The behalf of the Board of Directors of Mangalore Refi nery and
Petrochemicals Limited (MRPL) and on my own behalf, it is my privilege
to present the 25th Annual Report of the performance of your Company,
the Audited Accounts and Auditors’ Report thereon for the year ended
2012-13 : Silver Jubilee Year of your Company
Your Company which was set up in 1988 with a processing capacity of
3.69 MMTPA was later expanded to 9.69 MMTPA before reaching the present
capacity of 15 MMTPA.
25 years later, your Company MRPL, is an ONGC group company, a trail
blazer with cutting edge technology and a jewel in the crown of our
With ONGC powering MRPL : A Decade of Exponential Growth and Prosperity
The Board of Directors acknowledge the wonderful success story scripted
by your Company under ONGC Group. In just 10 years, your company turned
around from a ''BIFR’ case to a ''Mini Ratna, Category 1’ in July 2007
and a Schedule A” Public Sector Enterprise in July, 2013. Your Company
moved the needle of capacity utilization from a sluggish 70%, a decade
back to a remarkable above 100% capacity utilization, year on year, for
the last decade. The capacity itself has been increased from 9.69 MMTPA
to 15 MMTPA. Your Company’s ability to deliver results is recognized by
the Indian hydrocarbon industry and your Company have been awarded
Refi nery of the Year” for 2009 and for 2012 by Petrofed.
2012-13 : New milestones; Tough challenges.
2012-13 was a year of new milestones. Your Company have processed
highest ever crude of 14.4 MMT during the year and posted the highest
ever gross turnover of Rs. 68,834 Cr despite the shutdown of the refi
nery due to water shortage during 19/04/2012 to 27/04/2012. Inspite of
the good physical performance during the year, the Company has incurred
a net loss after tax of Rs. 757 Cr against after tax profi t of Rs. 909 Cr
in the previous year. The loss was mainly contributed by shutdown of
the refi nery due to water shortage at a time when the price of Crude
and Product was falling resulting in inventory losses, lower operating
margin, higher depreciation and interest cost arising out of Phase III
capitalization. It must be admitted that your Company has put in a very
creditable performance during the year 2012-13 in the background of the
industry scenario and as compared with the performance results of the
peers. On completion of Phase-III project in its entirety, the company
anticipates the benefi ts of the project will start accruing and is
expected to be in the path of profi tability again.
Major highlights of CompanyĘs performance during the year 2012-13
1. Processed the highest ever crude of 14.4 MMT during the year
2012-13, against 12.82 MMT in 2011-12 and recorded the highest ever
gross turnover of Rs. 68,834 Cr for the year 2012-13 against Rs. 57,207 Cr
for the year 2011-12.
2. Higher distillate yield in 2012-13 at 76.55% as against 73.27% in
3. Set a new record in export during the year at 7.10 MMT vis-a-vis
last year’s 5.59 MMT
4. Procured the highest Crude of 14.15 MMT during the year 2012-13 as
against 13.02 MMT in 2011-12 at a time of sanction against Iran.
5. The product despatch for the year 2012-13 at 13.17 MMT was highest
against 11.95 MMT in 2011-12.
1.1 SUMMARY OF FINANCIAL PERFORMANCE
Year ended Year ended
31st March, 2013 31st March, 2012
Turnover 68,834 57,207
Profi t before Depreciation Interest and 456 1,961
Interest and Finance Charges 329 207
Gross Profi t after interest but before 127 1,754
Depreciation and Tax
Depreciation and Amortizations 604 434
Profit/(Loss) Before Tax (477) 1,320
Provision for Taxation (deferred tax 280 411
Profit/(Loss) after Tax (757) 909
Balance of Profi t/(Loss) brought forward 4,999 4,298
from previous year
Surplus available for appropriation 4,242 5,207
Dividend on Equity Shares 175
Tax on Dividend 28
Transfer to Capital Redemption 5 5
Balance carried to Balance Sheet 4,237 4,999
In view of the losses during the year 2012-2013, declaration of
dividend could not be considered by the Board of Directors for the
1.3 OPERATIONAL PERFORMANCE
Your Company with increased capacity addition had processed the highest
ever crude of 14.4 MMT during 2012-13 against 12.82 MMT in 2011-12
despite shutdown of the refi nery from 19th April to 27th April, 2012
due to water shortage. Fuel & Loss for the year 2012-13 was 7% against
6.75% in 2011-12. Higher fuel & loss was mainly on account of
commissioning activities of Phase-III units and force majeure shutdown
of the refi nery during the fi rst quarter of the year due to water
crisis. The energy index for the year 2012-13 was 61.01 (MBTU / BBL /
NRGF) against 57.92 in 2011-12 and MBN was higher during the year due
to higher fuel & loss and lower complexity operations. The Company
processed some new crudes namely Zafi ro, Rabi, Aseng and Hungo for the
fi rst time during the year 2012-13.
Your Company have achieved highest ever export turnover of Rs. 33,340 Cr
during the year 2012-13 by exporting petroleum products viz., Motor
Spirit, Naphtha, Mixed Xylene, High Speed Diesel, Jet fuel and Fuel
The three year term export contract for the supply of petroleum
products to State Trading Corporation, Mauritius to meet the demands of
Republic of Mauritius continued during the year. Your Company has
successfully fi nalised a new 3 year contract with STC, Mauritius for
supply of petroleum products which will be valid till 31/07/2016.
In the global competitive market, your Company have secured its place
by exporting the petroleum products and is continuing to explore
opportunities for its growth.
1.5 SAFETY PERFORMANCE
Your Company have recorded accident free period of 435 days during the
year. No major outbreak of fi re during the year resulting in property
loss or environmental damage. Hydrogen and DHDT Plants of Phase-III
were commissioned safely during the year in addition to a few new
tanks. Your Company is committed towards imparting continuous training
in fi re & safety practices. During the year, 873 employees and 4,722
contract workmen were trained in fi re and industrial safety. OISD
external safety audit was conducted in December-2012.
A total of 7 Mock exercises were conducted during the year considering
the various emergency scenarios like toxic gas leak, fi res, in Plant
and Non-Plant area like Materials Department. This includes one full
scale off site” Mock exercise carried out in the presence of District
Crisis Group Members on 04/12/2012 which was followed by Review Meeting
and timely implementation of all the recommendations.
1.6 ENVIRONMENT MANAGEMENT & PERFORMANCE
In Environment Management, the Company’s Philosophy is to perform
beyond Compliance - that is to perform better than minimum required by
statutes. The refi nery is certifi ed with ISO 14001: 2004 for
Environment Management Systems.
The major achievements on the Environment Management and performance
- Phase III advanced Waste Water Treatment Plant which includes oil
effl uent treatment unit & Sequential Batch Reactor (SBR) unit was
commissioned in the month of March, 2013. Membrane Bio Reactor (MBR)
unit pre- commissioning jobs are in progress.
- Sulphur Pastillation Unit is being commissioned in the Refi nery as a
part of Phase - III to reduce dust emissions in the Sulphur Recovery
- An advanced Reverse Osmosis (RO)Plant is set up for maximizing the
quantity of treated effl uent back to the Refi nery. RO will be
- Wet Air Oxidation (WAO) Unit is set-up in the refi nery to treat
Spent Caustic and to improve the WWTP performance.
- A Condensate Recovery Unit has been commissioned in process unit
resulting reduction in fresh water consumption.
- A Closed Bioremediation Unit is being commissioned in the refi nery
as a part of WWTP-III
- VOC Emission is being monitored at 74,000 points in the refi nery
through reputed agency and corrective measures are taken to effectively
minimize the same.
- Environment Awareness programs are organized periodically in the
neighbouring villages & schools in association with Karnataka State
Pollution Control Board (KSPCB).
- Order was placed on State Forest Department for developing greenbelt
in 120 acres area. Plants are being developed in their nursery. Tree
Plantation is already commenced in the Refi nery.
- An advanced technology has been employed for cleaning Crude Tanks in
the refi nery.
- Seawater quality monitoring was carried out by M/s. College of
Fisheries on fortnight basis indicating no adverse effect on the marine
- Ten Ground Water monitoring stations in and around Refi nery have
been set up and regular monitoring of ground water quality is being
carried out along with KSPCB.
- Average treated effl uent recycled to cooling towers during the year
- Ambient air quality monitoring is being done inside and outside the
Refi nery at 9 locations (including two locations at Phase-III Project
site) as per revised National Ambient Air Quality Monitoring Standard.
The following ongoing projects are in various stages of installation:
- Vapour Recovering System for light hydrocarbon storage tanks in Phase
- III Refi nery Project,
- VOC Recovery system in WWTP- III,
- Installation of additional Hydrocarbon detector at strategic
locations in the Refi nery,
- Installation of automatic rim seal protection for storage tanks at
procurement stage and
- Connection of LPG spheres and Moulded Bullets PSV discharge to fl are
1.7.1 Domestic Marketing of Products
Your Company continued its direct marketing activity in the segment of
petroleum products in the State of Karnataka and the adjoining States.
The direct sales turnover during the year 2012-13 was ? 3,750 Cr
compared to ? 2,755 Cr in the previous year.
1.7.2 Retail Operations
Government of India has announced complete decontrol of HSD prices for
direct bulk consumers. Your Company has already made inroads in the
bulk HSD market. Pending fi nalization of the Govt. policy towards
eventual complete decontrol of HSD prices for retail segment, your
Company have taken cautious steps to set up only few retail outlets in
However, your company is in preparedness to enter the retail market in
short notice. MS prices remain decontrolled and sales from existing
retail outlets continue.
1.7.3 New Products Marketing Plan
Your Company is setting up a polypropylene (PP) plant of 440 KTPA
capacity for bulk supplies to downstream processing industry. Detailed
Business Plan for sale of PP has been fi nalized and selection of
channel partners for sale in domestic market is in progress. In
addition, your Company is also developing storage infrastructure for PP
Your Company is also putting up a Delayed Coker Unit, which will
produce pet coke, a new product in the product basket of MRPL. Your
Company shall undertake sale of pet coke to major industrial consumers
in South India.
1.7.4 Joint Ventures
Your Company’s Joint Venture (JV) with Shell B.V. Netherland in the
name and style of Shell MRPL Aviation Fuel Services Private Limited
(SMAFSPL) supplies Aviation Turbine Fuel to both domestic and
international airlines at Indian airports. During the year, this JV
Company has been converted into a public company (SMAFSL).
SMAFSL is aggressively acquiring market share in both domestic and
international airlines at Indian airports. The company commenced its
operations at Goa and New Delhi. Aviation fuelling station facility has
been set-up at Mangalore. The turnover for the year 2012-13 is Rs. 486.10
Cr (2011-12 Rs. 517.35 Cr) and recorded a Pre-tax profi t of Rs. 13.14 Cr
for the year (Previous Year Rs. 18.16 Cr). The company has proposed to
pay a dividend of 8% for the year 2012-13 (10% in 2011-12).
2. AWARDS AND RECOGNITION:
- MRPL has been upgraded from Schedule ''B’ to Schedule ''A’ company with
effect from 4/7/2013.
- MRPL has bagged the coveted Petrofed Award, 2012 Refi nery of the
Year” for the commendable performance in production and operational
effi ciencies while meeting the norms of health, safety and environment
- MRPL has won Export Excellence Award, 2013” in Best Manufacturer –
Exporter - large category- Gold by Federation of Karnataka Chamber of
Commerce and Industry.
- MRPL was conferred State Export Excellence Award” for 2010-11 &
2009- 10 Medium/Large category – Gold by Government of Karnataka.
- MRPL has been rated Excellent” in performance as per the MoU signed
with ONGC for the year 2011-12 and 2012-13 (provisional).
- Managing Director, MRPL has won the CEO with HR Orientation Award”
in the Global HR Excellence Awards presented by Institute of Public
- MRPL was conferred with BT-Star PSU Excellence Award, 2013” in Human
Resource Management category (Mini ratna /others).
- MRPL was awarded First Prize for outstanding performance in the area
on Hindi Implementation for two consecutive years 2011-12 and 2012-13
by the Town Offi cial Language Implementation Committee, Mangalore.
3. CREDIT PROFILE
3.1 ICRA has reaffi rmed Issuer Rating Ir AAA” (pronounced IR Triple
A) to MRPL. This rating indicates the highest credit quality rating
assigned by ICRA and the rated entity carries the lowest credit risk.
3.2 ICRA has assigned [ICRA] AAA” (pronounced as ICRA Triple A) to Rs.
3,000 Cr Fund- Based limits of MRPL. The outlook on the rating is
3.3 ICRA has assigned [ICRA] A1 ” (pronounced as ICRA A one plus) to Rs.
4,000 Cr Non-Fund based limits of MRPL.
3.4 ICRA has reaffi rmed [ICRA] A1 ” (pronounced as ICRA A one plus)
to Rs. 900 Cr Commercial Paper Programme of MRPL. This rating indicates
the very strong degree of safety regarding timely payment of fi nancial
obligations i.e., which carries the lowest credit risk.
3.5 CRISIL has reaffi rmed the highest Corporate Credit Rating [CCR
AAA]’’ (pronounced as CCR Triple A) to MRPL. This rating indicates
highest degree of strength with regard to honouring debt obligations by
External Commercial Borrowings
Towards partial Debt Funding for Phase III Refi nery Project,
Polypropylene Project and SPM Project, your Company had tied up
External Commercial Borrowings (ECB) of US $ 250 Million in 2011-12,
out of which US $ 50 Million was availed in the year 2011-12 and
remaining US $ 200 Million was drawn in the year 2012- 13. In order to
keep the interest cost lower, your Company tied up further ECB of US $
400 Million in the year 2012-13 and have drawn out of it US $ 50
Million during the year.
4. INTERNAL CONTROL SYSTEM
Your Company remains committed to ensure an effective internal control
environment that provides assurance on the effi ciency of operations
and security of assets. Internal Audit department functions under the
supervision of the Audit Committee chaired by an Independent Director.
Your Company have a well established internal control review mechanism
which assures an effective internal control environment to the Audit
Committee and Board of Directors.
A) Ongoing Projects
i. Phase III Refinery Upgradation and Expansion Project.
The implementation of ongoing Company’s Phase III Refi nery Project to
increase complexity and profi tability by increasing the refi ning
capacity to 15 MMTPA, to process high TAN and heavy crude, increasing
the distillate yield by upgrading low value naphtha and black oils and
to produce value added products like Propylene and upgrade its total
diesel pool to superior (Euro III/IV) grade HSD is nearing completion.
The estimated cost of the project continues to be Rs. 12,160 Crore
despite some delay in completion.
The implementation of the project though delayed is now progressing
satisfactorily. As of 15/07/2013, the overall physical progress is 99
% against scheduled target of 100%. Due to the delay in completion of
the CPP, your Company had taken up alternate measures to commission
some of the units in Phase III with the utilities (power and steam)
sourced from existing Refi nery CPP. All the process units and the
downstream units have achieved Mechanical Completion which includes
major units like Petro Fluidized Catalytic Cracking Unit (PFCCU),
Delayed Coker Unit (DCU), Sulphur Recovery Unit (SRU). The Units are
awaiting the availability of uninterrupted Steam and Power for carrying
out the pre-commissioning and commissioning activities from CPP which
is being executed by M/s BHEL. CPP is anticipated to be completed
progressively by September / October, 2013. However, GTG 1 / HRSG 1 /
GTG 2 have been commissioned.
HGU and DHDT units have been successfully commissioned. The other
associated Utilities and offsite facilities like Cooling Water System,
DM Water System, Air & Nitrogen System, Waste Water Treatment System &
Fire Water System have also been commissioned.
The cost commitment for Phase III project was Rs. 10,935 Cr while the
cumulative expenditure incurred was Rs. 10,458 Cr as on 31/07/2013. The
project having reached the completion stage of 99% and cost commitment
nearing completion, it is anticipated that there will not be any cost
overrun despite the delay in project completion.
ii. Polypropylene Project
The setting up a Polypropylene unit integrated with the Phase III
Project at an estimated capex of Rs. 1,804 Cr by your company with M/s.
Novolen Technology, Germany is moderately delayed due to PDF problems.
The non vacating of site by PDF has resulted in shifting the location
of the unit and delayed commencement of site work and delayed receipt
of environmental clearance. Site grading work has now been carried out
in the new location and civil and structural works and equipment
erection are in progress.
This Project has achieved a progress of 90 % as against target of 93 %
as of 15/07/2013. The Cost Commitment made for Polypropylene Project
was Rs. 1,298 Cr while the cumulative expenditure incurred was Rs. 725 Cr
as of 31/07/2013.
iii. Single Point Mooring (SPM) Project
Your Company have set up SPM project along with coastal booster pumping
station within the port limits at a location of 16 kilometers from the
shore (High-Seas) having draft availability of 30 meters for handling
upto Very Large Crude Carrier (VLCC) at an estimated cost of Rs. 1044 Cr.
This facility will enable the company to receive crude in suez max /
VLCC vessels, which in turn will give freight economics and also allow
access to West African and Latin American countries crudes. This
facility will also de-congest existing berth facility at NMPT port and
reduce the incidence of demurrage. The facility can also be deployed
for crude receipt by the Indian Strategic Petroleum Reserve Limited
(ISPRL) underground cavern for storage of Crude oil at Mangalore.
The project activity has achieved an overall progress of 98.64% against
the revised scheduled target of 99.12 % as of 15/07/2013. The testing
of the facility was started on 03/01/2013. However, due to technical
issues, it was taken up for repairs. This repair activity has since
been completed. Cost Commitment made for SPM project was Rs. 688 Cr while
the cumulative expenditure incurred was Rs. 651 Cr as of 31/07/2013.
iv. Refinery Performance Improvement Programme
Your Company have taken up Refi nery Performance Improvement Programme
(RPIP) through M/s Shell Global Solutions International B.V. (SGSI)
under the auspices of Center for High Technology, Ministry of Petroleum
& Natural Gas.
The RPIP is aimed at identifying opportunities for improvement by
adopting best operating practices in the areas having a bearing on
profi t margin including optimizing operation, energy and utilities
consumption, minimizing hydrocarbon loss and improving maintenance and
The fi rst part of Assessment phase has been completed and is presently
under development for implementation.
B) Future Projects
Your Company have signed an MoU with Government of Karnataka for
setting up a Linear Alkyl Benzene (LAB) Plant (for producing raw
materials to manufacture detergent) and to expand its refi ning
capacity to 21 MMTPA subject to techno- economic viability and
availability of required infrastructure at Mangalore with an
approximate investment of Rs. 8500 Cr. Besides these, Company has been
planning to put up a Pet Coke gasifi cation plant and an Olefi n
Complex (Naphtha Dual Feed Cracker) at an estimated cost of Rs. 2300 Cr.
The preliminary feasibility report is under fi nalization for this
6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS & OUTGO :
The additional information required to be disclosed pursuant to Section
217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 with respect to conservation of energy, technology absorption and
foreign exchange earnings & outgo are furnished in ÂAnnexure - IĘ which
forms part of this Report.
7. PARTICULARS OF EMPLOYEES
Your Company being a Government Company is exempted from disclosure of
particulars of employees under Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Amendment
8. RIGHT TO INFORMATION ACT, 2005
Your Company have a RTI manual posted in the website www.mrpl.co.in.
During the year, 96 applications were received, out of which 80 were
disposed off before 31/03/2013 and balance 16 applications disposed off
9. HUMAN RESOURCES
- During the year 2012-13, your Company continued to enjoy cordial and
harmonious relations with the collectives and as evidence to the same,
not a single man-hour was lost on account of industrial disturbance.
- Your Company have recruited 160 employees including 24 women
employees, 21 Schedule Caste (SC) & Schedule Tribe (ST) during the year
- Total employee strength as on 31/03/2013 was 1625 including 119 women
employees. The strength of Management cadre employees were 629 and 996
were from Non-Management cadre. The total number of employees belonging
to SC/ST categories was 150 and Physically Challenged 5.
- During the year 2012-13, your Company devoted 7191 man-days for
Training, Development and Learning which amounts to an average 4.50
man-days per employee. This includes functional, developmental and
special training programs covering the entire spectrum of employees.
10. OFFICIAL LANGUAGE:
Your Company implements Offi cial Language Policy in letter and spirit,
as per the Annual Programme prescribed by the Department of Offi cial
Language, Ministry of Home Affairs, Govt. of India. In order to
propagate Hindi among the employees, Hindi Workshops were organised on
a regular basis. In order to increase the correspondence in Hindi, by
the employees, special efforts were made to activate Unicode facilities
on all the computers of the Refi nery. Your Company promotes use of
Hindi by conducting various programmes and competitions for the
employees, their children and family members. Special awards were given
to the eight topper students of MRPL DPS School, Mangalore who earned
the highest marks in the public examination of class Xth in Hindi
Language. In order to propagate Hindi in the Refi nery a House Journal
(Half yearly) namely MRPL PRATIBIMB” is being published from January,
2013. Your Company have been awarded fi rst prize for outstanding
performance in Hindi implementation for the year 2011-12 and 2012-13 by
the Town Offi cial Language Implementation Committee, Mangalore and
also won nine prizes in the competition.
11. VIGILANCE FUNCTION:
Your Company have developed a structured mechanism of vigilance
functions and its practices are focused towards creation of value for
all the stakeholders. The practices involve multi-layer checks and
balances to improve transparency. Vigilance Awareness and Preventive
vigilance activities were continuously carried out during the year.
Guidelines of Central Vigilance Commission (CVC) are being followed.
Offi cers in sensitive posts are rotated regularly. Whistle Blower
Policy for employees is in place which ensures that a genuine whistle
blower is granted due protection from any victimization. In compliance
with CVC instruction, your Company has implemented a complaint handling
policy in which all complaints received from various sources can get
recorded and can be examined by vigilance. Further, in line with CVC
instruction, your Company have achieved very high compliance level with
regard to e-payment and e-tender. Leveraging of technology to enhance
transparency has been a thrust area of action in which vigilance has
played a catalytic role. The website of the company displays
downloadable tender document, publication of information of works
awarded on nomination basis, publication of post award information of
contracts. Full time Chief Vigilance Offi cer is in place and he can
be contacted at cvo@ mrplindia.com for any complaints having vigilance
12. SECURITY MEASURES
Security of MRPL Refi nery is designed to comply with Oil Sector
Infrastructure Protection Plan (OSIPP) formulated by Ministry of
Petroleum and Natural Gas (MoP&NG). Security of MRPL Refi nery is
constantly being upgraded to meet with the requirements of OSIPP.
Various security measures taken up at MRPL are as follows:
12.1 CISF Induction:
The Ministry of Home Affairs (MHA), Govt of India had sanctioned a
total of 200 Central Industrial Security Force (CISF) personnel for the
protection of MRPL Refi nery. The CISF had initially deployed a Quick
Reaction Team for protection of the Refi nery. The CISF has recently
taken over security of MRPL Refi nery with the induction of 110 CISF
personnel. The remaining sanctioned strength of 90 personnel will be
inducted by December, 2013. The CISF Township being constructed at a
total cost of Rs. 32 crore is expected to be ready by December, 2013.
12.2 CCTV Surveillance & Access Control:
The Refi nery is covered by state-of–the art CCTV Network designed to
cover all the access control gates and other strategic locations. Plan
to extend CCTV coverage along with an integrated CCTV cum Communication
control room is on the anvil. The security to Refi nery facility is
strictly controlled by appropriate access control.
12.3 Mock Drills:
Your Company regularly conducts mock drills to assess the preparedness
of the security forces to safeguard the Refi nery and its operation in
the event of strike, law and order problems and other security related
events independently and also along with the District Authorities
besides State Police and Coast Guard. MRPL and industries in the
neighbourhood are actively involved in the Coastal Security Exercises
conducted along the coastal area under the auspices of Coast Guard.
12.4 The security system in place is routinely inspected and reviewed
by the Industrial Security Branch of Intelligence Bureau (IB) to
identify grey area and recommend / suggest improvements. Your Company
deligently implements the majority of IB’s recommendations. The IB team
had appreciated the Physical Security, IT Security and Fire Fighting
systems at MRPL. Your Company is also guided by security expertise of
the parent company.
13. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
The CSR objective of your Company promoted under the name of
''SAMRAKSHAN’ is to promote in a holistic and sustainable manner,
development of under-privileged communities, affl icted by poverty,
illiteracy, illness and physical disabilities. Besides these, your
Company has taken CSR initiative to protect, preserve and promote the
social, cultural and environmental, heritage and wealth in and around
the area of company’s business and to usher in sustainable development.
Your Company with these objectives has implemented a number of CSR
programmes. The major programmes are sponsoring Midday Meal to support
continuing education, setting up of computer lab, add on facility to
Government schools, promotion of livelihood for economically weaker
section of people by organising computerised stitch craft, JCB and
crane operating training programme, construction of Community hall for
local Panchayat, participation in development of appropriate access
road to and from remote villages to main arterial roads, providing
scholarship and fi nancial assistance to girl and SC/ST students for
the Academic year 2012-13 , construction of class rooms, anganwadi,
toilets and bath rooms for students’ hostel and running a free primary
health centre. The Company along with ONGC has extended its commitment
by putting up a separate block to the 162 year old Lady Goschen
Hospital at an estimated cost of Rs. 21 Crores. The foundation stone for
this facility was laid on March 18, 2013 by the Honourable Union
Minister for Petroleum & Natural Gas Dr. M Veerappa Moily and Chief
Minister of Karnataka Shri Jagadish Shettar. This activity will make a
lasting impact in health services provided to women and infants in the
city of Mangalore and surrounding areas.
Your Company has spent Rs. 4.65 Cr. for various CSR activities during the
During the year, following changes took place in Board of Directors of
14.1 Shri P. K. Singh, Joint Secretary, MoP&NG was appointed on
17/08/2012 in place of Shri Vivek Kumar, Joint Secretary, MoP&NG.
14.2 Dr. A. K. Rath, Independent Director completed his three year
tenure on 15/02/2013.
14.3 Shri V. G. Joshi has been appointed as Director (Refi nery), MRPL
and he had assumed charge on 04/04/2013.
14.4 Shri P. Kalyanasundaram, Joint Secretary, MoP&NG has been
appointed w.e.f. 15/04/2013 in place of Shri P. K. Singh, Joint
14.5 Shri B. K Namdeo, Director (Refi nery), HPCL has been appointed
w.e.f. 01/07/2013 in place of Shri K. Murali, who superannuated from
14.6 The Board wishes to place on records its appreciation for the
services rendered by Shri Vivek Kumar, Dr. A. K. Rath, Shri P. K. Singh
and Shri K. Murali as Directors during their tenure on the Board of the
14.7 In accordance with the provisions of the Companies Act, 1956 and
Articles of Association of the Company, Shri P. Kalyanasundaram and
Shri Sudhir Vasudeva will retire by rotation at the 25th Annual General
Meeting of the Company. Shri P. Kalyanasundaram and Shri Sudhir
Vasudeva being eligible, offer themselves for re-appointment as
Directors of the Company.
14.8 Brief resume of the Directors seeking appointment /
re-appointment, together with the nature of their expertise in specifi
c functional areas, the names of the companies in which they hold the
directorship and the membership / chairmanship of committees of the
Board, and their shareholding in the Company are furnished in the
Annexure to the AGM notice.
15. DIRECTORSĘ RESPONSIBILITY STATEMENT
Pursuant to the requirement under section 217 (2AA) of the Companies
Act, 1956, with respect to Directors’ responsibility statement, it is
hereby confi rmed that: i) In the preparation of the Annual Accounts,
the applicable accounting standards have been followed and that there
are no departures from the same.
ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent, so as to give a true and fair view of the state of affairs
of the Company as at 31st March, 2013 and the Profi t & Loss of the
Company for the year ended on that date.
iii) The Directors have taken proper and suffi cient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
iv) The Directors have prepared the Annual Accounts of the Company on a
going concern” basis.
16. FIXED DEPOSIT
Your Company have not accepted any fi xed deposit during the year from
17. CORPORATE GOVERNANCE
17.1 Your Company have complied with all the mandatory provisions of
Clause 49 of the Listing Agreement relating to the Corporate Governance
requirements and mandatory guidelines on Corporate Governance for CPSEs
issued by DPE, Government of India except having requisite number of
Independent Directors on the Board of the Company. There are two
Independent Directors on the Board of your Company. The Company is
pursuing with Ministry of Petroleum and Natural Gas (MoP&NG),
Government of India for appointment of requisite number of Independent
17.2 The Annual Report contains a separate section on Corporate
Governance, which forms part of this report.
17.3 Pursuant to Clause 49 of the Listing Agreement with Stock
Exchanges, your Company have obtained the Certifi cate from the Joint
Statutory Auditors of the Company towards compliance of Corporate
Governance which is annexed and forms part of this report.
17.4 In terms of Clause 49 (IV) (F) of the Listing Agreement with the
Stock Exchanges, the Management Discussion and Analysis Report
(Annexure - II) have been attached and forms part of this report.
17.5 As a measure of good corporate governance, your Company has
engaged Practicing Company Secretaries for conducting Annual
Secretarial Compliance Audit for the year 2012-13. The Practicing
Company Secretaries have issued Annual Secretarial Compliance Audit
Report for the year 2012-13 which forms part of this report.
18.1 M/s. Maharaj N. R. Suresh & Co., Chennai and M/s. Gopalaiyer and
Subramanian, Coimbatore have been appointed as Joint Statutory Auditors
of the Company for the Financial Year 2012-13 by Comptroller & Auditor
General of India (C&AG).
18.2 The report of the C&AG at Annexure - III forms part of this
Report. You will be pleased to note that your Company has got ''NIL’
comments certifi cate from C&AG for the 11th year in a row.
18.3 Pursuant to the provisions of Section 233B of the Companies Act,
1956, the cost accounts maintained by the Company are being audited by
Cost Auditors M/s. Musib and Associates who are appointed with approval
of Ministry of Corporate Affairs, Government of India.
19.1 Your Directors sincerely thank the Government of India, Ministry
of Petroleum and Natural Gas, Ministry of Finance, Ministry of
Corporate Affairs, Department of Public Enterprises, Ministry of
Environment and Forest, Ministry of External Affairs, Ministry of
Shipping, Ministry of Heavy Industries, Ministry of Home Affairs other
Ministries, Public Enterprise Selection Board and Departments of the
Central Government and the Government of Karnataka for their valuable
support and continued co-operation.
19.2 Your Directors gratefully acknowledge support and cooperation
extended by Hindustan Petroleum Corporation Limited, as co-promoter of
19.3 Your Directors wish to thank the shareholders for their continued
confi dence reposed on the management and the Company.
19.4 Your Directors acknowledge the continuing co-operation and support
received from New Mangalore Port Trust, Financial Institutions, Banks
and all other stakeholders such as suppliers of crude oil and other
inputs, contractors, transporters and others.
19.5 Your Directors recognize the patronage extended by the valued
customers for the products of the company and promise to provide them
the best satisfaction.
19.6 Your Directors wish to place on record their sincere appreciation
of the sustained and dedicated efforts put in by all the employees
collectively and concertedly as a Team.
19.7 Your Company salutes ONGC with deep gratitude for the courage and
conviction displayed by ONGC in acquiring and transforming your
Company. Today, with all round achievements and spectacular growth and
having been crowned with Schedule ''A’ status, your Company shines as an
incredible example in the industry under the aegis of ONGC.
For and on behalf of the Board
Place: New Delhi
Date: 8th August, 2013