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Excelling DeliverablesMercator LimitedAnnual Report 2012-13

Forward Looking Statement

This report and other statements – written and oral – that we periodically make contain forward looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward looking statements will be realised, although we believe we have been prudent in our assumptions. The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward looking statement, whether as a result of new information, future events or otherwise.

Reader’s Roadmap

Corporate Overview 02-15Resolute and Responsible 02Milestones 04Global Footprints 05

Chairman’s Message 06Excelling Deliverables 08Risk Mitigation Focused Business Model 10Board of Directors 12Leadership Team 14

Business Review 16-19Financial Performance 16Operational Excellence 18Assets at a Glance 19

Statutory Reports 20-47Directors’ Report 20Report on Corporate Governance 24Management Discussion & Analysis Report 38

Financial Statements 48-116Standalone Financials 48Consolidated Financials 87

We undertook multiple initiatives across our business verticals: we operationalised our new coal mine in record time; we received environmental clearance for one of the blocks of our Oil & Gas exploration project. In addition, we took proactive measures in the shipping business to cut costs, reduce long term liabilities and strengthen the balance sheet. Our recent success in securing a five-year charter contract from Indian Oil and a three-year maintenance dredging contract from Paradip port improved our business prospects. Besides, our project ‘Sagar Samrat’ continued to advance on schedule.

At Mercator, excelling deliverables across all spheres of our operations is a continuous journey. During the year under review, we undertook steps to reduce long-term liabilities and enhance cash flow. We are confident that these steps will deliver long-term value by helping us mitigate risks and explore growth opportunities. We are strengthening our business model to ensure that it performs resolutely and delivers responsibly.

Global energy demand will be driven by population growth and quest for a better quality of life. We are excelling deliverables to carve out a niche for ourselves in the global energy landscape innovatively. Our significant presence across energy logistics and infrastructure has enabled us to meet customer requirements in a better, faster and smarter way.

Resolute and Responsible

Incorporated in 1983, we emerged as one of India’s leading diversified organisations. Currently, we have our presence across the energy value chain with businesses encompassing coal, oil & gas, commodity transportation, dredging and logistics solutions. Our innovative approach, technical expertise and a committed team help us cater to the clients in a resolute and responsible manner.

Quick glance

LeADInGOne of Indonesia’s leading coal exporters

DIverSIfIeDBusiness divisions with strong synergy

>USD1 BILLIOnAssets under management2 3

Mercator Limited Annual Report 2012-13

Business domains

VisionTo become a dominant global player in the energy value chain of

coal, oil & gas, and marine services & infrastructure

MissionCreating the best solutions and offering outstanding value and

service to our customers

Values Honouring Commitments towards all the stakeholders

ensuring that every employee feels pride in being called

a ‘Mercatorian’

Innovation...we believe in doing things differently!

Mining

Procurement

Logistic solutions

exploration & production

Offshore services

Dry bulk carriers

Wet bulk carriers

Capital dredging

Maintenance dredging

Coal

Oil & Gas

Commodity transportation

Dredging

fInAnCIAL STATeMenTS

Resolute and Responsible

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Milestones

2006 Entered in dry bulk business

2010 Awarded first Floating Production Unit (FPU) contract

2007 Awarded 2 oil blocks in India Forayed into offshore services

2011 Acquired one more coal mine in Indonesia

2008 Concluded Singapore subsidiary IPO

Diversified into Dredging and Coal mining

2012 Commissioned FPU at EBOK field in Nigeria

Awarded the first Engineering, Procurement and Construction (EPC) contract

2013 Started coal production at new mine in Indonesia

2009 Commenced coal mining operations in Indonesia

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Global Footprints

India Mercator headquarters

Oil & Gas blocks in Gujarat

Oil & Gas ePC contract

Dredging projects

Nigeria Oil & Gas

fPU Project

Singapore Offshore headquarters

Indonesia Coal mines

Procurement and Logistics

mozambique Coal mine license

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Annual Report 2012-13

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MilestonesGlobal Footprints

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POPUlAtION AND INCOmE grOwth ArE thE KEy DrIvErS BEhIND thE grOwINg DEmAND FOr ENErgy. By 2030, wOrlD POPUlAtION IS PrOjECtED tO rEACh 8.3 BIllION AND wOrlD INCOmE wIll rOUghly DOUBlE thE 2011 lEvElS IN rEAl tErmS.

Chairman’s Message

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The cautiously improved tone of the world economy and the steady fall in overall order book at 14% of the fleet, makes us believe there are reasons to think that a change is, if not in the air, certainly visible on the horizon. While market conditions still continue to remain difficult in 2013, we believe there are good reasons to hope that shipping has retained its cyclicality through this difficult period and will be able to share the fruits of any improvement in the world economy, once it arrives, relatively quickly.

Population and income growth are the key drivers behind the growing demand for energy. By 2030, world population is projected to reach 8.3 billion and world income will roughly double the 2011 levels in real terms.

Oil is expected to be the largest single source of energy to 2040, growing around 25%. Gas will grow faster than any other major fuel source, with demand expected up 65% by 2040. An economical and clean fuel source, gas grows in importance as it helps meet rising power generation demand in the future.

Because they are abundant in supply and more economical to develop than other fuel sources, oil, natural gas and coal will continue to play a major role in long-term energy supply. Together, these three fuels will provide approximately 80% of total global energy by 2040.

recognising its long term potential, our expansion into coal and Oil and Gas over the last few years was timely and will remain promising.

The Coal mine that we acquired last year in Indonesia was operationalised during the year with the first shipment of coal being dispatched in August, 2012. The SagarSamrat rig was handed over by OnGC during the year and the project execution is progressing at a rapid pace at the shipyard in Abu Dhabi. The success of eBOK fPU and the SagarSamrat project has established Mercator as a Global player in fast track MOPU conversions and we are exploring further opportunities within this space.

The e&P business is on track to spud the first oil well later this year, which would add substantial value to Mercator’s portfolio.

The Dredging segment has capitalised on its past experience by getting repeat orders for maintenance dredging for 2 ports. The demand for the dredging segment is expected to increase with the focus on development of the port infrastructure across the western and eastern coast of India.

During the year we took concrete steps aimed at reducing the long term liabilities and enhancing the cash flow of the group. While these measures have resulted in losses during this financial year, we expect them to add value by de-risking the balance sheet and remain better positioned to face future challenges and take advantage/explore growth opportunities.

At Mercator, we are as good as the spirit of our people. Our people drive our brand and accelerate our journey towards excellence. Our people policies and processes are consistent with our values and ethics.

We believe, businesses have a significant role to play in creating lasting social value. We serve the vulnerable sections of society through our association with PremPunita foundation. The foundation helps deserving candidates from economically disadvantaged backgrounds to shape their careers and lives.

We are confident of meeting challenges of the market yet remaining focused on creating value for the economy and society. I thank all our customers and stakeholders for the trust they have reposed in us and look forward to your continued support.

Warm regards,

h.K. mittal

Dear Shareholders,

the global economy appears to be slowly transitioning towards a period of stable but lower growth. Expectations for the world economy in 2013 are muted. growth is expected to nudge up to 3.5%, still well below its long term potential.

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Excelling Deliverables

Our proactive initiatives to manage the business in a focused way enabled us to face industry challenges and emerge stronger. these initiatives helped us to cut costs, reduce long-term liabilities and enhance future cash flow. these initiatives will help us enhance stakeholder value over the long term.

Batuah coal mineWe operationalised the coal mine acquired in the previous year within a short span of 14 months. The first shipment of coal from the new mine was despatched in August 2012, thereby augmenting the cash flow of the Company.

Dry bulk carriersWith a structured approach, we prematurely terminated contracts on 2 in-chartered vessels and commercially suspended the contract of a third vessel until December, 2015. The compensation for the

termination/suspension of the contracts was partly paid in cash and partly in shares making the transaction cash flow supportive. To fund the termination/suspension, we decided to sell the vessel Sri Prem Putli. The proceeds from the sale of the vessel were partially used for cancellation/suspension of long term chartered-in vessels’ contracts and partially for part prepayment of loan facilities. This transaction will result in reducing the total debt and enhance the cash flow over the next few years.

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Mercator Limited

Asset optimisationDuring the last financial year, we optimised our asset structure to deliver long-term stakeholder value. The measures have been discussed below.

Very Large Crude Carrier (VLCC)We transferred our vLCC to our Singapore subsidiary. High cost Inr debt on the vLCC was refinanced with a foreign currency loan having extended maturity, thereby reducing the interest costs and enhancing cash flow due to longer repayment timelines.

Very Large Ore Carrier (VLOC)We sold our vLOC and utilised the sale proceeds to prepay debts, deleveraging our balance sheet.

MR tankerWe acquired one Mr tanker that has been deployed on long-term charter contract with Indian Oil.

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excelling Deliverables

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Risk Mitigation Focused Business Model

At mercator, a dynamic approach to business sets us apart during a time when the financial environment is fraught with headwinds emanating from the global economic downturn. Our business model, which is focused on risk mitigation, drives us towards venturing into unexplored opportunities in coal, oil & gas and dredging. these initiatives help us minimise business risk and enhance our presence across the energy value chain.

Our three coal mines in Indonesia and one license in Mozambique reinforce our presence across the entire coal supply chain. Our activities in the coal industry include procurement, logistics, transportation, value enhancement and distribution. Our state-of-the-art infrastructure facilities provide us complete control over the logistics and evacuation chain, which provides us an edge over our competitors. We have a well-established presence in Indonesia, with 13 offices and staff strength of over 400. Our highly skilled, qualified and experienced team has in-depth understanding of client needs, which helps us to provide single-window end-to-end solutions to our customers across India, China and other Southeast Asian nations. We have achieved sales of over 24 million MTs since our foray into the coal business.

With the global energy demand increasing with every passing day, the demand for oil and gas is also likely to escalate. With increasing demand for oil and gas, the outlook for our offerings encompassing exploration & production (e&P) and offshore services is promising. Our project portfolio includes:

Two Oil & Gas blocks at Cambay basin, Gujarat.

floating Storage and Offloading (fSO) unit and a Mobile Offshore Production Unit (MOPU) in nigeria (collectively called fPU) – We have deployed the fPU on a nine year contract, assuring stable revenue stream from the offshore segment.

Sagar Samrat Conversion Project (ePC contract from OnGC) - This would open further opportunities for more such contracts in India as well as overseas.

Coal

Oil & Gas10 11


*As at March 31, 2013

Our decision to enter the dredging business was inspired by the rapid expansion of the global maritime infrastructure. We perform both capital as well as maintenance dredging projects, which include reclamation and trenching. Our state-of-the-art dredging fleet comprises five technologically advanced Trailer Suction Hopper Dredgers (TSHDs) and one Cutter Section Dredger (CSD). These world-class dredgers help us cater to our customers with utmost efficiency.

The cyclical nature of commodity transportation, a result of its dependence on international trade, causes volatility of freight rates. We deploy vessels under time and spot charters to counter volatility. More than 50% of tonnage is deployed on long-term contracts and the rest are offered in spot markets. This helps to insulate us from freight volatility as well as utilise opportunities, as and when they occur. We have our presence in the tanker as well as the dry bulk segment to hedge against volatility of crude oils prices.

Key projects executedCapital dredging Paradip Port Jaigad Port Palk Strait of Sethusamudram Ship Channel Project Taipei Port, Taiwan Karaikal Port

Fleet details*tankers Dry bulk carriers

Fleet size (units) owned/ In chartered

6/1 14/1

total capacity (Dwt) 6,30,966/19,966 10,61,488/ 91,800Average fleet age (in years) 14 10Fleet types very large crude carrier (vLCC), Aframax, product

tankers, chemical tankerPanamaxes, Kamsarmaxes, Post Panamaxes

maintenance dredging Paradip Port JSW Jaigarh Port new Mangalore Port naval Dockyard, Mumbai

Deepening Approach channel at Paradip Port


Dredging

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Risk Mitigation Focused Business Model

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Board of Directors

mr. Atul j. AgarwalManaging Director

Mr. Atul J. Agarwal, 55, is a Chartered Accountant having 30 years of professional experience. He has been associated with Mercator since its inception. As a Chartered Accountant, Mr. Agarwal specialises in the financial aspects of the business. He is responsible for the financial and strategic planning and execution. He has been instrumental in the successful implementation of several projects of the Company. Mr. Agarwal has been a member of various committees formed by the Government of India for shipping reforms. He is currently President and Director of the Indian national Shipowners’ Association (InSA). He is also a Director of, Indian register of Shipping (IrS) Thirumalai Chemicals Ltd., Mercator Petroleum Ltd., Mercator Oil & Gas Ltd. and other subsidiary companies.

mr. h. K. mittalexecutive Chairman

Mr. H. K. Mittal, 63, completed his Masters from the Indian Institute of Technology (IIT), roorkee. He ventured into business with the production of chemicals in 1975, sulphuric acid, Superphosphate fertilizer in 1980. In 1988 he acquired Mercator and later expanded it over the years both vertically and horizontally. Presently his business ventures include Chemicals, Shipping, Oil & Gas (Offshore; exploration and Production), Coal (Mining, Procurement & Logistics); Dredging; shipbuilding yard and a healthcare unit. He has been awarded “entrepreneur of the year” by ernst & young, the economic Times and Trade Winds. He is also the Chairman of the Board of Mercator Lines (Singapore) Ltd. (stepdown subsidiary listed on SGX), Mercator Offshore Limited (Singapore) and Indian subsidiaries viz. Mercator Oil & Gas Ltd., Mercator fPSO Private Limited and Mercator Petroleum Ltd.

mr. manohar BidayeIndependent and non-executive Director

Mr. Manohar Bidaye, 49, 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 honored with the yashashree 2008 Award and Marathi Udyog Bhushan Award, which recognise 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 and actively steers overseas ventures of Zicom.

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mr. K. r. BharatIndependent and non-executive Director

Mr. K. r. Bharat, 51, is an MBA from the Indian Institute of Management. He has been associated with the capital markets for more than 30 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., vaitarna Marine Infrastructure Pvt. Ltd. and other companies. 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 over a decade. Mr. Bharat had also been a member of the Market Advisory Committee of the Bombay Stock exchange.

mr. Kapil gargnon-executive Director

Mr. Kapil Garg, 47, is a graduate in Chemical engineering from the Indian Institute of Technology, roorkee. Mr. Garg has over 21 years of intensive management experience in both upstream and downstream businesses with several companies in India and abroad, such as OnGC, enron Oil and Gas India Ltd. (eOGIL), BG-Group and so on. He is also on the Boards of Mercator Petroleum Ltd., Mercator Oil & Gas Ltd., Oilmax energy Pvt. Ltd., Ivorene Oil Services nigeria Ltd., Mercator fPSO Private Limited, energia Consultancy Private Limited, and Oilmax energy International Pte Ltd. and Unicorn LnG Pte. Ltd.

mr. m. m. AgrawalIndependent and non-executive Director

Mr. M. M. Agrawal, 63, is a Bachelor of engineering from nagpur University. He has over 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., Karuturi Global Limited, Srei Mutual fund Asset Management Pvt. Limited, nSL renewable Power Private Limited, Moser Baer Projects Private Limited, nSL nagapatnam Power & Infratech Private Limited, and vision Drilling Pte. Ltd., Singapore.

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Board of Directors

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Leadership Team

mr. Shalabh mittalManaging Director and CeO - Mercator Lines (Singapore) Ltd.

Mr. Shalabh Mittal, 34, is a Master 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 business operations of the Dry bulk segment, under our subsidiary, Mercator Lines (Singapore) Limited, 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. He is also responsible for observing and ensuring compliance with all regulations.

Capt. Kowshik KuchrooPresident – Shipping

Capt. Kowshik, 49, is a Master Mariner with an HnD from the UK. He is also a qualified Ship Broker having around 31 years of experience in the Marine Industry (shore/ ashore). He has worked with companies like Maersk, Mundo Gas and others. He was also involved with Chartering as well as infrastructure projects in the Oil & Gas industry. At Mercator, he is responsible for the overall shipping business strategy: chartering, compliances, branding, expansion and industry interaction.

mr. K. S. raheja Country Head - Indonesia

Mr. raheja, 43, is B.Tech (Hons.) in Mining engineering from the Indian Institute of Technology, Kharagpur. He has also done Business Management from XLrI Jamshedpur. He has around 21 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 developing coal mining project in Mozambique. He is on the Board of group coal companies.

mr. Prasad PatwardhanChief financial Officer

Mr. Prasad Patwardhan, 47, is the Group’s Chief financial Officer. 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 21 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.

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mr. Atul malhotravice President - Coal & Logistics

Mr. Atul Malhotra, 41, is a Commerce graduate who started his career with Mercator in 1995. He was involved in setting up of the Coal Logistics Division. He has also been a pioneer 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 the Group’s Coal Marketing division and has contributed immensely to the division’s growth.

mr. Ashutosh Kumarexecutive vice President - Oil & Gas

Mr. Ashutosh Kumar, 48, has done his Bachelor of engineering in electronics and Telecommunication. 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 business performance of assets and delivery of projects within the Oil & Gas division.

Capt. Arun Nanda vice President - Tanker Operations

Capt. nanda, 58, holds a Master’s foreign Going Certificate of Competency. With a career in shipping spanning almost four decades, Capt. nanda held various roles at Shipping Corporation of India, serving different responsibilities, which include serving as the 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 the Company’s tanker business that includes contracts, chartering, operations, and business management.

mr. vikram madanevice President - Hr

Mr. Madane, 42, is a BSC and a post graduate in Management. He has extensive experience in Human resource strategic development and execution in the SeA region and exposure with international colleagues and support base. His experiences also include managing Hr generalist and Hr business partner role across multiple domains like Manufacturing, Construction & retail. regional exposure covers managing teams in Singapore and Indonesia. At Mercator his role is to formulate and manage Group Hr policies, trainings and development of employees.

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Leadership team

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Financial Performance

08-0

9

09-1

0

10-1

1

11-1

2

12-1

3

2,17

,382

1,81

,972

2,81

,164

3,75

,509

3,75

,906

Total Income (` In lakhs)

08-0

9

09-1

0

10-1

1

11-1

2

12-1

3

73,5

74

44,5

11

39,2

52 41,2

55

10,3

59

Cash Profit(` In lakhs)

08-0

9

09-1

0

10-1

1

11-1

2

12-1

3

91,0

24

65,5

93

62,1

29

63,8

10

30,1

13

EBITDA(` In lakhs)

08-0

9

09-1

0

10-1

1

11-1

2

12-1

3

2,21

,051

1,80

,873

2,82

,888

3,69

,991

3,73

,335

Operating Income (` In lakhs)

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08-0

9

09-1

0

10-1

1

11-1

2

12-1

3

6,07

,877

5,91

,716

5,37

,060

7,06

,529

5,91

,739

Fixed Assets(` In lakhs)

08-0

9

09-1

0

10-1

1

11-1

2

12-1

3

1.57

1.45

1.67

1.41

1.32

Debt Equity ratio Revenue contribution break-up (%)

2012-13

Coal54


26

Oil & Gas16

Dredging4

2011-12

Coal62


29

Oil & Gas5

Dredging4

08-0

9

09-1

0

10-1

1

11-1

2

12-1

3

6,07

,877

5,91

,716

5,37

,060

7,06

,529

5,91

,739

Fixed Assets Revenue Contribution Break-up (%)(` In lakhs)

08-0

9

09-1

0

10-1

1

11-1

2

12-1

3

1.57

1.45

1.67

1.32

1.41

Debt Equity Ratio

2012-13

2011-12

Coal54


26

Oil & Gas16

Dredging4

Coal62


29

Oil & Gas5

Dredging4


Financial performance

COrPOrATe OvervIeW

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Business Review

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Operational Excellence

Coal Started commercial operations at Batuah coal mine,

Indonesia in August, 2012

Achieved 24 million MT sales since inception

Increased coal production by 35% in 2012-13 driven by operationalisation of Batuah coal mine

Oil & Gas received environmental clearance for exploration drilling for

Block CB9 (Cambay basin)

Passed second successive year of continuous and stable operations with nearly 100% facility uptime at eBOK field, nigeria

Progressed as per schedule in case of the Sagar Samrat Conversion project

Commodity transportation Overall time charter equivalents (TCe) performance beat

Average Industry Market rates

Secured a long-term charter contract from Indian Oil recently

Dredging Secured three-year contract for maintenance dredging from

Paradip port

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operational excellenceAssets at a Glance

COrPOrATe OvervIeW

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Business Review

Assets at a Glance (as at March 31, 2013)

CoalSr. No. Coal mines location Ownership (%)1 Pentagis, east Kalimanthan; Indonesia 1002 Mozambique; Africa 853 Batuah, east Kalimanthan, Indonesia 50

Oil & Gas - Offshore servicesSr. No. Name of vessel type Capacity Ownership1 virini Prem fSO 1.2 million barrels storage Owned2 veer Prem MOPU 50,000 BOPD processing Owned

Oil & Gas - E & PSr. No. Blocks location Participation interest (%)1 CB-9 Onshore, Cambay basin 1002 CB-3 Onshore, Cambay basin 100

TankersSr. No. Name of vessel vessel type Dwt Ownership1 Kamakshi Prem vLCC 2,99,235 Owned2 Hansa Prem Mr Tanker 36,032 Owned3 Prem Pride Aframax 1,09,610 Owned4 Prem Mala Mr Tanker 47,044 Owned5 Harsha Prem Mr Tanker 42,235 Owned6 vedika Prem Mr Tanker 42,235 Owned7 royal natura Chemical Tanker 19,996 In-chartered

Dry bulk carriersSr. No. Name of vessel vessel type Dwt Ownership1 Sri Prem Poorva Panamax 69,286 Owned2 Gaurav Prem Panamax 73,901 Owned3 Sri Prem Aparna Panamax 73,461 Owned4 Garv Prem Panamax 74,444 Owned5 Garima Prem Panamax 74,456 Owned6 Kesari Prem Panamax 69,186 Owned7 Prem varsha Kamsarmax 82,379 Owned8 Prem vidya Kamsarmax 82,273 Owned9 Prem veena Kamsarmax 82,459 Owned10 Kanak Prem Panamax 69,221 Owned11 Kalpana Prem Panamax 73,652 Owned12 Gauri Prem Panamax 74,405 Owned13 Aarti Prem Panamax 69,087 Owned14 Chitra Prem Post Panamax 93,270 Owned15 Maria Laura Prem Post Panamax 91,800 In-chartered

DredgersSr. No. Name of vessel vessel type hopper capacity Ownership1 Bhagvati Prem TSHD 7,598 Owned2 Darshani Prem TSHD 7,450 Owned3 Tridevi Prem TSHD 5,433 Owned4 Omkara Prem TSHD 4,500 Owned5 Uma Prem TSHD 2,600 Owned6 yukti Prem CSD not Applicable Owned

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20

Mercator Limited

ToThe Members,Mercator Limited

We take pleasure in presenting Twenty-Ninth Annual Report of your Company for the year ended on March 31, 2013.

FINANCIAL HIGHLIGHTS:

(` in crores)

Particulars Consolidated StandaloneYear Ended Year Ended

March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012Income from operations 3,733.35 3,699.91 551.49 547.98Total Income 3,753.47 3,755.40 569.67 595.86Operating Profit 505.96 582.91 92.70 84.11Interest 239.45 203.32 125.56 128.18DepreciationImpairment

447.4887.91

382.41-

109.1681.18

119.00-

Profit before Tax & Minority InterestMinority InterestTaxes-Current Year-Deferred Tax

(479.30)120.39

(18.60)5.42

52.37(9.58)

(24.95)2.72

(215.94)N.A

(1.50)--

(115.17)N.A.

(3.50)--

Net Profit/(Loss) After Tax (372.09) 20.56 (217.44) (118.67)Balance brought forward from last year 718.62 698.06 (99.15) 19.52Balance carried to Balance Sheet 346.53 718.62 (316.59) (99.15)

During the year under review, the income from operations on a consolidated basis was ` 3,734 crores as against ` 3,700 crores in the previous year. After providing loss for the minority interest of ` 120 crores (previous year profit ` 10 crores); the loss after provision for tax was ` 372 crores as against net profit of ` 21 crores in the previous year.

On a standalone basis, the income from operations for the year under review was ` 551 crores (` 548 crores in the previous year). The Company suffered a loss of ` 217 crores (` 119 crores in the previous year).

OPERATIONS:Highlights of the consolidated operations of Mercator during the year includes, commencement of commercial operations at the new coal mining concession acquired in Indonesia last year. The first shipment of coal from the new mine was dispatched in August, 2012.

The Mobile Offshore Production Unit (MOPU) and Floating Storage Offshore Unit (FSO), which is deployed on a nine year contract in Nigeria is operating successfully.

During the year, Oil and Natural Gas Corporation Limited handed over its Rig, Sagar Samrat for conversion into a Processing Unit. The EPC contract is under execution at an overseas yard and the work is progressing satisfactorily.

The E&P activities at two blocks awarded to the Company under New Exploration Licensing Policy (NELP VII) are progressing well. The required land has been acquired and environmental clearances have also been received.

During the year, Mercator entered into early termination and settlement agreements in respect of chartered-in bulk carriers. The compensation paid under the agreements has been charged off during the year. Further Mercator sold its Very Large Ore Carrier (VLOC) and incurred a book loss on the same.

The Company’s Aframax tanker, which had suffered an accident in December, 2011 was sold for scrapping during the year and the insurance claim was partly realised. The proceeds were used to prepay debt.

Directors’ Report

21

Financial statements

Directors’ Report

corporate overview

StatutoRy RepoRtS

Business review


The Company entered into a MOA for the sale of its Very Large Crude Carrier (VLCC) to its WOS in Singapore. The VLCC has now been refinanced by a foreign currency loan with extended maturity.

During the year the Company also entered into a MOA for the sale of an Aframax tanker, which was delivered subsequently.

The Company assessed the carrying value of the vessels based on the discounted cash flows of the future earnings and recognised an impairment provision in the books in respect of the VLCC and aframax tanker.

The one-time charges to the Profit & Loss arising from early termination agreements, sale of VLOC and impairment provision have resulted in the group reporting a loss for the year. However, these initiatives together with the cash flow from the realisation of the insurance claim have resulted in reducing the long term liabilities of the Company and improving the cash flows over the next few years.

DIVIDEND:In view of the accumulated losses as also due to losses suffered during the year under review, your Directors regret their inability to recommend any dividend.

DIRECTORS:In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Manohar Bidaye is the Director liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

Further, it is also proposed to re-appoint Mr. H. K. Mittal as Executive Chairman and Mr. Atul J. Agarwal as Managing Director of the Company for a period of three years commencing from August 1, 2013, when their present terms are expiring. Their terms of appointment and remunerations have been approved by the Remuneration Committee and Board of Directors in their respective meetings held on May 18, 2013. The same are detailed in the accompanying notice of Annual General Meeting for the perusal and approval of the members.

Your Directors recommend for your approval the re-appointments of Mr. Manohar Bidaye, Mr. H. K. Mittal and Mr. Atul J. Agarwal at the ensuing Annual General Meeting. A brief resume of all the three Directors is included in the notice of the ensuing Annual General Meeting scheduled to be held on September 19, 2013.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:As at March 31, 2013, your Company had 29 subsidiaries/step-down subsidiaries. Audited consolidated financial statements for the year ended on March 31, 2013; 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 Companies Act, 1956, 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 Companies Act, 1956.

The Directors recommend their re-appointment for approval of the members.

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Mercator Limited

AUDITORS’ REPORT:In response to the qualification in the Auditors’ Report on the consolidated financial statements, it is clarified that the unaudited financial statements as approved by the management of the respective subsidiaries, were considered for reporting to the Singapore Stock Exchange by the listed subsidiary of Mercator Limited, which is the holding company of the six subsidiaries. The auditors relied on these financials for preparing the consolidated financial statements. Based on the explanation received, the Directors are of the opinion that there would not be any material differences upon completion of their audits.

There is no qualification/ remark in the Auditor’s Report on standalone financial statements.

COST AUDIT COMPLIANCE REPORT:

The Companies (Cost Accounting Records) Rules 2011 are applicable to the specified operations of the Company. The Company has taken necessary steps for compliance with the said rules.

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 requirements of giving particulars of 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.

Your Company has not imported any technology during the year. It has earned foreign exchange of ` 98.80 crores (previous year ` 87.98 crores) and spent ` 195.08 crores (previous year ` 223.69 crores) in foreign exchange, on account of acquisition of vessels, charter hire, other vessel expenses, and interests etc.

CORPORATE GOVERNANCE & SOCIAL RESPONSIBILITIES: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.

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Directors’ Report

corporate overview

StatutoRy RepoRtS

Business review


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 and on behalf of the BoardFor Mercator Limited

H. K. Mittal Executive Chairman

Regd. Office:3rd Floor, Mittal Tower, B-wing,Nariman Point, Mumbai – 400021.

Dated: May 18, 2013.

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Mercator Limited

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 is 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, 2013, the Board of Directors of the Company comprised of six Directors; Two Executive Directors and four Non-Executive Directors out of which three 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 of 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 25, 2012; August 14, 2012, October 26, 2012, November 12, 2012; and February 13, 2013. 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

& Promoter5 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

5 No 2 1 2

4 Mr. K. R. Bharat Non-Executive Independent

5 No 2 Nil Nil

5 Mr. Kapil Garg Non-Executive Non Independent

5 Yes 2 Nil Nil

6 Mr. M. M. Agrawal Non-Executive Independent

4 Yes 4 4 1

7 Mr. M. G. Ramkrishna (upto 29/08/2012)

Non-Executive Independent

1 No 2 1 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.

Report on Corporate Governance(Forming part of Directors’ report for the year ended on March 31, 2013)

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Report on Corporate Governance

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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 periodical compliance reports of all laws applicable to the Company, 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, 2013. Declaration to this effect signed by the Chief Executive Officer for the year ended on March 31, 2013 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, 2013, the Committee comprised of two 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; the other members being Mr. K. R. Bharat, MBA from Indian Institute of Management; 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. All have a sound accounting and financial background. Mr. M.G. Ramkrishna, a veteran from the banking & finance industry ceased to be Director and member of the Audit Committee w.e.f. 29.08.2012. The Chief Financial Officer as well as General Manager (Finance & Accounts) along with the Internal Auditors and Statutory Auditors are invitees to the Audit Committee Meeting. All other Functional Heads/Managers are invited to attend the meeting, as and when necessary. 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.

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.

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Mercator Limited

(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 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.

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 or discharging that 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 always presented to the Board, discussed and taken on record.

Meetings: During the year, in all four meetings of the Committee were held i.e. on May 25, 2012; August 14, 2012; November

12, 2012 and February 13, 2013. The time intervals between two meetings of the Committee were not more than four months. Due to some exigency, the Chairman of the Audit Committee could not remain present at the last Annual General meeting held on August 29, 2012. Mr. Atul J. Agarwal, the other committee member answered the queries of shareholders.

Attendance of each member at the Audit Committee Meetings:

Name of Director No. of Meetings attended out of four heldMr. Manohar Bidaye 4Mr. Atul J. Agarwal 4Mr. K. R. Bharat 4Mr. M. G. Ramkrishna* 1

*Ceased to be Member of Audit Committee w.e.f August 14, 2012.

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corporate overview

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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 2012-13.

Remuneration-Cum-Selection Committee: The Company has a 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. M. Agrawal being other members. During the year, Mr. M. G. Ramkrishna ceased to be the Director and subsequently, Mr. M. M. Agrawal was inducted as the member of the Committee during the year. 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.

Four meetings of Remuneration Committee of Directors were held during the year which were attended by all the members.

Expansion Committee: The Company has an Expansion Committee comprising of two Executive Directors viz. Mr. H. K. Mittal & Mr. Atul

J. Agarwal and one Non-Executive Independent Director viz. Mr. K.R. Bharat.

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 four 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 one Non-Executive Independent Director viz. Mr. Manohar Bidaye.

The Committee is authorised to formulate 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, 2013 the Company had total 29 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, 2013.

The Audit Committee reviews the financial statements including investments, 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.

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Mercator Limited

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 in ordinary course of business or 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, 2013; 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.

(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, 2013:

Executive Directors: ` in lakhs

Name Salary Perquisites TotalMr. H. K. MittalExecutive Chairman

36.00 12.00 48.00

Mr. A. J. AgarwalManaging Director

38.10 9.90 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, the 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 the tenure, subject however, to the ceiling prescribed under Companies Act, 1956; and approval of the Central Government, if required. The present terms and conditions of appointment agreements of both Executive Directors expires on July 31, 2013. The Remuneration cum Selection Committee as well as Board of Directors in its meeting held on May 18, 2013, have approved their re-appointments for a further period of three years effective August 1, 2013 on the terms and conditions disclosed in the accompanying notice convening the 29th Annual General Meeting of the Company.

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 2013; no commission was paid to the Non-Executive Directors.

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corporate overview

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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 lakhsMr. Manohar Bidaye 1.80Mr. K.R. Bharat 1.80Mr. Kapil Garg 1.00Mr. M. M Agrawal 0.80Mr. M.G. Ramkrishna* 0.40

*Ceased to be Director w.e.f. August 29, 2012

All the Non-Executive Directors have disclosed their shareholdings as at March 31, 2013 to the Company which is as under:

Name of the Director No. of equity shares heldMr. Manohar Bidaye 97,500Mr. K.R.Bharat NILMr. Kapil Garg NIL

No other convertible instrument was held by any of the above Non-Executive Directors. The Company did not have any pecuniary relationship or transaction with any of 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)

29/08/2012 2.30P.M M.C. Ghia Hall, 4th Floor, Bhogilal Hargovindas Building, 18/20, K. Dubhash Marg, Kala Goda, Mumbai-400001

1. Issue of securities2. Amendments to Articles of

Association

2010-11(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

2010-11(EGM)


1. Issue of Warrants convertible into equity shares on Preferential Basis to Promoters/Directors/their entities

2. Issue of Employee Stock Options3. Appointment of Mr. Adip Mittal,

relative of Director as Business Associate.

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Mercator Limited

Financial Year

Date Time Venue Special Resolution(s)

2009-10(AGM)


1. Payment of Minimum Remuneration to & Re-Appointment of Executive Chairman and Managing Director

Neither special resolution through postal ballot was passed in the last year; nor any special resolution is proposed to pass through postal ballot.

(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 Hindu Business Line 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 Ninth Annual General Meeting is scheduled to be held on Thursday, September 19, 2013 at

Rangaswar Hall, 4th Floor, Y. B. Chavan Center, Gen. Jagannath Bhosale Marg, Next to Sachivalaya Gymkhana, Mumbai – 400 021 at 3.30 pm

(v) Re-Appointment of Director: Brief resume of M. H. K. Mittal, Mr. Atul J. Agarwal and Mr. Manohar Bidaye whose re-appointments are

to be considered at the ensuing Annual General Meeting; alongwith their enterprise in specific functional areas and names of the Companies in which they hold Directorship; Chairmanship and membership of committees of the Board are provided in the Notice of the ensuing Annual General Meeting scheduled to be held on September 19, 2013.

(vii) Financial Calender for the Year 2013-14:

First Quarter Results (June, 30) Mid of August, 2013Mailing of Annual Reports By end of August, 2013Annual General Meeting September 19, 2013Second Quarter Results (September, 30) Mid of November, 2013Third Quarter Results (December, 31) Mid of February, 2014Fourth Quarter/ Annual Results May, 2014

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corporate overview

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(viii) Dates of Book-Closure: The Share Transfer Books and Register of Members of the Company will remain closed from September 12,

2013 to September 19, 2013 (both days inclusive).

(ix) 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.

(x) 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 2013-14 have been paid to these exchanges.

The monthly high-low quotations of the equity shares of the Company on Bombay Stock Exchange and National Stock Exchange during the financial year 2012-13 vis-à-vis Sensex performance of Bombay Stock Exchange is given below:

BSE:

Month Share Price (Rupees) Sensex Performance High Low High Low

April, 2012 26.30 20.60 17,664.10 17,010.16May, 2012 22.10 16.60 17,432.33 15,809.71June, 2012 22.15 16.10 17,448.48 15,748.98July, 2012 24.00 18.00 17,631.19 16,598.48August, 2012 21.45 18.55 17,972.54 17,026.97September,2012 23.20 18.75 18,869.94 17,250.80October, 2012 23.40 19.25 19,137.29 18,393.42November, 2012 23.00 18.55 19,372.70 18,255.69December, 2012 22.10 20.00 19,612.18 19,149.03January, 2013 23.00 19.30 20,203.66 19508.93February, 2013 20.10 15.10 19,966.69 18,793.97March, 2013 17.50 12.80 19,754.66 18,568.43

NSE:

Month Share Price (Rupees) High Low

April, 2012 27.55 20.50May, 2012 22.10 15.55June, 2012 22.10 16.25July, 2012 23.70 17.95August, 2012 21.45 18.45September, 2012 24.10 18.00October, 2012 23.95 19.15November, 2012 23.20 18.30December, 2012 22.15 19.80January, 2013 22.90 19.30February, 2013 20.20 14.90March, 2013 18.00 13.00

As at March 31, 2013; the Company had following series of listed Redeemable Non-Convertible Debentures issued on private placement basis in dematerialised form:

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Mercator Limited

Series No No. of NCDs

Couponrate

O/s. Face valueAs on 31/03/2013

Outstanding Amount

ISIN Scrip Code

IX-A 1,500 11.90% ` 10,00,000/- each ` 150.00 crores INE934B07207 945945X- B1 100 9.50% ` 10,00,000/- each ` 10.00 crores INE934B07256 946411X- C 1,200 9.50% ` 10,00,000/- each ` 120.00 crores INE934B07231 946412X- C1 300 9.50% ` 10,00,000/- each ` 30.00 crores INE934B07264 946413XI 1,000 9.50% ` 10,00,000/- each ` 100.00 crores INE934B07272 946373

OUTSTANDING GDRS/ADRS/ WARRANTS OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION DATE AND LIKELY IMPACT ON EQUITY:

As on March 31, 2013, the Company did not have any outstanding GDRs/ADRs/Warrants or any convertible instruments.

(xi) 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 J. 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.

During the year, Ms. Priya Vishwanathan, Company Secretary and Mr. Deepak Dalvi- Assistant General Manager – Secretarial were acting as Compliance Officers.

During the year, the Company received 18 complaints from the shareholders all of which were duly resolved. No complaint was pending as on March 31, 2013.

Further, during the year requests for Remat of 1,101 shares; Transmission of 6000 shares and demat of 97601 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, dematerialisation/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.

(xii) Distribution of Shareholding as on March 31, 2013:Shareholding of nominal value of

No. of Shareholders

% to total Shareholders

No. of Shares % to total Capital

UPTO 500 79,542 76.47 1,38,92,117 5.67 501-1,000 11,120 10.69 92,56,125 3.781,001-2,000 5,905 5.68 91,49,860 3.742,001-3,000 2,817 2.71 72,35,105 2.953,001-4,000 936 0.90 34,06,315 1.394,001-5,000 1,075 1.03 51,64,296 2.115,001-10,000 1,416 1.36 1,06,03,823 4.3310,001 and above 1,212 1.16 18,61,84,432 76.03Total 1,04,023 100.00 24,48,92,073 100.00

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(xiii) Shareholding Pattern as on March 31, 2013:

Sr. No Category No. of Shares % to Capital No. of Holders1 Promoters/Directors and their Relatives 9,84,84,066 40.22 102 Mutual Funds / UTI 78,714 0.03 23 Banks; FIs etc. 21,56,661 0.88 54 FIIs 3,58,67,681 14.65 295 Private Corporate Bodies 1,69,75,048 6.93 1,2356 Indian Public 8,49,98,587 34.71 1,00,9917 NRIs /OCBs 34,31,701 1.40 1,4688 Non-promoter Independent Directors and

their relatives1,69,250 0.07 3

9 Clearing members 27,30,365 1.11 280Total 24,48,92,073 100 1,04,023

(xiv) 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; 24,23,00,192 equity shares representing 98.94% were held in demat form and balance 25,91,881 equity shares representing 1.06% were in physical form as on March 31, 2013. 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 2012-13; was as under:Particulars BSE NSE TotalNo of shares 5,24,03,763 14,57,19,141 19,81,22,904Value (` In lakhs) 10,959.05 30,253.46 41,212.51

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, 2013 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. The Company also endeavours to follow Non Mandatory requirements. All Independent Directors of the Company are well qualified and experienced and contributes effectively to the

Company. A Remuneration-cum-Selection Committee of Directors has been set up whose all members are Non-Executive

Independent Directors. During the year, the Company had organised exclusive meetings to apprise Board members in depth business

reviews of the Company as well as a brief on the proposed Companies Bill.

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 sectors 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. Mercator is focused and committed to protect self, colleagues, equipments, stakeholders, society, and environment. The following are the initiatives and activities under taken by Mercator during the year ended March 31, 2013:

CSR towards Society:• Education: Mercator is associated with Prem Punita Foundation, a registered charitable trust, a platform created by our

Chairman Mr. H. K. Mittal to reach out to the weaker section of the society in the field of education. Mr. H. K. Mittal heads the Foundation as its Chief Trustee and is assisted by senior trustees. The Foundation has been supporting candidates pursuing engineering and merchant navy courses across India. The Foundation has partnered with well -known maritime institutes to reach out to eligible and deserving beneficiaries. Candidates enrolled for B. Sc. Nautical Science, B. E. Marine Engineering, Graduate Marine Engineering and General Purpose (G.P.) Ratings courses in the accredited maritime institutes are supported with academic scholarship and also provided employment to the extent possible.

• EmployabilityandSkillAdvancement: At present 29 candidates have been supported through this scheme. 18 out of selected 29 candidates are already

on board the vessels of Mercator Limited. Candidates coming from poor family background are shortlisted depending on their academic record. Selected candidates attend a rigorous selection procedure to prove their knowledge and skills. Senior officials from Mercator Ltd. give lectures at associated maritime institutes to mentor the candidates and educate them with industry updates.

The Foundation has also taken up a project focused on girl child in Mumbai in a fishermen colony. While endeavours are made to dissuade the parents to marry their daughters before they come of age, the Foundation trains the 10th pass children in attaining computer knowledge. Efforts are made to get employment to such children and make them stand on their feet. Also, plans are afoot to train the girls in self-defence.

CSR towards Environment & Energy Conservation:• On board of our vessels, we adopt HSSE Management System and Procedures to ensure safe, secure and healthy

working environment by training our staff continuously with the latest techniques to ensure high levels of maintenance. Internal audits and checks are held regularly 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 FSOs, we have installed Reverse Osmasis Plant for converting sea water into fresh water so that scarce fresh water on shore can be saved. 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 initiatives that helps to protect environment. On shore; its our endeavour to save water and energy by way of putting ACs on 24 degree Celsius; using power saver lights; switching 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 regular basis we disseminate our financial information through Stock Exchange in compliance with Listing Agreement. We also issue news releases giving information on performance and outlook. We also respond to teleconference calls/one to one meeting as requested by research analysts. We ensure prompt and timely disclosure of any price sensitive developments in the Company. To facilitate better accessibility for investor queries; we have

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a designated e-mail ID and also provide our contact details on our website, annual reports etc. We are focused on strengthening our investor relations framework to better serve the needs of the investor community.

CSR towards Employees:Mercator continuously works 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, 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 systems, encourages 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 which is consistent with our values and ethics.

Mercator treats all employees with utmost dignity and ensures a work environment, free of any forms of harassment. Our employee policies as well as our practices reflect our strong ethical values which ensures 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. (MLS) has a designated CSR Committee and organises its own programmes as well as participates in other initiatives programmers’ in support of social causes.

For and on behalf of the Board For Mercator Limited

H.K.Mittal

Executive Chairman Regd. Office:3rd Floor, Mittal Tower, B-Wing, Nariman Point, Mumbai-400021

Dated: May 18, 2013

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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, 2013 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 18, 2013

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Auditors’Certificate on Corporate Governance

The 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 March 31, 2013, 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.

In our opinion and to the best of our information and according to the explanations given to us, 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 ofContractor, Nayak & KishnadwalaChartered AccountantsFirm Registration No. 101961W

Himanshu KishnadwalaPartnerMembership No. 37391

Place: MumbaiDate: May 18, 2013

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Mercator is spread across multiple verticals: Coal Mining; Procurement and Logistics | Oil and Gas | Shipping | Dredging

I. COAL Coal is the second largest source of primary energy after oil.

Coal is the fastest growing global energy source. Coal consumption increased by nearly 60% from 4,600 million Tonnes in 2,000 to 7,200 Mio MT in 2010. Although coal was the fastest growing primary energy source from 2000-10, this growth was unevenly distributed. Most of the growth in coal consumption came from Asia, particularly China, while the growth in the OECD region was sluggish.

Economic growth is likely to be robust in both China and India over the medium-term (five years). Coal is the key fuel in both countries and since economic growth and energy use are highly correlated, coal demand prospects for both countries are bullish going forward. Therefore, global coal demand is expected to grow for the next several years.

Coal reserves and resources are widely dispersed over the globe and supply is not concentrated in a few regions, as is the case for natural gas and oil. The key exporting countries, Indonesia, Australia, Russia, South Africa, Colombia, and the United States are politically stable. Nevertheless, the fact that around 90% of coal exports come from only these six countries suggests the need for further diversification.

(Source: International Energy Agency)

The coal prices have fallen by almost 30% as compared to the last financial year. The main reason for reduction in coal prices is the slowing demand from Europe and U.S.A. where Gas is replacing Coal and end users switching to imports of lower grade in China.

China Coal market China’s share in global coal production is almost four times that of Saudi Arabia’s production of oil. China’s share

in global coal consumption is more than twice that of the demand for oil in the United States. (The United States is the largest consumer of oil). Overall, the Chinese domestic coal market is more than three times that of the entire coal trade worldwide. In 2013 China became the largest coal importer in the world; however, China’s coal imports make up just 5% of its total coal consumption. Therefore, any fluctuation in Chinese production and demand has the ability to have a large impact on global coal trade.

Indian Coal market

India’s heightened usage of coal has seen a growing trend for the past few decades, and the nation is set to surpass China as a major coal importer by 2014. Indian coal plants imported 142 million tons of thermal coal in 2012, a 39% increase from 2011, Bloomberg reports.

During the 12th Five year plan (2013-18), India plans to add 105,000 MW. The present installed generation capacity in India is more than 216,000 MW and over 105,000 MW of new power capacity is under construction. Power generating companies are entering into long term supply agreements especially for imported coal for securing coal supply. (Source: Independent Power Producers’ Association of India)

Estimated domestic demand is set to increase from 658 MMT to 980 MMT by 2018 (an increase of 322 MMT) Projected coal production by CIL is 615 MMT by 2018 Projected demand –supply gap is about 365 MMT by 2018. (Source: CIL, India)

The overall long-term demand of coal is closely linked to the performance of the end-user sectors. In India, the end-use sectors of coal mainly include electricity, iron and steel and cement. Demand from the unorganised small scale sector comprising primarily of the brick and ceramic industry is relatively large though not firm/

(forming part of Directors’ Report for the year ended March 31, 2013)

Management Discussion & Analysis Report

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regular as users switch between coal, firewood and biomass depending on their relative prices. Other industries using coal have only a marginal impact on the long-term demand for coal. The charts show the projected sector-wise coal consumption in India by the end of the 12th Plan.

Projected coal Demand in Mio MT

SECTOR 2011-12 2016-17 2021-22 2026-27 2031-32Electricity (A) 539 836 1,040 1,340 1,659Iron & Steel 69 104 112 120 150Cement 32 50 95 125 140Others 91 135 143 158 272Non Electricity (B) 192 289 350 403 562Total (A + B) 731 1,125 1,390 1,743 2,221

Indonesian Coal Indonesia is world’s largest thermal coal exporter. Indonesian coal production has grown from 230 Mio MT in

2008-09 to 410 Mio MT in 2012-13. With its proximity to India & China , Indonesia will continue to remain one of the largest exporter of thermal coal.(Source : Indonesian Chamber of Commerce)

Mercator is present across Coal mining, Coal procurement and Coal logistics.

Mercator has been in the business of Coal transportation & Logistics since 1995 & served many Thermal Power Stations in India with end to end solutions to the Customers. Mercator pioneered the handling of Coal at Haji Bunder Port, Mumbai. Mercator forayed into Coal mining and Coal procurement businesses in 2007. Currently Mercator has 3 mines in Indonesia.

Mercator exported about 7.63 Mio MT from Indonesia in 2012-13 thereby becoming one of the leading market players in India.

Coal Consumption (%)

Electricity59

Others10

Iron & Steel7

Cement4

Non Electricity20

(Source: India Energy Book 2012)

CY 08

230

CY 09

283

CY 10

325

CY11

352

CY12

410

CY 13

458

CY 14

480

(All values in Mio MT)

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Mercator Limited

II. OIL & GAS Global oil demand forecast is projected to be about 90.5 million barrels per day for the year 2013 as compared

to 89.70 mbopd in 2012. A significant change affecting global demand has been the supply from non-OPEC countries which is estimated to go up from 52.90 mbopd in 2012 to 54 mbopd in 2013. This non-OPEC supply is largely attributed in the rapid growth of US oil production, thus reducing the need of OPEC crude in the global market. As per EIA; US crude oil import fell by 9% to 6.08 mbopd in 2012. This is further likely to decline to about 4 mbopd by 2017. Crude imports to China increased by 7% to 5.43 mbopd in 2012 from 5.09 mbopd in 2011. It looks obvious that the import balance as regard OPEC crude will shift from West to East. Although the imports in China seem to offset declining imports in the US, a word of caution about the challenges presently faced by Chinese economy needs to be considered.

Global oil supply and demand balance, mb/d

Annual Annual2011 change Q112 Q212 Q312 Q412 2011 change Q113 Q213 Q313 Q413 2013 change

Demand 88.8 0.91 89.0 89.2 90.5 90.1 89.7 0.95 89.8 89.9 91.4 91.1 90.5 0.78

OECD demand 46.4 -0.47 46.2 45.4 45.8 46.4 45.9 -0.43 45.8 44.8 45.4 46.1 45.5 -0.43Non-OECD demand 42.4 1.38 42.8 43.8 44.7 43.7 43.8 1.38 44.0 45.1 46.0 45.0 45.0 1.21Non-OPEC supply 52.5 -0.03 52.9 52.6 52.7 53.4 52.9 0.42 53.9 53.8 53.7 54.5 54.0 1.12Non-OPEC exl. North Am. 36.9 -0.61 36.4 36.1 36.1 36.2 36.2 -0.73 36.6 36.1 35.5 35.9 36.0 -0.2North America 15.5 0.58 15.5 16.5 16.5 17.2 16.7 1.15 17.3 17.7 18.2 18.6 18.0 1.33OPEC NGLs/condensales 5.8 0.50 6.0 6.2 6.3 6.2 6.2 0.39 6.3 6.4 6.5 6.4 6.4 0.23Call on OPEC crudc+stocks 30.5 0.44 30.1 30.4 31.5 30.5 30.7 0.13 29.7 29.7 31.2 30.2 30.2 -0.49OPEC crude 29.9 0.47 31.3 31.6 31.3 30.8 31.3 1.39 30.7 31.1 30.9 30.8 30.9 -0.38Stockbuild 0.7 1.2 1.2 1.2 0.2 0.6 1.0 1.4 0.3 0.6 0.7

Souce: Barclays Rescarch

India continues its refining expansions at the same time in confronted with declining indigenous production thereby relying on crude oil imports on a very large scale. Crude oil imports in India grew by about 10% in 2012 as compared to 2011.

Crude Oil Imports 2009 2010 2011 2012 2013US 9.06 9.14 8.91 6.08 7.95India 2.91 3.25 3.30 3.63 3.85PRC 4.09 4.82 5.09 5.43 5.61

(Source : BP Statistical Review of World Energy, 2011)

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In view of the same; any indigenous production of crude oil will be more than welcome. Mercator is having two blocks in the Cambay Basin, where the initial 2D/3D studies have been completed and the first well will be drilled in the next year. Global crude oil prices of around USD 100 per barrel indicates an optimistic outlook for the exploration of the Oil blocks for Mercator.

Global E&P spending is expected to reach about USD 650 billion in 2013 which is about 7% higher than 2012. Companies are basing the 2013 spending plan on oil prices being about USD 90 per barrel and US natural gas price of about USD 3.50 per mnbtu. This increase in spending is spread across globally and is likely to result in an increase in demand for service companies.

As mentioned above; if increased global expenditure is based on price of bench mark crude at USD 90 per barrel, the demand for oil field services is bound to increase. West Africa presents unique business model at these prices. Over the years their Industry has perfected the art of offshore marginal fields development, production and export. With perfection one has also seen cost going down whereby threshold level of production has continuously reduced. This lower cost and production break even has provided an impetus to the fructification of many more marginal fields which previously had been left idle. We have seen a spate of marginal fields coming into production using FPSOs; MOPUs; FSOs etc. Mercator has been successful in bagging one such contract. As we continue to explore more opportunities in West Africa; we feel confident that coming times will see Mercator having a stronger foot print in that area.

India has tried to replicate the West Africa model and commenced development of marginal fields like D-6 and Cluster 7. Their success will ensure more such opportunities in the field of oil services. , Mercator has been awarded the contract for conversion of the iconic Rig Sagar Samrat into a MOPU. Mercator hopes to explore more such opportunities in coming times.

III. SHIPPING

Wet Bulk Carriers The Baltic Clean Tanker Index opened at 645 points in April, 2012, and closed at 691 points on March 31, 2013.

The Baltic Dirty Tanker Index remained subdued during the year with opening at 819 points in April, 2012 and closing at 661 points on March 31, 2013.

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The year 2012 brought a small cheer to the tanker owners with rates for the largest tankers on the busy trade route rising on speculation that traders and oil companies were booking cargoes for January before the Christmas holidays. Daily earnings for the large crude carriers on the Middle East-to-Asia voyage rose to $16,860 per day.

There was less activity in the crude segment with rates showing no appreciation. This was the result of adequate availability of tonnage. In the spot market the tanker rates remained weak with rates only reacting to geo-political situations.

In 2012, 121 crude tankers (25.3 million DWT) and 94 product tankers above 25,000 DWT (5.4 million DWT) were delivered and 62 crude carriers (9.3 million DWT) and 50 product tankers (2.5 million DWT) were demolished. Consequently, the capacity of the crude fleet grew 3.8% while the product fleet grew 2.2%. The capacity of the fleet of tankers below 25,000 DWT increased 3.0%. The China’s order for fifty VLCCs is viewed as alarming as it will exacerbate oversupply.

The outlook for the shipping sector in short term is likely to remain tough. It may improve in medium term and looks better in long term in view of new building orders recording lowest in last 5 years.

Dry Bulk Carriers The Baltic Dry Bulk Index opened at 934 points in April, 2012, and closed at 910 points on March 31, 2013

2012-13 was another challenging year for the dry bulk shipping industry which provided no respite from the already lack luster freight markets. The surplus tonnage ratio further deteriorated with further addition of tonnage. About 98 million DWT of dry bulk vessels were delivered during the period under review. The Baltic Dry Index touched a new bottom at 903. To conclude the year did not provide any encouragement to the ship owners and the crisis continued.

The supply and demand imbalance is expected to continue through the next year. Demand is expected to rise though tepid and so would be the supply. The imbalance would continue that would only provide all the comfort to charterers. The ship owners would likely remain cautious and curb expenses to counter the very soft freight market. The Chinese economy and trade does have a noticeable impact the dry bulk trade. If the Chinese imports of coal and iron ore improve, it may provide some cheer to the industry.

In spite of all the challenges, Mercator outperformed the Average Industry Market Rate. In Tanker segment Average TCE rate per day achieved for the 2012-13 was around USD 15,898 against Average Industry Market rate of around USD 12,771. In Dry Bulk segment TCE rate per day achieved was around USD 13,750 as against the Average Industry Market rate of around USD 7,448. Company’s proactive initiative of de-risking and liquidity enhancement measures have resulted it being in a strong position to face the industry challenges and also take advantage of the market to explore growth opportunities.

Mercator would continue to strive to enhance its strong relations with clients. The Company would trade with caution to achieve sustainable growth.

IV. DREDGING Dredging is underwater excavation of soil. This activity is associated with 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.

The dredging activity around the Indian coast though currently subdued; is likely to pick up during coming 2-3 years as many projects are expected to take off around east and west coast of India. The Projects around the East coast include a Container terminal at Diamond harbor and a new port at Sagar island both under Kolkatta port. The Gopalpur port dredging is already under progress and so is the expansion of Vizag port with deepening of inner harbor and the expansion of the outer harbor in JV with the Japanese govt. A new major port is coming up south of Kakinada and north of Ennore. A Captive port north of Cuddalore and expansion of Tuticorin port in Tamilnadu completes the projects that are in pipeline. In west coast, LNG terminals at Kochi, deepening of New Mangalore, JNPT deepening / expansion, dredging at Pipavav, Dahej, Hazira, Kandla outer tuna buoy, dredging at Jamnagar and other projects around Gujarat coast are expected to throw up opportunities.

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As more ports are developed, the requirement to maintain them increases the dredging activity. Upgrading / increasing navigable depths of existing ports results in increased dredging requirement. Further, emerging trends in shipbuilding like ultra-big ships also made it imperative on port developers and operators to go for dredging to increase the draft of the channels. The total dredging requirement between 2011-12 and 2015-16, including minor ports, is estimated to be 996 million cum. Of this, maintenance dredging is expected to account for 414 million cum.

The Maritime Agenda 2010-20 of India envisages increasing 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 up to 2020.

Mercator has successfully carried out dredging at a number of ports viz. Paradip Port; New Manglore Port and Angre Port.

CHALLENGES, RISKS AND CONCERNS 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 market research, collection of updated industry information and data .

The Coal markets have been extremely volatile during 2012-13 which has made a lot of small miners and traders in Indonesia struggle. Despite all odds, Mercator has been successful in tying up with Tier 1 and Tier 2 miners in Indonesia.

India and China the major economies not being able to keep up their pace of growth has affected their respective imports of coal and iron ore and so is our shipping business. We are focussing on other markets. Further, to control volatile bunker cost; we negotiate the new contracts to minimise its negative impact on freight earnings. We also do slow steaming to save on bunker cost.

Capital dredging has risks like unknown nature of soil on the seabed dredgers suitability; time overrun due to port berth construction; In order to overcome this we carry out risk evaluation by gathering as much data about the project ( site and soil conditions ) as feasible. We have commercial; technical and operation teams to ensure that the equipment performs and does not fail during execution. Further, we upgrade the capability of our machinery from time to time so that they are geared to handle soil conditions of varying nature.

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 business segments, aids the Company in de-risking .

Mercator continuously engages with strong counter parties to avoid any counter party risk. Our assets could be exposed to the risk from accidents. Hence, all assets are adequately insured. We are exposed to environmental risk like oil spillage during transportation, drilling and exploration, and the

risk of pollution in respect of coal mining and transportation . We adhere to globally accepted environmental regulations.

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 mine 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 by ONGC for conversion of Mobile Offshore Drilling Unit (MODU) into Mobile Offshore Production Unit (MOPU).

The consolidated income from the operations was ` 3,733 crores for the year under review as compared to ` 3,700 crores in the previous year. The operating profits were ` 506 crores as against ` 583 crores in the previous year. Loss After Tax and Minority Interest was ` 372 crores (previous year profit of ` 21 crores).

Coal Mining, Procurement and Logistics: Mercator has economic interest in 3 coal mines in Indonesia and 1 in Mozambique. Mercator has further

established itself as a coal procurement and logistics provider and has been considered as a preferred and reliable coal supplier from Indonesia.

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Mercator Limited

During the year; the new coal mine at Batuah, Indonesia commenced commercial operations.. This project was operationalised within 20 months Mercator has executed the entire project including construction of about 26 KM haul road; bridges; jetty; crushing and conveyor installations with its own team by employing some innovative solutions.

Overall, Mercator sold 7.63 million MT (previous year 7.35 million MT) of coal Total turnover of ` 2,007 crores (previous year ̀ 2,317 crores) was achieved. This contributed about 54% of the total operating income (previous year 62%). Although volumes increased marginally, the fall in the coal prices during the year affected sales realisations.

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 Afren Plc. Both these MOPU and FSO collectively called Floating Production Unit (FPU) are performing well. MOPU has a processing capacity of 50,000 barrels oil per day whereas FSO has storage capacity of 1.2 million barrels oil.

EPC project awarded by ONGC Ltd. for conversion of their Mobile Offshore Drilling Unit (“MODU”) ‘Sagar Samrat’ into a Mobile Offshore Production Unit (“MOPU”) is progressing satisfactorily. The project completion timeline has been extended due to changes in design and scope.

In this segment; Mercator achieved total turnover of ` 610 crores compared to ` 199 crores in previous year. This has contributed about 16% 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. The exploratory drilling programme has been finalised and is expected to commence later this year.

Tanker (Wet Bulk) performance: Mercator’s tanker fleet consists of a Very Large Crude Carrier (VLCC), Aframaxes, Product tankers and Chemical

tanker.

Mercator had 7 own tankers of aggregate capacity of 7,40,193 DWT at the beginning of the year and 1 in-chartered chemical tanker of 19,996 DWT. During the year; one aframax tanker of 109,227 DWT that had met with an accident in the previous year; was scrapped . A part of the insurance claim has been received from the insurers. Consequently, at the end of the year Mercator had 6 own tankers of 6,30,966 DWT and 1 in-chartered tanker of 19,996 DWT. Of these; one VLCC of 2,99,235 DWT was sold to a subsidiary in Singapore and one aframax tanker of 90,607 was also sold. Subsequent to year end; 1 MR tanker of about 36,032 DWT was acquired.

The proceeds of the insurance claim received in respect of the Aframax tanker that met with accident were used to prepay debt. The VLCC, which was funded by high cost INR debt, was contracted to be sold to a step down subsidiary and the high cost rupee debt was refinanced by a dollar denominated loan with extended tenor. As a consequence, the Company was able to substantially reduce the debt during the year.

The tanker business achieved a turnover of ` 333 crores as compared to ` 290 crores in the previous year. The numbers of operating days were reduced by about 5% to 2,479 days (previous year 2,618 days). The time charter equivalent (TCE) at USD 15,898 was flat as compared to USD 15,884 in the previous year. Overall contribution from the tanker division was 9% (previous year 8%) of the total operating income.

Dry Bulk performance: Mercator’s bulk carrier fleet comprises of Geared and Gearless Panamaxes; Kamsarmaxes and a Very Large Ore

Carrier (VLOC). At the beginning of the year, there were 15 own bulk carriers with aggregate tonnage of 13,40,510 DWT and 3 chartered-in bulk carriers with an aggregate capacity of 2,78,340 DWT. One VLOC of 2,79,022 DWT was sold. Further, two chartered-in vessels with aggregate tonnage of 186,540 DWT were re-delivered under early termination agreements as the cost of chartering the vessles was higher than the earnings of these vessels. Consequently, at the end of the year; there were 14 own bulk carriers of aggregate capacity of 10,61,488 DWT and one chartered in vessel of 91,800 DWT. The proactive measures of early termination of long term charters and sale of VLOC will have positive impact on cash flows of the Company going forward.

45




corporate overview

StAtutoRy RepoRtS

Business review

Mercator achieved a turnover of ` 627 crores (` 733 crores previous year). The vessel operating days decreased by about 9% over the last year to 6,044 days (previous year 6,619 days). TCE at USD 13,719 too declined by about 32% against previous year of USD 20,069. This segment contributed about 17% of the total operating income (previous year 20%).

Dredging performance: At the beginning of the year, Mercator has 5 dredgers having aggregate capacity of 26,100 Cubic meter and one

Cutter Suction Dredger. With 1,710 operating days (previous year 1349), Mercator achieved a turnover of ` 156 crores (Previous year ` 161 crores). This segment contributed about 4% of total operating income (previous year 4%).

REVIEW OF OPERATIONS OF SUBSIDIARIES Mercator International Pte. Ltd. (MIPL): MIPL incorporated in Singapore is a wholly owned subsidiary and apex Company for all overseas subsidiaries.

It has further subsidiary companies namely Mercator Lines (Singapore) Ltd., Mercator Offshore Holding Pte. Ltd., Mercator Offshore (P) Pte. Ltd. and Oorja Holdings Pte. Ltd. These subsidiaries have further step-down subsidiaries.

MIPL has one in-chartered chemical tanker of 19,926 DWT. There was no change in the tonnage capacity during the year. During the year under review, it achieved a turnover of about ̀ 65 crores equivalent of USD 11.43 million (as against ` 121 crores equivalent of USD 25.116 million in the previous year) and earned dividend income of ` 76 crores equivalent of USD 14.026 million (as against ` 72 crores equivalent of USD 15 million in the previous year) with a net profit of ` 68 crores equivalent of USD 12.50 million (previous year net profit of ` 51 crores equivalent of USD 10.528 million) on standalone basis.

Oorja Holdings Pte. Ltd. (OHPL) and its subsidiaries: OHPL is a 100% Singapore based subsidiary of MIPL established with the objective of exploring business

opportunities in commodity mining and trading.

OHPL, through its subsidiaries in Singapore and Indonesia, owns and operates 3 mines in Indonesia. OHPL, through its subsidiaries, has a mining license in Mozambique.

OHPL, through its subsidiaries, holds a Coal Trader License, and procures coal from various miners in South and East Kalimantan regions as well as Sumatra region in Indonesia.

OHPL has established itself in the coal mining, procurement and logistics business and has been considered as a preferred and reliable coal supplier from Indonesia. It has exported 7.63 million MT in 2012-13 ( 7.35 million MT in previous year). It exports coal to India, China, Thailand, Pakistan, Srilanka, Philippines and other Asian countries.

During the year; OHPL achieved consolidated turnover of ̀ 1,959 crores equivalent of USD 359 million (previous year ` 2,220 crores equivalent of USD 461 million) and earned profit of ` 40 crores equivalent of USD 7.40 million (previous year profit of ` 99 crores equivalent of USD 21 million). During the year, OHPL and MCS each paid dividend of USD 5 million and USD 3.2 million respectively (previous year USD 15 million each)

Mercator Offshore (P) Pte. Ltd. (MOPPL): This subsidiary based in Singapore has a contract for chartering of Floating Production Unit (FPU) comprising

of Mobile Offshore Production Unit (MOPU) and Floating Storage Offshore Unit (FSO) to a UK Listed Company, Afren PLC, through its subsidiary for deployment in their EBOK oilfield in Nigeria for a period of 9 years.

MOPPL has done entire Engineering; Procurement; Construction; Installation and Commissioning of the FPU in Nigeria which is operating well. MOPPL has a subsidiary located in Nigeria, IVORENE Oil Services Ltd. which supports local activities.

MOPPL achieved turnover of ̀ 269 crores equivalent of USD 49 million and earned profit of ̀ 41 crores equivalent of USD 7.40 million (previous year turnover of ` 199 crores equivalent of USD 41 million and profit of ` 26 crores equivalent of USD 5 million). MOPPL paid dividend of USD 6.40 million during its second year of operation.

46

Mercator Limited

Mercator Oil & Gas Ltd. (MOGL): This is an Indian unlisted subsidiary. MOGL in consortium with MOPPL and an Abu Dhabi based shipyard has been awarded contract by ONGC for

conversion of Mobile Offshore Drilling Unit (MODU) into Mobile Offshore Production Unit (MOPU). During the year, the MODU was handed over by ONGC, and taken to the shipyard in UAE, where the conversion contract is being executed. . The execution of the project is at advanced stage and is progressing well. MOGL achieved turnover of ` 341 crores and earned profit of ` 8 crores in its first year of operation.

Mercator Petroleum Ltd. (MPL): This is an Indian unlisted 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).

The exploratory drilling programme has been finalised and environment clearances received and drilling is expected to commence in 2013-14.

Mercator Offshore Holdings Pte. Ltd. (MOHPL): MOHPL is a Singapore based subsidiary. During the year Mercator contracted to sell its VLCC to MOHPL which

has been then refinanced by a foreign currency loan. The proceeds have been utilised to retire corresponding high cost INR debt.

Mercator Lines (Singapore) Ltd. (MLS): This is a Singapore Stock Exchange listed subsidiary of MIPL. During the year MIPL shareholding in MLS reduced

from 71.35% to 67.14% consequent upon allotment of further shares by MLS towards part compensation in terms of early termination and settlement agreements for the in-chartered vessels.

The Consolidated fleet of MLS as at beginning of the year comprised of 14 own vessels of aggregate capacity of 12,71,224 DWT and 3 in-chartered vessels of aggregate capacity of 2,78,340 DWT. During the year, MLS sold one VLOC of 2,79,022 DWT and entered into early termination agreements for 3 chartered in vessels. At the end of the year; MLS had 13 own vessels of aggregate capacity of 9,92,202 DWT and 1 in-chartered vessel of 91,800 DWT.

The Company had 3 long term chartered in vessels which were deployed on spot and the earnings were much lower than their charter in rates resulting in net cash outflow on these vessels to MLS., MLS was successful in premature termination of the contracts of 2 chartered-in vessels and commercially suspend the contract of one more chartered-in vessel.MLS re-delivered two of chartered in vessels of 1,86,540 DWT in aggregate under early termination agreements. Consequently at the end of the year; MLS had 13 own vessels of aggregate capacity of 9,92,202 DWT and 1 in-chartered vessel of 91,800 DWT.

MLS achieved a consolidated turnover of ` 593 crores equivalent of USD 109million (as against ` 712 crores equivalent of USD 147.737 million in the previous year). MLS suffered loss of ` 424 crores equivalent of USD 77 million ) against net profit after tax of ` 38 crores equivalent to USD 7.837 million in the previous year. The total impact of the compensation for the chartered-in vessels and the loss on sale of VLOC is USD 52 million. Out of the total loss of USD 77 million, USD 52 million was a onetime impact, of which the non cash loss was USD 11 million.. The termination/rearrangement of the 3 contracts and sale of VLOC would result in a reduction in the debt and long term liabilities of the Company and would improve the cash flows of the MLS going forward.

Subsidiaries of MLS; namely Chitra Prem and Vidya Varsha Inc declared and paid interim dividends of USD 1.30 million and USD 4 million respectively.

MLS issued Convertible Bonds aggregating USD 19 million that were fully subscribed by its parent company Mercator International Pte. Ltd.

The Auditors report includes an Emphasis of Matter regarding losses incurred and MLS having breached a financial covenant on certain bank loans MLS has requested and received a bank’s waiver of the said covenant as at March 31, 2013. Other than this; none of any subsidiary companies’ Audit Reports contains any qualification.

(For the purpose of financial performances conversion rate of per dollar has been taken as ` 54.53 for Profit & Loss account (previous year ` 48.19); and ` 54.39 for Balance Sheet items (previous year ` 51.16).

47




corporate overview

StAtutoRy RepoRtS

Business review

QUALITY, SAFETY & ENVIRONMENT We continue our efforts to raise awareness of our Health Safety Security Environment (HSSE) policies and

objectives across all offices and assets of the Company. Our Ship Energy Efficiency Management Plan ( SEEMP) for all our ships has been accepted by the Authorities and we are now making effort not only to reduce consumption but also emissions from our ships. ‘

We are continuously endeavouring to put forth HSSE policies and its objectives before each Mercatorian and encouraging to work towards zero deviations from the said policies. Our Loss Time Incidents (LTI) and near misses are reducing at each review. Mercator firmly believe that collateral benefit of a strong HSSE policy is enhancement of asset integrity.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY The Company’s internal control systems are adequate and commensurate with the scale and size of the

operations. An external firm of auditors evaluates the efficacy and adequacy of the internal controls, systems and adherence to management policies and provides their suggestions.. The Audit Committee constituted by the Board of Directors reviews the performance of the Company, with inputs from 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 its philosophy of ‘People First’. Our focus during the year has been on talent management and leadership development. In respect of the different

business verticals, our endeavour has been to acquire and retain talent with the requisite competencies. A number of initiatives and training programs were conducted for enhancing the existing skill sets and indentifying and nurturing potential leaders with an eye on the future.

We encourage a performance oriented culture leading to succession planning, training needs and skill enhancement programs.We believe in providing a professional, congenial, safe and environment friendly workplace copled with opportunities for personal growth and development. As on March 31, 2013 there were 101 employees with Mercator in India. Globally, Mercator group had 404 employees as on March 31, 2013.

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 labor relations.

For and on behalf of the BoardFor Mercator Limited

H. K. MittalExecutive Chairman

Regd. Office:3rd Floor, Mittal Tower,B-wing, Nariman Point, Mumbai - 400021 Dated: May 18, 2013

48 49


To the Members of

MERCATOR LIMITED (Formerly known as MERCATOR LINES LIMITED)

REpORT ON ThE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of MERCATOR LIMITED (‘the Company’), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAgEMENT’S RESpONSIbILITy FOR ThE FINANCIAL STATEMENTS

Management is responsible for the preparation of these financial statements that give a true and fair view of the Financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956(‘the Act’) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AuDITOR’S RESpONSIbILITy

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements 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 March 31, 2013;

(b) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Independent Auditors’ Report

48 49


REpORT ON OThER LEgAL AND REguLATORy REquIREMENTS

1. As required by the Companies (Auditor’s Report) Order, 2003(“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227 (3) of the Act, 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 purpose 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 those books;

c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) on the basis of written representations received from the Directors as on March 31, 2013, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2013, from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For and on behalf of Contractor, Nayak & Kishnadwala, Chartered Accountants Firm Registration No.: 101961W

himanshu Kishnadwala Partner Membership No.: 037391


FinAnciAL stAteMents

standalone Financials

Corporate overview

Statutory reportS

BuSineSS review

50 51


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. (b) The management carries out physical verification of the fixed assets at reasonable intervals and no material

discrepancies were noticed on such verification. (c) The vessels disposed off / held for disposal during the year, in our opinion, do not constitute substantial part of

the fixed assets of the Company and the same, in our opinion, does not affect the going concern status of the Company.

2 (a) As explained to us, the inventory has been physically verified during the year by the management. In our opinion, having regard to the nature and location of the inventory, the frequency of the physical verification is reasonable.

(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.

(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.

(e) During the year the Company has taken unsecured loan from a company covered in the register maintained under section 301 of the Companies Act, 1956 which was repaid during the year. The maximum amount involved during the year was ` 350 lakhs.

(f) In our opinion the rate of interest and other terms and conditions of unsecured 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) In our opinion, the repayment of the principal amount and interest 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) In our opinion and as explained to us, the particulars of contracts or arrangements referred to in section 301 that needed to be entered in the Register maintained under the said section have been so entered.

5 (b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of ` 5 lakhs in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6 The Company has not accepted any deposits from the 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 On the basis of the records produced, we are of the opinion that prima facie, the cost records and accounts prescribed

by the Central Government under section 209(1)(d) of the Act and applicable to the Company in respect of coal handling activities have been made and maintained by the Company. However, we are not required to carry out and have not carried out any detailed examination of such records and accounts.

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, custom duty, excise-duty, cess and other statutory dues and there are no undisputed statutory dues outstanding as at March 31, 2013, for a period of more than six months from the date they became payable except for service tax amounting to ` 6.90 lakhs outstanding for more than six months from the date it became payable.

Annexure to the Independent Auditors’ Report[Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date.]

50 51


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 8,004.22 2006-07 to 2011-12

Commissioner of Service tax

Income Tax Income Tax 3,235.87 597.47

3.7046.44

2007-082006-072005-062002-03

Commissioner of Income tax(Appeals)

Amounts paid under protest and not charged to Statement of Profit and Loss have not been included above. [Refer Note 3.3 to the financial statements]

10 The Company does not have any accumulated losses as on March 31, 2013. The Company has, however, incurred cash losses during the financial year but had not incurred cash losses 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 explanation given to us, the Company is not 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 The Company has not raised any new term loan during the year; however term loans outstanding at the beginning of the year have been applied for the purpose for which they were raised.

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 ofContractor, Nayak & Kishnadwala,Chartered AccountantsFirm Registration No.: 101961W

himanshu KishnadwalaPartnerMembership No.: 037391




Corporate overview

Statutory reportS

BuSineSS review

52 53


(` in lakhs) particulars Note As at

March 31, 2013As at

March 31, 2012A EquITy AND LIAbILITIES

1 Shareholder's funds (a) Share capital 2.1 2,448.92 2,448.92 (b) Reserves and surplus 2.2 64,543.09 84,911.29 (c) Money received against share warrants 2.3 - 2,596.00

66,992.01 89,956.212 Non - current liabilities

(a) Long-term borrowings 2.4 68,176.35 92,205.71 (b) Other long term liabilities 2.5 735.53 4,671.48 (c) Long-term provisions 2.6 228.81 285.88

69,140.69 97,163.073 Current liabilities

(a) Short-term borrowings 2.7 2,809.81 4,296.94 (b) Trade payables 2.8 7,906.55 8,861.63 (c) Other current liabilities 2.9 59,318.50 27,737.14 (d) Short-term provisions 2.10 42.78 45.89

70,077.64 40,941.60 Total 2,06,210.34 2,28,060.88

b ASSETS1 Non- current assets

(a) Fixed assets (i) Tangible assets 2.11 69,886.68 1,63,482.93 (ii) Assets held for disposal 53,462.45 - (b) Non-current investments 2.12 355.48 425.49 (c) Long-term loans and advances 2.13 29,117.97 28,864.61 (d) Other non-current assets 2.14 38.52 2.68

1,52,861.10 1,92,775.712 Current assets

(a) Current investments 2.12 50.00 50.00 (b) Inventories 2.15 955.73 1,740.89 (c) Trade receivables 2.16 20,866.07 19,896.30 (d) Cash and bank balances 2.17 15,513.32 4,124.00 (e) Short-term loans and advances 2.18 15,954.17 8,268.95 (f) Other current assets 2.19 9.95 1,205.03

53,349.24 35,285.17 Total 2,06,210.34 2,28,060.88

Significant Accounting policies 1 Notes forming part of the financial statements 2 to 7

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 K. R. bharat Partner Director Director

priya Vishwanathan Company Secretary

Dated: May 18, 2013 Dated: May 18, 2013 Place: Mumbai Place: Mumbai

Balance Sheet as at March 31, 2013

52 53






(` in lakhs)

particulars Note

year EndedMarch 31, 2013


INCOME

(a) Revenue from operations 2.20 55,149.42 54,797.68

(b) Other income 2.21 2,531.88 7,268.52

1 Total Revenue 57,681.30 62,066.20

EXpENSES:

(a) Ship operating expenses 2.22 40,396.74 43,358.96

(b) Employee benefit expenses 2.23 1,312.33 1,700.53

(c) Finance cost 2.24 13,269.09 15,296.93

(d) Depreciation and amortisation expenses 10,915.55 11,899.61

(e) Impairment of assets 8,118.00 -

(f) Other expenses 2.25 5,263.97 1,327.07

2 Total Expenses 79,275.68 73,583.10

3 profit /(Loss) before taxes (1 - 2) (21,594.38) (11,516.90)

4 Tax expense:

(a) Current tax (150.00) (350.00)

profit /(Loss) for the period (3 - 4) (21,744.38) (11,866.90)

Earnings per share (Equity share of ` 1/- Each)

Basic and Diluted (In `) 4.7 (8.88) (4.85)

Significant Accounting policies 1

Notes forming part of the financial statements 2 to 7

Statement of Profit and Loss for the year ended March 31, 2013



Corporate overview

Statutory reportS

BuSineSS review

54 55


(` in lakhs) particulars March 31, 2013 March 31, 2012

A CASh FLOw FROM OpERATINg ACTIVITIES Net Profit / (Loss) Before Tax (21,594.39) (11,516.90) Adjustment for: Depreciation 10,915.55 11,899.61 Impairment of assets 8,118.00 - Provision for doubtful debts/advances 2,086.54 - Loss on derivative transaction 19.80 - Interest paid 13,269.09 15,296.93 (Profit)/Loss on fixed assets sold (net) 1,093.28 (1.13) (Profit)/Loss on sale of investments (net) (44.90) (25.22) Interest income (713.49) (2,479.13) Dividend income (258.98) (0.48) Bad Debts and other amounts written off/(back) 450.33 (21.67) Adjustments for exchange fluctuation (1,332.39) (6,206.56) Operating profit before working capital changes 12,008.44 6,945.45 Adjustment for: Decrease/(Increase) in Long-term loans and advances (7.82) (11.69) Decrease/(Increase) in Inventories 785.16 607.74 Decrease/(Increase) in Short-term loans and advances (1,247.92) 399.75 Decrease/(Increase) in Other current assets 1,194.38 (1,194.38) Decrease/(Increase) in Trade Receivables (1,758.36) (3,738.74) (Decrease)/Increase in Long term provisions (57.07) 102.92 (Decrease)/Increase in Trade Payables (994.71) (504.57) (Decrease)/Increase in Other current liabilities 554.90 (693.48) (Decrease)/Increase in Short term Provisions (3.10) 11.27 Net Cash from Operating Activities 10,473.90 1,924.27 Direct taxes paid (3,374.39) (1,766.75) Total cash from / (used in) operating activites 7,099.51 157.52

b CASh FLOw FROM INVESTINg ACTIVITIES Acqusition of Fixed Assets including Capital Work in Progress (18.27) (3,101.69) Sale of Fixed Assets 18,273.22 6.24 Advance received on Sale of Fixed Asset 49,029.01 - (Increase) / Decrease in Short-term loans and advances (1,166.67) 16.95 (Increase) / Decrease in Long-term loans and advances 3,620.63 45,856.49 (Increase) / Decrease in Current Intercorporate deposits (3,841.76) (2,431.12) (Purchase)/sale of Investment 114.91 161.92 Investment in fixed deposits (3.30) 35,751.28 Interest Income 713.41 3,408.29 Dividend Income 258.98 0.48 Net Cash from Investing Activities 66,980.16 79,668.84

Cash Flow Statement for the year ended March 31, 2013

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particulars March 31, 2013 March 31, 2012

C CASh FLOw FROM FINANCINg ACTIVITIES Proceeds from Long term Borrowings (47,369.26) (9,493.37) Proceeds from Short term Borrowings (1,487.13) (59,424.42) Interest paid (13,808.45) (15,423.39) Loss on derivative transaction (19.80) - Net Cash from Financing Activities (62,684.64) (84,341.18) Net Increase / (Decrease) in cash and cash equivalents (A + b + C) 11,395.03 (4,514.82) Cash and Cash Equivalents as at beginning of the year (Refer Note 2.17) 3,756.39 8,152.03 Add: Unrealised Foreign Exchange Fluctuation on cash and cash equivalents

26.06 119.19

Cash and Cash Equivalents as at end of the year (Refer Note 2.17) 15,177.47 3,756.39 Cash and Cash Equivalents comprise of: Cash and Bank Balances ( Refer Note 2.17) 15,177.47 3,756.39

Notes: 1) Figures in bracket represent outflows. 2) Cash and cash equivalents include Unclaimed dividend accounts of ` 51.24 lakhs (P.Y. ` 68.06 lakhs) which are not available

for use by the Company. 3) Previous Year's figures have been regrouped wherever necessary to confirm to the current year's classification.

Cash Flow Statement for the year ended March 31, 2013





(` in lakhs)



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SIgNIFICANT ACCOuNTINg pOLICIES AND NOTES FORMINg pART OF ThE FINANCIAL STATEMENTS FOR yEAR ENDED MARCh 31, 2013

CORpORATE INFORMATIONMercator Limited was incorporated on November 24, 1983 as private limited company with name as Mercator Lines Private Limited. It was converted into limited company vide ROC approval dated April 12, 1984. The name was changed to Mercator Limited vide ROC approval dated November 22, 2011. The Company has directly and/or through its subsidiaries diversified business verticals viz. Shipping (tankers and dry bulkers), Dredging, Oil and Gas (EPCIC and E & P), Coal (Mining, Procurement and Logistics).

1. SIgNIFICANT ACCOuNTINg pOLICIES

1.1 basis of preparation

The financial statements have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention, on the accrual basis. GAAP comprises accounting standards notified by the Central Government of India under Section 211(3C) of the Companies Act, 1956, Accounting Standard 30, Financial Instruments: Recognition and Measurement issued by the Institute of Chartered Accountants of India to the extent it does not contradict with any other accounting standard referred to Section 211(3C) of the Act, other pronouncements of Institute of Chartered Accountants of India and other relevant provisions of the Companies Act, 1956 and guidelines issued by Securities and Exchange Board of India.

1.2 use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a going basis. Any revision to accounting estimates is recognised prospectively in the current and future periods.

1.3 Tangible fixed assets and depreciation

a) Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes cost of acquisition or construction including attributable borrowing cost, duties and other incidental expenses related to the acquisition of the asset.

b) Individual fixed assets costing up to ` 25,000 are not capitalised but fully written off to the statement of profit and loss in the year of purchase.

c) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign currency loans relating to acquisition of depreciable assets are, following option given by notification of Ministry of Corporate Affairs (MCA) dated March 31, 2009/December 29, 2011, adjusted to carrying cost of the respective fixed assets.

d) Depreciation on vessels is provided on Straight Line Method so as to write off the original cost as reduced by the 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 rate of depreciation ranges from 5% to 7%.

e) 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.

f) Depreciation on additions/disposals during the year is provided on pro-rata basis.

g) Depreciation on furniture, fixtures and electrical fittings installed at office premises taken on lease is provided over the initial period of lease.

h) 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.



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1.4 Impairment of assets

The carrying amounts of all assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors, where they are recorded in excess of their recoverable amounts, and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use determined asset wise. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions are identified, and appropriate valuation model is used.

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 Revenue Recognition

a) Income on account of freight 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 also carried forward to the next year.

c) Income from charter hire and demurrage earnings is recognised on accrual basis as per the terms of agreement.

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) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

g) Claims including insurance claims are accounted when there is a reasonable certainty of the realisability of the claim amount.

1.7 Incomplete Voyages

Incomplete voyages represent freight income and direct operating expenses on voyages which are not complete as at the balance sheet date.

1.8 Foreign exchange transactions and balances

a) Monetary transactions in foreign currency are recorded at standard exchange rates determined monthly.

b) Monetary items denominated in foreign currency outstanding at the end of the year are valued at the rates prevalent on that date.

c) Exchange differences arising on translation of Long Term Foreign Currency Monetary (LTFCM) items are, following option given by notification of MCA dated March 31, 2009/December 29, 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 March 31, 2020, whichever is earlier.

d) Differences in translation of other monetary items and realised gains and losses on foreign currency transactions are recognised in the statement of profit and loss.

e) Exchange differences arising on translation of long term foreign currency loans given to entities classified as non integral foreign operations is accumulated in Foreign Currency Fluctuation Reserve. On disposal of investment, the balance in the said reserve is transferred to the statement of profit and loss.


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1.9 Derivative financial instruments and hedging

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 Reserve”) and are reclassified into the statement of profit and loss upon occurrence of the hedged transaction.

If the hedging instrument no longer meets the criteria for hedge accounting, gets expired or is sold, terminated or exercised before the forecasted transaction, the hedge accounting on such transaction is discontinued prospectively. The cumulative gain or loss previously recognised in hedging reserve continues to remain there until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the balance in hedging reserve is recognised immediately in the statement of profit and loss.

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.

1.10 Employee 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 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.

1.11 Operating lease

a) Leases where the lessor effectively retains substantially all the risks and benefits of the ownership of the lease term are classified as operating lease.

b) 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.

c) 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.

1.12 Inventories

Bunker and Lubes on vessels are valued at lower of cost and Net Realisable Value ascertained on First in First out basis.



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1.13 Investments

a) Investments are classified into long-term and current investments.

b) Investments which are readily realisable and intended to be held for not more than 12 months are classified as current investments. All other investments are classified as long term investments.

c) 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.

d) Current investments are stated at cost of acquisition including incidental / related expenses or at fair value as at March 31, 2013, whichever is less and the resultant decline, if any, is charged to revenue.

1.14 borrowing Costs

Borrowing costs include interest, ancillary costs, incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are directly attributable to the acquisition/construction of the qualifying assets are capitalised as part of the cost of the asset, up to the date of acquisition/completion of construction. All other borrowing costs are expenses in the period they occur.

1.15 provision for Taxation

Tax expense comprises both current and deferred tax.

a) Provision for current income tax is made on the basis of the assessable income under the Income tax Act, 1961. Income from shipping activities is assessed on the basis of deemed tonnage income of the Company under section 115VG(3) of Chapter XII-G of the Income Tax Act, 1961.

b) Deferred income tax is recognised on timing differences, between taxable income and accounting income which originate in one period and are capable of reversal in one or more subsequent periods only in respect of the non shipping activities of the Company. The tax effect is calculated on the accumulated timing differences at the year end based on tax rates and laws, enacted or substantially enacted as of the balance sheet date.

c) Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period.

1.16 Earning per share

The basic earnings per share is computed by dividing the net profit after tax for year by weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit after tax for the year and weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.17 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.

1.18 premium on redemption of bonds / Debentures

Premium on redemption of bonds / debentures is adjusted against Securities Premium Account

1.19 Cash and Cash equivalents

Cash and cash equivalents for the purpose of the cash flow statement comprise cash in hand and at bank in current and foreign currency accounts. Term deposits having maturities of three months or less are considered as cash equivalents.


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2.1 Share Capital

(` in lakhs) particulars As at

March 31, 2013As at

March 31, 2012Authorised35,00,00,000 Equity shares of ` 1/- par value. 3,500.00 3,500.002,00,00,000 Preference shares of ` 100/- par value. 20,000.00 20,000.00

23,500.00 23,500.00Issued Capital24,48,92,073 (24,48,92,073) Equity shares of ` 1/- each fully paid up 2,448.92 2,448.92

2,448.92 2,448.92Subscribed and Fully paid up Capital24,48,92,073 (24,48,92,073) Equity shares of ` 1/- each fully paid up. 2,448.92 2,448.92

2,448.92 2,448.92

Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period

Equity Shares

particulars As atMarch 31, 2013

As atMarch 31, 2012

Number of shares at the beginning of the year 24,48,92,073 24,48,92,073Add: Shares issued during the year - -Number of shares at the end of the year 24,48,92,073 24,48,92,073

Terms/Rights attached to Equity shares

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 preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

For the period of five years immediately preceding the date as at which the balance sheet is prepared:

(i) No shares were allotted pursuant to contracts without payment being received in cash.

(ii) No bonus shares were issued.

(iii) No shares were bought back.

Details of shareholders holding more than 5% equity shares in the Company

Name of the shareholder As at March 31, 2013 As at March 31, 2012Equity shares of ` 1 each fully paid No of shares % of holding No of shares % of holdingH. K. Mittal 46,654,200 19.05 46,654,200 19.05Archana Mittal 26,327,400 10.75 26,327,400 10.75AHM Investments Private Limited 18,406,250 7.52 18,406,250 7.52Lotus Global Investments Limited 14,229,669 5.81 14,229,669 5.81



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2.2 Reserves and Surplus(` in lakhs)

particulars As at March 31, 2013

As at March 31, 2012

Capital ReserveAs per last Financial Statements 1,693.49 1,693.49Add: Transfer from Share Warrant Application money on forfeiture of Warrants during the year 2,596.00 -

4,289.49 1,693.49Capital Redemption ReserveAs per last Financial Statements 4,000.00 4,000.00

Securities premium AccountAs per last Financial Statements 36,374.92 36,456.57Less: Premium on redemption of Unsecured debentures - (81.65)

36,374.92 36,374.92Tonnage Tax Reserve (utilised)As per last Financial Statements 17,524.83 17,524.83

Debenture Redemption ReserveAs per last Financial Statements 25,562.50 21,332.50Add/(Less):Transferred to/from General Reserve (15,312.50) 4,230.00

10,250.00 25,562.50general ReserveAs per last Financial Statements 9,164.33 13,394.33Add/(Less) : Transferred from/to Debenture Redemption Reserve 15,312.50 (4,230.00)

24,476.83 9,164.33Foreign Exchange Fluctuation ReserveAs per last Financial Statements 1,004.51 1,235.60Add/Less: Exchange fluctuation on Long Term Loans in relation to non integral foreign operations (Net) 342.55 5,955.91Add/Less: Transfer to Statement of Profit and Loss on repayment of Long Term Loans in relation to non integral foreign operations (1,374.55) (6,187.00)

(27.49) 1,004.51Foreign Currency Monetary Item Translation Difference Account (Refer Note 4.1)As per last Financial Statements - -Add/Less: For the year 103.88 -

103.88 -hedging Reserve (Refer Note 1.9)As per last Financial Statements (498.35) -Add: Increase/(Decrease) during the year (net) (291.69) (498.35)

(790.04) (498.35)SurplusAs per last Financial Statements (9,914.94) 1,951.96Net (Loss) after tax transferred from Statement of Profit and Loss (21,744.39) (11,866.90)

(31,659.33) (9,914.94)Closing 64,543.09 84,911.29


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2.3 Money received against share warrants(` in lakhs)



warrants against share capital1,88,80,000 warrants of face value of ` 13.75 each - 2,596.00During 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, options for conversion of 89,00,000 warrants was excercised during the year 2010-11, 1,67,70,000 warrants lapsed on May 8, 2012 and 21,10,000 warrants lapsed on May 12, 2012 for non exercise of option.

- 2,596.00

2.4 Long term borrowings(` in lakhs)



Secured(A) Debentures 40,000.00 45,000.00(B) External commercial borrowings 8,294.37 10,295.25(C) Term loans from banks 19,881.98 36,910.46

68,176.35 92,205.71

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 property.

b) External Commercial Borrowings referred in (B) above are secured by exclusive charge on specified vessels of the Company of which ` 2,651.48 lakhs (P.Y. ` 2,557.83 lakhs) 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 ` 13,050.45 lakhs (P.Y. ` 13,500 lakhs) additonally secured by charge on loan extended to subsidiary as well as charge on cash flows of specified vessels.

d) Foreign Currency loan included in Term loans from banks in (C) is secured by first charge on specified vessels of the Company on pari passu basis with other lenders.

(ii) Terms of repayment and interest are as follows:

Loan from ROI* balance installments as on

31.03.2013

year of maturity F.y. ending

Amount outstanding

Amount outstanding

31.03.2013 31.03.2012Debentures - - 2013 - 1,125.00 Debentures 9.50% 2 2015 16,000.00 25,000.00 Debentures 9.50% 1 2015 10,000.00 10,000.00 Debentures 12.40% 3 2019 15,000.00 15,000.00 Indian Banks - - 2016 - 16,000.00 Indian Banks - - 2013 - 2,499.20 Indian Banks 12.65% 10 2018 7,733.60 8,000.00



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Loan from ROI* balance installments as on

31.03.2013

year of maturity F.y. ending

Amount outstanding

Amount outstanding

31.03.2013 31.03.2012Indian Banks - - 2013 - 7,500.00 Indian Banks - - 2013 - 1,249.60 Indian Banks 12.85% 10 2018 5,316.85 5,500.00 Indian Banks 6.76% 8 2017 10,307.86 12,117.95 Indian Banks 3.73% 6 2016 8,294.37 10,103.41 Indian Banks 5.31% 12 2019 2,651.48 2,557.83

75,304.16 1,16,652.99 Less: Shown in current maturities of long term debt 7,127.81 24,447.27 Balance shown as above 68,176.35 92,205.71

* Applicable Rate of Interest as on 31.03.20132.5 Other long term liabilities


March 31, 2013As at

March 31, 2012Trade payablesDue to Micro, Small & Medium Enterprises (Refer note 5.1) - -Other Trade payablesAcceptances - 4,189.72Other LiabilitiesLiability towards cash flow hedges (Refer note 4.8) 735.53 481.76

735.53 4,671.48

2.6 Long term provisions(` in lakhs)



Provision for employee benefitsGratuity 193.70 222.35Compensated absences 35.11 63.53

228.81 285.88

2.7 Short term borrowings(` in lakhs)



SecuredLoans repayable on demandWorking capital facilities from scheduled banks 848.61 2,320.72unsecuredWorking capital facilities from scheduled banks 1,961.20 1,976.22

2,809.81 4,296.94

Note:Working capital facilities from Scheduled Banks are secured by 1st charge on all receivables and other current assets of the Company on pari-passu basis and second charge on specified vessels.


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2.8 Trade payables(` in lakhs)



Trade payablesDue to Micro, Small & Medium Enterprises (Refer note 5.1) - -Other Trade payables* 7,906.55 8,861.63

7,906.55 8,861.63

*Other trade payable to subsidiary companies 1,644.99 669.34 1,644.99 669.34

2.9 Other current liabilities

(` in lakhs)



Current maturities of long-term debt

1) Debentures (Refer Note 2.4 (i) (a)) 1,000.00 6,125.00

2) External commercial borrowings (Refer Note 2.4 (i)(b)) 2,651.48 2,365.99

3) Term loans from banks (Refer Note 2.4 (i) (c) and (d)) 3,476.33 15,956.29

Interest accrued but not due on borrowings 1,682.00 2,333.37

Interest accrued and due on borrowings 87.12 104.43

Unpaid dividend* 51.24 68.05

For Other liabilities

Salaries & wages payable 125.25 112.74

Statutory dues payables 641.34 554.99

Liability towards cash flow hedges (Refer Note 4.8) 54.51 16.60

Advance from customers 261.10 -

Advance for sale of asset 49,029.01 -

Other payables** 259.12 99.68

59,318.50 27,737.14

* There is no amount, due and outstanding, to be credited to Investor Education and Protection Fund.

** Other payables include incomplete voyages (net off income) accrued but not due.

2.10 Short term provisions


March 31, 2013As at

March 31, 2012Provision for employee benefitsGratuity 21.52 24.71Compensated absences 21.26 21.18

42.78 45.89



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2.11 Fixed Assets(` in lakhs)

Original Cost Depreciation/Amortisation Net book Value

Net book Value

particulars As at April 1, 2012

Addition for the year

Other Adjustments

Deductions for the year


upto March 31, 2012

Depreciation For the year

Impairment For the year

Adjustment in respect of Assets Sold/

Discarded /held for disposal

up to March 31, 2013



Tangible Assets

Land 11.31 - - - 11.31 - - - - - 11.31 11.31

Office Premises (Refer Note 1 , 2)

344.28 - - - 344.28 137.39 10.34 - - 147.73 196.55 206.89

Vessels (Refer Note 3)

2,17,693.11 - 1,404.72 1,11,741.84 10,7,355.99 54,589.24 10,886.41 8,118.00 35,758.04 37,835.61 69,520.37 1,63,103.87

Furniture and Fixtures (Refer Note 4)

314.57 - - - 314.57 295.00 (16.91) - - 278.09 36.48 19.57

Vehicles 242.84 7.55 - 18.61 231.78 169.37 19.19 - 17.19 171.37 60.41 73.48

Office Equipments 105.11 1.05 - 0.86 105.30 61.63 6.03 - 0.41 67.25 38.05 43.48

Computer Equipments

128.42 9.67 - - 138.09 104.09 10.49 - - 114.58 23.51 24.33

Total 2,18,839.64 18.27 1,404.72 1,11,761.31 1,08,501.32 55,356.72 10,915.55 8,118.00 35,775.64 38,614.63 69,886.68 1,63,482.93

Notes1) 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 ` 147.27 lakhs (P.Y. ` 136.96 /- lakhs) are given on

operating Lease.3) Other adjustments include exchange fluctation loss on Long term foreign currency loans ` 1,404.72 lakhs (P.Y. ` 2,317.04 /- lakhs )4) Depreciation on furniture and fixtures for the year includes reversal of excess depreciation charged in earlier years.

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


upto March 31, 2011

Adjustment in respect of Assets Sold/

Discarded /held for disposal

For the year up to March 31, 2012



Tangible Assets

Land 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) 2,12,288.68 3,087.39 2,317.04 - 2,17,693.11 42,794.48 - 11,794.76 54,589.24 1,63,103.87 1,69,494.19

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 2,13,433.79 3,101.69 2,317.04 12.87 2,18,839.65 43,464.87 7.76 11,899.61 55,356.72 1,63,482.93 1,69,968.93


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2.12 Investments(` in lakhs)

particulars Nos As at March 31, 2013

Nos As at March 31, 2012

Non Current Investments - At costTrade investments (unquoted)Investment in Equity Shares of SubsidiariesMercator Oil and Gas Limited 1,50,000 15.00 1,50,000 15.00Mercator International Pte Limited 1,00,000 28.80 1,00,000 28.80Mercator Offshore Holdings Pte. Limited ** 2 - 2 -Mercator Petroleum Limited 1,00,000 10.00 89,000 8.90Mercator Offshore (P) Pte Limited 13,992 4.57 13,992 4.57Oorja Resources India Private Limited 25,000 2.50 25,000 2.50Mercator FPSO Private Limited 10,000 1.00 10,000 1.00OthersInvestment in Equity SharesMarg Swarnabhoomi Port Private Limited 1,250 0.13 1,250 0.13Non trade investments (unquoted)Investment in OthersUnits of Indian Real Opportunity Venture Capital Fund 29,348 293.48 36,459 364.59Aggregate amount of unquoted investments 355.48 425.49Current Investments - at the lower of cost and fair valuequotedInvestments in Mutual FundsAxis Equity Fund 5,00,000 50.00 5,00,000 50.00(Market value of current investments on 31.3.13 ` 54.65 lakhs (P.Y. ` 51.75 lakhs)

Aggregate amount of quoted investments 50.00 50.00

** Cost ` 51/- Note: The Company has agreed to maintain its beneficial stake of 100% in its subsidiary viz. Mercator International

Pte. Ltd. and upto 51% (directly/indirectly) in subsidiary/step down subsidiary viz. Mercator Offshore (P) Pte. Ltd.; and Mercator Lines (Singapore) Ltd. to the respective lenders under their financial assistance.

2.13 Long term loans and advances(` in lakhs)



UnsecuredConsidered goodLoans and advances to related parties* 15,019.95 17,892.62Capital Advances 940.00 940.00Capital Advances to related parties** 4,199.96 4,199.96DepositsDeposits with government and semi government bodies 2.74 17.28Other deposits 447.13 440.21Other deposits to related parties*** 500.00 500.00



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March 31, 2013As at

March 31, 2012Other loans and advancesAdvance payment of tax (net of provisions) 6,634.16 3,259.77Unamortised finance charges 179.03 269.78MAT credit available 1,195.00 1,345.00

29,117.97 28,864.61

*Loans and advances to related partiesMercator FPSO Private Limited 198.48 196.46Mercator International Pte Limited 12,237.59 14,576.62Mercator Offshore (P) Pte Limited - 1.89Mercator Petroleum Limited 2,465.85 2,052.14Oorja Resources India Private Limited 118.03 1,065.51

15,019.95 17,892.62** Capital Advances to related partiesVaitarna Marine Infrastructure Private Limited 4,199.96 4,199.96

4,199.96 4,199.96*** Other deposits to related partiesMLL Logistics Private Limited 500.00 500.00

500.00 500.002.14 Other non current assets

(` in lakhs)particulars As at

March 31, 2013As at

March 31, 2012Unsecured, Considered GoodFixed Deposits with bank with maturity more than 12 months 37.26 2.20Accrued interest on fixed deposit with banks 1.26 0.48

38.52 2.68

2.15 Inventories(` in lakhs)



At Cost (Valued at lower of cost and net realisable value)Bunker and lubes 955.73 1,740.89

955.73 1,740.89

2.16 Trade receivables(` in lakhs)



unsecured

Debts outstanding for a period exceeding six months from the due date of paymentConsidered good (net of provision for doubtful debts ` 400 lakhs) 11,939.47 9,908.12Others debtsConsidered good 8,926.60 9,988.18

20,866.07 19,896.30


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2.17 Cash and bank balances(` in lakhs)



Cash and cash equivalentsCash in hand 11.63 3.02Balances with banks 15,165.84 3,654.96Deposits with banks with 3 months maturity - 98.41

15,177.47 3,756.39OthersFixed Deposits with bank with maturity more than 3 months but less than 12 months 335.85 367.61

15,513.32 4,124.00Balances with banks in unpaid dividend accounts 51.25 68.06Balances with banks includes amount in escrow account 4.88 4.90Balances with banks held as margin money deposits against guarantees 296.92 360.33

2.18 Short term loans and advances(` in lakhs)



UnsecuredConsidered goodLoans and advances to related parties* 1,492.21 323.13OthersAdvance to employees 104.37 51.65Advance to suppliers 2,148.12 3,940.27Advances recoverable - 0.46Inter corporate deposits to related parties** 5,575.00 1,850.00Inter corporate deposits to others 979.30 1,834.51Insurance claim receivable 5,424.55 -Service tax receivable 24.79 68.45Unamortised finance charges 95.67 134.27Prepaid expenses 110.16 66.20Considered doubtfulInter corporate deposits to others 971.97 -Advance to suppliers 714.56 -

1,686.53Less: Provision for doubtful advances (1,686.53) -

- -15,954.17 8,268.95

*Loans and advances to related partiesMLL Logistics Private Limited 336.13 323.13Mercator Offshore (P) Pte Limited 353.42 -Mercator Oil & Gas Limited 631.42 -MCS Holdings Pte Limited 171.24 -

1,492.21 323.13** Inter corporate deposits to related parties MLL Logistics Private Limited 5,575.00 1,850.00

5,575.00 1,850.00



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2.19 Other current assets(` in lakhs)



Accrued interest on fixed deposit with banks 9.95 10.65Income accrued but not due * - 1,194.38

9.95 1,205.03

* Includes incomplete voyages

2.20 Revenue from operations

(` in lakhs)particulars year Ended

March 31, 2013year Ended

March 31, 2012Freight 32,477.81 31,028.06Charter hire 17,226.90 14,773.92Dispatch and demurrage 384.61 349.67Cargo handling services 5,060.10 8,646.03

55,149.42 54,797.68

2.21 Other income(` in lakhs)

particulars year EndedMarch 31, 2013


Dividend received on current investments 85.81 0.48Dividend received from subsidiary company 173.16 -Rent received 12.56 93.68Net gain on foreign currency transactions/translation 1,328.46 4,506.08Interest income- Fixed Deposits and Inter corporate deposits 427.72 710.52- Others 285.77 1,768.61Gain on sale of current investments 28.18 25.22Gain on sale of non-current investments 16.72 -Gain on sale of assets (net) - 1.13Insurance claims received - 137.24Sundry balances written back (net) - 21.67Other income 170.20 -Miscellaneous income 3.30 3.90

2,531.88 7,268.52

2.22 Ship operating expenses(` in lakhs)



Bunker consumed 10,500.16 14,098.59Vessel /Equipment hire expenses 8,214.56 6,341.40Technical & Ship management services 7,763.55 7,110.27Agency, Professional and service expenses 506.14 646.79Communication expenses 106.21 130.38


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Miscellaneous expenses 478.89 517.50Commission 80.27 67.12Insurance 1,152.35 713.49Port expenses 2,089.77 2,273.97Repairs and maintenance 7,349.31 8,044.67Stevedoring, transport and freight 2,155.53 3,414.78

40,396.74 43,358.96

2.23 Employee benefits expenses(` in lakhs)



Salaries, wages, bonus, etc. 1,202.22 1,571.32Contribution to provident and other funds 64.39 62.33Employee welfare expenses 45.72 66.88

1,312.33 1,700.53

2.24 Finance cost(` in lakhs)



Interest expense 11,935.36 14,898.57Other borrowing costs 1,333.73 298.66Loss on foreign currency transactions/translation - 99.70

13,269.09 15,296.93

2.25 Other expenses(` in lakhs)



Rent 434.47 412.37Payment to auditors

As auditors 20.00 20.00For other services (certification and other matters) 18.55 18.00

Repairs and maintenance (office premises and premises acquired on lease) 165.27 74.83Insurance 23.94 24.26Legal, Professional and consultancy expenses 267.61 143.31Donation 0.46 0.70Communication expenses 43.92 56.52Conveyance, car hire and travelling 139.44 212.94Advertisement 9.70 9.26Loss on sale of assets (net) 1,093.28 -Loss on derivative transaction 19.80 -Bad Debts and other amounts written off/back 450.33 -Provision for doubtful debts/advances 2,086.54 -Miscellaneous expenses* 490.66 354.88

5,263.97 1,327.07

* Miscellaneous expenses includes prior period expenses of ` 115.61 lakhs.



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3. OThER DISCLOSuRES

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 bank (net of margin).

4,191.12 5,243.83

Counter guarantees issued by the Company for guarantees obtained from bank on behalf of subsidiaries.

626.50 256.05

Corporate guarantees issued by the Company on behalf of subsidiaries. 99,487.87 1,01,320.89Total 1,04,305.49 1,06,820.77

3.2 Letters of comfort issued

Current year(` in lakhs)

previous year(` in lakhs)

Letters of comfort issued by the Company on behalf of wholly owned / step down subsidiaries.

5,139.79 6,906.13

3.3 Claims against the Company not acknowledged as debts in respect of following items:

a) The Company received the Show Cause cum Demand notices from the Commissioner of service tax aggregating to ` 8,004 lakhs for 2006-07 to 2011-12. 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.

b) No provision has been made in respect of disputed demands from Income-tax Authorities to the extent of ` 5,725.26 lakhs (` 5,697.51 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 ` 1,841.77 lakhs (` 1,541.77 lakhs).

3.4 Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) as at March 31, 2013 ` NIL (` NIL).

3.5 CIF value of ImportsCurrent year


(` in lakhs)On CIF basis during the accounting year in respect of:Stores & Spares 1,539.15 718.63Capital Goods (including CWIP) Nil 3,014.50

3.6 Value of Imported & Indigenous Stores & Spare parts consumedCurrent year previous year(` in lakhs) % (` in lakhs) %

Imported Stores & Spares 1,539.15 42% 718.63 40 %Indigenous Stores & Spares 2,112.70 58% 1,096.83 60 %

3.7 Expenditure in foreign currencyCurrent year


(` in lakhs)On Repairs/Renovations and expenses of Vessels 2,014.07 3,228.18On Bunker 4,269.24 7,621.07On Freight 3,855.19 654.85On Vessel Expenses 3,919.05 6,888.74On Travelling 13.07 89.54On Interest 1,785.44 872.04


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3.8 Earnings in foreign currency on account ofCurrent year


(` in lakhs)Shipping Income 9,355.78 7,170.13Interest Income 179.95 1,608.14Dividend Income 173.16 NilOther Income 170.80 19.32

3.9 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.

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 March 31, 2009/December 29, 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 ` 1,404.72 lakhs (P.Y ` 2,317.04 lakhs).

Exchange Fluctuation on restatement of foreign currency loan initially taken for acquisition of fixed asset has been transferred to “Foreign Currency Monetary Item Translation Difference Account” (FCMITD) since subsequently the said fixed asset was disposed off. The exchange gain (net) transferred to FCMITD for the same is ` 190.04 lakhs. The balance amount outstanding in FCMITD as on March 31, 2013 is ` 103.88 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. particulars Current year previous year

i Contribution to Employees’ Provident Fund 57.79 55.47ii Contribution to Employees’ Family Pension Fund NIL NILIii Contribution to Employees’ Superannuation Fund NIL NIL

Total 57.79 55.47

(B) Defined Benefit Plans and Other Long Term Benefits:

General Description of Significant Defined Benefit Plans:

Gratuity Plan:

Gratuity is payable to all eligible employees of the Company as per the provisions of the Payment of Gratuity Act, 1972. Gratuity is payable on resignation/retirement of the employee who has completed five years of continuous service.

Leave encashment:

All eligible employees can carry forward and accumulate leave upto maximum of 75 days. Encashment is allowed on Basic Salary for a minimum of 15 days and a maximum of 30 days at a time. However, encashment is subject to maintaining a minimum balance of 20 days at any given point of time.



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(i) Changes in the Present Value of Obligation

(` in lakhs)Sr. No.

particulars For the year Ended March 31, 2013

For the year Ended March 31, 2012

gratuity Leave Encashment


Present Value of Obligation as at April 1, 2012 (Opening)

247.06 84.71 131.88 85.70

Interest Cost 19.76 6.78 10.55 6.86Past Service Cost NIL NIL NIL NILCurrent Service Cost 26.42 13.61 47.35 26.95Curtailment Cost/ (Credit) NIL NIL NIL NILSettlement Cost/(Credit) NIL NIL NIL NILBenefits paid 0.68 12.01 5.90 19.35Actuarial (Gain)/Loss (77.34) (36.72) 63.18 (15.45)Present Value of Obligation as at March 31, 2013

215.22 56.37 247.06 84.71

(ii) Expenses recognised in the Statement of Profit and Loss

(` In lakhs)Sr. No.

particulars For the year Ended March 31, 2013

For the year Ended March 31, 2012



Current Service Cost 26.42 13.61 47.35 26.95Past Service Cost NIL NIL NIL NILInterest cost 19.76 6.78 10.55 6.86Curtailment Cost/ (Credit) NIL NIL NIL NILSettlement Cost/ (Credit) NIL NIL NIL NILNet Actuarial (Gain)/ Loss (77.34) (36.72) 63.18 (15.45)Employees’ Contribution NIL NIL NIL NILTotal Expenses recognised in Statement of Profit and Loss

(31.15) (16.33) 121.08 18.36

(iii) Following are the Principal Actuarial Assumptions used as at the balance sheet date:

Sr.No.

particulars 2012-13gratuity and Leave

Encashment

2011-12gratuity and Leave

Encashmenta Discount Rate 8.00% 8.00%b Salary Escalation Rate 8.00% 12.00%c Staff Turnover Rate 10% to 2% p.a. age related on

graduated scale10% to 2% p.a. age related

on graduated scaled 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.


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(iv) Experience adjustments (` In lakhs)

Experiences 2009 2010 2011 2012 2013Defined Benefit Obligation at the end of the period

58.74 87.28 131.88 247.06 215.22

Plan Assets N A N A N A N A N ASurplus / (Deficit) N A N A N A N A N AExperience adjustments of Obligation [Gain/ (Loss)]

(3.51) 37.86 1.24 (63.18) 77.34

Experience adjustments on Plan Assets

N A N A N A N A N A

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 Consolidation Financial Statements. The same are therefore not disclosed for standalone Financial Statements.

4.5 Related party Disclosures (as per Accounting Standard (AS) 18 “Related party Disclosures’- As per Annexure ‘A’

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 Private Limited (India) 5 Mercator FPSO Private Limited (India) 6 Mercator Offshore Holdings Pte Ltd. (MOHPL) (Singapore) 7 Mercator Offshore (P) Pte Ltd. (Singapore) 8 Oorja Holdings Pte. Ltd. (OHPL) (Singapore) 9 Mercator Lines (Singapore) Ltd. (MLS) (Singapore) 10 Mercator Offshore Ltd. (Singapore) 11 Ivorene Oil Services Nigeria Ltd. (Singapore)

12 Varsha Marine Pte. Ltd. (Singapore) - Liquidated during the year with effect from Jan 11, 2013 13 Vidya Marine Pte. Ltd. (Singapore) - Liquidated during the year with effect from Jan 11, 2013 14 Mercator Lines (Panama) Inc15 Chitra Prem Pte. Ltd. (Singapore)16 Target Ship Management Pte. Ltd. (Singapore) - Ceased to be subsidiary from March 15, 2013 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 Borneo24 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)



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29 PT Mincon Indo Resources (Jakarta)30 Bima Gema Permata PT (Jakarta)31 Nuansa Sakti Kencana PT (Jakarta)32 Varsha Vidya Inc (Panama)

II Key Management personnel

1 H.K Mittal2 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 Mercator Healthcare 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 Zicom Electronic Security Systems Limited 3 Vaitarna Marine Infrastructure Private Limited 4 Rishi Holding Private Limited

V Relative of Key Management personnel

1 Adip Mittal

b Details of Transactions with above parties 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 yrServices Rendered 1,671.48 1,145.76 - - - - 1,671.48 1,145.76Interest Income 284.16 1,638.94 - - 342.10 24.08 626.25 1,663.01Interest Expense - - - - 4.15 - 4.15 -Services Received 3,955.60 654.85 - - 475.52 30.60 4,431.13 685.45Reimbursments of Expenses paid 14.40 932.40 4.26 30.97 - 3.24 18.66 966.61Reimbursments of Expenses Received 565.92 1,105.16 3.32 134.03 - 1.74 569.24 1,240.93Finance providedLoansLoans Given during the Year 29,322.65 5,093.34 - - - - 29,322.65 5,093.34

Loans Repaid During the Year 21,962.89 45,691.93 - - - - 21,962.89 45,691.93

Inter Corporate DepositsInter Corporate Deposits given during the year

- - - - 3,725.00 1,850.00 3,725.00 1,850.00

Inter Corporate Deposits received during the year

- - - - 350.00 157.50 350.00 157.50

Inter Corporate Deposits repaid during the year

- - - - 350.00 157.50 350.00 157.50

AdvancesAdvances Given During the Year - - - - 13.00 20.38 13.00 20.38


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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 yrguarantees and Comfort LettersGuarantees Given 436.50 1,01,114.75 - - - - 436.50 1,01,114.75Outstanding as on 31.03.2013Comfort Letter 5,139.79 6,906.13 - - - - 5,139.79 6,906.13Guarantees 1,00,304.37 1,01,576.94 - - - - 1,00,304.37 1,01,576.94Outstanding balances as on 31.03.2013Loans ,Advances and ReceivablesLoans Advances and ReceivablesLoans 16,004.80 17,892.61 - - - - 16,004.80 17,892.61Advances 171.24 - - - 336.13 338.74 507.37 338.74Capital Advances - - - - 4,199.96 4,199.96 4,199.96 4,199.96Receivables 45.05 190.08 - - - - 45.05 190.08Outstanding balances of Sundry Debtors andSundry Creditors as on 31.03.2013Trade & Other Receivables 22.13 763.90 - - 1,260.67 924.36 1,282.80 1,688.26Trade & Other Payables 1,644.99 669.34 - 19.62 17.59 - 1,662.58 688.96Advance Received From Customers 94.50 - - - - - 94.50 -Advance received for sale of vessel 49,029.01 - - - - - 49,029.01 -Inter Corporate DepositBalance as on 31.03.2013 - - - - 5,575.00 1,850.00 5,575.00 1,850.00DepositBalance as on 31.03.2013 - - - - 515.00 515.00 515.00 515.00Remuneration paid to Key Management Personnel

96.00 96.00

Remuneration paid to Relative of Key Management Personnel

16.82 16.64

partywise details of material transactions

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 637.68 1,145.76 - - - - 637.68 1,145.76MCS Holdings Pte Ltd 1,030.10 - - - - - 1,030.10 -

Total 1,667.78 1,145.76 - - - - 1,667.78 1,145.76Interest IncomeMercator International Pte Limited 177.03 623.90 - - - - 177.03 623.90Oorja Resources India Private Ltd 86.46 - - - - - 86.46 -Mercator Offshore (P) Pte. Ltd. - 984.17 - - - - - 984.17MLL Logistics Private Limited - - - - 342.10 24.08 342.10 24.08

Total 263.49 1,608.06 - - 342.10 24.08 605.59 1,632.14Interest ExpensesZicom Electronic Security Systems Ltd - - - - 4.15 - 4.15 -

Total - - - - 4.15 - 4.15 -



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Total


Services ReceivedMercator International Pte Limited 3,955.60 654.85 - - - - 3,955.60 654.85Vaitarna Marine Infrastructure Private Limited - - - - 462.53 30.60 462.53 30.60

Total 3,955.60 654.85 - - 462.53 30.60 4,418.14 685.45Reimbursments of Expenses paidAnkur Fertilizers Private Limited - - 4.26 7.60 - 4.26 7.60MLL Logistics Private Limited - - - - - 3.24 - 3.24Mercator Lines ( Singapore) Limited 13.91 932.40 - - - - 13.91 932.40OMCI Ship Management Private Limited - - - 23.37 - - - 23.37

Total 13.91 932.40 4.26 30.97 - 3.24 18.17 966.61Reimbursments of Expenses ReceivedMercator Lines ( Singapore) Limited 72.56 - - - - - 72.56 -Ankur Fertilizers Private Limited - - 3.32 - - - 3.32 -MCS Holdings Pte Ltd 287.22 - - - - - 287.22 -Mercator FPSO Private Limited - 196.76 - - - - - 196.76Mercator Oil & Gas Limited 115.30 - - - - - 115.30 -Mercator Offshore (P) Pte. Ltd. 75.74 636.00 - - - - 75.74 636.00Vaitarna Marine Infrastructure Private Limited - - - - - 1.74 - 1.74OMCI Ship Management Private Limited - - - 129.43 - - - 129.43

Total 550.82 832.76 3.32 129.43 - 1.74 554.15 963.92Finance providedLoansLoans given during the yearMercator International Pte Limited 22,329.24 - - - - - 22,329.24 -Mercator Petroleum Limited - 1,769.40 - - - - - 1,769.40Mercator Offshore (P) Pte. Ltd. - 893.90 - - - - - 893.90Mercator Oil & Gas Limited 5,640.00 1,203.70 - - - - 5,640.00 1,203.70Oorja Resources India Private Ltd. - 1,000.00 - - - - - 1,000.00

Total 27,969.24 4,866.99 - - - - 27,969.24 4,866.99Loans Repaid During the yearMercator International Pte Limited 15,157.43 21,220.63 - - - - 15,157.43 21,220.63Mercator Oil & Gas Limited 5,140.00 - - - - - 5,140.00 -Mercator Offshore (P) Pte. Ltd. - 23,055.03 - - - - - 23,055.03

Total 20,297.43 44,275.66 - - - - 20,297.43 44,275.66Inter Corporate DepositsInter Corporate Deposits given during the yearMLL Logistics Private Limited - - - - 3,725.00 1,850.00 3,725.00 1,850.00

Total - - - - 3,725.00 1,850.00 3,725.00 1,850.00Inter Corporate Deposits received during the yearZicom Electronic Security Systems Ltd - - - - 350.00 157.50 350.00 157.50

Total - - - - 350.00 157.50 350.00 157.50Inter Corporate Deposits repaid during the yearZicom Electronic Security Systems Ltd - - - - 350.00 157.50 350.00 157.50

Total - - - - 350.00 157.50 350.00 157.50


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Total


AdvancesAdvances given During the yearMLL Logistics Private Limited - - - - 13.00 5.00 13.00 5.00Vaitarna Marine Infrastructure Private Limited - - - - - 15.38 - 15.38

Total - - - - 13.00 20.38 13.00 20.38Advance received against Sale of Fixed AssetMercator Offshore Holdings Pte. Ltd 49,029.01 - - - - - 49,029.01 -

Total 49,029.01 - - - - - 49,029.01 -guarantees and Comfort Lettersguarantees givenMercator Oil and Gas Limited - 24,380.00 - - - - - 24,380.00Mercator Petroleum Limited 436.50 - - - - - 436.50 -Mercator Offshore (P) Pte. Ltd. - 76,734.75 - - - - - 76,734.75

Total 436.50 1,01,114.75 - - - - 436.50 1,01,114.75Outstanding as on 31.03.2013Comfort LetterMercator Lines ( Singapore) Limited 5,139.79 6,906.13 - - - - 5,139.79 6,906.13

Total 5,139.79 6,906.13 - - - - 5,139.79 6,906.13guaranteesMercator Offshore (P) Pte. Ltd. 67,565.11 72,424.81 - - - - 67,565.11 72,424.81Mercator Petroleum Limited 13,702.05 12,533.12 - - - - 13,702.05 12,533.12Mercator Oil and Gas Limited 12,211.72 - - - - - 12,211.72 -

Total 93,478.87 84,957.94 - - - - 93,478.87 84,957.94Outstanding balances as on 31.03.2013Loans Advances and ReceivablesLoansMercator International Pte Limited 12,237.59 14,576.62 - - - - 12,237.59 14,576.62Mercator Petroleum Limited 2,465.85 2,052.14 - - - - 2,465.85 2,052.14

Total 14,703.44 16,628.75 - - - - 14,703.44 16,628.75AdvancesMLL Logistics Pvt Ltd - - - - 336.13 323.13 336.13 323.13MCS Holdings Pte Ltd 171.24 - - - - - 171.24 -

Total 171.24 - - - 336.13 323.13 507.37 323.13Capital AdvancesVaitarna Marine Infrastructure Pvt Ltd - - - - 4,199.96 4,199.96 4,199.96 4,199.96

Total - - - - 4,199.96 4,199.96 4,199.96 4,199.96ReceivablesMercator Lines ( Singapore) Limited 45.05 190.08 - - - - 45.05 190.08

Total 45.05 190.08 - - - - 45.05 190.08Outstanding balances of Trade andOther Receivables & payables as on 31.03.2013Trade and Other Receivables



Corporate overview

Statutory reportS

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78 79







Total


Mercator Lines ( Singapore) Limited 22.13 763.90 - - - - 22.13 763.90MLL Logistics Private Limited - - - - 1,260.67 924.36 1,260.67 924.36

Total 22.13 763.90 - - 1,260.67 924.36 1,282.80 1,688.26Trade and Other payablesMercator Lines ( Singapore) Limited 1,022.71 669.34 - - - - 1,022.71 669.34Mercator International Pte Limited 622.28 - - - - - 622.28 -OMCI Ship Management Pvt Limited - - - 19.62 - - - 19.62Vaitarna Marine Infrastructure Pvt Ltd - - - - 13.44 - 13.44 -Zicom Electronic Security Systems Ltd - - - - 4.15 - 4.15 -

Total 1,644.99 669.34 - 19.62 17.59 - 1,662.58 688.96Advance Received From CustomersMercator Lines ( Singapore) Limited 94.50 - - - - - 94.50 -

Total 94.50 - - - - - 94.50 -Inter Corporate Depositbalance as on 31.03.2013MLL Logistics Private Limited - - - - 5,575.00 1,850.00 5,575.00 1,850.00

Total - - - - 5,575.00 1,850.00 5,575.00 1,850.00Depositbalance as on 31.03.2013MLL Logistics Private Limited - - - - 500.00 500.00 500.00 500.00

Total - - - - 500.00 500.00 500.00 500.00Remuneration paid to Key Management personnel 96.00 96.00Remuneration paid to Relative of Key Management personnel

16.82 16.64

4.6 Disclosure in respect of Leases as per AS 19:

(A) In respect of Operating Leases (as Lessee): (` In lakhs)



(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 407.20 389.36(ii) Significant leasing arrangements The Company has given refundable interest free security deposits

under the agreements. The lease agreements are upto 48 to 60 months. These agreements also provide for periodical increase in rent. During the year one of the lease agreements was renewed for 48

months and the non cancellable period by both the parties is 12 months.

(iii) Future minimum lease payments under non-cancellable agreements

Not later than one year 165.88 348.34 Later than one year and not later than five years NIL 159.66


80 81




Later than five years NIL NIL

(b) In respect of Operating Leases (as Lessor):

(` In lakhs)year Ended

March 31, 2013year Ended

March 31, 2012(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

Loss12.56 93.68

(ii) Significant leasing arrangements - The new lease agreements are for a period of 36 months.

(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



Net Profit after Tax - Basic and Diluted (` In lakhs) (21,744.38) (11,866.90)Number of Shares used in computing Earning Per Share- Basic and Diluted 2,44,892,073 2,44,892,073Earning per share (equity shares of face value ` 1/-)- Basic and Diluted (in `) (8.88) (4.85)

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.



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80 81


(b) 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, 2013 March 31, 2013 March 31, 2012 March 31, 2012USD/INR 38.18 1,933.40 39.49 2,000.00USD/INR 21.41 966.70 22.14 1,000.00USD/INR 21.45 966.70 22.19 1,000.00

(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:

2012-13 2011-12` lakhs Fx.million ` lakhs Fx.million

Trade Receivables 2,764.34 USD 5.08 2,469.88 USD 4.65Balances with bank 617.40 USD 1.14 170.64 USD 0.33Fixed Deposit with foreign banks NIL NIL 98.41 USD 0.19Loan & Advances 12,762.25 USD 23.60 14,773.46 USD 28.91Advance from Customers 94.50 USD 0.67

SGD 0.63NIL NIL

Accounts Payable/Acceptances(including capital commitments made but not provided for)

1,964.02 USD 3.61AED 0.01JPY 1.82

SGD 0.12

2,344.62 USD4.45EURO 0.03

SGD 0.03JPY 2.78AED 0.13

Borrowings 21,253.71 USD 39.08 28,968.90 USD 56.63

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 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 12,237.59 14,576.62Maximum amount outstanding during the year. 14,576.62 36,838.27Mercator Oil & Gas LimitedBalance outstanding at year end 631.42 NILMaximum amount outstanding during the year. 5,613.70 1,332.49Mercator Petroleum LimitedBalance outstanding at year end 2,465.85 2,052.14Maximum amount outstanding during the year. 2,465.85 2,052.14Mercator FPSO Private Limited


82 83


Loans and Advances in nature of Loans given to subsidiaries Current year(` In lakhs)

previous year(` In lakhs)

Balance outstanding at year end 198.48 196.46Maximum amount outstanding during the year. 198.48 196.46MCS Holdings Pte LimitedBalance outstanding at year end 171.24 NILMaximum amount outstanding during the year. 601.84 53.78Mercator Offshore Holding Pte. Ltd.Balance outstanding at year end NIL NILMaximum amount outstanding during the year 54.54 44.65Mercator Offshore (P) Pte. Ltd. Balance outstanding at year end 353.42 1.89Maximum amount outstanding during the year 455.73 2,178.28Oorja Resources India Private Limited Balance outstanding at year end 118.03 1,065.61Maximum amount outstanding during the year 1,585.93 1,065.61

The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated February 8, 2011 and February 21, 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.

6. All assets and liabilities are classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, 12 months has been considered by the Company for the purpose of current – noncurrent classification of assets and liabilities.

7. pREVIOuS yEAR FIguRES Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s

classification / disclosure.







Corporate overview

Statutory reportS

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82 83


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Corporate overview

Statutory reportS

BuSineSS review


84 85


Stat

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87


To the Board of Directors of

MercaTor LiMiTeD,

We have audited the attached consolidated balance sheet of Mercator Limited (formerly known as Mercator Lines Limited) (‘the Company’) and its subsidiaries (together referred to as ‘the Group’) as at March 31, 2013, the consolidated statement of profit and loss and the consolidated cash flow statement for the year ended on that date, annexed thereto, and a summary of significant accounting policies and other explanatory information.

ManageMenT’s responsiBiLiTy for The consoLiDaTeD financiaL sTaTeMenTsManagement is responsible for the preparation of these consolidated financial statements on the basis of separate financial statements and other financial information of the subsidiary companies that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Company in accordance with accounting principles generally accepted in India. This includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

auDiTor’s responsiBiLiTy Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for QuaLifieD opinionFor the purpose of consolidation, the unaudited financial statements of 7 (seven) subsidiaries have been considered by the management. We have solely relied on such financial statements as approved by the management of these subsidiaries where in the Group’s share of Net Assets of ` 1,73,887.53 lakhs as at March 31, 2013, Revenues of ` 59,274.79 lakhs and Loss for the year of ` 42,368.53 lakhs for the year ended on that date in the Consolidated Financial Statements. Accordingly, our assurance on the Statement in so far as it relates to the amounts included in respect of these subsidiaries is based solely on the reports of the management of these subsidiaries which have been furnished to us.

opinionIn our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act 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 consolidated balance sheet, of the state of affairs of the Mercator Group as at March 31, 2013;b. in the case of the consolidated statement of profit and loss, of the loss of the Mercator Group for the year ended on that date; andc. in the case of the consolidated cash flow statement, of the cash flows of the Mercator Group for the year ended on that date.

oTher MaTTerWe did not audit the financial statements of twenty two subsidiaries, whose financial statements, prepared under generally accepted accounting principles (‘GAAPs’) accepted in the respective countries, reflect in relation to the amounts considered in the consolidated financial statements, total assets (net) of ` 20,995.46 lakhs as at March 31, 2013, total revenues of ` 2,24,504.60 lakhs and net profit ` 14,073.92 of lakhs for the year ended on that date. These financial statements and other financial information have been audited by other auditors, who have submitted their audit opinions, prepared under generally accepted auditing standards of their respective countries, to the shareholders / Board of Directors of the respective companies, copies of which have been provided to us by the Company. The management of the Company has converted these audited financial statements of the Company’s subsidiaries to accounting principles generally accepted in India, for the purpose of preparation of the Company’s consolidated financial statements under accounting principles generally accepted in India. Our opinion, thus, insofar it relates to amounts included in respect of these subsidiaries, is based solely on the reports of the other auditors under the aforementioned GAAPs in respective countries and conversion undertaken by the management and examined by us on a test basis.

for and on behalf of contractor, nayak & Kishnadwala, Chartered Accountants Firm Registration No.: 101961Whimanshu Kishnadwala Partner Membership No.: 37391Place: Mumbai Dated: May 18, 2013

Independent Auditors’ Report on Consolidated Financial Statements

FinAnciAl stAtements

consolidated Financials

Corporate overview

Statutory reportS

BuSineSS review

88

Mercator Limited

(` in lakhs)

particulars note as at March 31, 2013

as at March 31, 2012

a eQuiTy anD LiaBiLiTies1 shareholder's funds

(a) Share capital 2.1 2,448.92 2,448.92(b) Reserves and surplus 2.2 2,17,175.99 2,47,101.12(c) Money received against share warrants 2.3 - 2,596.00

2,19,624.91 2,52,146.04 Minority interest 42,908.77 42,779.94

2,62,533.68 2,94,925.982 non – current liabilities

(a) Long-term borrowings 2.4 2,58,477.35 2,74,263.25(b) Other long term liabilities 2.5 784.08 5,007.94(c) Long-term provisions 2.6 428.89 398.59

2,59,690.32 2,79,669.783 current liabilities

(a) Short-term borrowings 2.7 45,497.23 34,424.05(b) Trade payables 50,283.88 26,360.18(c) Other current liabilities 2.8 64,578.84 72,870.95(d) Short-term provisions 2.9 3,832.46 45.89

1,64,192.41 1,33,701.07 Total 6,86,416.42 7,08,296.83

B asseTs1 non – current assets

(a) Fixed assets(i) Tangible assets 2.10 4,48,147.65 5,69,962.64(ii) Assets held for disposal 53,462.45 -(iii) Capital work in progress 3,587.96 3,129.17

5,05,198.06 5,73,091.81 Goodwill on consolidation 1,613.32 1,517.41(b) Non-current investments 2.11 2,958.68 2,897.99(c) Deferred tax asset 1,029.04 467.74 (d) Long-term loans and advances 2.12 21,070.23 13,871.45(e) Other non-current assets 2.13 2,760.22 2,977.09

5,34,629.55 5,94,823.492 current assets

(a) Current investments 2.11 545.84 1,173.81(b) Inventories 2.14 3,514.06 9,322.78(c) Trade receivables 2.15 65,711.66 50,875.34(d) Cash and bank balances 2.16 34,106.53 25,331.96(e) Short-term loans and advances 2.17 28,771.91 24,595.61(f) Other current assets 2.18 19,136.88 2,173.83

1,51,786.88 1,13,473.33 Total 6,86,416.42 7,08,296.83

significant accounting policies 1 notes forming part of the financial statements 2 to 6

Consolidated Balance Sheet as at March 31, 2013

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 K. r. Bharat Partner Director Director



89


(` in lakhs)

particularsnote

year ended March 31, 2013

year ended March 31, 2012

incoMe

(a) Revenue from operations 2.19 3,73,335.38 3,69,990.76

(b) Other income 2.20 2,570.85 6,512.60

1 Total revenue 3,75,906.23 3,76,503.36

eXpenses:

(a) Operating expenses 2.21 3,07,221.64 2,99,780.02

(b) Employee benefit expenses 2.22 5,764.97 4,772.61

(c) Finance cost 2.23 24,503.81 21,294.71

(d) Depreciation and amortisation expenses 44,748.22 38,241.08

(e) Impairment of assets 8,791.15 -

(f) Other expenses 2.24 17,166.50 7,177.91

2 Total expenses 4,08,196.29 3,71,266.33

3 profit/(Loss) before exceptional items and taxes (1 - 2) (32,290.06) 5,237.03

4 Less: exceptional items 15,639.59 -

5 profit/(Loss) before taxes (3 - 4) (47,929.65) 5,237.03

6 Tax expense:

(a) Current tax (1,860.02) (2,495.26)

(b) Short provision of tax for earlier years 0.01 –

(c) Deferred Tax 542.22 271.75

Profit/(Loss) for the year before adjustment for Minority Interest

(49,247.44) 3,013.52

Less: share of profit / loss transferred to Minority Interest

12,038.78 (957.89)

profit/(Loss) for the period (37,208.66) 2,055.63

earnings per share (equity share of ` 1/ – each)

Basic and Diluted (In `) 4.7 (15.19) 0.84

significant accounting policies 1

notes forming part of the financial statements 2 to 6

Consolidated Statement of Profit and Loss for the year ended March 31, 2013







Corporate overview

Statutory reportS

BuSineSS review

90

Mercator Limited

(` in lakhs)

particulars March 31, 2013 March 31, 2012a cash fLow froM operaTing acTiViTies

Net Profit / (Loss) Before Tax (47,929.65) 5,237.03 Adjustment for: Depreciation 44,748.22 38,241.08 Impairment of assets 8,791.15 - Provision for doubtful debts/advances 3,137.69 - Gain on derivative transactions (239.63) (13.81) Interest paid 24,503.81 21,294.71 (Profit)/Loss on fixed assets sold (net) 7,413.61 30.97 (Profit)/Loss on sale of investments (net) (68.59) (287.62) Interest income (559.21) (962.94) Dividend income (87.40) (0.48) Bad Debts and other amounts written off/(back) 450.33 1,725.47 Adjustment for foreign exchange currency translation (11,108.06) (6,020.22) Adjustments for exchange fluctuation (555.57) 954.03 operating profit before working capital changes 28,496.70 60,198.22 Adjustment for: Decrease/(Increase) in Long-term loans and advances (2,353.52) (4,679.94) Decrease/(Increase) in Other non current assets 233.81 (233.81) Decrease/(Increase) in Inventories 5,808.72 (3,051.07) Decrease/(Increase) in Short-term loans and advances 1,179.37 3,142.93 Decrease/(Increase) in Other current assets (16,903.91) (2,148.10) Decrease/(Increase) in Trade Receivables (16,555.85) (13,162.16) (Decrease)/Increase in Other long term liabilities (287.91) 336.46 (Decrease)/Increase in Long term provisions 30.30 152.68 (Decrease)/Increase in Trade Payables 23,926.63 5,484.01 (Decrease)/Increase in Other current liabilities (1,144.24) 1,711.13 (Decrease)/Increase in Short term provisions 3,786.57 11.27 net cash from operating activities 26,216.68 47,761.62 Direct Taxes Paid (6,383.04) (2,630.28) Total cash from / (used in) operating activites 19,833.64 45,131.34

B cash fLow froM inVesTing acTiViTies Acqusition of Fixed Assets including Capital Work in Progress (7,453.53) (27,448.40) Sale of Fixed Assets 48,679.35 121.57 Net inflow on account of acquisition of subsidiaries - 168.03 (Increase) / Decrease in Short-term loans and advances (13.00) 16.94 (Increase) / Decrease in Capital Advances (399.21) (196.46) (Increase) / Decrease in Current Intercorporate deposits (3,955.52) (2,431.12) (Purchase)/sale of Investment 635.87 (938.76) Investment in fixed deposits 563.48 30,187.58 Interest Income 497.06 1,880.80 Dividend Income 87.40 0.48 net cash from investing activities 38,641.90 1,360.66

Consolidated Cash Flow Statement for the year ended March 31, 2013

91


particulars March 31, 2013 March 31, 2012c cash fLow froM financing acTiViTies

Proceeds from Long term Borrowings (38,899.44) 12,857.14 Proceeds from Short term Borrowings 11,073.18 (50,821.98) Proceeds from issue of shares to minority shareholders 3,586.90 - Interest paid (25,104.87) (21,586.53) Gain on derivative transaction 239.63 13.81 net cash from financing activities (49,104.60) (59,537.56) net increase / (Decrease) in cash and cash equivalents (a + B + c) 9,370.93 (13,045.56) Cash and Cash Equivalents as at beginning of the year (Refer Note 2.16) 22,111.96 35,038.36 Add: Unrealised Foreign Exchange Fluctuation on cash and cash equivalents

10.35 119.19

Cash and Cash Equivalents as at end of the year (Refer Note 2.16) 31,493.24 22,111.96 cash and cash equivalents comprise of: Cash and Bank Balances ( Refer Note 2.16) 31,493.24 22,111.96

Notes:1) Figures in bracket represent outflows.

2) Cash and cash equivalents include Unclaimed dividend accounts of ` 51.24 lakhs (P.Y. ` 68.06 lakhs) which are not available for use by the Company.

3) Previous Year's figures have been regrouped wherever necessary to confirm to the current year's classification.





Consolidated Cash Flow Statement for the year ended March 31, 2013

(` in lakhs)



Corporate overview

Statutory reportS

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92

Mercator Limited

Notes forming part of the consolidated financial statements

significanT accounTing poLicies anD noTes forMing parT of The consoLiDaTeD financiaL sTaTeMenTs for year enDeD March 31, 2013

corporaTe inforMaTionMercator Limited was incorporated on November 24, 1983 as private limited company with name as Mercator Lines Private Limited. It was converted into limited company vide ROC approval dated April 12, 1984. The name was changed to Mercator Limited vide ROC approval dated November 22, 2011.

The Consolidated Financial Statements relate to Mercator Limited (the Company) and its subsidiary companies. The Company and its subsidiaries constitute the Group. The group has diversified business verticals viz. Shipping (tankers and dry bulkers), Dredging, Oil and Gas (EPCIC and E & P), Coal (Mining, Procurement and Logistics).

1. significanT accounTing poLicies

1.1 Basis of preparation

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 March 31, 2013.

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.

1.2 use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a going basis. Any revision to accounting estimates is recognised prospectively in the current and future periods.

1.3 principles of consolidation

The consolidated financial statements include the financial statements of Mercator Limited (the Company), the parent company and all of its subsidiaries (collectively referred to as the group), in which the Company has more than one-half of the voting power of an enterprise or where the Company controls the composition of the board of directors.

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, 2013



Mercator International Pte. Ltd. Singapore 100 100

Mercator Oil & Gas Ltd. India 100 100

Mercator Petroleum Ltd. India 100 89

Mercator FPSO Pvt. Ltd. India 100 100

Oorja Resources India Pvt. Ltd. India 100 100

Mercator Offshore Holdings Pte. Ltd. Singapore 100 100

Mercator Offshore (P) Pte Ltd. Singapore 100 100

Oorja Holdings Pte. Ltd. Singapore 100 100

Mercator Lines (Singapore) Ltd. Singapore 68.44 71.95

Mercator Offshore Ltd. Singapore 100 100


93





Corporate overview

Statutory reportS

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name of the subsidiary company country of incorporation





Varsha Marine Pte. Ltd. Singapore - 100

Vidya Marine Pte. Ltd. Singapore - 100

Mercator Lines (Panama) Inc Panama 100 100

Oorja 1 Pte. Ltd. Singapore 100 100



Oorja Mozambique 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 100 100

Broadtec Mozambique Minas, Lda Mozambique 85 85

PT Mincon Indo Resources Indonesia 100 100

Target Ship Management Pte. Ltd. Singapore - 100

Chitra Prem Pte. Ltd. Singapore 100 100

Vidya Varsha Inc. Panama 100 100

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 50

P.T. Indo Perkasa Indonesia 51 51

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.

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1.4 Tangible fixed assets and depreciation

a) Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes cost of acquisition or construction including attributable borrowing cost, duties and other incidental expenses related to the acquisition of the asset.

b) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign currency loans relating to acquisition of depreciable assets are, following option given by notification of Ministry of Corporate Affairs (MCA) dated March 31, 2009/December 29, 2011, adjusted to carrying cost of the respective fixed assets.

c) 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.

d) 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.

e) Depreciation on additions/disposals during the year is provided on pro-rata basis.

f) Depreciation on assets acquired under lease is spread over the lease period.

g) 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.

h) Dry docking expenses, comprising cost of materials and services deployed during the dry docking, are capitalised and depreciated over the period to the next scheduled dry docking, which approximates 2.5 years. If the vessel is disposed before the next dry docking, the carrying amount of dry docking expenses is included in determining the gain or loss on disposal of the vessel and taken to profit or loss. If the period to the next dry docking is shorter than expected, the unamortised balance of the deferred dry docking cost is charged immediately as an expense before the next dry docking.

1.5 goodwill

Goodwill arising on the acquisition of subsidiaries is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

1.6 impairment of assets

The carrying amounts of all assets/CGU are reviewed at each balance sheet date. If there is any indication of impairment based on internal/external factors, where they are recorded in excess of their recoverable amounts, and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use determined asset wise. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions are identified, and appropriate valuation model is used.

1.7 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.

1.8 exploration and evaluation expenditure

Exploration Asset - Exploration activity involves the search for mineral resources, the determination of technical feasibility and the assessment of the commercial viability of an identified resource. Exploration expenditure are capitalised in respect of each area of interest for which the rights to tenure are current and where:

• Theexplorationexpendituresareexpectedtoberecoupedthroughsuccessfuldevelopmentandexploitationofthe area of interest; or

• Explorationactivitiesintheareaofinteresthavenotreachedastagewhichpermitsareasonableassessmentof the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the areas of interest are continuing.

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Exploration asset is reviewed at each reporting date as to whether an indication of impairment exists. If any such indication exists, the recoverable amount of the exploration asset is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable and where a decision is made to proceed with development, the exploration asset attributable to that area of interest are first tested for impairment and then reclassified to mining property within property, plant and equipment.

1.9 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 and 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.

1.10 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.

1.11 investments

a) Investments are classified into long-term and current investments.

b) Investments which are readily realisable and intended to be held for not more than 12 months are classified as current investments. All other investments are classified as long term investments.

c) 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.

d) Current Investments are stated at cost of acquisition including incidental / related expenses or at fair value as at March 31, 2013, whichever is less and the resultant decline, if any, is charged to revenue.

1.12 incomplete Voyages

Incomplete voyages represent freight received and direct operating expenses on voyages which are not complete as at the balance sheet date.

1.13 Borrowing costs

Borrowing costs include interest, ancillary costs, incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are directly attributable to the acquisition/construction of the qualifying assets are capitalised as part of the cost of the asset, up to the date of acquisition/completion of construction. All other borrowing costs are expenses in the period they occur.

1.14 revenue recognition

a) Income on account of freight 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.

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c) Income from charter hire and demurrage earnings is recognised on accrual basis as per the terms of agreement.

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) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

g) Claims including insurance claims are accounted when there is a reasonable certainty of the realisability of the claim amount.

h) Revenue from coal mining and trading is recognised on transfer of risk, reward and ownership of the goods, and is recorded net of returns, trade allowance, and government duties.

i) In case of a subsidiary, revenue from long-term construction contracts is recognised at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs.

1.15 foreign exchange Transactions

a) Monetary transactions in foreign currency are recorded at standard exchange rates determined monthly.

b) Monetary items denominated in foreign currency outstanding at the end of the year are valued at the rates prevalent on that date.

c) Exchange differences arising on translation of Long Term Foreign Currency Monetary (LTFCM) items are, following option given by notification of MCA dated March 31, 2009/December 29, 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 March 31, 2020, whichever is earlier.

d) Differences in translation of other monetary items and realised gains and losses on foreign currency transactions are recognised in the statement of profit and loss.

e) Exchange difference arising on translation of long term foreign currency loans given to entities classified as non integral foreign operations is accumulated in Foreign Currency Fluctuation Reserve. On disposal of investment, the balance in the said reserve is transferred to the statement of profit and loss.

1.16 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.

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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.

1.17 Lease accounting

a) Leases where the lessor effectively retains substantially all the risks and benefits of the ownership of the lease term are classified as operating lease.

b) 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.

c) 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.

d) 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 and 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.

1.18 earning per share:

The basic earnings per share is computed by dividing the net profit after tax for year by weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit after tax for the year and weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.19 provision for Taxation :

a) Provision for current income tax is made on the basis of the assessable income under the Income tax Act, 1961. Income from shipping activities is assessed on the basis of deemed tonnage income of the Company under section 115VG(3) of Chapter XII-G of the Income Tax Act, 1961.

b) In respect of subsidiary companies, provision for taxation is made as per the applicable local laws of the respective countries.

c) Deferred income tax is recognised on timing differences, between taxable income and accounting income which originate in one period and are capable of reversal in one or more subsequent periods only in respect of the non shipping activities of the Company. The tax effect is calculated on the accumulated timing differences at the year end based on tax rates and laws, enacted or substantially enacted as of the balance sheet date.

d) Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period.

1.20 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.

1.21 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).

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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).

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 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.

1.22 cash and cash equivalents

Cash and cash equivalents for the purpose of the cash flow statement comprise cash in hand and at bank in current and foreign currency accounts. Term deposits having maturities of three months or less are considered as cash equivalents.

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2.1 share capital(` in lakhs)

particulars as at March 31, 2013


authorised 35,00,00,000 Equity shares of ` 1/- par value. 3,500.00 3,500.00 2,00,00,000 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 fully paid up 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

reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period

equity sharesparticulars as at

March 31, 2013as at

March 31, 2012Number of shares at the beginning 24,48,92,073 24,48,92,073 Add: Shares issued during the year - - Number of shares at the end 24,48,92,073 24,48,92,073

Terms/rights attached to equity shares

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.

For the period of five years immediately preceding the date as at which the balance sheet is prepared:

(i) No shares were allotted pursuant to contracts without payment being received in cash.

(ii) No bonus shares were issued.

(iii) No shares were bought back.

Details of shareholders holding more than 5% equity shares in the Company:

name of the shareholder as at March 31,2013 as at March 31,2012Equity shares of ` 1 each fully paid no of shares % of holding no of shares % of holdingH. K. Mittal 4,66,54,200 19.05 4,66,54,200 19.05Archana Mittal 2,63,27,400 10.75 2,63,27,400 10.75AHM Investments Private Limited 1,84,06,250 7.52 1,84,06,250 7.52Lotus Global Investments Limited 1,42,29,669 5.81 1,42,29,669 5.81

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2.2 reserves and surplus(` in lakhs)



capital reserve As per last Financial Statements 1,693.49 1,693.49 Add: Transfer from Share Warrant Application money on forfeiture of Warrants during the year

2,596.00 -

4,289.49 1,693.49 capital redempetion reserve As per last Financial Statements 4,000.00 4,000.00

securities premium account As per last Financial Statements 36,374.92 36,456.57 Less: Premium on redemption of Unsecured debentures - (81.65)

36,374.92 36,374.92 Tonnage Tax reserve (utilised) As per last Financial Statements 17,524.83 17,524.83

Debenture redemption reserve As per last Financial Statements 25,562.50 21,332.50 Add/(Less):Transferred to/from General Reserve (15,312.50) 4,230.00

10,250.00 25,562.50general reserve As per last Financial Statements 9,164.33 13,394.33 Add/(Less) : Transferred from/to Debenture Redemption Reserve 15,312.50 (4,230.00)

24,476.83 9,164.33capital reserve on consolidation 68,532.65 69,625.88 foreign exchange currency Translation reserve 17,787.86 10,787.30 foreign exchange fluctuation reserve As per last Financial Statements 1,004.51 1,235.60 Add/Less: Exchange fluctuation on Long Term Loans in relation to non integral foreign operations (Net)

342.55 5,955.91

Add/Less: Transfer to Statement of Profit and Loss on repayment of Long Term Loans in relation to non integral foreign operations

(1,374.55) (6,187.00)

(27.49) 1,004.51foreign currency Monetary item Translation Difference account (refer note 4.3)

- -

As per last Financial Statements 103.88 -Add/Less: For the year 103.88 -

hedging reserve As per last Financial Statements (498.35) - Add/Less: For the year (291.69) (498.35)

(790.04) (498.35)surplus As per last Financial Statements 71,861.72 69,806.09 Net Profit/(Loss) after tax transferred from Statement of Profit and Loss

(37,208.66) 2,055.63

34,653.06 71,861.722,17,175.99 2,47,101.12

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2.3 Money received against share warrants(` in lakhs)



warrants against share capital 1,88,80,000 warrants of face value of ` 13.75 each - 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, options for conversion of 89,00,000 warrants was excercised during the year 2010-11, 1,67,70,000 warrants lapsed on May 8, 2012 and 21,10,000 warrants lapsed on May 12, 2012 for non exercise of option.

- 2,596.00

2.4 Long term borrowings(` in lakhs)



secured(A) Debentures 40,000.00 45,000.00(B) Foreign Currency Loans 1,98,595.37 1,92,352.79(C) Term loans from banks 19,881.98 36,910.46

2,58,477.35 2,74,263.25

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 property.

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 exclusive charge on specified mining assets

(iv) Corporate guarantees

(v) Personal guarantees

(vi) Charge on loan provided to subsidiary

(vii) Assigment of contract(s); earnings; insurance

(viii) Charge on shares; deposits & accounts

c) External Commercial Borrowings referred in (B) above are secured by exclusive charge on specified vessels of the Company of which ` 2,651.48 lakhs (P.Y. ` 2,557.83 lakhs) additionally 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 ` 13,050.45 lakhs (P.Y. ` 13,500 lakhs) additionally secured by charge on loan extended to subsidiary as well as charge on cash flows of specified vessels.

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Terms of repayment and interest are as follows:

Loan from roi* Balance installments as on

31.03.2013

year of maturity

f.y. ending

amount outstanding

amount outstanding

31.03.2013 31.03.2012Debentures - - 2013 - 1,125.00 Debentures 9.50% 2 2015 16,000.00 25,000.00 Debentures 9.50% 1 2015 10,000.00 10,000.00 Debentures 12.40% 3 2019 15,000.00 15,000.00 Indian Banks - - 2016 - 16,000.00 Indian Banks - - 2013 - 2,499.20 Indian Banks 12.65% 10 2018 7,733.60 8,000.00 Indian Banks - - 2013 - 7,500.00 Indian Banks - - 2013 - 1,249.60 Indian Banks 12.85% 10 2018 5,316.85 5,500.00 Indian Banks 6.76% 8 2017 10,307.86 12,117.95 Indian Banks 3.73% 6 2016 8,294.37 10,103.41 Indian Banks 5.31% 12 2019 2,651.48 2,557.83 Indian Banks Libor +4.25% 2 2015 7,591.69 7,140.38 Indian Banks Libor +6.0% 1 2018 7,914.44 - Indian Banks Libor +3.80% 40 2023 28,755.62 - Indian Banks Libor +4.30% 20 2017 10,605.91 10,231.20 Indian Banks Libor +6.0% 20 2019 10,155.60 - Indian Banks Libor +3.75% 20 2018 57,176.75 62,346.38 Indian Banks Libor +4.75% 11 2019 10,388.36 10,077.73 Indian Banks Libor +1.5% 10 2018 36,113.39 54,012.02 Foreign Banks Libor +2.50% 27 2020 21,438.78 21,605.71 Foreign Banks Libor +1.5% 4 2015 5,138.70 6,906.06 Foreign Banks Libor +2.25% 12 2016 3,244.61 4,230.75 Foreign Banks Libor +2.35% 21 2019 9,789.75 11,482.74 Foreign Banks Libor +2.25% 94 2021 15,797.70 16,029.91 Indian Banks 2.10% 1 2013 - 2,557.80 Indian Banks Libor+5.25% 1 2014 1,631.68 -

3,01,047.13 3,23,273.65 Less: Shown in current maturities of long term debt 42,569.78 49,010.40

Balance shown as above 2,58,477.35 2,74,263.25

* Applicable Rate of Interest as on 31.03.2013

2.5 other long term liabilities(` in lakhs)



Trade payable 48.55 80.68Acceptances - 4,189.72Others Due to Related Party - 255.78 Liability towards cash flow hedges 735.53 481.76

784.08 5,007.94

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2.6 Long term provisions(` in lakhs)



Provision for employee benefits Gratuity 387.79 335.06 Compensated absences 41.10 63.53

428.89 398.59

2.7 short term borrowings(` in lakhs)



secured Loans repayable on demand Working capital facilities from banks* 43,536.03 32,447.83 unsecured Working capital facilities from banks 1,961.20 1,976.22

45,497.23 34,424.05

note:* Working capital facilities from Banks are secured by 1st charge on all receivables and other current assets of the Company on pari-passu basis and second charge on specified vessels; and further by way of Corporate Guarantees, wherever applicable.

2.8 other current liabilities(` in lakhs)



Current maturities of long-term debt

1) Debentures (Refer Note 2.4 (a)) 1,000.00 6,125.00

2) Foreign Currency Loan (Refer Note 2.4 (b) & (c)) 38,093.45 27,044.06

3) Term loans from banks (Refer Note 2.4 (d)) 3,476.33 15,956.29

Interest accrued but not due on borrowings 2,132.76 2,745.66

Interest accrued and due on borrowings 87.12 104.43

Income received in advance 12,966.38 14,589.66

Unpaid dividend* 51.24 68.05

For Other liabilities

Salaries & wages payable 152.54 378.92

Statutory dues payables 898.96 601.18

Liability towards cash flow hedges 54.51 16.60

Advance from customer 166.60 0.17

Other payables** 5,498.95 5,240.93

64,578.84 72,870.95

* There is no amount, due and outstanding, to be credited to Investor Education and Protection Fund. ** Other payables include incomplete voyages (net off income) accrued but not due.

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2.10 fixed assets(Amount ` in lakhs)

particulars original cost Depreciation/amortisation net Book Value

net Book Value

as at april 1, 2012

Translation/ adjustment

addition for the

year

Deduction for the year


upto March 31, 2012

Translation /

adjustment

Depreciation for the year

impairment for the

year

adjustment in respect of assets

sold / Discarded / held for disposal

upto March 31, 2013



Tangible assets Land 262.55 2,735.34 720.97 - 3,718.86 42.15 2.55 44.74 - - 89.45 3,629.42 220.40 Road and Bridges 360.18 22.77 - - 382.94 169.83 10.58 58.35 - - 238.76 144.18 190.35 Office Premises (Refer Note 1 , 2)

586.56 15.31 161.46 0.09 763.25 293.57 9.77 51.97 - 0.08 355.23 408.01 292.99

Vessels (Refer Note 3) 6,93,541.75 35,520.00 3,933.67 1,60,197.77 5,72,797.65 1,33,914.98 841.22 44,112.01 8,118.00 47,487.52 1,39,498.68 4,33,298.97 5,59,626.77 Furniture and Fixtures (Refer Note 4)

629.47 19.90 51.12 - 700.50 385.87 5.63 26.41 - - 417.91 282.59 243.61

Vehicles (Refer Note 5) 868.92 39.92 65.54 18.61 955.77 447.65 17.95 155.58 - 17.19 604.00 351.77 421.27 Office Equipments 295.96 44.88 43.95 0.86 383.92 151.02 37.09 108.93 - 0.41 296.63 87.29 144.93 Computer Equipments 162.94 2.18 18.66 - 183.79 125.29 1.32 17.24 - - 143.85 39.93 37.65 Mines 8,198.77 (2,201.26) - - 5,997.51 - - - 492.05 - 492.05 5,505.45 8,198.77 Mining Equipments 1,621.85 2,234.17 1,999.36 - 5,855.39 1,035.96 65.31 172.99 181.10 - 1,455.36 4,400.03 585.90 grand Total 7,06,528.95 38,433.22 6,994.73 1,60,217.33 5,91,739.57 1,36,566.32 991.43 44,748.22 8,791.15 47,505.20 1,43,591.93 4,48,147.65 5,69,962.64

Note1) 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 ` 147.27 lakhs (P.Y. ` 136.96 /- lakhs) are given on operating Lease.3) Translation/Adjustments include exchange fluctation loss on Long term foreign currency Loans ` 1,404.72 lakhs (P.Y. ` 2,317.04 /- lakhs)4) Depreciation on furniture and fixtures for the year includes reversal of excess depreciation charged in earlier years.5) Vehicles having net book value of ` 103.69 lakhs (P.Y. ` 135.84 lakhs) are on finance lease.

particulars original cost Depreciation/amortisation net Book Value

net Book Value

as at april 1, 2011

Translation /

adjustment

addition for the year

Deduction for the

year

as at March 31,

2012

upto March 31, 2011

Translation /

adjustment

for the year adjustment in respect of assets sold /

Discarded / held for disposal

upto March 31, 2012



Tangible assets Land 230.60 31.95 - - 262.55 14.79 3.62 23.74 - 42.15 220.40 215.80 Road and Bridges 314.37 45.81 - - 360.18 94.52 17.34 57.97 - 169.83 190.35 219.85 Office Premises (Refer Note 1 , 2)

584.48 35.00 79.63 112.54 586.56 275.97 20.91 47.06 50.36 293.57 292.99 308.51

Vessels (Refer Note 3) 5,32,858.78 56,434.09 1,04,248.88 0.00 6,93,541.75 86,526.24 9,804.75 37,583.99 - 1,33,914.98 5,59,626.77 4,46,332.54 Furniture and Fixtures 468.59 22.42 138.46 - 629.47 292.37 8.94 84.56 - 385.87 243.61 176.22 Vehicles 646.22 56.22 178.26 11.77 868.92 270.26 25.57 159.13 7.30 447.65 421.27 375.96 Office Equipments 151.46 1.93 142.57 - 295.96 74.33 6.75 69.94 - 151.02 144.93 77.13 Computer Equipments 141.29 3.79 18.97 1.10 162.94 106.76 2.31 16.68 0.46 125.29 37.65 34.53 Mines 7,156.05 1,042.72 - - 8,198.77 - - - - - 8,198.77 7,156.05 Mining Equipments 1,524.82 224.70 17.07 144.74 1,621.85 776.12 121.33 198.01 59.50 1,035.96 585.90 748.70 grand Total 5,44,076.64 57,898.63 1,04,823.84 270.16 7,06,528.95 88,431.36 10,011.51 38,241.08 117.62 1,36,566.32 5,69,962.64 4,55,645.29

2.9 short term provisions(` in lakhs)



Provision for employee benefitsGratuity 23.26 24.71Compensated absences 23.25 21.18Provision for onerous contracts 3,785.95 -

3,832.46 45.89

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2.11 investments(` in lakhs)

particulars nos as at March 31, 2013

nos as at March 31, 2012

non current investments - at costTrade investments (unquoted)investment in equity sharesMarg Swarnabhoomi Port Private Limited 1,250 0.13 1,250 0.13others - 2,665.08 - 2,533.27non trade investments (unquoted)investment in othersUnits of Indian Real Opportunity Venture Capital Fund 29,348 293.48 36,459 364.59aggregate amount of unquoted investments 2,958.68 2,897.99current investments - at the lower of cost and fair valueQuotedinvestments in Mutual funds Axis Equity Fund 5,00,000 50.00 5,00,000 50.00 Axis Infra Bond - 490.67 - 1,118.77 (Market value of current investments on 31.3.13 ` 545.32 lakhs (P.Y. ` 1,170.72 lakhs)

aggregate amount of Quoted investments 540.67 1,168.77 unquotedinvestment in shares - 5.18 - 5.04aggregate amount of unquoted investments 5.18 5.04aggregate amount of current investments 545.84 1,173.81

2.12 Long term loans and advances(` in lakhs)



Unsecuredconsidered goodCapital Advances 1,535.67 1,136.46Capital Advances to related parties* 4,199.96 4,199.96Deposits Deposits with government and semi government bodies 3.49 18.03 Other deposits 658.11 777.25 Other deposits to related parties** 500.00 500.00 Exploration and development expenses recoverable 2,423.61 2,053.06 Deffered exploration and development of mine 3,164.28 2,151.88Other loans and advances Advances Recoverable 1,459.91 371.11 Advance payment of tax (net of provisions) 5,732.16 1,048.92 Unamortised finance charges 198.04 269.78 MAT credit available 1,195.00 1,345.00

21,070.23 13,871.45

* Capital Advances to related parties Vaitarna Marine Infrastructure Private Limited 4,199.96 4,199.96

4,199.96 4,199.96** Other deposits to related parties MLL Logistics Private Limited 500.00 500.00

500.00 500.00

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2.13 other non current assets(` in lakhs)



Assets not in use - 233.81 Prepaid Tax - 29.30 Fixed Deposits with bank with maturity more than 12 months 2,756.73 2,713.50 Accrued interest on fixed deposit with banks 3.49 0.48

2,760.22 2,977.09

2.14 inventories(` in lakhs)



At Cost (Valued at lower of cost and net realisable value) Coal 1,209.03 3,011.95 Bunker and lubes 2,305.03 6,310.83

3,514.06 9,322.78

2.15 Trade receivables(` in lakhs)



unsecured Debts outstanding for a period exceeding six months from the due date of paymentConsidered good (net of provision for doubtful debts ` 400 lakhs) 19,918.56 12,268.70Others debtsConsidered good 45,793.10 38,606.64

65,711.66 50,875.34

2.16 cash and bank balances(` in lakhs)



Cash and cash equivalentsCash in hand 37.97 95.68Balances with banks 31,455.27 20,480.70Deposits with banks with 3 months maturity - 1,535.58

31,493.24 22,111.96OthersFixed Deposits with bank with maturity more than 3 months but less than 12 months

2,613.29

3,220.00

34,106.53 25,331.96Balances with banks in unpaid dividend accounts 51.25 68.06Balances with banks includes amount in escrow account 4.88 4.90Balances with banks held as margin money deposits against guarantees 296.92 360.33

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2.17 short term loans and advances(` in lakhs)



Unsecured, Considered Good Loans and advances to related parties* 336.13 323.13 Deposits 542.25 30.78 Others Advance to employees 169.06 161.26 Advance to suppliers 8,467.18 11,960.94 Advances recoverable 4,309.35 3,944.64 Inter corporate deposits to related parties** 5,575.00 1,850.00 Inter corporate deposits to others 1,093.06 1,834.51 Indirect Tax receivable 298.65 164.92 Insurance receivable 6,181.43 1,810.31 Unamortised finance charges 176.86 134.27 Prepaid expenses 1,622.94 2,380.85considered doubtfulInter corporate deposits to others 971.97 -Advance to suppliers 714.56 -

1,686.53 -Less: Provision for doubtful advances (1,686.53) -

- -

28,771.91 24,595.61

*Loans and advances to related parties MLL Logistics Private Limited 336.13 323.13

336.13 323.13 ** inter corporate deposits to related parties MLL Logistics Private Limited 5,575.00 1,850.00

5,575.00 1,850.00

2.18 other current assets(` in lakhs)



Accrued interest on fixed deposit with banks 32.97 25.73 Interest accrued and due 51.90 - Statutory Dues - 6.06 Contract work in progress 19,052.01 947.66 Income accrued but not due * - 1,194.38

19,136.88 2,173.83

* Includes incomplete voyages

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2.19 revenue from operations(` in lakhs)

particulars year endedMarch 31, 2013

year endedMarch 31, 2012

Freight 62,469.38 60,621.22 Charter hire 73,206.60 75,304.34 Dispatch and demurrage 2,518.97 780.24 Ship management fees 318.23 - Sale of Coal 1,96,268.28 2,24,235.83 Cargo handling services 4,422.42 9,049.13 Income from project related activities 34,131.50 -

3,73,335.38 3,69,990.76

2.20 other income(` in lakhs)



Dividend received on current investments 87.40 0.48 Rent received 12.56 93.68 Net gain on foreign currency transactions/transalation 1,579.39 4,763.74 Net gain on derivatives transactions 239.63 13.81 Interest income 559.21 962.94 Gain on sale of current investments (net) 51.87 287.62 Gain on sale of non-current investments 16.72 - Insurance claims received - 137.24 Miscellaneous income 24.07 253.09

2,570.85 6,512.60

2.21 operating expenses(` in lakhs)



Purchase of Coal 1,29,264.17 1,53,103.69 Coal Mining and Logistics expenses 53,639.42 53,190.23 Designing and other technical charges 12,057.21 - Procurement of equipments for project related activities 15,443.02 - Bunker consumed 21,787.25 19,704.82 Vessel /Equipment hire expenses 24,044.68 26,410.83 Technical services 20,913.16 16,418.23 Agency, Professional and service expenses 2,262.40 1,626.62 Communication expenses 167.91 476.63 Miscellaneous expenses 2,188.17 778.18 Commission 1,661.16 2,084.51 Insurance 4,027.29 2,235.43 Port expenses 4,127.45 3,866.50 Repairs and maintenance 12,856.86 16,226.25 Stevedoring, transport and freight 2,781.49 3,658.10

3,07,221.64 2,99,780.02

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2.22 employee benefits expenses(` in lakhs)



Salaries, wages, bonus, etc. 5,430.65 4,399.77 Contribution to provident and other funds 179.36 171.03 Employee welfare expenses 154.96 201.81

5,764.97 4,772.61

2.23 finance cost(` in lakhs)



Interest expense 22,289.75 20,107.52 Other borrowing costs 2,214.06 1,087.49 Loss on foreign currency transactions/translation - 99.70

24,503.81 21,294.71

2.24 other expenses(` in lakhs)



Rent 688.72 834.95 Payment to auditors

As auditors 153.14 98.59 For other services 20.70 18.10

Repairs and maintenance (office premises and premises acquired on lease) 194.51 96.40 Insurance 70.28 61.82 Net loss on foreign currency transaction/transalation 0.00 30.19 Legal, Professional and consultancy expenses 2,342.77 1,277.00 Donation 18.18 19.26 Communication expenses 94.63 125.46 Conveyance, car hire and travelling 1,000.29 1,132.37 Advertisement 12.60 15.08 Loss on sale of assets (net) 7,413.61 30.97 Bad Debts and other amounts written off/back 450.33 1,725.47 Provision for doubtful debts/advances 3,137.69 - Miscellaneous expenses* 1,569.05 1,712.25

17,166.50 7,177.91

* Miscellaneous expenses includes prior period expenses of ` 115.61 lakhs.

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).

4,191.12 5,809.05

Counter guarantees issued by the Company for guarantees obtained from bank on behalf of subsidiaries

626.50 256.05

Corporate guarantees issued for performance by the Company 21,607.93 20,327.60Total 26,425.55 26,392.71

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3.2 Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) as at March 31, 2013 ` 13,265.55 lakhs (` 12,477.07 lakhs).

3.3 Estimated amount of commitments outstanding towards contributions to funds are ` 960.52 lakhs (` 969.93 lakhs).

3.4 No provision has been made in respect of disputed demands from Income-tax Authorities to the extent of ` 5,725.26 lakhs (` 5,697.51 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 ` 1,841.77 lakhs (` 1,541.77 lakhs).

4. DiscLosures as per accounTing sTanDarDs noTifieD By The coMpanies (accounTing sTanDarDs) ruLes, 2006.

4.1 change in accounting policy

The Company has changed its accounting policy with respect to a subsidiary for accounting of dry dock expenses. Hitherto, the entire dry dock expenses were written off to the statement of profit and loss which from this financial year has been capitalised as per the regular accounting policy followed by the subsidiary. On account of the same, the loss for the year is reduced by ` 2,474.40 lakhs.

4.2 Details of contract revenue and costs as per accounting standard 7(` in lakhs)

particulars for the year ended March 31, 2013

for the year ended March 31, 2012

Contract revenue recognised during the year 34,132 NilAggregate of contract costs incurred and recognised profits (less recognised losses) upto the reporting date

33,112 1,468

Advances received for contracts in progress Nil NilRetention money for contracts in progress Nil NilGross amount due from customers for contract work (asset) 22,014 948Gross amount due to customers for contract work (liability) Nil Nil

4.3 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 March 31, 2009/December 29, 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 ` 1,404.72 lakhs (P.Y ` 2,317.04 lakhs).

Exchange Fluctuation on restatement of foreign currency loan initially taken for acquisition of fixed asset has been transferred to “Foreign Currency Monetary Item Translation Difference Account” (FCMITD) since subsequently the said fixed asset was disposed off. The exchange gain (net) transferred to FCMITD for the same is ` 190.04 lakhs. The balance amount outstanding in FCMITD as on March 31, 2013 is ` 103.88 lakhs.

4.4 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.

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Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated corporate assets and liabilities respectively.

There are no Inter Segment transfers.

segment revenue shipping offshore coal Mining,

Trading and Logistics

others unallocated Total Total

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 Revenue 1,11,653.35 1,18,500.85 26,859.83 19,871.56 2,00,690.70 2,31,618.34 36,143.15 5,518.69 - - 3,75,347.04 3,75,509.45 Results Profit / (Loss) before tax and interest

(43,208.66) 1,122.13 7,558.70 4,940.01 8,330.22 13,955.86 3,338.08 5,550.80 - - (23,985.05) 25,568.80

Less :Interest (23,944.60) (20,331.77) Total Profit Before Tax (47,929.65) 5,237.03 Provision for Taxation Current Tax (1,860.01) (2,495.26) Deferred Tax 542.22 271.75 Minimum Alternate Tax - - Net Profit (49,247.44) 3,013.52 Other Information Assets 4,83,073.53 5,34,184.47 92,724.62 1,00,181.07 73,396.89 66,487.41 37,221.39 7,443.87 - - 6,86,416.42 7,08,296.82 Liabilities 29,966.97 25,088.35 14,196.69 17,284.60 7,082.13 7,723.99 26,092.60 1,269.70 3,46,544.35 3,62,003.83 4,23,882.73 4,13,370.47 Capital Expenditure 3,641.53 2,994.12 41.78 1,03,650.94 2,998.88 495.81 6.78 - 6,688.96 1,07,140.87 Depreciation 32,494.67 28,334.77 11,696.18 9,415.98 556.02 490.33 1.35 - 44,748.22 38,241.08Impairment 8,118.00 - - - 673.15 - - - 8,791.15 -

4.5 related party Disclosures as per accounting standard 18 on “related party Disclosures”

A List of Related Parties

i Key Management personnel1 H.K Mittal2 A.J. Agarwal3 Shalabh Mittal4 K.S.Raheja5 Shruti Mittal6 Handoko Soeseno7 Taufik Surya Darma

ii enterprises over which Key Management personnel exercise significant control1 AAAM Properties Private Limited2 Ankur Fertilizers Private Limited3 AHM Investments Private Limited4 Mercator Healthcare Limited

iii enterprises over which Directors/relative of Directors/Key Management personnel/relative of Key Management personnel exercise significant influence.1 MLL Logistics Private Limited2 Zicom Electronic Security Systems Limited3 Vaitarna Marine Infrastructure Private Limited4 Rishi Holding Private Limited5 Oilmax Energy Private Limited6 PT United Coal Indonesia

V relative of Key Management personnel

1 Adip Mittal

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B Details of Transactions with above parties(` in lakhs)

Name of the Transaction Key Management Personnel Enterprises over which Key Management Personnel


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 - - - - 342.10 24.08 342.10 24.08 Interest Expense - - - - 4.15 - 4.15 -

Services Received - - - - 1,616.12 257.02 1,616.12 257.02

Reimbursments of Expenses Paid - - 4.26 30.97 26.23 30.40 30.49 61.37 Reimbursments of Expenses Received - - 3.32 134.03 - 1.74 3.32 135.76 Inter Corporate Deposits Inter Corporate Deposits given during the year

- - - - 3,725.00 1,850.00 3,725.00 1,850.00

Inter Corporate Deposits received during the year

- - - - 350.00 157.50 350.00 157.50

Inter Corporate Deposits repaid during the year

- - - - 350.00 157.50 350.00 157.50

Advances Advances Given During the Year 128.41 - - - 13.00 20.38 141.41 20.38 Outstanding balances as on 31.03.2013 Advances and Receivables Advances 837.39 966.29 - - 336.13 338.74 1,173.52 1,305.03 Capital Advances - - - - 4,199.96 4,199.96 4,199.96 4,199.96 Outstanding Balances of Trade and Other Receivables & Other Payables as on 31.03.2013 Trade & Other Receivables - - - - 1,260.67 1,091.83 1,260.67 1,091.83 Trade & Other Payables - 255.78 - 19.62 460.24 52.48 460.24 327.88 Inter Corporate Deposit Balance as on 31.03.2013 - - - - 5,575.00 1,850.00 5,575.00 1,850.00 Deposit Balance as on 31.03.2013 - - - - 565.00 565.00 565.00 565.00 Remuneration paid to Key Management Personnel

465.14 423.67


16.82 16.64

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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 IncomeMLL Logistics Private Limited - - - - 342.10 24.08 342.10 24.08

Total - - - - 342.10 24.08 342.10 24.08 Interest Expenses Zicom Electronic Security Systems Ltd - - - - 4.15 - 4.15 -

Total - - - - 4.15 - 4.15 - Services ReceivedVaitarna Marine Infrastructure Pvt Ltd - - - - 466.05 30.60 466.05 30.60Oilmax Energy Pvt Ltd - - - - 1,137.08 226.42 1,137.08 226.42

Total - - - - 1,603.13 257.02 1,603.13 257.02 Reimbursments of Expenses Paid Ankur Fertilizers Private Limited - - 4.26 7.60 - 4.26 7.60 MLL Logistics Pvt Limited - - - - - 3.24 - 3.24 OMCI Ship Management Pvt Limited - - - 23.37 - - - 23.37Oilmax Energy Pvt Ltd - - - - 26.23 27.16 26.23 27.16

Total - - 4.26 30.97 26.23 30.40 30.49 61.37 Reimbursments of Expenses ReceivedAnkur Fertilizers Private Limited - - 3.32 - - - 3.32 -Vaitarna Marine Infrastructure Pvt Ltd - - - - - 1.74 - 1.74OMCI Ship Management Pvt Limited - - - 129.43 - - - 129.43

Total - - 3.32 129.43 - 1.74 3.32 131.17 Inter Corporate Deposits Inter Corporate Deposits given during the year MLL Logistics Private Limited - - - - 3,725.00 1,850.00 3,725.00 1,850.00

Total - - - - 3,725.00 1,850.00 3,725.00 1,850.00 Inter Corporate Deposits received during the year Zicom Electronic Security Systems Ltd - - - - 350.00 157.50 350.00 157.50

Total - - - - 350.00 157.50 350.00 157.50 Inter Corporate Deposits repaid during the year Zicom Electronic Security Systems Ltd - - - - 350.00 157.50 350.00 157.50

Total - - - - 350.00 157.50 350.00 157.50 Advances Advances Given During the Year MLL Logistics Pvt Ltd - - - - 13.00 5.00 13.00 5.00Vaitarna Marine Infrastructure Pvt Ltd - - - - - 15.38 - 15.38Handoko Soeseno 128.41 - - - - - 128.41 -

Total 128.41 - - - 13.00 20.38 141.41 20.38 Outstanding balances as on 31.03.2013 Advances and Receivables Advances MLL Logistics Pvt Ltd - - - - 336.13 323.13 336.13 323.13Handoko Soeseno 837.39 966.29 - - - - 837.39 966.29

(` in lakhs)

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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

Total 837.39 966.29 - - 336.13 323.13 1,173.52 1,289.42Capital AdvancesVaitarna Marine Infrastructure Pvt Ltd - - - - 4,199.96 4,199.96 4,199.96 4,199.96

Total - - - - 4,199.96 4,199.96 4,199.96 4,199.96Outstanding Balances of Trade andOther Receivables & Other Payables as on 31.03.2013Trade and Other Receivables MLL Logistics Private Limited - - - - 1,260.67 924.36 1,260.67 924.36PT United Coal Indonesia - - - - - 167.47 - 167.47

Total - - - - 1,260.67 1,091.83 1,260.67 1,091.83Trade and Other Payables OMCI Ship Management Pvt Limited - - - 19.62 - - - 19.62Oilmax Energy Pvt Ltd - - - - 442.66 52.48 442.66 52.48Handoko Soeseno - 255.78 - - - - - 255.78

Total - 255.78 - 19.62 442.66 52.48 442.66 327.88Inter Corporate Deposit Balance as on 31.03.2013MLL Logistics Private Limited - - - - 5,575.00 1,850.00 5,575.00 1,850.00

Total - - - - 5,575.00 1,850.00 5,575.00 1,850.00 Deposit Balance as on 31.03.2013 MLL Logistics Private Limited - - - - 500.00 500.00 500.00 500.00

Total - - - - 500.00 500.00 500.00 500.00Remuneration paid to Key Management Personnel

465.14 423.67


16.82 16.64

4.6 Disclosure in respect of Leases as per as 19:

(a) Disclosure in respect of operating lease (as Lessee):(` in lakhs)



(a) Operating LeasesDisclosures in respect of cancelable agreements for office premises taken on lease(i) Lease payments recognised in the Statement of Profit and Loss 540.25 560.92(ii) Significant leasing arrangements

The Company has given refundable interest free security deposits under the agreements.The lease agreements are upto 24 to 60 months.These agreements also provided for increase in rent.These agreements are non cancellable by both the parties for 12–24 months except in certain exceptional circumstances.

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(iii) Future minimum lease payments under non-cancellable agreementsNot later than one year 315.99 459.86Later than one year and not later than five years 267.60 159.66Later than five years NIL NIL

(B) Disclosure in respect of operating lease (as Lessor):

(` in lakhs)year ended

March 31, 2013year ended

March 31, 2012(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 12.56 93.68(ii) Significant leasing arrangements- The new lease agreements are for a period of 36 months.(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.

(c) Disclosure in respect of finance lease (as Lessee): (` in lakhs)(` in lakhs)

Total Minimum Lease payments outstanding



Within 1 year 82.65 117.01Later than 1 year and not later than 5 years 37.26 101.93Later than 5 years NilTotal 119.91 218.94Less: Interest 12.13 23.32present Value of Minimum Lease payments 107.77 195.63

4.7 earning per share as per as 20` in lakhs

particulars year ended 31/03/2013

year ended 31/3/2012

Net Profit after Tax, Minority interest- Basic and Diluted (37,208.66) 2,055.63

Number of Shares used in computing Earning Per Share - Basic and Diluted 2,44,892,073 2,44,892,073Earning per share (equity shares of face value ` 1/-) - Basic and Diluted (in `) (15.19) 0.84

(` in lakhs)

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4.8 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, 2013 March 31, 2013 March 31, 2012 March 31, 2012USD/INR 38.18 1,933.40 39.49 2,000.00USD/INR 21.41 966.70 22.14 1,000.00USD/INR 21.45 966.70 22.19 1,000.00

(B) 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:

2012-13 2011-12` lakhs Fx.million ` lakhs Fx.million

Account Receivable 5,727.76 USD 10.53 4,019.69 USD 4.65IDR 27,811.22

Balance in Bank 7,019.07 USD 11.17IDR 16,568.77

0.03 SGD

863.78 USD 0.33IDR 12,438.32

Fixed Deposit with foreign Bank NIL NIL 200.72 USD 0.19IDR 1,836.00

Loan & Advances 15,435.73 USD 24.03AED 0.02

EURO 2.47IDR 12,768.90

15,327.06 USD 28.91SGD 0.08

EURO 0.24JPY 0.02

IDR 6,813.12Advance from Customers 94.50 USD 0.67

SGD 0.63- -

Accounts Payable/Acceptance(including capital commitments made but not provided for)

6,592.71 USD 7.73SGD 0.90JPY 1.82AED 0.01

IDR 33,313.01

5,730.73 USD 4.45SGD 1.06

EURO 0.04JPY 2.84AED 0.13GBP 0.01

IDR 50,541.08Borrowings 21,253.71 USD 39.08 28,968.90 USD 56.63

5 All assets and liabilities are classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, 12 months has been considered by the Company for the purpose of current – noncurrent classification of assets and liabilities.

6 preVious year figures

Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.


himanshu Kishnadwala Kapil garg K. r. Bharat Partner Director Director priya Vishwanathan Company SecretaryDated: May 18, 2013 Dated: May 18, 2013 Place: Mumbai Place: Mumbai

Board of DirectorsMr. H. K. Mittal Executive Chairman

Mr. Atul J. Agarwal Managing Director

Mr. Manohar Bidaye

Mr. K. R. Bharat

Mr. Kapil Garg

Mr. M. M. Agrawal

Mr. M. G. Ramkrishna (upto August 29, 2012)

Audit CommitteeMr. Manohar Bidaye Chairman

Mr. K. R. Bharat Member

Mr. Atul J. Agarwal Member

Shareholders Grievance CommitteeMr. Manohar Bidaye Chairman

Mr. K. R. Bharat Member

Mr. Atul J. Agarwal Member

Company SecretaryMs. Priya Vishwanathan

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] [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]

Corporate Information

Registererd Office3rd Floor, Mittal Tower, B-wing, Nariman Point, Mumbai - 400021, IndiaTel : 91-22-66373333/40373333, Fax : 91-22-66373344E-mail : [email protected]

Website : www.mercator.in

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