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Mangalore Refinery And Petrochemicals Ltd. Directors Report
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You can view full text of the latest Director's Report for the company.
Market Cap. (Rs.) 38303.05 Cr. P/BV 3.88 Book Value (Rs.) 56.28
52 Week High/Low (Rs.) 289/50 FV/ML 10/1 P/E(X) 14.42
Bookclosure 02/02/2024 EPS (Rs.) 15.15 Div Yield (%) 0.00
Year End :2022-03 

The Board of Directors of your Company are pleased to share the highlights of developments and progress of your Company since its last report along with audited financial statements, Auditors’ Report thereon and comments on the financial statements by the Comptroller and Auditor General (C&AG) of India.

STATE OF COMPANY’S AFFAIRS

Your Board is reporting the affairs of the Company for the FY 2021-22 as under:

Financial Performance

The standalone / consolidated financial highlights for the year ended 31/03/2022 are summarized below:

(' in crores)

Particulars

Standalone

Consolidated

Year ended 31st March, 2022

Year ended 31st March, 20211

Year ended 31st March, 2022

Year ended 31st March, 20211

PROFIT BEFORE TAX

2,708.33

(915.13)

2,711.31

(918.93)

Less: Current Tax (Current Year & Earlier Years)

477.29

(1.09)

477.29

(1.09)

Deferred Tax

(724.23)

(152.87)

(724.23)

(152.87)

PROFIT FOR THE YEAR

2,955.27

(761.17)

2,958.25

(764.97)

Add: Other Comprehensive Income

3.15

2.09

3.19

2.09

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,958.42

(759.08)

2,961.44

(762.88)

Less: Total Comprehensive Income Attributable to Non-Controlling Interest

-

-

-

-

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY

2,958.42

(759.08)

2,961.44

(762.88)

Add: Opening Balance in Profit and Loss Account

3,355.10

4,114.18

3,365.09

4,127.97

SUB-TOTAL

6,313.52

3,355.10

6,326.53

3,365.09

LESS: APPROPRIATION

Payment of Dividend on Equity Shares

-

-

-

-

CLOSING BALANCE (INCLUDING OTHER COMPREHENSIVE INCOME)

6,313.52

3,335.10

6,326.53

3,365.09

Term Debt (STD) programme. ICRA has also reaffirmed rating of [ICRA] AAA (pronounced as ICRA “Triple A rating with stable outlook) for the '2,560 Crore Non-Convertible Debenture (NCD) Program of Mangalore Refinery and Petrochemicals Limited. CRISIL has reaffirmed “CRISIL AAA/Stable” (pronounced “CRISIL triple A rating with stable outlook”) for the '2,560 Crore Non-Convertible Debenture, reaffirmed its Corporate Credit Rating (CCR) “CCR AAA/Stable”, reaffirmed short-term rating of '1,000 Crore “CRISIL A1 ” and also reaffirmed the rating of “CRISIL A1 ” '3,500 Crore Commercial Paper (CP) / Short Term Debt (STD) programme of Mangalore Refinery and Petrochemicals Limited.

CARE Ratings has reaffirmed “CARE AAA/Stable (pronounced “Triple A rating with stable outlook”) for the '5,000 Crore Non-Convertible Debenture and the short-term rating of A1 for '3,000 Crore Commercial Paper (CP) / Short Term Debt (STD) program of Mangalore Refinery and Petrochemicals Limited.

India Ratings (Fitch Group) has reaffirmed “IND AAA/Stable (pronounced “Triple A rating with stable outlook”) for the '5,000 Crore Non-Convertible Debenture program, long-term Rating of '1,000 Crore “IND AAA/Stable” and also reaffirmed foreign currency loan ratings of “IND AAA/Stable” for $524.66 Mn programme of Mangalore Refinery and Petrochemicals Limited.

MERGER OF OMPL WITH MRPL

The amalgamation of ONGC Mangalore Petrochemicals Limited (OMPL) with Mangalore Refinery and Petrochemicals Limited (MRPL) was approved by the Ministry of Corporate Affairs, New Delhi vide its Final Order dated 14/04/2022 with 01/04/2021 as Appointed Date and the Effective Date for Scheme of Amalgamation of OMPL and MRPL is 01/05/2022.

OPERATIONAL PERFORMANCE FOR FY 2021-22 Some of the major highlights for the FY 2021-22 are as under:

> Gross Crude Throughput of 14.871 MMT achieved during FY 2021-22 and Refinery Net Throughput of 15.040 MMT was achieved which includes Intermediates & Other Inputs.

> MRPL successfully commissioned FCC Gasoline Treating Unit (FGTU) of 800 KTPA Feed capacity as part of its BS-VI Project, on 11/07/2021.

> MRPL successfully commissioned Desalination Plant based on Reverse Osmosis Technology using Seawater with design capacity of 30 MLD process grade water, on 17/12/2021.

> MRPL successfully commissioned Sulfur Recovery Unit (SRU-7) with design capacity of 185 TPD Sulfur production as part of its BS-VI Project, on 28/03/2022.

> 4 New HSD tanks @ Beta Land with the capacity of 30200 KL each of gross storage capacity along with the New HSD coastal line to Jetty were commissioned during FY 2021-22.

> Five (5) new Crudes were processed for the first time during the FY 2021-22:

Tupi Crude (API-30.2) from Brazil, Amna Crude (API-37.2) from Libya, Egina Crude (API-27.6) from Nigeria, Basrah Medium Crude (API- 28.57) from Iraq, Baobab Crude (API- 22.6, High TAN) from Ivory Coast.

> For the first time, Vacuum Gas Oil (VGO) was imported coastally from M/s. HPCL, Vizag, in the month of September, 2021.

> Naphtha to M/s. ONGC Petro additions Limited (OPaL) was supplied for the first time in the month of September, 2021.

> ATF Defense grade was supplied to M/s. IOCL, for the first time in the month of September, 2021.

> Marine Fuel oil (MFO) - 0.35% SUL was exported for the first time in the month July, 2021.

> Ever Highest Capacity Utilization ofDHDT (108.8%) was achieved in the month ofNovember, 2021.

> Ever Highest Capacity Utilization ofDCU (105.6%) was achieved in the month of January, 2022.

> Highest PP production of 43.267 TMT achieved for the month of October, 2021 against Previous highest 43.111 TMT during July, 2021 . Ever Highest Polypropylene production of 460 TMT achieved for FY 2021-22 against nameplate Capacity of440 TMT.

> Ever Highest LPG production of 1049 TMT achieved for FY 2021-22, against Previous Highest was 970 TMT for FY 2018-19.

> Ever highest MS production of203.86 TMT in the month of March, 2022 against Previous highest was 198.2 TMT in the month of December, 2021. Ever Highest MS Production of 1727 TMT achieved for FY 2021-22, against Previous Highest was 1279 TMT for FY 2018-19.

> Ever highest LPG Dispatch of 105.2 TMT done for the month of December, 2021.

> ATF Export of 60 KT Cargo size was supplied for the first time in the month of October, 2021.

> Ever highest HSD Dispatch of664.6 TMT for the month of March, 2022 against Previous highest was 662.6 TMT in the month of December, 2021.

> Produced 389.976KT Para-Xylene, 148.240KT Benzene, 124.281 KT Paraffinic Raffinate and 293.903 KT Reformate.

MARKETING AND BUSINESS DEVELOPMENT

> Your company continues to maintain major share of the direct sales segment of petroleum products market in Karnataka and adjoining states. Your Company maintained leadership position in its marketing zone for all direct sales products such as Bitumen, Diesel, Sulphur, Petcoke, ATF, Polypropylene, Xylol (Xylenes) etc. The total domestic sales volume of all products during FY 2021-22 has been 1988 TMT with a sales value of ^11033 Crores against turnover of 1691 TMT and sales value of ' 7207 Crores in FY 2020-21.

> Retail marketing plan: MRPL is continuously focusing on its retail expansion in the States of Karnataka & Kerala and so far has successfully commissioned 32 retail outlets with another 20 retail outlets under various stages of construction. MRPL had given advertisement in FY 2021-22 for more than 400 locations in Karnataka & 100 locations in Kerala. Plans are in place for adding 50 new retail outlets every year for the next 5-10 years and will be entering new geographical areas of Tamil Nadu, Andhra Pradesh and Telangana in near to medium term.

> Your company’s Polypropylene Production has achieved a milestone by crossing the 440 KTPA Name plate capacity, as on 15th March, 2022 and annual PP Sales achieved the pinnacle feat of 450 KTPA for the 1st time since inception, during FY 2021-22. MRPL is increasing focus in core PP markets of Southern and Western parts of the country and also targeting Northern and Eastern locations for garnering more volume.

> Your Company’s Joint Venture, Shell MRPL Aviation Fuel and Services Limited has steadily acquired business for sale of Aviation Turbine Fuel (ATF) at Indian airports. The company achieved a turnover of '673.19 Crores during FY 2021-22 against turnover of '260.50 Crores in the previous FY 2020-21.

> The COVID-19 pandemic impacted adversely in FY 2021-22 and resulted in squeezed Aromatic spreads/margins. In order to mitigate the impact of reduced spreads/margins, mode of operation was changed to Reformate from Paraxylene/Benzene in Q3.

> Aromatics complex posted sales of approx. 400 KT of PX during the year. Exports constituted majority of the sales. North East Asia (NEA) constituted bulk of the Exports (77 %) with other regions viz., America and Europe comprising the rest.

> A significant milestone during the year was commencement of supplies to a major domestic Purified Terephthalic Acid (PTA) producer via coastal vessels.

> Benzene sales were at 147 KT an increase of 14% compared to FY 2020-21. New customers were added in the domestic market during the year expanding its reach and catering to Western India.

> Term contracts were entered into with major downstream producers in South India. For FY 2022, Export contract was entered into with one of the largest consumers of BZ in Middle East.

> Aromatics complex (SEZ Unit) switched over to Reformate mode in Q3. Sale of Reformate during the year was at 273 KT with Middle East (90 %) being the major Export destination.

> Paraffinic Raffinate and Heavy Aromatic sales were at 148 KT and 4 KT respectively.

> Exported Para-Xylene worth '1,967 Crore, Benzene worth '790 Crore, Paraffinic Raffinate worth '711 Crore and Reformate worth ' 1758 Crore.

RECOGNITION

1. Indian Green Manufacturing Challenge (IGCM) 2020-21 - Gold Medal

2. Won two state level Safety Awards for best co-generation boiler.

3. Won best safety practices in Oil & Gas Industry award.

PROCUREMENT OF GOODS AND SERVICES FROM MSMEs

In line with the Public Procurement Policy, 2012 issued by Ministry of Micro, Small and Medium Enterprises, for the year 2021-22, your Company has achieved 28.79% procurement of goods and services from Micro and Small Enterprises against the target of 25%

PROJECTS BS VI upgradation

As per Auto Fuel Policy and directives from Ministry of Petroleum and Natural Gas (MoP&NG), the entire country has moved towards BS VI quality specifications for MS and HSD. The project involved setting up of new units and additional facilities. M/s. Engineers India Limited (EIL) was the Engineering, Procurement and Construction Management Consultant for the job. The main unit - FGTU was commissioned on 11/07/2021 resulting in additional 25 TMT/month BS VI MS. The balance two units - Nitrogen plant and SRU-7 were commissioned on 16/03/2022 and 28/03/2022 respectively.

Desalination Plant

Desalination Plant of 30 MLD capacity (scalable to 70 MLD) is set up to ensure continuous operation of Refinery during summer / weak monsoons and to eliminate risk of Nethravathi river being the only source of fresh water. The plant is set up on the shore of the Arabian Sea at Thannirbhavi in Mangalore on land leased from New Mangalore Port Trust. M/s. Fichtner India was the Project Management Consultant and M/s VA Tech Wabag Limited was the LSTK contractor. The plant was commissioned on 30/12/2021 and is operating at designed load consistently while the permeate (Desalinated water) is as per the required specifications.

Marketing Terminal at Devongonthi, Bengaluru

Marketing Terminal at Devangonthi, Bengaluru is being constructed to cater to business primarily in the state of Karnataka. The terminal would receive finished petroleum products (MS, HSD and ATF) through the existing PMHB pipeline from MRPL. The supplies of petroleum products to the retail outlets / customer / aviation stations would be met through road tankers. M/s. Nauvata Engineering Private Limited is the Consultant for the project. LSTK tender for Tankages and associated civil, mechanical, piping, electrical, instrumentation and fire-fighting is placed on M/s. Vishal Structurals Private Limited and for Civil and Structural works on M/s. SRR Projects Private Limited. Construction activities have commenced and the Terminal is scheduled to be completed by third quarter of FY 2023-24.

2G Ethanol

MRPL has been informed by MoP&NG to set up a 2G Ethanol Project in the state of Karnataka. Land for the same has been allotted by the Karnataka Industrial Areas Development Board (KIADB) at Harihara, Davanagere. Technology for the project has been selected and Detailed Feasibility Report has been prepared. MRPL has applied for the Viability Gap funding from GoI and Environmental clearance for the Project is awaited.

Modification of Gas Turbines for Natural Gas firing

MRPL has two Gas Turbines. Presently, GT-1 is fired using Light Cycle Oil and GT-2 by Refinery Fuel Gas. Both the Gas Turbines are designed to operate with Natural Gas. The project involved modifications to the Gas Turbines for Natural Gas firing. M/s. L&T-SL was the Project Management Consultant and M/s. BGGTS was awarded the contract for execution of the project. The project was commissioned on 24/12/2021.

CCR-1 Revamp

CCR-1 converts heavy naphtha feedstock into high octane reformate for gasoline blending and produces hydrogen for hydro-treating / hydrocracking. Revamp of Regenerator section of CCR-1 is being carried out to increase Regenerator Coke burn capacity thereby resulting in overall capacity increase to 80 m3/hr (from current 75 m3/hr). M/s. Triune Energy Services Private Limited is the Engineering, Procurement and Construction Management Consultant for the project. Major ordering is completed and equipment deliveries to site have commenced. Mechanical Completion of the project is scheduled in first quarter of FY 2023-24.

PFCC Stack Wet Gas Scrubber System

Petrochemical Fluidized Catalytic Cracking (PFCC) unit processes unconverted oil from Hydrocracker units, straight run low sulphur vacuum gas oil and hydro treated heavy coker gas oil and converts into value added products such as propylene, LPG and gasoline. During this process, carbon is deposited on the catalyst which reduces the ability of the catalyst to aid the cracking process. The carbon is then burnt off and the catalyst is regenerated. The regeneration process produces flue gas which passes through a system of cyclones and separators to remove catalyst fines. The project is conceived to reduce SPM limit in flue gas of PFCC as pollution control measure. M/s. Thyssenkrupp Industrial Solutions (India) Private Limited is the Project Management Consultant and M/s. Kalpataru Power Transmission Limited is the LSTK contractor for the project. Mechanical Completion of the project is scheduled in second quarter of FY 2023-24.

PFCC LPG Propylene Amine Scrubber

While processing feed with high Sulphur content in Petrochemical Fluidized Catalytic Cracking (PFCC), higher Hydrogen Sulfide (H2S) is expected in LPG and Propylene stream. Current system to meet H2S in LPG and Propylene product is caustic wash. Amine Scrubber System reduces dependency on caustic wash to a large extent. The system removes H2S in the LPG and Propylene streams and minimizes the spent caustic generation in existing Caustic Treatment System. M/s. Triune Energy Services Private Limited is the Engineering, Procurement and Construction Management Consultant for the project. Mechanical Completion of the project is scheduled in second quarter of FY 2023-24.

New Bitumen Blowing Train as a part of extension of existing Bitumen Blowing Unit

The project envisages setting up of additional Bitumen Blowing Train with a capacity of 144 KTPA as a part of extension of existing Bitumen Blowing Unit to cater to the simultaneous demand of VG-30 and VG-40 grades of bitumen to leverage market demand. M/s. Engineers India Limited is the Engineering, Procurement and Construction Management Consultant for the project. Mechanical Completion of the project is scheduled in third quarter of FY 2023-24.

DIGITAL TRANSFORMATION AND IT SECURITY

information technology (IT) has become a vital and integral part of every business plan. With the view to support organizational demands and for effectively utilizing Information technology, MRPL has been undertaking several digital transformation initiatives.

MRPL has a state of art Data Center (DC) and Disaster Recovery (DR) Site. The Data Center hosts a set of hardware infrastructures which caters to the day to day business needs of the organization. Presently MRPL ERP is running on SAP Suite on HANA (SoH) which is catering to day to day business transactions through it various modules. SAP HANA is an in-memory database technology that runs the SAP Landscape serving as a backend database. This has helped business achieve better performance and also future ready for upcoming versions.

On the IT security front, MRPL has been awarded the ISO-27001:2013 certification for MRPL Data Center and Disaster Recovery Center. ISO 27001:2013 is an international standard that provides a framework for Information Security Management Systems (ISMS). The standard describes best practices for an information security management system (ISMS) and helps organizations improve their IT security, comply with cyber security regulations, protect its information assets and enhance reputation.

As part of Digital India initiatives, MRPL has taken several initiatives with the emphasis on increased use of information technology to go digital and to promote transparency and efficiency in the system. In order to achieve the said objective, MRPL has successfully implemented the E-Office system. It is a digital workplace solution that replaces the existing manual handling of files and documents with efficient electronic system. The solution seeks to achieve a set of objectives like increasing efficiency & effectiveness of the processes, employee productivity, and efficient management of data, documents, files, information & knowledge, project tracking & monitoring etc within MRPL for better communication & co-ordination among departments.

SECRETARIAL STANDARDS

The Secretarial Auditor has certified that your Company has complied with the applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, during the financial year 2021-22.

HEALTH, SAFETY & ENVIRONMENT PERFORMANCE Occupational Health

• Two Occupational Health Centres (OHC) in Refinery and one Hospital in the township area are functional. It is equipped with emergency medical aids, ambulance facility, doctors, paramedic, shower facility for Chemical contact, emergency medicines and antidotes.

• During the outbreak of Covid-19, Occupational Health Centre was aptly and adequately supported by making all possible arrangements to combat and contain the spread of Covid-19. MRPL Hospital was made to stand as equipped enough as per the approved protocol & was declared the designated location for the benefit of all stakeholders for the purpose of initial screening & treatment before being referred for further medical management, if required to combat Covid-19.

• Dedicated Covid 19 vaccination centre established inside MRPL premises for vaccine coverage to employees, secondary workforce, dependants and CISF staff. Total number of beneficiaries of vaccination are 15,217 as on 31/3/2022.

• Oral Polio Vaccination program conducted at MRPL Hospital in association with Katipalla primary health centre. Total 145 children were benefited.

Safety

• MRPL successfully achieved ZERO RLTI in the FY 2021-22.

• MRPL achieved 2120 & 638 days without Reportable Lost time injuries (RLTI) as on 31/03/2022, in case of employee & contract workers respectively.

• MRPL bagged 2 state level awards by Department of Factories, Boilers, Industrial Safety & Health, GoK, for the year 2021:

? Best Safe Industry award under Oil Industry Category.

? Safe Operation, Maintenance & reliable boiler under Cogen Boiler category.

• As on 31/03/2022, MRPL employees achieved 29.4 safe million man hours.

• Carried out OISD Pre-commissioning safety audit for SRU 7, offsite facility & HSD line to jetty.

Environment Management

• Consent for Operation (CFO) granted by KSPCB for BS-VI Project namely FGTU, SRU-7 and Offsite facilities & commissioned.

• Consent for Operation (CFO) granted by KSPCB for 30MLD Desalination unit at Thannirbavi village & commissioned.

• Consent for Establishment (CFE) obtained for setting up Marketing Terminal at Devangonthi, Bangalore.

• Environmental Clearance was recommended by State Environment Impact Assessment Authority (SEIAA), GoK for proposed 2G-Ethanol project at Davangere. Wildlife Conservation plan authentication from PCCF-WL, Bangalore in progress.

• Baseline monitoring for Environment Impact Assessment study of proposed Petro Addition & Capacity Enhancement Project (PACE) completed.

• 81.43 MT of Oily Sludge, 208.99 MT of PFCC Spent catalyst and 183.8 MT of Spent clay have been Co-processed in SPCB authorized cement industries.

• 846.5 MT of Spent catalysts has been disposed through SPCB authorized Recyclers/ Reprocessors.

• 7.31 MT of Waste White Oil have been disposed to SPCB authorized Incineration Facility.

• 304.19 MT ofNon-Recyclable/ Non-Reusable Hazardous waste handed over to secured landfill (TSDF).

• 65,87,079 M3 of Tertiary Treated Municipal Sewage water from Mangalore city was utilized in MRPL during FY 2021-22.

• MRPL hosted Activity Committee Meet (ACM) on Environment and Water Management in association with Centre for High Technology (CHT), MoP&NG. The objective of the ACM is to share best operational practices, case studies, modifications and troubleshooting by Refineries.

• MRPL awarded Gold Medal by International Research Institute for Manufacturing (IRIM), for India Green Manufacturing Challenge 2020-21.

Sustainability Initiatives

Sustainable development is a key consideration for MRPL. Climate change is a major issue that the world is facing today

and MRPL is taking actions to reduce the environmental impact. MRPL is taking relevant initiatives to reduce carbon

footprint and conserve resources. In this process MRPL is pursuing several sustainable projects.

• MRPL is adopting projects to reduce overall emissions through energy conservation, improving the energy efficiency in its processes and use of renewable energy.

• In FY 2021-22 total solar energy generated in MRPL’s own solar plant is 28,405 KWh and total solar energy consumed by the company is 29,097 KWh (including the solar energy imported).

• MRPL has taken up different energy efficiency improvement measures and has achieved a fuel savings of 19,213 metric ton of oil equivalent (MTOE).

• To mitigate the risk of river water as a single source of water, a 30 MLD Desalination plant has been installed at sea coast of Arabic ocean.

• In addition to the de-salination plant, MRPL is utilizing Mangalore city treated sewage water to reduce our fresh river water conservation. In FY 2021-22 total Mangalore city treated sewage water utilized in the refinery is 65,87,079 M3

• Recycling and reusing is a key component of waste management and MRPL is adopting sustainable methods to recycle and re-use the waste generated.

• In FY 2021-22, 89% of ETP feed flow was recycled and re-used in the refinery.

• Oily sludge generated in ETP is re-used in the DCU unit.

• Hazardous wastes are co-processed through SPCB authorized cement industries, where hazardous waste materials are used in the cement kiln for the alternate source of energy.

• Recycling of hazardous wastes is done through SPCB authorized recyclers where spent catalysts are recycled and precious metals are recovered.

• In FY 2021-22, 63.7% oftotal hazardous and non-hazardous waste was recycled and re-used.

• To ensure the sustainable utilization of life support systems on earth, MRPL is taking major initiatives towards bio diversity conservation. MRPL is establishing a bio-diversity park in 41 acres of marshy land where the marshy land is being converted to a full-fledged bio diversity park. The bio-diversity park will have native tree species of Western Ghats which will act as a habitat for different varieties of Birds and insects.

• MRPL has taken several greenbelt development and compensatory afforestation initiatives to increase its green cover.

• MRPL has developed 50 acres of Greenbelt in Pilikula Biodiversity Park with approximately 4000 numbers of different western ghat plant species

• MRPL has developed green belt in 25 acres at Bengre near Thannirbhavi sea shore and raised approximately 4000 numbers ofplants saplings in co-ordination with Karnataka Forest Department.

• In addition, 969 numbers of saplings were planted during the FY 2021-22 in Refinery.

• MRPL has commissioned a Vermi compost facility for efficient management of cut grass, tree branches & leaves. 12,076 Kg of Vermi-compost was harvested in FY 2021-22. Two more Vermi compost facility construction is under progress.

• MRPL is committed towards the conservation of ecological system and Bio-diversity, in this regard MRPL has adopted wild animals in Pilikula Biological Park, Mangalore.

HEALTH, SAFETY & ENVIRONMENT PERFORMANCE OF AROMATIC COMPLEXHealth

Annual Medical Checkup of employees was carried out in compliance with the Rules under Factories Act and Karnataka

Factories Rules. 100% health check-up of employees completed as per schedule during the year 2021-22.

Occupational Health Centre (OHC) with 24X7 availability of Medical Staff is functional.

Safety Performance

The major achievements in the Safety are summarized as under:

• Aromatic Complex has achieved Zero Loss Time Incident (LTI) for FY 2021-22 it is an exemplary achievement to achieve 2346 Safe working days without LTI as on 31 March, 2022 which is equal to 15.20 Million man hours.

• Aromatic Complex has also received Prashansha Patra Award (4th position) from National Safety Council -Mumbai in Refinery and Petrochemical Sector (Manufacturing).

• Aromatic Complex has also been audited by British Safety Council- Mumbai for five star health and safety audit and Scored 87.31% (4 Star) on Health and safety Management system.

• Internal Safety Audits as well as External Safety Audits were conducted successfully in FY 2021-22 as per statutory requirement.

• Aromatic Complex observed Chemical Disaster prevention day on 04/12/2021.

• Public Awareness Programme on Safety and Environment was also conducted at SNDT College Kateel, Mangaluru.

• Various safety awareness program also conducted for District disaster Management Authorities of Kerala and Karnataka state on Tanker handling Emergency.

Environment Management

Inline with your Company’s commitment towards water conservation various steps have been taken for increasing treated effluent recycle in absolute terms. The technical/ Engineering solutions include: Adoption of Improved Chemical Treatment Program by introduction of ClO2 dosing with Hypochlorite, a better oxidizing agent to maintain better oxidation reduction potential (ORP) in recirculation cooling water thereby to have increased load of Treated effluent .

• At ETP, Impeller size of treated effluent Recycle transfer Pump to Cooling tower was increased resulting in increase in treated effluent flow capacity to Cooling Tower. By this, the effluent recycle has increased by approx. 50% in 2021-22 over 2020-21. Your Company is encouraging various initiatives in line with GOI Sustainable Development Goals, as chartered in UN summit such as usage of Gaseous fuel from Process Blocks instead of flaring, in Dual Mode Fired Heaters and usage of Hydrogen Peroxide reagent as substitute to Fenton’s reagent while treating effluent from Aromatic Complex in the Effluent Treatment Plant by which sludge generation is almost NIL.

• Your company is extensively promoting usage of Environment friendly Electric Vehicles as mode of transportation, to bring down carbon foot print. Usage of cleaner fuels, efficient usage of heat recovery systems have resulted in the decrease of SOX load by approx. 16% in 2021-22 over 2020-21. Your companys fruitful measures have resulted in CO2 reduction by 5% in 2020-21 over previous financial year. Your company has undertaken extensive forestation program and is maintaining the Greenery around the plant in more than Regulatory Body stipulated 33% area manifesting your companys commitment to achieve Environment safeguards.

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY DEVELOPMENT Corporate Social Responsibility:

MRPL’s social welfare and community development initiatives focus on the key areas of education, health care & sanitation and overall development of basic infrastructure in and around its operational area/ Dakshina Kannada & Udupi District/Karnataka State. These projects are largely in accordance with Schedule VII of the Companies Act, 2013. The key objectives of the MRPL’s CSR Policy is to ensure an increased commitment at all levels in the organization, to operate its business in an economically, socially and environmentally sustainable manner, while recognizing the interests of all its stakeholders.

The Company has identified following focus areas for CSR engagement:

1. Shiksha Samrakshan

2. Arogya Samrakshan

3. Bahujan Samrakshan

4. Prakruti Samrakshan

5. Sanskrithi Samrakshan

The CSR & SD Policy may be accessed on the Company’s website at http://www.mrpl.co.in/csr. The Annual Report on CSR activities for FY 2021-22 is annexed herewith as “Annexure-A”

PERFORMANCE AND FINANCIAL POSITION OF JOINT VENTURES/ ASSOCIATE

As per the Material Subsidiary Policy, there is no material subsidiary to the Company, applying the test of materiality for the FY 2021-22. A scheme of amalgamation of OMPL with MRPL has been filed with the Ministry of Corporate Affairs, pursuant to the provisions of Section 230 to 232 of the Companies Act, 2013 and other applicable statues, Regulations and Guidelines. Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule (5) of the Companies (Accounts) Rules, 2014, and has been approved on 14/04/2022 with 01/04/2021 as Appointed Date. The Effective Date for Scheme of Amalgamation of ONGC Mangalore Petrochemicals Limited and Mangalore Refinery and Petrochemicals Limited is 01/05/2022. A statement on the performance and financial position of the Joint Venture Companies is provided as an Annexure to the Consolidated Financial Statements. The details on the performance and financial position of Associate and Joint Venture Companies are given in Management Discussion and Analysis (MDA) Report.

In accordance with the provisions of the SEBI guidelines, the Company has framed a policy for determining material subsidiaries that can be accessed on the Company’s website.

ANNUAL REPORT OF CONSOLIDATED FINANCIAL STATEMENT

The Audited Consolidated Financial Statements for the year ended 31st March, 2022 of the Company and its subsidiaries form part of the Annual Report in accordance with Section 129 of the Companies Act, 2013 and Ind AS 110 on “Consolidated Financial Statements” read with Ind AS 28 on “Investments in Associates and Joint Ventures”. In accordance with section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company are available on the Company’s website. These documents will also be available for inspection 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, notified that Indian Accounting Standards (Ind AS) are applicable to certain classes of companies from April 1, 2016 with a transition date of April 1,2015. Ind AS has replaced the previous Indian GAAP prescribed under Section 133 of the Companies Act, 2013 (“the Act”) read with Rule 7 of the Companies (Accounts) Rules, 2014 and are applicable to the Company from April 1,2016.

TRANSFER TO RESERVES

No amount has been transferred to General Reserves for the financial year 2021-22.

DIVIDEND

The Board has not recommended any dividend for the FY 2021-22. The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), is available on the Company’s website www.mrpl.co.in.

DEPOSITS

Your company has not accepted any deposits during the year pursuant to Section 74 of the Companies Act, 2013 and Rules there under.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

There have been no loans / guarantees given or securities provided during FY 2021-22 under the provisions of Section 185 / 186 of the Companies Act, 2013. The details of investments covered under the provisions of Section 186 of the Act are given in notes to financial statements provided in this Annual Report.

SHARE CAPITAL

The company has not issued any shares during FY 2021-22. The Issued, Subscribed and Paid up Equity Share Capital of your Company as on 31/03/2022 was '1,753 Crore. The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise and also sweat equity shares to employees of the Company under any scheme during the FY 2021-22.

DISCLOSURE OF ACCOUNTING TREATMENT:

In the preparation of Annual Financial Statements for the year ended March 31, 2022, the applicable Ind AS have been followed. So there is no treatment different from that prescribed in an Indian Accounting Standards.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OF COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT.

As far as Section 143 (12) of Companies Act 2013 is concern, there have been no instances of fraud as mentioned above.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF FINANCIAL YEAR AND DATE OF REPORT

No material changes or commitments have occurred after close of the year till date of review of financial by Audit Committee and subsequent approval of same by Board of Directors of the Company which affects the financial position of the Company except Government of India vide Excise Notifications No. 02/2022 to 11/2022- CE dated 30.06.2022 has levied Special Additional Excise Duty (SAED) and Road and Infrastructure Cess (RIC) on export of MS, HSD and ATF at the rate of ?6, ?13 and ?6 per litre respectively (approx. $ 26.5/bbl for HSD, $12.5/bbl each for MS and ATF ). Such levy is effective from 01/07/2022 which and is payable in addition to the existing levies. It is understood from the media reports that the levy has been imposed due to extra-ordinary situation prevailing in the global energy markets and to ensure domestic availability of Refined Products. Further, there is corresponding decrease in domestic Refinery Transfer Price (RTP). As the levy and reduction in RTP will have substantial financial impact on the company. The company has suitably represented to the Govt. of India for review of such levy and removal of deduction in RTP.

HUMAN RESOURCES

Your company values its human resources the most. To keep their morale high, your company extends several welfare benefits to the employees and their families by way of compensative medical care, education, housing and social security. During the financial year 2021-22, various welfare related policies have been implemented by the Company for its employees.

The Company maintains a MRPL Employees Recreation Centre. The Centre offers a wide range of pastime activities for the employees and their dependents.

Your Company continues to enjoy cordial and harmonious relations and not a single man-hour was lost on account of any industrial disturbance during the year 2021-22.

The welfare policies of the company are being revised consistent with the industry policies so as to enable employees to get enhanced benefits.

Reporting on SC / ST / PWD

Presidential Directives and other guidelines issued by Department of Public Enterprises, Ministry of Petroleum & Natural Gas, Ministry of Social Justice and empowerment from time to time with regard to reservation in services for Scheduled Castes, Scheduled Tribes, other backward castes and Persons with disabilities have been complied with. An adequate monitoring mechanism has been put in place for sustained and effective compliance. Liaison officers are appointed to ensure implementation of the Government Directives. Reservation Rosters are maintained as per the directives and are regularly inspected by the Liaison officer of the company as well as the officials from MoP&NG to ensure proper compliance of the Directives. MRPL also complies with provisions under “The Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 relating to providing employment opportunities for Persons with Disabilities (PWDs). As on 31/03/2022, there are 37 permanent employees with disabilities on the roll of MRPL.

During the financial year 2021-22, company has recruited 213 employees comprising of 34 Scheduled Caste (SC) employees and 17 Scheduled Tribe (ST) employee and 12 women employees.

During the Year 2021-22, the Company devoted 4229 Mandays for training, development and learning, which amounts to 1.82 average Mandays per employee for Management staff and 2.57 Mandays per employee for Non-Management staff.

In accordance with para-29 of the Presidential Directive, statistics relating 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.

EMPLOYEE WELFARE POLICIES:

The company, over a period of time, has introduced several welfare policies for its employees and their dependent family members in order to improve their quality of life, besides improving the morale and motivation of its employees. The welfare policies of the company are being revised from time to time with the industry practise so as to enable employees to get enhanced benefits.

SKILL DEVELOPMENT CENTER:

As part of National Skill Development Mission, Govt. of India, MRPL has undertaken skill development initiatives. MRPL has partnered with NTTF, Bengaluru & CIPET, Mysuru for imparting skill development training for unemployed youths.

In FY 2021-22, training could not be given to any of the candidates due to two waves of Covid-19.

WOMEN EMPOWERMENT

Women employees constituted 6.95 percent ofthe Company’s workforce.

Your Company has an Internal Complaints Committee (ICC) required under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There have been no cases reported to the committee for the FY 2021-22. Annual Report pertaining to sexual Harassment of Women at workplace is attached at ‘Annexure -C’

HUMAN RESOURCES / PERSONNEL OF AROMATIC COMPLEX

Total employee strength in Aromatic Complex as on 31/03/2022 was 472. Out of which, 179 employees belonged to Management cadre and 293 employees belonged to Non-Management cadre. It included 297 Project Displaced Family (PDFs) Candidates. 83 Women employees constituted over 18 percent of Aromatic Complex’s workforce. During the year 2021-22, Aromatic Complex devoted 669.83 Man-days for Training, Development and Learning which amounted to an average of 1.43 Man-days per employee. This included functional, developmental and special training programmes covering the entire spectrum of employees.

OFFICIAL LANGUAGE

Annual Hindi Implementation Report for the year 2021-22

Your company is implementing Official Language Policy in letter and spirit as per the Annual Programme prescribed by the Department of Official Language, Ministry of Home Affairs, Govt. of India. In order to propagate and promote Hindi among the employees, Hindi Workshops are organized on a regular basis at Mangalore, Mumbai, Delhi & Bangalore Offices. At regular intervals inspection of internal departments and subordinate offices were carried out. Besides, Hindi Fortnight was celebrated and many online Hindi competitions such as Hindi Knowledge competition, Admin. Glossary, Letter writing etc., were conducted for the employees in the month of September, 2021. Hindi usage is promoted by conducting special quiz competitions at all levels including senior officials during Hindi month celebrations.

In addition to the above, online Hindi competition (Admin. Glossary) during World Hindi Diwas was conducted in January, 2022 for employees. Competitions were held in Hindi language for employees and their family members during National Safety Day, Environment Day, Security awareness week and Vigilance awareness week.

Your Company participated at Town Official Language Implementation Committee (TOLIC) Mangaluru level Hindi competitions and won Seven prizes and stood First at the TOLIC-Mangaluru level competitions. Online Hindi Essay competition was conducted for employees of TOLIC member organizations in October, 2021. In addition to this, your company participated in one more competition on the occasion of Vishwa Hindi Diwas and won First prize. To promote Hindi usage in neighboring Schools, Hindi Books were distributed to Eight Govt. Higher Primary and High Schools. Hindi classes were conducted regularly to employees to qualify in Prabodh, Praveen & Pragya examinations. Employees are motivated to pass final Hindi examinations through Incentive schemes such as Cash award & Personal Pay etc. To increase the correspondence in Hindi in the organization, Unicode facilities were activated on all computers used for daily office work.

Special awards were given to 04 students of DPS (Delhi Public School) in MRPL Township, who have scored highest marks in Class-X Hindi examination.

To implement Hindi in organization, sign boards have been made in bilingual/trilingual.

In order to propagate and to promote usage of Hindi in the company, in house Hindi Journal "MRPL PRATIBIMB" is being annually published. MRPL follow the guidelines of OL (Official Language), and conducted OLIC (Official Language Implementation Committee) meeting during four quarters of the year under the chairmanship of MD. Your company is making Continuous efforts for promoting Hindi usage in the organization by encouraging employees through trainings, workshops, seminars and incentives.

In view of the above activities and initiatives taken in Official Language Implementation, MRPL has been awarded II place by TOLIC- Mangalore.

RIGHT TO INFORMATION ACT, 2005

Your company has put in place an elaborate mechanism to deal with matters related to the Right to Information Act, 2005. The company has designated one Nodal Officer based at Registered Office at Mangalore and one First Appellate Authority (FAA), one Central Public Information Officers (CPIO) and Two Assistant Public Information Officers (APIOs). RTI manual is hosted on the website of the Company as per Section 4(2) of the RTI Act. Your company has aligned with the online RTI portal launched by DoPT and all the applications/appeals received through the portal have been disposed off through the portal.

The Quarterly Reports / Annual Reports have been submitted through the online portal of Central Information Commission www.cic.gov.in within the prescribed time limit. The data on RTI applications received and disposed off by your company is available online at www.mrpl.co.in/Content/RTI.

SECURITY MEASURES

Security of MRPL Refinery is designed to comply with Oil Sector Infrastructure Protection Plan (OSIPP) and the Security Audit recommendations given by MHA from time to time.

Physical Protection of the Refinery is handled by Central Industrial Security Force (CISF). They are fully equipped with adequate gadgets and weapons to handle all kinds of security threats to the Refinery. The Refinery has a state-of-the-art electronic surveillance system with an integrated CCTV cum Electronic Intrusion Detection system which is monitored from a Central Command & Control Centre.

Security is on top of the agenda of your Company and to ensure preparedness, periodic mock drills are conducted. To promote awareness of security issues among all stakeholders, Security Awareness Weeks are organised periodically.

VIGILANCE FUNCTION

Your company has developed a structured mechanism of vigilance functions. Its practices are focused towards creation of value to stakeholders. The practices involve multi-layer checks and balances to improve transparency. Vigilance awareness and preventive vigilance activities were continuously carried out during the year.

Your company has adopted a complaint handling procedure in accordance with CVC regulations, in which all complaints received from various sources are documented and investigated by vigilance. The details on the best vigilance practices and links to various useful websites is also provided in the MRPL Corporate website. Your company has achieved high compliance level with regard to e-procurement, e-tender and e-payment. Vigilance function focus on regular study of systems and procedures for continuous improvement and enhanced efficiency. Company is always looking forward to implement Technology based Innovation to ensure greater transparency and accountability.

In line with instructions of CVC, your company had conducted Vigilance Awareness programs for spreading awareness on Integrity. Sensitization programme conducted on the importance of ethics and moral values in public life for employees at entry level. Many awareness activities were designed to touch all walks of life. Sixth edition of in-house Vigilance Souvenir “Pardarshak” was released. Vigilance Awareness Online Quiz Competition was organized for Colleges by Mangalore Refinery (MRPL) on Vigilance related topics for creating awareness among college students and citizens. More than 3000 students participated in this quiz from almost all states and 16 different countries. PIDPI (Public Interest Disclosure and Protection of Informers) Resolution awareness posters and booklet was prepared and distributed by MRPL for creating awareness among employees and citizens about PIDPI. MRPL Vigilance Manual was released as a reference book covering all the relevant sections of CVC Vigilance Manual and MRPL Conduct, Discipline and Appeal rules. MRPL Vigilance Manual on Disciplinary Proceedings was prepared and released. It’s a compilation of all the instructions, guidelines and process of disciplinary proceedings. Various other activities such as Kiosk for Integrity Pledge, Vendors meet, various awareness program were conducted for stakeholders. Sensitization programme on the importance of ethics and moral values in public life.

Online essay competition for school and college students with the theme "Independent India @ 75: Self Reliance with Integrity” was conducted. Online poster competition was conducted for College students. The students of several schools and colleges participated in large number in the programme. Promotional videos and number of competitions like poster making, slogan writing, online quiz, essay writing etc. were conducted for employees and dependents. Short films, posters etc. were put in MRPL social media handle for creating awareness. Using technology to improve transparency has been a major focus area in which vigilance has played a key role.

During the FY 2021-22, 7 vigilance cases were received from PIDPI and all 7 complaints were disposed-off. Further 5 complaints were received from other Sources (Non-PDPI) and all 5 complaints were disposed-off. There were no pending vigilance complaints as on 31/03/2022.

WHISTLE BLOWER POLICY

The Whistle Blower Policy is formulated to provide a vigil mechanism for Directors and Employees to raise genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy. The Policy provides necessary safeguards for protection of Directors and Employees who avail the vigil mechanism from reprisals or victimization, for whistle blowing in good faith and to provide opportunity to Directors and Employees for Direct access to the Chairperson of the Audit Committee in exceptional cases. The policy is available on the Company’s website. During the year, no complaints were received under Whistle Blower Policy.

The Central Vigilance Commission (CVC) has advised Government organisations to adopt Integrity Pact voluntarily in their major procurement activities.

The Integrity Pact essentially envisages an agreement between the prospective vendors / bidders and the buyer, committing the persons / officials of both sides not to resort to any corrupt practices in any aspect / stage of the contract.

Only those vendors / bidders, who commit themselves to such a pact with the buyer, would be considered competent to participate in the bidding process.

The CVC guidelines further advises CPSUs to appoint Independent External Monitors as approved by the CVC to oversee the compliance of obligations under the Integrity Pact.

MRPL has implemented Integrity Pact in compliance with CVC guidelines and as per its recommendation, appointed Ms Alka Sirohi, IAS (Retd) and Mr. Sunil Kumar Chhourasia, IOFD (Retd) Former CVC as Independent External Monitor.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO:

Information required to be disclosed pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo are furnished in ‘Annexure- D’ which forms part of this Report.

MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES:

MRPL, being a Government Company, is exempted from the provisions of Section 197(12) of the Companies Act, 2013 and relevant Rules in view of the Notification dated 05/06/2015 issued by Ministry of Corporate Affairs (MCA).

The functional Directors of the Company are appointed by the administrative Ministry i.e., MoP&NG within the framework of DPE guidelines.

ANNUAL RETURN :

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 the Annual Return as on 31/03/2022 is available on the Company’s website on www.mrpl.co.in/content/shareholders

RELATED PARTY TRANSACTIONS & PARTICULARS OF CONTRACTS/ARRANGEMENTS WITH RELATED PARTY :

All transactions entered with related parties during the FY 2021-22 were on arm’s length basis and in ordinary course of business. Further, there were no material related party transactions during the year with the Promoters, Directors or Key Managerial Personnel and no related party transactions were made which could have had a potential conflict with interests of the Company at large. The Company’s major related party transactions are generally with its holding Company, subsidiary, joint Venture Company and associates. All the contracts/arrangements/transactions entered into with related parties were on arm’s length basis, intended to further the Company’s interest. The Company has adopted a Related Party policy and procedure, which is available at company’s website.

The particulars of every contract or arrangements entered into by the Company with Related Parties referred in Section 188(1) of the Companies Act, 2013, is attached in the prescribed Form No. AOC - 2 as ‘Annexure-E’. MCA vide Notification dated 05/06/2015, has exempted the applicability of proviso 1 and 2 of Section 188(1) of the Companies Act, 2013 for transactions entered into between two Government Companies.

DIRECTORS & KEY MANAGERIAL PERSONNEL :

Changes in the Board of Directors and Key Managerial Personnel during the financial year 2021-22 MRPL being a Central Public Sector Enterprise (CPSE), Directors on the Board of the company are appointed by the Administrative Ministry i.e., Ministry of Petroleum and Natural Gas (MoP&NG), Government of India and therefore the provisions of Section 134(3) of the Companies Act, 2013 regarding policy on Directors appointment and remuneration shall not apply in view of the MCA notification dated 05/06/2015.

• Shri Shashi Shanker, Chairman/Director - MRPL has resigned from the Board of MRPL w.e.f 01/04/2021 consequent to his superannuation from the services of Oil and Natural Gas Corporation Limited as Chairman & Managing Director on 31/03/2021.

• Shri Subhash Kumar has been nominated as the Chairman on the Board of MRPL by ONGC with effect from 05/04/2021.

• Shri K B Shyam Kumar was appointed as Company Secretary and Compliance Officer with effect from 17/05/2021 in place of Shri Dinesh Ranjan Mishra who ceased to be Company Secretary and Compliance Officer due to sad demise on 02/05/2021.

• Shri Om Prakash Singh has been appointed as Additional Director of MRPL by ONGC with effect from 07/06/2021.

• Shri Rajkumar Sharma, Smt Nivedida Subramanian, Shri Manohar Singh Verma, and Shri Pankaj Gupta were appointed as Independent Directors on the Board of MRPL with effect from 15/11/2021

• Shri Subhash Kumar, Chairman/ Director - MRPL has resigned from the Board of MRPL w.e.f 01/01/2022 on the attaining the age of Superannuation from the services of Oil and Natural Gas Corporation Limited as Chairman & Managing Director on 31/12/2021.

• Dr. Alka Mittal was nominated as the Chairperson on the Board of MRPL by ONGC with effect from 11/01/2022. The Board placed on record its appreciation for the valuable services rendered by the outgoing Directors during their respective tenures.

All Independent Directors have given a declaration that they meet the criteria 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 31/03/2022

• Smt Pomila Jaspal, Director (Finance) has resigned from the Board of MRPL w.e.f 18/04/2022 consequent upon her appointment as Director (Finance), Oil and Natural Gas Corporation Limited.

• Shri Asheesh Joshi, Director, has been appointed on the Board of MRPL vice Smt. Esha Srivastava, as Government Nominee Director w.e.f. 14/06/2022.

• Shri Om Prakash Singh ceased to be director w.e.f. 23/06/2022 on withdrawal of nomination by ONGC.

• Smt. Pomila Jaspal, Director (Finance), ONGC has been appointed as Nominee Director on the Board of MRPL w.e.f. 15/07/2022.

Changes in the Key Managerial Personnel after 31/03/2022

• Smt Pomila Jaspal, Director Finance & CFO, has resigned from the office of MRPL w.e.f. 18/04/2022 consequent upon her appointment as Director ( Finance), Oil and Natural Gas Corporation Limited.

• Shri Yogish Nayak S. was appointed as Chief Financial Officer w.e.f. 27/04/2022.

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 and individual Directors shall not apply in view of the MCA notification dated 05/06/2015. However, as per Regulation 17 of SEBI (LODR) Regulations, 2015 formal annual evaluation of Independent Director for the FY 2021-22 had been carried out by the Board.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 134 of the Companies Act, 2013, the Board of Directors ofyour Company has made the following statement for FY 2021-22:

a) In the preparation of the Annual Financial Statements for the year ended March 31,2022, the applicable Ind AS have been followed along with proper explanation relating to material departures;

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

c) The Directors have taken proper profit and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) The Directors have prepared the Annual Financial Statements on a going concern basis;

e) The Directors have laid down internal financial controls to be followed by the company and that 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 all applicable laws and that such systems are adequate and operating effectively.

NUMBER OF BOARD MEETINGS

The Board of Directors of your Company had seven (7) Meetings during the FY 2021-22. The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013. Details of the Board Meetings held, have been furnished in the Corporate Governance Report which forms part of this Report.

AUDIT COMMITTEE

The Audit Committee has been constituted as per the terms of reference prescribed under Section 177 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of the Board and its Powers) Rules, 2014,Listing Regulation, 2015 and Guidelines on Corporate Governance for Central Public Sector Enterprise issued by Department of Public Enterprise, Government of India. There have been no instances where the recommendations of the Audit Committee were not accepted by the Board of Directors. The details of Audit Committee are disclosed in the Corporate Governance Report which forms part of this Report.

NOMINATION & REMUNERATION COMMITTEE (NRC) :

MRPL being a Central Public Sector Enterprise (CPSE), Directors on the Board of the company are appointed by the Administrative Ministry i.e., Ministry of Petroleum and Natural Gas (MoP&NG), Government of India. Accordingly, the Company has not adopted any Nomination & Remuneration policy.

Pursuant to Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (LODR) Regulations, 2015 and DPE guidelines on Corporate Governance for CPSE, your Company has constituted a Nomination & Remuneration Committee.

The details on the Nomination & Remuneration are disclosed in Corporate Governance Report which forms part of this report.

MRPL is a ‘Schedule-A’ Category-1 Miniratna Central Public Sector Enterprise (CPSE). The appointment, terms, conditions and remuneration of Managing Director and Functional Directors (Whole-time Directors) are fixed by the Department of Public Enterprises (DPE), Govt. of India.

RISK MANAGEMENT POLICY:

In line with the requirements of SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015, your Company has developed and rolled out a comprehensive Enterprise -wide Risk Management (ERM) Policy throughout the organization. The Audit Committee periodically 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 future operations.

CORPORATE GOVERNANCE:

The Companies Act, 2013 and SEBI (LODR) Regulations, 2015 have strengthened the governance regime in the country. Your Company is in compliance with the governance requirements provided under the Companies Act, 2013, SEBI Listing Regulations, 2015 and has complied with all the mandatory provisions of Companies Act, 2013 and Rules made there under, SEBI Listing Regulation, 2015 relating to the Corporate Governance requirements and mandatory guidelines on Corporate Governance for CPSEs issued by DPE, Government of India. The Corporate Governance Report for the FY 2021-22 forms part of this Report.

Pursuant to Schedule V of the SEBI Listing Regulations, 2015, the compliance certificate from Practicing Company Secretaries regarding compliance of conditions of Corporate Governance also forms part of the Annual Report. The Secretarial Auditors have made observations on non-availability of requisite number of Independent Directors on the Board of the Company from 01/04/2021 to 15/11/2021, constitution of Audit Committee from 01/04/2021 to 16/01/2022 and Nomination and Remuneration Committee from 01/04/2021 to 31/03/2022. The matter for appointment of requisite number of independent Directors is being pursued with MoP&NG and the same is under active consideration of MoP&NG.

Pursuant to requirements of the Companies Act, 2013 and SEBI Listing Regulations, 2015, following policies/codes have been formulated and uploaded on the Company’s website at www.mrpl.co.in

a) Code of Conduct for Board Members and Senior Management Personnel;

b) Whistle Blower Policy;

c) Related Party Transactions - Policy and Procedures;

d) CSR & SD Policy;

e) Material Subsidiary Policy;

f) The Code of Internal Procedures and Conduct for prohibition of Insider Trading in Dealing with the securities of MRPL;

g) Policy on Materiality for disclosure of events to the Stock Exchanges;

h) Policy on preservation of Documents;

i) Training Policy for Board of Directors;

j) Dividend Distribution Policy.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the IEPF rules”), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF, established by the Government of India, after the completion of seven years. Further, according to the Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. During the financial year no amounts of unclaimed dividend and corresponding shares were due for transfer to Investor Education & Protection Fund (IEPF). The details are provided in the Shareholder Information Section of this Annual Report and are also available on website ofthe company www.mrpl.co.in.

ANNUAL BUSINESS RESPONSIBILITY REPORT :

SEBI Listing Regulations, 2015 mandated inclusion of Annual Business Responsibility Report (ABRR) as part of the Annual Report for top 1,000 Listed Entities based on market capitalization. In compliance with the Regulation, ABRR for the FY 2021-22 forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS :

In terms of Regulation 34 of the SEBI Listing Regulations, 2015 the Management’s Discussion and Analysis (MDA) Report for the FY 2021-22 forms part of this Report.

INTERNAL FINANCIAL CONTROL :

Your Company has a well-established and efficient internal financial control system to ensure an adequate and effective internal control environment that provides assurance on efficiency of conducting business, including adherence to Company’s policies, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information.

The Company has in-house Internal Audit Department commensurate with its size of operations. Audit observations are periodically reviewed by the Audit Committee of the Board and necessary directions are issued whenever required. The highlights on Internal Control system are disclosed in the Management Discussion Analysis Report which forms part of this report.

As regards Financial Reporting controls, the internal auditor verifies the adequacy and effectiveness of controls. Your Company has also obtained a certificate from the Joint statutory auditors under Sec 143(3)(I) of the Companies Act, 2013 towards the existence of adequate Internal Financial control system over Financial reporting and its operating effectiveness, as at 31st March 2022.

AUDITORS:

Joint Statutory Auditors

M/s Sankar & Moorthy, Chartered Accountants, Kannur and M/s Ram Raj & Co, Chartered Accountants, Bengaluru were the Joint Statutory Auditors of the Company for the FY 2021-22. They have audited the Financial Statements for FY 2021-22 and submitted their report which forms part of this report. There is no qualification in the Auditors Report on the financial statements of the Company. Notes to the Accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any comments. Total fees paid to the Joint Statutory Auditors for the financial year 2021-22 was ' 28 lakh consolidated basis.

Secretarial Auditors

Your Company engaged M/s Ullas Kumar Melinamogaru & Associates, Practising Company Secretaries, Mangaluru for conducting Annual Secretarial Audit for FY 2021-22 pursuant to Section 204 of the Companies Act, 2013. M/s Ullas Kumar Melinamogaru & Associates, Practising Company Secretaries, Mangaluru has issued Secretarial Audit Report for the FY 2021-22 which forms part of this report as ‘Annexure-F’. The Auditors have made observations on the composition of the Board with regard to requisite number of Independent Directors on the Board of the Company. The matter for appointment of requisite number of independent Directors is being pursued with MoP&NG and the same is under active consideration of MoP&NG.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Accounts maintained by the company for the FY 2021-22 are being audited by Cost Auditors M/s. Musib & Co. Cost Accountant, Mumbai.

COMMENTS OF C&AG ON THE JOINT STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED AND STANDALONE FINANCIAL STATEMENTS FOR THE FY 2021-22

The Comments of Comptroller & Auditor General of India (C&AG) forms part of this report and are attached as ‘Annexure-G’. You would be pleased to know that there are no comments from C&AG on the Auditor’s Report or on the Financial Statements for the year 2021-22. There were no pending audit para as far as financials concerned.

ACKNOWLEDGEMENT

Your Board of Directors wish to thank the shareholders for the continued confidence reposed on their Company. Your Directors sincerely thank the Government of India (Gol), Ministry of Petroleum and Natural Gas (MoP&NG), Ministry of Finance (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 and Departments of the Central Government for their valuable support, guidance and continued co-operation. Your Directors also place on record their appreciation for the support from Government of Karnataka.

Your Directors gratefully acknowledge support and direction provided by the parent company, Oil and Natural Gas Corporation Limited (ONGC) and the support of Hindustan Petroleum Corporation Limited (HPCL) as Promoters of the company. Your Directors acknowledge the continuous cooperation and support received from New Mangalore Port Trust, Financial Institutions, Banks and all other stakeholders. Your Directors recognize the patronage extended by the valued customers for the products of the Company and promise to provide them the best satisfaction. The Board would like to express its sincere appreciation for the dedicated efforts made and valuable services rendered by all the employees collectively and concertedly as a team known as “Team MRPL” towards the Company’s achievements during the year 2021-22.

1

Restated (refer Note - 50 to the Financial Statements)

Your company achieved a turnover of '86,037 crore during the financial year 2021-22 as against '50,739 crore during the financial year 2020-21. The company earned profit of '2,955.27 crore (profit after tax) during the financial year 2021-22 against loss of '761.17 crore incurred during the financial year 2020-21.

Impacts of COVID on Financial performance

The Company has assessed the possible effect that may result from COVID-19 pandemic / Russia-Ukraine War, which is not significant on the carrying amounts of Property, Plant and Equipment, Inventories, Receivables and Other Current Assets. The demand for Company’s products is expected to be lower in the short term which is not likely to have a continuing impact on the business operations ofthe Company. In the opinion ofthe management, the carrying amount of these assets will be recovered.

During the FY 2021-22, the Company has issued Non-Convertible Debentures (NCDs) aggregating '1,200 Crore. The NCDs are listed on BSE Limited and National Stock Exchange of India Limited (NSE). The company has also taken Capex loans from Federal Bank and State Bank of India - FCTL amounting to '234.30 crores and '111.67 crores respectively.

ICRA has reaffirmed the long-term rating of [ICRA] AAA (pronounced ICRA “Triple A rating with stable outlook) and the short-term rating of [ICRA] A1 (pronounced ICRA A one plus) on the '19,200 Crore bank facilities and also reaffirmed the rating of “[ICRA]A1 ” (pronounced ICRA A one plus) for '4000 Crore Commercial Paper (CP) / Short


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