MRPL

MRPL after almost a decade long profitable operation post loss in the1st Quarter 2012-13 due to sharp decline in crude prices, rupee value and throughput levels
The Board of Directors of Mangalore Refinery and Petrochemicals Limited, a subsidiary company of ONGC and a category I Mini Ratna, approved its un-audited results for the first quarter 2012-13 posting a loss of Rs. 1,521 crore post tax, This loss was mainly triggered with sharp reduction in crude and product prices in April 2012 and May 2012, steep devaluation of Rupee against USD by almost 8% and lower throughput due to force majeure arising out of stoppage of water supply for about 10 days by District Administration.

HIGHLIGHTS DURING Q1 (2012-13):

PERFORMANCE of Q3:

Particulars

Throughput (MMT) Exports (MMT) Gross Turnover (Rs. In Crore) Exports (Rs. In Crore) PBDIT (Rs In Crore) PBT (Rs. In Crore) PAT (Rs. In Crore) GRM (US$ / BBL) (Rs. In Crore) GRM Variance Analysis Net Exchange Gain / (Loss) (Rs. In Crore) (-) 649

2012-13 2.89 1.35 13,465 5,940 (-)1,247 (-)1,495 (-)1,521 (-) 4.15 (-) 492

Q1 2011-12 3.30 1.38 14,522 5,335 359 237 173 3.72 408 (-) 83

FINANCIAL PERFORMANCE:
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MRPL recorded loss of Rs. 1,521 Crore in the1st Quarter 2012-13 after adjustment of tax. The above loss is after considering Rs.138 Crore as depreciation, Rs.110 Crore as interest Cost and Rs. 46 Crore as Interest Income) as compared to Rs.173 Crore of Profit after Tax, (after considering Rs. 95 Crore as depreciation, Rs. 27 Crore as interest Cost and Rs. 133 Crore as Interest Income) in the corresponding 1st Quarter of 2011-12. As the rupee value against USD depreciated during Q1 from Rs. 51.53 level to Rs. 55.62 against US$, the Company recorded an exchange loss of Rs. 649 Crore. In view of stoppage of water drawal from river source for almost 10 days it has to carry forward inventory when prices of crude and products were declining sharply resulting in Inventory loss of Rs. 733 crore and the rupee was getting devaluated against USD resulting in loss of Rs. 649 crore.

AWARDS, RECOGNITION AND ACHEIVEMENTS:

MRPL has won the BT STAR PSU Excellence Award 2012 in the category of Market Capitalization.

MARKETING INTITIATIVES:
a. The Company while retaining strong market presence in its Refinery zone for products being marketed to direct customers (viz. Bitumen & CRMB), the Fuel oil market share has come down due to discount philosophy of the players in the market. b. MRPL is continuing its limited presence in Retail Marketing of auto fuels, keeping in view the uncertainties in pricing of these products. The Company is in readiness for marketing of Petcoke and other new products that will be produced from Phase III Expansion and upgradation Project.

PHASE III REFINERY PROJECT:

MRPL Phase III Expansion project is progressing well. The overall project progress as on 15th June 2012 is 95.40%. The Company has completed the Hydrogen unit on 19.7.2012 and commissioning of DHDS is nearing completion. The overall progress of Polypropylene Project has reached 81.6% as on 15th June, 2012 and is scheduled for commissioning by November, 2012. The company during the quarter has successful revamped its Hydrocracker Unit II. However the progress of CPP by BHEL continued to be critical and may delay the progress of other commissioning schedule.

SPM IMPLEMENTATION
The SPM implementation has achieved the progress level of 94.60% as on 15th June 2012 and will be likely to be operational by August, 2012.

TAX INCENTIVES AND CONCESSION FOR PHASE III PROJECT FROM GOVERNMENT OF KARNATAKA
The company has been granted special tax incentives/ concession package by the Govt. of Karnataka for a period of 15 year comprising of Entry tax, CST exemption and VAT deferment
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equal to 100% and 60% of eligible gross VAT for first 3 years and balance 12 years respectively. The entry tax on capital goods bought during construction is also exempted during project execution stage.

CORPORATE SOCIAL RESPONSIBILITY:

The Company as a socially conscious corporate continues its Samrakshan, programme. The company during the quarter has contributed for construction of class rooms, introduction of Midday meal and scholarship for school going children and has also taken up development of road around the Refinery area. Speaking on the occasion Shri Sudhir Vasudeva, Chairman complimenting the Team MRPL for dedicated Project execution, expressed words of caution as the Company has incurred losses after a decade of profitable operation and urged upon to exercise austerity in expenditure and achieve a turnaround during the balance period of this financial year.
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MRPL looks to acquire Haldia Petrochemicals The company seeks the state govts permission to conduct a due diligence exercise at Haldia Petrochemicals Romita Datta Kolkata: Key officials of Mangalore Refinery and Petrochemicals Ltd (MRPL) on Monday met West Bengals commerce and industries minister Partha Chatterjee to seek the governments permission to conduct a due diligence exercise at Haldia Petrochemicals Ltd (HPL), formally announcing for the first time its interest in acquiring the beleaguered firm. Mounting burden: West Bengals commerce and industries minister Partha Chatterjee. HPLs total debt is approaching Rs 4,000 crore. Photo: Indranil Bhoumik/Mint The West Bengal government, which is one of HPLs co-promoters, owns 40% of the firm. The state is looking to sell its stake in HPL, but The Chatterjee Group (TCG)the other co-promoter of the firmisnt willing to wash its hands of HPL. TCG owns 41% in HPL. The state government cannot, under existing agreements with TCG, unilaterally sell its stake in HPL. MRPL, a subsidiary of government-owned Oil and Natural Gas Corp. Ltd (ONGC), is looking to acquire HPL for forward integration, MRPL managing director U.K. Basu said in Kolkata on Monday. We made a presentation to the West Bengal government and asked for permission to conduct the due diligence exercise, he added. Partha Chatterjee, who is also HPLs chairman, refused to comment on Mondays discussions. He, however, said he would inform HPLs board about MRPLs proposals at its next meeting on 19 June.

HPL managing director Partha S. Bhattacharyya appears to be in favour of handing the reins of the company to a public sector company from the petrochemical sector, according to the firms employees. Addressing HPLs employees at a town-hall meeting last week, Bhattacharyya said the company needs integration with a naphtha-producing refinery for long-term viability. Naphtha is HPLs key feedstock. Strapped for cash, HPL is unable to buy naphtha and has had to scale back production to 50-55% of its peak capacity. A spokesperson for TCG wasnt immediately available for comments. Asked why MRPL was looking to buy HPL despite its financial woes, Basu said MRPL faced similar uncertainties until ONGC bought majority control in it in 2003 and helped restructure its debts by infusing cash. HPLs lenders have already told its co-promoters that unless they inject cash into the company or commit to bring in a strategic investor, working capital loans wouldnt be forthcoming. HPLs total debt is approaching Rs 4,000 croremore than three times its equity capital. HPL needs at least Rs 300 crore in fresh working capital loans immediately to step up production, according to a finance department official, who did not want to be named. Naphtha prices have lately declined, and if HPL is able to buy naphtha again, it will be able to scale up production to at least 90% (of its peak capacity), this person said. This will lead to more optimal recovery of fixed costs and help the management cut losses significantly. The firms management is going to make another attempt to convince banks to make fresh loans at a meeting of HPLs loan monitoring committee on 13 June. The meeting has been convened by banks in Mumbai to review whether the two co-promoters had made any progress in injecting cash into the company. romita.d@livemint.com
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MRPL pushes BHEL to ready captive power plants quickly

Renuka Phadnis Share Comment print T+ The aim is to increase the processing capacity of the refinery Mangalore Refinery and Petrochemicals Limited (MRPL) , is waiting for a quick completion of its captive power plant. The commissioning of all the units under Phase III of its project hinges on the functioning of the power plant. P. P. Upadhya, the new Chairman and Managing Director, who took over from U.K.Basu on July 1, told The Hindu on Wednesday that MRPL had been 'pushing' Bharat Heavy Electricals Limited (BHEL) to finish the plant soon. BHEL has undertaken the long-term turnkey job of building the power plant for MRPL, a subsidiary of Oil and Natural Gas Corporation. The BHEL power plant has to get into operation. It (BHEL) had said that the power plant would be ready by July but that was doubtful, he said. The upcoming captive power plant will havea generating capacity of 110 MW,

and will enable MRPL to commission its units instantly instead of in instalments. At present, five gas turbines generating 85 MW power and steam are being used for all operations. He said the focus would be on starting with two projects the fluid catalytic cracking (FCC) and the `coker units - as they consumed the most energy. (The coker processes heavy residual oil into gas and diesel with petroleum coke as a residue.) The greatest challenge for us is the next six months. Phase III has been our bread and butterthe margin driverit will drive our future business, he said. The aim of the Phase III expansion is to increase the processing capacity of the refinery by adding three MTPA (million tonnes per annum), and to upgrade low-value products into highvalue products. It also aims at processing cheaper crude oil, and production of petrochemical feedstock such as propylene.
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MRPLs expansion to refine margins - BUY

Anand Kalyanaraman

MRPLs expansion program will raise its capacity from 12 mtpa to 15 mtpa, and refinery complexity from around 6 mtpa to 10. July 14, 2012: Investors with a long-term perspective can buy the shares of public sector refiner, Mangalore Refinery and Petrochemicals Limited (MRPL). Attractive valuation and an expansion programme which is close to completion support the recommendation. During the past year, uncertainty about oil supply from Iran, a weak refining market and heavy foreign exchange losses has been an overhang on the stock. At its current price of Rs 58, the
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stock discounts its trailing twelve month earnings by around 11.3 times. This is lower than levels it has traded at in the past (14-17 times).

Expansion bodes well

The completion of its Phase III refinery project by the end of the calendar may provide a positive trigger for MRPL. The project is in an advanced stage, with around 95 per cent of the work complete. A major part, including the crude distillation and vacuum distillation units, was commissioned in March 2012. The balance portion is expected to be completed by October this year. After the expansion, the refinerys capacity will increase from around 12 mtpa to 15 mtpa, and its complexity will rise from around 6 to 10. This will enable MRPL to process cheaper, heavier crude to produce more value-added products, and improve its gross refining margin (GRM) by around $2-$3 per barrel. GRM is the difference between the price of the product mix produced by a refiner and the cost of crude oil. MRPL also expects to commission the single point mooring facility by July. This will reduce its freight costs. The polypropylene unit, which should be ready by December, will give the company a foothold in the petrochemicals space. MRPL will also benefit from the incentive package announced by the Karnataka government for the Phase III project. Concessions include soft loans, and exemption from entry tax and central sales tax. This should further aid the companys margins.

Diversifying supply sources

MRPL is among the big importers of crude oil from Iran, which has been subject to economic sanctions. The payment problem pertaining to that country took a toll on the MRPL stock last year. But alternative settlement arrangements and the US exemption to India have helped the company continue to source supplies without disruption in operations. To reduce its dependence on Iranian oil, MRPL has been diversifying its supply sources and increasing procurement from countries such as Saudi Arabia.

Rebound in performance
A weak refining market environment for a good part of the last fiscal and heavy foreign exchange losses contributed to MRPL reporting low gross refining margin (less than $4 a barrel) in the first three quarters.

This dragged the companys financial performance. But GRM improved significantly to $7.07 a barrel in the March quarter, aided by an improvement in refining market conditions and forex gains. Also, there was an increase in output to 3.41 mmt. This helped MRPL grow March quarter profits by 8 per cent year-on-year to Rs 602 crore. For the full year though, the companys profits fell almost 23 per cent to Rs 909 crore. With the global economic environment uncertain, refining margins for the industry may remain muted. But benefits from MRPLs refinery expansion should provide it support. The companys financial position remains strong with debt-to-equity at a reasonable 0.8 times. While rupee volatility remains a concern, steep depreciation from current levels seems unlikely. Keywords: Public sector refiner, long-term perspective, recommendations, petroleum, Printable version | Aug 14, 2012 9:22:34 PM | http://www.thehindubusinessline.com/features/investment-world/stockinsight/article3639829.ece The Hindu Business Line
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MRPL gives ` 21 crore to upgrade Lady Goschen hospital

Mangalore: Aug 8 , 2012 DH News Service Building would be named ONGC-MRPL-Lady Goschen block; to have burns centre

The ONGC-MRPL administrative board has decided to provide Rs 21 crore to the district administration to reconstruct Lady Goschen hospital. The six-floor (basement + ground + 4 floors) state-of-the art ultra modern building would come up at 1.5 lakh square foot area. The building would be constructed after demolishing (already partially demolished) about 30,000 squre foot area (of the 90,000 square foot) of the 164-year-old Lady Goschen Hospital. When completed, the hospital would also have a state-of-the art burns centre, according to a press release issued by MLAand Deputy Speaker NYogish Bhat. He also said that the new building would be named as ONGC-MRPL-Lady Goschen block.A
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meeting held in this regard at the Deputy Commissioners office on Monday decided to call tenders at the earliest. Deputy Commissioner Dr NSChannappa Gowda, Deputy Speaker NYogishBhat, MCCCommissioner Dr Harish Kumar, ONGC-MRPL MDPPUpadhya, Group General Manager (HR) Lakshminarayana, General Manager (HR)Susheelachandra, Architect Premananda Shenoy and Lady Goschen Superintendent Dr Shakunthala were present. Ray of hope It may be recalled that a portion of the hospital was demolished more than a year ago after a Andhra Pradesh based entrepreneur Raghava Naidu came forward to donate a sum of Rs 18 crore and the foundation for the same was laid in the presence of former chief minister B S Yeddyurappa on April 17, 2011. When the foundation was laid, the donor and the government had announced that the hospital will be ready within a year. However, the work failed to take off as the donor had failed to provide the promised funds. With the ONGC-MRPL coming forward to take up the work on construction of Lady Goschen hospital, which serves as a ray of hope for the poor women, who come from neighbouring districts like Udupi, Kodagu, Chikmagalur and Kasargod, apart from Dakshina Kannada, the days of better facilities may not be too far. It is said that at least 15 delivery cases come to the hospital daily. Before the demolition of the building, there were four operation rooms. However, at present, there are only two rooms. Yogish Bhat in a release welcomed the ONGC-MRPLgesture for the two facilities which they are taking up under their corporate social responsibility and thanked ONGCMRPLChairman Sudheer Vasudeva, Managing Director PPUpadhya and all the directors of the firm.
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MRPL turns to Iran for oil insurance: Sources

Indian insurers deny MRPL coverage for Iran crude cargo; MRPL to continue to use Iran insurer for future cargo
Nidhi Verma / Reuters

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New Delhi: Indian refiner MRPL secured coverage from an Iranian insurer for a crude cargo that arrived last week, becoming the first Indian firm known to have taken such action as Western sanctions tighten, sources with knowledge of the matter said. India is the worlds fourth-largest oil importer and one of the biggest customers for second largest OPEC producer Irans exports of 2.2 million barrels per day, but Western sanctions make it tough for Indian oil importers and shipowners to maintain access to Irans crude market. Indian insurers denied coverage to Mangalore Refinery and Petrochemicals for fear the action could fall foul of a pending European oil embargo against Iran. Tough new European Union sanctions aimed at stopping Irans oil exports to Europe also ban EU insurers and reinsurers from covering shipments of Iranian oil anywhere in the world from July. Indias insurers do not fall directly under the sanctions regime but depend on the Western reinsurance market to hedge their risk. But an Iranian insurer provided cover for MRPLs crude cargo of about 7 07,500 barrels that arrived at Indias Mangalore Port last week, the sources said. (MRPL) recently got a cargo insured by an Iranian firm and other cargoes can also be insured from Iran. The company will do that on a case-by-case basis, said one of the sources. The sources declined to be named due to the sensitivity of the subject. Another source said MRPL might continue to get Iranian insurance cover for oil imports from Tehran. As long as we can avail of Iranian cover we will continue to import cargoes on that basis, the source said. MRPL is a major Indian buyer of Iranian oil and its insurance policy with New India Assurance Co Ltd for cargoes lapsed this month. State-run insurers were willing to extend cover for crude cargoes except those from Iran under MRPLs new policy, another source said, forcing the refiner to approach Iran. MRPL and other oil firms buy insurance to protect their crude cargo, while ship owners usually arrange cover for the ship and any liability from an oil spill or personal injury.

Indian state-run insurers have agreed to give $50 million cover for local tankers carrying Iranian oil from July, a Shipping Corp of India director said earlier this month. No such facility exists for insuring Iranian oil cargoes. India does not allow state refiners to import oil on a delivered basis, a facility which privatelyrun Essar Oil has begun using. MRPL is buying oil on a free-on-board (FOB) basis with insurance covered by the Iranian firm. MRPL has cut to 100,000 bpd its annual crude import deal with Iran for this fiscal year, about 30% lower than last year, the first source said, adding the actual off-take could be less. Some units at MRPLs 300,000 bpd refinery in southern India are shut for maintenance, leading to reduced purchases of Iranian oil in May and June, this source said, adding it bought 124,000 bpd from Iran in 2011/12 versus a deal of 142,000 bpd.
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Company History - Mangalore Refinery and Petrochemicals

1988 - The Company was incorporated on 7th March, pursuant to a Memorandum of Understanding (MOU) dated 26th June, 1987 executed between the President of India representing the Government of India (GOI), Hindustan Petroleum Corporation Limited (HPCL) and Indian Rayon & Industries Limited (IRIL) for the purpose of setting up a refinery at Mangalore in the state of Karnataka. - The Company obtained the Certificate of Commencement of business on 2nd August, from the Registrar of Companies, Karnataka and subsequently the Letter of Intent from the Government India. - The Company was promoted by Hindustan Petroleum Corporation Ltd., Indian Rayon and Industries Ltd., Grasim Industries Limited, Hindalco Industries Ltd., and Indo Gulf Fertilisers and Chemicals Corp. Ltd., 1993 - The Company has made a mega Public Issue consisting 4,31,60,000 16% Secured Redeemable Partly Convertible Debentures (PCDs) of Rs.135/each aggregating to Rs.582.66 crores and 2,80,00,000/- 17.5% Secured Redeemable Non Convertible Debentures of Rs.200/- each (with detachable Equity Warrants) aggregating to Rs.560 crores.

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- The Company has already tied up the entire Foreign Exchange requirements of the project. - The Company has tied up process technologies with internationally reputed technology suppliers. 1995 - The Company had already tied up the entire funds required for the project. 1996 - The Company has already tied-up the debt (both foreign exchange and rupee) required for the expansion of capacity. 1997 - MRPL commissioned its three million tonnes refinery towards the end of 1995-96 and it has been operating at more than 100 per cent capacity. 1998 - The Company has entered into an agreement with the National Securities Depository Limited (NSDL) to facilitate investors to hold the Shares in the electronic form. 1999 - The Company had issued 376947036 FCDs of Rs.19.26 each to the Promoter Companies for raising part Funds required for the expansion project which were converted into 376947036 equity shares of Rs.10/each at a premium of Rs.9.26 per equity share. - MRPL is signing a crude-sourcing deal with the Chevron-Texaco combine. 2000 - The Company a joint venture between the AV Birla group and Hindustan Petroleum, is set to register losses of arond Rs 300 crore for the 1999-2000 financial year. - Reliance Petroleum and Mangalore Refineries have entered into First World markets with petro-products like motor spirit at prices, which are not only competitive but have also contributed to the bottomlines of these companies. - The Company has enhanced its refining capacity to 12 million tonnes

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through a cost-effective process of debottlenecking some units. - The Company is expanding its refining capacity from the existing 3 to 9 million tonnes per annum. - The Company joint venture between the Aditya Birla group and Hindustan Petroleum Corporation Ltd has been its outstandings from the Oil Coordination Committee rise to whopping Rs 792 crore. - H.L. Zutshi has been elected as Chairman of the company for period of two years. - Jagdish Mehta has stepped down as joint MD of Mangalore Refinery and Petrochemicals the nine million tonne refinery promoted by HPCL and the AV Birla group of companies. - The Company despite intense lobbying with Petronet India, has been denied a 26 per cent stake in the Mangalore-Bangalore propline. 2001 - ICRA has downgraded the non-convertible debenture program and the partially-convertible debenture programe of the company. - Refineries and Petrochemicals Ltd (MRPL) has reported a net loss of Rs 185.04 crore for the year ended March 31, 2001. 2002 - Mangalore Refinery & Petrochemicals Ltd has informed that IDBI has appointed their nominee Shri G M Ramamurthy on the Board of the company. -New Delhi: The board of directors of Oil and Natural Gas Corporation (ONGC) has approved the acquisition of the Aditya Birla group's stake in the joint venture Mangalore Refinery and Petrochemicals Ltd (MRPL). -Mangalore Refinery & Petrochemicals Ltd has informed that the Board of Directors approved issuance of additional Equity Shares upto Rs 20,000 million on preferential basis as per the existing SEBI guidelines for such issue of preferential shares to ONGC and /or Lenders of the Company on conversion of their debt into equity as part of a proposed financial restructuring of the company subject to approval of Shareholders of the company and lenders of the company and lenders of the company and further subject to approval of Govt. of India for cancellation of tripartite MOU dated June 26,1987 between Govt. of India, Hindustan Petroleum Corporation Ltd. (HPCL) and Indian Rayon & Industries Ltd. (IRIL) and completion of sale of Shares of IRIL and its associates in MRPL to ONGC.

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2003 -Mangalore Refinery and Petrochemical Ltd has informed BSE that ONGC has acquired its 37.38% equity stake. -Shri.M.C.Bhargodia, Shri B.N.Puranmalka, Shri P Ramakrishnan, Shri Ravi Kastia have resigned as directors of the company. -ICRA has assigned 'A1+' rating to MRPL in respect of its short term borrowings programme. -MRPL issued MIBOR linked bonds of Rs.500million with a green shoe option of Rs.250million at the interest of MIBOR plus 15 basispoint. -ONGC and MRPL have signed a Memorandum of Understanding for the supply of crude oil. -Becomes the third largest refinery in India 2004 -Shell ties up with MRPL for petro products -MRPL prepays Rs 2,380 Cr under debt restructuring package

-MRPL inks agreement with Shell -Equity shares of Mangalore Refineries and Petrochemicals, a subsidiary of state-owned Oil and Natural Gas Corporation, enter 'A' group of scrips at Bombay Stock Exchange from March 1, 2004 -Mangalore Refinery & Petrochemicals Ltd has informed that Oil & Natural Gas Corporation Ltd, the promoter company has nominated Dr Ashok Kumar Balyan, Director (HR) ONGC, as director on the Board of MRPL 2005 -MRPL signs pact with Saudi, Iran firms for crude supply -MRPL forges alliance with Ashok Leyland for retail outlets - The Centre for High Technology (CHT) selects Mangalore Refinery and Petrochemicals Ltd (MRPL) for the Jawaharlal Nehru centenary awards for energy performance of refineries for 2003-04. -MRPL bags Jawaharlal Nehru award 2006 -Mangalore SEZ Co names Subir Raha as chairman -Mangalore Refinery forges alliance with Abu Dhabi firm

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-MRPL inks agreement with Mauritius co -Mangalore Refinery & Petrochemicals Ltd (MRPL) has informed that ICRA Ltd has assigned an Issuer Rating of IR AAA (pronounced as IR Triple A) to the Company. 2007 -Mangalore Refinery & Petrochemicals Ltd (MRPL) has appointed Shri. V P Joy as Director of the Company w.e.f. January 16, 2007. -Mangalore Refinery & Petrochemicals Ltd (MRPL) has appointed Shri. V K Dewangan, Deputy Secretary (E-I), Ministry of Petroleum & Natural Gas as Director of the Company w.e.f. March 05, 2007. -MRPL signs long-term product supply agreement with Shell -MRPL receives award for energy performance 2008 -Mangalore Refinery & Petrochemicals Ltd has entered into an agreement to form a Joint Venture with Shell for domestic marketing of Aviation Fuel. -MRPL & SHELL enter into Joint Venture in Aviation Fuelling Business -Shell-MRPL joins hand to supply ATF to Jet Airways 2009 -MRPL to buy crude from Cairn's Rajasthan blocks -MRPL gets first consignment of crude from Cairn

Source : Dion Global Solutions Limited

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alance Sheet of Mangalore Refinery and Petrochemicals

Mar '12

------------------- in Rs. Cr. ------------------Mar '11 Mar '10 Mar '09 Mar

12 mths

12 mths

12 mths

12 mths

12 mt

Sources Of Funds Total Share Capital Equity Share Capital 1,757.26 1,752.66 1,761.85 1,752.66 1,761.85 1,752.66 1,761.83 1,752.65

1,761.

1,752.

14

Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities

0.00 4.59 5,471.94 0.00 7,229.20 262.36 5,489.34 5,751.70 12,980.90 Mar '12

0.00 9.19 4,767.05 0.00 6,528.90 202.71 1,354.26 1,556.97 8,085.87 Mar '11

0.00 9.19 3,834.70 0.00 5,596.55 342.14 1,354.26 1,696.40 7,292.95 Mar '10

0.00 9.19 2,967.57 0.00 4,729.40 238.94 1,747.86 1,986.80 6,716.20 Mar '09

0.

9.

2,021.

0.

3,782.

350.

1,707.

2,058.

5,841. Mar

12 mths

12 mths

12 mths

12 mths

12 mt

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances 9,024.28 4,964.43 4,059.85 7,089.17 42.28 7,817.58 3,459.27 2,234.72 13,511.57 1,453.24 0.00 14,964.81 7,619.75 4,530.14 3,089.61 5,467.43 94.83 4,097.38 2,526.63 13.48 6,637.49 1,083.15 2,401.62 10,122.26 7,435.17 4,142.81 3,292.36 1,860.29 1,623.66 3,114.36 1,657.22 22.98 4,794.56 2,522.98 2,321.03 9,638.57 7,415.88 3,766.14 3,649.74 414.95 642.89 1,890.43 1,286.98 15.37 3,192.78 2,569.95 1,755.75 7,518.48

7,371.

3,398.

3,972.

133.

645.

3,624.

2,204.

12.

5,841.

1,378.

394.

7,614.

15

Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets

0.00 12,841.76 333.43 13,175.19 1,789.62 0.00 12,980.92

0.00 10,328.82 359.45 10,688.27 -566.01 0.00 8,085.86

0.00 7,023.84 2,098.08 9,121.92 516.65 0.00 7,292.96

0.00 3,902.06 1,607.81 5,509.87 2,008.61 0.00 6,716.19

0.

5,506.

1,017.

6,524.

1,089.

0.

5,841.

Contingent Liabilities Book Value (Rs)

3,904.57 41.22

6,417.62 37.20

9,788.60 31.88

5,739.54 26.93

746.

21.

Source : Dion Global Solutions Limited

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Profit & Loss account of Mangalore Refinery and Petrochemicals

Mar '12

------------------- in Rs. Cr. ------------------Mar '11 Mar '10 Mar '09 Mar

12 mths

12 mths

12 mths

12 mths

12 mt

Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income 57,213.69 3,443.41 53,770.28 347.38 150.21 54,267.87 43,800.24 4,831.76 38,968.48 214.91 815.27 39,998.66 36,080.91 4,210.74 31,870.17 671.42 295.88 32,837.47 42,718.89 4,439.69 38,279.20 -426.90 -596.86 37,255.44

37,339.

4,773.

32,565.

206.

104.

32,877.

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Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 51,299.58 11.97 160.64 79.05 0.00 755.86 0.00 52,307.10 Mar '12 37,272.60 12.02 184.54 72.85 175.84 67.94 0.00 37,785.79 Mar '11 30,284.32 10.39 95.90 65.86 129.26 64.10 0.00 30,649.83 Mar '10 34,537.71 13.45 113.03 58.00 139.60 58.06 0.00 34,919.85 Mar '09

30,127.

3.

124.

48.

246.

63.

0.

30,615. Mar

12 mths

12 mths

12 mths

12 mths

12 mt

Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend

1,613.39 1,960.77 206.68 1,754.09 433.87 0.00 1,320.22 -1.42 1,318.80 410.20 908.58 1,007.53 0.00

1,997.96 2,212.87 104.37 2,108.50 391.42 0.00 1,717.08 25.10 1,742.18 565.40 1,176.63 513.18 0.00

1,516.22 2,187.64 389.33 1,798.31 115.50 0.00 1,682.81 8.44 1,691.25 578.58 1,112.38 365.50 0.00

2,762.49 2,335.59 143.45 2,192.14 382.32 0.00 1,809.82 -45.09 1,764.73 571.27 1,192.54 382.13 0.00

2,054.

2,261.

147.

2,114.

377.

0.

1,736.

-119.

1,617.

342.

1,272.

487.

0.

17

Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)

175.26 28.43

210.31 34.12

210.31 34.93

210.35 35.75

210.

35.

17,525.99 5.18 10.00 41.22

17,525.99 6.71 12.00 37.20

17,525.99 6.35 12.00 31.88

17,529.02 6.80 12.00 26.93

17,529.

7.

12.

21.

Source : Dion Global Solutions Limited 888

Quarterly Results of Mangalore Refinery and Petrochemicals

------------------- in Rs. Cr. -------------------

Jun '12

Mar '12

Dec '11

Sep '11

Jun '

Sales Turnover Other Income Total Income Total Expenses Operating Profit Profit On Sale Of Assets Profit On Sale Of Investments Gain/Loss On Foreign Exchange VRS Adjustment Other Extraordinary Income/Expenses Total Extraordinary Income/Expenses

12,813.53 45.80 12,859.33 14,106.49 -1,292.96 -------

16,075.08 33.00 16,108.08 15,056.40 1,018.68 -----2.23

12,966.84 8.20 12,975.04 12,649.14 317.70 ------4.71

11,648.43 150.21 11,798.64 11,571.04 77.39 ------0.79

13,371.

132.

13,504.

13,146.

225.

2.

18

Tax On Extraordinary Items Net Extra Ordinary Income/Expenses Gross Profit Interest PBDT Depreciation Depreciation On Revaluation Of Assets PBT Tax Net Profit Prior Years Income/Expenses Depreciation for Previous Years Written Back/ Provided Dividend Dividend Tax Dividend (%) Earnings Per Share Book Value Equity Reserves Face Value

---1,247.16 110.17 -1,357.33 137.51 --1,494.84 25.71 -1,520.55 -------1,752.60 -10.00

--1,051.68 37.47 1,016.44 124.77 -891.67 289.70 601.97 -----3.43 -1,752.60 -10.00

--325.90 42.31 279.01 117.37 -161.64 51.89 109.75 0.13 ----0.63 -1,752.60 -10.00

--227.60 99.93 126.88 96.50 -30.38 6.25 24.13 -----0.14 -1,752.60 -10.00

357.

26.

331.

95.

236.

63.

172.

0.

1,752.

10.

Source : Dion Global Solutions Limited 888

Competition
Name Last Price Market Cap.
(Rs. cr.)

Sales

Net Profit

Total Ass

19

Turnover Reliance IOC BPCL HPCL MRPL Essar Oil Chennai Petro Nagarjuna Oil 799.55 254.90 346.45 318.15 58.55 53.80 129.35 5.70
Enter Name

259,252.03 61,888.51 25,051.25 10,773.43 10,261.47 7,347.29 1,926.17 244.06

329,904.00 434,508.57 211,972.97 178,335.82 53,793.52 58,336.00 40,766.29 --

20,040.00 3,954.62 1,311.27 911.43 908.58 -4,199.00 61.83 -0.74

224,723

108,066

33,029

37,566

12,980

21,084

7,988

777

Compare MRPL with another company

Comparison with Competitors

Balance Sheet P&L Account Cash Flows Quarterly Half Yearly 9 Monthly Yearly

Balance Sheet MRPL

------------------- in Rs. Cr. ------------------Reliance IOC BPCL

HPC

Mar '12

Mar '12

Mar '11

Mar '11

Mar '1

Sources Of Funds Total Share Capital Equity Share Capital Share Application Money 1,757.26 1,752.66 0.00 3,271.00 3,271.00 0.00 2,427.95 2,427.95 0.00 361.54 361.54 0.00

339.0

339.0

0.0

20

Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities

4.59 5,471.94 0.00 7,229.20 262.36 5,489.34 5,751.70 12,980.90 MRPL

0.00 159,698.00 3,127.00 166,096.00 6,969.00 51,658.00 58,627.00 224,723.00 Reliance

0.00 52,904.37 0.00 55,332.32 20,379.65 32,354.22 52,733.87 108,066.19 IOC

0.00 13,696.08 0.00 14,057.62 4,033.10 14,938.77 18,971.87 33,029.49 BPCL

0.0

12,206.7

0.0

12,545.8

3,657.

21,363.5

25,021.1

37,566.9

HPC

Mar '12

Mar '12

Mar '11

Mar '11

Mar '1

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits 9,024.28 4,964.43 4,059.85 7,089.17 42.28 7,817.58 3,459.27 2,234.72 13,511.57 1,453.24 0.00 209,552.00 91,770.00 117,782.00 4,885.00 54,008.00 35,955.00 18,424.00 889.00 55,268.00 24,573.00 38,709.00 92,696.69 34,509.29 58,187.40 12,620.44 19,544.76 49,284.52 8,869.65 643.92 58,798.09 25,454.49 650.50 29,334.23 13,334.90 15,999.33 1,012.23 11,377.96 15,375.08 2,664.42 379.03 18,418.53 10,239.02 0.94

29,648.3

11,003.8

18,644.5

3,798.

11,335.0

16,622.2

2,654.

75.4

19,352.1

7,234.

4.5

21

Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets

14,964.81 0.00 12,841.76 333.43 13,175.19 1,789.62 0.00 12,980.92

118,550.00 0.00 66,244.00 4,258.00 70,502.00 48,048.00 0.00 224,723.00

84,903.08 0.00 60,441.18 6,763.46 67,204.64 17,698.44 15.15 108,066.19

28,658.49 0.00 20,848.49 3,170.03 24,018.52 4,639.97 0.00 33,029.49

26,590.9

0.0

20,997.4

1,804.

22,802.2

3,788.

0.0

37,566.9

Contingent Liabilities Book Value (Rs)

3,904.57 41.22

45,831.00 498.21

31,505.33 227.90

9,943.94 388.82

8,158.

370.4

Source : Dion Global Solutions Limited

888

Profit & Loss account MRPL Mar '12 Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 57,213.69 3,443.41 53,770.28 347.38 150.21 54,267.87 51,299.58 11.97 160.64 79.05 0.00 755.86 0.00 52,307.10

------------------- in Rs. Cr. ------------------Reliance IOC BPCL Mar '12 339,792.00 9,860.00 329,932.00 5,981.00 872.00 336,785.00 279,737.00 4,094.00 2,857.00 2,557.00 7,510.00 255.00 -37.00 296,973.00 Mar '11 357,275.89 26,141.04 331,134.85 3,554.94 4,972.93 339,662.72 299,806.97 1,880.24 6,429.58 1,638.36 13,378.79 1,249.03 -945.24 323,437.73 Mar '11 163,218.36 12,380.03 150,838.33 1,321.04 2,056.05 154,215.42 141,028.03 475.89 2,802.85 410.13 3,331.54 1,335.33 0.00 149,383.77
22

HPC

Mar '

142,396. 9,182. 133,213. 1,332. 3,438. 137,984.

126,018. 339. 2,017. 598. 3,519. 836. 0. 133,329.

MRPL Mar '12 Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)
888

Reliance Mar '12 33,831.00 39,812.00 2,668.00 37,144.00 11,394.00 0.00 25,750.00 0.00 25,750.00 5,710.00 20,040.00 17,236.00 0.00 2,531.00 410.00 32,710.59 61.26 85.00 498.21

IOC Mar '11 12,670.05 16,224.99 2,702.14 13,522.85 4,546.67 132.04 8,844.14 -41.93 8,802.21 1,297.71 7,445.48 23,630.76 0.00 2,306.55 358.70 24,279.52 30.67 95.00 227.90

BPCL Mar '11 3,510.61 4,831.65 1,100.78 3,730.87 1,655.40 0.00 2,075.47 247.45 2,322.92 776.24 1,546.68 8,355.74 0.00 506.16 71.08 3,615.42 42.78 140.00 388.82

HPC

Mar '

1,613.39 1,960.77 206.68 1,754.09 433.87 0.00 1,320.22 -1.42 1,318.80 410.20 908.58 1,007.53 0.00 175.26 28.43 17,525.99 5.18 10.00 41.22

3,323. 4,655. 887. 3,768. 1,406. 0. 2,361. -97. 2,263. 724. 1,539. 7,310. 0. 474. 76.

3,386. 45. 140. 370.

Source : Dion Global Solutions Limited Directors Report Year End : Mar '12
The behalf of the Board of Directors, I take pleasure in presenting the 24th Annual report on the performance of your company, together with the Audit report and Audited account for the year ended 31/03/2012. It is a matter of immense satisfaction that the performance of your company both on the Physical as well as Fiscal parameters created certain new benchmarks of excellence during the year 2011-12. Major highlights of your Company''s performance during the year are enumerated below: 1. 2. 3. 4. Highest ever Refinery crude thruput at 12.82 MMTPA. Highest ever Turnover at Rs. 572,068 Million. Highest ever Export Turnover at Rs. 234,183 Million. Lowest ever Energy consumption index of 57.92 MBN.

5. Nameplate capacity of the refinery has been enhanced to 15 MMTPA with successful commissioning of 3 MMTPA Crude and Vaccum Distillation Unit III (CDU&VDU III) of Phase-III project on 29/03/2012. 6. With Commissioning of CDU and VDU-III before 31/03/2012 your

23

Company is eligible for benefits under Section 80(IB) of the Income Tax Act, 1962 for Phase- III project. 7. Government of Karnataka has sanctioned an attractive Tax Incentive package for the Phase-III project. 8. Diesel Hydro Treater/ Hydrogen Generation/ Coker Gas Oil Hydro Treater Units were mechanically completed before 31/03/2012. 9. DPE Adjudged performance of your company as Excellent for the year 2010- 11 against the MoU target. 1.1 FINANCIAL PERFORMANCE (Rs. In Million) Year ended ended 31st March, 2012 2011 Turnover 572,068 437,236 Profit be fore Depreciation 22,332 Interest and Tax Interest and Finance Charges 1,047 Gross Profit after interest but before 21,285 Depreciation and Tax Depreciation and Amortizations 3,914 Profit Before 17,371 Tax 4,339 13,202 4,116 9,086 2,067 19 08 31st March, Year

17,541

Provision for Taxation 5,605 Profit after Tax 11,766 Balance of Profit/(Loss) brought forward 959 from previous year

42 998

33

24

Surplus available for appropriation 45,727 Appropriations: Proposed dividend on Preference 0,00 Shares (Rs. 9,186) Proposed Dividend on Equity Shares 2,103 Tax on Dividend 341 Transfer to Capital Redemption Reserve Transfer to General reserve 295 Balance carried to Balance Sheet 42,988 1.2 DIVIDEND

52,074

0,000

1,753 284 46 49,991

The Board of Directors of your company is pleased to recommend dividend payout of 10% (Rs. 1/- per equity share) ofRs. 10/- each fully paid-up in view of the ongoing project investment and the reduced profitability. This will absorb Rs. 2,036 Million including Rs. 284 Million as dividend distribution tax. 1.3 OPERATIONAL PERFORMANCE The Highest ever Refinery thruput was 12.82 MMTPA for the year 2011-12 compared to 12.64 MMTPA during the previous year. During the last fiscal, your Company has completed the revamp of its CDU/ VDU -I unit as well as Hydro Cracker Unit-II. Your company, keeping in view the process requirement and to maintain high utilization of its assets, has planned these revamps along with the turnaround shutdowns during the year 2011-12. During the year 2011-12, your company has processed three new crudes i.e., Agbami, COCO, Mellitah and continues to expand its crude basket. 1.4 EXPORTS Your company has achieved highest ever export turnover ofRs. 234,183 Million during the year 2011-12 by exporting products like Motor Spirit (MS), Naphtha, Mixed Xylene, High Speed Diesel (HSD), Jet fuel and Fuel Oil (FO).

25

Your Company continues to have the Term export contract for the supply of petroleum products to Mauritius with the State Trading Corporation (STC), Mauritius. In the global competitive market, your company has secured its place by exporting the petroleum products and continues to explore opportunities for its growth. 1.5 SAFETY PERFORMANCE The year CDU/VDUaccident previous 2011-12 witnessed successful and safe commissioning of III of Phase-III. Your company has also recorded longest free period of 1662 days during the year by surpassing best record of 1301 days during the year.

Your company is committed towards imparting continuous training in fire & safety practices. During the year under review, 885 Nos. of Plant employees and 7,184 Nos. of contract employees were trained in Fire and Industrial Safety. Employees of your company were also trained on safety aspects and practices during the year. Your company has conducted Multidisciplinary Internal Safety Audit and OISD external surprise audit was also conducted during the year and its recommendations are being complied with. 1.6 ENVIRONMENT MANAGEMENT Your company believes in Perform beyond Compliance for Protection of the Environment. Your Company is ISO 14001:2004 certified company, authenticated by TUV Rheinl and. Your Company has undertaken following major initiatives for Greener Environment during the last fiscal: - Wet Air Oxidation Unit is under trial to treat Spent Caustic and to improve the WWTP performance. - An advanced Reverse Osmosis Plant is being commissioned for maximizing the quantity of treated effluent recycle. - Condensate Recovery Unit commissioned in CDU-1 resulting reduction in fresh water consumption. Similar units are planned for other process units as well. - Second continuous ambient air quality monitoring system was installed in the refinery to monitor the ambient air quality. - An external agency monitors Ambient Air Quality at 7 locations in and around the refinery.

26

- A Closed Bioremediation Unit is being commissioned in the refinery to treat oily sludge generated in the refinery. - VOC Emission monitoring is being done at 74,000 points in the refinery through reputed agency and corrective measures taken to effectively minimize the same. - Community awareness programme was organized in the neighboring villages in association with Karnataka State Pollution Control Board. - In a unique partnership with Karnataka Forest Department, your company is developing green belt in 120 acres of land. As a first stage, 40,000 saplings are being grown in an offsite nursery by the Forest Department, which will be later transplanted in the green belt. 1.6.1 Environmental Performance: Your company continues to comply with the Environmental Regulations and also making its best efforts for protection of environment by taking various steps. Following major actions were taken to prevent water and air pollution. Water: - Effluent treatment plant operation was normal throughout the year. - Treated effluent quality was well within the prescribed limits. - Seawater quality monitoring carried out by M/s. College of Fisheries indicates no adverse effect on the marine environment due to treated effluent discharge. - Average treated effluent recycle to cooling towers during the year was about 74% - Treated effluent after maximum recycle and within the stipulated standards are discharged into sea at a distance of 700 m and at a depth of 6.5m through diffusers for maximum dispersion & dilutions. Independent government agency monitors the marine ecology at the outfall point in the sea on a fortnight basis. Till date there has been no adverse effect on the marine eco-system. - Cooling towers are operated at greater than 6 Cycles of concentration, this measure has brought down the cooling tower blow down. Refinery practices the cascade blow down system in the cooling towers to conserve water and chemicals. Air: - Various energy conservation schemes are implemented for reducing air emission. - Utilization of low sulphur (less than 1% S) fuel oil in furnaces,

27

with average sulphur content, less than 1% maintained into fuel oil. - Maximum utilization of Ultra Low Sulphur Fuel Gas (less than 10 ppmS) in furnaces. - SRU units are running with more than 99% efficiency. - Ambient air quality monitoring being done inside and outside the Refinery by reputed external agency as per revised National Ambient Air Quality Monitoring Standard set by Ministry of Environment & Forests (MoEF). - Regular monitoring has minimized flaring. - Daily average Sulphur dioxide emissions from the refinery kept beneath the prescribed limits of 40.0 T/day. 1.6.2 Solid Waste Management and implementation of Supreme Court Monitoring Committee (SCMC) Recommendations: - 125MT of spent activated carbon was disposed off. - Bioremediation of 2000 Tonnes of oily sludge has been completed successfully. 1.6.3 Noise Pollution Control: Acoustic enclosures are provided for DG sets at Sarapady and APMC pumping station. 1.6.4 Future Plans: - Utilization of Liquified Natural Gas (LNG) as alternative fuel in the Refinery. - Vapour recovery System for light hydrocarbon storage tanks in Phase - III Refinery Project. - VOC Recovery system in Waste Water Treatment Plant (WWTP) of PhaseIII. 1.7 MARKETING Domestic Marketing of Products Your Company continues to increase its market sales segment of petroleum products in the state of adjoining states. The direct sales turn over 27,552 Million compared to Rs. 22,912 Million share in the direct Karnataka and its during the year was Rs. in the previousfiscal.

During the year Bitumen sales was increased to 293 TMT from 248 TMT sold during the previous year, registering a growth of 18%, Furnace Oil sales was increased to 146 TMT during the year from 99 TMT sold during the previous year, registering a growth of 47% and Mixed Xylene sales

28

was also increased by threefold during the year. 1.7.1 Retail Operations Keeping in view the under recoveries in retail marketing of autofuels, your company continues to adopt a non aggressive approach with its miniscule presence in the retail marketing. 1.7.2 New Products Marketing Plan Your company is setting up a Polypropylene (PP) plant with the capacity of 440 KTPA, integrated with Phase- III expansion of refinery complex with an investment of Rs. 18,037.8 Million for supplying to downstream processing industry. Detailed business plan for sale of Polypropylene in domestic market is being finalized. Storage infrastructure for Polypropylene is being developed at Hassan in the State of Karnataka. Your company is also setting up a Delayed Coker Unit (DCU) in its Phase- III expansion project, which will produce Petcoke, a new product in the product basket. Detailed business plan is being finalized for sale of Petcoke to major Industrial consumers in Southern India. 1.7.3 Joint Ventures Your Company is in Joint Venture (JV) with Shell B.V Netherland known as Shell MRPLA viation Fuel Services Private Limited (SMAFSPL) which supplies Aviation Turbine Fuel (ATF) to both domestic and international airlines at Indian airports. SMAFSPL is aggressively acquiring market share in both domestic and international airlines at Indian airports. It has commenced its refuelling operations at Mangalore airport. Your company continues to hold 50% equity in the Joint Ventures by holding 15 Million equity shares worth ofRs. 150 Million. Turnover of this JV Company was Rs. 5,173.48 Million during the year against Rs. 2,867.03 Million during the previous year and the Pre-tax profit ofRs. 181.59 Million during the year againstRs. 136.28 Million during the previous year. The JV Company declared its maiden dividend ofRs. 1 per equity share ofRs. 10 each fully paid during the year. 2. AWARDS AND RECOGNITION:

Your company has been recognized for its excellence in all of its operational areas and received following awards during the year: - Won the Unnatha Suraksha Puraskara award - 2011 conferred by National Safety Council -Karnataka Chapter for Outstanding Performance

29

in Safety Management Systems. - Excellent MoU rating received from Department of Public Enterprise, Government of India for the year 2010-11. - Secured second prize for outstanding performance in the area of Hindi implementation for the year 2010-2011 by the Town Official Language Committee (TOLIC), Mangalore. - Won BT- STAR PSU Excellence award 2012 for Excellence in Market Capitalization. - Won OISD Most Consistant Performer (Refineries) Award for 2009-10 3. CREDIT PROFILE

3.1 ICRA Limited has reaffirmed Issuer Rating IrAAA (pronounced IR Triple A) to your company. This rating indicates the highest credit quality rating assigned by ICRA and the rated entity i.e., which carries the lowest credit risk. 3.2 ICRA has reaffirmed the rating assigned to the Rs. 15,000 Million Fund- Based limits of your company at [ICRA] AAA (pronounced ICRA Triple A).The outlook on the rating is Stable. 3.3 ICRA has also reaffirmed the rating reassigned to the Rs. 55,000 Million Non- Fund based limits of your company at [ICRA] A1 (pronounced as ICRA A one plus). 3.4 ICRA has reaffirmed [ICRA] A1 (pronounced as ICRA A one plus).This rating indicates the very strong degree of safety regarding timely payment of financial obligations i.e., which carries the lowest credit risk. 3.5 CRISIL has reaffirmed [CCR AAA] (pronounced as CCR Triple A). This rating indicates highest degree of strength with regard to honoring debt obligations by your company. 4. FINANCIAL ACCOUNTING

The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles (GAAP) and in compliance with all applicable accounting standards and as per the guidance note on accounting for activities of the company issued by The Institute of Chartered Accountants of India (ICAI) and provisions of the Companies Act, 1956. The financial statements have been prepared under the Revised Schedule VI format of the Companies Act, 1956 pursuant to notification of Ministry of Corporate Affairs (MCA), Government of India. 5. INTERNAL CONTROL SYSTEM

Your company remains committed to ensure an effective internal control environment that provides assurance on the efficiency of operations and security of assets.

30

Internal audit department functions Committee chaired by an Independent established internal control review internal control environment to the Directors. 6. PROJECTS

under the supervision of the Audit Director. Your company has a well mechanism which assures effective Audit Committee and Board of

6.1 Phase-III Refinery Expansion and Up gradation Project As you are aware that your company is implementing Phase-III refinery expansion and up gradation project at an estimated cost of Rs. 121,600 Million, which will drive the future growth of the company. Major highlights of Phase-III refinery expansion and up gradation project are as under: - With the increased capacity of 15 MMTPA your company is well placed in the market vis-e-vis its peers in the Industry. - Your company is the second refinery in the country, capable of processing high TAN crudes. - The Nelson Complexity Index of the refinery of your company enhanced to approximately 9.0 from 6.0. - The Distillate yield of the refinery will be increased by approximately 80%. - Your company will produce value added products like Propylene from the low value black oil. - The Diesel Hydro Treater (DHDT) of the refinery of your company will convert the High Speed Diesel (HSD) into Euro -III, IV and V grade for domestic and global market. The Phase-III project is being executed in hybrid mode consisting of various modes of execution viz., Engineering, Procurement and Construction Management (EPCM), Open Book Execution (OBE) and Lump Sum Turn Key (LSTK). M/S Engineers India Limited (EIL) is the Project Management Consultant. M/S Jacob is the EPCM Contractor for the cDu/VDU and M/S EIL is the contractor for Petro Fluidized Catalytic Cracking Unit (PFCCU) and Sulphur Recovery Unit (SRU) which are executed under OBE and LSTK. Your company has achieved an overall progress of 95.7% against scheduled target of 100% as of 15/07/2012 in Phase-III project and is in the process of progressive commissioning of the following major units:(i) Hydrogen Generation Unit (HGU) (ii) Diesel Hydro Treater Unit (DHDT) (iii) Sulphur Recovery Unit (SRU)

31

(iv) Captive Power Plant (CPP) (v) Petro Fluidized Catalytic Cracking Unit (PFCCU) (vi) Delayed Coker Unit (DCU) (vii) Coker Gas Oil Hydro Treater Unit (CHTU) The crude was cut into CDU and VDU of Phase-III on 25/03/2012 after mechanical completion of necessary fire water network, flare network, utilities control systems and various finished products were routed to respective storage tanks on 29/03/2012. Hydrogen Generation Unit (HGU) was succusfully commissioned on 18/07/2012 Two crude storage tanks each having 60,000 m3 capacity were commissioned on 30/3/2012 to enhance the crude storage capacity of the refinery of your company. Wet Air Oxidation unit, a part of the auxiliary units/facilities was commissioned on 13/12/2011. The Phase-III project has Hydrocarbon streams interconnections with the existing Phase-1 & II of the refinery of your company. Revamp of the existing Hydro Cracker Units (HCU-1 and hCu-2) has been successfully completed and commissioned during May, 2012. Your company is pleased to inform that the Government of Karnataka has given an attractive incentive package consisting of following fiscal benefits for Phase- III project: - Exemption from payment of Entry Tax on plant and machinery and capital goods during the initial period of 4 years from the date of commencement of project implementation. - Exemption from payment of Entry Tax on the crude oil thruput in Phase-III for15yearsfrom the start of commercial production of the Phase-III. - Exemption from Central Sale Tax for 15 years from the date of commencement of commercial production for all the interstate sales. - Interest free soft loan at the rate of 100% of eligible gross VAT for first 3 years and 60% of eligible gross VAT on the sale of Polypropylene, Petroleum Coke, LSHS, Naphtha, LPG (incremental production), Mixed Xylenes and reformate to non SEZ units for next 12 years to be repaid after 15 years by 15 equal annual installments limited to Rs. 5000 Million per annum. The Phase-III project of your company is now eligible for Income Tax benefit under Section 80(IB) of the Income Tax Act, 1962 as it has successfully commissioned CDU and VDU of Phase-III project on

32

29/03/2012 before the sunset deadline of 31/03/2012 .This benefit will place your company in a better position for competing with its peers in the market. Hydrogen Generation (HG), Diesel Hydro Treater (DHDT), and Coker Gas Oil Hydro Treater (CHT) units along with related utilities were also mechanically completed before March 2012. The pre-commissioning activities of these units are nearing completion by extending steam and power from the existing facilities of Phase-I and Phase-II due to delay in commissioning of Captive Power Plant (CPP) of Phase -III by its LSTK contractor ( M/s BHEL). It is expected that M/s BHEL will be able to commission CPP of Phase-III by the end of September 2012 as assured by it. 6.2 Polypropylene Project As you are aware that your company is setting up a Polypropylene (PP) unit integrated with the Phase-III project at an estimated Capex of Rs. 18,037.8 Million. M/s. Engineers India Limited (EIL) has been engaged to implement this project under OBE convertable to LSTK methodology and M/s. Novolen Technology, Germany has been selected as the licensor for the same. Project Displaced Families (PDF) problems had delayed the site work which resulted in shifting the location of this project. Fresh environmental clearance has been obtained from the Ministry of Environment and Forest (MoEF) due to shifting of the location. Polypropylene Project has achieved an overall progress of 82.2% against scheduled target of 97.7% as of 15/07/2012. Cost commitment made for this project was Rs. 12,976.6 Million and the cumulative expenditure incurred was Rs. 5,492.1 Million as of 31/03/2012. 6.3 Single Point Mooring (SPM) Project Your company is setting up Single Point Mooring (SPM) project along with coastal booster pumping station within the port limits at a location of 16 kilometers inside the sea (High-Seas) having draft availability of 30 meters for handling Very Large Crude Carrier (VLCC) at an estimated cost of Rs. 10,440 Million. SPM facility will have following advantages: a. Use of VLCC will reduce the average freight cost of crude.

b. Flexibility to receive opportunity crudes from West African and Latin American countries. c. De-congestion of existing jetties at New Mangalore Port Trust (NMPT) will result in handling more petroleum products.

33

d. Crude will be pumped to the Indian Strategic Petroleum Reserve Limited (ISPRL) underground cavern for storage of Crude oil at Mangalore and Padur. Single Point Mooring (SPM) project has achieved an overall progress of 95.6% against the scheduled target of 100% as of 15/07/2012 and is expected to commence trial operation by the end of September, 2012. 6.4 Future Projects for Growth During Global Investors Meet on 7th & 8th June, 2012 at Bengaluru, your company has signed a Memorandum of Understanding with the Government of Karnataka for setting up a Linear Alkyl Benzene Plant (a raw material to manufacture Detergents) and to expand its refining capacity to 21 MMTPA subject to techno- economic viability and availability of required infrastructure at Mangalore with an approximate investment ofRs. 85,000 Million. 7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO The additional information required to be disclosed pursuant to Section 217(1) (e) of the Companies Act,1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in ''Annexure-1'' which forms part of this Report. 8. PARTICULARS OF EMPLOYEES

Your company being a government company is exempted from disclosure of particulars of employees under Section 217(2A) of the Companies Act, 1956, and the Particulars of Employees Amendment Rules, 2011. 9. RIGHT TOINFORMATIONACT, 2005

Your company has a RTI manual posted in the website www.mrpl.co.in. During the year 87 applications were received, out of which 82 were disposed off before 31/03/2012 and balance 5 applications disposed off after 01/04/2012. 10. HUMAN RESOURCES

- During the year 2011-12, your company continued to enjoy cordial and harmonious relations with the collectives and as evidence to the same not a single man-hour was lost on account of any industrial disturbance. - Your company has recruited 168 employees including 13 women employees during the year 2011-12, out of these 20 employees are

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Schedule Caste (SC), 12 Schedule Tribe (ST) and 1 Physically Challenged (PC). - Total employee strength as on 31/03/2012 was 1500 including 104 women employees, out of these employees, 597 are from Management cadre whereas 903 are from Non-Management cadre. The number of employees belonging to SC/ST categories are 129 and Physically Challenged are 5. - During the year 2011-12, your company devoted 5095 man-days for Training, Development and Learning which amounts to an average 3.45 man-days per employee. This includes functional, developmental and special training programs covering the entire spectrum of employees. 11. OFFICIAL LANGUAGE (OL)

Your company continues to implement Official Language (OL) Policy as per the Annual Programme prescribed by the Department of Official Language, Ministry of Home Affairs, Government of India, in this regard following steps were undertaken during the year. - Periodical reports are sent to all the Government agencies including Administrative Ministry, Ministry of Petroleum and Natural Gas (MoP & NG) highlighting the progress made in promotion of Hindi. - Hindi workshops and Hindi classes namely Prabodh, Praveen and Pragya are organized on a regular basis. - Special efforts were made to activate Unicode facilities on all the computers used in the office for increasing the correspondence in OL. - To motivate employees, incentive schemes such as cash award and personal pay is introduced. - An OL inspection of various departments and offices was carried out. Hindi Fortnight was celebrated and many Hindi competitions such as Hindi dictation, Handwriting, Admin-Glossary, speech etc. were conducted for the employees and their family members during the year. Competitions are also held in Hindi language for employees and their family members during National Safety Day, Environment Day, Security awareness week and Vigilance awareness week. Hindi Hasya Kavi Sammelan was held on 30/03/2012, 5 National level eminent Hindi poets from different parts of the country participated in this programme organized by your company. Official Language Implementation Committee (OLIC) meetings, were held on quarterly basis under the chairmanship of Managing Director. All out efforts are being made to promote OL in your company. Your company has been awarded first prize for outstanding performance

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in Hindi implementation for the year 2011-12 by the Town Official Language Implementation Committee (TOLIC), Mangalore. Your company also won eight prizes and stood Second at the TOLiC level competitions. 12. VIGILANCE FUNCTION

Your company has developed a structured mechanism of vigilance functions and its practices are focused towards creation of value for all the stakeholders. The practices involve multi-layer checks and balances to improve transparency. Vigilance awareness and preventive vigilance activities were continuously carried out during the year. Guidelines of Central Vigilance Commission are being followed. Officers in sensitive posts are rotated regularly. Whistle Blower Policy for employees is in place which ensures that a genuine whistle blower is granted due protection from any victimization. In compliance with CVC instruction, your company has implemented a complaint handling policy in which all complaints received from various sources can get recorded and can be examined by vigilance. Further, in line with CVC instruction, your company has achieved very high compliance level with regard to e-payment and e-tender. Leveraging of technology to enhance transparency has been a thrust area of action in which vigilance has played a catalytic role. The website of the company displays downloadable tender document, publication of information of works awarded on nomination basis, publication of post award information of contracts. 13. SECURITY MEASURES

Your company continues to improve the security measures at the refinery. The following steps were taken to improve the security during the year: 13.1 CISF Induction Ministry of Home Affairs (MHA) has approved induction of 200 CISF personnel for security of the refinery. A Quick Reaction Team (QRT) team consisting of 22 CISF personnel was inducted to guard the refinery. Construction of an exclusive Township for CISF personnel is underway at a cost of Rs. 320 Million and is scheduled for completion in April, 2013. The second phase of CISF induction with an additional 80 personnel is expected to take place by September, 2012. The remaining CISF manpower will be inducted after completion of CISF Township. 13.2 CCTV Surveillance The refinery is under surveillance of state-of-the art CCTV Network designed to cover all the access control gates and other strategic locations.

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13.3 Access Control Access to refinery area is controlled by computerised Smart Card & Manual Pass system for contract labourers and RFID smart card for employees. Access control to the refinery area is being improved by completion of the proposed new refinery gate and security building. The security building will be equipped with multi-zone metal detectors and X-ray baggage scanners. This gate will also have turnstiles controlled through bio-metric card readers for strict access control to refinery area. Anti-vehicle intrusion systems like Tyre Rippers are also being planned to be installed at refinery gates. Marketing operation and security infrastructure is being built in the lower plateau of the Refinery. 13.4 IB Recommendations A team from Industrial Security Branch of Intelligence Bureau (IB) visits the refinery of your company once in every two years to inspect security arrangements, identify grey area and recommend / suggest improvements. All the recommendations given by the IB in the year 2008 have been complied. The last IB inspection was carried out during December, 2010 and out of 30 Recommendations, majority have been complied. The remaining recommendations are under varying stages of compliance. 13.5 Security Audit by ONGC Chief of Security, Oil and Natural Gas Corporation (ONGC), carries out periodical review of security of the refinery besides periodical security audits, and recommends for improvement which are implemented. 13.6 Mock Drills A Protection Scheme to safeguard the refinery of your company from the events of strike, law & order situation have been finalized with the district Commissioner and Police Commissioner, Mangalore. Regular security mock drills and district level security exercises are conducted jointly with State Police and Coast Guards. Your company is actively involved in the coastal security exercises conducted at the coastal area jointly with Coast Guard. 14. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

Your company''s CSR initiative continues to be influenced by the needs and concerns of the community residing in the close proximity of the refinery. The CSR initiative of your company known as Samrakshan have 5 areas with a vision to protect, preserve and promote people, peace and progress in and around of the refinery as under. - Shikshana Samrakshan, - Arogya Samrakshan

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- Bahujan Samrakshan - Prakrithi Samrakshan - Sanskrithi Samrakshan With these objectives, your company has implemented number of CSR schemes during the year. The major schemes covered under the CSR activities during the year includes construction of community hall, Road asphalting, mid- day meal to school students, construction of school building, toilet blocks for schools, scholarship for meritorious students including SC/ST students, add on facilities to SC/ST community, self employment training for women, free distribution of sewing machines to women , construction of Anganwadi, artificial limb camp, mega medical camp and running a free primary health centre. The main thrust areas where your company has taken various initiatives are in line with DPE guidelines and has spentRs. 240 Million in various CSR schemes during last 4 years. 15. DIRECTORS

During the year following changes took place in Board of Directors of your company: 15.1 I, Shri Sudhir Vasudeva took over as Chairman of your Company from 03/10/2011. 15.2 Shri Vishnu Agrawal has assumed the office of Director (Finance) with effect from 01/04/2011 pursuant to his appointment as Director (Finance) of MRPL by the Ministry of Petroleum & Natural Gas (MoP&NG), Government of India. 15.3 Shri D.K.Sarraf has resigned on 16/09/2011 from the Board consequent upon his appointment as Managing Director of ONGC Videsh Limited (OVL). 15.4 The nomination of Shri A.K.Hazarika, and Shri K.S.Jamestin, was withdrawn by ONGC the parent company with effect from 31/10/2011 for optimizing the strength of the Board in compliance with Clause 3.1.3 of the mandatory guidelines of corporate governance for Central Public Sector Enterprises (CPSE) issued by Department of Public Enterprises (DPE), Government of India. Shri A.K.Hazarika and Shri K.S.Jamestin are continuing as special invitees on the Board of the company. 15.5 Shri U.K. Basu, Former Managing Director superannuated from the services of MRPL on 30/06/2012 and resigned from the Board of the company with effect from 01/07/2012. 15.6 Shri P.P. Upadhya, has assumed the office of Managing Director with additional change of Director (Technical) MRPL w.e.f. 01/07/2012,

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pursuant to his appointment as Managing Director and addittional charge of Director (Technical) of MRPL by the Ministry of Petroleum & Natural Gas (MoP&NG), Government of India. 15.7 The Board wishes to place on records its appreciation for the services rendered by Shri U.K. Basu as Managing Director and Shri D.K.Sarraf as Director during their tenure on the Board of the Company. 15.8 In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Dr. A.K. Rath will retire by rotation at the 24th Annual General Meeting of the Company. Dr. A.K. Rath, being eligible, offers himself for re-appointment as Director of the company. 15.9 Dr. D.Chandrasekharam was nominated by ONGC pursuant to clause 6.1 of the guidelines on corporate governance for CPSEs and was appointed as an additional Director with effect from 10/01/2012 by the Board of Directors who vacates his office as Additional Director and being eligible offers himself for re- appointment as a Director in the 24th Annual General Meeting. 15.10 Brief resume of the Directors seeking appointment / re-appointment, together with the nature of their expertise in specific functional areas, the names of the companies in which they hold the directorship and the membership / chairmanship of committees of the Board, and their shareholding in the Company are furnished in the Annexure to the AGM notice. 15.11 Your Company has complied with all the mandatory provisions of clause 49 of the Listing Agreement relating to the corporate governance requirements and mandatory guidelines on corporate governance for CPSEs issued by Department of Public Enterprise (DPE), Government of India except having requisite number of Independent Directors on the Board of the Company. There are three Independent Directors on the Board of your company constituting 1/3rd of its strength. The company is pursuing with Ministry of Petroleum and Natural Gas (MoP&NG), Government of India for appointment of requisite number of Independent Directors. The Annual Report contains a separate section on corporate governance, which forms part of this report. 16. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' responsibility statement, it is hereby confirmed that: i) In the preparation of the Annual Accounts, the applicable accounting

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standards have been followed and that there are no material departures from the same. ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company as at 31st March,2012 and the Profit & Loss of the company for the year ended on that date. iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities, and iv) The Directors have prepared the Annual Accounts of the Company on a going concern basis. 17. FIXED DEPOSIT

Your Company has not accepted any fixed deposit during the year from the public. 18. CORPORATE GOVERNANCE

18.1 Your Company has complied with all the mandatory provisions of Clause 49 of the Listing Agreement relating to the corporate governance requirements and mandatory guidelines on corporate governance for CPSEs issued by DPE, Government of India except having requisite number of Independent Directors on the Board of the Company. There are three Independent Directors on the Board of your company constituting 1/3rd of its strength. The company is pursuing with Ministry of Petroleum and Natural Gas (MoP&NG), Government of India for appointment of requisite number of Independent Directors. 18.2 The Annual Report contains a separate section on Corporate Governance, which forms part of this report. 18.3 Your Company is listed with the Bombay Stock Exchange Limited and National Stock Exchange Limited. 18.4 Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, your Company has obtained the Certificate from the Joint Statutory Auditors of the Company, for Compliance of Corporate Governance which is annexed to and forms part of this report. 18.5 As a measure of good corporate governance, your Company has engaged M/s Ullas Kumar Melinamogaru & Associates Practicing Company Secretaries for conducting Annual Secretarial Compliance Audit for the year 2011-2012. M/s. Ullas Kumar Melinamogaru & Associates, Practicing Company Secretaries have issued Annual Secretarial Compliance Audit

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Report for the year 2011-12 which forms part of this report. 18.6 Chairman speech at the 24th Annual General Meeting (AGM) will be distributed to shareholders during the meeting and will be published in the leading news papers. 18.7 Your Company has despatched a copy of Annual Report consisting of Directors Report, Auditors Report, Balance Sheet and Profit & Loss Statement and other documents as required to be sent under the provisions of Companies Act 1956 to all, its members as on the records date i.e. 13.07.2012 pursuant to Section 219 and the Companies Act, 1956. 19. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of Clause 49 (IV) (F) of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report have been attached and forms part of this report. 20. AUDITORS

20.1 M/s. Maharaj N. R. Suresh & Co., Chennai and M/s. Gopalaiyer and Subramanian, Coimbatore have been appointed as joint Statutory Auditors of the Company for the Financial Year 2011-12 by Comptroller & Auditor General of India (C&AG). 20.2 The report of the C&AG at Annexure III forms part of this Report. 20.3 Particulars of the Cost Auditor for the financial year 2011-12 (a) M/s. Musib and Associates, Cost Accountants has been appointed as Cost Auditor for the year 2011-12. (b) Cost Audit report for the year 2011-12 will be filed before the due date i.e. 27/09/2011. 21. ACKNOWLEDGEMENT

21.1 Your Directors sincerely thank the Government of India (GoI), Ministry of Petroleum and Natural Gas (MoP&NG), Ministry of Finance (MoF), Ministry of Corporate Affairs (MCA), Department of Public Enterprise (DPE), Ministry of Environment and Forest (MoEF), Ministry of External Affairs (MEA), Ministry of Shipping (MoS), Ministry of Home Affairs (MHA) other Ministries and Departments of the Central Government and the Government of Karnataka, for their valuable support, guidance and continued co-operation. 21.2 Your Directors gratefully acknowledge support and direction provided by the parent company, Oil and Natural Gas Corporation Limited (ONGC) and the support of Hindustan Petroleum Corporation Limited (HPCL), as Promoters of the company.

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21.3 Your Directors wish to thank the shareholders for the continued confidence reposed on their Company. 21.4 Your Directors acknowledge the continuing co-operation and support received from New Mangalore Port Trust, Financial Institutions, Banks and all other stakeholders such as suppliers of crude oil, vendors, contractors, transporters. 21.5 Your Directors recognize the patronage extended by the valued customers for the products of the company and promise to provide them the best satisfaction. 21.6 Your Directors wish to place on record their sincere appreciation of the sustained and dedicated efforts put in by all the employees collectively and concertedly as a Team known as Team MRP. For and on behalf of the Board Place: New Delhi Date: 3rd August,2012 (Sudhir Vasudeva) Chairman

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State-owned Mangalore Refinery and Petrochemicals (MRPL) has posted a net loss of Rs 1,521 crore in the quarter ended June 2012 as against profit of Rs 203 crore in a year ago period. The company said the operating performance was hurt by refinery production in April. The loss was also due to rupee depreciation that fell nearly 8% against the US dollar. MRPL also reported a forex loss of Rs 649 crore in the April-June quarter. Gross refining margin (GRM) too turned negative at USD 4.15 a barrel as against a positive USD 3.72 a barrel year-on-year. Throughput during the quarter declined 12.4% YoY to 2.89 mt from 3.3 mt. Mangalore Refinery and Petrochemicals The stock fell as much as 12.7% intraday to hit a 52-week low of Rs 49.55.
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Mangalore, Aug. 10: MRPL is hoping BHEL will commission its captive power plant for phase-III unit by September-end. The power plant is key to the commissioning of phase-III, as the margin-driving units of phase-III are dependent on its commissioning. The annual report of Mangalore Refinery and Petrochemicals Ltd (MRPL) for 2011-12 said the two margin drivers of the company the petro-fluidised catalytic cracking unit

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(PFCCU) and the delayed coker unit (DCU) can be commissioned only on availability of steam and power from BHELs captive power plant of phase-III.

Commissioning
The pre-commissioning activities of many other units of phase-III are nearing completion, drawing on steam and power from the existing facilities of phase-I and phase-II. It is expected that BHEL will be able to commission the captive power plant by the end of September, as assured by it, the report said. According to the original schedule, the plant should have been commissioned in April 2011. The power plant will supply around 110 MW to the refinery. The annual report said: your company has perceived risk as regards supply of utilities, namely steam and power from the captive power plant of the phase-III unit, being built by BHEL, due to continuous delay.

OTHER FACILITIES
The company said it is expecting delays from Mangalore Special Economic Zone Ltd for upcoming facilities such as water pipeline, infrastructure for effluent disposal, and corridor for the movement of trucks and other vehicles. This could impact the operation of phase-III, it said. MRPL took up the phase-III project in 2008 to expand the processing capacity of the refinery to 15 million tonnes a year, and to upgrade the low-value output into high-value products. Shortage of water and depleted reservoirs, following a poor monsoon, could also impact the refinerys operation, it said. vinayak.aj@thehindu.co.in
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MRPL eyes Mallyas Mangalore Fertilizers stake

Piyush Pandey & Boby Kurian, TNN | Mar 15, 2012, 12.59AM IST MUMBAI: Mangalore Refinery and Petrochemicals (MRPL), majority owned by stateowned ONGC, has expressed interest to acquire promoter's stake in Mangalore Chemicals & Fertilizers (MCF), said a source directly involved with the matter. Liquor baron Vijay Mallya's UB Group holds little over 30% stake in MCF, a non-core investment that may be sold to fund its bleeding Kingfisher Airlines. MRPL managing director Uttam Kumar Basu has written a letter to Mallya last month expressing interest to takeover MCF and seeking permission to start a due diligence. U K Basu declined to offer any comments while ONGC chairman Sudhir Vasudeva, who is in Kuwait to attend
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an international oil and gas conference, could not be immediately reached for his comments. Recent media reports said Zuari Industries and Chambal Chemicals & Fertilizers have evinced interest to buy Mallya's fertilizer unit. The ONGC subsidiary finds MCF a strategic fit, which is in close vicinity and the refinery by-products naphtha and fuel oil may be used as feed stock to operate the fertilizer plant. MRPL MD U K Basu term is coming to an end in June and MRPL director technical P P Upadhya is likely to take over new MD from July. "Yes, MRPL is interested in that asset but it's too premature to comment anything at this point of time," said the source briefed about the matter, adding that we are yet to hear anything from UB group. MCF shares closed at Rs 40, valuing the firm close to Rs 500 crore. But the deal is likely to be done at a premium considering the over 200 acres land bank of the company can be used for further expansion. "I don't think UB Group is interested in keeping this fertilizer business under its fold and it would be a good move if they sell it to MRPL because of the synergies it draws. With this sale, UB Group will get some breathing space as it struggles to keep afloat the debt laden kingfisher airlines," said investment advisor S P Tulsian.
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MRPL posts Rs.1,521 crore loss in Q1

Special Correspondent Share Comment print T+ Mangalore Refinery and Petrochemicals Limited (MRPL) has posted a loss in the first quarter of 2012-13, said a company release. The loss of Rs.1,521 crore post-tax is due to a sharp decline in crude prices, rupee value and throughput levels, it said. A sharp reduction in crude and product prices in April and May, steep decline in value of the rupee against the U.S. dollar, and lower throughput due to force majeure arising out of stoppage of water supply for about 10 days by the Dakshina Kannada District Administration, triggered the loss. The rupee value against the U.S. dollar during the first quarter from 51.53 to 55.62 led to an exchange loss of Rs.649 crore. With stoppage of water from the river source for 10 days, the company had to carry forward inventory when prices of crude and products were declining sharply, resulting in inventory loss of Rs.733 crore. P. P. Upadhya, Managing Director, told The Hindu that he was not worried about the stoppage of crude purchase from Iran. He said, It is not a crisis. Indian flag vessels can still get the crude and the Finance Ministry has said that cover must be extended to them. Meanwhile, he has found a working arrangement of combining spot purchases and annual supplies of crude and they are adjusted with the overall purchases remaining the same. The refinerys Phase-III expansion project is progressing well. The company completed the hydrogen unit on July 19. Commissioning of diesel hydro-desulphurisation (DHDS) is nearing completion. , says the release.

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