On behalf of the Board of Directors of your Company it gives meimmense pleasure to share with you the highlights developments and the progress that yourCompany has made during the financial year ended March 31 2019 and to present the 31stAnnual Report on the business and operations of Mangalore Refinery and PetrochemicalsLimited (MRPL) and its audited financial statements together with the Auditors'Report and comments on the financial statements by the Comptroller and Auditor General(C&AG) of India. You will be delighted to know that financial year 2018-19 has beenyet another year of achievements for your Company.
STATE OF COMPANY'S AFFAIRS
Your Board is reporting the affairs of the Company for the FY2018-19 as under:
The standalone / consolidated financial highlights for the year ended31/03/2019 are summarized below:
| || || |
( र In Crore)
| ||Standalone ||Consolidated |
| ||Year ended 31st March 2019 ||Year ended 31st March 2018 ||Year ended 31st March 2019 ||Year ended 31st March 2018 |
|Profit Before Tax ||580.77 ||3350.70 ||651.37 ||2871.40 |
|Less: Current Tax ||135.54 ||698.86 ||135.54 ||698.86 |
|Deferred Tax ||113.28 ||427.72 ||164.57 ||398.98 |
|Profit For The Year ||331.95 ||2224.12 ||351.26 ||1773.56 |
|Add: Other Comprehensive Income ||(4.52) ||3.32 ||(5.95) ||3.51 |
|Total Comprehensive Income For The Year ||327.43 ||2227.44 ||345.31 ||1777.07 |
|Less: Total Comprehensive Income Attributable to Non Controlling Interest ||- ||- ||10.53 ||(218.95) |
|Total Comprehensive Income Attributable to Owners Of the Company ||327.43 ||2227.44 ||334.78 ||1996.02 |
|Add: Opening Balance in Profit and Loss Account ||8799.13 ||7837.32 ||8001.72 ||7271.33 |
|Sub-Total ||9126.56 ||10064.76 ||8336.50 ||9267.35 |
|Less: Appropriation || || || || |
|Transferred to Debenture Redemption Reserve ||- ||- ||11.69 ||- |
|Payment of Dividend on Equity Shares ||525.78 ||1051.56 ||525.78 ||1051.56 |
|Tax on Dividend ||108.07 ||214.07 ||108.07 ||214.07 |
|Closing Balance (Including Other Comprehensive Income) ||8492.71 ||8799.13 ||7690.96 ||8001.72 |
Your company achieved turnover of र 72283 crore during thefinancial year 2018-19 against र 63067 crore during the financial year 2017-18. TheCompany earned a profit after tax (PAT) of र 332 crore during the financialyear 2018-19 against profit of र 2224 crore earned during the financial year2017-18. The Gross Refining Margin (GRM) for financial year 2018-19 was 4.06 $/bbl asagainst 7.54 $/bbl during the financial year 2017-18.
ICRA has reafirmed the long-term rating of AAA (pronounced ICRA tripleA) and the short-term rating of A1+ (pronounced ICRA A one plus) on the र 7000crore bank facilities of Mangalore Refinery and Petrochemicals Limited (MRPL). CRISIL hasreafirmed its Corporate Credit Rating (CCR) CCR AAA/Stable' on MangaloreRefinery and Petrochemicals Limited (MRPL).
The financial year 2018-19 has been a successful year for your Company.Some of the major highlights for the year 2018-19 are as under: Your companyprocessed 16.23 Million Tons of Crude during Financial year 2018-19 against the previoushighest crude processing of 16.13 Million Tons in Financial Year 2017-18. Total input tothe refinery was 16.43 Million Tons against previous highest of 16.31 Million Tons duringfinancial year 2017-18.
The Company registered the highest ever throughput of 16.43 MT andlowest ever energy consumption of 74.27 MBN for FY 2018-19.
Company's Polypropylene production was 388.17 ThousandMT (TMT) in the financial year 2018-19 as against 294.5 TMT in the financial year2017-18. Company's Polypropylene dispatch was 405.718 TMT in the financialyear 2018-19 as against 278.16 TMT in the financial year 2017-18.
Company's LPG production and dispatch during the financialyear 2018-19 was 969.82 TMT and 974.66 TMT respectively as against 876.8 TMT and 873.08TMT during the financial year 2017-18.
Your Company continued to include newer crude grades in theprocessing basket with an aim to diversify crude sourcing. Urals from Russia Basra Heavyfrom Iraq and Nagayalanka crude from domestic sources were processed in the refinery forthe first time. Similarly efforts to establish newer markets were fruitful when MRPLexported approximately 18567 MT of Polypropylene during financial year 2018-19 comparedwith 7520 MT of Polypropylene during financial year 2017-18.
MARKETING AND BUSINESS DEVELOPMENT
Your company continues to maintain major share of the Direct salessegment of petroleum products market in Karnataka and adjoining states. Your Companymaintained leadership position in its marketing zone for Direct sales products such asBitumen Fuel Oil Sulphur Pet Coke Xylol (Xylenes) etc. The total domestic sales volumeof all products during the FY 2018-19 has been 2050 TMT against 1786 TMT in FY 17-18 witha sales value of र 8034 Crore during the year 2018-19 against र 5940Crore which is about 35 % higher than previous year sales value. Your Company continuesto enhance its market share for Polypropylene with introduction of new and niche grades.The company has enhanced its sales value in FY 2018-19 to र 4180 Crorecompared to the previous year sales value of र 2639 Crore. The company hasmaintained its leadership position in the Polypropylene market of South India for itsMANGPOL brand. Your Company has achived highest value of PP production of 388 KT for2018-19.
Your Company has also successfully marketed its entire production ofPetcoke on a consistent basis with sales volumes of 993 TMT in FY 2018-19 against 809 TMTin FY 17-18. The Company also sold about 123 TMT Sulphur (against 103 TMT in FY 17-18) inits marketing zone and the surplus Sulphur is being exported in larger parcel sizes.
Your company has also maintained timely supplies to State TradingCorporation Mauritius which has a long term supply contract with MRPL. The companysupplied 1021 TMT of petroleum products to STC Mauritius with a sales value of र4192 Crore in FY 2018-19.
Your Company Shell MRPL Aviation Fuel Services Limited has steadilyacquired business for sale of Aviation Turbine Fuel (ATF) at Indian airports. The companyachieved a turnover of र 719 Crore during FY 2018-19 against turnover ofर 543 Crore in the previous FY 2017-18.
New retail outlet at Gubbi in Tumakuru District Karnataka wascommissioned in the FY 2018-19. Your company continues the process of retail expansionplan to set up new retail outlets in the state of Karnataka & Kerala. Letter ofIntents have been issued to several shortlisted applicants for commissioning of new retailoutlets.
Received Srishti-Good Green Governance (G-Cube) winner'saward under Manufacturing Sector on the occasion of Earth Day 22nd April 2018organized by Srishti Publications New Delhi.
Conferred with Platinum Award by Greentech foundation on 31stMay 2018 at New Delhi in Petroleum Refining Sector for outstanding achievement inEnvironment Management.
Bagged Parisara Pratishti Award during Environment ConservationDay celebration by KSPCB at Town hall Mangalore on 1st August 2018.
SECONA (Security Consultants Association) has conferred on MRPLSecurity Project (Integrated) of the Year award for the Integrated Security ManagementSystem (ISMS) project. This is one of the highest awards in India in the field of Security
Won the prestigious Plant of the Year award for 2018 conferredby Field Comm Group. MRPL is the first Indian company to receive such an esteemedinternational award.
PROCUREMENT OF GOODS AND SERVICES FROM MSMEs
In line with the Public Procurement Policy 2012 issued by Ministry ofMicro Small and Medium Enterprises for the year 2018-19 your Company has achieved 25.29%procurement of goods and services from Micro and small Enterprises.
PROJECTS Existing Projects BS VI Upgradation
As per Auto Fuel Policy and Directives from Ministry of Petroleum andNatural Gas the entire country has to move towards BS VI quality specificationsfor MS and HSD by 1st April 2020. The project involves setting of newunits and additional facilities. M/s Engineers India Ltd has been appointed asEngineering Procurement and Construction Management Consultant for the job. EnvironmentClearance for the project has been obtained. Critical ordering activities have beencompleted and deliveries have commenced. Site activities are in full swing. Mechanicalcompletion and commissioning of the new facilities will be achieved progressively to meetministry guidelines.
CCR#2 unit revamp
The existing CCR-2 unit was revamped to increase the Capacity ofNHT/Platformer/CCR from 79 m3/hr. to 90m3/hr& RSU from 122m3/hr to 145 m3/hr thereby yielding higher quantity of MS. Thefeedstock to the unit is heavy naphtha from Crude distillation units and Hydrocrackerunits.
The unit after revamp was successfully commissioned on 19thOctober 2018 and is currently operating with 100% capacity. UOP is the Licensor and M/sL&T Chiyoda was appointed as EPCM consultant for the project.
Railway Siding for Pet Coke evacuation
Dispatches by Railway Wagons will make MRPL products convenientlyavailable in competitive markets and improve commercial realization to MRPL. Constructionof Railway siding for smooth evacuation of Petcoke is being carried out. The Railwaysiding is being executed by M/s Konkan Railway Corporation Ltd and M/s Mecon have beenappointed as the EPCM consultant to execute the balance of the Project consisting ofClosed conveyor system Loading silos with Rapid Loading Systems Measuring devicesfacilities to control environmental pollution etc. The project is mechanically completeand pre-commissioning activities are under progress.
To mitigate the risk of river water as a single source of water adesalination plant is being set up near the sea. This plant of current capacity 30MLD(expandable to 70MLD) will cater to the future water requirement of the company. Projectis approved by MoEF & CC for Environmental Clearance and formal grant of EC obtainedon 18.04.2019.
M/s Fichtner India is the PMC for the project and M/s VA Tech Wabag isthe LSTK contractor. The plant is scheduled to be completed by 2020.
MRPL is in a process of setting up 2G Ethanol project in the State ofKarnataka in line with the national vision for reducing import dependency of crude oil. 2GEthanol is produced from Agro residues viz Corn cobs Rice straw Wheat stalk Corn Stalketc. Land for the same is allotted by KIADB at Harihara Davangere. Licensor has beenselected and Basic Engineering Design Package preparation is in progress by the licensor.
USING INFORMATION AND COMMUNICATION TECHNOLOGY FOR PRODUCTIVITYENHANCEMENT
MRPL has taken many initiatives to leverage on Information Technologyfor improving its business productivity. As part of this initiative an EnterpriseResource Planning product SAP was implemented in the year 2010 covering all major businessprocesses. To run SAP applications a state of the art Data Centre has been functioning atMangalore site for supporting 24 x 7 business operations. As part of an upgradation &migration phase SAP system at MRPL is being migrated to HANA (High-Performance AnalyticAppliance) platform using Suite-On-HANA (SoH) approach with refreshed hardware setup. Thiswould enable SAP system to process massive amounts data in main memory resulting inperformance improvement and user experience. In addition MRPL recently undertook andcompleted a SAP system audit across various SAP modules by appointing M/s PwC foraddressing any control gaps in the business processes.
On the Cyber Security front all the necessary audits pertaining toInformation Security Management System (ISMS) have been completed and MRPL has beenrecommended for ISO-27001:2013 certification. Future projects on IT front for MRPLinclude implementation of CRM (Customer Relationship Management) on SAP system during FY2019-20 for enhancing customer relationship.
The Secretarial Auditor has certified that your Company has compliedwith the applicable Secretarial Standards i.e. SS-1 and SS-2 relating to Meetingsof the Board of Directors' and General Meetings' respectively during thefinancial year 2018-19.
HEALTH SAFETY & ENVIRONMENT PERFORMANCE
The company's Philosophy on the HSE is to perform better thanminimum required by statutes. The major Achievements on the Environment Management frontinclude:
The Expert Appraisal Committee (EAC) for CRZ Projects MoEF& CC New Delhi has recommended CRZ clearance for the proposed 70 MLD DesalinationPlant at Tanneerbavi village in Mangaluru in its meeting held on 25th Jan 2019.EC certificate for Desalination Plant has been received in the current financial year.
Environmental Impact Assessment (EIA) report for theproposed 2G Ethanol project has been submitted to KSPCB Regional Office Davanagere on 15thNov 2018.
Memorandum of Understanding (MoU) has been signed with M/s.Dr. Shivarama Karantha Pilikula Nisarga Dhama on 14th December 2018 for thedevelopment of Bio-Diversity Park in 41 acres of Marshy land area in MRPL premises.
New Hazardous Waste Storage Shed has been constructed andcommissioned in the month of Dec-18 with a view of better management of Hazardous Waste.
New Digital Display Board has been installed outside theCargo Gate for displaying Environmental data in accordance with the Supreme CourtMonitoring Committee (SCMC) Directive.
As a part of Corporate Environment Responsibility (CER)approximately 32000 nos. of LED bulbs were distributed in 10 neighboring villages.
Under Stage-2 Compensatory a orestation in 30 acres at Dr.Shivarama Karantha Pilikula Nisarga Dhama plantation of 2000 saplings was carried out inthe month of July 2018.
1643 MT of Oily sludge 2369 MT of PFCC Spent catalyst 842MT of Spent Clay 140 MT of Spent Adsorbent and 406 MT of Waste Insulation was sent forco-processing in SPCB Authorized Cement Industries. l 565 MT of Spent Catalyst and174 MT of Spent Carbon was disposed through SPCB Authorized Recyclers/ Reprocessors.
7.1 MT of E-Waste (Fused Lamps Category CEEW 5) wasdisposed through SPCB Authorized Recyclers.
15 MT of PPU Treated Waste White Oil was disposed to SPCBAuthorized Incineration Facility.
5089921 m3 Tertiary Municipal Sewage Water receivedin MRPL during FY 18-19 and after proper disinfection treatment was utilized in coolingtowers as make-up water.
Awareness programme was organized on 05th November2018 for MRPL DPS school children sensitizing about ill effects of noise & airpollution by fire crackers during Diwali festival. Another sensitization programme onPhasing out use of single-use plastic item in coordination with KSPCB and NITK was alsocarried out.
Pre-Commissioning Safety Audit of RTLF (Relocation ofTankages and Loading Facility) was carried out by Oil Industry Safety Directorate (OISD).
Safety Awareness Survey was carried out in the Refinery byM/s National Safety Council Mumbai during 27th 29thNovember 2018.
1024 days without Reportable Lost Time Injuries (RLTI)achieved as on 31-03-2019.
13.67 Million Man Hrs worked as on 31-03-2019.
Fire & Safety training imparted to all the employeesincluding contract work force
Annual Medical Checkup of employees was carried out in threecategories in compliance with the Rules under Factories Act and Karnataka Factories Rulesone below 40 years of age second for age group between 40 to 45 years and third for agegroup for 45 and above. Di erent groups have to undergo different medical tests. Theemployees were also subject to Hearing Loss test for those employees who are working inhigh noise areas. Lung Function Test Colour Blindness Test Blood Test etc were some ofthe general tests which were undergone by the employees.
Two Occupational Health Centres (OHC) with 24x7 availabilityof Medical Staff are functional.
The services of MRPL Hospital are available not only for theemployees and their dependents but also for neighboring villages
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY DEVELOPMENT
Corporate Social Responsibility
MRPL's social welfare and community development initiatives focuson the key areas of education health care & sanitation and overall development ofbasic infrastructure in and around its operational area/ Dakshina Kannada & UdupiDistrict/Karnataka State. These projects are largely in accordance with Schedule VII ofthe Companies Act 2013.
The key objectives of the MRPL CSR Policy is to ensure an increasedcommitment at all levels in the organization to operate its business in an economicallysocially and environmentally sustainable manner while recognizing the interests of allits stakeholders.
The Company has identified following focus areas for CSR engagement:
1. Shiksha Samrakshan
2. Arogya Samrakshan
3. Bahujan Samrakshan
4. Prakrithi Samrakshan
5. Sanskrithi Samrakshan
The CSR and SD policy of the Company was amended during the financialyear 2018-19. The salient features of the amendment were inclusion of Swachh Bharatactivities allocation of funds implementation methodology and revision in delegation ofpowers. The CSR & SD Policy may be accessed on the Company's website athttp://www.mrpl.co.in/csr. The Annual Report on CSR activities for FY 2018-19 is annexedas Annexure-A'.
Sustainability efforts of the Company have reached the mainstream withopportunities on long term viable approaches in all segments of the organization.Embracing environmentally sustainable business practices and sustainable businessprocesses are prioritized in all endeavors of the organization with focus on ensuringsustainability to build a culture of accountability across the organization. The companyhad conceptualized a novel concept to establish a biodiversity park at MRPL premises whichwill be an ex-situ development process wherein native species of plants from differentlocalities of Western Ghats and those from the coastal Karnataka will be established inthe park. Since increased density and species of plants habitually attract different formsof animals birds and other species to this region it will be helpful in maintainingBio-Diversity in the region. The company is partnering with Dr. Shivarama KaranthaPilikula Nisarga Dhama (Dr. SKPND) for the purpose who brings in domain expertise. Inanother novel endeavor MRPL along with Karnataka State Pollution Control Board (KSPCB)has embarked on building an Urban eco-park wherein measures are taken to protect theenvironment and will enable create awareness to public and educating students. MRPLintends to emphasize the environmental responsibility undertaken and sensitize the role oftechnology in sustainable refinery operations. MRPL has also initiated one more noveldrive which is to replace the use of inorganic fertilizer with in-house generated organicfertilizer within the refinery premises by Vermicomposte of MRPL horticulture debris.
MRPL is committed to the responsibility of carrying out refineryoperations by maintaining high standards towards Sustainable Development.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY/ JOINT VENTURES/ASSOCIATE
The details on the performance and financial position of SubsidiaryAssociate and Joint Venture Companies are given in Management Discussion and Analysis(MDA) Report. Pursuant to Section 129(3) of the Companies Act 2013 read with
Rule (5) of the Companies (Accounts) Rules 2014 a statement on theperformance and financial position of the subsidiary and Joint Venture Companies isprovided as an Annexure to the Consolidated Financial Statements.
In accordance with the provisions of the SEBI guidelines the Companyhas framed a policy for determining material subsidiaries that can be accessed on theCompany's website. Your company has one subsidiary i.e. ONGC Mangalore PetrochemicalsLimited (OMPL). As per the Material Subsidiary Policy OMPL is not a material subsidiaryof the Company applying the test of materiality for the FY 2018-19.
ANNUAL REPORT OF SUBSIDIARY AND CONSOLIDATED FINANCIAL STATEMENT
The Audited Consolidated financial statements for the year ended 31stMarch 2019 of the Company and its subsidiaries form part of the Annual Report inaccordance with Section 129 of the Companies Act 2013 and the Ind AS 110 on"Consolidated Financial Statements" read with Ind AS 28 on "Investments inAssociates and Joint Ventures". In accordance with section 136 of the Companies Act2013 the audited financial statements including the consolidated financial statementsand related information of the Company and audited accounts of the subsidiary Company areavailable on the Company's website. These documents will also be available forinspection during business hours at the registered office of the Company at Mangalore.
INDIAN ACCOUNTING STANDARDS IND AS IFRS CONVERGED STANDARDS
The Ministry of Corporate Affairs (MCA) on February 16 2015 notifiedthat Indian Accounting Standards (Ind AS) are applicable to certain classes of companiesfrom April 1 2016 with a transition date of April 1 2015. Ind AS has replaced theprevious Indian GAAP prescribed under Section 133 of the Companies Act 2013 ("theAct") read with Rule 7 of the Companies (Accounts) Rules 2014 and are applicable tothe Company from April 1 2016.
TRANSFER TO RESERVES
No amount has been transferred to General Reserves for the financialyear 2018-19.
The Board of Directors has recommended a dividend of र 1/- perequity share for the FY 2018-19. The dividend shall be paid after the approval of membersat the Annual General Meeting. The dividend has been recommended in accordance withCompany's Policy on Dividend Distribution. The Dividend Distribution Policy of theCompany is hosted on the website of the Company at www.mrpl.co.in.
Your company has not accepted any deposits during the year pursuant toSection 74 of the Companies Act 2013 and Rules there under.
There have been no loans / guarantees given or securities providedduring the FY 2018-19 under the provisions of Section 185 / 186 of the Companies Act2013. The details of investments covered under the provisions of Section 186 of the Actare given in notes to financial statements provided in this Annual Report.
The company has not issued any shares during the FY 2018-19. TheIssued Subscribed and Paid up Equity Share Capital of your Company as on 31/03/2019 wasर 1753 Crore.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEENTHE END OF FINANCIAL YEAR AND DATE OF REPORT
There has been no change in the nature of business during the year. Nomaterial changes or commitments have occurred after close of the year till the date ofthis report which affects the financial position of the Company.
Your company values its human resources the most. To keep their moralehigh your company extends several welfare benefits to the employees and their families byway of compensative medical care education housing and social security. During thefinancial year 2018-19 various welfare related policies have been implemented by theCompany for its employees. The welfare policies of the company are being revised as andwhen revisions take place in welfare policies of downstream companies to enable theemployees to get enhanced benefits.
The Company maintains an MRPL Employees Recreation Centre. The Centreoffers a wide range of pastime activities for the employees and their dependents. AnInternal Departmental Cricket Tournament was also organised during the year.
Your Company continues to enjoy cordial and harmonious relations andnot a single man-hour was lost on account of any industrial disturbance during the year2018-19.
The welfare policies of the company are being revised as and whenrevisions take place in welfare policies of downstream companies to enable the employeesto get enhanced benefits. Your company organized 30th PSPB Chess tournamentfrom 18th March 2019 to 22nd March 2019.
Reporting on SC / ST / PWD
Presidential Directives and other guidelines issued by Department ofPublic Enterprises Ministry of Petroleum & Natural Gas Ministry of Social Justiceand empowerment from time to time with regard to reservation in services for ScheduledCastes Scheduled Tribes other backward castes and Persons with disabilities have beencomplied with. An adequate monitoring mechanism has been put in place for sustained andeffective compliance. Liaison officers are appointed to ensure implementation of theGovernment Directives. Reservation Rosters are maintained as per the directives and areregularly inspected by the Liaison officer of the company as well as the Officials fromMoP&NG to ensure proper compliance of the Directives. MRPL also complies withprovisions under "The Persons with Disabilities (Equal Opportunities Protection ofRights and Full Participation) Act 1995 relating to providing employment opportunitiesfor Persons with Disabilities (PWDs). As on 31/03/2019 there are 29 permanent employeeswith disabilities on the roll of MRPL. During the financial year 2018-19 company hasrecruited 66 employees including 11 Scheduled Caste (SC) and 4 Scheduled Tribe (ST)employees and 2 employees belonging to Persons with Disability category. No women employeewas recruited during the said period.
During the year 2018-19 the Company devoted 4446 Mandays for trainingdevelopment and learning which amounts to 2.9 Mandays per employee for Management staffand 1.8 Mandays per employee for Non-Management staff.
In accordance with para-29 of the Presidential Directive statisticsrelating to representation of SCs / STs in the prescribed performa SC / ST/ OBC Report I and SC / ST / OBC Report II are attached as Annexure B' to the report.
Skill Development Centre
AsapartofNationalSkillDevelopmentMissionoftheGovernment of India MRPLhas set up "MRPL Kaushal Vikas Kendra" (MRPL KVK) on 12/02/2017. A total of 58candidates of MRPL KVK have undergone skill development training in various courses like"CNC Operator - Vertical Machining Centre and "Through Hole AssemblyOperator" at Nettur Technical Training Foundation (NTTF) Bangalore during thefinancial year. Assessment of the course by respective Trade Council was undertaken by thecandidates for Certification and Placement assistance were offered to all the candidateswilling for relocation.
Women employees constituted 6.73 percent of the Company'sworkforce.
Your Company has an Internal Complaints Committee (ICC) required underSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.There have been no cases reported to the committee for the FY 2018-19.
Your company is implementing Official Language Policy in letter andspirit as per the Annual Programme prescribed by the Department of Official LanguageMinistry of Home Affairs Govt. of India. In order to propagate and promote Hindi amongthe employees Hindi Workshops were organized on a regular basis at Mangalore MumbaiDelhi & Bangalore Offices. At regular intervals inspection of internal departments andsubordinate offices were carried out. Also Hindi Fortnight was celebrated and many Hindicompetitions such as Hindi Knowledge competition Handwriting Admin. Glossary Hindi solosong Hindi dictation etc. were conducted for the employees and their family members inthe month of September 2018. In addition one more Hindi competition (Admin. Glossary) wasconducted in January 2019 for employees. Competitions were held in Hindi language foremployees and their family members during National Safety
Day Environment Day Security awareness week and Vigilance awarenessweek. Hindi usage is promoted by conducting special quiz competition for senior officerssuch as CGMs & GGMs during Hindi month celebrations.
Hindi classes were conducted regularly for employees to qualify inPrabodh Praveen & Pragya examinations. Employees are motivated to pass final Hindiexaminations through Incentive schemes such as Cash award & Personal Pay etc. Toincrease the correspondence in Hindi in the organization Unicode facilities was activatedon all computers used for daily office work. Special awards were given to 15 students ofDPS (Delhi Public School) in MRPL Township who have scored highest marks in Class-X Hindiexamination.
Your Company participated at TOLIC level Hindi competitions and wonEight prizes and stood Second at the TOLIC level competitions. Hindi debate competitionwas conducted for employees of TOLIC member organizations at MRPL. Hindi Essay competitionwas also organized for Degree College students of Mangalore University as a part of Hindimonth celebrations under the auspices of TOLIC Mangalore. In addition to the above a Hindiseminar was organized on 07/03/2019 wherein all the TOLIC member organizations along withOfficial Language Liaison Officers (OLLO) took part in the seminar. In order to propagateand to promote usage of Hindi in the company in house Hindi Journal namely "MRPLPRATIBIMB" is being annually published. MRPL follows the guidelines on OL (OfficialLanguage) and conducted OLIC (Official Language Implementation Committee) meeting duringfour quarters of the year under chairmanship of MD to review and for action plan forimproving usage of Hindi in MRPL. Your company is making Continuous efforts for promotingHindi usage in the organization by encouraging employees through trainings workshopsseminars and incentives.
RIGHT TO INFORMATION ACT 2005
NUMBEROF RTI APPLICATIONRECEIVED DISPOSED AND PENDING.
Company's RTI Manual is available on Company's website.During the year 253 applications were received out of which 18 applications weretransferred to other Public Authorities and balance 235 were disposed off as perprovisions of the Act.
Security of MRPL Refinery is designed to comply with Oil SectorInfrastructure Protection Plan (OSIPP) and the Security Audit recommendations given by MHAfrom time to time.
Physical Protection of the Refinery is handled by Central IndustrialSecurity Force (CISF). The CISF strength at MRPL has been recently augmented following anapproval in this regard by MHA Govt of India.
Security is on top of the agenda of MRPL and to ensure preparednessperiodic mock drills on work-place security preparedness are conducted. To promoteawareness on security issues among all stake holders Security Awareness Weeks areorganised periodically.
A major revamp of electronic surveillance of the Refinery through anintegrated CCTV cum Electronic Intrusion Detection system has been completed with thecommissioning of the system on December 31 2018. Further up-gradation of SecurityInfrastructure of MRPL with building two separate Gate Complexes are under progress.
Your company has developed a structured mechanism of vigilancefunctions. Its practices are focused towards creation of value to stakeholders. Thepractices involve multi-layer checks and balances to improve transparency. Vigilanceawareness and preventive vigilance activities were continuously carried out during theyear. Your company has a full time Chief Vigilance Officer assisted by a dedicated team.
In compliance with CVC instructions your company has implemented acomplaint handling policy in which all complaints received from various sources arerecorded and examined by vigilance. The details on the best vigilance practices and linksto various useful websites are also provided in the MRPL Corporate website. Your companyhas achieved highest compliance level with regard to e-procurement e-tender ande-payment. In line with instructions of CVC your company had conducted VigilanceAwareness programs for spreading awareness on ill effects of corruption. Being nominatedas the nodal agency for conducting the Vigilance awareness programs in the city ofMangalore various awareness activities were designed to touch all walks of life. Vendorsmeet was conducted as a part of Vigilance Awareness Program in which more than 500 vendorsparticipated. Vigilance awareness mobile van with Anti-corruption audio message covereddifferent areas around the Refinery and Mangalore city to educate the citizens about theill-e ect of corruption. Vigilance awareness walkathon was conducted in which more than400 people participated to create an ethical awareness among the citizens on the menace ofcorruption and emphasized to use latest technology to curb the evil practices. Awarenessprogram was conducted for Contract workman and CISF security Personnel. For popularizingthe "Integrity Pledge" developed by central vigilance Commission MRPL installed3 integrity pledge kiosk in Mangalore City during Vigilance Awareness Week. MRPL alongwith All India Radio Mangalore jointly produced various vigilance awareness programswhich were aired during Vigilance Awareness Week-2018 including interview of CVO and MDMRPL online phone in program conducted by head Anti-Corruption Bureau Mangalore.Vigilance sensitization program for top management was conducted by Shri. J. Vinod KumarDirector Central Vigilance Commission. A one-day seminar on integrity for children"Chilume Bhavya Barathadatta" was conducted.
To incite the development of ethics and honesty among school childrena leadership program was conducted for 18 integrity clubs launched during 2017 indifferent schools along with various other awareness programs and competitions in 22schools and 16 colleges. Observance of Vigilance awareness week was accomplished witheffective utilization of social media. Schools and colleges government offices generalpublic and employees of MRPL OMPL and Shell-MRPL were covered in the vigilance awarenessdrive. E-office has been implemented in the company and is aimed at improving efficiencyin the working of MRPL. Leveraging the technology to enhance transparency has been athrust area of action in which vigilance has a catalytic role. The website of companydisplays downloadable tender document publication of information of work awarded onnomination basis publication of post award information of contracts etc.
Whistle Blower Policy
The Whistle Blower Policy is formulated to provide a vigil mechanismfor Directors and Employees to raise genuine concerns about unethical behaviour actual orsuspected fraud or violation of the Company's code of conduct or ethics policy. Italso provides for adequate safeguard against victimisation of persons who use suchmechanism. The Policy provides necessary safeguards for protection of Directors andEmployees who avail the vigil mechanism from reprisals or victimization for whistleblowing in good faith and to provide opportunity to Directors and Employees for Directaccess to the Chairperson of the Audit Committee in exceptional cases. The policy isavailable on the Company's website. During the year no complaints were receivedunder Whistle Blower Policy.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS & OUTGO
Information required to be disclosed pursuant to Section 134(3) (m) ofthe Companies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 withrespect to Conservation of Energy Technology Absorption and Foreign Exchange Earnings& Outgo are furnished in Annexure- C' which forms part of thisReport.
MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES
MRPL being a Government Company is exempted from the provisions ofSection 197(12) of the Companies Act 2013 and relevant Rules in view of the Notificationdated 05/06/2015 issued by Ministry of Corporate Affairs (MCA). The functional Directorsof the Company are appointed by the administrative Ministry i.e. MoP&NG within theterms & conditions as per DPE guidelines.
EXTRACT OF ANNUAL RETURN
Information required to be disclosed pursuant to Section 134(3) (a) ofthe Companies Act 2013 with respect to the details forming part of the extract of theAnnual Return in form MGT-9 are furnished in Annexure- D' which formspart of this Report. The same is also available on the website of the Company.
RELATED PARTY TRANSACTIONS & PARTICULARS OF CONTRACTS /ARRANGEMENTS WITH RELATED PARTY
All transactions entered with related parties during the FY2018-19 were on arm's length basis and in ordinary course of business. Further therewere no material related party transactions during the year with the Promoters Directorsor Key Managerial Personnel and no related party transaction were made which could havepotential conflict with interest of the Company at large. The Company has adopted aRelated Party policy and procedure which is available at company's website. Theparticulars of every contract or arrangements entered into by the Company with RelatedParties referred in Section 188(1) of the Companies Act 2013 in the prescribed
Form No. AOC - 2 attached as Annexure-E'. MCA videNotification dated 05/06/2015 has exempted the applicability of Section 188(1) of theCompanies Act 2013 for a transaction entered into between two Government Companies.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Changes in the Board of Directors and Key Managerial Personnel duringthe financial year 2018-19
MRPL being a Central Public Sector Enterprise (CPSE) Directors on theBoard of the company are appointed by the Administrative Ministry i.e. Ministry ofPetroleum and Natural Gas (MoP&NG) Government of India and therefore the provisionsof Section 134(3)(e) of the Companies Act 2013 regarding policy on Directorsappointment and remuneration shall not apply in view of the MCA notification dated05/06/2015.
Shri Subhash Kumar Director (Finance) ONGC was appointed as anAdditional Director on the Board of MRPL on 15/05/2018. Shri M Venkatesh was appointed asManaging Director & CEO w.e.f 01/06/2018 by MoP&NG on superannuation of ShriH. Kumar on 31/05/2018 from the services of the Company. Shri M. VenkateshManaging Director was entrusted the additional charge of Director (Refinery) by MoP&NGupto 31/05/2019 due to vacancy in the position of Director (Refinery). Shri M. VenkateshManaging Director was also entrusted with the additional charge of Director (Finance)consequent upon the sad demise of Shri A. K. Sahoo Director (Finance) on 11/12/2018. ShriVivek Mallya nominated as Non Official Independent Director by MoP&NG for a periodconcurrent with his tenure as Non Official Director (NoD) on the Board of ONGC i.e.till 30/01/2020 or until further orders by MoP&NG whichever is earlier was appointedas an Additional Director designated as Non Official Independent Director by the Boardwith effect from 07/01/2019 to hold office until the date of Annual General Meeting. ShriS. Raviprasad GGM (Finance) was appointed as Chief Financial Officer (CFO) of the Companyw.e.f. 07/02/2019. The Board places on record its appreciation for the valuableservices rendered by the outgoing Directors during their respective tenure.
All Independent Directors have given a declaration that they meet thecriteria of independence as laid down under Section 149(6) of Companies Act 2013 and SEBI(Listing Obligations & Disclosure Requirement) Regulations 2015.
Changes in the Board of Directors after 31/03/2019
There were no changes in the Board of Directors after 31/03/2019.
FORMAL ANNUAL EVALUATION
MRPL being a Government Company the provisions of Section 134(3) (p)of the Companies Act 2013 in respect of annual evaluation of the Board Committees andindividual Directors shall not apply in view of the MCA notification dated 05/06/2015.However as per Regulation 17 of SEBI Listing Regulations 2015 formal annual evaluationof Independent Directors for the FY 2018-19 had been carried out by the Board. A meetingof Independent Directors was held on 04/02/2019. Independent
Directors also reviewed the performance of non independentDirectors and the Board of Directors as a whole along with the Chairperson of theCompany as per SEBI (LODR) Regulations 2015.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to provisions of Section 134 of the Companies Act 2013 theBoard of Directors of your Company has made the following statement for FY 2018-19: a) Inthe preparation of the Annual Financial Statements for the year ended March 31 2019 theapplicable Ind AS have been followed along with proper explanation relating to materialdepartures; b) The Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the company for that period; c) The Directors havetaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe company and for preventing and detecting fraud and other irregularities; d) TheDirectors have prepared the Annual Financial Statements on a going concern basis; e) TheDirectors have laid down internal financial controls to be followed by the company andthat 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 allapplicable laws and that such systems are adequate and operating effectively.
The Board of Directors of your Company had seven (7) Meetings duringthe FY 2018-19. The maximum interval between any two meetings did not exceed 120 days asprescribed in the Companies Act 2013. Details of the Board Meetings held have beenfurnished in the Corporate Governance Report which forms part of this Report.
The Audit Committee has been constituted as per the terms of referenceprescribed 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 ListingRegulation 2015 and Guidelines on Corporate Governance for Central Public SectorEnterprise issued by Department of Public Enterprise Government of India. There have beenno instances where the recommendations of the Audit Committee were not accepted by theBoard of Directors. The details of Audit Committee are disclosed in the CorporateGovernance Report which forms part of this Report.
NOMINATION REMUNERATION NR AND HUMAN RESOURCE MANGAGEMNT HRM COMMITTEE
MRPL being a Central Public Sector Enterprise (CPSE) Directors on theBoard of the company are appointed by the Administrative Ministry i.e. Ministry ofPetroleum and Natural Gas (MoP&NG) Government of India. Accordingly the Company hasnot adopted any Nomination/Remuneration policy.
Pursuant to Section 178 of the Companies Act 2013 and Regulation 19 ofSEBI Listing Regulations 2015 and DPE guidelines on Corporate Governance for CPSE yourCompany has constituted a Nomination/ Remuneration Committee. During the year HRMCommittee of the Company was merged with Nomination/Remuneration Committee as NominationRemuneration and Human Resource Management Committee. The details on the NominationRemuneration and HRM Committee are disclosed in Corporate Governance Report which formspart of this report.
MRPL is a Schedule-A' category-1 Miniratna Central PublicSector Enterprise (CPSE). The appointment terms conditions and remuneration of ManagingDirector and Functional Directors (Whole-time Directors) are fixed by the Department ofPublic Enterprises (DPE) Govt. of India.
In line with the requirements of SEBI (Listing Obligations &Disclosure Requirement) Regulations 2015 your Company has developed and rolled out acomprehensive Enterprise-wide Risk Management (ERM) Policy throughout the organization.ERM policy is also being reviewed by an independent professional firm. The Audit Committeeperiodically reviews the risk assessment and mitigation actions in MRPL.
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 futureoperations.
The Companies Act 2013 and SEBI Listing Regulations 2015 havestrengthened the governance regime in the country. Your Company is in compliance with thegovernance requirements provided under the Companies Act 2013 SEBI Listing Regulations2015 and has complied with all the mandatory provisions of Companies Act 2013 and Rulesmade thereunder SEBI Listing Regulation 2015 relating to the Corporate Governancerequirements and mandatory guidelines on Corporate Governance for CPSEs issued by DPEGovernment of India. The Corporate Governance Report for the FY 2018-19 forms part of thisReport.
Pursuant to Schedule V of the SEBI Listing Regulations 2015 theAuditors' certificate on compliance of conditions of Corporate Governance also formspart of the Annual report. The Auditors have made observations on the appointment ofIndependent Directors on the Board of the Company for the part of
FY 2018-19. Presently there are 6 Independent Directors on the Boardof your Company. Pursuant to requirements of the Companies Act 2013 and SEBI ListingRegulations 2015 following policies/codes have been formulated and uploaded on theCompany's website at www. mrpl.co.in: a) Code of Conduct for Board Members and SeniorManagement Personnel; b) Whistle Blower Policy; c) Related Party Transactions Policy and Procedures; d) CSR & SD Policy; e) Material Subsidiary Policy; f) The Codeof Internal Procedures and Conduct for prohibition of Insider Trading in Dealing with thesecurities of MRPL; g) Policy on Materiality for disclosure of events to the StockExchanges; h) Policy on preservation of Documents; i) Training Policy for Board ofDirectors; j) Dividend Distribution Policy.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of the Companies Act 2013 readwith the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 ("theIEPF rules") all unpaid or unclaimed dividends are required to be transferred by theCompany to the IEPF established by the Government of India after the completion of sevenyears. Further according to the Rules the shares on which dividend has not been paid orclaimed by the shareholders for seven consecutive years or more shall also be transferredto the demat account of the IEPF Authority. During the year the Company has transferredthe unclaimed and unpaid dividends of र 29047291/-. Further 14562735corresponding shares on which dividends were unclaimed for seven consecutive years stoodtransferred to IEPF as per the requirements of the IEPF rules. The details are providedin the Shareholder information section of this Annual Report and are also available onwww.mrpl.co.in.
ANNUAL BUSINESS RESPONSIBILITY REPORT
SEBI Listing Regulations 2015 mandated inclusion of Annual BusinessResponsibility Report (BRR) as part of the Annual Report for top 500 listed entities basedon market capitalization. In compliance with the Regulation BRR for the FY 2018-19 formspart of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of Regulation 34 of the SEBI Listing Regulations 2015 theManagement's Discussion and Analysis (MDA) Report for the FY 2018-19 forms part ofthis Report.
INTERNAL FINANCIAL CONTROL
Your Company has a well-established and efficient internal financialcontrol system to ensure an adequate and effective internal control environment thatprovides assurance on efficiency of conducting business including adherence toCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of accounting records and the timelypreparation of reliable financial information. An independent audit of Information Systemsof the Company was also undertaken and appropriate actions are taken on suggestions givenduring audit. The Company has in-house internal Audit Department commensurate with itssize of operations. Audit observations are periodically reviewed by the Audit Committee ofthe Board and necessary Directions are issued whenever required. Details on the InternalControl system are disclosed in the Management Discussion Analysis Report which forms partof this report.
Joint Statutory Auditors
M/s Shreedhar Suresh & Rajagopalan Chennai and M/s ManoharChowdhry and Associates Mangalore were the Joint Statutory Auditors of the Company forthe FY 2018-19. They have audited the Financial Statements for the FY 2018-19 andsubmitted their report which forms part of this report. There is no qualification in theAuditors Report on the financial statements of the Company. Notes to the Accounts referredto in the Auditors Report are self-explanatory and thereof do not call for anycomments.
Your Company engaged M/s Kumar Naresh Sinha & AssociatesPracticing Company Secretary Noida for conducting Annual Secretarial Audit for the FY2018-19 pursuant to Section 204 of the Companies Act 2013. M/s Kumar Naresh Sinha &Associates Practicing Company Secretary Noida has issued Secretarial Audit Report forthe FY 2018-19 which forms part of this report as Annexure-F'. TheAuditors have made observations on the non - availability of requisite number ofIndependent Directors on the Board of the Company till 06/01/2019.There were requisitenumber of Independent Directors on the Board of the Company as on 31/03/2019.
Pursuant to Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Amendment Rules 2014 the Cost Accounts maintained bythe company for the FY 2018 19 are being audited by Cost Auditors M/s.Chandra Wadhwa & Co. New Delhi. M/s Chandra Wadhwa & Co Cost Accountant havebeen re-appointed as Cost Auditors for FY 2019-20.
COMMENTSOFC&AGONTHEJOINTSTATUTORYAUDITORS' REPORT ON THECONSOLIDATED AND STANDALONE FINANCIAL STATEMENTS FOR THE FY 2018 19
The Comments of Comptroller & Auditor General of India (C&AG)forms part of this report and are attached as Annexure-G'. You would bepleased to know that there is no comments from C&AG on the Auditor's Report or onthe Financial Statements for the year 2018-19.
Your Board of Directors wish to thank the shareholders for thecontinued confidence reposed on their Company. Your Directors sincerely thank theGovernment of India (GoI) Ministry of Petroleum and Natural Gas (MoP&NG) Ministry ofFinance (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 andDepartments of the Central Government for their valuable support guidance and continuedco-operation. Your Directors also place on record its appreciation for the support fromGovt. of Karnataka.
Your Directors gratefully acknowledge support and Direction provided bythe parent company Oil and Natural Gas Corporation Limited (ONGC) and the support ofHindustan Petroleum Corporation Limited (HPCL) as Promoters of the company. YourDirectors acknowledge the continuing cooperation and support received from New MangalorePort Trust Financial Institutions Banks and all other stakeholders. Your Directorsrecognize the patronage extended by the valued customers for the products of the Companyand promise to provide them the best satisfaction. The Board would like to express itssincere appreciation for the dedicated efforts made and valuable services rendered by allthe employees collectively and concertedly as a Team known as "Team MRPL" in theCompany's excellent achievements during the year 2018-19.
| ||For and on behalf of the Board |
| ||(Shashi Shanker) |
| ||Chairman |
| ||(DIN: 06447938) |
|Place : New Delhi || |
|Date : 03/07/2019 || |