I, on behalf of the Board of Directors of your Company, am pleased to
share with you and report the highlights, affairs and developments,
your Company has made during the financial year ended March 31, 2016
and present the 28th Annual Report on the business and operations of
Mangalore Refinery and Petrochemicals Limited (MRPL) and its audited
financial statements together with the Auditors'' Report and comments on
the Accounts by the Comptroller and Auditor General (C&AG) of India.
You will be delighted to know that your Company commissioned all the
Units under Phase III Refinery expansion project during the year and
registered the highest ever throughput of 15.53 MMT.
The standalone / consolidated financial highlights for the year ended
31/03/2016 are summarized below:
(Rs. In Crores)
Year ended Year ended Year ended Year ended
31st March, 31st March, 31st March, 31st March,
2016 2015 2016 2015
Turnover (Gross) 50864 62412 50983 62341
Earnings before 2464 (1250) 2386 (1325)
Profit/(Loss) Before 1174 (2156) 306 (2295)
after Tax, 1148 (1712) 710 (1803)
and share of
Profit/ (Loss) of
Your company achieved turnover of Rs. 50864 crore during the financial
year 2015-16 against Rs. 62412 crore during the financial year 2014-15.
The decrease in sales is mainly on account of decline in product prices
linked with declining crude price as also on account of more domestic
of take. The Company earned a Profit of after tax (PAT) of Rs. 1148
crore during the financial year 2015-16 against a loss of Rs. (1712)
crore incurred during the financial year 2014-15. The Gross Refining
Margin (GRM) for financial year 2015-16 was 5.20$/bbl as against (0.64)
$/bbl during the financial year 2014-15.Your Company has retained its
highest corporate rating [CCR AAA] affirmed by CRISIL and IRAAA by
ICRA during the FY 2015-16.
The financial year 2015-16 has been a very successful year for your
Company. During the year, the Company''s Refinery processed 15.53 MMT of
crude achieving an average utilization rate of 103.5% as against 14.63
MMT during the financial year 2014-15. During the year, the Company
achieved highest ever production and dispatch of LPG, Diesel, Coke and
Throughput in MBPL pipeline.
The Company has achieved direct sales of 1470 TMT against 820 TMT
during 2014-15 and retail sales of 4.8 TMT against 2.53 TMT during
MARKETING AND BUSINESS DEVELOPMENT
Your Company has successfully penetrated the Polypropylene market in a
short span of 9 months with a sales volume of 139 TMT and sales value
of Rs. 1039 Crores. The company is in the process of expanding its
markets reach in order to sell 440 TMT of Polypropylene per year. In
addition, your Company is also setting up its own infrastructure for
storage of Polypropylene. To leverage the highly Profitable
Polypropylene and to position MRPL as a niche market player,
comprehensive pricing of various grades of Polypropylene has been put
in place along with customer enrolment activity. Del Credere Agents cum
Consignment Stockist has been appointed to partner us in addressing
major demand clusters in the South and West of India.
Your Company has also succeeded in marketing the entire production of
Petcoke on consistent basis. Company evacuated additional quantity of
Sulphur in domestic as well as export market. The Company has achieved
major breakthrough for bulk evacuation of Pet-coke and Sulphur by
forging alliances with large Industrial houses which, in turn has
helped the Delayed Coker Unit to run at 100 percent capacity
utilization from 50 percent earlier. This has significantly increased
specialty sales and improved Refinery margins.
Your company continues to expand its market spread in the direct sales
segment of petroleum products in the state of Karnataka and its
adjoining states and has maintained significant market share and direct
customer relations for products such as Bitumen, Fuel Oil, Sulphur,
Diesel, Naphtha, Petcoke and Mixed Xylene in its Refinery zone.
Your company has also maintained timely supplies to State Trading
Corporation, Mauritius which has a long term supply contract with MRPL.
The company supplied 1067 TMT of petroleum products to STC Mauritius at
a sales value of Rs. 2774 Crores during FY 2015-16 against supply of
1084 TMT and sales value of Rs. 4394 Crores in FY 2014-15.
After deregulation of HSD pricing, your company has commenced the
retail expansion plan by releasing the advertisement for appointment of
dealers for retail outlets in the state of Karnataka & Kerala. The
company is expecting to commission a sizeable number of retail outlets
during FY 2016-17.
During the year, the Company has been conferred with following awards
and recognitions :
''Niryat Shree'' Gold Trophy in the Residual sector for Non MSME category
by Federation of Import Export Organization (FIEO). MD, MRPL received
the award from Hon''ble President of India on 4th May, 2016 in a
glittering ceremony held at Vigyan Bhawan, New Delhi.
Export Excellence Award, 2015 in Best Exporter Award (Medium/large
category) from the Federation of Karnataka Chamber of Commerce and
Certificate of recognition of ''Highest Ever Central Excise Duty payment
and Incremental growth''
First prize for outstanding performance in the area of Hindi
Implementation for the year 2015-16 for fifth consecutive year by
After successful commissioning of the Phase-III major units such as
Delayed Coker Unit, Petrochemical grade Fluidised Catalytic Cracking
Unit (PFCCU), Diesel Hydro treating Unit and the latest Polypropylene
Unit, MRPL''s product base has expanded to include Pet coke, Ultra Low
sulfur Diesel and Polypropylene. MRPL is establishing value partners
to expand market base and partner sustainable growth. MRPL has already
initiated actions for upgrading the MS & HSD qualities to meet BS VI
specifications which will come into force from April 2020. Further
incremental optimizations such as fare gas recovery, energy
optimizations activities have also been pursued.
A. COMPLETED PROJECTS
Phase - III Refinery Project
All the units of the Phase III Refinery capacity expansion and up
gradation project and the last unit PFCCU which was commissioned in
August, 2014 are running at full capacities today. This has resulted in
complete conversion of HSD and Petrol to Euro 4 grades, increased the
distillate yield with production of high value products viz Propylene,
Gasoline from low value black oils. The total expenditure incurred by
your Company on Phase -III Refinery project is around Rs. 13265 Crore
as on 31/03/2016.
Polypropylene Project (PP)
Polypropylene unit of Capacity 440 KTPA, (Licensor Technology from M/s
Lummus Novolen Technology GmbH, Germany) integrated with Phase -III
Refinery Project was commissioned successfully on 17/06/2015.
Commercial production has started and was dedicated to the Nation by
Shri Dharmendra Pradhan, Hon''ble Petroleum and Natural Gas Minister.
The total expenditure incurred by your Company on Polypropylene project
is around Rs. 1611 Crore as on 31/03/2016. The various grades of
Polypropylene produced by the unit were received well in the market and
was able to capture substantial market share in south zone in a short
B) ONGOING PROJECTS
Following new projects are being taken up for better logistics, value
addition and Profitability improvement :
(a) Railway Siding - A state of the art Railway siding for smooth
evacuation of Petcoke and Polypropylene.
(b) Revamp of CCR2 - The existing CCR-2 unit is being revamped to
produce greater quantity of Reformate, yielding greater quantity of MS.
(c) Relocation of loading facilities & additional tankages -This
project will provide greater flexibility to your company and allow for
greater marketing outreach.
(d) Flare Gas Recovery System - This project recovers gases that are
lost from the fare and utilize it as fuel, thereby saving cost. This
also helps to reduce the Carbon footprint of your company by reducing
greenhouse gas emissions.
(e) Additional Petcoke Silos for marketing - This facility allows your
company to attain greater flexibility in marketing of Pet-Coke and to
mitigate environmental impact of concentrated loading.
HEALTH, SAFETY AND ENVIRONMENT PERFORMANCE
Your Company is committed to ensure environmental friendly operations
to achieve highest standards of environmental excellence. MRPL
continues to leverage environment and sustainable development as an
ingredient of its business policies and strategic plans. The major
actions taken in 2015-16 on this front includes the following:
Audit of New Mangalore Portjetties for oil spill management by Oil
Industry Safety Directorate (OISD).
SOx & NOx Stack Online Analyzer data of Phase III units connected to
CPCB server in the month of June, 2015.
Periodic Manual Stack Monitoring is being carried out by MoEF/KSPCB
approved external agency.
Ambient Air Quality Monitoring is carried out by MoEF/ KSPCB approved
external agency in and around the Refinery at 9 locations as per
revised National Ambient Air Quality Monitoring Standards.
Environment Awareness Programs are being organized periodically in the
neighboring villages in association with Karnataka State Pollution
Continuous Online Monitoring Analyzers are being installed to monitor
Treated Effluents for various parameters in line with the directions of
Central Pollution Control Board (CPCB).
Treated effluents are monitored on a daily basis at both Refinery end &
at discharge end. A Fortnightly Marine Environment Impact Assessment
study was carried out by M/s. Central Marine Fisheries Research
Institute, Mangalore from 7 monitoring locations in the vicinity of
Treated effluent disposal point at sea & 3 Stations in the seashore.
So far, no adverse effect on the marine environment, was found.
Ten Nos. of Ground Water monitoring stations in and around Refinery
have been set up and regular monitoring of ground water quality is
being carried out along with Karnataka State Pollution Control Board
Low sulphur Fuel oil being used in the Refinery furnaces and boilers.
Usage of ultra low sulphur fuel gas generated in the Refinery process
units is also being maximized.
Sulphur Recovery Units (SRUs) are operated at efficiency greater than
Annual Submarine pipeline inspection has also been carried out by M/s.
National Institute of Oceanography (NIO).
The Refinery is certified with ISO 14001: 2004 for Environment
Management Systems by TUV Rheinland.
1531 Number of days worked without Reportable Lost Time Injuries as on
Nil Reportable Lost Time Injuries (RLTI) during the year.
16.81 Million Man Hours worked as on 31/03/2016,.
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY DEVELOPMENT
Corporate Social Responsibility (CSR)
Your Company''s social welfare and community development initiatives
focus on the key areas of education, health care and overall
development of basic infrastructure in and around its operational
areas. These projects are largely in accordance with Schedule VII of
the Companies Act, 2013.
Your company has spentRs.4.11 Crores (previous yearRs.4.81 crore) for
various CSR activities during the year 2015-16. Pursuant to Rule 9 of
Companies (Corporate Social Responsibility Policy) Rules, 2014 the
Annual Report on CSR activities is annexed herewith as Annexure ''A''.
Sustainability Development and Performance
Sustainability efforts of your Company last year centered on drawing
action plans towards minimizing carbon footprint through managing
complex projects and operations, addressing risk and opportunity, and
engaging externally. The Company also made progress on defining
supplier expectations for business conduct and on addressing related
risks in our supply chain. The Company continues to work to reduce
greenhouse gas emissions in our operations and to integrate climate
change- related activities and goals into our business planning. The
Plan further provides guidance regarding integrating sustainable
development with our business operations. Your Company has laid down
priority areas as well as short and long term actions to be undertaken
for meeting the objectives of the plan. Key identified areas includes:
Hydrocarbon value chain optimization
Energy consumption optimization
Water and Waste Management
Customer development and growth partnership.
Specific enablers have also been identified to facilitate the
implementation of action plans developed for above four areas.
Your Company is consolidating its position in potential hydrocarbon
value chain optimization avenues for sustainable development. The
pivotal emphasis is on recovering value from low value hydrocarbons
such as pet-coke, Refinery of gas and internal fuel oil. Efforts are on
the anvil to exploit such potentials to enhance share holders value.
Your Company is also considering other sustainable options to utilize
the pet coke for fringe in utility boilers to produce steam for power
generation along with capture of the associated pollutant - sulfur
molecule. This is expected to not only help in production of cheaper
power, but also ensure timely evacuation of this product from the
Refinery complex. Another advantage envisaged is the reduction in
internal fuel oil consumption which is currently being fired in the
boilers, for up-gradation into various lighter molecules like
Polypropylene, diesel etc. via the delayed coking route. In-house
feasibility study of the project with support from potential technology
suppliers is being taken-up.
Your Company is also looking into the option of recovering valuable
ethylene from low value PFCC of gas and supplying into downstream
petrochemical complexes. Also, the recovered ethylene can be used as a
co-monomer along with propylene to produce hetero-polymers of
polypropylene for enhancing market value. The in-house viability study
along with the potential increase in Profitability estimations are
being carried out with inputs from downstream petrochemical complexes
and ethylene recovery technology suppliers.
The Phase-3 Refinery Complex captive power plant facilities and some of
the process heaters are designed to burn Natural Gas as fuel. The
Phase-3 Hydrogen generation unit is also designed to consume Natural
Gas as an alternate feedstock. The infrastructure to bring natural gas
to Mangalore is being assessed by various gas suppliers. Subject to
economics, utilization of natural gas will not only reduce SOx
emissions but also open up the avenue of converting the low value
internal fuel oil into high value hydrocarbons.
PERFORMANCE OF SUBSIDIARY/ JOINT VENTURES
Pursuant to Section 129 (3) of the Companies Act, 2013 read with Rule
(5) of the Companies (Accounts) Rules, 2014, the salient features of
financial statement of Subsidiary and Joint Ventures in Form AOC-1 is
attached as Annexure ''B'' which forms part of this report.
ANNUAL REPORT OF SUBSIDIARY AND CONSOLIDATED FINANCIAL STATEMENT
The Audited Consolidated financial statements for the year ended 31st
March, 2016 of the Company and its subsidiaries form part of the Annual
Report in accordance with Section 129 of the Companies Act, 2013 and
the Accounting Standard (AS)-21 on Consolidated Financial Statements
read with AS-23 on Accounting for Investments in Associates and AS-27
on Financial Reporting of Interests in Joint Ventures. In accordance
with section 136 of the Companies Act, 2013, the audited financial
statements, including the consolidated financial statements and related
information of the Company and audited accounts of the subsidiary
Company are available on the Company''s website. These documents will
also be available for inspection during business hours at the
registered office of the Company at Mangalore.
ONGC Mangalore Petrochemicals Limited (OMPL) is the only subsidiary
company. Your company continues to hold 51% of equity shares in OMPL
and 49% is held by ONGC.
OMPL has set up an Aromatic Complex with an annual capacity 914 KTPA of
Para-xylene and 283 KPTA of Benzene in Mangalore Special Economic Zone.
During the year, 0.56 MMT of Para-xylene and 0.17 MMT of Benzene were
exported and the revenue for FY 2015-16 was Rs. 4,188.87 Crores. The
Company incurred loss of Rs. 875.35 Crores mainly due to Interest,
Depreciation and lower capacity utilization. A scheme of amalgamation
of OMPL with your Company has been fled with the Ministry of Corporate
Affairs, which is under process.
Your Company has adopted a Policy on determining Material Subsidiary,
which is available at company''s website.
The company has two Joint Ventures viz. Shell MRPL Aviation Fuels and
Services Limited (SMAFSL) with Shell B.V. Netherlands where in your
company holds 50% of share capital and Mangalam Retail Services Limited
(MRSL) with Gulf Oil, a Hinduja Group Company wherein your Company
holds 49.98% of share capital. The accounts of JV companies have been
consolidated with MRPL''s Accounts.
Shell MRPL Aviation Fuels and Services Limited (SMAFSL)
Shell MRPL Aviation Fuels and Services Limited (SMAFSL) supplies
aviation turbine fuel (ATF) to both domestic and international airlines
at several Indian airports. The revenue for FY 2015-16 is Rs. 324
Crores (Previous Year Rs. 636 Crores) with Pre-tax Profit of Rs. 4.72
Crores (Previous Year Rs. 10.69 Crores) and post-tax Profit of Rs. 3.82
Crores (Previous Year Rs. 7.74 Crores). The company commenced its
operation at Chennai during 2015-16. The Company is currently present
in 10 airports and entered into a facilitation model with HPCL for the
three airports of Mumbai, Kolkata and Delhi. The Company paid a
dividend of Rs. 0.75 Crores to MRPL during the FY 2015-16. M/s ICRA has
reaffirmed A1 to the non fund working capital limits of Rs. 50
million which indicates highest credit quality.
Mangalam Retail Services Limited (MRSL)
Mangalam Retail Services Limited (MRSL) the Joint Venture (JV) Company
with Gulf Oil an Hinduja Group Company for promoting retail plan of
MRPL. MRPL holds 49.98 % of shares in this Company. In absence of any
viable business plan, the continuance of the JV is being examined. The
JV has not commenced any business activities. Hence, there is no
business transaction during the FY 2015-16. The Accounts of the JV was
audited for the purpose of consolidation.
INDIAN ACCOUNTING STANDARDS (IND AS) IFRS CONVERGED STANDARDS
The financial statements have been prepared in accordance with the
generally accepted Accounting Principles (GAAP) and in accordance with
all applicable Accounting Standards. Your Company, its subsidiary and
joint venture Companies have adopted Ind AS with effect from 1st April,
2016 pursuant to the Companies (Indian Accounting Standard) Rules, 2015
notified by the Ministry of Corporate Affairs vide notification dated
16th February, 2015.
TRANSFER TO RESERVES
No amount has been transferred to General Reserves for the financial
In view of inadequacy of Profits in the last three financial years, the
Board did not recommend any dividend for the FY 2015-16.
Your company has not accepted any deposits during the year pursuant to
Section 74 of the Companies Act, 2013 and Rules thereunder. Your
Company is to refund certain customer advances which were unclaimed and
various steps to refund them are being taken.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
There have been no investments made, loans / guarantees given or
securities provided during the financial year 2015-16 under the
provisions of Section 185 / 186 of the Companies Act, 2013. The
details of investments made in earlier years covered under the
provisions of Section 186 of the Act are given in notes to financial
statements provided in this Annual Report.
The company has not issued any shares during the FY 2015-16. The
Issued, Subscribed and Paid up Equity Share Capital of your Company as
on 31/03/2016 was Rs. 1753 Crores.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN
THE END OF FINANCIAL YEAR AND DATE OF REPORT
There has been no change in the nature of business during the year. No
material changes or commitments have occurred after close of the year
till the date of this report which affects the financial position of
Your company values its human resources the most. To keep their morale
high, your company extends several welfare benefits to the employees
and their families by way of compensative medical care, education,
housing and social security. During the financial year 2015-16, 30 HR
policies in line with Indian Oil Corporation Ltd (IOCL) were revised
and notified. Promotions for management and non management staff were
released on time and S1 grade was introduced along with other pending
issues as per long term settlement (LTS).
Your Company continues to enjoy cordial and harmonious relations and
not a single man-hour was lost on account of any industrial disturbance
during the year 2015-16.
During the year, your Company has recruited 116 employees comprising of
6 women employees and 13 Schedules Caste (SC) / Schedule Tribe (ST)
employees. Total employee strength as on 31/03/2016 was 1812 including
130 women employees, 210 SC/ST employees and 26 persons with
disabilities (PWD). 816 employees belong to Management cadre whereas
996 employees belong to Non-Management cadre. During the year 2015-16,
your Company devoted 3669 Mandays for Training, Development and
Learning which amounted to an average of 2.16 Mandays per employee
which includes functional, developmental and special training programs
covering the entire spectrum of employees.
The Company maintains an Employee Club known as MRPL Employees Club
(MEC). The Club offers a wide range of pastime activities for the
employees and their dependents. An Internal Departmental Cricket
Tournament was also organised by MRPL Employees Club (MEC).
Presidential Directives and other guidelines issued by Department of
Public Enterprises, Ministry of Petroleum & Natural Gas, Ministry of
Social Justice and empowerment from time to time with regard to
reservation in services for Scheduled Castes, Scheduled Tribes, other
backward castes and Persons with disabilities. An adequate monitoring
mechanism has been put in place for sustained and effective compliance.
Liaison officers were appointed to ensure implementation of the
Government Directives. Rosters are maintained as per the directives and
are regularly inspected by the Liaison officer of the company as well
as the Liaison officer of MoP&NG to ensure proper compliance of the
Directives. Special Reservation Cell on SC/ST is constituted for
redressal of grievances of Scheduled Castes and OBC employees.
MRPL also complies with provisions under The Persons with Disabilities
(Equal Opportunities, Protection of Rights and Full Participation) Act,
1995 relating to providing employment opportunities for Persons with
Disabilities (PWDs). As on 31/03/2016, there were 26 permanent
employees with disabilities on the roll of MRPL.
Women employees constituted over 6 per cent of the Company''s workforce.
During the year, programs on women empowerment and development,
including programs on gender sensitization were organized. Your company
has an Internal Complaints Committee (ICC) required under Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013. There have been no cases reported to the
Committee, for the FY 2015-16.
Competitions were also held in Hindi language for employees and their
family members during National Safety Day, Environment Day, Security
awareness week and Vigilance awareness week. In order to propagate
Hindi among the employees, Hindi Workshops are being organized on a
regular basis at Mangalore, Mumbai, Delhi & Bangalore Offices. In order
to promote Hindi in the Company , Hindi fortnight was celebrated and
many Hindi competitions such as Hindi Padho, Samajho exam Tick karo,
Hindi Dictation, Handwriting, Admin. Glossary, News reading etc were
conducted for the employees, their children and family members in the
month of September 2015. A special quiz competition was also conducted
for GMs & GGMs during Hindi month celebrations. OL inspections of
internal departments and subordinate offices were carried out. Special
awards were given to the twelve topper students of DPS School,
Mangalore who scored the highest marks in Class-X Hindi examination.
Your Company won the first prize in Town Official Language
Implementation Committee (TOLIC) under the category of PSU Central
Government offices for outstanding performance in the area of Hindi
implementation for the year 2015-16.
In order to propagate Hindi in the Refinery, a Hindi In House Journal
namely MRPL PRATIBIMB is being published. As per OL Rule, OLIC
meeting was conducted in all the four quarters under the chairmanship
of MD. Meetings were organized specially for Official Language liaison
Offers during the year. Constant efforts for promotion of Hindi over
the years have resulted in significant increase in usage of Hindi in
RIGHT TO INFORMATION ACT, 2005
Your Company''s RTI manual is available on company''s website which
discloses all required information. During the year, 172 applications
were received, out of which 163 were disposed of before 31/03/2016 and
balance 9 applications are being disposed of.
Security of MRPL Refinery is designed to comply with Oil Sector
Infrastructure Protection Plan (OSIPP) and the Security Audit
recommendations given by MHA from time to time.
Physical Protection of the Refinery is handled by Central Industrial
Security Force (CISF). Proposal to augment the CISF strength to extend
protection to Refinery - Phase-3 area is under consideration of the
Security has always been on priority of the Company and to ensure
preparedness, periodic mock drills on work-place security preparedness
are conducted. Security Awareness Weeks are organised periodically to
promote awareness on security issues among all stake holders. An
integrated CCTV cum Electronic Intrusion Detection system is under
implementation to further strengthen electronic surveillance of the
Your company has developed a structured mechanism of vigilance
functions and its practices are focused towards creation of value of
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.
Officers in sensitive posts are rotated regularly.
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 instructions, your Company has achieved high compliance
level with regard to e-procurement, e-tender and e-payment.
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.
Whistle Blower Policy for Directors & Employees
The Whistle Blower Policy is formulated to provide a vigil mechanism
for Directors and Employees to raise genuine concerns about unethical
behaviour, actual or suspected fraud. The Policy provides necessary
safeguards for protection of Directors and Employees who avail the
vigil mechanism from reprisals or victimization, for whistle blowing in
good faith and to provide opportunity to Directors and Employees for
direct access to the Chairperson of the Audit Committee in exceptional
cases. The policy is available on the Company''s website. During the
year, no complaints were received under Whistle Blower Policy.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS & OUTGO
Information required to be disclosed pursuant to Section 134(3)(m) of
the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts)
Rules, 2014 with respect to Conservation of Energy, Technology
Absorption and Foreign Exchange earnings & outgo are furnished in
Annexure ''C'' which forms part of this Report.
MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES
MRPL, being a Government Company, is exempted from the provisions of
Section 197 (12) of the Companies Act, 2013 and relevant Rules in view
of the Notification dated 05/06/2015 issued by Ministry of Corporate
The functional directors of the Company are appointed by the
administrative Ministry i.e. MoP&NG within the terms & conditions as
per DPE guidelines.
EXTRACT OF ANNUAL RETURN
Information required to be disclosed pursuant to Section 134(3)(a) of
the Companies Act, 2013 with respect to the details forming part of the
extract of the Annual Return in form MGT-9 are furnished in Annexure
''D'' which forms part of this Report.
UNIFORM LISTING AGREEMENT
The Securities and Exchange Board of India (SEBI) on 02/09/2015, issued
SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 (hereinafter referred to as SEBI Listing Regulations, 2015) with
the aim to consolidate and streamline the provisions of the Listing
Agreement for different segments of capital markets to ensure better
enforceability. The said Regulations were effective December 1, 2015.
The Company entered into Uniform Listing Agreement with BSE Limited and
National Stock Exchange of India Limited during December, 2015.
RELATED PARTY TRANSACTIONS & PARTICULARS OF CONTRACTS / ARRANGEMENTS
WITH RELATED PARTY
All transactions entered with related parties during the financial year
2015-16 were on arm''s length basis and in ordinary course of business.
Further, there were no material related party transactions during the
year with the Promoters, Directors or Key Managerial Personnel. The
Company has adopted a Related Party policy and procedure, which is
available at company''s website.
The particulars of every contract or arrangements entered into by the
Company with Related Parties referred in Section 188(1) of the
Companies Act, 2013, in the prescribed Form No. AOC - 2 attached as
Annexure ''E''. MCA vide Notification dated 05/06/2015, has exempted the
applicability of Section 188 (1) of the Companies Act, 2013 for a
transaction entered into between two Government Companies.
DIRECTORS & DIRECTORS'' RESPONSIBILITY STATEMENT
Policy on Directors'' Appointment
MRPL being a Government Company, the provisions of Section 134(3) (e)
of the Companies Act, 2013 shall not apply in view of the MCA
notification dated 05/06/2015.
Changes in the Board of Directors and Key Managerial Personnel during
the financial year 2015-16.
Shri M. Venkatesh assumed the office of Director (Refinery) on 1st
April, 2015 and elected as a Director in the 27th Annual General
Meeting held on 08/08/2015. Shri Nalin Kumar Srivastava, Deputy
Secretary, MoP&NG was appointed as Additional Director with effect from
5th March, 2015 and elected as a Director in the 27th Annual General
Meeting held on 08/08/2015. Shri Nalin Kumar Srivastava, ceased to be a
Director w.e.f 3rd March 2016 consequent upon withdrawal of his
nomination by MoP&NG. Smt. Perin Devi, Director of MoP&NG was
appointed as additional Director with effect from 14th May, 2015 and
elected as a Director in the 27th Annual General Meeting held on
08/08/2015. Shri A. K. Sahoo, assumed the office of Director (Finance)
with effect from 1st February, 2016. He vacates his office as
Additional Director in this AGM and being eligible offers himself for
appointment as Director (Finance) in the 28th Annual General Meeting.
Shri Diwakar Nath Misra, Director (GP) of MoP&NG was appointed as
Additional Director with effect from 9th March, 2016, vacates his
office as Additional Director in this AGM and being eligible offers
himself for appointment as Director in the 28th Annual General Meeting.
Shri Vishnu Agrawal, ceased to be a Director consequent upon his
superannuation from the services of MRPL on 31st January, 2016.The
Board places on record its appreciation for the valuable services
rendered by the outgoing Directors during their respective tenure.
Independent Directors on the Board of Directors of the Company are yet
to be nominated by the Ministry of Petroleum and Natural Gas
(MoP&NG).The matter is regularly followed with the Ministry.
FORMAL ANNUAL EVALUATION
MRPL being a Government Company, the provisions of Section 134(3) (p)
of the Companies Act, 2013 shall not apply in view of the MCA
notification dated 05/06/2015.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to provisions of Section 134 of the Companies Act, 2013, the
Board of Directors of your Company has made the following statement for
a) In the preparation of the Annual Accounts for the year ended March
31, 2016, the applicable Accounting Standards have been followed along
with proper explanation relating to material departures;
b) 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 at the end of the financial year and of the Profit of
the company for that period;
c) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the company and for preventing and detecting fraud and other
d) The Directors have prepared the Annual Accounts on a going concern
e) The Directors have laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively; and
f) The Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
NUMBER OF BOARD MEETINGS
The Board of Directors of your Company had seven (7) Meetings during
the FY 2015-16. The maximum interval between any two meetings did not
exceed 120 days as prescribed in the Companies Act, 2013. Details of
the Board Meetings held, have been furnished in the Corporate
Governance Report which forms part of this Report.
The Audit Committee has been constituted as per the terms of reference,
prescribed under Section 177 of the Companies Act, 2013 read with Rule
6 of the Companies (Meetings of the Board and its Powers) Rules, 2014,
Regulation 18 of SEBI Listing Regulation, 2015 and Guidelines on
Corporate Governance for Central Public Sector Enterprise issued by
Department of Public Enterprise, Government of India. There have been
no instances where the recommendations of the Audit Committee were not
accepted by the Board of Directors. The details of Audit Committee are
disclosed in the Corporate Governance Report which forms part of this
Report. MRPL being a Central Public Sector Enterprise (CPSE), Directors
on the Board of the company are appointed by the Administrative
Ministry i.e. Ministry of Petroleum and Natural Gas (MoP&NG),
Government of India.
Due to non-availability of Independent Directors, the Audit Committee
is not constituted as per the provisions of the Companies Act, 2013 &
SEBI Listing Regulation, 2015.
NOMINATION AND REMUNERATION COMMITTEE
Pursuant to Section 178 of the Companies Act, 2013 and Regulation 19 of
SEBI Listing Regulations, 2015 and DPE guidelines on Corporate
Governance for CPSE, your Company has constituted a Nomination and
Remuneration Committee. The details on the Nomination and Remuneration
Committee are disclosed in Corporate Governance Report which forms part
of this report.
MRPL is a ''Schedule A'' category-1 Miniratna Central Public Sector
Enterprise (CPSE). The appointment, terms, conditions and remuneration
of Managing Director and Functional Directors (Whole-time Directors)
are fixed by the Department of Public Enterprises (DPE), Govt. of
India. MRPL being a Central Public Sector Enterprise (CPSE), Directors
on the Board of the company are appointed by the Administrative
Ministry i.e. Ministry of Petroleum and Natural Gas (MoP&NG),
Government of India.
Due to non-availability of Independent Directors, the Nomination and
Remuneration Committee is not constituted as per the provisions of the
Companies Act, 2013 & SEBI Listing Regulation, 2015.
RISK MANAGEMENT POLICY
Your Company has a well-defined policy framework for Enterprise Risk
Management formulated by Deloitte. Risk Managers are continuously
monitoring the Risks pertaining to their area. Risk Management
Committee was reconstituted consisting of majority of Directors
pursuant to Regulation 21 of SEBI Listing Regulation, 2015 which
monitors and evaluates the risk overview document once in quarter and
recommends the same to the Audit Committee for evaluation. The Risk
Management Committee''s overview document is duly reviewed by the Audit
Committee and placed before the Board on quarterly basis.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS
There are no significant and material orders passed by the Regulators /
Courts / Tribunals that would impact the going concern status of the
Company and its future operations.
The Companies Act, 2013 and SEBI Listing Regulations, 2015 have
strengthened the governance regime in the country. Your Company is in
compliance with the governance requirements provided under the
Companies Act, 2013 and SEBI Listing Regulations, 2015 and has complied
with all the mandatory provisions of the Companies Act, 2013 and Rules
made thereunder and SEBI Listing Regulation, 2015 relating to the
Corporate Governance requirements and mandatory guidelines on Corporate
Governance for CPSEs issued by DPE, Government of India, except for the
presence of requisite number of Independent Directors on the Board and
Board Committees. The Corporate Governance Report for the FY 2015- 16
forms part of this Report.
Pursuant to Schedule V of the SEBI Listing Regulations, 2015, the
Auditors'' Certificate on compliance of conditions of Corporate
Governance also forms part of the Annual report. The Auditors have made
observations on the appointment of Independent Directors on the Board
of the Company. The Company is pursuing with the Ministry of Petroleum
& Natural Gas (MOP&NG) for the appointment of requisite number of
Pursuant to requirements of the Companies Act, 2013 and SEBI Listing
Regulations, 2015, following policies/codes have been formulated and
uploaded on the Company''s website at www.mrpl.co.in :
a) Code of Conduct for Board Members and Senior Management Personnel,
b) Whistle Blower Policy,
c) Related Party Transactions Policy and Procedures,
d) CSR & SD Policy,
e) Material Subsidiary Policy,
f) The Code of Internal Procedures and Conduct for prohibition of
Insider Trading in Dealing with the securities of MRPL,
g) Policy on Materiality for disclosure of events to the Stock
h) Policy on preservation of Documents,
i) Training Policy for Board of Directors.
BUSINESS RESPONSIBILITY REPORT
SEBI Listing Regulations, 2015 mandated inclusion of Business
Responsibility Report (BRR) as part of the Annual Report for top 500
listed entities based on market capitalization. In compliance with the
Regulation, BRR forms part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of Regulation 34 of the SEBI Listing Regulations, 2015 the
Management''s Discussion and Analysis Report (MDA) for the FY 2015-16
forms part of this Report.
INTERNAL FINANCIAL CONTROL
Your Company has a well established Internal Financial Control System
to ensure an adequate and effective internal control environment that
provides assurance on efficiency of conducting business, including
adherence to Company''s policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and
completeness of accounting records and the timely preparation of
reliable Financial information. The Company has appointed an external
frm of Chartered Accountants, M/s K.Verghese & Co., as Internal
Auditors for the FY 2015-16 and 2016-17, which is assisted by the
Company''s Internal Audit Department. The reports of the Internal
Auditors are reviewed by the Audit Committee and the corrective actions
on their advice/suggestions, wherever required, are taken. The internal
financial control is based on quarterly and annual gap analysis on
which the CEO/CFO certifies the Audit Committee as well Board for
approving financial statements.
Joint Statutory Auditors
M/s Shreedhar, Suresh & Rajagopalan, Chennai and M/s A Raghavendra Rao
and Associates, Mangalore were the Joint Statutory Auditors of the
Company for the FY 2015-16. They have audited the Financial Statements
for the Financial Year ended 2015-16 and submitted their report which
forms part of this report. There is no qualification in the Auditors
Report on the Financial Statements of the company. Notes to the
Accounts referred to in the Auditors Report are self-explanatory and
therefore do not call for any further comments.
Your Company has engaged M/s Ullas Kumar Melinamogaru & Associates,
Practicing Company Secretaries, Mangalore for conducting Annual
Secretarial Audit for the year 2015-16 pursuant to Section 204 of the
Companies Act, 2013. M/s Ullas Kumar Melinamogaru & Associates
Practicing Company Secretaries, Mangalore have issued Secretarial Audit
Report for the year 2015-16 which forms part of this report as Annexure
F. The Auditors have made observations on the appointment of
Independent Directors on the Board of the Company and overtime working
hours as per the provisions of the Factories Act, 1948. The Company is
pursuing with the Ministry of Petroleum & Natural Gas (MoP&NG), Govt.
of India, for the appointment of requisite number of Independent
Directors. As regards the observations on working hours, the same has
been taken up with the Department of Public Enterprises by the Industry
Pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the cost
accounts maintained by the company for the FY 2015 16 are being
audited by Cost Auditors M/s. Bandyopadhyaya Bhaumik & Co., Kolkata.
M/s. Bandyopadhyaya Bhaumik & Co., Kolkata have been re-appointed as
Cost Auditor for FY 2016-17.
COMMENTS OF C&AG ON THE JOINT STATUTORY AUDITORS'' REPORT ON THE
CONSOLIDATED AND STANDALONE FINANCIAL STATEMENTS FOR THE FY 2015-16
The Comments of Comptroller & Auditor General of India (C&AG) forms
part of this report and are attached as Annexure-G. You would be
pleased to know that your company has received NIL comments from C&AG
for the year 2015-16.
Your Directors wish to thank the shareholders for the continued
confidence reposed on their Company. Your Directors sincerely thank the
Government of India (GoI), Ministry of Petroleum and Natural Gas
(MoP&NG), Ministry of Finance (MoF), Ministry of Corporate Affairs
(MCA), Department of Public Enterprises (DPE), Ministry of Environment
and Forest (MoEF), Ministry of External Affairs (MEA), Ministry of
Shipping (MoS), Ministry of Home Affairs (MHA), other Ministries and
Departments of the Central Government and the Government of Karnataka,
for their valuable support, guidance and continued co-operation.
Your Directors gratefully acknowledge support and direction provided by
the parent company, Oil and Natural Gas Corporation Limited (ONGC) and
the support of Hindustan Petroleum Corporation Limited (HPCL), as
Promoters of the company. Your Directors acknowledge the continuing
co-operation and support received from New Mangalore Port Trust,
Financial Institutions, Banks and all other stakeholder. Your Directors
recognize the patronage extended by the valued customers for the
products of the Company and promise to provide them the best
satisfaction. 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 known as Team MRPL.
For and on behalf of the Board
(Dinesh Kumar Sarraf)
Place: New Delhi