Petronet LNG Ltd
Chairman Speech
REPORT ON CORPORATE GOVERNANCE
FORMING PART OF DIRECTORS' REPORT
A Brief Statement on Company's Philosophy on Code of Corporate Governance
The Philosophy of the Company in relation to Corporate Governance is to ensure
transparent disclosures and reporting that conforms fully to laws, regulations and
guidelines, and to promote ethical conduct throughout the organization with the primary
objective of enhancing shareholders' value while being a responsible corporate citizen.
The Company firmly believes that any meaningful policy on Corporate Governance must
provide empowerment to the executive management of the Company, and simultaneously create
a mechanism of checks and balances which ensures that the decision-making power vested in
the executive management is used with care and responsibility to meet shareholders' and
stakeholders' aspirations. The Company is committed to attain the highest standards of
Corporate Governance.
Board of Directors
The total strength of the Board as on 31st March, 2013, was thirteen Directors as
detailed herein below:
| S No |
Name |
Designation |
Category (Whole-time / Non-executive / Independent) |
| 1 |
Shri Vivek Rae |
Chairman, Secretary, Govt. of India, (MOP&NG) |
Independent |
| 2 |
Dr. A. K. Balyan |
Managing Director & CEO |
Whole-time |
| 3 |
Shri R. K. Garg |
Director (Finance) |
Whole-time |
| 4 |
Shri Rajender Singh |
Director (Technical) |
Whole-time |
| 5 |
Shri B. C. Tripathi |
Director, Nominee of GAIL |
Non-executive |
| 6 |
Shri R. K. Singh |
Director, Nominee of BPCL |
Non-executive |
| 7 |
Shri Sudhir Vasudeva |
Director, Nominee of ONGC |
Non-executive |
| 8 |
Shri A. M. K. Sinha |
Director, Nominee of IOCL |
Non-executive |
| 9 |
Mr. Dominique PELLOUX-PRAYER |
Director, Nominee of GDF International |
Non-executive |
| 10 |
Shri Tapan Ray |
Director, Nominee of GMB/GOG |
Independent |
| 11 |
Shri B. C. Bora |
Director |
Independent |
| 12 |
Shri Ashok Sinha |
Director |
Independent |
| 13 |
Shri R. Ram Mohan |
Director, Lender's Nominee |
Independent |
Board Meetings
During the year 2012-13, four Board Meetings were held on 24th April, 31st July, 19th
October, 2012, and 13th January, 2013. The attendance of each Director in the Board
Meetings and the last Annual General Meeting is detailed herein below:
| Name of Directors |
Designation |
Number of Board Meetings held during the year 2012-13 |
Number of Board Meetings attended during the year 2012-13 |
Attendance at last Annual General Meeting held on 4th July, 2012 |
| Executive Directors |
|
|
|
|
| Dr. A. K. Balyan |
Managing Director & CEO |
4 |
4 |
yes |
| Shri R. K. Garg |
Director (Finance) |
4 |
4 |
yes |
| Shri C. S. Mani (upto 19th October, 2012) |
Director (Technical) |
4 |
3 |
yes |
| Shri Rajender Singh ( w.e.f. 14th November, 2012) |
|
|
1 |
NA |
| Non-executive Directors |
|
|
|
|
| Shri B. C. Tripathi |
Nominee Director of GAIL |
4 |
2 |
No |
| Shri R. K. Singh |
Nominee Director of BPCL |
4 |
2 |
No |
| Shri Sudhir Vasudeva |
Nominee Director of ONGC |
4 |
3 |
No |
| Shri A. M. K. Sinha |
Nominee Director of IOCL |
4 |
3 |
No |
| Mr. Dominique PELLOux-PRAYER *(Two Board meetings attended by Mr. Eric Ebelin as an
Alternate Director) |
Nominee Director of GDF International |
4 |
4 |
No |
| Non-executive Independent Directors |
|
|
|
|
| Shri G. C. Chaturvedi (upto 31st January, 2013) |
Chairman |
4 |
3 |
yes |
| Shri Vivek Rae (w.e.f. 21st February, 2013) |
|
|
NIL |
NA |
| Shri Tapan Ray |
Independent Director |
4 |
2 |
No |
| Shri B. C. Bora |
Independent Director |
4 |
4 |
yes |
| Shri Ashok Sinha |
Independent Director |
4 |
4 |
yes |
| Shri R. Ram Mohan (w.e.f. 19th October, 2012) |
Independent Director |
4 |
1 |
NA |
Detail of Directorship / Membership / Chairmanship on the Board / Committees of the
other Companies and Shareholding in the Company as on 31.03.2013
| Name |
No. of other Companies in which
Directorship / Chairmanship is held |
No. of Membership / Chairmanship held
in Committees of Board of other Companies |
No. of Shares held in the Company |
|
Directorship |
Chairmanship |
Membership |
Chairmanship |
|
| Shri Vivek Rae |
NIL |
1 |
NIL |
NIL |
NIL |
| Dr. A. K. Balyan |
2 |
NIL |
NIL |
NIL |
400 |
| Shri R. K. Garg |
2 |
NIL |
NIL |
NIL |
5300 |
| Shri Rajender Singh |
NIL |
NIL |
NIL |
NIL |
NIL |
| Shri B. C. Tripathi |
NIL |
4 |
1 |
NIL |
NIL |
| Shri R. K. Singh |
1 |
5 |
NIL |
1 |
400 |
| Shri Sudhir Vasudeva |
NIL |
7 |
NIL |
NIL |
800 |
| Shri A. M. K. Sinha |
1 |
1 |
NIL |
NIL |
600 |
| Mr. Dominique PELLOlix-PRAYER |
1 |
NIL |
NIL |
NIL |
NIL |
| Shri Tapan Ray |
11 |
1 |
3 |
2 |
NIL |
| Shri B. C. Bora |
1 |
NIL |
NIL |
NIL |
NIL |
| Shri Ashok Sinha |
2 |
NIL |
2 |
Nil |
NIL |
| Shri R. Ram Mohan |
NIL |
NIL |
NIL |
NIL |
NIL |
Note: -
As per Clause 49, the above details are required to be disclosed only for the following
three committees:
1 Audit Committee
2 Shareholders/Investors Grievance Committee
3 Remuneration Committee
Remuneration paid to Whole-time Directors and to Non-executive Directors during the
year ended 31st March, 2013
The remuneration to Whole-time Directors is being paid as per terms of their
appointment. The Company pays remuneration by way of salary, perquisites, allowances and
commission to Whole-time Directors. The commission is calculated with reference to profits
of the Company in a particular year and is determined by the Board and Shareholders,
subject to overall ceiling as prescribed in the Companies Act, 1956.
The details of remuneration paid to the Whole-time Directors during the year are stated
herein below:
(In Rupees)
| S. No. |
Name |
Designation |
Salaries & Allowances |
Contribution to PF & Gratuity Fund |
Other Benefits & Perks |
Commission payable on Profit for the year 2012-13 |
Total |
| 1 |
Dr. A. K. Balyan |
Managing Director & CEO |
50,82,552 |
2,89,548 |
6,22,429 |
20,00,000 |
79,94,529 |
| 2 |
Shri C. S. Mani |
Director (Technical) (upto 19th October, 2012) |
30,18,243 |
7,04,091 |
15,34,806 |
11,06,849 |
63,63,989 |
| 3 |
Shri R. K. Garg |
Director (Finance) |
38,51,363 |
2,01,701 |
7,03,904 |
20,00,000 |
67,56,968 |
| 4 |
Shri Rajender Singh |
Director (Technical) (w.e.f. 14th November, 2012) |
12,58,444 |
69,048 |
2,18,992 |
7,56,164 |
23,02,648 |
The details of the sitting fees paid to Non-executive Directors or their nominated
Organization / Company during the year ended 31st March, 2013, is as detailed below:
| S. No. |
Name |
Sitting Fees paid during 2012-13 (Rs.) |
| 1 |
Mr. Dominique Pelloux - Prayer/ Mr. Eric Ebelin |
1,00,000 |
| 2 |
Government of India |
80,000 |
| 3 |
Bharat Petroleum Corporation Ltd. |
80,000 |
| 4 |
Oil & Natural Gas Corporation Ltd. |
1,20,000 |
| 5 |
Indian Oil Corporation Ltd. |
1,80,000 |
| 6 |
GAIL (India) Ltd. |
60,000 |
| 7 |
Gujarat Maritime Board |
40,000 |
| 8 |
Shri B. C. Bora |
2,00,000 |
| 9 |
Shri Ashok Sinha |
2,20,000 |
| 10 |
Shri R. Ram Mohan (w.e.f. 19th October, 2012) |
20,000 |
*Alternate Director to Mr. Dominique Pelloux-Prayer
In addition to the above, Commission on Profits is also payable to the following
Independent Directors:
| S. No. |
Name |
Commission payable on Profit for the year 2012-13 (Rs.) |
| 1 |
Shri B. C. Bora |
7,50,000 |
| 2 |
Shri Ashok Sinha |
7,50,000 |
Terms of appointment of Whole-time Directors
The Company has the following Whole-time Directors as on 31st March, 2013:
1. Dr. A. K. Balyan, Managing Director & CEO
2. Shri R. K. Garg, Director (Finance)
3. Shri Rajender Singh, Director (Technical)
The initial tenure of Whole-time Director(s) is for a period of five years w.e.f. their
respective date of appointment. However, the tenure of Whole-time Directors may further be
extended by re-appointing them, subject to approval by Members in the Annual General
Meeting.
The appointment of Whole-time Directors is subject to termination by a three-month
notice in writing by either party.
Audit Committee
The Audit Committee comprises the following Directors as on 31st March, 2013:
1 Shri Ashok Sinha, Chairman
2 Shri B. C. Bora, Member
3 Shri A. M. K. Sinha, Member
4 Shri R. Ram Mohan, Member
All the Members of Audit Committee are Non-executive Directors and three out of four
Members are Independent Directors, namely Shri Ashok Sinha, Shri B. C. Bora and Shri R.
Ram Mohan. The quorum of the Audit Committee is two Members.
The Chairman of the Audit Committee also attended the last Annual General Meeting of
the Company held on 4th July, 2012.
The Company Secretary is the Secretary of the Audit Committee.
Detail of Meetings of Audit Committee held during the year
| Member |
No. of Meetings Held |
No. of Meeting Attended |
| Shri Ashok Sinha |
4 |
4 |
| Shri B. C. Bora |
4 |
4 |
| Shri A. M. K. Sinha |
4 |
3 |
| Shri R. Ram Mohan, Independent Director (Appointed as member w.e.f. 13th January,
2013) |
4 |
Nil |
Terms of Reference of Audit Committee
The primary function of the Audit Committee is to assist the Board of Directors in
fulfilling its oversight responsibilities by reviewing the financial reports and other
financial information provided by the Company to any Government Body or to the investors
or the public; the company's system of internal controls regarding finance, accounting and
legal compliances that the Management and the Board have established.
The terms of reference of Audit Committee include inter-alia the following:
• Oversee the Company's financial reporting process and disclosure of its
financial information to ensure that the financial statement is correct, sufficient and
credible.
• Recommending the appointment and removal of statutory and internal auditors
(wherever required), fixation of audit fee and also approval for payment for any other
services.
• Reviewing with the Management the quarterly, half-yearly and the annual
financial statements before submission to the Board, focusing primarily on:
- Any changes in accounting policies and practices.
- Major accounting entries based on exercise of judgment by the Management.
- The going-concern assumption.
- Compliance with accounting standards.
- Compliance with Stock Exchange(s) and Legal requirements concerning financial
statements.
- Any related party transactions, i.e. transactions of the Company of material nature,
with Promoters or the Management, or relatives etc. that may have potential conflict with
the interest of the Company at large.
• Reviewing with the Management, statutory and internal auditors, the adequacy and
compliance of internal control systems.
• Reviewing the adequacy of internal audit function, reporting structure coverage
and frequency of internal audit.
• Discussion with internal auditors about any significant findings and follow-up
thereon.
• Reviewing the findings of any internal investigations by the internal auditors
into matters where they are suspected of any fraud or irregularity or a failure of
internal control systems of a material nature and reporting the matter to the Board.
• Discussion with statutory auditors about the scope of audit as well as have
post-audit discussion to ascertain any area of concern.
• Reviewing the company's financial and risk-management policies.
Shareholders' / Investors' Grievance Committee
As on 31st March, 2013, the Shareholders'/Investors' Grievance Committee comprises the
following Directors:
1 Shri Ashok Sinha, Chairman
2 Shri A. M. K. Sinha, Member
3 Shri R. K. Garg, Member
4 Shri Rajender Singh*, Member
The Company Secretary is the Compliance Officer of the Company.
One Meeting of the Shareholders'/Investors' Grievance Committee was held on 13th
January, 2013 which was attended by all the memebers of the committee.
* (Appointed as member w.e.f. 13th January,2013)
Details of Complaints received and redressed during the year ended 31st March, 2013
2 complaints were pending as on 1st April, 2012. 1,206 complaints were received and
1,203 complaints were resolved during the year. Only 5 complaints were pending as on 31st
March, 2013.
Share Transfer Committee
The Share Transfer Committee was constituted to deal with the cases like
re-materialization of shares, transfer, transposition and splitting of shares in physical
mode. The Share Transfer Committee comprises Whole-time Directors, namely,
1 Dr. A. K. Balyan, Managing Director & CEO
2 Shri R. K. Garg, Director (Finance)
3 Shri Rajender Singh, Director (Technical)
Dr. A. K. Balyan, Managing Director & CEO, is the Chairman of the Committee.
Remuneration Committee
The Remuneration Committee was constituted by the Board to determine the Remuneration
Package for Executive Directors. The following Directors are the Members of the
Remuneration Committee as on 31st March, 2013:
1. Shri Ashok Sinha, Chairman
2. Shri B. C. Bora, Member
3. Shri Sudhir Vasudeva, Member
One meeting of the Remuneration Committee was held on 24th April, 2012.
Risk Assessment & Minimisation Procedure
The Company has laid down procedures to inform the Members of the Board about the risk
assessment and minimization procedure. A Risk Management Committee consisting of
Whole-time Directors periodically reviews the procedures to ensure that Executive
Management controls risk through properly defined framework. The risk assessment framework
encompassed, inter-alia, methodology for assessing risks on ongoing basis, risk
prioritization, risk mitigation, monitoring plan and comprehensive reporting system.
Legal Compliance Reporting
As required under Clause 49 of the Listing Agreement, the Board periodically reviews
compliances of various laws applicable to the Company.
Annual General Meetings (AGMs)
The details of last three Annual General Meetings are as mentioned below:
| Year |
2009-10 |
2010-11 |
2011-12 |
| Date & Time |
24th June, 2010 at 10:00 AM. |
30th June, 2011 at 10:00 AM. |
4th July, 2012 at 10:00 AM |
| Venue |
Air Force Auditorium, Subroto Park, Dhaula Kuan, New Delhi-110010 |
Air Force Auditorium, Subroto Park, Dhaula Kuan, New Delhi-110010 |
Air Force Auditorium, Subroto Park, Dhaula Kuan, New Delhi-110010 |
| Details of Special Resolutions |
1) Appointment of Statutory Auditors |
1) Appointment of Statutory Auditors |
1) Appointment of Statutory Auditors |
|
2) Amendment of Articles of Association |
2) Approval for payment of Commission on profit to Directors |
2) Approval for Employee Stock Option Scheme |
| Resolutions passed through Postal Ballot |
Nil |
Nil |
Nil |
Extraordinary General Meeting(s) (EGMs)
During the year 2012-13, no Extraordinary General Meeting of the Members of the Company
was held.
Disclosure
During the year 2012-13, no material transactions with the Directors or the Management,
their subsidiaries or relatives etc. have taken place, which have potential conflict with
the interest of the Company.
Compliance
There has been no non-compliance of the provisions/requirements of Stock
Exchanges/SEBI. No penalties/strictures have been imposed on the Company by the Stock
Exchanges or SEBI or any other statutory authority on any matter relating to the Capital
Market.
Means of Communication
The Company's website (www.petronetlng.com) has updated details about the Company, its
project status, Shareholding pattern on quarterly basis, etc. The financial results are
being posted on the Company's website. The Company also has an exclusive e-mail ID
(investors@petronetlng.com) for investors to contact the Company in case of any
information and grievances. The financial results were also published in National Daily
Newspapers in terms of Listing Agreement.
General Shareholders Information Annual General Meeting (AGM)
| Day & Date |
4th July, 2013 |
| Time |
10:00 AM |
| Venue |
Air Force Auditorium, Subroto Park, Dhaula Kuan, New Delhi-110010 |
| Date of Book Closure |
24th June, 2013, to 4th July, 2013 (Both days inclusive) |
Dividend Payment Date
The dividend, if approved by the Members of the Company, will be paid on or after 16th
July, 2013.
Financial Calendar
Petronet LNG Ltd. follows the financial year from April to March. The Un-audited
Financial Results for the first three quarters and the Audited Financial Results for the
year ended 31st March, 2013, were taken on record and approved by the Board in its
meeting(s) held on the following dates:
| Quarter Ended |
Date of Board Meeting |
| April - June, 2012 |
31st July, 2012 |
| July - September, 2012 |
19th October, 2012 |
| October-December, 2012 |
13th January, 2013 |
| Year Ended |
|
| 31st March, 2013 |
30th April, 2013 |
Listing on Stock Exchange(s)
| Name of Stock Exchanges |
Stock Code |
| The Stock Exchange, Mumbai (BSE) |
532522 |
| The National Stock Exchange of India Limited (NSE) |
PETRONET |
Market Price Data: High and Low during each month in the last financial year
| Month |
BSE (in Rs.) |
NSE (in Rs.) |
|
High |
Low |
High |
Low |
| April, 2012 |
175.00 |
135.20 |
174.90 |
135.00 |
| May, 2012 |
145.25 |
122.25 |
145.35 |
122.00 |
| June, 2012 |
149.50 |
125.40 |
149.80 |
125.30 |
| July, 2012 |
150.65 |
139.55 |
150.80 |
139.25 |
| August, 2012 |
155.45 |
144.60 |
155.40 |
144.55 |
| September, 2012 |
172.95 |
152.20 |
172.65 |
150.65 |
| October, 2012 |
171.20 |
157.50 |
180.00 |
157.25 |
| November, 2012 |
175.15 |
153.90 |
175.35 |
153.65 |
| December, 2012 |
165.70 |
153.55 |
165.70 |
157.00 |
| January, 2013 |
168.80 |
150.90 |
168.70 |
150.55 |
| February, 2013 |
156.20 |
140.00 |
156.30 |
139.60 |
| March, 2013 |
150.80 |
127.15 |
150.75 |
126.75 |
Distribution Schedule as on 31st March, 2013
| Category (Amount) |
No. of Cases |
% of Cases |
Total Shares |
Amount in Rs. |
% of Amount |
| Up to - 5000 |
3,26,964 |
89.51 |
5,06,24,071 |
50,62,40,710 |
6.75 |
| 5001 - 10,000 |
24,974 |
6.84 |
1,95,93,154 |
19,59,31,540 |
2.61 |
| 10,001 - 20,000 |
8,381 |
2.29 |
1,23,04,032 |
12,30,40,320 |
1.64 |
| 20,001 - 30,000 |
1,923 |
0.53 |
49,29,379 |
4,92,93,790 |
0.66 |
| 30,001 - 40,000 |
821 |
0.22 |
29,30,880 |
2,93,08,800 |
0.39 |
| 40,001 - 50,000 |
602 |
0.16 |
28,47,433 |
2,84,74,330 |
0.38 |
| 50,001 - 1,00,000 |
813 |
0.22 |
58,97,181 |
5,89,71,810 |
0.79 |
| 1,00,001 & Above |
838 |
0.23 |
65,08,73,914 |
6,50,87,39,140 |
86.78 |
| TOTAL |
3,65,316 |
100.00 |
75,00,00,044 |
7,50,00,00,440 |
100.00 |
Shareholding Pattern of the Company as on 31st March, 2013
| Category |
No. of Shares Held |
% of Shareholding |
| A Promoter's holding |
|
|
| 1 Promoters |
|
|
| • Indian Promoters |
37,50,00,000 |
50.00 |
| • Foreign Promoters |
Nil |
Nil |
| Sub- Total (A) |
37,50,00,000 |
50.00 |
| B Non- Promoters holding |
|
|
| 1 Institutional Investors |
|
|
| a Mutual Funds and IITI |
6,72,80,381 |
8.97 |
| b Banks, Financial Institutions |
1,50,953 |
0.02 |
| c Insurance Companies / Central / State Govt. Institutions / Non-government
Institutions / Venture Capital Funds |
1,40,000 |
0.02 |
| d FII's (Including ADB holding) |
10,26,46,886 |
13.69 |
| Sub-Total (B1) |
17,02,18,220 |
22.70 |
| 2 Others |
|
|
| a Private Corporate Bodies |
1,78,19,673 |
2.38 |
| b Indian Public including HUF and Foreign Nationals |
10,63,62,860 |
14.18 |
| c NRI's / OCB's (Including GDFI) |
7,89,29,492 |
10.52 |
| d Any other (Clearing Members & Trusts) |
16,69,799 |
0.22 |
| Sub-Total (B2) |
20,47,81,824 |
27.30 |
| GRAND TOTAL (A+B1+B2) |
75,00,00,044 |
100.00 |
List of Shareholders Holding More than 1% of Equity Capital as on 31st March, 2013
| Name |
No. of Shares Held |
% of Shareholding |
| Promoter's Holding |
|
|
| Bharat Petroleum Corporation Ltd. |
9,37,50,000 |
12.50 |
| GAIL (India) Ltd. |
9,37,50,000 |
12.50 |
| Indian Oil Corporation Ltd. |
9,37,50,000 |
12.50 |
| Oil & Natural Gas Corporation Ltd. |
9,37,50,000 |
12.50 |
| Non-promoters Holding |
|
|
| GDF International |
7,50,00,000 |
10.00 |
| Asian Development Bank |
3,90,00,000 |
5.20 |
Detail of Unclaimed Shares as on 31.03.2013 issued pursuant to Initial Public Offer
(IPO)
| S. No. |
Particulars |
Cases |
No. of shares |
| 1 |
Aggregate Number of shareholders and the outstanding shares in the suspense account
(i.e. KCL ESCROW ACCOuNT PETRONET LNG IPO-OFFER) lying at the beginning of the year i.e.
1st April, 2012. |
649 |
1,32,700 |
| 2 |
Number of shareholders who approached for transfer of shares from suspense account
during the year. |
2 |
300 |
| 3 |
Number of shareholders to whom shares were transferred from suspense account during
the year. |
1 |
200 |
| 4 |
Aggregate number of shareholders and outstanding shares in the suspense account at the
end of year, i.e. 31st March, 2013. |
648 |
1,32,500 |
Code of Conduct for Board Members & Senior Management Personal
The Board of Directors of the Company approved Code of Conduct for Board Members &
Senior Management Personnel and the same was made effective from 1st April, 2006. A copy
of the same has also been hosted on the website of the Company. All the Board Members and
Senior Management Personnel have affirmed compliance with the said Code for the year ended
31st March, 2013.
CEO/CFO Certification
A certificate from the Managing Director & CEO and Director (Finance) on the
financial Statements of the Company in terms of Clause 49 of Listing Agreement was placed
before the Board, who took the same on record.
Related Party Transactions
The details of all significant transactions with related parties are periodically
placed before Audit Committee.
Reconciliation of Share Capital Audit
A qualified practicing Company Secretary carried out a Reconciliation of Share Capital
Audit on quarterly basis to reconcile the total Share Capital with National Securities
Depository Limited (NSDL), Central Depository Services Limited (CDSL) and the total issued
and listed capital. The audit confirms that the total issued/paid-up capital is in
agreement with total number of shares in physical forms and total number of dematerialized
shares held with NSDL and CDSL.
Status of Corporate Governance Voluntary Guidelines 2009
The voluntary guidelines issued by Ministry of Corporate Affairs in December 2009,
pertaining to Corporate Governance are complied with to the extent found feasible.
| Major Plant / Unit Location(s) |
|
| Dahej LNG Terminal |
Kochi LNG Project Site |
| GIDC Industrial Estate, |
Survey No. 347, |
| Plot No 7/A, Dahej, |
Puthuvypu (Puthuypeeen SEZ), |
| Taluka: Vagra, Distt. Bharuch, |
P.O. 682508, Kochi, |
| Gujarat - 392130 |
Kerala |
| Tel : 02641-253182/257004-257007 |
Tel: 0484-2502259 |
| Fax: 02641-253179/300310 |
Fax : 0484-2502264 |
| Address for Correspondence |
|
| Registered & Corporate Office |
Registrar & Share Transfer Agent |
| Petronet LNG Limited |
M/s Karvy Computershare Pvt. Limited |
| World Trade Centre, First Floor, |
Plot No. 17 to 24, |
| Babar Road, Barakhamba Lane, |
Vittal Rao Nagar, |
| New Delhi - 110 001 |
Madhapur, Hyderabad - 500081 |
| Tel: 011- 23472525, 23411411 |
Tele: 040-23312454,23320751/52 |
| Fax: 011- 23472550 |
Fax: 040-23311968,23323049 |
| Email: investors@petronetlng.com |
|
Auditors' Certificate on Compliance with the conditions of Corporate Governance
under clause 49 of the Listing Agreements
To the Shareholders of Petronet LNG Limited
1. We have examined the compliance of conditions of Corporate Governance by Petronet
LNG Limited ("the Company") for the year ended March 31st, 2013 as stipulated in
clause 49 of the Listing Agreements of the said company with Stock Exchanges in India.
2. The compliance of conditions of Corporate Governance is the responsibility of the
Company's management. Our examination was limited to the review of procedures and
implementation thereof, adopted by the Company or ensuring the compliance of the
conditions of Corporate Governance. It is neither an audit nor an expression of opinion on
the financial statements of the Company.
3. In our opinion and to the best of our information and according to the explanations
given to us, we certify that the Company has complied with the conditions of Corporate
Governance as stipulated in the above mentioned Listing Agreement.
4. We further state that such compliance is neither an assurance as to the future
viability of the Company nor the efficiency or effectiveness with which the management has
conducted the affairs of the Company.
|
For T.R. Chadha & Co. |
|
Chartered Accountants |
|
(Firm Registration No. 006711N) |
|
Sd/- |
|
Neena Goel |
| Place : New Delhi |
Partner |
| Date : 29th May, 2013 |
M.N.057986 |
BUSINESS RESPONSIBILITY REPORT
| Section 1: About our Company |
|
| 1. Corporate Identity Number (CIN) of the Company |
: L74899DL1998PLC093073 |
| 2. Name of the Company |
: Petronet LNG Ltd.(PLL) |
| 3. Registered address |
: World Trade Centre, First Floor, Babar Road, Barakhamba Lane, New Delhi - 110 001 |
| 4. Website |
: http://www.petronetlng.com |
| 5. E-mail id |
: investors@petronetlng.com |
| 6. Financial Year reported |
: April 2012 - March 2013 |
| 7. Sector that the Company is engaged in |
: Oil & Gas |
| 8. Product provided by the Company |
: Regasified Liquefied Natural Gas (LNG) |
| 9. Total number of locations where business activity is undertaken by the Company: |
|
| a. International Locations |
: Qatar (primarily) and various other countries of the world (for sourcing of LNG) |
| b. National Locations |
: Dahej in Gujarat, Kochi in Kerala and New Delhi. |
| 10. Markets served by the Company |
: Pan-India |
| Section 2: Our financial details |
|
| 1. Paid up capital (INR) |
: 750 crores |
| 2. Total turnover (INR) |
: 31,649 crores |
| 3. Total profit after taxes (INR) |
: 1,149 crores |
| 4. Total spending on Corporate Social Responsibility (CSR) as percentage of profit
after tax (%) |
: 0.32% |
| 5. Activities in which CSR expenditure has been incurred |
|
| • Community Development |
• Healthcare |
| • Education |
• Water Management |
| • Disaster relief |
• Sports and Culture |
| • Fostering Entrepreneurship |
|
| Section 3: Other details |
|
| Subsidiary companies |
: The Company does not have any subsidiary Company. |
Section 4: BR information
1. Details of Director/Directors responsible for Business Responsibility
a. Details of the Director/Directors responsible for implementation of the BR
policy/policies
| i. DIN Number |
: 00793181 |
| ii. Name |
: Dr. A. K. Balyan |
| iii. Designation |
: MD & CEO |
b. Details of the BR head
| S.No. |
Particulars |
Details |
| 1. |
DIN Number |
00793181 |
| 2. |
Name |
Dr. A. K. Balyan |
| 3. |
Designation |
MD & CEO |
| 4. |
Telephone number |
011 - 23472503 / 04 |
| 5. |
e-mail id |
md.ceo@petronetlng.com |
Governance related to Business Responsibility
In our Company, compliance is the Board's responsibility and the members take it very
seriously, thus ensuring regular evaluation of the Company's sustainability performance.
We have a Risk Management Committee to identify and mitigate all types of risks pertaining
to the business of the Company. The Committee meets regularly to discuss various risks and
mitigating factors for the same. The Board reviews and approves the annual business plans.
The decisions on all strategic matters related to capital expenditure, revenue, etc. are
taken with the approval of the Board. It also discusses and deliberates on issues
pertaining to risk management, safety performance, and monitors compliance to applicable
statutes and norms.
Our detailed sustainability performance will be published in our first Sustainability
Report - Partners of Clean Energy. This report will be available on our website from July,
2013, onwards.
Nine Business Responsibility Principles
Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency
and Accountability
As part of our Company's endeavor to set high standards of conduct for its employees, a
Code of Business Conduct and Ethics has been laid down for all Board Members and Senior
Management personnel. The Code, which was approved by the Board in 2006, encompasses
general moral imperatives, specific professional responsibilities, and additional duties /
imperatives for the Board Members and Senior Management personnel. From 1st April, 2006,
strict adherence to the Code has been mandatory for all. The Code reflects our thorough
belief in maintaining the highest standards of business ethics, which takes into account
our business performance and its impact on society. All members have affirmed compliance
to the Code in the reporting period. Besides being available on our website, copies of the
Code are circulated to all the individuals concerned.
Anti-corruption
Corruption is one of the world's greatest challenges. It is a major hindrance to
sustainable development and corrodes the very fabric of the society. Petronet LNG Ltd.
(PLL) strongly believes in maintaining integrity and work ethics to protect not just the
reputation of the Company but also the interests of its shareholders.
We have identified that the major potential source of corruption could be contracts
awarded for construction of various facilities in an LNG Terminal. In order to mitigate
the risk, the EPC Sub-Committee of the Board, which is responsible for evaluating and
recommending large EPC contracts for Board approval, has an Independent Director as a
Member. In addition to this, we also have safeguards in place in the tender documents
which discourage bidders from indulging in any corrupt practice. In case of any such act
of misconduct, it is within our rights to reject the bid or contract, as the case may be.
Further, to strengthen our commitment to anti-corruption practices and principles, we
have been a member of Global Compact Network (GCN) since the last three years. We have
committed to the principles and practices of the Global Compact that includes the ten
principles pertaining to human rights, labour standards, environment and anti-corruption.
PLL has submitted its first Communication on Progress (CoP) for 2011-12 that details our
willingness to actively support the efforts made by GCN.
As part of our mission statement, we believe in maintaining highest standard of
business ethics and values.
Principle 2: Businesses should provide goods and services that are safe and
contribute to sustainability throughout their life cycle
At present, PLL deals primarily in one business segment: the import, storage and
re-gasification of Liquefied Natural Gas (LNG). The product composition is dominated by
methane, with varying portions of ethane, propane and butane. Natural Gas is cooled to
minus 160C to liquefy, which facilitates transportation. LNG is transported in cryogenic
tankers across seas to our terminal, where it is re-gasified and then distributed.
PLL has branded its product as" Taral3" -the new-age eco-friendly
fuel. It is proposed to be delivered to customers not connected with pipeline near our
Terminals.
Three LNG ships - 'Disha', 'Raahi' and 'Aseem', bring LNG from RasGas, Qatar, to Dahej,
transporting the contracted quantity of 7.5 MMTPA of LNG. Further, 1.44 MMTPA will be
imported from Australia.
Product responsibility forms the very basis of the existence of our Company. Our
product itself being clean energy, there are no sustainability challenges arising from the
impact of our product. Having said that, there have been no instances of complacency and
PLL is committed to diligence when it comes to taking responsibility for our product,
including its provision, transportation and use. We are entirely compliant with all
existing regulations and during the reporting period, have not paid any fine for
non-compliance.
While we ensure that there is minimal environmental impact from transporting LNG across
India, sourcing from local suppliers is not a valid option, given the nature of the
product. Further, the product doesn't produce any waste. Hence, recycling is also not
applicable.
Principle 3: Businesses should promote the wellbeing of all employees
We believe a Company is as good as its people. Given our constant drive for success,
our employees form the most important part of our DNA. As on 31st March 2013, our total
employee strength stands at 397. The detailed break-up of our workforce will be available
in our Sustainability Report.
We engage the services of contractors at our facilities. In FY 2012-13, 477 contractual
workers (annual average) were operating in our Dahej facility. Additionally, for the
construction project of our second jetty at Dahej, we engaged the services of a contractor
who employed approximately 950 (annual average) personnel at the project site.
We look at collective bargaining as an employee's right and do not object to it in any
way. However, the culture of an organized employee union or association does not exist in
our Company.
Child and forced labour
To eliminate any instance of child labour, we ensure strict adherence to the minimum
age provisions of National Labour Laws and Regulations. Being a part of the hydrocarbon
industry, we have stringent rules for hiring. Forced labour too, holds similar stances on
our part, culminating in a clearly defined exit policy and a zero-tolerance approach to
this violation of human rights.
Enhancing potential
Attracting, motivating, and retaining talented employees today, given the competitive
market, is a major challenge we must give adequate importance to.
Through our training programs, we would like to benchmark and enhance competencies
which will address workforce issues on which the Company could capture value and make a
tangible positive impact of a learning organization.
The number of hours spent on training for our employees in the reporting period (in
man-hours) is as follows:
| Employee category |
FY 2012-13 |
|
Male |
Female |
| Senior Management |
136 |
NA |
| Mid Management |
2483 |
82 |
| Junior Management |
5192 |
377 |
| GETs / PGETs |
592 |
131 |
| Staff |
4223 |
409 |
Further, PLL has a robust Quality, Health, Safety and Environment Policy which is
circulated and emphasized to all our employees to help inculcate a culture of safety on
our premises.
Principle 4: Businesses should respect the interests of, and be responsive, towards
all stakeholders, especially those who are disadvantaged, vulnerable and marginalized.
We, at PLL, believe that stakeholder engagement plays a vital role in improving
sustainability performance. It enables a better understanding of the reasonable
expectations and interests of stakeholders, allowing the Company to better manage and
respond to their concerns. Interacting with stakeholders and responding to stakeholders'
expectations and feedback on the organization's performance confer many benefits on those
that undertake genuine stakeholder engagement. Engagement is not only a trust-building
exercise, but can also give us a first-mover advantage in opportunities with relation to
the stakeholder groups consulted.
Stakeholder identification
Stakeholder identification is about defining the different groups of individuals or
institutions that affect, or are affected by PLL's business operations in some capacity.
We have identified our stakeholders on the basis of the parameters of responsibility,
influence, proximity, dependency and representation.
The Government, our shareholders, employees, suppliers, contractors, customers and
communities are key stakeholders, amongst others.
Though not disadvantaged or vulnerable, communities operating in and around our Dahej
Terminal need some assistance for faster development and we, at PLL, have provided support
to facilitate the same.
In this context, we would like to mention an initiative in Luwara village situated near
our Dahej Terminal. We have contributed significantly to the overall development of the
village, specifically focusing on primary healthcare. Our contribution in other schemes,
like improving drinking water facilities, installing solar street lights, development of
school infrastructure, etc., has also been significant.
Principle 5: Businesses should respect and promote human rights
Our policies related to human rights are all-encompassing and thorough. We expect all
our contractors and suppliers to also follow them. Some of the policies are as follows:
• It is the policy of the Company to provide employment opportunity, regardless of
race, color, gender, religion, age, sexual orientation, national or ethnic origin,
disability, marital status, veteran status, or any other occupationally irrelevant
condition.
• The above policy applies to recruitment, hiring and job assignment, promotion,
demotion and transfer, layoff or termination, rates of pay and benefits, selection for
training and the provision of any other human resources service.
• The continuing progress and vitality of the Company requires that we utilize all
available human resources to the fullest. The continuing need for well-qualified personnel
dictates that individuals with talent must be recognized and encouraged to progress.
• The Company treats its employees with fairness and is deeply interested in their
growth and development. The Company expects its employees to adhere to the established
standards of conduct and performance to enable all to work together to achieve the
objectives of the Company.
There have been no complaints regarding breach of human rights in the reporting year.
Principle 6: Business should respect, protect, and make efforts to restore the
environment
Our Quality, Health, Safety, and Environment (QHSE) Policy is displayed at prominent
locations within our Dahej Terminal. We expect our employees, contractors and suppliers to
adhere to the principles outlined in the policy.
At PLL, not only do we import cleaner fuel and propel India towards low carbon growth,
we also ensure energy efficiency, water conservation and other environment friendly
activities in our operations. We take our role in contributing to a better environment
seriously and assess all potential environmental risks of our operations.
Energy and emissions
Our primary energy sources are Natural Gas and Diesel. In 2012-13, 2.48 million GJ of
primary energy was consumed in our operations. Natural Gas is the main fuel constituting
nearly 95% of the energy consumed. Captive power generation using Natural Gas contributes
92.39 % of the total carbon dioxide emissions from our operations.
As our processes are already environmentally clean, we do not have any Clean
Development Mechanism (CDM) projects.
Water management
Our operations do not necessitate consumption of large quantities of water. Yet, we
have undertaken certain innovative measures to reduce water consumption in our operations.
Waste management
We, at PLL, have robust waste management systems in place. All hazardous waste
generated in our facility is responsibly disposed through authorized waste recyclers.
Biodiversity management
The Company has undertaken measures towards protecting the marine ecology in the area
of its operations.
All our emissions/waste, etc. are well within regulatory limits.
Details of our environmental performance will be available in our Sustainability
Report.
Principle 7: Businesses, when engaged in influencing public and regulatory policy,
should do so in a responsible manner
For the past three years, we have been a part of the Global Compact Network. Our
Company is also a member of the Standing Conference of Public Enterprises (SCOPE) and the
International Group of Liquefied Natural Gas Importers (GIIGNL). Our Senior Management
represents the Company in various industry forums. We understand our responsibility as an
influential part of the economy and do not engage in influencing public policy with vested
interests.
Principle 8: Businesses should support inclusive growth and equitable development
As a responsible corporate citizen of the country, PLL has dedicated itself wholly to
the betterment of India, through business, by providing clean energy, and through constant
community engagement. Socio-economic development programmes are undertaken by our Company
in order to meet the priority needs of the community we operate in, envisioning
self-sustaining communities in the near future. We have designated CSR roles and
responsibilities to ensure thorough implementation of our plans. Spearheading it at the
Board level is our MD & CEO who is responsible for the overall CSR planning and
implementation.
At the Corporate level, the Head HR, in consultation with Executive Committee (EC), is
responsible for the formulation of plans and strategies, annual fund allocation, periodic
monitoring and evaluation of activities to be taken up by terminals, documentation, brand
enhancement and active CSR involvement at the Corporate office.
Similarly at the Dahej Terminal, CSR is undertaken by the Plant Head, who is
responsible for identification of appropriate schemes, in consultation with concerned
executives in the field, examination and consolidation of proposals, maintenance of data
records, etc.
Further, we constantly motivate our employees to engage in the CSR schemes as a
voluntary philanthropic contribution to the society we live in.
Our community initiatives
At the Corporate level, emphasis is laid on providing support for disaster relief
management, water management, education, healthcare, promotion of sports, art and culture,
entrepreneurship, environment, etc. Similarly, at the LNG terminals priority is given to
education, healthcare including drinking water, environment and entrepreneurship schemes.
Investments
Each development project at PLL has a CSR component as a part of the project cost now.
Since FY 2012-13, we have been allocating a certain part of our profit for CSR activities.
We work closely with the local Gram Panchayat and District administration. A couple of
major schemes, such as sweet drinking water facilities for Bharuch and mangrove
plantations for environmental development near Dahej, are under implementation in
collaboration with the State Governments in which PLL has made substantial contribution.
Principle 9: Businesses should engage with and provide value to their customers and
consumers in a responsible manner
We, at PLL, follow the highest standards of business ethics while dealing with our
customers. Adherence to all laws pertaining to product labeling, branding and distribution
is of utmost priority to us and we are fully compliant with each one of them. As of now,
there are no instances of customer dissatisfaction.
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