Mercator Director Discussions


To

The Members, Mercator Limited

We hereby present the 39th (Thirty-Ninth) Annual Report of your Company for the year ended on March 31, 2023.

In accordance with an application made by ICICI Bank, Financial Creditor of the Company, the Honble National Company Law Tribunal, Mumbai Bench, vide its order dated February 08, 2021 (“Order”) in Company Petition No. (IB) 4404/MB/2019 (“Insolvency Commencement Order”) in the matter of ICICI Bank Ltd V. Mercator Ltd & Anr., had initiated Corporate Insolvency Resolution Process (“CIRP”) against Mercator Limited, Corporate Debtor (“the Company”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“the Code”). Pursuant to the Order, the powers of the Board of Directors were suspended and were vested with Mr. Girish Siriram Juneja, who was appointed as Interim Resolution Professional (IRP) by the NCLT and later con rmed as a Resolution Professional (RP) by the Committee of Creditors (CoC). The Resolution Plans submitted by the Resolution Applicants were placed before the CoC for their consideration and voting but failed to receive the requisite votes in terms of the provisions of the Code. Accordingly, an application for liquidation of the Corporate Debtor was led in terms of section 33 of the Code. NCLT, Mumbai has ordered the company to be liquidated as a going concern and Mr. Girish Siriram Juneja has been appointed as Liquidator of the company vide its order dated February 21, 2023.

Pursuant to the aforesaid order by NCLT, Liquidator is trying to liquidate the company as a going concern. Accordingly, the nancial results of the Company have been prepared on a going concern basis.

FINANCIAL HIGHLIGHTS:

The consolidated and standalone nancial performance of the Company for the year ended March 31, 2023 is summarized below: (Rs in Million)

Consolidated Standalone

Particulars

Year ended Year ended
March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Income from operations - - - -
Other Income 0.48 3.93 123.80 126.95

Total Income

0.48 3.93 123.80 126.95
Operating Pro t (22.48) (121.11) 100.82 89.81
Finance Costs (1.28) (132.65) (1.28) (1.52)
Depreciation (0.80) (0.97) (0.80) (0.97)
Impairment - 48.09 (94.67) (46.46)
Exceptional Items - - - -

Pro t/(Loss) before Tax

(24.56) (206.64) 4.07 40.86
Taxes
-Current Year - - - -
-Excess/(Short) provision of earlier years - 11.25 - 11.25
-Deferred Tax - - - -

Net Pro t/(Loss) After Tax

(24.56) (195.39) 4.07 52.11
Minority Interest - - - -

Other Comprehensive Income Adjustment

- - - -

The Standalone & Consolidated nancial statements of the Company for the nancial year ended March 31, 2023 have been prepared in accordance with the Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013 (“the Act”) read with relevant rules issued thereunder (IND AS) and other accounting principles generally accepted in India.

The comments of the Directors on the nancial performance of the Company along with state of Company a airs have been provided under the Management Discussion and Analysis Report which is appended as Annexure I to this Report.

STATE OF COMPANYS AFFAIRS & REVIEW OF BUSINESS OPERATIONS AND EFFECT OF COVID-19:

During the year under review, the income from operations on a consolidated basis was Nil against Nil in the previous year. This is on account of (i) Audited / Unaudited nancial statements of all subsidiaries for the year ending March 31, 2023, have not been provided to the Holding Company (ii) sale of entire eet of ships, auction of 2 out of 4 dredgers (iii) remaining 2 dredgers remaining idle and in arrested condition.

The consolidated EBIDTA is Rs. (22.48) million against Rs. (121.11) million in the previous year. The consolidated loss before tax was Rs. 24.56 million against previous year loss of Rs. 206.64 million. The consolidated loss after tax was Rs. 24.56 million against loss after tax of Rs. 195.39 million in the previous year.

On a standalone basis, the income from operations for the year under review was Nil (Nil in the previous year), Depreciation was Rs. 0.80 million against Rs. 0.97 million in previous year and Finance Cost was Rs. 1.28 million against Rs. 1.52 million in previous year. The Company had standalone pro t of Rs. 4.07 million (previous year pro t of Rs. 52.11 million) after provision of tax of Nil (previous year Rs. 11.25 million in negative).

Following are the key nancial highlights for the nancial year 2022-23 (PY 2021-22):

At standalone level, Finance Costs of Rs. 1.28 million (PY Rs. 1.52 million) includes Nil (PY Nil million) towards penal interest charged by the lenders;

At standalone level, impairment provision was Rs. 94.67 million (PY Rs. 46.46 million);

The Company has prepared its accounts for the year ended March 31, 2023 on a going concern basis rather than on liquidation value basis. The Company has negative retained earnings as at March 31, 2023, wherein assets are insu cient in comparison to liabilities thereby resulting in erosion of its Net-worth. Further, the Company had since disposed-o the substantial part of the Property, Plant and Equipment (PPE). As on March 31, 2023 the Company has only two non-operating dredgers which have been arrested by operational creditors. The current liabilities substantially exceed the current assets and large sums of money receivable are in dispute, which is not readily realisable. A Corporate Insolvency Resolution Process (CIRP) was initiated by Honble NCLT, Mumbai. It may be further noted that in consonance with the stipulations contained in Section 14 of the Code, a moratorium was declared in the aforesaid order passed by the Honble NCLT, inter alia, prohibiting the following:

a. the institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgement, decree or other in any court of law, tribunal, arbitration panel or other authority;

b. transferring, encumbering, alienating or disposing o by the Corporate Debtor any of its assets or any legal right or bene cial interest therein;

c. any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

d. the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor.

The Companys ability to continue as a going concern was dependent upon many factors including continued support from the nancial creditors, operational creditors and submission of a viable resolution plan by the prospective investor. The Resolution Plans submitted by the Resolution Applicants (RAs) were placed before the Committee of Creditors for their consideration and voting but failed to receive the requisite votes in terms of the provisions of the code. Accordingly, an application for liquidation was led in terms of section 33 of the Code. NCLT, Mumbai has ordered the Company to be liquidated as a going concern and Mr. Girish Siriram Juneja has been appointed as Liquidator of the company vide its order dated February 21, 2023. Further, the Liquidator is required to make every endeavour to protect and preserve the value of the property of the corporate debtor and manage the operations of the corporate debtor as a going concern.

The management / Liquidator is of the view that they are making best e orts to achieve favourable order in ongoing litigations in order to protect the value of its assets and is making e orts to revive operations. As per rules and regulations of the CIRP stipulated under the Code, RP had invited Resolution Plans from the eligible Prospective Resolution Applicants (PRA). Further, the Company believes that the claims receivable for Rs. 15,800 million at the group level could, if realised, provide a reasonable su cient opportunity for the repayment of loans from lenders and provide required resources for the development of business opportunities for the revival.

Pursuant to the aforesaid order by NCLT, Liquidator is trying to liquidate the company as a going concern. Accordingly, the nancial results of the Company have been prepared on a going concern basis.

Updates on Debts Position:

Total Debts at standalone levels and consolidated levels as on 31st March, 2023 stands at Rs. 9429.19 million and Rs. 16,413.30 million respectively. We have already deleveraged Long-term debts by selling the Floating Storage and O oading Unit (FSO) ‘Prem Pride in the nancial year 2019-20 on 16th January 2020 for Rs. 495.4 million and Vessel M. T. Hansa Prem on 23rd March, 2020 through an e-auction process for a consideration of USD 3.60 million plus taxes and in the nancial year 2020-21, sold the Vessel M. T. Prem Mala vide Honble Bombay High Courts order dated 26th May 2020, con rmed the sale of the Vessel under the auction process to the highest bidder at a consideration of Rs. 364 million.

As per the Code, the Liquidator has to receive, collate, verify and admit all the claims submitted by the creditors of the Company. Such claims can be submitted to the Liquidator during the liquidation. The impact of such claims, if any, that may arise has not been considered in the preparation of the aforesaid standalone audited nancial results as on 31st March, 2023.

Principal portion of loans from nancial creditors in the books of the Corporate Debtor have not been restated with the amounts admitted by Liquidator as on Insolvency Commencement Date (“ICD date”) (Rs. NIL million). Total amount of claims towards principal dues of the nancial creditors as on March 31, 2023 stand as under:

a. Principal amount of Loans admitted by Liquidator Nil
b. Claims under veri cation by Liquidator/Not led Nil

Total

Rs. Nil*

* Liquidator had not received any claims as on 31st March 2023. The last date of the receipt of the claim was 07th April 2023. As on 07th April 2023, the total claim amount is Rs. 22,934.1 million, which includes fresh claims led during the liquidation process and the claims submitted during the CIRP process. As per clause c of sub-regulation 2 of Regulation 12 of Liquidation of IBBI (Liquidation Process) Regulations, 2016, where a stakeholder does not submit its claims during the liquidation process, the claims submitted by such a stakeholder, and duly collated by the interim resolution professional or resolution professional, as the case may be, during the corporate insolvency resolution process under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, shall be deemed to be submitted during the liquidation process.

Lenders including Bank of Baroda (having exclusive charge on the collateral property in the name of Corporate Guarantor M/s Mercator Limited, First charge on all movable and immovable xed assets of the Project, First charge on all project contracts and insurance policies in relation to the Project, Security interest by way of security of all rights, titles, bene ts, claims and demands of the Borrower on each Project document with respect to this Project, Charge on the Borrowers bank accounts for the Project, including but not limited to the trust and retention account(s) save and except Dividend Distribution Account/No Lien Account where the surplus monies, including any income generated on the same, shall be transferred upon having met the Restricted Covenants.), J.C. Flowers Asset Reconstruction Private Limited (secured against rst pari passu charge on movable, current and xed assets, including plant and machinery, Insurance Contracts, raw material, current assets, semi- nished and nished goods, consumable stores and all monies, securities, contractor guarantees, performance bonds, cash ows, book debt and receivables, revenues, bank accounts together with investments, xed deposits, lms and any letter of credit provided by any person in favour of the Borrower, excluding the exploration division of the Hypothecator.) and ICICI Bank (First ranking pari-passu and second ranking pari-pasu basis all rights, titles and interest in the vessels [Darshini Prem, Tridevi Prem, Vivek Prem and Uma Prem] for Facility I, Facility II, Facility III and Facility IV) has not relinquished the security interest. The above claim amount is covering all the claimants, including those who have not relinquished their security interest.

Operations & Finance:

Shipping:

The Company does not have any tonnage now. The Company may explore chartering in tonnage in the future.

Dredging:

Slowdown of dredging business has been in place on account of business downturn contributed largely by majority stake buyout of DCI by government owned major ports. The core management team will continue to focus on developing low capex businesses in the Dredging Business. An example of asset light model for dredging contracts could be wherein the work can be accomplished by chartering dredgers. One of such contracts is under execution with Mumbai Port Trust. The Company shall continue to explore suitable opportunities in the asset light model, where the experience and expertise of the Company can be leveraged. The Company did not participate in any fresh tenders during nancial year 2022-23.

The status of various dredgers of the Company is as under:

Further, there is only one non-operational dredgers (arrested by creditors) with the Company as on March 31, 2023, which was fully impaired in nancial year 2019-20 and are carried at realisable scrap value in the books of accounts. On account of this, no depreciation has been charged on Vessels in the year ended March 31, 2023 and March 31, 2022. The current status of the said dredgers are as under

Darshani Prem: The dredger is under arrest by a few operational creditors, crew and port authorities. The cases led against Darshini Prem in High court of Andhra Pradesh shall get listed in due course. Kakinada Seaports Ltd. has vide its email dated January 08, 2021 required the Company for shifting of the vessel Darshini Prem to anchorage at its cost and risk. The Company has intimated ICICI Bank Ltd, the charge holder, to initiate any action at their end, as may be deemed appropriate.

Yukti Prem: During the year, the dredger has been sold under court auction (order dated September 1, 2021 of Kerala High Court) for a price of Rs. 7.90 million. However, the appropriation of the proceeds shall follow in due course of time and the sale proceeds of Rs. 7.90 million is lying as deposit with the court. Basis the transaction, the vessel has been considered as sold by the Company, as management has no control over it, e ective from the date of order and the amount receivable from Court has been classi ed as "Other Current Assets".

Coal

Oorja Holdings Pte Ltd. (‘Oorja Holdings”), a wholly owned subsidiary of the Company along with other investors owns an operational open cut thermal coal asset in the entity named PT Karya Putra Borneo (KPB) and logistics infrastructure services in coal business in another entity named PT Indo Perkasa (IPK). KPB is located in Butuah village, province of Kalimantan Timur, Indonesia covering c.914 hectares of license area with all requisite licenses consisting of an operational coal mine since 2012 having c.26.30 MMT of present reserves with 3600/4200 GAR thermal coal. The local logistics infrastructure services business includes haul road logistics and load port handling supported by own logistics and infrastructure facilities.

Audited/Unaudited Financial Statements of all Indonesian subsidiaries for the year ended March 31, 2023 have not been provided to the Parent Company and hence their financial statements for the 9 months period ended December 31, 2020 have only been considered for the purpose of preparation of Consolidated Financial Statements for the year ended March 31, 2023.

During period of COVID-19, coal prices have uctuated and has a ected EBITDA margin of KPB. The Company has been delivering regular production. Pro tability will have an impact due to uctuations in prices due to pandemic situation.

A minority shareholder of one of our step-down subsidiary, PT Karya Putra Borneo, based at Indonesia has raised a frivolous claim with respect to the shareholding of the said subsidiary Company. On account of frivolous claim led by minority shareholder of KPB by allegedly accessing Legal Entity Accessibility System (LEAS) and resultant to that existing directors and shareholders have been changed in records of Ministry of Law and Human Rights (MoLHR) which was not in compliance with applicable mining law prescribed by Ministry of Energy and Mineral Resources (MEMR) seeking prior consent of the MEMR for any change in directors and/or shareholders of mining company. As per information available until date of reporting, matter is sub-judice and under review cum discussion at court. Management of the Company is anticipating positive outcome as per their judgment and other compliance under applicable Mining Law in Indonesia. The Company is taking all legal steps to protect its rights and interests. Meanwhile the control of the operations are continuing normally.

Some of the key risks for the coal business are:

1) Coal prices have always been volatile. As on date, amongst several reasons including Covid Pandemic and Russia Ukraine war have caused the coal prices to crash threatening sustainable cash ows.

2) Coal subsidiaries have a running default on their loan obligations and lenders are now seeking legal recourse.

3) Legal cases continue to distract management and incur high expenses.

4) Internationally most countries are encouraging move to cleaner energy sources and this remains a threat for the long term price sustainability of the coal prices.

5) India opening mining sector to private sector does pose a threat to coal prices as India may reduce import of coal over a period of time.

6) Change of regulations in Indonesia with respect to taxes, annual production and exports poses an unseen risk.

Oil and Gas

Mercator Petroleum Limited (‘MPL), has Production Sharing Contracts with the Government of India for exploration of petroleum in two blocks viz. CB-ONN-2005/9 (‘CB-9) and CB-ONN-2005/3 (‘CB-3), under the Seventh New Exploration Licensing Policy round (NELP-VII). MPL has 100% participating interest (‘PI) in both the above blocks. These ‘S-Type blocks are situated onshore in the proli c Cambay Basin in Gujarat, India and together cover an area of 180.22 kms.

Ministry of Petroleum and Natural Gas, Government of India vide their letter dated October 24, 2019 has issued a termination notice referring to Production Sharing Contract

(PSC) dated December 22, 2008 for the Block CB-ONN-2005/3 executed between Government of India and Mercator Petroleum Limited. There was no oil discovery in the said Block CB-ONN-2005/3 (‘CB-3). However, PSC for the Block CB-ONN-2005/9 (‘CB-9) remains in force.

Minutes of Meeting (MoM) of the 5th Expert Appraisal Committee (EAC) for the Environmental Clearance (EC) presentation held on March 27, 2019 were issued of 3rd April 2019 recommending grant of EC for Development of PML area of the Block CB-ONN-2005/9. Work over rig was deployed at Jyoti-2 from March 25, 2019 to May 7, 2019 for cement repairs but the operations had to be terminated because of technical problems. The well Jyoti-1 was also closed because of non-grant of (EC) which has since been granted on January 7, 2020. Management Committee has approved completion of Minimum Work Program (MWP) of Exploration Phase-I which is a pre-requisite for transfer of PI. Formal communication to this e ect is awaited.

The application for initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) led by an Operational Creditor before the National Company Law Tribunal (NCLT), Mumbai Bench against the material subsidiary of the Company, Mercator Petroleum Limited (MPL) was admitted vide the order of NCLT dated August 31, 2020 (Order). In terms of Section 17 of the IBC, the power of the Board of Directors stand suspended and all such powers stand vested in an Interim Resolution Professional (IRP) appointed vide the said Order. Further, in terms of stipulations contained in Section 14 of the Code, a moratorium has been declared vide the Order prohibiting certain stipulated actions.

In terms of the last update received from RP of that company, as a part of the Corporate Insolvency Resolution Process (CIRP), RP had oated an Expression of Interest and had received interest from Public and Private Players in the process. The Request for Resolution Plans (RFRP) has been issued to the shortlisted Prospective Resolution Applicants (PRA) and they are required to submit their Resolution Plans in October 2021 as per the process laid down under the Code. Prospective Resolution Applicants (PRAs) have expressed their interest in the Oil Assets of MPL. The process of due diligence by these entities is currently going on. However, due to a pending litigation led in NCLT by a nancial creditor of the Parent Company and a consequent stay granted by NCLAT, the timelines under the Code stand extended.

Monetization of the Block CB-ONN-2005/9:

1. During the nancial year 2019-20, MPL made e orts to Farm-out (in full or in part) its Participating Interest (PI) in the Block CB-ONN-2005/9. To this e ect, MPL signed a Sale Purchase Agreement (SPA) with an identi ed buyer on 26th December, 2019. Further, Deed of Assignment for transfer of 100% PI was signed on 14th January, 2020. Application for transfer of PI along with requisite documents has been submitted to Director General of Hydrocarbon (DGH) for approval and the same was being reviewed by them. We had signed an addendum to extend the completion date to 31st August, 2020 and further extending the long stop date to October 31, 2020. In terms of the update received from IRP, as a part of the

Corporate Insolvency Resolution Process (CIRP), IRP had invited Resolution Plans from the eligible bidders. IRP had received a positive response and after the initial phase, there are a few Prospective Resolution Applicants in the fray. As part of the process, these Resolution Applicants have been carrying out the necessary due diligence. The Resolution Applicants include certain Private Entities in the sector, a Public Sector Undertaking and others. Prospective Resolution Applicants (RPAs) have expressed their interest in the Oil Assets of MPL. The process of due diligence by these entities is currently going on. The sale proceeds will enable the company to pay its nancial creditors and trade creditors.

Sagar Samrat Conversion Project Update on Dispute with ONGC and GPC

Mercator Oil & Gas Limited (MOGL), a material subsidiary of the Company and Mercator O shore (P) Pte. Limited (collectively ‘Mercator Oil & Gas) were engaged in the execution of an EPC contract involving conversion of Sagar Samrat, a mobile o shore drilling unit into a mobile o shore production unit for ONGC. The said contract was awarded to a consortium comprising of Mercator Oil & Gas and Gulf Piping Co. WLL (GPC), a shipyard based out of Abu Dhabi.

On September 25, MOGL received a notice of termination from ONGC for Sagar Samrat Conversion Project giving the consortium 14 days cure period as per the contract. At the same time, ONGC proceeded to encash the bank guarantees. MOGL had then challenged the invocation of Bank Guarantees and was granted a stay by Honble Single Member Bench (SMB) of the Bombay High Court. Appeal in the Arbitration Petition before division bench of Honble Bombay High Court in a 100% subsidiary of the Company was dismissed vide order in July-2019; By virtue of the above order, ONGC invoked bank guarantees worth INR 1421.90 million in the previous nancial year. This has increased the debt of MOGL by an equivalent amount. A claim of Rs. 19,470 million (USD 262 Mn) has been made by the MOGL on ONGC. In the view of the management and based on legal advice made available earlier, an estimated amount of Rs. 12,880 million (USD 173.36 Mn) could probably be awarded as payable to the subsidiary company. However, any impact of the settlement will be known only after completion of the ongoing arbitration proceedings. Management feels it has a very strong case in its favor as per a legal opinion which also includes claims for wrongful invocation of the Bank Guarantees against ONGC on account of the following:

• Certified work but not invoiced

• Works completed and invoiced but unpaid• Unpaid and/or unapproved variations• Wrongful deduction of liquidated damages

• New Taxes

• Wrongful invocation of the Bank Guarantees

• Damages at large

• Wrongful termination

MOGL in its pleadings had alleged fraud and collusion by and between ONGC & GPC for illegally terminating the contract and subsequently awarding it to GPC which was ultra vires

(a) the Contract signed between ONGC & the Consortium, (b) Contract signed between the Consortium parties inter se and (c) Guidelines laid down by the Central Vigilance Commission (CVC) for PSUs mandating policies for awarding contracts. The arbitration is likely to complete in a few months and the tribunal is expected to issue its award thereafter. In terms of an update received from RP, the arbitration tribunal has provided revised schedule of recording of evidence from October 18, 2021 to October 23, 2021 and nal hearing from December 6, 2021 to December 11, 2021. ONGC with a view of postponing the trial, led a writ petition in Bombay High Court, challenging Tribunals various orders for timely completion of October,2021 Trial. On 18 October 2021, the Tribunal convened to commence the October Trial. However, ONGC was not present in the trial. On 19 October 2021, the MOGL was served with an unnumbered writ petition to be led by the ONGC before the Bombay High Court (“Writ Petition”), inter alia seeking a direction to the Tribunal not to proceed with the October Trial till such time as the NCLT decides the Parties applications, a stay of this Arbitration until nal disposal of the Writ Petition, and interim and ad interim reliefs in this regard. On 21st October, 2021 ONGC mentioned that the Writ Petition before the Bombay High Court, which refused to pass any orders, and directed for the same to be listed on 25 October 2021. The hearing on this petition now xed for 15 December 2021. ONGC appeared on the 22nd October, 2021 and requested for new dates for October Trial. Despite MOGLs objections, new dates were for hearing were give as under:

(a) 10, 20 -22 December, 2021 for Respondents opening submissions and for completing cross-examination witnesses of both parties;

(b) 17-20 January, 2022 for Claimants oral submissions

(c) 14-17 February 2022 for Respondents oral submissions

(d) 18 February, 2022 for Claimants oral submissions in rejoinder.

Further, RP had updated that the last date of submission of Expression of Interest (EOI) by Prospective Resolution Applicants (PRAs) was October 13, 2021. The Resolution Plan was placed before CoC. However, the plan did not secure a majority vote of the CoC and accordingly an application for approval of liquidation of the Company has been led with Honorable NCLT, Mumbai.

Mercator has also initiated arbitration proceedings against consortium partner GPC and have sought to encash their counter Bank Guarantees worth US$ 9.2 million issued in favour of MOGL. Legal advice states that our case is strong in both the matter and expect a favorable outcome.

A nancial creditor has incurred legal costs aggregating Rs.56.9 million in the year ended March 31 2021 on behalf of MOGL in relation to the ongoing arbitration in the SSCP matter. The same has been expenses out in MOGL towards Legal Costs in the FY 2020-21. MOGL is also in advanced stages of discussions with overseas funds to fund litigation for Sagar Samrat Arbitration matter and encashment of the counter bank guarantees given by GPC for any shortfall of amount sanctioned by the nancial creditor and/or further expenses that may be needed for execution of the award.

MATERIAL CHANGES AND COMMITMENTS:

The Company was undergoing CIRP vide order of NCLT dated February 08, 2021. Pursuant to the said order, the powers of the Board of Directors were suspended and were vested with Mr. Girish Siriram Juneja, who was appointed as Resolution Professional (RP) by the NCLT. The Resolution Plans submitted by the Resolution Applicants were placed before the Committee of Creditors for their consideration and voting but failed to receive the requisite votes in terms of the provisions of the Code. Accordingly, an application for liquidation of the Corporate Debtor has been led in terms of section 33 of the Code.

NCLT, Mumbai has ordered the company to be liquidated as a going concern and Mr. Girish Siriram Juneja has been appointed as Liquidator of the company vide its order dated February 21, 2023.

Further, there were no material changes and commitments a ecting the nancial position of the Company, between the end of the nancial year of the Company to which the nancial statements relate and the date of this Report.

SHARE CAPITAL:

The paid-up Equity Share Capital as at March 31, 2023 stood at Rs.302.46 million. During the year under review, the Company has not issued shares or shares with di erential voting rights nor has granted any stock options or sweat equity or warrants.

TRANSFER TO RESERVES:

No amount is proposed to be transferred to the Reserves, including Debenture Redemption Reserve.

DIVIDEND:

In view of accumulated losses of the Company, no dividend has been recommended for nancial year 2022-23.

CHANGE IN THE NATURE OF BUSINESS:

There was no change in the nature of business activities or operations of the Company during the nancial year under review.

PUBLIC DEPOSITS:

During the nancial year under review, the Company has not accepted any deposits from public/members within the meaning of Sections 73 and 76 of the Companies Act, 2023 (‘the Act) read with Companies (Acceptance of Deposits) Rules, 2014.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under review, Mr. Jagmohan Talan (DIN: 08890353) and Ms. Ritu Vats (DIN: 08890591) continued to be the Directors of the Company.

Resignations:

Mr. Harish Kumar Mittal (DIN: 00007690) resigned as Director of the company vide his email dated October 21, 2022. Pursuant to provisions of Section 28 of Insolvency and Bankruptcy Code, 2016 as amended from time to time, the aforesaid resignation was placed for the approval of the Committee of Creditors (CoC) of the Company at its meeting held on November 15, 2022. CoC requested Mr. Mittal to defer his decision and the same was intimated to Mr. Mittal vide letter dated 29-11-2022. However, Mr. Harish Kumar Mittal has led e-form DIR-11 with MCA and his resignation has been taken on record by MCA w.e.f. 21-10-2022. After this, number of Directors of the company has fallen less than the minimum number prescribed by the Companies Act, 2013 for public limited companies.

In furtherance to the above, all the Directors of the Company are disquali ed from being appointed as Director in terms of Section 164 (2) of the Act.

However, since the Company is under liquidation, the Liquidator has requested the existing Directors to continue with their term.

Directors retiring by rotation:

Since the Company is under liquidation and all the exiting directors are the Independent Director, no Director shall be retiring by rotation at the ensuing Annual General Meeting.

Declaration by Independent Directors:

During the year under review, the Company has not received declarations from all the Independent Directors as the powers of the Directors are suspended. However, there has been no change in the circumstances which may a ect their status as Independent Directors of the Company and the Liquidator is satis ed of the integrity, expertise and experience (including pro ciency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board.

Mr. Jagmohan Talan, the Independent Director of the Company had undertaken requisite steps towards the inclusion of their names in the databank of Independent Directors maintained with the Indian Institute of Corporate A airs (IICA) in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Quali cation of Directors) Rules, 2014 as per the Ministry of Corporate A airs Noti cation dated October 22, 2019. However, the renewal of subscription of Mr. Talan was pending as on September 23, 2021. Furthermore, the registration of Mr. Jagmohan Talan with the databank maintained by IICA expired on 23rd September 2021, which was not renewed till the date of this report. Ms. Ritu Vats, Independent Director has not applied for inclusion of her name in the databank.

Remuneration to Non-Executive Directors:

During the nancial year under review, the Non-Executive Directors (NEDs) of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committees of the Company.

Disquali cation of Directors:

The Company has failed to pay the instalment due of the debentures on the due date and has failed to pay the interest due thereon for a continuous period of more than a year. Hence, all the Directors of the Company are disquali ed from being appointed as Director in terms of Section 164 (2) of the Act.

However, since the company is under Liquidation, the Liquidator has requested to the Directors to continue with their term.

Board Evaluation Process:

Since, the Company was under CIRP during the substantial part of nancial year 2022-23 and pursuant to the provisions of the Code, the powers of Board of Directors had been suspended, hence, the evaluation couldnt be conducted. The Liquidator however, appreciated the valuable contribution made by Independent Directors in the Company.

Key Managerial Personnel:

Pursuant to the approval of CoC, Mr. Mangesh Mukund Deokar Bhosale was appointed as Chief Financial O cer & Compliance O cer of the Company w.e.f. March 1, 2022. However, Mr. Harish Kumar Mittal (DIN: 00007690) tendered his Resignation from the Company w.e.f. October 21, 2022.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:

As on March 31, 2023, your Company had total 27 subsidiaries/step-down subsidiaries. However, the nancials of all subsidiaries were not available for review during the nancial year ended March 31, 2023, hence, the materiality of subsidiaries could not be determined.

Further, the Policy for determining material subsidiary companies is however framed and adopted which due to the non-availability of the functional website is available for inspection at the Registered o ce of the Company.

As per Section 134 of the Act, your Company has provided the Audited Consolidated Financial Statements for the year ended on March 31, 2023; together with Auditors Report thereon forming part of this Annual Report, which includes nancial information as available of all the subsidiaries. A statement pursuant to the provisions of the Section 129(3) of the Act read with relevant rules made thereunder in the prescribed form AOC-1, showing nancial highlights of the subsidiary companies, as available, is attached to the consolidated nancial statements.

During the nancial year under review, no company ceased to be subsidiary, associate or joint venture. The Company does not have any associate or joint venture companies as on March 31, 2023.

MEETINGS OF RP/LIQUIDATOR & DIRECTORS:

During the year, 4 (Four) Meetings of RP & Directors was held i.e. on May 28, 2022, August 09, 2022, November 14, 2022 and February 14, 2023, to discuss and decide on a airs, operations of the Company and to supervise and control the activities of the Company, details of which are given in the Report on Corporate Governance forming a part of this Report.

The intervening gap between two consecutive meetings was within the period prescribed under the Act, Secretarial Standards on Board Meetings.

COMMITTEES:

The Company being into CIRP for most part of the year, the regulations 17 to 21 of Listing Regulations, were not applicable to the Company, during year under review, however, the provisions of Companies Act, 2013 shall continue to apply, wherever applicable.

Accordingly, the Committees constituted under the Act are:

1. Audit Committee

2. Stakeholders Relationship Committee

3. Nomination & Remuneration Committee

However, during the previous nancial year, the Corporate Social Responsibility Committee and the Risk Management Committee was dissolved, owing to the exemptions provided under the Act and Listing Regulations.

The details of the Committees along with their composition, terms of reference, number of meetings held and attendance of the members are provided in the Corporate Governance Report, forming part of this Annual Report.

PARTICULARS OF EMPLOYEES:

As on March 31, 2023, the Company has 1 employee i.e. the Chief Financial O cer.

The information required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company for part of nancial year 2022- 23, is appended as Annexure IIA and Annexure IIB respectively forming part of this Report.

During the year under review, no employee was in receipt of remuneration exceeding the limits as prescribed under provisions of Section 197 of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

Pursuant to the provisions of Section 178 of the Act read with the Rules made thereunder and on the recommendation of the Nomination & Remuneration Committee, the Companys policy on Directors appointment and remuneration and other matters provided in Section 178(3) of the Act is available for inspection at the Registered o ce of the Company.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

During the year under review, the Company being under CIRP, no programs were conducted.

STATUTORY AUDITORS & AUDIT REPORT:

M/s. Singhi and Co. (FRN: 302049E), were appointed as Statutory Auditors of the Company at the 33rd Annual General Meeting of the Company held on September 15,

2017 to hold o ce from the conclusion of the said meeting till the conclusion of the 38th AGM of the Company.

The RP & Directors places on record, its appreciation for the contribution of M/s. Singhi and Co., Chartered Accountants, during his tenure as the Statutory Auditors of the Company.

The RP & Directors at its meeting held on August 09, 2022 had recommended the appointment of M/s. SMBC & Co. LLP (Firm Registration No. 121388W/W100687) as Statutory Auditors for a First term of 5 (Five) years, from the conclusion of the 38th Annual General Meeting till the conclusion of 43rd Annual General Meeting to be held in the year 2027 for approval of shareholders of the Company based on the recommendation of Audit Committee.

Subsequently, M/s. SMBC & Co. LLP withdrew their consent for appointment vide their letter dated October 21, 2022 due to non-availability of peer review number, hence not meeting the criteria for appointment as Statutory Auditor of a Listed Company.

Based on the recommendations of the Audit Committee, the Resolution Professional & the Board of Directors, at its meeting held on November 14, 2022, M/s G.P. Sharma & Co. LLP (Firm Registration Number: 109957W/W100247) were appointed Statutory Auditors of the Company in the Annual General Meeting of the Company held on December 07, 2022 for a term of 5 consecutive years who shall hold the o ce from the conclusion of 38th AGM till the conclusion of the 43rd AGM to be held in the year 2027 at a remuneration of Rs. 250,000/- p.a. including Rs. 50,000/- for limited review report per quarter for rst three quarters and Rs. 100,000/- as the Statutory Audit fees per year including last quarter.

No fraud was reported by the Statutory Auditors of the Company during the year under review pursuant to Section 143(12) of the Act.

Qualifications in Statutory Auditors report:

STANDALONE FINANCIAL STATEMENTS

Sr. Auditors Observations No.

Company Reply

1 The management has prepared these Financial Statements on a going concern basis in spite of following facts and circumstances: The financial results of the Company have been prepared on a going concern basis by the management. The company has negative retained earnings as at 31st March, 2023 and 31st March, 2022, wherein assets are insu cient in comparison to liabilities thereby resulting in erosion of its Net-worth. Further, the Company had since disposed-o the substantial part of the Property, Plant and Equipment (PPE). As on March 31, 2023 the Company has only two non-operating dredgers which have been arrested by operational creditors. The current liabilities substantially exceed the current assets and large sums of money receivable are in dispute, which is not readily realizable. A CIRP process was initiated by Honble NCLT, Mumbai. It may be further noted that in consonance with the stipulations contained in Section 14 of the Code, a moratorium was declared in the aforesaid order passed by the Honble NCLT, inter alia, prohibiting the following:
i. NCLT, Mumbai has ordered the company to be liquidated as going concern. The management has obtained an external legal opinion to prepare the accounts with going concern assumption. a. the institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgement, decree or other in any court of law, tribunal, arbitration panel or other authority;
ii. The net-worth of the company has been fully eroded and is INR (-) 9787.50. million as at March 31, 2023 and INR INR (-) 9791.60 million as at March 31, 2022; b. transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein;
iii. There are no operations during the current and previous financial year and no revenue is earned except for interest on xed deposits; c. any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
iv. Legal proceedings are pending before various Judicial Authorities seeking claims / compensations; d. the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor.
v. The financial statements and other details in respect of various subsidiaries, associates and joint ventures of the company are not available due to which we are unable to comment on the impact it may have on the carrying amount and the impairment, if any, in respect of investments, loans, advances, receivables and payable, the requirement of provisioning for guarantees provided, disclosures for liabilities crystalized or contingent. Interest earned on loans granted to related parties are subject to reconciliation. The Companys ability to continue as a going concern is dependent upon many factors including continued support from the financial creditors, operational creditors and submission of a viable resolution plan by the prospective investor.
vi. No documentary evidences are available for bank balances, trade receivables loans granted Resolution plans received from prospective resolution applicants were submitted to the CoC for their consideration and approval but failed to gain requisite votes. Accordingly, an application for liquidation of the Company was led in terms of section 33 of the Code. NCLT, Mumbai. Pursuant to the said application, the company has been ordered to be liquidated as a going concern and Mr. Girish Siriram Juneja has been appointed as Liquidator of the company vide its order dated February 21, 2023.
vii. Recoverability of Income Tax Assets, Security and Judicial Deposits, Insurance Receivable, Other Financial Assets, Other Current and Non- Current Assets being remote Pursuant to the aforesaid order by NCLT, Liquidator is trying to liquidate the company as a going concern. Further, the Company believes that the claims receivable for Rs. 15,800 million at the group level could, if realized, provide a reasonable su cient opportunity for the repayment of loans from lenders and provide required resources for the development of business opportunities for the revival.
The above mentioned conditions cast significant doubt about the Companys ability to continue as a going concern. The Company may be unable to discharge its liabilities in the normal course of business and adjustments may have to be made to re ect the situation that assets may need to be realized other than in the normal course of business and at amounts which could differ significantly from the amounts at which they are currently recorded in the balance sheet. Due to these conditions at the date of this report, we are unable to ascertain the impacts of the same on the standalone financial Statements. In view of the aforesaid details, the nancial statements of the Company have been prepared on going concern basis.
2.Regarding the balances restated in the books of accounts pursuant to admission of the claims submitted by the financial creditors as on March 31, 2023 post aforementioned NCLT order for liquidation. As confirmed by Liquidator, claims are in the process of being received and shall be duly verified upon receipt of the same. We have relied on the adjustments, if any, made by the erst while Resolution Professional w.r.t. the claims received during Corporate Insolvency Resolution Process and are unable to comment on the adjustment, if any arising on any pending claim or claim not received on the standalone financial statement s of the company. As per the Code, the Liquidator has to receive, collate, verify and admit all the claims submitted by the creditors of the Company. Such claims can be submitted to the Liquidator during the Liquidation. The impact of such claims, if any, that may arise has not been considered in the preparation of the unaudited nancial results.
Principal portion of loans from nancial creditors in the books of the Corporate Debtor have not been restated with the amounts admitted by Liquidator as on Insolvency Commencement Date (“ICD date”) (Rs. NIL million). Total amount of claims towards principal dues of the nancial creditors as on March 31, 2023 stand as under:
Total amount of claims towards principal dues of the financial creditors as on March 31, 2023 stand as under:;
a. Principal amount of Loans admitted by Liquidator Rs.Nil million and
b. Claims under verification by Liquidator Rs. Nil
Total Rs.Nil*
* Liquidator had not received any claims as on 31st March 2023. The last date of the receipt of the claim was 07th April 2023. As on 07th April 2023, the total claim amount is Rs. 22,934.1 million, which includes fresh claims led during the liquidation process and the claims submitted during the CIRP process. As per clause c of sub-regulation 2 of Regulation 12 of Liquidation of IBBI (Liquidation Process) Regulations, 2016, where a stakeholder does not submit its claims during the liquidation process, the claims submitted by such a stakeholder, and duly collated by the interim resolution professional or resolution professional, as the case may be, during the corporate insolvency resolution process under the Insolvency and Bankruptcy Board of India (Insolvency

 

Sr. No. Auditors Observations

Company Reply

3 Regarding interest or any other charges not being accrued in the books of accounts from the date of commencement of CIRP process, i.e. February 8, 2021 onwards till date on account of section 14 of the code. We have relied on the erstwhile Resolution Professional and Liquidaor regarding the same and are unbale to comment on the adjustment, if any, on the nancial statements of the company. The management has accounted for Bank Guarantee commission as Finance Cost. Resolution Process for Corporate Persons) Regulations, 2016, shall be deemed to be submitted during the liquidation process.
4 Regarding the Companys investments in preference shares in its wholly owned foreign subsidiary Mercator International Pte Ltd. (MIL), (which is under liquidation as per the Singapore laws), has been impaired in full, amounting to Rs. 4,649.41 million. The Company has not made any provision on investment in equity shares Rs. 2.88 million) as on March 31, 2023. The signi cant investment of MIL is in its coal mines and related infrastructure in Indonesia and the valuation of these assets was conducted on December 31, 2020 by an independent valuer. We have been informed by the Management/Liquidator the same is the only and latest information available. Further, as informed to us, a liquidator has been appointed on MIL e ective April 9, 2021. No audited nancial statement of MIL are available with the Company. We are further informed that ICICI Bank which was the major lender having a charge on the coal assets of the subsidiary has assigned its loan and the securities that they held on the coal assets to a third party. Interest or any other charges has not been accrued in the books of accounts from the date of commencement of CIRP process, i.e. 8th February, 2021 onwards, on account of moratorium under section 14 of Code.
The Company had impaired investment amounting to USD 566.50 million (Rs. 4156.70 million) in Non-Cumulative Redeemable Preference Shares (NCRPS) of its wholly owned subsidiary Mercator International Pte Ltd, Singapore (MIPL) in the financial year 2019-20. The step-down Subsidiary Company had last carried out valuation of coal business taking cut-o date December 31, 2020 for the purpose local reporting requirement and the same has been considered for nancial reporting as on March 31,2021 and March 31, 2022 as well. However, due to on-going events such as commencement of liquidation proceedings in Mercator International Pte. Ltd (MIPL), Singapore with e ect from April 9, 2021 and non-availability of audited nancial statements of step down coal subsidiaries at Indonesia for year ended March 31, 2023, any impact on the valuation is not known as on the date. The coal business is housed in companies which are a subsidiary of MIPL and given the fact that a liquidation has been ordered in case of MIPL by the High Court of the Republic of Singapore, the coal business will be monetized by the liquidator of MIPL or the receiver appointed by the nancial creditors with whom the shares of the subsidiary owning the coal business have been pledged, as the case may be. The residual value, if any, after settling the debts of the nancial and other creditors would be available for redemption of the NCRPS of MIPL held by Mercator Limited and accordingly the entire impairment provision continues to be held. No latest information is available with the management of the Company as on March 31, 2023.
In view of the non availability of the nancials statement / nancial information and updates on other matters as stated above, we are unable to comment on the value or recoverability of the said investment in subsidiary. Non-Current Tax Assets (net) as on March 31, 2023 includes Rs. 691.90 million which has not been settled due to ongoing tax assessment for the various Assessment Years from AY 2003-04 to AY 2018-19 against which net tax demand of Rs. 867.50 million has been received and contested by the Company. The management is taking steps to resolve the cases with the income tax department.
5 Regarding unprovided current tax demands under dispute to the tune of Rs. 867.50 million pending at various judicial forums of the Income Tax department, which are treated as contingent liabilities. In the absence of the required supporting documents justifying the stand of the Company we are unable to comment on nal outcome of such contested statutory demands and the potential nancial impact of the same. Mercator Oil & Gas Limited (‘MOGL), a subsidiary of the Company was engaged in EPC project awarded by ONGC for conversion of their Mobile O shore Drilling Unit (MODU) ‘Sagar Samrat into a Mobile O shore Production Unit (MOPU). On September 25, 2018, MOGL received a notice of termination from ONGC for
6 Regarding termination of Sagar Samrat Conversion Project (SSCP), undertaken by a subsidiary Mercator Oil & Gas Ltd. (hereinafter referred as “MOGL” or “subsidiary”), by ONGC, which is currently under arbitration. The Company has investments in equity amounting to Rs. 1.50 million, which has been fully impaired in previous years and loans amounting to Rs. 1,042.36 million (which includes un-serviced interest, excluding impairment of Rs. 414.28 million), and the balance as per the nancial results net of impairment amounts to Rs. 628.06 million as at March 31, 2023 in MOGL, which in the view of the management / Liquidator is recoverable. Sagar Samrat Conversion Project after completing almost 96% of the project work. MOGL has since initiated arbitration proceedings against ONGC and appointed its Arbitrator and a Tribunal was formed. The proceedings are underway. In addition to above, based on the order of Honble Bombay High Court dated July 29, 2019, ONGC had invoked Bank Guarantee amounting to Rs. 1421.90 million which had been accounted in the books of the accounts of MOGL in the quarter ended June 30, 2019. Based on the progress of the arbitration proceedings and discussion with the legal counsel, the management is hopeful of a positive outcome in the claim of Rs. 19,467.30 million led against ONGC. Accordingly, in the nancial year 2022-23, the Company made 50% impairment for an amount of Rs. 28.64 million for the year ended March 31, 2023 towards accrued interest on loan given to MOGL. Out of the total outstanding loan of Rs. 1042.36 million, unimpaired amount as on March 31, 2023 is Rs. 628.08 million after considering a provision for impairment of Rs.414.28 million.
The petition led in NCLT, Mumbai Bench by an operational creditor against MOGL was admitted vide Order dated June 30, 2021 and a Resolution Professional has been appointed. Further, the Resolution Professional had updated that the last date of submission of Expression of Interest (EOI) by Prospective Resolution Applicants (PRAs) was October 13, 2021. The Resolution Plan was placed before Committee of Creditors (‘COC). However, the plan did not secure a majority vote of the CoC and accordingly an application for approval of liquidation of the Company has been led with Honourable NCLT, Mumbai. Further, one of the operational creditors has led petition u/s 9 of IBC 2016 before the National Company Law Tribunal (NCLT), Mumbai Bench against MOGL and the said application for initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) was admitted vide the order of NCLT dated June 30, 2021 (Order). In terms of Section 17 of the IBC, the power of the Board of Directors stands suspended and all such powers stand vested in an Interim Resolution Professional (IRP) appointed vide the said Order and subsequently con rmed as a Resolution Professional (RP) by the Committee of Creditors (CoC) in their meeting held on July 27, 2021. Further, in terms of stipulations contained in Section 14 of the Code, a moratorium has been declared vide the Order prohibiting certain stipulated actions. A claim of Rs. 19,470 million (USD 262 Mn) has been made by the subsidiary company on ONGC. In the view of the management and based on legal advice made available earlier, an estimated amount of Rs. 12,880 million (USD 173.36 Mn) could probably be awarded as payable to the subsidiary company. However, any impact of the settlement will be known only after completion of the ongoing arbitration proceedings.
We have been informed by the management / Liquidator that no financial statement / financial results / financial information of MOGL as on March 31, 2023 is being made available to the Company. The Company has receivable towards loan given of Rs. 958.68 million (including debentures) to Mercator Petroleum Limited (MPL) as on March 31, 2023, against which impairment of Rs. 292.26 million has been created and balance outstanding as on March 31, 2023 is Rs. 666.42 million. During the year ended March 31, 2023, the Company has provided additional impairment of Rs. 47.07 million for the year ended March 31, 2023 towards accrued interest on loan to Mercator Petroleum Limited (MPL), Rs. 19 million towards interest accrued on 6% optionally convertible debentures issued by MPL, on evaluating the following criteria
Further, the Company have also accounted for Rs. 28.64 million as interest income after impairment during the year. a. In October, 2019, MPL has received notice of termination from the Ministry of Petroleum and Natural Gas (MOPNG) in compliance with Production Sharing Contract (PSC) for its non- operative oil Block (CB-3) and also has demanded costs and other dues to be determined as per terms and conditions of PSC. The management of MPL and the Company is con dent of defending the amounts claimed by Directorate General of Hydrocarbon (DGH). In event of rejection of subsidiarys contention, basis the latest available information with the management, the estimated nancial impact on the Company would be approx. Rs. 358 million.
In view of the non availability of the financials statement / nancial information and updates on other matters as stated above of MOGL as on March 31, 2023, we are unable to comment on the recoverability of such investment and loan amount. b. The application for initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) led by an Operational Creditor before the National Company Law Tribunal (NCLT), Mumbai Bench against one of the material subsidiary of the Company, Mercator Petroleum Limited (MPL) was admitted vide the order of NCLT dated August 31, 2020 (Order). In terms of Section 17 of the IBC, the power of the Board of Directors stands suspended and all such powers stand vested in an Interim Resolution Professional (IRP) appointed vide the said Order who has taken charge under the directions of the Committee of Creditors. Further, in terms of stipulations contained in Section 14 of the Code, a moratorium has been declared vide the Order prohibiting certain stipulated actions. In terms of the last update received from IRP, as a part of the Corporate Insolvency Resolution Process (CIRP), IRP had oated an Expression of Interest and had received interest from Public and Private Players in the process. Basis the latest available information with the management, the Request for Resolution Plans (RFRP) has been issued to the shortlisted Prospective Resolution Applicants (PRA) and they are required to submit their Resolution Plans in October 2021 as per the process laid down under the Code. Prospective Resolution Applicants (PRAs) have expressed their interest in the Oil Assets of MPL. RP of the said company has informed that the COC has approved one resolution plan which has been put for the approval with the adjudicating authority.
In view of the non availability of the financials statement / financial information and updates on other matters as stated above of MOGL as on March 31, 2023, we are unable to comment on the recoverability of such investment and loan amount. The Company has not received Audited or management certified Financial Statements from subsidiaries/Step down subsidiaries as under:
7 Regarding the Companys investments in its Indian subsidiary Mercator Petroleum Ltd. (hereinafter referred to as “MPL”) amounting to Rs. 479.30 million, (excluding impairment of Rs. 161.75 million during the year) and loan (including Debentures) given amounting to Rs. 1,274.75 million (including un-serviced interest and excluding impairment of Rs. 292.26 million) as on March 31, 2023, and the balance as per the standalone nancial statements including investments and loans amounts to Rs. 1,300.04 million, which are considered recoverable. Further, the petition led in NCLT, Mumbai Bench by an operational creditor against MPL was admitted vide Order dated August 31, 2020 and a Resolution Professional (RP) has been appointed. We have been informed by the management / Liquidator that no nancial statement / nancial results / nancial information/Resolution Process of MPL as on March 31, 2023 is being made available to the Company. We are informed that a Resolution Plan has been approved by the Committee of Creditors of MPL and has been led for approval with the adjudicating authority by the Resolution Professional of MPL.
Further, the Company has also accounted for Rs. 66.03 million as interest income which is fully impaired during the year. In view of the non availability of the nancials statement / nancial information and updates on other matters as stated above of MPL as on March 31, 2023, we are unable to obtain su cient appropriate evidence about the recoverability of such investment and loan given.

Indian Subsidiaries

8 Regarding the fact that no Financial Statement / Financial Information (including balance con rmations) of any of the subsidiaries have been made available to the management / Liquidator for the purpose of preparation of consolidated nancial statements for the year ended March 31, 2023. In the view of the non availability of any financial information, we are unable to obtain su cient appropriate evidence about the recoverability of such investments and loans and advances given which are outstanding as on March 31, 2023. In view of initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) vide order of NCLT dated August 31, 2020, the nancial statements / nancial results / nancial information of Mercator Petroleum Limited, one of the material subsidiaries of the Company for the year ended March 31, 2023 have not been made available to the Company by IRP of the said material subsidiary. In view of this, the nancial statements / nancial results / nancial information available as on March 31, 2021, which are neither management / IRP certi ed nor audited, have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023. In view of initiation of Corporate Insolvency Resolution Process

 

Sr. Auditors Observations No.

Company Reply

(CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) vide order of NCLT dated June 30, 2021, nancial statements / nancial results / nancial information of Mercator Oil and Gas Limited, one of the material subsidiary of the Company, for the nine months period ended December 31, 2021 have been made available to the Company by IRP of the said material subsidiary, which are neither management / IRP certi ed nor audited, have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023. The nancial statements / nancial results / nancial information of Oorja Resources India Pvt. Ltd, Mercator O shore Logistics Pvt. Ltd. and O shore Transport Pvt. Ltd. for the quarter ended June 30, 2021 which have neither been certi ed by the management nor have been audited / reviewed, have been considered for the purpose of preparation of Consolidated Financial Results basis the nancial information available with the Holding Company for the quarter ended June 30, 2021. However, the said subsidiaries have not provided their nancial statements / nancial results / nancial information for year ended March 31, 2023. In view of the same, the nancial statements / nancial results / nancial information available for the period ended June 30, 2021 have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023.

Overseas Subsidiaries

Financial Statements / nancial results / nancial information of 4 nos. of Singapore subsidiaries i.e. Oorja 1 Pte. Ltd., Oorja Batua Pte. Ltd., Oorja Holdings Pte. Ltd. and Panther Resources Pte. Ltd. for the half year ended September 30, 2021, which are neither been certi ed by the management or liquidator nor audited / reviewed and the same has been considered as provided by the liquidators of Mercator International Pte. Ltd., Singapore for the purpose of preparation of Consolidated Financial Results of the Company for the quarter and half year ended September 30, 2021. However, the said subsidiaries have not provided their nancial Statements / nanclial results / nancial information for the year ended March 31, 2023. In view of the same, latest nancial Statements / nancial results / nancial information available for the period ended September 30, 2021 have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023.
MCS Holdings Pte. Ltd. (In Liquidation) is currently undergoing the liquidation process pursuant to an Order of the High Court of the Republic of Singapore dated April 16, 2021 and M/s Lim Soh Yen (NRIC No. S7672591H) and Lynn Ong Bee Ling Care (NRIC No. S7932085D) of Auctus Advisory Pte. Ltd. have been appointed as joint and several liquidators of MCS Holdings Pte. Ltd. Financials Statements / nancial results / nancial information of MCS Holdings Pte Ltd. (MCS) (in liquidation) have not been provided to the Company by the liquidators of such subsidiaries. In view of this, nancial Statements / nancial results / financial information available as on March 31, 2021 have been considered for the
purpose of preparation of the Consolidated Financial Results of the Company for the year ended March 31, 2023.
Mercator International Pte. Ltd. (In Liquidation) a material subsidiary of the Company at Singapore, currently under liquidation process pursuant to an Order of the High Court of the Republic of Singapore dated April 9, 2021 and M/s Lim Soh Yen (NRIC No. S7672591H) and Lynn Ong Bee Ling Care (NRIC No. S7932085D) of Auctus Advisory Pte. Ltd. have been appointed as joint and several liquidators of Mercator International Pte. Ltd. Financials Statements / nancial results / nancial information of Mercator International Pte Ltd. (MIPL) (in liquidation) have not been provided to the Company by the liquidators of such subsidiaries. In view of this, latest nancial Statements / nancial results / financial information available as on March 31, 2021 have been considered for the purpose of preparation of the Consolidated Financial Results of the Company for the year ended March 31, 2023.
Financials Statements / nancial results / nancial information of rest of the Singapore subsidiaries/step down subsidiaries have not been made available to the Company. In view of this, nancial Statements / nancial results / nancial information available as on March 31, 2021 have been considered for the purpose of preparation of the Consolidated Financial Results of the Company for the year ended March 31, 2023.
Financial Statements / nancial results / nancial information of all Indonesian subsidiaries (step down subsidiaries of MIPL) for the year ended March 31, 2023 have not been provided to the Parent Company and hence the latest unaudited nancial Statements / nancial results / nancial information available as on March 31, 2021 have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the quarter and year ended March 31, 2023.
9 Regarding balance confirmations not been received in respect of any secured / unsecured loans, bank balance, trade receivables, trade and other payables, and loans and advances as a result of which reconciliation process and consequential adjustments, if any, has not been carried out. In the view of the management / Liquidator, all the balances outstanding to be receivable are to be considered as good and no additional provisioning on account of non recoverability or expected credit loss is required. The Company has not been able to obtain any confirmations from various debtors, loans and advances from banks and others, current accounts from banks, trade and other payables. Further, the balances related to Input Tax Credit of Goods and Service Tax as per books of accounts as on March 31, 2023 are under reconciliation with the available regulatory records and any impact of the same is not known as on the date of Financial Statements. This is due to limited resources available with the company. Accordingly, adjustments if any arising out of reconciliation with these parties is not readily available. The Company has carried out its internal assessment and accordingly provided/ written o / back certain receivables/ payables/ loans and advances.
Further, bank statements (except for one bank account) are also not available. In the view of the non availability of balance con rmation or documents substantiating balances, we are unable to comment on the impact of the same on the Financial Statements of the Company and compliance of relevant Ind-AS. All of the directors on the Board of Directors of the Company are disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Companies Act, 2013.
Further, the balances related to Input Tax Credit of Goods and Service Tax as per books of accounts as on March 31, 2023 are under reconciliation with the available regulatory records and any impact of the same is not known as on the date of Financial Statements. The Company has an insurance claim amounting to Rs. 542.8 million, being the balance amount payable against a total loss claim (Rs. 2252.90 million) on a vessel pertaining to the year 2012-13, which has been considered fully recoverable by the management and is supported by a legal opinion. The litigation is up for nal hearing at National Commission, New Delhi.
10 All the directors are disquali ed from being appointed as director in terms of Section 164 (2) of the Act.
11 Regarding receivable from an insurance Company amounting to Rs. 542.80 million pertaining to a total loss claim on a vessel pertaining to the year 2012-13, which is under litigation and has been considered fully recoverable by the management / RP and is supported by a legal opinion. In the view of the non availability of any information, we are unable to obtain su cient appropriate evidence about the recoverability of such claim which are outstanding as on March 31, 2023.

CONSOLIDATED FINANCIAL STATEMENTS:

Sr. Auditors Observations No.

Company Reply

1 Regarding The Financial Statement / Financial Information of none of the subsidiaries have been audited as at and for year ended March 31, 2023 or certi ed by the management of the respective companies and hence, we are unable to express any conclusion on the subsidiary nancial statements and thereby on the consolidated nancial statements / nancial information given the materiality of the subsidiaries. Further, in the absence of latest details/ records in respect of all the components being available, we are unable to communicate with the component auditors. In terms of Regulation 33(3)(h) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the listed entity shall ensure that, for the purposes of consolidated nancial statement, at least eighty percent of each of the consolidated revenue, assets and pro ts, respectively, shall have been subject to audit in case of audited results. The status of consolidation of nancial statements of all subsidiaries of the Holding Company is as under:
Status of financial information considered in preparing Consolidated Financial Statements is as under (a) In view of initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) vide order of NCLT dated August 31, 2020, the nancial statements / nancial results / nancial information of Mercator Petroleum Limited, one of the material subsidiaries of the Company for the year ended March 31, 2023 have not been made available to the Company by IRP of the said material subsidiary. In view of this, nancial Statements / nancial results / nancial information available for the period ended March 31, 2021, which are also neither management / RP certi ed nor audited, have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023.
1 . Mercator Oil and Gas Limited (MOGL) Not Available December, 2021 (b) In view of initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) vide order of NCLT dated June 30, 2021, unsigned unaudited nancial statements / nancial results / nancial information of Mercator Oil and Gas Limited, one of the material subsidiary of the Company, for the nine months period ended December 31, 2021 have been made available to the Holding Company by IRP of the said material subsidiary and the same have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023. The said financial information has neither been audited/reviewed nor has been certified by the management/IRP.
2. Mercator Petroleum Limited (MPL) Not Available March, 2021
3. Oorja Resources India Private Limited Not Available June, 2021
4. Mercator O shore Logistic Private Limited. (FPSO) (Formerly Mercator Dredging Private Limited) Not Available June, 2021
5. Mercator Oceantransport Limited Not Available June, 2021

6. Mercator International Pte. Limited Management Certified March, 2021

7. O shore Holdings Company Pte. Limited Not Available March, 2021 (c) The financial statements / financial results / financial information of Oorja Resources India Pvt. Ltd, Mercator O shore Logistics Pvt. Ltd. and O shore Transport Pvt. Ltd. for the quarter ended June 30, 2021, which have neither been certi ed by the management nor have been audited / reviewed, have been considered for the purpose of preparation of Consolidated Financial Results basis the nancial information available with the Holding Company for the said period.
8 Oorja Holdings Pte. Limited Not Available September, 2021 However, the said subsidiaries have not provided their nancial statements / nancial results / nancial information for the year ended March 31, 2023 and in view of the same, the nancial Statements / nancial results / nancial information available for the period ended June 30, 2021 have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023.
9. Mercator Energy Pte Limited Under Liquidation June, 2020 (d) The financial statements /financial results / nancial information of 4 nos. of Singapore subsidiaries i.e. Oorja 1 Pte. Ltd., Oorja Batua Pte. Ltd., Oorja Holdings Pte. Ltd. and Panther Resources Pte. Ltd. for the half year ended September 30, 2021 have neither been certi ed by the management or liquidator nor have been audited / reviewed and the same have been considered as provided by the liquidators of Mercator International Pte. Ltd., Singapore for the purpose of preparation of Consolidated Financial Results of the Company for the quarter and half year ended September 30, 2021. Further, the said subsidiaries have not provided their nancial Statements / nancial results / nancial information for year ended March 31, 2023. In view of the same, the nancial Statements / nancial results / nancial information available for the period ended September 30, 2021 have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023.
10. Mercator O shore Assets Holding Pte Limited Under Liquidation June, 2020 (e) MCS Holdings Pte. Ltd. (in Liquidation) is currently undergoing the liquidation process pursuant to an Order of the High Court of the Republic of Singapore dated April 16, 2021 and M/s Lim Soh Yen (NRIC No. S7672591H) and Lynn Ong Bee Ling Care (NRIC No. S7932085D) of Auctus Advisory Pte. Ltd. have been appointed as joint and several liquidators of MCS Holdings Pte. Ltd. Financials Statements / nancial results / nancial information of MCS Holdings Pte Ltd. (MCS) (in liquidation) have not been provided to the Company by the liquidators of such subsidiaries. In view of this, nancial Statements / nancial results / nancial information available as on March 31, 2021 have been considered for the purpose of preparation of the Consolidated Financial Results of the Company for the year ended March 31, 2023.
11.Mercator O shore (P) Pte Limited Under Liquidation June, 2020 (f) One of the nancial lenders of the Wholly Owned Foreign
12. Panther Resources Pte Limited Not Available September, 2021 Subsidiary had recalled loan in the month of May 2019 and further to that, have led case in Singapore High Court for recovery of their outstanding dues. Mercator International Pte. Ltd. (in Liquidation),the said material subsidiary of the Company at Singapore, is currently under liquidation process pursuant to an Order of the High Court of the Republic of Singapore dated April 9, 2021 and M/s Lim Soh Yen (NRIC No. S7672591H) and Lynn Ong Bee Ling Care (NRIC No. S7932085D) of Auctus Advisory Pte. Ltd. have been appointed as joint and several liquidators of Mercator International Pte. Ltd. Financials Statements / nancial results / nancial information of Mercator International Pte Ltd. (MIPL) (in liquidation) have not been provided to the Company by the liquidators of such subsidiaries. In view of this, unaudited nancial Statements / nancial results / nancial information available as on March 31, 2021 have been considered for the purpose of preparation of the Consolidated Financial Results of the Company for the year ended March 31, 2023.
13.Oorja (Batua) Pte. Limited Not Available September, 2021 (g) Financials Statements / nancial results / nancial information of rest of the Singapore subsidiaries/step down subsidiaries have not been made available to the Company. In view of this, nancial Statements / nancial results / nancial information available as on March 31, 2021 or last available have been considered for the purpose of preparation of the Consolidated Financial Results of the Company for the year ended March 31, 2023.
14. Oorja 1 Pte. Limited Not Available September, 2021 (h) Audited / Reviewed or management certi ed Financial Results of all Indonesian subsidiaries (step down subsidiaries of MIPL) for the quarter and year ended March 31, 2022 have not been provided to the Parent Company and hence the audited nancial Statements / nancial results / nancial information available as on March 31, 2021 (last available) have been carried to March 31, 2023 for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023.
15. Oorja Mozambique Lda No Financials March, 2020 As none of the audited / reviewed Financial Statement / nancial results / nancial information of the Subsidiaries were available as on March 31, 2023, the Company could not comply with the aforesaid regulations.
16 MCS Holdings Pte. Ltd. Management Certi ed March, 2021 Ind AS 110 establishes principles for the presentation and preparation of consolidated nancial statements when an entity controls one or more other entities. The Interim Resolution Professional (IRP) for the Indian Subsidiary Mercator Petroleum Limited and Resolution Professional (RP) for another Indian Subsidiary Mercator Oil and Gas Limited have been providing business updates from time to time. Lenders of Mercator Petroleum Limited are also a part of the CoC of the Company by virtue of the Corporate Guarantee issued by the Company while there is a common lender of Mercator Oil and Gas Limited and the Company. In view of the management, the required level of control is available with the Company with respect to the subsidiaries/step down subsidiaries in India and overseas.
17. PT Karya Putra Borneo Not Available March, 2021
18. PT Indo Perkasa Not Available March, 2021
19. Oorja Indo Petangis Four Not Available December, 2020
20. Oorja Indo Petangis Three Not Available December, 2020
21.Bima Gema Permata, PT Not Available December, 2020
22. Oorja Indo KGS Not Available December2020
23.Broadtec Mozambique Minas Lda Not Available March, 2020
24.Marvel Value International Limited (BVI) Dissolved e ective August, 2020
However, the Management / Liquidator of the Holding Company are con dent that the Holding Company still maintains the control on the aforementioned subsidiaries, as de ned in Ind - AS 110 “Consolidated Financial Statements”, and is being considered in preparation of the Consolidated Financial Results of the Holding Company basis the information available
In the absence of details of transactions and balances outstanding with components within the group the elimination of transactions and balances outstanding within the group done in the consolidated nancial results could not be veri ed by us. Further, the transactions / balances within the group in the books of the holding company have also not been fully eliminated in the absence of relevant details. The details in respect of amounts appearing under Other Comprehensive Income w.r.t. components is not available due to which we are unable to comment on the same. The same is not in compliance with the requirements of Ind AS 110 issued by ICAI. Note no. 5(xiii) & 5(xiv), regarding non - availability of requisite information for preparation of segment reporting, Statement of Cash Flow and assumptions considered for eliminations. The requirements of Ind AS 110 issued by ICAI such as alignment of accounting policies of all component and holding company have not been complied with. Impact, whereof, if any, is not ascertainable in the absence of relevant details being made available. The holding company has considered closing rate for translation of assets and liabilities, translation of items appearing in statement of pro t and loss of foreign components, which is not in line with requirements of Ind AS 21.
2 Regarding non - compliance of Section 134 and 149 of the Companies Act 2013 in case of certain material subsidiaries. Compliance under section 134 and 149 of Companies Act 2013:
(a) In case of MPL, Independent Director, Chief Financial O cer and Company secretary had resigned during the year ended March 31, 2020. The management has not lled the said vacancy until date of reporting.
(b) In case of MOGL, Independent Director had resigned during the year ended March 31, 2020. The management has lled the said vacancy. Mr. Jagmohan Talan and MRs. Ritu Vats were appointed as Additional Directors (Non-Executive and Independent) of the Company with e ect from September 26, 2020. Further, Mr. H K Mittal resigned as a Director with e ect from September 26, 2020 citing personal reasons.
3 The Management has prepared these Financial Results on a going concern basis in spite of following facts and circumstances: The management/Liquidator of the Holding Company is of the view that they are making best e orts to achieve favourable order in ongoing litigations in order to protect the value of its assets and is making e orts to revive operations. Further, the Parent Company believes that the claims receivable for Rs. 15,800 million at the group level could, if realised, provides a reasonable su cient opportunity for the repayment of loans from lenders and provide required resources for the development of business opportunities for the revival.
i. NCLT, Mumbai has ordered the company to be liquidated under going concern. The Management has obtained an external legal opinion to prepare accounts with going concern assumption. The Resolution Plans submitted by the Resolution Applicants (RAs) were placed before the Committee of Creditors for their consideration and voting but failed to receive the requisite votes in terms of the provisions of the code. Accordingly, an application for liquidation was led in terms of section 33 of the Code. Pursuant to the said application, the company has been ordered to be liquidated as going concern vide order dated February 21, 2023 of the aforesaid bench of NCLT.
ii. The net-worth of the Company has been fully eroded and is Rs (-) 9,787.50 million as at March 31, 2023 and Rs (-) 9,791.58 million as at March 31, 2022; In view of the aforesaid details, the nancial statements of the Holding Company have been prepared on going concern basis.
iii. There are no operations during the current and previous nancial year and no revenue is earned except for interest on xed deposits; As per the Code, the Liquidator has to receive, collate, verify and admit all the claims submitted by the creditors of the Company. Such claims can be submitted to the Liquidator during the liquidation. The impact of such claims, if any, that may arise has not been considered in the preparation of the audited nancial results. Principal portion of loans from nancial creditors in the books of the Corporate Debtor have been restated with the amounts admitted by RP as on Insolvency Commencement Date (“ICD date”) (Rs.Nil ). Total amount of claims towards principal dues of the nancial creditors as on March 31, 2023 stand as under:
iv. The Company had substantially disposed-o its Property, Plant and Equipment and currently doesnt have any operating revenue and operating assets. a. Principal amount of Loans admitted by RP Rs. Nil million
v. Legal proceedings are pending before various Judicial Authorities seeking claims / compensations; b. Claims under veri cation by RP/Not led Nil
vi. The nancial statements and other details in respect of various subsidiaries, associates and joint ventures of the company are not available due to which we are unable to comment on the impact it may have on the carrying amount and the impairment, if any, in respect of investments, loans, advances, receivables and payable, the requirement of provisioning for guarantees provided, disclosures for liabilities crystalized or contingent. Interest earned on loans granted to related parties are subject to reconciliation. *Liquidator had not received any claims as on 31st March, 2023. The last date of the receipt of the claim was 07th April, 2023. As on 07th April 2023, the total claim amount is Rs.2,293.41 crores, which includes fresh claims led during the liquidation process and the claims submitted during the CIRP process. As per clause c of sub-regulation 2 of Regulation 12 of Liquidation of IBBI (Liquidation Process) Regulations, 2016, where a stakeholder does not submit its claims during the liquidation process, the claims submitted by such a stakeholder, and duly collated by the interim resolution professional or resolution professional, as the case may be, during the corporate insolvency resolution process under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, shall be deemed to be submitted during the liquidation process.
vii. No documentary evidences are available for bank balances, trade receivables loans granted. Interest or any other charges has not been accrued in the books of accounts of Holding Company from the date of commencement of CIR process, i.e. 8th February, 2021 onwards, on account of moratorium under section 14 of Code.
viii. Recoverability of Income Tax Assets, Security and Judicial Deposits, Insurance Receivable, The Company had impaired investment amounting to USD 566.50 million (Rs. 4156.70 million) in Non-Cumulative Redeemable Preference Shares (NCRPS) of its wholly owned subsidiary Mercator International Pte Ltd, Singapore (MIPL) in the nancial year 2019-20. The step-down Subsidiary Company had last carried out valuation of coal business taking cut-o date December 31, 2020 for the purpose local reporting requirement and the same has been considered for nancial reporting as on March 31,2021 and March 31, 2022 as well. However, due to on-going events such as commencement of liquidation proceedings in Mercator International Pte. Ltd (MIPL), Singapore with e ect from April 9, 2021 and non-availability of audited nancial statements of step down coal subsidiaries at Indonesia for year ended March 31, 2023, any impact on the valuation is not known as on the date. The coal business is housed in companies which are a subsidiary of MIPL and given the fact that a liquidation has been ordered in case of MIPL by the High Court of the Republic of Singapore, the coal business will be monetized by the liquidator of MIPL or the receiver appointed by the nancial creditors with whom the shares of the subsidiary owning the coal business have been pledged, as the case may be. The residual value, if any, after settling the debts of the nancial and other creditors would be available for redemption of the NCRPS of MIPL held by Mercator Limited and accordingly the entire impairment provision continues to be held. No latest information is available with the management of the Company as on March 31, 2023.
Other Financial Assets, Other Current and Non- Current Assets being remote. Current Tax Assets (net) as on March 31, 2022 includes Rs. 691.90 million which has not been settled due to ongoing tax assessment for the various Assessment Years from AY 2003-04 to AY 2018-19 against which net tax demand of Rs. 631.80 million has been received and contested by the Company. The management is taking steps to resolve the cases with the income tax department.
The above mentioned conditions cast signi cant doubt about the Companys ability to continue as a going concern. The Company may be unable to discharge its liabilities in the normal course of business and adjustments may have to be made to re ect the situation that assets may need to be realized other than in the normal course of business and at amounts which could di er signi cantly from the amounts at which they are currently recorded in the balance sheet. Due to these conditions at the date of this report, we are unable to ascertain the impacts of the same on the standalone nancial Statements. Mercator Oil & Gas Limited (‘MOGL), a subsidiary of the Company was engaged in EPC project awarded by ONGC for conversion of their Mobile O shore Drilling Unit (MODU) ‘Sagar Samrat into a Mobile O shore Production Unit (MOPU). On September 25, 2018, MOGL received a notice of termination from ONGC for Sagar Samrat Conversion Project after completing almost 96% of the project work. MOGL has since initiated arbitration proceedings against ONGC and appointed its Arbitrator and a Tribunal was formed. The proceedings are underway. In addition to above, based on the order of Honble Bombay High Court dated July 29, 2019, ONGC had invoked Bank Guarantee amounting to Rs. 1421.90 million which had been accounted in the books of the accounts of MOGL in the quarter ended June 30, 2019. Based on the progress of the arbitration proceedings and discussion with the legal counsel, the management is hopeful of a positive outcome in the claim of Rs. 19,467.30 million led against ONGC. Accordingly, in the nancial year 2022-23, the Company made 50% impairment for an amount of Rs. 28.64 million for the year ended March 31, 2023 towards accrued interest on loan given to MOGL. Out of the total outstanding loan of Rs. 1042.36 million, unimpaired amount as on March 31, 2023 is Rs. 628.08 million after considering a provision for impairment of Rs.414.28 million.
4 Regarding the balances restated in the books of accounts pursuant to admission of the claims submitted by the nancial creditors as on March 31, 2023 post aforementioned NCLT order for liquidation. As con rmed by Liquidator, no claim is pending for veri cation with Liquidator. We have relied on the adjustments made by the Liquidator w.r.t. the claims received and are unable to comment on the adjustment, if any, arising on any pending claim or claim not received on the standalone nancial statements of the Company. Further, one of the operational creditors has led petition u/s 9 of IBC 2016 before the National Company Law Tribunal (NCLT), Mumbai Bench against MOGL and the said application for initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) was admitted vide the order of NCLT dated June 30, 2021 (Order). In terms of Section 17 of the IBC, the power of the Board of Directors stands suspended and all such powers stand vested in an Interim Resolution Professional (IRP) appointed vide the said Order and subsequently con rmed as a Resolution Professional (RP) by the Committee of Creditors (CoC) in their meeting held on July 27, 2021. Further, in terms of stipulations contained in Section 14 of the Code, a moratorium has been declared vide the Order prohibiting certain stipulated actions. A claim of Rs. 19,470 million (USD 262 Mn) has been made by the subsidiary company on ONGC. In the view of the management and based on legal advice made available earlier, an estimated amount of Rs. 12,880 million (USD 173.36 Mn) could probably be awarded as payable to the subsidiary company. However, any impact of the settlement will be known only after completion of the ongoing arbitration proceedings.
5 Regarding interest or any other charges not being accrued in the books of accounts from the date of commencement of CIR process, i.e. February 8, 2021 onwards till date on account of Section 14 of the Code. We have relied on the Liquidator regarding the same and are unable to comment on the adjustment, if any, on the standalone nancial statements of the Company. The Management has accounted for Bank Guarantee commission as Finance Costs. The Company has receivable towards loan given of Rs. 958.68 million (including debentures) to Mercator Petroleum Limited (MPL) as on March 31, 2023, against which impairment of Rs. 292.26 million has been created and balance outstanding as on March 31, 2023 is Rs. 666.42 million. During the year ended March 31, 2023, the Company has provided additional impairment of Rs. 47.07 million for the year ended March 31, 2023 towards accrued interest on loan to Mercator Petroleum Limited (MPL), Rs. 19 million towards interest accrued on 6% optionally convertible debentures issued by MPL, on evaluating the following criteria
6 Regarding the Companys investments in preference shares in its wholly owned foreign subsidiary Mercator International Pte Ltd. (MIL) which was been impaired in full, amounting to Rs. 4,649.41 million. The Company has not made any provision on investment in equity shares Rs. 2.88 million) as on March 31, 2023. The signi cant investment of MIL is in its coal mines and related infrastructure in Indonesia and the valuation of these assets was conducted on December 31, 2020 by an independent valuer. We have been informed by the Management/Liquidator the same is the only and latest information available. Further, as informed to us, a liquidator has been appointed on MIL e ective April 9, 2021. No audited nancial statement of MIL are available with the Company. a. In October, 2019, MPL has received notice of termination from the Ministry of Petroleum and Natural Gas (MOPNG) in compliance with Production Sharing Contract (PSC) for its non- operative oil Block (CB-3) and also has demanded costs and other dues to be determined as per terms and conditions of PSC. The management of MPL and the Company is con dent of defending the amounts claimed by Directorate General of Hydrocarbon (DGH). In event of rejection of subsidiarys contention, basis the latest available information with the management, the estimated financial impact on the Company would be approx. Rs. 358 million.
In view of the non availability of the nancials statement / nancial information and updates on other matters as stated above, we are unable to comment on the value or recoverability of the said investment in subsidiary. 7 Regarding unprovided current tax demands under dispute, pertaining to Holding Company, to the tune of Rs. 867.50 million pending at various judicial forums of the Income Tax department. In the absence of the required supporting documents justifying the stand of the Holding Company we are unable to comment on nal outcome of such contested statutory demands and the potential financial impact of the same. The application for initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) led by an Operational Creditor before the National Company Law Tribunal (NCLT), Mumbai Bench against one of the material subsidiary of the Company, Mercator Petroleum Limited (MPL) was admitted vide the order of NCLT dated August 31, 2020 (Order). In terms of Section 17 of the IBC, the power of the Board of Directors stands suspended and all such powers stand vested in an Interim Resolution Professional (IRP) appointed vide the said Order who has taken charge under the directions of the Committee of Creditors. Further, in terms of stipulations contained in Section 14 of the Code, a moratorium has been declared vide the Order prohibiting certain stipulated actions. In terms of the last update received from IRP, as a part of the Corporate Insolvency Resolution Process (CIRP), IRP had oated an Expression of Interest and had received interest from Public and Private Players in the process. Basis the latest available information with the management, the Request for Resolution Plans (RFRP) has been issued to the shortlisted Prospective Resolution Applicants (PRA) and they are required to submit their Resolution Plans in October 2021 as per the process laid down under the Code. Prospective Resolution Applicants (PRAs) have expressed their interest in the Oil Assets of MPL. RP of the said company has informed that the COC has approved one resolution plan which has been put for the approval with the adjudicating authority.
8 Regarding termination of Sagar Samrat Conversion Project (SSCP), undertaken by a subsidiary Mercator Oil & Gas Ltd. (hereinafter referred as “MOGL” or “subsidiary”), by ONGC, which is currently under arbitration. The Company has investments in equity amounting to Rs. 1.50 million, which has been fully impaired in previous years and loans amounting to Rs. 1,042.36 million (which includes un-serviced interest, excluding impairment of Rs. 414.28 million), and the balance as per the nancial results net of impairment amounts to Rs. 628.06 million as at March 31, 2023 in MOGL, which in the view of the management / Liquidator is recoverable. The Company has not received Audited or management certified Financial Statements from subsidiaries/Step down subsidiaries as under:
The petition led in NCLT, Mumbai Bench by an operational creditor against MOGL was admitted vide Order dated June 30, 2021 and a Resolution Professional has been appointed. Further, the Resolution Professional had updated that the last date of submission of Expression of Interest (EOI)

Indian Subsidiaries

by Prospective Resolution Applicants (PRAs) was October 13, 2021. The Resolution Plan was placed before Committee of Creditors (‘COC). However, the plan did not secure a majority vote of the CoC and accordingly an application for approval of liquidation of the Company has been led with Honorable NCLT, Mumbai. In view of initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) vide order of NCLT dated August 31, 2020, the nancial statements / nancial results / nancial information of Mercator Petroleum Limited, one of the material subsidiaries of the Company for the year ended March 31, 2023 have not been made available to the Company by IRP of the said material subsidiary. In view of this, the nancial statements / nancial results / nancial information available as on March 31, 2021, which are neither management / IRP certi ed nor audited, have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023.
We have been informed by the management / Liquidator that no nancial statement / nancial results / nancial information of MOGL as on March 31, 2023 is being made available to the Company. In view of initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) vide order of NCLT dated June 30, 2021, nancial statements / nancial results / nancial information of Mercator Oil and Gas Limited, one of the material subsidiary of the Company, for the nine months period ended December 31, 2021 have been made available to the Company by IRP of the said material subsidiary, which are neither management / IRP certi ed nor audited, have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023.
Further, the Company have also accounted for Rs. 28.64 million as interest income after impairment during the year. The nancial statements / nancial results / nancial information of Oorja Resources India Pvt. Ltd, Mercator O shore Logistics Pvt. Ltd. and O shore Transport Pvt. Ltd. for the quarter ended June 30, 2021 which have neither been certi ed by the management nor have been audited / reviewed, have been considered for the purpose of preparation of Consolidated Financial Results basis the nancial information available with the Holding Company for the quarter ended June 30, 2021. However, the said subsidiaries have not provided their nancial statements / nancial results / nancial information for year ended March 31, 2023. In view of the same, the nancial statements / nancial results / nancial information available for the period ended June 30, 2021 have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023.
In view of the non availability of the nancials statement / nancial information and updates on other matters as stated above of MOGL as on March 31, 2023, we are unable to comment on the recoverability of such investment and loan amount.

Overseas Subsidiaries

9 Regarding the Companys investments in its Indian subsidiary Mercator Petroleum Ltd. (hereinafter referred to as “MPL”) amounting to Rs. 479.30 million, (excluding impairment of Rs. 161.75 million during the year) and loan (including Debentures) given amounting to Rs. 1,274.75 million (including un-serviced interest and excluding impairment of Rs. 292.26 million) as on March 31, 2023, and the balance as per the standalone nancial statements including investments and loans amounts to Rs. 1,300.04 million, which are considered recoverable. Further, the petition led in NCLT, Mumbai Bench by an operational creditor against MPL was admitted vide Order dated August 31, 2020 and an Interim Resolution Professional (IRP) has been appointed. We have been informed by the management / Liquidator that no nancial statement / financial results / financial information/Resolution Process of MPL as on March 31, 2023 is being made available to the Company. Financial Statements / nancial results / nancial information of 4 nos. of Singapore subsidiaries i.e. Oorja 1 Pte. Ltd., Oorja Batua Pte. Ltd., Oorja Holdings Pte. Ltd. and Panther Resources Pte. Ltd. for the half year ended September 30, 2021, which are neither been certi ed by the management or liquidator nor audited / reviewed and the same has been considered as provided by the liquidators of Mercator International Pte. Ltd., Singapore for the purpose of preparation of Consolidated Financial Results of the Company for the quarter and half year ended September 30, 2021. However, the said subsidiaries have not provided their nancial Statements / nanclial results / nancial information for the year ended March 31, 2023. In view of the same, latest nancial Statements / nancial results / nancial information available for the period ended September 30, 2021 have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the year ended March 31, 2023.
Further, the Company has also accounted for Rs. 66.03 million as interest income which is fully impaired during the year MCS Holdings Pte. Ltd. (In Liquidation) is currently undergoing the liquidation process pursuant to an Order of the High Court of the Republic of Singapore dated April 16, 2021 and M/s Lim Soh Yen (NRIC No. S7672591H) and Lynn Ong Bee Ling Care (NRIC No. S7932085D) of Auctus Advisory Pte. Ltd. have been appointed as joint and several liquidators of MCS Holdings Pte. Ltd. Financials Statements / nancial results / nancial information of MCS Holdings Pte Ltd. (MCS) (in liquidation) have not been provided to the Company by the liquidators of such subsidiaries. In view of this, nancial Statements / nancial results / nancial information available as on March 31, 2021 have been considered for the purpose of preparation of the Consolidated Financial Results of the Company for the year ended March 31, 2023.
In view of the non availability of the nancials statement / nancial information and updates on other matters as stated above of MPL as on March 31, 2023, we are unable to obtain sufficient appropriate evidence about the recoverability of such investment and loan given. Mercator International Pte. Ltd. (In Liquidation) a material subsidiary of the Company at Singapore, currently under liquidation process pursuant to an Order of the High Court of the Republic of Singapore dated April 9, 2021 and M/s Lim Soh Yen (NRIC No. S7672591H) and Lynn Ong Bee Ling Care (NRIC No. S7932085D) of Auctus Advisory Pte. Ltd. have been appointed as joint and several liquidators of Mercator International Pte. Ltd. Financials Statements / nancial results / nancial information of Mercator International Pte Ltd. (MIPL) (in liquidation) have not been provided to the Company by the liquidators of such subsidiaries. In view of this, latest nancial Statements / nancial results / nancial information available as on March 31, 2021 have been considered for the purpose of preparation of the Consolidated Financial Results of the Company for the year ended March 31, 2023.
10 Regarding the fact that no Financial Statement / Financial Information (including balance con rmations) of any of the subsidiaries have been made available to the management / Liquidator for the year ended March 31, 2023. In the view of the non availability of any nancial information, we are unable to obtain su cient appropriate evidence about the recoverability of such investments and loans and advances given which are outstanding as on March 31, 2023. Financials Statements / nancial results / nancial information of rest of the Singapore subsidiaries/step down subsidiaries have not been made available to the Company. In view of this, nancial Statements / nancial results / nancial information available as
Regarding balance con rmations not been received in respect of any secured / unsecured loans, bank balance, trade receivables, trade and other payables, and loans and advances as a result of which reconciliation process and consequential adjustments, if any, has not been carried out. In the view of the management / Liquidator, all the balances outstanding to be receivable are to be considered as good and no additional provisioning on account of non recoverability or expected credit loss is required. on March 31, 2021 have been considered for the purpose of preparation of the Consolidated Financial Results of the Company for the year ended March 31, 2023.
Further, bank statements (except for one bank account) are also not available. In the view of the non availability of balance con rmation or documents substantiating balances, we are unable to comment on the impact of the same on the Financial Statements of the Company and compliance of relevant Ind-AS. Financial Statements / nancial results / nancial information of all Indonesian subsidiaries (step down subsidiaries of MIPL) for the year ended March 31, 2023 have not been provided to the Parent Company and hence the latest unaudited nancial Statements / nancial results / nancial information available as on March 31, 2021 have been considered for the purpose of preparing the Consolidated Financial Results of the Company for the quarter and year ended March 31, 2023.
Further, the balances related to Input Tax Credit of Goods and Service Tax as per books of accounts as on March 31, 2023 are under reconciliation with the available regulatory records and any impact of the same is not known as on the date of Financial Statements. The Company has not been able to obtain any con rmations from various debtors, loans and advances from banks and others, current accounts from banks, trade and other payables. Further, the balances related to Input Tax Credit of Goods and Service Tax as per books of accounts as on March 31, 2023 are under reconciliation with the available regulatory records and any impact of the same is not known as on the date of Financial Statements. This is due to limited resources available with the company. Accordingly, adjustments if any arising out of reconciliation with these parties is not readily available. The Company has carried out its internal assessment and accordingly provided/ written o / back certain receivables/ payables/ loans and advances.
12 Regarding all the directors are disquali ed from being appointed as director in terms of Section 164 (2) of the Act. All of the directors on the Board of Directors of the Company are disquali ed as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Companies Act, 2013. The Company has an insurance claim amounting to Rs. 542.80 million, being the balance amount payable against a total loss claim (Rs. 2252.90 million) on a vessel pertaining to the year 2012-13, which has been considered fully recoverable by the management and is supported by a legal opinion. The litigation is up for nal hearing at National Commission, New Delhi.
13 Regarding receivable from an insurance Company amounting to Rs. 542.80 million pertaining to a total loss claim on a vessel pertaining to the year 2012-13, which is under litigation and has been considered fully recoverable by the management / RP and is supported by a legal opinion. In the view of the non availability of any information, we are unable to obtain su cient appropriate evidence about the recoverability of such claim which are outstanding as on March 31, 2023.