Mercantile Shipping : Annual Report 2021/2022

MERCANTILE SHIPPING COMPANY PLC

	MERCANTILE SHIPPING COMPANY PLC	1
	Annual Report 2021/2022

CONTENTS

02

Statutory Status

03

Notice of Annual General Meeting

04

The Chairman's Review

05

Management

Discussion and Analysis

06

Annual Report of the Board of Directors On the Affairs of the Company

09

Directors' Profiles

11

Corporate Governance

19

Independent Auditor's Report

22

Statement of Profit or Loss and Other Comprehensive Income

23

Statement of Financial Position

24

Statement of Changes in Equity

25

Statement of Cash Flows

26

Notes to the Financial Statements

56

Shareholders Information

58

Five Year Summary

59

Supplementary Notice to Shareholders

Propelled by Passion

2	MERCANTILE SHIPPING COMPANY PLC
	Annual Report 2021/2022

Statutory Status

COMPANY NAME

Mercantile Shipping Company PLC

LEGAL FORM

Quoted Public Company with Limited Liability, Incorporated on the 17th of March 1981

Registered No. PQ 148

BOARD OF DIRECTORS

H A R K Wickramatileka (Chairman)

T Kriwat (Managing Director and Alternate Director to Capt K Kriwat) Capt K Kriwat

(Mrs) C D A Peiris Capt R E G Codipilly M S P Gunawardena P A Nandasena

W S Weeraman

(Mrs) Y S Wettasinghe

C C Wickramatileka

CORPORATE SECRETARIES

Managers & Secretaries (Pvt) Ltd

BANKERS

Commercial Bank of Ceylon PLC

AUDITORS

Ernst & Young (Chartered Accountants)

LAWYERS

Asian Legal Partners

(Attorneys-at-Law & Notaries Public)

REGISTERED OFFICE

108, Aluthmawatha Road Colombo 15, Sri Lanka Tel: [phone] Fax: [phone]

E-mail: [e-mail]

Web: www.mercmarine.net

Propelled by Passion

MERCANTILE SHIPPING COMPANY PLC	3
Annual Report 2021/2022

Annual General Meeting

NOTICE OF MEETING

Notice is hereby given that the 41st Annual General Meeting of Mercantile Shipping Company PLC will be held on 28th September 2022 at 2.30 p.m. via zoom Audio/Video at the Registered Office of the Company, Mercantile Shipping Company PLC No.108, Aluthmawatha Road, Colombo 15 for the following purposes:

Agenda

1. To receive and consider the Annual Report of the
   Board of Directors on the affairs of the Company for the year ended 31st March 2022 and the Report of the Auditors thereon.
2. To re-elect Mr. C C Wickramatileka who retires by rotation in terms of Article No. 86 of the Articles of Association of the Company.
3. To re-appoint following Directors, to the Board in terms of Section 211 of the Companies Act No.07 of 2007;

1. Captain K Kriwat retires and being eligible offers himself for re-appointment. Accordingly, the following resolution to be passed for this purpose, if thought fit.

IT IS HEREBY RESOLVED:

that Captain K Kriwat, who has reached the age of 82 being eligible offers himself for re-appointment as a Director in terms of Section 211 of the Companies Act No. 7 of 2007 and it is specially declared that the age limit referred to in Section 210 of the Companies Act No. 7 of 2007 shall not apply to the said Captain K Kriwat.

1. Mrs. C D A Peiris who will be retiring during the year and being eligible offers herself for re-appointment.
   Accordingly, the following resolution to be passed for this purpose, if thought fit.

IT IS HEREBY RESOLVED:

that Mrs. C D A Peiris, who would reach the age of 70 during the year, being eligible offers herself for reappointment as a Director in terms of Section 211 of the Companies Act No. 7 of 2007 and it is specially declared that the age limit referred to in Section 210 of the Companies Act No. 7 of 2007 shall not apply to the said Mrs. C.D.A. Peiris.

1. Mr. M S P Gunawardena retires and being eligible offers himself for re-appointment. Accordingly, the following resolution to be passed for this purpose, if thought fit.

IT IS HEREBY RESOLVED:

that Mr. M S P Gunawardena, who has reached the age of 71 being eligible offers himself for re-appointment as a Director in terms of Section 211 of the Companies Act No. 7 of 2007 and it is specially declared that the age limit referred to in Section 210 of the Companies Act No. 7 of 2007 shall not apply to the said Mr. M S P Gunawardena.

1. Mr. P A Nandasena retires and being eligible offers himself for re-appointment. Accordingly, the following resolution to be passed for this purpose, if thought fit.

IT IS HEREBY RESOLVED:

that Mr. P A Nandasena, who has reached the age of 71 as a Director in terms of Section 211 of the Companies Act No. 7 of 2007 be and hereby is re-appointed and it is specially declared that the age limit referred to in Section 210 of the Companies Act No. 7 of 2007 shall not apply to the said Mr. P A Nandasena.

1. To re-appoint the Auditors Messrs Ernst & Young and to authorize the Board of Directors to determine their remuneration.
2. To authorise Directors to determine contribution to Charities.
3. To consider any other business of which due notice has been given.

Board

Managers & Secretaries (Private) Limited

Corporate Secretaries

Colombo

26th August 2022

Note:

1. A member entitled to attend and vote at the above meeting is required to complete and submit a pre- registration form in order to ensure participation at the AGM of the Company. A Pre- registration form is enclosed for this purpose to be completed by Mercantile Shipping Company PLC Shareholders only.
2. A member entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and vote in his/her behalf. A proxy need not be a member of the Company. A form of proxy is enclosed for this purpose.
3. Only members of Mercantile Shipping Company PLC are entitled to take part at the AGM of Mercantile Shipping Company PLC.
4. The instruments for Pre-registration and appointing a proxy must be completed and deposited at the
   Registered Office of the Company Secretaries,
   Managers & Secretaries (Private) Limited, No.8, Tickell Road, Colombo 08 or e-mailed to [e-mail] not less than forty-eight hours prior to the time appointed for holding the meeting.

Propelled by Passion

4	MERCANTILE SHIPPING COMPANY PLC
	Annual Report 2021/2022

The Chairman's Review - 2021/2022

I warmly welcome you all to the 41st Annual General Meeting of the Company.

We have passed yet another year of coping with COVID, over which some control has been regained thankfully.

The last year has been, all the more significant with a crash in the economic system and the political system of the country. The fuel crisis and food shortages have a rippling effect on all sectors. Future business opportunities seem bleak at the moment.

The closure of Mercantile Emerald Shipping (Pvt) Ltd, the 100% owned subsidiary of the Company is still in progress due to the delays in the tax clearance from the Department of Inland Revenue. The situation has contributed to this and Government departments along with private companies have limited working hours.

Mercantile Global Shipping Ltd which ceased operations many years ago continues to be reflected since it still awaits the refund of WHT from the Department of Inland Revenue.

The Company as intimated previously no longer receives any income from shipping operations due to the sale of the ships.

Until the economic situation and political situation hopefully reaches stability, we are not able to see a way forward, regarding future business. Hence, we are compelled to maintain the investment properties in their current status.

Mercantile Shipping Company PLC continues to receive a stable flow of income from rent which was sufficient to meet the basic needs for its current operation. However, one investment property is currently vacant as the lease reached its completion in July this year. We are hopeful to sign up a fresh lease and expect that the current economic conditions will not hinder its progress.

The current status of the insurance claim receivable on the vessel Mercs Hendela for INR 58,153,461 is now at the Appeal Court of Madras. We understand this may take a few more years before it is finalized.

The Company has accounted for a net loss before tax of approximately Rs. 5 Mn for the year 2021/2022.

I wish to express my sincere thanks to the staff and management who continue to patiently do their part under trying conditions.

I would like to conclude by thanking my fellow Board Members for their unstinted support as always, throughout this very difficult year.

I also wish to thank the Shareholders, for their continuing patience. We kindly request your continued support as we are called to face more challenges in the prevailing economic conditions.

Furthermore, I extend my sincere appreciation to all other stakeholders, for their commitment and support to the Company.

H A R K Wickramatileka

Chairman

Colombo

26th August 2022

Propelled by Passion