The behalf of the Board of Directors, I take pleasure in presenting the
24th Annual report on the performance of your company, together with
the Audit report and Audited account for the year ended 31/03/2012.
It is a matter of immense satisfaction that the performance of your
company both on the Physical as well as Fiscal parameters created
certain new benchmarks of excellence during the year 2011-12.
Major highlights of your Company''s performance during the year are
1. Highest ever Refinery crude thruput at 12.82 MMTPA.
2. Highest ever Turnover at Rs. 572,068 Million.
3. Highest ever Export Turnover at Rs. 234,183 Million.
4. Lowest ever Energy consumption index of 57.92 MBN.
5. Nameplate capacity of the refinery has been enhanced to 15 MMTPA
with successful commissioning of 3 MMTPA Crude and Vaccum Distillation
Unit III (CDU&VDU III) of Phase-III project on 29/03/2012.
6. With Commissioning of CDU and VDU-III before 31/03/2012 your
Company is eligible for benefits under Section 80(IB) of the Income Tax
Act, 1962 for Phase- III project.
7. Government of Karnataka has sanctioned an attractive Tax Incentive
package for the Phase-III project.
8. Diesel Hydro Treater/ Hydrogen Generation/ Coker Gas Oil Hydro
Treater Units were mechanically completed before 31/03/2012.
9. DPE Adjudged performance of your company as Excellent for the
year 2010- 11 against the MoU target.
1.1 FINANCIAL PERFORMANCE
(Rs. In Million)
Year ended Year ended
31st March, 2012 31st March, 2011
Profit be fore Depreciation 19 08 22,332
Interest and Tax
Interest and Finance Charges 2,067 1,047
Gross Profit after interest
but before 17,541 21,285
Depreciation and Tax
Depreciation and Amortizations 4,339 3,914
Profit Before Tax 13,202 17,371
Provision for Taxation 4,116 5,605
Profit after Tax 9,086 11,766
Balance of Profit/(Loss)
brought forward 42 998 33 959
from previous year
Surplus available for appropriation 52,074 45,727
Proposed dividend on Preference 0,000 0,00
Shares (Rs. 9,186)
Proposed Dividend on Equity Shares 1,753 2,103
Tax on Dividend 284 341
Transfer to Capital Redemption Reserve 46 -
Transfer to General reserve - 295
Balance carried to Balance Sheet 49,991 42,988
The Board of Directors of your company is pleased to recommend dividend
payout of 10% (Rs. 1/- per equity share) ofRs. 10/- each fully paid-up in
view of the ongoing project investment and the reduced profitability.
This will absorb Rs. 2,036 Million including Rs. 284 Million as dividend
1.3 OPERATIONAL PERFORMANCE
The Highest ever Refinery thruput was 12.82 MMTPA for the year 2011-12
compared to 12.64 MMTPA during the previous year. During the last
fiscal, your Company has completed the revamp of its CDU/ VDU -I unit
as well as Hydro Cracker Unit-II. Your company, keeping in view the
process requirement and to maintain high utilization of its assets, has
planned these revamps along with the turnaround shutdowns during the
year 2011-12. During the year 2011-12, your company has processed three
new crudes i.e., Agbami, COCO, Mellitah and continues to expand its
Your company has achieved highest ever export turnover ofRs. 234,183
Million during the year 2011-12 by exporting products like Motor Spirit
(MS), Naphtha, Mixed Xylene, High Speed Diesel (HSD), Jet fuel and Fuel
Your Company continues to have the Term export contract for the supply
of petroleum products to Mauritius with the State Trading Corporation
In the global competitive market, your company has secured its place by
exporting the petroleum products and continues to explore opportunities
for its growth.
1.5 SAFETY PERFORMANCE
The year 2011-12 witnessed successful and safe commissioning of
CDU/VDU- III of Phase-III. Your company has also recorded longest
accident free period of 1662 days during the year by surpassing
previous best record of 1301 days during the year.
Your company is committed towards imparting continuous training in fire
& safety practices. During the year under review, 885 Nos. of Plant
employees and 7,184 Nos. of contract employees were trained in Fire and
Industrial Safety. Employees of your company were also trained on
safety aspects and practices during the year.
Your company has conducted Multidisciplinary Internal Safety Audit and
OISD external surprise audit was also conducted during the year and its
recommendations are being complied with.
1.6 ENVIRONMENT MANAGEMENT
Your company believes in Perform beyond Compliance for Protection
of the Environment. Your Company is ISO 14001:2004 certified company,
authenticated by TUV Rheinl and.
Your Company has undertaken following major initiatives for Greener
Environment during the last fiscal:
- Wet Air Oxidation Unit is under trial to treat Spent Caustic and to
improve the WWTP performance.
- An advanced Reverse Osmosis Plant is being commissioned for
maximizing the quantity of treated effluent recycle.
- Condensate Recovery Unit commissioned in CDU-1 resulting reduction
in fresh water consumption. Similar units are planned for other process
units as well.
- Second continuous ambient air quality monitoring system was
installed in the refinery to monitor the ambient air quality.
- An external agency monitors Ambient Air Quality at 7 locations in
and around the refinery.
- A Closed Bioremediation Unit is being commissioned in the refinery
to treat oily sludge generated in the refinery.
- VOC Emission monitoring is being done at 74,000 points in the
refinery through reputed agency and corrective measures taken to
effectively minimize the same.
- Community awareness programme was organized in the neighboring
villages in association with Karnataka State Pollution Control Board.
- In a unique partnership with Karnataka Forest Department, your
company is developing green belt in 120 acres of land. As a first
stage, 40,000 saplings are being grown in an offsite nursery by the
Forest Department, which will be later transplanted in the green belt.
1.6.1 Environmental Performance:
Your company continues to comply with the Environmental Regulations and
also making its best efforts for protection of environment by taking
Following major actions were taken to prevent water and air pollution.
- Effluent treatment plant operation was normal throughout the year.
- Treated effluent quality was well within the prescribed limits.
- Seawater quality monitoring carried out by M/s. College of
Fisheries indicates no adverse effect on the marine environment due to
treated effluent discharge.
- Average treated effluent recycle to cooling towers during the year
was about 74%
- Treated effluent after maximum recycle and within the stipulated
standards are discharged into sea at a distance of 700 m and at a depth
of 6.5m through diffusers for maximum dispersion & dilutions.
Independent government agency monitors the marine ecology at the
outfall point in the sea on a fortnight basis. Till date there has been
no adverse effect on the marine eco-system.
- Cooling towers are operated at greater than 6 Cycles of
concentration, this measure has brought down the cooling tower blow
down. Refinery practices the cascade blow down system in the cooling
towers to conserve water and chemicals.
- Various energy conservation schemes are implemented for reducing
- Utilization of low sulphur (less than 1% S) fuel oil in furnaces,
with average sulphur content, less than 1% maintained into fuel oil.
- Maximum utilization of Ultra Low Sulphur Fuel Gas (less than 10
ppmS) in furnaces.
- SRU units are running with more than 99% efficiency.
- Ambient air quality monitoring being done inside and outside the
Refinery by reputed external agency as per revised National Ambient Air
Quality Monitoring Standard set by Ministry of Environment & Forests
- Regular monitoring has minimized flaring.
- Daily average Sulphur dioxide emissions from the refinery kept
beneath the prescribed limits of 40.0 T/day.
1.6.2 Solid Waste Management and implementation of Supreme Court
Monitoring Committee (SCMC) Recommendations:
- 125MT of spent activated carbon was disposed off.
- Bioremediation of 2000 Tonnes of oily sludge has been completed
1.6.3 Noise Pollution Control:
Acoustic enclosures are provided for DG sets at Sarapady and APMC
1.6.4 Future Plans:
- Utilization of Liquified Natural Gas (LNG) as alternative fuel in
- Vapour recovery System for light hydrocarbon storage tanks in Phase
- III Refinery Project.
- VOC Recovery system in Waste Water Treatment Plant (WWTP) of Phase-
Domestic Marketing of Products
Your Company continues to increase its market share in the direct sales
segment of petroleum products in the state of Karnataka and its
adjoining states. The direct sales turn over during the year was Rs.
27,552 Million compared to Rs. 22,912 Million in the previousfiscal.
During the year Bitumen sales was increased to 293 TMT from 248 TMT
sold during the previous year, registering a growth of 18%, Furnace Oil
sales was increased to 146 TMT during the year from 99 TMT sold during
the previous year, registering a growth of 47% and Mixed Xylene sales
was also increased by threefold during the year.
1.7.1 Retail Operations
Keeping in view the under recoveries in retail marketing of auto-fuels,
your company continues to adopt a non aggressive approach with its
miniscule presence in the retail marketing.
1.7.2 New Products Marketing Plan
Your company is setting up a Polypropylene (PP) plant with the capacity
of 440 KTPA, integrated with Phase- III expansion of refinery complex
with an investment of Rs. 18,037.8 Million for supplying to downstream
processing industry. Detailed business plan for sale of Polypropylene
in domestic market is being finalized. Storage infrastructure for
Polypropylene is being developed at Hassan in the State of Karnataka.
Your company is also setting up a Delayed Coker Unit (DCU) in its
Phase- III expansion project, which will produce Petcoke, a new product
in the product basket. Detailed business plan is being finalized for
sale of Petcoke to major Industrial consumers in Southern India.
1.7.3 Joint Ventures
Your Company is in Joint Venture (JV) with Shell B.V Netherland known
as Shell MRPLA viation Fuel Services Private Limited (SMAFSPL) which
supplies Aviation Turbine Fuel (ATF) to both domestic and international
airlines at Indian airports.
SMAFSPL is aggressively acquiring market share in both domestic and
international airlines at Indian airports. It has commenced its
refuelling operations at Mangalore airport.
Your company continues to hold 50% equity in the Joint Ventures by
holding 15 Million equity shares worth ofRs. 150 Million.
Turnover of this JV Company was Rs. 5,173.48 Million during the year
against Rs. 2,867.03 Million during the previous year and the Pre-tax
profit ofRs. 181.59 Million during the year againstRs. 136.28 Million during
the previous year.
The JV Company declared its maiden dividend ofRs. 1 per equity share ofRs.
10 each fully paid during the year.
2. AWARDS AND RECOGNITION:
Your company has been recognized for its excellence in all of its
operational areas and received following awards during the year:
- Won the Unnatha Suraksha Puraskara award - 2011 conferred by
National Safety Council -Karnataka Chapter for Outstanding Performance
in Safety Management Systems.
- Excellent MoU rating received from Department of Public
Enterprise, Government of India for the year 2010-11.
- Secured second prize for outstanding performance in the area of
Hindi implementation for the year 2010-2011 by the Town Official
Language Committee (TOLIC), Mangalore.
- Won BT- STAR PSU Excellence award 2012 for Excellence in Market
- Won OISD Most Consistant Performer (Refineries) Award for 2009-10
3. CREDIT PROFILE
3.1 ICRA Limited has reaffirmed Issuer Rating IrAAA (pronounced
IR Triple A) to your company. This rating indicates the highest credit
quality rating assigned by ICRA and the rated entity i.e., which
carries the lowest credit risk.
3.2 ICRA has reaffirmed the rating assigned to the Rs. 15,000 Million
Fund- Based limits of your company at [ICRA] AAA (pronounced ICRA
Triple A).The outlook on the rating is Stable.
3.3 ICRA has also reaffirmed the rating reassigned to the Rs. 55,000
Million Non- Fund based limits of your company at [ICRA] A1
(pronounced as ICRA A one plus).
3.4 ICRA has reaffirmed [ICRA] A1 (pronounced as ICRA A one
plus).This rating indicates the very strong degree of safety regarding
timely payment of financial obligations i.e., which carries the lowest
3.5 CRISIL has reaffirmed [CCR AAA] (pronounced as CCR Triple A).
This rating indicates highest degree of strength with regard to
honoring debt obligations by your company.
4. FINANCIAL ACCOUNTING
The financial statements have been prepared in accordance with the
Generally Accepted Accounting Principles (GAAP) and in compliance with
all applicable accounting standards and as per the guidance note on
accounting for activities of the company issued by The Institute of
Chartered Accountants of India (ICAI) and provisions of the Companies
Act, 1956. The financial statements have been prepared under the
Revised Schedule VI format of the Companies Act, 1956 pursuant to
notification of Ministry of Corporate Affairs (MCA), Government of
5. INTERNAL CONTROL SYSTEM
Your company remains committed to ensure an effective internal control
environment that provides assurance on the efficiency of operations and
security of assets.
Internal audit department functions under the supervision of the Audit
Committee chaired by an Independent Director. Your company has a well
established internal control review mechanism which assures effective
internal control environment to the Audit Committee and Board of
6.1 Phase-III Refinery Expansion and Up gradation Project
As you are aware that your company is implementing Phase-III refinery
expansion and up gradation project at an estimated cost of Rs. 121,600
Million, which will drive the future growth of the company.
Major highlights of Phase-III refinery expansion and up gradation
project are as under:
- With the increased capacity of 15 MMTPA your company is well placed
in the market vis-e-vis its peers in the Industry.
- Your company is the second refinery in the country, capable of
processing high TAN crudes.
- The Nelson Complexity Index of the refinery of your company
enhanced to approximately 9.0 from 6.0.
- The Distillate yield of the refinery will be increased by
- Your company will produce value added products like Propylene from
the low value black oil.
- The Diesel Hydro Treater (DHDT) of the refinery of your company
will convert the High Speed Diesel (HSD) into Euro -III, IV and V grade
for domestic and global market.
The Phase-III project is being executed in hybrid mode consisting of
various modes of execution viz., Engineering, Procurement and
Construction Management (EPCM), Open Book Execution (OBE) and Lump Sum
Turn Key (LSTK). M/S Engineers India Limited (EIL) is the Project
Management Consultant. M/S Jacob is the EPCM Contractor for the cDu/VDU
and M/S EIL is the contractor for Petro Fluidized Catalytic Cracking
Unit (PFCCU) and Sulphur Recovery Unit (SRU) which are executed under
OBE and LSTK.
Your company has achieved an overall progress of 95.7% against
scheduled target of 100% as of 15/07/2012 in Phase-III project and is
in the process of progressive commissioning of the following major
(i) Hydrogen Generation Unit (HGU)
(ii) Diesel Hydro Treater Unit (DHDT)
(iii) Sulphur Recovery Unit (SRU)
(iv) Captive Power Plant (CPP)
(v) Petro Fluidized Catalytic Cracking Unit (PFCCU)
(vi) Delayed Coker Unit (DCU)
(vii) Coker Gas Oil Hydro Treater Unit (CHTU)
The crude was cut into CDU and VDU of Phase-III on 25/03/2012 after
mechanical completion of necessary fire water network, flare network,
utilities control systems and various finished products were routed to
respective storage tanks on 29/03/2012.
Hydrogen Generation Unit (HGU) was succusfully commissioned on
Two crude storage tanks each having 60,000 m3 capacity were
commissioned on 30/3/2012 to enhance the crude storage capacity of the
refinery of your company.
Wet Air Oxidation unit, a part of the auxiliary units/facilities was
commissioned on 13/12/2011.
The Phase-III project has Hydrocarbon streams interconnections with the
existing Phase-1 & II of the refinery of your company. Revamp of the
existing Hydro Cracker Units (HCU-1 and hCu-2) has been successfully
completed and commissioned during May, 2012.
Your company is pleased to inform that the Government of Karnataka has
given an attractive incentive package consisting of following fiscal
benefits for Phase- III project:
- Exemption from payment of Entry Tax on plant and machinery and
capital goods during the initial period of 4 years from the date of
commencement of project implementation.
- Exemption from payment of Entry Tax on the crude oil thruput in
Phase-III for15yearsfrom the start of commercial production of the
- Exemption from Central Sale Tax for 15 years from the date of
commencement of commercial production for all the interstate sales.
- Interest free soft loan at the rate of 100% of eligible gross VAT
3 years and 60% of eligible gross VAT on the sale of Polypropylene,
Petroleum Coke, LSHS, Naphtha, LPG (incremental production), Mixed
Xylenes and reformate to non SEZ units for next 12 years to be repaid
after 15 years by 15 equal annual installments limited to Rs. 5000
Million per annum.
The Phase-III project of your company is now eligible for Income Tax
benefit under Section 80(IB) of the Income Tax Act, 1962 as it has
successfully commissioned CDU and VDU of Phase-III project on
29/03/2012 before the sunset deadline of 31/03/2012 .This benefit will
place your company in a better position for competing with its peers in
Hydrogen Generation (HG), Diesel Hydro Treater (DHDT), and Coker Gas
Oil Hydro Treater (CHT) units along with related utilities were also
mechanically completed before March 2012. The pre-commissioning
activities of these units are nearing completion by extending steam and
power from the existing facilities of Phase-I and Phase-II due to delay
in commissioning of Captive Power Plant (CPP) of Phase -III by its LSTK
contractor ( M/s BHEL). It is expected that M/s BHEL will be able to
commission CPP of Phase-III by the end of September 2012 as assured by
6.2 Polypropylene Project
As you are aware that your company is setting up a Polypropylene (PP)
unit integrated with the Phase-III project at an estimated Capex of Rs.
18,037.8 Million. M/s. Engineers India Limited (EIL) has been engaged
to implement this project under OBE convertable to LSTK methodology and
M/s. Novolen Technology, Germany has been selected as the licensor for
Project Displaced Families (PDF) problems had delayed the site work
which resulted in shifting the location of this project. Fresh
environmental clearance has been obtained from the Ministry of
Environment and Forest (MoEF) due to shifting of the location.
Polypropylene Project has achieved an overall progress of 82.2% against
scheduled target of 97.7% as of 15/07/2012. Cost commitment made for
this project was Rs. 12,976.6 Million and the cumulative expenditure
incurred was Rs. 5,492.1 Million as of 31/03/2012.
6.3 Single Point Mooring (SPM) Project
Your company is setting up Single Point Mooring (SPM) project along
with coastal booster pumping station within the port limits at a
location of 16 kilometers inside the sea (High-Seas) having draft
availability of 30 meters for handling Very Large Crude Carrier (VLCC)
at an estimated cost of Rs. 10,440 Million.
SPM facility will have following advantages:
a. Use of VLCC will reduce the average freight cost of crude.
b. Flexibility to receive opportunity crudes from West African and
Latin American countries.
c. De-congestion of existing jetties at New Mangalore Port Trust
(NMPT) will result in handling more petroleum products.
d. Crude will be pumped to the Indian Strategic Petroleum Reserve
Limited (ISPRL) underground cavern for storage of Crude oil at
Mangalore and Padur.
Single Point Mooring (SPM) project has achieved an overall progress of
95.6% against the scheduled target of 100% as of 15/07/2012 and is
expected to commence trial operation by the end of September, 2012.
6.4 Future Projects for Growth
During Global Investors Meet on 7th & 8th June, 2012 at Bengaluru, your
company has signed a Memorandum of Understanding with the Government of
Karnataka for setting up a Linear Alkyl Benzene Plant (a raw material
to manufacture Detergents) and to expand its refining capacity to 21
MMTPA subject to techno- economic viability and availability of
required infrastructure at Mangalore with an approximate investment ofRs.
7. 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 Directors) Rules, 1988 with
respect to conservation of energy, technology absorption and foreign
exchange earnings & outgo are furnished in ''Annexure-1'' which forms
part of this Report.
8. 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, and the Particulars of Employees Amendment Rules, 2011.
9. RIGHT TOINFORMATIONACT, 2005
Your company has a RTI manual posted in the website www.mrpl.co.in.
During the year 87 applications were received, out of which 82 were
disposed off before 31/03/2012 and balance 5 applications disposed off
10. HUMAN RESOURCES
- During the year 2011-12, 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 any industrial
- Your company has recruited 168 employees including 13 women
employees during the year 2011-12, out of these 20 employees are
Schedule Caste (SC), 12 Schedule Tribe (ST) and 1 Physically Challenged
- Total employee strength as on 31/03/2012 was 1500 including 104
women employees, out of these employees, 597 are from Management cadre
whereas 903 are from Non-Management cadre. The number of employees
belonging to SC/ST categories are 129 and Physically Challenged are 5.
- During the year 2011-12, your company devoted 5095 man-days for
Training, Development and Learning which amounts to an average 3.45
man-days per employee. This includes functional, developmental and
special training programs covering the entire spectrum of employees.
11. OFFICIAL LANGUAGE (OL)
Your company continues to implement Official Language (OL) Policy as
per the Annual Programme prescribed by the Department of Official
Language, Ministry of Home Affairs, Government of India, in this regard
following steps were undertaken during the year.
- Periodical reports are sent to all the Government agencies
including Administrative Ministry, Ministry of Petroleum and Natural
Gas (MoP & NG) highlighting the progress made in promotion of Hindi.
- Hindi workshops and Hindi classes namely Prabodh, Praveen and
Pragya are organized on a regular basis.
- Special efforts were made to activate Unicode facilities on all the
computers used in the office for increasing the correspondence in OL.
- To motivate employees, incentive schemes such as cash award and
personal pay is introduced.
- An OL inspection of various departments and offices was carried
Hindi Fortnight was celebrated and many Hindi competitions such as
Hindi dictation, Handwriting, Admin-Glossary, speech etc. were
conducted for the employees and their family members during the year.
Competitions are also held in Hindi language for employees and their
family members during National Safety Day, Environment Day, Security
awareness week and Vigilance awareness week.
Hindi Hasya Kavi Sammelan was held on 30/03/2012, 5 National level
eminent Hindi poets from different parts of the country participated in
this programme organized by your company.
Official Language Implementation Committee (OLIC) meetings, were held
on quarterly basis under the chairmanship of Managing Director. All out
efforts are being made to promote OL in your company.
Your company has been awarded first prize for outstanding performance
in Hindi implementation for the year 2011-12 by the Town Official
Language Implementation Committee (TOLIC), Mangalore. Your company also
won eight prizes and stood Second at the TOLiC level competitions.
12. VIGILANCE FUNCTION
Your company has 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 are being followed. Officers
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 has
achieved very high compliance level with regard to e-payment and
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.
13. SECURITY MEASURES
Your company continues to improve the security measures at the
refinery. The following steps were taken to improve the security during
13.1 CISF Induction
Ministry of Home Affairs (MHA) has approved induction of 200 CISF
personnel for security of the refinery. A Quick Reaction Team (QRT)
team consisting of 22 CISF personnel was inducted to guard the
refinery. Construction of an exclusive Township for CISF personnel is
underway at a cost of Rs. 320 Million and is scheduled for completion in
April, 2013. The second phase of CISF induction with an additional 80
personnel is expected to take place by September, 2012. The remaining
CISF manpower will be inducted after completion of CISF Township.
13.2 CCTV Surveillance
The refinery is under surveillance of state-of-the art CCTV Network
designed to cover all the access control gates and other strategic
13.3 Access Control
Access to refinery area is controlled by computerised Smart Card &
Manual Pass system for contract labourers and RFID smart card for
employees. Access control to the refinery area is being improved by
completion of the proposed new refinery gate and security building. The
security building will be equipped with multi-zone metal detectors and
X-ray baggage scanners. This gate will also have turnstiles controlled
through bio-metric card readers for strict access control to refinery
area. Anti-vehicle intrusion systems like Tyre Rippers are also being
planned to be installed at refinery gates. Marketing operation and
security infrastructure is being built in the lower plateau of the
13.4 IB Recommendations
A team from Industrial Security Branch of Intelligence Bureau (IB)
visits the refinery of your company once in every two years to inspect
security arrangements, identify grey area and recommend / suggest
improvements. All the recommendations given by the IB in the year 2008
have been complied. The last IB inspection was carried out during
December, 2010 and out of 30 Recommendations, majority have been
complied. The remaining recommendations are under varying stages of
13.5 Security Audit by ONGC
Chief of Security, Oil and Natural Gas Corporation (ONGC), carries out
periodical review of security of the refinery besides periodical
security audits, and recommends for improvement which are implemented.
13.6 Mock Drills
A Protection Scheme to safeguard the refinery of your company
from the events of strike, law & order situation have been finalized
with the district Commissioner and Police Commissioner, Mangalore.
Regular security mock drills and district level security exercises are
conducted jointly with State Police and Coast Guards. Your company is
actively involved in the coastal security exercises conducted at the
coastal area jointly with Coast Guard.
14. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
Your company''s CSR initiative continues to be influenced by the needs
and concerns of the community residing in the close proximity of the
The CSR initiative of your company known as Samrakshan have 5
areas with a vision to protect, preserve and promote people, peace and
progress in and around of the refinery as under.
- Shikshana Samrakshan,
- Arogya Samrakshan
- Bahujan Samrakshan
- Prakrithi Samrakshan
- Sanskrithi Samrakshan
With these objectives, your company has implemented number of CSR
schemes during the year. The major schemes covered under the CSR
activities during the year includes construction of community hall,
Road asphalting, mid- day meal to school students, construction of
school building, toilet blocks for schools, scholarship for meritorious
students including SC/ST students, add on facilities to SC/ST
community, self employment training for women, free distribution of
sewing machines to women , construction of Anganwadi, artificial limb
camp, mega medical camp and running a free primary health centre.
The main thrust areas where your company has taken various initiatives
are in line with DPE guidelines and has spentRs. 240 Million in various
CSR schemes during last 4 years.
During the year following changes took place in Board of Directors of
15.1 I, Shri Sudhir Vasudeva took over as Chairman of your Company from
15.2 Shri Vishnu Agrawal has assumed the office of Director (Finance)
with effect from 01/04/2011 pursuant to his appointment as Director
(Finance) of MRPL by the Ministry of Petroleum & Natural Gas (MoP&NG),
Government of India.
15.3 Shri D.K.Sarraf has resigned on 16/09/2011 from the Board
consequent upon his appointment as Managing Director of ONGC Videsh
15.4 The nomination of Shri A.K.Hazarika, and Shri K.S.Jamestin, was
withdrawn by ONGC the parent company with effect from 31/10/2011 for
optimizing the strength of the Board in compliance with Clause 3.1.3 of
the mandatory guidelines of corporate governance for Central Public
Sector Enterprises (CPSE) issued by Department of Public Enterprises
(DPE), Government of India. Shri A.K.Hazarika and Shri K.S.Jamestin are
continuing as special invitees on the Board of the company.
15.5 Shri U.K. Basu, Former Managing Director superannuated from the
services of MRPL on 30/06/2012 and resigned from the Board of the
company with effect from 01/07/2012.
15.6 Shri P.P. Upadhya, has assumed the office of Managing Director
with additional change of Director (Technical) MRPL w.e.f. 01/07/2012,
pursuant to his appointment as Managing Director and addittional charge
of Director (Technical) of MRPL by the Ministry of Petroleum & Natural
Gas (MoP&NG), Government of India.
15.7 The Board wishes to place on records its appreciation for the
services rendered by Shri U.K. Basu as Managing Director and Shri
D.K.Sarraf as Director during their tenure on the Board of the Company.
15.8 In accordance with the provisions of the Companies Act, 1956 and
Articles of Association of the Company, Dr. A.K. Rath will retire by
rotation at the 24th Annual General Meeting of the Company. Dr. A.K.
Rath, being eligible, offers himself for re-appointment as Director of
15.9 Dr. D.Chandrasekharam was nominated by ONGC pursuant to clause 6.1
of the guidelines on corporate governance for CPSEs and was appointed
as an additional Director with effect from 10/01/2012 by the Board of
Directors who vacates his office as Additional Director and being
eligible offers himself for re- appointment as a Director in the 24th
Annual General Meeting.
15.10 Brief resume of the Directors seeking appointment /
re-appointment, together with the nature of their expertise in specific
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.
15.11 Your Company has 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 Department of Public Enterprise (DPE), Government of India
except having requisite number of Independent Directors on the Board of
the Company. There are three Independent Directors on the Board of your
company constituting 1/3rd of its strength. The company is pursuing
with Ministry of Petroleum and Natural Gas (MoP&NG), Government of
India for appointment of requisite number of Independent Directors. The
Annual Report contains a separate section on corporate governance,
which forms part of this report.
16. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under section 217 (2AA) of the Companies
Act, 1956, with respect to Directors'' responsibility statement, it is
hereby confirmed that:
i) In the preparation of the Annual Accounts, the applicable accounting
standards have been followed and that there are no material 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,2012 and the Profit & Loss of the
company for the year ended on that date.
iii) The Directors have taken proper and sufficient 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.
17. FIXED DEPOSIT
Your Company has not accepted any fixed deposit during the year from
18. CORPORATE GOVERNANCE
18.1 Your Company has 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 three
Independent Directors on the Board of your company constituting 1/3rd
of its strength. The company is pursuing with Ministry of Petroleum and
Natural Gas (MoP&NG), Government of India for appointment of requisite
number of Independent Directors.
18.2 The Annual Report contains a separate section on Corporate
Governance, which forms part of this report.
18.3 Your Company is listed with the Bombay Stock Exchange Limited and
National Stock Exchange Limited.
18.4 Pursuant to Clause 49 of the Listing Agreement with Stock
Exchanges, your Company has obtained the Certificate from the Joint
Statutory Auditors of the Company, for Compliance of Corporate
Governance which is annexed to and forms part of this report.
18.5 As a measure of good corporate governance, your Company has
engaged M/s Ullas Kumar Melinamogaru & Associates Practicing Company
Secretaries for conducting Annual Secretarial Compliance Audit for the
year 2011-2012. M/s. Ullas Kumar Melinamogaru & Associates, Practicing
Company Secretaries have issued Annual Secretarial Compliance Audit
Report for the year 2011-12 which forms part of this report.
18.6 Chairman speech at the 24th Annual General Meeting (AGM) will be
distributed to shareholders during the meeting and will be published in
the leading news papers.
18.7 Your Company has despatched a copy of Annual Report consisting of
Directors Report, Auditors Report, Balance Sheet and Profit & Loss
Statement and other documents as required to be sent under the
provisions of Companies Act 1956 to all, its members as on the records
date i.e. 13.07.2012 pursuant to Section 219 and the Companies Act,
19. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of Clause 49 (IV) (F) of the Listing Agreement with the Stock
Exchanges, the Management Discussion and Analysis Report have been
attached and forms part of this report.
20.1 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 2011-12 by Comptroller & Auditor
General of India (C&AG).
20.2 The report of the C&AG at Annexure III forms part of this Report.
20.3 Particulars of the Cost Auditor for the financial year 2011-12
(a) M/s. Musib and Associates, Cost Accountants has been appointed as
Cost Auditor for the year 2011-12.
(b) Cost Audit report for the year 2011-12 will be filed before the due
date i.e. 27/09/2011.
21.1 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
Enterprise (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.
21.2 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.
21.3 Your Directors wish to thank the shareholders for the continued
confidence reposed on their Company.
21.4 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, vendors,
21.5 Your Directors recognize the patronage extended by the valued
customers for the products of the company and promise to provide them
the best satisfaction.
21.6 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 known as Team MRP.
For and on behalf of the Board
Place: New Delhi (Sudhir Vasudeva)
Date: 3rd August,2012 Chairman