YEARS

Reflecting
Printed at Infomedia18
SYNAPSE

Excellence

Registered Office: 3 rd Floor, Mittal Tower, B-Wing, Nariman Point, Mumbai-400 021.
Tel: +91-22-66373333 • Fax: +91-22-66373344
Website: www.mercator.in • Email: mercator@mercator.in Annual Report 2008 - 2009
 Annual Report 2008-2009

Our Vision 03
Year at a Glance 05
Board of Directors 07
Index Chairman's Letter to the Shareholders 09
Business Segments 11
Directors' Report 13
Corporate Governance Report 21
Management Discussion & Analysis Report 39
Auditors' Report 52
The Financials
- Balance Sheet 56
- Profit & Loss Account 57
- Cash Flow Statement 58
- Schedules 59
- Consolidated Financials 89

YEARS
Financial Data Analysis 116

Reflecting
Growth

1
 1995
2004
2007

Built 5 Dumb Barges

1983 Awarded “Star Company of the Year”

1998
Mercator was formed
Acquired a 9000 DWT Tanker
Award in SME by Business Standard
Acquired first VLCC of 280,000 DWT
and 1 Aframax of 100000 DWT
Crossed 1 million ton DWT
Mercator Singapore IPO listed on SGX
Foray into Dredging and acquired 2 Dredgers
Acquired an Aframax of 109000 DWT,
3 Kamsarmaxes of 247111 aggregate DWT &
3 Panamaxes of 222801 aggregate DWT
Acquired coal mines in Indonesia and Mozambique
Crossed 2 million ton DWT

2005
1988

2008
2000 -
2002

25Years of Current management

acquired Mercator

Excellence Mr. H. K. Mittal awarded “Entrepreneur

Acquired another VLCC of 299235 DWT
Acquired 2 more Dredgers
of the Year” Award by Ernst & Young
Acquired 5 Tankers of Acquired 2 more Panamaxes of
Acquired 4 Tankers of 197466 DWT
75000 DWT in aggregate 134407 DWT in aggregate
in aggregate and 2 Panamaxes of
125309 DWT in aggregate
Chartered in fleet of 9 geared Panamaxes

2009
2003
2006

Acquired three Mini Bulk Carriers

1993
Delivery of Jack-up Rig

Acquired 4 Aframaxes of
379868 DWT in aggregate
Mr. H. K. Mittal awarded “Entrepreneur
of the Year” Award by Economic Times
IPO; listed on BSE
Acquired a Panamax of 73461 DWT And the journey continues….
Foray into offshore - orders first Jack-up Rig
 Annual Report 2008-2009

OUR CORE VALUES

Our ‘Honouring Commitments’ towards all the stakeholders.

Vision Consistent Growth.

Ensuring that every employee takes pride in being called
a “Mercatorian”.
Innovation... We believe in doing things differently!

OUR CORE PURPOSE

Giving the best solutions and offering outstanding value

and service to our customers.

OUR GOAL

YEARS
To become a dominant player in the international shipping
and offshore

Reflecting
Vision

2 3
 Annual Report 2008-2009

Year Crossed consolidated turnover mark of

Rs. 2000 crores
at a
Glance Increase in consolidated own tonnage by 26%

Delivery of Jack-up Rig ahead of schedule and

deployed immediately for a period of three years
on firm bare-boat charter

Udyog Ratna Award (for Company Excellence) to

Mr. H. K. Mittal from the Institute of Economic Studies
in the month of November 2008.

Mercator Lines Singapore,

YEARS
won ‘Singapore Corporate Awards’
in two categories in the first year of
operations as listed company

Reflecting
Innovation

4 5

Mr. H. K. Mittal
Executive Chairman
Mr. H.K. Mittal, aged 59 years, is the
Executive Chairman of the company.
Having received Masters from Indian
Institute of Technology (IIT), Roorkee;
he started his tryst with enterprise
by forming a proprietorship firm; way
back in 1975, which was later converted
into a limited company. Expansion of
businesses both vertically and horizontally soon became his
passion that still continues to be a major driving force backed up
by more than three decades of entrepreneurial experience.
Mr. Mittal acquired Mercator Lines Ltd. in 1988, and with his vision
and keen insight has scaled up the Company to one of the leading
shipping companies in India with diversified segments.
On He is also Chairman of Board of Mercator Lines (Singapore) Ltd.
(step-down subsidiary listed on SGX); Mercator Offshore Ltd. (WOS,
Board Singapore), Mercator Oil & Gas Ltd., and Mercator Petroleum Pvt. Ltd.
Mr. Manohar Bidaye
Independent & Non-executive Director
Mr. Manohar Bidaye, aged 45 years, is
a Master of Commerce (M.Com) from
the University of Mumbai, and has a
general Degree in Law (LLB - Gen.). He
is also Fellow Member of The Institute
of Company Secretaries of India (FCS).
After establishing himself as successful
Consultant in Corporate Laws and Finance by servicing many
mid-size organizations, in 1995 he co-founded Zicom, a leading
YEARS
electronic security provider in India. He is leading a foray of Zicom
in many allied fields in the domain of safety and training.
He joined Mercator Lines Limited in May 1994.
Reflecting
Mr. M. G. Ramkrishna
Independent & Non-executive Director
Teamwork
Mr. M. G. Ramkrishna, aged 65
years, an M. A., L. L. B. & CAIIB, has over
35 years of experience in handling
treasury, financial and banking matters.
During the span of his service, he has
worked with reputed national and
international banks in various
capacities and currently is on the Board
of many companies.
He joined Mercator Lines Limited in
January 2003.
6 7
Annual Report 2008-2009
Mr. Atul J. Agarwal
Managing Director
Mr. Atul J. Agarwal, aged 51 years, the
Managing Director of the Company, is
a Chartered Accountant, with 27 years
of professional experience. He has
been associated with the Company
since its inception.
As a Chartered Accountant, Mr. Agarwal
specializes in the financial aspects of the business. He looks
after day-to-day management and financial matters of the
Company. He also has a strong expertise in financial and strategic
planning and execution. Mr. Agarwal has been accredited with
memberships of various committees formed by the Government
for shipping reforms. He has been instrumental in the successful
implementation of many of the Company's projects.
He is on the Board of Directors of various organizations such
as Indian National Ship-owners' Association (INSA); Thirumalai
Chemicals Ltd., Mercator Healthcare Ltd. and many others including
step-down overseas subsidiaries.
Mr. Anil Khanna
Independent & Non-executive Director
Mr. Anil Khanna aged 50 years, a Fellow
Chartered Accountant, is a practicing
professional specializing in business
management, joint ventures and
international taxation. He has been
on the Board of Directors of several
Indian and multinational companies.
Mr. Khanna has over 15 years of
experience in consultancy specially
relating to foreign companies engaged in Oil exploration business
in India.
He joined Mercator Lines Limited in May 1994.
Mr. K. R. Bharat
Independent & Non-executive Director
Mr. K. R. Bharat, aged 47 years is an
MBA from Indian Institute of
Management. He has been associated
with Capital Market for more than 26
years in various segments like
Merchant Banking, Equities and
Investment banking; Risk Management,
research etc. He is on the Boards many
companies. He worked as Managing Director at Credit Suisse First
Boston Securities (CSFB) India and Pregrine Securities (India). Before
that he had a successful stint of 10 yrs with Citi Bank. He was also
member of Market Advisory Committee of Bombay Stock Exchange.
 Annual Report 2008-2009

Dear Shareholders,

Many Congratulations!!

I enjoin the entire team of Mercatorians to

congratulate each one of you as your company
commemorates its Silver Jubilee this year!

It has been a wonderful journey of just twenty five

years during which your company has grown from
strength to strength both vertically and horizontally.
Beginning with a moderate barge operator to India's second largest private sector
company with six solid verticals, the growth trajectory seems to have been
satisfactory. Moreover, your company reached out geographically as well, having
a base at Singapore, further expanding in Indonesia and Mozambique. Yet, for us
Chairman's at Mercator, it still is the beginning!

Letter At Mercator, we believe, nothing gets accomplished without challenges and ability
to weather the storms, this daunting spirit of your company is once again
to the demonstrated by this year's annual report at hand. As you are aware, this year
witnessed a historical global meltdown, recession across the board with many

Shareholders countries even slipping into depression; many economists compared this with
the great depression of 1930 in different ways. Despite recessive markets and
negative sentiments; your company's operating results are in line with its legacy
of growth and expansions. I would let the figures and numbers presented fill the
details for you.

Apart from growth, we have been equally focusing on building organizational

development, cutting across the entire gamut of people, processes and corporate
governance. I am delighted to share with you, our Singapore based subsidiary,
Mercator Lines (Singapore) Ltd. has won the coveted Singapore Corporate Awards in
two categories in its first year of operation itself, as listed company.

YEARS
Companies never make great organizations but for its people. As over past few
years, this year too. We have laid emphasis on human capital development, talent
management and talent retention. I would like to thank each Mercatorian for their
spirit and support in making Mercator what it is today.

Reflecting We shall endeavor to continually and consistently improve and deliver. Deliver
long term value to all of our stakeholders in general and to you our shareholders.

Leadership
I take this opportunity to thank all of you for your faith in the company, trust in the
organization and support to our businesses.

Thank You,
Yours Sincerely,

H. K. Mittal
May 19, 2009

8 9
CMYK

Annual Report 2008-2009

Shipping
Tankers (Wet Bulk) Dry Bulk Carriers
VLCC Panamax – Geared
Suezmax Panamax - Gearless
Business Aframax
Product Carriers
Post Panamax
Kamsarmax
Segments Chemical Carriers VLOC

Offshore Dredgers
Premium Jack-Up Rig Trailer Hopper Suction
Oil and Gas Exploration Dredgers (THSD's)

Logistic solutions Mining

YEARS
Coal Handling Coal Mining

Reflecting
Opportunities

10 11
 Annual Report 2008-2009

To
The Members,
Mercator Lines Limited

We take great pleasure in presenting Silver Jubilee annual report of your Company for the year ended
on March 31, 2009.

FINANCIAL HIGHLIGHTS: (Rs. in Crores)

Year ended Year ended Year ended Year ended
Particulars 31.03.2009 31.03.2008 31.03.2009 31.03.2008
Consolidated Consolidated Standalone Standalone

Income from operations 2210.51 1476.85 1182.78 803.12

Total Income 2173.82 1588.98 1183.11 863.08
Operating Profit 910.23 721.48 433.37 339.14

Directors’ Interest
Depreciation
166.32
268.70
144.64
167.49
101.84
143.66
58.56
103.83
Report Profit before Tax & Minority Interest 475.21 409.35 187.87 176.75
Minority Interest (90.55) (29.89) N.A. N.A.
Taxes
- Current Year (7.55) (8.81) (6.50) (7.70)
- Deferred Tax (0.38) - - -
- Fringe Benefit Tax (0.25) (0.21) (0.25) (0.21)
Net Profit After Tax & Minority Interest 376.48 370.44 181.12 168.84
Balance brought forward from last year 478.31 236.13 233.94 153.06
Prior Period Adjustments 0.01 (41.49) - (1.20)
Short provision for tax of earlier years 0.02 (1.30) (0.02) (1.30)

YEARS
Profit available for appropriations: 854.77 563.79 415.04 319.41
Less: Appropriations:
Transfers to Reserves
- Tonnage Tax Reserve 39.00 33.00 57.00 33.00
- General Reserve 18.80 17.70 18.80 17.70

Reflecting - Debenture Redemption Reserve

Interim Dividend on Preference Shares
39.00
- 3.08
- 39.00
- 3.08
-

Accomplishments Dividend on Equity Shares of

previous year 0.12 0.80 0.12 0.80
Provision for final Dividend on Equity 11.80 25.84 11.80 25.84
Shares:
Tax on Dividend 2.02 5.05 2.02 5.05
Balance carried to Balance Sheet 726.03 478.32 286.30 233.94

12 13

The consolidated income from operations for the year under review crossed Rs. 2000 crore mark and was at Rs. 2210.51
crores as against Rs. 1476.85 crores in the previous year; registering a impressive growth of 50%. The operating profit for
the year of Rs. 910.23 crores was higher by 26% over previous year of Rs. 721.48 crores. In spite of difficult times of
recession prevailing all over the world; the Company was able to maintain its growth trajectory, thus maintaining its
legacy of growth and expansion.
The Profit Before Tax (PBT) too registered an increase of 16% to Rs. 475.21 crores as against Rs. 409.35 crores in the
previous year; despite of 60% higher depreciation, totaling to Rs. 268.70 crores (previous year Rs. 167.49 crores) and 15%
higher interest costs amounting to Rs. 166.32 crores (previous year Rs. 144.64 crores). Profit After Tax (PAT) also
correspondingly grew by 17% to Rs. 467.03 crores as against Rs. 400.33 crores for the previous year. After providing for
the minority interests of Rs. 90.55 crores (Rs. 29.89 crore, previous year) the net profit was recorded at Rs. 376.48 crores as
against Rs. 370.44 crore in the previous year.
On a standalone basis, the income from operations for the year under review was Rs. 1182.78 crores as against
Rs. 830.28 crores in the previous year, registering a growth of 42% for the year. The operating profit for the year under
review at Rs. 433.37 crores was higher by 28% as against Rs. 339.14 crores for the previous year. The Profit Before Tax
(PBT) increased by 6% to Rs. 187.87 crores as against Rs. 176.75 crores in the previous year. Profit after Tax also grew by
7% to Rs. 181.12 crores as against Rs. 168.84 crores for the previous year
EXPANSION AND FINANCE:
Mercator has had a consistent track record of organic growth and expansion; that is also central to its core values too.
While expanding vertically in its core segment of shipping by acquisition of vessels; the Mercator Group also expanded
horizontally by backward integration into related activities such as drilling and coal mining.
During the year; a Very Large Crude Carrier (VLCC) was acquired at a cost of Rs. 685.04 crores (equivalent of USD 160 mn).
The Company also took delivery of one more dredger at a cost of Rs. 61.54 crores (equivalent of USD 14.40 mn). These
acquisitions were financed by mix of debt and internal accruals.
During the year, Mercator achieved another major milestone by receiving most sought after delivery of Jack-up Rig
through its subsidiary Mercator Offshore Ltd. The cost of Rig amounting to approximately Rs. 1000 crores (equivalent of
USD 200 mn) was funded by mix of internal accruals and debt. The rig received ahead of its schedule; was deployed
immediately upon delivery in March 2009; for a period of three years on firm bare boat charter. It speaks volumes about
your company’s ability to execute projects of this nature ahead of time.
Your Company’s subsidiary Mercator Lines (Singapore) Ltd. (MLS), acquired two Panamax vessels during the year, thus
increasing total tonnage of the subsidiary by 138,407 DWT during the year under review. The total cost of acquisitions
was Rs. 667 crores (equivalent of USD 131 mn) that was financed by a mix of IPO proceeds; internal accruals and debt. At
the end of the year, MLS also contracted to acquire one more Panamax vessel of 73,652 DWT which was on charter, at a
cost of about Rs. 123 crores, (equivalent of USD 24.20 million); by exercising options of right to purchase.
As you are aware, your company developed coal fields and commenced mining last year through its subsidiaries. Your
company scaled up to full commercial production during the year at Indonesia, producing about 327,000 Metric tones
of quality coal.
14
Annual Report 2008-2009
Your company would consider raising funds for general corporate purposes including capital expenditure, working
capital requirements, strategic investments by way of issue securities (whether in India and/or aboard) at appropriate
time.
BUSINESS OPERATIONS & FUTURE OUTLOOK:
Your Company has added a new business segment, namely, Offshore Drilling with the acquisition of Jack Up Rig; in
addition to its existing range of segments of Bulk Carriers, Tankers; Dredgers; Coal Mining and Logistics.
Mercator Petroleum Private Ltd., wholly owned subsidiary of the Company has entered into a Production Sharing
Contract with the Government of India for exploration of petroleum under the NELP-VII and has been allotted two
blocks under the scheme.
The Baltic Dry Bulk Index (BDI) that saw extreme lows about six months ago has now been on recovery path until as on
date. Though the tanker market index is expected to remain soft; current year will have full year and consistent earnings
from almost volatility neutral segments such as Rig and coal mining; therefore top and bottom lines of your company
are expected to stay firm.
SHARE CAPITAL:
During the year, the Company issued and allotted 10,96,686 equity shares of Re. 1/- each upon conversion of 150
FCCB’s of an aggregate amount of USD 1,500,000 at a price of Rs. 59.812 per share at a fixed exchange rate of Rs. 43.73
per USD.
Subsequent to the year end; 285,00,000 warrants; carrying an option to apply and subscribe for an equivalent number
of shares at a price not less than Rs. 58.50 per share issued to one of promoters on preferential basis; were lapsed as
options were not exercised within the validity period. Accordingly, all 2,85,00,000 warrant stood cancelled and
consequently, the entire amount of Rs. 16.67 crores received thereon from the warrant holder was forfeited in
accordance with SEBI Guidelines.
DIVIDEND:
During these times of recession, the company would like to conserve resources to enable it to plough back accruals
into its operations. Your directors still recommend dividend @ 50% i.e. Rs. 0.50 per equity share of Re. 1/- each for the
financial year 2008-09 (previous year 110% i.e. Rs. 1.10 per share). The aggregate amount of the dividend on
23,59,92,073 equity shares for the financial year 2008-09 would be Rs. 13.69 crores including corporate tax & surcharge
thereon (Rs. 30.23 crores in the previous year).
DIRECTORS:
In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, M. G.
Ramkrishna is the Director liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has
offered himself for re-appointment. A brief resume of M. G. Ramkrishna is included under the Corporate Governance
section of this report.
Your Directors recommend re-appointment of M. G. Ramkrishna and present for your approval at the ensuing Annual
General Meeting.
15
25 Years Reflecting Excellence
 Annual Report 2008-2009

SUBSIDIARY COMPANIES: PARTICULARS OF EMPLOYEES:

Your company has following subsidiaries/step-down subsidiaries: We firmly believe that real strength of the company lies in its human capital; our employees are not just the key
enablers of the success that your company has witnessed this year but are also the think tank to define the future of the
Sr. No. Name Country of Incorporation company.

1 Mercator Oil & Gas Ltd. India As required under provisions of Section 217(2A) of the Companies Act, 1956 (the Act), read with the Companies

2 Mercator Petroleum Private Ltd. India (Particulars of Employees) Rules 1975 as amended, the requisite particulars in respect of the employees of the
Company, who were in receipt of remuneration in excess of the limits specified under the said section are set out in the
3 Mercator International Pte. Ltd. Singapore
annexure forming part of this report. However, as per the provisions of section 219(b) (iv) of the Act; the report and the
4 Mercator Offshore Ltd Singapore
accounts are being sent to all members of the Company excluding this annexure of particulars of employees. Any
5 Mercator Lines (Singapore) Ltd. Singapore
member interested in obtaining such particulars may write to the Company at the registered office.
6 Varsha Marine Pte. Ltd Singapore
7 Vidya marine Pte. Ltd Singapore CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION; EXPORT MARKET DEVELOPMENT AND FOREIGN EXCHANGE
8 Mercator Lines (Panama) Inc. Panama EARNINGS & OUTGO:
9 Mercator Offshore Holdings Pte. Ltd. Singapore
The Conservation of Energy and Technology Absorption under the Companies (Disclosure of Particulars in the Report
10 MCS Holdings Pte. Ltd. Singapore
of the Board of Directors) Rules, 1988 are not applicable to your Company. However, the Directors would like to assure
11 Oorja Holdings Pte. Ltd. Singapore
you that every measure is being taken to save and conserve energy at all the stages of the operation of the vessels, as
12 Oorja 1 Pte. Ltd. Singapore
well as, in our shore activities.
13 Oorja 2 Pte. Ltd. Singapore
14 Oorja 3 Pte. Ltd. Singapore In its endeavor to develop the export market, your Company has formed new subsidiaries abroad during the year, so
15 Oorja Indo KGS PT Indonesia that localized and focused attention could be assigned to the export markets.
16 Oorja Mozambique Minas Limitada Mozambique Your Company has not imported any technology during the year. It has earned foreign exchange of Rs. 403.94 crores (as
17 Broadtec Mozambique Minas Limitada Mozambique against the previous year earnings of Rs. 269 crores) and spent Rs. 1457.01 crores (as against Rs. 602.12 crores for the
18 Oorja Indo Petangis Three PT Indonesia previous year) in foreign exchange on account of acquisition of vessels, charter hire, other vessel expenses and
19 Oorja Indo Petangis Four PT Indonesia interests etc.
20 PT Mincon Indo Resources Indonesia
CORPORATE GOVERNANCE:
Pursuant to Accounting Standard (AS 21) issued by the Institute of Chartered Accountants of India, consolidated
financial statements presented by the Company include financial information of its subsidiaries. Your Company complies with the provisions laid down in Corporate Governance laws. At Mercator, several key
initiatives have been taken to look at Corporate Governance not just a compliance issue but to practice sound
A statement in respect of the said subsidiaries pursuant to Section 212 of the Companies Act, 1956 is enclosed herewith
principles of corporate governance to value add company's processes and return long term value to its shareholders.
as required. The Company has applied to the Government of India u/s 212(8) of the Companies Act 1956 for exemption
Mercator Lines (Singapore) Limited has recently received coveted Singapore Corporate Awards in two different
from attachment of the documents of above subsidiaries for the year ended on March 31, 2009. The annual reports and
categories in its first year operations itself as listed company.
accounts of subsidiaries will be kept for inspection at the registered office of the Company and also of the subsidiary
companies concerned during the working hours; and the same along with related detailed information will be made A separate report on the Corporate Governance, along with the requisite certificate from the Auditors of the Company is
available to the investors of the Company as well as of subsidiaries, on request. A statement in respect of brief financial annexed herewith as part of this Annual Report. Management Discussion and Analysis Report as per the Corporate
details of the Company's subsidiaries for the year ended March 31, 2009 is annexed to this report. Governance requirement is also annexed herewith and forms part of this Report.

AUDITORS: INSURANCE:
The Auditors of your Company, M/s. Contractor, Nayak & Kishnadwala, Chartered Accountants, retire at the ensuing All properties of the Company are adequately insured.
Annual General Meeting and have confirmed their eligibility for re-appointment under Section 224 (1-B) of the
Companies Act, 1956.

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

16 17
25 Years Reflecting Excellence
 Annual Report 2008-2009

FIXED DEPOSITS: ANNEXURE – A TO THE DIRECTORS' REPORT

The Company has not accepted any public deposits falling under the purview of section 58-A of the Companies Act; For the purpose of interse transfer of shares under Regulation 3 (1) (e) of the Securities and Exchange board of India
1956. (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, the following person constitute “Group” as
defined in the Monopolistic & Restrictive Trade Practices, 1969, (54 of 1969):
DIRECTORS' RESPONSIBILITY STATEMENT:
1. Mercator Healthcare Ltd.
Pursuant to the provisions of section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that: 2. MLL Logistics Pvt. Ltd.
3. AHM Investments Pvt. Ltd.
(I) In preparation of the annual accounts, the applicable accounting standards have been followed along with 4. Mercator Mechmarine Ltd.
proper explanation relating to material departures; 5. Ankur Fertilizers Pvt. Ltd.
6. Rishi Holdings Pvt. Ltd.
(ii) They have selected such accounting policies and applied them consistently and made judgments and 7. AAAM Properties Private Ltd.
estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the 8. Mercator International Pte. Ltd.
Company at the end of the financial year and of the profit for the year under review; 9. Mercator Offshore Ltd.
10. Mercator Oil & Gas Ltd.
(iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance 11. Mercator Petroleum Pvt. Ltd.
with the provision of the Companies Act 1956, for safeguarding the assets of the Company and for preventing 12. Mercator Lines (Singapore) Ltd.
and detecting fraud and other irregularities; 13. Mercator Lines (Panama) Inc
14. Varsha Marine Pte. Ltd.
(iv) They have prepared the annual accounts on a going concern basis. 15. Vidya Marine Pte. Ltd.
16. Oorja Holdings Pte. Ltd.
GROUP FOR INTERSE TRANSFER OF SHARES: 17. Mercator Offshore Holdings Pte. Ltd.
18. MCS Holdings Pte. Ltd.
As required under clause 3(1) (e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and 19. Oorja 1 Pte. Ltd.
Takeovers) Regulations, 1997 persons constituting “Group” (within the meaning as defined in the Monopolies and 20. Oorja 2 Pte. Ltd.
Restrictive Trade Practices act, 1969) for the purpose of availing exemption from applicability of the provisions of 21. Oorja 3 Pte. Ltd.
22. Oorja Indo KGS PT
Regulation 10 to 12 of the aforesaid Regulations, are given in the annexure A attached herewith and forms part of this 23. Oorja Mozambique Minas Limitada
Annual Report. 24. Broadtec Mozambique Minas Limitada
25. Oorja Indo Pentangis Three PT
26. Oorja Indo Pentangis Four PT
ACKNOWLEDGEMENTS: 27. PT Mincon Indo Resources
28. H. K. Mittal
The Directors would like to thank the suppliers, customers, service providers, regulators and the governmental 29. Archna Mittal
agencies, such as Ministry of Shipping, M/s. Transchart, the Directorate General of Shipping and other statutory 30. Atul J. Agarwal
31. Manjuli Agarwal
authorities for their continual support and encouragement.
32. Shalabh Mittal
33. Shruti Mittal
We would also like to express our gratitude towards our bankers; all the stakeholders and employees for their kind
34. Tanvi Mittal
support to the Company. 35. Adip Mittal
36. Aayush Agarwal
For and on behalf of the Board 37. Arooshi Agarwal

H. K. Mittal
Executive Chairman

Regd. Office:
3rd Floor, Mittal Tower, B-wing,
Nariman Point, Mumbai - 400021
Dtd: May 19, 2009

18 19
25 Years Reflecting Excellence
 Annual Report 2008-2009

COMPANY'S PHILOSOPHY:

The Company strongly believes in ethical way of conducting business. The Company
upholds its relationship with the society and hence its social responsibility of
environmental safety and human welfare.

Corporate governance to the company is not just a compliance issue but central guiding
principle for everything it does. It's a way of thinking, way of conducting business and a
way to steer the organization to take on challenges for now and for the future.

The Company recognizes its responsibility towards its shareholders and therefore
constantly endeavors to create and enhance shareholder's wealth and value by
implementing its business plans at appropriate times and thus taking maximum

Report on advantage of available opportunities to benefit the Company, its shareholders and the
society at large. The Company believes in monitoring its performance regularly and with

Corporate utmost transparency to ensure ethical governance at all levels within the organization.

Governance I. BOARD OF DIRECTORS:

Forming part of Directors' report The Board of Directors of the Company comprises of six Directors; Two Executive Directors
for the year ended on and four Non-Executive Independent Directors. Among the two Executive Directors one is
31st March 2009 the Executive Chairman and the other is Managing Director. The Company is in compliance
with the requirement of at least half of the Board comprising of Independent Directors as
the Chairman of the Board is an Executive Director and a Promoter.

There is no Nominee Director on the Board of the Company.

YEARS
No Director of the Company is either member in more than ten committees and/or
Chairman of more than five committees across all Companies in which he is Director and
necessary disclosures to this effect has been received by the Company from all the
Directors.

Reflecting
During the year, in all Four Board meetings were held i.e. on May 14, 2008; July 29, 2008,
October 27, 2008 and January 29, 2009. The time interval between any two meetings was

T r u s t
not more than 4 months.

The details of Directors and their attendance record at Board Meetings held during the year,
at last Annual General Meeting and number of other Directorships and Chairmanships/
membership of Committees is given below:

20 21
 Annual Report 2008-2009

Sr. No Name of Director Category No. of Attendance No. of No. of No. of II. AUDIT COMMITTEE:
Board at last Other committee committee
Meetings AGM Directorship membership Chairmanship Composition:
Attended in other in other
Companies * Companies * Pursuant to the provisions of Section 292(A) of the Companies Act, 1956 and Clause 49 of the Listing Agreements, the
Company has a qualified and independent Audit Committee comprising of three Independent Non-Executive
1 H. K. Mittal Chairman & 4 Yes 5 Nil Nil Directors. Anil Khanna, a senior member of Institute of Chartered Accountants of India, having a sound accounting and
Managing Director-
financial background, is the Chairman of the Committee, the other members being Manohar Bidaye, a senior member
Executive-Promoter
of Institute of Company Secretaries of India and M. G. Ramkrishna, a veteran from the banking & finance industry. The
2 A. J. Agarwal Managing Director, 4 Yes 10 1 Nil Managing Director, Head of Finance Department along with the Internal Auditors and Statutory Auditors are always
Executive-Promoter invitees to the Audit Committee Meeting. All other Functional Managers are invited to attend the meeting, as and when
3 Manohar Bidaye Non-Executive 3 Yes 11 2 1 necessary. The Committee is vested, inter alia, with following powers and terms of references as prescribed under
Independent Director relevant provisions of the Companies Act, 1956 and Stock Exchanges Listing Agreement:

4 Anil Khanna Non-Executive 4 Yes 8 1 Nil Powers:

Independent Director
a) To investigate any activity within its terms of reference.
5 M. G. Ramkrishna Non-Executive 4 Yes 3 2 1 b) To seek information from any employee.
Independent Director c) To obtain outside legal or other professional advice.
d) To secure attendance of outsiders with relevant expertise, if it considers necessary.
6 K. R. Bharat Non-Executive 2 Yes 2 Nil Nil
Independent Director Terms of Reference:

*In accordance with Clause 49 of the Listing Agreement, Memberships / Chairmanships of only the Audit Committees
and Shareholders'/ Investors' Grievance Committees of all Public Limited Companies have been considered.
None of the independent directors had resigned nor removed from the Board of the Company during the year and
hence compliance in respect of replacement thereof did not arise.
All the information required to be furnished to the Board was made available to them along with detailed agenda
notes.
The Board reviews compliance reports of all laws applicable to the Company, presented by Managing Director at the
meeting.
The Audit committee reviews the reports of the Internal Auditors and the Statutory Auditors periodically and discuss
their findings and suggest the corrective measures. The role of the Audit Committee is as follows: -
1. Oversight of the company's financial reporting process and the disclosure of its financial
information to ensure that the financial statement is correct, sufficient and credible.
2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the
statutory auditor and the fixation of audit fees.
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
4. Reviewing, with the management, the annual financial statements before submission to the board for approval,
with particular reference to:

Code of Conduct: (a) Matters required to be included in the Director's Responsibility Statement to be included in the Board's
Report in terms of clause (2AA) of Section 217 of the Companies Act, 1956.
The Board has laid down a Code of Conduct for all Board members and senior management personnel of the Company, (b) Changes, if any, in accounting policies and practices and reasons for the same.
which has been posted on the website of the Company www.mercator.in (c) Major accounting entries involving estimates based on the exercise of judgment by the management.
(d) Significant adjustments made in the financial statements arising out of the audit findings.
All Board members and senior management personnel have affirmed compliance with the code for the year ended on (e) Compliance with listing and other legal requirements relating to financial statements.
March 31, 2009. Declaration to this effect signed by the Chief Executive Officer for the year ended on March 31, 2009 has (f) Disclosure of any related party transactions.
(g) Qualifications in the draft audit report.
been included elsewhere in this annual report.
5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval.

22 23
25 Years Reflecting Excellence
 Annual Report 2008-2009

5A. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public
issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in
the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the
utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take
up steps in this matter.
6. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal
control systems.
7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department,
staffing and seniority of the official heading the department, reporting structure coverage and frequency of
internal audit.
8. Discussion with internal auditors any significant findings and follow up there on.
9. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected
fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the
board.
10. Discussion with statutory auditors before the audit commences, about the nature and scope of audit, as well as,
post-audit discussion to ascertain any area of concern.
Review of Information:
The Audit committee was presented with and reviewed following information:
1. Management discussion and analysis of financial condition and results of operations;
2. Statement of significant related party transactions (as defined by the audit committee), submitted by management.
3. Management letters/letters of internal control weaknesses issued by the statutory auditors, if any.
4. Internal audit reports related to internal control weaknesses; and
5. The appointment, removal and terms of remuneration of the Internal Auditor. Presently the Company has
independent Chartered Accountant's firm as its Internal Auditor.
6. Financial statements and the investments made by the unlisted subsidiary company.
7. Related Party Transactions i.e.;
(i) Transactions with related parties in the ordinary course of business.
(ii) Details of material individual transactions with related parties, which are not in the normal course of business.
(iii) Details of material individual transactions with related parties or others, which are not on an arm's length basis,
together with Management's justification for the same; as and when applicable.
There was no instance of management letter/letter of internal control weaknesses issued by the Statutory Auditors
during the financial year 2008-09.
EXPANSION COMMITTEE:

11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non payment of declared dividends) and creditors.
12. To review the functioning of the Whistle Blower mechanism, in case the same is existing.
13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
Meetings:
The Company has Expansion Committee comprising of two Executive Directors viz. H. K. Mittal & A. J. Agarwal and two
Non-executive Independent Directors viz. Anil Khanna & K.R. Bharat. The Committee is authorized to assess the
business opportunities and take the decisions from time to time on expansion projects; means of finance and other
related matters, within the limits sanctioned by the Board. During the year ten meetings were held.
Attendance of each member at the Expansion Committee Meetings:

During the year, in all four meetings of the Committee were held i.e. on May 14, 2008; July 29, 2008; October 27, 2008 Name of Director No. of Expansion Committee Meetings attended
and January 29, 2009. The time intervals between two meetings of the Committee was not more than four months.
H. K. Mittal 10
Atul J. Agarwal 9
Attendance of each member at the audit Committee Meetings:
Anil Khanna 10
Name of Director No. of Audit Committee Meetings attended K. R. Bharat 10

Anil Khanna 4
Manohar Bidaye 3 ESPS COMMITTEE:
M. G. Ramkrishna 4
The Company has Employee Stock Purchase Committee (ESPS) of Directors comprising of two Executive Directors viz.
H. K. Mittal & A. J. Agarwal and three Non-executive Independent Directors viz. Manohar Bidaye; Anil Khanna &
The Managing Director, as a head of the Finance Department; Statutory Auditors and Internal Auditors attended all the M. G. Ramkrishna, to implement the Employee Stock Purchase Scheme of the Company. No meeting was held during
four meetings. The Company Secretary and in his/her absence Sr. Manager-Secretarial acted as the Secretary to the the year.
committee.

24 25
25 Years Reflecting Excellence
 Annual Report 2008-2009

REMUNERATION-CUM-SELECTION COMMITTEE: The Indian Subsidiaries Mercator Oil & Gas Ltd. and Mercator Petroleum Private Limited were neither listed nor material
as at March 31, 2009.
The Company has Remuneration Committee comprising of three Non-executive Independent Directors. Manohar
Bidaye is the Chairman of the Committee with Anil Khanna and M. G. Ramkrishna being other members. The The Audit Committee reviews the financial statements of all the subsidiary companies including the investment made
committee, on behalf of the Board and the shareholders, determines, with agreed terms of reference, the Company's by the Company.
policy on specific remuneration packages for Executive Directors and senior management people including pension
The Minutes/resolutions of the Board Meetings of all the subsidiary companies (including the step down subsidiary
rights and any compensation payment. This Committee also acts as a Remuneration Committee under Schedule XIII
Companies) are placed before the Board periodically.
and as Selection Committee under Section 314 of the Companies Act, 1956.
The management periodically reviews a statement of all significant transactions, if any, entered into by all the
Two meetings of Remuneration Committee were held during the year. Except Manohar Bidaye, who attended one
subsidiary companies.
meeting; all other members attended both the meetings.
IV. DISCLOSURES:
III. SUBSIDIARY COMPANIES: (A) Basis of related party transactions:
As at March 31, 2009 the Company had following subsidiaries:
I. A statement in summary form of transactions with related parties in the ordinary course of business is placed
Sr. No. Name Incorporated in Remark periodically before the audit committee.
1 Mercator International Pte. Ltd. (MIPL) Singapore Wholly Owned Subsidiary (WOS) ii. Details of material individual transaction with related parties, which are not in the normal course of business, are
placed before the audit committee, whenever applicable.
2 Mercator Offshore Ltd. Singapore Wholly Owned Subsidiary iii. During the year, there was no material individual transaction with related parties or others, that was not on an arm's
3 Mercator Offshore Holdings Pte. Ltd. Singapore Wholly Owned Subsidiary length basis.
4 Mercator Oil & Gas Ltd. India Wholly Owned Subsidiary
5 Mercator Petroleum Private Ltd. India Wholly Owned Subsidiary (B) Disclosure of Accounting Treatment:
6 Mercator Lines (Singapore) Ltd.(MLS) Singapore Step down Subsidiary (Subsidiary In the preparation of financial statements for the year ended on March 31, 2009; there was no treatment different from
of MIPL with 72.35% holding) that prescribed in an Accounting Standards and applicable Laws & Regulations that had been followed.
7 Varsha Marine Pte. Ltd. Singapore Step down subsidiary (WOS of MLS)
8 Vidya Marine Pte. Ltd. Singapore Step down subsidiary (WOS of MLS) (C) Board Disclosures-Risk Management:
9 Mercator Lines (Panama) Inc Panama Step down subsidiary (WOS of MLS)
The Company has laid down procedures to inform Board members about the risk assessment and minimization
10 Oorja Holdings Pte. Ltd.(OHPL) Singapore Step down Subsidiary (WOS of MIPL)
procedures. These procedures are periodically reviewed to ensure that executive management controls risk through
11 Oorja 1 Pte. Ltd. Singapore Step down Subsidiary (WOS of OHPL)
means of properly defined framework.
12 Oorja 2 Pte. Ltd. Singapore Step down Subsidiary (WOS of OHPL)
13 Oorja 3 Pte. Ltd. Singapore Step down Subsidiary (WOS of OHPL)
14 Oorja Mocambique Minas Limitada (OML) Mocambique Step down subsidiary (WOS of OHPL) (D) Proceeds from public issues, rights issues, preferential issues etc.
15 Broadtec Mocambique Minas Limitada Mocambique Step down subsidiary
During the year; the Company raised an amount of Rs. 150 crores through issue of Non-convertible Secured
(Subsidiary of OML with 85% holding)
Redeemable Debentures on private placement basis; proceeds of which were utilized for the intended purpose.
16 Oorja Indo Petangis Four PT Indonesia Step down subsidiary
(Subsidiary of Oorja 1 with 50% holding) Besides this, the Company did not raise any amount through public or right or preferential issues.
17 Oorja Indo Petangis Three PT Indonesia Step down subsidiary (E) Remuneration of Directors:
(Subsidiary of Oorja 2 with 50% holding)
18 Oorja Indo KGS PT Indonesia Step down subsidiary The remuneration of non-executive Directors is decided by the Board/Shareholders.
(Subsidiary of Oorja 3 with 70% holding)
The Company did not have any pecuniary relationship or transaction with the Non-executive Directors during the year
19 MCS Holdings Pte. Ltd. Singapore Step down subsidiary(WOS of OHPL)
other than those disclosed elsewhere in this report. Except commission on net profits for the year ended on March 31,
20 PT Mincon Indo Resources Indonesia Step down subsidiary with Oorja Indo
2009 as decided by the Board of Directors and approved by the shareholder's resolution; no Non-Executive Director
Petangis Three holding 99% and
was paid any fees/compensation.
Oorja Indo Petangis Four holding 1%)

26 27
25 Years Reflecting Excellence
 Annual Report 2008-2009

Executive Directors: (F) Management

Name Salary Commission Perquisites A Management Discussion and Analysis report forming part of this Directors' report is attached herewith.
H. K. Mittal
During the year, there was no material financial and commercial transaction by senior management that may have a
Executive Chairman 68.00 960.00 8.98
potential conflict with the interest of the Company at large.
A. J. Agarwal
Managing Director 68.00 966.48 2.49 (G) Shareholders

The remuneration to the Executive Directors is governed by the agreements executed with them as approved by the (i) GENERAL BODY MEETINGS:
Details of General Meetings held during last three years are given below:
members of the Company in their General Meeting. As per the agreement, salary and perquisites are a fixed
component and the commission is based on the performance of the Company, i.e. on the net profit of the year, Financial Year Date Time Venue Special Resolution(s)
however aggregate of which shall not exceed 5% of net profit calculated as per the provisions of the Companies Act,
1956; per Executive Director. The present terms & conditions of appointment agreements of both the Executive 2008-09 16/07/2008 4.00P.M. C. K. Nayudu Hall, NIL
Directors were approved by the shareholders at the Annual General Meeting of the Company held on September The Cricket Club of India
26, 2007. As per the terms of respective agreements, the appointments of Executive Chairman and Managing Director Limited, Brabourne
are valid upto July 31, 2012 and can be terminated by either party by giving six month's notice in writing. There is no Stadium, Churchgate,
severance fees payable. The Executive Directors were not issued any Stock Options during the year. Mumbai-400020

Non-executive Directors: 2007-08 11/10/2007 11.00 A.M. Y. B. Chavan Centre, 1. Issue of warrants on preferential
During the year, non-executive Directors were paid following remuneration for the financial year 2008-09: (E.G.M) General Jagannath basis to promoter.
Name Commission Rs. In lacs Bhosle Marg, Nariman Point,
Manohar Bidaye 2.50 Mumbai-400021
Anil Khanna 2.50
M. G. Ramkrishna 2.50 2007-08 26/09/2007 3.30 P.M. Y. B. Chavan Centre, 1. Appointment of Mr. H. K. Mittal as
K. R. Bharat 2.50 (A.G.M.) General Jagannath Executive Chairman of the Company
Bhosle Marg, Nariman Point, and remuneration thereof.
The Board decided the payment of commission to Non-executive directors within the limits approved by members of Mumbai-400021 2. Appointment of Mr. A.J. Agarwal as
the Company in their Annual General Meeting held on September 26, 2007. Presently the Company pays remuneration Managing Director of the Company
to Non-executive Directors by way of commission not exceeding 1% of its net profit being distributed among them and remuneration thereof.
equally. No sitting fees are being paid to non-executive Directors. 3. Appointment of Mr. Adip Mittal, a
relative of Director to hold the office
All the Non-executive Directors have disclosed their shareholdings to the Company, which is as under: or place of profit of the Company.
Name No of equity shares held as on 31/03/2009 4. Delisting of equity shares from
Manohar Bidaye 97,500 Ahmedabad Stock Exchange
Anil Khanna 2,47,120
M. G. Ramkrishna 15,000 2006-07 31/07/2006 12.00 C. K. Nayudu Hall, Brabourne 1. Alteration of Object Clause of
K. R. Bharat Nil (A.G.M.) Noon Stadium, Churchgate, Memorandum of Association.
Mumbai-400020 2. Approval for commencing new
No other convertible instrument was held by any of the above Non-executive Directors. business activity set out in the object
No stock options were issued to the Non-executive Directors during the year. clause of Memorandum of Association.

No special resolution through postal ballot was passed last year nor proposed at the ensuing Annual General
Meeting.

28 29
25 Years Reflecting Excellence
 Annual Report 2008-2009

(ii) DISCLOSURES: ISSUE OF SECURITIES:

During the year, there were no transactions of materially significant nature with the Promoters or Directors or the
Management or their subsidiaries or relatives etc. that had potential conflict with the interest of the Company.
However, the transactions entered into with the related parties as per Accounting Standard 18 are reported at
Note No. 21 of Notes forming part of the Accounts under Schedule I (B) annexed to the Accounts for the year under
review.
To enable the Company to raise funds, for general corporate purposes including capital expenditure, working capital
requirements, strategic investments as the Board may deem fit, it is proposed to seek approval of the members of the
Company; to issue Securities (whether in India and/or abroad).
(v) FINANCIAL CALENDER FOR THE YEAR 2009-10:

There were no instances of non-compliance and that no penalties or strictures were imposed on the Company by any First Quarter Results (June, 30) End July 2009
Stock Exchange or SEBI or any statutory authority on any matter related to capital market during the past three years.
Mailing of Annual Reports End August 2009
Presently the Company does not have any Whistle Blower Policy. However, no person has been denied access to the Annual General Meeting September 24, 2009
Audit Committee on any matter. Payment of Dividend Last week of September 2009
Second Quarter Results (September, 30) End October 2009
(iii) MEANS OF COMMUNICATION: Third Quarter Results (December, 31) End January 2010
Fourth Quarter/ Annual Results End June 2010
Quarterly/half-yearly/yearly results are normally published in Economics Times or Business Standard and Sakal or
Lokmat. The audited annual results are posted to every member of the Company. Quarterly shareholding distribution
and quarterly/half yearly/yearly results submitted to the Stock Exchanges are posted on the website of the Company
(vi) DATES OF BOOK-CLOSURE:
www.mercator.in and SEBI i.e. www.sebiedifar.nic.in.The Company also displays official news releases on its website
i.e. www.mercator.in. The Company has created an email id: investors@mercator.in, to facilitate redressal of investors/ The Share Transfer Books and Register of Members of the Company will remain Closed from Wednesday, September
shareholders grievances. 16, 2009 to Thursday, September 24, 2009 (Both days inclusive), for deciding entitlement of shareholders for payment of
dividend on Equity share capital.
The presentations made to institutional investors/analysts through personal meetings are also displayed on website of
the Company and submitted to the Stock Exchanges simultaneously. (vii) DIVIDEND:

(iv) ANNUAL GENERAL MEETING The Board of Directors has recommended dividend on Equity Shares of the Company @ 50% i.e. Re. 0.50 per share for the
year ended on March 31, 2009 amounting Rs. 13.69 crores (inclusive of Corporate Tax & Surcharge thereon amounting
Twenty Fifth Annual General Meeting is scheduled to be held on Thrusday, the September 24, 2009 at 4.00 p.m. at
Rs. 1.89 cr.) The dividend if declared at the Annual General meeting; will be payable on or after September 24, 2009.
C. K. Nayudu Hall, The Brabourne Stadium, Churchgate, Mumbai - 400020.
(viii) LISTING OF SHARES:
RE-APPOINTMENT OF NON-EXECUTIVE DIRECTOR:
The Equity Shares of the Company are listed on Bombay Stock Exchange (Scrip Code 526235); National Stock Exchange
M. G. Ramkrishna, the Director retiring by rotation at the ensuing Annual General Meeting has offered himself for
(Scrip Code MLL EQ) and the annual listing fees in respect of the year 2009-2010 have been paid to these exchanges.
re-appointment as Director of the Company. M. G. Ramkrishna, aged 66 years, an M. A., L. L. B. & CAIIB, has over 35 years
of experience in handling treasury, financial and banking matters. He is also member of Audit Committee and The monthly high-low quotations of the equity shares of the Company on Bombay Stock Exchange and National Stock
Selection-cum-remuneration Committee of Directors of the Company. During the span of his service, he has worked Exchange during the financial year 2008-09 vis-à-vis Sensex performance of Bombay Stock Exchange is given below:
with reputed national and international banks, in various capacities and is on the Board of following companies viz.
Saint Gobain Sekurit India Ltd.; Summit Securities Ltd. (erstwhile KEC Infrastructure Ltd.) and Binani Cements Ltd. He is a
member of Audit Committees of Saint Gobain Sekurit India Ltd. and KEC Infrastructure Ltd.

He has been actively associated with the Company since 2003 and his advisory Services have always been of great
importance in the growth of the Company. He holds 15,000 equity shares of the Company.

He does not have any relationship with any of the other Directors of the Company.

30 31
25 Years Reflecting Excellence
 Annual Report 2008-2009

BSE: NSE:
Month Share Price (Rupees) Sensex Performance Month Share Price (Rupees)
High Low High Low High Low
April 2008 105.85 73.55 17378.46 15343.12 April 2008 105.80 73.55
May 2008 129.30 93.25 17600.12 16275.59 May 2008 129.20 93.10
June 2008 121.50 78.55 16063.18 13461.60 June 2008 121.40 78.90
July 2008 98.80 68.25 14942.28 12575.80 July 2008 98.80 68.15
August 2008 99.50 76.25 15503.92 14048.34 August 2008 99.40 76.30
September2008 85.25 49.00 15049.86 12595.75 September 2008 85.25 48.50
October 2008 59.20 25.15 13055.67 8509.56 October 2008 59.50 25.15
November 2008 40.00 23.00 10631.12 8451.01 November 2008 40.20 20.70
December 2008 38.30 22.35 10099.91 8739.24 December 2008 39.70 22.40
January 2009 41.15 26.00 10335.93 8674.35 January 2009 41.10 26.30
February 2009 34.20 25.10 9647.47 8822.06 February 2009 34.15 25.10
March 2009 29.85 21.00 10048.49 8160.40 March 2009 29.80 20.90

190 High Share price

Low Share price
170

180 High Share price 18000 150

Low Share price 17000 130

Share Price (Rupees)

160 High Sensex Performance
16000 110
Low Sensex Performance
140

Sensex Performance
15000 90

120
Share Price (Rupees)

70
14000
100 50
13000
30
80 12000
0
60 11000

January 2009

February 2009

March 2009
April 2008

May 2008

June 2008

July 2008

August 2008

September 2008

October 2008

November 2008

December 2008
10000
40
9000
20
8000
0 0
(ix) SHARE TRANSFER:
January 2009

February 2009

March 2009
April 2008

May 2008

June 2008

July 2008

August 2008

September 2008

October 2008

November 2008

December 2008

SHAREHOLDERS'/ INVESTORS' GRIEVANCES COMMITTEE:

The Company has Shareholders'/Investors' Grievances Committee comprising of one Executive Director and two Non-
executive Directors to look after share transfer and other related matters, including the shareholders' grievances.
Manohar Bidaye, a Fellow Member of Institute of Company Secretaries of India, is the Chairman of the Committee with
the other members being, A. J. Agarwal and Anil Khanna, both senior members of Institute of Chartered Accountants of
India. The Committee normally meets fortnightly and looks into the shareholder & investor grievances that are not
settled at the level of the Company Secretary/Compliance Officer and helps to expedite share transfers & related
matters. The committee has also delegated power of transfer/transmission; dematerialsation /rematerialisation of
shares; issue of duplicate/split/consolidated certificates to expedite relative process.

32 33
25 Years Reflecting Excellence
 Annual Report 2008-2009

Twenty four Meetings of the Committee were held during the year. All the members attended all the meetings. (xi) SHAREHOLDING PATTERN AS ON MARCH 31, 2009:

As at March 31, 2009; Deepak Dalvi- Sr. Manager-Secretarial was acting as Compliance Officer. Sr. No Category No. of Shares % to Capital No. of Holders
1 Promoters/Directors and their Relatives 8,95,84,066 37.96 10
During the year, the Company received 51 complaints from the shareholders which were duly resolved. Further, during 2 Mutual Funds/UTI 1,81,27,824 7.68 20
the year requests for transfer of 38,500 equity shares; and for demat of 24,23,372 equity shares were received and 3 Banks; FIs etc. 12,65,975 0.54 5
processed. 4 FIIs 3,44,97,738 14.62 30
5 Private Corporate Bodies 2,25,55,161 9.56 1,595
Registrar and Transfer Agents and Share Transfer System:
6 Indian Public 6,39,09,159 27.08 98,212
Link Intime India Private Limited (erstwhile Intime Spectrum Registry Ltd.) having their office at C-13, Pannalal Silk Mills 7 NRIs/OCBs 23,95,659 1.02 1,605
Compound, LBS Road, Bhandup (W), Mumbai - 400 078 (Tel No.91-22-25963838) and branch office at 203, Dawer House, 8 Non-promoter Independent Directors 4,74,895 0.20 8
197/199, D.N. Road, Mumbai - 400 001 (Tel No. 91-22-22694127) are the Registrar and Transfer Agents (RTA) as also the and their relatives
registrar for electronic connectivity. Entire functions of Share Registry, both for physical transfer, as well as, 9 Clearing members 31,81,596 1.35 465
dematerialization/rematerialization of shares, issue of duplicate/split/consolidation of shares is being carried out by Total 23,59,92,073 100.00 1,01,950

the RTA at their above address.

The correspondence regarding query of dividends shall be addressed to Compliance Officer at the registered office of
the Company.

Non-promoter
Independent Directors
(x) DISTRIBUTION OF SHAREHOLDING AS ON MARCH 31, 2009: and their relatives
0.20%
Shareholding of nominal value of No. of Shareholders % to total Shareholders No. of Shares % to total Capital Clearing
UPTO 5000 1,00,036 98.12 3,98,79,520 16.90 NRIs/OCBs members Promoters/Directors
Indian Public 1.02% 1.35%
5001 10000 904 0.89 68,42,454 2.90 and their Relatives
27.08% 37.96%
10001 20000 496 0.49 69,49,284 2.94
20001 30000 190 0.18 47,03,126 1.99
30001 40000 67 0.07 23,48,798 0.99
40001 50000 36 0.03 16,62,118 0.70
50001 100000 108 0.11 76,20,997 3.23
100001 AND ABOVE 113 0.11 16,59,85,776 70.34
TOTAL 1,01,950 100.00 23,59,92,073 100.00
Private Corporate
Bodies
9.56% Mutual Funds/UTI
FIIs Banks; 7.68%
14.62% FIS etc.
0.54%

34 35
25 Years Reflecting Excellence
 Annual Report 2008-2009

(xii) DEMATERIALISATION OF SECURITIES: V) CEO/CFO CERTIFICATION:

The necessary certification from Chief Executive Officer H. K. Mittal and Chief Financial Officer Atul J. Agarwal in respect
The equity shares of the Company are under compulsory trading in demat form. Out of total capital of 23,59,92,073
of the financial year ended on March 31, 2009 has been annexed to this report.
equity shares; 23,27,83,075 equity shares representing 98.64% were held in demat form and balance 32,08,998 equity
shares representing 1.36% were in physical form as on March 31, 2009. The ISIN of the equity shares of the Company is VI) COMPLIANCE:
INE934B01028.
The Company has complied with all the mandatory requirements of Corporate Governance Clause 49 of the Listing
The shares are actively traded on BSE and NSE and the turnover data during the financial year 2008-09; was as under: Agreement with Stock Exchanges. Further, the Company has also adopted Remuneration committee requirements out
of Non-mandatory requirements of the Clause.
Particulars BSE NSE Total A certificate from the Auditors of the Company regarding compliance of conditions of corporate governance is annexed
No of shares 37,80,45,624 59,81,39,272 97,61,84,896 to the Directors' Report.
Value (Rs. In lacs) 2579,08.69 3774,43.14 6353,51.83
VII) PLANT LOCATIONS:

As at March 31, 2009; the Company had following series of listed Redeemable Non-Convertible Debentures issued on The Company does not have any plant.
private placement basis in dematerialized form:
As at March 31, 2009, the Company owns total fifteen vessels of aggregate tonnage of 14,43,239 DWT consisting of a
Series No. No. of NCDs Coupon rate O/s. Face value As on 31/03/09 Outstanding Amount ISIN Very Large Crude Carriers (VLCCs); a Suezmax tanker; five Aframax tankers; two MR Tankers; a Panamax and four
VII-A 900 11.25% Rs. 5,62,500/- each Rs. 50.62 crores INE934B07066 dredgers. The Company also owns a 350' Jack-up Rig through its subsidiary. Further, nine vessels of aggregate tonnage
IX-A 1500 11.90% Rs. 10,00,000/- each Rs. 150.00 crores INE934B07207 of 6,81,780 DWT were owned through Subsidiary of the Company consisting of six Panamaxs and three Kansarmax
vessels. Additionally, as at March 31, 2009; the Company along with its subsidiaries also had four chartered vessels of
aggregate tonnage of 1,78,103 DWT comprising of two Panamax and two chemical tankers. The consolidated capacity
(xiii) OUTSTANDING GDRs/ADRs OR WARRANTS OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION DATE AND LIKELY was 28 vessels of 23,03,122 DWT and one 350' jack-up Rig. All the vessels are deployed on various sea-routes.
IMPACT ON EQUITY The Company has coal mines; one in Mozambique and two in Indonesia; owned by its subsidiaries.

2,85,00,000 Warrants carrying an option to apply for equivalent number of equity shares of Re. 1/- each in the Company; Address for correspondence:
Mercator Lines Limited
were issued to a promoter on October 25, 2008, on preferential basis in accordance with SEBI Guidelines on
3rd Floor, Mittal Tower, B-wing,
Preferential Issue, as approved by shareholders in their meeting held on October 11, 2007; and the same were Nariman Point, Mumbai - 400 021
outstanding as on March 31, 2009. Subsequent to year end; the same stood lapsed on maturity date i,e, April 24, 2009; Tel Nos: 91-22-66373333
as warrant holder did not exercise the option. Consequently; the entire amount of application money paid thereon was Fax Nos: 91-22-66373344
E-mail: mercator@mercator.in /
forfeited. investors@mercator.in

Further, out of 10,000 1.50% Foreign Currency Convertible Bonds of USD 10,000 each aggregating USD 60 millions
issued in April 2005; 700 FCCBs of an aggregate amount of USD 7.00 mn were outstanding as at March 31, 2009. The
For and on behalf of the Board
conversion price of the Bonds was fixed at Rs. 59.812 per share with a fixed rate of exchange on conversion of
Rs. 43.73= USD 1.00 with maturity date as April 27, 2010. If all the FCCB holders exercise their rights to convert FCCB into H. K. MITTAL
equity shares then the paid up equity capital of the Company would increase by 51,17,869 shares of Re. 1/- each. Executive Chairman

Regd. Office:
Other than above, there were no outstanding GDRs/ADRs or warrants or any other convertible instruments. 3rd Floor, Mittal Tower,
B-Wing, Nariman Point,
Mumbai - 400021
Dtd: May 19, 2009.

36 37
25 Years Reflecting Excellence
 SHIPPING:

Industry Structure:
To quote, Mr. Efthimios E. Mitropoulos, Secretary General of International Maritime
Organization (IMO):

“Without shipping, there would be virtually no international commerce and as a result, one
half of the world would starve, while the other would freeze”

The Shipping Industry is probably the most aptly and most succinctly defined as above.
Once again shipping industry arguably is one of the oldest commercial endeavors.

Even in Indian context, it is all about maritime transport as our country's international trade;
approximately 95% by volume and 70% by value is sea-borne. Although the bug picture is
transport, but shipping by itself stands out as all other modes of transport heavily and at
times entirely depend on it. Therefore, this industry plays a pivotal role in shaping economy

Management mother
by facilitating international trade. It is therefore an ideal candidate to enjoy the status of a
industry.
Discussion Globally, the industry is classified in several ways; ranging from capacity specific

& Analysis classification to route specific classification. Most commonly, it is broadly classified into Wet
Bulk; Dry bulk and Liners. Wet Bulk gets further sub divided into Tankers and Offshore;
Report whereas Dry Bulk is mainly further broken down into sub segments based on carrying
capacities; VLOCs, Panamax, Cape Size and so on. Similarly, typical Liner firms deal with
Container Carriers, MPP, Ro-Ro's etc. Obviously, individual focus of each one these
(Forming part of Directors' report
segments stays firm on the type of commodities being transported; wet bulk largely
for the year ended on
31st March 2009) include crude and petroleum; whereas dry bulk is coal and ores and liners provide services
to a very large and broad industry base.

Recent Developments:

YEARS
Tanker Markets:
In spite of global financial crises; the tanker market that was firm at the beginning of the
year; started showing signs of weakness in the month of August 2008. The impact of global
economic meltdown was so enormous that the market that clearly peaked in July 2008 did

Reflecting
not recover until March 31, 2009. The declining freight rates were due to the worldwide
decline in the demand of petroleum
products and falling crude oil price that

Diversification triggered output cuts. The OPEC cut the

crude oil production by nearly 4.2 MBPD
as it was fighting hard to stabilize the
falling prices. The price of crude oil fell
from a high of USD 150 a barrel to about
USD 40 a barrel.

38 39

Dry Bulk Markets:
The world economy directly impacts dry bulk business. First quarter of last year saw Baltic Dry Index (BDI) a barometer of
dry bulk market touching historical high at around 11700 while third quarter saw BDI touching historical low at about
600; a drop of nearly 95% over just about 6 months. This drop was primarily due to economical meltdown.
Opportunities and Outlook:
Tanker Markets:
The recession in developing and developed nations caused lack of demand in the transportation of crude oils. The
freight market which softened since the highs in July 2008 is expected to slide down and remain soft for most period of
the year.
The phasing out of single hull tankers would be accelerated from third quarter of current year but one cannot discount
addition of new building tonnage which would increase total tonnage by about 4%. The tonnage would be adequate
for the carriage of crude oils and thus would not assist the freight market in firming up. In addition; owners will be
confronted with high operating costs.
The economic growth of OECD/developed countries is one of the indicators for crude oil demand. Lately the macro
economic numbers coming out of these countries indicates that slump is at its lowest and that the turn around should
start soon. Reading further into this; it is felt that large economies of US and Europe should be back on track by the
fourth quarter of calendar year 2009 which in turn hopefully will also revive the tanker market.
Dry Bulk Market:
The IMF has revised down its projection for 2009 for global economic growth at -1.30%. The economic forecast for China
is to grow at 6.5%; down from 6.7% in 2008. The other major economies that would contract are Japan at -6.2%, EU at -
4.2%; & US at -2.8%. Keeping these indications in mind 2009-10 will definitely test a Company's Balance Sheet. As
regards commodities; the total seaborne trade for coal stood at 831.4 mn. tons in 2008 as against 815 mn tons for 2007;
rise of only 2%. With regard to iron ore; the total seaborne trade was 884 mn ton as against 820 mn ton in 2007. In 2009,
it is estimated there will be decline in excess of about 10% in iron ore trade.
Despite the abovementioned supply demand negativity; there are some positive factors that make ship-owners rise
and encounter these challenging times. The USD 800 bn stimulus package has finally been approved by US Govt. The
USD 4 trillion RMB stimulus package has been rolled out by Chinese Govt. The G-20 is also making the right noises. We
expect the impact of these spends to be seen in second half of 2009 as raw materials & non ferrous shipments should
pick-up. The inflow of funds should also ease credit situation with the banks.
Threats; Risks and Concerns:
Tanker
The new building order book executed at peak prices will not be economically viable in the present scenario of
depressed freight rates. Till recovery from present economic crisis not visible; freight rates will continue to be
depressed. Daily operational cost will continue to increase as net additional tonnage is delivered. The main
contributor in this increase being limited availability of skilled man power.
40
Annual Report 2008-2009
High inventory of crude oil & petroleum products whereby storages on land are full leading to further storage on ships
when coupled with high crude oil prices makes the possibility of incremental demand more so difficult than before.
Heightened piracy attacks lead to added insurance and daily operating cost vessels also deviate from normal shipping
lanes to join-up with security convoy thereby traveling extra distances leading to higher time and fuel consumption.
The falling commodity prices and the crude oil production cuts imposed by OPEC could continue to create a negative
impact on the demand for transportation.
The three of company's single hull tankers would be phased out in the year 2010. Some of the long term time charters
that were contracted at steep rate during buoyant markets and due for renewal during near future; will have bearing of
current soft market rates.
Dry Bulk Markets:
The line-up of deliveries of vessels that were contracted during steep buoyant markets in 2008 which would expand
the dry bulk fleet by about 42% would have adverse effect on the freight rates if the recession is prolonged.
Credit defaults in financial sector due to continued recession would worsen the situation of industry.
Extreme short term volatility in commodity markets will be a matter of concern.
Unpredictable weather patterns would lead to inconsistent season demand.
Long lead time for critical equipments/spares due to prevailing recession and consequent uncertainty would lead to
increased demurrage.
OFFSHORE DRILLING:
Industry Structure:
The Offshore Industry is a logical offshoot of the Shipping Industry. The Offshore sector is further segmented into
drilling, exploration and production, development and maintenance essentially based on the services required by the
petroleum sector.
A drilling rig or oil rig is a structure housing equipment used to drill for water, oil or natural gas from underground
reservoirs. Sometimes a drilling rig is also used to complete (prepare for production) the well. However, the rig itself is
not involved with the extraction of the oil, its primary function is to make a hole in the ground so that the oil can be
produced.
There are two basic types of offshore drilling rigs: those that can be moved from place to place, allowing for drilling in
multiple locations, and those rigs that are permanently placed. Moveable rigs are often used for exploratory purposes
because they are much cheaper to use than permanent platforms. Once large deposits of hydrocarbons have been
found, a permanent platform is built to allow their extraction.
Recent Developments:
The offshore drilling sector withstood economic downturn for most of 2008. Rates for Jack-up started tumbling down in
last quarter of 2008 but have since March 2009 maintained a steady level. This downward event was due to global
economic collapse which then led to price of oil falling from about USD 150 to less than USD 40 a barrel. The utilization
41
25 Years Reflecting Excellence

for jack-up dropped from high of 90% to about 77% in March 09 and has been steady since then. Oil prices have now
inched upto round about USD 55 per barrel and oil companies are reworking their E&P programmes. Rigs which are on
charter continued to be employed even though they are at rate higher than present market. Rigs without an
employment at the very best get contracts for few wells only.
Opportunities and Outlook:
Global spending on offshore drilling is forecast to rise 32% over the period 2009-2013 compared with 2004-2008,
despite reduced spending in 2009 and 2010. By 2013 the global drilling market will be worth close to $100 billion, more
than doubling since 2004.
From 2010 a return to increases in spending are forecast, especially directed at deepwater development projects. The
big expansion in the number of rigs available for these projects will just about meet market demandAsia will be the
driver, followed by North America. Thus in early 2009 the supply/demand balance for oil had already stabilized, despite
the worsening recession. The numbers in segment point to a return to stability in 2010 and, by 2011, a strong growth in
the offshore drilling industry is forecast
Threats; Risks and Concerns:
Capex and Schedule overruns during upgradation or refurbishment of an acquired old asset Volatile Oil prices leading
to renegotiations or even cancellation of contracts
JV partner or Technical collaborator may not honor the required commitments and cash calls at all times, may be
expected. Intense competition due to recent major expansions during buoyant times, leading to lower day rates.
DREDGING:
Industry Structure:
The dredging industry is primarily driven by infra structural growth, particularly port infrastructure. India having a
coastline of about 7200 Km and with changes in port development policies of the government of India, this segment
seems to become a sunrise sector.
The dredging industry has mainly two segments, viz. maintenance and capital dredging; former being maintenance of
existing ports or channels whereas latter involves dredging for development of new major or minor ports. Most ports in
India being naturally developed receive large amounts of silt during the monsoons. All these ports require dredging
operation to maintain the available depth in the approach channel and at the berths. Kandla, Goa, Mangalore, Cochin
and river Hoogly are typical ports that require maintenance dredging each year. In River Hoogly and Port Cochin the
dredging requirement is nearly through the year as river brings silt with the flowing waters. Such dredging
requirements are met by trailer suction hopper dredgers.
The dredging industry on account of numerous infrastructure projects under development was in very big demand in
the last few years. Until the middle of year 2008, the demand for the dredgers exceeded availability. The numerous
capital dredging and reclamation projects, particularly in the Middle East and Asia kept the dredgers fully occupied.
42
Annual Report 2008-2009
Recent Developments:
The dredging industry witnessed a buoyant phase in the first half of financial year 2008-09. The charter rates were firm
boosted by the large scale development in the infrastructure projects. Most of the ports globally were engaged in
deepening their channels and development of berths. West Asia Gulf region offered tremendous opportunity in the
deployment of dredgers in reclamation projects.
Three of the company’s dredgers were fixed at a very firm rate on time charter basis with the Government of India
Undertaking. The fourth dredger was engaged in operation in Taipei Port. All the four dredgers were gainfully
employed through the year 2008-09.
With the onset of the financial melt down witnessed in September 2008, many of the dredging projects were severely
affected. The erosion in these projects lead to increased availability of dredgers causing the charter hire rate to soften.
The company’s dredgers were not affected as they were tied up in long term charters which still continue .
India did not remain isolated from the global financial crisis but was affected to a lesser degree. Many of the
development programs were put on hold and the competition increased. The maintenance dredging projects in
various ports however continue to be undertaken.
Opportunities and Outlook:
The ports need to cater to faster turn-around and utilization of large vessels. Capital dredging projects are undertaken
at ports to meet such requirements. The trade requirements change with time and require cost effective measures for
their commercial viability. Many ports were recently developed and are being upgraded to service the industry
located in their hinterland.
The Gujrat Pipavav Port Limited recently entered in a capital dredging work and increased the available depth in the
port from 12.5 meters to 14.5 meters. It had undertaken development of a container yard with dredgers utilized for
reclamation works. Similarly, other ports would follow the suit. Further, the maintenance dredging requirements
being unavoidable would continue. This opportunity would not be adequate to create a positive impact on the charter
rates. The dredging requirements having reduced the market outlook would remain weak.
The opportunities still exist in the deployment of dredgers but the rates continue to soften.
Threats; Risks and Concerns:
The global financial crisis had compelled the erosion of various development and reclamation projects in the West
Asia Gulf region. The development in various ports and shipyards worldwide was placed on hold as finances required
were not available. The lack of confidence in the bankers resulted in some projects being left incomplete. The projects
in hand were progressing slowly. The revenue generated from these projects would be softer so would be the
earnings of the dredge owners.
The down time of the dredgers built in China continues to be greater than normal.
43
25 Years Reflecting Excellence

Three Company’s dredgers are currently employed in the ‘Sethusamudram’ Canal Project which is a politically sensitive
issue. The increased availability of dredgers and reduced charter rate is prompting charterers to re-negotiate their
terms of contract. This would adversely affect the returns.
The sector is not well reported in the market and the activity is little known.
COAL MINING:
Industry Structure:
Coal industry is all about mining, transportation, storage and logistics. Miners usually look for long term contracts, so do
the primary users such as power plants. Therefore, coal linkage contracts present a win-win opportunity for power
plants and major coal user industries.
Coal is a major global energy source and is expected to be the dominant fuel for power generation well into the
foreseeable future. Despite having very large domestic coal industries, China and India are actively seeking to secure
the supply of coal from other countries. Out of total steam coal production of 4 billion tons worldwide approx 750
million tons of coal per annum is traded internationally. There is currently up to 200 years of proven coal reserves at
current rates of production. Fuel cost is the largest component in electricity generation. Making use of coal is relatively
advantageous due to its low cost compared with other fuels such as oil and natural gas. Other advantages of coal
include stable supply from a wide range of geographic locations, easy and safe storage, and ease of transportation by
rail or ship.
Recent Developments:
Internationally coal is traded mainly from Australia, South Africa and Indonesia. China which used to be the coal
exporter has become the net coal importer in recent years due to their huge internal demand. For Fareast Asian
markets the coal from Indonesia remains attractive because of its low haul. The coal from Indonesia is mostly of sub
bituminous type which is suitable for power generations and of late 75 to 80% of the coal production from Indonesia is
exported. There has been a spurt in interest to invest in coal resources. Many Indian companies have made a bee-line
to such places and even some are endowed with hostile terrain. The question now being asked is will coal be the
new “black gold”?
Opportunities and Outlook:
Asian countries mainly China and India will continue to drive the steam coal demand because of the power
deficiencies' in those countries. Coal will always remain the cheaper source of power generation as compared to other
sources. Due to the huge demand for power and the technological improvements in power generations the lower
quality of coal will become useful. Indonesia which has got huge reserves of thermal coal will be the major exporter
and cheap source of coal in future. So in our opinion power generation will be the demand driver and Indonesia will be
fulfilling the supply for this increase in demand. Coal accounts for 27% of world energy consumption. Of the total coal
produced worldwide, 63% is consumed by electricity producers, 34% by industrial consumers, and most of the
remaining 3 % went to coal consumers in the residential and commercial sectors. Coal's share of total world energy
consumption is projected to increase to 29 percent by 2030, and its share in the electric power sector is projected to
rise from existing 42 percent to 46 percent in 2030. Over the outlook period growing demand for thermal coal is
expected to be met by increased production in Indonesia, Australia, and South Africa.
44
Annual Report 2008-2009
Threats; Risks and Concerns:
The alternative source of power generation is gas and oil. But due to cost efficiency coal is and will always be attractive.
But it has some Environmental concerns which remain a threat. With stricter environmental regulatory framework
globally, GHG's and carbon emissions will continue to pose challenges; however, Clean Development Mechanisms
will get mature over a period of time and these challenges will then get met with.
Infrastructure and transportation bottlenecks are viewed as a major challenge to the continued expansion of the coal
industry and are expected to contribute to a rise in import demand. Coal is expected to remain an important source
of new electricity generation capacity because of its low cost, reliability of supply and wide geographic
spread of producers. Although, the need for rapid development of electricity capacity favors coal fired technology over
others, there is also expected to be an increased uptake of natural gas for electricity generation in many economies.
Expansion to nuclear power generation is also expected in Asian countries with existing nuclear programs such as
Japan, China and India.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has adequate internal control systems in place. These systems ensure that all corporate policies are
strictly adhered to and absolute transparency is followed in accounting and all of its business dealings.
The Internal Auditors appointed by the Company ensure that adequate internal controls are in place and all mandatory
accounting policies are complied with. The Audit Committee constituted by the Board of Directors assesses the
financials of the Company at regular intervals, in consultation with internal and statutory auditors.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
The Company standalone as well as through its various subsidiaries; has diversified operations with its own fleet of
Tankers, Bulk Carriers; Dredgers and a Jack Up Rig. The consolidated income from the operations was Rs. 2211 crores for
the year under review as compared to Rs. 1,477 crores in the previous year, recording top line growth of about 50% year
on year.
The company's tanker fleet consists of Very Large Crude Carriers (VLCCs), Suezmaz, Aframaxes, Product Tankers and
Chemical Tankers.
Within the tanker segment, the Company had nine tankers owned by it totaling a capacity of 10,44,273 DWT at the
beginning of the year. During the year, the Company acquired a VLCC of 2,99,235 DWT. Consequently at the end of the
year, the Company had ten tankers owned; with an aggregate tonnage of 1,343,508 DWT. Out of these; one VLCC was
under conversion to Very Large Ore Carrier (VLOC) at the end of the year. Further, at the year end the Company had; two
chartered in chemical tankers with an aggregate capacity of 30,826 DWT; through its subsidiary.
The performance of tanker division was satisfactory. The Company was able to achieve targeted returns. During the
year, the Company achieved a turnover of Rs. 966 crores as compared to Rs. 771 crores in the previous year for this
division. Though the number of operating days by reduced by about 19% to 4196 days (previous year increase of 16% to
5,589 days) the performance was offset by 19% increase in Time Charter Equivalent (TCE) to USD 27,976/-. Overall
contribution from the tanker division was pegged at 43% (previous year 52%) of the total operational income.
The Company's bulk carrier fleet is comprised of Geared and Gearless Panamaxes and Kamsarmaxes.
45
25 Years Reflecting Excellence

The bulk division too performed satisfactorily. The Company's strategy of employing a large portion of the fleet on term
business with renowned customers ensured that it met its targets even in such challenging year.
At the beginning of the year, there were eight own bulk carriers aggregating a tonnage of 6,12,659 DWT (including
seven through a subsidiary) and four chartered-in bulk carriers through the subsidiary with an aggregate capacity of
2,85,684 DWT. During the year, two bulk carriers were acquired by the company's subsidiary by exercising options on
the chartered vessels. Therefore aggregate own capacity increased by 1,38,407 DWT. At the end of the year the
Company had ten bulk carriers with an aggregate capacity of 7,51,066 DWT and two chartered in bulk carriers of
1,47,277 DWT. An increase in vessel operating days of about 18% over the last year to 4499 days (previous year increase
of 19% to 3,820 days) backed by 4% increase in TCE to USD 39,966/-, the bulk division performed well during the year. It
achieved a turnover of Rs. 935 crores (Rs. 670 crores previous year. This division contributed about 42% of the total
operational income (Previous year 45%).
Last year the Company forayed into dredging by acquiring three own dredgers aggregating 24,153 DWT. This was
strengthened further by acquiring one more dredger of 6,292 DWT. The aggregate capacity of these four dredgers is
23500 Cubic meter. On 1208 (previous year 271) days of operating, the Company achieved a turnover of Rs. 168 cr
(Previous year Rs. 14 crores). This contributed about 7% of total operational income (Previous year 1%).
During the year, the operations of coal mines in Indonesia commenced through subsidiaries of the Company. About
327,000 MT coal was generated and traded on which a turnover of Rs. 77 cr (net of inter company transactions) was
achieved. This contributed about 4% of the total operational income (previous year Nil%).
The turnover from coal handling was Rs. 57 crores (previous year Rs. 22crores). This contributed about 3% of the total
operational income (previous year 1%).
At the end of the year; a jack-up rig was delivered and the same was received through a subsidiary of the Company that
was deployed immediately thereafter. On 21 operating days; a turnover of Rs. 9 cr. was achieved. This contributed about
0.4% of the total operational income (previous year Nil %)
Coal
Mining* Off Shore
Coal
Drilling*
Handling 3.5%
Dredger 0.4%
2.6%
7.6% Dry Bulk*
42.3%
Tanker
43.7%
* These figures include turnovers achieved by applicable subsidiaries for this business segment.
46
Annual Report 2008-2009
Review of Operations of Subsidiaries:
1) Mercator International Pte. Ltd. (MIPL) – (Wholly Owned Overseas Subsidiary -WOS):
MIPL was incorporated in Singapore in January 2007 as WOS. This company has multiple subsidiaries or fellow
subsidiaries in Singapore and other countries. As at the beginning of the year; MIPL had fleet of chartered in VLCC; an
Aframax and a chemical tanker of aggregate capacity of 374,337 DWT on standalone basis. At the end of the year it
had two chartered in chemical tankers of aggregate 30,826 DWT MIPL has also diversified interest through its
Subsidiaries; in commodity mining and trade business as a move towards backward integration of the Company’s
business strategy.
Last year was the first full year of operation of MIPL. It achieved a turnover of about Rs. 139.14 crores equivalent of
USD 29.95 mn (as against Rs. 132.03 crores equivalent to USD 32.78 mn in the previous year) with a net profit of
Rs. 12.66 crores equivalent of USD 2.72 mn (previous year Rs. 3.90 crores equivalent of USD 0.97mn) on
standalone basis; that is excluding contribution from its fellow subsidiaries.
2) Mercator Lines (Singapore) Ltd. (MLS)
This is a Singapore Stock Exchange listed subsidiary of MIPL, which owns 72.35% controlling interest in the company.
MLS has three fully owned subsidiaries; namely, Varsha Marine Pte. Ltd., Vidya Marine Pte. Ltd. and Mercator Lines
(Panama) Inc. Consolidated fleet of MLS as at 31st March 2009, comprised of nine own vessels of aggregate capacity
of 6,90,650 DWT and two chartered-in vessels of aggregate capacity of 1,38,407 DWT.
During the year, MLS achieved a consolidated turnover of Rs. 898.52 crores equivalent of USD 187.64 mn (as against
Rs. 589.03 crores equivalent to USD 148.48 mn in the previous year) and earned net profit after tax of Rs. 380.20 crores
equivalent to USD 75.84 mn (as against Rs. 230.44 crores equivalent to USD 57.21 mn in previous year).
The Board of Directors of MLS recommended dividend @ 1.16 cents per share for the year ended on 31st Mach 2009.
The Board of Directors of wholly owned subsidiaries of MLS; namely Varsha Marine and Vidya Marine declared and
paid interim dividends of USD 3 mn for each of the companies, during the year under review.
Mercator Lines Panama did not carry out any business other than holding and assigning charter hire rights of two
Panamax vessels (previous year four) on a back to back basis and remained dormant during the year.
3) Mercator Offshore Ltd. (MOL)-WOS:
This is a wholly owned overseas subsidiary incorporated in May 2006 in Singapore with an objective of exploring
offshore business worldwide, headquartered at Singapore. This subsidiary had placed an order for construction of a
premium jack-up rig suitable for worldwide operations, delivery of which was received on 11th March 2009 and
commenced operations immediately thereafter. The rig has been deployed for a period of three years on firm bare
boat contract.
During the year; this subsidiary achieved turnover of Rs. 8.92 crore equivalent of USD 1.92 mn (previous year only
interest income of Rs.0.01 crore equivalent of USD 0.003mn) and recorded net profit of Rs. 3.89 crores equivalent of
USD 0.84 mn (previous year loss of Rs. 0.14 crore equivalent of USD 0.03mn).
4) Mercator Oil & Gas Ltd. (MOGL)-WOS:
This an Indian based non-listed non-material wholly owned subsidiary is yet to commence any business activities.
47
25 Years Reflecting Excellence
 Annual Report 2008-2009

5) Mercator Petroleum Private Ltd. (MPPL)-WOS:
This is an Indian non-listed non-material subsidiary, with an object to explore business opportunities in the oil and
gas sector domestically. The company has entered into a Production Sharing Contract with the Government of
India for exploration of Petroleum under the Seventh New Exploration Licensing Policy round (NELP-VII) and has
been allotted tow blocks under the scheme in Cambay Basin, Western India.
Pursuant to the provisions of the Companies Act, 1956; MPPL has become deemed public limited company in view
of entire share capital held by the Company
6) Oorja Holdings Pte. Ltd. (OHPL) and its subsidiaries:
OHPL is 100% subsidiary of Mercator International Pte. Ltd. (MIPL) based in Singapore with the objective to explore
business opportunities in commodity mining and trade. As at March 31, 2009, OHPL had four wholly owned
subsidiaries further; namely, Oorja 1 Pte. Ltd., Oorja 2 Pte. Ltd., Oorja 3 Pte. Ltd.; Oorja Mocambique Minas Limitada;
and MCS Holdings Pte. Ltd.,
Oorja 1 has a further subsidiary by the name of Oorja Indo Petangis Four (OIP-4) incorporated in Indonesia.
Oorja 2 has further subsidiary by the name of Oorja Indo Petangis Three incorporated in Indonesia (OIP-3).
Over the year the company’s strength grew remarkably by 60 per cent. As on March 31, 2009, there were 104 on-shore
employees with an average age of 37 years and 134 shore staff crew members.
CAUTIONARY STATEMENT:
The Statement in this Management Discussion and Analysis Report describing the Company’s objectives, projections,
estimates, expectations or predictions may be ‘forward looking statements’ within the meaning of applicable laws and
regulations. Actual results might differ substantially or materially from those expressed or implied. Important
developments that could affect the Company’s operations include demand-supply conditions, changes in
Government and International regulations, tax regimes, economic developments within and outside India and other
factors such as litigation and labour relations.
For and on behalf of the Board
H. K.MITTAL
Executive Chairman

Oorja 3 has further subsidiary named Oorja Indo KGS incorporated in Indonesia. Regd. Office:
3rd Floor, Mittal Tower,
Oorja Mocambique has a step-down subsidiary named Broadtec Mocambique Minas Limitada with 85% holding B-Wing, Nariman Point,
incorporated in Mocambique. Mumbai - 400021
Dtd: May 19, 2009.
During the year; OHPL achieved consolidated turnover of Rs. 137.54 crores equivalent of USD 29.51 mn and
suffered loss of Rs 17.19 crores equivalent of USD 2.49 mn.

7) Mercator Offshore Holdings Pte. Ltd.

This was in corporated in March 2009 as WOS of the Company in Singapore as a part of internal strategy of the
comapny.

None of above subsidiaries audit report contains any qualification.

(For the purpose of financial performances conversion rate of per dollar has been taken as Rs. 46.455 for profit and
loss account (previous year Rs. 40.28) and Rs. 50.95 for balance sheet items (previous year Rs. 39.82).

HUMAN RESOURCES POLICIES:

The Company gives utmost importance to its human capital and recognizes the importance of organization building.
The company has embarked on several HR initiatives with a focus on improving organizational and individual
productivity and excellence. The company organized several training programs in order to motivate and help the
employees to realize their potential. Apart from productivity related initiatives, the company also organized programs
on team building and several welfare related activities for the employees.

48 49
25 Years Reflecting Excellence
 Annual Report 2008-2009

CEO / CFO CERTIFICATION AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

To, To the members,

The Board of Directors Mercator Lines Limited,
Mercator Lines Limited Mumbai
Mumbai
We have examined the compliance of conditions of corporate governance by Mercator Lines Limited for the year ended
Dear Sir, on 31st March 2009, as stipulated in Clause 49 of the Listing Agreement of the said company with stock exchange.

This is to certify that: The compliance of conditions of corporate governance is the responsibility of the management. Our examination was

a) We have reviewed financial statement for the F.Y. ended on 31.03.2009 and the cash flow statement for the year limited to procedure and implementation thereof, adopted by the company for ensuring the compliance of the
(consolidated and unconsolidated) and that to the best of our knowledge and belief:- conditions of the corporate Governance. It is neither an audit nor an expression of the financial statement of the
company.
I) these statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading; We certify that the company has compiled with the conditions of corporate Governance as stipulated in the above
mentioned Listing Agreement.
ii) these statements together present a true and fair copy of the company's affairs and are in compliance with
existing accounting standards, applicable laws and regulations.
We state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or
b) There are, to the best of our knowledge and belief, no transactions entered into by the company during the year effectiveness with which the management has conducted the affairs of the company.
which are fraudulent, illegal or violative of the company's code of conduct.
For and on behalf of
c) We accept responsibility for establishing and maintaining internal controls and that we have evaluated the Contractor Nayak & Kishnadwala
effectiveness of the internal control systems of the company and we have disclosed to the auditors and the Audit Chartered Accountants
Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps
we have taken or propose to take to rectify these deficiencies. Himanshu Kishnadwala
Partner
d) We have indicated to the auditors and the Audit Committee: Membership No. 37391
Mumbai
i) significant changes in internal control during the year, whenever applicable; 19th May 2009

ii) that there were no significant changes in accounting policies during the year and that the same have been
disclosed in the notes to the financial statements; and

iii) that there were no instances of fraud of which we have become aware and the involvement therein, if any, of
the management or an employee having such significant role in the company's internal control system.

e) We further declare that all board members and senior managerial personnel have affirmed compliance with the
code of conduct for the current year.

For Mercator Lines Limited For Mercator Lines Limited

H. K. Mittal A. J. Agarwal
Chief Executive Officer Chief Financial Officer
19th May, 2009

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 Annual Report 2008-2009

AUDITORS' REPORT Statement referred to in paragraph 3 of the Auditors' Report of even date to the Members of MERCATOR LINES
LIMITED on the accounts for the year ended 31st March 2009.
The Members of
MERCATOR LINES LIMITED On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we

1. We have audited the attached Balance Sheet of MERCATOR LINES LIMITED as at 31st March 2009, the related Profit
and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government in terms of Section
227(4A) of the Companies Act, 1956, and on the basis of such checks as considered appropriate and according to
the information and explanations given to us during the course of the audit, we enclose in the Annexure hereto a
statement on the matters specified in Paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in above paragraph, we report that:
a) We have obtained all the information and explanations, which to the best of our knowledge and belief were
necessary for the purposes of our audit;
b) In our opinion, proper books of account, as required by law have been kept by the Company so far as appears
from our examination of the books of the Company;
c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by the report are in
agreement with the books of account of the Company;
d) In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement comply with the
mandatory Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.
e) On the basis of written representations received from the directors of the Company as on 31st March 2009, and
taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March
2009, from being appointed as a director in terms of Section 274(1) (g) of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to the explanations given to us, the said
accounts read together with the Notes to Accounts in Schedule 'I' give the information required by the
Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India:
a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2009;
b. In the case of the Profit and Loss Account, of the Profit for the year ended on that date,
c. In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
For and on behalf of
Contractor Nayak & Kishnadwala
Chartered Accountants
Himanshu Kishnadwala
Partner,
Membership No 37391
Mumbai
19th May 2009
state as under:
1(a) The company has maintained proper records showing full particulars including quantitative details
and situation of the fixed assets;
1(b) As explained to us, the management at reasonable intervals carries out the physical verification of the fixed
assets. The discrepancies noticed on such verification, which were not material, have been appropriately
dealt with in the accounts.
1(c) The fixed assets disposed off by the company were not substantial and does not affect the going concern
assumption.
2(a) As explained to us, the inventories of bunker and lube have been physically verified during the year by the
management. In our opinion, having regard to the nature and location of stocks, the frequency of the
physical verification is reasonable.
2(b) In our opinion and according to the information and explanations given to us, the procedures of physical
verification of the above mentioned inventory followed by the management are reasonable and adequate
in relation to the size of the Company and the nature of its business.
2(c) In our opinion, the Company is maintaining proper records of inventory and no material discrepancies were
noticed on physical verification.
3(a) As per the information and explanations given to us, the Company has granted unsecured loans to 5 parties
covered in the register maintained under section 301 of the Companies Act, 1956. The outstanding balance as
on 31st March 2009 is Rs. 57,303.26 Lacs and maximum balance outstanding during the year is 85,564.11 lacs.
3(b) In case of the aforesaid unsecured loans granted to the parties covered in the register maintained under
Section 301 of the Companies Act, 1956, looking to the long term involvement of the company in the
subsidiaries and their businesses, the rate of interest and the other terms and conditions are not prima-facie
prejudicial to the interests of the Company.
3(c) In case of the aforesaid unsecured loan granted to the parties covered in the register maintained under
Section 301 of the Companies Act, 1956, the repayment of principal amount and interest, where applicable is
regular.
3(d) In case of the aforesaid unsecured loans granted to the parties covered in the register maintained under
Section 301 of the Companies Act, 1956, the company is taking reasonable steps for the timely recovery of the
principal and interest
3(e) As per the information and explanations given to us, the Company has not taken unsecured loans from a
Company or any other party covered in the register maintained under section 301 of the Companies Act, 1956,
the provisions of Clause 3(f) and 3(g) are not applicable.

52 53
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 Annual Report 2008-2009

4 In our opinion and as explained to us, there are adequate internal control procedures commensurate with the 16
size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and
for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the
internal controls and there is no continuing failure for the same. 17
5(a) Based on the audit procedures applied by us and according to the information and explanations provided by
the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 18
301 of the Companies Act, 1956 have been entered in register required to be maintained under that section.
According to the information and explanations given to us, the term loans raised were used for the purpose for
which they were raised.
As explained to us and on an overall examination of the balance sheet of the Company, in our opinion there
are no funds raised on short-term basis which have been used for long-term investment by the Company.
According to the information and explanation given to us, the Company has not made any preferential
allotment of shares/warrants during the year.

5(b) In our opinion and as explained to us, the transactions made in pursuance of such contracts or arrangements
have been made at prices which are reasonable having regard to the prevailing market prices at the relevant
time.
6 The Company has not accepted any deposits from public during the year
7 In our opinion, the Company has an internal audit system commensurate with the size of the Company and
the nature of its business.
19 In respect of secured debentures issued during the year for Rs. 15,000 lakhs, the company has created
adequate charge.
20 The Company has not raised any money by public issues during the period covered by our report.
21 Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial
statements and as per the information and explanations given by the management, we report that no fraud on
or by the company has been noticed or reported during the course of our audit.

8 The maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d)
of the Companies act, 1956.
For and on behalf of
9(a) According to the information and explanations given to us and the records examined by us, the Company is Contractor Nayak & Kishnadwala
regular in depositing with appropriate authorities undisputed statutory dues including provident fund, Chartered Accountants
investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax,
service tax, custom duty, excise-duty, cess and other statutory dues and there are no undisputed statutory Himanshu Kishnadwala
dues outstanding as at 31st March 2009, for a period of more than six months from the date they became Partner,
payable. Membership No 37391
Mumbai
9(b) According to the information and explanations given to us, there are no dues of income-tax, sales tax, wealth 19th May 2009
tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute.

10 The company does not have any accumulated losses as on 31st March 2009 and has not incurred any cash
losses during the financial year and in the immediately preceding financial year.

11 Based on the information and explanations given to us, the Company has not defaulted in repayment of any
dues to financial institutions and banks.

12 Based on our examination of the records and as explained to us, the Company has not granted any loans
and/or advances on the basis of security by way of pledge of shares, debentures and other securities

13 In our opinion, the company is not a chit fund, nidhi/mutual benefit fund/society. The provisions of clause
4(xiii) are therefore not applicable to the company.

14 During the year, the Company does not have any transactions in respect of dealing and trading in shares,
securities, debentures and other investments. All shares, debentures and other investments held by the
company are held by the Company in its own name.

15 According to the information and explanations given to us, the terms and conditions on which the Company
has given guarantees for loans taken by subsidiaries and others from banks and financial institutions are,
considering the long term involvement of the company in these entities, not prejudicial to the interests of the
company.

54 55
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 Annual Report 2008-2009

BALANCE SHEET AS AT MARCH 31, 2009 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON MARCH 31, 2009
(Amount Rs. in Lacs) (Amount Rs. in Lacs)
As at As at As at As at
Particulars Schedule 31, March 2009 31, March 2008 Particulars Schedule 31, March 2009 31, March 2008

SOURCES OF FUNDS INCOME

Shareholders’ Funds Shipping Income J 113,770.02 80,312.06
Share Capital A 2,359.92 2,348.95 Other Income K 4,505.84 2,716.11
Warrants against Share Capital A1 1,667.25 1,667.25 Profit on Sale of Investments (Net) 36.50 325.80
Reserves and Surplus B 107,095.25 87,863.64 Profit on Sale of Assets (Net) (1.17) 2,953.95
111,122.42 91,879.84 Total 118,311.19 86,307.92
Loan Funds
Secured Loans C 125,742.11 91,293.82 Expenses
Unsecured Loans D 15,551.70 5,909.35 Ship Operating Expenses L 70,208.32 49,221.93
141,293.81 97,203.17 Administrative and Other Expenses M 4,766.14 3,170.85
Finance Charges N 10,183.97 5,856.87
Total 252,416.23 189,083.01 Depreciation 14,365.62 10,382.84
Total 99,524.05 68,632.49
APPLICATION OF FUNDS
Fixed Assets E Profit Before Taxes 18,787.14 17,675.43
Gross Block 239,581.02 158,187.87 Provision for Taxation
Depreciation (37,478.73) (28,392.27) Current Tax (650.00) (770.00)
Net Block 202,102.29 129,795.60 Deferred Tax - -
Capital work in progress 4,914.12 10,010.47 Fringe Benefit Tax (25.00) (21.00)
Asset Held for Disposal 26,060.57 - Profit After Taxes 18,112.14 16,884.43
233,076.99 139,806.07
Prior Year Expenses / Income (Net) - (119.54)
Investments F 4,342.80 2,014.93 Short Provision for Tax of earlier Year (1.94) (130.00)
Balance brought forward from last year 23,394.22 15,305.96
Current Assets, Loans & Advances G
Inventories 1,082.01 2,244.33 Available for Appropriations 41,504.43 31,940.85
Sundry Debtors 22,763.28 10,377.96 Less/(Add): Appropriations
Cash and Bank Balances 45,958.27 5,642.17 Transfer to General Reserve 1,880.00 1,770.00
Loans and Advances 68,433.05 51,053.93 Transfer to Debenture Redemption Reserve 3,900.00 -
138,236.61 69,318.39 Transfer to Tonnage Tax Reserve 5,700.00 3,300.00
Current Liabilities and Provisions H Dividend on Preference Shares - 307.76
Current Liabilities 121,380.81 18,797.11 Dividend On Equity Shares (on conversion of
Provisions 1,504.95 3,071.25 FCCB/warrants) 12.06 80.00
Incomplete Voyages (Net) 354.41 188.02 Proposed Dividend on Equity Shares 1,179.96 2,583.85
123,240.17 22,056.38 Tax on Dividend (including for previous year
Rs.13.60 Lacs) 202.58 505.02
Net Current Assets 14,996.45 47,262.01 Balance Carried to Balance Sheet 28,629.83 23,394.23
Earning Per Share (Equity Share of Re. 1/- Each)
Total 252,416.23 189,083.01 Basic (Rs) 7.68 7.24
Significant Accounting Policies I Diluted (Rs) 7.54 6.91
& Notes to the Accounts
Significant Accounting Policies I
& Notes to the Accounts
As per our report of even date For and on behalf of the Board
As per our report of even date For and on behalf of the Board
For Contractor, Nayak & Kishnadwala H. K. Mittal A. J. Agarwal
Chartered Accountants Executive Chairman Managing Director For Contractor, Nayak & Kishnadwala H. K. Mittal A. J. Agarwal
Chartered Accountants Executive Chairman Managing Director
Himanshu Kishnadwala
Anil Khanna M. G. Ramkrishna
Partner Himanshu Kishnadwala
Director Director Anil Khanna M. G. Ramkrishna
M No. 37391 Partner
Mumbai - 19th May 2009 Dated: 19th May 2009 Director Director
M No. 37391
Mumbai - 19th May 2009 Dated: 19th May 2009

56 57
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 Annual Report 2008-2009

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009 SCHEDULES FORMING PART OF ANNUAL ACCOUNTS
(Amount Rs. in Lacs) (Amount Rs. in Lacs)
Particulars Current Year Previous Year Particulars Current Year Previous Year
Cash Flow from Operating Activities
Net Profit Before Tax 18,787.15 17,675.43 SCHEDULE ‘A’
Adjustment for: Share Capital
Depreciation 14,365.62 10,382.84 Authorised
Interest Paid 10,183.97 5,856.87 35,00,00,000 Equity Shares of Re 1/- each. 3,500.00 3,500.00
(Profit)/Loss on Fixed Assets Scrapped/Sold 1.17 (2,953.95) 200,00,000 Preference Shares of Rs. 100 each. 20,000.00 20,000.00
(Profit)/Loss on Sale of Investment (36.50) (325.80) 23,500.00 23,500.00
Dividend Income (168.81) (406.91) Issued Capital
Interest Income - - 23,59,92,073(23,48,95,387) Equity of Shares Re. 1/-
Operating Profit before Working Capital Changes 43,132.60 30,228.48 each fully paid up 2,359.92 2,348.95
Adjustment for: 2,359.92 2,348.95
Trade and Other Receivables (27,489.68) (13,351.36) Subscribed and Paid Up Capital
Trade Payables 101,183.80 11,613.75
Equity
Cash Generated from Operations 116,826.72 28,490.86
23,59,92,073(23,48,95,387) Equity of Shares Re. 1/-
Direct Taxes Paid (676.94) (921.00)
each fully paid up. 2,359.92 2,348.95
Total Cash Generated from Operating Activities 116,149.78 56,060.73 (a) NIL (11,83,45,500) shares of Re 1/- were allotted
Cash Generated from Prior Period Items - (119.54) as bonus shares by capitilisation of Securities
Net Cash from Operating Activities 116,149.78 27,450.32 Premium Account during the year 2005-06
Cash flow from Investing Activities (b) NIL (32,00,000) shares of Re. 1/- each were allotted on
Acquisition of Fixed Assets including Capital Work in Progress (107,644.35) (25,005.12) conversion of warrants issued on preferential basis.
Sale of Fixed Assets 6.64 6,184.70 (C)10,96,686(37,652,887) Shares of Re. 1/- each were
Proceed from sale of Non Trade Investments 36.50 325.80 allotted on conversion of FCCBs during the Year.
(Purchase)/sale of Investment (2,327.87) 8,277.41
Dividend Income 168.81 406.91 2,359.92 2,348.95
Net Cash from Investing Activities (109,760.27) (9,810.30) SCHEDULE ‘A1’
Cash Flow from Financing Activities Warrants against Share Capital
Proceeds from issue of Share Capital from conversion 2,85,00,000 Warrants (Each Warrant carry option/entitlement
of Bonds and warrants 10.97 22,048.69 to subscribe to 1 number of equity share of Re. 1/- each on or
Proceeds from Long Term Borrowing 44,090.64 (36,591.35) before April 24, 2009 at a price not less than Rs. 58.50 per share.) 1,667.25 1,667.25
Increase / Decrease in Reserves 2,516.00 - (The warrant holder has not exercised the above option by
Interest Paid (10,183.97) (5,856.87) validity and the amount received has been subsequently
Dividends Paid including tax thereon (1,394.61) (3,476.63) forfeited.)
Net Cash from Financing Activities 35,039.03 (23,876.17) 1,667.25 1,667.25
SCHEDULE ‘B’
Net Increase in Cash and Cash Equivalents 41,428.54 (6,236.14) Reserves and Surplus
Cash and Cash Equivalents as at beginning of the year
(As per Schedule G) 5,730.18 11,966.32 Capital Reserve
Cash and Cash Equivalents as at end of the year As per last Balance Sheet 26.24 26.24
(As per Schedule G) 47,158.72 5,730.18 26.24 26.24
Notes: Capital Redemption Reserve
1) Figures in bracket represent outflows As per last Balance Sheet 4,000.00 -
2) Cash and cash equivalents include gain/(loss) on foreign exchange revaluation of Rs.208.10 lacs (Previous Year Loss of Rs. 76.71) Add: Transferred From General Reserve on redemption
3) Interest paid/acquisition of Fixed Assets is exclusive/inclusive of interest capitalised Rs. 67.14 (Previous Year Rs. 91.63) of Preference
4) Cash and cash equivalents include Fixed Deposit of Rs.370,00 lacs ( Previous Year NIL) as margin deposit against an acceptance.* Shares - 4,000.00
5) Previous year's figures have been recast/restated wherever necessary. 4,000.00 4,000.00
Securities Premium Account
As per our report of even date For and on behalf of the Board As per last Balance Sheet 31,945.52 7,532.61
Add: Received during the year on conversion of
For Contractor, Nayak & Kishnadwala H. K. Mittal A. J. Agarwal warrants and FCCBs 612.71 24,439.88
Chartered Accountants Executive Chairman Managing Director Less: Share Issue Expenses (0.66) (26.97)
32,557.57 31,945.52
Himanshu Kishnadwala
Partner Anil Khanna M. G. Ramkrishna Tonnage Tax Reserve
M No. 37391 Director Director As per last Balance Sheet 3,300.00 1,600.00
Mumbai - 19th May 2009 Add: Transfer from Profit and Loss Account 5,700.00 3,300.00
Dated: 19th May 2009 Less: Transferred to Utilised Account (3,300.00) (1,600.00)
5,700.00 3,300.00

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 Annual Report 2008-2009

SCHEDULES FORMING PART OF ANNUAL ACCOUNTS SCHEDULE FORMING PART OF ANNUAL ACCOUNTS
(Amount Rs. in Lacs) (Amount Rs. in Lacs)

Particulars Current Year Previous Year Particulars Current Year Previous Year

Tonnage Tax Reserve (Utilised) 5) 1500 11.90% Non Convertible Secured Debentures
As per last Balance Sheet 8,524.83 6,924.83 Series IX A of Rs.10,00,000/- each with the tenure of
10 years, redeemable in 3 yearly instalments at the
Add: Transfer from Tonnage Tax Reserve 3,300.00 1,600.00
end of 8th, 9th and 10th year from the date of allotment.
11,824.83 8,524.83 There is call optionat the end of 4th year from the date
Debenture Redemption Reserve of allotment. In the event, this call option is not exercised
As per last Balance Sheet 6,200.00 8,000.00 by the Issuer at the end of 4th year, the coupon on the
Transferred from Profit & Loss Account 3,900.00 - debentures shall stand increased to 12.35% p.a. payable
Transferred to General Reserve on redemption of debentures - (1,800.00) half yearly effective immediately there after for the
10,100.00 6,200.00 balance tenor. 15,000.00 -
General Reserve
As per last Balance Sheet 10,472.83 10,902.83 (b) Foreign Currency Loans from Banks
Add: Transferred from Debenture Redemption Reserve - 1,800.00 (1) External Commercial Borrowings 20,103.53 10,829.70
Add: Transferred from Profit and Loss Account 1,880.00 1,770.00 (2) Foreign Currency Non-Resident (B) Loan Scheme 19,308.01 17,982.12
(c) Term Loans from Scheduled Banks 64,873.00 50,207.00
Less: Exchange fluctuation for 2007-08 on long term foreign (d) Cash Credit facilities from scheduled Banks 1,395.07 -
currency Monetary
Items as per transitional provision of AS 11 (Refer Note 25 125,742.11 91,293.82
of Schedule I) (4,696.00) -
Note:
Less: Transferred to Capital Redemption Reserve on redemption
of Preference Shares - (4,000.00) 1) Debentures referred in (a) above are secured by first mortgage on specified vessels of the company on pari-passu
7,656.83 10,472.83 basis with other lenders and first charge on the specified immovable properties together with structure thereon.
Foreign Exchange Fluctuation Reserve 2) Foreign Currency Loan refered in (b) above are secured by first Charge on specified vessels of the company on pari
As per last Balance Sheet - - passu basis with other lenders and also include a External Commercial Borrowings of Rs. 12,359.12 lacs which is
Exchange fluctuation on Long Term Loans in relation to non secured by exclusive charge on specified vessels of the company.
integral foreign operations 6,571.15 - 3) Term Loan refered in (c) above are secured by first charge on specified vessels, on pari passu basis with other
6,571.15 - lenders.
4) Working capital facilities from Schedule Banks are secured by second charge on specified vessels and 1st charge on
Foreign currency Monetary Item Translation Difference all receivables and other current assets of the company on pari-passu basis.
Exchange fluctuation on Long Term Loans utilised for other
purpose as per SCHEDULE ‘D’
transitional provision of AS 11 (Refer Note 25 of Schedule I) 28.80 - Unsecured Loans
(Net of amortisations Rs.81.95 lacs) 1) 700 (850)1.50% Foreign Currency Convertible Bonds of
Surplus in Profit and Loss Account 28,629.83 23,394.22 USD 10,000 each 3,566.50 3,409.35
107,095.25 87,863.64 During the year, pursuant to notices received from
Bondholders 150 (5150) FCCBs of aggregate amount
SCHEDULE ‘C’ of USD 15,00,000 (USD 51,500,000) were converted into
Secured Loans 10,96,686 (37,652,887) equity shares of Re.1/- each at
(a) Debentures a predetermined price of Rs.59.812 per share at a fixed
(1) NIL (30,00,000), 10.00% Non Convertible Secured exchange rate of Rs.43.73 per USD
Debentures Series IV of Rs. NIL (Rs. 10/-) each - 300.00 The balance bonds are convertible at any time up to the
(2) NIL (30,00,000), 10.00% Non Convertible Secured close of Business on 20 April 2010 by holders into newly
Debentures Series V of Rs. 10/- (Rs. 20/-) each - 600.00 issued ordinary shares of Re.1 each at agreed conversion
(3) 900 (1,600) 11.25% (7.5% upto 30th June, 2008) Non price. The Bonds may be redeemed in whole at the option
Convertible Secured Debentures of Rs.5,62,500/- of the Company at any time on or after 15 May 2008 and
(Rs.6,87,500/-) each, redeemable in 12 half yearly or prior to 20 April 2010 at the accreted principal amount
instalments of 6.25% and last two of 12.50% of face value together with accrued interest.
each commencing from six months after one year from 2) Other Loans - 2,500.00
the date of allotment i.e. June 30, 2004 towards face 3) Commercial Paper 10,000.00 -
value Series VII A. There is a put/call option at the (Maximum balance outstanding for commercial paper
30th June every year. 5,062.00 11,000.00 Rs.10,000 lacs)
(4) NIL (50) 7.50% Non Convertible Secured Debentures (Amount repayable within one year Rs.10,000 Lacs
Series VII B of NIL (Rs. 7,50,000/-) each. - 375.00 (Rs.25000 Lacs))
4) Overdraft facility from Scheduled Banks 1,985.20 -
15,551.70 5,909.35

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25 Years Reflecting Excellence
 62
SCHEDULE FORMING PART OF ANNUAL ACCOUNTS

Schedule E
Fixed Assets (Amount Rs. in Lacs)

Cost Depreciation Net Block

Particulars As at Addition Deduction As at Up to Adjustment For the Up to As at As at
April 1, for the for the March 31, March 31, in respect of Year March 31, March March
2008 year year 2009 2008 Assets Sold / 2009 31,2009 31,2008
Discarded/held
for disposal

Land - 11.31 - 11.31 - - - - 11.31 -

Office Premises (Refer Note 1, 2) 344.28 - - 344.28 90.27 - 12.70 102.97 241.31 254.01
Vessels (Refer Note 3) 157,154.61 101,936.78 20,590.51 238,500.88 28,052.98 5,274.11 14,242.03 37,020.90 201,479.98 129,101.63
Office and Computer Equipment 179.43 22.85 - 202.28 75.40 - 28.78 104.18 98.10 104.02
Furniture and Fixtures 317.22 - - 317.22 90.82 - 54.90 145.72 171.50 226.40
Vehicles 192.34 25.58 12.86 205.06 82.80 5.05 27.21 104.96 100.10 109.54
Plant & Machinery - - - - - - - - - -

Total 158,187.88 101,996.52 20,603.37 239,581.02 28,392.27 5,279.16 14,365.62 37,478.73 202,102.29 129,795.60
Previous Year 148,335.11 14,994.65 5,141.90 158,187.87 19,920.58 1,911.15 10,382.84 28,392.27 129,795.60 128,414.53
Capital Work In Progress(Ref Note 4) 10,010.47 4,914.12 10,010.47 4,914.13 - - - - 4,914.12 10,010.47
Asset Held for Disposal(Ref Note 5) - 26,060.57 - 26,060.57 - - - - 26,060.57 -

Note:
1. Includes cost of 10 shares of Rs. 50/- each fully paid in Mittal Tower Premises Co-op. Society Ltd.
2. Office premises having gross value Rs. 343.16 lacs (Rs.343.16/- lacs) and accumulated depreciation Rs.102.65 lacs (Rs.89.99 lacs) are given on operating Lease.
3. Addition includes exchange fluctuation gain on long term foreign currency loans Rs.4900.40 lacs for the year 2007-08, exchange fluctuation loss Rs. 21,832.90 lacs for
the current year (Refer Note 25 of Notes to Accounts)
4. Capital Work in Progress Includes Rs.49.14 lacs (Rs.873.35) towards advance for Capital Goods.
5. During the year ended 31.03.2009, the company has transferred one of its vessel M. T. Prem Putli to Assets held for disposal account. This Vessel is
currently under conversion process and is contracted to be sold for USD 85 Mn (approx Rs.40,689.16 lacs) to one of the subsidiaries of the company. The breakup of the
costs incurred for the same in as under.

Detail Rs. (in Lacs)

WDV as on date of transfer 15,611.78
Costs Incurred upto 31.03.2009 10,448.79
Further estimated costs to be 9,621.75
incurred in future
Total 35,682.32
Note:
Items

Sub Total
Schedule F
Investments

Lotus FMP - Series I

Long Term (At cost)

In others (Unquoted)
Mercator Offshore Ltd.
Non-Trade (Unquoted)

In units of Mutual Funds

In Units of Mutual Funds
In shares of Subsidiaries

Mercator Oil and Gas Ltd.

Mercator International Pte. Ltd.

Mercator Petroleum Private Ltd.

Rs. 2,376.74 Lacs (Previous Year Nil)

not fall below 51% **Cost Rs.52/-
Mercator Offshore Holdings Pte. Ltd.

Marg Swarnabhoomi Port Private Ltd

In shares of Companies (Unquoted)

Birla Sun Life Saving Fund - Instl - Daily Dividend

(Repurchase Value of current investment on 31.3.09 is

Units of Indian Real Opportunity Venture Capital Fund

Current Investments (at lower of cost and Market value)

(Repurchase Value is Rs. NIL (Previous year Rs.458.51 Lacs)
SCHEDULE FORMING PART OF ANNUAL ACCOUNTS

or indirectly) till the term of the respective facilities to MLS.

ICICI Prudential Flexible Income Plan Premium - Daily Dividend

Limited, that its direct or indirect holding in this Company will
2) The Company has agreed with the lender of Mercator Offshore
1) The Company has given an undertaking to the lenders of one of
its fellow subsidiary ie Mercator Lines (Singapore) Ltd. (MLS) that

Reliance Money Manager Fund Institutional Option - Daily Dividend

the company will continue to hold majority shares of MLS (directly

1,966.05
37,500
-
-
1,591.05
1,250
10,000
1
5,226,170
100,000
150,000
Nos

4,342.80
2,376.74
611.82
1,363.90
401.02
375.00
375.00
-
-
0.13
1.00
**0.00
1,546.13
28.80
15.00
Cost
Current Year

-
-
-
2,014.93
12,500
300.00
-
3,000,000
1,589.93
-
-
-
5,226,170
100,000
150,000
Nos.

25 Years Reflecting Excellence

Annual Report 2008-2009

2,014.93
-
-
-
-
125.00
125.00
300.00
-
-
-
1,546.13
28.80
15.00
Cost
Previous Year
(Amount Rs. in Lacs)

63
 Annual Report 2008-2009

SCHEDULE FORMING PART OF ANNUAL ACCOUNTS SCHEDULE FORMING PART OF ANNUAL ACCOUNTS
(Amount Rs. in Lacs) (Amount Rs. in Lacs)
Particulars Current Year Previous Year Particulars Current Year Previous Year

SCHEDULE ‘G’ SCHEDULE ‘J’

Current Assets Shipping and related Income
Sundry Debtors Freight 57,890.74 47,543.59
(Unsecured, Considered Good) Charter Hire 48,481.62 26,998.65
Over Six Months 2,724.16 1,337.32 Dispatch and Demurrage 1,432.01 3,572.02
Others 20,039.12 9,040.64 Ship Management Fees 328.26 -
(Includes Rs.1962.33 lacs from Subsidiary Companies) 22,763.28 10,377.96 Cargo Handling Services 5,637.39 2,197.80
Cash and Bank Balances 113,770.02 80,312.06
Balances with Scheduled Banks
In fixed Deposit Accounts 42,144.33 2,088.98 SCHEDULE ‘K’
(Includes Margin Deposit of Rs.37000 Lakhs given against Other Income
an Acceptance) Dividend from Current Investments 168.81 406.91
In current Accounts 1,679.71 3,402.11 Rent Received 106.47 113.87
In Exchange Earners Foreign Currency Account 1,944.67 8.57 Exchange Fluctuations (Net) 4,229.30 2,194.76
In Dividend Accounts 67.10 39.40 Miscellaneous Income 1.26 0.57
Bank Balance/Fixed Deposits with Foreign Banks 4,505.84 2,716.11
(Refer Note B (9) of Schedule I) 119.47 93.54 SCHEDULE ‘L’
Cash hand 2.99 9.57 Ship Operating Expenses
45,958.27 5,642.17 Bunker Consumed 19,153.08 14,400.57
Loans and Advances Vessel/Equipment Hire Charges 23,677.56 15,702.48
(Unsecured Considered Good) Technical Service Expenses 5,385.90 4,089.44
Loan to Subsidiary Companies 58,855.94 43,094.24 Agency, Professional and Service Charges 784.70 620.65
(Loan to Mercator Offshore Limited of Rs 5121.32 Lacs Crew Expenses 2,195.37 535.81
(US $ 10.05mn) is also subordinated to the other lenders.) Communication Expenses 204.34 135.62
Advances recoverable in cash or in kind Miscellaneous Expenses 563.18 216.26
or for value to be received 4,993.12 5,388.76 Commission 1,628.45 1,566.54
Deposits with Government and semi Government Bodies 16.78 16.78 Insurance 1,080.11 827.86
Inter Corporate Deposits 1,382.60 689.43 Port Expenses 4,143.81 3,694.05
Other Deposits 961.13 959.79 Repairs and Maintenance 9,275.92 6,927.26
Accrued Interest on fixed deposit with banks 1,200.45 88.01 Stevedoring, Transport and Freight 2,115.90 505.41
Advance payment of tax (Net of provisions) 1,023.02 816.92 70,208.32 49,221.93
68,433.05 51,053.93 SCHEDULE ‘M’
SCHEDULE ‘H’ Administrative and Other Expenses
Current Liabilities Advertisement 7.71 8.89
Sundry Creditors Auditors Remuneration 19.25 17.00
For Services and expenses Conveyance, Car Hire and Travelling 163.23 145.32
Due to Micro, Small and Medium Enterprises Communication expenses 48.45 31.59
(Refer Note B7 of Schedule I) - - Donation 62.12 11.26
Others 3,438.01 3,379.48 Directors’ Remuneration 2,083.94 1,615.79
(Includes NIL (Rs. 664.78 lakhs) due to subsidiary companies) Miscellaneous expenses 277.89 273.19
Acceptances 74,629.11 7,580.79 Insurance 16.54 8.77
Advances from Customers 32,192.64 4,206.14 Legal, Professional and Consultancy expenses 561.04 109.23
Deposits 87.98 85.26 Rent 395.65 364.39
Unclaimed Dividend* 67.10 39.40 Repairs and Maintenance 63.12 62.77
Other liabilities 10,965.97 3,506.03 Salary, Wages, Bonus etc. 948.06 421.18
*(There is no amount due and outstanding to be Staff Welfare, Training etc. 38.96 22.17
credited to Investor Education and Protection Fund) 121,380.81 18,797.11 Contribution to Provident and other funds 38.48 24.75
Bad Debts and other amounts written off (Net) 41.69 54.55
Provisions 4,766.14 3,170.85
Proposed Dividend 1,179.96 2,583.85
Tax on Proposed Dividend 200.53 439.13
Employees Retirement Benefits 124.45 48.27
1,504.94 3,071.25

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 Annual Report 2008-2009

SCHEDULE FORMING PART OF ANNUAL ACCOUNTS 5. Capital Work in Progress

(Amount Rs. in Lacs) All expenditure, including advances given to contractors and borrowings cost incurred during the vessel
Particulars Current Year Previous Year acquisition period, are accumulated and shown under this head till the vessel is put to commercial use.

SCHEDULE ‘N’ 6. Retirement and Disposal of Ships

Finance Charge a) Profits on sale of vessels are accounted for on completion of sale thereof.
Interest on b) Assets which are retired from active use and are held for disposal are stated at the lower of their net book value
Debentures 1,501.75 1,108.40 or net realisable value.
Fixed Loans 12,632.13 6,518.76
14,133.88 7,627.16
7. Inventories
Less: Interest received (TDS Rs.372.60 lacs Previous Year 60.85 lacs) 3,949.91 1,504.06
Bunker and Lubes on vessels are valued at lower of cost and net realisable value ascertained on first in first out
Less: Profit on Derivative Transactions - 266.23
10,183.97 5,856.87 basis.8.Investments
a) Investments are classified into Long Term and Current investments.
b) Long Term Investments are stated at cost of acquisition and related expenses. Provision for diminution, if any, in
the value of such investments is made to recognise a decline, other than of a temporary nature.
Schedule 'I' c) Current Investments are stated at cost of acquisition including incidental / related expenses or at fair value as at
31st March 2009, whichever is less and the resultant decline, if any, is charged to revenue.
A. SIGNIFICANT ACCOUNTING POLICIES d) Investment in shares of subsidiaries outside India is stated at cost by converting at the rate of exchange at the
time of their acquisition.
1. Basis of Accounting
The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and 8. Investments
in conformity with Generally Accepted Accounting Principles in India, Accounting Standards as notified by the a) Investments are classified into Long Term and Current investments.
Companies (Accounting Standards) Rules, 2006 and the other relevant provisions of the Companies Act, 1956. b) Long Term Investments are stated at cost of acquisition and related expenses. Provision for diminution, if any, in
the value of such investments is made to recognise a decline, other than of a temporary nature.
2. Use of Estimates c) Current Investments are stated at cost of acquisition including incidental / related expenses or at fair value as at
The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires the 31st March 2009, whichever is less and the resultant decline, if any, is charged to revenue.
management to make estimates and assumptions that affect the reported balances of assets and liabilities as of d) Investment in shares of subsidiaries outside India is stated at cost by converting at the rate of exchange at the
the date of the financial statements and reported amounts of income and expenses during the period. The time of their acquisition.
management believes that the estimates used in the preparation of financial statements are prudent and
reasonable. 9. Incomplete Voyages
Incomplete voyages represent freight received and direct operating expenses on voyages which are not
3. Fixed Assets complete as at the Balance sheet date.
a) Fixed assets are stated at cost less accumulated depreciation.
b) Cost includes cost of acquisition or construction including attributable borrowing cost, duties and other 10. Borrowing Costs
incidental expenses related to the acquisition of the asset. Borrowing costs incurred for the acquisition of vessels are capitalized till first loading of cargo, only if the time gap
c) Operating costs and other incidental costs including initial stores and spares of newly acquired vessels till the between date of Memorandum of Agreement and “Date when vessel is ready for use” is more than three months.
port of first loading are included in the cost of the respective vessels.
d) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign 11. Revenue Recognition
currency liabilities relating to acquisition of depreciable assets are, following option given by notification of a) Income on account of freight earnings is recognised in all cases where loading of the cargo is completed
Ministry of Corporate Affairs (MCA) dt. 31st March 2009, adjusted to carrying cost of the respective fixed assets. before the close of the year. All corresponding direct expenses are also provided.
e) Individual fixed assets costing up to Rs. 25,000 are fully written off under the head fixed assets written off. b) Where loading of the cargo is not completed before the close of the year, revenue is not recognised and the
corresponding expenses are carried forward to the next accounting year.
4. Depreciation c) Income from charter hire and demurrage are recognised on accrual basis.
a) Depreciation on all the vessels is computed on Straight Line Method so as to write off the original cost as d) Income from services is accounted on accrual basis as per the terms of the relevant agreement.
reduced by the expected/estimated scrap value over the balance useful life of the vessels. If however, the rates e) Dividend on investments is recognised when the right to receive the same is established.
as prescribed under the Schedule XIV of the Companies Act, 1956, are higher; the said higher rate is applied, f) Insurance claims are accounted on accrual basis when there is a reasonable certainty of the realisability of the
which ranges from 5% to 12% of the original cost of the vessel. claim amount.
b) Depreciation on all assets other than vessels is computed on the Written Down Value method in the manner
and at the rates prescribed under schedule XIV of the Companies Act, 1956. 12. Foreign Exchange Transactions
c) On additions made to the existing vessels depreciation is provided for the full year over the remaining useful a) Monetary Current assets and liabilities denominated in foreign currency outstanding at the end of the year are
life of the ships. valued at the rates prevalent on that date.
d) Depreciation on furniture, fixtures and electrical fittings installed at office premises taken on lease is provided b) Exchange differences arising on Long Term Foreign Currency Monetary (LTFCM) items are following option
over the initial period of lease. given by notification of MCA dt. 31st March 2009, treated in the following manner:

66 67
25 Years Reflecting Excellence
 Annual Report 2008-2009

i) In respect of borrowings relating to or utilized for acquisition of depreciable capital assets, the same is
adjusted to the cost of the relevant capital asset and depreciated over the balance life of the said capital asset.
ii) In other cases, the same is accumulated in a 'Foreign Currency Monetary Item Translation Difference
Account'. The amount so accumulated in this account is amortized over the balance period of such assets /
liabilities or 31st March 2011, whichever is earlier.
c) Differences in translation of other monetary assets and liabilities and realised gains and losses on foreign
currency transactions are recognised in the Profit and Loss Account.
d) Exchange difference arising on long term foreign currency loans given to non integral foreign operations is
accumulated in foreign currency fluctuation reserve. On disposal of investment , the balance in the reserve will
be transferred to profit and loss account
e) Contracts in the nature of foreign currency swaps, are converted at the exchange rate prevailing as on 31st
March 2009 and the profits or losses thereon are charged to the Profit and Loss account.
f) Differences on account of swap contracts for interest payable in foreign currency are accounted on accrual
basis and the profit or loss thereon are charged to the Profit and Loss account.
c) Deferred tax resulting from timing differences, if any, between book and tax profits for income other than that
covered under Tonnage Tax scheme is accounted for under the liability method, at the current rate of tax, to the
extent that the timing differences are expected to reverse in future.
17. Impairment of assets
The Company reviews the carrying values of tangible and intangible assets for any possible impairment at each
balance sheet date. Impairment loss, if any, is recognized in the year in which impairment takes place.
18. Provisions and Contingent Liabilities:
Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be
reliably estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past
events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future
events not wholly within the control of the Company.

13. Employees Benefits B] NOTES TO THE ACCOUNTS

a) Short – term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short term 1. Contingent Liabilities not provided for
employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognised at actual
Current Year Previous Year
amounts due in the period in which the employee renders the related service.
(Rs in Lacs) (Rs in Lacs)
b) Post – employment benefits Counter guarantees issued by the Company 1,632.09 1,456.54
i. Defined Contribution Plans for guarantees obtained from bank
Payments made to defined contribution plans such as Provident Fund are charged as an expense as they fall
due. Counter guarantees issued by the company for NIL 458.89
ii.Defined Benefit Plans guarantees obtained from the bank on behalf
The cost of providing benefit i.e. gratuity is determined using the Projected Unit Credit Method, with actuarial of subsidiaries
valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised immediately in
the Profit and Loss Account. Corporate guarantees issued by the company on 88,398.25 29,962.17
c) Other Long – term employee benefits behalf of wholly owned subsidiaries
I. Other Long – term employee benefit viz. leave encashment is recognised as an expense in the profit and loss
account as and when it accrues. The company determines the liability using the Projected Unit Credit Method, Corporate guarantees issued by the company on NIL 19,400.00
with actuarial valuation carried out as at the balance sheet date. The Actuarial gains and losses in respect of behalf of business associates
such benefit are charged to the profit and loss account.
TOTAL 90,030.34 51,277.60
14. Lease Accounting
a) In respect of operating lease agreements entered into by the Company as a lessee, the lease payments are 2. Letter of comfort issued
recognised as expense in the profit and loss account over the lease term.
b) In respect of operating lease agreement entered into by the Company as a lessor, the initial direct costs are Current Year Previous Year
recognised as expenses in the year in which they are incurred. (Rs in Lacs) (Rs in Lacs)
Letters of comfort issued by the company on 57,318.75 45,123.75
15. Earning per share: bebehalf of wholly owned / fellow subsidiaries
The company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard – 20. The
Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average
number of equity shares outstanding during the accounting year. The diluted EPS have been computed using the 3. Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of
weighted average number of equity shares and dilutive potential equity shares outstanding at the end of the year. advances) as at March 31, 2009 Rs 34,707.63 Lacs (Rs. 14,928.51 Lacs)*.

16. Provision for Taxation : 4. Estimated amount of commitment outstanding towards contribution to Milestone Domestic Fund is Rs. 125.00Lacs
a) The company has opted for the Tonnage Tax scheme and provision for tax has been accordingly made under (Rs. 375.00 Lacs)*.
the relevant provisions of the Income Tax Act, 1961.
b) Tax on incomes on which the Tonnage Tax is not applicable is provided as per other provisions of the Income
Tax Act, 1961.

Note*- The amount in the brackets at the end of the report/ page are of the previous year.

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25 Years Reflecting Excellence
 Annual Report 2008-2009

5. Investments purchased and sold during the financial year 2008-09 (Amount Rs. in Lacs) (Amount Rs. in Lacs)
. Quantity Purchase . Quantity Purchase
Sr. No. MF House Name Scheme ( Units ) Amount Sr. No. MF House Name Scheme ( Units ) Amount

1 AIG India Mutual Fund Liquid Fund -I P- DDR 50,240.67 502.81 13 Lotus India Mutual Fund Liquid Plus Fund-Inst-DDR 3,364,083.25 336.93
(NIL) (NIL) (15,205,266.53) (1,521.02)
2 Birla Sun Life Mutual Fund Cash Plus-Instl. Prem - DDR 102,082,470.88 10,228.15 Short Term Plan-Inst-DDR NIL NIL
(92,314,916.02) (9,249.49) (5,194,862.39) (519.56)
Saving Fund-Inst-DDR 19,98,640.24 200.00 14 Quantum Mutual Fund Liquid Fund-DDR NIL NIL
(NIL) (NIL) (11,000,000.00) (1,123.63)
Liquid Plus-Instl. Prem-DDR NIL NIL 15 Reliance Mutual Fund Liquidity Fund-DDR 20,999,302.18 2,100.58
(15,010,463.15) (1,502.07) (1,641,334.09) (250.91)
3 CANARA Robeco Mutual Fund Liquid- Super IP-DDR 90,05,938.49 904.28 Liquid Plus Fund-DDR/ 420,062.12 4,205.41
(NIL) (NIL) Money Manager Fund-DDR (NIL) (NIL)
4 DBS Chola Mutual Fund Short Term Floating Rate(Equity) NIL NIL Medium Term Fund-DDR 15,272,632.38 2,610.93
(1,000,000.00) (100.00) (NIL) (NIL)
Short Term Floating-DDR NIL NIL 16 SBI Mutual Fund Liquid Fund - Super IP -DDR 29,925,795.43 3,002.31
(1,516,501.36) (151.90) (8,100,367.43) (812.67)
Liquid Inst. Prem-DDR NIL NIL Infrastructure Fund (Equity) NIL NIL
(20,154,392.12) (2,021.83) (5,000,000.00) (500.00)
5 DSP Merrill Lynch Mutual Fund Liquid- Inst.-DDR NIL NIL LIQUID PLUS -Inst-DDR 4,026,153.86 402.81
(160,885.04) (1,609.17) (NIL) (NIL)
6 Deutsche Asset Management DWS Money Plus Fund - IP-DDR NIL NIL 17 Sundaram BNP Paribas Mutual Liquid-SIP-DDR 14,977,941.11 1,501.54
Mutual Fund (46,664,160.01) (4,670.24) (NIL) (NIL)
DWS Insta Cash Plus Fund-DDR 24,999,286.29 2,504.85 18 Tata Mutual Fund Liquid Fund-SHIP-DDR 468,261.78 5218.87
(25,066,111.43) (2,511.50) (194,307.30) (2,165.59)
7 Franklin Templeton Mutual Fund FLEXI CAP FUND (Equity) NIL NIL Floater Fund - DDR 32,117,856.59 3,223.22
(57,870.66) (9.28) (25,994,949.56) (2,608.75)
8 HDFC Mutual Fund Liquid Fund Premium Plan-DDR 40,291,687.84 4,939.68 Treasury Manager Fund SHIP-Gr. NIL NIL
(NIL) (NIL) (47,708.91) (500.08)
9 ICICI Prudential Mutual Fund Liquid Fund- Inst.-DDR 44,631,274.64 4,463.35 19 UTI Mutual Fund Liquid Cash Plan Instit.-DDR 245,793.23 2,505.73
(9,169,764.17) (916.98) (770,313.03) (7,850.97)
Flexible Income-DDR 5,698,146.90 602.49 Liquid Plus Instit.-DDR NIL NIL
(NIL) (NIL) (102,885.08) (1,028.85)
Emerging Star Fund (Equity) NIL NIL
(32,183.22) (7.09)
Discovery Fund (Equity) NIL NIL
(33,730.21) (5.75) 6. In view of long term interest of the company in its subsidiaries namely Mercator Offshore Holding Pte Ltd
(Singapore), Mercator Oil and Gas Ltd and Mercator Petroleum Pvt Ltd, no provision is made for diminution in
10 JM Money Manager Fund Manager Fund-SuperPlus- DDR NIL NIL
value of investment in these subsidiary companies.
(32,719,504.02) (3,272.81)
7. a) The company has raised Foreign Currency Loans aggregating to USD 25 Mn ( Nil)
11 Kotak Mutual Fund Liquid Fund- Institutional-DDR 7,387,413.32 903.34
b) The Company has established Letters of Credit aggregating to Rs. 74,629.11 Lacs (Rs. 7,580.79 Lacs). The same
(4,114,788.25) (503.16)
12 LIC MF LIC Mutual Fund Liquid Plus Fund -DDR 49,032,730.74 4,903.27 has been utilized for acquisition of vessels.
(NIL) (NIL)
Liquid Fund - DDR 101,366,464.70 11,130.69 8. The company has not received any intimation from its vendors regarding the status under the Micro, Small and
(NIL) (NIL) Medium Enterprises Development Act 2006 and hence disclosures required under this act have not been made.

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 Annual Report 2008-2009

9. The balance in the Exchange Earners Foreign Currency account is maintained in US Dollars and shown in Current Year Previous Year
equivalent Indian Rupees. The balance in the said account as at the Balance Sheet date was USD 40.51 Lacs (Rs in Lacs.) (Rs in Lacs)
(Previous Year USD 0.217 Lacs) Mercator Offshore Limited
Balance outstanding at year end 5,121.32 5,291.35
10. Details of bank balances with Foreign Banks Maximum amount Outstanding during the year. 7,203.73 5,514.01
Mercator Petroleum Limited
Name of the Bank Balance as at March 31, Maximum Balance during Balance outstanding at year end 125.73 0.16
2009 (Rs. in lacs) the year (Rs. in lacs) Maximum amount Outstanding during the year. 125.73 0.16
MCS Holdings Pte Limited
HSBC Bank Singapore 119.47 119.47 Balance outstanding at year end 2.22 NIL
(72.22) (6,428.73) Maximum amount Outstanding during the year. 2.22 NIL
HSBC Bank Singapore NIL 22.93 Oorja Indo Petangis 3.48 NIL
(Fixed Deposit) (21.32) (2,086.38) Balance outstanding at year end 3.48 NIL
Maximum amount Outstanding during the year.
Companies in which some directors are directors
Current Year Previous Year
Mercator Mechmarine Limited
(Rs in Lacs.) (Rs in Lacs)
Balance outstanding at year end NIL 9.00
11) Value of material imported by the company
Maximum amount Outstanding during the year. 2,039.00 9.00
on CIF basis during the accounting year in respect of
Stores & Spares 1,257.65 384.14
15) a) Remuneration to Directors Executive Chairman
Capital Goods (including CWIP) 102,342.33 21,726.12
and Managing Directors
Salary 136.00 96.00
12) Details of Spare Parts consumed
Perquisites 11.46 17.29
Raw Material
Commission 1,926.48 1,492.50
Imported Spares 1,257.65 384.14
Non-Executive Directors
39.24% 19.48%
Commission 10.00 10.00
Indigenous Spares 1,946.95 1,586.95
60.76% 80.52%
b) Computation of Net Profit in accordance with section 349
of the Companies Act, 1956 for calculation of commission
13) Expenditure in foreign currency during the year
payable to Executive Chairman and Managing Director
On Repairs / Renovations and expenses of Vessels 3354.19 3,405.21
Profit before Tax 18,787.15 17,675.43
On Charter Hire 8,892.65 12,837.37
Add: Remuneration paid to Directors 2,083.94 1,615.79
On Vessel Expenses 22,993.23 20,990.15
Less: Gain on sale of Fixed Assets (2,953.95)
On Travelling 11.15 9.32
Less: Adjustments (1.17) (162.27)
On Interest 4,451.43 2,710.98
Net Profit on which remuneration is payable 20,869.92 16,175.00
14) Disclosure as required under clause 32 of the listing agreement
Directors' Commission within overall Remuneration
Loans and Advances include amount receivable from
Executive Directors 2,073.94 1,605.79
Amount Receivable from Subsidiaries
Non Executive Directors 10.00 10.00
Mercator International (Pte) Ltd.
Balance outstanding at year end 53,880.45 37,990.66
16) Payment to Auditors
Maximum amount Outstanding during the year. 76,104.38 42,330.33
Audit Fees 11.00 10.00
Tax Audit Fees 1.50 1.50
Mercator Lines Singapore (Pte) Ltd.
For Quarterly Limited Review 2.00 1.50
Balance outstanding at year end NIL NIL
For certification and other matters 4.75 4.00
Maximum amount Outstanding during the year. NIL 31,401.51
Service Tax 1.98 2.10
Total 21.23 19.10
Mercator Oil & Gas Limited
Balance outstanding at year end 91.27 76.27
17) Earnings in foreign currency on account of
Shipping Income 38,149.30 25,725.52
Maximum amount Outstanding during the year. 91.27 76.27
Other Income 2,244.56 1,174.67

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 Annual Report 2008-2009

18. Remittance in foreign currencies for dividends (ii) Expenses recognized in the Profit and Loss Account
The Company has not remitted any amount in foreign currencies on account of dividends during the year
and does not have information as to the extent to which remittance, if any, of foreign currencies on account of For the Year Ended March 31, 2009 For the Year Ended March 31, 2008
dividends have been made by/on behalf of non-resident shareholders. The particulars of dividend payable
Gratuity Leave Total Gratuity Leave Total
to non-resident shareholder which were declared during the year are as under:
Encashment Encashment
(a) Current Service Cost 22.17 18.77 40.94 13.67 8.87 22.54
Current Year Previous Year
(b) Past Service Cost NIL NIL NIL NIL NIL NIL
(Rs in Lacs) (Rs in Lacs)
(c) Interest cost 2.16 1.21 3.37 1.43 1.17 2.6
i) Number of non-resident shareholders 1,343 941 (d) Curtailment Cost/(Credit) NIL NIL NIL NIL NIL NIL
ii) Number of ordinary shares held by them 4,66,97,593 4,14,44,348 (e) Settlement Cost/(Credit) NIL NIL NIL NIL NIL NIL
iii) Gross amount of dividend 513.67 414.44 (f) Net Actuarial (Gain)/Loss 24.10 15.42 39.52 (1.78) (5.72) (7.5)
(g) Employees' Contribution NIL NIL NIL NIL NIL NIL
(h) Total Expenses recognized
19. Disclosures in accordance with Revised Accounting Standard (AS) -15 on “Employee Benefits”: in Profit and Loss A/c 48.44 35.42 83.86 13.32 4.32 17.64
Disclosure as required by AS-15 is as under

(A) Defined Contribution Plans:

The Company has recognized the following amounts in the Profit and Loss Account for the year: (iii) Following are the Principal Actuarial Assumptions used as at the balance sheet date:

Current Year Previous Year Particulars FY 2008-09 FY2008-09 FY 2007-08 FY2007-08

(Rs in Lacs) (Rs in Lacs) Gratuity Leave Encashment Gratuity Leave Encashment

(i) Contribution to Employees’ Provident Fund 34.20 22.02 (a) Discount Rate 7% 7% 8% 8%
(ii) Contribution to Employees’ Family Pension Fund NIL NIL (b) Salary Escalation Rate –
(iii) Contribution to Employees’ Superannuation Fund NIL NIL
Management Staff 12% 12% 7% 7%
Total 34.20 22.02
(c) Turnover Rate 11% 11% 3% 3%
(d) Mortality Table LIC (1994-96) LIC (1994-96) LIC (1994-96) LIC (1994-96)
(B) Defined Benefit Plans: Ultimate Ultimate Ultimate Ultimate
(i) Changes in the Present Value of Obligation

For the Year Ended March 31, 2009 For the Year Ended March 31, 2008 The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority,
promotion and other relevant factors.
Gratuity Leave Total Gratuity Leave Total
Encashment Encashment
(a) Present Value
Obligation as at April 1, 2008 30.89 17.37 48.26 17.91 14.64 32.55
20. Segment Reporting
(b) Interest cost 2.16 1.21 3.37 1.43 1.17 2.6
(c) Past Service Cost NIL NIL NIL NIL NIL NIL
As the company principal business activities fall within the single segment viz Shipping and related activities there is no
(d) Current Service Cost 22.17 18.77 40.94 13.67 8.87 22.54
(e) Curtailment Cost/(Credit) NIL NIL NIL NIL NIL NIL reportable segment pursuant to Accounting Standard 17 'Segment Reporting; as notified by the Companies
(f) Settlement Cost/(Credit) NIL NIL NIL NIL NIL NIL (Accounting Standards) Rules, 2006
(g) Benefits Paid NIL 7.68 7.68 0.33 1.58 1.91
(h) Actuarial (Gain)/Loss 24.10 15.42 39.52 (1.78) (5.72) (7.5)
(i) Present Value of Obligation
as at March 31, 2009 79.33 45.12 124.45 30.89 17.38 48.27

74 75
25 Years Reflecting Excellence
 Annual Report 2008-2009

(Amount Rs. in Lacs)

Previous Yr

1,090.72
4,724.25

1,252.96
176.51

51,211.30
-
43,872.56

68,936.70

30,421.06

43,626.57
1,170.25
3,409.35

664.89

500.00
500.00

-
232.84

4.29

-
232.84
21. Related Party Disclosures
A List of Related Parties
i) Subsidiaries

Total
1. Mercator Offshore Limited (MOL) - Singapore
2. Mercator International Pte Limited (MIPL) - Singapore

Current Yr

2,287.58
2,244.45
462.88

646.47
2,566.20

54,254.41
4,230.00
40,183.88

1.00

57,318.75

88,398.25

60,988.12
1,891.96
32,179.71

32,179.71

10.00
515.00

2,287.58
-
3. Mercator Offshore Holdings Pte. Limited - Singapore
4. Mercator Oil and Gas Limited (MOGL) - India
5. Mercator Petroleum Private Limited - India
6. Mercator Lines ( Singapore) Limited (MLS) (subsidiary of MIL)
7. Oorja Holdings Pte. Limited. (OHL) Singapore - subsidiary of MIL
8. Varsha Marine Pte Limited (subsidiary of MLS)

which the directors/relatives

Previous Yr

232.84
-
-

24.24
0.82

9.00
-
-

268.29
1,170.25
-

500.00
500.00

232.84
232.84
9. Vidya Marine Pte Limited (subsidiary of MLS)
10. Mercator Lines (Panama) Inc (subsidiary of MLS)
11. Oorja 1 Pte Limited - (Oorja 1) - Singapore - Subsidiary of OHL

Companies in
12. Oorja 2 Pte Limited - (Oorja 2) - Singapore - Subsidiary of OHL

of directors
13. Oorja 3 Pte Limited - (Oorja 3) - Singapore - Subsidiary of OHL
14. Oorja Mocambique Minas Limitada - (Oorja Mocambique) - Mocambique- Subsidiary of OHL

1,969.61
Current Yr

1,969.61
-
-

75.85
27.47

2,030.00
4,230.00
2,039.00

268.13
1,419
-

10.00
515.00

1,969.61
15. MCS Holdings Pte. Ltd – Singapore- Subsidiary of OHL
16. Oorja Indo Petangis Four (Indonesia) – Subsidiary of Oorja 1
17. Oorja Indo Petangis Three (Indonesia) – Subsidiary of Oorja 2
18. Oorja Indo KGS - Indonesia- Subsidiary of Oorja 3
19. Broadtec Mocambic Minas Limited - Mozambique - Subsidiary of Oorja Mozambique

-
-
20. PT Mincon Indo Resources- Indonesia – Subsidiary of Oorja Indo Petangis Three

Previous Yr

-
1,090.72
4,724.25

1,228.73
175.70

51,202.30
-
43,872.56

4.29

68,936.70

30,421.06

43,358.28
-
3,409.35

664.89

-
-
Subsidiary Companies
ii) Companies in which the directors/relatives of directors have substantial interest
1. MLL Logistics Private Limited
2. Mercator Mech Marine Limited
3. Mercator Healthcare Limited

Current Yr

317.97
2,224.45
462.88

570.62
2,538.73

52,224.41
-
38,144.88

1.00

57,318.75

88,398.25

60,719.99
472.82
32,179.71

32,179.71

-
-

-
317.97
317.97
4. Ankur Fertilizers Private Limited
5. Rishi Holding Private Limited
6. AHM Investments Private Limited.
7. CMA Constructions & Properties Private Limited.

B. Details of transactions with the above parties:

Outstanding balances as on 31.03.2009

iii) Directors of the Company

(Including Loans & Equity Contributions)

Mercator Lines ( Singapore) Pte Limited

Advances Received For Capital Goods
1. H. K Mittal

Expenses Charged by the company

2. A. J Agarwal

Loans ,Advances and Receivables

Advances Given for Capital Goods
Name of the Transaction
3. Manohar Bidaye

Deposit given during the year

4. Anil Khanna

Loans Given during the Year

MLL Logistics Private Limited

Outstanding Guarantees as
5. M. G Ramakrishna

Balance as on 31/03/2009
Outstanding balances as
Expenses recharged by
6. K. R Bharat

Equity Contributions
Services Rendered

Services Rendered
Services Received

Guarantees Given
iv) Key Management Personnel

Finance Provided
other companies
Interest Income

During the Year

Sundry Debtors
1. H. K Mittal

on 31/03/2009
Comfort Letter

on 31.03.2009
Loans Repaid
2. A. J. Agarwal

Guarantees

Payables
Deposit
V) Relative of Key Management Personnel

Loans

Total
1. Adip Mittal

76 77
25 Years Reflecting Excellence
 78
(Amount Rs. in Lacs)
Companies in which the
Name of the Transaction Subsidiary Companies directors/relatives of directors Total
have substantial interest
Current Yr Previous Yr Current Yr Previous Yr Current Yr Previous Yr

Interest Income
Mercator International Pte Limited 2,244.45 952.05
Mercator Lines ( Singapore) Pte Limited 138.67
Total 2,244.45 1,090.72 - - 2,244.45 1,090.72
Services Received
Mercator International Pte Limited 462.88 3,213.65
Mercator Lines ( Singapore) Pte Limited 1,510.60
Total 462.88 3,213.65 - - 462.88 3,213.65
Expenses recharged by
other companies
Mercator International Pte Limited 570.62 1,227.41 - - - -
Ankur Fertilizers Private Limited 75.85 24.24
Total 570.62 1,227.41 75.85 24.24 646.47 1,215.64
Expenses Charged by the company
Mercator Lines ( Singapore) Pte Limited 2,353.75
Mercator Offshore Limited 175.70
Mercator Petroleum Private. Limited 0.16
MLL Logistics Private Limited 27.33 0.66
Total 2,353.75 175.70 27.33 0.82 2,381.08 176.51
Finance Provided
(Including Loans &
Equity Conributions)
Loans
Loans Given during the Year
Mercator International Pte Limited 45,309.19 51,202.30
Mercator Offshore Limited 6,775.76
Mercator Mechmarine Limited 2,030.00 9.00
Total 52,084.94 51,202.30 2,030.00 9.00 54,114.94 51,211.30
Advances Given for Capital Goods
Mech Marine Engineers Pvt Ltd 4,230.00
Total - - 4,230.00 - 4,230.00 -

(Amount Rs. in Lacs)

Companies in which the
Name of the Transaction Subsidiary Companies directors/relatives of directors Total
have substantial interest
Current Yr Previous Yr Current Yr Previous Yr Current Yr Previous Yr
Loans Repaid
Mercator International Pte Limited 31,070.87 15,880.40 -
Mercator Offshore Limited 7,074.01 - -
Mercator Mechmarine Limited - - 2,039.00 -
Mercator Lines ( Singapore)
Pte Limited - 27,992.16 -
Total 38,144.88 43,872.56 2,039.00 - 40,183.88 43,872.56
Equity Contributions
During the Year
Mercator Oil and Gas Limited - 4.29
Total - 4.29 - - - 4.29
Guarantees
Comfort Letter 57,318.75 45,123.75
Guarantees Given 0 0
Mercator Offshore Limited 0 23,236.34
Total 57,318.75 68,360.09 - - 57,318.75 68,360.09
Outstanding Guarantees as
on 31/03/2009
Mercator Offshore Limited 88,398.25 29,962.17
Total 88,398.25 29,962.17 - - 88,398.25 29.962.17
Outstanding balances
as on 31.03.2009
Loans ,Advances and Receivables
Loans Advances and Receivables
Mercator International Pte Limited 53,460.44 37,726.62
Mercator Offshore Limited - 5,291.35
MLL Logistics Private Limited
(Advance) 268.13 268.13
Total 53,460.44 43,017.97 268.13 268.13 53,728.57 43,286.10
25 Years Reflecting Excellence

Sundry Debtors
Mercator Lines ( Singapore)
Pte Limited 472.82
MLL Logistics Private Limited 1,419.14 1,170.25
79

Total 472.82 - 1,419.14 1,170.25 1,891.96 1,170.25

 Annual Report 2008-2009
(Amount Rs. in Lacs)

Previous Yr

664.89

500.00

500.00
3,409.35
22. Disclosure in respect of operating lease (as Lessee):

Year Ended Year ended

Total

31st March, 2009 31st March, 2009

(Rs in Lacs) (Rs in Lacs)
Current Yr

10.00

500.00
32,179.71
32,179.71
(a) Operating Leases
Disclosures in respect of cancellable agreements for
office premises taken on lease
(i) Lease payments recognized in the Profit and Loss Account 354.86 314.71
directors/relatives of directors

Previous Yr

-
500.00
500.00

500.00
500.00
(ii) Significant leasing arrangements
have substantial interest
Companies in which the

The Company has given refundable interest free security

deposits under the agreements.
The lease agreements are for a period from 60 to 108 months.
These agreements also provided for increase in rent.
These agreements are non cancellable by both the parties for
Current Yr

10.00
-
10.00

500.00
500.00
period of 60 months except in certain exceptional circumstances.

(iii) Future minimum lease payments under

non-cancellable agreements
Not later than one year 373.21 351.25
Previous Yr

3,409.35
3,409.35

664.89
664.89

-
-
-

1,615.79

10.00

2.82
Later than one year and not later than five years 578.87 952.07
Later than five years NIL NIL
Subsidiary Companies

23. Disclosure in respect of operating lease (as Lessor):

Current Yr

32,179.71
32,179.71

32,179.71
32,179.71

-
-
-

1,937.94

10.00

5.03
Year Ended Year ended
31st March, 2009 31st March, 2009
(Rs in Lacs) (Rs in Lacs)
(a) Operating Leases
Disclosures in respect of cancellable agreements for office
premises given on lease
(i) Lease payments recognized in the Profit and Loss Account 106.47 113.87
Name of the Transaction

Deposit given during the year

Rishi Holding Private Limited

Key Management Personnel

MLL Logistics Private Limited

MLL Logistics Private Limited

Remuneration to relative of
Mercator Lines ( Singapore)

Mercator Lines ( Singapore)

(ii) Significant leasing arrangements

Balance as on 31/03/2009

Remuneration paid to Key

Management Personnel

The Company has taken refundable interest free security

Non-Executive Directors
Advances Received For

Outstanding balances

deposits under the agreements.

Commission Paid to

The lease agreements are for a period of sixty months.

as on 31.03.2009

Sundry Creditors
Capital Goods

These agreements are non cancelable by both the parties

Pte Limited

Pte Limited

for 18 months except in certain exceptional circumstances.

Payables

Deposit
Total

Total

Total

Total

80 81
25 Years Reflecting Excellence
 Annual Report 2008-2009

Year Ended Year ended 26. Out of the total outstanding loans given to subsidiaries amounting to Rs.58,638.94 Lacs (USD 115.08Mn), Company
31st March, 2009 31st March, 2009 has considered loans of Rs.43,205.60 Lacs (USD 84.8Mn) as long term loans. Gains of Rs.6571.15 lacs on
restatement of these foreign currency long term loans, given to non integral foreign operations is, following
(Rs in Lacs) (Rs in Lacs) applicable provisions of AS 11, accumulated in foreign currency fluctuation reserve in Reserves and Surplus. On
(iii) Future minimum lease payments under non-cancellable disposal of the investment, the corresponding balance in the said reserve will be transferred to profit and loss
agreements account.
Not later than one year 138.00 NIL
27. Derivative Instruments
Later than one year and not later than five years NIL NIL The Company uses foreign currency forward contracts to hedge its risks associated with foreign Currency
Later than five years NIL NIL fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward
contracts is governed by the Company's strategy approved by the Board of Directors, which provide principles on
the use of such forward contracts consistent with the Company's Risk Management Policy. The Company does not
24. Earning Per Share use forward contracts for speculative purposes. There are no outstanding Forward Exchange Contracts entered into
by the Company as on 31st March 2009.
Year Ended Year ended
31st March, 2009 31st March, 2009 28. Foreign Currency Exposures
The year end exposure in a currency other than the financial currency of the Company that were not hedged by a
Net Profit after Tax and preference dividend including derivative instrument or otherwise are given below:
tax thereon
- Basic (Rs. in Lacs) 18,112.15 16,274.83
- Diluted (Rs. in Lacs) 18,168.97 16,333.56 2008-09 2007-08
Rs. Lacs Fx.Million Rs. Lacs Fx.Million
Number of Shares used in computing Earning Per Share
- Basic 235,946,403 224,883,073 Account Receivable 4,978.99 $ 9.77 968.95 $ 2.44
- Diluted 241,064,272 236,414,299
Balance in EEFC Account 2064.13 $ 4.05 80.78 $ 0.20

Earning per share (equity shares of face value Re 1/-) Fixed Deposit with foreign Bank NIL NIL 21.32 $ 0.05
- Basic (in Rs.) 7.68 7.24
- Diluted (in Rs.) 7.54 6.91 Loan & Advances 60,906.73 $ 118.49 43,017.97 $108.04
Euro 0.65
JPY 2.71
SGD 0.27
25. The Company has opted for accounting the exchange differences arising on reporting of long term foreign Accounts Payable/Acceptance 74,629.11 $ 145.86 27771.82 $ 66.60
currency monetary items in line with the notification of Ministry of Corporate Affairs (MCA) dt. 31st March (including capital commitments Euro 0.49 J¥ 325.0
2009, On Accounting Standard AS 11. made but not provided for)
a) Losses arising from the effect of changes in foreign exchange rates on foreign currency loans relating to Borrowings 42,978.04 $ 84.35 32221.17 $ 80.92
acquisition of depreciable capital assets, amounting to Rs.21,832.90 Lacs for the year ended March 31,
2009, are added to the cost of such assets. Consequent to the change, the depreciation for the year is
higher by Rs.827.03 Lacs and the profit for the year and reserves are higher by Rs.21,000.62 Lacs The
corresponding foreign exchange gains of Rs.4,991.38 Lacs (net of depreciation of Rs.295.37 Lacs) for the year 29. During the year the Company did not have full-time company secretary as required under section 383A of the
ended March 31, 2008, have been reversed from the General Reserve and deducted from the cost of such assets.
Companies Act, 1956. Company is in the process of appointing company secretary.
b) Losses arising from the effect of change in foreign exchange rates on foreign currency loan not relating to
acquisition of depreciable capital assets amounting to Rs.144.12Lacs for FY 2008-09 and gain of Rs.90.97 Lacs for 30. Previous years figures have been regrouped / rearranged wherever necessary.
the 2007-08, are transferred to Foreign Currency Monetary Item Translation Difference Account. In line with the
policy referred to in point no 12. (b) (ii) above, Rs.81.95 Lacs has been amortised during the year. Consequent to
the change, profit for the year is lower by Rs.28.80 Lacs.

82 83
25 Years Reflecting Excellence
 I.

V.
II.

84
Turnover
Public Issue
Bonus Issue

Secured Loans

Item Code No:

Total Liabilities

Paid-up Capital
Registration No.

Source of Funds

Net Fixed Assets

Deferred Tax Asst

Net Current Assets
Balance Sheet Date
Registration Details

Product Description:
IV. Application of Funds

Earning per Share (Rs.)

Profit/(Loss) Before Tax
Performance of Company (Amount in Rs. Thousand)
Capital Raised during the year (Amount in Rs. Thousand)
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

Shipping
NA
7.68
1,878,715.47
11,831,120.77
1,499,644.65
20,210,229.32
12,574,210.34

Director
Anil Khanna
402,717.07
25,241,623.21
NIL
NIL
3/31/2009
11-31418

Executive Chairman
H. K. Mittal
31
Date

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousand)

Right Issue

Total Assets

Investments
State Code 011

Dividend Rate%
Total Expenditure
Unsecured Loans

Misc, Expenditure
Private Placement

Reverse & Surplus

VI. Generic Name of the Principle Product / Services of the company (AS per monetary terms)

Dated: 19th May 2009

Profit/(Loss) after Tax
3
Month

50%
1,811,215.47
9,952,405.30
NIL
434,279.94
1,555,170.44
10,709,525.37
25,241,623.21
NIL
NIL
2009
Year

Director
M. G. Ramkrishna
Managing Director
A. J. Agarwal
For and on behalf of the Board

Statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Companies for the Year Ended 31st March,2009

(Amount Rs. in Lacs)

Sr. Name of Company Financial Capital Reserves Total Total Investment Turnover Profit Provision Profit Proposed
No. Year Assets Liability before Tax for Taxation After Tax Dividend
Ended
1 Mercator Lines ( Singapore) Pte. Ltd. 31-Mar-09 102,666 53,117 261,110 105,327 - 69,654 26,137 91 26,046 4,798
2 Mercator Line (Panama) Inc. 31-Mar-09 4 (189) (185) - - - - - - -
3 Mercator International Pte. Ltd. 31-Mar-09 31 1,493 64,341 62,818 - 13,914 1,266 - 1,266 -
4 Mercator Offshore Ltd. 31-Mar-09 1,598 406 112,804 110,801 - 892 391 2 389 -
5 Vidya Marine Pte. Ltd. 31-Mar-09 0 5,276 32,948 27,672 - 8,383 5,034 5 5,030 1,394
6 Varsha Marine Pte. Ltd. 31-Mar-09 0 11,963 39,517 27,555 - 11,815 6,948 5 6,944 1,394
7 Mercator Oil & Gas Ltd. 31-Mar-09 15 - 109 94 - - (15) - (15) -
8 Oorja Holdings Pte Ltd 31-Mar-09 0 (232) 6,046 6,278 - 647 (47) - (47) -
9 Oorja 1 Pte. Ltd 31-Mar-09 0 (112) 1,245 1,357 - 55 (95) - (95) -
10 Oorja 2 Pte. Ltd 31-Mar-09 0 (107) 1,463 1,569 - 71 (91) - (91) -
11 Oorja 3 Pte. LTd 31-Mar-09 0 (100) 2,432 2,532 - 13 (88) - (88) -
12 Oorja Indo KGS PT 31-Mar-09 127 (728) 1,261 1,862 - - (663) - (663) -
13 Oorja Mozambique Minas LDA 31-Mar-09 0 - 8 8 - - (4) - (4) -
14 Broadtech Mozambique Minas LDA 31-Mar-09 0 - 19 18 - - (10) - (10) -
15 Oorja Indo Petangis Three PT 31-Mar-09 127 (544) 2,084 2,501 - 3,896 (496) 5 (491) -
16 Oorja Petangis Four PT 31-Mar-09 127 (434) 1,654 1,961 - 1,015 (364) - (364) -
17 MCS Holdings Pte Ltd. 31-Mar-09 0 221 2,055 1,835 - 7,669 232 27 204 -
18 Mercator Petroleum Pvt. Ltd. 31-Mar-09 1 - 132 131 - - (38) - (38) -
19 Mercator Offshore Holdings Pte Ltd. 31-Mar-09 0 (1) 306 307 - - (1) - (1) -
20 PT Mincon Indo Resources 31-Mar-09 127 (176) 1,790 1,839 - 388 47 15 31 -

For and on behalf of the Board

H. K. Mittal A. J. Agarwal
Executive Chairman Managing Director
25 Years Reflecting Excellence

Anil Khanna M. G. Ramkrishna

Director Director
Dated: 19th May 2009
85
 86
Statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary Companies

Sr. Name of Company Financial

Extent of No. of Net aggregate of the profit or losses Net aggregate of profits
No. Year
interest of Shares held of the subsidiary for the current period or losses for previous
Ended
the Holding by Company so far as it concerns the members of financial years of the
Company directly or the holding company. subsidiary so far as it
in the capital
Statement pursuant to Section 212 of the Companies Act, 1956through
relating to Subsidiary Companies concerns the members
of subsidiary its subsidiary of the holding company

not dealt with dealt with or not dealt with dealt with or
or provided for provided for or provided for provided for
in the accounts in the account in the accounts in the account
of the holding of the holding of the holding of the holding
company company company company

1 Mercator Lines ( Singapore) Pte. Ltd. 31-Mar-09 72.35% 900,850,000 Profit NIL Profit Nil
Rs. 23,259.09 Lacs Rs. 16006.60 Lacs
2 Mercator Lines (Panama) Inc. 31-Mar-09 100% 10,000 NIL Loss Nil
NIL Rs. 0.01 Lacs
3 Mercator International Pte.Ltd. 31-Mar-09 100% 100,000 Profit NIL Profit Nil
Rs. 1,266.14 Lacs Rs 385.49 Lacs
4 Mercator Offshore Ltd. 31-Mar-09 100% 5,226,170 Profit NIL Loss Nil
Rs. 388.73 Lacs Rs. 13.69 Lacs
5 Vidya Marine Pte. Ltd. 31-Mar-09 100% 2 Profit NIL Profit Nil
Rs. 5,029.68 Lacs Rs. 5,764.56 Lacs
6 Varsha Marine Pte. Ltd. 31-Mar-09 100% Profit NIL Profit Nil
2 Rs. 6,943.63 Lacs Rs. 1,007.49 Lacs
7 Mercator Oil & Gas Ltd. 31-Mar-09 100% 150,000 Loss NIL Loss Nil
Rs. 14.71 Lacs Rs. 52.00 Lacs
8 Oorja Holdings Pte Ltd 31-Mar-09 100% 2 Loss NIL Loss Nil
Rs. 47.08 Lacs Rs.140.58 Lacs
9 Oorja 1 Pte. Ltd 31-Mar-09 100% 2 Loss NIL Loss Nil
Rs. 95.43 Lacs Rs. 6.08 Lacs
10 Oorja 2 Pte. Ltd 31-Mar-09 100% 2 Loss NIL Loss Nil
Rs. 90.64 Lacs Rs. 5.61 Lacs
11 Oorja 3 Pte. LTd 31-Mar-09 100% 2 Loss NIL Loss Nil
Rs. 87.75 Lacs Rs. 2.84 Lacs
12 Oorja Indo KGS 31-Mar-09 70% 700 Loss NIL NIL Nil
Rs. 663.50 Lacs

Sr. Name of Company Financial

Extent of No. of Net aggregate of the profit or losses Net aggregate of profits
No. Year
interest of Shares held of the subsidiary for the current period or losses for previous
Ended
the Holding by Company so far as it concerns the members of financial years of the
Company directly or the holding company. subsidiary so far as it
in the capital
Statement pursuant to Section 212 of the Companies Act, 1956through
relating to Subsidiary Companies concerns the members
of subsidiary its subsidiary of the holding company

not dealt with dealt with or not dealt with dealt with or
or provided for provided for or provided for provided for
in the accounts in the account in the accounts in the account
of the holding of the holding of the holding of the holding
company company company company

13 Oorja Mosambique Minas LDA 31-Mar-09 100% 25,000 Loss NIL Loss NIL
Rs.. 3.66 Lacs Rs. 1.37 Lacs
14 Broadtech Mozambique Minas LDA 31-Mar-09 85% 21,250 Loss NIL NIL NIL
Rs. 9.72 Lacs -
15 Oorja Indo Petangis Three 31-Mar-09 50% 1,000 Loss NIL NIL NIL
Rs 490.52 Lacs
16 Oorja Petangis Four 31-Mar-09 50% 1,000 Loss NIL NIL NIL
Rs. 364.18 Lacs
17 MCS Holdings Pte Ltd. 31-Mar-09 100% 2 Profit NIL Loss NIL
Rs. 204.33 Lacs Rs. 0.12 Lacs
18 Mercator Petroleum Ltd. 31-Mar-09 100% 10,000 Loss NIL Loss NIL
Rs. 38.08 Lacs Rs. 0.33 Lacs
19 Mercator Offshore Holdings Pte Ltd. 31-Mar-09 100% 1 Loss NIL NIL NIL
Rs. 0.93 Lacs
20 PT Mincon Indo Resources 31-Mar-09 100% 2,50,000 Profit NIL NIL NIL
Rs. 31.43 Lacs

For and on behalf of the Board

H. K. Mittal A. J. Agarwal
Executive Chairman Managing Director

Anil Khanna M. G. Ramkrishna

Director Director
25 Years Reflecting Excellence

Dated: 19th May 2009

87
 Annual Report 2008-2009

Auditors’ report to the Board of Directors on the Consolidated financial statements of Mercator Lines Limited CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2009
(Amount Rs. in Lacs)
and its subsidiaries
As at As at
Particulars Schedule 31, March 2009 31, March 2008
1. We have audited the attached consolidated balance sheet of Mercator Lines Limited (the Company) and its
subsidiaries (collectively called ‘the Mercator Group’) as at March 31, 2009, the consolidated profit and loss account SOURCES OF FUNDS
and the consolidated cash flow statement for the year ended on that date, annexed thereto. These financial Shareholders’ Funds
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on Share Capital A 2,359.92 2,348.95
these financial statements based on our audit. Warrants against Share Capital A1 1,667.25 1,667.25
Reserves and Surplus B 224,579.10 158,051.71
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards Minority Interest 29,533.07 15,483.39
258,139.34 177,551.30
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
Loan Funds
are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts Secured Loans C 259,859.90 198,832.01
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and Unsecured Loans D 23,703.70 12,280.55
significant estimates made by management, as well as evaluating the overall financial statement presentation. We 283,563.60 211,112.56
believe that our audit provides a reasonable basis for our opinion.
Deferred Tax Liabilities 0.30 -
3. We did not audit the financial statements of subsidiaries, whose financial statements reflect total assets (net) of Total 541,703.24 388,663.86
Rs.2,913.36 Crores as at 31st March, 2009, and total revenues of Rs. 999.81 Crores. These financial statements and
other financial information have been audited by other auditors whose reports have been furnished to us, and our APPLICATION OF FUNDS
Fixed Assets E
opinion is based solely on the report of the other auditors.
Gross Block 607,876.71 314,196.02
Depreciation (59,345.15) (35,286.91)
4. We report that the consolidated financial statements have been prepared by the Company’s management in Net Block 548,531.56 278,909.11
accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, as notified Capital work in progress 5,185.69 45,101.71
by the Companies (Accounting Standards) Rules, 2006. Asset Held for Disposal 26,060.57 -
579,777.83 324,010.82
In our opinion and to the best of our information and according to the explanations given to us, the consolidated Investments F 4,196.50 425.00
financial statements give a true and fair view in conformity with the accounting principles generally accepted in
India: Current Assets, Loans & Advances G
Inventories 2,369.22 2,704.68
Sundry Debtors 29,954.91 20,795.84
a. in the case of the consolidated balance sheet, of the state of affairs of the Mercator Group as at March 31, 2009; Cash and Bank Balances 85,448.08 85,314.49
b. in the case of the consolidated profit and loss account, of the profit of the Mercator Group for the year ended on Loans and Advances 35,025.21 41,954.77
that date; and 152,797.42 150,769.78
c. in the case of the consolidated cash flow statement, of the cash flows of the Mercator Group for the year ended Current Liabilities and Provisions H
on that date. Current Liabilities 192,332.14 83,126.34
Provisions 1,504.94 3,071.25
Incomplete Voyages (Net) 1,271.16 344.15
For and on behalf of 195,108.24 86,541.74
Net Current Assets (42,310.81) 64,228.04
Contractor, Nayak & Kishnadwala
Deferred Tax Assets 39.74 -
Chartered Accountants
Total 541,703.24 388,663.86
Significant Accounting Policies I
& Notes to the Accounts
Himanshu Kishnadwala
Partner, M. No 37391 As per our report of even date For and on behalf of the Board
Mumbai
19th May 2009 For Contractor, Nayak & Kishnadwala H. K. Mittal A. J. Agarwal
Chartered Accountants Executive Chairman Managing Director

Himanshu Kishnadwala Anil Khanna M. G. Ramkrishna

Partner Director Director
M No. 37391
Mumbai - 19th May 2009
Dated: 19th May 2009

88 89
25 Years Reflecting Excellence
 Annual Report 2008-2009

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON MARCH 31, 2009 CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009
(Amount Rs. in Lacs) (Amount Rs. in Lacs)
Year Ended Year Ended Particulars Current Year Previous Year
Particulars Schedule 31, March 2009 31, March 2008 Cash Flow from Operating Activities
Net Profit Before Tax 38,466.44 37,946.18
INCOME Adjustment for:
Shipping Income J 213,359.98 147.685.09 Depreciation 26,870.56 16,749.92
Sale of Coal 7,690.75 - Interest Paid 16,632.29 14,464.28
(Profit)/Loss on Fixed Assets Scrapped/Sold 47.43 (325.80)
Other Income K (3,657.93) 7,933.65 (Profit)/Loss on Sale of Investment (36.50) (2,953.95)
Profit on Sale of Investments (Net) 36.50 325.80 Dividend Income 168.81 (406.91)
Profit/(loss) on Sale of Assets (Net) (47.43) 2,953.95 Foreign Currency Translation Adjustment (41,609.62) 1,839.23
Operating Profit before Working Capital Changes 40,539.41 67,312.95
Total 217,381.87 158,898.49 Adjustment for:
Trade and Other Receivables (1,053.85) (23,162.76)
EXPENSES Trade Payables 108,566.50 65,811.12
Ship Operating Expenses L 111,408.97 81,871.63 Cash Generated from Operations 148,052.06 109,961.31
Mining Expenses M 6,800.98 - Direct Taxes Paid (819.97) (1,031.89)
Administrative and Other Expenses N 7,907.76 4,877.58
Diminusion in Value of Investment 239.81 - Total Cash Generated from Operating Activities 147,232.09 108,929.42
Cash Generated from Prior Period Items (1.17) (4,148.60)
Finance Charges O 16,632.29 14,464.28
Net Cash from Operating Activities 147,230.92 104,780.82
Depreciation 26,870.56 16,749.92 Cash flow from Investing Activities
Increase in Fixed Assets including Capital Work in Progress (242,154.80) (165,407.63)
Total 169,860.37 117,963.41 Sale of Fixed Assets 1,079.41 6,085.61
Proceed from sale of Non Trade Investments 36.50 325.80
Profit Before Taxes 47,521.50 40,935.08 (Purchase)/sale of Investment (3,771.50) 8,281.69
Provision for Taxation Dividend Income (168.81) 406.91
Current Tax (755.50) (880.89) Net Cash from Investing Activities (244,979.20) (150,307.62)
Deferred Tax (37.53) - Cash Flow from Financing Activities
Fringe Benefit Tax (25.00) (21.00) Proceeds from issue of Share Capital from conversion of
Profit After Taxes 46,703.47 40,033.19 Bonds and warrants 10.97 83,586.35
Proceeds from Long Term Borrowing 72,451.04 27,639.09
Minority Interest 14,049.68 -
Minority Interest (9,055.06) (2,988.90) Increase/Decrease in Reserves 30,276.70 -
Prior Year Expenses / Income (Net) (1.17) (4,148.60) Interest Paid (16,632.29) (14,464.28)
Short Provision for Tax of earlier Year (1.94) (130.00) Dividends Paid including tax thereon (1,394.60) (3,476.63)
Balance brought forward from last year 47,831.92 23,612.86 Net Cash from Financing Activities 98,761.50 93,284.53
Available for Appropriations 85,477.23 56,378.55 Net Increase in Cash and Cash Equivalents 1,013.22 47,757.73
Less/(Add): Appropriations Cash and Cash Equivalents as at beginning of the year
Transfer to General Reserve 1,880.00 1,770.00 (refer Schedule G) 85,635.29 37,877.56
Transfer to Debenture Redemption Reserve 3,900.00 - Cash and Cash Equivalents as at end of the year
Transfer to Tonnage Tax Reserve 5,700.00 3,300.00 (refer Schedule G) 86,648.51 85,635.29
Dividend on Preference Shares - 307.76
Dividend On Equity Shares (on conversion of
FCCB’s/Warrents) 12.06 80.00 Notes:
Proposed Dividend on Equity Shares 1,179.96 2,583.85 1) Figures in bracket represent outflow
Tax on Dividend (including for previous year 2) Cash and cash equivalents include gain/(loss) on foreign exchange revaluation of Rs.208.10 lacs (Previous Year Loss of Rs. 76.71)
Rs.2.05 Lacs( Rs. 13.60 Lacs) 202.58 505.02 3) Interest paid/acqusition of Fixed Assets is exclusive/inclusive of interest capitalised Rs. 67.14 (Previous Year Rs.91.63)
Balance Carried to Balance Sheet 72,602.63 47,831.92 4) Cash and cash equivalent include Fixed Deposit of Rs.370,00 lacs ( Previous Year NIL) as margin deposit against an acceptance.
Earning Per Share (Equity Share of Re. 1/- Each) 5) Previous year's figures have been recast/restated wherever necessary.
Basic (Rs) 15.96 14.45
Diluted (Rs) 15.64 13.73
Significant Accounting Policies I
& Notes to the Accounts As per our report of even date For and on behalf of the Board
For Contractor, Nayak & Kishnadwala H. K. Mittal A. J. Agarwal
As per our report of even date For and on behalf of the Board
Chartered Accountants Executive Chairman Managing Director
For Contractor, Nayak & Kishnadwala H. K. Mittal A. J. Agarwal
Chartered Accountants Executive Chairman Managing Director Himanshu Kishnadwala Anil Khanna M. G. Ramkrishna
Partner Director Director
Himanshu Kishnadwala Anil Khanna M No. 37391
M. G. Ramkrishna
Partner Director Mumbai - 19th May 2009
Director Dated: 19th May 2009
M No. 37391
Mumbai - 19th May 2009

90 91
25 Years Reflecting Excellence
 Annual Report 2008-2009

SCHEDULE FORMING PART OF CONSOLIDATED ANNUAL ACCOUNTS SCHEDULES FORMING PART OF CONSOLIDATED ANNUAL ACCOUNTS
(Amount Rs. in Lacs) (Amount Rs. in Lacs)
Particulars Current Year Previous Year Particulars Current Year Previous Year

SCHEDULE ‘A’ Tonnage Tax Reserve (Utilised)

as per last Balance Sheet 8,524.83 6,924.83
Share Capital
Add: Transfer from Tonnage Tax Reserve 3,300.00 1,600.00
Authorised
11,824.83 8,524.83
35,00,00,000 Equity Shares of Re 1/- each. 3,500.00 3,500.00 Debenture Redemption Reserve
200,00,000 Preference Shares of Rs. 100 each. 20,000.00 20,000.00 As per last Balance Sheet 6,200.00 8,000.00
23,500.00 23,500.00 Transferred to Profit & Loss Account 3,900.00 -
Issued Capital Transferred to General Reserve on redemption of debentures - (1,800.00)
23,59,92,073(23,48,95,387) Equity of Shares Re. 1/- each fully 10,100.00 6,200.00
paid up 2,359.92 2,348.95 General Reserve
2,359.92 2,348.95 As per last Balance Sheet 10,472.83 10,902.83
Subscribed and Paid Up Capital Add: Transferred from Debenture Redemption Reserve - 1,800.00
Add: Transferred From Profit and Loss Account 1,880.00 1,770.00
Equity
Less: Exchange fluctuation for 2007-08 on long term foreign
23,59,92,073 (23,48,95,387) Equity of Shares Re. 1/- each fully
currency Monetary
paid up. 2,359.92 2,348.95 Items as per transitional provision of AS 11 (Refer Note 11
(a) 11,83,45,500 shares of Re 1/-were allotted as bonus of Schedule I) (4,696.00) -
shares by capitalisation of Securities Premium Account.. Less: Transferred to Capital Redemption Reserve on redemption
(b) NIL (32,00,000) shares of Re. 1/- each are issued on of Preference Shares - (4,000.00)
preferential basis on conversion of warrants. 7,656.83 10,472.83
(c) 10,96,686 (37,652,887) Shares of Re. 1/- each are issued
on conversion of FCCBs during the Year. Profit/Loss on Cash Flow hedging Reserve Account - (5,701.31)
2,359.92 2,348.95 Foreign Exchange Fluctuation Reserve
SCHEDULE ‘A1’ Exchange fluctuation on Long Term Loans in relation to integral
Warrants against Share Capital foreign operations 6,571.15 -
2,85,00,000 Warrants (Each Warrant carry option/entitlement 6,571.15 -
to subscribe to 1 number of equity share of Re. 1/- each on
or before April 24, 2009 at a price not less than Rs.58.50 Capital Reserve (on Consolidation) 69,681.03 54,459.24
-
per share.) 1,667.25 1,667.25 Foreign currency Translation Reserve 3,830.03 (3,007.57)
(The warrant holder has not exercised the above option on
or before April, 24 2009 and the amount received has been Foreign currency Monetary Item Translation Difference - -
subsequently forfeited.) Exchange fluctuation on Long Term Loans utilised for
1,667.25 1,667.25 other purpose as per transitional provision of AS 11 - -
(Refer Note 11 of Schedule I)
SCHEDULE ‘B’
(Net of amortisation Rs.81.95) 28.80 -
Reserves and Surplus Surplus in Profit and Loss Account 72,602.62 47,831.92
224,579.10 158,051.71
Capital Reserve
As per last Balance Sheet 26.24 26.24 SCHEDULE ‘C’
26.24 26.24 Secured Loans
Capital Redemption Reserve
As per last Balance Sheet 4,000.00 - (a) Debentures
Add: Transferred From General Reserve on redemption of (1) NIL (30,00,000) - 10.00% Non Convertible Secured Debentures
Preference Shares - 4,000.00 Series IV of Rs. NIL (Rs. 10/-) each - 300.00
4,000.00 4,000.00
Securities Premium Account (2) NIL (30,00,000) - 10.00% Non Convertible Secured Debentures
As per last Balance Sheet 31,945.52 7,532.61 Series V of Rs. 10/- (Rs. 20/-) each - 600.00
Add: Received during the year on conversion of warrants
(3) 900 (1,600) 11.25% (7.5% upto 30th June, 2008) Non Convertible
and FCCBs 612.71 24,439.88
Secured Debentures of Rs.5,62,500/- (Rs.6,87,500/-) each,
Less: Share Issue Expenses (0.66) (26.97)
redeemable in 12 half yearly instalments of 6.25% and last two
32,557.57 31,945.52 of 12.50% of face value each commencing from six months after
Tonnage Tax Reserve one year from the date of allotment i.e. June 30, 2004 towards
As per last Balance Sheet 3,300.00 1,600.00 face value Series VII A. There is a put/call option at the end of
Add: Transfer from Profit and Loss Account 5,700.00 3,300.00 the 4th Year & 6th Year from the date of allotment. 5,062.50 11,000.00
Less: Transferred to Utilised Account (3,300.00) (1,600.00)
5,700.00 3,300.00

92 93
25 Years Reflecting Excellence
 Annual Report 2008-2009

SCHEDULES FORMING PART OF CONSOLIDATED ANNUAL ACCOUNTS SCHEDULES FORMING PART OF CONSOLIDATED ANNUAL ACCOUNTS
(Amount Rs. in Lacs) (Amount Rs. in Lacs)
Particulars Current Year Previous Year Particulars Current Year Previous Year

4) NIL (50) 7.50% Non Convertible Secured Debentures Series VII B SCHEDULE ‘D’
of NIL (7,50,000/-) each. - 375.00 Unsecured Loans
1) 700 (850) 1.50% Foreign Currency Convertible Bonds of
(5) 1500 11.90% Non Convertible Secured Debentures Series IX A of USD 10,000 each 3,566.50 3,409.35
Rs.10,00,000/- each with the tenor of 10 years, redeemable in 3 During the year, pursuant to notices received from
yearly instalments at the end of 8th, 9th and 10th year from the Bondholders 150 (5150) FCCBs of aggregate amount
date of allotment. There is call option at the end of 4th year from of USD 1,500,000 (USD 51,500,000) were converted into
the date of allotment. In the event, this call option is not exercised
10,96,686 (37,652,887) equity shares of Re. 1/- each at
by the Issuer at the end of 4th year, the coupon on the debentures
shall stand increased to 12.35% p.a. payable half yearly effective a predetermined price of Rs. 59.812 per share at a fixed
immediately there after for the balance tenure. 15,000.00 - exchange rate of Rs.43.73 per USD

(b) Foreign Currency Loans from Banks 173,529.33 136,350.01 The balance bonds are convertible at any time up to the
close of Business on 20 April 2010 by holders into newly
(c) Term Loans from Banks 64,873.00 50,207.00 issued ordinary shares of Re. 1 each at agreed conversion
price. The Bonds may be redeemed in whole at the option
(d) Cash Credit facilities from scheduled Banks 1,395.07 - of the Company at any time on or after 15 May 2008 and or
prior to 20 April 2010 at the accreted principal amount
259,859.90 198,832.01 together with accrued interest.

(b) USD 16,000,000 2.50% Convertible Bonds B (Unsecured

convertible bonds due in 2012. They are optionally
Note convertible on and after 45 days from the date of listing
of the ordinary shares of the company in the SGX or
1) Debentures referred in (a) above are secured by first mortgage on specified vessels of the company on pari- alternative stock exchange pursuant to the IPO and on
passu basis with other lenders and first charge on the specified immovable properties together with or before the close of business on March 12, 2012.
structure thereon. The conversion price is fixed at SG$ 0.76 per share.)
8,152.00 6,371.20
2) Foreign Currency Loan refered in (b) above are secured by first Charge on specified vessels of the company
on pari-passu basis with other lenders and also include a External Commercial Borrowing of Rs. 12,359.12 2) Other Loans - 2,500.00
lacs which is secured by exclusive charge on specified vessels of the company.
3) Commercial Paper from Financial Institution 10,000.00 -
(Amount repayable within one year Rs.10,000 Lacs
3) Term Loan refered in (c) above are secured by first charge on specified vessels, on pari passu basis with (Rs.25000 Lacs))
other lenders.
4) Overdraft from Scheduled Banks facility 1,985.20 -
4) Working capital facilities from Schedule Banks are secured by second charge on specified vessels and 1st
charge on all receivables and other current assets of the company on pari-passu basis. 23,703.70 12,280.55

94
25 Years Reflecting Excellence 95
 96
SCHEDULE FORMING PART OF ANNUAL ACCOUNTS

Schedule E
Fixed Assets (Amount Rs. in Lacs)
Cost Depreciation Net Block

Particulars As at Addition Deduction Translation As at Up to Translation Adjustment For the Up to As at As at

April for the for the March March in respect Year March March March
1, 2008 year year 31, 2009 31, 2008 of Assets 31,2009 31, 2009 31, 2008
Sold /
Discard
Goodwill - 159.35 - - 159.35 - - - - - 159.35 -
Land - 11.31 - - 11.31 - - - - - 11.31 -
Road & Bridges - 360.29 - - 360.29 - - - 17.75 17.75 342.54 -
Office Premises (Refer Note 1,2) 1,208.48 252.02 1,105.75 241.55 596.30 97.42 2.01 16.12 44.52 127.83 468.47 1,111.06
Vessels (Refer 3) 312,172.63 168,692.40 20,590.51 42,655.69 502,930.21 34,896.03 1,234.63 5,274.11 27,507.37 58,363.92 444,566.27 277,276.60
Office and Computer Equipments 198.11 41.26 - 1.66 237.71 78.03 0.52 - 35.45 114.25 123.46 120.08
Furniture & Fixtures 402.57 22.59 33.60 13.12 378.44 124.71 30.92 4.20 67.54 157.13 221.30 277.86
Vehicles 214.23 94.00 12.86 3.94 299.31 90.72 4.50 5.05 45.24 135.41 163.91 123.51
Offshore Rig - 101,386.32 - - 101,386.32 - - - 277.77 277.77 101,108.55 -
Mining Equipment - 1,517.47 - - 1,517.47 - - - - 151.07 1,366.42 -

Total 314,196.02 272,537.01 21,742.72 42,886.40 607,876.71 35,286.91 1,276.78 5,299.48 28,080.92 59,345.13 548,531.58 278,909.11
Previous Year 189,446.46 129,891.46 5,141.90 - 314,196.02 19,920.58 - 1,911.15 10,382.84 35,286.91 278,909.11 168,899.23
Capital Work In Progress 45,101.72 5,185.00 45,101.72 - 5,185.00 - - - - - 5,185.00 45,101.72
(Refer Note 4)
Asset Held For Construction - 26,060.57 - 26,060.57 - - - - - 26,060.57 -

Note
1. Includes cost of 10 shares of Rs. 50/- each fully paid in Mittal Tower Premises Co-op. Society Ltd.
2. Office premises having gross value Rs. 343.16 Lacs ( Rs. 343.16 Lacs) and accumulated depreciation Rs. 102.65 Lacs ( Rs.89.99 Lacs) are given on operating lease.
3. Addition includes exchange fluctuation gain on long term foreign currency loans Rs. 4,900.40 Lacs for the year 2007-08, exchange fluctuation loss Rs. 21,832.90 Lacs for the current
year (Refer note 25 of Notes to account).
4. Capital work in progress includes Rs. 4,914 lacs (Rs. 873.35 Lacs) towards advance for Capital Goods.
Coal

Other
Items

Sub Total
Schedule F

Grand Total

Inventories
Investments

Bunker/Lubes
SCHEDULE ‘G’

Cash on hand
Daily Dividend

Current Assets

an Acceptance)
Sundry Debtors

Over Six Months

Long Term (At Cost)

In current Accounts
Investment in shares
Axis Infrastructure Ltd

In Dividend Accounts
In Other s (Unquoted)

Lotus FMP mutual Fund

Non-Trade - Unquoted

In units of Mutual Funds

Cash and Bank Balances

In fixed Deposit Accounts

(Refer Note B (9) of Schedule I)

(Unsecured, Considered Good)

Balances with Scheduled Banks

Marg Swarnabhoomi Part Pvt.. Ltd.
In shares of company (Unquoted)

Rs.2,376.74 Lacs (Previous Year Nil)

Birla Sun Life Saving Fund - Instl - Daily Dividend

In Exchange Earners Foreign Currency Account

Bank Balance / Fixed Deposits with Foreign Banks

(Repurchase Vale of current investment on 31.3.09 is
Reliance Money Manager Fund Institutional Option -
Units of Indian Real Opportunity Venture Capital Fund

Current Investments (at lower of cost and Market value

Includes Margin Deposit of Rs.37000 Lakhs given against

(Repurchase Value is Rs.NIL Lacs(Previous Year Rs.458.51 Lacs)

ICICI Prudential Flexible Income Plan Premium - Daily Dividend

SCHEDULE FORMING PART OF CONSOLIDATED ANNUAL ACCOUNTS

-
Nos

-
1,250

37,500

2,762.88
-

19,458.52
27,192.03

29,954.91
681.32
1,687.90
1,439.78

85,448.08
5.14
119.47
67.10
1,944.67
5,612.91
77,698.79
4,196.50
2,376.74
611.82
1,363.90
401.02
1,444.63
4.85

2,369.22
375.00
375.00
0.13
0.13
Cost
Current Year

3,000,000.00
12,500.00
Nos.

25 Years Reflecting Excellence

Annual Report 2008-2009

85,314.49
10.17
93.54
39.40
8.57
8,243.11
76,919.69
20,795.84
1,337.32
2,704.68
-
425.00
300.00
300.00
125.00
125.00
125.00
-
Cost

2,704.68
(Amount Rs. in Lacs)
Previous Year

97
 Annual Report 2008-2009

SCHEDULES FORMING PART OF CONSOLIDATED ANNUAL ACCOUNTS SCHEDULE FORMING PART OF CONSOLIDATED ANNUAL ACCOUNTS
(Amount Rs. in Lacs) (Amount Rs. in Lacs)
Particulars Current Year Previous Year Particulars Current Year Previous Year

Loans and Advances SCHEDULE ‘L’

(Unsecured Considered Good) Ship Operating Expenses
Advances recoverable in cash or in kind Bunker Consumed 29,859.94 23,010.93
or for value to be received 20,141.93 15,893.73 Vessel/Equipment Hire Charges 43,524.79 31,761.88
Technical, Service expenses 8,430.69 5,598.66
Deposits with Government and semi Government Bodies 16.78 16.78 Agency, Professional and Service Charges 1,198.97 620.65
Inter Corporate Deposits 1,382.60 689.43 Crew Expenses 2,779.87 846.18
Other Deposits 1,156.75 960.52 Communication Expenses 204.34 188.86
Accrued Interest on fixed deposit with banks 1,200.45 320.81 Miscellaneous Expenses 642.16 254.68
Advance payment of tax (Net of provisions) 871.92 704.58 Commission 4,360.72 4,276.02
Derivative Financial Instruments 10,254.77 23,368.91 Insurance 1,799.58 1,425.98
Port Expenses 5,346.60 5,478.93
35,025.21 41,954.77 Repairs and Maintenance 11,131.96 7,887.30
SCHEDULE ‘H’ Stevedoring, Transport and Freight 2,129.35 521.55
Current Liabilities
Sundry Creditors 111,408.97 81,871.63
For Services and expenses 5,077.91 10,006.76 SCHEDULE ‘M’
Other liabilities 19,183.58 6,777.65 Mining Expenses
Acceptances 159,907.90 37,905.27 Mining 3,509.74 -
Advance from customer 12.93 796.79 Distribution Cost 1,107.48 -
Deposits 87.98 85.26 Government Payment 629.24 -
Unclaimed Dividend * 67.10 39.40 Freight and Shipment 829.72 -
Derivative Financial Instrument 7,994.74 27,515.21 Miscellaneous Expenses 724.80 -
*(There is no amount due and outstanding to
6,800.98 -
be credited to Investor
SCHEDULE ‘N’
Education and Protection Fund) 192,332.14 83,126.34
Administrative and Other Expenses
Advertisement 23.33 11.74
Provisions Auditors Remuneration 80.79 68.16
Proposed Dividend 1,179.96 2,583.85 Conveyance, Car Hire and Traveling 318.99 229.27
Tax on Dividend 200.53 439.13 Communication expenses 98.57 50.53
Employees Retirement Benefits 124.45 48.27 Donation 81.25 11.26
1,504.94 3,071.25 Directors’ Remuneration 2,291.82 1,615.79
Miscellaneous expenses 738.00 644.97
SCHEDULE ‘J’ Insurance 29.48 10.27
Shipping and related Income Legal, Professional and Consultancy expenses 931.56 252.11
Freight 91,863.93 81,549.86 Rent 575.73 364.39
Charter Hire 109,086.26 59,996.57 Repairs and Maintenance 71.27 186.61
Dispatch and Demurrage 6,772.40 3,940.86 Salary, Wages, Bonus etc. 2,481.20 1,326.31
Cargo Handling Services 5,637.39 2,197.80 Staff Welfare, Training etc. 64.04 26.89
213,359.98 147,685.09 Contribution to Provident and other funds 56.07 24.75
Bad Debts and other amounts written off (Net) 65.65 54.55
SCHEDULE ‘K’ 7,907.76 4,877.58
Other Income SCHEDULE ‘O’
Dividend from Investments 168.81 406.91 Finance Charge
Rent Received 106.47 121.96 Interest on
Exchange Fluctuations Net 3,831.75 4,333.55 Debentures 1,501.75 1,108.39
Gain / (Loss) on FFA Transaction (7,767.30) 3,079.70 Fixed Loans 19,853.82 12,955.07
Miscellaneous Income 2.34 (8.47) Others - 2,137.62
(3,657.93) 7,933.65
21,355.57 16,201.08
Less : Interest received (TDS Rs. 372.60 Lacs Previous Year 60.85 Lacs) 4,723.28 1,470.57
(Less: (Profit)/Loss on Derivative Transactions - 266.23

16,632.29 14,464.28

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 Annual Report 2008-2009

Schedule 'I' Name of the Subsidiary Company Country of % of holding either directly % of holding either directly
incorporation or through subsidiary as or through subsidiary as
A. BASIS OF CONSOLIDATION at March 31, 2009 at March 31, 2008
The Consolidated Financial Statements relate to Mercator Lines Limited (the company), its subsidiary companies
and associates. The Company and its subsidiaries constitute the Group. Pt Oorja Indo Petangis Three Indonesia 50* 50*
Pt Oorja Indo KGS Indonesia 70 70
a) Basis of Accounting Broadtec Mocambique Minas, Lda Mocambique 85 85
I. The financial statements of the subsidiary companies used in the consolidation are drawn upto the same Mercator Offshore Holdings Pte. Ltd. Singapore 100 NA
reporting date as of the Company i.e. year ended 31st, March 2009. Mercator Petroleum Pvt. Ltd. India 100 NA
MCS Holdings Pte. Ltd. Singapore 100 NA
II. The financial statements of the Group have been prepared in accordance with the principles and procedures PT Mincon Indo Resources Indonesia 100 NA
required for the preparation and presentation of consolidated financial statements as laid down under the
Accounting Standard 21 “Consolidated Financial Statements” as notified by the Companies (Accounting
Standards) Rules 2006. * Considered as subsidiaries for consolidation purposes on account of control as per principles of AS-21.

b) Principles of consolidation
B. SIGNIFICANT ACCOUNTING POLICIES
The Consolidated Financial Statements have been prepared on the following basis:
I. The Financial statements of the Company and its subsidiary companies have been combined on a line by
1. Basis of Accounting
line basis by adding together book values of similar items of assets, liabilities income and expenses. The
The financial statements are prepared under the historical cost convention, on the accrual basis of accounting
intra-group balances and intra-group transactions have been fully eliminated.
and in conformity with Generally Accepted Accounting Principles in India, Accounting Standards as notified by
II. Minority Interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable
the Companies (Accounting Standards) Rules, 2006 and the other relevant provisions of the Companies Act,
to the minority shareholders at the date on which investments are made by the company in the subsidiary
1956.
companies and further movements in their share in equity, subsequent to the date of the investment as
stated above.
2. Use of Estimates
III. Consolidated Financial Statements are prepared by applying uniform accounting policies to the extent
The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires
possible, in use at the group.
the management to make estimates and assumptions that affect the reported balances of assets and liabilities
as of the date of the financial statements and reported amounts of income and expenses during the period.
IV. Indian Rupee is the reporting currency for the Group. However, the reporting currencies of non-integral
The management believes that the estimates used in the preparation of financial statements are prudent and
overseas subsidiaries are different from the reporting currency of the Group. The translation of those
reasonable.
currencies into Indian Rupee is performed for assets and liabilities, using the exchange rate as at the balance
sheet date, and for revenues, costs and expenses using average exchange rate during the reporting period.
3. Fixed Assets
Resultant currency translation exchange gain/loss is carried as foreign currency translation reserve under
a) Fixed assets are stated at cost less accumulated depreciation.
Reserves and Surplus.
b) Cost includes cost of acquisition or construction including attributable interest, duties and other incidental
expenses related to the acquisition of the asset.
c) The following subsidiary companies are considered in the Consolidated Financial Statements:
c) Operating costs and other incidental costs including initial stores and spares of newly acquired vessels till
Name of the Subsidiary Company Country of % of holding either directly % of holding either directly the port of first loading are included in the cost of the respective vessels.
incorporation or through subsidiary as or through subsidiary as d) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign
at March 31, 2009 at March 31, 2008 currency liabilities relating to acquisition of depreciable assets are, following option given by notification of
Ministry of Corporate Affairs (MCA) dt. 31st March 2009, adjusted to carrying cost of the respective assets.
e) Individual fixed assets costing up to Rs. 25,000 are fully written off under the head fixed assets written off.
Mercator International Pte.Ltd. Singapore 100 100
Mercator Offshore Ltd Singapore 100 100
Mercator Oil & Gas Ltd India 100 100 4. Exploration and evaluation expenditure
Mercator Lines (Singapore) Ltd Singapore 72.35 72.35 Exploration and evaluation expenditure are capitalized when it is considered likely to be recoverable by future
Varsha Marine Pte. Ltd Singapore 100 100 exploitation or sale. This policy requires management to make certain estimates and assumptions as to future
Vidya Marine Pte. Ltd Singapore 100 100 events and circumstances, in particular whether an economically viable extraction operation can be
Mercator Lines (Panama) Inc Panama 100 100 established. Any such estimates and assumptions may change as new information becomes available. If,
Oorja Holdings Pte. Ltd Singapore 100 100 after having capitalized the expenditure under the policy, a judgement is made that recovery of the
Oorja 1 Pte. Ltd. Singapore 100 100 expenditure is unlikely, the relevant capitalized amount will be written off to the income statement.
Oorja 2 Pte. Ltd. Singapore 100 100
Oorja 3 Pte. Ltd. Singapore 100 100
Oorja Mocambique Minas, Limitada Mocambique 100 100
Pt Oorja Indo Petangis Four Indonesia 50* 50*

100 101
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5. Environmental Obligations
Restoration, rehabilitation and environmental expenditures incurred during the production phase are charge
to cost of revenue as incurred.
Provision for decommissioning, demobilization and restoration provides for the legal obligations associated
with the retirement of the tangible long-lived asset that result from the acquisition, construction or
development and/or the normal operation of a long-lived asset. The retirement of a long-lived asset is its other
than temporary removal from service, including its sale abandonment, recycling or disposal in some other
manner.
These obligations are recognized as liabilities when a legal obligation with respect to the retirement of an asset
is incurred, with the initial measurement of the obligation at fair value. These obligations are accreted to full
value over time through charges to the statement of income. In addition, an asset retirement cost equivalent
to these liabilities is capitalized as part of the related asset’s carrying value and is subsequently depreciated or
depleted over the asset’s useful life. A liability for asset retirement obligation is incurred over more than one
reporting period when the even that create the obligation occur over more than one reporting period. For
example, if a facility is permanently closed but the closure plan is developed over more than one reporting
period, the cost of closure of the facility is incurred over those reporting period when the closure plan is
finalized. Any incremental liability incurred in a subsequent reporting period is considered to be an addition
layer of the original liability. Each layer is initially measured at fair value. A separate layer shall be measure,
recognized and accounted for prospectively. The obligations consist primarily of costs associated with mine
reclamation, decommissioning and demobilization of facilities and other closure activities.
For environmental issues that may not involve the retirement of an asset, where the Company is a responsible
party and is determined that a liability exists, and amounts can be quantified, the Company accrues for the
estimated liability exists in respect of such environmental issues, the Company applies the criteria for liability
recognition under the applicable accounting standards.
6. Depreciation
a) Depreciation on all the vessels is computed on Straight Line Method so as to write off the original cost as
reduced by the expected/estimated scrap value over the balance useful life of the vessels. If however, the
rates as prescribed under the Schedule XIV of the Companies Act, 1956, are higher; the said higher rate is
applied, which ranges from 5% to 12% of the original cost of the vessel.
b) Depreciation on all assets other than vessels is computed on the Written Down Value method in the manner
and at the rates prescribed under schedule XIV of the Companies Act, 1956.
c) On additions made to the existing vessels depreciation is provided for the full year over the remaining useful
life of the ships.
d) Depreciation on furniture, fixtures and electrical fittings installed at office premises taken on lease is
provided over the initial period of lease.
e) In respect of the non-shipping assets held outside India, depreciation is computed on the basis of estimated
useful life of the assets. The estimated useful life of the non-shipping assets held outside India is as follows:
Asset Country Useful life
Offshore Rig Singapore 20 years
Furniture & Fixtures Indonesia 4 - 8 years
Office & Electronic Equipment Indonesia 4 - 8 years
Vehicles Indonesia 8 years
Mining & Heavy Equipment Indonesia 16 years
Roads & Bridges Indonesia 16 years
102
Annual Report 2008-2009
7. Capital Work in Progress
All expenditure, including advances given to contractors and borrowings cost incurred during the asset
acquisition period, are accumulated and shown under this head till the asset is put to commercial use.
8. Retirement and Disposal of Assets
a) Profits on sale of assets are accounted for on completion of sale thereof.
b) Assets which are retired from active use and are held for disposal are stated at the lower of their net book
value or net releasable value.
9. Inventories
Bunker and Lubes on vessels are valued at lower of cost and net Realisable value ascertained on first in first out
basis.
Coal inventory valued at the lower of cost or net realizable value. Cost is determined based on the weighted
average cost incurred during the period and includes an appropriate portion of fixed and variable overheads.
Net realizable value is the estimated sales amount in the ordinary course of business less the costs of
completion and selling expense.
10. Investments
a) Investments are classified into Long Term and Current investments.
b) Long Term Investments are stated at cost of acquisition and related expenses. Provision for diminution, if
any, in the value of such investments is made to recognise a decline, other than of a temporary nature.
c) Current Investments are stated at cost of acquisition including incidental / related expenses or at fair value
as at 31st March 2009, whichever is less and the resultant decline, if any, is charged to revenue.
11. Incomplete Voyages
Incomplete voyages represent freight received and direct operating expenses on voyages which are not
complete as at the Balance sheet date.
12 . Borrowing Costs
Borrowing costs incurred for the year for acquisition of vessels are capitalized till first loading of cargo, only if
the time gap between date of Memorandum of Agreement and “Date when vessel is ready for use” is more
than three months.
In respect of other assets, borrowing cost incurred till the date when asset is put to use are capitalized.
13.Revenue Recognition
a) Income on account of freight earnings is recognised in all cases where loading of the cargo is completed
before the close of the year. All corresponding direct expenses are also provided.
b) Where loading of the cargo is not completed before the close of the year, revenue is not recognised and the
corresponding expenses are carried forward to the next accounting year.
c) Income from charter hire and demurrage are recognised on accrual basis.
d) Income from services is accounted on accrual basis as per the terms of the relevant agreement.
e) Dividend on investments is recognised when the right to receive the same is established.
f) Insurance claims are accounted on accrual basis when there is a reasonable certainty of the realisability of
the claim amount.
g) Revenue from coal mining is recognized on transfer of risk, reward and ownership of the goods, and is
recorded net of returns, trade allowance, and government duties.
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25 Years Reflecting Excellence

14. Foreign Exchange Transactions
a) Monetary Current assets and liabilities denominated in foreign currency outstanding at the end of the year
are valued at the rates prevalent on that date.
b) Exchange differences arising on Long Term Foreign Currency Monetary (LTFCM) items are following option
given by notification of MCA dt. 31st March 2009, treated in the following manner:
i) In respect of borrowings relating to or utilized for acquisition of depreciable capital assets, the same is
adjusted to the cost of the relevant capital asset and depreciated over the balance life of the said capital
asset.
ii) In other cases, the same is accumulated in a 'Foreign Currency Monetary Item Translation Difference
Account'. The amount so accumulated in this account is amortized over the balance period of such assets /
liabilities or 31st March 2011, whichever is earlier.
c) Differences in translation of other monetary assets and liabilities and realised gains and losses on foreign
currency transactions are recognised in the Profit and Loss Account.
d) Exchange difference arising on long term foreign currency loans given to non integral foreign operations is
accumulated in foreign currency fluctuation reserve. On disposal of investment , the balance in the reserve
will be transferred to profit and loss account
e) Contracts in the nature of foreign currency swaps, are converted at the exchange rate prevailing as on 31st
March 2009 and the profits or losses thereon are charged to the Profit and Loss account.
f) Differences on account of swap contracts for interest payable in foreign currency are accounted on accrual
basis and the profit or loss thereon are charged to the Profit and Loss account.
15. Employees Benefits
a) Short – term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short
term employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognised at
actual amounts due in the period in which the employee renders the related service.
b) Post – employment benefits
i. Defined Contribution Plans
Payments made to defined contribution plans such as Provident Fund are charged as an expense as they
fall due.
ii. Defined Benefit Plans
The cost of providing benefit i.e. gratuity is determined using the Projected Unit Credit Method, with
actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised
immediately in the Profit and Loss Account.
c) Other Long – term employee benefits
i. Other Long – term employee benefit viz. leave encashment is recognised as an expense in the profit and
loss account as and when it accrues. The company determines the liability using the Projected Unit Credit
Method, with actuarial valuation carried out as at the balance sheet date. The Actuarial gains and losses in
respect of such benefit are charged to the profit and loss account.
16 . Lease Accounting
a) In respect of operating lease agreements entered into by the Company as a lessee, the lease payments are
recognised as expense in the profit and loss account over the lease term.
b) In respect of operating lease agreement entered into by the Company as a lessor, the initial direct costs are
recognised as expenses in the year in which they are incurred.
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Annual Report 2008-2009
17. Earning per share:
The company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard – 20.
The Basic EPS has been computed by dividing the income available to equity shareholders by the weighted
average number of equity shares outstanding during the accounting year. The diluted EPS have been
computed using the weighted average number of equity shares and dilutive potential equity shares
outstanding at the end of the year.
18. Provision for Taxation :
a) The company has opted for the Tonnage Tax scheme and provision for tax has been accordingly made under
the relevant provisions of the Income Tax Act, 1961.
b) Tax on incomes on which the Tonnage Tax is not applicable is provided as per the other provisions of the
Income Tax Act, 1961.
c) In case of subsidiaries companies engaged in shipping and incorporated in Singapore, no provision is
made for taxation on qualifying shipping income derived which is exempt form taxation under section 13 A
of the Singapore Income Tax Act and the Singapore Approved International shipping enterprise Tax
Incentive.
d) In respect of a subsidiary company in Singapore engaged in offshore drilling & support services, no
provision for tax is made for qualifying offshore income as it is exempt from taxation under Section 13 F of
Singapore Income Tax Act.
e) Deferred tax resulting from timing differences, if any, between book and tax profits for income other than
that covered under relevant Tax exempt schemes is accounted for under the liability method, at the current
rate of tax, to the extent that the timing differences are expected to reverse in future.
19. Impairment of assets
The Company reviews the carrying values of tangible and intangible assets for any possible impairment at
each balance sheet date. Impairment loss, if any, is recognized in the year in which impairment takes place.
20. Provisions and Contingent Liabilities:
Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can
be reliably estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past
events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future
events not wholly within the control of the Company.
21. Derivative instruments and hedge accounting
The Group uses foreign currency forward contracts; forward freight agreements, options on forward freight
agreements and currency options to hedge its risks associated with foreign currency fluctuations and
fluctuations in freight rates relating to certain firm commitments and forecasted transactions. The Company
has designated these hedging instruments as cash flow hedges or economic hedges applying the recognition
and measurement principles set out in the Accounting Standard 30 “Financial Instruments : Recognition and
Measurement” (AS – 30).
The use of hedging instruments is governed by the Company’s policies approved by the board of directors,
which provide principles on the use of such financial derivatives consistent with the Company’s risk
management strategy.
Derivatives are initially recognised at fair value at the dates the derivative contracts are entered into and are
subsequently re-measured to their fair values at each balance sheet date.
The resulting gain or loss is recognised in the profit and loss statement immediately unless the derivative is
designated and effective as a hedging instrument, in which event the timing of the recognition in the profit and
loss statement depends on the nature of the hedge relationship.
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25 Years Reflecting Excellence
 Annual Report 2008-2009

Hedge accounting 2. Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of
Hedges which include derivatives, embedded derivatives and non-derivatives in respect of price risk, are advances) as at March 31,2009 Rs. 47,037.53 Lacs (Rs.14,928.51 Lacs).
designated as either hedges of fair value of recognised assets or liabilities or fair commitments (fair value
hedges) or hedges of highly probable forecast transactions (cash flow hedges). 3. Estimated amount of commitments outstanding towards contributions to funds are Rs. 1,547.52 Lacs
(Rs. 375.00Lacs)
Some forward freight agreements that the Group has entered into fall within the definition of fair value hedge.
Some other forward freight agreements fall within the definition of cash flow hedge as described below. 4. Remuneration to Holding Company Directors
Current Year Previous Year
At the inception of the hedge relationship, the relationship between the hedging instrument and hedged item
is determined, along with its risk management objectives and the strategy for undertaking the hedge. At the (Rs. In Lacs) (Rs. In Lacs)
inception of the hedge and on a quarterly basis, the effectiveness of the hedging relationship in offsetting Executive Chairman and Managing Directors
changes in fair values or cash flows of the hedged item is determined.
Salary 136.00 96.00
Fair value hedge Perquisites 11.46 17.29
Changes in the fair value of derivatives that are designated and qualify as fair value hedges will be recorded in Commission 1,926.48 1,492.50
the profit and loss statement immediately, together with any changes in the fair value of the hedged item that is Non-Executive Directors
attributable to the hedged risk.
Commission 10.00 10.00
Hedge accounting will be discontinued when the Group revokes the hedging relationship, the hedging Total 2,083.94 1,615.79
instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. The
adjustment to the carrying amount of the hedged item arising from the hedged risk will be amortised to the 5. Disclosures in accordance with Accounting Standard (AS) -15 on “Employee Benefits”:
profit and loss statement from that date. AS – 15 (Revised 2005) on “Employee Benefits” has been adopted by the Company effective from April 1, 2007.
The disclosures are as required by the said AS are given hereunder.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated as and qualify as cash flow (A) Defined Contribution Plans:
hedges are deferred in equity. The gain or loss relating to the ineffective portion of the hedge, if any, is The Company has recognized the following amounts in the Profit and Loss Account for the year:
recognised immediately in the profit and loss statement.
Current Year Previous Year
Amounts deferred in equity will be recycled in the profit or loss in the periods when the hedged item is (Rs. In Lacs) (Rs. In Lacs)
recognised in the profit and loss statement. However, when the forecast transaction that is hedged results in (i) Contribution to Employees’ Provident Fund 34.20 22.02
the recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in
equity will be transferred from equity and included in the initial measurement of the cost of the asset or liability. (ii) Contribution to Employees’ Family Pension Fund NIL NIL
(iii) Contribution to Employees’ Superannuation Fund NIL NIL
Hedge accounting will be discontinued when the Group revokes the hedging relationship, the hedging Total 34.20 22.02
instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any
cumulative gain or loss deferred in equity at that time will remain in equity and will be recognised when the
forecast transaction is ultimately recognised in the profit and loss statement. When a forecast transaction is no (B) Defined Benefit Plans:
(i) Changes in the Present Value of Obligation (Amount Rs. in Lacs)
longer expected to occur, the cumulative gain or loss that had been deferred in equity will be recognised
immediately in the profit and loss statement. Year Ended March 31, 2009 Year Ended March 31, 2008
Gratuity Leave Total Gratuity Leave Total
B] NOTES TO THE ACCOUNTS
Encashment Encashment
1. Contingent Liabilities not provided for
(a) Present Value of Obligation
Current Year Previous Year as at April 1, 2008 30.89 17.37 48.26 17.91 14.64 32.55
(b) Interest cost 2.16 1.21 3.37 1.43 1.17 2.6
(Rs. In Lacs) (Rs. In Lacs) (c) Past Service Cost NIL NIL NIL NIL NIL NIL
Counter guarantees issued by the Company for (d) Current Service Cost 22.17 18.77 40.94 13.67 8.87 22.54
guarantees obtained the bank 2,132.09 1,456.54 (e) Curtailment Cost/ (Credit) NIL NIL NIL NIL NIL NIL
Corporate guarantees issued by the company (f) Settlement Cost/ (Credit) NIL NIL NIL NIL NIL NIL
(g) Benefits Paid NIL 7.68 7.68 0.33 1.58 1.91
on behalf of business associates NIL 19,400.00
(h) Actuarial (Gain)/ Loss 24.10 15.42 39.52 (1.78) (5.72) (7.5)
TOTAL 2,132.09 20,856.54
(i) Present Value of Obligation
as at March 31, 2009 79.33 45.12 124.45 30.89 17.38 48.27

106 107
25 Years Reflecting Excellence
 Annual Report 2008-2009

(Ii) Expenses recognized in the Profit and Loss Account 7. Related Party Disclosures
(Amount Rs. in Lacs)
A List of Related Parties
Year Ended March 31, 2009 Year Ended March 31, 2008 i) Companies in which the directors/relatives of directors have substantial interest
Gratuity Leave Total Gratuity Leave Total 1. MLL Logistics Private Limited
Encashment Encashment 2. Mercator Mech Marine Limited
a) Current Service Cost 22.17 18.77 40.94 13.67 8.87 22.54 3. Mercator Healthcare Limited
(b)Past Service Cost NIL NIL NIL NIL NIL NIL 4. Ankur Fertilizers Private Limited
(c) Interest cost 2.16 1.21 3.37 1.43 1.17 2.6 5. Rishi Holding Private Limited
(d) Curtailment Cost/ (Credit) NIL NIL NIL NIL NIL NIL 6. AHM Investments Private Limited.
(e) Settlement Cost/ (Credit) NIL NIL NIL NIL NIL NIL 7. CMA Constructions & Properties Pvt Ltd
(f) Net Actuarial (Gain)/ Loss 24.10 15.42 39.52 (1.78) (5.72) (7.5)
(g) Employees' Contribution NIL NIL NIL NIL NIL NIL ii) Directors of the Company
(h) Total Expenses recognized in
1. H. K Mittal
` Profit and Loss A/c 48.44 35.42 83.86 13.32 4.32 17.64 2. A. J Agarwal
3. Manohar Bidaye
4. Anil Khanna
5. M. G Ramakrishna
(iii) Following are the Principal Actuarial Assumptions used as at the balance sheet date: 6. K. R Bharat

Particulars FY 2008-09 FY2008-09 FY 2007-08 FY2007-08 iii) Key Management Personnel

Gratuity Leave Encashment Gratuity Leave Encashment
1. H. K Mittal
2. A. J. Agarwal
(a) Discount Rate 7% 7% 8% 8%
3. Shalabh Mittal
(b) Salary Escalation Rate –
Management Staff 12% 12% 7% 7% iv) Relative of Key Management Personnel
(c) Turnover Rate 11% 11% 3% 3%
(d) Mortality Table LIC (1994-96) LIC (1994-96) LIC (1994-96) LIC (1994-96) 1. Adip Mittal
Ultimate Ultimate Ultimate Ultimate 2. Shruti Mittal

The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority,
promotion and other relevant factors.

6. Segment Reporting
The company’s principal business activities fall within the segment shipping and related activities. Along
with the other activities of the group, there is no reportable segment pursuant to Accounting Standard 17 ‘
Segment Reporting; notified by Companies (Accounting Standards) Rules, 2006.

108 109
25 Years Reflecting Excellence
 Annual Report 2008-2009

B. Details of transactions with the above parties: (Rs. in Lacs) C. Details in respect of material transactions with parties refer to in item A above:
Name of the Transaction Companies in which the directors/relatives of (Amount Rs. in Lacs)
directors have substantial interest Companies in which the directors/relatives of
Name of the Transaction
directors have substantial interest
Year Ended 31st March, 2009 Year Ended 31st March, 2008
Year Ended 31st March, 2009 Year Ended 31st March, 2008
Services Rendered 1,969.61 232.84

Interest Income - - Services Rendered

MLL Logistics Private Limited 1,969.61 232.84
Services Received - - Total 1,969.61 232.84

Expenses Recharged by other companies 75.85 24.23 Interest Income NIL NIL

Expenses Charged by the company 27.46 0.81 Services Received NIL NIL
Finance Provided
Expenses recharged by other companies
(Including Loans & Equity Contributions)
Ankur Fertilizers Private Limited 75.85 24.23
Loans Total 75.83 24.23
Loans Given during the Year 2,030.00 9.00
Expenses Charged by the company
Advances Given for Capital Goods 4,230.00 - MLL Logistics Private Limited 27.33 0.65
Mech Marine Engineers Pvt Ltd 0.13 -
Loans Repaid 2,039.00 - Total 27.46 0.65
Equity Contributions
Finance Provided
During the Year - -
(Including Loans & Equity Conributions )
Guarantees
Loans
Comfort Letter - - Loans Given during the Year
Guarantees Given Mercator Mech Marine Limited 2,030.00 9.00
Total 2,030.00 9.00
Outstanding Guarantees as on 31.03.2009 - -
Advances Given for Capital Goods
Outstanding Balances as on 31.03.2009
Loans, Advances and Receivables 268.12 268.29 Mech Marine Engineers Pvt Ltd 4,230.00
Total 4,230.00 -
Sundry Debtors 1,419.14 1,170.25
Loans Repaid
Advances Received for Capital Goods - - Mercator Mech Marine Limited 2,039.00 -
Total 2,039.00 -
Outstanding Balances as on 31.03.2009 Payables - -
Equity Contributions NIL NIL
Deposit During the Year
Deposit given during the year 10.00 500.00
Guarantees
Balance as on 31.03.2009 515.00 500.00
Comfort Letter NIL NIL
Remuneration paid to Key Management Personnel 3,137.54 1,658.78 Guarantees Given NIL NIL
- -
Commission Paid to Non-Executive Directors 10.00 10.00
Outstanding Guarantees as on 31.03.2009 NIL NIL
Remuneration to relative of Key Management
Personnel 5.03 6.04

110 111
25 Years Reflecting Excellence
 Annual Report 2008-2009

(Amount Rs. in Lacs) (Amount Rs. in Lacs)

Name of the Transaction Companies in which the directors/relatives of Year Ended Year ended
directors have substantial interest 31st March, 2009 31st March, 2008
The Company has given refundable interest free security
Year Ended 31st March, 2009 Year Ended 31st March, 2008
deposits under the agreements.
Outstanding balances as on 31.03.2009 ` The lease agreements are for a period from 60- 108 months.
Loans, Advances and Receivables These agreements also provided for increase in rent.
These agreements are non cancellable by both the parties
Loans Advances and Receivables
MLL Logistics Private Limited (Advance) 268.13 268.12 for 24–60 months except in certain exceptional circumstances.
Total 268.13 268.12
(iii) Future minimum lease payments under non-cancellable
Sundry Debtors agreements
MLL Logistics Private Limited 1,419.14 1,170.25 Not later than one year 478.68 533.65
Total 1,419.14 1,170.25
Later than one year and not later than five years 578.87 1068.24
Advances Received for Capital Goods NIL NIL
Later than five years NIL NIL
Outstanding Balances as on 31.03.2009
Payables NIL NIL 9. Disclosure in respect of operating lease (as Lessor): (Amount Rs. in Lacs)
Sundry Creditors NIL NIL
Year Ended Year ended
Deposit 31st March, 2009 31st March, 2008
(a) Operating Leases
Deposit given during the year Disclosures in respect of cancellable agreements for office
Rishi Holding Private Limited 10.00 -
given on lease
MLL Logistics Private Limited - 500.00
Total 10.00 500.00 (I) Lease receipt recognized in the Profit and Loss Account 106.47 113.87
(ii) Significant leasing arrangements
Balance as on 31.03.2009 - The Company has taken refundable interest free security
Rishi Holding Private Limited 15.00 deposits under the agreements.
MLL Logistics Private Limited 500.00 500.00
- The lease agreements are for a period of 60 months.
Total 515.00 500.00
- These agreements are non cancelable by both the parties
Remuneration paid to Key Management Personnel 3,137.54 1,658.78 for 18 months except in certain exceptional circumstances.

Commission Paid to Non-Executive Directors 10.00 10.00 (iii) Future minimum lease receivable under non-cancellable
agreements
Remuneration to relative of Key Management
Personnel 5.03 6.04 - Not later than one year 138.00 NIL
- Later than one year and not later than five years NIL NIL
8. Disclosure in respect of operating lease (as Lessee): (Amount Rs. in Lacs) - Later than five years NIL NIL
Year Ended Year ended
31st March, 2009 31st March, 2008 Disclosures in respect of cancellable agreements for
(a) Operating Leases Rig given on lease
Disclosures in respect of cancelable agreements for office (i) Lease receipt recognized in the Profit and Loss Account 891.77 NIL
premises taken on lease (ii) Significant leasing arrangements
(I) Lease payments recognized in the Profit and Loss Account 530.64 392.66 - The lease agreements are for a period of 36 months.
- These agreements are non cancelable by both the parties
(ii) Significant leasing arrangements except in certain exceptional circumstances.

112 113
25 Years Reflecting Excellence
 Annual Report 2008-2009

(Rs. in Lacs) 12. Out of the total outstanding loans given to subsidiaries amounting to Rs. 58,638.94 Lacs (USD 115.08Mn),
Year Ended Year ended Company has considered loans of Rs. 43,205.60Lacs (USD 84.8 Mn) as long term loans. Gains of Rs. 6571.15 lacs on
restatement of these foreign currency long term loans, given to non integral foreign operations is, following
31st March, 2009 31st March, 2008
applicable provisions of AS 11, accumulated in foreign currency fluctuation reserve in Reserves and Surplus. On
(iii) Future minimum lease receivable under non-cancellable disposal of the investment, the corresponding balance in the said reserve will be transferred to profit and loss
agreements account.
- Not later than one year 17,239.19 NIL
- Later than one year and not later than five years NIL 13. Derivative Instruments
The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency
- Later than five years 33,533.76 NIL
fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward
contracts is governed by the Company’s strategy approved by the Board of Directors, which provide principles on
the use of such forward contracts consistent with the Company’s Risk Management Policy. The Company does not
use forward contracts for speculative purposes.

10. Earning Per Share There are no outstanding Forward Exchange Contracts entered into by the Company.

Year Ended Year ended 14. Foreign Currency Exposures

31st March, 2009 31st March, 2008 The year end exposure in a currency other than the financial currency of the relevant Company that were not
hedged by a derivative instrument or otherwise are given below:
Net Profit after Tax, Minority interest and preference dividend
Year Ended 31st March,2009 Year Ended 31st March,2008
including tax thereon
- Basic (Rs. in Lacs) 37,645.31 32,405.63 Rs. in Lacs Fx. Million Rs. in Lacs Fx. Million
- Diluted (Rs. in Lacs) 37,702.13 32,464.36
Account Receivable 4,978.99 $ 9.77 968.95 $ 2.44

Number of Shares used in computing Earning Per Share Bank Balance 2,086.04 $ 4.05 38,175.38 $ 0.20
- Basic 235,946,403 224,225,062 SGD 0.65 SGD 132.03
- Diluted 241,064,272 236,414,299
Fixed Deposit in other currency NIL NIL 21.32 $ 0.05
Earning per share (equity shares of face value Re 1/-) Loan & Advances 60,906.73 $ 118.49 43,017.97 $108.04
- Basic (in Rs.) 15.96 14.41 Euro 0.65
- Diluted (in Rs.) 15.64 13.73 JPY 2.71
SGD 0.27

Accounts Payable/Acceptance 74.681.59 $ 145.86 97,652.81 $ 146.60

11. The Company has opted for accounting the exchange differences arising on reporting of long term foreign
(including capital commitments Euro 0.49 SGD 131.69
currency monetary items in line with the notification of Ministry of Corporate Affairs (MCA) dt. 31st March 2009, On
made but not provided for) SGD 0.16 J¥ 325.00
Accounting Standard AS 11.
INR 2.99
a) Losses arising from the effect of changes in foreign exchange rates on foreign currency loans relating to
Borrowings 42,978.04 $ 84.35 32,221.17 $ 80.92
acquisition of depreciable capital assets, amounting to Rs. 21,832.90 Lacs for the year ended March 31, 2009,
are added to the cost of such assets. Consequent to the change, the depreciation for the year is higher by Rs.
827.03 Lacs and the profit for the year and reserves are higher by Rs. 21,000.62Lacs The corresponding foreign 15. Previous years figures have been regrouped / rearranged wherever necessary.
exchange gains of Rs. 4,991.38 Lacs (net of depreciation of Rs 295.37 Lacs) for the year ended March 31, 2008,
For and on behalf of the Board
have been reversed from the General Reserve and deducted from the cost of such assets.
H. K. Mittal A. J. Agarwal
b) Losses arising from the effect of change in foreign exchange rates on foreign currency loan not relating to Executive Chairman Managing Director
acquisition of depreciable capital assets amounting to Rs.144.12Lacs for FY 2008-09 and gain of Rs.90.97 Lacs for
the 2007-08, are transferred to Foreign Currency Monetary Item Translation Difference Account. In line with the Anil Khanna M. G. Ramkrishna
policy referred to in point no 12. (b) (ii) above, Rs. 81.95 Lacs has been amortised during the year. Consequent to Director Director
the change, profit for the year is lower by Rs. 28.80 Lacs.

Dated: 19th May 2009

114 115
25 Years Reflecting Excellence
 Annual Report 2008-2009

68,258
70,000 64,519
213,360
65,000
220,000

200,000 60,000

180,000 55,000
145,487
160,000 50,000
Income From Operations

Rs. In Lacs
140,000 45,000
Rs. In Lacs

112,276
120,000 40,000

35,000
Cash Profit
100,000 82,625 29,170

30,000 23,874
80,000

60,000 56,066 25,000 20,229

40,000 20,000
08-09
20,000 07-08 15,000
06-07
05-06 EAR 10,000
04-05 NC IAL Y 08-09
FINA 07-08
5,000
06-07
05-06
R
04-05 L YEA
NCIA
FINA

639,123
660,000

620,000

560,000

520,000
50,000
37,648
480,000
45,000 37,044
440,000
40,000

Rs. In Lacs
400,000
Net Profit 35,000 359,298
380,000
Fixed Assets
Rs. In Lacs

30,000 360,000
320,000
25,000 19,803
280,000
13,493 199,032
20,000 17,444 240,000
15,000 200,000 147,831
10,000 08-09 160,000
87,316
07-08 120,000
5,000
06-07
80,000 08-09
05-06
YEAR 07-08
04-05
N CIAL 40,000
06-07
FINA
05-06
04-05
YEAR
N CIAL
FINA

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25 Years Reflecting Excellence
 Annual Report 2008-2009

FINANCIAL PERFORMANCE RATIO

228,606
Year 04-05 05-06 06-07 07-08 08-09
240,000
Operational Profit Turnover (%) 39.54 43.30 28.26 45.41 41.08
220,000
Net Profit/Total Turnover (%) 30.94 23.48 11.81 25.19 12.48
200,000
162,068 RONW (PAT/Shareholders fund (%) 50.80 36.1 21.46 24.70 23.46
180,000

160,000
Balance Sheet Ratio
140,000 Net Worth
Year 04-05 05-06 06-07 07-08 08-09
Rs. In Lacs

120,000

100,000 62,836 Debt Equity Ratio (Net) 1.53 2.02 2.18 1.01 1.57
80,000 54,097 Current Ratio 1.83 7.04 3.85 3.02 3.06
60,000
34,336
40,000
08-09
20,000 07-08
06-07
0 05-06 R
04-05 L YEA 2,303,122
NCIA Owned
FINA

178,103
Chartered 2,340,838
3,000,000
2,029,908 Tonnage

684,174
1,982,642

660,021
2,000,000

644,021

2,125,019
DWT IN MT
1,031,400

1,656,664
96.87 1,000,000

1,369,887
1,338,621
100.00
500,000
08-09
90.00 07-08
69.00 06-07
Basic Earning (RS.)
80.00 05-06
04-05
EAR
Cash Earning (Rs.) NC IAL Y
70.00 FINA

60.00 Book Value (Rs.)

27.34 COMPOSITION OF FLEET- AS AT 31-03-09

Rupees

50.00 32.20 29.06

15.96
40.00
26.21 14.45 Dredgers
12.62 Kamsarmax
Per Share Data 30.00
15.41 11%
1% Very Large Crude Carrier
16.60 26%
6.04 08-09
20.00 10.42 Chemical Tanker
11.13
07-08 1%
9.75
10.00 06-07
05-06 R
0.00 L YEA
NCIA Panamax
04-05 FINA 29% Suezmax Tanker
6%

MR Tanker
Aframax Tankers
4% 22%

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25 Years Reflecting Excellence
 Annual Report 2008-2009

Notes:

AUDIT COMMITTEE
Anil Khanna Chairman
Manohar Bidaye Member
M. G. Ramkrishna Member

SHAREHOLDERS’ GRIEVANCE COMMITTEE

Manohar Bidaye Chairman
Anil Khanna Member
Atul J. Agarwal Member

REMUNERATION CUM SELECTION COMMITTEE

Manohar Bidaye Chairman
Anil Khanna Member
M. G. Ramkrishna Member

EXPANSION COMMITTEE REGISTERED OFFICE

H. K. Mittal Chairman 3rd Floor, Mittal Tower, B-Wing,
Atul J. Agarwal Member Nariman Point, Mumbai - 400 021
Anil Khanna Member Tel: +91-22-66373333
K. R. Bharat Member Fax: +91-22-66373344
Website: www.mercator.in
Email: mercator@mercator.in
AUDITORS
M/s. Contractor, Nayak & Kishnadwala
REGISTRAR & TRANSFER AGENTS
Link Intime India Pvt. Ltd.
BANKERS C-13, Pannalal Silk Mills Compound,
State Bank of India, ICICI Bank, Axis Bank, HDFC Bank LBS Road, Bhandup West,
Mumbai - 400078.
DEBENTURE AND SECURITY TRUSTEES Tel: 022-25963838
Axis Bank Limited Fax: 022 25946969
Unit Trust of India Investment & Advisory Services Ltd. Email: helpline@linkintime.co.in

120
25 Years Reflecting Excellence