On behalf of the Board of Directors it is our privilege and honour to present thetwentieth Annual Report along with Audited Statement of Accounts the Auditors' Report andReview of the Accounts for the financial year ended 31st March 2018.
The financial year 2017-18 saw the Company operate its Dahej Terminal at 16.03 milliontonnes throughput as compared to 13.13 Million tonnes in the previous year. The demand forLNG was robust.
During the financial year 2017-18 the Dahej Terminal handled 241 LNG Cargoes andsupplied 815.55 TBTUs of RLNG. 2843 LNG Road Tankers were also loaded and dispatched.
The utilization of Kochi Terminal remained extremely low in the absence of pipelinenetwork for gas evacuation. 14 Cargoes (including reload) were handled at the KochiTerminal during the full year similar to 7 Cargoes during the last year.
During the financial year 2017-18 your Company achieved a turnover of Rs. 30599 Croreas against Rs. 24616 Crore in 2016-17. The net profit during the year stood at Rs. 2078Crore as against Rs. 1706 Crore in the previous year. A summary of the comparativefinancial performance in the fiscal 2017-18 and
2016-17 is presented below:
| ||(Rs. in crore) |
|Particulars ||2017-18 ||2016-17 |
|Revenue from operations ||30599 ||24616 |
|Other Income ||317 ||347 |
|Total Revenue ||30916 ||24963 |
|Cost of LNG imports ||26690 ||21417 |
|Gross Margin ||4226 ||3546 |
|Salary & other operating expenses ||596 ||607 |
|Finance charges ||163 ||210 |
|Depreciation ||412 ||369 |
|Profit before Tax ||3055 ||2360 |
|Tax expenses including deferred tax ||977 ||654 |
|Profit after Tax ||2078 ||1706 |
|Earnings (Rs.) per Share* ||13.85* ||22.74 |
*EPS is reduced due to 1:1 bonus issue in July 2017.
The Board of Directors of your Company has recommended a final dividend of Rs. 4.50 perequity share of Rs. 10/- each i.e. 45 % of the post Bonus paid-up Share Capital of theCompany as on 31st March 2018 subject to approval of Members of the Company as comparedto Rs. 5 Per equity share of Rs. 10 each i.e. 50% of the pre Bonus paid-up Share Capitalof the Company as on 31st March 2017. This is the 12th consecutive year for which yourCompany has recommended payment of dividend.
The final dividend shall be paid to the members whose names appear in the Register ofMembers as well as the Beneficial Ownership Position provided by NSDL/CDSL as at the closeof business hours on 7th September 2018. The Board of your Company has formulated aDividend Distribution Policy ("The Policy"). The Policy is annexed to thisReport and is also available on our website www.petronetlng. com.
CHANGES IN SHARE CAPITAL
During the year the Authorised Share Capital of the Company was increased from Rs.1500 crore (150 Crore Equity Shares of Rs. 10 each) to Rs. 3000 crore (300 Crore EquityShares of Rs. 10 each). Your Company issued bonus shares in the ratio of 1:1 i.e. onebonus share in the ratio of one share held during the financial year ended on 31st March2018. Consequently the paid-up share capital increased from Rs. 750 crore to Rs. 1500Crore.
FINANCING OF PROJECTS
Given the strong cash flows of the Company the expansion of the Dahej project andother capital expenditure was funded entirely with the internal accruals without the needto draw any debt. The relationship with the existing lenders continues to be good.
Three LNG ships namely Disha' Raahi' and Aseem' carry the entireLNG volumes from RasGas under a long-term contract to Dahej. Besides Japanese companiesShipping Corporation of India (SCI) is also an equity partner in the ship-owningcompanies. All these ships are manned managed maintained and operated by SCI. The shipsoperate on a long-term time charter basis with Petronet as the charterer. During FY2017-18 the overall shipping operations at Dahej LNG terminal have run smoothly and thejetty utilization has been very good without any downtime. The fourth LNG vessel"Prachi" was delivered on 30th November 2016. Besides Japanese Companies NYKMOL and K-Line
Shipping Corporation of India (SCI) is an equity partner in the ship-owning companies.PLL has taken 26% equity in this LNG ship. As is the case with the first three ships thefourth ship is also being manned managed maintained and operated by SCI. Supply of LNGfrom Gorgon is now on delivered basis and "Prachi" has been novated to ExxonMobil.
DAHEJ LNG TERMINAL
Your terminal has been operating well at average capacity utilization of 104.97% duringthe year. There have been addition of four LNG truck loading bays to cater gas requirementto customers not connected to pipe line.
Your company is in advance stage of expanding Dahej Terminal Regasification capacityfrom 15 MMTPA to 17.5 MMTPA. Regasification unit of 2.5 MMTPA at an approximate cost ofRs. 415 crore is being added without raising any external debt. The project is likely tobe commissioned by end of 2018-19.
Your company is also planning to build seventh LNG Tank. The tendering process is inadvance stage. Also feasibility study for third jetty is being started for betterreliability of LNG ship receiving system.
KOCHI LNG TERMINAL
During the year the Kochi terminal continued to operate at a low capacity due to lackof evacuation pipelines to Bangalore and Mangalore. BPCL-Kochi Refinery was the only majorconsumer throughout the year and the other customer FACT consumed R-LNG intermittently.
The average capacity utilization during the year was 12.09 %. R-LNG off-take isexpected to increase in 2018-19 in view of the RLNG evacuation pipeline connectivity toMangalore.
Other specialised services like cooling down of LNG vessels and storage and reloadservices were provided by the Kochi terminal during the year. Taral' LNG suppliescontinued with trucks to HLL Lifecare Ltd. Trivandrum.
It is understood that GAIL the executing agency for the pipelines has madesignificant progress in the Kochi - Mangalore section of the pipeline.
NEW BUSINESS INITIATIVES
LNG TERMINAL AND POWER PLANT AT SOUTH ANDAMAN
Your Company has signed a Memorandum of Understanding (MoU) with Andaman and NicobarAdministration for establishment of small scale floating LNG Receiving Storage andRegasification Terminal and Gas based Power Plant at South Andaman. Your Company hascompleted pre-project studies like environment impact assessment geo-technicalinvestigations marine studies including navigational studies etc. output of which hasbeen used to prepare the detailed feasibility report. All the above studies are inprogress and your Company has submitted a Detailed Feasibility Report (DFR) to Andaman andNicobar Administration for their consideration thereafter.
LNG TERMINAL AT BANGLADESH PROJECT
Your Company has signed an MoU with Petrobangla of Bangladesh for cooperation /collaboration to set up a land based 7.5 MMTPA LNG Receiving Storage and RegasificationTerminal at Kutubdia Island. In continuance of the Memorandum of Understanding (MOU) yourCompany and Petrobangla have also signed a non-binding Heads of Understanding (HoU) on LNGTerminal Use during the recent visit of Hon'ble Prime Minister of Bangladesh to Delhi.
Your Company has completed pre-project studies such as geotechnical investigations bothfor land and marine area marine studies bathymetry study etc. Also Engineers IndiaLimited has prepared Detailed Feasibility Report (DFR). Based on above studies and DFRyour Company has submitted a commercial proposal along with terms and conditions toPetrobangla for their consideration.
LNG TERMINAL AT SRI LANKA
Your Company has signed an MoU with Sri Lankan Authorities forcooperation/collaboration for development of LNG/NG infrastructure in Sri Lanka.
LNG AS AN AUTOMOTIVE FUEL
There were intense efforts required on the regulatory side of the business over thepast year. Your company's initiatives to develop the small scale LNG market in the Countryrequired discussions and deliberation with Ministry of Road Transpiration and Highways(MORTH) and Ministry of Commerce and Industries (MOCI) for inclusion of LNG as anautomotive fuel in Central Motor Vehicle Rules (CMVR) and for inclusion of LNG dispensingstations development regulation in Static and Mobile Pressure vessel rules (SMPV). Boththese regulations are in place now leading to opening of a new doorway in the Indianmarket for use of LNG as a cleaner transportation fuel.
Your company has prepared a business plan based on traffic study on Indian Roads anddecided to develop an LNG corridor covering 4000 Kms. of National highways. Your companyhas conducted a conference on this subject wherein Hon'ble Minister of Petroleum andNatural gas has supported this business to replace diesel in Heavy and Medium Commercialvehicles with cleaner LNG. Your company has shortlisted twenty (20) locations to developLNG dispensing stations as a pilot project. A core team with OMC's and Gas marketingcompanies are working together to develop this LNG infrastructure.
HEALTH SAFETY & ENVIRONMENT (HSE)
Your Company is committed to conduct business with a strong environment conscienceensuring sustainable development safe workplaces and enrichment of the quality of life ofits employees customers and the community at large. Compliance with safety systems andprocedures and environmental laws is monitored by the Company. The Company is having welldefined policy for Health Safety & Environment (HSE).
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has developed adequate internal control systems commensurate to its sizeand business. M/s Ernst & Young as the Company's Internal Auditors conduct regularaudits for various activities. The reports of the Internal Auditors are submitted to theManagement and the Board's Audit Committee at regular intervals. There is a thoroughreview of the adequacy of internal control system periodically.
DETAILS OF SUBSIDIARY/ JOINT VENTURES / ASSOCIATE COMPANIES
1) Adani Petronet (Dahej) Port Private Ltd.
A Solid Cargo Port through a Company named Adani Petronet (Dahej) Port Private Ltd.had commenced its operations in August 2010 at the Dahej Port. Solid Cargo
Port Terminal has facilities to import/export bulk products like coal steel andfertilizer. PLL has a 26% equity in this
Solid Cargo Company and the balance equity is held by the Adani Group.
Performance and Financial Position of Solid Cargo Joint Venture (JV) Company
| || ||(Rs. In Lakhs) |
|Particulars ||For the year ended 31st March 2018 ||For the year ended 31st March 2017 |
|Revenue ||33503 ||32516 |
|Profit/ (loss) from continuing operations ||7228 ||6715 |
| ||175 ||(656) |
|Other comprehensive income || || |
|Total comprehensive income ||7403 ||6059 |
|Company's share of total comprehensive income (26%) ||1924 ||1575 |
2) India LNG Transport Co. (No. 4) Pvt. Ltd. (ILT4')
India LNG Transport Co. (No. 4) Pvt. Ltd. (ILT4') is joint venture of yourCompany with 26% ownership interest. ILT4 is the owner of vessel MT Prachi and isprimarily engaged in transportation of LNG. It is one of the Company's strategicinvestments and has the principal place of business in Singapore.
Performance and Financial Position of ILT4
|Particulars ||For the year ended 31st December 2017 |
|Revenue ||17819 |
|Profit/ (loss) from continuing operations ||6016 |
|Other comprehensive income ||0 |
|Total comprehensive income ||6016 |
|Company's share of total comprehensive income (26%) ||1380 |
Petronet also owns 3% equity in the vessel MT Aseem which carries LNG from Qatar toDahej under a long term agreement.
3) Petronet LNG Foundation
Petronet LNG Foundation a Company Limited by Guarantee has been promoted by theCompany under the provisions of Section 8 of the Companies Act 2013 and the rules madethereunder as a wholly owned subsidiary of the Company. Petronet LNG Foundation isfacilitating the promoter to comply with its requirement of Corporate SocialResponsibility (CSR) under provisions of Section 135 of Companies Act 2013 and rules madethereunder.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
All possible measures have been undertaken successfully by your Company to achieve thedesired objective of energy conservation and technology upgradation. In order to ensureoptimum conservation of energy and absorption of technology
Your Company's engineers have been interacting with industry peers technologyproviders and EPC Contractors. They have also been nominated to important national andinternational seminars. A team has closely worked with Project Consultant and EPCContractors in all phases of designing and construction of Dahej and Kochi LNG Terminals.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Your Company has incurred outgo in foreign exchange to the extent of Rs. 24587 Croreduring the year under review. Foreign exchange earnings during the year were Rs. 49 Crore.
EXTRACT OF THE ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in the prescribed format (Form MGT-9) is annexed to this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company fully understands its responsibility towards the society and has beenconstantly contributing its bit towards various causes. In its endeavor to be more focusedtowards its social goals the Company is developing a more structured approach to enhanceaccess to quality healthcare enrich the lives of people in the rural communitiesenvironmental causes and enhance the educational quotient in the Country.
The Company is implementing short-term medium-term and long-term strategy tochannelize the resources in a manner so as to derive maximum socio-economic impact fromtargeted approach. In line with its social goals as enumerated above the Company hasalready identified several projects in the areas of Healthcare Education SkillDevelopment Environment Sports Agriculture Swacch Bharat etc. where your Company willspend the annual CSR budget in a progressive and sustainable manner. Further as reportedlast year Petronet LNG Foundation a Company Limited by Guarantee has been incorporatedon 31st March 2017 by Petronet LNG Limited as a promoter of the Company under theprovisions of Section 8 of the Companies Act 2013 and the rules made thereunder. PetronetLNG Foundation is facilitating the promoter to comply with its CSR under provisions ofSection 135 of Companies Act 2013 and rules made thereunder. It has already taken up somehigh impact projects and is in the process of finalising projects/programmes with higherproject cost and impact. While all CSR projects have been carefully chosen giving utmostimportance to quality of spending instead of just spending some projects have beenoutstanding in their impact.
In terms of provisions of Companies Act 2013 an amount of Rs. 30.29 Crore wasrequired to be utilized on CSR activities in FY 2017-18. The Competent Authority hasapproved / committed new Projects of Rs. 23.46 Crore in FY 2017-18 out of which Rs. 8.55Crore was spent on CSR activities. In some projects disbursement of fund is linked toachieving deliverable targets and due to dynamic implementation environment targets havenot yet achieved. Nevertheless your Company has been making constant efforts to reachoptimum level of CSR expenditure resulting in tangible positive impact on society and hasmade significant improvements over the previous years in terms of both spending as well asnumber of projects taken up. The disclosure as per Rule 9 of Companies (Corporate SocialResponsibility
Policy) Rules 2014 is attached herewith and forms part of the Board Report.
Petronet Kashmir Super-30' is one such outstanding CSR project which preparesunderprivileged students of Kashmir to overcome various social and other disadvantages andhelps them to compete with the best for admission into the premier engineeringinstitutions like IITs and NITs by providing high quality coaching and guidance.Numma Onnu' is another such project to feed the hungry in Ernakulam District whichhas been recently expanded post successful pilot project. The project was implemented withthe Ernakulum District Administration. Further in collaboration with Central Institute ofPlastics Engineering & Technology (CIPET) Petronet LNG Foundation is imparting skilldevelopment programme for local underprivileged youth in Gujarat and Kerala helping thembe confident enough to find gainful employment. Petronet LNG Foundation is also extendingfinancial support to Himalayan Institute of Alternative Learning (HIAL) Ladakh in settingup Alternative University to address the issues like education livelihood preservationof local culture and environment in the region.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) DURING THE YEAR
Shri Shashi Shankar was appointed by the Board of Directors as Additional Director(Nominee Director of ONGC) w.e.f. 17th October 2017. Dr. Jyoti Kiran Shukla wasreappointed by the Board of Directors as Independent Director w.e.f 31st March 2018 aftercompletion of her 3 years tenure on 30th March 2018. Shri V. K. Mishra was appointed bythe Board of Directors as Additional Director in the capacity of Director (Finance) of theCompany w.e.f. 18th April 2018. Shri Sidhartha Pradhan was appointed by the Board ofDirectors as Additional Director (Independent Director) of the Company w.e.f. 16th May2018. Dr. M. M. Kutty was appointed by the Board of Directors as Additional Director andChairman of the Company w.e.f. 12th July 2018.
In accordance with the Articles of Association of the Company and as per statutoryrequirements Shri G. K. Satish Nominee Director IOCL and Shri T. Natarajan NomineeDirector GMB would retire by rotation at the ensuing Annual General Meeting and beingeligible offers themselves for reappointment. In accordance of provisions of CompaniesAct 2013 Shri Shashi Shankar who was appointed as Additional Director (Nominee Directorof ONGC) Dr. Jyoti Kiran Shukla who was reappointed as Independent Director Shri V. K.Mishra who was appointed as Additional Director in the capacity of Director (Finance) ofthe Company Shri Sidhartha Pradhan who was appointed as Additional Director (IndependentDirector) of the Company Dr. M. M. Kutty who was appointed as Additional Director andChairman of the Company after the date of last Directors' Report shall vacate theiroffices at the ensuing Annual General Meeting. Necessary notices have been received fromthem/Member(s) under Section 160 of Companies Act 2013 proposing their candidature forappointment. The same has also been given at website of the Company atwww.petronetlng.com. The Board recommends their appointment. Brief resume of directorsseeking appointment and reappointment together with the nature of their expertise inspecificfunctional areas disclosure of relationship between director inter-se name ofcompanies in which they hold membership/ chairmanship of committees of the Board alongwiththeir shareholding in company etc. as stipulated under SEBI (LODR) Regulations 2015 andother statutory provisions are given in the annexure to Notice of 20th Annual
After the date of last Directors' Report i.e. 8th August 2017 Shri A. K. MisraIndependent Director ceased to be director of the Company w.e.f. 14th August 2017 due tocompletion of his 3 years tenure. Shri D. K. Sarraf ceased to be director (NomineeDirector of ONGC) of the Company w.e.f. 1st October 2017 due to withdrawal of hisnomination by the nominating company. Shri Sushil Kumar Gupta ceased to be IndependentDirector of the Company w.e.f. 15th January 2018 due to completion of his 3 years tenure.Shri Subhash Kumar ceased to be an Additional Director in the capacity of Director(Finanace) of the Company w.e.f. 1st February 2018 due to resignation. Shri K. D.Tripathi Chairman of the Company ceased to be Director and Chairman of the Companyw.e.f. 30th June 2018 due to his resignation consequent to superannuation on attainingthe age of retirement from Ministry of Petroleum and Natural Gas Government of India.Shri D. Rajkumar ceased to be Director (Nominee Director of BPCL) of the Company w.e.f.19th July 2018 due to his resignation and withdrawal of his nomination by the nominatingcompany.
The Board placed on record its sincere appreciation for valuable services rendered andcontribution made by above mentioned directors.
Shri Rajender Singh Director (Technical) was having additional charge of Director(Finance) from 20th July 2017 to 4th August 2017. With the appointment of Shri SubhashKumar as Additional Director in the capacity of Director (Finance) w.e.f. 5th August2017 the additional charge of Director (Finance) entrusted with Shri Rajender SinghDirector (Technical) was vacated. He was also having additional charge of Director(Finance) from 1st February 2018 to 17th April 2018. With the appointment of Shri V. K.Mishra as Additional Director in the capacity of Director (Finance) w.e.f. 18th April2018 the additional charge of
Director (Finance) entrusted with Shri Rajender Singh Director (Technical) wasvacated.
Key Managerial Personnel
Pursuant to Section 203 of Companies Act 2013 the Key Managerial Personnel of theCompany are:
1. Shri Prabhat Singh MD&CEO
2. Shri V. K. Mishra Director (Finance) and CFO (w.e.f. 18th April 2018)
3. Shri Rajan Kapur Vice President Company Secretary (w.e.f. 27th July 2018)Following are the changes in Key Managerial Personnel of the Company:
1. Shri R. K. Garg Director (Finance) and CFO (upto 19th July 2017)
2. Shri Subhash Kumar Director (Finance) and CFO (w.e.f. 5th August 2017 and upto31st January 2018)
3. Shri K. C. Sharma Vice President Company Secretary (upto 31st January2018)# # Shri Mukesh Gupta VP (F&A) was officiating Company Secretary and ComplianceOfficer from 1st February 2018 to 26th July 2018.
ANNUAL EVALUATION OF THE BOARD
The Board adopted a formal mechanism for evaluating its performance and as well as thatof its Committees and individual
Directors including Chairman of the Board. An exercise is being carried out through astructured evaluation process considering various aspects of the Board's functioning suchas composition of Board and Committees experience and competencies performance ofspecific duties and obligations contribution at the meetings and otherwise independentjudgment governance issues etc. The Company is in process of adopting all therequirements as stated in SEBI (LODR) Regulations 2015.
DECLARATION BY INDEPENDENT DIRECTORS
Pursuant to Section 149(7) of Companies Act 2013 Declaration(s) by all theIndependent Director(s) have been obtained stating that they meet the criteria ofindependence as provided in sub-section (6) of Section 149 of the Companies Act2013 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
TRAINING OF INDEPENDENT DIRECTORS
The Company has well-defined Training Program for training to Board Members whichinter-alia include the various familiarization programs in respect of their roles rightsresponsibilities in the Company nature of the industry in which Company operatesbusiness model of the Company etc. Further the same is also taken care during the variousstrategy meets of the Company and different presentations in the Board/Committee meetings.The details of such familiarization programs have also been posted on the website of theCompany.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year four Board Meetings were held and the details of which are given inthe Corporate Governance Report annexed to this Report which forms part of the AnnualReport. The intervening gap between the meetings was within the period prescribed underthe Companies Act 2013 and also as per SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. For further details regarding number of meetings of theBoard and its committees please refer Corporate Governance Report annexed to thisReport.
The recommendations made by the Audit Committee during the year were accepted by theBoard. The other details of Audit Committee like composition terms of reference meetingsheld are provided in the Corporate Governance Report annexed to this Report.
NOMINATION AND REMUNERATION COMMITTEE
The Company has a Nomination and Remuneration Committee and detailed disclosure in thisregard has been given in the Corporate Governance Report which is annexed to this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
In compliance with the provisions of the Companies Act 2013 the details ofinvestments made and loans/guarantees provided as on 31st March 2018 are given in therespective Notes to the financial statements.
The Company has taken appropriate insurance for all assets against foreseeable perils.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators courts orTribunals which would impact the going concern status and the Company's future operations.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES (RPTs)
In line with the provisions of the Companies Act 2013 and the SEBI (LODR) Regulations2015 the Company has formulated a Policy on materiality of Related Party Transactions andalso on dealing with Related Party Transactions. The same has been posted on the websiteof the Company. The Company gives the disclosure regarding material transactions withrelated parties on quarterly basis along with the compliance report on
Corporate Governance. As per requirements of Section 134 (3) of Companies Act 2013read with rule 8 of Companies (Accounts) Rule 2014 particulars of contracts orarrangements with related parties as referred in section 188 (1) of the Companies Act2013 is annexed to this report. Further suitable disclosure as required by the AccountingStandards has been given in the Notes to the Financial Statements.
PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197 OF THE COMPANIES ACT 2013
Pursuant to provisions of Section 197 of the Companies Act 2013 read with the Rule 5of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the namesand other particulars of employees are annexed to this Report.
DISCLOSURES PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT 2013
The ratio of remuneration of each Director to the median employees remuneration andsuch other details in terms of Section 197 (12) of Companies Act 2013 read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 formspart of Directors' Report and is annexed herewith.
The company maintained harmonious and cordial industrial relations. No man days werelost due to strike or lock-out. As on 31st March 2018 there were 486 employees excludingtwo Whole-time Directors.
M/s A. N. Kukreja Practicing Company Secretary was appointed by Board of Director toconduct the Secretarial Audit of the Company for the financial year 2017-18 as requiredunder Section 204 of Companies Act 2013 and rules thereunder. A Secretarial Audit Reportsubmitted by M/s A. N. Kukreja a
Company Secretary in practice is annexed with this report.
Regarding inadequate number of Independent Directors as stated in the Secretarial AuditReport it is stated that the Company is in the process of finding suitable candidates tobe appointed as Independent Directors and the requisite number of Independent Directorswill be appointed shortly. Regarding the expenditure on CSR activities the details inrespect of the same along with the reasons for not spending the amount on CSR activitiesas per the statutory requirements are given in the Annual Report on Corporate SocialResponsibility (CSR) which is annexed to the Directors' Report.
The Company is committed to good Corporate Governance and lays strong emphasis ontransparency accountability and integrity. As required under SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Report on Corporate Governancetogether with Auditors' Certificate regarding Compliance of the SEBI Code of CorporateGovernance is annexed to this report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Annual Report contains a separate section on Management Discussion and Analysiswhich is annexed with the Directors' Report.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report covering initiatives taken with environmentalsocial and governance perspective has been prepared in accordance with the directives ofSEBI and forms a part of the Annual Report.
Your Company continued to enjoy cordial and smooth relations amongst all its employeesat Dahej and Kochi terminals.
The Company has laid down policies and procedures to inform the Members of the Boardabout the risk assessment and minimization procedure. A Risk Management Committeeperiodically reviews the procedures to ensure that Executive
Management controls risk through properly defined framework. The risk assessmentframework encompasses inter-alia methodology for assessing risks on an ongoing basisrisk prioritization risk mitigation monitoring plan and comprehensive reporting system.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
The Board of Directors of the Company has approved the Vigil Mechanism in terms ofprovisions of Section 177 of Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 for Directors and employees of the Company toreport to the management concerns about unethical behavior actual or suspected fraud orviolation of the policy. The same has also been hosted on the website of the Company.During the year ended 31st March 2018 two complaints were received under Vigil Mechanismand out of which one complaint was resolved and one complaint was pending as on 31stMarch 2018.
CODE OF CONDUCT
The Company has formulated a Code of Conduct for Board Members and Senior ManagementPersonnel. The confirmation of compliance of the same is obtained from all concerned onannual basis. All Board Members and Senior Management Personnel have given theirconfirmation of compliance for the year under review. A declaration duly signed by MD& CEO is given in the Report on Corporate Governance annexed to this Report. The Codeof Conduct for Board Members and Senior Management Personnel is given on the website ofthe Company.
LISTING ON STOCK EXCHANGES
The Company is listed on the BSE Ltd. and National Stock Exchange of India Ltd. TheCompany has paid Listing fees for the Financial Year 2017-18 to the above Stock Exchangesin time.
TRANSFER OF AMOUNTS/SECURITIES TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 124 and 125 of the Companies Act 2013 and Rulesmade thereunder the Company has deposited the amount lying in Unpaid/Unclaimed Dividendaccount for the financial year 2006-07 to 2009-10 to Investor Education and ProtectionFund. Detail of the same is available at website of the Company at the following link https://www. petronetlng.com/UnpaidDividend.php Further pursuant to the provisionsof Section 124(6) of Companies Act 2013 all the shares in respect of which dividend hasnot been paid or claimed for seven consecutive years or more were also transferred to IEPFSuspense Account. Detail of the same is available at website of the Company at thefollowing link https://www.petronetlng.com/PDF/IEPFSuspense.pdf
No disclosure or reporting is required in respect of the following items as eitherthese were not applicable or there were no transactions on these items during thefinancial year 2017-18:-
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
4. Neither the Managing Director nor the Wholetime Directors of the Companyreceive any remuneration or commission from any of its subsidiaries.
During the financial year 2017-18 there was one cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and thesame was also resolved on 5th May 2018. There are no material changes and commitmentsaffecting the financial position of the Company which have occurred between the end of thefinancial year and the date of this report.
M/s T. R. Chadha & Co. Chartered Accountants LLP have been appointed by theShareholders of the Company as Statutory Auditors for the financial year 2017-18.
The Auditors have submitted an unqualified report for the financial year 2017-18.
The Board of Directors has appointed M/s K. L. Jaisingh & Co. Cost Accountants(Regn. No. 00182) as the Cost Auditor of the Company for the Financial Year 2017-18.
The Cost Audit Report for the year 2016-17 has been filed under XBRL mode on 6thSeptember 2017.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of clause (c) of sub-section (3) of Section134 of the Companies Act 2013 Directors hereby states that: (a) in the preparation ofthe annual accounts the applicable accounting standards have been followed along withproper explanation relating to material departures;
(b) the directors have 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 have taken properand sufficient care for the maintenance of adequate accounting records in accordance withthe provisions of this Act for safeguarding the assets of the Company and for preventingand detecting fraud and other irregularities; (d) the directors have prepared the annualaccounts on a going concern basis; (e) the directors have laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and are operating effectively; and (f) the directors have devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems areadequate and operating effectively.
The Board of Directors sincerely thanks and wishes to place on record its appreciationof the Ministry of Petroleum and Natural Gas Government of India State Governments ofGujarat and Kerala Promoters of the Company Engie (erstwhile GDF Suez)
RasGas Exxon Mobil and other LNG suppliers gas off-takers and consumers ofre-gasified LNG Auditors Lenders and the Employees of the Company for theirwhole-hearted co-operation and unstinted support. The Directors want to express theirdeep-felt thanks and best wishes to all the shareholders for the continued support and thetrust they have reposed in the Management. The Directors look forward to a better futureand further growth of your Company.
| ||For and on behalf of the Board of Directors |
|Place : New Delhi ||(Dr. M. M. Kutty) |
|Date : August 6 2018 ||Chairman |