ABOUT THE COMPANY

MRPL was incorporated on March 7, 1988 and commenced its business on August 2, 1988.  MRPL’s registered office is located at Mudapadav, Kuthethoor P.O. via Katipalla, Mangalore, Karnataka.

MRPL was incorporated pursuant to a Memorandum of Understanding dated June 26, 1987 entered into between

The President of India representing the Government of India,

Hindustan Petroleum Corporation Ltd. (HPCL) and

Indian Rayon and Industries Limited and its affiliates (IRIL), for the purpose of setting up Crude Petroleum Refinery at Mangalore in the State of Karnataka.  MRPL has a refining capacity of 9.69 million tonnes per annum and is involved in refining crude oil into petroleum products.

In view of the losses incurred by MRPL in the last few years, the peak net worth of MRPL was eroded by more than 50 percent as on March 31, 2002 and accordingly as required under Section 23(1)(a)(ii) of the Sick Industrial Companies (Special Provisions) Act, 1985, a report was submitted to the Board for Industrial and Financial Reconstruction (BIFR). The company has earned a net profit of Rs. 4594.15 million for the year ended March 31, 2004, as against net loss of Rs. 4,118.06 million in previous year, thus achieving a turnaround in the very first year after becoming a subsidiary of ONGC.  MRPL is now no longer a potentially sick Company, as its accumulated losses have gone down below 50% of the net worth as on March 31, 2004. The company entered the elite club of top 30 Companies by Market Cap at The Stock Exchange, Mumbai (BSE) on August 17, 2003.

HPCL and IRIL each were holding 37.39 percent shares in MRPL.  The entire 37.39 percent of equity capital held by IRIL was acquired by ONGC on March 3, 2003.  ONGC infused a sum of Rs. 6000 million through preferential allotment of equity shares to ONGC on March 30, 2003. This increased its stake in MRPL to 51.27 percent of equity share capital of MRPL, making MRPL the subsidiary of ONGC and also a Government company under Section 617 of the Companies Act.  ONGC exercised the option in the option agreement as part of the Debt Restructuring Package at a cost of Rs. 3811 million.  As a result, our shareholding in MRPL increased to 71.62 percent of equity share capital of MRPL.

Some of the salient features of the Debt Restructuring Package are:

(i)          Reduction of average cost of borrowings from 13.61 percent to 9.15 percent with saving interest cost of Rs. 2,350 million

(ii)       Repayment period of loans extended to 12 years, with a four years moratorium (prepayment of debt permitted without prepayment premium)

(iii)     Prepayment of debt without prepayment premium

(iv)     Interest payments linked to cash flows and payable in a staggered manner

(v)       Conversion of part loan into equity shares / preference shares / zero coupon debentures; and

(vi)     Penal, compound, additional interest and liquidated damages were waived and interest including overdue interest as on June 30, 2002 along with principal term loan restructured into facility A & B, equity share, zero coupon debentures and 0.01% non-cumulative redeemable preference shares. MRPL has on January 7, 2004 prepaid all its Facility A and Facility B loans to the lenders along with stipulated secured yield.  MRPL has also prepaid to the lenders the existing outstanding under Facility C on January 19, 2004 along with stipulated secured yield.

For this purpose, ONGC had extended a term loan facility up to Rs. 26,000 million to MRPL at bank rate (presently 6 percent) as compared to the average interest rate of 9.15 percent p.a. under the DRP. This refinancing resulted in saving of Rs. 820 million p.a.  During 2004-05 the Company has already begun prepayment of the loan from ONGC and Rs. 6,000 million have been prepaid in the April-September period.  This will lead to a further reduction in interest cost by Rs. 360 million p.a.

Shareholding pattern of MRPL as on September 30, 2004

The shares of MRPL are listed on Mumbai and Mangalore stock exchanges.  The company has made application to Bangalore, Ahmedabad, Kolkata, Delhi and Madras stock exchanges to seek de-listing from these stock exchanges.  The company has received approvals for de-listing of its securities from Bangalore, Delhi, Madras and Ahmedabad stock exchanges and accordingly the Company’s shares have been de-listed from these exchanges.  The approval from Kolkata stock exchange is expected shortly.

Key Executives:

Board of Directors

Financials Rs (in Crores)

ANALYSIS:

Most of the departments have on an average 4-5 computers, excluding the information systems where it is very natural to have more number of computers i.e. 25, as we know that the department is dealing with computers only.
Information technology was first applied to the different departments on different times, like in finance and information systems department it was applied in 1996 and marketing was 4 years thereafter.
The computers are being used for the following reasons depending on the departments:
Marketing department – for information, programming, research, database, presentations, etc.
Finance department – receivables management, fund planning, cash flow, accounting and budgeting, etc.
Information technology department – research and analysis, programming, etc.
Officer’s department – drafting official letters, data entry, etc.
Prior to the computers being introduced in the company, the above mentioned purposes were dealt with manually. This was very tedious and time consuming as compared to the use of computers. This was basically done by using the accounting books, papers, files and typewriters; this also occupied a lot of space. This was too messy also.
IT has definitely helped the company in improving its overall working process as it is
Time saving
Paperless office
Productivity increased
Work done more accurately
More systematic and secured data
Overall knowledge level increased
Minimized writing work
Record maintenance is easier
The company has been using the following softwares for their easy usage and facilitation to the employees like Windows Ms-Office 2000, power-builder, Oracle, Acrobat, SAP, E-Trust Antivirus, etc
A few departments of the company are definitely facing a few problems either its working pretty well. In case of breakdown, departments like finance and officer there is a feeling of being handicap. Presently, in the company, computerization is mainly a stand-alone and not integrated totally and thus affects the company as they get information or reports slowly.
There has definitely been customer satisfaction due to technology upgradation, but no data regarding the same has been provided by any of the departments. On seeing the share values at the various stock exchanges and seeing the financial reports of the company we can conclude that the company is on an upward trend and the customer are surely satisfied by the company’s output whether related directly or indirectly to information technology at the plant or at the office.
The company is using the Internet and Intranet facilities available everywhere just now. They are using the Intranet facility extensively so that the information can be transferred and shared among the employees.
Introduction of IT in the company has led to a change in the number of employees and their job satisfaction as one person is now able to do a couple of tasks and even manage to do them at the same time.
The company is also taking keen interest in the development of the technology used in the company, as there are a number of innovations in this field everyday.
The departments of the company rate their company moderately say 50-60% on an average in the industry in terms of the technology applied by them..