To
The Members,
Mercator Limited
The take pleasure in presenting Thirty Fourth Annual Report of your Company for the year ended on March 31, 2018.
Financial highlights: (Rs. in Crore)
| |
Consolidated
|
Standalone
|
|
Particulars
|
Year ended
|
Year ended
|
| |
March 31, 2018
|
March 31, 2017
|
March 31, 2018
|
March 31, 2017
|
|
Income from operations
|
974.21
|
2115.39
|
405.67
|
538.33
|
|
Total Income
|
1010.68
|
2271.62
|
448.07
|
568.83
|
|
Operating Profit
|
141.89
|
610.23
|
99.15
|
173.78
|
|
Interest
|
(173.16)
|
(232.42)
|
(104.23)
|
(96.90)
|
|
Depreciation
|
(186.04)
|
(318.64)
|
(137.76)
|
(147.28)
|
|
Impairment
|
-
|
0.01
|
-
|
-
|
|
Exceptional Items
|
|
(9.16)
|
-
|
(9.16)
|
|
Profit/(Loss) before Tax & Minority Interest
|
(217.30)
|
50.01
|
(142.84)
|
(29.55)
|
|
Minority Interest
|
17.97
|
(4.23)
|
-
|
-
|
|
Other Comprehensive Income Adjustment
|
1.49
|
(0.43)
|
0.92
|
(0.61)
|
|
Taxes
|
|
|
|
|
|
- Current Year
|
(58.12)
|
(20.03)
|
42.17
|
(1.00)
|
|
- Deferred Tax
|
(2.12)
|
(1.18)
|
-
|
-
|
|
Net Profit/(Loss) After Tax
|
(294.02)
|
24.14
|
(184.10)
|
(31.15)
|
During the year under review, the income from operations on a consolidated basis was Rs. 974.21 cr as against Rs. 2115.39 cr in the previous year. The consequential loss in revenue were on account of (i) reduction of coal trading activities (ii) disruption of coal mining and infrastructure business for a part of the year (iii) sale of three tankers during the year and (iv) decline in dredging income during the year affected the revenue.
The consolidated EBIDTA was Rs. 141.89 cr against profit of Rs. 610.24 cr in the previous year. The consolidated loss before tax was Rs. 217.30 cr against previous year profit of Rs. 50.01 cr. After providing loss for the minority interest of Rs. 17.97 cr (previous year Rs. 4.23 cr); the loss after tax was Rs. 294.02 cr as against profit of Rs. 24.14 cr in the previous year.
On a standalone basis, the income from operations for the year under review was Rs. 405.67 cr. (Rs. 538.33 cr in the previous year). Depreciation was Rs. 137.76 crore against Rs. 147.28 cr in previous year and Interest was Rs. 104.23 cr against Rs. 96.90 cr in previous year); the Company had standalone loss of Rs. 184.10 cr (previous year loss of Rs. 31.15 cr) after provision of tax of Rs. 42.17 cr (previous year Rs. 1 cr).
Operations & finance:
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.
We had temporary disruption in operations of the above mentioned step down subsidiaries in Indonesia for about 5-6 months in the period under review due to change in the senior management. Such material event led to stoppage of coal production and infrastructure facilities from September, 2017 till January, 2018 and resulted into certain legal proceedings which are presently sub-judice at various forums. Since early part of 4th quarter of FY18, the operations have recommenced and have since attained optimum levels and third party logistics operations have been stabilized.
We are aiming to rapidly ramp up production of 4200 GAR coal through village shifting exercise and merging of 4200 GAR coal pits. We also intend to foray into coal transportation operations through chartered vessels based on existing relationship with infra logistics clientele. This will be a capex light business. We plan to pursue opportunities of acquiring neighboring mines to strengthen portfolio and drive growth in the longer term.
Oil and Gas
Mercator Petroleum Limited (‘MPL’), a subsidiary of the Company has Production Sharing Contracts with the Government of India for exploration of petroleum in two blocks viz. CB-3 & CB-9, under the Seventh New Exploration Licensing Policy round (NELP-VII). MPL has 100% participating interest (‘PI’) in both the above blocks. Discovery highlights include oil flowing to the surface @ over 2,000 barrels/day which is an excellent quality light oil (42 degrees API) and enjoys at least 5% premium over Bonny Light. Indian State Refineries benchmark the price of this oil to Bonny Light, using 4-cut Analysis. ~26 million barrels of recoverable oil is estimated though recoverable reserves according to Filed Development Plan (FDP) approved by DG Hydrocarbons are 23.79 million barrels. Competent Persons Report (CPR)/ Third party Certification for reserves were obtained from Leap Energy, Australia and Darcy Reservoir Consultancy Services, India. Test run was conducted in the discovered wells in April, 2018. MOU with Indian Oil Corporation Limited (IOCL) for crude oil sale is in place for the nearest IPCL refinery in Kayoli, Gujarat, just 85 Kms from the block. For evacuation of oil through pipelines, an MOU with ONGC for using their pipeline passing through CB-9 block for evacuation of oil is in place.
Mining Lease (ML) for commercial production has been applied for and the approval is expected from the Government of Gujarat by end of May Rs. 18/early June Rs. 18 upon receipt of which the commercial production would begin in the discovered oil wells. Environmental Clearance (EC) for discovered wells already available and requisite equipment already mobilized. Production in the developmental wells expected to commence by December, 2018, i.e. post receipt of EC for the said wells which shall augment the overall production profile of the Block. Exploration in the 8th and last exploratory well is underway and is expected to be completed by May, 2018. Testing in 6th exploratory well is underway, Discovery in the well could add to the existing Reserves in place.
Mercator Oil & Gas Limited (‘MOGL’), a subsidiary of the Company engaged in EPC project awarded by ONGC for conversion of their Mobile Offshore Drilling Unit (MODU) ‘Sagar Samrat’ into a Mobile Offshore Production Unit (MOPU), it is expected that MOPU would sail away post monsoon i.e. by September/October, 2018. While most of the yard activities have been accomplished, consortium plans to use the interim time to complete string test and other balance commissioning activities which were planned offshore. The above shall help in fast tracking the hand over process which is expected by December, 2018 / January, 2019.
Shipping
All the vessels are deployed under time charter except VLGC (Sisouli Prem) being on voyage and VLCC (Nerissa) being on pool charter. During the year under review, Prem Mala was sent for scheduled dry docking and completed successfully. The outlook for the tanker market remains soft. The freight rates have been sliding and remained depressed. The supply and demand ratio is in favour of the charterers with freight remaining under pressure. The US exports of Shale 011 would contribute in firming of the VLCC freight rates on account of increased tonne mile. American light crude shipments to Asia will reach almost 1.3 million barrels/day in the next 5 years from almost nothing in 2016, according to Wood Mackenzie.
During the year, the Company has monetized its aged fleet by selling Dry Bulk Carrier “M. T. Sri Prem Poorva” and a Tanker “M. T. Harsha Prem” at a net loss of Rs. 37.28 Crore in Q3 and further by selling another Dry Bulk Carrier “M. V. Vrinda” at a loss of Rs. 27.70 Crore in Q4; thereby loss on sale of vessels aggregating to Rs. 64.98 Crore. With this successful monetization of its aged fleet, the Company now has a younger fleet and the proceeds were utilized for reduction of debts.
Dredging
In September, 2017, there was a change in senior management with Dr. GVY Victor joining the Dredging Division as President - Dredging along with his key team. During the year, the dredging division accounted for works at various ports including Paradip, Vishakhapatnam, Karaikal, Goa, Cochin, Mangalore etc. During the year, the Company won a dredging contract for reclamation of Jawahar Dweep, Mumbai Port for Rs. 30.40 Crore. The work on this contract commenced from March, 2018 and the contract period is 12 months. The dredgers were operating at various ports across the Indian coast during the year under review except once under major breakdown.
The existing dredging contracts in hand are expected to contribute a revenue of about Rs. 156 Crore in FY19 with an average capacity utilization of around 69%. The Dredging Division has targets of bagging new contracts which could additionally contribute to the topline of dredging business by over Rs. 200 Crore in FY19.
Central Government’s Sagar Mala project which envisages minimum draft of 18 meters in major ports, expanding capacity in existing major ports, creation of new ports and development of inland waterways traffic is expected to add to the demand for dredging in India. The Company intends to diversify by an early contractor to work on Sagar Mala projects, wherein projects worth Rs. 20,000 Crore are allocated out of which dredging for inland waterways would be for about Rs. 5,000 Crore. While increasing its share in maintenance dredging, the Company is looking to participate and bid for capital projects with JV partners or on its own considering the soil parameters and operating efficiency of dredgers. The Company also plans to diversify into marine civil works including construction of breakwaters, bank protection works, coastal defence and coastal protection works.
The Company is also looking into oil and gas trenching works for laying submersible pipeline. The Company is seeking opportunities to establish its presence in blue and green energy sectors and work closely with NIO and NIOT to establish its presence for shallow water and deep sea mining activities.
Finance
Pursuant to the approval received from the members of the Company at the last Annual General Meeting held on September 15, 2017; the Company successfully completed QIP issue of Rs. 145.41 Cr during the year. Under the issue 3,25,67,262 Equity shares of face value of Re. 1/- each at a premium of Rs. 43.65 per equity share aggregating to Rs. 145.41 Cr were placed which were subscribed fully by marquee investors. The proceeds of the issue were utilized for intended purposes i.e. repayment of loans and general corporate purposes. As a result of above issue the paid up capital of the Company has increased by Rs. 3.25 Cr and Securities premium account increased by Rs. 142.15 Cr.
UTI Structured Debt Opportunities Fund I sanctioned for subscribing to the Company’s Secured Unlisted NonConvertible Debentures aggregating to Rs. 190 Cr, out of which the Company has raised total fund of Rs. 100 Cr by issue of unlisted Non-Convertible Debentures, which was in pursuance of the approval of the members as aforesaid. Further, the Company has sought approval of members by way of Postal Ballot, for issue of Secured/Unsecured, Redeemable, Non-convertible Debentures upto an amount not exceeding Rs. 100 Crore, the results of which will be declared on or before Wednesday, June 6, 2018. Upon receipt of approval of members through the said Postal Ballot, the Company proposes to raise the Balance amount of Rs. 90 Cr by way of issue of Secured Unlisted Non-Convertible Debentures to UTI Structured Debt Opportunities Fund I.
During the year under review the Company has redeemed the total 500 Non-Convertible Debentures amounting to Rs. 50 Cr comprising of Series IX, NCD of Rs. 150 Crore. In view of this the total debentures stands at Rs. 100 Crore including Non-Convertible debentures issued during the year under review.
Demerger of dredging business undertaking of mercator limited into mercator dredging private limited:
The Board of Directors at its meeting held on February 14, 2018, accorded its approval for Scheme of Arrangement between Mercator Limited (‘Demerged Company’) and Mercator Dredging Private Limited (‘Resulting Company’) and their respective shareholders for the demerger of Dredging Business Undertaking of Mercator Limited into Mercator Dredging Private Limited, a wholly owned subsidiary subject to necessary approvals. The Board is in process of filing the said scheme with the Stock Exchanges to obtain their No-objection letter in accordance with the provisions of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.
Transfer to reserves:
In view of loss incurred during the year, no amount proposed to be transferred to Reserves, including Debenture Redemption Reserve (as against Rs. 12.50 Cr in the previous year).
Dividend:
In view of losses suffered during the year under review, your Directors regret their inability to recommend any dividend.
Changes in board of directors and key managerial personnel:
Board of Directors:
During the year under review, Mr. Desh Raj Dogra (DIN:00226775) resigned from the office of Directors of the Company with effect from the closure of business hours on January 8, 2018. The Board of Directors place on record its sincere appreciation for the support and contribution made by Mr. Desh Raj Dogra during his tenure as Director of the Company.
Mr. Anil Khanna (DIN: 00199924) was appointed as an Additional Director (Independent Non-Executive Director) by the Board with effect from November 21, 2017. Subsequent to the financial year end, Mr. Chetan Desai (DIN:03595319) and Mr. Paritosh Kakkad (DIN:02558443) were also appointed as Additional Directors (Independent Non-Executive Directors) by the Board with effect from April 27, 2018. Pursuant to the provisions of the Section 161 of the Companies Act, 2013; Mr. Khanna; Mr. Desai and Mr. Kakkad holds their respective offices as such upto the date of ensuing Annual General Meeting. The Company has received a notice from a member proposing appointment of Mr. Khanna; Mr. Desai and Mr. Kakkad for the office of Director along with necessary deposit.
Mr. H. K. Mittal (DIN:00007690) shall be the Director liable to retire by rotation at the ensuing Annual General Meeting in accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company; and being eligible, offers himself for re-appointment. Additional information on Directors recommended for appointment / reappointment, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), is provided in the notice convening 34th Annual General meeting of the Company accompanying this report. The Company has received declarations from Mr. M. M. Agrawal, Mr. Anil Khanna, Mr. Chetan Desai and Mr. Paritosh Kakkad confirming that they meet with the criteria of Independence as prescribed under provisions of the Companies Act, 2013, Rules made thereunder and the Listing Regulations. Your Directors recommend the above appointment / reappointment for your approval.
Key managerial personnel:
Mr. Prasad Patwardhan resigned from the office of Chief Financial Officer and Key Managerial Personnel of the Company w.e.f. May 29, 2017. Mr. Kiran Vaidya who was appointed w.e.f May 30, 2017, resigned from the Office of Chief Financial Officer and Key Managerial Personnel of the Company w.e.f January 31, 2018. Mr. Suhas Pawar who was appointed w.e.f. April 10, 2017, resigned from the office of Company Secretary and Key Managerial Personnel w.e.f. March 26, 2018. Mr. Rajendra Kothari was appointed as Chief Financial Officer and Key Managerial Personnel of the Company w.e.f. February 1, 2018. The Company is looking for a right candidate for the office of Company Secretary and Key Managerial Personnel of the Company.
Board evaluation process:
Pursuant to the provisions of the Companies Act, 2013 & the Listing Regulations, and guidance note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017, the evaluation of every Director’s performance was done by the Nomination and Remuneration Committee at its meeting held on February 14, 2018. The performance evaluation of the Non Independent Directors and the Board as a Whole, committees thereof and the Chairman of the Company was carried out by the Independent Directors. Evaluation of the Independent Directors was carried out by the Board. A structured questionnaire was prepared based on criteria approved by Nomination and Remuneration Committee and circulated to the Directors for evaluation process.
Subsidiary companies and consolidated financial statements:
As on March 31, 2018, your Company had total 33 subsidiaries/step-down subsidiaries. During the year under review, M/s. Mercator Oceantransport Limited was incorporated as a Wholly Owned Subsidiary. As per Section 134 of the Companies Act, 2013, your Company has provided the Audited consolidated financial statements for the year ended on March 31, 2018; together with Auditors’ Report thereon forming part of this Annual Report, which includes financial information of all the subsidiaries. These documents will also be available for inspection during the business hours at the Registered Office of your Company and the respective subsidiary companies. A statement pursuant to the provisions of the Section 129 (3) of the Companies Act, 2013 read with relevant rules in the prescribed form AOC-1, showing financial highlights of the subsidiary companies is attached to the consolidated financial statements and therefore not repeated here for the sake of brevity. The Annual Report of your Company though does not contain full financial statements of the subsidiary companies; the audited annual accounts and related information of subsidiary companies is placed on its website and will be made available, upon request by any member of the Company.
Auditors:
Pursuant to the provisions of Section 139 of the Companies Act, 2013, M/s. Singhi and Co. (FRN: 302049E), were appointed as the Statutory Auditors for a period of five years by the Members in the 33rd Annual General Meeting held on September 15, 2017 to hold office from the 33rd Annual General Meeting till the conclusion of 38th Annual General Meeting of the Company.
Auditors’ report:
Statutory Auditors’ Observations in Audit Report on Consolidated/ Standalone Financials and Directors’ explanation thereto -
a. In case of a step down subsidiary, the auditors have given a modified opinion for the financial year ended March 31, 2018 on the following basis:
i. recoverability and non-provision of impairment loss in case of long overdue Trade Receivables amounting to Rs. 126.01 Crore (US$ 19.37 Mn), (Previous Year Rs. 72.97 Crore (US$ 11.25 Mn))
ii. in case of claim of Hindustan Zinc Ltd (HZL), the company had forwarded a draft settlement agreement proposing a full and final additional cash settlement of Rs. 7.39 Crore (US$ 1.13 Mn), which is currently being reviewed by the claimant. However, the company has not made any provision for the potential claim amount and other incidental costs, pending final settlement of the claim.
- i) The Management is reasonably confident of the recovery of these receivables amounting to Rs. 126.01 Crore (US$ 19.37 Mn), (Previous Year Rs. 72.97 Crore, US$ 11.25 Mn).
ii) Once the Amount is ascertained and after the settlement agreement is executed, the required liability shall be recognized by us in the books of accounts
b. In case of two step down subsidiaries the respective auditors have given a modified opinion for the financial year ended March 31,2018, raising concern regarding the recoverability of deposits amounting to Rs. 22.03 Crore (USD 3.39 Mn,) (Previous Year Rs. 21.96 Crore (US$ 3.39 Mn))paid in the past to acquire 70% equity interests in companies which own coal mining concessions.
- The Management is reasonably confident of the recoverability of those advances amounting to Rs. 22.03 Crore (USD 3.39 Mn)
Secretarial audit report:
As required under the provisions of Section 204 of the Companies Act, 2013, your Company has obtained a Secretarial Audit Report for the financial year ended on March 31, 2018, from M/s. Ganesh Narayan & Co. (FCS: 6910), Company Secretaries which is appended as Annexure I and forms part of this report. The said report is self-explanatory and does not contain any qualifications, reservations, or adverse remarks or disclaimers.
Meetings of the board:
Nine meetings of the Board of Directors were held during the year. The details are provided in the Corporate Governance Report forming part of this Report.
Committees of the board:
The details of the Committees of the Board constituted under the Companies Act, 2013 and Listing Regulations are given in the Corporate Governance Report forming part of this Report.
Particulars of employees:
The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 (1) and Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is appended as Annexure II and IIA respectively.
Conservation of energy, technology absorption and foreign exchange earnings and outgo:
Your Company operates offshore and onshore activities in environment friendly manner. The major activities carried by the Company are offshore and your Company work towards minimizing the impact of its operations on the environment including marine life.
Several steps are taken for conservation of energy, some of which are listed below:
(A) Conservation of Energy:
(i) The steps taken or impact on conservation of energy:
- Having regular track on weather updates, M/E RPM and settings of the Auto Pilot System of Vessels are adjusted accordingly which in turn helps to save the fuel oil. Besides, the crews are properly trained to steer in bad weather using minimum Rudder movements.
- Cleaning of Hull and Polishing the propeller in afloat condition of some of the vessels was done to reduce the Hull Roughness and thereby fuel consumption.
- Using the latest Performance Monitoring Technology helps in maintaining engines and generators of Vessels in good conditions; which leads higher operation efficiently and reduce consumption of energy considerably.
- Weekly inspection of entire vessels and providing training to Crew and Officers about preservation of resources by Master brings the consumption of energy down.
- Machineries are run efficiently by following the laid down procedures and following the PMS (Planned Maintenance Schedule) so that fuel consumption are kept under control.
- Machineries which are not required are immediately shut down, this reduces the load on generators which leads to fuel saving.
- Cargo Planning load and discharge is done in such a way so as to use relevant cargo gear to the optimum levels. Ballasting and Deballasting is carried out by using gravity which shortens time frame to use pumping arrangements, this in turn helps us to reduce fuel consumption.
(ii) The steps taken by the company for utilizing alternate sources of energy:
Since your Company operates mostly from offshore; options for utilizing of alternate sources of energy options are minimal but your Company takes every necessary step to use alternate energy source as and when available.
(iii) The capital investment on energy conservation equipment’s:
Your Company has not made any material capital investment on energy conservation equipment during the year. All vessels are equipped with Exhaust Gas Economizers, so that the hot exhaust gases which are going up the funnel are used to provide heat source, this piece of equipment undergoes regular repairs and maintenance.
(B) Technology Absorption:
Your Company has neither entered into technical collaboration with any entity, relating to technology absorption nor imported any technology during the year.
(C) Foreign Exchange Earnings and Outgo:
Your Company has earned foreign exchange of Rs. 80.03 cr (previous year Rs. 78.83 cr) and spent Rs. 150.34 cr (previous year Rs. 126.46 cr) in foreign exchange, on account of import of stores & spares, capital goods, repairs / renovations of vessels, bunker, other vessel expenses, travelling and interests etc.
(D) Expenditure Incurred on Research & Development:
During the year, the Company has not incurred any expenditure on research and development.
Directors’ responsibility statement:
Pursuant to the provisions of Section 134 of the Companies Act, 2013, the Directors hereby confirm that:
i. In preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of loss for the year under review;
iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 2013, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities;
iv. They have prepared the annual accounts on a going concern basis;
v. They have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;
vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Details in respect of fraud reported by auditors:
No fraud was reported by Auditors of the company during the year under review pursuant to Section 143(12) of the Companies Act, 2013.
Corporate governance and management discussion and analysis reports:
The Company is committed to good corporate governance in compliance with the Listing Regulations; and the Philosophy of the Mercator Group. A report on Corporate Governance including the relevant Auditors’ Certificate regarding compliance with the conditions of Corporate Governance as stipulated in the Listing Regulations is annexed. Management Discussion and Analysis Report is also annexed.
Corporate social responsibility (CSR):
In compliance with regulations under the Companies Act, 2013; CSR Committee has been constituted and CSR policy has been adopted by the Company.
In respect of financial year 2016-17, the Company’s liability for spending on CSR activities was determined as Rs. 0.27 Cr, against which the Company could not spend any amount. Further, in respect of financial year 2015-16, Company’s liability to spend towards CSR was Rs. 0.53 Cr against which Rs. 0.05 Cr was spent during the year 2016-17. The Balance amount of R.s 0.48 Cr to be spend during the financial year 2017-18 as well as liability towards CSR for the year 201617 were to be met by spending during the financial year 2017-18.
However, on account of losses during the year, and due to liquidity crunch, the Company could not spend the amount on CSR activities, but the Company is committed to spend the said amount in years to come.
During the year under review, Your Company have revised CSR Policy to expand its scope and also authorized to complete CSR Activities with the help of external agencies. Your Company is ascertaining the expenditure in consultation with them and will spend accordingly the balance money. The details of the Committee and initiatives on CSR are set out in the Corporate Governance Report forming part of the Directors’ Report. Reporting on CSR in format specified is forming part of this report as Annexure III.
Particulars of loans given, investments made, guarantees given and securities provided:
Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement.
Particulars of contracts or arrangements with related parties:
All related party transactions that were entered into during the financial year; were on an arm’s length basis and in the ordinary course of business. The requirement of giving particulars of contracts/arrangement made with related parties, in Form AOC-2 are not applicable for the year under review. There were no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all such related party transactions is placed before the Audit Committee and the Board of Directors for their approval on quarterly basis. The Company has framed a Related Party Transactions policy to ensure proper identification, approval process and reporting of transactions. The policy on Related Party Transactions as approved by the Board is available on the Company’s website. http://mercator.in/investors/index.aspx?id=7055 Risk management policy:
The Company has a Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Directors’ Report. The Company has framed policy to identify, evaluate business risks and opportunities and to mitigate the risk. The policy defines the risk management approach at various levels including documentation and reporting. The policy helps in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments.
Internal control systems and their adequacy:
The Company has in place adequate internal financial controls. The Audit Committee of Directors periodically reviews the internal control systems with the top management and the Statutory and Internal Auditors. The Audit Committee also looks after adequacy of internal audit function, significant findings of the internal audit, and subsequent follow-up action on the same from time to time.
Vigil mechanism / whistle blower policy:
The Company has a Vigil Mechanism and Whistle Blower Policy for Directors and employees to deal with instance of fraud and mismanagement. The policy facilitates reporting of genuine concern or grievances, unethical behavior, actual or suspected fraud, or violation of the Code of Conduct of the Company, or its ethics Policy. They provide adequate safeguards to Directors/employees who avail of the mechanism. The same is overseen by the Audit Committee. During the year under review, no personnel of the Company approached the Audit Committee on any issue falling under the Policy. The said Policy is posted on the website of the Company.
http://mercator.in/investors/index.aspx?id=7055
Familiarization program for independent directors:
The details of the training and familiarization program are provided in the Corporate Governance Report. Further at the time of appointment of an independent director, the Company issues a formal letter of appointment outlining his /her role, function, duties and responsibilities. The format of letter of appointment is available on the website at http://mercator.in/investors/Statutory%20Disclosures/Policies/TermsandConditions.pdf.
Transfer of shares to investor education and protection fund:
Pursuant to Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), dividends, if not claimed for a consecutive period of 7 years from the date of transfer to Unpaid Dividend Account of the Company, are liable to be transferred to the Investor Education and Protection Fund (“IEPF”).
Further, shares in respect of such dividends which have not been claimed for a period of 7 consecutive years are also liable to be transferred to the demat account of the IEPF Authority.
The Company has also displayed details of shares so transferred to IEPF on the website of the Company at http://mercator.in/investors/index.aspx?id=7043
Disclosures with respect to demat suspense account/ unclaimed suspense account:
Material changes and commitments:
There have not been any material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company as on March 31, 2018 and the date of this report i.e. May 28, 2018.
Extract of annual return:
Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return of the Company for the financial year ended on March 31, 2018 in Form MGT-9 is appended as Annexure IV.
General:
- During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 and rules made thereunder.
- During the year under review, there was no change in nature of business of the Company.
- The Company’s policy on Directors’ appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 is appended as Annexure V.
- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.
- The Company has in place policy as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no case was reported to the Committee constituted under the said Act.
Acknowledgements:
The Directors express their sincere thanks to all customers, suppliers, service providers, regulators, Governmental agencies and other statutory authorities for their continued whole hearted support to the Company during the year. We also acknowledge the support lent and confidence bestowed upon us by our bankers, stakeholders and all Mercatorians.
Regd. Office: For and on behalf of the Board
3rd Floor, Mittal Tower, For Mercator Limited
B-wing, Nariman Point,
Mumbai - 400 021 H. K. Mittal
Dated: May 28, 2018 Executive Chairman
(DIN:00007690)
|