Corporate Governance

Report on Corporate Governance

(Forming part of Directors’ report for the year ended on March 31, 2016)

 COMPANY’S PHILOSOPHY: The Company strongly believes in ethical way of conducting business and in maintaining the highest standards of corporate governance. Corporate Governance as practiced at all levels of the Company is not restricted only to the Board of Directors. The Company upholds its relationship with the society and its social responsibility for environmental safety and human welfare.

Corporate governance to the company is not just a compliance issue but central guiding principle for everything it does. It’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 following report on the implementation of the Corporate Governance Code is a sincere effort of the Company to follow the Corporate Governance Principles in its letter and spirit.

 

I.  BOARD OF DIRECTORS:

As at the year end March 31, 2016, the Board of Directors of the Company comprised of Six Directors; Two Executive Directors and Four Non-Executive Directors, out of which Three are Independent Directors and One is Women Director. Among the Two Executive Directors; One is the Executive Chairman and the other is Managing Director. The Company is in compliance with the requirement of at least half of the Board comprising of Independent Directors as the Chairman of the Board is an Executive Director and a Promoter. There is no Nominee Director on the Board of the Company. The Company has issued letter of appointment to all the Independent Directors as per Schedule IV to the Companies Act, 2013 and the terms and conditions of their appointment have been disclosed on its website.

http://mercator.in/investors/index.aspx?id=7055

 

Changes in Board Composition during the year:

During the year, Mr. Shalabh Mittal and Mr. Manohar Bidaye resigned from the office of Directors of the Company.

 

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/she is Director; and necessary disclosures to this effect has been received by the Company from all the Directors.

 

During the year, in all Nine Board Meetings were held i.e. on April 10, 2015, May 29, 2015,  August 5, 2015, September 23, 2015, November 7, 2015, December 14, 2015, January 18, 2016, February 11, 2016 and March 29, 2016. The time interval between any two consecutive meetings was not more than 120 days.

 

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 are given below:

Sr.

No

Name of
Director & DIN

Category

No. of Board Meetings

Attended

Attendance at last AGM

No. of other Directorships in Indian
Public
Companies*

No. of
committee
membership
in other
Companies**

No. of
committee
Chairmanship in other
Companies**

1

Mr. H. K. Mittal

(00007690)

Executive Chairman & Promoter

8

 Yes

4

0

0

2

Mr. A. J. Agarwal

(00007663)

Managing Director,

Executive-Promoter

9

Yes

2

2

2

3

Mr. Manohar Bidaye

(00010699)

(upto 30.03.2016)

Non-Executive Independent

9

Yes

2

3

2

4

Mr. K. R. Bharat

(00584367)

Non-Executive Independent

8

Yes

1

0

0

6

Mr. M. M. Agrawal

(00681433)

Non-Executive Independent

9

Yes

6

5

0

7

Mr. Gunender Kapur

(01927304)

Non-Executive Independent

6

Yes

0

0

0

8

Mr. Shalabh Mittal

(00007919)

(upto 24.12.2015)

Non-Executive Non Independent

3

No

0

0

0

9

Mrs. Archana Mittal

(00007972)

Non-Executive Non Independent

8

Yes

2

0

0

 

*Other directorships does not include One Person Company, Private Companies, Companies registered u/s 8 of the Companies Act, 2013, Alternate directorships and foreign Companies.

 

**In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations,  2015, Memberships / Chairmanships of only the Audit Committees and Stakeholders’ Relationship Committees of all Public Limited Companies have been considered.

 

All the information required to be furnished to the Board as mentioned under the SEBI (Listing Obligations and Disclosure Requirements) Regulations,  2015 (Listing Regulations) was placed before the Board.

 

Your Company’s Board plays an important role in ensuring good governance and functioning of the Company. The Board consists of professionals from diverse fields who have vast experience in their respective areas. The Board’s role, functions, responsibility are clearly defined. Members of the Board have complete freedom to express their views on agenda items and can discuss any matter at the meeting with the permission of the Chairman. The Board reviews periodical compliance reports of all laws applicable to the Company, presented by Chief Executive Officer or Managing Director at the meeting.

 

Independent Directors’ Meeting:

During the year, a separate meeting of the Independent Directors was held on March 29, 2016, without the attendance of non-independent Directors and members of the management. All Independent Directors were present at the meeting.

 

Familiarisation Programme:

The Company has a familiarisation programme for Independent Directors to keep them familiarised and updated about the business and the operations of the Company and the same is available on the website of the Company.

http://mercator.in/investors/index.aspx?id=7055

 

Code of Conduct:

The Board has laid down a Code of Conduct for all Board Members and Senior Management Personnel of the Company, which has been posted on the website of the Company.

http://mercator.in/investors/index.aspx?id=7055

 

All Board Members and Senior Management Personnel have affirmed compliance with the code for the year ended on March 31, 2016. Declaration to this effect signed by the Chief Executive Officer for the year ended on March 31, 2016 has been included elsewhere in this annual report.

 

II. AUDIT COMMITTEE:

 

Composition:

Pursuant to the provisions of Section 177 of the Companies Act, 2013 read with relevant rules and the Listing Regulations, the Company has a qualified and Independent Audit Committee.   Upto March 30, 2016; the Audit Committee members comprised of Mr. Manohar Bidaye (Chairman) Mr. K.R. Bharat (Member); and Mr. H.K. Mittal (Member). Subsequent upon resignation by Mr. Manohar Bidaye with effect from March 31, 2016 the Board of Directors reconstituted the Audit Committee by appointing Mr. M. M. Agrawal as member/Chairman of the Committee. As at March 31, 2016, the Committee comprised of two Independent Non-Executive Directors and one Executive Promoter Director. Mr. M. M. Agrawal, Bachelor of Engineering having vast experience in Banking and Finance Industry is the Chairman of the Committee; other members being Mr. K. R. Bharat, MBA from Indian Institute of Management; and Mr. H. K. Mittal, Master from Indian Institute of Technology-Roorkee, Executive Chairman of the Company, all having a sound accounting knowledge. Subsequent to the year end; on May 12, 2016, Mr. Gunender Kapur, Mechanical Engineer (BITS-Pilani) and an MBA from FMS Delhi University; has been co-opted on the Audit Committee. Group Chief Financial Officer; Chief Financial Officer as well as General Manager (Finance & Accounts) along with the Internal Auditors and Statutory Auditors are invitees to the Audit Committee Meetings. All other Functional Heads/Managers are invited to attend the meeting, as and when necessary. The Committee is vested, inter alia, with following powers and terms of references as prescribed under relevant provisions of the Companies Act, including the rules made there under, and Listing Regulations.

 

Mr. Manohar Bidaye, then Chairman of the Committee was present at the 31st Annual General Meeting to reply to the queries of the Shareholders.

      

The Audit committee is vested with following Powers:

a)  To investigate any activity within its terms of reference.

b)  To seek information from any employee.

c)  To obtain outside legal or other professional advice.

d)  To secure attendance of outsiders with relevant expertise, if it considers necessary.

 

Terms of Reference:

The Audit Committee reviews the reports of the Internal Auditors and the Statutory Auditors periodically and discusses their findings and suggests 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. Recommendation for appointment, remuneration and terms of appointment of auditors of the company;

 

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 and auditor’s report thereon before submission to the board for approval, with particular reference to:

       (a) Matters required to be included in the Director’s Responsibility Statement to be    included           in the Board’s Report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013.

       (b) Changes, if any, in accounting policies and practices and reasons for the same.

       (c) Major accounting entries involving estimates based on the exercise of judgment by the        management.

       (d) Significant adjustments made in the financial statements arising out of the audit    findings.           (e) Compliance with listing and other legal requirements relating to financial statements.

       (f) Disclosure of any related party transactions.

       (g) Modified Opinions in the draft audit report.

 

5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval.

 

6. 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 utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;

 

7. Review and monitor the auditor’s independence and performance, and effectiveness of audit process;

 

8. Approval or any subsequent modification of transactions of the company with related parties;

 

9. Scrutiny of inter-corporate loans and investments;

 

10. Valuation of undertakings or assets of the company, wherever it is necessary;

 

11. Evaluation of internal financial controls and risk management systems;

 

12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

 

13. 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;

 

14. Discussion with internal auditors of any significant findings and follow up there on;

 

15. 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;

 

16. 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;

 

17. 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;

 

18. To review the functioning of the Whistle Blower Mechanism;

 

19. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;

 

20. Such other functions / powers as may be assigned / referred to the Committee by Board from time to time.

      

The minutes of the Audit Committee meeting are always presented to the Board for its discussion and taking on record.

 

Meetings:

During the year, in all 6 meetings of the Audit Committee were held i.e. on April 10 2015, May 29, 2015, August 5, 2015, November 7, 2015, December 14, 2015 and February 11, 2016. The time intervals between two meetings of the Committee were not more than 120 days.

 

Attendance of each member at the Audit Committee Meetings:

Name of Director

No. of Meetings attended out of Six held

Mr. Manohar Bidaye (upto 30.03.2016)

6

Mr. K. R. Bharat

6

Mr. H. K. Mittal

6

Mr.  M. M. Agrawal (w.e.f. 31.03.2016)

NA

 

Statutory Auditors / Internal Auditors, Chief Financial Officer and Other functional heads attended the meetings as and when called for. The Company Secretary acted as the Secretary to the Committee.

 

Review of Information:

The Audit Committee was presented with necessary information from time to time for its review as required under the Listing Regulations and section 177 of the Companies Act, 2013.

 

There was no instance of management letter/letter of internal control weaknesses issued by the Statutory Auditors during the financial year 2015-16.

 

III.      NOMINATION AND REMUNERATION COMMITTEE:-

Composition:

Upto March 30, 2016; the Nomination and Remuneration Committee members comprised of Mr. Manohar Bidaye (Chairman) Mr. M.M. Agrawal (Member); Mr. K. R. Bharat (Member)  and Mr. H. K. Mittal (Member). Subsequent upon resignation by Mr. Manohar Bidaye with effect from March 31, 2016; the Board of Directors reconstituted the Nomination and Remuneration Committee by appointing Mrs. Archana Mittal as Member; and Mr. K R Bharat as Chairman of the Committee. As at March 31, 2016, the Committee comprised of two Non-Executive Independent Director, one Non-Executive Director and one Executive Director. Mr. K. R. Bharat is the Chairman of the Committee with Mr. M. M. Agrawal, Mr. H. K. Mittal and Mrs. Archana Mittal being other members. Subsequent to the year end; on May 25, 2016, Mr. Gunender Kapur, Mechanical Engineer (BITS-Pilani) and an MBA from FMS Delhi University; has been co-opted on the Committee.

 

Mr. Manohar Bidaye, then Chairman of the Committee was present at the 31st Annual General Meeting to reply to the queries of the Shareholders.

 

The Company has framed necessary mandate and working procedures of the committee as required under Section 178 of Companies Act, 2013 and Listing Regulations defining thereunder the Role, Membership, Meeting Procedures etc.

 

    

Terms of Reference:

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations the role of the Nomination and Remuneration Committee includes the following:

 

1.  Formulation of criteria for determining qualifications, positive attributes and independence of a director;

 

2.  Identification of persons who are qualified to become Directors and who may be appointed in senior management; recommend to the Board their appointment and removal;

 

3.  Formulation of criteria for evaluation of Independent Directors and the Board of Directors;

 

4.  Formulation of Remuneration policy and recommend the same to the Board, relating to the remuneration for the directors, key managerial personnel and other employees ensuring the following:

(a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

(b) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(c) Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals;

    

     5.    Devising a policy on Board diversity;

    

     6.    Such other functions / powers as may be assigned / referred to the Committee by Board from           time to time.

 

Remuneration Policy:

Pursuant to the Provisions of Section 178 of the Companies Act, 2013, the Company has adopted and implemented Remuneration Policy to recommend to the Board matters relating to the remuneration for the Directors, Key Managerial Personnel and other employees. The objective of this Policy is directed towards having a compensation philosophy and structure that will reward and retain talent.

 

The Committee, on behalf of the Board and the shareholders, determines, with agreed terms of reference, the Company’s policy on specific remuneration packages for Executive Directors, Key Managerial Personnel and Senior Management Personnel including pension rights and any compensation payment.

 

 

Performance Evaluation:

The Nomination and Remuneration Committee had laid down the criteria for performance evaluation of Independent Directors and other Directors, Board of Directors and Committees of the Board of Directors. The assessment was carried on the basis of following criteria

 

1.  Valuable Input Provided;

2.  Dedication and Commitment;

3.  Industry Knowledge;

4.  Overall contribution; and

5.  Compliances under Companies Act

 

Meetings:

During the year, in all 3 meetings of the Nomination and Remuneration Committee were held i.e. on May 29, 2015, December 14, 2015 and March 29, 2016 and necessary quorum was present at the meeting.

 

Attendance of each member at the Nomination and Remuneration Committee Meetings:

Name of Director

No. of Meetings attended out of Three held

Mr. Manohar Bidaye (upto 30.03.2016)

3

Mr. M.M. Agrawal

3

Mr. K. R. Bharat

3

Mr. H. K. Mittal

2

Mrs. Archana Mittal (w.e.f. 31.03.2016)

NA

 

IV. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Board of Directors through Circular Resolution dated April 1 2016, reconstituted the Stakeholders Relationship Committee and appointed Mrs. Archana Mittal as Member and Mr. K R Bharat as Chairman of the Committee in place of Mr. Manohar Bidaye w.e.f March 31, 2016. The Committee comprises of one Executive Director and two Non-executive Directors to look after share transfer and other related matters, including the shareholders’ grievances. Mr. K R Bharat, is the Chairman of the Committee with the other members being, Mr. Atul .J. Agarwal and Mrs. Archana Mittal. The Committee normally meets fortnightly. The terms of reference of the Committee are as under:

 

1.      To approve or deal with applications for transfer/transmission; dematerialisation/ rematerialisation of shares, issue of duplicate / split / sub-division / consolidation of certificates and to deal with all related matters.

 

2.  To look into and redress shareholders / investors grievances relating to:

(a) Transfer of shares;

(b) Non-receipt of declared dividends;

(c) Non-receipt of annual reports;

(d) All such complaints directly concerning the shareholders / investors as stakeholders of the Company; and

(e) Any such matters that may be considered necessary in relation to shareholders and investors of the Company.

 

24 Meetings of the Committee were held during the year. All the members attended all the meetings.

 

Mr. Deepesh Joishar (w.e.f. May 4, 2015) and Mr. Deepak Dalvi- Assistant General Manager – Secretarial acted as Compliance Officers.

 

During the year, the Company received 25 complaints from the shareholders all of which were duly resolved. No complaint was pending as on March 31, 2016.

 

Further, during the year requests for Transfer of 7,500 shares; Transmission of 17,500 shares and Demat of 74,000 shares were received.

 

V.   CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

The Corporate Social Responsibility Committee of the Company comprising of three Directors. Mr. H. K. Mittal is the Chairman of the Committee with Mr. K. R. Bharat and Mr. M. M. Agrawal being other members.

 

The Company has framed the CSR Policy in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Committee is authorized to plan, approve the operational procedures and supervise / monitor implementation of CSR policy. During the year, the Committee met on March 29, 2016, except Mr. H. K. Mittal all other members of the Committee attended the meeting.

 

VI. RISK MANAGEMENT COMMITTEE:

As at March 31, 2016, the Risk Management Committee comprises of Mr. Atul. J. Agarwal, Managing Director, who is the Chairman of the Committee and other members being Mr. M. M. Agrawal, Mr. K. R. Bharat, the Independent Directors, Capt. Kowshik Kuchroo, President Shipping and Mr. Kishor Shah, Group Chief Financial Officer of the Company. The Company has laid down the procedure to inform Board members about risk assessment and minimization procedures. The Board periodically monitors the risk management plan.

 

VII. ESOP COMPENSATION COMMITTEE:

During the year, the Board of Directors dissolved the ESOP Compensation Committee of Directors.

 

VIII. SUBSIDIARY COMPANIES:

As at March 31, 2016; the Company had total 36 subsidiaries. The Indian Subsidiaries viz. Mercator Oil and Gas Limited, Mercator Petroleum Limited, Oorja Resources India Private Limited and Mercator FPSO Private Limited were neither listed nor material as at March 31, 2016.

 

MCS  Holdings Pte. Ltd. and Oorja Indo KGS PT are material non-listed foreign subsidiaries of the Company.

 

During the year, the Company has not disposed any shares that reduces shareholding to less than 50% or ceases the exercise of control over any of these subsidiaries other than that of step down subsidiary Mercator Lines Singapore Ltd. (MLS) as approved by the shareholders vide special resolution passed by postal ballot on March 18, 2016. Further the Company has not sold, disposed or lease the assets amounting to more than twenty percent of the assets of these subsidiaries.

 

The Audit Committee reviews the financial statements including investments, of all the subsidiary companies from time to time.

 

The Minutes / resolutions of the Board Meetings of all the subsidiary companies (including step down subsidiary companies) are placed before the Board periodically for noting and taking on record.

 

The Board periodically reviews a statement of all significant transactions, if any, entered into by any of the subsidiary companies.

The Company has formulated a policy for determining “Material Subsidiaries”, and the same is available on the website of the Company.

http://mercator.in/investors/index.aspx?id=7055

 

IX. DISCLOSURES:

A.  Basis of related party transactions:

i.     A statement in summary form of transactions with related parties in the ordinary course of business is placed periodically before the Audit Committee.

ii.    At the beginning of every financial year, proposal for omnibus approval is placed before the Audit Committee for related party transactions with necessary details in compliance with relevant provisions of the Listing Regulations. All related party transactions were within prescribed limit and as per the Related Party Transaction Policy of the Company.

iii.   Details of material individual transaction with related parties are placed before the Audit Committee, whenever applicable.

iv.   During the year, there was no material individual transaction with related parties or others that was not in ordinary course of business or not on an arm’s length basis.

 

B.   Disclosure of Accounting Treatment:

In the preparation of Financial Statements for the year ended on March 31, 2016; there was no treatment different from that prescribed in an Accounting Standard and applicable Laws and Regulations that had been followed.

 

C.   Proceeds from public issues, rights issues, preferential issues etc.

During the year, the Company did not raise any funds through public / rights / preferential issues.

 

D.  Remuneration of Directors:

The Nomination and Remuneration Committee recommends the Remuneration of Directors, which is approved by the Board of Directors, subject to the approval of shareholders, where necessary.

 

Details of remuneration paid to Directors for the financial year ended March 31, 2016:

 

       Executive Directors:                                                                             Amount Rs. in lakhs

Name

Salary

Bonus

Stock options

Perquisites

Commission

Total

Mr. H. K. Mittal

Executive Chairman

52.94

--

--

13.06

23.00

89.00

Mr. A. J. Agarwal

Managing Director

62.76

--

--

3.24

23.00

89.00

 

The remuneration to the Executive Directors is governed by the agreements executed with them as approved by the members of the Company in their General Meeting held on September 19, 2013. As per the agreement, salary and perquisites are a fixed component and the commission is based on the performance of the Company, i.e. on the net profit of the year. However, the aggregate remuneration shall not exceed 5% of net profit calculated as per the provisions of the Companies Act, 2013; per Executive Director with payment of minimum remuneration to them in case of loss or inadequacy of profit in any financial year during the tenure, subject however, to the ceiling prescribed under Companies Act, 2013; and approval of the Central Government, if required. The present terms and conditions of appointment agreements of both Executive Directors will expire on July 31, 2016.

 

The tenure of office of the Executive Chairman and Managing Director is for three years from their respective dates of appointments, and can be terminated by either party by giving 6 months’ notice in writing. Before the expiration of the tenure of office of Executive Chairman and Managing Director are entitled by way of compensation for the loss of office, the amount equivalent to the remuneration which they would have earned if they have been in the office for the unexpired residue of their term or for three years whichever is shorter, calculated on the basis of average remuneration actually earned by them during the period of three years immediately preceding the date on which they ceased to hold office or where they held the office for a lesser period than three years, during such period.

 

No stock options were issued to any of the Executive Directors during the year

 

Non-executive Directors:

The Board decides the payment of commission within the limits approved by members of the Company in their Annual General Meeting not exceeding 1% of its net profit to Non-executive Directors. During the year no commission was paid to the non-executive Directors of the Company.

 

Remuneration by way of sitting fees for attending Board meetings, Audit Committee and other Committee meetings are paid to Non-executive Directors Rs. 50,000/- per such meeting attended by them.

 

Details of sitting fees paid to Non-Executive Directors are as follows:

Name of the Director

Rs. in lakhs

Mr. Manohar Bidaye (upto 30/03/2016)

9.50

Mr. K.R. Bharat

9.50

Mr. M. M Agrawal

7.00

Mr. Gunender Kapur

3.50

Mr. Shalabh Mittal (upto. 24/12/2015)

1.50

Mrs. Archana Mittal

4.00

 

All the Non-Executive Directors have disclosed their shareholdings as at March 31, 2016 to the Company which is as under:

Name of the Director

No. of equity shares held

% of total share capital

Mr. K.R.Bharat

NIL

NIL

Mr. M. M Agrawal

NIL

NIL

Mr. Gunender Kapur

NIL

NIL

Mrs. Archana Mittal

2,63,27,400

10.75

 

No convertible instrument was held by any of the above Non-executive Directors.

 

The Company did not have any pecuniary relationship or transaction with any of the Non-Executive Directors.

 

No stock options were issued to the Non-Executive Directors during the year

 

E.   Management:

A Management Discussion and Analysis Report forming part of this Directors’ Report is attached herewith and forms part of this Report.

 

Based on the disclosures received from the Senior Management Personnel, during the year, there was no material financial and commercial transaction by any of the Senior Management Personnel that may have a potential conflict with the interest of the Company at large.

 

F.   Shareholders:

Your Company recognizes rights of shareholders and protects and facilitates their rights and gives equitable treatment to all shareholders. Your Company practices and believes in sharing adequate and timely information with all the stakeholders of the Company.

 

i.    General Body Meetings:

Details of General Meetings held during last three years are given below:

Financial Year

Date

Time

Venue

Special Resolution(s)

2014-15

(AGM)

21/08/2015

3.00 P.M.

Rangaswar Hall,

4th Floor, Y. B. Chavan Centre, Gen. Jagannath Bhosale Marg,

Next to Sachivalaya Gymkhana,

Mumbai – 400 021

NIL

 

2013-14

(AGM)

24/09/2014

3.30 P.M.

Rangaswar Hall,

4th Floor, Y. B. Chavan Centre, Gen. Jagannath Bhosale Marg,

Next to Sachivalaya Gymkhana,

Mumbai – 400 021

1.   Appointment of Mr. Aayush Agarwal (Son of Mr. Atul Agarwal, Managing Director) to hold office or place of profit in Mercator Energy Pte Ltd. a subsidiary of the Company

2.   Authority to Board of Directors to issue of Non-convertible Debentures (NCDs) /Commercial paper (CPs) on private placement basis aggregating up to an amount not exceeding Rs. 500 crores.

3.   Approval for payment of Commission to Non-executive Directors up to 1% of annual Net profits of the Company.

2012-13

(AGM)

19/09/2013

3.30

P. M.

Rangaswar Hall,

4th Floor, Y. B. Chavan Centre, Gen. Jagannath Bhosale Marg,

Next to Sachivalaya Gymkhana,

Mumbai – 400 021

1.   Payment of Minimum Remuneration to & Re-Appointment of Executive Chairman, Mr. H. K. Mittal and Managing Director, Mr. Atul Agarwal

2.   Re-appointment of Mr. Adip Mittal, Relative of Director as Business Associate.

 

 

POSTAL BALLOT

During the year ended March 31, 2016 the Company completed process of one Postal Ballot as per provisions of Section 110 of the Companies Act, 2013, for approval of sale, transfer or dispose off of the entire investment in shares in Mercator Lines (Singapore) Ltd held through a wholly owned subsidiary company Mercator International Pte. Ltd.

 

The voting was conducted through physical mode as well as electronic mode. For conducting postal ballot in fair and transparent manner, Mr. Haresh Jani, Practicing Company Secretary was appointed as Scrutinizer to the Postal Ballot process. The said Special Resolution was passed with requisite majority.

 

Based on the Scrutinizer’s Report, the result of the Postal Ballot was as under:

Mode of Voting

 

No. of shares held

No. of votes
polled

 

No. of Votes – in favour

% of Votes in
favour on votes polled

No. of Votes – against

% of Votes against on votes polled

E-Voting

244892073

130444057

130365528

99.94

78529

0.06

Postal Ballot

621913

605267

97.32

16646

2.68

Total

244892073

131065970

130970795

99.93

95175

0.07

 

Detailed results were posted on website of the Company www.mercator.in.

 

 

ii.   Disclosures:

a)    During the year, the Company had no materially significant related party transaction, which is considered to have potential conflict with the interests of the Company at large and was not in ordinary course of business or not on an arm’s length basis. All related party transaction Transactions with related parties are disclosed in Note No. 4.5 of notes forming part of the Annual Accounts for the year under review. The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions and during the year there were no material transactions with related parties. The policy is also available on the website of the Company.

       http://mercator.in/investors/index.aspx?id=7055

 

b)    There were no instances of non-compliance and that no penalties or strictures were imposed on the Company by any Stock Exchange or SEBI or any statutory authority on any matter related to capital market during the past three years.

 

c)    The Company has formulated a Vigil Mechanism / Whistle Blower Policy and the same is available on the website of the Company.

       http://mercator.in/investors/index.aspx?id=7055

 

d)    Every employee and Director has access to the Audit Committee on any matter and is free to report any unethical behavior, improper practice and wrongful conduct taking place in the Company for taking appropriate action. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice. No person has been denied the access to the Audit Committee.

 

e)    During the year the Company has not entered into Commodity Hedging activities. For Commodity Price Risk refer to Management Discussion and Analysis Report.

 

iii.  Means of Communication:

Quarterly/yearly results are normally published in Hindu Business Line and Mumbai Lakshadweep. The audited annual accounts are posted/emailed to every member of the Company. Quarterly shareholding pattern and quarterly/yearly results submitted to the Stock Exchanges are posted on the website of the Company www.mercator.in. The Company also displays official news releases on its website i.e. www.mercator.in. The Company has created an email id investors@mercator.in to facilitate redressal of investors’/ shareholders’ grievances.

 

The presentations if any, made to institutional investors/analysts through personal meetings are also displayed on website of the Company and submitted to the Stock Exchanges simultaneously.

 

All price sensitive, material and relevant information from the shareholders’ / investors’ point of view are promptly informed to the stock exchanges.

 

iv.  Annual General Meeting:

Thirty Second Annual General Meeting is scheduled to be held on Saturday, July 30, 2016 at 3:00 pm at Rangaswar Hall, 4th Floor, Y. B. Chavan Center, Gen. Jagannath Bhosale Marg, Next to Sachivalaya Gymkhana, Mumbai – 400 021.

 

v.   Re-Appointment of Directors:

As per the provisions of Section 152(6) of the Companies Act, 2013, Mr. Atul Agarwal (DIN 00007663) is liable for retiring by Rotation at the forthcoming Annual General Meeting (AGM) of the Company.

 

Further, it is also proposed to re-appoint Mr. H.K. Mittal as Executive Chairman for a period of three years wef August 1, 2016; and appoint Mr. Atul Agarwal as Executive Vice Chairman for a period of two years wef from August 1, 2016, respectively, when their present terms are expiring. Their terms of appointment and remuneration have been approved by the Nomination and Remuneration Committee and the Board of Directors in their respective meetings held on May 27, 2016

 

Mr. H. K. Mittal and Mrs. Archana Mittal are related to each other and hence are interested in the proposed appointment of Mr. H. K. Mittal as Executive Chairman, to the extent of permitted payments and benefits which each of them may get in their capacity as Director of the Company.

 

Brief resume of Mr. H. K. Mittal and Mr. Atul Agarwal, whose re-appointment / appointment is to be considered at the ensuing Annual General Meeting alongwith their expertise in specific functional areas and names of the Companies in which they hold Directorship, Chairmanship and membership of committees of the Board, are provided in the Notice of the ensuing Annual General Meeting scheduled to be held on July 30, 2016.

 

vi.  Financial Calendar For The Year 2016-17 (tentative and subject to change):

First Quarter Results (June, 30)

Mid of August 2016

Mailing of Annual Reports

End of June, 2016

Annual General Meeting

July 30, 2016

Second Quarter Results (September, 30)

Mid of November, 2016

Third Quarter Results (December, 31)

Mid of February, 2017

Fourth Quarter/ Annual Results

May 2017.

 

vii. Dates of Book-Closure:

The Share Transfer Books and Register of Members of the Company will remain closed from Saturday, July 23, 2016 to Saturday, July 30, 2016 (both days inclusive) for determining the names of members eligible for dividend on Equity Shares if declared, at the ensuing Annual General Meeting.

 

viii. Dividend:

The Board of Directors has recommended Dividend on Equity Shares of the Company at the rate of 10% i.e. Rs. 0.10 per share on 24,48,92,073 Equity Shares of Rs. 1/- each for the financial year ended on March 31, 2016 amounting Rs. 2.95 cr (inclusive of Dividend Distribution Tax thereon amounting Rs. 0.50 cr). The Dividend if declared at the Annual General meeting; will be paid/dispatched on or after August 4, 2016.

 

ix.  Listing Of Shares, Non-Convertible Debentures:

The Equity Shares of the Company are listed on Bombay Stock Exchange (Scrip Code 526235); National Stock Exchange (Scrip Code MERCATOR) and the annual listing fees in respect of the year 2015-2016 have been paid to these exchanges.

 

The monthly high-low quotations of the equity shares of the Company on Bombay Stock Exchange and National Stock Exchange during the financial year 2015-16 vis-à-vis Sensex performance of Bombay Stock Exchange is given below:

Month

BSE Share Price

(Rs.)

NSE Share Price

(Rs.)

SENSEX

Performance

 

High

Low

 High

 Low

High

Low

April, 2015

20.25

16.45

20.25

16.25

29,094.61

26,897.54

May, 2015

18.30

16.00

18.25

16.05

28,071.16

26,423.99

June, 2015

19.90

14.55

19.85

15.70

27,968.75

26,307.07

July, 2015

24.35

18.05

24.30

17.20

28,578.33

27,416.39

August, 2015

25.40

17.80

25.40

17.60

28,417.59

25,298.42

September, 2015

24.30

19.95

24.30

17.10

26,471.82

24,833.54

October, 2015

25.70

22.00

25.75

22.05

27,618.14

26,168.71

November, 2015

29.45

22.50

29.40

22.50

26,824.30

25,451.42

December, 2015

31.45

24.45

31.40

24.50

26,256.42

24,867.73

January, 2016

30.45

19.75

30.35

19.70

26,197.27

23,839.76

February, 2016

23.70

15.90

23.60

16.00

25,002.32

22,494.61

March, 2016

22.90

19.50

22.90

19.60

25,479.62

23,133.18

 

The Redeemable Non-Convertible Debentures of the Company are listed on Bombay Stock Exchange (Scrip Code: 945945); and the annual listing fees in respect of the year 2016-2017 have been paid to the said exchange. As at March 31, 2016; the Company has following series of listed Redeemable Non-Convertible Debentures issued on private placement basis in dematerialized form:

 

Series No

No. of NCDs

Coupon rate

O/s. Face value
As on 31/03/2016

Outstanding Amount

ISIN

Scrip Code

IX-A

1500

12.40%

Rs. 10,00,000/- each

Rs. 150.00 crores

INE934B07207

945945

 

Annual Custody fee for the year 2016-17 will be paid by the Company to NSDL and CDSL on receipt of the invoices.

 

Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, Conversion Date and Likely Impact on Equity:

As on March 31, 2016; the Company has 160, 4.75% Foreign Currency Convertible Bonds (FCCBs) of USD 100,000 each aggregating to US $16,000,000 (US Dollar Sixteen Million) outstanding with an initial conversion price of Rs. 38.30 per share (with a fixed rate of exchange on conversion of Rs. 58.5740 per USD 1.00). The said FCCBs are listed on Singapore Stock Exchange. Tenure of FCCBs is 5 years i.e. up to May, 2019. Assuming all FCCB holders exercise their option to convert the Bonds into Equity, there would be increase in the paid-up capital of the Company by 2,44,69,556 shares.

 

x.   Registrar and Transfer Agents and Share Transfer System:

Link Intime India Private Limited having their office at C-13, Pannalal Silk Mills Compound, LBS Road, Bhandup (W), Mumbai - 400 078 (Tel No.91-22-25963838) are the Registrar and Transfer Agents (RTA) as also the Registrar for Electronic Connectivity. Entire functions of Share Registry, both for physical transfer and in de-mat form; as well as dematerialisation/ rematerialisation of shares, issue of duplicate / split / consolidation of Certificates along with registry function of Debentures is being carried out by the RTA at their above address.

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

 

xi.  Distribution of Shareholding as on March 31, 2016:

Shareholding of nominal value of

No. of Shareholders

% to total Shareholders

No. of Shares

% to total Capital

UPTO 500

63041

74.772

11175008

4.5632

501 - 1000

9480

11.2441

8014319

3.2726

1001 - 2000

5041

5.9791

7902436

3.2269

2001 - 3000

2502

2.9676

6457898

2.6370

3001 - 4000

817

0.969

2982208

1.2178

4001 - 5000

976

1.1576

4690994

1.9155

5001 - 10000

1279

1.517

9779596

3.9934

10001 AND ABOVE

1175

1.3936

193889614

79.1735

TOTAL

84,311

100.0000

24,48,92,073

100.0000

 

xii. Shareholding Pattern as on March 31, 2016:

Sr. No

Category

No. of Shares

% to Capital

No. of Holders

1

Promoters/Directors and their Relatives

9,85,96,566

40.26

 10

2

Mutual Funds / UTI

77,140

 0.03

 2

3

Banks; FIs etc.

16,70,576

0.68

 6

4

FIIs/FPIs

3,43,86,710

14.04

11

5

Private Corporate Bodies

2,21,85,436

9.06

852

6

Central Government/State Government

2,500

0.00

2

7

Indian Public

8,06,22,143

32.92

81,964

8

NRIs / OCBs

31,86,756

1.30

1,157

9

Non-promoter Independent Directors and their relatives

54,501

0.02

2

10

Clearing members

41,09,745

1.68

307

 

Total

24,48,92,073

100.00

84,313

 

xiii. Dematerialisation of Shares & Liquidity:

The equity shares of the Company are under compulsory trading in demat form. Out of total capital of 24,48,92,073 equity shares; 24,24,83,386 equity shares representing 99.02% were held in demat form and balance 24,08,687 equity shares representing 0.98% were in physical form as on March 31, 2016. The ISIN of the equity shares of the Company is INE934B01028.

 

The shares are actively traded on BSE and NSE and the turnover data during the financial year 2015-16; was as under:

Particulars

BSE

NSE

Total

No of shares

10,66,10,412

34,55,51,181

45,21,61,593

Value (Rs. In lacs)

25,082.01

81,358.25

1,06,440.26

 

X.   CEO/CFO CERTIFICATION:

The necessary certification from Chief Executive Officer/Chairman, Mr. H. K. Mittal and Group Chief Financial Officer, Mr. Kishor Shah in respect of the financial year ended on March 31, 2016 has been annexed to this report.

 

XI. COMPLIANCE:

The Company has complied with the provisions of the erstwhile Listing Agreement. Information, certificates and returns as required under erstwhile Listing Agreement are sent to the stock exchanges within the prescribed time.

 

The Company has complied with all the mandatory requirements of Corporate Governance of the Listing Regulations. The Company also endeavors to follow Non Mandatory requirements.

 

The Company has complied with corporate governance requirements specified in regulation 17 to 27 and clauses (b) to (i)of sub-regulation (2) of regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

 

A certificate from the Auditors of the Company regarding compliance of conditions of corporate governance is annexed to the Directors’ Report.

 

XII. PLANT LOCATIONS:

The Company does not have any plant.

 

Address for correspondence:

Mercator Limited

3rd Floor, Mittal Tower, B-wing,

Nariman Point, Mumbai - 400 021.

Tel Nos: 91-22-66373333

Fax Nos: 91-22-66373344

E-mail: mercator@mercator.in /investors@mercator.in