Mercator Ltd


BSE: 526235 | NSE: MERCATOR | ISIN: INE934B01028 
Market Cap: [Rs.Cr.] 847 | Face Value: [Rs.] 1
Industry: Shipping

 Discuss this stock

Director's Report

DIRECTORS' REPORT

To

The Members, Mercator Limited

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

FINANCIAL HIGHLIGHTS:

(Rs. in crores)
Particulars

Consolidated

Standalone

Year ended

Year ended

March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Income from operations 3733.35 3699.91 551.49 547.98
Total Income 3753.47 3755.40 569.67 595.86
Operating Profit 505.96 582.91 92.70 84.11
Interest 239.45 203.32 125.56 128.18
Depreciation 447.48 382.41 109.16 119.00
Impairment 87.91 - 81.18 -
Profit before Tax & Minority Interest (479.30) 52.37 (215.94) (115.17)
Minority Interest 120.39 (9.58) N.A N.A.
Taxes
-Current Year (18.60) (24.95) (1.50) (3.50)
-Deferred Tax 5.42 2.72 -- --
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) 19.52
Balance 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 wasRs. 3734 crores as against Rs. 3700 crores in the previous year. After providing loss forthe minority interest of Rs. 120 crores (previous year profit Rs. 10 crores); the lossafter provision for tax was Rs. 372 crores as against net profit of Rs. 21 crores in theprevious year.

On a standalone basis, the income from operations for the year under review was Rs. 551crores (Rs. 548 crores in the previous year). The Company suffered a loss of Rs. 217crores (Rs. 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 inIndonesia last year. The first shipment of coal from the new mine was dispatched in August2012.

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, SagarSamrat for conversion into a Processing Unit. The EPC contract is under execution at anoverseas yard and the work is progressing satisfactorily.

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

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

The Company's Aframax tanker, which had suffered an accident in December 2011 was soldfor scrapping during the year and the insurance claim was partly realised. The proceedswere used to prepay debt.

The company entered into a MOA for the sale of its Very Large Crude Carrier (VLCC) toits WOS in Singapore. The VLCC has now been refinanced by a foreign currency loan withextended 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 cashflows of the future earnings and recognised an impairment provision in the books inrespect of the VLCC and aframax tanker.

The one-time charges to the Profit & Loss arising from early terminationagreements, sale of VLOC and impairment provision have resulted in the group reporting aloss for the year. However, these initiatives together with the cash flow from therealisation of the insurance claim have resulted in reducing the long term liabilities ofthe 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 underreview, your Directors regret their inability to recommend any dividend.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Articles ofAssociation of the Company, Mr. Manohar Bidaye is the Director liable to retire byrotation at the ensuing Annual General Meeting and being eligible, has offered himself forre-appointment.

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

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 briefresume of all the three directors is included in the notice of the ensuing Annual GeneralMeeting 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. Auditedconsolidated financial statements for the year ended on March 31, 2013; together withAuditors' Report thereon forming part of this Annual Report includes financial informationof all the subsidiaries.

Pursuant to general exemption granted by the Ministry of Corporate Affairs, Governmentof India, this Annual Report is presented without attaching annual accounts of thesubsidiaries. A statement in respect of the said subsidiaries pursuant to Section 212 ofthe Companies Act, 1956, is enclosed herewith as required. The annual reports and accountsof subsidiaries will be made available for inspection during working hours at theregistered 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 ofthe Company as well as of subsidiaries, on request. The brief financial details of thesubsidiaries as prescribed under the said notification have been disclosed in theconsolidated financial statements of the Company.

AUDITORS:

The Auditors of your Company, M/s. Contractor, Nayak & Kishnadwala, CharteredAccountants, retires at the ensuing Annual General Meeting and have confirmed theireligibility for re-appointment under Section 224 (1-B) of the Companies Act, 1956.

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

AUDITORS' REPORT:

In response to the qualification in the Auditors' Report on the consolidated financialstatements, it is clarified that the unaudited financial statements as approved by themanagement of the respective subsidiaries, were considered for reporting to the SingaporeStock Exchange by the listed subsidiary of Mercator Ltd, which is the holding company ofthe six subsidiaries. The auditors relied on these financials for preparing theconsolidated financial statements. Based on the explanation received, the Directors are ofthe opinion that there would not be any material differences upon completion of theiraudits.

There is no qualification/ remark in the Auditor's Report on standalone financialstatements.

COST AUDIT COMPLIANCE REPORT:

The Companies (Cost Accounting Records) Rules 2011 are applicable to the specifiedoperations of the Company. The Company has taken necessary steps for compliance with thesaid 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 respectto the employees of the Company, who were in receipt of remuneration in excess of thelimits specified under the said section are set out in the annexure forming part of thisreport. However, as per the provisions of Section 219(b)(iv) of the Act, the report andthe accounts are being sent to all members of the Company excluding this annexure ofparticulars of employees. Any member interested in obtaining such particulars may write tothe Company at the registered office.

No ESOPs were issued during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORT MARKET DEVELOPMENT AND FOREIGNEXCHANGE EARNINGS AND OUTGO

The requirements of giving particulars of Conservation of Energy and TechnologyAbsorption under the Companies (Disclosure of Particulars in the Report of the Board ofDirectors) Rules, 1988, are not applicable to your Company. However, the Directors wouldlike to assure you that every measure is taken to save and conserve energy at all thestages of operating the vessels, as well as, on shore activities.

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

CORPORATE GOVERNANCE & SOCIAL RESPONSIBILITIES:

A separate report on Corporate Governance, along with certificate from the Auditors ofthe Company; including report on Corporate Social Responsibility is annexed herewithforming a part of this Annual Report. Management Discussion and Analysis Report is alsoannexed 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 section58-A of the Companies Act, 1956.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, theDirectors hereby confirm that:

(i) In preparation of the annual accounts, all applicable accounting standards havebeen followed along with proper explanation relating to material departures;

(ii) They have selected such accounting policies in consultation with StatutoryAuditors and applied them consistently and made judgments and estimates that arereasonable and prudent, so as to give a true and fair view of the state of affairs of theCompany 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 adequateaccounting records in accordance with the provision of the Companies Act, 1956, tosafeguard the assets of the Company and to prevent and detect fraud and otherirregularities;

(iv) They have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS:

The Directors express their sincere thanks to all customers, suppliers, serviceproviders, regulators, Governmental agencies and other statutory authorities for theircontinued 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 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.
   

Peer Comparison

Company Market Cap
(Rs. in Cr.)
P/E (TTM)
(x)
P/BV (TTM)
(x)
EV/EBIDTA
(x)
ROE
(%)
ROCE
(%)
D/E
(x)
GE Shipping Co 5,452.54 26.64 0.81 8.04 0.8 2.9 0.74
Essar Ports 3,602.83 0.00 1.35 105.12 -1.4 1.0 0.26
S C I 2,864.67 0.00 0.45 10.30 -8.2 -2.8 1.09
Global Offshore 1,250.97 54.45 3.44 4.55 16.0 11.7 1.23
Mercator 847.35 91.05 1.28 36.64 0.0 0.0 1.27
GOL Offshore 472.58 3.88 0.47 4.57 5.7 7.6 2.36
Essar Shipping 451.51 0.00 0.09 10.98 0.0 0.0 0.69
SEAMEC Ltd 368.66 350.81 0.78 5.95 0.2 1.2 0.00
Varun Ship. Co. 138.15 0.00 0.39 2.30 -20.9 2.3 2.45
Shreyas Shipping 75.98 9.03 0.57 4.60 8.6 8.6 0.56
Chowgule Steam 59.91 0.00 0.44 12.35 -3.8 -4.6 0.14
Shahi Shipping 10.43 0.00 0.38 6.16 -0.4 4.7 0.93
Scindia Steam 7.77 0.00 -0.02 0.00 0.0 0.0 0.00
Diamond Shipping 6.64 61.79 1.34 0.00 2.3 1.3 1.07
Hifunda 1.49 0.00 0.35 0.00 0.0 0.0 0.21

Futures & Options Quote

 
Expiry Date
NA
Instrument: NA
Expiry Date: NA
Strike Price: NA
Open Price: NA
Average Price: NA
No. of Contracts Traded: NA
Open Interest: NA
Underlying: NA
Option Type: NA
Market Lot: NA
Previous Close: NA
Day’s High | Low: NA | NA
Turnover (Cr.): NA
Open Int. Change: NA | NA
View detailed F& O quotes >>

Key Information

Key Executives:

H K Mittal , Executive Chairman  

Atul J Agarwal , Managing Director  

Manohar Bidaye , Director  

K R Bharat , Director  


Company Head Office / Quarters:
3rd Floor Mittal Towers,
B-Wing Nariman Point,
Mumbai,
Maharashtra-400021
Phone : 91-22-66373333/40373333
Fax : 91-22-66373344
E-mail :
mercator@mercator.in
investors@mercator.in
Web : http://www.mercator.in
Registrars:
Intime Spectrum Reg. Pvt. Ltd.
203 Daver House
197/199 D N Road
Fort
Mumbai - 400001

Fund Holding

 
Scheme Name No. of Shares
Goldman Sachs CNX 500 Fund (G) 2,531

Calendar

Jul-2014
M T W T F S S
21 22 23 24 25 26 27
IPO
listIssue Closing : Bhanderi Infra.
Economic Events
list Cap Goods Orders Nondef Ex Air
list Cap Goods Ship Nondef Ex Air
Results
list Ashok Leyland | Century Textiles | Colgate-Palm. | Colgate-Palm.