It gives me immense pleasure to share my views with our valued stakeholders and presentthe 29th Annual Report for the year 2016-17.
I am pleased to report that during the year 2016-17 MRPL has shown outstandingfinancial and operational performance. Let me highlight some of the major accomplishmentduring the year 2016-17 which would not have been possible without your support.
During the year 2016-17 your Company achieved turnover of Rs. 59415 Croreagainst a turnover of Rs. 50864 Crore during 2015-16.
During the financial year 2016-17 your Company earned a profit after tax (PAT)of Rs. 3644 Crore against Rs. 1148 Crore during 2015-16 and the reported loss of Rs.1712 Crore during 2014-15.
The Board has recommended a dividend of Rs. 6 per equity share of Rs. 10 eachwhich is the highest-ever in MRPL's history.
Highest-ever crude throughput of 16.27 MMT during the year 2016-17 against theprevious highest of 15.69 MMT during 2015-16 - an increase of 3.69%. This could beachieved by optimal crude mix better equipment reliability timely shutdown adherence andcommendable operational discipline.
Highest-ever Gross Refining Margin (GRM) of 7.75$/bbl during 2016-17 as against5.20 $/bbl during 2015-16.
Market capitalisation of your Company has grown three-and-a-half times duringlast four years - on 17th July 2017 market capitalisation was Rs. 21556 Crore as againstRs. 6073 Crore on 17th July 2013.
Your Company achieved 294 accident free days as on 31st March 2017 with 4.75million man hours worked.
The highest Corporate Credit Rating has been reafirmed by both CRISIL and ICRAin March 2017.
During 2016-17 direct marketing sales volume including Polypropylene has been 1858TMT with a sales value of Rs. 5132 Crore compared to sales volume of 1610 TMT with asales value of Rs. 3308 Crore during 2015-16. Your company has already achieved dominantmarket share for its MANGPOL branded Polypropylene in its marketing zone in a very shorttime attaining the reputation of exceptional quality for its Polypropylene brand. MRPLalso continues to maintain leadership position for sales of Bitumen Sulphur Pet Coke andXylol in its marketing zone.
Lower oil price environment continues to drive strong demand growth across key markets.Global oil demand for 2016 grew by 1.6 mb/d led by China and India. India's oil demandgrew 5.2% during the year. India has now become a major force in driving global oil demandgrowth and is now the world's third largest oil consumer.
According to IMF World Economic Outlook Update Indian economy has grown at 7.1 %during FY 2016-17 supported by strong consumption growth and government spending. Theintroduction of GST is a significant reform measure and will help India in simplifying taxstructure and compliance facilitating Indian businesses to remain globally competitive.India has emerged as the fastest growing major economy globally. Indian economy's growthrate is expected to accelerate to over 8 per cent driven by the implementation ofstructural reforms higher disposable income and improvement in economic activity. India'sgrowth has been impressive in the recent years which along with expectations of better taxcompliances in future makes room for reduction in tax rates by the government.Elimination of fuel subsidies and direct transfer of social benefit to the bank accountsof beneficiaries would lead to better union budget management. Current account de3cit at0.7% of GDP and government's commitment to 3scal consolidation reinstated investorconfidence in the economy resulting in record Net Foreign Direct Investment of US$35.9billion in FY 2016-17.
In terms of supplies renewable energy has made rapid strides in the last few years.2016 produced a new record for global investment in renewable energy. However as per mostindustry outlooks oil and gas would continue to account for majority of global energyrequirement in the next 20-30 years.
On 08/11/2016 the Government announced a historic measure with profound implicationsfor the economy. The high value currencies were "demonetized" with immediateeffect which ceased to be legal tender except for a few specified purposes. The objectiveof demonetization was to eliminate black money curb corruption counterfeiting andeliminate fake currency being used for funding terrorism. The implications ofdemonetization are many far and favourable to economy. The measure would certainlyimprove tax compliance and inspire confidence of international community that India isserious about its commitment to fight corruption. This will enhance India's ranking inease of doing business as well as in various global indices on corruption.
A strong governance framework has been the most essential element of the company insupporting long term sustainable growth of the refinery business. The focus of the companyhas not just been on the products we make but also about how responsibly we make them.Responsible production starts with respecting and ensuring a clean environment for thebenefit of the employees and neighbouring communities in the areas where we operate. Asbusiness grows investments must not only serve business interests but should alsocontribute to local development and community needs.
Our exceptionally skilled and dedicated employees have been instrumental in making thefinancial year 2016-17 the most successful year in MRPL's history. They continue to bethe most important anchor in achieving the vision of the company i.e. "To be aworld-class Refining & Petrochemicals Company with a strong emphasis on ProductivityCustomer Satisfaction Safety Health & Environment Management Corporate SocialResponsibility and Care for Employees".
Your Company continues to remain focused on employee welfare and employee relations andcontinues to enjoy cordial and harmonious relations with all the employees. As a resultthe company takes pride in reporting that not a single man-hour was lost on account of anyindustrial disturbance.
We at MRPL are committed towards providing a healthy and safe work environment to ouremployees contractors and all the visitors to the Refinery. We have adopted the bestindustry practices and built robust systems and standards for continuously reducing therisks in the refinery associated with Health Safety and Environment (HSE).
Safety is an integral part of our culture and several awareness programs areundertaken in the refinery to ensure safety of people processes and assets. Emphasis hasbeen given on Safety of contractor's staff. Your Company is committed to continuingexcellence in petroleum refining in harmony with Nature. The product portfolio comprisesquality products eco-friendly grades and the processing itself is carried out in an ecofriendly and safe environment using sound/ effcient technologies. All efforts have beenmade for effcient use of resources such as raw material water and energy. MangaloreRefinery is a certified ISO 14001: 2004 for Environment Management Systems with severalinitiatives being taken for environment protection and continual improvement.
We at MRPL believe that businesses that address the needs and aspirations of consumersas well as social and environmental challenges will thrive in the long term. This is thefoundation of what it means to be future ready. MRPL embraces environmental and socialresponsibility by creating value for its stakeholders. Your refinery remains focused onmaximizing the use of clean energy and higher energy effciency in refinery operations.
During the year MRPL has contributed Rs. 1.45 Crore towards various communitydevelopment initiatives focused in the areas of rural transformation health educationand sanitation. Your Company remains deeply committed to socially inclusive sustainabledevelopment aimed at improving the living conditions of underprivileged people.
I would like to place on record my sincere appreciation to the Board of Directors fortheir expertise and guidance. On behalf of the Board I would also like to express mygratitude to all our stakeholders including the Government of India Government ofKarnataka and the promoter companies - ONGC & HPCL for their continued supportpatronage trust and confidence .
(Dinesh K. Sarraf) Chairman
Place: New Delhi Date: 19/07/2017