaries
1 Mercator International Pte Limited (MIPL) – Singapore
2 Mercator Oil and Gas Limited (MOGL) – India
3 Mercator Petroleum Limited – India
4 Oorja Resources India Pvt. Ltd – India
5 Mercator FPSO Pvt. Ltd. – India
6 Mercator Offshore Holdings Pte Ltd (MOHPL) – Singapore
7 Mercator Offshore (P) Pte Ltd – (formerly known as Mercator Offshore (Nigeria) Pte Ltd
8 Oorja Holdings Pte.Limited. (OHL) Singapore
9 Mercator Lines Singapore Pte Ltd (MLS)
10 Mercator Offshore Ltd Singapore
11 Ivorene Oil Services Nigeria Ltd. (Singapore)
12 Varsha Marine Pte Ltd (Singapore)
13 Vidya Marine Pte Ltd (Singapore)
14 Mercator Lines (Panama) Inc
15 Chitra Prem Pte. Ltd. (Singapore)
16 Target Ship Management Pte. Ltd. (Singapore)
17 Oorja 1 Pte Ltd (Singapore)
18 Oorja 2 Pte Ltd (Singapore)
19 Oorja 3 Pte Ltd (Singapore)
20 Oorja Mozambique Limitada (Mozambique)
21 MCS Holdings Pte Ltd (Singapore)
22 Oorja (Batua) Pte. Ltd.(Singapore)
23 PT Karya Putra Borneo
24 PT Indo Perkasa (IPK)
25 Oorja Indo Petangis Four (Indonesia)
26 Oorja Indo Petangis Three (Indonesia)
27 Oorja Indo KGS (Indonesia)
28 Broadtec Mozambique Minas Limitada (Mozambique)
29 PT Mincon Indo Resources (Jakarta)
30 Bima Gema Permata PT (Jakarta)
31 Nuansa Sakti Kencana PT (Jakarta)
32 Varsha Vidya Inc (Panama)
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II Key Management Personnel
1 H.K Mittal
2 A.J. Agarwal
III Enterprises over which Key Management Personnel exercise significant control
1 AAAM Properties Private Limited
2 Ankur Fertilizers Private Limited
3 AHM Investments Private Limited.
4 Vaitarna Marine Infrastructure Ltd. (Erstwhile Mech Marine Engineers Pvt Ltd)
5 Mercator Healthcare Limited
6 Rishi Holding Private Limited
IV Enterprises over which Directors/Relative of Directors/Key Management Personnel/Relative of Key Management Personnel exercise significant influence.
1 MLL Logistics Private Limited
2 MMAXX Dredging Pvt Ltd (Liquidated during the year)
3 CMA Constructions & Properties Pvt Ltd (Liquidated during the year)
4 Zicom Electronic Security Systems Ltd
5 OMCI Ship Management Pvt Limited
V Relative of Key Management Personnel
1 Adip Mittal
B Details of Transactions with above parties (` In Lakhs)
Name of the Transaction Subsidiary Companies
Enterprises over which Key
Management Personnel exercise significant control
Enterprises over which Directors/Relative of Directors/
Key Management Personnel/Relative of Key Management
Personnel exercise significant influence.
Total
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Services Rendered 1,145.76 452.32 – – – – 1,145.76 452.32
Interest Income 1,638.94 4,241.94 – – 24.08 – 1,663.01 4,241.94
Services Received 654.85 – 30.60 – – 36.37 685.45 36.37
Sale of Capital Asset – 8,825.00 – – – – – 8,825.00
Purchase of Capital Asset – 7,481.60 – – – – – 7,481.60
Reimbursments of Expenses Paid 932.40 102.31 30.97 642.95 3.24 – 966.61 745.27
Reimbursments of Expenses Received
1,200.06 4,148.11 135.76 0.06 – 0.02 1,335.83 4,148.19
Finance Provided – –
(Including Loans & Equity
Conributions)
– –
Loans – –
Loans Given during the Year 5,093.34 29,872.36 – – – – 5,093.34 29,872.36
Loans Repaid During the Year 45,691.93 33,833.22 – – – – 45,691.93 33,833.22
Equity Contributions – –
During the Year – 4.57 – – – – – 4.57
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B Details of Transactions with above parties (` In Lakhs)
Name of the Transaction Subsidiary Companies
Enterprises over which Key Management
Personnel exercise significant control
Enterprises over which Directors/Relative of Directors/
Key Management Personnel/Relative of Key Management
Personnel exercise significant influence.
Total
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Inter Corporate Deposits
Inter Corporate Deposits given
during the year
– – – – 1,850.00 – 1,850.00 –
Inter Corporate Deposits received
during the year
– – – – 157.50 – 157.50 –
Inter Corporate Deposits repaid
during the year
– – – – 157.50 – 157.50 –
Advances – –
Advances Given During the Year – – 15.38 4,914.46 5.00 – 20.38 4,914.46
Advances Received Back During
the Year
– 9.97 – – – 0.19 – 10.16
Advances Received From
Customers
– 465.65 – – – – – 465.65
Advances Adjusted Against Services
Rendered
– 299.99 – – – – – 299.99
Guarantees and Comfort Letters – –
Guarantees Given 320,534.75 58249.525 320,534.75 58,249.53
Outstanding as on 31.03.2012 – –
Comfort Letter 6,906.13 29,384.17 6,906.13 29,384.17
Guarantees 101,376.94 50,864.42 101,376.94 50,864.42
Outstanding balances as on 31.03.2012
– –
Loans, Advances and Receivables – –
Loans Advances and Receivables – –
Loans 17,892.61 56,586.09 – – – – 17,892.61 56,586.09
Advances – – 15.61 – 323.13 318.13 338.74 318.13
Capital Advances – – 4,199.96 – – – 4,1996.96 -
Receivables 190.08 759.91 – – – – 190.08 759.91
Outstanding Balances of Trade & Other Receivables & Payable as on 31.03.2012
Trade & Other Receivables 763.90 2.06 – – 924.36 1,003.53 1,688.26 1,005.59
Trade & Other Payables 669.34 – 19.62 129.33 – – 688.96 129.33
Advance Received From Customers – 165.66 – – – – – 165.66
Inter Corporate Deposit
Balance as on 31.03.2012 – – – – 1,850.00 – 1,850.00 -
Deposit
Balance as on 31.03.2012 – – 15.00 15.00 500.00 500.00 515.00 515.00
Remuneration paid to Key
Management Personnel
96.00 96.00
Remuneration paid to Relative of
Key Management Personnel
16.64 5.58
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Partywise details of material transactions (` In Lakhs)
Name of the Transaction Subsidiary Companies Enterprises over which Key Management
Personnel exercise significant control
Enterprises over which Directors/Relative of Directors/
Key Management Personnel/Relative of Key Management
Personnel exercise significant influence.
Total
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Services RenderedMercator Lines (Singapore) Limited 1,145.76 452.32 1,145.76 452.32
Total 1,145.76 452.32 – – 1,145.76 452.32Interest IncomeMercator International Pte Limited 623.90 3,468.43 623.90 3,468.43
Mercator Offshore (P) Pte. Ltd. 984.17 773.51 984.17 773.51
MLL Logistics Private Limited – 24.08 24.08 –
Total 1,608.06 4,241.94 – – 24.08 – 1,632.14 4,241.94Services ReceivedMercator International Pte Limited 654.85 654.85 –
Vaitarna Marine Infrastructure Ltd 30.60 30.60 –
MLL Logistics Private Limited 3.60 – 3.60
OMCI Ship Management Pvt Limited 32.77 – 32.77
Total 654.85 – 30.60 – – 36.37 685.45 36.37Sale of Capital AssetMercator Offshore (P) Pte. Ltd. 8,825.00 – 8,825.00
Total – 8,825.00 – – – – – 8,825.00Purchase of Capital Asset –
Mercator International Pte Limited 7,481.60 – 7,481.60
Total – 7,481.60 – – – – – 7,481.60Reimbursments of Expenses PaidAnkur Fertilizers Private Limited 7.60 7.60 –
MLL Logistics Pvt Limited 3.24 3.24 –
Mercator Offshore (P) Pte. Ltd. – – –
Mercator Lines (Singapore) Limited 932.40 932.40 –
Mercator International Limited 102.31 – 102.31
OMCI Ship Management Pvt Limited 23.37 630.85 23.37 630.85
Total 932.40 102.31 30.97 630.85 3.24 – 966.61 733.16Reimbursments of Expenses ReceivedMercator Lines (Singapore) Limited 2,898.80 – 2,898.80
Ankur Fertilizers Private Limited – –
Vaitarna Marine Infrastructure Ltd 0.06 – 0.06
Mercator FPSO Pvt Ltd 196.76 196.76 –
Mercator Offshore (P) Pte. Ltd. 636.00 1,215.58 636.00 1,215.58
MMAXX Dredging Pvt Ltd 0.02 – 0.02
OMCI Ship Management Pvt Limited 129.43
Total 832.76 4,114.38 129.43 0.06 – 0.02 832.76 4,114.46Finance Provided(Including Loans & Equity Conributions)LoansLoans Given during the YearMercator International Pte Limited 10,007.74 – 10,007.74
Mercator Petroleum Limited 1,769.40 1,769.40 –
Mercator Offshore (P) Pte. Ltd. 893.90 19,724.63 893.90 19,724.63
Mercator Oil & Gas Limited 1,203.70 1,203.70 –
Oorja Resources India Private Ltd 1,000.00 1,000.00 –
Total 4,866.99 29,732.36 – – – – 4,866.99 29,732.36
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Partywise details of material transactions (` In Lakhs)
Name of the Transaction Subsidiary Companies Enterprises over which Key Management
Personnel exercise significant control
Enterprises over which Directors/Relative of Directors/
Key Management Personnel/Relative of Key Management
Personnel exercise significant influence.
Total
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Loans Repaid During the YearMercator International Pte Limited 21,220.63 32,703.82 21,220.63 32,703.82
Mercator Offshore (P) Pte. Ltd. 23,055.03 23,055.03 –
Total 44,275.66 32,703.82 – – – – 44,275.66 32,703.82Equity ContributionsDuring the YearMercator Offshore (P) Pte. Ltd. 4.57 – 4.57
Total – 4.57 – – – – – 4.57Inter Corporate DepositsInter Corporate Deposits given during the yearMLL Logistics Private Limited – – – – 1,850.00 1,850.00 –
Total – – – – 1,850.00 – 1,850.00 –Inter Corporate Deposits received during the yearZicom Electronic Security Systems
Ltd
– 157.50 157.50 –
Total – – – – 157.50 – 157.50 –Inter Corporate Deposits repaid during the yearZicom Electronic Security Systems
Ltd
– 157.50 157.50 –
Total – – – – 157.50 – 157.50 –AdvancesAdvances Given During the YearMLL Logistics Pvt Ltd 5.00 5.00 –
Vaitarna Marine Infrastructure Ltd 15.38 4,914.46 15.38 4,914.46
Total – – 15.38 4,914.46 5.00 – 20.38 4,914.46Advances Received Back During the YearOorja Resources India Pvt Ltd 9.97 – 9.97
MMAXX Dredging Pvt Ltd 0.19 – 0.19
Total – 9.97 – – – 0.19 – 10.16Advances Received From CustomersMercator Lines ( Singapore) Limited 465.65 – 465.65
Total – 465.65 – – – 465.65Advances Adjusted Against Services RenderedMercator Lines ( Singapore) Limited 299.99 – 299.99
Total – 299.99 – – – – – 299.99Guarantees and Comfort LettersGuarantees GivenMercator International Pte Ltd 9,823.00 – 9,823.00
Mercator Oil and Gas Limited 243,800.00 243,800.00 –
Mercator Offshore (P) Pte. Ltd. 76,734.75 37,282.75 76,734.75 37,282.75
Mercator Petroleum Limited 10,943.78 – 10,943.78
Total 320,534.75 58,049.53 – – – – 320,534.75 58,049.53Outstanding as on 31.03.2012Comfort LetterMercator Lines (Singapore) Limited 6,906.13 6,920.75 6,906.13 6,920.75
Varsha Marine Pte Ltd/ Vidya Marine
Pte Ltd
22,463.42 – 22,463.42
Total 6,906.13 29,384.17 – – – – 6,906.13 29,384.17
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Partywise details of material transactions (` In Lakhs)
Name of the Transaction Subsidiary Companies Enterprises over which Key Management
Personnel exercise significant control
Enterprises over which Directors/Relative of Directors/
Key Management Personnel/Relative of Key Management
Personnel exercise significant influence.
Total
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
GuaranteesMercator International Pte Ltd 4,670.39 – 4,670.39
Mercator Offshore (P) Pte. Ltd. 72,424.81 35,050.25 72,424.81 35,050.25
Mercator Petroleum Limited 12,533.12 10,943.78 12,533.12 10,943.78
Total 84,957.94 50,664.42 – – – – 84,957.94 50,664.42Outstanding balances as on 31.03.2012Loans, Advances and ReceivablesLoans Advances and ReceivablesLoansMercator International Pte Limited 14,576.62 35,601.86 14,576.62 35,601.86
Mercator Petroleum Limited 2,052.14 2,052.14 –
Mercator Offshore (P) Pte. Ltd. 20,542.85 – 20,542.85
Total 16,628.75 56,144.71 – – – – 16,628.75 56,144.71AdvancesMLL Logistics Pvt Ltd 323.13 318.13 323.13 318.13
Vaitarna Marine Infrastructure Ltd 15.61 15.61 –
Total – – 15.61 – 323.13 318.13 338.74 318.13Capital AdvancesVaitarna Marine Infrastructure Ltd 4,199.96 4,199.96 –
Total – – 4,199.96 – – – 4,199.96 –ReceivablesMercator Lines ( Singapore) Limited 190.08 759.91 190.08 759.91
Total 190.08 759.91 – – – – 190.08 759.91Outstanding Balances of Trade andOther Receivables & Payables as on 31.03.2012Trade and Other ReceivablesMercator Lines ( Singapore) Limited 763.90 2.06 763.90 2.06
MLL Logistics Private Limited 924.36 1,003.53 924.36 1,003.53
Total 763.90 2.06 – – 924.36 1,003.53 1,688.26 1,005.59Trade and Other PayablesMercator Lines ( Singapore) Limited 669.34 669.34 –
OMCI Ship Management Pvt Limited 19.62 129.33 19.62 129.33
Total 669.34 – 19.62 129.33 – – 688.96 129.33Advance Received From CustomersMercator Lines (Singapore) Limited 165.66 – 165.66
Total – 165.66 – – – – – 165.66Inter Corporate DepositBalance as on 31.03.2012MLL Logistics Private Limited 1,850.00 1,850.00 –
Total – – – – 1,850.00 – 1,850.00 –DepositBalance as on 31.03.2012MLL Logistics Private Limited – – 500.00 500.00 500.00 500.00
Rishi Holding Private Limited – – 15.00 15.00 15.00 15.00
Total – – 15.00 15.00 500.00 500.00 515.00 515.00Remuneration paid to Key Management Personnel
96.00 96.00
Remuneration paid to Relative of Key Management Personnel
16.64 5.58
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4.6 Disclosure in respect of Leases as per AS 19:
(A) In respect of Operating Leases (as Lessee): ` In Lakhs
Year EndedMarch 31,
2012
Year endedMarch 31,
2011(a) Operating Leases
Disclosures in respect of cancellable agreements for office premises taken
on lease
(i) Lease payments recognised in the Statement of Profit and Loss 389.36 383.63
(ii) Significant leasing arrangements
The Company has given refundable interest free security deposits
under the agreements.
The lease agreements are upto 60 months.
These agreements also provide for periodical increase in rent.
During the year one of the lease agreement was renewed for 60 months
and the non cancellable period by both the parties is 24 months.
(iii) Future minimum lease payments under non-cancellable agreements
Not later than one year 348.34 165.88
Later than one year and not later than five years 159.66 NIL
Later than five years NIL NIL
(B) In respect of Operating Leases (as Lessor): ` In Lakhs
Year EndedMarch 31,
2012
Year endedMarch 31,
2011(a) Operating Leases
Disclosures in respect of cancellable agreements for office premises
given on lease
(i) Lease payments recognised in the Statement of Profit and Loss 93.68 144.00
(ii) Significant leasing arrangements
- During the year the above lease agreement has been expired
and the company has refunded the interest free security
deposit.
(iii) Future minimum lease payments under non-cancellable
agreements
- Not later than one year NIL NIL
- Later than one year and not later than five years NIL NIL
- Later than five years NIL NIL
General Description of leasing arrangement
(i) Leased Assets: Premises, Godown
(ii) Future lease rentals are determined as per Agreements.
4.7 Earning Per Share as per AS 20
Particulars Year Ended31/03/2012
Year ended31/3/2011
Net Profit after Tax
– Basic and Diluted (` in Lakhs) (11,866.90) (9803.81)
Number of Shares used in computing Earning Per Share
– Basic and Diluted 244,892,073 237,893,991
Earning per share (equity shares of face value ` 1/-)
– Basic and Diluted (in `) (4.85) (4.12)
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4.8 Derivative Instruments
(A) The Company uses foreign currency forward contracts to hedge its risks associated with foreign Currency
fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency
forward contracts is governed by the Company’s strategy approved by the Board of Directors, which provide
principles on the use of such forward contracts consistent with the Company’s Risk Management Policy.
The Company does not use forward contracts for speculative purposes.
(B) Details of outstanding Hedging Contracts
Derivative contracts
Amount in foreign currency
Equivalent ` In Lakhs
Amount in foreign currency
Equivalent ` In Lakhs
March 31, 2012 March 31, 2012 March 31, 2011 March 31, 2011
USD/INR 39.49 2,000.00 NIL NIL
USD/INR 22.14 1,000.00 NIL NIL
USD/INR 22.19 1,000.00 NIL NIL
(C) Foreign Currency Exposures
The year end exposure in currencies other than the financial currency of the Company, that were not hedged
by a derivative instrument or otherwise are given below:
2011-12 2010-11` Lakhs Fx.Million ` Lakhs Fx.Million
Accounts Receivable 2469.88 USD 4.65 9,370.76 USD 20.99
Balance in EEFC Account 170.64 USD 0.33 32.19 USD 0.07
Fixed Deposit with foreign Banks 98.41 USD 0.19 Nil Nil
Loan & Advances 14773.46 USD 28.91 3,832.82 USD 8.18
SGD 0.21
EURO 0.13
JPY 3.02
0.00
SLR 0.13
DKK0.05
Advance from Customers - - 165.66 USD 0.37
Accounts Payable/Acceptances
(including capital commitments
made but not provided for)
2344.62 USD4.45
EURO 0.03
SGD 0.03
JPY 2.78
AED 0.13
2,732.68 USD 6.09
Euro 0.01
SGD 0.01
JPY 0.28
Borrowings 28968.90 USD 56.63 78,058.92 USD 174.82
5. OTHER DISCLOSURES AND NOTES
5.1 The company has not received any intimation from its vendors regarding the status under the Micro and Small
Enterprises Development Act 2006 and hence disclosures required under the said Act have not been made.
5.2 Tonnage Tax reserve
In terms of section 115VT of the Income Tax Act, 1961, the company is required to transfer amounts out of its
profit to Tonnage Tax Reserve. In view of NIL “Income from shipping” (As defined u/s 115V – I sub clause (i) and
(ii) of Income Tax Act, 1961), there is no transfer during the year as well as in the previous year to the Tonnage
Tax Reserve.
5.3 Note on Prem Divya
During the year, in Dec 2011, an Aframax Tanker, Prem Divya, suffered an accident near Fujairah Port. The
vessel is fully insured including for all third party liabilities. The insurance claim is being processed by the
insurance company and we are confident of its early settlement which would adequately cover the costs of
repairs and restoration of the tanker.
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5.4 Disclosure as required under clause 32 of the Listing agreement
Loans and Advances in nature of Loans given to subsidiaries Current Year
(` In Lakhs)
Previous Year
(` In Lakhs)
Mercator International (Pte) Ltd.
Balance outstanding at year end 14,576.62 35,601.86
Maximum amount Outstanding during the year. 36,838.27 67,792.24
Mercator Oil & Gas Limited
Balance outstanding at year end NIL 92.04
Maximum amount Outstanding during the year. 1,332.49 92.04
Mercator Offshore Limited
Balance outstanding at year end NIL NIL
Maximum amount Outstanding during the year. NIL 85.70
Mercator Petroleum Limited
Balance outstanding at year end 2,052.14 282.74
Maximum amount Outstanding during the year. 2,052.14 342.74
Mercator FPSO Private Limited
Balance outstanding at year end 196.46 NIL
Maximum amount Outstanding during the year. 196.46 NIL
MCS Holdings Pte Limited
Balance outstanding at year end NIL 21.95
Maximum amount Outstanding during the year. 53.78 31.46
Mercator Offshore Holding Pte. Ltd.
Balance outstanding at year end NIL 44.65
Maximum amount outstanding during the year 44.65 45.14
Mercator Offshore (P) Pte. Ltd.
Balance outstanding at year end 1.89 20,542.85
Maximum amount outstanding during the year 2,178.28 20,634.35
Oorja Resources India Private Limited
Balance outstanding at year end 1,065.61 NIL
Maximum amount outstanding during the year 1,065.61 NIL
5.5 (a) The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O. 301 (E) dated
8th February 2011 issued under Section 211(3) of the Companies Act, 1956 has exempted certain classes of
companies from disclosing certain information in their statement of profit and loss. The Company being a
‘shipping company’ is entitled to the exemption. Accordingly, disclosures mandated by paragraphs 4-D (a),
(b), (c) & (e) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.
(b) The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February
2011 and 21st February 2011 respectively has granted a general exemption from compliance with section
212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company
has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary
Information relating to the subsidiaries has been included in the Consolidated Financial Statements.
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6. PREVIOUS YEAR FIGURES
The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements.
This has significantly impacted the disclosure and presentation made in the financial statements. Previous
year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s
classification / disclosure.
As per our report of even date For and on behalf of the Board For Contractor, Nayak & Kishnadwala Chartered Accountants H. K. Mittal A. J. Agarwal Manohar Bidaye Executive Chairman Managing Director Director
Himanshu Kishnadwala Kapil Garg M. M. Agrawal K. R. Bharat Partner Director Director Director
Suchita Shirambekar
Company Secretery
Dated: May 25, 2012 Dated: May 25, 2012
Place: Mumbai Place: Mumbai
AUDI
TORS
’ REP
ORT
CASH
FLO
W S
TATE
MEN
TNO
TES
BALA
NCE
SHEE
T I S
TATE
MEN
T OF
PRO
FIT
AND
LOSS
84
MERCATOR S
tate
men
t pur
suan
t to
Sect
ion
212
of th
e Co
mpa
nies
Act
, 195
6 re
latin
g to
Sub
sidi
ary
Com
pani
es fo
r the
Yea
r End
ed 3
1st M
arch
,201
2(`
in
La
kh
s)
Sr.
No.
Nam
e of
Com
pany
Fina
ncia
l Ye
arEn
ded
Capi
tal
Res
erve
sTo
tal
Asse
tsTo
tal
Liab
ility
Inve
stm
ent
(exc
ept
Inve
stm
ent
in s
ubsi
diar
ies
Turn
over
Profi
t/(L
oss)
befo
re T
ax
Prov
isio
nfo
r Ta
xatio
nPr
ofit
Afte
r Ta
xPr
opos
edD
ivid
end
1M
erc
ato
r L
ine
s
(Sin
ga
po
re)
Pte
. L
td.
31
-Ma
r-1
21
03
78
8.7
89
39
71
.88
29
05
81
.99
92
82
1.3
41
08
4.9
05
47
70
.37
87
15
.07
(9
.37
)8
70
5.7
09
44
.16
2M
erc
ato
r L
ine
(P
an
am
a)
Inc.
31
-Ma
r-1
25
.12
-
(1.2
7)
-
-
-
-
-
-
-
3M
erc
ato
r In
tern
ati
on
al
Pte
. L
td.
31
-Ma
r-1
2 3
0.6
9
11
,25
5.1
6
43
,59
7.1
6
32
,31
1.3
0
2,5
45
.76
3
,37
2.0
0
5,0
73
.70
(
0.1
3)
5,0
73
.57
-
4M
erc
ato
r O
ffsh
ore
Ltd
.3
1-M
ar-
12
1,6
04
.12
1
25
.95
1
,73
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8
1.0
2
-
-
(0
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) 3
.16
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rin
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2
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9
1,0
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(
1.9
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,88
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6V
ars
ha
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rin
e P
te.
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1-M
ar-
12
0.0
0
(0
.00
) 2
.94
2
.94
-
2
,82
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9
66
7.1
9
(1
.45
) 6
65
.75
7
,07
6.7
4
7M
erc
ato
r O
il &
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s L
td.
31
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0
(1
22
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) 1
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4
1,1
38
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-
-
(
15
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) -
(
15
.48
) -
8O
orj
a H
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ing
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te L
td3
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ar-
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0.0
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(4
98
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) 2
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25
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(
53
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) (
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a 1
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. L
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ar-
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) 2
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(
62
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) (
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10
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rja
2 P
te.
Ltd
31
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2 0
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(
42
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2,8
66
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3
,29
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-
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12
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) (
6.6
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(1
19
.32
) -
11
Oo
rja
3 P
te.
Ltd
31
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2 0
.00
(
46
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59
2.7
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55
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-
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17
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4)
(5
.87
) (
17
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-
12
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In
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T3
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ar-
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12
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78
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0,9
52
.96
-
1
78
,65
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2,3
98
.21
(
58
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1,8
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.99
-
13
Oo
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zam
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ue
Min
as
LD
A
31
-Ma
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2 0
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-
4
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43
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-
-
(
21
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) -
(
21
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) -
14
Bro
ad
tech
Mo
zam
biq
ue
Min
as L
DA
31
-Ma
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2 0
.45
-
4
5.0
0
44
.55
-
-
(
6.0
5)
-
(6
.05
) -
15
Oo
rja
In
do
Pe
tan
gis
Th
ree
PT
31
-Ma
r-1
2 2
81
.36
(
55
1.8
3)
1,1
85
.45
1
,45
5.9
2
-
97
6.8
3
25
2.9
5
(3
8.0
1)
21
4.9
4
-
16
Oo
rja
Pe
tan
gis
Fo
ur
PT
31
-Ma
r-1
2 2
81
.36
(
1,0
79
.00
) 1
,53
0.2
4
2,3
27
.89
-
5
05
.14
1
19
.62
(
43
.34
) 7
6.2
8
-
17
MC
S H
old
ing
s P
te L
td.
31
-Ma
r-1
2 5
11
.57
1
0,0
81
.22
4
1,5
73
.17
3
0,9
80
.39
-
2
23
,65
1.9
0
9,7
04
.60
(
1,2
44
.21
) 8
,46
0.3
9
-
18
Me
rca
tor
Pe
tro
leu
m L
td.
31
-Ma
r-1
2 1
0.0
0
(4
0.1
0)
2,1
52
.64
2
,18
2.7
4
-
-
(0
.80
) -
(
0.8
0)
-
19
Me
rca
tor
Off
sh
ore
Ho
ldin
gs P
te.
Ltd
.
31
-Ma
r-1
2 0
.08
7
,15
4.3
0
8,7
92
.20
1
,63
7.8
2
-
-
(2
.39
) -
(
2.3
9)
-
20
PT
Min
co
n I
nd
o R
eso
urc
es
31
-Ma
r-1
2 1
27
.89
(
75
8.7
3)
86
4.7
6
1,4
95
.60
-
1
,25
3.7
5
39
.05
1
1.4
0
50
.45
-
STAN
DALO
NE F
INAN
CIAL
STA
TEM
ENTS
85
annual report 2011-12Sr
.N
o.N
ame
of C
ompa
nyFi
nanc
ial
Year
Ende
d
Capi
tal
Res
erve
sTo
tal
Asse
tsTo
tal
Liab
ility
Inve
stm
ent
(exc
ept
Inve
stm
ent
in s
ubsi
diar
ies
Turn
over
Profi
t/(L
oss)
befo
re T
ax
Prov
isio
nfo
r Ta
xatio
nPr
ofit
Afte
r Ta
xPr
opos
edD
ivid
end
21
Me
rca
tor
Off
sh
ore
(P
) P
te.
Ltd
.
31
-Ma
r-1
2 1
02
.31
2
,75
4.3
0
10
0,1
09
.89
9
7,2
53
.28
-
1
9,8
69
.98
2
,59
8.5
9
-
2,5
98
.59
-
22
Ivo
ren
e O
il S
erv
ice
s
(Nig
eri
a)
Pte
. L
td.
31
-Ma
r-1
2 3
2.3
8
23
.57
8
00
.69
7
44
.74
-
5
1.0
6
46
.73
(
24
.52
) 2
2.2
1
-
23
Oo
rja
(B
atu
a)
Pte
. L
td.
31
-Ma
r-1
2 0
.00
5
.80
1
1,9
10
.24
1
1,9
04
.44
-
-
6
.57
-
6
.57
-
24
Bim
a G
em
a P
erm
ata
Pt.
31
-Ma
r-1
2 2
93
.49
1
42
.31
2
,09
3.0
7
1,6
57
.27
-
1
1,1
62
.51
3
05
.07
(
71
.35
) 2
33
.72
-
25
Nu
sa
Sa
kti
Ke
nca
na
Pt.
31
-Ma
r-1
2 2
92
.69
8
3.8
0
1,8
29
.55
1
,45
3.0
6
-
9,2
08
.03
2
41
.64
(
59
.53
) 1
82
.11
-
26
Ch
itra
Pre
m P
te.
Ltd
. 3
1-M
ar-
12
-
54
3.5
1
22
,79
8.0
9
22
,25
4.5
8
-
3,7
66
.16
1
,72
6.0
5
(0
.06
) 1
,72
5.9
9
48
1.9
0
27
Ta
rge
t S
hip
Ma
na
ge
mn
et
Pte
. L
td.
31
-Ma
r-1
2 0
.21
2
9.6
9
1,7
53
.89
1
,72
4.0
0
-
80
9.8
7
20
.45
-
2
0.4
5
-
28
Oo
rja
Re
so
urc
es I
nd
ia
Pvt
Ltd
.
31
-Ma
r-1
2 2
.50
3
4.5
7
1,2
23
.30
1
,18
6.2
3
-
56
6.1
4
2.6
0
(1
.14
) 1
.46
-
29
Me
rca
tor
FP
SO
Pvt
Ltd
. 3
1-M
ar-
12
1.0
0
(0
.42
) 1
97
.43
1
96
.85
-
-
(
0.4
2)
-
(0
.42
) -
30
Vid
ya V
ars
ha
In
c.
(Pa
na
ma
)
31
-Ma
r-1
2 -
3
,00
1.5
1
57
,91
9.4
7
54
,91
7.9
5
-
6,7
99
.62
2
,82
7.4
6
-
2,8
27
.46
2
,79
5.0
2
31
PT
Ka
rya
Pu
tra
Bo
rne
o
31
-Ma
r-1
2 2
82
.26
(
60
9.2
9)
11
,78
6.6
9
12
,11
3.7
1
-
(7
38
.25
) 1
86
.33
(
55
1.9
1)
-
32
PT
In
do
Pe
rka
sa
3
1-M
ar-
12
2,8
39
.87
(
21
0.4
0)
5,6
00
.70
2
,97
1.2
4
-
(2
52
.25
) 4
7.8
1
(2
04
.43
) -
Fo
r an
d on
beh
alf o
f the
Boa
rd
H
. K. M
ittal
A.
J. A
garw
al
Man
ohar
Bid
aye
E
xecu
tive
Ch
air
ma
n
Ma
na
gin
g D
ire
cto
r D
ire
cto
r
K
apil
Garg
M
. M. A
graw
al
K. R
. Bha
rat
D
ire
cto
r D
ire
cto
r D
ire
cto
r
Su
chita
Shi
ram
beka
r
Co
mp
an
y S
ecre
tery
D
ate
d:
Ma
y 2
5,
20
12
P
lace
: M
um
ba
i
AUDI
TORS
’ REP
ORT
CASH
FLO
W S
TATE
MEN
TNO
TES
BALA
NCE
SHEE
T I S
TATE
MEN
T OF
PRO
FIT
AND
LOSS
86
MERCATORSt
atem
ent p
ursu
ant t
o Se
ctio
n 21
2(3)
of t
he C
ompa
nies
Act
, 195
6 re
latin
g to
Sub
sidi
ary
Com
pani
es
(` in
Lak
hs)
Sr.
No.
Nam
e of
Com
pany
Fina
ncia
l Ye
arEn
ded
Exte
nt o
fin
tere
st o
fth
e H
oldi
ngCo
mpa
nyin
the
capi
tal
of s
ubsi
diar
y
No.
of S
hare
she
ld b
y Co
mpa
nydi
rect
ly o
r th
roug
hits
sub
sidi
ary
Net
agg
rega
te o
f the
pro
fit o
r lo
sses
of t
he
subs
idia
ry fo
r th
e cu
rren
t per
iod
so fa
r as
it
conc
erns
the
mem
bers
of
the
hold
ing
com
pany
.
Net
agg
rega
te o
f pro
fits
or lo
sses
for
prev
ious
fina
ncia
l yea
rs o
f the
sub
sidi
ary
so fa
r as
it c
once
rns
the
mem
bers
of t
he
hold
ing
com
pany
not d
ealt
with
or
prov
ided
for
in th
e ac
coun
ts o
f the
ho
ldin
g co
mpa
ny
deal
t with
or
prov
ided
for
in
the
acco
unt o
f the
ho
ldin
g co
mpa
ny
not d
ealt
with
or
prov
ided
for
in th
e ac
coun
ts o
f the
ho
ldin
g co
mpa
ny
deal
t with
or
pro
vide
d fo
r in
th
e ac
coun
t of t
he
hold
ing
com
pany
1M
erc
ato
r L
ine
s (
Sin
ga
po
re)
Ltd
.3
1-M
ar-
12
71
.95
%9
00
,85
0,0
00
Pro
fit
NIL
Pro
fit
NIL
8,7
05
.70
1
3,8
12
.40
2M
erc
ato
r L
ine
(P
an
am
a)
Inc.
31
-Ma
r-1
21
00
%1
0,0
00
NIL
NIL
NIL
NIL
3M
erc
ato
r In
tern
ati
on
al
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. L
td.
31
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21
00
%1
00
,00
0P
rofi
tN
ILP
rofi
tN
IL 5
,07
3.5
7
4,7
25
.40
4
Me
rca
tor
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sh
ore
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.3
1-M
ar-
12
10
0%
5,2
26
,17
0P
rofi
tN
ILP
rofi
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IL 2
.53
2
,40
4.9
9
5V
idya
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rin
e P
te.
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.3
1-M
ar-
12
10
0%
2P
rofi
tN
ILP
rofi
tN
IL 1
,06
3.6
0
2,7
55
.92
6
Va
rsh
a M
ari
ne
Pte
. L
td.
31
-Ma
r-1
21
00
%2
Pro
fit
NIL
Pro
fit
NIL
66
5.7
5
2,0
61
.12
7
Me
rca
tor
Oil
& G
as L
td.
31
-Ma
r-1
21
00
%1
50
,00
0L
oss
NIL
Lo
ss
NIL
(1
5.4
8)
(1
.75
)8
Oo
rja
Ho
ldin
gs P
te L
td3
1-M
ar-
12
10
0%
2L
oss
NIL
Lo
ss
NIL
(5
4.6
5)
(1
19
.15
)9
Oo
rja
1 P
te.
Ltd
31
-Ma
r-1
21
00
%2
Lo
ss
NIL
Lo
ss
NIL
(6
6.5
0)
(1
08
.64
)1
0O
orj
a 2
Pte
. L
td3
1-M
ar-
12
10
0%
2L
oss
NIL
Lo
ss
NIL
(1
19
.32
) (
15
7.3
9)
11
Oo
rja
3 P
te.
LTd
31
-Ma
r-1
21
00
%2
Lo
ss
NIL
Lo
ss
NIL
(1
79
.91
) (
13
0.1
6)
12
Oo
rja
In
do
KG
S P
T3
1-M
ar-
12
10
0%
10
00
Pro
fit
NIL
Pro
fit
NIL
1,8
15
.99
1
07
.19
1
3O
orj
a M
oza
mb
iqu
e M
ina
s L
DA
31
-Ma
r-1
21
00
%2
5,0
00
Lo
ss
NIL
Lo
ss
NIL
(2
1.9
4)
(4
.58
)1
4B
roa
dte
ch
Mo
zam
biq
ue
Min
as L
DA
31
-Ma
r-1
28
5%
21
,25
0L
oss
NIL
Lo
ss
NIL
(6
.05
) (
4.6
4)
15
Oo
rja
In
do
Pe
tan
gis
Th
ree
PT
31
-Ma
r-1
21
00
%2
,20
0P
rofi
tN
ILL
oss
NIL
21
4.9
4
(5
23
.63
)1
6O
orj
a P
eta
ng
is F
ou
r P
T3
1-M
ar-
12
10
0%
2,2
00
Pro
fit
NIL
Pro
fit
NIL
76
.28
3
56
.42
1
7M
CS
Ho
ldin
gs P
te L
td.
31
-Ma
r-1
21
00
%1
,25
6,5
60
Pro
fit
NIL
Pro
fit
NIL
8,4
60
.39
7
,06
2.5
1
18
Me
rca
tor
Pe
tro
leu
m L
td.
31
-Ma
r-1
28
9%
89
,00
0L
oss
NIL
Pro
fit
NIL
(0
.80
) (
0.4
7)
19
Me
rca
tor
Off
sh
ore
Ho
ldin
gs P
te L
td.
31
-Ma
r-1
21
00
%2
00
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ss
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fit
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(2
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) 7
,93
6.9
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20
PT
Min
co
n I
nd
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31
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50
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rofi
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oss
NIL
STAN
DALO
NE F
INAN
CIAL
STA
TEM
ENTS
87
annual report 2011-12
Sr.
No.
Nam
e of
Com
pany
Fina
ncia
l Ye
arEn
ded
Exte
nt o
fin
tere
st o
fth
e H
oldi
ngCo
mpa
nyin
the
capi
tal
of s
ubsi
diar
y
No.
of S
hare
she
ld b
y Co
mpa
nydi
rect
ly o
r th
roug
hits
sub
sidi
ary
Net
agg
rega
te o
f the
pro
fit o
r lo
sses
of t
he
subs
idia
ry fo
r th
e cu
rren
t per
iod
so fa
r as
it
conc
erns
the
mem
bers
of
the
hold
ing
com
pany
.
Net
agg
rega
te o
f pro
fits
or lo
sses
for
prev
ious
fina
ncia
l yea
rs o
f the
sub
sidi
ary
so fa
r as
it c
once
rns
the
mem
bers
of t
he
hold
ing
com
pany
not d
ealt
with
or
prov
ided
for
in th
e ac
coun
ts o
f the
ho
ldin
g co
mpa
ny
deal
t with
or
prov
ided
for
in
the
acco
unt o
f the
ho
ldin
g co
mpa
ny
not d
ealt
with
or
prov
ided
for
in th
e ac
coun
ts o
f the
ho
ldin
g co
mpa
ny
deal
t with
or
pro
vide
d fo
r in
th
e ac
coun
t of t
he
hold
ing
com
pany
50
.45
(
27
1.7
8)
21
Me
rca
tor
Off
sh
ore
(P
) P
te.
Ltd
.3
1-M
ar-
12
10
0%
27
9,8
40
Pro
fit
NIL
Lo
ss
NIL
2,5
98
.59
(
1.9
3)
22
Ivo
ren
e O
il S
erv
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s (
Nig
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a)
Pte
. L
td.
31
-Ma
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0,0
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0 P
rofi
t N
IL -
N
IL 2
2.2
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-
23
Oo
rja
(B
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. L
td.
31
-Ma
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21
00
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fit
NIL
Lo
ss
NIL
6.5
7
(1
.05
)2
4B
ima
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ma
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rma
ta P
t.3
1-M
ar-
12
10
0%
5,1
00
Pro
fit
NIL
Lo
ss
NIL
23
3.7
2
(4
2.8
3)
25
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sa
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kti
Ke
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na
Pt.
31
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00
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,10
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oss
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18
2.1
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(3
9.8
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26
Ch
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m P
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Ltd
. 3
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ar-
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10
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2P
rofi
tN
ILP
rofi
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IL 1
,72
5.9
9
12
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5
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et
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ip M
an
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t P
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Ltd
.3
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ar-
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52
6P
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0.4
5
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28
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Re
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nd
ia P
vt L
td.
31
-Ma
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fit
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-N
IL 1
.46
-
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-N
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-
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ya V
ars
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-
32
PT
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do
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sa
31
-Ma
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50
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ss
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-N
IL (
20
4.4
3)
-
Fo
r an
d on
beh
alf o
f the
Boa
rd
H
. K. M
ittal
A.
J. A
garw
al
Man
ohar
Bid
aye
E
xecu
tive
Ch
air
ma
n
Ma
na
gin
g D
ire
cto
r D
ire
cto
r
K
apil
Garg
M
. M. A
graw
al
K. R
. Bha
rat
D
ire
cto
r D
ire
cto
r D
ire
cto
r
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chita
Shi
ram
beka
r
Co
mp
an
y S
ecre
tery
D
ate
d:
Ma
y 2
5,
20
12
P
lace
: M
um
ba
i
Stat
emen
t pur
suan
t to
Sect
ion
212(
3) o
f the
Com
pani
es A
ct, 1
956
rela
ting
to S
ubsi
diar
y Co
mpa
nies
(` in
Lak
hs)
AUDI
TORS
’ REP
ORT
CASH
FLO
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MEN
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AND
LOSS
88
MERCATOR
Consolidated Financial Statements
89
annual report 2011-12
Auditors’ Report
The Members of
MERCATOR LIMITED (Formerly known as MERCATOR LINES LIMITED)
Auditors’ report to the Board of Directors on the Consolidated financial statements of Mercator Limited (formerly known as Mercator Lines Limited) and its subsidiaries
1. We have audited the attached consolidated balance sheet of Mercator Limited (the Company) and its subsidiaries
(collectively called ‘the Mercator Group’) as at March 31, 2012, the consolidated statement of profit and loss
and the consolidated cash flow statement for the year ended on that date, annexed thereto. These financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
3. We did not audit the financial statements of subsidiaries, whose financial statements reflect total assets (net) of
` 2,05,097.08 lakhs as at 31st March, 2012, total revenues of ` 3,13,899.54 lakhs and net cash outflow of
` 2942.83 lakhs for the year ended on that date. These financial statements and other financial information have
been audited by other auditors whose reports have been furnished to us, and our opinion is based solely on the
report of the other auditors.
4. We report that the consolidated financial statements have been prepared by the Company’s management in
accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, as notified
by the Companies (Accounting Standards) Rules, 2006.
In our opinion and to the best of our information and according to the explanations given to us, the consolidated
financial statements give a true and fair view in conformity with the accounting principles generally accepted in
India:
a. in the case of the consolidated balance sheet, of the state of affairs of the Mercator Group as at March 31,
2012;
b. in the case of the consolidated statement of profit and loss , of the profit of the Mercator Group for the year
ended on that date; and
c. in the case of the consolidated cash flow statement, of the cash flows of the Mercator Group for the year
ended on that date.
For and on behalf of Contractor Nayak & Kishnadwala Chartered Accountants
Firm Registration No 101961W
Himanshu Kishnadwala Partner,
Membership No 37391
Mumbai
25th May, 2012
AUDI
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MERCATOR
Consolidated Balance Sheet as at March 31, 2012` in Lakhs
Particulars Note As at March 31, 2012
As at March 31, 2011
A EQUITY AND LIABILITIES1 Shareholder's funds
(a) Share capital 2.1 2,448.92 2,448.92
(b) Reserves and surplus 2.2 247,101.12 224,617.58
(c) Money received against share warrants 2.3 2,596.00 2,596.00
252,146.04 229,662.50
Minority interest 42,779.94 34,985.00
294,925.98 264,647.50
2 Non – current liabilities(a) Long-term borrowings 2.4 274,263.25 239,192.66
(b) Other long term liabilities 2.5 5,007.94 3,656.84
(c) Long-term provisions 2.6 398.59 245.91
279,669.78 243,095.41
3 Current liabilities(a) Short-term borrowings 2.7 34,424.05 32,888.00
(b) Trade payables 26,360.18 73,040.05
(c) Other current liabilities 2.8 72,870.95 77,777.93
(d) Short-term provisions 2.9 45.89 34.62
133,701.07 183,740.60
Total 708,296.83 691,483.51
B ASSETS1 Non – current assets
(a) Fixed assets 2.10 569,962.64 455,645.29
Capital work in progress 3,129.17 80,504.61
573,091.81 536,149.90
Goodwill on consolidation 1,517.41 139.64
(b) Non-current investments 2.11 2,897.99 409.16
(c) Deferred tax asset 467.74 323.64
(d) Long-term loans and advances 2.12 12,822.53 8,217.65
(e) Other non-current assets 2.13 263.59 0.30
591,061.07 545,240.28
2 Current assets(a) Current investments 2.11 1,173.81 2,436.26
(b) Inventories 2.14 9,322.78 6,271.71
(c) Trade receivables 2.15 50,875.34 37,634.19
(d) Cash and bank balances 2.16 28,045.46 71,159.44
(e) Short-term loans and advances 2.17 25,644.53 27,797.85
(f) Other current assets 2.18 2,173.83 943.77
117,235.75 146,243.22
Total 708,296.83 691,483.51
Significant Accounting Policies 1
Notes forming part of the financial statements 2,3,4,5
As per our report of even date For and on behalf of the Board For Contractor, Nayak & Kishnadwala Chartered Accountants H. K. Mittal A. J. Agarwal Manohar Bidaye Executive Chairman Managing Director Director
Himanshu Kishnadwala Kapil Garg M. M. Agrawal K. R. Bharat Partner Director Director Director
Suchita Shirambekar
Company Secretery
Dated: May 25, 2012 Dated: May 25, 2012
Place: Mumbai Place: Mumbai
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annual report 2011-12
Consolidated Statement of Profit and Loss for the year ended March 31, 2012` in Lakhs
Particulars Note Year Ended March 31, 2012
Year Ended March 31, 2011
INCOME
(a) Revenue from operations 2.19 369,990.76 282,888.46
(b) Other income 2.20 6,512.60 2,740.93
1 Total Revenue 376,503.36 285,629.39
EXPENSES:
(a) Operating expenses 2.21 299,780.02 212,303.08
(b) Employee benefit expenses 2.22 4,777.81 2,652.91
(c) Finance cost 2.23 21,294.71 23,790.58
(d) Depreciation and amortisation expenses 38,241.08 30,666.67
(e) Other expenses 2.24 7,172.71 6,277.32
2 Total Expenses 371,266.33 275,690.56
3 Profit before taxes (1 – 2) 5,237.03 9,938.83
4 Tax expense:
(a) Current tax (2,495.26) (1,573.66)
(b) Short provision of tax for earlier years – 4,715.17
(c) Deferred Tax 271.75 220.56
Profit for the year before adjustment for Minority Interest 3,013.52 13,300.90
Less: share of profit / loss transferred to Minority Interest (957.89) (3,900.97)
Profit for the period 2,055.63 9,399.93
Earnings per share (Equity share of ` 1/ – Each)
Basic and Diluted (In `) 4.6 0.84 1.97
Significant Accounting Policies 1
Notes forming part of the financial statements 2,3,4,5
As per our report of even date For and on behalf of the Board For Contractor, Nayak & Kishnadwala Chartered Accountants H. K. Mittal A. J. Agarwal Manohar Bidaye Executive Chairman Managing Director Director
Himanshu Kishnadwala Kapil Garg M. M. Agrawal K. R. Bharat Partner Director Director Director
Suchita Shirambekar
Company Secretery
Dated: May 25, 2012 Dated: May 25, 2012
Place: Mumbai Place: Mumbai
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MERCATOR
Consolidated Cash Flow Statement for the year ended March 31, 2012` in Lakhs
Particulars March 31, 2012 March 31, 2011A Cash Flow from Operating Activities
Net (Loss) / Profit Before Tax 5,237.03 9,938.83
Adjustment for:
Depreciation 38,241.08 30,666.67
Interest Paid (net) 20,331.77 21,523.31
(Profit)/Loss on Fixed Assets Scrapped / Sold 30.97 2,198.07
(Profit)/Loss on Sale of Investment (287.62) (18.41)
Dividend Income (0.48) (31.41)
Operating profit before working capital changes 63,552.75 64,277.06
Adjustment for:
Trade and Other Receivables (18,723.87) (30,404.87)
Trade and Other Payables (44,431.26) (10,369.88)
Cash flow from / (used in) Operating activities 397.62 23,502.31
Direct Taxes Paid (2,223.51) 3,362.07
Total cash from / (used in) operating activites (1,825.89) 26,864.38
B Cash Flow from Investing Activities Acqusition of Fixed Assets including Capital Work in Progress (76,713.29) (137,102.40)
Sale of Fixed Assets 121.57 88,517.50
(Increase) / Decrease in loans and advances (2,431.12) (984.40)
Proceed from sale of Investments 287.62 18.41
(Purchase)/sale of Investment (1,226.38) 4,613.36
Dividend Income 0.48 31.41
Net Cash from Investing Activities (79,961.12) (44,906.12)
C Cash Flow from Financing Activities Proceeds from Issue of Share Capital from conversion of Bonds and warrants – 2,685.00
Proceeds from Borrowings 30,966.10 15,746.13
Increase / Decrease in Reserves 20,427.92 3,319.37
Increase / Decrease in DT (144.10) 660.20
Increase / Decrease in Minority Intt 6,837.05 (416.78)
Interest Paid (net) (20,331.77) (21,523.31)
Dividends Paid including tax thereon – –
Net Cash from Financing Activities 37,755.20 470.61
Net Increase / (decrease) in cash and cash equivalents (A + B + C) (44,031.82) (17,571.13)
Cash and Cash Equivalents as at beginning of the year ( As per Note 2.16) 72,103.51 89,674.64
Cash and Cash Equivalents as at end of the year ( As per Note 2.16) 28,071.67 72,103.51
Cash and Cash Equivalents comprise of: Cash and Bank Balances ( Refer Note 2.16) 28,045.46 71,159.44
Accrued Interest on fixed deposit with banks 26.21 944.07
Notes:
1) Figures in bracket represent outflows
2) Cash and cash equivalents include :
(a) Gain/(loss) on foreign exchange revaluation of ` 119.19 lakhs (P.Y. ` 86.84 lakhs).
(b) Fixed Deposit of ` 397.53 lakhs (P.Y. ` 36,672.00 lakhs) as margin deposit against an acceptance.
(c) Unclaimed dividend accounts of ` 68.06 lakhs (P.Y. ` 77.17 lakhs) which are not available for use by the company .
3) Previous Year’s figures have been recast / restated wherever necessary.
As per our report of even date For and on behalf of the Board For Contractor, Nayak & Kishnadwala Chartered Accountants H. K. Mittal A. J. Agarwal Manohar Bidaye Executive Chairman Managing Director Director
Himanshu Kishnadwala Kapil Garg M. M. Agrawal K. R. Bharat Partner Director Director Director
Suchita Shirambekar
Company Secretery
Dated: May 25, 2012 Dated: May 25, 2012
Place: Mumbai Place: Mumbai
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annual report 2011-12
SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
A. BASIS OF CONSOLIDATION
The Consolidated Financial Statements relate to Mercator Limited (the company) and its subsidiary companies.
The Company and its subsidiaries constitute the Group.
I. Basis of Accounting
1. The financial statements of the subsidiary companies used in the consolidation are drawn upto the same
reporting date as of the Company i.e. year ended 31st March, 2012.
2. The financial statements of the Group have been prepared in accordance with the principles and procedures
required for the preparation and presentation of consolidated financial statements as laid down under the
Accounting Standard 21 “Consolidated Financial Statements” as notified by the Companies (Accounting
Standards) Rules, 2006.
II. Principles of consolidation
The Consolidated Financial Statements have been prepared on the following basis:
1. The Financial statements of the Company and its subsidiary companies have been combined on a line by
line basis by adding together book values of similar items of assets, liabilities income and expenses. The
intra-group balances and intra-group transactions have been fully eliminated.
2. The difference between the cost of investments in the subsidiaries, over the net assets at the time of
acquisition of shares in the subsidiaries is recognised in the financial statements as Goodwill or Capital
Reserve, as the case may be.
3. Minority Interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable
to the minority shareholders at the date on which investments are made by the company in the subsidiary
companies and further movements in their share in equity, subsequent to the date of the investment as
stated above.
4. Consolidated Financial Statements are prepared by applying uniform accounting policies to the extent
possible, in use at the group.
5. Indian Rupee is the reporting currency for the Group. However, the reporting currencies of non-integral
overseas subsidiaries are different from the reporting currency of the Group. The translation of those
currencies into Indian Rupee is performed for assets and liabilities, using the exchange rate as at the
balance sheet date, and for revenues, costs and expenses using average exchange rate during the reporting
period. Resultant currency translation exchange gain/loss is carried as Foreign Currency Translation
Reserve under Reserves and Surplus.
6. The carrying value of goodwill is tested for impairment as at each balance sheet date.
III. The following subsidiary companies are considered in the Consolidated Financial Statements:
Name of the Subsidiary Company Country of incorporation
% of holding either directly or through
subsidiary as at March 31, 2012
% of holding either directly or through
subsidiary as at March 31, 2011
Mercator International Pte.Ltd. Singapore 100 100
Mercator Oil & Gas Ltd India 100 100
Mercator Petroleum Ltd. India 89 89
Mercator FPSO Pvt. Ltd. India 100 -
Oorja Resources India Pvt. Ltd. India 100 -
Mercator Offshore Holdings Pte. Ltd. Singapore 100 100
Mercator Offshore (P) Pte Ltd Singapore 100 100
Oorja Holdings Pte. Ltd Singapore 100 100
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MERCATOR
Name of the Subsidiary Company Country of incorporation
% of holding either directly or through
subsidiary as at March 31, 2012
% of holding either directly or through
subsidiary as at March 31, 2011
Mercator Lines (Singapore) Ltd Singapore 71.95 71.95
Mercator Offshore Ltd Singapore 100 100
Varsha Marine Pte. Ltd Singapore 100 100
Vidya Marine Pte. Ltd Singapore 100 100
Mercator Lines (Panama) Inc Panama 100 100
Oorja 1 Pte. Ltd. Singapore 100 100
Oorja 2 Pte. Ltd. Singapore 100 100
Oorja 3 Pte. Ltd. Singapore 100 100
Oorja Mocambique Minas, Limitada Mozambique 100 100
MCS Holdings Pte. Ltd. Singapore 100 100
Pt Oorja Indo Petangis Four Indonesia 100 100
Pt Oorja Indo Petangis Three Indonesia 100 100
Pt Oorja Indo KGS Indonesia 100 95
Broadtec Mocambique Minas, Lda Mozambique 85 85
PT Mincon Indo Resources Indonesia 100 100
Target Ship Management Pte. Ltd Singapore 100 100
Chitra Prem Pte. Ltd Singapore 100 100
Vidya Varsha Inc. Panama 100 -
Bima Gema Permata PT Jakarta 100 100
Nuansa Sakti Kenca PT Jakarta 100 100
Ivorene Oil Services Nigeria Ltd Singapore 100 100
Oorja (Batua) Pte Ltd Singapore 100 100
P.T. Karya Putra Borneo* Indonesia 50 -
P.T. Indo Pekasa Indonesia 51 -
* Considered as subsidiary for consolidation purposes on account of control as per principles of AS-21.
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of Accounting
The financial statements are prepared under the historical cost convention, on the accrual basis of accounting
and in conformity with Generally Accepted Accounting Principles in India, Accounting Standards as notified by
the Companies (Accounting Standards) Rules, 2006 and the other relevant provisions of the Companies Act,
1956.
1.2 Use of Estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires
the management to make estimates and assumptions that affect the reported balances of assets and liabilities
as of the date of the financial statements and reported amounts of income and expenses during the period.
The management believes that the estimates used in the preparation of financial statements are prudent and
reasonable.
1.3 Fixed Assets
a) Fixed assets are stated at cost less accumulated depreciation.
b) Cost includes cost of acquisition or construction including attributable interest, duties and other incidental
expenses related to the acquisition of the asset.
c) Operating costs and other incidental costs including initial stores and spares of newly acquired vessels till
the port of first loading are included in the cost of the respective vessels.
CONS
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annual report 2011-12
d) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign
currency liabilities relating to acquisition of depreciable assets are, following option given by notification of
Ministry of Corporate Affairs (MCA) dated 29th December 2011, adjusted to carrying cost of the respective
assets.
e) Individual fixed assets costing up to ` 25,000 are fully written off under the head fixed assets written off.
1.4 Goodwill
Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the
Group’s interest in the net fair value of the identifiable assets and liabilities of the subsidiary recognised at the
date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less
any accumulated impairment losses.
1.5 Exploration and evaluation expenditure
Exploration and evaluation expenditure are capitalised when it is considered likely to be recoverable by future
exploitation or sale. This policy requires management to make certain estimates and assumptions as to future
events and circumstances, in particular whether an economically viable extraction operation can be established. Any
such estimates and assumptions may change as new information becomes available. If, after having capitalised the
expenditure under the policy, a judgment is made that recovery of the expenditure is unlikely, the relevant capitalised
amount will be written off to the statement of profit and loss .
1.6 Environmental Obligations
Restoration, rehabilitation and environmental expenditure incurred during the production phase are charged to
statement of profit and loss as incurred.
Provision for decommissioning, demobilisation and restoration provides for the legal obligations associated with
the retirement of the tangible long-lived asset that result from the acquisition, construction or development and/
or the normal operation of a long-lived asset. The retirement of a long-lived asset is it’s other than temporary
removal from service, including its sale abandonment, recycling or disposal in some other manner.
These obligations are recognised as liabilities when a legal obligation with respect to the retirement of an asset
is incurred, with the initial measurement of the obligation at fair value. These obligations are accreted to full
value over time through charges to the statement of income. In addition, an asset retirement cost equivalent to
these liabilities is capitalised as part of the related asset’s carrying value and is subsequently depreciated or
depleted over the asset’s useful life. A liability for asset retirement obligation is incurred over more than one
reporting period when the event creating the obligation occur over more than one reporting period. For example,
if a facility is permanently closed but the closure plan is developed over more than one reporting period, the
cost of closure of the facility is incurred over those reporting period when the closure plan is finalised. Any
incremental liability incurred in a subsequent reporting period is considered to be an addition layer of the
original liability. Each layer is initially measured at fair value. A separate layer shall be measured, recognised
and accounted for prospectively. The obligations consist primarily of costs associated with mine reclamation,
decommissioning and demobilisation of facilities and other closure activities.
For environmental issues that may not involve the retirement of an asset, where the Company is a responsible
party and is determined that a liability exists, and amounts can be quantified, the Company accrues for the
estimated liability existing in respect of such environmental issues. The Company applies the criteria for liability
recognition under the applicable accounting standards.
1.7 Depreciation
a) Depreciation on Vessels and on fixed assets held outside India is provided using straight line method based
on estimated useful life or on the basis of depreciation rates prescribed under respective local laws.
b) Depreciation on all other assets is computed on the Written Down Value method in the manner and at the
rates prescribed under schedule XIV of the Companies Act, 1956.
c) Depreciation on assets acquired under lease is spread over the lease period.
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1.8 Capital Work in Progress
All expenditure and borrowings cost incurred during the asset acquisition period, are accumulated and shown
under this head till the asset is put to commercial use.
1.9 Retirement and Disposal of Assets
a) Profit on sale of assets is accounted for on completion of sale thereof.
b) Assets which are retired from active use and are held for disposal are stated at the lower of their net book
value or net releasable value.
1.10 Inventories
Bunker and Lubes on vessels are valued at lower of cost and net realisable value ascertained on first in first out
basis.
Inventory of coal is valued at the lower of cost or net realisable value. Cost is determined based on the weighted
average cost incurred during the period and includes an appropriate portion of fixed and variable overheads. Net
realisable value is the estimated sales amount in the ordinary course of business less the costs of completion
and selling expense.
1.11 Oil and Gas Assets:
The Successful Efforts method is followed for accounting for oil and gas as per the Guidance Note issued by the
Institute of Chartered Accountants of India on “Accounting for Oil and Gas producing activities”.
Expenditure incurred on the acquisition of a licence interest is initially capitalised on a licence by licence basis.
Costs are held, undepleted, within exploratory and development wells-in – progress until the exploration phase
relating to the licence area is complete or commercial oil and gas reserves have been discovered.
1.12 Investments
a) Investments are classified into Long Term and Current investments.
b) Long Term Investments are stated at cost of acquisition and related expenses. Provision for diminution, if
any, in the value of such investments is made to recognise a decline, other than of a temporary nature.
c) Current Investments are stated at cost of acquisition including incidental / related expenses or at fair value
as at 31st March 2012, whichever is less and the resultant decline, if any, is charged to revenue.
1.13 Incomplete Voyages
Incomplete voyages represent freight received and direct operating expenses on voyages which are not complete
as at the Balance sheet date.
1.14 Borrowing Costs
Borrowing costs incurred for the year for acquisition of vessels are capitalised till first loading of cargo, only if
the time gap between date of Memorandum of Agreement and Date when vessel is ready for use is more than
three months.
In respect of other assets, borrowing cost incurred till the date when asset is put to use is capitalised.
Incidental expenses related to borrowing are amortised over the term of the said borrowings.
1.15 Revenue Recognition
a) Income on account of freight earnings is recognised in all cases where loading of the cargo is completed
before the close of the year. All corresponding direct expenses are also provided.
b) Where loading of the cargo is not completed before the close of the year, revenue is not recognised and the
corresponding expenses are carried forward to the next accounting year.
c) Income from charter hire and demurrage are recognised on accrual basis.
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d) Income from services is accounted on accrual basis as per the terms of the relevant agreement.
e) Dividend on investments is recognised when the right to receive the same is established.
f) Insurance claims are accounted on accrual basis when there is a reasonable certainty of the realisability of
the claim amount.
g) Revenue from coal mining is recognised on transfer of risk, reward and ownership of the goods, and is
recorded net of returns, trade allowance, and government duties.
h) In case of a subsidiary, revenue from long-term construction contracts is recognised on the percentage of
completion method as mentioned in Accounting Standard (AS) 7 “Construction Contracts” notified by the
Companies (Accounting Standards) Rules, 2006. The stage of completion is measured with reference to
costs incurred as a percentage of total estimated costs for the project.
1.16 Foreign Exchange Transactions
a) Monetary Current assets and liabilities denominated in foreign currency, outstanding at the end of the year
are valued at the rates prevalent on that date.
b) Exchange differences arising on Long Term Foreign Currency Monetary (LTFCM) items are, following option
given by notification of MCA dated 29th December 2011, treated in the following manner:
- In respect of borrowings relating to or utilised for acquisition of depreciable capital assets, the same is
adjusted to the cost of the relevant capital asset and depreciated over the balance life of the said capital
asset.
- In other cases, the same is accumulated in a ‘Foreign Currency Monetary Item Translation Difference
Account’. The amount so accumulated in this account is amortised over the balance period of such
assets / liabilities or 31st March 2012, whichever is earlier.
c) Differences in translation of other monetary assets and liabilities and realised gains and losses on foreign
currency transactions are recognised in the Statement of Profit and Loss.
d) Exchange difference arising on long term foreign currency loans given to non integral foreign operations is
accumulated in foreign currency fluctuation reserve. On disposal of investment , the balance in the reserve
will be transferred to statement profit and loss.
1.17 Employees Benefits
a) Short – term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short
term employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognised at
actual amounts due in the period in which the employee renders the related service.
b) Post – employment benefits
i. Defined Contribution Plans
Payments made to defined contribution plans such as Provident Fund are charged as an expense as
they fall due.
ii. Defined Benefit Plans
The cost of providing benefit i.e. gratuity is determined using the Projected Unit Credit Method, with
actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised
immediately in the Statement Profit and Loss.
c) Other Long – term employee benefits
i. Other Long – term employee benefit viz. leave encashment is recognised as an expense in the statement
of profit and loss as and when it accrues. The company determines the liability using the Projected Unit
Credit Method, with actuarial valuation carried out as at the balance sheet date. The Actuarial gains
and losses in respect of such benefit are charged to the statement of profit and loss.
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1.18 Lease Accounting
a) In respect of operating lease agreements entered into as a lessee, the lease payments are recognised as
expense in the statement of profit and loss over the lease term.
b) In respect of operating lease agreement entered into as a lessor, the initial direct costs are recognised as
expenses in the year in which they are incurred.
c) At the beginning of the lease period, the finance lease is capitalised based on the fair value of leased assets
or based on the present value of a minimum lease payment, if the present value is lower than the fair
value. The minimum lease payment is bifurcated between the financial cost and the payment obligation
so as to produce a constant periodical interest rate for the obligation. Lease expense is recorded in the
Statement of Profit & Loss. Leased assets under finance lease are recorded in the fixed assets account and
depreciated based on the useful lives of the assets or the lease period, whichever is shorter.
1.19 Earning per share:
Basic and diluted earnings per share (EPS) are reported in accordance with Accounting Standard – 20. The
Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average
number of equity shares outstanding during the accounting year. The diluted EPS is computed using the
weighted average number of equity shares and dilutive potential equity shares outstanding at the end of the
year.
1.20 Provision for Taxation :
a) The holding company has opted for the Tonnage Tax scheme and provision for tax has been accordingly
made under the relevant provisions of the Indian Income Tax Act, 1961.
b) Tax on incomes on which the Tonnage Tax is not applicable is provided as per the other provisions of the
Indian Income Tax Act, 1961.
c) In case of subsidiary companies engaged in shipping and incorporated in Singapore, no provision is made
for taxation on qualifying shipping income derived which is exempt form taxation under section 13 A of the
Singapore Income Tax Act and the Singapore Approved International shipping enterprise Tax Incentive.
d) In respect of a subsidiary company in Singapore engaged in offshore drilling & support services, no
provision for tax is made for qualifying offshore income as it is exempt from taxation under Section 13 F of
Singapore Income Tax Act.
e) In respect of subsidiary companies incorporated in Singapore and Indonesia and engaged in activities other
than shipping and offshore, provision for taxation is made as per the applicable local laws of the respective
countries.
f) Deferred tax resulting from timing differences, if any, between book and tax profits for income other than
that covered under relevant Tax exempt scheme is accounted for under the liability method, at the current
rate of tax, to the extent that the timing differences are expected to be reversed in future.
1.21 Impairment of assets
A review is done of the carrying values of tangible and intangible assets for any possible impairment at each
balance sheet date. Impairment loss, if any, is recognised in the year in which impairment takes place.
1.22 Provisions and Contingent Liabilities:
Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can
be reliably estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past
events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future
events not wholly within the control of the Company or its subsidiary companies.
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1.23 Derivative instruments and hedge accounting
The Group uses foreign currency forward contracts; forward freight agreements, options on forward freight
agreements and currency options to hedge its risks associated with foreign currency fluctuations and
fluctuations in freight rates relating to certain firm commitments and forecasted transactions. The Company
has designated these hedging instruments as cash flow hedges or economic hedges applying the recognition
and measurement principles set out in the Accounting Standard 30 “Financial Instruments : Recognition and
Measurement” (AS – 30).
The use of hedging instruments is governed by the Company’s policies approved by the board of directors, which
provide principles on the use of such financial derivatives consistent with the Company’s risk management
strategy.
Derivatives are initially recognised at fair value at the dates the derivative contracts are entered into and are
subsequently re-measured to their fair values at each balance sheet date.
The resulting gain or loss is recognised in the statement of profit and loss immediately unless the derivative is
designated and effective as a hedging instrument, in which event the timing of the recognition in the statement
of profit and loss depends on the nature of the hedge relationship.
Hedge accounting
Hedges which include derivatives, embedded derivatives and non-derivatives in respect of price risk, are
designated as either hedges of fair value of recognised assets or liabilities or fair commitments (fair value
hedges) or hedges of highly probable forecast transactions (cash flow hedges).
Some forward freight agreements that the Group has entered into fall within the definition of fair value hedge.
Some other forward freight agreements fall within the definition of cash flow hedge as described below.
At the inception of the hedge relationship, the relationship between the hedging instrument and hedged item
is determined, along with its risk management objectives and the strategy for undertaking the hedge. At the
inception of the hedge and on a quarterly basis, the effectiveness of the hedging relationship in offsetting
changes in fair values or cash flows of the hedged item is determined.
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges will be recorded in
the statement of profit and loss immediately, together with any changes in the fair value of the hedged item that
is attributable to the hedged risk.
Hedge accounting will be discontinued when the Group revokes the hedging relationship, the hedging instrument
expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. The adjustment to the
carrying amount of the hedged item arising from the hedged risk will be amortised to the statement of profit
and loss from that date.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated as and qualify as cash
flow hedges are deferred in equity. The gain or loss relating to the ineffective portion of the hedge, if any, is
recognised immediately in the statement of profit and loss.
Amounts deferred in equity will be recycled in the profit or loss in the periods when the hedged item is
recognised in the statement of profit and loss. However, when the forecast transaction that is hedged results in
the recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in
equity will be transferred from equity and included in the initial measurement of the cost of the asset or liability.
Hedge accounting will be discontinued when the Group revokes the hedging relationship, the hedging instrument
expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or
loss deferred in equity at that time will remain in equity and will be recognised when the forecast transaction
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is ultimately recognised in the statement of profit and loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that had been deferred in equity will be recognised immediately in the
statement of profit and loss.
1.24 Cash and Cash equivalents
Cash and cash equivalents for the purpose of the cash flow statement comprise cash at bank and in hand and
short-term investments with an original maturity of three months or less.
2.1 Share Capital ` in Lakhs
Particulars As atMarch 31, 2012
As atMarch 31, 2011
Authorised 35,00,00,000 Equity shares of ` 1/- par value. 3,500.00 3,500.00
200,00,000 Preference shares of ` 100/- par value. 20,000.00 20,000.00
23,500.00 23,500.00
Issued Capital 24,48,92,073 (24,48,92,073)Equity shares of ` 1/- each fully paid up 2,448.92 2,448.92
2,448.92 2,448.92
Subscribed and Paid Up Capital Equity
24,48,92,073 (24,48,92,073) Equity shares of ` 1/- each fully paid up. 2,448.92 2,359.92
(a) Nil (89,00,000) shares of ` 1/- alloted on exercise of option of
conversion of 89,00,000 warrants issued on preferential basis during
the year.
-
89.00
2,448.92 2,448.92
Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period
Equity Shares
Particulars As atMarch 31, 2012
As atMarch 31, 2011
Number of shares at the beginning 244,892,073 235,992,073
Add: Shares issued on exercise of option of conversion of warrants - 8,900,000
Number of shares at the end 244,892,073 244,892,073
The company has two class of shares referred to as equity shares having a par value of ` 1/- and preference
shares having a par value of ` 100/-. Each holder of equity shares is entitled to one vote per share.
The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the
remaining assets of the company, after distribution of all preferetial amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.
The aggregate number of bonus shares issued during the period of five years immediately preceeding the
balance sheet date is Nil (P.Y. 11,83,45,500 which were issued in the year 2005-06)
Details of each shareholder holding more than 5 percent shares in the company:
Name of the shareholder As at March 31, 2012 As at March 31, 2011Equity shares of ` 1 each fully paid No of shares % of holding No of shares % of holding
H. K. Mittal 46,654,200 19.05 48,254,200 19.70
Archana Mittal 26,327,400 10.75 24,727,400 10.10
AHM Investments Private Limited 18,406,250 7.52 18,406,250 7.52
Lotus Global Investments Limited 14,229,669 5.81 14,350,000 5.86
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2.2 Reserves and Surplus ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Capital Reserve As per last Balance Sheet 1,693.49 1,693.49
Capital Redempetion Reserve As per last Balance Sheet 4,000.00 4,000.00
Securities Premium Account As per last Balance Sheet 36,456.57 31,765.21
Add: Received during the year on conversion of warrants - 4,806.00
Less: Premium paid on redemption of FCCBs - (91.39)
Less: Expenses on issue of shares pursuant to conversion of warrants
during the year
- (4.90)
Less: Premium on redemption of Unsecured debentures (81.65) (18.35)
36,374.92 36,456.57
Tonnage Tax Reserve (Utilised) As per last Balance Sheet 17,524.83 17,524.83
Debenture Redemption Reserve As per last Balance Sheet 21,332.50 26,970.00
Add/(Less):Transferred to/from General Reserve 4,230.00 (5,637.50)
25,562.50 21,332.50
General Reserve As per last Balance Sheet 13,394.33 7,756.83
Add/(Less) : Transferred from/to Debenture Redemption Reserve (4,230.00) 5,637.50
9,164.33 13,394.33
Capital Reserve on Consolidation 69,625.88 60,770.89
Foreign Exchange Currency Translation Reserve 10,787.30 (1,596.72)
Foreign Exchange Fluctuation Reserve As per last Balance Sheet 1,235.60 1,574.76
Add/Less: Exchange fluctuation on Long Term Loans in relation to non
integral foreign operations (Net)
5,955.91 (631.76)
Add/Less: Transfer to Statement of Profit and Loss (6,187.00) 292.60
1,004.51 1,235.60
Hedging Reverse As per last Balance Sheet - -
Add/Less: For the year (498.35) -
(498.35) -
Surplus in Statement of Profit and Loss As per last Balance Sheet 69,806.09 60,406.16
Net Profit after tax transferred from Statement of Profit and Loss 2,055.63 9,399.93
71,861.72 69,806.09
247,101.12 224,617.58
2.3 Money received against share warrants` in Lakhs
Particulars As at March 31, 2012
As at 31. March 2011
Warrants against share capital 1,88,80,000 warrants of face value of ` 13.75 each 2,596.00 2,596.00
During the year ended 31.03.2011 2,77,80,000 warrants (each warrant
carrying option / entitlement to subscribe 1 number of equity share
of ` 1/- each) on or before May 2012 at a price of ` 55/- per share
were allotted on preferential basis. Out of these option for conversion
of 89,00,000 warrants was excercised during the year 2010-11, the
balance 1,67,70,000 warrants have lapsed on 8th May 2012 and
21,10,000 warrants on 12th May 2012 on non exercise of option.
2,596.00 2,596.00
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2.4 Long term borrowings` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Secured (A) Debentures 45,000.00 51,125.00
(B) Foreign Currency Loans 192,352.79 152,818.86
(C) Term loans from banks 36,910.46 35,248.80
274,263.25 239,192.66
Notes:
Security details
a) Debentures referred in (A) above are secured by first mortgage on specified vessels of the company on
pari-passu basis with other lenders and first / pari- passu charge on the specified immovable properties.
b) Foreign Currency Loan referred in (B) above are secured by, wherever applicable
(i) By way of exclusive charge on specified vessels
(ii) By way of pari-passu charge on specified vessels
(iii) By way of exlusive charge on specified mining assets
(iv) Corporate guarantees
(v) Charge on loan provided to subsidiary
(vi) Assigment of contract(s); earnings; insurance
(vii) Charge on shares; deposits & accounts
c) External Commercial Borrowings included in (B) above are secured by exclusive charge on specified
vessels of the company of which ` 2,557.83 lakhs (P.Y. ̀ Nil) additonally secured by charge on loan extended
to subsidiary as well as charge on cash flows of specified vessels.
d) Term Loan refered in (C) above are secured by first charge on specified vessels, on pari passu basis
with other lenders and includes ` 13,500 lakhs (P.Y. ` 8,000 lakhs) additonally secured by charge on loan
extended to subsidiary as well as charge on cash flows of specified vessels.
Terms of repayment and interest are as follows: ` in Lakhs
Loan from ROI* No. of instalments left as on
31.03.2012
Year of maturity
Amount outstanding 31.03.2012
Amount outstanding 31.03.2011
Debentures 10.50% 1 2013 1,125.00 2,812.50
Debentures 9.50% 6 2015 25,000.00 25,000.00
Debentures 9.50% 1 2015 10,000.00 10,000.00
Debentures 11.90% 3 2019 15,000.00 15,000.00
Indian Banks 15.25% 8 2016 16,000.00 17,600.00
Indian Banks 11.40% 2 2013 2,499.20 4,999.20
Indian Banks 13.90% 11 2018 8,000.00 8,000.00
Indian Banks 14.50% 2 2013 7,500.00 15,000.00
Indian Banks 11.75% 2 2013 1,249.60 2,499.60
Indian Banks 14.10% 11 2018 5,500.00 -
Indian Banks 10.05% 9 2017 12,117.95 12,691.32
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Loan from ROI* No. of instalments left as on
31.03.2012
Year of maturity
Amount outstanding 31.03.2012
Amount outstanding 31.03.2011
Indian Banks 3.42% 8 2016 10,103.41 9,488.13
Indian Banks 5.55% 13 2019 2,557.83 -
Indian Banks Libor +4.25% 3 2016 7,140.38 12,502.00
Indian Banks Libor +4.30% 16 2017 10,231.20 -
Indian Banks Libor +3.75% 24 2018 62,346.38 -
Indian Banks Libor +4.75% 12 2019 10,077.73 -
Indian Banks Libor +3.35% - - - 35,050.25
Indian Banks Libor +0.95% 21 2018 54,012.02 54,095.19
Foreign Banks Libor +2.50% 31 2020 21,605.71 -
Foreign Banks Libor +1.0% 6 2015 6,906.06 6,920.75
Foreign Banks Libor +0.95% - - - 11,231.71
Foreign Banks Libor +0.95% - - - 11,231.71
Foreign Banks Libor +2.25% 16 2016 4,230.75 4,783.62
Foreign Banks Libor +2.25% - - - 2,679.00
Foreign Banks Libor +2.35% 25 2019 11,482.74 11,124.10
Foreign Banks Libor +2.25% 106 2021 16,029.91 15,050.33
Indian Banks 2.10% 1 2013 2,557.80 2,232.50
Indian Banks 2.10% - - - 4,465.00
323,273.65 294,456.91
Less: Shown in current maturities of long term debt 49,010.40 55,264.25
Balance shown as above 274,263.25 239,192.66
* Applicable Rate of Interest as on 31.03.2012
2.5 Other long term liabilities
` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Trade payable 80.68 -
Acceptances 4,189.72 3,656.84
Others
Due to Related Party 255.78 -
Liability towards cash flow hedges 481.76 -
5,007.94 3,656.84
2.6 Long term provisions
` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Provision for employee benefits
Gratuity 335.06 181.63
Compensated absences 63.53 64.28
398.59 245.91
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2.7 Short term borrowings
` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
SecuredLoans repayable on demand
Working capital facilities from banks* 32,447.83 15,744.00
UnsecuredDebentures1) Nil (1000) - 10.25% Non convertible redeemable debentures of `
10,00,000 each redeemed in January 2012 with 1% redemption premium.
- 10,000.00
2) 2.5% Convertible bond B** - 7,144.00
3) Working capital facilities from scheduled bank 1,976.22 -
34,424.05 32,888.00
Note:
* Working capital facilities from Banks are secured by second charge on specified vessels and 1st charge on
all receivables and other current assets of the company on pari-passu basis; and further by way of Corporate
Guarantees, wherever applicable.
** The convertible bond B were convertible to ordinary equity shares of the Company at the option of the holders
of the Bond B on or before March 14, 2012; at a fixed price of 76 Singapore cents per share based on the nominal
issued amount of the bonds totalling to USD 16 Mn. However the Bond B holders did not exercise their options
and on March 20, 2012, the company has repurchased the Bonds B in its entirety.
2.8 Other current liabilities` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Current maturities of long-term debt
1) Debentures 6,125.00 1,687.50
2) Foreign Currency Loan (Refer Note 2.4 (b) & (c)) 27,044.06 40,726.75
3) Term loans from banks (Refer Note 2.4 (d) 15,956.29 12,850.00
Interest accrued and not due on borrowings 2,850.09 3,345.90
Income received in advance 14,589.66 9,068.39
Unpaid dividend* 68.05 77.17
For Other liabilities
Salaries & wages payable 378.92 95.36
Statutory dues payables 601.18 921.51
Liability towards cash flow hedges 16.60 -
Advance from customer 0.17 165.66
Other payables** 5,240.93 8,839.69
72,870.95 77,777.93
* These figures do not include any amounts, due and outstanding, to be credited to Investor Education and
Protection Fund.
** Other payables includes uncomplete voyages net off income accrued but not due in the previous year.
2.9 Short term provisions` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Provision for employee benefits
Gratuity 24.71 13.19
Compensated absences 21.18 21.43
45.89 34.62
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14
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3.6
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0.4
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.80
Ro
ad
an
d B
rid
ge
s 3
14
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.81
– –
36
0.1
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57
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9.8
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Offi
ce
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mis
es (
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fer
No
te 1
, 2
)
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8.5
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ls (
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fer
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te 3
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8.7
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– 3
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– 8
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Offi
ce
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me
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2.5
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– 6
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r E
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es
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- –
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– –
– –
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Min
ing
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me
nts
1,5
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4.7
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1,6
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8.7
0
Gran
d To
tal
544
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57,8
98.6
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4,82
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36 1
0,01
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08 1
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9
Prev
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r 5
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393.
24 1
07,1
31.8
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(5,7
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6,41
6.23
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66 8
8,43
1.36
448
,489
.24
511
,832
.30
No
te
1)
Incl
ud
es
cost
of
10 s
ha
res
of
` 50
/ –
ea
ch f
ull
y p
aid
in M
itta
l To
we
r P
rem
ise
s C
o-o
p. S
oci
ety
Ltd
.
2)
Offi
ce p
rem
ise
s h
avi
ng
gro
ss v
alu
e `
343
.16
lak
hs
(P.Y
. ` 3
43.1
6 la
kh
s) a
nd
acc
um
ula
ted
de
pre
cia
tio
n `
136
.96
lak
hs
(P.Y
. `12
6.11
/ –
la
kh
s) a
re g
ive
n o
n o
pe
rati
ng
Le
ase
.
3)
Tran
slat
ion
/Ad
just
men
ts in
clu
de
exch
ang
e fl
uct
atio
n lo
ss o
n L
ong
ter
m f
orei
gn
cu
rren
cy L
oan
s `
2,31
7.04
lak
hs
(P.Y
. Exc
han
ge
Flu
ctu
atio
n G
ain
` 3
85.5
2 /
– la
kh
s )
4)
Veh
icle
s h
avi
ng
ne
t b
oo
k v
alu
e o
f `
135.
84 l
ak
hs
(F.Y
. ` 3
9.39
la
kh
s) a
re o
n fi
na
nce
lea
se.
AUDI
TORS
’ REP
ORT
CASH
FLO
W S
TATE
MEN
TNO
TES
BALA
NCE
SHEE
T I S
TATE
MEN
T OF
PRO
FIT
AND
LOSS
106
MERCATOR
2.11 Investments ` in Lakhs
Particulars Nos As at March 31, 2012
Nos As at March 31, 2011
Non Current Investments – At cost
Trade investments (Unquoted)
Investment in Equity Instruments
Marg Swarnabhoomi Port Private Limited 1250 0.13 1,250 0.13
Others – 2,533.27 – 4.25
Non trade investments (Unquoted)
Investment in Others
Units of Indian Real Opportunity Venture Capital Fund 36459 364.59 40,479 404.78
Aggregate amount of Unquoted investments 2,897.99 409.16
Current Investments – at the lower of cost and fair value
Quoted
Investments in Mutual Funds
Axis Equity Fund 500000 50.00 500000 50.00
SBI Magnum Insta Cash Fund Daily Dividend – – 597,004 100.00
Axis Infra Bond – 1,118.77 – 2,286.26
(Market value of current investments on 31.3.12
is ` 1,170.72 lakhs (P.Y. ` 2,441.41 lakhs)
Aggregate amount of Quoted investments 1,168.77 2,436.26
Unquoted
Investment in Shares – 5.04 – –
Aggregate amount of Unquoted investments 5.04 –
Aggregate amount of Current investments 1,173.81 2,436.26
2.12 Long term loans and advances ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Unsecured, Considered Good
Capital Advances 1,136.46 940.00
Capital Advances to related parties 4,199.96 4,199.96
Deposits
Deposits with government and semi government bodies 18.03 17.28
Other deposits 1,277.25 1,173.29
Exploration and development expenses recoverable 2,053.06 -
Deffered exploration and development of mine 2,151.88 -
Advances Recoverable 371.11 -
Other loans and advances
Unamortised finance charges 269.78 351.30
Prepaid expenses 1,345.00 0.82
MAT credit available - 1,535.00
12,822.53 8,217.65
CONS
OLID
ATED
FIN
ANCI
AL S
TATE
MEN
TS
107
annual report 2011-12
2.13 Other non current assets` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Assets not in use 233.81 -
Prepaid Tax 29.30 -
Accrued interest on fixed deposit with banks 0.48 0.30
263.59 0.30
2.14 Inventories` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
At Cost
Coal 3,011.95 2,399.73
Bunker and lubes 6,310.83 3,871.98
9,322.78 6,271.71
2.15 Trade receivables ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Unsecured, Considered Good
Debts outstanding for a period exceeding six months from the date
they were due for payment 12,268.70 8,462.66
Others 38,606.64 29,171.53
50,875.34 37,634.19
2.16 Cash and bank balances` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Cash and cash equivalents
Cash in hand 95.68 10.82
Balances with banks 20,480.70 8,907.66
Deposits with banks with 3 months maturity 1,535.58 26,119.88
Others
Fixed Deposits with bank with maturity more than 3 months 5,933.50 36,121.08
28,045.46 71,159.44
Balances with banks in unpaid dividend accounts 68.06 77.17
Balances with banks includes amount in escrow account 4.90 4.90
Fixed Deposits with more than 12 months maturity 2,713.50 352.40
Balances with banks held as margin money deposits against
guarantees 397.53 36,672.00
AUDI
TORS
’ REP
ORT
CASH
FLO
W S
TATE
MEN
TNO
TES
BALA
NCE
SHEE
T I S
TATE
MEN
T OF
PRO
FIT
AND
LOSS
108
MERCATOR
2.17 Short term loans and advances ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Unsecured, Considered Good
Loans and advances to related parties 323.13 340.07
Deposits 30.78 –
Others
Advance to employees 161.26 57.82
Advance to suppliers 11,960.94 15,635.30
Advances recoverable 3,944.64 6,663.50
Inter corporate deposits to related parties 1,850.00 –
Inter corporate deposits to others 1,834.51 1,253.39
Advance payment of tax (net of provisions) 1,048.92 625.55
Indirect Tax receivable 164.92 123.48
Insurance receivable 1,810.31 968.85
Unamortised finance charges 134.27 256.74
Prepaid expenses 2,380.85 1,873.15
25,644.53 27,797.85
2.18 Other current assets ` in Lakhs
Particulars As at March 31, 2012
As at March 31, 2011
Accrued interest on fixed deposit with banks 25.73 943.77
Statutory Dues 6.06 –
Contract cost incurred 947.66 –
Income accrued but not due * 1,194.38 –
2,173.83 943.77
* Income accrued but not due includes uncomplete voyages
2.19 Revenue from operations ` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Freight 60,621.22 61,911.84
Charter hire 75,304.34 78,266.11
Dispatch and demurrage 780.24 3,904.52
Sale of Coal 224,235.83 133,638.99
Cargo handling services 9,049.13 5,167.00
369,990.76 282,888.46
CONS
OLID
ATED
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annual report 2011-12
2.20 Other income ` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Dividend received on current investments 0.48 31.41
Rent received 93.68 144.00
Net gain on foreign currency transactions/transalation 4,763.74 -
Net gain on Derivatives translation 13.81 -
Interest income 962.94 2,267.27
Gain on sale of current investments (net) 287.62 18.41
Insurance claims received 137.24 -
Miscellaneous income 253.09 279.84
6,512.60 2,740.93
2.21 Operating expenses ` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Purchase of Coal 153,103.69 98,122.77
Coal Mining and Logistics expenses 53,190.23 25,174.76
Bunker consumed 19,704.82 17,546.60
Vessel /Equipment hire expenses 26,410.83 33,250.29
Technical services 12,245.60 8,952.19
Agency, Professional and service expenses 1,626.62 1,190.39
Crew expenses 4,172.63 2,830.64
Communication expenses 476.63 124.30
Miscellaneous expenses 778.18 855.72
Commission 2,084.51 2,552.63
Insurance 2,235.43 1,678.52
Port expenses 3,866.50 3,325.65
Repairs and maintenance 16,226.25 14,591.02
Stevedoring, transport and freight 3,658.10 2,107.60
299,780.02 212,303.08
2.22 Employee benefits expenses ` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Salaries, wages, bonus, etc. 4,404.97 2,444.73
Contribution to provident and other funds 171.03 79.33
Employee welfare expenses 201.81 128.85
4,777.81 2,652.91
2.23 Finance cost ` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Interest expense 20,107.52 21,917.79
Other borrowing costs 1,087.49 1,872.79
Applicable net gain/loss on foreign currency transactions/translation 99.70 –
21,294.71 23,790.58
AUDI
TORS
’ REP
ORT
CASH
FLO
W S
TATE
MEN
TNO
TES
BALA
NCE
SHEE
T I S
TATE
MEN
T OF
PRO
FIT
AND
LOSS
110
MERCATOR
2.24 Other expenses` in Lakhs
Particulars Year Ended March 31, 2012
Year Ended March 31, 2011
Rent 834.95 555.09
Payment to auditors
As auditors 98.59 87.01
For Tax Audit 2.00 1.75
For Other services (certification and other matters) 16.10 15.60
Repairs to office premises and premises acquired on lease 96.40 108.20
Insurance 61.82 36.68
Net loss on foreign currency transaction/transalation 30.19 539.59
Legal, Professional and consultancy expenses 1,277.00 713.75
Donation 19.26 44.31
Communication expenses 125.46 101.75
Conveyance, car hire and travelling 1,132.37 524.12
Advertisement 15.08 5.16
Bad Debts / Sundry balance Written off 1,725.47 267.79
Loss on sale of assets (net) 30.97 2,198.07
Miscellaneous expenses 1,707.05 1,078.45
7,172.71 6,277.32
3. ADDITIONAL DISCLOSURES AS PER REVISED SCHEDULE VI
3.1 Contingent Liabilities not provided for
Current Year(` in Lakhs)
Previous Year (` in Lakhs)
Counter guarantees issued by the Company for guarantees obtained
from the bank (net of margin).
5,809.05 2,747.74
Counter guarantees issued by the Company for guarantees obtained
from bank on behalf of subsidiaries
256.05 253.64
Corporate guarantees issued for performance by the company 20,327.60 10,890.14
TOTAL 26,392.71 13,891.52
3.2 Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of
advances) as at March 31, 2012 ` 12,477.07 Lakhs (` 10,890.13 Lakhs).
3.3 Estimated amount of commitments outstanding towards contributions to funds are ` 969.93 Lakhs (` 900.59
Lakhs).
3.4 No provision has been made in respect of disputed demands from Income-tax Authorities to the extent of
` 5,697.51 Lakhs (` 666.67 Lakhs), since the company has reasons to believe that it would get relief at the
appellate stage as the said demands are excessive and erroneous. Against the above, the company has already
paid ` 1,541.77 Lakhs (Nil).
CONS
OLID
ATED
FIN
ANCI
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111
annual report 2011-12
4. DISCLOSURES AS PER ACCOUNTING STANDARDS NOTIFIED BY THE COMPANIES (ACCOUNTING STANDARDS) RULES, 2006.
4.1 Details of contract revenue and costs as per Accounting Standard 7
(` In Lakhs)
ParticularsFor the year
ended March 31, 2012
For the year ended
March 31, 2011
Contract revenue recognised during the year Nil Nil
Aggregate of contract costs incurred and recognised profits (less
recognised losses) upto the reporting date
1,468 Nil
Advances received for contracts in progress Nil Nil
Retention money for contracts in progress Nil Nil
Gross amount due from customers for contract work (asset) 948 Nil
Gross amount due to customers for contract work (liability) Nil Nil
4.2 The company has opted for accounting the exchange differences arising on reporting of long term foreign
currency monetary items in line with the notification of Ministry of Corporate Affairs (MCA) dated 31st March
2009/29th December 2011 on Accounting Standard (AS)-11. In line with the above notification, gains / losses
arising during the year from the effect of changes in foreign exchange rates on foreign currency loans relating
to acquisition of depreciable capital assets, are adjusted to the cost of the fixed assets. The addition to fixed
assets on account of the same is ` 2,317.04 Lakhs (previous year deduction ` 385.53 Lakhs).
4.3 Disclosure in accordance with Accounting Standard 17 on “Segment Reporting”.
Primary Segments:
The group has identified Business Segment as the primary segment. Segments have been identified taking into
account the nature of the services / products, the differing risks and returns, the organisation structure and
internal reporting system. The group’s operations predominantly relate to
a) Shipping
b) Offshore
c) Coal Mining, Trading and Logistics.
Secondary Segment:
The shipping activities are managed from India and Singapore. The Off Shore activities are managed from
Singapore. The Coal Mining, Coal Trading and logistics are managed from India, Singapore and Indonesia.
Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts
identifiable to each of the segments as also amounts allocated on a reasonable basis. The expenses, which are
not directly attributable to the business segment, are shown as others.
Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated
corporate assets and liabilities respectively.
AUDI
TORS
’ REP
ORT
CASH
FLO
W S
TATE
MEN
TNO
TES
BALA
NCE
SHEE
T I S
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T OF
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AND
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112
MERCATOR
There are no Inter Segment transfers.
Segment Revenue Shipping Offshore Coal Mining, Trading and Logistics
Others Unallocated Total Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 Revenue 118,500.85 1,29,903.59 19,871.56 11,980.81 231,618.34 1,38,805.99 – – 5,518.69 473.66 375,509.45 281,164.05 Results Profit / (Loss) before tax and interest
1,122.13 13,083.88 4,940.01 8,351.14 13,955.86 9,555.66 – (2.21) 5,550.80 473.66 25,568.80 31,462.14
Less :Interest (20,331.77) (21,523.31) Total Profit Before Tax 5,237.03 9,938.82 Provision for Taxation Current Tax (2,495.26) (1,573.66) Deferred Tax 271.75 220.56 Minimum Alternate Tax – – Net Profit 3,013.52 8,585.72 Other Information Assets 534,184.47 5,67,527.04 103,536.77 82,527.22 66,487.41 39,283.58 336.42 4,088.17 2,845.42 708,296.82 692,520.24 Liabilities 25,088.35 21,454.76 18,554.30 14,949.33 7,723.99 8,101.49 142.77 362,003.83 383,224.39 413,370.47 427,872.74 Capital Expenditure 2,994.12 55,892.83 103,650.94 22.01 495.81 478.39 107,140.87 56,393.23 Depreciation 28,334.77 26,842.93 9,415.98 3,355.48 490.33 468.25 38,241.08 30,666.67
4.4 Related Party Disclosures as per Accounting Standard 18 on “Related Party Disclosures”
A List of Related Parties
I Key Management Personnel
1 H.K Mittal
2 A.J. Agarwal
3 Shalabh Mittal
4 K.S.Raheja
5 Shruti Mittal
6 Hondoko Soeseno
7 Taufik Surya Darma
II Enterprises over which Key Management Personnel exercise significant control
1 AAAM Properties Pvt Ltd
2 Ankur Fertilizers Private Limited
3 AHM Investments Private Limited.
4 Vaitarna Marine Infrastructure Ltd. (Erstwhile Mech Marine Engineers Pvt Ltd)
5 Rishi Holding Private Limited
6 OMCI Ship Management Pvt Limited
III Enterprises over which Directors/Relative of Directors/Key Management Personnel/Relative of Key Management Personnel exercise significant influence.
1 MLL Logistics Private Limited
2 MMAXX Dredging Pvt Ltd (Liquidated during the year)
3 CMA Constructions & Properties Pvt Ltd (Liquidated during the year)
4 Zicom Electronic Security Systems Ltd
5 Oilmax Energy Pvt Ltd
6 PT United Coal Indonesia
IV Relative of Key Management Personnel
1 Adip Mittal
CONS
OLID
ATED
FIN
ANCI
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113
annual report 2011-12
B Details of Transactions with above parties ` In Lakhs
Name of the Transaction Key Management Personnel
Enterprises over which Key
Management Personnel exercise significant control
Enterprises over which Directors/Relative of
Directors/Key Management Personnel/Relative of Key
Management Personnel exercise significant
influence.
Total
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Interest Income – – – – 24.08 – 24.08 –
Services Received – – 30.60 – 226.42 105.69 257.02 105.69
Reimbursments of Expenses Paid – – 30.97 642.95 30.40 0.52 61.37 643.48
Reimbursments of Expenses
Received
– – 135.76 0.06 – 0.02 135.76 0.08
Inter Corporate Deposits
Inter Corporate Deposits given during
the year
– – – – 1,850.00 –
1,850.00
–
Inter Corporate Deposits received
during the year
– – – – 157.50 – 157.50 –
Inter Corporate Deposits repaid
during the year
– – – – 157.50 – 157.50 –
Advances
Advances Given During the Year – – 15.38 4,914.46 5.00 – 20.38 4,914.46
Advances Received Back During the
Year
– – – 9.97 – 0.19 – 10.16
Outstanding balances as on
31.03.2012
Loans ,Advances and Receivables
Advances – – 15.61 – 323.13 318.13 338.74 318.13
Capital Advances – – 4,199.96 – – – 4,199.96 –
Outstanding Balances of Trade and
Other Receivables & Other Payables
as on 31.03.2012
Trade & Other Receivables 966.29 – – – 1,091.83 1,003.53 2,058.13 1,003.53
Trade & Other Payables 255.78 – 72.10 139.42 – – 327.88 139.42
Inter Corporate Deposit
Balance as on 31.03.2012 – – – – 1,850.00 – 1,850.00 –
Deposit
Balance as on 31.03.2012 – – 65.00 65.00 500.00 500.00 565.00 565.00
Remuneration paid to Key
Management Personnel
423.67 690.84
Remuneration paid to Relative of Key
Management Personnel
16.64 5.58
AUDI
TORS
’ REP
ORT
CASH
FLO
W S
TATE
MEN
TNO
TES
BALA
NCE
SHEE
T I S
TATE
MEN
T OF
PRO
FIT
AND
LOSS
114
MERCATOR
Partywise details of material transactions ` In Lakhs
Name of the Transaction Key Management Personnel
Enterprises over which Key
Management Personnel exercise significant control
Enterprises over which Directors/Relative of
Directors/Key Management Personnel/Relative of Key
Management Personnel exercise significant
influence.
Total
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Interest Income
MLL Logistics Private Limited – – – – 24.08 – 24.08 –
Total – – – – 24.08 – 24.08 –
Services Received
MLL Logistics Private Limited – – – – – 3.60 – 3.60
Vaitarna Marine Infrastructure Ltd – – 30.60 – – – 30.60 –
Oilmax Energy Pvt Ltd – – – – 226.42 69.32 226.42 69.32
OMCI Ship Management Pvt Limited – – – – – 32.77 – 32.77
Total – – 30.60 – 226.42 105.69 257.02 105.69
Reimbursments of Expenses Paid
Ankur Fertilizers Private Limited – – 7.60 12.10 – – 7.60 12.10
MLL Logistics Pvt Limited – – – – 3.24 – 3.24 –
Oilmax Energy Pvt Ltd – – – – 27.16 0.52 27.16 0.52
OMCI Ship Management Pvt Limited – – 23.37 630.85 – – 23.37 630.85
Total – – 30.97 642.95 30.40 0.52 61.37 643.48
Reimbursments of Expenses Received
Vaitarna Marine Infrastructure Ltd – – – 0.06 – – – 0.06
MMAXX Dredging Pvt Ltd – – – – – 0.02 – 0.02
OMCI Ship Management Pvt Limited – – 129.43 – – – 129.43 –
Total – – 129.43 0.06 – 0.02 129.43 0.08
Inter Corporate Deposits
Inter Corporate Deposits given during the year
MLL Logistics Private Limited – – – – 1,850.00 – 1,850.00 –
Total – – – – 1,850.00 – 1,850.00 –
Inter Corporate Deposits received during the year
Zicom Electronic Security Systems
Ltd
– – – – 157.50 – 157.50 –
Total – – – – 157.50 – 157.50 –
Inter Corporate Deposits repaid during the year
Zicom Electronic Security Systems
Ltd
– – – – 157.50 – 157.50 –
Total – – – – 157.50 – 157.50 –
Advances
Advances Given During the Year
MLL Logistics Pvt Ltd – – – – 5.00 – 5.00 –
Vaitarna Marine Infrastructure Ltd – – 15.38 4,914.46 – – 15.38 4,914.46
Total – – 15.38 4,914.46 5.00 – 20.38 4,914.46
CONS
OLID
ATED
FIN
ANCI
AL S
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Partywise details of material transactions ` In Lakhs
Name of the Transaction Key Management Personnel
Enterprises over which Key
Management Personnel exercise significant control
Enterprises over which Directors/Relative of
Directors/Key Management Personnel/Relative of Key
Management Personnel exercise significant
influence.
Total
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Current Yr
Previous Yr
Advances Received Back During the Year
MMAXX Dredging Pvt Ltd – – – – – 0.19 – 0.19
Oorja Resources India Pvt Ltd. – – – 9.97 – – – 9.97
Total – – – 9.97 – 0.19 – 10.16
Outstanding balances as on 31.03.2012
Loans ,Advances and Receivables
Advances
MLL Logistics Pvt Ltd – – – – 323.13 318.13 323.13 318.13
Vaitarna Marine Infrastructure Ltd – – 15.61 – – – 15.61 –
Total – – 15.61 – 323.13 318.13 338.74 318.13
Capital Advances
Vaitarna Marine Infrastructure Ltd – – 4,199.96 – – – 4,199.96 –
Total – – 4,199.96 – – – 4,199.96 –
Outstanding Balances of Trade and
Other Receivables & Other Payables as on 31.03.2012
Trade and Other Receivables
PT United Coal Indonesia – – – – 167.47 – 167.47 –
Handoko Soeseno 966.29 – – – – – 966.29 –
MLL Logistics Private Limited – – – – 924.36 1,003.53 924.36 1,003.53
Total 966.29 – – – 1,091.83 1,003.53 2,058.13 1,003.53
Trade and Other Payables
Oilmax Energy Pvt Ltd – – 52.48 – – – 52.48 –
Handoko Soeseno 255.78 – – – – – 255.78 –
OMCI Ship Management Pvt Limited – – 19.62 129.33 – – 19.62 129.33
Total 255.78 – 72.10 129.33 – – 327.88 129.33
Inter Corporate Deposit
Balance as on 31.03.2012
MLL Logistics Private Limited – – – – 1,850.00 – 1,850.00 –
Total – – – – 1,850.00 – 1,850 –
Deposit
Balance as on 31.03.2012
MLL Logistics Private Limited – – – – 500.00 500.00 500.00 500.00
Rishi Holding Private Limited – – 15.00 15.00 – – 15.00 15.00
Oilmax Energy Pvt Ltd – – 50.00 50.00 – – 50.00 50.00
Total – – 65.00 65.00 500.00 500.00 565.00 565.00
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4.5 Disclosure in respect of Leases as per AS 19:
(A) Disclosure in respect of operating lease (as Lessee):` in Lakhs
Year EndedMarch 31, 2012
Year endedMarch 31, 2011
(a) Operating Leases
Disclosures in respect of cancelable agreements for office
premises taken on lease
(i) Lease payments recognised in the Statement of Profit and Loss 560.92 491.22
(ii) Significant leasing arrangements
The Company has given refundable interest free security
deposits under the agreements.
The lease agreements are for a period from 60 – 108 months.
These agreements also provided for increase in rent.
These agreements are non cancellable by both the parties for
24–60 months except in certain exceptional circumstances.
(iii) Future minimum lease payments under non-cancellable
agreements
Not later than one year 459.86 291.35
Later than one year and not later than five years 159.66 76.35
Later than five years NIL NIL
(B) Disclosure in respect of operating lease (as Lessor):` in Lakhs
Year EndedMarch 31, 2012
Year endedMarch 31, 2011
(a) Operating Leases
Disclosures in respect of cancellable agreements for office
given on lease
(i) Lease receipt recognised in the Statement of Profit and
Loss
93.68 144.00
(ii) Significant leasing arrangements
- The Company has taken refundable interest free security
deposits under the agreements.
- The lease agreements are for a period of 60 months.
- These agreements are non cancelable by both the parties
for 18 months except in certain exceptional circumstances.
(iii) Future minimum lease receivable under non-cancellable
agreements
- Not later than one year NIL NIL
- Later than one year and not later than five years NIL NIL
- Later than five years NIL NIL
Disclosures in respect of cancellable agreements for Rig given
on lease
(i) Lease receipt recognised in the Statement of Profit and
Loss
NIL 14,178.88
(ii) Significant leasing arrangements
– The lease agreements are for a period of 36 months.
– These agreements are non cancelable by both the parties
except in certain exceptional circumstances.
(iii) Future minimum lease receivable under non-cancellable
agreements
– Not later than one year NIL NIL
– Later than one year and not later than five years NIL NIL
– Later than five years NIL NIL
General description of leasing arrangement:
i. Leased Assets: Office premises, Godown And Vehicle
ii. Future Lease rentals are determined on the basis of agreed terms.
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(C) Disclosure in respect of finance lease (as Lessee): ` In Lakhs
Total Minimum Lease Payments outstanding
As at March 31, 2012
As at March 31, 2011
Within 1 year 117.01 64.95
Later than 1 year and not later than 5 years 101.93 124.04
Later than 5 years Nil Nil
Total 218.94 188.96Less: Interest 23.32 26.32
Present Value of Minimum Lease Payments 195.63 162.64
4.6 Earning Per Share as per AS 20` in Lakhs
Particulars Year Ended 31/03/2012
Year Ended 31/3/2011
Net Profit after Tax, Minority interest
- Basic and Diluted 2,055.63 4,684.75
Number of Shares used in computing Earning Per Share
– Basic and Diluted 244,892,073 237,893,991
Earning per share (equity shares of face value ` 1/-)
– Basic and Diluted (in `) 0.84 1.97
4.7 Derivative Instruments
(A) Details of outstanding Hedging Contracts ` in Lakhs
Derivative contracts
Amount in foreign currency
Equivalent Indian rupee
Amount in foreign currency
Equivalent Indian rupee
March 31, 2012 March 31, 2012 March 31, 2011 March 31, 2011USD/INR 39.49 2,000.00 NIL NIL
USD/INR 22.14 1,000.00 NIL NIL
USD/INR 22.19 1,000.00 NIL NIL
(B) Foreign Currency Exposures
The year end exposure in a currency other than the functional currency of the relevant Company that were
not hedged by a derivative instrument or otherwise are given below:
March 31, 2012 March 31, 2011` Lakhs Fx.Million ` Lakhs Fx.Million
Account Receivable 4,019.69 USD 4.65
IDR 27,811.22
9,370.76 USD 20.99
Balance in Bank 863.78 USD 0.33
IDR 12,438.32
523.01 USD 0.07
SGD 0.50
IDR 6,174.43
Fixed Deposit with foreign
Bank
200.72 USD 0.19 NIL NIL
IDR 1,836.00
Loan & Advances 15,327.06 USD 28.91
SGD 0.08
Euro 0.24
JPY 0.02
IDR 6,813.12
4,399.39 USD 8.18
SGD 0.27
Euro 0.22
JPY 3.02
SLR 0.13
DKK 0.05
IDR 9,509.66
Advance from Customers - - 165.66 USD 0.37
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March 31, 2012 March 31, 2011` Lakhs Fx.Million ` Lakhs Fx.Million
Accounts Payable/
Acceptance
(including capital
commitments made but not
provided for)
5,730.73 USD 4.45
SGD 1.06
Euro 0.04
JPY 2.84
AED 0.13
GBP 0.01
IDR 50,541.08
5,532.33 USD 6.09
SGD 1.04
Euro 0.68
JPY 34.25
IDR 43,125.29
Borrowings 28,968.90 USD 56.63 78,058.92 USD 174.82
5 PREVIOUS YEAR FIGURES
The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements.
This has significantly impacted the disclosure and presentation made in the financial statements. Previous
year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s
classification / disclosure.
As per our report of even date For and on behalf of the Board For Contractor, Nayak & Kishnadwala Chartered Accountants H. K. Mittal A. J. Agarwal Manohar Bidaye Executive Chairman Managing Director Director
Himanshu Kishnadwala Kapil Garg M. M. Agrawal K. R. Bharat Partner Director Director Director
Suchita Shirambekar
Company Secretery
Dated: May 25, 2012 Dated: May 25, 2012
Place: Mumbai Place: Mumbai
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NOTES
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MERCATOR
CORPORATE INFORMATIONBOARD OF DIRECTORSH. K. Mittal, Executive Chairman
Atul J. Agarwal, Managing Director
Manohar Bidaye
M. G. Ramkrishna
K. R. Bharat
Kapil Garg
M. M. Agrawal
AUDIT COMMITTEEManohar Bidaye
Chairman
M. G. Ramkrishna
Member
K. R. Bharat
Member
Atul J. Agarwal
Member
SHAREHOLDERS GRIEVANCE COMMITTEEManohar Bidaye
Chairman
K. R. Bharat
Member
Atul J. Agarwal
Member
COMPANY SECRETARYSuchita Shirambekar (Upto 29 May 2012)
AUDITORSM/s Contractor, Nayak & Kishnadwala
BANKERSState Bank of India
ICICI Bank
Axis Bank
HDFC Bank
DEBENTURE AND SECURITY TRUSTEESAxis Trustee Services Limited
REGISTERED OFFICE3rd Floor, Mittal Tower, B-Wing.
Nariman Point, Mumbai – 400021
Tel : + 91 – 22 – 66373333/40373333
Fax : + 91 – 22 – 66373344
Website : www.mercator.in
E-mail : [email protected]
REGISTRAR & TRANSFER AGENTSLink Intime India Pvt. Ltd.
C-13, Pannalal Silk Mills Compound
LBS Road. Bhandup West,
Mumbai – 400078.
Tel : 022 – 25963838
Fax : 022 - 25946969
E-mail : [email protected]
The Mercator Limited Annual Report 2010-11 was awarded at
the prestigious LACP Vision Awards, 2011 - the world’s largest
annual reports competition featuring over 5,500 companies from
25 countries.
The awards are based on a rating received across factors,
such as First Impression, Cover, Letter to Shareholders,
Narrative, Financial Message Clarity, Creativity and Information
Accessibility.
GLOBAL RECOGNITION FOR MERCATOR LIMITED‘S ANNUAL REPORT 2010-11
Platinum Award in Energy - Oil, Gas & Consumable Fuels
No. 27 in top 100 Annual Reports worldwide
No. 4 on Asia-Pacific Top 50
Platinum Award and Bronze Award for being the ‘Most
Engaging Report’ in the Asia-Pacific Region and worldwide
respectively
Top 10 Indian Annual Reports of 2011
Driven by growth......Sustained by values
Registered office
3rd Floor, Mittal Tower, B-wing,
Nariman Point, Mumbai-400021, India.
Tel : 91-22-66373333 / 40373333
Fax : 91-22-66373344
Website: www.mercator.in
Email : [email protected]