Your Company's Directors have pleasure in presenting the Twenty-Fifth Annual Reportalong with the Audited Financial Statements of the Company for the Financial Year endedMarch 31 2020 and the Auditors' Report.
1. FINANCIAL RESULTS:
During the year under review your Company has achieved turnover of H 3264 Croresregistering a growth of 6.77% over previous financial year. The Profit after Tax is H 795Crores for the financial year 2019-2020 as compared to H 546 Crores for the financial year2018-2019. The Company's financial results for the financial year ended March 31 2020 aredepicted below:
| || ||(H in Crores) |
|Sr. No. Particulars ||As on March 31 2020 ||As on 31st March 2019 |
|a. Revenue from operations ||3264 ||3057 |
|b. Other Income ||99 ||78 |
|c. Profit before Depreciation and Finance cost ||1152 ||963 |
|d. Depreciation and Amortisation Expenses ||162 ||126 |
|e. Finance cost ||7 ||- |
|f. Profit before Tax (PBT) [c-d-e] ||984 ||837 |
|g. Income Tax ||190 ||291 |
|h. Profit after Tax (PAT) [f-g] ||794 ||546 |
|i. Other Comprehensive Income ||-2 ||1 |
|j. Total Comprehensive Income [h+i] ||792 ||548 |
|k. Balance of Profit for earlier years ||2299 ||1996 |
|l. Balance Available for appropriation (j+k) ||3091 ||2544 |
|Appropriations: || || |
|m. Dividend Paid || || |
|Final FY 2017-18 ||- ||108 |
|Interim FY 2018-19 ||- ||94 |
|Final FY 2018-19 ||104 ||- |
|Interim FY 2019-20 ||94 ||- |
|n. Tax on Dividend ||41 ||42 |
|o. Total Appropriations (n+o) ||239 ||244 |
|p. Balance of profit carried in Balance Sheet[m-p] ||2852 ||2300 |
|Earning Per Share (Face value of H 10.00 each) Basic and Diluted (H) ||80.33 ||55.31 |
2. TRANSFER TO RESERVES:
The closing balance of the Retained Earnings of the Company after appropriation for thefinancial year 2019-20 was H 2852 crores.
Your Company is consistently distributing dividends to the Shareholders. Your Directorsrecommend for approval of shareholders at the 25th Annual General Meeting theFinal Dividend of H 10.50/- per share and a Special Dividend of H 15/- for thefinancial year 2019-2020. The Board of Directors in its meeting held on February 262020 declared an Interim Dividend of H 9.50/- per equity share for the financial year 2019-20and the same has been paid on March 16 2020 to all the eligible shareholders as on recorddate i.e. March 09 2020.
The Dividend Distribution Policy is disclosed in the Annual Report for FY 2019-2020(refer Annexure 1) as per requirement of Regulation 43A of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (hereinafter referred to as the"Listing Regulations"). The policy is also available on the Company's website athttps:// www.mahanagargas.com/UploadAssets/UploadedFiles/_ DividendDistributionPolicy_f4049de0be.pdf
4. STATE OF COMPANY'S AFFAIRS:
The Financial Year 2019-2020 was one of the significant years in terms of growth andoperations. Further information on the business overview and outlook of the Company isdiscussed in detail in the Management Discussion & Analysis section forming part ofthe Annual Report.
The revenue from operations for financial year 2019-2020 at H 3264 croreshigher by 6.8% over previous year's revenue at H 3057 crores in financial year 2018-2019.
During the financial year 2019-2020 your Company has not accepted any deposit withinthe ambit of Chapter V i.e. Section 73 of the provisions of the Companies Act 2013 readwith Companies (Acceptance of Deposit) Rules 2014. Therefore default in repayment ofdeposits or payment of interest thereon during the year under review does not arise.
6. DIVESTMENT OF SHAREHOLDING BY PROMOTER:
BG Asia Pacific Holdings Pte. Limited (BGAPH) one of the Promoters of the Company soldits remaining stake of 10% in the Company on August 20 2019 thereby divesting its entireshareholding in the Company during the Financial Year 2019-2020 consequent to which BGAPHceased to be one of the Promoters of the Company. Post the divestment GAIL (India) Ltd.(GAIL) is currently the sole promoter of the Company.
7. NUMBER OF MEETINGS OF THE BOARD:
During the year under review the Board met 6 (Six) times on (1) May 09 2019 (2)August 08 2019 (3) September 09 2019 (4) November 11 2019 (5) February 07 2020 and(6) February 26 2020 respectively.
8. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Sections 134(3)(c) and 134(5) of the Companies Act 2013 your Directorshereby confirm that:
a) In preparation of the annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;
b) the Directors had selected such accounting policies and applied them consistentlyand reasonable and prudent judgments and estimates were made so as to give a true andfair view of the state of affairs of your Company as at the end of the year and of theprofit & loss of your Company for that period; c) the Directors had taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of your Company and for preventing anddetecting fraud and other irregularities;
d) the Directors had prepared the annual accounts on a going concern' basis;
e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
f) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Further your Directors confirm that during the year the Company has been incompliance with the applicable Secretarial Standards issued by the Institute of CompanySecretaries of India.
9. RISK MANAGEMENT:
The Board had constituted the Risk Management Committee and also adopted the terms ofreference of the Committee at its meeting held on January 29 2019 in compliance with therequirements of the listing regulations. The Company has also developed and implementedEnterprise Risk Management Policy. The framework also includes objective of identificationof elements of risks which includes operational risks as well as business risks andassessment of Management's actions to mitigate the exposures periodically. Further theRisk Management Systems under the policy are in place for identification of the elementsof risks.
10. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY:
The Company maintains appropriate systems of internal controls including monitoringprocedures to ensure that all assets and investments are safeguarded against loss fromunauthorized use or disposition. Company policies guidelines and procedures provide foradequate checks and balances and are meant to ensure that all transactions are authorizedrecorded and reported correctly.
The Internal Auditors review the efficiency and effectiveness of these systems andprocedures. The Internal Auditors submit their Reports periodically which are placedbefore and reviewed by the Audit Committee.
11. VIGIL MECHANISM AND WHISTLE BLOWER POLICY:
The Company has established a Whistle Blower Policy as part of formal mechanism whichhas provided a stage to the employees to come forward and raise their genuine concernswithout any fear of victimization. The details of the Vigil Mechanism and Whistle BlowerPolicy are available on the web link of the Company www.mahanagargas.com/investors/Policies.aspx.
12. CORPORATE SOCIAL RESPONSIBILITY:
The Company has constituted the Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014. Pursuant to the provisions of Section 135 of theCompanies Act 2013 the Company has also formulated a Corporate Social ResponsibilityPolicy which is also available on the website of the Company at https://www.mahanagargas.com/UploadAssets/UploadedFiles/_ MGL-CSR_Policy_952a5a4889.pdf.
The Annual Report on CSR activities as required under Companies (Corporate SocialResponsibility Policy) Rules 2014 (including the activities undertaken by the Companyduring the period of COVID-19 under CSR) is enclosed herewith as Annexure 2 to thisreport.
13. DISCLOSURES PURSUANT TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:
Your Company has in place a Policy on Prevention of Sexual Harassment of Women atWorkplace which is in line with requirements of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 ("POSH Act"). Theobjective of this policy is to provide an effective complaint redressal mechanism if thereis an occurrence of sexual harassment.
Your Company has also complied with the provisions of setting up of an InternalComplaints Committee which is duly constituted in compliance with the provisions of thePOSH Act. Further the Company also conducts adequate awareness programmes and interactivesessions against sexual harassment for all the employees to build awareness amongstemployees about the policy and the provisions of POSH Act. During the year under reviewthere were no complaints pertaining to sexual harassment.
14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALS IMPACTINGTHE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE:
There are no significant material orders passed by the Regulators/Courts/Tribunalswhich would impact the going concern status and the Company's future operations.
PNGRB had passed an order dated 18.03.2020 wherein while dismissing the complaint filedby MGL PNGRB has directed MGL and GAIL to pay to ONGC the transportation charges as perthe transportation tariff fixed by PNGRB from time to time for the Uran TrombayNatural Gas Pipeline (UTNGPL). Pursuant to the Order passed by PNGRB MGL had filed asappeal before the APTEL.
APTEL is currently non-functional due to want of quorum pursuant to retirement of thetechnical member of the said bench in December 2019. The matter shall be listed when thebench quorum is complete and APTEL starts functioning. Since APTEL was non functioning wefiled one writ before the Delhi High Court (DHC). DHC while disposing of the writ vide itsorder dated 04.05.2020 inter alia ordered that "Pending the decision of the APTEL onthe appeal preferred by the petitioner or the application filed therewith for interimrelief no coercive steps shall be taken against the petitioner consequent upon theimpugned order dated 18th March 2020 passed by the PNGRB."
Current Status: Pursuant to the order of DHC operation of PNGRB order dated18.03.2020 stands stayed. Status Quo is maintained.
15. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
A. APPOINTMENT AND CESSATION OF DIRECTORS
The details of appointment and cessation of Directors of the Company during the yearunder review are given in the table as hereunder:
|Sr. No. Name of the Director and DIN ||Date of Appointment /Cessation with reason |
|1. Mr. Deepak Sawant (DIN: 07339381) ||Appointed by Board as Additional Director on May 09 2019 and regularized by Shareholders as Whole-Time Director (Designated as Deputy Managing Director) at the AGM held on September 09 2019. |
|2. Mr. Akhil Mehrotra (DIN: 07197901) ||Resigned as Non-Executive Director on May 09 2019 due to withdrawal of nomination by BG Asia Pacific Holdings Pte. Ltd. |
|3. Mr. Trivikram Arun Ramanathan (DIN: 08035390) ||Appointed by Board as Additional Director (Non-Executive) on May 10 2019# and resigned on August 20 2019 due to withdrawal of nomination by BG Asia Pacific Holdings Pte. Ltd. consequent to divestment of its entire shareholding in the Company. |
|4. Mr. Bhuwan Chandra Tripathi (DIN: 01657366) ||Resigned as Chairman and Non-Executive Director on August 01 2019 due to completion of tenure as Chairman and Managing Director of GAIL (India) Limited. |
|5. Dr. Ashutosh Karnatak (DIN: 03267102) ||Appointed by Board as Chairman and Additional Director w.e.f. August 01 2019@ and regularized by Shareholders as Director at the AGM held on September 09 2019. |
|6. Mr. Satish Gavai (DIN: 01559484) ||Vacated the office as Non-Executive Director w.e.f. July 31 2019 under Section 167(1)(b) of the Companies Act 2013. |
|7. Mr. Arun Balakrishnan (DI: 00130241) ||Ceased to be Non-Executive Independent Director w.e.f. September 09 2019 on Completion of second term as Independent Director of the Company. |
|8. Mr. Santosh Kumar (DIN: 00239324) ||Ceased to be Non-Executive Independent Director w.e.f. September 09 2019 on Completion of second term as Independent Director of the Company. |
|9. Mr. Syed S. Hussain (DIN: 00209117) ||Appointed by Board as Additional Director (Non-Executive Independent Director) on September 09 2019. |
|10. Mrs. Radhika Vijay Haribhakti (DIN: 02409519) ||Appointed by Board as Independent Director for a second term (Non-Executive) on March 05 2020$. |
# The Appointment of Mr. Trivikram Arun Ramanathan was made at the meeting of the Boardof Directors held on May 09 2019.
@ The Appointment of Dr. Ashutosh Karnatak was made by the Board of Directors on August07 2019 vide resolution passed through Circulation. $ The Re-appointment of Mrs. RadhikaVijay Haribhakti was made at the meeting of the Board of Directors held on February 072020.
The Board places on record its appreciation for the valuable services rendered as wellas advice and guidance provided by Mr. Akhil Mehrotra Mr. Trivikram Arun Ramanathan Mr.Bhuwan Chandra Tripathi Mr. Arun Balakrishnan and Mr. Santosh Kumar during theirtenure as Directors of the Company.
GAIL (India) Limited Promoter of the Company nominated Mr. Manoj Jain (DIN: 07556033)as its Nominee in place of Dr. Ashutosh Karnatak (DIN: 03267102) as Chairman on theBoard of your Company consequent to which Dr. Ashutosh Karnatak tendered his resignation.Accordingly the Board of Directors through Circular Resolution appointed Mr. ManojJain as an Additional Director (Non-Executive
Non- Independent category) with effect from May 06 2020 designated as Chairman on theBoard of the Company to hold office upto the date of the ensuing Annual General Meeting.Special Business with respect to his appointment is one of the agenda items of the ensuingTwenty- Fifth Annual General Meeting of the Company.
The Board places on record its sincere appreciation for the valuable advice andguidance provided by Dr. Ashutosh Karnatak during his tenure as Chairman andNon-Executive Director of the Company.
In accordance with the provisions of Section 149 of the Companies Act 2013 Mr. SyedS. Hussain and Mrs. Radhika Vijay Haribhakti are being appointed as
Independent Directors to hold office as per their tenure of appointment mentioned inthe Notice of the ensuing Annual General Meeting of the Company.
The Company has received declarations from all Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both under149(6) of the Companies Act 2013 and the Listing Regulations and there has been no changein the circumstances which may affect their status as Independent Director during theyear. The Board of Directors after undertaking assessment and on evaluation of therelationships disclosed considered the Non-Executive Directors as Independent Directors.All Independent Directors have affirmed compliance to the Code of Conduct for IndependentDirectors as prescribed in Schedule IV of the Companies Act 2013.
Mr. Raj Kishore Tewari Mrs. Radhika Haribhakti Mr. Premesh Kumar Jain and Mr. Syed S.Hussain are Independent Directors of the Company and pursuant to the provisions of Section149 of the Companies Act 2013 and Regulation 25 of Listing Regulations they havesubmitted the Declaration of Independence to the Company.
Brief profiles of the directors proposed to be appointed / re-appointed are annexed tothe Notice convening Twenty-Fifth Annual General Meeting. The aforesaid appointments werebased on the recommendation of the Nomination and Remuneration Committee of the Board.
B. KEY MANAGERIAL PERSONNEL:
The details of appointment and cessation of Key Managerial Personnel of the Companyduring the year under review are given in the table as hereunder:
|No. Key Managerial Personnel || ||Appointment during the FY 2019-2020 ||during the FY 2019-2020 ||Resignation |
|1. Mr. Alok Mishra ||Company Secretary & Compliance Officer ||-- ||May 14 2019 ||Better Growth Opportunity |
|2. Mr. Anand Upadhyay ||Company Secretary & Compliance Officer ||May 15 2019 ||August 08 2019 ||Vacation of Interim Charge as Company Secretary & Compliance Officer |
|3. Mr. Arvind Kumar ||Company Secretary & Compliance Officer ||August 09 2019 * ||September 09 2019 ||Personal Reasons |
|4. Mr. Anand Upadhyay ||Company Secretary & Compliance Officer ||September 09 2019 ||February 07 2020 ||Vacation of Interim Charge as Company Secretary & Compliance Officer |
|5. Mr. Saghan Srivastava ||Company Secretary & Compliance Officer ||February 08 2020 * ||-- ||-- |
*The Appointments of Mr. Arvind Kumar and Mr. Saghan Srivastava were made at themeeting of the Board of Directors held on August 8 2019 (effective from August 9 2019)and February 7 2020 (effective from February 8 2020) respectively.
Pursuant to Section 203 of the Act the Key Managerial Personnel of the Company as atMarch 31 2020 are Mr. Sanjib Datta Managing Director Mr. Sunil Ranade Chief FinancialOfficer and Mr. Saghan Srivastava Company Secretary and Compliance Officer.
16. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
The Company has received declarations from all Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both under149(6) of the Companies Act 2013 and the Listing Regulations and there has been no changein the circumstances which may affect their status as independent director during theyear.
17. ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD ITS COMMITTEES AND OF INDIVIDUALDIRECTORS:
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations theannual evaluation of the performance of the Board and that of its Committees as well as ofindividual Directors was carried out during the year under review based on the formalmechanism adopted by the Board covering various aspects mentioned in the framework forevaluation through questionnaire. This questionnaire was prepared with various parameterswhich included Board composition and structure effectiveness of Board processesinformation and functioning attendance of the Directors composition of Committeeseffectiveness of Committee meetings etc. The same was carried out by the Nomination andRemuneration Committee the Board of Directors and the Independent Directors at theirrespective meetings. In the meeting of Independent Directors the performance evaluationof Board as a whole Chairman of the Board and of other Independent and Non-IndependentDirectors (excluding the Director being evaluated) was done on the basis of Questionnaireand Evaluation Sheet after taking into account the views of Executive and Non-ExecutiveDirectors of the Company. In the Board meeting that followed the meeting of theIndependent Directors and meeting of Nomination and Remuneration Committee theperformance of the Board its committees and individual Directors was also discussed.Performance evaluation of Independent Directors was done by the entire board excludingthe Independent Director being evaluated.
18. NOMINATION AND REMUNERATION POLICY:
In terms of Section 178 of the Companies Act 2013 and the Listing Regulations apolicy on nomination and remuneration of Directors Key Managerial Personnel (KMP) SeniorManagement and other employees of the Company act as a guideline for determininginter-alia qualifications positive attributes and independence of a Director mattersrelating to the remuneration appointment removal and evaluation of performance of theDirectors Key Managerial Personnel Senior Management and other employees.
The policy is available on the website of the Company athttps://www.mahanagargas.com/UploadedFiles/_MGL-Nomination_and_Remuneration_Policy_329e2e5b7e.pdf
19. AUDITORS: STATUTORY AUDITORS:
At the Twenty-Third Annual General Meeting of the Company held on September 17 2018the Members approved appointment of M/s. S R B C & Co. LLP Chartered Accountants(Firm Reg. No. 324982E/E-300003) as Statutory Auditors of the Company to hold office fromthe conclusion of the Twenty-Second Annual General Meeting held on September 25 2017 tillthe conclusion of the Twenty-Seventh Annual General Meeting to be held in the year 2022subject to ratification of their appointment by Members at every Annual General Meetingif so required under the Act. As the requirement of ratification by Members of appointmentof Auditors at every AGM is no longer required under the Act with effect from May 7 2018resolution for the same is not included in the Notice for this AGM.
M/s. S R B C & Co. LLP Chartered Accountants (Firm Reg. No. 324982E/E-300003) hascarried out the Statutory Audit of your Company for the financial year 2019-2020. Furtherthe Auditors' Report "with an unmodified opinion" given by the StatutoryAuditors on the Financial Statements of the Company for FY 2019-2020 is disclosed in theFinancial Statements forming part of this Annual Report. There has been no qualificationreservation adverse remark or disclaimer given by the Statutory Auditors in their Reportfor the year under review.
The Notes to the financial statements referred to in the Auditors' Report for FY2019-2020 of M/s. S R B C & Co. LLP are self-explanatory and do not call forany further comments.
20. REPORTING OF FRAUDS BY AUDITORS:
The Statutory Auditors have not reported any incident of fraud to the Audit Committeeor the Board of Directors under Section 143(12) of the Act during the financial year underreview.
21. SECRETARIAL AUDITORS:
Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company had appointed M/s. Dholakia & Associates LLP Company Secretaries toconduct the Secretarial Audit of the Company for the financial year 2019-2020. TheSecretarial Audit Report for the financial year 2019-2020 issued by M/s. Dholakia &Associates LLP Company Secretaries in Form MR-3 is enclosed herewith as Annexure 3 tothis report. The Secretarial Audit Report is self-explanatory in nature. There has been noqualification reservation adverse remark or disclaimer given by the Secretarial Auditorin his Report for the year under review.
22. COST AUDITORS:
Your Company is required to carry out Cost Audit pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014.
M/s. Dhananjay V. Joshi & Associates a firm of Cost Accountants conducted thisaudit for the Company's financial year ended March 31 2019 and submitted their report tothe Central Government in Form CRA 4 on August 08 2019. The Board of Directors has on therecommendation of the Audit Committee appointed M/s. Dhananjay V. Joshi & AssociatesCost Auditors to audit the Cost Accounts of the Company for financial year 2020-2021 onremuneration of H 345000/- (Rupees Three Lakh Forty Five Thousand) plus applicable taxes(travelling and out of pocket expenses to be paid at actuals).
As required under the Companies Act 2013 the remuneration payable to the CostAuditors is required to be placed before the Members in General Meeting for theirratification. Accordingly the necessary resolution seeking Members' ratification for theremuneration payable to the Cost Auditors for FY 2020-2021 has been included in the Noticeconvening the Annual General Meeting. Your Company is maintaining cost records asspecified by the Central Government under Section 148 of the Companies Act 2013 andaccordingly such accounts and records are made and maintained by the Company.
23. PARTICULARS OF LOANS ADVANCES GUARANTEES AND INVESTMENTS:
Pursuant to Section 186 of Companies Act 2013 and Schedule V of the ListingRegulations disclosure on particulars relating to loans advances guarantees andinvestments are provided as part of the financial statements if any.
24. RELATED PARTY TRANSACTIONS:
All Related Party Transactions entered during the year were in ordinary course ofbusiness and on arm's length basis and same have been disclosed in the Notes to theFinancial Statements. All Related Party Transactions are placed before the Audit Committeefor approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are repetitive in nature. A statement of all Related Party Transactionsis placed before the Audit Committee for its review on a quarterly basis.
All material Related Party Transaction arising from contracts/ arrangements withRelated Parties referred to in the Section 188(1) of the Companies Act 2013 and asrequired under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 has beenattached as Annexure 4 to this Report. The Company has adopted a Related PartyTransactions Policy. The Policy as approved by the Board is uploaded on the Company'swebsite at the web link www.mahanagargas.com/investors/ Policies.aspx.
Disclosures of transactions of the listed entity with any person or entity belonging tothe promoter/promoter group which hold(s) 10% or more shareholding in the listed entityin the format prescribed in the relevant accounting standards for annual results.
GAIL (India) Limited (GAIL) has a significant influence on the Company. BG Asia PacificHoldings Pte. Limited (BGAPHPL) had a significant holding till 23rd August 2018on which date its shareholding reduced to 10%.
Details of transactions with related entities (including entities transacting on behalfof related entities) in ordinary course of business:
| || ||(H in Lakh) |
|Particulars ||For the year ended March 31 2020 ||For the year ended March 31 2019 |
|Purchase of Natural ||134554.44 ||125625.68 |
|Gas (from GAIL) || || |
|Secondment Charges (also included in KMPs' remuneration refer table below) ||164.33 ||204.51 |
|Expense incurred and recovered / recoverable (relates to IPO) ||- ||18.34 |
|Refundable Security ||- ||- |
|Deposit given/ received || || |
|Other Expense ||17.73 ||37.24 |
|Capital Expense ||17.87 ||94.61 |
|Other Income ||3.47 ||0.88 |
|(subsidiary/Joint Ventures of GAIL) || || |
|Remittance of IPO proceeds to promotors ||- ||649.16 |
|Capital Advance ||310.50 ||- |
25. DISCLOSURE REGARDING REMUNERATION TO DIRECTORS AND EMPLOYEES:
Disclosures pertaining to remuneration of Directors and employees as required underSection 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are enclosed as Annexure 5 to this Report.
A statement containing inter alia the names of top ten employees in terms ofremuneration drawn is provided at Annexure 6.
Further there is no employee employed throughout the financial year who was in receiptof remuneration of H 102 lakhs or more and employees employed for part of the year and inreceipt of remuneration of H 8.50 lakhs or more per month pursuant to Rule 5(2) theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
26. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO:
Your Company consciously makes all efforts to conserve energy across all itsoperations. A report containing details with respect to conservation of energy technologyabsorption and foreign exchange earnings and outgo required to be disclosed in terms ofSection 134(3)(m) of the Act read with the Companies (Accounts) Rules 2014 is enclosedas Annexure 7 to this Report.
27. MANAGEMENT DISCUSSION AND ANALYSIS:
A separate report on Management Discussion and Analysis as stipulated by the ListingRegulations forms part of this Annual Report.
28. BUSINESS RESPONSIBILITY REPORT:
The Business Responsibility Report for the year ended March 31 2020 as stipulatedunder Regulation 34 of the Listing Regulations is annexed which forms part of this AnnualReport.
29. CORPORATE GOVERNANCE:
As per the requirements of the Listing Regulations a detailed report on CorporateGovernance and certificate regarding compliance of conditions of Corporate Governance arepart of this Annual Report.
M/s. Santosh Singh & Associates Practising Company Secretary vide certificatedated May 29 2020 have confirmed that the Company is and has been compliant with theconditions stipulated in the Chapter IV of the Listing Regulations.
30. STATEMENT REGARDING OPINION OF THE
BOARD WITH REGARD TO INTEGRITY EXPERTISE AND EXPERIENCE:
The Board confirms that Independent Directors appointed during the year possessintegrity expertise and experience.
31. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Sections 92(3) and 134(3) (a) of the Act and theCompanies (Management and Administration) Rules 2014 an extract of the Annual Return forFY 2019 in Form No. MGT-9 is given in Annexure 8 to this Report. The same is available onthe website of the Company i.e. www.mahanagargas.com.
32. OTHER DISCLOSURES
In terms of the applicable provisions of the Act and SEBI
Listing Regulations your Company additionally discloses that during the year underreview :
there was no change in the nature of business of your Company;
your Company has not issued any shares with differential voting rights;
your Company has not issued any Sweat Equity Shares; and It is further disclosedthat :
There is no plan to revise the Financial Statements or Directors' Report inrespect of any previous financial year.
No material changes and commitments have occurred between the end of theFinancial Year of the Company to which the Financial Statements relate and the date of theReport affecting the financial position of the Company.
Your Company does not engage in Commodity hedging activities.
33. AWARDS AND RECOGNITIONS:
Various CSR initiatives of Mahanagar Gas Limited received accolades and recognitionsduring the year. MGL was conferred with Stars of Industry Award 2019 for outstandingachievement in CSR.
We take this opportunity to place on record our appreciation to the Ministry ofPetroleum & Natural Gas Government of India Petroleum & Natural Gas RegulatoryBoard Government of Maharashtra (GOM) Municipal Corporations of Greater Mumbai NaviMumbai Thane Mira-Bhayander Kalyan-Dombivali Raigad other State and CentralGovernment Authorities Mumbai Metropolitan Regional Development Authority (MMRDA)Maharashtra Industrial Development Corporation (MIDC) Police and Fire BrigadeAuthorities all our customers members investors vendors suppliers businessassociates bankers and financial institutions for their continuous co-operation andsupport.
We acknowledge the patronage of the GAIL (INDIA) Limited Shell Group and GOM for theirsupport and above all we place on record our sincere appreciation for the hard-worksolidarity and contribution of each and every employee of the Company in driving thegrowth of the Company.
For and on behalf of the Board of Directors
Place : New Delhi Date : June 30 2020
DIVIDEND DISTRIBUTION POLICY Preamble
The Securities Exchange Board of India (SEBI) on July 8 2016 has notified the SEBI(Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations 2016(Regulations).
Vide these Regulations SEBI has inserted Regulation 43A after Regulation 43 of SEBI(LODR) Regulations 2015 which requires the Company to frame and adopt a DividendDistribution Policy which shall be disclosed in its Annual Report and on its website.
Accordingly this Dividend Distribution Policy has been approved and adopted by theBoard of Directors of the Company at its meeting held on February 11 2017.
Circumstances under which the shareholders may expect dividend
The equity shareholders of the Company may expect an annual dividend if the Company ishaving surplus funds after providing for all expenses depreciation etc. and aftercomplying with related requirements of the Companies Act 2013 and under other statutes.Company's sustainability of business position of Reserves to handle unforeseen financialimpact and immediate expansion plans shall also be important factors to be considered fortaking the dividend decision.
The financial parameters that shall be considered while declaring dividend
The factors to be considered while arriving at the quantum of dividend will include :
Reasonable consistency to be maintained in dividend pay-out ratio except incases of abnormal change in profit for the year.
Current year profits and outlook in line with the development of internal andexternal environment.
Operating cash flows and treasury position keeping in view the debt to equityratio.
Any cash reserves to be created either mandatory or voluntary.
Possibilities of alternate usage of cash e.g. capital expenditure M&Aopportunities with potential to create greater value for shareholders.
Providing for unforeseen events and contingencies with financial implications.
The Board may declare interim dividend(s) as and when considered fit and recommendfinal dividend to the shareholders for their approval in the general meeting of theCompany. The Board may additionally recommend special dividend in special circumstances.
Internal and external factors that shall be considered for declaration of dividend
The decision regarding dividend pay-out is a crucial decision as it determines theamount of profit to be distributed among shareholders and amount of profit to be retainedin business. The Board of Directors will endeavour to take a decision with an objective toenhance shareholders' wealth and market value of the shares. However the decisionregarding pay-out is subject to several factors and hence any optimal policy in thisregard may be far from obvious.
The dividend pay-out decision will depend upon certain external and internal factors asfollows:
State of Economy - in case of uncertain or recessionary economic and businessconditions Board will endeavour to retain larger part of profits to build up reserves toabsorb future shocks.
Government policies & Regulation - when Policies & Regulations arefavourable to the business dividend pay-out can be liberal. However in case ofunfavourable Policies & Regulations Board may resort to a conservative dividendpay-out in order to conserve cash outflows.
Statutory & other Restrictions - The Board will keep in mind the restrictionsimposed by the Companies Act other applicable statutes lenders with regard todeclaration of dividend.
Apart from the external factors aforementioned the Board will take into accountvarious internal factors while declaring Dividend which inter alia will include :
(i) Profits earned during the year;
(ii) Present & future capital requirements of the existing businesses;
(iii) Plan for business acquisitions;
(iv) Expansion / modernization of existing businesses / assets;
(v) Contingent liabilities
(vi) Any other factor as deemed fit by the Board.
Utilisation of retained earnings:
The profits retained in business may be used for corporate actions in accordance withapplicable laws and for investments towards growth of the business. The Company may chooseto retain a part of its profits and distribute the balance among its shareholders asdividend. The Board of Directors will aim to balance between all these needs.
Parameters that shall be adopted with regard to various classes of share
The Company does not have different classes of shares. In case the Company issuesPreference Shares equity dividend shall stand second in priority.
The Board shall assess the policy as and when need arises.