Your Directors are pleased to present you the Twenty Second Annual Report of theCompany (MGL) together with the Audited Statements of Accounts for the year ended on March312017.
1. FINANCIAL PERFORMANCE
Your Company registered a turnover of '2239 Crores during the financial year 2016-17.The Profit after Tax is '394 Crores for the financial year 2016-17 as compared to '311Crores for the financial year 2015-16.
The Financial results for the financial year ended March 312017 are summarized below:
|PARTICULARS ||F.Y. 2016-17 ||F.Y. 2015-16 |
| ||'in Crores ||'in Crores |
|a. Revenue from Operations ||2239 ||2285 |
|b. Other Income ||53 ||47 |
|c. Profit before Depreciation and Finance cost ||697 ||557 |
|d. Depreciation and Amortisation Expenses ||95 ||83 |
|e. Finance cost ||1 ||2 |
|f. Profit before Tax (PBT) [c-d-e] ||601 ||472 |
|g. Income Tax ||207 ||161 |
|h. Profit after Tax (PAT) for the year [f-g] ||394 ||311 |
|i. Other Comprehensive Income ||(1) ||2 |
|j. Total Comprehensive Income [h+i] ||393 ||313 |
|k. Balance of Profit for earlier years ||1631 ||1506 |
|l. Adjustment on conversion of 9% Unsecured Compulsorily Convertible Debentures into Equity Shares ||(1) ||- |
|m. Balance Available for appropriation (j+k-l) ||2023 ||1819 |
|Appropriations : || || |
|n. Dividend Paid || || |
|Final - FY 2014-15 ||- ||156 |
|Final - FY 2015-16 ||156 ||- |
|Interim - FY 2016-17 ||78 ||- |
|o. Tax on Dividend ||48 ||32 |
|p. Total Appropriations (n+o) ||282 ||188 |
|q. Balance of profit carried in Balance Sheet [m-p] ||1741 ||1631 |
|Earnings Per Share (Face value of '10.00 each) - Basic and Diluted (') ||39.83 ||31.47 |
2. APPROPRIATIONS DIVIDEND
Your Directors are pleased to recommend a final dividend of '11.00 per equity share offace value of '10.00 each for the financial Year 2016-17 subject to the approval of theshareholders in the ensuing Annual General Meeting.
The Board of Directors in its meeting held on February 112017 declared an interimdividend of '8.00 per equity share for the financial year 2016-17 and the same has beenpaid to all the eligible shareholders as on record date i.e. February 20 2017.
The total dividend for the financial year ended March 31 2017 would accordingly shallbe '19.00 per equity share (normal dividend of '12.50 and special dividend of '6.50) offace value '10.00 each as against the dividend of '17.50 per equity share (which includedspecial dividend of '7.50 per share) for the financial year ended March 312016.
3. INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs (MCA) vide its notification in the Official Gazettedated February 16 2015 notified the Indian Accounting Standards (Ind AS) applicable tocertain class of companies. Ind AS has replaced the existing Indian GAAP prescribed underSection 133 of the Companies Act 2013 and Companies (Accounts) Rules 2014. Accordinglyyour Company has adopted Indian Accounting Standards (Ind AS) with effect from April 012016 with a transition date of April 012015. Previous years' figures have been restatedand audited by the Statutory Auditors of the Company.
4. CHANGES IN SHARE CAPITAL
During the year under review 9436178 Compulsorily Convertible Debentures issued tothe Government of Maharashtra has been converted into 9436178 Equity shares of facevalue of '10.00 each pursuant to terms of the issue.
Consequent to the above the issued subscribed and paid up capital of the Company ason March 31 2017 stood at 987777780 consisting of 98777778 equity shares of '10.00each.
5. STATE OF COMPANY'S AFFAIRS
Your Company's growth is on fast track and is poised for scaling newer heights in itschosen areas of operations. A brief summary of the operations of the company is providedin the Management Discussion & Analysis section forming part of the Annual Report.
Return on Capital Employed has increased from 18.70% in FY 2015-16 to 21.97% in FY2016-17 signifying sound return on investment.
6. INITIAL PUBLIC OFFER
Your Company got successfully listed on the BSE Limited and National Stock Exchange ofIndia Limited on July 01 2016. The stake of the promoters GAIL (India) Limited and BGAsia Pacific Holdings Pte Limited (ultimately owned by Shell Group) reduced to 32.50%pursuant to Offer for Sale in the IPO. During IPO process Government of Maharashtra hasacquired additional 9.5% stake and currently is holding 10% stake in the Company andbalance 25% stake is held by the public.
7. CORPORATE SOCIAL RESPONSIBILITY
The Board of Directors of your Company has constituted the CSR Committee to help yourCompany to frame monitor and execute the CSR activities of your Company under its CSRscope. The Committee defines the parameters and observes them for effective discharge ofthe social responsibility of your Company.
The Board of Directors of your Company has further approved the CSR Policy of yourCompany to provide a guideline for CSR activities of your Company. The CSR Policy is alsouploaded on your Company's website at https://www.mahanagargas.com/investors/Policies.aspx
The Composition of CSR Committee is mentioned in the Corporate Governance Reportforming part of Annual Report. Further Details required as per the provisions of theCompanies Act 2013 are attached to this report as Annexure -1.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the financial year 2016-17 Mrs. Radhika Haribhakti has been appointed as anAdditional (Independent) Director on the Board of the Company with effect from March 052017 and shall hold office upto the date of the ensuing Annual General Meeting of thecompany.
Based on the recommendation of Nomination and Remuneration Committee Mr. JainendarKumar Jain was re-appointed as an Additional (Independent) Director on the Board of theCompany with effect from March 05 2017 and shall hold office upto the date of the ensuingAnnual General Meeting of the company.
Your Company has received Notice under Section 160 of the Companies Act 2013 togetherwith requisite deposit from Mr. Jainendar Kumar Jain proposing his appointment asIndependent Director on the Board of your Company and from a member proposing thecandidature of Mrs. Radhika Haribhakti for appointment as Independent Director of theCompany. Necessary resolution seeking approval of the members for appointment of Mr.Jainendar Kumar Jain and Mrs. Radhika Haribhakti as Independent Director(s) has beenincorporated in the Notice of the ensuing Annual General Meeting. The IndependentDirectors have given the declarations that they meet the criteria of independence as laiddown under Section 149(6) of the Companies Act 2013.
The Board of Directors in its meeting held on February 11 2017 re-appointed Ms.Susmita Sengupta as Whole Time Director designated as Technical Director for a period ofone year with effect from February 11 2017 subject to the approval of the Shareholdersin the forthcoming Annual General Meeting. A separate proposal seeking approval of theMembers for the reappointment of Ms. Susmita Sengupta as an Whole Time Director of yourCompany has been incorporated in the Notice of the ensuing Twenty- Second Annual GeneralMeeting.
Brief profile of the directors proposed to be appointed/ re-appointed is annexed to theNotice convening Annual General Meeting.
Due to expiry of tenure Dr. Basudeb Sen has ceased to act as Director on the Board ofthe Company with effect from March 05 2017. The Board of Directors places on record thevaluable contribution made by him to the growth of the Company during his tenure asDirector of the Company.
c) CHANGES IN THE BOARD OF DIRECTORS WHICH HAVE OCCURRED BETWEEN THE END OF THEFINANCIAL YEAR OF THE COMPANY I.E. MARCH 312017 AND THE DATE OF THIS REPORT
Dr. Ashutosh Karnatak and Mr. Apurva Chandra have resigned from the position ofDirectors w.e.f. May 27 2017 and May 232017 owing to withdrawal of their nomination byGAIL (India) Limited and Government of Maharashtra respectively. The Board of Directorsplaces on record the valuable contribution made by them to the growth of the Companyduring their tenure as Directors of the Company.
Mr. Virendra Nath Datt has been nominated by GAIL (India) Limited as its Nominee on theBoard of your Company in place of Dr. Ashutosh Karnatak. Accordingly the Board ofDirectors in its meeting held on May 26 2017 approved appointment of Mr. Virendra NathDatt as Additional Director with effect from May 28 2017 and shall hold office upto thedate of the ensuing Annual General Meeting of the Company.
Mr. Sunil Porwal Additional Chief Secretary (Industries) has been nominated byGovernment of Maharashtra as its Nominee on the Board of your Company in place of Mr.Apurva Chandra. Accordingly the Board of Directors in its meeting held on May 26 2017approved appointment of Mr. Sunil Porwal as Additional Director with effect from May 262017 and shall hold office upto the date of the ensuing Annual General Meeting of theCompany.
In terms of Articles of Association of the Company the Chairman of the Company is tobe nominated by the Promoters on a rotational basis for a period of two years.Accordingly the tenure of the Chairman nominated by GAIL (India) Limited expired on May27 2017. Consequently Mr. Akhil Mehrotra Nominee of BG Asia Pacific Holdings Pte.Limited on the Board of the Company has been elected as Chairman of your Company witheffect from May 28 2017 for a period of two years.
d) RETIREMENT BY ROTATION
In terms of Section 152(6) of the Companies Act 2013 and Article 35 of the Articles ofAssociation of your Company Mr. Akhil Mehrotra Non-Executive Director is liable toretire by rotation at the ensuing Annual General Meeting and being eligible offershimself for re-appointment. In the opinion of your Directors Mr. Akhil Mehrotra hasrequisite qualifications and experience and therefore your Directors recommend hisre-appointment at the ensuring Annual General Meeting.
9. PARTICULARS OF EMPLOYEES
The ratio of remuneration of each director to the median of employees' remuneration asper Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of theBoard's report (Annexure - II).
There are no employees who are posted in India throughout the financial year and inreceipt of a remuneration of Rupees One Crore and Two Lakhs or more or posted for part ofthe year and in receipt of Rupees Eight Lakhs and Fifty Thousand or more a month underRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
10. BOARD MEETINGS DURING THE FINANCIAL YEAR 2016 -2017
The Board of Directors met 6 (Six) times in the Financial Year 2016-17. The detailspertaining to the composition terms of reference attendances etc. of the Board ofDirectors of your Company are given in the Report on Corporate Governance section formingpart of this Annual Report.
11. DIRECTORS' RESPONSIBILITY STATEMENT :
In pursuance of Section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors of the Company had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
12. CORPORATE GOVERNANCE AND SHAREHOLDERS' INFORMATION
Your Company is committed to maintain the highest standards of Corporate Governance.Your Company continues to be compliant with the requirements of Corporate Governance asrequired under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015('Listing Regulations').
A Report on Corporate Governance as stipulated under the Listing Regulations forms partof the Annual Report. A certificate from the Practicing Company Secretary confirmingcompliance with the conditions of Corporate Governance as stipulated in the ListingRegulations forms part of the Annual Report.
13. BUSINESS RESPONSIBILITY REPORT
Report on Business Responsibility as stipulated under the Listing Regulations and anyother applicable law for the time being in force describing the initiatives taken by theManagement from an environmental social and governance perspective forms part of thisAnnual Report.
14. EXTRACT OF ANNUAL RETURN
Extract of Annual Return as prescribed under sub - section (3) of Section 92 and rule12(1) of the Companies (Management and Administration) Rules 2014 in Form MGT - 9 hasbeen annexed to this Report as Annexure - III.
15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Policy to determine materiality of related party transactions and dealing withrelated party transactions as approved by the Board of Directors is available on yourCompany's website at https://www.mahanagargas. com/investors/Policies.aspx
During the financial year 2016-17 your Company has not entered into transactions withrelated parties as defined under Section 2(76) of the Companies Act 2013.
However your Company has entered into transaction with parties which falls in thedefinition of "Related Parties" defined under Listing Regulations. Details oftransactions with related parties are as set out in Note No. 32.3 of the Notes toAccounts forming part of this Annual Report.
16. MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitment affecting the financial position ofthe Company occurred between the end of the financial year i.e March 312017 and the dateof this report.
17. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL
There are no significant and material orders passed by the Courts or tribunalsimpacting the going concern status and the Company's operation in future.
The Company has not accepted any deposits pursuant to provisions of the Companies Act2013 and rules made thereunder.
19. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
The Company has received necessary declaration from the Independent Directors of theCompany under Section 149(7) of the Companies Act 2013 stating that they meet with thecriteria of their Independence laid down in Section 149(6) and provisions of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
20. AUDIT COMMITTEE
Details regarding the constitution re-constitution of the Audit Committee as per theprovisions of Companies Act 2013 and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 along with the dates of Meeting and the Terms of Referencehave been entailed in the Report on Corporate Governance.
21. STAKEHOLDERS RELATIONSHIP COMMITTEE
Details regarding the constitution re-constitution of the Stakeholders' RelationshipCommittee as per the provisions of Companies Act 2013 along with the dates of Meeting andthe Terms of Reference have been entailed in the Report on Corporate Governance.
22. NOMINATION AND REMUNERATION COMMITTEE
Details regarding the constitution re-constitution of the Nomination and RemunerationCommittee (NRC) as per the provisions of Companies Act 2013 along with the dates ofMeeting and the Terms of Reference have been entailed in the Report on CorporateGovernance. The Company follows a policy on remuneration of Directors and SeniorManagement Employees. Details of the same are given in the Report on Corporate Governanceand is available on the website at https://www.mahanagargas.com/UploadedFiles/_MGL-Nomination_and_ Remuneration_Policy_329e2e5b7e.pdf.
23. STATUTORY AUDITORS
In terms of the provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 an audit firm can hold office as statutoryauditor for two terms of five consecutive years i.e. for a maximum period of ten years.Further as per the provisions of the Companies Act 2013 Company is required to complywith these provisions within three years from the commencement of the Companies Act 2013.Accordingly as per the aforesaid provisions M/s. Deloitte Haskin and Sells (DHS)Chartered Accountants have served the requisite period as Statutory Auditors of theCompany and shall not be eligible for further re-appointment as Statutory Auditors onconclusion of their term at the ensuing 22nd Annual General Meeting of theCompany.
The Board of Directors at its Meeting held on May 26 2017 recommended appointment ofM/s. S R B C & Co. LLP Chartered Accountants having Registration No. 324982E/E300003as the Statutory Auditors of the Company to hold office for a period of five years fromthe conclusion of the forthcoming 22nd Annual General Meeting until theconclusion of the 27th Annual General Meeting of the Company subject toratification by members at every Annual General Meeting.
In this regard your Company has received a certificate from the auditors to the effectthat if they are appointed it would be in accordance with the provisions of CompaniesAct 2013.
24. SECRETARIAL AUDITOR
Pursuant to Section 204 of the Companies Act 2013 the Board of Directors hadappointed M/s. Mehta & Mehta Practicing Company Secretaries for conductingSecretarial Audit of the Company and accordingly the said firm carried out SecretarialAudit for the Financial Year 2016-17. The Secretarial Audit Report for the financial yearended March 312017 is annexed herewith as Annexure - IV to this Report.
25. COST AUDITOR
M/s. Dhananjay V. Joshi & Associates Cost Auditors were appointed as Cost Auditorfor the audit of cost records maintained by the Company for the financial year ended March31 2016. The Cost Audit Report was filed by the Cost Auditors on September 16 2016within the due date. In respect of the Financial Year ended on March 31 2017 M/s.Dhananjay V. Joshi & Associates Cost Auditors were re-appointed. The due date forfiling the Cost Audit Report is September 27 2017 (within 180 days from the end offinancial year).
26. FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act 2013 and in compliance with therequirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Board has carried out the annual performance evaluation of its own performance theDirectors individually as well as the evaluation of the working of its Committees. TheBoard of Directors have laid down the manner for carrying out an annual evaluation of itsown performance its various Committees and individual directors pursuant to theprovisions of the Companies Act 2013 and the Listing Regulations. These guidelines werefurther revised by the Board based on the Guidance Note issued by SEBI.
The Nomination and Remuneration Committee (NRC) in its meeting held on February 112017 designated Mr. Arun Balakrishnan the Chairman of NRC as the Lead Director fordiscussing and soliciting the views of the group and summarizing the collective views inthe questionnaire for the purpose of performance evaluation for the financial year2016-2017. The Independent Directors in its separate meeting prepared a report onperformance evaluation of Individual Directors (including Chairperson independent andnon-independent directors) Board as a whole and Board Committees and submitted it to theChairman for perusal.
27. VIGIL MECHANISM
In compliance with requirements of the provisions of Section 177(9) & (10) of theCompanies Act 2013 and as per Regulation 22 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 your Board of Directors at its meeting held onMarch 26 2015 approved the establishment of Vigil Mechanism to ensure that appropriatesystems and procedures to curb opportunities for any sort of corrupt and unethicalpractices are in place.
This vigilance directive aims to set-out a structured efficient and effectivevigilance mechanism in the organization to cover both preventive and punitive approachesin this regard. The policy on Company's Vigil Mechanism may be accessed on the Company'swebsite at the link https://www.mahanagargas.com/investors/ Policies.aspx.
28. DIVIDEND DISTRIBUTION POLICY
As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has formulated a Dividend Distribution Policy and the samehas been approved by the Board of Directors on February 11 2017 which endeavours forfairness consistency and sustainability while distributing profits to the shareholders.The Dividend Distribution Policy is annexed hereto as Annexure - V and hasalso been disclosed on the Company's website.
29. CHANGES IN ARTICLE OF ASSOCIATION OF THE COMPANY
The Shareholders in its 21st Annual General Meeting held on September 262016 approved and adopted new set of Articles of Association of the Company.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company had constituted an Internal Complaints Committee in compliance withrequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. The members of this committee include representatives from theCompany and external experts/NGOs.
Your Directors further state that during the year under review there were no casesfiled pursuant to the provisions of the said Act.
31. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information in accordance with the provisions of Section 134(3)(m) and Rule 8 ofCompanies (Accounts) Rules 2014 is annexed hereto as Annexure - VI.
32. APPRECIATION AND ACKNOWLEDGEMENT:
Your Directors take this opportunity to place on record their appreciation and sincerethanks to the Ministry of Petroleum & Natural Gas Government of India Petroleum& Natural Gas Regulatory Board Government of Maharashtra (GOM) MunicipalCorporations of Greater Mumbai Navi Mumbai Thane Mira-Bhayander Kalyan-DombivaliRaigad other State and Central Government Authorities Mumbai Metropolitan RegionalDevelopment Authority (MMRDA) Maharashtra Industrial Development Corporation (MIDC)Police and Fire Brigade Authorities Bankers Contractors Consultants Consumers andLocal Citizens for their whole hearted support and co-operation. The Board also recordstheir appreciation to its Stakeholders - GAIL (India) Limited Shell Group and GOM fortheir support and to the employees of the Company for their devotion dedication and hardwork for efficient operations and implementation of projects while maintaining momentum ofyour Company's growth.
|For and on behalf of the Board of Directors |
|Place: Mumbai ||(Akhil Mehrotra) |
|Date: August 09 2017 ||Chairman |