25 Apr 2017 | Livemint.com

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Mangalore Refinery & Petrochemicals Ltd.

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  • BSE Code: 500109
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  • NSE Code: MRPL
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Mangalore Refinery & Petrochemicals Ltd. Accounting Policy

CORPORATE GOVERNANCE REPORT FOR THE YEAR 2014-15

Corporate Governance is a set of systems and practices to ensure that the affairs of the company are being managed in a way which ensures accountability, transparency and fairness in all its transactions in the widest sense and meet its stakeholder's aspirations and societal expectations. The Corporate Governance framework of your Company enjoys the highest standards of ethical and responsi­ble conduct of business to create value for all its stakeholders. Your Company's philosophy on Corporate Governance envisages the attainment of the highest levels of transparency, accountability and ethics, in all facets of its operations, with the primary objective of enhancing shareholder value.

The Company believes in adopting the 'best practices' that are followed in the area of Corporate Governance across various geogra­phies. The Company emphasises the need for full transparency and accountability in all its transactions, in order to protect the inter­ests of its stakeholders. Corporate governance is the acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the stakeholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal and corporate funds in the management of a company.

Our Corporate Governance framework is based on the following principles:

• Protecting and facilitating the exercise of shareholder's rights;

• Committed to a transparent system and values; which recognize the rights of the stakeholders and encourage co-operation between Company and the Stakeholders;

• Timely and accurate disclosure on all material matters including the financial situation, performance, ownership and govern­ance of the Company;

• Operating in a sound system of internal control with a thrust on integrity and accountability;

• Ensuring timely and adequate disclosure of all material information to all Stakeholders;

• Ensuring compliance of applicable laws, guidelines, rules and regulations;

• Committed for equitable and fair treatment to all its stakeholders and society at large;

• Effective Whistle Blower Policy mechanism is provided for the Stakeholders.

1) BOARD OF DIRECTORS:

The Board of Directors function within the purview of Corporate Governance norms in transparent and effective manner. The Com­pany has an exhaustive Book of Delegated Powers (BDP) and other manuals like Material Management, Works manual etc, which spell out the processes and defines the level (Board / Executive Committee / Functional Director) at which any decision is to be made and are reviewed from time to time to ensure that they are updated and meet the needs of the organization. The company has 7 committees of the Board which deliberate upon various important matters and advise the Board on the course of action to be taken.

A) COMPOSITION OF DIRECTORS AS ON 31/03/2015

Executive Directors : 3

Non Executive Directors : 3

Since the Chairman is a Non-executive Director nominated by promoter and the present Board consists of only 6 Non Independ­ent Directors, the Board should have 6 Non-official Part-time Directors (Independent Directors) in addition.

(i) PARTICULARS OF APPOINTMENT OF A NEW DIRECTOR OR RE-APPOINTMENT OF A DIRECTOR IN TERMS OF CLAUSE 49 (VIII)(E) OF THE LISTING AGREEMENT

Brief resume of following Directors proposed to be appointed or re-appointed mentioning qualification, expertise, names of the companies in which they hold Chairmanship/ Directorship in the Board and Chairmanship/ Directorship in the Board sub- com­mittees, shareholding in these companies and relationship between director inter-se pursuant to Clause 49 (VIII)(E) of Listing Agreement with Stock Exchanges are provided in the notice for the 27th Annual General Meeting which forms part of the Annual Report.

• Shri M. Venkatesh (DIN: 07025342) was appointed as an Additional Director and designated as Director (Refinery) is pro­posed for appointment as Director.

• Shri Nalin Kumar Srivastava (DIN: 06682842) was appointed as an Additional Director is proposed for appointment as Director.

• Smt Perin Devi (DIN: 07145051) was appointed as an Additional Director is proposed for appointment as Director.

• Shri Vishnu Agrawal (DIN: 03127566) designated as Director (Finance) retires from office by rotation and being eligible offers himself for re-appointment as a Director.

 (ii) CHANGES IN THE BOARD OF DIRECTORS AFTER 31/03/2015

• Pursuant to MoP&NG order, Shri M Venkatesh GGM (I/c Refinery) assumed the office of Director (Refinery) on 1st April, 2015 consequent upon the superannuation of Shri V. G. Joshi Director (Refinery) from the services of the Company on 31st March, 2015.

• Smt. Perin Devi, Director, MoP&NG, has been nominated as Government Director by Ministry of Petroleum & Natural Gas (MoP&NG), Government of India w.e.f 14/05/2015. The Company fulfills the requirement of Woman Director pursuant to Section 149 (1) of Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014 and pursuant to Clause 49 of Listing Agreement for FY 2014-15.

B) ATTENDANCE OF DIRECTORS AT THE BOARD MEETINGS HELD DURING THE FINANCIAL YEAR 2014-15 AND 26th ANNUAL GENERAL MEETING HELD ON 13/09/2014

2) AUDIT COMMITTEE

Audit Committee of the Board of Directors ("the Audit Committee") is entrusted with the responsibility to supervise the Company's internal controls and financial reporting process. The composition, quorum, powers, role and scope are in accordance with Section 177 of the Companies Act, 2013 and the provisions of Clause 49 of the Listing Agreement. All members of the Audit Committee are financially literate and bring in expertise in the fields of Finance, Taxation, Economics, Risk and International Finance. However, as no Independent Directors have been appointed, Company is pursuing with Ministry of Petroleum & Natural Gas (MoP&NG) for the appointment of requisite number of Independent Directors.

(i) TERMS OF REFERENCE:

The Audit Committee inter alia performs the functions of approving Annual Internal Audit Plan, review of financial reporting system, internal controls system, discussion on quarterly, half-yearly and annual financial results, interaction with Statutory and Internal Auditors. Review and recommend appointment of Cost Auditors/Internal Auditors and their remuneration, review of Business Risk Management Plan, review of Forex policy, Management Discussions & Analysis, review of Internal Audit Reports, significant related party transactions. The Board has framed the Audit Committee Charter for the purpose of effective compliance of provisions of Section 177 of the Companies Act, 2013, Clause 49 of the Listing Agreement and DPE guidelines on Corporate Governance for CPSEs. In fulfilling the above role, the Audit Committee has powers to investigate any activity within its terms of reference, to seek information from employees and to obtain outside legal and professional advice.

3) RISK MANAGEMENT COMMITTEE (RMC) :

The company has constituted a Risk Management Committee (RMC) in accordance with Clause 49(VI)(C) of the Listing Agreement. The Risk Management Committee consists of majority of members of the Board of Directors. The Risk Management Committee shall review and monitor the risk overview document of the Company on a quarterly basis in accordance with the Board approved Enterprises Risk Management policy of the Company and submit a report to the Audit Committee.

4) NOMINATION AND REMUNERATION COMMITTEE:

MRPL is a 'Schedule A' 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.

Pursuant to Clause 49 of the Listing Agreement and DPE guidelines on Corporate Governance for CPSE, the Company has constituted a Remuneration Committee in April, 2009. The Committee was reconstituted with revised terms of reference as Nomination and Remuneration Committee pursuant to Sec 178 of the Companies Act, 2013 read with Companies (Meetings of Board and its powers) Rule, 2014 and pursuant to Clause 49(IV)(A) of the Listing Agreement.

(i) TERMS OF REFERENCE:

The Company has not complied with the requirement of Clause 49(IV)(A) of the Listing Agreement as regards to constitution of Nomination and Remuneration Committee with requisite number of Independent Directors. However, the Company is pursuing with MoP&NG for appointment of requisite number of Independent Directors.

(ii)  REMUNERATION POLICY :

The Remuneration paid to Directors and other Managerial persons are regulated by the guidelines issued by Department of Public Enterprises, Government of India as the Company is a Schedule - "A" Central Public Sector Enterprise. The remuneration policy of the company is as per the guidelines issued by the Department of Public Enterprises, Government of India.

5) STAKEHOLDERS' RELATIONSHIP COMMITTEE

(i) The Company has reconstituted Stakeholders' Relationship Committee with revised terms of reference pursuant to Section 178 of the Companies Act, 2013 read with Revised Clause 49 of Listing Agreement and Guidelines issued by SEBI in the 185th meeting of the Board held on 8th February, 2014.

(i) TERMS OF REFERENCE:

• To consider and resolve the grievances of Stakeholders of the company.

• To look into the redressal of stakeholders complaints/ grievances relating to transfer of shares, Non-receipt of Balance Sheet, Non-receipt of Dividend etc.

• To protect the rights of the Stakeholders and ensure timely and accurate disclosure of information and transparency.

6) SHARE TRANSFER COMMITTEE (STC)

(i) Pursuant to the provisions of the Companies Act, 2013 and the Companies (Share Capital and Debentures) Rules 2014, a Committee of Directors (Share Transfer Committee) is constituted for approving transfer of shares, transmission of shares and issue of duplicate share certificates.

(ii) Pursuant to Rule 6(2)(a) of the Companies (Share Capital and Debentures) Rules, 2014 duplicate share certificates are issued in lieu of those that are lost or destroyed with the approval of Share Transfer Committee, as the Board has delegated the Powers to STC pursuant to MCA General Circular No.19/2014 dated 12th June, 2014 to issue duplicate share certificates.

(iii) The Share Transfer Committee consists of Managing Director, Director (Finance) and Director (Refinery) for approving transfer of shares, transmission of shares and issue of Duplicate Share Certificates and matter incidental thereto. The Quorum of the committee shall be any two Directors.

Note:

• Name and Designation of the Compliance officer: Shri Dinesh Mishra, Company Secretary & Compliance Officer.

• No. of Shareholder's complaints received during the FY 2014-15 : 59

• No. of complaints remains unresolved during the FY 2014 - 15 : 1*

• No. of pending share transfers as on 31/03/2015 : NIL

• Subsequently resolved.

7) DISCLOSURE & TRANSPARENCY:

The Company ensures timely and complete dissemination of information on all matters which require to be made public. The website of the company and the Annual Report of the company contain exhaustive information regarding every aspect of the functioning, financial health, ownership and governance of MRPL.

All disclosures by Company are strictly in accordance with the formats prescribed by the concerned regulatory authority in respect of accounting, financial and non-financial matters.

MRPL disseminates information through press releases, on its website, to the Stock Exchanges etc. Access to all these modes is free for all users.

The Company maintains records of the proceedings of all meetings (Board / Committees/ General meetings, etc.).

The company follows the accounting standards in letter and spirit. The annual audit is conducted by Joint Statutory Auditors appointed by the C&AG. MRPL is further subject to supplementary audit by C&AG. Internal Audit Department reports to the Audit Committee, apart from periodical oversight by the Government of India and Parliamentary Committees.

Members of the Board and Key Managerial Personnel disclose to the board whether they directly, indirectly or on behalf of third parties, have a material interest in any transaction or matters directly affecting the company.

It is the endeavor of the Board of Directors and the top management of MRPL to ensure that the stakeholders are aware of all important developments, while ensuring confidentiality of relevant information.

(i) MATERIALLY SIGNIFICANT RELATED PARTY TRANSACTIONS:

1.0 The transactions with Related Parties are governed by Clause 49 of the Listing Agreement, and the provisions of Section 188 of the Companies Act, 2013 and rules made thereunder along with the circulars and notifications issued by SEBI and MCA from time to time.

2.0 Pursuant to SEBI circular dated 17/04/2014 and 15/09/2014 and Clause 49 of the Listing Agreement, the Company has adopted Related Party Transaction Policy and procedures and the same is displayed in the website of the company i.e. www.mrpl.co.in .

(ii) Key Management Personnel:

1. Shri H.Kumar : Managing Director

2. Shri Vishnu Agrawal : Director (Finance)

3. Shri M.Venkatesh : Director (Refinery)

4. Shri Dinesh Mishra : Company Secretary

There is no transaction with Key Management Personnel during the financial year 2014-15 except for the remuneration paid. The remuneration of Key Management Personnel has been disclosed under Clause (VI) of MGT - 9 to the Board's Report.

 (iii) Details of non-compliance by the company, penalties, strictures imposed by the Stock Exchange or SEBI or any authority on any matter related to capital markets during last 3 years: Nil

(iv) NON - MANDATORY REQUIREMENTS:

a) The Company maintains a Chairman's office at its expense.

b) MRPL is a 'Schedule A' Central Public Sector Enterprise. 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.

c) As the Company's Quarterly / Half Yearly Financial results are displayed on the website of the company and Published in the Newspaper, the half-yearly report is not sent to each Shareholder's residence.

d) There are no qualifications in the Auditor's report on the financial statements to the shareholders of the Company.

e) A formal policy for training of the Board Members of the Company has been formulated and the same is displayed in the website of the company i.e. www. mrpl.co.in.The directors are sponsored for various seminars, training, workshops and orientation programmes depending on the suitability and convenience.

f) The Company has adopted Whistle Blower Policy for employees and Directors. The company has not denied any employee and Directors access to the Competent Authority. Policy which is available at company website www.mrpl.co.in .

(v) CODE OF CONDUCT FOR MEMBERS OF THE BOARD AND SENIOR MANAGEMENT

A Code of Conduct for Members of the Board and Senior Management is a comprehensive code applicable to Executive and Non-executive Directors as well as members of the Senior Management i.e. Managerial Personnel at the level of Group General Manager and above of the Company.

The Code of conduct is available on the Company's website www.mrpl.co.in

The Managing Director has declared that all the members of the Board and Senior Management have affirmed that they have complied with the code of conduct for the financial year 2014-15.

(vi) CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING :

1.0 "Code of Conduct for Prevention of Insider Trading" for the Company was approved by the Board at its 89th meeting held on 22nd June, 2002 pursuant to SEBI (Insider Trading) (Amendment) Regulations, 2002. The same was amended by the Board at its 135th meeting held on 20th January, 2009 in view of SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2008.

2.0 SEBI has notified the SEBI (Prohibition of Insider Trading) Regulations, 2015 on 15th January, 2015 repealing SEBI (Insider Trading) Regulations, 1992 applicable to all the listed companies with effect from 15/05/2015. Accordingly company has adopted code of internal procedures and conduct for prohibition of insider trading, as amended, in dealing with the securities of the company and the same is displayed in the website of the company i.e. www.mrpl <http://www.mrpl>. co.in.

(vii) CEO & CFO CERTIFICATION :

In terms of Clause 49(IX) of the Listing Agreement, the certification by the CEO & CFO on the financial statements and internal controls relating to financial reporting has been presented before Audit Committee for review on quarterly basis and the same is also placed before the Board for information.

(viii) WHISTLE BLOWER POLICY:

The Company has adopted a Whistle Blower Policy for Directors and Employees of the company and the same is displayed in the website of the company i.e. www.mrpl.co.in

(ix) BUSINESS RESPONSIBILITY REPORT (BRR) :

Pursuant to Clause 55 of the Listing Agreement, a BRR for the year 2014-15 has been made which forms part of the Annual Report. As a measure of Green Initiative, Stock Exchange has permitted the Company to upload the BRR in the Company's website with a reference to the link printed in the Annual Report. Accordingly, the BRR could be viewed at www.mrpl.co.in . The BRR Annexure is not sent along with the Annual Report. Any member who is interested to have a hard copy of the BRR may write to the Company or its Registrars & Transfer Agent, Link Intime (India) Limited.

(x) DEMATERIALISATION OF SHARES AND LIQUIDITY

97.65% of the equity shares of the Company have been dematerialized (NSDL - 44.76% and CDSL 52.89%) as on March 31, 2015. The Company has entered into agreements

with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) whereby shareholders have an option to dematerialize their shares with either of the Depositories and cast their electronic vote.

(xi) RECONCILIATION OF SHARE CAPITAL AUDIT REPORT

As stipulated by SEBI, a qualified Practicing Company Secretary carries out Secretarial Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges where the Company's shares are listed. The audit confirms that the total Listed and Paid-up Capital is in agreement with the aggregate of the total number of shares in dematerialized form (held with NSDL and CDSL) and total number of shares in physical form.

(xii) NOMINATION

Individual shareholders holding shares singly or jointly in physical form can nominate a person in whose name the shares shall be transferable in case of death of the registered shareholder(s). Nomination facility in respect of shares held in electronic form is also available with the Depository Participants as per the bye-laws and business rules applicable to NSDL and CDSL. Nomination form can be obtained from the Company's Registrar and Share Transfer Agent.

(xiii) SERVICE OF DOCUMENTS THROUGH ELECTRONIC MODE

As a part of Green initiatives, the members who wish to receive the notice /documents through e-mail, may kindly intimate their e-mail address to the Company's Registrar and Transfer Agent, Link Intime India Private Limited, to their dedicated e-mail id i.e. investor@mrpl.co.in

8) MEANS OF COMMUNICATION:

i) Quarterly Results : Quarterly Results of the Company are published in English and Vernacular Newspaper and are also displayed in the Company's website www.mrpl.co.in  

ii) News Releases, : Official news releases and Official Presentations etc Media Releases are available on the website of the Company.

iii) Presentation to Institutional Investors / Analysts. : Yes

iv) Website : The Company's website www. mrpl.co.in contains a separate dedicated section 'Stakeholders' where shareholders information is available. The Annual Report of the Company is also available on the website.

v) Annual Report : Annual Report containing the Audited Annual Financial Statements, Directors' Report, Auditors' Report, Corporate Governance Report is sent to the shareholders. The Management Discussion and Analysis (MD&A) Report forms part of the Annual Report and is also displayed on the Company's website www. mrpl.co.in

vi) Chairman's Communique : Printed copy of the Chairman's Speech is distributed to all the shareholders at the Annual General Meeting. The same is placed on the website of the Company and sent to Stock Exchanges and published in leading Newspapers.

vii) Reminders to investors : Reminders for unclaimed physical share certificates were sent to the shareholders. Several reminders were sent to the shareholders for e-mail updation for communicating through e-mail.

viii) Corporate Filing and Dissemination System(CFDS): The CFDS portal jointly owned, managed and maintained by BSE and NSE is a single source to view information filed by listed companies. All disclosures and communications to BSE & NSE are filed electronically through CFDS portal and hard copies of the said disclosures and correspondences are also filed

ix) NSE Electronic Application Processing System (NEAPS):The NEAPS is web based application designed by NSE for corporates. The Shareholding Pattern and Corporate Governance Report are also filed electronically on NEAPS.

x) SEBI Complaints Redressal System ( SCORES):The investor complaints are redressed in a centralized web based complaints redressal system provided by SEBI.

xi) Designated Exclusive email-id: Company has designated the following e-mail-id exclusively for investor servicing. investor@mrpl.co.in

GENERAL SHAREHOLDERS INFORMATION

27th ANNUAL GENERAL MEETING

(i) Company Registration Details

The Company is registered in the State of Karnataka, India. The Corporate Identity Number (CIN) allotted to the Company by the Ministry of Corporate Affairs (MCA) is L85110KA1988GOI008959

(ii) Day, Date, Time and Venue :

Saturday 8th August, 2015 at 16:30 hrs,

Registered Office:  Mudapadav, Kuthethoor P.O.Via Katipalla, Mangalore –575 030

(iii) Financial Year :

01/04/2014 to 31/03/2015

(iv) Date of Book Closure :

03/08/2015 to 08/08/2015 (bothdays inclusive)

(v) Dividend Payment Date :

Not applicable

(vi) E-voting :

 The company has provided for remote e-voting facility to the shareholders in accordance with Clause 35B of Listing Agreement, Provisions of the Companies Act,2013 and the Rules made there under.

(vii) Listing on Stock Exchange

A) Equity Shares : ISIN: INE103A01014

1) Bombay Stock Exchange Limited

Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai - 400 001

Scrip Code : 500109

2) The National Stock Exchange of India Limited

Exchange Plaza, Bandra (E), Mumbai - 400 051

Trading Symbol : MRPL

B) Payment of Listing Fees :

Annual listing fee for the year 2015-16 has been paid by the Company to BSE and NSE.

C) Payment of DepositoryFees -:

Annual Custody fees for the year itory Fees 2015-16 are pending due to non re ceipt of bill from the Depositories.

(viii) Registrar and Transfer Agent:

M/s Link Intime India Private Limited., C - 13, Pannalal Silk Mills Compound, L.B.S Marg, Bhandup (W), Mumbai - 400 078

(ix) Share transfer system:

The transfer of shares in physical form is processed and completed by Registrar & Transfer Agent within a period of seven days from the date of receipt thereof provided all the documents are in order. In case of shares in electronic form, the transfers are processed by NSDL/CDSL through respective Depository Participants. In compliance with the Listing Agreement with the Stock Exchanges, a Practicing Company Secretary carries out audit of the System of Transfer and a certificate to that effect is issued.

(x) Share transfer system:

The transfer of shares in physical form is processed and completed by Registrar & Transfer Agent within a period of seven days from the date of receipt thereof provided all the documents are in order. In case of shares in electronic form, the transfers are processed by NSDL/CDSL through respective Depository Participants. In compliance with the Listing Agreement with the Stock Exchanges, a Practicing Company Secretary carries out audit of the System of Transfer and a certificate to that effect is issued.

(xi) Dematerialization of Shares and liquidity :

As on 31st March, 2015, 171,14,07,337 equity shares representing 97.65%, are in dematerialized form. Both the promoters, ONGC and HPCL are holding shares in dematerialized form.

xii) Outstanding GDR/ ADR/ Warrants or any convertible instruments, conversion date and impact on equity:

NIL

 (xiii) Refinery Location:

Mangalore Refinery and Petrochemicals Limited Mudapadav, Kuthethoor P.O.Via Katipalla, Mangalore - 575 030, Karnataka, India.

(xiv) Address for Correspondence:

REGISTERED OFFICE/ COMPANY'S INVESTOR RELATIONS CELL:

• Shri. Dinesh Mishra

Company Secretary, Compliance Officer & Chief

Investor Relation Officer

Mudapadav, Kuthethoor, P.O.Via Katipalla, Mangalore-575 030. Karnataka.

Tel.: 0824-2270400 Email: investor@mrpl.co.in   Website: www.mrpl.co.in  

• LGF, Mercantile House, 15, K. G. Marg, New Delhi-110001.

Tel.: 011-23463100 Email: irc.mrpl.co.in  

M/s. LINK INTIME INDIA (PVT) LTD., (R&T Agent) UNIT: MRPL

C-13 Pannalal Silk Mills Compound, L.B.S Marg, Bhandup (West), Mumbai- 400 078

Tel.: 022-25963838 / 25946970 Fax No.: 022-25946969

E-mail: mrplirc@linkintime.co.in   Website: www.linkintime.co.in