Your Company's Directors hereby present the Twenty Third Annual Report of Mahanagar GasLimited (the Company or MGL) along with the Audited Financial Statements for the FinancialYear ended March 31 2018.
1) Financial Performance
Your Company registered a turnover of Rs. 2453 Crores during the financial year2017-18. The Profit after Tax is Rs. 478 Crores for the financial year 2017-18 as comparedto Rs. 394 Crores for the financial year 2016-17.
The Company's financial performance for the year ended March 31 2018 is summarisedbelow:
| || ||( Rs. in Crores) |
|Particulars ||As on March 31 2018 ||As on March 31 2017 |
|a. Revenue from operations ||2453 ||2239 |
|b. Other Income ||58 ||53 |
|c. Profit before Depreciation and Finance cost ||838 ||697 |
|d. Depreciation and Amortisation Expenses ||111 ||95 |
|e. Finance cost ||- ||1 |
|f. Profit before Tax (PBT) [c-d-e] ||727 ||601 |
|g. Income Tax ||249 ||207 |
|h. Profit after Tax (PAT) [f-g] ||478 ||394 |
|i. Other Comprehensive Income ||1 ||(-1) |
|j. Total Comprehensive Income [h+i] ||479 ||393 |
|k. Balance of Profit for earlier years ||1741 ||1631 |
|l. Adjustment on conversion of 9% Unsecured Compulsorily Convertible Debentures into Equity Shares ||- ||(1) |
|m. Balance Available for appropriation (j+k-l) ||2220 ||2023 |
|Appropriations: || || |
|n. Dividend Paid || || |
|Final FY 2015-16 ||- ||156 |
|Interim- FY 2016-17 ||- ||78 |
|Final-FY 2016-17 ||107 ||- |
|Interim - FY 2017-18 ||79 ||- |
|o. Tax on Dividend ||38 ||48 |
|p. Total Appropriations (n+o) ||224 ||282 |
|q. Balance of profit carried in Balance Sheet[m-p] ||1996 ||1741 |
|Earning Per Share (Face value of Rs. 10.00 each) Basic and Diluted (RS. ) ||48.38 ||39.83 |
Based on the Company's performance the Directors are pleased to recommend for theapproval of the Shareholder a final dividend of Rs. 11.00 per share on the equity sharecapital of the Company for the year ended March 31 2018.
The Board of Directors in its meeting held on February 09 2018 declared an interimdividend of Rs. 8.00 per equity share for the financial year 2017-18 and the same has beenpaid to all the eligible shareholders as on record date February 21 2018.
The total dividend for the financial year ended March 31 2018 would accordingly beRs. 19.00 per equity share (normal dividend of Rs. 12.50 and special dividend of Rs. 6.50)of face value of Rs. 10.00 each.
3) State of Company's Affairs
Your Company's growth is on fast track and is poised for scaling newer heights in itschosen areas of operations.
A brief summary of the operations of the company is provided in the ManagementDiscussion & Analysis section forming part of this Annual Report.
Return on Capital Employed has increased from 21.97% in FY 2016-17 to 24.31% in FY2017-18 signifying sound return on investment.
4) Change in Share Capital
There is no change in the Authorised and Paid up Share Capital of the Company duringthe year.
5) Change in Promoter Shareholding
The stake of BG Asia Pacific Holdings Pte Limited (one of the promoter of the Company)reduced to 24% pursuant to sale of shares by them in the month of April 2018.
6) Number of Meetings of the Board
Six meetings of the Board of Directors were held during the year. For details ofmeetings of the Board please refer to the Corporate Governance Report which forms partof Annual report.
Details of meetings of the Board and its Committees along with the attendance of theDirectors therein have been disclosed as part of the Corporate Governance Report.
The intervening gap between the meetings was in compliance with the Companies Act 2013("Act") and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("SEBI Listing Regulations").
7) Statement on Declaration of Independence
All the Independent Directors of the Company have provided their declarations that theymeet the criteria of Independence as provided in Section 149 (6) of the Act and Regulation16 (1) (b) of the SEBI Listing Regulations.
8) Reporting of Frauds by Auditors to the Company
During the year there has been no reporting of any frauds by the Auditors to the AuditCommittee or the Board as per Section 143 (12) of the Act.
9) Details in Respect of Adequacy of Internal Financial Controls with Referenceto the Financial Statements
The Directors confirm having laid down Internal Financial Controls and that suchInternal Financial Controls are adequate and were operating effectively.
10) Directors Responsibility Statement
Pursuant to the provisions of Sections 134 (3) (c) and 134 (5) of the Act theDirectors to the best of their knowledge and ability confirm that:-
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitand loss of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
11) Listing of Shares
Equity Shares of your Company are continued to be listed at both the BSE Limited andNational Stock Exchange of India Limited. Your Company has paid listing fees for FY2018-19.
The international Security Identification Number is (ISIN) INE002S01010. The details ofshare trading price have been provided under Corporate Governance Report which forms partof Annual Report. Your Company has complied with all SEBI LODR Regulations.
12) Directors and Key Managerial Personnel
During the year under review Mr. Virendra Nath Datt has been nominated by GAIL (India)Limited as its Nominee on the Board of your Company in place of Dr. Ashutosh Karnatak.Accordingly the Board of Directors in its meeting held on May 26 2017 approvedappointment of Mr. Virendra Nath Datt as Additional Director with effect from May 28 2017and appointment of Mr. Virendra Nath Datt was approved by shareholders in the TwentySecond Annual General Meeting held on September 25 2017.
Further Mr. Sunil Porwal Additional Chief Secretary (Industries) has been nominatedby Government of Maharashtra as its Nominee on the Board of your Company in place of Mr.Apurva Chandra. Accordingly the Board of Directors in its meeting held on May 26 2017approved appointment of Mr. Sunil Porwal and the appointment of Mr. Sunil Porwal wasapproved by shareholders in the Twenty Second Annual General Meeting held on September 252017.
Mr. Akhil Mehrotra Director on the Board of the Company was appointed as the Chairmanof the Company for a tenure of two years with effect from May 28 2017.
The term of office of Mr. Raj Kishore Tewari as an Independent Director expired onMarch 04 2018. The Board of Directors on recommendation of the Nomination andRemuneration Committee has recommended reappointment of Mr. Raj Kishore Tewari as anIndependent Director of the Company for a second term commencing from March 05 2018 uptoMarch 31 2021 subject to approval of the Members. Business with respect to hisreappointment is one of the agenda of the ensuing Twenty-third Annual General Meeting ofthe Company.
Further Mr. Premesh Kumar Jain was appointed as the Additional Director (IndependentCategory) for a period commencing from April 9 2018 till March 31 2021 subject to theapproval of the Members. Business with respect to his appointment is one of the agendas ofthe ensuing Twenty-third Annual General Meeting of the Company.
Pursuant to the provisions of Section 149 of the Act Mr. Arun Balakrishnan Mr.Santosh Kumar Mr. Raj Kishore Tewari Mrs. Radhika Harhibhakti and Mr. Premesh Kumar Jainare Independent Directors of the Company. There has been no change in the circumstancesaffecting their status as an Independent Director during the year.
Mr. Satish Gavai Additional Chief Secretary (Industries) has been nominated byGovernment of Maharashtra as its Nominee on the Board of your Company in place of Mr.Sunil Porwal. Accordingly the Board of Directors in its meeting held on July 31 2018approved appointment of Mr. Satish Gavai as an Additional Director with effect from July31 2018 and shall hold office upto the date of the ensuring General Meeting.
Brief profiles of the directors proposed to be appointed/ re-appointed are annexed tothe Notice convening Annual General Meeting forming part of this Annual Report. Theaforesaid appointments were based on the recommendation of the Nomination and RemunerationCommittee of the Board ("NRC").
During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company other than sitting fees commission andreimbursement of expenses incurred by them for the purpose of attending meetings of theCompany.
B. Cessation of Directors (other than KMP)
Due to expiry of tenure Dr. Ashutosh Karnatak resigned from the position of Chairmanand Director from the Board of the Company with effect from May 27 2017.
Further Mr. Apurva Chandra resigned from the Board of the Company with effect from May23 2017.
Mr. Sunil Porwal Director has resigned from the position of Director with effect fromJuly 31 2018 owing to his transfer to another department by Government of Maharashtra.
Further due to expiry of tenure Mr. Jainendar Kumar Jain has ceased to act asDirector on the Board of the Company with effect from March 04 2018.
The Board places on record its deep appreciation and gratitude for the substantialcontribution and valuable advice offered by them during their tenure as the Directors ofthe Company.
C. Key Managerial Personnel ("KMP")
BG Asia Pacific Holdings Pte. Ltd has nominated Mr. Goutam Ghosh as a Whole-timeDirector designated as Technical Director of your Company in line with Articles ofAssociation of the Company and pursuant to the provisions of the Nomination andRemuneration Policy of the Company with effect from November 20 2017 on non-retiringbasis subject to the approval of Members. Mr. Ghosh is also appointed as one of the KMP ofthe Company. Business with respect to his appointment is one of the agendas of the ensuingTwenty-third Annual General Meeting of the Company.
Mr. Sanjib Datta was nominated by GAIL (India) Limited as a Managing Director on theBoard of the Company Accordingly Mr. Sanjib Datta was appointed as the AdditionalDirector and Managing Director of your Company in line with Articles of Association of theCompany and pursuant with the provisions of the Nomination Policy of the Company witheffect from May 30 2018 on non-retiring basis subject to the approval of Members. Mr.Datta is also appointed as one of the KMP of the Company. Business with respect to hisappointment is one of the agendas of the ensuing Twenty-third Annual General Meeting ofthe Company.
Further the following KMP of the Company resigned from their post during the yearunder review and between the end of FY 2017-18 and the date of this report:-
Ms. Susmita Sengupta resigned from the post of Whole- Time Director designated asTechnical Director with effect from November 06 2017 thus ceasing to be one of the KMPof the Company. The Board places on record its deep appreciation and gratitude for thevaluable contribution and advice offered by Ms. Sengupta during her tenure as theTechnical Director of the Company.
Mr. Rajeev Kumar Mathur was re-appointed as Managing Director of the Company witheffect from September 29 2017 on being re nominated by GAIL (India) Limited (GAIL).
Later Mr. Rajeev Kumar Mathur resigned from the post of Managing Director of theCompany with effect from May 30 2018 owing to withdrawal of his nomination by GAIL andrepatriation to GAIL Head to be one of the KMP of the Company. The Board places on recordits deep appreciation and gratitude for the substantial contribution and valuable adviceoffered by Mr. Mathur during his tenure as the Managing Director of the Company. Howeverbusiness with respect to approval of terms of his re-appointment period and remunerationfrom September 29 2017 till May 30 2018 is one of the agendas of the ensuingTwenty-third Annual General Meeting of the Company.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company as on date are:
Mr. Sanjib Datta Managing Director Mr. Goutam Ghosh Whole-Time Director designatedas Technical Director Offi. Alok Mr.SunilRanadeChiefFinancial Mishra CompanySecretary & Compliance
D. Retirement By Rotation
In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Virendra Nath Datt - Non-executive Director of the Company is due to retireby rotation at the ensuing Twenty-third Annual General Meeting and being eligible hasoffered himself for re-appointment. Business with respect to his reappointment is one ofthe agenda of the ensuing Twenty-third Annual General Meeting of the Company.
13) Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and the SEBI Listing Regulationsthe Board has to evaluate its own performance and that of its Committees and Individualdirectors ("Evaluation").
To enable such evaluation an evaluation framework has been adopted by the Companywhich is formulated with a view to provide a more regulated approach for the evaluationand which lays down overall guidelines and processes to be adopted for the evaluation ofperformance. The NRC and Board have approved the Evaluation Framework.
Pursuant to the provisions of the Act and the SEBI Listing Regulations the Directorshave carried out the annual performance evaluation of the Board Independent DirectorsNon-executive Directors Executive Directors and the Committees of the Board. TheDirectors were satisfied with the evaluation results which reflected the overallengagement of the Individual Directors the or material Board orders as a whole were andpassed its Committees with the Company. Performance evaluation criteria for IndependentDirectors have been disclosed as a part of the Corporate Governance Report.
14) Statutory Auditors & Auditors Report
Pursuant to the provisions of Section 139 of the Act read with Companies (Audit andAuditors) Rules 2014 as amended from time to time M/s. S R B C & Co. LLP CharteredAccountants (Firm Registration No. 324982E/E-300003) were appointed as statutory auditorsfrom the conclusion of the twenty-second Annual General Meeting (AGM) held on September25 2017 till the conclusion of the twenty-seventh AGM of the Company in 2022 subject tothe ratification of their appointment at every AGM as applicable. Accordingly necessaryresolution for ratification of appointment of auditors is included in the Notice for thisAGM.
There has been no qualification reservation or adverse remark given by the StatutoryAuditors in their Report for the year under review.
15) Secretarial Auditor
M/s. Mehta & Mehta Practicing Company Secretaries were appointed as SecretarialAuditor of the Company to conduct Secretarial Audit for the year under review pursuantto the provisions of Section 204 of the Act.
The Secretarial Audit report does not contain any qualification reservations oradverse remark. The Secretarial Audit Report given by the Secretarial Auditor of theCompany is annexed as Annexure I to this report.
16) Cost Auditor
Your Company makes and maintains cost records as specified by Central Government underSection 148(1) of the Companies Act 2013. M/s. Dhananjay V. Joshi & Associates CostAuditors were appointed as Cost Auditor for the audit of cost records maintained by theCompany for the financialyear ended March 31 2017. The Cost Audit Report was filed onSeptember 07 2017 within the due date. In respect of the Financial Year ended on March31 2018 M/s. Dhananjay V. Joshi & Associates Cost Auditors were re-appointed. Thedue date for filing the Cost Audit Report is September 27 2018 (within 180 days from theend of financial year).
17) Details of Significant and Material Orders Passed by the Regulators or Courts orTribunals Impacting the Going Concern Status and Company's Operations in Future
No significant Regulators or Courts or Tribunals which impact the going concern statusoperations of your Company in future.
18) Material Changes Affecting the Company
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and date of this report. There has beenno change in the nature of business of the Company.
19) Statement on Compliances of Applicable Secretarial Standards
Your Directors hereby confirm that during the year the Company has been compliant withthe applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia.
20) Particulars of Contracts or Arrangements with Related Parties Referred to inSub-Section (1) of Section 188 of the Act in the Prescribed Form
Pursuant to the provisions of Section 188(1) of the Act read with Companies (Meetingsof Board and its Powers) Rules 2014 and Regulation 23 of the SEBI Listing Regulationsthe Company has entered into related party transactions.
Accordingly Form AOC-2 prescribed under the provisions of Section 134(3) (h) of theAct and Rule 8 of the Companies (Accounts) Rules 2014 for disclosure of details ofRelated Party Transactions has been provided as an Annexure II of the Directors'Report.
All Related Party Transactions entered into during the year under review were approvedby the Audit Committee and Board from time to time as per the applicable provisions ofthe Act and the SEBI Listing Regulations.
Further pursuant to the provisions of the Act and the SEBI Listing Regulations theBoard has on recommendation of its Audit Committee adopted a Policy on Related PartyTransactions and the said policy is available on the website of the Company i.e.www.mahanagargas.com.
21) Corporate Governance
Your Company is committed to follow the best practices of Corporate Governanceincluding the requirements under the SEBI Listing Regulations and the Board is responsibleto ensure the same from time to time.
The report on Corporate Governance as stipulated under the Listing Regulations forms avital part of this Report.
Company The requisite confirming compliance with the Governance is attached to thereport on Corporate Governance.
22) Business Responsibility Report
As per Regulation 34 of the SEBI Listing Regulations the Business ResponsibilityReport describing the initiatives taken by the Company from an environmental social andgovernance outlook is attached as a part of the Annual Report.
23) Management Discussion and Analysis
In terms of the provisions of Regulation 34 of the Listing Regulations theManagement's Discussion and Analysis is set out in this Annual Report.
24) Vigil Mechanism and Whistle Blower Policy
The Board has adopted a Policy thereby enumerating the Vigil Mechanism for Directorsand Employees of your Company to report concerns about unethical behaviour actual orsuspected fraud or violation of the Code of Conduct of the Company and to voice genuineconcerns or grievances about unprofessional conduct without fear of reprisal. In order toprovide a conducive open and accountable place of work to its employees the Board hasformulated Whistle Blower Policy to provide a forum to the employees for timely reportingof serious concerns with any aspect of Company's work. Adequate safeguards are providedagainst victimization to those who avail of the mechanism and under the policy and directaccess to the Chairperson of the Audit Committee is provided to them. The Vigil Mechanismand Whistle Blower Policy are also available on the website of the Company i.e.www.mahanagargas.com/investors/Policies.aspx.
25) Dividend Distribution Policy
The Company has in compliance with SEBI Listing Regulations formulated a DividendDistribution Policy. Objective of this policy is to provide the dividend distributionframework to the Stakeholders of the Company and it sets out various internal and externalfactors which shall be considered by the Board in determining the dividend payout.
The policy is annexed as Annexure III to this report and is also available onthe website of the Company i.e. www.mahanagargas.com.
26) Audit Committee
The details pertaining to the composition of the Audit conditions Committeeof Corporatealong with dates of meetings attendance and Terms of Reference has been disclosed in theCorporate Governance Report which is a part of the Annual Report.
27) Nomination and Remuneration Committee
The Company's policy on directors' appointment and remuneration along with dates ofmeetings attendance Terms of Reference and other matters provided in Section 178(3) ofthe Act has been disclosed in the Corporate Governance Report which is a part of AnnualReport. https://www.mahanagargas.com/UploadedFiles/_MGL-Nomination_and_Remuneration_Policy_329e2e5b7e.pdf
28) Stakeholders Relationship Committee
The purpose of Stakeholders Relationship Committee is to consider and resolve thegrievances of security holders The Terms of reference has been disclosed in the CorporateGovernance Report which is a part of the Annual Report.
29) Corporate Social Responsibility
The Corporate Social Responsibility Committee has formulated and recommended to theBoard a CSR Policy signifying the activities to be undertaken by the Company which hasbeen approved by the Board.
The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure IV of this report in the format prescribed in the Companies(Corporate Social Responsibility) Rules 2014. For other details regarding CSR Committeeplease refer to the Corporate Governance Report which is a part of this report. Thepolicy is available on https://mahanagargas.com/investors/Policies.aspx
In accordance with the vision of the Company its CSR initiatives focuses towardsenvironment protection education development of healthy and enlightened citizens socialupliftment and sustainable community development through its service conduct and socialinitiatives.
30) Disclosures as per the Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013
Your Company is committed towards providing a work environment that is professional andmature free from enmity and one that reinforces our value of integrity that includesrespect for the individual. Pursuant to the same the Company has complied with theprovisions relating to the constitution of Internal Complaints Committee (ICC) under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.The members of this committee comprises of representatives from the Company and externalexperts/NGOs.
During the year under review no cases were filed pursuant to the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013. However 2 (two)separate complaints addressed to the Grievance Handling Officer were forwarded to ICC. TheICC after hearing both the complainants and respondent concluded that the complaint wasa case of office grievance and not a complaint of Sexual harassment.
31) Extract of Annual Return
As per the requirements of Section 92(3) of the Act the extract of the annual returnis given in Annexure V in the prescribed Form No. MGT-9 which is a part of theAnnual Report.
32) Particulars of Employees
Disclosures with respect to the remuneration of Directors and employees with regard tothe ratio of remuneration of each director to the median of employees remuneration asrequired under Section 197 (12) of the Act and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed as Annexure VI to theAnnual Report.
There are no employees drawing remuneration of Rupees One Crore and Two Lakhs or moreor posted for part of the year and in receipt of Rupees Eight Lakhs and Fifty Thousand ormore a month under the Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 ("said rules").
During the year under review the Company has not accepted any fixed deposits from thepublic falling under Section 73 of the Act read with the Companies (Acceptance ofDeposits) Rules 2014. Thus as on March 31 2018 there were no deposits which wereunpaid or unclaimed and due for repayment hence there has been no default in repaymentof deposits or payment of interest thereon during the year.
34) Awards and Recognitions
Your Company has been a proud recipient of the following Awards and Recognitions duringthe year under review:
I. Won the Golden Globe Tigers Award 2017 under the category of Support and improvementin Quality of Education.
II. Won the CSR Leadership Summit & Awards under the category of Best CSR practicesfor Children Welfare.
III. Won the National CSR Leadership Congress & Awards under the category of BestCSR Impact Initiatives (World CSR Day) 2017.
IV. Won the Middle East CSR Leadership Awards 2017 for Support and Improvement InQuality of Education.
V. Won the Social Change Award under the category of Animal Welfare.
VI. Won the Innov Award 2017 for outstanding achievement in CSR.
35) Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
Your Company determinedly makes all efforts to conserve energy across all itsoperations. Information on conservation of energy technology absorption and foreignexchange earnings and outgo required to be disclosed pursuant to Section 134(3)(m) of theAct read with the Companies (Accounts) Rules 2014 is given in Annexure VII to thisReport.
The Board of Directors wishes to place on record their deep sense of gratitude to theMinistry of Petroleum & Natural Gas Government of India Petroleum & Natural GasRegulatory Board Government of Maharashtra (GOM) Municipal Corporations of GreaterMumbai Navi Mumbai Thane Mira-Bhayander Kalyan-Dombivali Raigad other State andCentral Government Authorities Mumbai Metropolitan Regional Development Authority(MMRDA) Maharashtra Industrial Development Corporation (MIDC) Police and Fire BrigadeAuthorities Bankers Contractors Consultants Consumers and Local Citizens for theirwhole hearted support and co-operation. The Board wishes to especially thank andacknowledge the valuable guidance and support received from time to time from itsStakeholders GAIL (India) Limited Shell Group and GOM for their support. The Board ofDirectors expresses their deep appreciation for the commitment and dedication put in byevery employee of the Company resulting in excellent results and achievement of yourCompany.
For and on behalf of the Board of Directors
|Place : Mumbai ||(Akhil Mehrotra) |
|Date : July 31 2018 ||Chairman |