related_party_transactions — [table] transaction — NOTES TO THE FINANCIAL STATEMENTS Contd... Year ended 31 March 2012 22. COMMITMENTS AND CONTINGENCIES 22.1 Commitments During the year the Group did not have any commitments that require adjustments or disclosure in the Financial Statements. 22.2 Contingencies During the year the Group did not have any contingencies that require adjustments or disclosure in the Financial Statements. 23. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE Mercantile shipping Company PLC has entered into a joint venture agreement with Hemas Transportation Limited forming a new company namely H & M Shipping Services (Private) Limited subsequent to the balance sheet date. The new company will be involved in providing crew transport services for international carriers who travel via Sri Lanka’s Southern seas. The Company expects to invest Rs. 30 Million in this project. 24. ASSETS PLEDGED The following assets have been pledged as at the Balance Sheet Date. Company Nature of Nature of Liabilities and Carrying Amount Pledged Included Assets Pledged to 2012 2011 Under Pledged Rs. Rs. Mercantile Emerald Interest Bearing Loans and 3,683,066,932 3,528,066,553 Property, Shipping (Private) Vessels Borrowings from Bremer Plant and Limited Landesbank - Germany Equipment 36

related_party_transactions — [table] transaction — NOTES TO THE FINANCIAL STATEMENTS Contd... Year ended 31 March 2012 19. INCOME TAX EXPENSE Contd... 19.3 Deferred Tax Assets, Liabilities and Income Tax Relates to the Following - Group / Company Balance Sheet Income Statement 2012 2011 2012 2011 Rs. Rs. Rs. Rs. Deferred Tax Liability Capital Allowances for Tax Purposes 1,642,580 1,318,342 324,238 (515,748) 1,642,580 1,318,342 324,238 (515,748) Deferred Tax Assets Retirement Benefit Obligation 231,734 214,689 (17,045) 106,988 Brought Forward Losses 3,400,915 1,103,653 (2,297,262) (1,103,653) 3,632,649 1,318,342 (2,314,307) (996,665) Deferred Income Tax Income (1,990,069) (1,512,413) Net Deferred Tax (Asset)/ Liability (1,990,069) - 20. INCOME TAX PAYABLE The Income Tax payable balance consist of income tax provisions made in previous years. However, due to the different interpretation of the tax clauses, this liability has not been crystallized as at 31 March 2012 and if the Department of Inland Revenue rules in favour of the Company, the liability would be adjusted at the point of such ruling is obtained and the negotiations in this regard are in progress. 21. EARNINGS/(LOSS) PER SHARE 21.1 Basic Earnings/(Loss) Per Share is calculated by dividing the net profit/(Loss) for the year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. The following reflects the income and share data used in the Basic Earnings Per Share computation. Group 2012 2011 Amounts used as the Numerators: Rs. Rs. Profit/(Loss) attributable to Ordinary Shareholders (32,216,448) (23,352,793) Group 2012 2011 Number of Ordinary Shares used as Denominator Number Number Weighted average number of Ordinary Shares in issue applicable to Basic Earnings Per Share 2,844,990 2,844,990 Earnings/(Loss) Per Share (11.32) (8.21) 35

related_party_transactions — [table] transaction — NOTES TO THE FINANCIAL STATEMENTS Contd... Year ended 31 March 2012 Group Company 19. INCOME TAX 2012 2011 2012 2011 Rs. Rs. Rs. Rs. Current Income Tax Current Tax Expense on Ordinary Activities for the Year (Note 19.1) 840,352 155,109 840,352 155,109 Under/(Over) Provision of Current Taxes in respect of Prior Years - (3,899,829) - (5,120,179) Deferred Income Tax Deferred Taxation (Reversal)/Charge (Note 19.3) (1,990,069) (1,512,413) (1,990,069) (1,512,413) Income Tax (Reversal)/Charge (1,149,716) (5,257,133) (1,149,716) (6,477,483) 19.1 Reconciliation between Current Tax Expense/ (Income) and the product of Accounting Profit. Group Company 2012 2011 2012 2011 Rs. Rs. Rs. Rs. Accounting Profit/(Loss) Before Tax (33,366,164) (28,609,925) 4,364,325 (14,513,491) Aggregate Disallowed Items 7,265,847 5,389,935 7,265,847 5,389,935 Aggregate Allowable Expenses (9,345,237) (7,007,633) (9,345,237) (7,007,633) (Income) /Loss Not Subject to Tax 37,730,490 16,398,089 - - 2,284,935 (13,829,535) 2,284,935 (16,131,189) Other Sources of Income Liable to Tax Finance Income 2,332,385 1,056,338 2,332,385 1,056,338 Total Other Sources of Income Liable for Tax 2,332,385 1,056,338 2,332,385 1,056,338 Total Assessable Income 4,617,321 1,056,338 4,617,320 1,056,338 Tax Losses Brought Forward and utilized (Note 19.2) (1,616,062) (369,718) (1,616,062) (369,718) Less : Qualifying Payments - (250,000) - (250,000) Taxable Income 3,001,258 436,620 3,001,258 436,620 Statutory Tax Rate 28% 35% 28% 35% Current Income Tax Expense 840,352 152,817 840,352 152,817 Social Responsibility Levy - 1.5% - 2,292 - 2,292 840,352 155,109 840,352 155,109 Group Company 19.2 Tax Losses 2012 2011 2012 2011 Rs. Rs. Rs. Rs. Tax Loss Brought Forward 20,904,751 5,709,602 13,762,186 - Tax Loss Incurred During the Year - 15,564,867 - 14,131,904 Tax Loss Utilized During the Year (1,616,062) (369,718) (1,616,062) (369,718) Tax Losses Carried Forward 19,288,689 20,904,751 12,146,124 13,762,186 34

related_party_transactions — [table] transaction — NOTES TO THE FINANCIAL STATEMENTS Contd... Year ended 31 March 2012 15. REVENUE Group Company 15.1 Summary 609,503,093 599,081,726 - - Revenue 609,503,093 599,081,726 - - 15.2 Goods and Services Analysis Rendering of Services - International 609,503,093 599,081,726 - - 609,503,093 599,081,726 - - Group Company 2012 2011 2012 2011 Rs. Rs. Rs. Rs. 16. OTHER INCOME AND GAINS Profit on Sale of Property, Plant and Equipment 5,376,313 2,708,333 5,376,313 2,708,333 Sundry Income 1,339,497 566,060 1,224,060 566,060 Rent Income 4,158,000 834,240 4,158,000 834,240 Dividend Income 5,355 5,950 5,355 5,950 Exchange Gain 8,669,195 - 1,214,166 - Management Fees - - 12,514,084 10,081,370 Other Vessel Income - 1,402,536 - 1,402,536 19,548,359 5,517,119 24,491,978 15,598,489 Group Company 17. FINANCE COST AND INCOME 2012 2011 2012 2011 17.1 FINANCE COST Rs. Rs. Rs. Rs. Interest - Overdraft - - - - - Bank Loan 103,870,087 91,075,897 - - 103,870,087 91,075,897 - - 17.2 FINANCE INCOME Interest Income 2,332,385 1,063,483 2,332,385 1,056,338 2,332,385 1,063,483 2,332,385 1,056,338 Group Company 18. PROFIT / (LOSS) BEFORE TAX Stated after Charging /(Crediting) 2012 2011 2012 2011 Rs. Rs. Rs. Rs. Included in Cost of Sales Employee Benefits including the following ; 132,824,155 125,991,160 - - - Defined Contribution Plan Cost - (VPF, EPF and ETF) 5,028,474 5,372,283 - - - Crew Wages 118,006,600 107,835,530 - - Depreciation 177,020,264 179,654,667 - - Vessel Repair Cost 78,837,680 54,410,639 - - Included in Administrative Expenses Employee Benefits including the following ; 4,200,463 3,885,904 324,875 664,641 - Defined Benefit Plan Costs - Gratuity 157,595 191,874 60,875 78,021 - Defined Contribution Plan Costs - (VPF, EPF and ETF) 492,745 289,756 - 1,794 - Other Staff Cost 3,550,123 3,404,274 264,000 584,826 Directors' Emoluments 1,218,731 1,381,585 840,000 1,069,500 Depreciation - Property, Plant and Equipment 3,779,511 1,145,137 2,736,208 2,736,208 - Investment Property 515,782 515,782 515,782 515,782 Audit Fees 756,869 700,000 275,000 250,000 Donation - 250,000 - 250,000 Exchange Loss - 4,533,282 - 1,300,672 33

related_party_transactions — [table] transaction — NOTES TO THE FINANCIAL STATEMENTS Contd... Year ended 31 March 2012 Group Company 13. RETIREMENTS BENEFIT OBLIGATION - GRATUITY 2012 2011 2012 2011 Rs. Rs. Rs. Rs. Balance as at Beginning of the Year 882,181 919,075 766,746 919,075 Provision Made During the Year 120,282 191,874 60,875 78,021 Payments Made During the Year - (230,350) - (230,350) Exchange Loss 12,774 1,582 - - Balance as at End of the Year 1,015,236 882,181 827,621 766,746 13.1 The Retirement Benefit Obligation (Gratuity) is calculated in accordance with the formula method as described in Appendix E of Revised SLAS 16 for the year ended 31 March 2012. Appropriate and compatible assumptions were used in determining the cost of retirement benefits. Group / Company 2012 2011 The principal assumptions used were as follows; Discount Rate 10% 10% Future Salary Increment Rate 9% 9% Retirement Age 55 Years 55 Years Group Company 14. TRADE AND OTHER PAYABLES 2012 2011 2012 2011 Rs. Rs. Rs. Rs. Trade Payable 13,522,864 16,537,160 - - Sundry Creditors Including Accrued Expenses 38,921,625 28,513,410 8,552,128 3,315,673 Amounts due to Related Parties (Note14.1) 139,513 94,614 28,524,084 28,898,550 52,584,003 45,145,184 37,076,212 32,214,223 Group Company 14.1 Amounts due to Related Parties Relationship 2012 2011 2012 2011 Rs. Rs. Rs. Rs. Mercantile Marine Management Limited Affiliate 139,513 94,614 - - Mercantile Global Shipping Limited Subsidiary - - 28,524,084 28,898,550 139,513 94,614 28,524,084 28,898,550 32

related_party_transactions — [table] transaction — NOTES TO THE FINANCIAL STATEMENTS Contd... Year ended 31 March 2012 As at Loans Repayment Exchange As at 12.1.1Bank Loans 01.04.2011 Obtained Loss 31.03.2012 Rs. Rs. Rs. Rs. Rs. Bremer LandesBank - Germany 3,346,571,846 - (151,816,180) 318,669,293 3,513,424,959 3,346,571,846 - (151,816,180) 318,669,293 3,513,424,959 Security: A first statutory mortgage in account current form of Vessels together (if applicable) with a pertaining deed of covenants covering the loan, interest and cost; and assignment of insurances contracted in respect of Vessels and its operation together with notices of assignment to and acknowledgement by the insurers together with the usual letter of undertaking of brokers and assignment of all freights, charter hires, demurrage, detention and requisition compensation and all other monies earned or to be earned by the Vessels during the term of loan and letter of Support issued by the Corporate Guarantor Mercantile Shipping Company PLC, covering all the obligations of borrower under the loan agreement. Tranche A (Euro 20,300,000) shall be repaid by 56 equal consecutive quarter annual installments of Euro 362,500 each is paid from six months after the delivery date. Tranche B (Euro 2,500,000) shall be repaid by 26 equal consecutive quarter annual installments of Euro 92,600 each and a final installment of Euro 92,400. The first tranche B installment shall is paid from six months after the delivery date and the final installment being due and payable at the end of the term of the tranche B. Bremer LandesBank has granted a revised repayment scheme for the capital repayments of the above loans which were due for the year ended March 31, 2012. According to the revised repayment scheme, a part of the capital due from tranche A and tranche B for the period ended March 31 2012 amounting to Euro 1,592,850 could be repaid in whole or in parts by February 2024. Bremer LandesBank has agreed in principle to further reschedule the capital repayment of the above loans which were due for the year ended 31st March 2012. The formal approval specifying the rescheduling of the capital repayments has not yet been received by Mercantile Emerald Shipping (Pvt) Ltd. Interest: Euro Inter Bank Offered Rate (EURIBOR) plus 0.5% . 12.1.2 Finance Lease As at Obtained Repayments Exchange As at 01.04.2011 Loss 31.03.2012 Rs. Rs. Rs. Rs. Rs. LB Finance PLC 3,224,042 (1,208,887) 4,793 2,019,948 Gross Liability - 3,224,042 (1,208,887) 4,793 2,019,948 Finance Charges Allocated to Future Periods - (507,555) 296,145 - (211,410) Net Liability - 2,716,487 (912,742) 4,793 1,808,538 31

related_party_transactions — [table] transaction — NOTES TO THE FINANCIAL STATEMENTS Contd... Year ended 31 March 2012 Group Company 8.3 Amounts Due from Related Parties Relationship 2012 2011 2012 2011 Rs. Rs. Rs. Rs. Current MSC Trading Limited Subsidiary 1,833,600 1,833,600 1,833,600 1,833,600 Mercantile Emerald Shipping (Private) Limited Affiliate - - 1,269,168 - Mercantile Shipping Agencies Limited Subsidiary 3,673,968 3,673,968 3,673,968 3,673,968 Mercantile Marine Management Limited Affiliate - 345,677 - 345,677 Provision for Doubtful Debts (5,507,568) (1,833,600) (5,507,568) (1,833,600) - 4,019,645 1,269,168 4,019,645 Non-Current Mercantile Emerald Shipping (Private) Limited Subsidiary - - 87,646,078 87,646,078 Group Company 9. Short Term Investments 2012 2011 2012 2011 Rs. Rs. Rs. Rs. Investment in Treasury Bills 42,174,408 29,878,575 42,174,408 29,878,575 42,174,408 29,878,575 42,174,408 29,878,575 10. CASH AND CASH EQUIVALENTS IN THE CASH FLOW STATEMENT Group Company Components of Cash and Cash Equivalents 2012 2011 2012 2011 Favourable Cash and Cash Equivalents Balance Rs. Rs. Rs. Rs. Cash and Bank Balances 77,803,729 87,391,002 18,918,379 17,302,247 Total Cash and Cash Equivalents for the Purpose of Cash Flow Statements 77,803,729 87,391,002 18,918,379 17,302,247 Group Company 11. STATED CAPITAL Number Rs. Number Rs. Fully Paid Ordinary Shares (11.1) 2,844,990 37,262,606 2,844,990 37,262,606 2,844,990 37,262,606 2,844,990 37,262,606 Group Company Number Rs. Number Rs. 11.1 Balance at Beginning of the Year 2,844,990 37,262,606 2,492,482 24,924,820 Issue of Shares for Non Cash Consideration - - 352,508 12,337,786 Balance at End of the Year 2,844,990 37,262,606 2,844,990 37,262,606 12. INTEREST BEARING LOANS AND BORROWINGS 2012 2012 2012 2011 2011 2011 12.1 Group Amount Amount Total Amount Amount Total Repayable Repayable Repayable Repayable Within 1 Year After 1 Year Within 1 Year After 1 Year Rs. Rs. Rs. Rs. Rs. Rs. Bank Loans (Note 12.1.1) 155,809,856 3,357,615,103 3,513,424,959 284,216,685 3,062,355,160 3,346,571,846 Finance Lease (Note12.1.2) 1,488,256 320,282 1,808,538 - - - 157,298,113 3,357,935,384 3,513,424,959 284,216,685 3,062,355,160 3,346,571,846 30