mangalore refinery and petrochemicals …(a mini ratna schedule ‘a’ public sector undertaking...

Private & Confidential – For Private Circulation Only

(This Draft Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus) Private Placement Offer Letter Series -1 dated January 9, 2019

S. No.: [●] Addressed to: [●]

MANGALORE REFINERY AND PETROCHEMICALS LIMITED

(A Mini Ratna Schedule ‘A’ Public Sector Undertaking and a subsidiary of Oil and Natural Gas Corporation Limited

incorporated in India under the provisions of the Companies Act, 1956)

Regd. and Corporate Office: Mudapadav, Kuthethoor, P.O. via Katipalla, Mangaluru – 575030, Karnataka, India

Tel.: +91 824 2270400; Facsimile: +91 824 2271404; E-mail: [email protected]; Website: www.mrpl.co.in

CIN: L23209KA1988GOI008959

Compliance Officer for the Issue: Dinesh Ranjan Mishra, Company Secretary

Tel: +91 824 2883275; Facsimile: +91 824 2271404; E-mail: [email protected]

This Private Placement Offer Letter is issued in conformity with Companies Act, 2013, as amended, Form PAS-4, as

prescribed under Section 42 and Rule 14 of Companies (Prospectus and Allotment of Securities) Rules, 2014, as amended,

the Companies (Share Capital and Debenture) Rules, 2014, as amended, Securities and Exchange Board of India (Issue and

Listing of Debt Securities) Regulations, 2008, as amended. This issuance would be under the electronic book mechanism for

issuance of debt securities on private placement basis as per SEBI circular dated January 05, 2018 bearing reference number

SEBI/HO/DDHS/CIR/P/2018/05 and SEBI circular dated August 16, 2018 bearing reference number

SEBI/HO/DDHS/CIR/P/2018/122, each as amended (“SEBI EBP Circulars”), read with the Updated Operational Guidelines

“for issuance of Securities on Private Placement basis through an Electronic Book Mechanism” issued by BSE vide their

notice number 220180928-24 dated September 24, 2018 (“BSE EBP Guidelines”) as amended and SEBI Letter no.

SEBI/DDHS/TD/OW/P/2019/32928/1 dated December 11, 2019, received vide DIPAM OM No. 3/2/2018-DIPAM-II (Vol.V)

dated December 18, 2019. The SEBI EBP Circulars and the BSE EBP Guidelines shall hereinafter be referred to as the

“Operational Guidelines”. The Issuer intends to use the BSE’s electronic debt bidding platform for this Issue.

PRIVATE PLACEMENT OFFER LETTER DATED JANUARY 9, 2020

PRIVATE PLACEMENT OFFER LETTER FOR PRIVATE PLACEMENT OF FIXED RATE, UNSECURED,

RATED, TAXABLE, REDEEMABLE, NON-CONVERTIBLE DEBENTURES OF FACE VALUE ₹ 10,00,000/-

EACH (“DEBENTURES”) UNDER SERIES-1 FOR AN ISSUE SIZE OF ₹ 500 CRORE, WITH OPTION TO

RETAIN OVERSUBSCRIPTION UPTO ₹ 1,000 CRORE AGREEGATING TO ₹ 1,500 CRORE. SERIES 1

COMPRISES OF SERIES 1A DEBENTURES WITH BASE ISSUE SIZE OF RS. 125 CRORES WITH OPTION TO

RETAIN OVERSUBSCRIPTION UPTO RS. 375 CRORES AGGREGATING TO RS. 500 CRORES AND SERIES

1B DEBENTURES WITH BASE ISSUE SIZE OF RS. 250 CRORES WITH OPTION TO RETAIN

OVERSUBSCRIPTION UP TO RS. 750 CRORES AGGREGATING TO RS. 1,000 CRORES. OPTION TO RETAIN

OVERSUBSCRIPTION (GREEN SHOE OPTION) IS RESERVED FOR BHARAT BOND ETF.

NEITHER THE ISSUER NOR ANY OF THE CURRENT DIRECTORS OF THE ISSUER HAVE BEEN DECLARED

AS WILFUL DEFAULTER. FOR DETAILS OF THE SAME PLEASE REFER TO PAGE NO. 103 OF THIS

PRIVATE PLACEMENT OFFER LETTER.

TRUSTEE FOR THE DEBENTURE HOLDERS

REGISTRAR TO THE ISSUE

SBICAP TRUSTEE COMPANY LIMITED

Registered Office: 202, Maker Tower 'E', Cuffe Parade,

Mumbai - 400 005.

Corp Office: Apeejay House, 6th Floor, 3, Dinshaw Wachha

Road, Churchgate, Mumbai - 400 020

Tel: +91 22 43025555

Facsimile: +91 22 43025500

Contact Person: Ms. Savitri Yadav, Company Secretary and

Compliance Officer

Email: [email protected]

Website: www.sbicaptrustee.com

SEBI Registration No.: IND000000536

LINK INTIME INDIA PVT. LTD.

Registered Office: C 101, 247 Park, L.B.S. Marg,

Vikhroli (West), Mumbai - 400083.

Tel: +91 22 4918 6000

Facsimile: +91 22 4918 6060

Contact Person: Amit Dabhade


Website: www.linkintime.co.in

SEBI Registration No.: INR000004058

ISSUE PROGRAMME Bid Opening & Closing: January 9, 2020

Issue opening & Closing: January 9, 2020

Pay-In Date: January 13, 2020 (T+2)

Deemed Date of Allotment: January 13, 2020

LISTING

The Debentures are proposed to be listed on the Wholesale Debt Market segment of the BSE and NSE. The BSE and NSE

have granted the in-principle approval vide letter dated January 3, 2020, and dated January 3, 2020, respectively.

TABLE OF CONTENTS

SECTION I .............................................................................................................................................................................. 4

DEFINITIONS AND ABBREVIATIONS ............................................................................................................................ 4

SECTION II ...........................................................................................................................................................................10

DISCLAIMERS .....................................................................................................................................................................10

SECTION III ..........................................................................................................................................................................14

GENERAL INFORMATION ...............................................................................................................................................14

SECTION IV ..........................................................................................................................................................................17

BRIEF HISTORY OF THE ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES UNDERTAKEN, ANY

REORGANISATION, RECONSTRUCTION OR AMALGAMATION ..........................................................................17

SECTION V ...........................................................................................................................................................................21

EXISTING CORPORATE ORGANOGRAM (CORPORATE STRUCTURE) AS ON DATE OF THIS DOCUMENT

.................................................................................................................................................................................................21

SECTION VI ..........................................................................................................................................................................22

BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF BUSINESS ...............................22

SECTION VII ........................................................................................................................................................................31

OUR MANAGEMENT .........................................................................................................................................................31

SECTION VIII .......................................................................................................................................................................38

DISCLOSURES WITH REGARD TO INTEREST OF DIRECTORS, LITIGATION, ETC. .......................................38

SECTION IX ..........................................................................................................................................................................50

MANAGEMENT’S PERCEPTION OF RISK FACTORS ................................................................................................50

SECTION X ...........................................................................................................................................................................56

CAPITAL STRUCTURE AND FINANCIAL POSITION OF THE ISSUER ..................................................................56

SECTION XI ..........................................................................................................................................................................74

PARTICULARS OF THE OFFER ......................................................................................................................................74

SECTION XII ........................................................................................................................................................................87

SUMMARY TERM SHEET .................................................................................................................................................87

SECTION XIII .......................................................................................................................................................................99

MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE ......................................................99

SECTION XIV .....................................................................................................................................................................100

CREDIT RATING & RATIONALE THEREOF .............................................................................................................100

SECTION XV ......................................................................................................................................................................101

NAME OF DEBENTURE TRUSTEE ...............................................................................................................................101

SECTION XVI .....................................................................................................................................................................102

STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED ....................................................102

SECTION XVII ...................................................................................................................................................................103

DEBT EQUITY RATIO (On standalone basis) ................................................................................................................103

SECTION XVIII ..................................................................................................................................................................104

WILFUL DEFAULTER ......................................................................................................................................................104

SECTION XIX .....................................................................................................................................................................105

SERVICING BEHAVIOUR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS..........................105

SECTION XX ......................................................................................................................................................................106

UNDERTAKING REGARDING COMMON FORM OF TRANSFER .........................................................................106

SECTION XXI .....................................................................................................................................................................107

MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER ..107

SECTION XXII ...................................................................................................................................................................108

DECLARATION .................................................................................................................................................................108

SECTION XXIII ..................................................................................................................................................................109

ANNEXURES ......................................................................................................................................................................109

4

SECTION I

DEFINITIONS AND ABBREVIATIONS

Terms Description

AY Assessment Year

Articles/ Articles of Association/ AoA Articles of Association of our Company, as amended from time to time.

Allotment/ Allot The issue and allotment of the Debentures to the successful Applicants

pursuant to this Issue.

Applicant/ Investor A person who makes an offer to subscribe to the Debentures pursuant

to the terms of this Private Placement Offer Letter and the Application

Form.

Auditing Standards Standards of auditing or any addendum thereto for companies or class

of companies referred to in sub-section (10) of Section 143 of the

Companies Act, 2013.

Application Form The form in terms of which the Applicant shall make an offer to

subscribe to the Debentures and which will be considered as the

application for Allotment of Debentures for Series 1.

Arrangers to the Issue Arrangers to the issue are the entities as listed in this Private Placement

Offer Letter.

Beneficial Owner(s) Debenture holder(s) holding Debenture(s) in dematerialized form

(Beneficial Owner of the Debenture(s) as defined in clause (a) of sub-

section of Section 2 of the Depositories Act, 1996).

Board/ Board of Directors The Board of Directors of Mangalore Refinery and Petrochemicals

Limited or any committee of the Board thereof.

Book Closure/ Record Date Record date of interest shall be 15 days prior to each interest payment date

and/ or 15 days prior to the date of Maturity. Interest shall be paid to the

person whose name appears as sole/ first in the Register of Debenture

holders/Beneficial Owners position of the Depositories on Record Date or

to the Debenture holders who have converted the Debentures to physical

form and their name is registered on the registers maintained by Company/

Registrar. In the event of MRPL not receiving any notice of transfer at least

15 days before the respective due date of payment of interest and at least

15 days prior to the maturity date, the transferees for the Debenture shall

not have any claim against MRPL in respect of interest so paid to the

registered Debenture holder.

BSE BSE Limited

CAG Comptroller and Auditor General of India

CDSL Central Depository Services (India) Limited

CIN Corporate Identity Number

Companies Act The Companies Act, 2013, as amended from time to time.

Company/ Issuer/ MRPL/ we/ us/ our Mangalore Refinery and Petrochemicals Limited, a company

incorporated under Companies Act, 1956 and having its registered

office at Mudapadav, Kuthethur P.O. via Katipalla, Mangaluru -

575030 Karnataka, India and bearing CIN: L23209KA1988GOI008959

5

Terms Description

CRISIL CRISIL Limited

CSR Corporate Social Responsibility

Debentures Fixed rate, Unsecured, Rated, Taxable, Redeemable, Non-convertible

Debentures of the face value of ₹ 10,00,000/- each offered through

private placement route under the terms of this Private Placement Offer

Letter.

Debenture holder(s) Any person holding the Debentures and whose name appears in the list of

Beneficial Owners provided by the Depositories or whose name appears in

the Register of Debenture holders maintained by the Issuer/ Registrar.

Debt Securities Non-Convertible debt securities which create or acknowledge

indebtedness and include debenture, Debentures and such other

securities of the Issuer, whether constituting a charge on the assets of

the Issuer or not but excludes security receipts and securitized debt

instruments.

Deemed Date of Allotment The cut-off date on which the Board/ duly authorized committee or

officials authorised approves the Allotment of the Debentures i.e. the

date from which all benefits under the Debentures including interest on

the Debentures shall be available to the Debenture holders. The actual

allotment of Debentures (i.e. approval from the Board of Directors or a

committee thereof) may take place on a date other than the Deemed

Date of Allotment.

Depository A Depository registered with SEBI under the SEBI (Depositories and

Participant) Regulations, 1996, as amended from time to time

Depositories Act The Depositories Act, 1996, as amended from time to time

Depository Participant A Depository participant as defined under Depositories Act, 1996

Designated Stock Exchange BSE

DP Depository Participant

DRR Debenture Redemption Reserve

EBP “Electronic Book Platform” or “EBP” means a recognized stock

exchange or a recognised depository which, pursuant to obtaining

approval from SEBI, provides an electronic platform for the private

placement of securities.

EPS Earnings Per Share

FBIL Financial Benchmark India Private Ltd

FIs Financial Institutions

FIIs Foreign Institutional Investors (as defined under the SEBI (Foreign

Institutional Investors) Regulations, 1995) and registered with the SEBI

under applicable laws in India.

FPIs Foreign Portfolio Investors as defined under SEBI (Foreign Portfolio

Investors) Regulations, 2014 registered with SEBI.

Financial Year/ FY/ Fiscal Period of twelve months ending on March 31, of that particular year

6

Terms Description

ICRA ICRA Limited

GoI Government of India/ Central Government

HUF Hindu Undivided Family

Trustee/ Debenture Trustee SBICAP Trustee Company Limited

Independent Director An independent director referred to in sub-section (6) of Section 149 of

the Companies Act, 2013

Issue/ Offer Private Placement of Debentures of ₹ 500 crore with an option to retain

oversubscription up to ₹ 1,000 crore aggregating to ₹ 1,500 crore

comprising of Series 1A Debentures with base issue size of Rs. 125

crores with option to retain oversubscription upto Rs. 375 crores

aggregating to Rs. 500 crores and Series 1B Debentures with base issue

size of Rs. 250 crores with option to retain oversubscription up to Rs.

750 crores aggregating to Rs. 1,000 crores under this Private Placement

Offer Letter.

The oversubscription portion is reserved for Bharat Bonds ETF.

IT Act The Income Tax Act, 1961, as amended from time to time.

IT Department/ IT Dept. Income Tax Department

IT Income Tax

Key Managerial Personnel Key managerial personnel, in relation to the Company, shall mean:

i. Managing Director & Whole-time Directors;

ii. Company Secretary; and

iii. Chief Financial Officer.

Listing Agreement Listing agreement under SEBI (Listing Obligation and Disclosure

Requirements) Regulations, 2015

MD Managing Director of MRPL

Memorandum/Memorandum of

Association

Memorandum of Association of the Company as originally framed or

as altered from time to time in pursuance of any previous company law

or of the Companies Act, 2013.

MoPNG Ministry of Petroleum and Natural Gas

MIBOR Mumbai Interbank Offer Rate

MCLR Marginal Cost of Funds based Lending Rate

MF Mutual Fund

NSE National Stock Exchange of India Limited

NSDL National Securities Depository Limited

PAN Permanent Account Number

Private Placement The offer of Debentures or invitation to subscribe to the Debentures of

the Issuer (other than by way of public offer) through the issue of this

7

Terms Description

Private Placement Offer Letter investors on such conditions including

the form and manner of the private placement as prescribed under the

Companies Act, 2013, as amended

Private Placement Offer Letter/

Information Memorandum/ PPOL

Private Placement Offer Letter shall mean this Private Placement Offer

Letter.

GIR General Index Registration Number

₹/ INR/ Rupees/ Rs. Indian National Rupee

RTGS Real Time Gross Settlement

ROC Registrar of Companies, Bengaluru

Registrar to the Issue Link Intime India Private Limited

SEBI Securities and Exchange Board established under the Securities and

Exchange Board of India Act, 1992, as amended from time to time

SEBI Act Securities and Exchange Board of India Act, 1992, as amended from

time to time

SEBI Guidelines Any rule, regulation or amendment as may be issued by SEBI from time

to time.

SEBI Debt Regulations Securities and Exchange Board of India (Issue and Listing of Debt

Securities) Regulations, 2008 as amended from time to time.

TDS Tax Deducted at Source

Business Related Terms

Term Description

ATF Aviation Turbine Fuel

BS Bharat Standards

CRMB Crumb Rubber Modified Bitumen

CHTU Coker Heavy Gas Oil Hydrotreating Unit

DHDT Diesel Hydrotreating

DCU Delayed Coker Unit

DBS Development Bank of Singapore

EC Environmental Clearance

ECB External Commercial Borrowing

FKCCI Federation of Karnataka Chamber of Commerce and Industry

FO Furnace Oil

GRM Gross Refining Margin

GOHDS Gas Oil Desulphurization Unit

HPCL Hindustan Petroleum Corporation Limited

8

Term Description

HR Human Resource

HSD High-speed diesel

IOCL Indian Oil Corporation Limited

ISPRL Indian Strategic Petroleum Reserves Limited

KIADB Karnataka Industrial Areas Development Board

KTPA Kilo-Tonnes Per Annum

L&T Larsen and Toubro

LPG Liquefied petroleum gas

LSFO Low Sulphur Fuel Oil

LSWR Low Sulphur Waxy Residue

LSHS Low Sulphur Heavy Stock

MBN Million British Thermal Units/Barrel/Energy Factor

NRGF MBTU/BBL/NRGF is the unit for measuring energy consumption +

loss in the refinery sector as per the guidelines of the Center for High

Technology

MLD Megalitres per Day

MM Million Metric

MMT Million Metric Tonnes

MMTPA Million Metric Tonnes Per Annum

MoEF &CC Ministry of Environment, Forest and Climate Change

MS Motor Spirit

MSEZ Mangalore Special Economic Zone

MSL Mangalore SEZ Limited

MSME Ministry of Micro, Small & Medium Enterprises

MW Megawatt

NA Not Available

NBFC Non-Banking Finance Company

NMPT New Mangalore Port Trust

OIDB Oil Industry Development Boards

OGCF Oil & Gas Conservation Fortnight

OMC Oil Marketing Companies

OMPL ONGC Mangalore Petrochemicals Limited

ONGC Oil and Natural Gas Corporation Limited

OVL ONGC Videsh Limited

PMC Project Management Consultant

PFCCU Petrochemical Fluidized Catalytic Cracking Unit

TMT Thousand Metric Tonnes

9

Term Description

SBI State Bank of India

SKO Superior Kerosene Oil

SMAFSL Shell MRPL Aviation Fuels and Services Ltd (SMAFSL)

SOMO State Organization for Marketing of Oil, Iraq

TOLIC Town Official Language Committee

USD United States Dollar

VIZ Videlicet

VGO Vacuum Gas Oil

WDM Wholesale Debt Market

10

SECTION II

DISCLAIMERS

DISCLAIMER OF THE ISSUER

This Private Placement Offer Letter is neither a Prospectus nor a Statement in lieu of Prospectus and is prepared in

conformity with Companies Act, 2013, Form PAS-4 prescribed under Section 42 and Rule 14 of Companies (Prospectus

and Allotment of Securities) Rules, 2014, SEBI Guidelines and the relevant rules and regulations therein. This document

does not constitute an offer to the public generally to subscribe for or otherwise acquire the Debentures to be issued by

the Issuer. This document is for the exclusive use of the investors to whom it has been specifically addressed and it

should not be circulated or distributed to the third party(s). It is not and shall not be deemed to constitute an offer or an

invitation to the public, in general, to subscribe to the Debentures issued by the Issuer. This Issue is made strictly on

private placement basis. Apart from this Private Placement Offer Letter, no offer document or prospectus is being

prepared in connection with the offering of this Issue or in relation to the Issuer.

This Private Placement Offer Letter is not intended to form the basis of evaluation for the prospective subscribers to

whom it is addressed, and who are willing and eligible to subscribe to the Debentures issued by the Company. This

Private Placement Offer Letter has been prepared to give general information regarding the Company to parties

proposing to invest in this Issue and it does not purport to contain all the information that any such party may require.

The Company believes that the information contained in this Private Placement Offer Letter is true and correct as of the

date hereof. the Company does not undertake to update this Private Placement Offer Letter to reflect subsequent events

and thus prospective subscribers must confirm the accuracy and relevance of any information contained herein with the

Company. However, the Company reserves its right for providing the information at its absolute discretion. The

Company accepts no responsibility for statements made in any advertisement or another material and anyone placing

reliance on any other source of information would be doing so at their own risk and responsibility.

Prospective subscribers must make their own independent evaluation and judgment before making the investment

and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing

in Debentures. It is the responsibility of the prospective subscribers to have obtained all consents, approvals or

authorizations required by them to make an offer to subscribe for and purchase the Debentures. It is the

responsibility of the prospective subscribers to verify if they have the necessary power and competence to apply

for the Debentures under the relevant laws and regulations in force. Prospective subscribers should conduct their

own investigation, due diligence and analysis before applying for the Debentures. Nothing in this Private

Placement Offer Letter should be construed as advice or recommendation by the Issuer or by the Arrangers to the

Issue to subscribers to the Debentures. The prospective subscribers also acknowledge that the Arrangers to the

Issue do not owe the subscribers any duty of care in respect of this private placement offer to subscribe to the

Debentures. Prospective subscribers should also consult their own advisors on the implications of application,

allotment, sale, holding, ownership and redemption of these Debentures and matters incidental thereto.

This Private Placement Offer Letter is not intended for distribution and as per sub-section (7) of section 42 of the

Companies Act, 2013, the Issuer shall not release any public advertisements or utilise any media, marketing or

distribution channels or agents to inform the public at large in relation to this Issue. It is meant for the consideration of

the person to whom it is addressed and should not be reproduced by the recipient. The securities mentioned herein are

being issued on a private placement basis and this offer does not constitute a public offer/ invitation.

The Issuer reserves the right to withdraw the private placement of the Debentures prior to the issue closing date(s),

in the event of any unforeseen development adversely affecting the economic and regulatory environment or any

other force majeure condition including any change in applicable law. In such an event, the Issuer will refund the

application money, if any, along with interest payable on such application money, if any. The Private placement

Offer Letter is also in accordance with the SEBI Letter no. SEBI/DDHS/TD/OW/P/2019/32928/1 dated December

11, 2019, received vide DIPAM OM No. 3/2/2018-DIPAM-II (Vol.V) dated December 18, 2019, in terms of

which the Green Shoe Option shall be exclusively reserved for the BHARAT Bond ETF at the same cut-off yield

of the base amount.

11

The Investors confirm that they are aware of and understand the contents as set out under this section.

DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA

This Private Placement Offer Letter has not been filed with SEBI. The Debentures have not been recommended

or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this Private Placement Offer Letter.

It is to be distinctly understood that this Private Placement Offer Letter should not, in any way, be deemed or

construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the

financial soundness of any scheme or the project for which the Issue is proposed to be made or for the correctness

of the statements made or opinions expressed in this Private Placement Offer Letter. Since the Issue of Debentures

is being made on a private placement basis, this Private Placement Offer Letter is not required to be filed with

SEBI.

DISCLAIMER OF THE ARRANGERS

It is advised that the Company has exercised self-due-diligence to ensure complete compliance of the prescribed

disclosure norms in this Private Placement Offer Letter. The role of the Arrangers to the Issue in the assignment is

confined to marketing and placement of the Debentures on the basis of this Private Placement Offer Letter as prepared

by the Company. The Arrangers to the Issue have neither scrutinized/ vetted nor have they done any due diligence for

verification of the contents of this Private Placement Offer Letter. The Arrangers to the Issue shall use this Private

Placement Offer Letter for the purpose of soliciting subscription from qualified institutional investors in the Debentures

to be issued by the Company on a private placement basis. It is to be distinctly understood that the aforesaid use of this

Private Placement Offer Letter by the Arrangers to the Issue shall neither in any way be deemed or construed that this

Private Placement Offer Letter has been prepared, cleared, approved or vetted by the Arrangers to the Issue; nor do they

in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Private

Placement Offer Letter; nor do they take responsibility for the financial or other soundness of the Issuer, its promoters,

its management or any scheme or project of the Company. The Arrangers to the Issue or any of its directors, employees,

affiliates or representatives do not accept any responsibility and/ or liability for any loss or damage arising of whatever

nature and extent in connection with the use of any of the information contained in this Private Placement Offer Letter.

DISCLAIMER OF THE STOCK EXCHANGES

As required, a copy of this Private Placement Offer Letter has been submitted to NSE and BSE (hereinafter

referred to as the “Exchange”) for hosting the same on its website. It is to be distinctly understood that such

submission of the document with NSE and BSE or hosting the same on its website should not in any way be

deemed or construed that this Private Placement Offer Letter has been cleared or approved by the Exchange; nor

do they in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this

document; nor do they warrant that the Issuer’s Debentures will be listed or continue to be listed on the Exchange;

nor do they take responsibility for the financial or other soundness of this Issuer, its promoters, its management

or any project of the Company. Every person who desires to apply for or otherwise acquires any Debentures of

the Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim

against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or

in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated

herein or any other reason whatsoever.

A draft copy of this document was also submitted to BSE for hosting the same on electronic bidding platform of

BSE. It is to be distinctly understood that such submission of the document with BSE for hosting the same on its

electronic bidding platform shall not be, in any way, deemed or construed that this Private Placement Offer Letter

has been cleared or approved by the BSE; nor do they in any manner warrant, certify or endorse the correctness

or completeness of any of the contents of this document; nor does it warrant that the Issuer’s Debentures will be

listed or continue to be listed on any exchange; nor does it take responsibility for the financial or other soundness

of this Issuer, its promoters, its management or any project of MRPL. Every person who desires to apply for or

otherwise acquire any Debentures of the Issuer may do so pursuant to independent inquiry, investigation and

analysis and shall not have any claim against the MRPL whatsoever by reason of any loss which may be suffered

by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything

stated or omitted to be stated herein or any other reason whatsoever.

12

DISCLAIMER OF THE RATING AGENCIES

CRISIL ratings should not be treated as a recommendation to buy, sell or hold the rated debt instruments. CRISIL

ratings are subject to a process of surveillance, which may lead to a revision in ratings. CRISIL rating is a symbolic

indicator of CRISIL’s current opinion on the relative capability of the issuer concerned to timely service debts

and obligations, with reference to the instrument rated. Please visit our website www.crisil.com or contact any

CRISIL office for the latest information on CRISIL ratings outstanding. CRISIL has not conducted any audit of

the rated issuer or of the information provided by it. While reasonable care has been taken to ensure that the

information herein is true, such information is provided ‘as is’ without any warranty of any kind, and CRISIL in

particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness

of any such information. Also, CRISIL or any of its group companies may have provided services other than the

rating to the issuer rated. All information contained herein must be construed solely as statements of opinion, and

CRISIL shall not be liable for any losses incurred by users from any use of this publication or its contents.

ICRA ratings should not be treated as a recommendation to buy, sell or hold the rated debt instruments. ICRA

ratings are subject to a process of surveillance, which may lead to a revision in ratings. ICRA rating is a symbolic

indicator of ICRA’s current opinion on the relative capability of the issuer concerned to timely service debts and

obligations, with reference to the instrument rated. Please visit our website www.icra.in or contact any ICRA

office for the latest information on ICRA ratings outstanding. ICRA has not conducted any audit of the rated issuer

or of the information provided by it. While reasonable care has been taken to ensure that the information herein

is true, such information is provided ‘as is’ without any warranty of any kind, and ICRA in particular, makes no

representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such

information. Also, ICRA or any of its group companies may have provided services other than the rating to the

issuer rated. All information contained herein must be construed solely as statements of opinion, and ICRA shall

not be liable for any losses incurred by users from any use of this publication or its contents.

DISCLAIMER OF THE TRUSTEE

The Debenture Trustee does not confer any guarantee and will not be responsible for any non-payment of interest

and redemption and or any loss suffered or any claim made by a debenture holder(s).

CONFIDENTIALITY

The person who is in receipt of this private placement offer letter shall maintain utmost confidentiality regarding

the contents of this private placement offer letter and shall not reproduce or distribute in whole or part or make

any announcement in public or to a third party regarding the contents of this private placement offer letter or

deliver this private placement offer letter or any other information supplied in connection with this private

placement offer letter or the Debentures to any other person, whether in electronic form or otherwise, without the

consent of the Issuer. Any distribution or reproduction of this private placement offer letter in whole or in part or

any public announcement or any announcement to third parties regarding the contents of this private placement

offer letter or any other information supplied in connection with this private placement offer letter or the

Debentures is unauthorized. Failure to comply with this instruction may result in a violation of the Companies

Act, the SEBI Debt Regulations or other applicable laws of India and other jurisdictions. This private placement

offer letter has been prepared by the Issuer for providing information in connection with the proposed Issue

described in this private placement offer letter.

CAUTIONARY NOTE

By investing in the Debentures, the Eligible Investor(s) acknowledge that they: (i) are knowledgeable and

experienced in financial and business matters, have expertise in assessing credit, market and all other relevant risk

and are capable of evaluating, and have evaluated, independently the merits, risks and suitability of purchasing

the Debentures, (ii) have not requested the Issuer to provide it with any further material or other information, (iii)

have not relied on any investigation that any person acting on their behalf may have conducted with respect to the

Debentures, (iv) have made their own investment decision regarding the Debentures based on their own

knowledge (and information they have or which is publicly available) with respect to the Debentures or the Issuer,

(v) have had access to such information as deemed necessary or appropriate in connection with purchase of the

Debentures, (vi) are not relying upon, and have not relied upon, any statement, representation or warranty made

by any person, including, without limitation, the Issuer, and (vii) understand that, by purchase or holding of the

13

Debentures, they are assuming and are capable of bearing the risk of loss that may occur with respect to the

Debentures, including the possibility that they may lose all or a substantial portion of their investment in the

Debentures, and they will not look to the Debenture Trustee or other intermediaries appointed for the Debentures

for all or part of any such loss or losses that they may suffer. DISCLAIMER REGARDING JURISDICTION

This Issue will be made in India to the Investors as specified under “Eligible Investors” of this Information

Memorandum, who shall be specifically approached by the Issuer. This Information Memorandum does not

constitute an offer to sell or an invitation to subscribe to the Debentures offered hereby to any person to whom it

is not specifically addressed. Any disputes arising out of this Issue will be subject to the jurisdiction of the courts

of Mangaluru, Karnataka. This Information Memorandum does not constitute an offer to sell or an invitation to

subscribe to the Debentures herein, in any other jurisdiction and to any person to whom it is unlawful to make an

offer or invitation in such jurisdiction.

14

SECTION III GENERAL INFORMATION

3.1. ISSUER

Name of the Issuer : Mangalore Refinery and Petrochemicals Limited

Registered and Corporate Office : Mudapadav, Kuthethur P.O. via Katipalla

Mangaluru -575030, Karnataka, India

Website : www.mrpl.co.in

E-mail : [email protected]

Telephone Number : +91 824 2270400

Fax Number : +91 824 2271404

CIN : L23209KA1988GOI008959

3.2. DIRECTOR (FINANCE) / CHIEF FINANCIAL OFFICER (CFO) AND COMPLIANCE

OFFICER

DIRECTOR (FINANCE) / CFO COMPLIANCE OFFICER

Pomila Jaspal

Mudapadav, Kuthethur P.O. via Katipalla,

Mangaluru -575030, Karnataka, India

Tel. No. : +91 824 2883022

Fax: +91 824 2273079


Dinesh Ranjan Mishra

Company Secretary

Mudapadav, Kuthethur P.O. via Katipalla, Mangaluru -

575030, Karnataka, India

Tel: +91 824 2883275

Facsimile: +91 824 2271404

E-mail: [email protected]

3.3. ARRANGERS TO THE ISSUE

[●]

[● name]

[● address]

[●contact person]

[● SEBI Registration No.]

Tel: [●]

Facsimile: [●]

E-mail: [●] Website: [●]

3.4. CREDIT RATING AGENCIES

CRISIL LIMITED ICRA LIMITED

CRISIL House

Central Avenue,

Hiranandani Business Park,

Powai, Mumbai- 400 076

Tel: + 91 22 3342 3000

Fax: +91 22 3342 3050

Website: www.crisil.com

1105, Kailash Building

11th Floor

26, Kasturba Gandhi Marg,

New Delhi – 110001

Tel: +91 11 23357940/50

Fax: +91 11 23357014

Website: www.icra.in

3.5 Trustee for the Debenture Holders


Registered Office: 202, Maker Tower 'E'

Cuffe Parade,

Mumbai - 400 005.

15

Corp Office: Apeejay House, 6th Floor, 3,

Dinshaw Wachha Road,

Churchgate,

Mumbai - 400 020

Tel: +91 22 43025555

Facsimile: +91 22 43025500

Contact Person: Ms. Savitri Yadav


Investor Grievance Email: [email protected]


SEBI Registration No.: IND000000536

3.6 Registrar to the Issue

LINK INTIME INDIA PVT. LTD.

Registered Office: C 101, 247 Park, L.B.S.Marg,

Vikhroli (West), Mumbai - 400083.

Tel: +91 22 4918 6000

Facsimile: +91 22 4918 6060

Contact Person: Amit Dabhade


Website: www.linkintime.co.in

SEBI Registration No.: INR000004058

3.7 STATUTORY AUDITORS OF THE ISSUER

S.

No.

Name Address Auditors of the

Company since

1. M/s. Manohar Chowdhry &

Associates,

Chartered Accountants

ICAI Firm Registration: 001997S

#102, MICASA, Near KSRTC Bus Stand,

Bejai Main Road,

Mangaluru – 575004

Tel: 0824-2988383


Contact Person: Murali Mohan Bhat

July 12, 2017

2. M/s. S Venkatram & Co LLP,

Chartered Accountants,

ICAI Firm

Registration: 004656S/S200095

965, JLB Road, Lakshmipuram, Mysore -

570004

Tel: 24992155 / 56 / 57


Contact Person: R. Vaidyanathan

August 1, 2019

Statutory auditors of the Company are appointed by the Comptroller and Auditor General of India (“CAG”).

Annual accounts of the company are reviewed every year by CAG.

3.8 Details of change in statutory Auditors of the Company since last 3 (three) years:

S.

No.

Financial

Year

Name Address Date of

Appointment/

Resignation

Remark

(if any)

1. 2017-18 M/s. Manohar

Chowdhry &

Associates

Chartered

Accountants

ICAI Firm

Registration:

001997S

#102, MICASA, Near KSRTC

Bus Stand, Bejai Main Road,

Mangaluru – 575004

Tel: 0824-2988383


Contact Person: Murali Mohan

Bhat

July 12, 2017 Appointed by

CAG.

16

S.

No.

Financial

Year

Name Address Date of

Appointment/

Resignation

Remark

(if any)

2. 2019-20 M/s. S Venkatram

& Co LLP,

Chartered

Accountants,

ICAI Firm

Registration:

004656S/S200095

965 JLB Road, Lakshmipuram,

Mysore -570004

Tel: 24992155 / 56 / 57


Contact Person: R. Vaidyanathan

August 1,

2019

Appointed by

CAG on

August 1,

2019.

3. 2019-20 M/s. Sreedhar,

Suresh &

Rajagopalan LLP

Chartered

Accountants,

ICAI Firm

Registration:

003957S

3-B” Green Heaven”, New 26,

Third Main Road, Gandhi Nagar,

Adyar, Chennai -600 020

Tel: 044-24453149/ 4453159


Contact Person: V. Suresh

Ceased to be

the statutory

auditor of the

Company in

August 2019

Ceased to be

the statutory

auditor of the

Company on

the

appointment

of M/s. S

Venkatram &

Co LLP.

4. 2017-18 M/s. A.

Raghavendra Rao

& Associates,

Chartered

Accountants,

ICAI Firm

Registration:

003324S

G.H.S. Road, Mangaluru -570

001

Tel: 0824-2425966/2421566


m

Contact Person: Gopalakrishna

Bhat T.M.

Ceased to be

the statutory

auditor of the

Company in

July 2017.

Ceased to be

the statutory

auditor of the

Company on

the

appointment

of M/s.

Manohar

Chowdhry &

Associates.

3.9 Transaction Adviser to the Issue

SBI Capital Markets Ltd.

6th Floor, World Trade Tower

Barakhamba Lane, Connaught Place

New Delhi-110001

4.0 Legal Counsel to the Issue

Link Legal India Law Services

Thapar House, Central Wing,

First Floor, 124, Janpath

New Delhi - 110001

Tel: +91 11 465 11000

Facsimile: +91 11 465 11099

Website: www.linklegal.in

mailto:[email protected]



17

SECTION IV

BRIEF HISTORY OF THE ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES

UNDERTAKEN, ANY REORGANISATION, RECONSTRUCTION OR AMALGAMATION

4.1. CONSTITUTION

MRPL was set up as a result of joint venture agreement in 1987 between Hindustan Petroleum

Corporation Limited (“HPCL”), a public sector company and M/s IRIL & Associates, an entity set up

by A.V. Birla Group. MRPL was incorporated as a company in the year 1988. MRPL was incorporated

with the objective to operate a refinery at Mangaluru having an initial processing capacity of 3.0 MMT

per annum.

The Company made a mega public issue consisting of 4,31,60,000, 16% Secured Redeemable Partly

Convertible Debentures (PCDs) of ₹ 135/- each aggregating to ₹ 582.66 crore in the year 1993 and

2,80,00,000, 17.5% Secured Redeemable Non-Convertible Debentures of ₹ 200/- each (with detachable

Equity Warrants) aggregating to ₹ 560 crore.

The initial processing capacity of refinery was 3.0 Million Metric tonnes per annum that were later

expanded to the present capacity of 15 Million Metric tonnes per annum. The refinery was conceived to

maximise middle distillates, with the capability to process light to heavy and sour to sweet Crudes with

24 to 46 API gravity. In March 2003, ONGC acquired the total shareholding of A.V. Birla Group and

further infused equity capital of ₹600 crore thus making MRPL a majority held subsidiary of ONGC.

4.2. CHANGES IN THE REGISTERED AND CORPORATE OFFICE

The registered and corporate office of the Company is currently situated at Mudapadav, Kuthethoor, P.O.

Via Katipalla, Mangaluru – 575030.

The table below encapsulates the changes in our registered office since our incorporation.

Date of shareholders’

resolution

Change in address of the Registered Office

September 29, 1995 The Registered Office was changed to Mudapadav, Kuthethoor, P.O. Via

Katipalla, Mangaluru – 575 030

From: 7, Magadi Road, Bangalore – 560 023 on September 30, 1995

Except as above, there has been no change in the registered office of the Company.

4.3. MAJOR EVENTS AND MILESTONES

Year Event

1988 Establishment of Mangalore Refinery & Petrochemicals Limited, as a joint venture

between HPCL and M/s IRIL & associates, AV Birla Group, associate

1993 Public Issue consisting secured redeemable partly convertible debentures (PCDs) and

secured redeemable non-convertible debentures with detachable equity warrants.

2001 The capacity of the plant increased to 9 MMT from 3 MMT

2003 M/s IRIL & associates’ stake acquired by ONGC

2007 Declared as a Mini Ratna company

2011-12 • Won the “Unnatha Suraksha Puraskara” award – 2011 conferred by National

Safety Council –Karnataka Chapter for Outstanding Performance in Safety

Management Systems.

• Excellent” MoU rating received from Department of Public Enterprise,

Government of India for the year 2010-11.

18

Year Event

• Secured second prize for outstanding performance in the area of Hindi

implementation for the year 2010-2011 by the Town Official Language

Committee (TOLIC), Mangaluru.

• Won BT- STAR PSU Excellence award 2012 for Excellence in Market

Capitalization.

• Won OISD ‘Most Consistent Performer (Refineries)’ Award for 2009-10

2012-13 • MRPL has bagged the coveted Petro-fed Award, 2012 “Refinery of the Year” for

the commendable performance in production and operational efficiencies.

• MRPL won “Export Excellence Award, 2013” in Best Manufacturer – Exporter

- large category- Gold by Federation of Karnataka Chamber of Commerce and

Industry.

• MRPL was conferred “State Export Excellence Award” for 2010-11 & 2009-10

Medium/Large category – Gold by Government of Karnataka.

• Managing Director, MRPL has won the “CEO with HR Orientation Award” in

the Global HR Excellence Awards presented by Institute of Public Enterprise,

Hyderabad.

• MRPL conferred with “BT-Star PSU Excellence Award, 2013” in Human

Resource Management category (Mini Ratna /others).

• MRPL was awarded First Prize for outstanding performance in the area on Hindi

Implementation for two consecutive years 2011-12 by the Town Official

Language Implementation Committee (“TOLIC”), Mangaluru

2013-14 • Upgraded to Schedule ‘A’ CPSEs from Schedule “B” with effect from July 4,

2013, by the Department of Public Enterprises, thereby making it eligible for

achieving the “NAVARATNA” status.

• Won the “Refinery of the Year” from Petrofed for the year 2011-12 for leading

performance in production and operational efficiencies while meeting the norms

of Health, Safety and Environment protection.

• Won the “Export Excellence Award, 2013” in Best Manufacturer / Exporter

(large category) – Gold from the Federation of Karnataka Chamber of Commerce

and Industry (FKCCI) on June 22, 2013.

• Secured the first prize for outstanding performance in the area of Hindi

Implementation for the year 2012-13 by Town Official Language Committee

(TOLIC), Mangaluru on May 28, 2013.

• Secured the first prize in the Jawaharlal Nehru Centenary Awards for energy

performance for the year 2011-12 & 2012-13 under the Refineries category

having the complexity of 6.0.

• Secured the first prize in the OGCF-2012 awards for furnace/boiler efficiency

having heat duty more than 1000MM Kcal/hr.

• Won the “State Export Excellence Award” for 2012-13 & 2011-12 Medium/

Large category – Gold & Platinum respectively by Government of Karnataka.

• Won the award for “Best Fuel-efficient Boiler operation” by the Department of

Factories and Boilers on the occasion of 43rd National Safety Day celebration.

2014-15 • Won the “Export Excellence Award, 2014” in Best Exporter Award

(Medium/large category) from the Federation of Karnataka Chamber of

Commerce and Industry (FKCCI) for FY 2013-14

• Won the Silver at “Niryat Shree Award -2014” in the residual sector of the MSME

at FIEO (Federation of Indian Export Organization).

• MRPL was conferred the prestigious “Skoch Foundation Order –of-Merit

Award” for the best project in the country.

19

Year Event

• Shri Vishnu Agrawal, Director Finance of MRPL was adjudged winner of the

‘BT-STAR Excellence Award in the category PSU-small, DIRECTOR-

FINANCE OF THE YEAR’ post a rigorous evaluation process by the Jury of the

BT-Star Excellence Awards 2015.

• MRPL won the first prize for outstanding performance in the area of Hindi

Implementation for the year 2014-15 for the fourth consecutive year by TOLIC,

Mangaluru.

2015-16 • Won the “Export Excellence Award, 2015” in Best Exporter Award

(Medium/large category) from the Federation of Karnataka Chamber of

Commerce and Industry.

2016-17 • ‘FORE - Top Rankers Excellence Award’ for Organizational Excellence

• ‘Niryat Shree’ Gold Trophy in the Residual sector for Non-MSME category by

Federation of Import Export Organization (FIEO)

2017-18 • ‘Governance Now’ award under the Employee Productivity category.

2018-19 • Srishti Good Green Governance Award.

• Runner up in the Public Sector Category in the “Annual BML Munjal Awards for

Business Excellence through Learning & Development”

• Platinum Trophy at 18th Annual Greentech Environment Award”

• "First Prize under ‘large enterprises’ for Hindi Implementation during 2018-19by

TOLIC”

• "Security Project Award of the Year from SECONA (Security Consultants

Association)”

• Plant of the Year 2018 by Fieldcomm Group

2019-20 • MRPL received Unnatha Suraksha Puraskara from National Safety Council.

• MRPL received “Dun & Bradstreet PSU Award” for being the Best Miniratna in

‘Manufacturing, Processing and Generation’ category”

• 19th Annual Greentech Award 2019”

• 2nd prize in “Best Safe Power Boiler” during State level 48th National Safety

day 2019

• Commissioned railway siding project.

4.4. DETAILS REGARDING ACQUISITION OF BUSINESS/ UNDERTAKINGS, MERGERS,

AMALGAMATIONS, REVALUATION OF ASSETS

There has been no acquisition of business/undertakings, mergers, amalgamation or revaluation of assets

in last one year.

4.5. HOLDING ENTITY- OUR PROMOTER

ONGC and HPCL are promoters of the Company. Shareholding of our promoters is as follows:

Number/Detail

s of

Shareholders

Total No. of

Equity Shares

No. of Shares in

Demat form

Total

Shareholding as

a % of total no.

of equity shares

Number of

Shares

pledged

% of Shares

pledged to shares

owned

ONGC 1,25,53,54,097 1,25,53,54,097 71.63 - -

20

HPCL 29,71,53,518 29,71,53,518 16.95 - -

Total 1,55,25,07,615 1,55,25,07,615 88.58 - -

4.6. SUBSIDIARY

ONGC- Mangalore Petrochemicals Limited (“OMPL”) was incorporated on December 19, 2006. OMPL

has its registered office at Mangalore Special Economic Zone, Permude, Mangaluru- 575 006. The

Company holds 51% of the share capital of OMPL. OMPL has set up an aromatic complex with an

annual capacity 914 KTPA of para-xylene and 283 KPTA of Benzene in Mangalore Special Economic

Zone. The revenue from operations was ₹ 8,362 crore during FY 2018-19 as against ₹ 5,561 crore during

the FY 2017-18. OMPL achieved a profit after tax of ₹ 22.90 Crore in FY 2018-19 as against a loss after

tax of ₹ 447 Crore during the FY 2017-18 on the strength of improved physical performance coupled

with improved market conditions

4.7. JOINT VENTURES

The Company has a joint venture.

(i) Shell MRPL Aviation Fuel Services Limited (SMAFSL)

The Company holds 50% of the equity share capital in Shell MRPL Aviation Fuel Services Limited

(SMAFSL) and the balance is held by Shell Gas BV, the Netherlands and its associates. SMAFSL

supplies aviation turbine fuel (ATF) to both domestic and international airlines at several Indian airports

and acts as a contracting company for Indian carrier’s International Aviation Fuel requirements. The

accounts of SMAFSL are consolidated with the Company.

4.8. ENTITIES IN WHICH THE COMPANY HAS EQUITY INVESTMENT

(i) Mangalam Retail Services Limited (MRSL)

The Company has incorporated MRSL along with Gulf Oil, a Hinduja Group Company. MRSL was

incorporated to undertake the business of distribution of petroleum products through retail outlets and

transport terminal. The Company holds 18.98% of the equity share capital in MRSL. MRSL has not

started commercial operations and is in the process of applying for dormant Company status. However,

presently MRSL is not an associate of the Company.

Other than the investment as mentioned above the Company does not have any direct equity investment

in any other entity. However, the subsidiary of our Company OMPL has invested in the equity share of

Mangalore SEZ Limited (“MSL”). OMPL has invested an amount of ₹ 48,00,000 /- equivalent to 0.96%

of the equity capital of MSL. MSL is engaged in the business of developing a special economic zone.

21

SECTION V EXISTING CORPORATE ORGANOGRAM (CORPORATE STRUCTURE) AS ON DATE OF

THIS DOCUMENT

Chairman

22

SECTION VI BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF BUSINESS

Mangalore Refinery and Petrochemicals Limited is a schedule ‘A’ Miniratna, Central Public Sector Enterprise

(CPSE) under the Ministry of Petroleum & Natural Gas, Government of India. The Company is a subsidiary of

Oil and Natural Gas Corporation Limited.

The Company was incorporated on March 7, 1988, as a joint venture oil refinery promoted by M/s Hindustan

Petroleum Corporation Limited, a public sector company and M/s IRIL & associates (AV Birla Group). In March

2003, ONGC acquired the total shareholding of A.V. Birla Group and further infused equity capital of ₹ 600 crore,

thus making MRPL a majority held subsidiary of ONGC. The Company became a public-sector undertaking in

the year 2005 and was upgraded as a Schedule – A Public Sector Undertaking in the year 2013.

The Company is engaged in the business of refining and petrochemicals. It is one of the most complex refineries

in India converting crude oil to various value-added products. The Neilson Complexity Index is 10.63 including

Aromatics Complex.

Other than the registered office we also have the offices at

Delhi Mumbai Bengaluru

SCOPE COMPLEX

7th Floor, Core-8, Lodhi Road

New Delhi – 110003

Tel: 011-24306400

Fax: 011- 24361744

Maker Towers, ‘ E ‘ Wing, 15th Floor,

Cuffe Parade, Mumbai - 400005

Tel: 022-22173000

Fax: 022-22173233

Plot A-1, Opp. KSSIDC A.O.

Building, Industrial Estate

Rajajinagar, Bengaluru – 560010

(Karnataka)

Tel: 080-22642200

Fax: 080-23505501

Main Objects of the Company are as follows:

To purchase or otherwise acquire crude oils and manufacture refine, treat, reduce, distil, blend, smelt, store, hold,

compress, bottle, pack, use, experiment with the exchange, transport, import, export dispose of and generally deal

in: (i) all kinds of petroleum and petrochemical products.

Vision

The Company’s vision is to be a world-class refining and petrochemicals company with a strong emphasis on

productivity, customer satisfaction, safety, health and environment management, corporate social responsibility

and care for employees.

Mission

• Sustain Leadership in energy conservation, efficiency, productivity and innovation.

• Capitalize on emerging opportunities in the domestic and international market.

• Strive to meet customers’ requirements to their satisfaction.

• Maintain global standards in health, safety and environmental norms with a strong commitment towards

community welfare.

• Continuing focus on employee welfare and employee relations.

• Imbibe highest standards of business ethics and values.

23

Refining Capacity

The Company’s 15 MMTPA refinery is located north of Mangaluru city, in Dakshina Kannada district of

Karnataka. Phase - 1 of the Company’s refinery was commissioned with an initial processing capacity of 3.69

MMTPA in the year 1996 which was later expanded by 6 MMTPA to 9.69 MMTPA in 1999. Phase - 3 expansion

of the Company’s refinery was completed in 2013 to its present capacity of 15 MMTPA. The refinery was

conceived to maximise middle distillates, with the capability to process light to heavy and sour to sweet crudes

with 24 to 46 API (American Petroleum Institute) gravity. MRPL has 6% share of total refining capacity in the

country and 10% refining capacity of public sector undertakings.

MRPL’s refinery is capable of processing more than 80 different varieties of crude, which are procured from

around the world including the Middle East, South Asia, Europe, Russia, Africa, South America and the United

States of America.

Geographical Procurement of Crude

The Company sources its crude oil requirement from India and various national oil companies of exporting

countries on a term basis and from open market on the spot basis. During 2018-19, the company procured 16.31

MMT of crude oil of which 12.27 MMT was imported and the balance was sourced indigenously like Mumbai

High, Ravva and Mangala from ONGC and Cairn India. Import of crude oil was 11.823 Million Metric Ton from

middle east countries. To meet the Low Sulphur Heavy Stock (LSHS) requirement and a shortfall in term crude

requirement, MRPL also imported crude oil (1.321 MMT) through spot tender during the year.

19

69

39

Domestic Middle east Others Spot tenders

Sources of Crude Processed as % of Total

24

Petrochemical Business

MRPL also operates a Polypropylene unit which was commissioned in the year 2015.

The Company’s subsidiary, OMPL primarily produces two products: Para Xylene and Benzene. OMPL plant,

situated in the Mangalore Special Economic Zone (“MSEZ”), is integrated with the refinery operations and has

a production capacity of 0.905 MMTPA of Para Xylene and 0.273 MMTPA of Benzene.

Various Units at MRPL and their capacities are as below:

Units Phase1 (1996) Phase 2(1999) Phase 3(2012-14)

Crude & Vac. 4.8 MMTPA 7.2 MMTPA 3.0 MMTPA

Hydrocracker 1.6 MMTPA 1.7 MMTPA Nil

Platformer /CCR 0.45 MMTPA 0.45 MMTPA Nil

Visbreaker 0.8 MMTPA 0.8 MMTPA Nil

GOHDS Nil 1.7 MMTPA Nil

PFCCU Nil Nil 2.2 MMTPA

DCU Nil Nil 3.0 MMTPA

CHTU Nil Nil 0.65 MMTPA

DHDT Nil Nil 3.7 MMTPA

Hydrogen 100 TPD 100 TPD 200 TPD

Sulphur Recovery 1 x 105 TPD 2 x 105 TPD 3 x 185 TPD

CPP (Captive Power Plant) 44 MW 73.5 MW 84 MW

Other infrastructure facilities owned by the Company include:

• Raw Water Intake Facility at Nethravati

• Coastal Terminal and Captive Jetty in NMPT • Single Point Mooring Facility • Solar Power Plant (Rooftop) of 6.06 MWp • Retail Outlets (7 Nos.) • RO Plant for treatment of Municipal Sewage Water • Flare Gas Recovery System • Pet-Coke Truck Loading System • Rail Wagon Loading System & Railway Siding • White Oil Loading Facilities

• 137 Storage Tanks including 7 Horton Spheres and 6 Mounded Bullets.

Further, MRPL is in the process of developing the following 2 (two) projects:

• BS-VI Fuel Upgradation at an approved cost of ₹1,810 crore which is scheduled to be completed by

December 2019 and commissioned between December 2019-March 2020.

• Desalination Plant at an approved cost of ₹621 crore which are slated for completion between March-

August 2020. The Plant has received approval from the environmental authority. The Plant is presently

under construction.

Raw materials

The Company sources its crude oil requirement from India and various national oil companies of exporting

countries on the term basis and from open market on a spot basis. During 2018-19, the company procured 16.31

MMT of crude oil of which 12.27 MMT was imported and the balance was sourced indigenously like Mumbai

High, Ravva and Mangala from ONGC and Cairn India. To meet the Low Sulphur Heavy Stock (LSHS)

25

requirement and the shortfall in term crude requirement, MRPL also imported crude oil (1.321 MMT) through

spot tender during the year.

The company lifted the first parcel of UAE’s Das Blend crude oil from OVL equity in the field. The first cargo

was received at Mangaluru Port on June 09, 2018. Ural and Basrah Heavy and Nagayalanka (domestic) crudes

were processed for the first time. MRPL has also processed US crudes viz southern green canyon, thunder horse

etc.

Products

Products of the Company and their production during 2018-19 are as follows:

High-speed diesel and motor spirit are the main revenue-generating products for the Company. For the year 2018-

19 HSD and MS generated revenue of ₹ 35,512.86 crore and ₹ 8,706.56 crore, respectively.

MRPL is the only company in southern India to produce Poly Propylene (“PP”). The PP unit has been

commissioned and started commercial production since June 2015. The plant is having an annual production

capacity of 440 KTPA based on a single line and 8000 operating hours. The technology supplier for the plant is

M/s Novolen, Germany. The line is having two reactors and single extruder. The product is sold under the trade

name of MangPol. The brand is well established and is the leading brand of PP in southern India.

The company also exported certain products:

Operational Performance

The Company achieved its highest ever levels of crude processing at 16.23 MMTPA and its highest-ever high-

sulphur crude processing at 81.50% during the FY 2018-19. Further, the Company achieved certain other key

performance efficiencies during the last fiscal, such as lowest ever MBN at 74.3, highest ever NRGF at 7.35;

highest ever operational availability of 98.46%, and highest ever production of polypropylene at 388 TMT.

The Company achieved a turnover of ₹ 72,283 crore during the financial year 2018-19 and a PAT of ₹ 332 crore

during the financial year 2018-19. The Gross Refining Margin (GRM) for the financial year 2018-19 was 4.06

$/bbl.

PRODUCTS 000 MT PRODUCTS 000 MT

Hydrogen 0.24 HSD 6309

LPG 970 ATF 1517

Fuel gas 2.9 VGO 84

Polypropylene 388 FO 696

M S 1279 LSFO 45.4

Xylol 201 LSWR 21.8

APHTHA 1600 ASPHALT 139

A7 192.5 CRMB 2.5

A9 99 PET COKE 922

SKO 61.5 Sulphur 209

PRODUCTS 000 MT

MS 232.2

NAPHTHA 848.6

ATF 1281

Diesel 1990

Fuel Oil 611

Others 222.5

Total 5185.3

26

Crude Processing

High-sulphur Crude Processing

FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

78.3% 76.8% 74.3% 81.5%

The Company processed 16.43 MMT (Gross) of Crude in 2018-19 against 16.31 MMT during 2017-18. This was

the highest ever Crude processing achieved by the company. Of this 81.5% of Crude was of the high sulphur

variety.

Distillate Yield

Energy Consumption

Financial Performance

Company’s significant revenues are derived from sales to oil marketing companies which is 64% and 66% of the

Company’s total revenue for the year ending March 31, 2019, & March 31, 2018, respectively. The total sales for

such companies amounted to ₹ 380,85.37 crore for the year ended March 31, 2019, and ₹ 413,92.29 crore for the

15.2515.45

1616.2

15.53

15.9616.13

16.23

FY 15 16 FY 16 17 FY 17 18 FY 18 19

MOU Target Actual

77.04 77.39 76.49 76.8

50

55

60

65

70

75

80

Distillate Yield (%Wt)

80.2479.61

77.06

74.32

70

72

74

76

78

80

82

FY 15 16 FY 16 17 FY 17 18 FY 18 19

Energy Consumption (MBN)

27

year ended March 31, 2018. MRPL supplies around 70% of demand for petroleum products for the State of

Karnataka.

.

There has been a consistent increase in the financial performance of MRPL during recent years.

28

Certifications

The Company confirms and holds the following quality, environment, sustainability and safety standards:

• ISO 9001 – Quality in Operations

• ISO 14001 – Environment Protection

• ISO 17025 – Competency of QC Laboratory

• OHSAS 18001 – Occupational Health and Safety

• ISO 50000 – Energy Performance

• ISO 27001 – Server Security

Research and Development

MRPL has spent about ₹20 Crore on its Research and Development initiatives so far. As part of its research and

development activities, the Company has tied up with major universities and research institutions, such as:

• Central Institute of Plastic Engineering & Technology, Gurugram

• Indian Institute of Technology, Guwahati

• National Chemicals Laboratory, Pune

• National Institute of Technology Karnataka, Surathkal

The Company is undertaking research initiatives in the areas of product & technology development and is

progressively filing patents. MRPL has filed 5 patents in the FY 2018-19 and is undertaking further patents from

its in-house R&D and collaborative R&D initiatives. The Company has spent appx. Rs. 20 crores on research and

development to date.

29

Recently Completed Projects

MRPL has recently completed certain projects which includes 6.063 MWp Rooftop Solar Power Plant, RO Plant

for treatment of municipal sewage water, Flare Gas Recovery System, CCR-2 Revamp, Pet-Coke Truck Loading

System, Rail Wagon Loading System & Railway Siding and white oil loading facilities.

Ongoing Projects

• BS-VI Upgradation

In terms of Auto Fuel Policy and Directives from the Ministry of Petroleum and Natural Gas, MRPL has to

upgrade its plant for BS-VI quality specifications for MS and HSD by April 1, 2020. The project involves

the setting of new units and additional facilities. M/s Engineers India Ltd has been appointed as Engineering,

Procurement and Construction Management Consultant for the job. Environment Clearance for the project

has been obtained. Critical ordering activities have been completed and deliveries have commenced. Site

activities are in full swing. Mechanical completion and commissioning of the new facilities will be achieved

progressively to meet ministry direction guidelines to be applicable from April 2020. While the project will

facilitate the production of 100% MS and HSD compliant to BS-VI grades, the Company has already started

the production and dispatch of BS-VI grade products from its existing facilities.

• Desalination Plant

To mitigate the risk of river water as a single source of water, a desalination plant is being set up near the

sea. This plant of current capacity 30MLD (expandable to 70MLD) will cater to the future water requirement

of the Company. Project is approved by MoEF & CC for Environmental Clearance and formal grant of EC

obtained on 18.04.2019. M/s Fichtner India is the PMC for the project and M/s VA Tech Wabag is the LSTK

contractor. The plant is scheduled to be completed by 2020.

• 2G Ethanol

MRPL is in a process of setting up a 2G Ethanol project in the State of Karnataka in line with the national

vision for reducing import dependency of crude oil. 2G Ethanol is produced from agro residues viz Corn

cobs, Rice straw, Wheat stalk, Corn Stalk etc. Land for the same is allotted by KIADB at Harihara,

Davangere. The project is under the techno-economic feasibility study.

Corporate Social Responsibility

MRPL’s social welfare and community development initiatives focus on the key areas of education, health

care & sanitation and overall development of basic infrastructure in and around its operational area/

Dakshina Kannada & Udupi District/Karnataka State. These projects are largely in accordance with

Schedule VII of the Companies Act, 2013.

As a part of National Skill Development Mission of the Government of India, MRPL has set up “MRPL

Kaushal Vikas Kendra” (MRPL KVK) on 12/02/2017. A total of 58 candidates of MRPL KVK have

undergone skill development training in various courses like “CNC Operator - Vertical Machining Centre

and “Through Hole Assembly Operator” at Nettur Technical Training Foundation (NTTF), Bangalore during

the financial year. Assessment of the course by respective Trade Council was undertaken by the candidates

for Certification and Placement assistance were offered to all the candidates willing for relocation. Till date

around 77 people have been offered jobs by various industry.

MRPL and Indian Institute of Management-Kozhikode (IIM-K) has also signed an MoU to support

innovative start-up ventures to leverage the individual strengths of the two public organizations to contribute

to the entrepreneurial ecosystem in line with start-up mission of the government of India. MRPL has

allocated an amount of Rs. Rs. 10 Crore and disbursed an amount of 1.26 crores towards the said purpose.

MRPL has identified villages under three Gram Panchayats (GP) in its surroundings and decided to make

them smoke-free. About 132 families belonging to the villages under these Panchayats have been distributed

with the free LPG kits. In addition to these, 161 leftover families belonging to Chelairu, Soorinje, Permude,

Jokatte Panchayats have also distributed the LPG kits.

30

Growth Plan

Stage 1 (2018-2021) – Minor Projects & Revamps

In stage 1 MRPL plans to complete various ongoing projects including various infrastructure projects, BS-

VI Project, OMPL Integration. The Company plans to add another 200 retail outlets in the near future. BS-

VI and desalination are major projects under stage 1.

Stage 2 (2022-2027) – Expansion & Non-Bulk Petchems

During the second stage, the Company intends to enhance the present capacity to 18 MMTPA, to increase

petrochem products to more than 10% of the total production. Land acquisition for the same is in progress

through KIADB. The Company has also applied for Environment clearance.

Stage 3 (2030-Beyond) - Stage 3

In stage 3 the Company intends to increase capacity to produce Petchem and complex petrochemical

products.

31

SECTION VII OUR MANAGEMENT

7.1. DETAILS OF THE BOARD

As per Article 128A of AoA of the Company, subject to provisions of applicable law, the Board of the

Company shall have 16 (Sixteen) Directors. Presently, Board of the Company comprises of 15 (Fifteen)

Directors, out of which the Board consist of a Non-Executive Chairman, 3 Executive Directors, 4 Non-

executive Directors and 7 independent Directors. The Company is short of one independent director. The

Company has already requested the administrative ministry, MoPNG for the nomination of an

independent director on the Board of the Company. The following table sets forth details regarding our

Board as on date of making Private Placement offer:

NAME,

FATHER’S/HUSBAN

D’S NAME,

DESIGNATION,

OCCUPATION, DIN,

AGE AND

NATIONALITY

RESIDEN

TIAL

ADDRESS

DIRECTOR

OF THE

COMPANY

SINCE

APPOINTMENT /

RESIGNATION

REMARKS

Name: Shri Shashi

Shanker

S/o Shri Nand Jee

Sahay

Date of birth: 02-03-

1961

Occupation: Chairman

/Non-Executive

Director

DIN: 06447938

Age: 58

Nationality: Indian

5 Anand

Lok,

August

Kranti

Marg, New

Delhi - 110

049

October 1, 2017

• Oil and Natural Gas

Corporation Limited

• ONGC Videsh

Limited

• Mangalore SEZ Ltd.

• ONGC Tripura Power

Company Limited

• ONGC Petro-additions

Limited

• ONGC Mangalore

Petrochemicals

Limited

• Petronet LNG Limited

Chairman w.e.f.

October 1, 2017.

Name: Shri M.

Venkatesh

S/o Madhav Mysore

Govinda Rao


1965

Occupation: Managing

Director and CEO

DIN: 07025342

Age: 54

Nationality: Indian

MD

Bungalo,

MRPL

Township,

Bala Post,

Katipalla,

Mangaluru

- 575 030

April 1, 2015 • ONGC Mangalore

Petrochemicals

Limited

• Shell MRPL Aviation

Fuels and Services

Limited

• Petronet MHB Limited

• Mangalore SEZ

Limited

Appointed as MD

vide MoPNG letter

dated May 30, 2018.

Earlier he was

holding the post of

Director (Refinery).

Name: Shri M.

Vinayakumar

Quarter

No.: B-1,

MRPL

July 11, 2019 ONGC Mangalore

Petrochemicals Limited

Appointed as

Director Refinery

vide MoPNG letter

32

NAME,

FATHER’S/HUSBAN

D’S NAME,

DESIGNATION,

OCCUPATION, DIN,

AGE AND

NATIONALITY

RESIDEN

TIAL

ADDRESS

DIRECTOR

OF THE

COMPANY

SINCE

APPOINTMENT /

RESIGNATION

REMARKS

S/o Shri Chillayil

Purushothaman


1960

Occupation: Director

(Refinery)

DIN: 08225553

Age: 59

Nationality: Indian

Township,

Bala Post,

Dakshina

Kannada,

Katipalla,

Mangaluru

- 575 030

(Karnataka)

Shell MRPL Aviation

Fuels and Services

Limited

dated July 11, 2019.

Name: Smt. Pomila

Jaspal

D/o Late Shri Yoginder

Singh


1964

Occupation: Director

(Finance)

DIN: 08436633

Age: 55

Nationality: Indian

House No.

C-53,

Ardee City,

Sector – 52,

Wazirabad

(75),

Gurgaon –

122003

(Haryana)

October 14,

2019 • ONGC Petro-

Additions Limited

• ONGC Mangalore

Petrochemicals

Limited

Appointed as

Director (Finance)

vide MoPNG letter

dated October 14,

2019

Name: Shri Subhash

Kumar

S/o Late Shri

Dasaundhi Ram Shastri


1962

Occupation: Non-

Executive Nominee

Director

DIN: 07905656

Age: 57

Nationality: Indian

F-104,

Pawittra

Appts.

Vasundhara

Enclave,

East Delhi -

110 096

(India)

May 15, 2018

• Oil and Natural Gas

Corporation Limited

• Hindustan Petroleum

Corporation Limited

• Petronet MHB Limited

• ONGC Petro

Additions Limited

• ONGC Tripura Power

Company Limited

• Mangalore SEZ Ltd

Appointed as

Nominee Director of

ONGC subsequent

to ONGC Letter

dated May 7, 2018.

Name: Shri Vinod S.

Shenoy

S/o Shri Sadanand

Shenoy


1962

Occupation: Non-

Executive Nominee

Director (HPCL

Nominee)

DIN: 07632981

Age: 57

Nationality: Indian

B-1, Flat

No.-904,

Shree

Saraswati

CHS, N G

Acharya

Marg,

Chembur,

Mumbai -

400 071

November 8,

2016 • Hindustan Petroleum

Corporation Limited

• HPCL Mittal Energy

Limited

• Prize Petroleum

Company Limited

• Ratnagiri Refinery and

Petrochemicals Ltd.

• HPCL Rajasthan

Refinery Limited

Appointed as

nominee director of

HPCL subsequent to

HPCL letter dated

November 7, 2016.

33

NAME,

FATHER’S/HUSBAN

D’S NAME,

DESIGNATION,

OCCUPATION, DIN,

AGE AND

NATIONALITY

RESIDEN

TIAL

ADDRESS

DIRECTOR

OF THE

COMPANY

SINCE

APPOINTMENT /

RESIGNATION

REMARKS

• HPCL Biofuels

Limited

Name: Shri Sunil

Kumar

S/o Shri Jitender Prasad

Yadav


1970

Occupation: Non-

Executive Nominee

Director (Government

Nominee)

DIN: 08467559

Age: 49

Nationality: Indian

CK- 04/4A

Opposite

Cris

Chanakya

Rail

Enclave

Chankyapu

ri New

Delhi –

110021

(India)

October 17,

2019 • Hindustan Petroleum

Corporation Limited

• Engineers India

Limited

Appointed as

Director vide

MoPNG letter dated

October 17, 2019

Name: Shri Sanjay

Kumar Jain

S/o Late Shri Jogdhyan

Jain


1974

Occupation: Non-

Executive Nominee

Director (“Government

Nominee”)

DIN: 08015083

Age: 45

Nationality: Indian

D-2, House

No- 324,

Pandara

Road,

Lodhi

Road,

Central

Delhi,

Delhi -

110003

November 24,

2017

Nil Appointed as

Director vide

MoPNG letter dated

November 24, 2017

Name: Ms. Manjula C.

S/o Late Shri L. K.

Cheluvegowda


1968

Occupation:

Independent Director

DIN: 07733175

Age: 51

Nationality: Indian

63, Old

Bhandrahal

li,

Bhadrawat

hi, Shimoga

- 577229

(Karnataka)

January 31,

2017

Nil Appointed as Non

Official Independent

Director vide

MoPNG letter dated

January 31, 2017

Name: Shri Balbir

Singh

S/o Shri Jagmal Singh


1951

Occupation:


DIN: 07945679

363,

Nitikhand-

3 Near

Jaipuria

Mall Gate

No. 1,

Indirapura

m-201014

Ghaziabad

September 8,

2017

Nil Appointed as Non-


Director vide

MoPNG letter dated

September 8, 2017

34

NAME,

FATHER’S/HUSBAN

D’S NAME,

DESIGNATION,

OCCUPATION, DIN,

AGE AND

NATIONALITY

RESIDEN

TIAL

ADDRESS

DIRECTOR

OF THE

COMPANY

SINCE

APPOINTMENT /

RESIGNATION

REMARKS

Age: 68

Nationality: Indian

Name: Shri Sewa Ram

S/o Shri Kartar Chand

Sarangal

Date of birth 23-05-

1951

Occupation:


DIN: 01652464

Age: 68

Nationality: Indian

660, Sector

26,

Panchkula-

134116

September 8,

2017



Director vide

MoPNG letter dated

September 8, 2017

Name: Shri V. P. Haran

S/o Late Mr. K.

Virupakshan


1954

Occupation:


DIN: 07710821

Age: 65

Nationality: Indian

23, IFS

Villa, P-6

Builders

Area

Greater

NOIDA:

201310

September 8,

2017



Director vide

MoPNG letter dated

September 8, 2017

Name: Dr. G. K. Patel

S/o Shri Kantilal

Venidas Patel


1948

Occupation:

Orthopaedic Surgeon


DIN: 07945704

Age: 71

Nationality: Indian

G. K.

Orthopaedi

c Hospital

Krishna

Society

Rotary

Bhavan

Road,

Mehsana-

384002

Gujrat

September 8,

2017



Director vide

MoPNG letter dated

September 8, 2017

Name: Shri Vivek

Mallya

S/o Late Shri

Moodabidri Ramesh

Mallya


1975

Occupation: Practising

Chartered Accountant


DIN: 05311763

Age: 44

B 601,

Mantri

Elegance

behind

Shoppers

Stop,

Bannerghat

ta Road,

Bangalore

560076,

Karnataka

January 7, 2019 Oil and Natural Gas

Corporation Limited

Appointed as Non


Director vide

MoPNG letter dated

January 3, 2019

35

NAME,

FATHER’S/HUSBAN

D’S NAME,

DESIGNATION,

OCCUPATION, DIN,

AGE AND

NATIONALITY

RESIDEN

TIAL

ADDRESS

DIRECTOR

OF THE

COMPANY

SINCE

APPOINTMENT /

RESIGNATION

REMARKS

Nationality: Indian

Name: Shri R. T.

Agarwal

S/o Late Shri Hazari Lal

Agarwal


1956

Occupation:


DIN: 01937329

Age: 63

Nationality: Indian

H. No. 16,

Sector - 41,

Gurugram,

Haryana -

122 001

July 12, 2019 Nil Appointed as Non-


Director vide

MoPNG letter dated

July 12, 2019

Confirmation

None of the current Directors of the Issuer appear in the RBI’s defaulter list and/or ECGC default list.

Corporate Governance

Except as disclosed in this Private placement Offer Letter, the Company is in compliance with the requirements

of Corporate Governance as prescribed under SEBI (Listing Obligation and Disclosure Requirements)

Regulations, 2015 and DPE Guidelines on Corporate Governance.

Details of Changes in Directors in the last 3 years:

Name DIN Designation Date of

Appointment

Date of

Completion

of tenure/

Resignation

Date

Reason

Shri V. P. Haran 07710821 Independent

Director

September 8,

2017

Continuing Appointed as Non-

official Independent

Director by MoPNG,

Govt. of India

Shri Sewa Ram 01652464 Independent

Director

September 8,

2017



Director by MoPNG,

Govt. of India

Dr. G. K. Patel 07945704 Independent

Director

September 8,

2017



Director by MoPNG,

Govt. of India

Shri Balbir Singh 07945679 Independent

Director

September 8,

2017



36


Appointment

Date of

Completion

of tenure/

Resignation

Date

Reason

Director by MoPNG,

Govt. of India

Shri Shashi

Shanker

06447938 Chairman October 1,

2017

Continuing Appointed as Chairman

/ Director

Shri K. M.

Mahesh

07402110 Director November 24,

2017

October 17,

2019

Ceased to be a director

w.e.f. from October 17,

2019.

Shri Sanjay

Kumar Jain


2017

Continuing Appointed as Govt.

Director by MoPNG,

Govt. of India

Shri Dinesh

Kumar Sarraf

00147870 Chairman March 1, 2014 October 1,

2017

Ceased to be Director

consequent upon his

superannuation as

CMD – ONGC

Shri Diwakar

Nath Misra

07464700 Director March 9, 2016 November 24,

2017

Ceased to be Govt.

Director on withdrawal

of nomination by

MoPNG, Govt. of India

Smt. Perin Devi 07145051 Director May 14, 2015 November 24,

2017

Ceased to be Govt.

Director on withdrawal

of nomination by

MoPNG, Govt. of India

Shri M.

Venkatesh

07025342 Managing

Director

June 1, 2018 Continuing Appointed as

Managing Director

consequent upon the

superannuation of Shri

H. Kumar

Shri Subhash

Kumar

07905656 Director May 15, 2018 Continuing Appointed as nominee

Director of ONGC

Shri Vivek Mallya 05311763 Independent

Director

January 7,

2019


official independent

Director by MoPNG,

Govt. of India

Shri H. Kumar 06851988 Managing

Director

August 14,

2014

May 31, 2018 Superannuation from

the services of the

Company on May 31,

2018

Shri A. K. Sahoo 07355933 Director

(Finance)

February 1,

2016

December 11,

2018

Ceased to be Director

due to death

Smt. Pomila

Jaspal

08436633 Director

(Finance)

October 14,

2019

Continuing Appointed as Director

(Finance) vide MoPNG

letter dated October 14,

2019

Shri Sunil Kumar 08467559 Nominee October 17, Continuing Appointed as Director

vide MoPNG letter dated

37


Appointment

Date of

Completion

of tenure/

Resignation

Date

Reason

Director 2019 October 17, 2019

Shri R. T

Aggarwal

01937329 Independent

Director

July 12, 2019 Continuing Appointed as Independent

Director vide MoPNG

letter dated July 12, 2019

Shri M.

Vinayakumar

08225553 Director July 11, 2019 Continuing Appointed as Director

(Refinery) vide MoPNG

letter dated July 11, 2019

Ms. Manjula C 07733175 Independent

Director

January 31,

2017

Continuing Appointed as Independent

Director vide MoPNG

letter dated January 31,

2017

Shri Vinod S.

Shenoy


2016

Continuing Appointed as Nominee of

HPCL vide HPCL letter

dated November 7, 2016

38

8.1. INTERESTS OF OUR DIRECTORS

Except as otherwise stated in “Financial Statements – Related Party Transactions” our Company has not

entered into any contract, agreements and arrangement during the three financial years preceding the date of

this Private Placement Offer Letter in which the directors are interested directly or indirectly, and no payments

have been made to them in respect of such contracts or agreements.

All directors, including independent director, may be deemed to be interested to the extent of fees if any,

payable to them for attending meetings of the Board or a committee thereof, as well as to the extent of

other remuneration and reimbursement of expenses payable to them and in view of their

employment/nomination.

8.2. INTEREST OF KEY MANAGERIAL PERSONS/PROMOTERS IN THE OFFER

There is no financial or other material interest of the directors, promoters or key managerial personnel in the

offer. There are no contributions which are being made by the directors either as part of the offer or separately

in furtherance of such objects.

8.3. DETAILS OF LITIGATION OR LEGAL ACTION PENDING OR TAKEN BY ANY MINISTRY

OR DEPARTMENT OF THE GOVERNMENT OR A STATUTORY AUTHOTHORITY

AGAINST PROMOTER OF THE OFFEROR COMPANY DURING LAST 3 YEARS

IMMEDIATELY PRECEEDING THE YEAR OF ISSUE AND DIRECTIONS ISSUED

THEREOF

Our promoter, ONGC and HPCL are involved in various legal proceedings including taxation related

proceedings, before various courts and other forums in the ordinary course of business and may have received

directions in this regard.

8.4. REMUNERATION OF DIRECTORS

8.4.1. Managing Director and CEO (Whole Time Director)/ Manager

The following table sets forth the details of remuneration paid to the Directors during the current financial

year (2019-20):

Name of the Director Salary & Allowances,

Performance, Perquisites

Linked Incentive/ Ex-

gratia (₹)

Contribution to

provident and

other funds (₹)

Total (₹)

Shri M. Venkatesh, Managing

Director (from April 1, 2019, to

December 31, 2019)

33.18 Lacs 7.84 Lacs 41.02 Lacs

Shri M. Vinayakumar, Director

(Refinery), (From July 11,

2019, to December 31, 2019)

19.81 Lacs 4.78 Lacs 24.59 Lacs

Smt. Pomila Jaspal, Director

(Finance) (From October 15,

2019 to December 31, 2019)

9.57 Lacs 1.66 Lacs 11.23 Lacs

Total 62.56 Lacs 14.28 Lacs 76.84 Lacs

The following table sets forth the details of remuneration paid to the Directors during FY 2018-19:

SECTION VIII

DISCLOSURES WITH REGARD TO INTEREST OF DIRECTORS, LITIGATION, ETC.

39


Performance, Perquisites

Linked Incentive/ Ex-

gratia (₹)

Contribution to

provident and

other funds (₹)

Total (₹)

Shri M. Venkatesh, Managing

Director (from June 1, 2018,

and Director (Refinery) till May

31, 2018)

62.97 Lacs 5.55 Lacs 68.52 Lacs

Shri H. Kumar, Managing

Director till May 31, 2018 67.07 Lacs 2.84 Lacs 69.91 Lacs

Shri A. K. Sahoo, Director

(Finance) till December 11,

2018

46.04 Lacs 4.95 Lacs 50.99 Lacs




Performance,

Perquisites Linked

Incentive/ Ex-gratia (₹)

Contribution to

provident and

other funds (₹)

Total (₹)


Director

70 Lacs 6 Lacs 76 Lacs

Shri M. Venkatesh,

Director (Refinery)



(Finance)


Total 196 Lacs 17 Lacs 213 Lacs



Performance,

Perquisites Linked

Incentive/ Ex-gratia (₹)

Contribution to

provident and

other funds (₹)

Total (₹)


Director


Shri M. Venkatesh,

Director (Refinery)



(Finance)


Total 123 Lacs 12 Lacs 135 Lacs

8.4.2. Remuneration in terms of Sitting Fee

Set forth below are the details of the sitting fees paid to directors during the current financial year (2019-

20):

S. No. Name of the

Directors

Sitting Fees Total

Board Meeting Committee

Meeting

In ₹

40

1 Ms. Manjula C 2.00 Lacs 1.80 Lacs 3.80 Lacs

2 Shri V. P Haran 2.00 Lacs 5.10 Lacs 7.10 Lacs

3 Shri Sewa Ram 2.00 Lacs 4.20 Lacs 6.20 Lacs

4 Dr. G. K. Patel 2.00 Lacs 3.00 Lacs 5.00 Lacs

5 Shri Balbir Singh 2.00 Lacs 3.00 Lacs 5.00 Lacs

6 Shri Vivek Mallya 2.00 Lacs 2.70 Lacs 4.70 Lacs

7 Shri R. T. Agarwal 0.80 Lacs ---- 0.80 Lacs


Set forth below are the details of the sitting fees paid to directors during FY-2018-19:

S. No. Name of the

Directors

Sitting Fees Total


Meeting

1 Ms. Manjula C 6 Meeting 19 Meeting 9.60 Lacs

2 Shri V. P Haran 7 Meeting 26 Meeting 12.40 Lacs

3 Shri Sewa Ram 7 Meeting 24 Meeting 11.50 Lacs

4 Dr. G. K. Patel 7 Meeting 24 Meeting 11.50 Lacs

5 Shri Balbir Singh 7 Meeting 24 Meeting 11.80 Lacs

6 Shri Vivek Mallya 1 Meeting 3 Meeting 1.30 Lacs

7 Total 58.10 lacs


S. No. Name of the

Directors

Sitting Fees Total


Meeting

In ₹

1 Ms. Manjula C 7 Meeting 20 Meeting 9 Lacs

2 Shri V. P Haran 3 Meeting 7 Meeting 4 Lacs

3 Shri Sewa Ram 3 Meeting 7 Meeting 4 Lacs

4 Dr. G. K. Patel 4 Meeting 7 Meeting 4 Lacs

5 Shri Balbir Singh 4 Meeting 7 Meeting 4 Lacs

Total 25 Lacs


In ₹

S. No. Name of the

Directors

Sitting Fees Total


Meeting

1 Ms. Manjula C. Board Meeting no

208 held on

07.02.2017

Nil 0.15 Lacs

Total 0.15 Lacs

41

8.5. RELATIONSHIP WITH OTHER DIRECTORS

None of the Directors of the Company is, in any way, related to each other.

8.6. RELATED PARTY TRANSACTIONS

Related party transactions entered during the last 3 financial years immediately preceding the year of

circulation of this private placement offer letter are as follows:

Transactions with Holding Company

(₹ in crore)

Oil and Natural

Gas Corporation

Limited (ONGC)

Nature of Transactions Year ended

March 31, 2019

Year ended

March 31, 2018

Year ended

March 31, 2017

Sales of products Sales of HSD 0.71 1.35 2.05

Sales of High Flash High-Speed

Diesel

868.74 884.73 530.21

Purchase of Crude

& Retail

Outlet

Purchase of Crude Oil 5,441.53 4,943.95 5,330.50

Purchase of Retail Outlet - 1.22 2.51

Services Received Deputation of ONGC

Employees

0.65 0.72 0.29

Rent and Electricity Charges

paid for Mumbai and Delhi

Office

4.90 7.36 1.54

Guarantee Fees Charges for Guarantee given to

Saudi Aramco

1.65 1.58 1.67

Services

provided

Expenses incurred on behalf of

ONGC

- 0.02 1.05

Dividend Dividend Paid 376.61 753.21 -

Loan Repayment of Loan 1,885.69 685.72 -

Interest Expense Interest on Term Loan 54.91 165.78 243.50

Outstanding balances with Holding Company

(₹ In Crore)

Oil and Natural Gas

Corporation Limited

(ONGC)

Nature of Transactions As at March 31,

2019

As at March

31, 2018

As at

March

31, 2017.

Loans Term Loan - 1,885.69 2,571.41

Amount receivable Sale of Oil products 0.69 98.54 61.46

Amount payable Purchase of Crude Oil 410.26 666.56 319.18

Amount payable Purchase of Others 2.59 6.28 1.22

Transactions with Entity having significant influence over the Company

(₹ In Crore)

Hindustan Petroleum

Corporation Limited

(HPCL)


March 31,

2019

Year ended

March 31,

2018

Year ended

March 31, 2017

Sales of products Sale of petroleum

products

15,657.89 20,766.34 18,533.48

42

Services provided a) Received / Receivable

on account of

Terminalling Charges

- 0.83 4.92

b) Reimbursement of

water charges, facilitation

charges

0.97 1.64 0.49

c) Receipts of

contaminated products,

Hospitality Charges,

Wharfage and stock loss

etc.

4.46 0.62 0.31

d) Dividend 89.15 178.29 -

e) State specific cost

ration-ET reimbursement - - 39.05

Outstanding balances with Entity having significant influence over the Company

(₹ In Crore) Hindustan

Petroleum

Corporation

Limited (HPCL)

Nature of Transactions As at March 31,

2019

As at March

31, 2018

As at March

31, 2017

Amount

receivable

Sale of products 716.88 878.99 896.31

Transit Loss and Others 4.03 4.03 9.55

Amount payable HPCL R &D & Chemical Cleaning 0.24 0.23 0.03

Transactions with Subsidiary

(₹ in crore)

ONGC Mangalore


(OMPL)


March 31,

2019

Year ended

March 31,

2018

Year ended

March 31,

2017

Sales of products Sale of products 5,957.95 4,316.95 466.25

Purchase of products Purchases 1,586.33 1,062.11 89.87

Services received Salary for OMPL staff on

deputation

0.12 1.24 -

Road Facility -0.04 0.79 -

Services provided a) Facilitation Charges 6.88 4.44 0.37

b) Deputation of MRPL

Employees, Energy Charges,

Survey Fees reimbursement

0.38 3.60 -

c) Consultancy back

charges/credit note for metering

charges

3.37 6.17 -

d) Investment in Equity 153.01 - -

e) Crane charges and reimbursement of consultancy fee

- - -

Interest income and

Other recovery Reimbursement of Charges 15.86 3.44 -

Interest charges for delayed

payments

- - 0.58

43

Outstanding balances with Subsidiary

(₹ in crore) ONGC Mangalore


(OMPL)

Nature of Transactions As at March

31, 2019 As at March

31, 2018 As at March

31, 2017

Loans Short Term Loans &

Advances

0.30 0.90 0

Amount receivable Sales of Oil products,

Facilitation Charges & Others

249.19 175.48 19.03

Amount payable a) Purchase of Raffinate,

Hydrogen & Other Service

Charges

57.07 54.04 0.96

b) Feed Transfer Facility within

MRPL Provided by OMPL - 0.17 3.44

Transactions with Joint Ventures

(₹ in crore)

Shell MRPL Aviation

Fuels and Services Ltd

(SMAFSL)


March 31, 2019

Year ended

March 31, 2018

Year

ended

March 31,

2017

Sales of products Petroleum Products 643.43 474.92 472.08

Services provided a) Reimbursement of Electrical

Charges

0.00 0.00 0.03

b) Royalty Income 0.97 0.92 1.04

Dividend Income Dividend received 2.10 11.25 0.75

Product Purchase Contaminated Product - 0.06 -

Outstanding balances with Joint Ventures

(₹ in crore)

Shell MRPL Aviation

Fuels and Services Ltd

(SMAFSL)

Nature of Transactions As at March

31, 2019

As at March

31, 2018

As at

March

31,

2017

Amount receivable: a) Royalty and Terminalling Charges,

etc.

49.63 42.64 50.99

b) Receivable for the Services - 0.00 0.03

Transactions with Other Related Parties

(₹ in crore)

Name of Associates Nature of Transactions Year ended

March 31, 2019

Year ended

March 31,

2018

Year

ended

March

31, 2017

a) Services received

from:

1 Mangalore SEZ

Limited

a) River Water, STP Water & Road

Repairs

61.63 55.37 41.70

b) Advance for the right of way for

pipeline cum road

- - 8.71

a) Advance for payment of bypass road - - 5.15

b) Lease rent paid for petcoke road - - 13.05

44

Name of Associates Nature of Transactions Year ended

March 31, 2019

Year ended

March 31,

2018

Year

ended

March

31, 2017

2 Petronet MHB Limited Pipeline Transportation Charges 25.42 4.49 -

3 ONGC Nile Ganga BV a) Purchase of Crude Oil 1,774.10 - -

b) Tendering services 0.00 - -

4 ONGC Campos Ltd. Tendering services 0.00 - -

b) Services provided to:

Petronet MHB Limited Reimbursement of Electricity Charges 3.69 4.13 3.02

Outstanding balances with Other Related Parties:

(₹ in crore)

Name of Associates Nature of Transactions As at March

31, 2019

As at

March 31,

2018

As at March

31, 2017

Amount receivable:

1. Petronet MHB

Limited

Reimbursement of Electricity

Charges

3.75 0.58 0.27

2. ONGC Nile Ganga

BV

Outstanding on account of

services

0.01 - -

3. ONGC Campos

Ltd.

Outstanding on account of

services

0.01 - -

Amount payable:

1. Mangalore SEZ

Limited

River Water, STP Water and Road

Repairs

4.45 4.39 3.89

2. ONGC Nile Ganga BV

Balance Outstanding on account of crude procurement

3.91 6.81 6.77

Advances to:

Mangalore SEZ Limited

Advance for Right of Way for Pipeline-cum- Road Corridor

- 98.06 98.06

Transactions with Trusts

(₹ in crore)

Name of Trusts Nature of Transactions Year ended

March 31,

2019

Year ended

March 31,

2018

Year ended

March 31,

2017

Remittance of payments:

Provident Fund of MRPL Limited

Contributions 46.28 42.83 35.22

Reimbursement of

Gratuity payment made

on behalf of Trust:

MRPL Gratuity Fund Trust Reimbursements and

Contributions 3.89 1.21 1.22

Independent Directors

(₹ in crore)

Particulars Year ended

March 31, 2019

Year ended

March 31, 2018

Year ended

March 31,

45

2017

Sitting Fees 0.62 0.26 0.00

Compensation to Key Management Personnel

(₹ in crore)

Whole Time Directors/ Company Secretary/ Chief

Financial Officer Particulars

Year ended

March 31, 2019

Year ended

March 31, 2018

Year ended

March 31,

2017

Short Term employee benefits 2.37 2.36 1.43

Post-employment benefits (includes provision for leaves, gratuity and other post-retirement benefits)

0.86 0.74 0.84

Other long-term benefits (includes contribution to provident

fund)

0.22 0.21 0.17

Total 3.45 3.31 2.44

Loans / Accrued Interest on Loan to directors and other officers:

(₹ in crore)

Whole Time Directors and

Company Secretary Particulars

Year ended

March 31, 2019

Year ended

March 31, 2018

Year ended

March 31,

2017

Loans to Director and Company Secretary 0.08 0.16 0.12

Accrued interest on Loans to Director and Company

Secretary

0.01 0.04 0.04

Total

0.09

0.20 0.16

The transactions with Government Related entities

(₹ in crore) Name of related party Nature of

transactions

Year ended

March 31, 2019

Year ended

March 31, 2018

Year ended

March 31, 2017

A Sale of products

during year to:

1 Indian Oil

Corporation

Limited (IOCL)

Sale of

petroleum

products

12,010.23 11,819.75 11,479.62

2 Bharat

Petroleum

Corporation Ltd

(BPCL)

Sale of

petroleum

products

8,766.84 7,135.40 8,996.54

3 New Mangalore

Port Trust

Sale of

petroleum

products

0.24 0.13 -

4 Indian Strategic

Petroleum

Reserves

Limited (ISPRL)

a) Sale of

petroleum

products

0.01 0.31 -

b) Sale of Crude

oil (High Sea

Sale)

534.22 0.50 618.67

B Purchase of

product during

the year from:

1 Bharat Heavy

Electrical Ltd

CPP Phase III

and other

supplies

6.25 7.54 3.31

2 Indian Oil

Corporation

Limited (IOCL)

Contaminated

Product / Lubes

1.14 1.32 43.32

46

3 Bharat

Petroleum

Corporation Ltd

(BPCL)

Purchase of

Contaminated

Product

0.10 0.23 -

C Service

Provided

1 Bharat Petroleum Corporation Ltd

(BPCL)

a) Received /

Receivable on

account of

Terminalling

Charges

- 0.43 -

b) Loading Arm

Charges

- 0.01 -

2 Indian Strategic Petroleum Reserves

Limited (ISPRL)

Deputation of

MRPL

Employees

0.94 0.90 -

3 Indian Oil Corporation Limited (IOCL)

Received /

Receivable on

account of

Terminalling

Charges

- 0.72 -

(₹ in crore)

Name of related party Nature of

transactions

Year ended

March 31,

2019

Year

ended March

31, 2018

Year

ended

March 31,

2017

D Services Received from:

1 Karnataka Power Transmission Purchase of electricity 20.46 23.59 20.91

Corporation Ltd

2 Oriental Insurance Co. Ltd Insurance premium 31.68 25.12 27.14

3 New Mangalore Port Trust Port Services 39.45 13.23 3.95

4 Bridge & Roof Co (India) Ltd Job Work Service 111.86 18.56 2.90

5 Engineers India Ltd Technical Services 39.77 75.25 55.21

6 The Shipping Corporation of India

Service 204.44 283.18 394.54

Ltd

7 New Mangalore Port Trust Port Services 127.54 130.42 127.54

8 Konkan Railway Corporation

Limited

Railway Siding - 24.81 32.07

9 Indian Oil Corporation Limited Testing Fees & Demurrage

0.30 0.00 -

(IOCL)

10 Bharat Petroleum Corporation Ltd

(BPCL)

PT Programme Services

0.01 -

E Advance for Acquisition for

Land

1 Karnataka Industrial Area Advance towards land for

15.82 110.72 590.52

47


transactions

Year ended

March 31,

2019

Year

ended March

31, 2018

Year

ended

March 31,

2017

Development Board expansion

Outstanding balances with Government related entities

(₹ in crore)


transaction

As at March 31,

2019

As at March

31, 2018

As at March

31, 2017

Amount receivable:

1 Indian Oil Corporation

Limited

Trade and other

receivable

730.69 534.83 621.65

2 Bharat Petroleum

Corporation Ltd

Trade and other

receivables

244.59 314.89 340.61

3 Indian Strategic Petroleum Reserves Limited (ISPRL)

Trade and other receivables

0.14 0.48 303.33

4 New Mangalore Port Trust Trade and other

receivables

22.27 5.35 3.81

Advance to Vendors:

1 Centre for High

Technology

Advance 2.96 2.98 2.98

2 Karnataka Industrial Area

Development Board

Advance for Land 717.58 701.71 590.92

3 Karnataka Power Transmission

Corporation Ltd

Advance - 6.06 6.03

4 Indian Strategic Petroleum Reserves Limited (ISPRL)

Advance 0.75 0.05 0.07

Amount payable:

1 Bridge & Roof Co (India)

Ltd

Trade and other

payable

11.41 10.38 6.87

2 Engineers India Ltd Trade and other

payable

15.79 56.10 108.73

3 Bharat Heavy Electrical Ltd Trade and other

payable

87.46 87.05 148.29

4 The Shipping Corporation of

India Ltd

Trade and other

payable

11.82 4.35 30.99

5 Konkan Railway

Corporation Limited

Trade and other

payable

- 1.69 0.00

6 Karnataka Power Transmission Corporation Ltd

Trade and other payable

2.01 2.10 1.94

7 Indian Oil Corporation

Limited

Trade and other

payable

0.01 0.01 0.01

8.7. DETAILS OF ANY INQUIRY, INSPECTIONS OR INVESTIGATIONS INITIATED OR

CONDUCTED UNDER THE COMPANIES ACT OR ANY PREVIOUS COMPANY LAW IN THE

LAST THREE YEARS IMMEDIATELY PRECEDING THE YEAR OF CIRCULATION OF

48

PRIVATE PLACEMENT OFFER LETTER AGAINST THE COMPANY AND ITS SUBSIDIARIES

Nil

8.8. DETAILS OF ANY PROSECUTION FILED, FINES IMPOSED, COMPOUNDING OF OFFENCES

UNDER THE COMPANIES ACT OR ANY PREVIOUS COMPANY LAW IN THE LAST THREE

YEARS IMMEDIATELY PRECEDING THE YEAR OF CIRCULATION OF PRIVATE

PLACEMENT OFFER LETTER AGAINST THE COMPANY AND ITS SUBSIDIARIES

Nil

8.9. DETAILS OF DEFAULT, IF ANY, INCLUDING THEREIN THE AMOUNT INVOLVED,

DURATION OF DEFAULT AND PRESENT STATUS, IN REPAYMENT OF STATUTORY DUES/ DEBENTURES AND INTEREST THEREON/ DEPOSITS AND INTEREST THEREON, LOAN FROM ANY BANK OR FINANCIAL INSTITUTION AND INTEREST THEREON AND OTHER FINANCIAL INDEBTEDNESS INCLUDING CORPORATE GUARANTEE ISSUED BY THE COMPANY. 8.9.1 The Issuer has not defaulted on payment of any kind of statutory dues to the Government of

India, State Government(s), statutory/ regulatory bodies, authorities, departments etc. (b) debentures and interest thereon (c) deposits and interest thereon (d) loan from any bank or financial institution and interest thereon.

8.9.2 The main constituents of the Issuer’s borrowings are generally in form of loans, loans from banks and financial institutions etc. In respect of such borrowings, the Issuer certifies that:

(i) it has serviced all the principal and interest liabilities on all its borrowings on time and

there has been no instance of default.

8.9.3 The issuer has not defaulted on any of its payment obligations arising out of any corporate guarantee issued by it to any counterparty including group companies etc. in the past.

8.10. DETAILS OF ACTS OF MATERIAL FRAUDS COMMITTED AGAINST THE COMPANY IN

THE LAST THREE YEARS, IF ANY, AND IF SO, THE ACTION TAKEN BY THE COMPANY

There was no material fraud committed against the Company.

8.11. OUTSTANDING BORROWINGS/ DEBT SECURITIES ISSUED FOR CONSIDERATION

OTHER THAN CASH, WHETHER IN WHOLE OR PART, AT A PREMIUM OR DISCOUNT, OR IN PURSUANCE OF AN OPTION

Company has not issued any debt securities or agreed to issue any debt securities or availed any

borrowings for a consideration other than cash, whether in whole or in part, at a premium or discount or

in pursuance of an option.

8.12. AUDITORS’ QUALIFICATIONS

Details with respect to qualifications, reservations and adverse remarks of the auditors of the Company in the last five financial years immediately preceding the year of circulation of private placement offer letter and their impact on the financial statements and financial position of the Company and the corrective steps taken and proposed to be taken by the Company for each of the said qualifications, reservations and adverse remarks are given as under:

Financial Year Auditors’ qualifications, reservations and adverse remarks

2018-19 Nil

2017-18 Nil

2016-17 Nil

49

Financial Year Auditors’ qualifications, reservations and adverse remarks

2015-16 Nil

2014-15 Nil

8.13. DEFAULT IN ANNUAL FILING OF THE COMPANY

The Company confirms that it has not defaulted in annual filings under Companies Act, 2013 or the

rules made thereafter.

8.14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS OR

TRIBUNALS IMPACTING GOING CONCERN STATUS

Nil.

50

SECTION IX

MANAGEMENT’S PERCEPTION OF RISK FACTORS

MANAGEMENT PERCEPTION OF RISK FACTOR

The Investor should carefully consider all the information in this private placement offer letter, including the risks

and uncertainties described below before making an investment in the Debentures. The risks and uncertainties

described in this section are not the only risks that the Company currently faces. Additional risks and uncertainties

not known to us or that we currently believe to be immaterial may also have an adverse effect on our business,

prospects, results of operations and financial condition.

RISK RELATING TO BUSINESS OR INDUSTRY

1. The Company operates from a single refinery and its operations and results may be affected by

factors affecting the refinery margins.

The Company operates from its single refinery situated at village Katipalla near Mangaluru. The

Company does not have any alternative location/plant to operate from in case there is any

exigency/accident/deficit of raw material may impact the operation of the Company. The Issuer’s

operations are subject to various risks associated with the petroleum and petrochemicals industry. These

risks are particularly significant for the Issuer, as most of the Issuer’s operations are located at a single

plant. As such, the occurrence of any of these hazards in one area of the Issuer’s business may have a

direct and adverse effect on the performance of other areas of the Issuer’s business. These hazards

include, but are not limited to, explosions, fires, earthquakes and other natural disasters, mechanical

failures, accidents, acts of terrorism, operational problems, transportation interruptions, chemical or oil

spills, discharges of toxic or hazardous substances or gases, and other environmental risks. These hazards

can cause personal injury and loss of life, environmental damage and severe damage to, or destruction

of, property and equipment, and may result in the stoppage of work or interruption of the Issuer’s business

operations and the imposition of civil or criminal liabilities.

Further, operations of the refinery are also impacted by crude prices, conversion efficiency, operational

availability and frequency of shutdowns. To ensure optimum performance of the plant, the Company has

made its best endeavor to adhere to the shutdown schedule, close monitoring of yield/energy efficiency.

The refinery is built with a robust fire protection system across all its facilities complying with the

statutory requirements. The design of the Refinery has factored the seismic zone in which it is located

and it has been built accordingly for earthquake resistance. High Operational, Safety and Maintenance

discipline is ensured to mitigate mechanical problems and operational issues and ensure no chemical or

oil spills. The issuer is in full compliance of the standards prescribed by the Pollution Control Board for

treated effluents and stack emissions. Availability of Captive Jetty and SPM alleviate crude supply

disruption. The product that is moved inland/hinterland is majorly through cross country pipeline thereby

reducing the risk of transportation interruption.

2. The Company depends heavily on oil marketing companies and caters to a limited geographical

area.

The Issuer relies on OMCs to market its products in the retail space. This results in lesser off-take of

products from the company when OMCs prefer to bring in products from outside the Karnataka to meet

the demand in Karnataka. On account of the same, the Issuer is forced to rely on exports which results

in marginally lower realization for the products. To overcome the said challenge the Issuer has set up

and is in the process of expanding the retail outlets within the area of its influence to overcome the

reliance on OMCs in the medium term.

3. The Company relies heavily on imports for its supply of raw material, any interruption in imports

may affect the performance of the Company.

The Issuer’s operations largely depend on the import of crude oil, one of the Issuer’s principal raw

materials. The Company imported crude oil worth ₹ 4,715.49 crore during 2018-19 which is about 80%

of our crude requirement. The Issuer sources major portion of its crude oil requirement from the gulf

51

region. Events such as international sanctions, hostilities, strikes, natural disasters, political

developments in petroleum-producing regions, domestic and foreign government regulations and other

events could interrupt the supply of crude oil which could have a material adverse effect on the Issuer’s

business, financial condition and results of operations.

In addition, these events or other events, such as changes in the regulatory environment in India or

elsewhere, may adversely affect prices of crude oil generally or the price at which the Issuer is able to

obtain a supply of crude oil. Any increase in the price of crude oil would have an adverse effect on the

Issuer’s business, financial condition and results of operations if the Issuer is unable to pass on any such

higher costs to its customers.

To mitigate the risk of heavy reliance on the crude type and crude origin, the refinery has been lining up

an alternative source of crude oil. The Company has also initiated steps to diversify the crude basket.

The Company has processed three new crudes i.e. Basra Heavy from Iraq, Urals from Russia and

Nagyalanka, a domestic crude from Krishna basin in 2018-19.

Further, though, crude remains the single most important factor to affect the pricing there are emerging

factors which may affect the performance of the Issuer. Global demand and supply balance, product

inventories with refiners and marketers, the emergence of the US as a major player in the markets along

with OPEC with the increased production of shale oil. The US shale crude has a product profile skewed

to lighter ends. This results in the prices of lighter fuels like gasoline being controlled to some extent by

US shale. With gasoline being a significant part of Issuer’s product mix (greater than 8%), price

fluctuation of gasoline can have a significant impact on the profitability.

4. The Issuer’s operation is affected by prices and fluctuation risk.

Crude oil is the most important ingredient for operations of the Issuer. About 80% of the crude

requirement is imported by the Issuer. Prices of crude oil depend on various factors including policies by

major producers of crude oil, demand variations, geopolitical situations and market sentiment. Any

adverse policy decision by major oil producers or any untoward incident in this region may affect the

prices of the crude and thus impact the finances of the Company. The Issuer has entered into long term

agreements with national oil companies. The said agreements help not only in assured supplies of crude

but also offer competitive prices for procurement of crude oil. Also, management of the Issuer prepares

a three-month advance crude rolling plan to reduce the effect of price fluctuation. As a part of oil

procurement policy, the Issuer has adopted the strategy to procure some of its crude oil on spot/trial basis

to mitigate the price risk. The Issuer also endeavors to maintain the optimum level of the inventory to

mitigate price risk.

The payment for the import of oil crude is dollar-denominated. The Issuer imports about eighty per cent

of its crude oil requirement. Therefore, the Issuer is exposed to foreign exchange variation. The strategy

of hedging is a costly tool to protect the Issuer, The refinery exported 35% of its products in FY 2018-

19. In the domestic market the Refinery Gate Price that the company realizes in sales to OMCs factors

Import Parity Pricing. These provide a natural hedge against exchange rate variation and provides a

cheaper tool to protect the Issuer from the vagaries of the exchange rate.

There has been a lot of volatility in the foreign exchange rates and rates of crude oil in recent times. Such

volatility affects the operations of the Company. It cannot be assured that such volatility will not affect

the Company in future.

5. Scarcity of the water for the refinery may affect the operation of the availability of the Issuer.

Water is one of the vital inputs for operations of the Issuer. The Issuer is majorly dependent on

Nethravathi river to meet its requirement of water for the operations of its plant. The issuer nevertheless

consumes about 3MGD of treated sewage water to alleviate the dependence on fresh water. There have

been instances where the water supply has been interrupted in months of summer. The administration

has also restrained the Issuer from using water from Nethravathi River for certain period during summer

in a few instances. The Issuer cannot guarantee that such shortages or administrative restrictions will not

take place again in the future. To reduce the reliance on Netharavati river as a single source of water, to

mitigate the risk of river water as a single source of water, the Issuer has planned to set up a desalination

52

plant near the sea. The capacity of the said plant is expected to be 30MLD which could be expanded to

70MLD. The proposed plant has received Environmental Clearance and is expected to be operational by

2021. When set up successfully the plant is expected to meet the future water requirements of the Issuer.

However, there can be no assurance that such a plant will be successful and there will be no water scarcity

in the future.

6. Cyclical trends in the refining and petrochemical industry may affect the operation of the Issuer.

A significant portion of the Company’s revenue is attributable to sales of petroleum products in South

India, especially the State of Karnataka. The prices of the raw materials for the refinery are impacted by

various factors including global prices of petro products, Government regulation. Historically, the prices

of raw materials have been sensitive to relative changes in supply and demand, the availability of

feedstock and general economic conditions. Any downturn resulting from the existing or future industry

capacity or otherwise would have a material adverse effect on the Issuer’s business, financial condition

and results of operations.

7. A change in the Government’s policy on tariffs, direct and indirect taxation and fiscal or other

incentives and payment for petroleum goods could adversely affect the Issuer’s business

The Issuer’s operation and profitability are affected by the difference between import tariffs currently

imposed by the Government on crude oil, which is the Issuer’s most significant raw material, and tariffs

currently imposed on certain refined petroleum products. Increases in import tariffs on crude oil or

decreases in import tariffs on certain refined petroleum products could have a material adverse effect on

the Issuer’s business, financial condition and results of operations. There can be no assurance that there

will not be a significant change in Government policy which might/would adversely affect the Issuer’s

financial condition and results of operations. The Issuer’s profitability is also significantly dependent on

the policies of the central and state governments relating to various direct and indirect taxes (including

sales tax and income tax), duties (including excise duties and import duties) and fiscal or other incentives.

Any change in Government policies relating to such taxes or duties or incentives could adversely affect

the Issuer’s profitability.

Furthermore, there can be no assurance that the Government will not intervene with regard to the timing

of payments by purchasers of certain petroleum products in the interest of public policy. Any prolonged

or additional significant changes in Government policy with respect to payment for any of the Issuer’s

products could adversely affect the Issuer’s financial conditions and results of operations.

Government intervention in the pricing decisions of the Issuer may adversely affect its business

8. The Issuer is subject to many environmental and safety regulations.

The operation of refineries and petrochemical plants, the distribution of petroleum, petrochemical

products and the related production of by-products and wastes entail environmental risks. The Issuer is

subject to extensive central, state regulations, rules and ordinances relating to pollution, the protection of

the environment and the generation, storage, handling, transportation, treatment, disposal and

remediation of hazardous substances and waste materials. In the ordinary course of business, the Issuer

is continually subject to environmental inspections and monitoring by government enforcement

authorities. The Issuer may incur substantial costs, including fines, damages and criminal or civil

sanctions, and experience interruptions in the Issuer’s operations for actual or alleged violations arising

under applicable environmental laws and/or implementing preventive measures. In addition, the Issuer’s

refining and storage facilities require operating permits that are subject to renewal, modification and, in

some circumstances, revocation. Violations of operating permit requirements or environmental laws can

also result in restrictions to or prohibitions on plant operations, substantial fines and civil or criminal

sanctions.

The Issuer has an in-house department for close and continuous monitoring of compliance to

Environmental Regulations. Periodicity of sampling and provision of online instruments is ensured for

the same. The design of the plants has been made considering due adherence to stipulations pertaining

to emissions, requirements of material handling and standards in respect of treated discharges and

effluents. Storage facilities of the Refinery are designed and installed as per applicable standards. These

53

are regularly subjected to Inspection and Maintenance as per statute and operations of such facilities are

conducted under valid certificates and permits issued by competent agencies.

The Issuer’s operations involve the generation, storage, handling, transportation, treatment, disposal and

remediation of hazardous substances and waste materials. Changes in regulations regarding the Issuer’s

operations involving hazardous substances and waste materials could inhibit or interrupt the Issuer’s

operations and have a material adverse effect on the Issuer’s business. Potentially significant

expenditures could be necessary in order to comply with future environmental laws. Such capital

expenditures and operating expenses relating to environmental matters will be subject to evolving

regulatory requirements and will depend on the timing of the promulgation and enforcement of specific

standards which impose requirements on the Issuer’s operations. The Issuer faces competition from

petroleum and petrochemical companies

To the extent that the Issuer seeks to export its products to, or source raw products (such as crude oil)

from, the international markets, it faces competition from petroleum and petrochemical companies

elsewhere in the world. In addition, the continued deregulation and liberalization of industries in India,

when combined with any reductions in customs duties and import tariffs, could lead to increased

competition from international companies in the Issuer’s domestic market which may, in turn, have a

material adverse effect on the Issuer’s business, financial condition and results of operations.

9. The Issuer faces competition due to alternative sources of energy.

The Issuer is primarily engaged in the refining and distribution of petroleum products. The Issuer faces

growing competition from companies engaged in the marketing of alternative sources of energy.

Increases in the sale of alternative energy sources may have an adverse effect on the sale of the Issuer’s

petroleum products and hence may affect the Issuer’s business, financial condition and results of

operations.

The Issuer may be unable to attract and retain the skilled personnel to successfully implement its business

strategy.

The Issuer requires personnel with specialized skills to implement and operate many aspects of its

strategic growth projects. Competition for such individuals is fierce due to the relatively small number

of qualified people and the many industrial projects being undertaken locally, regionally and globally.

The Issuer’s success in building a fully capable and multifunctional workforce depends principally on its

ability to continue to attract, retain and motivate sufficient qualified personnel. Failure to successfully

manage its growth and personnel needs could have a material adverse effect on its business and results

of operations.

10. The Issuer may be involved in litigation or regulatory proceedings which, if determined adversely,

could subject the Issuer to significant liabilities

The Issuer is currently, and may in the future be, implicated in lawsuits or regulatory proceedings in the

ordinary course of its business, including lawsuits involving allegations of improper delivery of goods

or services, product liability, product defects, quality problems and intellectual property or competition

law infringements. Litigation or regulatory proceedings could result in substantial costs to, and a

diversion of effort by, the Issuer and/or subject the Issuer to significant liabilities to third parties. There

can be no assurance that the results of such legal or regulatory proceedings will not materially harm the

Issuer’s business, reputation or standing in the marketplace or that the Issuer will be able to recover any

losses incurred from third parties, regardless of whether the Issuer is at fault. The Issuer has insurance to

cover fire, property damage, business interruption and third party liability, among others. However, there

can be no assurance that (i) losses relating to litigation will not be incurred beyond the limits, or outside

the coverage, of such insurance or that any such losses would not have a material adverse effect on the

results of the Issuer’s operations or financial condition or (ii) provisions made for litigation related losses

will be sufficient to cover the Issuer’s ultimate loss or expenditure.

54

RISKS RELATING TO INVESTMENT IN THE DEBENTURES

1. There is no guarantee that the Debentures issued pursuant to this Issue will be listed on the BSE

and NSE in a timely manner, or at all.

In accordance with Indian law and practice, permissions for listing and trading of the Debentures issued

pursuant to this Issue will not be granted until after the Debentures have been issued and allotted.

Approval for listing and trading will require all relevant documents authorizing the issuing of Debentures

to be submitted. There could be a failure or delay in listing the Debentures on the BSE and NSE.

2. There has been only limited trading in the Debentures and it may not be available on a sustained

basis in the future, and the price of the Debentures may be volatile.

The Company intends to list the Debentures on the WDM segment of the BSE and NSE. The Company

cannot provide any guarantee that the Debentures will be frequently traded on the Stock Exchange(s) and

that there would be any market for the Debenture(s). It is not possible to predict if and to what extent a

secondary market may develop in these debentures or at what price the debentures will trade in the

secondary market or whether such market will be liquid or illiquid. The fact that the debentures may be

so listed or quoted or admitted to trading does not necessarily lead to greater liquidity. The more limited

the secondary market is, the more difficult it may be for holders of the Debentures to realize value for

the Debentures prior to settlement of the Debentures.

3. You may not be able to recover, on a timely basis or at all, the full value of the outstanding amounts

and/or the interest accrued thereon in connection with the Debentures.

Company’s ability to pay interest accrued on the Debentures and/or the principal amount outstanding

from time to time in connection therewith would be subject to various factors, including, inter-alia the

financial condition, profitability and the general economic conditions in India and in the global financial

markets. The company cannot assure you that it would be able to repay the principal amount outstanding

from time to time on the Debentures and/or the interest accrued thereon in a timely manner, or at all.

4. Changes in interest rates may affect the prices of the Debentures.

All securities where a fixed rate of interest is offered, such as the Debentures, are subject to price risk.

The price of such securities will vary inversely with changes in prevailing interest rates, i.e. when interest

rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase. The

extent of fall or rise in the prices is a function of the existing coupon, days to maturity and the increase

or decrease in the level of prevailing interest rates. Increased rates of interest, which frequently

accompany inflation and/or a growing economy, are likely to have a negative effect on the price of the

Debentures.

5. Any downgrading in the credit rating of the Debentures may affect the value of Debentures and

thus our ability to raise further debts.

The Debentures proposed to be issued under this Issue have been rated "ICRA AAA/Stable” by ICRA vide

its letter dated December 30, 2019, and “CRISIL AAA/Stable” by CRISIL vide its letter dated December

30, 2019. The Company cannot guarantee that these credit ratings will not be downgraded by the rating

agencies in future. The ratings provided by these Credit Rating Agencies may be suspended, withdrawn or

revised at any time. Any revision or downgrading in the above credit rating may lower the value of the

Debentures and may also affect MRPLs ability to raise further debt.

6. Any volatility in the exchange rate may lead to a decline in India's foreign exchange reserves and

may affect liquidity and interest rates in the Indian economy, which may impact the Issuer.

Capital inflows into India have remained extremely volatile responding to concerns about the domestic

macroeconomic landscape and changes in the global risk environment. A substantial increase in the

import bill, mainly on account of increase in crude oil prices may lead to a significant widening of the

trade deficit that in turn increase the size of the current account deficit from the budget estimates. In

addition to this, the reversal of the US monetary policy, trade conflicts across the globe and US sanctions

55

on Iran can lead to pressure on India’s foreign exchange reserve and further bring volatility for Indian

Rupee. This may lead to a reduction in the amount of liquidity in the domestic financial system and in

turn, could further impact domestic interest rates.

7. No Debenture Redemption Reserve.

No Debenture Redemption Reserve is being created for the present Issue. Creation of DRR is not required

for the proposed issue of Debentures as per Rule 18 (7) (b)(ii) of Companies (Share Capital and

Debentures) Rules,2014. In absence of DRR investor may find it difficult to recover their money.

EXTERNAL RISK FACTOR

1. Business is subject to a significant number of tax regimes and changes in legislation governing the rules

implementing them or the regulator enforcing them in any one of those jurisdictions could negatively

and adversely affect Company’s results of operations.

Company is subject to regulations by Indian governmental authorities. These laws and regulations impose

numerous requirements on us, including asset environmental compliances, foreign exchange. Any changes

in the regulatory framework affecting could adversely affect the profitability of the Company or its future

financial performance by requiring a restructuring of its activities, increasing costs or otherwise. Any

adverse change in certain statutory, regulatory, exposure and prudential norms may limit the flexibility

of the Company’s loans, investments and other products.

2. Civil unrest, terrorist attacks and war would affect our operations.

Certain events that are beyond our control, such as terrorist attacks and other acts of violence or war,

may adversely affect worldwide financial markets and could potentially lead to a severe economic

recession, which could adversely affect results of our operations and cash flows, and more generally, any

of these events could lower confidence in India's economy.

Any act of tension in the country leading to overall political and economic instability could have a

materially adverse effect on results of our operations, future performance and the trading price of the

Debentures.

3. Operations may be adversely impacted by natural calamities or unfavorable climatic changes.

An act of God, epidemic, extremely adverse weather conditions or radioactive contamination or ionizing

radiation, fire or explosion may adversely affect results of our operations.

56

SECTION X CAPITAL STRUCTURE AND FINANCIAL POSITION OF THE ISSUER

10.1. CAPITAL STRUCTURE

10.1.1. The equity share capital of the Company, as on December 31, 2019, is set forth below:

Aggregate value at nominal value (₹)

A) AUTHORISED SHARE CAPITAL

3,00,00,00,000 Equity Shares of ₹ 10/- each

comprising of

(i) 2,90,00,00,000 equity shares of ₹ 10/- each

(ii) 10,00,00,000 redeemable preference shares of ₹ 10/- Each

30,00,00,00,000

B) ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL

1,75,25,98,777 Equity Shares of face value of ₹ 10/- each fully

paid up 17,52,59,87,770

C) SECURITIES PREMIUM ACCOUNT 349.05 crore

Note: Since the present offer comprises of issue of non-convertible debt securities, it shall not affect the paid-up equity share capital or share premium account of the Company after the offer.

10.1.2. Changes in the Capital Structure for since inception

Date of Change

(AGM/EGM)

₹ Particulars

February 13, 1992 (EGM) Authorised capital increased from ₹8 Crore to ₹450 Crore

Authorised Capital divided into 45 Crore shares of ₹ 10/- each

September 29, 1995 (AGM)

Authorised capital increased from ₹450 Crore to ₹ 2000 Crore

Authorised Capital divided into 200 Crore shares of ₹ 10/- each

March 28, 2003 (EGM) From ₹ 2000 Crore to ₹2000 Crore - 28.3.2003

Authorised capital included 190 Crore Equity Shares of ₹10/- each and 10 Crore Redeemable Preference Shares of ₹10/- each

September 13, 2014 (AGM)

From ₹ 2000 Crore to ₹3000 Crore - 13.9.2014 (AGM) 290 Crore Equity Shares of ₹10/- each 10 Crore Redeemable Preference Shares of ₹10/- each

Authorised Capital divided into 290 Crore Equity Shares of ₹10/- each 10 Crore Redeemable Preference Shares of ₹10/- each

10.1.3. Share Capital History

Date of

Issue/

allotme

nt

No. of equity

shares of

our Company

Face

Value

(₹)

Issu

e

pric

e (₹)

Nature for

allotment

Considerat

ion in

Cash/

other than

cash

Share

Premiu

m per

share

Equity Share

Capital (₹)

Cumulative Equity

Share Capital (₹)

July 4,

1988 500 10 10

Subscribed by

signatories to

the

memorandum

of association.

10 Nil

5

5,000.00

57

Date of

Issue/

allotme

nt

No. of equity

shares of

our Company

Face

Value

(₹)

Issu

e

pric

e (₹)

Nature for

allotment

Considerat

ion in

Cash/

other than

cash

Share

Premiu

m per

share

Equity Share

Capital (₹)

Cumulative Equity

Share Capital (₹)

July 31,

1992 21,73,59,500 10 10

Issued to

promoters in

1992

10 Nil 2,17,35,95,000 2,17,36,00,000

July 31,

1992 8,63,20,000 10 10

On 1st

conversion of

partially

convertible

debentures(“P

CD”)

10 Nil 86,32,00,000 3,03,68,00,000

June 6,

1994 8,63,20,000 10 10

on 2nd

conversion of

PCDs

10 Nil 86,32,00,000 3,90,00,00,000

June 6,

1994 2,77,54,712 10 10

Issue against

Tradable

Equity Warrant

10 Nil 27,75,47,120 4,17,75,47,120

Decem

ber 26,

1998

37,69,47,036 10 19.2

6

Issued to

promotors on

conversion of

fully

convertible

debentures

(“FCD”)

10 Nil 3,76,94,70,360 7,94,70,17,480

March

30,

2003

95,60,04,552 10 10

Fresh shares

issued on

taking over by

ONGC

10 Nil 9,56,00,45,520 17,50,70,63,000

June 3,

2003 21,96,027 10 10

Preferential

allotment of

Equity shares

10 Nil 2,19,60,270 17,52,90,23,270

January

19,

2010

(3,03,550) * (30,35,500) 17,52,59,87,770

Total 1,75,25,98,777

*The equity shares of the Company were forfeited.

Note: The Company issued 9186242, 0.01% non-cumulative redeemable preference shares of ₹10 each were issued on

30/03/2003 which were redeemed during the FY 2012-13.

Note: The equity shares allotted to the promoter companies at a premium of Rs.9.26 totalling Rs.349.05 crore in 1998, on the

conversion of fully convertible debentures.

10.1.4. Our Shareholding Pattern

The table below represents the shareholding pattern of our Company as on December 31, 2019:

Sr.

No.

Particulars Pre-Issue Post-Issue

Total No. of

equity shares

No. of shares

in Demat

form

Total

shareholding

as % of the

total

number of

equity

shares

Total No. of

equity

shares

Total

shareholding

as % of the

total number

of equity

shares

Promoter and

Promoter Group

1 Indian

58

Sr.

No.


Total No. of

equity shares

No. of shares

in Demat

form

Total

shareholding

as % of the

total

number of

equity

shares

Total No. of

equity

shares

Total

shareholding

as % of the

total number

of equity

shares

(a) Individuals / Hindu

Undivided Family

0 0 0 0 0

(b) Central Government /

State Government(s)

0 0 0 0 0

(c) Financial Institutions /

Banks

0 0 0 0 0

(d) Any Other (Specify) 1,55,25,07,615 1,55,25,07,615 88.58 1,55,25,07,615 88.58

Bodies Corporate 1,55,25,07,615 1,55,25,07,615 88.58 1,55,25,07,615 88.58

Oil and Natural Gas

Corporation Ltd

1,25,53,54,097 1,25,53,54,097 71.63 1,25,53,54,097 71.63

Hindustan Petroleum

Corporation Limited

29,71,53,518 29,71,53,518 16.95 29,71,53,518 16.95

Sub Total (A)(1) 1,55,25,07,615 1,55,25,07,615 88.58 1,55,25,07,615 88.58

2 Foreign

(a) Individuals (Non-

Resident Individuals /

Foreign Individuals)

0 0 0 0 0

(b) Government 0 0 0 0 0

(c) Institutions 0 0 0 0 0

(d) Foreign Portfolio

Investor

0 0 0 0 0

(e) Any Other (Specify) 0 0 0 0 0

Sub Total (A)(2) 0 0 0 0 0

i Total Shareholding Of

Promoter And

Promoter Group (A)=

(A)(1) +(A)(2)

1,55,25,07,615 1,55,25,07,615 88.58 1,55,25,07,615 88.58

1 Institutions

(a) Mutual Fund 3,61,38,928 3,60,99,778 2.06 3,61,38,928

1.98

ICICI prudential India

Opportunities Fund 2,02,21,798 2,02,21,798 1.15 2,02,21,798 1.16

(b) Venture Capital Funds 0 0 0 0 0

(c) Alternate Investment

Funds

0 0 0 0 0

(d) Foreign Venture

Capital Investors

0 0 0 0 0

(e) Foreign Portfolio

Investor

2,59,90,170 2,59,90,170 1.48 2,59,90,170 1.48

(f) Financial Institutions /

Banks

2,31,84,329 2,31,59,679 1.32 2,31,84,329 1.32

59

Sr.

No.


Total No. of

equity shares

No. of shares

in Demat

form

Total

shareholding

as % of the

total

number of

equity

shares

Total No. of

equity

shares

Total

shareholding

as % of the

total number

of equity

shares

Life Insurance

Corporation of India

2,28,51,209 2,28,51,209 1.30 2,28,51,209 1.30

(g) Insurance Companies 28,39,201 28,39,201 0.16 28,39,201 0.16

(h) Provident Funds/

Pension Funds

0 0 0 0 0

(i) Any Other (Specify) 150 150 0 150 0

Foreign Bank 150 150 0 150 0

Sub Total (B)(1) 8,81,52,778 8,80,88,978 5.02 8,81,52,778 5.02

2 Central Government/

State Government(s)/

President of India

Central Government /

State Government(s)

2,900 2900 0.00 2,900 0.00

Sub Total (B)(2) 2,900 2900 0.00 2,900 0.00

3 Non-Institutions

(a) Individuals 0 0

i. Individual

shareholders holding

nominal share capital

up to ₹ 2 lakhs.

7,70,49,143 6,07,54,846 4.39 7,70,49,143 4.39

ii. Individual

shareholders holding

nominal share capital in

excess of ₹ 2 lakhs.

58,21,177 58,21,077 0.33 58,21,177 0.33

(b) NBFCs registered with

RBI

22,950 22,950 0.00 22,950 0.00

Trust Employee 0 0 0 0 0

(d) Overseas Depositories

(holding DRs)

(balancing figure)

0 0 0 0 0

(e) Any Other (Specify) 2,90,42,214 2,51,64,014 1.65 2,90,42,214 1.65

IEPF 1,74,25,048 1,74,25,048 0.99 1,74,25,048 0.99

Trusts 21,550 21,150 0.00 21,550 0.00

Foreign Nationals 600 600 0 600 0

Hindu Undivided

Family

17,38,138 17,37,638 0.09 17,38,138 0.09

Non Resident Indians

(Non-repat.)

8,22,885 8,22,685 0.04 8,22,885 0.04

Non Resident Indians

(Repat.)

56,53,399 18,17,349 0.32 56,53,399 0.32

60

Sr.

No.


Total No. of

equity shares

No. of shares

in Demat

form

Total

shareholding

as % of the

total

number of

equity

shares

Total No. of

equity

shares

Total

shareholding

as % of the

total number

of equity

shares

Clearing Member 4,51,444 4,51,444 0.02 4,51,444 0.02

Bodies Corporate 29,29,150 28,88,100 0.17 29,29,150 0.17

Sub Total (B)(3) 11,19,35,484 9,17,62,887 6.38 11,19,35,484 6.38

II Total Public

Shareholding (B)=

(B)(1) +(B)(2) +(B)(3)

20,00,91,162 17,98,54,765 11.42 20,00,91,162 11.42

Total = I + II 1,75,25,98,777 1,73,23,62,380 100 1,75,25,98,777 100

Since the present offer comprises of issue of non-convertible debt securities, it shall not affect the post-issue shareholding pattern of the Company after the offer.

10.1.5. Directors holding any Equity Shares as on December 31, 2019:

Shri M. Vinayakumar holds 200 shares of the Company. No other Director of the Company holds any share in the Company.

10.1.6. Our top ten shareholders and the number of Equity Shares held by them, as on December 31, 2019, are as follows:

S. No. Name Shares % to Equity Category

1 Oil and Natural Gas Corporation

Limited

1,25,53,54,097 71.63 Promoter

2 Hindustan Petroleum Corporation

Limited

29,71,53,518 16.95 Promoter

3 Life Insurance Corporation of India 2,28,51,209 1.30 FII

4 Investor Education and Protection

Fund Authority Ministry Of Corporate

Affairs

1,74,25,048 1.00 IEPF

5 Fidelity Funds - Asian Smaller

Companies Pool

86,87,100 0.50 Mutual Fund

6 Aditya Birla Sun Life Trustee Private

Limited A/C Aditya Birla Sun Life

Midcap Fund

70,46,010 0.40 Mutual Fund

7 Aditya Birla Sun Life Trustee Private

Limited A/C Aditya Birla Sun Life

Equity Hybrid '95 Fund

68,36,379 0.40 Mutual Fund

8 ICICI Prudential Value Fund - Series

19

50,80,473 0.29 Mutual Fund

9 ICICI Prudential India Opportunities

Fund

51,83,049 0.29 Mutual Fund

61

S. No. Name Shares % to Equity Category

10 Vanguard Emerging Markets Stock

Index Fund, A Series Of Vanguard

International Equity Index Funds

38,63,302 0.22 Foreign Portfolio Investor

10.1.7. List of top ten debenture holders of the Company as on date:

As on date, there are no outstanding debentures of the Company.

10.1.8. No Equity Shares of the Company as on December 31, 2019, are pledged or otherwise encumbered by

the Promoters.

10.1.9. No equity shares or debt securities for consideration other than cash, whether in whole or part, has been issued since the incorporation of Company except against the conversion against the fully convertible debentures or partially convertible debentures as disclosed in Share Capital History.

10.1.10. Our Company has not undergone any other reorganization or reconstruction in the last one year prior to the issue of this private placement offer letter.

10.1.11. Other than outstanding debt securities issued by the Company, outstanding as on December 31, 2019, our Company has not issued any marketable securities: • for consideration other than cash: Nil • at a premium or a discount: Nil

• Commercial Papers: Nil

• in pursuance of an option: Nil

• Unsecured Debenture: Nil

10.1.13. Amount of corporate guarantees issued by the Issuer in favour of various counterparties including its

subsidiaries, joint venture entities, group companies etc.

No corporate guarantees existing on the date have been issued to the subsidiary, joint ventures or group

company.

10.2. FINANCIAL INDEBTEDNESS (ON STANDALONE BASIS)

10.2.1. Set forth below is a summary of our Company’s significant outstanding secured borrowings of ₹ 3,139.34

Crore and unsecured borrowings of ₹ 5,201.57 crore, as on December 31, 2019, together with a brief

description of certain significant terms of such financing arrangements.

(1) Secured loans from banks and financial institutions availed by our Company as on December 31, 2019

Sr.

No.

Name of the

Lender

Type of

Loan

facility

Amount

Sanction

ed

Amount

outstanding

Provisional Repayment

Date/Schedule

Security

1. SBI, Hong

Kong

ECB USD

350 mio

USD 350 mio USD 50 mio – 29.06.20

USD 50 mio – 29.12.20

USD 50 mio – 29.06.21

USD 50 mio – 29.12.21

USD 50 mio – 29.06.22

USD 50 mio – 29.12.22

USD 50 mio – 29.06.23

First

ranking

pari passu

charge over

movable

and

immovable

fixed assets

62

Sr.

No.

Name of the

Lender

Type of

Loan

facility

Amount

Sanction

ed

Amount

outstanding

Provisional Repayment

Date/Schedule

Security

2. OIDB Term

Loan

₹ 539

Crore

₹ 539 Crore Repayable in four yearly instalments

after a moratorium of 1 year. Drawl

date were

₹268 Cr. – 31.12.2018,

₹184 Cr. – 01.07.2019,

₹15 Cr. – 01.07.2019,

₹45 Cr. – 20.08.2019,

₹27 Cr. – 15.11.2019.

First

ranking

pari passu

mortgage/h

ypothecatio

n charge

over

assets/proje

cts financed

out of loan

proceeds of

OIDB

3 Govt. of

Karnataka

Intere

st-

free

VAT

Loan

₹ 101.68

Crore

₹ 101.68 Crore ₹13.26 Cr. - 31.03.28

₹15.52 Cr. -31.03.29,

₹19.78 Cr. -31.03.30,

₹10.74 Cr -31.03.31,

₹10.10Cr. -31.03.31,

₹32.28Cr -31.03.32,

VAT Loan

amounts

have been

secured

against

Bank

Guarantees

for

equivalent

amounts

submitted

by MRPL

to the

Commerce

&

Industries

Department

, Govt. of

Karnataka,

valid up to

the

repayment

period of

VAT loan.

Total of Term Loans from banks and

financial institutions

₹ 3,139.34

Crore

Converted @ USD / INR 71.39 (Reuters Rate as on

31.12.2019)

(2) Unsecured loans from banks and financial institutions availed by our Company as on December 31, 2019

Sr.

No.

Name of the

Lender

Loan facility Amount

Sanctioned

Amount

outstanding,

Provisional Repayment Date/Schedule

A. Unsecured Term Loans

1 Corporation

Bank

Short Term Loan ₹ 970 Crore ₹ 946.40

Crore

₹ 946.40 Crore – January 2020

2 SBI Term Loan ₹ 1,371

Crore

₹ 685.67

Crore

₹171.43 Crore – 31.03.20

₹171.43 Crore – 30.06.20

₹171.43 Crore – 30.09.20

₹171.38 Crore – 31.12.20

63

Sr.

No.

Name of the

Lender

Loan facility Amount

Sanctioned

Amount

outstanding,

Provisional Repayment Date/Schedule

Total ₹ 1,632.07

Crore

B. Foreign Currency Borrowings

1 SBI, Hong

Kong

ECB USD 400

mio

USD 400

mio

USD 1 mio – 29.03.24

USD 60 mio – 03.04.24

USD 84 mio – 18.04.24

USD 80 mio – 23.04.24

USD 60 mio – 25.04.24

USD 30 mio – 26.04.24

USD 50 mio – 30.04.24

USD 35 mio – 21.05.24

2 Axis Bank Buyers’ Credit USD 50

mio

USD 50 mio USD 50 mio – 07.01.20

3 DBS Bank Pre Shipping Credit

in Foreign Currency

USD 50

mio

USD 50 mio 1 Month USD Libor Plus 75 bps

USD 42 mio – 17.01.20

USD 8 mio – 29.01.20

Total Unsecured Loans from Banks and other

Institutions

USD 100

mio

₹ 3,569.50

Crore

Converted @ USD / INR

71.39 (Reuters Rate as on

31.12.2019)

Total Unsecured Loans – (2) (A + B) ₹ 5,201.57

Crore

(3) Details of Commercial Paper:

The Issuer does not have any outstanding commercial paper as on December 31, 2019.

(4) Secured & Unsecured Debentures issued by our Company

As on date, there are no outstanding secured or unsecured debentures issued by the Company.

10.2.2. Details of Rest of the Borrowings (if any including hybrid debt like FCCB, Optionally Convertible Debentures/Preference Shares)

There are no outstanding borrowings in the form of hybrid debt as on December 31, 2019.

10.2.3. Corporate Guarantees

No Corporate Guarantees existing on the date have been issued to any subsidiary, joint ventures or

group Company.

64

KEY FINANCIAL AND OPERATIONAL PARAMETERS

(₹ in crore) Parameters FY: 2018-19 FY: 2017-18 FY: 2016-17

For Non-Financial Entities

Net worth 10,727.03 11,033.07 10,070.47

Total Debt* 9,131.04 7,950.17 8,540.96

of which - Non Current Maturities of

Long Term Borrowings

3,220.90 1,499.48 4,815.78

Short Term Borrowings 4,856.76 3,077.76 1,817.29

Current Maturities of Long Term

Borrowings 1,053.38 3,372.93 1,907.89

Net Fixed Assets

13,988.36 14,030.51 14,160.58

Non-Current Assets 17,989.00 17,763.94 17,004.69

Cash and Cash Equivalents 2.59 440.35 233.17

Current Investments - - -

Current Assets 9,202.26 8,450.47 9,399.93

Current Liabilities 11,811.41 12,372.73 10,982.04

Net Sales 62,030.11 48,434.01 43,192.44

EBITDA 1,809.27 4,462.48 6,726.51

EBIT 1,052.51 3,791.16 6,048.59

Interest 471.75 440.46 517.17

PAT 331.95 2,224.12 3,643.69

Dividend Amounts 175.26 525.78 1,051.56

Current Ratio** 0.78 0.68 0.86

Interest Coverage Ratio *** 3.84 10.13 13.01

Gross Debt / Equity Ratio****

0.85 0.72 0.85

Debt Service Coverage Ratio *****

0.29 0.66 1.66

Note :-

*Total Debt = Non Current Borrowings + Current Borrowings + Current Maturities of Long Term Debt (Secured & Unsecured)

**Current Ratio = Current Asset / Current Liability

***Interest Coverage Ratio = EBIT / (Interest & Finance Charges net of amount transferred to expenditure during construction) ****Gross Debt Equity Ratio = Total Debt / Net Worth

*****Debt Service Coverage Ratio = Net Operating Income (Earnings before Interest, Depreciation & Tax (EBITDA)) / (Interest & Finance

Charges net of amount transferred to expenditure during construction*(1-tax rate) + Principal Repayments due during year (Current maturities of long term borrowings + Short Term Borrowings.

65

STANDALONE STATEMENT OF ASSETS AND LIABILITIES

(₹ in crore) Particulars Year Ended on

March 31, 2019

Year Ended on

March 31, 2018

Year Ended on

March 31, 2017

Assets

I Non-current assets

(a) Property plant and equipment 13,982.79 14,025.15 14,158.14

(b) Capital work-in-progress 982.50 667.54 219.87

(c) Investment Property 7.80 7.80 -

(d) Goodwill 0.40 0.40 0.40

(e) Other intangible assets 5.17 4.96 2.04

(f) Financial assets

i. Investments 1,502.650 1,349.64 1,349.64

ii. Loans 92.73 60.80 41.60

iii. Others financial assets 13.50 9.48 6.87

(g) Non-current tax assets (net) 230.65 433.30 457.55

(h) Other non-current assets 1,170.81 1,204.87 768.58

Total Non-current assets (I) 17,989.00 17,763.94 17,004.69

II Current Assets

(a) Inventories 5,811.04 4,734.72 4,039.00

(b) Financial assets

i. Trade receivables 2,322.30 2,660.92 2,621.16

ii. Cash and cash equivalents 2.59 440.35 233.17

iii. Bank balances other than (ii)

above

484.94 392.63 1,897.68

iv. Loans 11.16 8.28 5.96

v. Other financial assets 0.56 7.27 314.50

(c) Current Tax Assets (net) 152.38 28.12 -

(d) Other current Assets 417.29 178.18 280.66

Non current asset held for sale - - 7.80

Total current assets (II) 9,202.26 8,450.47 9,399.93

TOTAL ASSETS (I+II) 27,191.26 26,214.41 26,404.62

Equities and Liabilities

I Equity

(a) Equity share capital 1,752.66 1,752.66 1,752.66

(b) Other equity 8,974.36 9,280.41 8,317.81

Total Equity 10,727.03 11,033.07 10,070.47

Liabilities

II Non-Current Liabilities

(a) Financial liabilities

i. Borrowings 3,220.90 1,499.48 4,815.78

66

ii. Other financial liabilities - - -

(b) Provisions 68.17 43.41 59.67

(c) Deferred tax liabilities (net) 1,015.54 906.17 476.66

(d) Other non-current liabilities 348.21 359.55 -

Total noncurrent liabilities (II) 4,652.80 2,808.61 5,352.11

III Current Liabilities


i. Borrowings 4,856.76 3,077.76 1,817.29

ii. Trade payables 4,675.04 4,710.29 6,033.97

iii. Other financial liabilities 1,618.97 3,971.04 2,620.31

(b) Other current liabilities 202.52 209.88 180.56

(c) Provisions 458.13 403.76 285.12

(d) Current tax liabilities - - 44.79

Total current liabilities (III) 11,811.41 12,372.73 10,982.04

IV Total liabilities (II+III) 16,464.23 15,181.34 16,334.15

TOTAL EQUITY AND

LIABILITIES (I+IV)

27,191.26 26,214.41 26,404.62

STANDALONE STATEMENT OF PROFIT AND LOSS

(₹ in crore)

Particulars Year Ended on March

31, 2019

Year Ended on

March 31, 2018

Year Ended on

March 31, 2017

I Revenue from operations 72,315.11 63,083.64 59,430.49

II Other income 155.27 204.57 423.20

III Total Income (I + II) 72,470.38 63,288.21 59,853.69

IV Expenses

Cost of materials consumed 58,513.71 43,248.16 37,488.76

Purchase of Stock-in-trade 526.09 - -

Changes in inventories of

finished goods stock-in-process

and stock-in-trade

(561.64) (766.72) (288.30)

Excise duty on sale of goods 10,252.97 14,633.06 16,222.61

Employee benefits expense 428.66 417.35 352.01

Finance costs 471.75 440.46 517.17

Depreciation and amortisation

expense

756.75 671.32 677.92

Other expenses 1,486.53 1,267.99 949.40

Total Expenses (IV) 71,874.82 59,911.62 55,919.57

V Profit before exceptional items

and tax (III-IV)

595.56 3,376.59 3,934.12

VI Exceptional items

(income)/expenses (net)

14.79 25.89 (1,597.29)

VII Profit before tax (V - VI) 580.77 3,350.70 5,531.41

67

VIII Tax expense

(1) Current Tax

- Current year 122.16 699.58 1,185.38

-Earlier years 13.38 (0.72) -

(2) Deferred tax 113.28 427.72 702.35

Total tax expense (VIII) 248.82 1,126.58 1,887.73

IX Profit for the year (VII-VIII) 331.95 2,224.12 3,643.68

X Other comprehensive income

Items that will not be reclassified to profit or loss

(a) Remeasurement of the

defined benefit plans

(6.95) 5.10 (7.70)

(b) Income tax relating to above 2.43 (1.78) 2.67

Total other comprehensive

income (X)

(4.52) 3.32 (5.03)

XI Total comprehensive income

for the year (IX+X)

327.43 2227.44 3638.65

XII Earnings per equity share:

(1) Basic (in ₹) 1.89 12.69 20.79

(2) Diluted (in ₹) 1.89 12.69 20.79

STANDALONE STATEMENT OF CASH FLOWS

(₹ in crore) Year Ended on

March 31, 2019

Year Ended on

March 31, 2018

Year Ended on

March 31, 2017

A CASH FLOW FROM OPERATING ACTIVITIES

Profit After Tax 331.96 2,224.12 3,643.69

Adjustments For:

Tax Expense 248.81 1,126.58 1,887.73

Depreciation and amortisation expense 756.76 671.33 677.93

Loss/ (profit) on sale of property plant and

equipment (net)

8.01 24.96 5.67

Liability no longer required written back (12.99) (83.95) (6.57)

Impairment of doubtful trade receivables 7.37 - 30.28

Write off of doubtful trade receivables - 47.23 5.94

Exchange rate fluctuation (net) 82.32 61.98 (156.58)

Finance costs 471.75 440.46 517.17

Interest income (103.68) (78.43) (383.89)

Dividend income (10.45) (14.25) (26.29)

Amortisation of prepayments 1.12 0.94 0.98

Amortisation of a deferred government

grant

(17.82) (16.42) -

Others (6.95) 5.10 (7.70)

1,756.21 4,409.65 6,188.36

68

Movements from Working Capital

- (Increase)/ decrease in trade and other

receivables

337.24 (89.05) (265.23)

- (Increase)/ decrease in loans (34.81) (21.52) (4.09)

(Increase)/ decrease in other assets (444.84) 1,718.03 10,262.38

- (Increase)/ decrease in inventories (1,078.11) (693.43) (842.28)

- Increase/ (decrease) in trade payable other

liabilities

60.81 (1,099.47) (15,073.21)

Cash Generated From operations 596.50 4,224.21 265.93

Income taxes paid net of refunds (52.34) (717.65) (1,117.63)

(a) Net cash generated from / (used in)

operations

544.16 3,506.56 (851.70)

B CASH FLOW FROM INVESTING ACTIVITIES

Payments for property plant and equipment (911.08) (1,053.07) (861.83)

Proceeds from disposal of property plant

and equipment

1.39 (0.69) 0.16

Interest received 106.28 79.69 540.29

Dividend received from joint venture 2.10 11.25 0.75

Dividend received from investments in the

mutual funds

8.35 3.00 25.54

Investment in subsidiary company (153.01) - -

Investment in Joint Venture company - - .03

Tax Paid on Interest Income (6.26) (5.87) (41.63)

(b) Net cash generated from / (used in)

investing activities

(952.23) (965.69) (336.69)

C CASH FLOW FROM INVESTING ACTIVITIES

Proceeds from long term borrowings/

Repayment of Long-Term Borrowings net

(638.33) (1,848.16) (1,285.58)

Proceeds from short term borrowings net 1,708.22 1,217.92 1,849.44

Finance costs paid (465.72) (437.82) (496.43)

Dividends and dividend tax paid on equity

shares

(633.86) (1,265.63) -

(c) Net cash generated from / (used in)

financing activities

(29.69) (2,333.69) 67.44

Net increase / (decrease) in cash and cash

equivalents (a+b+c)

(437.76) 207.18 (1,120.94)

Cash and cash equivalents as at the

beginning of the year

440.35 233.17 1,354.11

Cash and cash equivalents as at the end of

the year

2.59 440.35 233.17

(437.76) 207.18 (1,120.94)

69

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

(₹ in crore) Particulars Year ended on

March 31, 2019

Year ended on

March 31, 2018

Year ended on

March 31,

2017

ASSETS

I Non-current assets

(a) Property, plant and equipment 19,611.42 19,826.00 20,238.43

(b) Capital work-in-progress 995.27 682.14 219.91

(c) Investment Property 7.80 7.80 -

(d) Goodwill 377.28 377.28 377.28

(e) Other intangible assets 5.88 5.63 2.71

(f) Financial assets

(i) Investments 28.76 30.63 41.85

(ii) Loans 94.65 62.72 44.66

(iii) Others financial assets 13.50 9.48 6.87

(g) Non-current tax assets (net) 230.65 433.30 457.55

(h) Deferred tax assets - - 310.69

(i) Other non-current assets 1,478.06 1,520.24 1,096.61

Total non-current assets (I) 22,843.27 22,955.21 22796.56

II Current assets

(a) Inventories 6,308.68 5,240.40 4,414.05

(b) Financial assets

(i) Trade receivables 2,373.92 2,576.79 2,618.98

(ii) Cash and cash equivalents 4.67 440.37 246.15

(iii) Bank balances other than (ii) above 484.94 392.63 1,897.68

(iv) Loans 11.52 8.64 5.96

(v) Other financial assets 0.65 7.27 314.50

(c) Current tax assets (net) 152.43 28.39 -

(d) Other current assets 586.18 300.91 538.05

(e) Non-current assets held for sale - - 7.80

Total current assets (II) 9,922.99 8,995.40 10,043.17

Total assets (I+II) 32,766.26 31,950.61 32,839.73

EQUITY AND LIABILITIES

I Equity

(a) Equity share capital 1,752.66 1,752.66 1,752.66

(b) Other equity 8,193.11 8,480.75 7,749.57

(c) Non-controlling interest 300.14 153.98 372.93

Total equity (I)

LIABILITIES

10,245.91 10,387.39 9,875.16

II Non-current liabilities

70

Particulars Year ended on

March 31, 2019

Year ended on

March 31, 2018

Year ended on

March 31,

2017


(i) Borrowings 3,935.76 4,478.68 8,590.95

(ii) Other financial liabilities - - -

(b) Provisions 80.60 49.38 66.15

(c) Deferred tax liabilities (Net) 250.13 90.22 -

(d) Other non-current liabilities 348.21 359.55 -

Total non-current liabilities (II) 4,614.70 4,977.83 8,657.10

III Current liabilities


(i) Borrowings 8,302.61 6,261.64 4,668.63

(ii) Trade payables

(a) Total outstanding dues of micro enterprises and small

enterprises

23.03 34.37 7.08

(b) Total outstanding dues of creditors other than micro-

enterprises and small enterprises

4,670.21 4,758.17 6,037.42

(iii) Other financial liabilities 4,247.15 4,915.73 3,081.44

(b) Other current liabilities 203.72 211.29 183.00

(c) Provisions 458.93 404.18 285.36

(d) Current tax liabilities (net) - - 44.54

Total current liabilities (III) 17,905.65 16,585.39 14,307.47

IV Total liabilities (II + III) 22,520.35 21,563.22 22,964.57

TOTAL EQUITY AND LIABILITIES (I+IV) 32,766.26 31,950.61 32,839.73

CONSOLIDATED STATEMENT OF PROFIT AND LOSS

(₹ in crore)


March 31, 2019

Year ended March

31, 2018

Year ended

March 31 2017

I. Revenue from operations 73,494.08 63,688.06 59,989.14

II. Other income 359.03 273.92 418.85

III. Total Income (I + II) 73,853.11 63,961.98 60,407.99

IV. Expenses

Cost of materials consumed 58,569.77 43,179.06 37,268.99

Purchase of Stock-in-trade 526.09 - -

Changes in inventories of finished goods,

stock-in-process and stock-in-trade

(417.33) (879.99) (331.98)

Excise duty on sale of goods 10,252.97 14,633.06 16,222.61

Employee benefits expense 480.81 458.96 390.29

Finance costs 1,058.73 912.65 965.92

Depreciation and amortisation expense 1,047.52 966.09 984.12

Other expenses 1,668.65 1,794.96 1,456.16

71


March 31, 2019

Year ended March

31, 2018

Year ended

March 31 2017

Total expenses (IV) 73,187.21 61,064.79 56,956.11

V. Profit before exceptional items and tax

(III-IV)

665.90 2,897.19 3,451.88

VI. Exceptional items (income)/expenses

(net)

14.79 25.89 (1,597.29)

VII. Share of profit of the joint venture 0.26 0.10 4.68

VIII. Profit before tax (V- VI+VII) 651.37 2,871.40 5,053.85

IX. Tax expense:

(1) Current tax

- Current year 122.16 699.58 1,185.38

- Earlier years 13.38 (0.72) -

(2) Deferred tax 164.57 398.98 575.26

Total tax expense (IX) 300.10 1,097.84 1,760.64

X. Profit for the year (VIII-IX) (351.26) (1,773.56) 3,293.21

XI. Other comprehensive income

Items that will not be reclassified to profit

or loss

(a) Remeasurement of the defined benefit

plans

(9.17) 5.49 (7.95)

(b) Effective portion of gains (losses) on

hedging instruments in cash flow

hedges

0.02 (0.06) 0.3

(c) Income tax relating to above 3.20 (1.92) 2.75

Total other comprehensive income (XI) (5.95) 3.51 (4.90)

XII. Total comprehensive income for the

year (X+XI)

(345.31) (1,777.07) 3,288.31

XIII. Profit for the year attributable to

Owners of the Company 340.04 1,992.64 3,472.64

Non-controlling interest 11.22 (219.08) 179.43

XIV. Other comprehensive income for the

year attributable to

Owners of the Company (5.26) 3.38 4.78

Non-controlling interest (0.69) 0.13 0.12

XV. Total comprehensive income for the

year attributable to

Owners of the Company 334.78 1,996.02 3,467.86

Non-controlling interest 10.53 (218.95) 179.55

XVI Earnings per equity share:

(1) Basic (in ₹) 1.94 11.37 19.81

(2) Diluted (in ₹) 1.94 11.37 19.81

72

CONSOLIDATED STATEMENT OF CASH FLOWS

(₹ in crore) Particulars

Year ended

March 31,

2019.

Year ended

March 31,

2018.

Year ended

March 31,

2017.

A CASH FLOW FROM OPERATING ACTIVITIES

Profit after tax 351.26 1,773.56 3,293.21

Adjustments for:

Tax expense 300.10 1,097.84 1,760.64

Share of profit of the joint venture 1.84 11.14 (3.93)

Depreciation and amortisation expense 1,047.53 966.10 984.13

Loss/ (profit) on sale of property, plant and equipment

(net)

8.01 24.96 5.67

Liability no longer required written back (12.99) (83.95) (6.57)

Impairment of doubtful trade receivables & Non Moving

Inventories

7.37 - 30.28

Write off of doubtful trade receivables - 47.23 5.94

Exchange rate fluctuation (net) 38.86 115.05 (156.97)

Finance costs 874.35 878.22 971.63

Interest income (103.72) (78.64) (384.07)

Dividend income (11.15) (15.33) (27.55)

Amortisation of prepayments 1.12 0.94 0.98

Amortisation of deferred government grant (17.82) (16.42) -

Others (6.95) 5.10 (7.70)

2,477.81 4,725.80 6,465.69

Movements in working capital:

- (Increase)/ decrease in trade and other receivables 124.94 (36.43) (304.33)

- (Increase)/ decrease in loans (34.81) (20.74) (4.09)

- (Increase)/ decrease in other assets (434.95) 1,863.63 10,259.08

- (Increase)/ decrease in inventories (1,070.08) (824.06) (1,031.61)

- Increase/ (decrease) in trade payable other liabilities 243.31 (1,047.42) (15,502.50)

Cash generated from operations 1,306.22 4,660.78 (117.76)

Income taxes paid, net of refunds (103.42) (688.93) (990.53)

Net cash generated from / (used in) operations 1,202.81 3,971.85 (1,108.29)

B CASH FLOW FROM INVESTING ACTIVITIES

Payments for property, plant and equipment (964.58) (1,070.02) (861.83)

Proceeds from disposal of property, plant and equipment 1.39 (0.69) 69.99

Interest received 106.33 79.90 540.48

Dividend received from joint venture 2.10 11.25 0.75

Dividend received from investments in the mutual fund 9.05 4.08 26.80

Investment in subsidiary company (153.01) - 0.03

Tax Paid on interest income (6.26) (5.87) (41.63)

73

Particulars

Year ended

March 31,

2019.

Year ended

March 31,

2018.

Year ended

March 31,

2017.

Net cash generated from / (used in) investing activities (1,004.98) (981.35) (265.41)

C) CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of share capital 299.70 - -

Proceeds from long term borrowings 19.37 0.90 1,968.63

Repayment of long term borrowings (1,466.20) (2,156.02) (1,656.14)

Proceeds from short term borrowings, net 2,013.50 1,497.12 899.57

Finance costs paid (866.03) (872.67) (947.53)

Dividends and dividend distribution tax paid on equity

shares

(633.86) 1,255.63 -

Net cash generated from / (used in) financing activities (633.52) (2,796.30) 264.54

Net increase / (decrease) in cash and cash equivalents (435.70) 194.22 (1,109.17)

Cash and cash equivalents as at the beginning of the

year

440.37 264.15 1,355.32

Cash and cash equivalents as at the end of the year 4.67 440.37 246.15

Total (435.70) 194.22 (1,109.17)

10.3. OTHER FINANCIAL PARAMETERS (₹ in crores)

Particulars FY 19 FY 18 FY 17

Dividend declared (As %age on FV) 10.00 30.00 60.00 Interest Coverage Ratio (times) 3.84 10.13 13.01 Profit after tax 331.95 2,224.12 3,643.69

Profit before tax 580.77 3,350.70 5,531.41

10.4. CHANGES IN ACCOUNTING POLICIES DURING THE LAST THREE YEARS AND THEIR

EFFECT ON THE PROFITS AND THE RESERVES OF THE COMPANY

Financial

Year

Change in accounting policies and their effect

2018-19 No such major change in Accounting policy having an effect on the profit and reserves,

except change in the base of inventory valuation of Stock-in-trade during FY 2018-19, for

which the impact on financial is insignificant.

2017-18 No such change in Accounting policy having an effect on the profit and reserves

2016-17 No such change in Accounting policy having an effect on the profit and reserves *

* Note – The Ministry of Corporate Affairs (MCA) on February 16, 2015, notified that Indian Accounting Standards (Ind AS) are applicable to certain classes of companies from April 1, 2016, with a transition date of 01/04/2015. As MRPL was falling under the category of the

company as cited above, so Ind AS was implemented from April 1, 2016, with a transition date of 01/04/2015.

74

SECTION XI

PARTICULARS OF THE OFFER

Eligibility of MRPL to come out with the Issue and Government Approvals

The Company, its Directors and authorised officers have not been prohibited from accessing the debt market

under any order or directions passed by SEBI/any other Government authority.

Issue-specific guidelines

This present issue of Debentures is being made in accordance with extant guidelines of Companies Act 2013 and Rules made thereafter, SEBI (Issue and Listing of Debt Securities) Regulations, 2008 as amended, SEBI (Debenture Trustee) Regulation 1993 as amended and SEBI Letter no. SEBI/DDHS/TD/OW/P/2019/32928/1 dated December 11, 2019, received vide DIPAM OM No. 3/2/2018-DIPAM-II (Vol.V) dated December 18, 2019.

Authority for the Placement available

The present issue of Debentures is being made pursuant to:

(i) the resolution passed by the Board of Directors of the Company on November 4, 2019, and delegation

provided thereunder;

(ii) the special resolution passed by the shareholders of the Company under section 42 of the Companies Act,

2013 and sub-rule 1 of rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014, in

Annual General Meeting held on August 3, 2019;

(iii) Article 73 of the Articles of Association of the Company.

Issue Size

Private placement offer letter for the private placement of fixed rate, unsecured, rated, taxable, redeemable, non-

convertible debentures of face value ₹ 10,00,000/- each (“debentures”) under Series-1 for an issue size of ₹ 500

crore, with option to retain oversubscription up to ₹ 1,000 crore aggregating to ₹ 1,500 crore. Series 1 comprises

of Series 1A Debentures with the base issue size of Rs. 125 crores with an option to retain oversubscription up to

Rs. 375 crore aggregating to Rs. 500 crores and Series 1B Debentures with the base issue size of Rs. 250 crores

with an option to retain oversubscription up to Rs. 750 crores aggregating to Rs. 1,000 crores. Option to retain

oversubscription (Greenshoe option) is reserved for Bharat Bond ETF.

Pricing Mechanism

The price for base issue Rs.125 crore for Series 1A and Rs. 250 crore under Series 1B aggregating to Rs. 375

crore shall be discovered in a transparent manner on the EBP Platform. After the discovery of price for base issue

the same price will be applicable to the Greenshoe option which is reserved for BHARAT Bond ETF.

Further, there is no restriction on BHARAT Bond ETF to participate in bidding for base issue size on EBP

Platform.

Purpose and Utilisation of the Proceeds

The funds raised through this issue will be utilized for, inter alia, funding of capital expenditure of the Company,

including recoupment of expenditure already incurred; discharging existing debt obligations. Issue proceeds will

not be used for acquisition of land or for investing in Capital Markets and for purposes not eligible for bank

finance.

The “Main Object Clause” of the Memorandum of Association of the Company enables it to undertake the

activities for which the funds are being raised through the present issue and also the activities which the Company

has been carrying on till date.

75

Minimum Subscription

As the current issue of Debentures is being made on private placement basis, the requirement of minimum subscription shall not be applicable and therefore said requirement shall not be liable to refund the issue subscription(s)/proceed(s) in the event of the total issue collection falling short of issue size or certain percentage of issue size.

Nature and Class of Securities

Fixed rate, Unsecured, Rated, Taxable, Redeemable, Senior, Non-convertible Debentures. These Debentures shall

be fully paid-up basis.

Put & Call Option

Neither the Debenture holder(s) shall have any right to exercise Put option nor shall the Company have the right

to exercise Call Option.

Maximum Investors for the Issue

In terms of Companies Act, 2013 and rules made thereunder, maximum no. of Investors are 200 in a year, however,

such number shall not include qualified institutional buyers.

Issue Price

Each Debenture has a face value of INR 10,00,000/- each and is issued at par. The Debentures shall be redeemable

at par i.e. for INR 10,00,000/- per Debenture. Since there is no discount or premium on either issue price or

redemption value of the Debentures, the effective yield for the investors shall be the same as the coupon rate on

the Debentures.

Relevant date with reference to which issue price has been arrived

NA

Security

Debentures are unsecured.

Names and address of the valuer who performed the valuation of security offered

NA

Mode of Payment

The full Issue price of the Debentures applied for is to be paid along with the Application Form. Investor(s) need

to send in the Application Form along with RTGS details for the full face value of the Debentures applied for.

Issue Price of the

Debenture Minimum Application for

Amount Payable on Application per

Debenture

INR 10,00,000/- 1 Debenture ₹ 10,00,000 per Debenture

Deemed Date of Allotment The cut-off date declared by the Company from which all benefits under the Debentures including interest on the Debentures shall be available to the Debenture holders is called as the Deemed Date of Allotment. The actual allotment of Debentures (i.e. approval from the Board of Directors or a Committee or officials authorised in this respect) may take place on a date other than the Deemed Date of Allotment. MRPL reserves the right to keep multiple allotment date(s)/deemed date(s) of allotment at its sole and absolute discretion without any notice. If in case, the issue closing date changes (i.e. preponed/postponed), then the Deemed Date of Allotment may also be changed (pre-pond/ postponed) by MRPL, at its sole and absolute discretion.

76

Timelines in which the allotment shall be completed

Allotment of securities along with listing shall be completed in 15 days where the investor is an authorised foreign

entity and in 20 days where the investor is a domestic entity.

Letter(s) of Allotment/ Debenture Certificate(s)/ Refund Order(s)/ Issue of Letter(s) of Allotment

The beneficiary account of the investor(s) with NSDL/CDSL)/ Depository Participant will be given initial credit

within 2 days from the Deemed Date of Allotment. The initial credit in the account will be akin to the letter of

allotment. On completion of the all-statutory formalities, such credit in the account will be akin to a Debenture

Certificate.

Debentures to be issued in Demat format only

The Debentures since issued in electronic (dematerialized) form, will be governed as per the provisions of the

Depository Act, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996,

rules notified by NSDL/ CDSL/Depository Participant from time to time and other applicable laws and rules

notified in respect thereof. The Debentures shall be allotted in DEMAT form only.

Depository Arrangements

MRPL has entered into depository arrangements with NSDL and CDSL. The securities shall be issued in

dematerialized form as per the provisions of Depositories Act, as amended from time to time.

MRPL has signed two tripartite agreements in this connection viz.

1. Tripartite Agreement dated January 14, 2010, between Registrar, Company and CDSL.

2. Tripartite Agreement dated January 12, 2010, between Registrar, Company and NSDL.

The Debentures will be issued in dematerialised form and the same shall be in accordance with the provisions of

the SEBI Debt Regulations, Depositories Act, 1996 and the regulations made thereunder and are to be issued as

per the terms and conditions stipulated under this Private Placement Offer Letter.

Procedure for applying for Demat Facility

1. Investor(s) should have/open a beneficiary account with any Depository Participant of NSDL and CDSL.

2. For allotment of Debentures in dematerialized form, the beneficiary account number and depository

participants ID shall be specified in the relevant columns of the Application Form.

3. If incomplete/incorrect beneficiary account details are given in the Application Form which does not match

with the details in the depository system, the Allotment of Debentures shall be held in abeyance till such

time satisfactory demat account details are provided by the investor.

4. The Debentures allotted to the investor in dematerialized form would be directly credited to the beneficiary

account as given in the Application Form after verification. Allotment advise/refund order (if any) would be sent

directly to the applicant by the Registrar to the Issue but the confirmation of the CREDIT of the Debentures to

the investor’s Depository Account will be provided to the investor by the investor’s DP.

5. Interest or other benefits with respect to the Debentures held in dematerialized form would be paid to those

Debenture holders whose names appear on the list of beneficial owners given by the depositories to the

Issuer as on the Record Date and their names are registered as Debenture holders on the registers maintained

by Company/Registrar. In case, the beneficial owner is not identified by the Depository on the Record Date

due to any reason whatsoever, MRPL shall keep in abeyance the payment of interest or other benefits, till

such time the beneficial owner is identified by the Depository and intimated to MRPL. On receiving such

intimation, MRPL shall pay the interest or other benefits to the beneficiaries identified, within a period of

15 days from the date of receiving such intimation.

77

6. Investors may please note that the Debentures in dematerialised form can be traded only on the stock

exchanges having electronic connectivity with NSDL or CDSL.

Fictitious applications

Any person who makes, in a fictitious name, any application to a body corporate for acquiring, or subscribing to,

the Debentures, or otherwise induced a body corporate to allot, register any transfer of Debentures therein to them

or any other person in a fictitious name, shall be punishable under the extant laws.

Market Lot

The market lot for the trading of Debentures will be one Debenture (“Market Lot”).

Trading of Debentures

The marketable lot for the purpose of trading of Debentures shall be ONE (1) DEBENTURE. Trading of

Debentures would be permitted in dematerialised mode only in the standard denomination of INR 10,00,000 and

such trades shall be cleared and settled in the recognised stock exchange(s) subject to conditions specified by

SEBI. In case of trading in Debentures which has been made over the counter, the trades shall be executed and

reported on a recognized stock exchange having a nation-wide trading terminal or such other platform as may be

specified by SEBI.

Mode of Transfer of Debentures

The Debentures shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the

NSDL/ CDSL/Depository Participant of the transferor/ transferee and any other applicable laws and rules notified

in respect thereof. The normal procedure followed for transfer of securities held in the dematerialized form shall

be followed for transfer of these Debentures held in electronic form. The seller should give delivery instructions

containing details of the buyer’s DP account to his Depository Participant.

Transfer of Debentures to and from foreign investors, in case they seek to hold the Debentures and are eligible to

do so, will be governed by the then prevailing guidelines of RBI. The transferee(s) should ensure that the transfer

formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption

will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by

the transferee(s) would need to be settled with the transferor(s) and not with MRPL.

Interest on Application Money

As the Pay-In Date and the Deemed Date of Allotment fall on the same date, interest on application money shall

not be applicable. Further, no interest on application money will be payable in case the Issue is withdrawn by the

Issuer in accordance with the BSE EBP Operational Guidelines.

Interest on the Debentures

The Debentures shall carry interest at the coupon rates as per term sheet (subject to deduction of tax at source at

the rates prevailing from time to time under the provisions of the Income Tax Act, 1961, or any other statutory

modification or re-enactment thereof for which a certificate will be issued by MRPL) on the outstanding principal

amount of Debentures till final redemption. The credit will be made in the bank account linked to the depository

account only.

If any interest payment date falls on a day which is not a Business Day, then payment of interest will be made on

the next day that is a Business Day without interest for such additional days. It is clarified that Interest/redemption

with respect to debentures, interest/redemption payments shall be made only on the days when the money market

is functioning in Mumbai.

Computation of Interest

The Debentures will carry interest rates as per the term sheet from the Deemed Date of Allotment. The interest will be

78

paid from the Deemed Date of Allotment (subject to deduction of tax at source at the rates prevailing from time to time

under the IT Act, or any other statutory modification or re-enactment thereof) as per term sheet. The Interest shall be

computed on “Actual / Actual” day count basis.

Mode of Payment of Interest

Payment on interest will be made by way of cheque(s)/ redemption warrants(s)/ demand draft(s)/ CREDIT through

RTGS system in the name of the Debenture holders whose name appear on the list of Beneficial Owners given by

Depository to MRPL whose names are registered on the register maintained by the Registrar as on the Record Date.

Record Date

Record date of interest shall be 15 days prior to each interest payment date and 15 days prior to the date of

Maturity. Interest shall be paid to the person whose name appears as sole/first in the Register of Debenture

holders/beneficiaries’ position of the Depositories on Record Date or to the Debenture holders who have converted

the Debentures to physical form and their name is registered on the registers maintained by Company/Registrar.

In the event of MRPL not receiving any notice of transfer at least 15 days before the respective due date of payment

of interest and at least 15 days prior to the maturity date, the transferees for the Debenture shall not have any claim

against MRPL in respect of interest so paid to the registered Debenture holder.

Deduction of Tax at Source

Tax as applicable under the Income Tax laws or any other statutory modification or re-enactment thereof will be

deducted at source. The investor(s) desirous of claiming exemption from deduction of income tax at source on the

interest on Application money are required to submit the necessary certificate(s), in duplicate, along with the

Application Form in terms of Income Tax rules.

Interest payable subsequent to the Deemed Date of Allotment of Debentures will be treated as “Interest on

Securities” as per Income Tax Rules. Debenture holders desirous of claiming exemption from deduction of income

tax at source on the interest payable on Debentures should submit tax exemption certificate/ document, under

Section 193 of the Income Tax Act, 1961, if any, at the registered/corporate office of MRPL, at least 45 days

before the payment becoming due.

Regarding deduction of tax at source and the requisite declaration forms to be submitted, prospective investors

are advised to consult their own tax consultant(s).

Redemption

The face value of the Debentures will be redeemed at par, on the expiry of the tenor of the Debentures series as

per details in the summary term sheet from the Deemed Date of Allotment. The Debentures will not carry any

obligation, for interest or otherwise, after the date of redemption. The Debentures shall be taken as discharged on

payment of the redemption amount by MRPL on maturity to the registered Debenture holders whose names appear

in the Register of Debenture holders on the Record Date/ or the beneficial owners as per the list provided by the

Depositories. Such payment will be a legal discharge of the liability of the Company towards the Debenture

holders.

In case if the redemption date falls on a day which is not a Business Day, then the payment due shall be made on

the previous Business Day but without liability for making payment of interest after the actual date of redemption.

It is clarified that Interest/redemption with respect to debentures, interest/redemption payments shall be made only

on the days when the money market is functioning in Mumbai.

Settlement/ Payment on Redemption

Payment on redemption will be made by way of cheque(s)/ redemption warrants(s)/ demand draft(s)/ CREDIT through

RTGS system in the name of the Debenture holders whose name appear on the list of Beneficial Owners given by

Depository to MRPL and whose names are registered on the register maintained by the Registrar as on the Record Date.

The credit will be made in the bank account linked to the depository account only.

The Debentures shall be taken as discharged on payment of the redemption amount by MRPL on maturity to the list of

79

Debenture holders as provided by NSDL/ CDSL/ Depository Participant. Such payment will be a legal discharge of the

liability of MRPL towards the Debenture holders. On such payment being made, MRPL shall inform NSDL/ CDSL/

Depository Participant and accordingly the account of the Debenture holders with NSDL/ CDSL/ Depository Participant

shall be adjusted.

MRPL’s liability to the Debenture holders towards all their rights including for payment or otherwise shall cease

and stand extinguished from the due date of redemption in all events. Further MRPL will not be liable to pay any

interest or compensation from the date of redemption. On crediting the amount to the Beneficiary(s) as specified

above in respect of the Debentures, the liability of MRPL shall stand extinguished.

Right of Debenture holder(s)

A debenture holder is not a shareholder. The Debenture holders will not be entitled to any other rights and privilege

of shareholders other than those available to them under statutory requirements. The Debenture(s) shall not confer

upon the holders the right to receive notice or to attend and vote at the General Meeting of the Company. The

principal amount and interest on the Debentures will be paid to the registered Debenture holders only, and in case

of Joint holders, to the one whose name stands first.

Besides the above, the Debentures shall be subject to the provisions of the Companies Act, 2013, the relevant rules and

regulations, the Articles of Association of MRPL, the terms of this issue of Debentures and the other terms and

conditions as may be incorporated in the Debenture Trustee Agreement and other documents that may be executed in

respect of these Debentures.

Effect of Holidays

‘Business day’ shall be the day on which money markets are functioning in Mumbai. If the interest payment

date/redemption doesn’t fall on a business day, then payment of interest/principal amount shall be made in

accordance with SEBI circular no. CIR/IMD/DF-1/122/2016 dated November 11, 2016, as amended from time to

time.

If the interest payment day doesn’t fall on a business day, the payment of interest up to original scheduled date

will be made on the following working day, however, the dates of the future coupon payments would be as per

the schedule originally stipulated at the time of issuing the security.

If the Redemption Date (also being the last Coupon Payment Date) of the Debentures falls on a day that is not a

Business Day, the redemption proceeds shall be paid by the Issuer on the immediately preceding Business Day

along with interest accrued on the Debentures until but excluding the date of such payment.

It is clarified that Interest/redemption with respect to debentures, interest/redemption payments shall be made only

on the days when the money market is functioning in Mumbai.

If the Record Date falls on a day which is not a Business Day, the immediately succeeding Business Day will be

considered as the Record Date.

List of Beneficial Owners

MRPL shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall

be the list, which shall be considered for payment of interest or repayment of the principal amount, as the case may be.

Succession

In the event of the demise of the sole/first holder of the Debenture(s) or the last survivor, in case of joint holders, for the

time being, MRPL will recognize the executor or administrator of the deceased Debenture holder or the holder of

succession certificate or other legal representative as having title to the Debenture(s). MRPL shall not be bound to

recognize such executor or administrator, unless such executor or administrator obtains probate, wherever it is

necessary, or letter of administration or such holder is the holder of succession certificate or other legal representation,

80

as the case may be, from a Court in India having jurisdiction over the matter. MRPL may, in its absolute discretion,

where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal

representation, in order to recognize such holder as being entitled to the Debenture(s) standing in the name of the

deceased Debenture holder on production of sufficient documentary proof or indemnity.

Where a non-resident Indian becomes entitled to the Debentures by way of succession, the following steps have

to have complied:

a. Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that the Debenture was

acquired by the NRI as part of the legacy left by the deceased holder.

b. Proof that the NRI is an Indian National or is of Indian origin.

Such holding by the NRI will be on a non-repatriation basis.

Class or Classes of person to whom the allotment is proposed to be made

The following categories are eligible to apply for this private placement of Debentures:

1. Mutual Funds,

2. Public Financial Institutions specified in Section 2(72) of the Companies Act 2013;

3. Scheduled Commercial Banks;

4. State Industrial Development Corporations;

5. Provident Funds, Pension Funds, Gratuity Funds and Superannuation Funds authorised to invest in the

Issue

6. National Investment Funds set up by resolution no. F. No. 2/3/2005- DDII dated November 23, 2005, of

the Government of India, Published in the Gazette of India;

7. Companies and Bodies Corporate authorized to invest in Debentures;

8. Co-operative Banks and Regional Rural Banks authorized to invest in Debentures;

9. Societies authorized to invest in Debentures;

10. Trusts authorized to invest in Debentures;

11. Foreign Institutional Investors and sub-accounts registered with SEBI or Foreign Portfolio Investors (not

being an individual or family offices);

12. Statutory Corporations/ Undertakings established by the Central/ State legislature authorized to invest

in Debentures/ debentures.

13. Insurance Companies registered with the Insurance Regulatory and Development Authority.

14. Insurance funds set up and managed by army, navy and air force of the Union of India.

15. Systemically important non-banking financial company registered with the RBI and having a net worth

of more than ₹ 500 Crore.

16. Any other entity authorised to invest in these debentures including Bharat Bond ETF.

The applications must be accompanied by certified true copies of (1) Memorandum and Articles of Association/

Constitution/Bye-laws; (2) Resolution authorizing investment and containing operating instructions; (3) Specimen

signatures of authorized signatories; (4) Necessary forms for claiming exemption from deduction of tax at source

on the interest income/ interest on application money, wherever applicable; (5) Documents relating to withholding

tax applicability;(6) Copy of Permanent Account Number Card (PAN Card) provided by the Income Tax

Department; and (7) in case of remittance of money through electronic mode, a self-attested bank account

statement has to be submitted reflecting the debit for the application money. The bank account statement should

contain the name of the applicant, account number, name and branch of the bank.

Application under Power of Attorney or by Limited Companies

81

In case of applications made under a power of attorney or by a limited company or a body corporate or registered

society or mutual fund, and scientific and/or industrial research organizations or trusts etc., the relevant power of

attorney or the relevant resolution or authority to make the application, as the case may be, together with the

certified true copy thereof along with the certified copy of the memorandum and articles of association and/or

bye-laws as the case may be, shall be attached to the application form or lodged for scrutiny separately with the

photocopy of the application form, quoting the serial number of the application form, at the office of the registrars

to the issue after submission of the application form to the EBP Platform, failing which the applications are liable

to be rejected.

Proposed time schedule for which this Private Placement Offer Letter is valid

The Private Placement Offer Letter shall be valid till 20 days from issue closing date.

Mode of Subscription/How to Apply

All eligible Investors should refer the operating guidelines for issuance of debt securities on private placement

basis through an electronic book mechanism as available on the website of BSE. Investors will also have to

complete the mandatory know your customer verification process. Investors should refer to the EBP Guidelines

in this respect. The application form will be filled in by each Investor and uploaded in accordance with the SEBI

regulatory and operational guidelines. Applications for the Debentures must be in the prescribed form (enclosed)

and completed in BLOCK LETTERS in English as per the instructions contained therein.

(a) The details of the Issue shall be entered on the EBP Platform by the Issuer at least 2 (two) Business Days

prior to the Issue opening date, in accordance with the Operational Guidelines.

(b) The Issue will be open for bidding for the duration of the bidding window that would be communicated

through the Issuer’s bidding announcement on the EBP Platform, at least 1 (one) Business Day before

the start of the Issue opening date.

Some of the key guidelines in terms of the current Operational Guidelines on the issuance of securities

on private placement basis through an EBP mechanism are as follows:

(a) Modification of Bid

Investors may note that modification of bid is allowed during the bidding period/window. However, in

the last 10 (ten) minutes of the bidding period/window, revision of bid is only allowed for improvement

of coupon/yield and upward revision of the bid amount placed by the Investor.

(b) Cancellation of Bid

Investors may note that cancellation of bid is allowed during the bidding period/window. However, in

the last 10 minutes of the bidding period/window, no cancellation of bids is permitted.

(c) Multiple Bids

Investors may note that multiple bids are permitted. Multiple bids by the Arranger to the Issue are

permitted as long as each bid is on behalf of different Investors/ same Investors. Arranger to the Issue

can put multiple bids for the same Investor provided the total of all bids entered is not equal to or more

than Rs.15 crore or 5% of the Base Issue Size, whichever is lower.

Bids by the Arrangers

The Arrangers as mapped on BSE EBP platform by the issuer are allowed to bid on a proprietary, client and

consolidated basis. At the time of bidding, the Arranger is required to disclose the following details to the BSE

EBP Platform:

82

(i) Whether the bid is proprietary bid or is being entered on behalf of an Eligible Investor or is a

consolidated bid, i.e., an aggregate bid consisting of proprietary bid and bid(s) on behalf of

Eligible Investors.

(ii) For consolidated bids, the Arranger shall disclose breakup between proprietary bid and bid(s)

made on behalf of Eligible Investors.

(iii) For bids entered on behalf of eligible Investors, the Arranger shall disclose the following:

(a) Names of such eligible Investors;

(b) Category of the eligible Investors (i.e. QIB or non-QIB); and

(c) Quantum of the bid of each eligible Investor.

Provided that the Arranger shall not be allowed to bid on behalf of any Eligible Investor if the bid amount exceeds

5% (five per cent.) of the Base Issue Size or ₹15,00,00,000 (Rupees Fifteen Crores Only), whichever is lower (or

such revised limits as may be specified in the Operational Guidelines from time to time).

The names of successful arrangers along with respective amounts have been disclosed in the final private

placement offer letter after the bidding. Eligible participants bidding on a proprietary basis, for an amount equal to or more than Rs.6.25 crore (i.e. 5% of

base issue size of Series1A) under Series-1A or more than Rs. 12.50 crore (i.e. 5% of the base issue size of Series

1B) for Series 1B, shall bid directly i.e. shall enter the bids directly on EBP platform.

Manner of bidding

The Issue will be through closed bidding on the BSE EBP platform in line with the BSE EBP Guidelines and the

SEBI EBP Circulars. Investors are advised to refer to the BSE EBP Guidelines as prevailing on the date of the

bid.

Applications by Successful bidders and Payment Mechanism

Original application forms complete in all respects must be submitted to the MRPL before the last date indicated

in the Issue time table or such extended time as decided by the Issuer accompanied by details of remittance of the

Application money. This Application will constitute the application required under section 42 of the Companies

Act, 2013 and the PAS Rules. Successful bidders should ensure to do the funds pay-in from their same bank

account which is updated by them in the EBP Platform while placing the bids. In case of mismatch in the bank

account details between EBP Platform and the bank account from which payment is done by the successful bidder,

the payment would be returned back. Payment should be made by the deadline specified by the EBP provider.

Payment of subscription money for the Debentures should be made by the successful eligible Investor as notified

by the Issuer (to whom the Issuer has issued given the offer by the issue of Private Placement Offer Letter.

Successful Investors should do the funds pay-in to the account of ICCL (“Designated Bank Account”). The

Designated Bank Account information shall be displayed in the front end of BSE EBP Platform and the same shall

also be available in the obligation file downloaded to eligible Investors.

Successful Investors must do the subscription amount payment to the Designated Bank Account on or before

10:30 a.m. on the Pay-in Date (“Pay-in Time”). Successful Investors should ensure to make payment of the

subscription amount for the Debentures from their same bank account which is updated by them in the BSE EBP

Platform while placing the bids. In case of mismatch in the bank account details between BSE EBP Platform and

the bank account from which payment is done by the successful bidder, the payment would be returned.

Note: In case of failure of any successful bidder to complete the funds pay-in by the Pay-in Time or the funds are

not received in the Designated Bank Account of the clearing corporation of the relevant Exchanges by the Pay-in

Time for any reason whatsoever, the bid will liable to be rejected and the Issuer and/or the Arranger shall not be

liable to the successful bidder. Cheque(s), demand draft(s), Money orders, postal orders will not be accepted. The

Issuer assumes no responsibility for any applications lost in the mail. The entire amount of ₹ 10 (ten) Lakhs per

Debenture is payable on application.

Applications not completed in the manner required are liable to be rejected. The name of the Applicant’s bank,

type of account and account number must be filled in the Application Form.

83

The Applicant or in the case of an Application in joint names, each of the Applicant, should mention the PAN

allotted under the I.T. Act or where the same has not been allotted, the GIR No. and the Income Tax

Circle/Ward/District. In accordance with the provision of Section 139A (5A) of the I.T. Act, PAN/GIR No. needs

to be mentioned on the TDS certificates. Hence, the Investor should mention his PAN/GIR No. In case neither the

PAN nor the GIR Number has been allotted, the applicant shall mention “Applied for” and in case the applicant

is not assessed to Income Tax, the Applicant shall mention ‘Not Applicable’ (stating reasons for non-applicability)

in the appropriate box provided for the purpose. Application Forms without this information will be considered

incomplete and are liable to be rejected. All Applicants are requested to tick the relevant column “Category of

Investor” in the Application Form. Public/ Private/ Religious/ Charitable Trusts, Provident Funds and Other

Superannuation Trusts and other investors requiring “approved security” status for making investments.

Mode of Settlement Mechanism

Settlement of the Issue will be done through Indian Clearing Corporation Limited (ICCL) and the account details

are given in the section on Payment Mechanism of this Private Placement Offer Letter.

Basis of Allocation

Beginning from the issue opening date and until the day immediately prior to the Issue Closing date, firm allotment

against valid applications for the Debentures will be made to applicants in accordance with applicable SEBI

regulations, operational guidelines of the Exchanges and all applicable laws. At its sole discretion, the Issuer shall

decide the amount of oversubscription to be retained over and above the base Issue size (in case of greenshoe

option available, if any).

According to the SEBI circular, SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 allotment to the bidders

on EBP shall be done on the basis of "Yield-time priority". Thus, allotment shall be done first on "yield priority"

basis, however, where two or more bids are at the same yield, then the allotment shall be done on "time -priority"

basis. Further, if two or more bids have the same yield and time, then allotment shall be done on the "pro-rata"

basis.

If the proportionate allotment of Debentures to such applicants is not a minimum of one Debenture or in multiples

of one Debenture (which is the market lot), the decimal would be rounded off to the next higher whole number if

that decimal is 0.5 or higher and to the next lower whole number if the decimal is lower than 0.5. All successful

applicants on the Issue closing date would be allotted the number of Debentures arrived at after such rounding

off.

Debentures under greenshoe option are reserved for Bharat Bond ETF.

Right to Accept or Reject Applications

The Issuer reserves its full, unqualified and absolute right to accept or reject any Application, in part or in full,

without assigning any reason thereof. The rejected applicants will be intimated along with the refund if applicable,

sent. The Application forms that are not complete in all respects are liable to be rejected and will not be paid any

interest on the Application money. The application would be liable to be rejected on one or more technical

grounds, including but not restricted to:

(i) Number of Debentures applied for is less than the minimum application size;

(ii) Applications exceeding the issue size;

(iii) Debenture holder account details not given;

(iv) Details for the issue of Debentures in the dematerialized form not given; PAN/GIR and IT

Circle/Ward/District not given;

(v) In case of Applications under power of attorney by limited companies, corporate bodies, trusts, etc., if

relevant documents not submitted;

84

In the event, if any Debenture(s) applied for is/are not allotted in full, the excess application monies of such

Debentures will be refunded, as may be permitted.

Provisional or Final Allocation

The allocation shall be made on a pro-rata basis in the multiples of the bidding lot size, i.e., in multiples of ₹ 10

(ten) Lakh with a minimum allotment of Rs 1 (one) Crore. Post completion of the bidding process, the Issuer will

upload the provisional allocation on the BSE Bond EBP Platform. Post receipt of Investor details, the Issuer will

upload the final allocation file on the BSE Bond EBP Platform.

Terms of Payment

The full-face value of the Debentures applied for is to be paid along with the Application Form as set out above.

Settlement Process

The settlement process would be followed as per the relevant operating guidelines of SEBI on EBP.

Post-Allocation Disclosures by the EBP

Upon final allocation by the Issuer, the Issuer shall disclose the Issue Size, coupon rate, ISIN, number of successful

bidders, category of the successful bidder(s), etc., in accordance with the EBP circular issued by

SEBI/HO/DDHS/CIR/P/2018/05 dated January 5, 2018, as amended. The EBP shall upload such data, as provided

by the Issuer, on its website to make it available to the public. Debentures under greenshoe option are reserved

for Bharat Bond ETF.

Name of the proposed allottee’s &percentage of post private placement capital that may be held by them

Not applicable in case of issue of non-convertible debentures

Change in Control, if any, in the Company that would occur subsequent to the private placement

Nil

Number of persons to whom allotment on preferential basis / private placement/rights issue has been made

during the year:

Particulars No. of

Investors

Number of

securities

issued

Consideration in

₹

Remarks

Nil Nil Nil Nil Nil

Justification for the allotment proposed to be made for consideration other than cash

NA

Force Majeure and other Withdrawal of Issue

The Issuer reserves the right to withdraw the Issue prior to the closing date in the event of any unforeseen

development adversely affecting the economic and regulatory environment. The Issuer reserves the right to change

the Issue schedule.

The Issuer reserves the right to withdraw the Issue as set out under the Operating Guidelines or as permitted under

applicable law or regulations.

Acknowledgements

No separate receipts will be provided by the Issuer for the Application money.

85

Applications under Power of Attorney

A certified true copy of the power of attorney or the relevant authority as the case may be along with the names

and specimen signature(s) of all the authorized signatories and the tax exemption certificate/ document, if any,

must be lodged along with the submission of the completed Application Form. Further modifications/ additions

in the power of attorney or authority should be notified to the Issuer or to its Registrars or to such other person(s)

at such other address(s) as may be specified by the Issuer from time to time through suitable communication.

Application by Mutual Funds

In case of Applications by Mutual Funds, a separate Application must be made in respect of each scheme of an Indian

Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, provided that the

application made by the asset management Company/trustees/custodian clearly indicate their intention as to the scheme

for which the Application has been made.

PAN/GIR Number

All Applicants should mention their PAN or the GIR Number allotted under I.T. Act, and the Income Tax Circle/ Ward/

District. In the case where neither the PAN nor the GIR Number has been allotted, the fact of such a non-allotment

should be mentioned in the Application Form in the space provided.

Signatures

Signatures should be made in English or in any of the Indian languages. Thumb impressions must be attested by

an authorized officer of the Issuer or by a Magistrate/ Notary Public under his/her official seal.

Debenture holder, not a shareholder

The Debenture holders will not be entitled to any of the rights and privileges available to the shareholder. If,

however, any resolution affecting the rights attached to the Debentures is placed before the members of the Issuer,

such resolution will first be placed before the Debenture holders for their consideration.

Modification of Rights

The rights, privileges, terms and conditions attached to the Debentures may be varied, modified or abrogated with

the consent, in writing, of those holders of the Debentures who hold majority of the outstanding amount of the

Debentures (or any limit as specified under Companies Act or any other provision of law) or with the sanction

accorded pursuant to a resolution passed at a meeting of the Debenture holders, provided that nothing in such

consent or resolution shall be operative against the Issuer where such consent or resolution modifies or varies the

terms and conditions of the Debentures, if the same is not acceptable to the Issuer.

Right to the further issue under the ISIN’s

The Issuer reserves right to effect multiple issuances under the same ISIN with reference to SEBI Circular

CIR/IMD/DF-1/ 67 /2017 dated June 30, 2017, as amended (“First ISIN Circular”) and SEBI Circular

CIR/DDHS/P/59/2018 dated March 28, 2018, as amended or any other applicable laws or regulations from time

to time (“Second ISIN Circular”, together with the First ISIN Circular, the “ISIN Circulars”).

The Issue can be made either by way of creation of a fresh ISIN or by way of issuance under the existing ISIN at

a premium, par or discount as the case may be in line with the ISIN Circulars.

Right to Re-purchase, Re-issue or Consolidate the Debentures

The Issuer will have power, exercisable at its sole and absolute discretion from time to time, to re-purchase a part

or all of its Debentures from the secondary markets or otherwise, at any time prior to the Redemption Date, subject

to applicable law and in accordance with the applicable guidelines or regulations, if any.

86

In the event of a part or all of the Issuer’s Debentures being repurchased as aforesaid or redeemed under any

circumstances whatsoever, the Issuer shall have, and shall be deemed always to have had, the power to re-issue

the Debentures either by re-issuing the same Debentures or by issuing other debentures in their place. The Issuer

shall have the right to consolidate the Debentures under present series in accordance with applicable law.

Further the Issuer, in respect of such re-purchased or redeemed Debentures shall have the power, exercisable

either for a part or all of those Debentures, to cancel, keep alive, appoint nominee(s) to hold or re-issue at such

price and on such terms and conditions as it may deem fit and as permitted under the ISIN Circulars or by-laws

or regulations.

Future Borrowings

The Company shall be free to borrow or raise loans or create encumbrances or avail financial assistance in

whatever form, as also issue promissory notes or debentures or guarantees or indemnities or other securities in

any manner with ranking as pari-passu basis or otherwise and to change its capital structure, including issue of

shares of any class or redemption or reduction of any class of paid-up capital, on such terms and conditions as the

Issuer may think appropriate, without the consent of, or intimation to, the Debenture holder(s) or the Debenture

Trustee in this connection.

Ranking of Debentures

The claims of the investors shall rank pari-passu inter se and, subject to any obligations preferred by mandatory

provisions of the law (prevailing from time to time), shall also, as regards repayment of principal and payment of interest,

rank pari-passu with all other existing unsecured borrowings issued by the Company.

Debenture Redemption Reserve

As per Rule 18(7)(b)(ii) of Companies (Share Capital and Debentures) Rules, 2014, as amended (“Debentures

Rules”), a debenture redemption reserve account is not required to be created in the case of privately placed

debentures issued by NBFCs registered with the RBI under section 45-IA of the RBI (Amendment) Act, 1997, as

amended.

Notices

All notices required to be given by the Issuer or by the Debenture Trustee to the Debenture holders shall be deemed

to have been given if sent by ordinary post/ courier to the original sole/first allottees of the Debentures and/ or if

published in one all India English daily newspaper and one regional language newspaper.

All notices required to be given by the Debenture holder(s), including notices referred to under “Payment of

Interest” and “Payment on Redemption” shall be sent by registered post or by hand delivery to the Issuer or to

such persons at such address as may be notified by the Issuer from time to time.

Tax Benefits to the Debenture holders of the Issuer

The holder(s) of the Debentures are advised to consider in their own case, the tax implications in respect of

subscription to the Debentures after consulting their own tax advisor or legal counsel.

Disputes and Governing Law

The Debentures are governed by and shall be construed in accordance with the existing laws of India. Any dispute

arising thereof will be subject to the jurisdiction of courts of Mangaluru.

Investor Relations and Grievance Redressal

Arrangements have been made to redress investor grievances expeditiously as far as possible. The Issuer

endeavours to resolve the investors' grievances within 30 (thirty) days of its receipt. All grievances related to the

issue quoting the Application number (including prefix), number of Debentures applied for, the amount paid on

application, may be addressed to the Compliance Officer. All Investors are hereby informed that the Issuer has

appointed the Compliance Officer who may be contacted in case of any problem related to this Issue.

87

SECTION XII

SUMMARY TERM SHEET

MRPL proposes to raise Debentures with Issue Size ₹ 500 Crore each with Green-shoe option to retain

oversubscription up to ₹ 1,000 Crore aggregating to ₹ 1,500 Crore under Debenture Series 1. Series 1 comprises

of Series 1A Debentures with a base Issue size of Rs. 125 Crores with an option to retain oversubscription up to

Rs. 375 crores aggregating to Rs. 500 crores and Series 1B Debentures with a base issue size of Rs. 250 crores

with an option to retain oversubscription up to Rs. 750 crores aggregating to Rs. 1,000 crores.

In accordance with the SEBI Letter no. SEBI/DDHS/TD/OW/P/2019/32928/1 dated December 11, 2019, received

vide DIPAM OM No. 3/2/2018-DIPAM-II (Vol.V) dated December 18, 2019, the base issue size i.e. Rs. 125 crore

is 25% of the issue size under Series 1A and base issue size i.e. Rs. 250 crores is 25% of issue size under Series-

1B. The green shoe options of Rs. 375 crore under Series 1A and Rs. 750 crores under Series 1B shall be

exclusively reserved for the BHARAT Bond ETF at the same cut-off yield of the base amount for respective

series.

The price for base issue Rs. 125 crore under Series 1A and Rs. 250 crore under Series 1B shall be discovered in a

transparent manner on the EBP Platform. After the discovery of price for base issue the same price will be

applicable to the Green shoe option which is reserved for BHARAT Bond ETF.

Further, there is no restriction on BHARAT Bond ETF to participate in bidding for base issue size on EBP

Platform.

All other provisions as per SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018, and SEBI

Circular No. SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018, shall be applicable.

Security

Name

[●] MRPL2019-Series 1A [●] MRPL2019-Series 1B

Issuer Mangalore Refinery and Petrochemicals

Limited

Mangalore Refinery and Petrochemicals

Limited

Type of

Instrument

Fixed-Rate, Unsecured Rated, Taxable,

Redeemable, Non-Convertible Debentures

Fixed-Rate, Unsecured Rated, Taxable,

Redeemable, Non-Convertible Debentures

Nature of

Instrument

Unsecured Unsecured

Seniority Unsecured, senior and unsubordinated. Unsecured, senior and unsubordinated.

Mode of Issue Private Placement Private Placement

Eligible

Investors

1. Mutual Funds,

2. Public Financial Institutions specified

in Section 2(72) of the Companies

Act 2013;


4. State Industrial Development

Corporations;

5. Provident Funds, Pension Funds,

Gratuity Funds and Superannuation

Funds authorised to invest in the Issue

6. National Investment Funds set up by

resolution no. F. No. 2/3/2005- DDII

dated November 23, 2005, of the

1. Mutual Funds,

2. Public Financial Institutions specified

in Section 2(72) of the Companies

Act 2013;


4. State Industrial Development

Corporations;

5. Provident Funds, Pension Funds,

Gratuity Funds and Superannuation

Funds authorised to invest in the Issue

6. National Investment Funds set up by

resolution no. F. No. 2/3/2005- DDII

dated November 23, 2005, of the

88

Government of India, Published in

the Gazette of India;

7. Companies and Bodies Corporate

authorized to invest in Debentures;

8. Co-operative Banks and Regional

Rural Banks authorized to invest in

Debentures;

9. Societies authorized to invest in

Debentures;

10. Trusts authorized to invest in

Debentures;

11. Foreign Institutional Investors and

sub-accounts registered with SEBI or

Foreign Portfolio Investors (not being

an individual or family offices);

12. Statutory Corporations/ Undertakings

established by the Central/ the State

legislature authorized to invest in

Debentures/ debentures.

13. Insurance Companies registered with

the Insurance Regulatory and

Development Authority

14. Insurance funds set up and managed

by army, navy and air force of the

Union of India

15. Systemically important non-banking

financial company registered with the

RBI and having a net worth of more

than ₹ 500 Crore

16. Any other entity authorised to invest

in these debentures including Bharat

Bond ETF.

Government of India, Published in

the Gazette of India;

8. Companies and Bodies Corporate

authorized to invest in Debentures;

8. Co-operative Banks and Regional

Rural Banks authorized to invest in

Debentures;

9. Societies authorized to invest in

Debentures;

10. Trusts authorized to invest in

Debentures;

11. Foreign Institutional Investors and

sub-accounts registered with SEBI or

Foreign Portfolio Investors (not being

an individual or family offices);

12. Statutory Corporations/ Undertakings

established by the Central/ State

legislature authorized to invest in

Debentures/ debentures.

13. Insurance Companies registered with

the Insurance Regulatory and

Development Authority

14. Insurance funds set up and managed

by army, navy and air force of the

Union of India

15. Systemically important non-banking

financial company registered with the

RBI and having a net worth of more

than ₹ 500 Crore

16. Any other entity authorised to invest

in these debentures including Bharat

Bond ETF.

Listing

(including the

name of stock

Exchange(s)

where it will

be listed and

the timeline

for listing)

Proposed on the BSE Limited (“BSE“) and

National Stock Exchange of India Ltd.

(“NSE”)

Proposed on the BSE Limited (“BSE“) and

National Stock Exchange of India Ltd.

(“NSE”)

Rating of the

Instrument

CRISIL AAA/Stable by CRISIL

ICRA AAA Stable by ICRA

CRISIL AAA/Stable by CRISIL

ICRA AAA Stable by ICRA

Base Issue

Size

₹ 125 crore ₹ 250 crore

Option to

retain

oversubscript

ion (Amount)

Upto ₹ 375 crore aggregating to Rs 500 crore Upto ₹ 750 crore aggregating to Rs 1,000

crore

89

Covenant

with respect

to

oversubscript

ion

The oversubscription option shall be raised

only exclusively through Bharat Bonds ETF.

The oversubscription option shall be raised

only exclusively through Bharat Bonds ETF.

Object /

Purpose and

Utilization of

proceeds

The funds raised through this issue will be

utilized for, inter alia, funding of capital

expenditure of the Company, including

recoupment of expenditure already incurred;

discharging existing debt obligations

The main objects of the Memorandum of

Association of our Company enable us to

undertake the activities for which the funds

are being raised in the Issue. Further, we

confirm that the activities we have been

carrying out until now are in accordance with

the objects specified in our Memorandum of

Association.

The Issue proceeds shall be utilized in course

of our normal business activities and shall not

be utilized in contravention of the

regulations, guidelines, or circulars issued by

the RBI, SEBI, RoC or the Stock

Exchange(s).

The funds raised through this issue will be

utilized for, inter alia, funding of capital

expenditure of the Company, including

recoupment of expenditure already incurred;

discharging existing debt obligations

The main objects of the Memorandum of

Association of our Company enable us to

undertake the activities for which the funds

are being raised in the Issue. Further, we

confirm that the activities we have been

carrying out until now are in accordance with

the objects specified in our Memorandum of

Association.

The Issue proceeds shall be utilized in course

of our normal business activities and shall not

be utilized in contravention of the

regulations, guidelines, or circulars issued by

the RBI, SEBI, RoC or the Stock

Exchange(s).

Coupon Rate [●] [●]

Step Up/Step

Down

Coupon Rate

NA NA

Coupon

Payment

Frequency

Annual Annual

Coupon

Payment

Date

First Interest payment on January 13, 2021,

and thereafter January 13, of every year and

last interest payment on April 14, 2023, along

with maturity proceeds. (Refer Illustration

for cash flows)

First Interest payment on January 13, 2021,

and thereafter January 13 of every year and

last interest payment on April 12, 2030, along

with maturity proceeds. (Refer Illustration

for cash flows)

Coupon Type Fixed Fixed

Coupon Reset N.A. N.A.

Day Count

Basis

Interest shall be computed on an

“actual/actual basis”. Where the interest

period (start date to end date) includes

February 29, interest shall be computed on

366 days-a-year basis in accordance with

SEBI circular No CIR/IMD/DF-1/122/2016

dated November 11, 2016.

Interest shall be computed on an

“actual/actual basis”. Where the interest

period (start date to end date) includes

February 29, interest shall be computed on

366 days-a-year basis in accordance with

SEBI circular No CIR/IMD/DF-1/122/2016

dated November 11, 2016.

Interest on

Application

Money

As the Pay-In Date and the Deemed Date of

Allotment fall on the same date, interest on

application money shall not be applicable.

Further, no interest on application money

will be payable in case the Issue is withdrawn

As the Pay-In Date and the Deemed Date of

Allotment fall on the same date, interest on

application money shall not be applicable.

Further, no interest on application money

will be payable in case the Issue is withdrawn

90

by the Issuer in accordance with the BSE

EBP Operational Guidelines.

by the Issuer in accordance with the BSE

EBP Operational Guidelines.

Default

Interest Rate

2% p.a. over the coupon rate will be payable

by the Company for the defaulting period i.e.

the period commencing from and including

the date on which such amount becomes due

and up to but excluding the date on which

such amount is actually paid, in case of

default in payment of interest/redemption

amount.

2% p.a. over the coupon rate will be payable

by the Company for the defaulting period i.e.

the period commencing from and including

the date on which such amount becomes due

and up to but excluding the date on which

such amount is actually paid, in case of

default in payment of interest/redemption

amount.

Tenor 3 years and 3 months and 1 day 10 years and 2 months and 30 days

Redemption

Date

April 14, 2023 April 12, 2030

Redemption

Amount

Redeemed at face value of Debentures Redeemed at face value of Debentures

Redemption

Premium

/Discount

Nil Nil

Issue

Premium/Dis

count

Nil Nil

Issue Price ₹ 10,00,000 per Debenture ₹ 10,00,000 per Debenture

Discount at

which

security is

issued and the

effective yield

as a result of

such

discount.

Nil Nil

Put option

Date

NA NA

Put option

Price

NA NA

Call Option

Date

NA NA

Call Option

Price

NA NA

Put

Notification

Time

NA NA

Call

Notification

Time

NA NA

Face Value ₹ 10,00,000 per Debenture ₹ 10,00,000 per Debenture

91

Minimum

Application/b

id and in

multiples of

Debt

securities

thereafter

The application must be for a minimum size

of ₹ 10,00,000 each and in multiples of ₹

10,00,000 (1 Debenture) thereafter.

The application must be for a minimum size

of ₹ 10,00,000 each and in multiples of ₹

10,00,000 (1 Debenture) thereafter.

Type/Form of

Bidding

Closed Bidding Closed Bidding

Manner of

allotment

The allotment will be done on a uniform yield

basis in line with BSE EBP Operational

Guidelines and SEBI EBP Circulars.

The allotment will be done on a uniform yield

basis in line with BSE EBP Operational

Guidelines and SEBI EBP Circulars.

Pricing

Mechanism

The price for base issue Rs.125 crore shall be

discovered in a transparent manner on the

EBP Platform. After the discovery of price

for base issue the same price will be

applicable to the greenshoe option which is

reserved for BHARAT Bond ETF.

Further, there is no restriction on BHARAT

Bond ETF to participate in bidding for base

issue size on EBP Platform.

All other provisions as per SEBI Circular No.

SEBI/HO/DDHS/CIR/P/2018/05 dated

January 05, 2018, and SEBI Circular No.


August 16, 2018, shall be applicable.

The price for base issue Rs.250 crore shall be

discovered in a transparent manner on the

EBP Platform. After the discovery of price

for base issue the same price will be

applicable to the greenshoe option which is

reserved for BHARAT Bond ETF.

Further, there is no restriction on BHARAT

Bond ETF to participate in bidding for base

issue size on EBP Platform.

All other provisions as per SEBI Circular No.


January 05, 2018, and SEBI Circular No.


August 16, 2018, shall be applicable.

Bidding date January 9, 2020 January 9, 2020

Issue Timing

1. Issue

Opening

Date

2. Issue

Closing

Date

3. Pay-in

Date

4. Deemed

Date of

Allotment

January 9, 2020

January 9, 2020

January 13, 2020 (T+2)

January 13, 2020

January 9, 2020

January 9, 2020

January 13, 2020(T+2)

January 13, 2020

Settlement

Cycle

T+2 (‘T’ being the bidding date as set out

above)

T+2 (‘T’ being the bidding date as set out

above)

No. of

Applications*

*

N.A. N.A.

Issuance

mode of the

Instrument

In Dematerialized mode In Dematerialized mode

92

Trading

mode of the

Instrument

In Dematerialized mode In Dematerialized mode

Settlement

mode of the

Instrument

Payment of interest and repayment of

principal shall be made by way of

cheque(s)/warrant(s), demand draft(s)/direct

credit/ RTGS/NECS/NEFT or any other

electronic mode offered by the Banks

Payment of interest and repayment of

principal shall be made by way of

cheque(s)/warrant(s), demand draft(s)/direct

credit/ RTGS/NECS/NEFT or any other

electronic mode offered by the Banks

Depository National Securities Depository Limited

(NSDL) and Central Depository Services

(India) Limited (CDSL).

National Securities Depository Limited

(NSDL) and Central Depository Services

(India) Limited (CDSL).

Effect of

Holidays

‘Business day’ shall be the day on which

money markets are functioning in Mumbai. If

the interest payment date/redemption doesn’t

fall on a business day, then payment of

interest/principal amount shall be made in

accordance with SEBI circular no.

CIR/IMD/DF-1/122/2016 dated November

11, 2016, as amended from time to time.

If the interest payment day doesn’t fall on a

business day, the payment of interest up to

original scheduled date will be made on the

following working day, however, the dates of

the future coupon payments would be as per

the schedule originally stipulated at the time

of issuing the security.

If the Redemption Date (also being the last

Coupon Payment Date) of the Debentures

falls on a day that is not a Business Day, the

redemption proceeds shall be paid by the

Issuer on the immediately preceding

Business Day along with interest accrued on

the Debentures until but excluding the date of

such payment.

It is clarified that Interest/redemption with

respect to debentures, interest/redemption

payments shall be made only on the days

when the money market is functioning in

Mumbai.

If the Record Date falls on a day which is not

a Business Day, the immediately succeeding

Business Day will be considered as the

Record Date.

‘Business day’ shall be the day on which

money markets are functioning in Mumbai.

If the interest payment date/redemption

doesn’t fall on a business day, then payment

of interest/principal amount shall be made in

accordance with SEBI circular no.

CIR/IMD/DF-1/122/2016 dated November

11, 2016, as amended from time to time.

If the interest payment day doesn’t fall on a

business day, the payment of interest up to

original scheduled date will be made on the

following working day, however, the dates of

the future coupon payments would be as per

the schedule originally stipulated at the time

of issuing the security.

If the Redemption Date (also being the last

Coupon Payment Date) of the Debentures

falls on a day that is not a Business Day, the

redemption proceeds shall be paid by the

Issuer on the immediately preceding

Business Day along with interest accrued on

the Debentures until but excluding the date of

such payment.

It is clarified that Interest/redemption with

respect to debentures, interest/redemption

payments shall be made only on the days

when the money market is functioning in

Mumbai.

If the Record Date falls on a day which is not

a Business Day, the immediately succeeding

Business Day will be considered as the

Record Date.

Record Date 15 days prior to each Coupon Payment/

Redemption Date.

15 days prior to each Coupon Payment/

Redemption Date.

Security The Debentures are unsecured. The Debentures are unsecured.

Reissuance

and

consolidation

Our Company shall have the right to reissue

or consolidate the Debentures under present

series in accordance with applicable law

Our Company shall have the right to reissue

or consolidate the Debentures under present

series in accordance with applicable law

93

Transaction

Documents

The Issuer has executed/ shall execute the

documents including but not limited to the

following in connection with the Issue:

1. Letter appointing Trustees to the

Debenture holders;

2. Debenture Trustee Agreement;

3. Debenture Trust Deed;

4. Rating letter from CRISIL;

5. Rating letter from ICRA;

6. Tripartite Agreement between the

Issuer; Registrar and NSDL for the issue

of Debentures in dematerialized form;


Issuer; Registrar and CDSL for the issue


8. Letter appointing Registrar;

9. Application made to NSE and BSE for

seeking their in-principle approval for

listing of Debentures;

10. Listing Agreement with NSE & BSE

11. Consent letter by Link Intime India

Private Limited to act as Registrar to the

issue

12. Consent letter by SBICAP Trustee

Company Limited to as Trustee to the

issue

13. A certified true copy of board resolution

The Issuer has executed/ shall execute the

documents including but not limited to the

following in connection with the Issue:

1. Letter appointing Trustees to the

Debenture holders;

2. Debenture Trustee Agreement;

3. Debenture Trust Deed;

4. Rating letter from CRISIL;

5. Rating letter from ICRA;


Issuer; Registrar and NSDL for the issue



Issuer; Registrar and CDSL for the issue


8. Letter appointing Registrar;

9. Application made to NSE and BSE for

seeking their in-principle approval for

listing of Debentures;

10. Listing Agreement with NSE & BSE

11. Consent letter by Link Intime India

Private Limited to act as Registrar to the

issue

12. Consent letter by SBICAP Trustee

Company Limited to as Trustee to the

issue

13. A certified true copy of board resolution

Additional

Covenants

The Company shall allot the Debentures

within sixty (60) days from the date of receipt

of the application money for such Debentures

and if the Company is not able to allot the

Debentures within such period, it shall repay

the application money to the subscribers

within fifteen days from the date of

completion of sixty days and if the Company

fails to repay the application money within

the aforesaid period, it shall be liable to repay

such money with interest at the rate of 12%

p.a. from the expiry of the sixtieth day.

Default in Payment: In the event of delay in

the payment of interest amount and/or

principal amount on the due date(s), the

Issuer shall pay additional interest of 2.00%

per annum in addition to the respective

Coupon Rate payable on the Debentures, on

such amounts due, for the defaulting period

i.e. the period commencing from and

including the date on which such amount

becomes due and up to but excluding the date

on which such amount is actually paid

The Company shall allot the Debentures

within sixty (60) days from the date of receipt

of the application money for such Debentures

and if the Company is not able to allot the

Debentures within such period, it shall repay

the application money to the subscribers

within fifteen days from the date of

completion of sixty days and if the Company

fails to repay the application money within

the aforesaid period, it shall be liable to repay

such money with interest at the rate of 12%

p.a. from the expiry of the sixtieth day.

Default in Payment: In the event of delay in

the payment of interest amount and/or

principal amount on the due date(s), the

Issuer shall pay additional interest of 2.00%

per annum in addition to the respective

Coupon Rate payable on the Debentures, on

such amounts due, for the defaulting period

i.e. the period commencing from and

including the date on which such amount

becomes due and up to but excluding the date

on which such amount is actually paid

94

Delay in Listing: The Issuer shall complete

all the formalities and seek listing permission

within 15 days from the Deemed Date of

Allotment in the case where investor includes

foreign investor and 20 days where investors

only include domestic investor. In case of

delay in listing of the debt securities beyond

20 days from the deemed date of allotment,

the Company will pay penal interest of at

least 1 % p.a. over the coupon rate from the

expiry of 30 days from the deemed date of

allotment till the listing of such debt

securities to the investor.

In case the Debentures issued to the SEBI

registered FIIs / sub-accounts of FIIs/FPIs are

not listed within 15 days of issuance to the

SEBI registered FIIs / sub-accounts of

FIIs/FPIs, for any reason, then the FII/sub-

account of FII/FPIs shall immediately

dispose of the Debentures either by way of

sale to a third party or to the Issuer and in case

of failure to list the Debentures issued to

SEBI registered FIIs/ sub-accounts of

FIIs/FPIs within 15 days of issuance, the

Issuer shall immediately redeem / buyback

such Debentures from the FIIs/sub-accounts

of FIIs/FPIs.

In the event of delay in execution of

Debenture Trust Deed within ninety days of

Deemed closure of the Issue, the Company

shall refund the subscription with the Coupon

Rate or pay penal interest at the rate of 2.00%

p.a. over the Coupon Rate till these

conditions are complied with, at the option of

the Debenture holder(s). OR

Where the Company fails to execute the trust

deed within three months from the closure of

the issue, the Company shall pay interest of

at least two per cent per annum to the

debenture holder, over and above the agreed

coupon rate, till the execution of the trust

deed.

Delay in Listing: The Issuer shall complete

all the formalities and seek listing permission

within 15 days from the Deemed Date of

Allotment in the case where investor includes

foreign investor and 20 days where investors

only include domestic investor. In case of

delay in listing of the debt securities beyond

20 days from the deemed date of allotment,

the Company will pay penal interest of at

least 1 % p.a. over the coupon rate from the

expiry of 30 days from the deemed date of

allotment till the listing of such debt

securities to the investor.

In case the Debentures issued to the SEBI

registered FIIs / sub-accounts of FIIs/FPIs are

not listed within 15 days of issuance to the

SEBI registered FIIs / sub-accounts of

FIIs/FPIs, for any reason, then the FII/sub-

account of FII/FPIs shall immediately

dispose of the Debentures either by way of

sale to a third party or to the Issuer and in case

of failure to list the Debentures issued to

SEBI registered FIIs/ sub-accounts of

FIIs/FPIs within 15 days of issuance, the

Issuer shall immediately redeem / buyback

such Debentures from the FIIs/sub-accounts

of FIIs/FPIs.

In the event of delay in execution of

Debenture Trust Deed within ninety days of

Deemed closure of the Issue, the Company

shall refund the subscription with the Coupon

Rate or pay penal interest at the rate of 2.00%

p.a. over the Coupon Rate till these

conditions are complied with, at the option of

the Debenture holder(s). OR

Where the Company fails to execute the trust

deed within three months from the closure of

the issue, the Company shall pay interest of

at least two per cent per annum to the

debenture holder, over and above the agreed

coupon rate, till the execution of the trust

deed.

Events of

Default

As specified in the Debenture Trust Deed As specified in the Debenture Trust Deed

Remedies

As mentioned in Debenture Trust Deed As mentioned in Debenture Trust Deed

Cross Default N.A. N.A.

Trustee SBICAP Trustee Company Limited SBICAP Trustee Company Limited

Registrars Link Intime India Private Limited Link Intime India Private Limited

Role and

Responsibiliti

es of

The Trustees shall protect the interest of the

Debenture holders as stipulated in the

Debenture Trust Deed and in the event of

default by MRPL in regard to the timely

The Trustees shall protect the interest of the

Debenture holders as stipulated in the

Debenture Trust Deed and in the event of

default by MRPL in regard to the timely

95

Debenture

Trustee

payment of interest and repayment of

principal and shall take necessary action at

the cost of MRPL. No Debenture holder shall

be entitled to proceed directly against MRPL

unless the Trustees, having become so bound

to proceed, fail to do so.

payment of interest and repayment of

principal and shall take necessary action at

the cost of MRPL. No Debenture holder shall

be entitled to proceed directly against MRPL

unless the Trustees, having become so bound

to proceed, fail to do so.

Conditions

precedent to

subscription

of Debentures

The subscription from investors shall be

accepted for allocation and allotment by the

Issuer subject to the following:

1. Rating letters from ICRA and CRISIL

not being more than one month old from

the issue opening date;

2. Seek a written consent letter from the

Trustees conveying their consent to act

as Trustees for the Debenture holders;


Registrar & Transfer Agent conveying

their consent for the issue

4. Making an application to BSE and / or

NSE for seeking their in-principle

approval for listing of Debentures.

5. Certified copies of Board Resolutions

6. Signed Private Placement Offer Letter

The subscription from investors shall be

accepted for allocation and allotment by the

Issuer subject to the following:

1. Rating letters from ICRA and CRISIL

not being more than one month old from

the issue opening date;


Trustees conveying their consent to act

as Trustees for the Debenture holders;


Registrar & Transfer Agent conveying

their consent for the issue

4. Making an application to BSE and / or

NSE for seeking their in-principle

approval for listing of Debentures.

5. Certified copies of Board Resolutions

6. Signed Private Placement Offer Letter

Conditions

subsequent to

subscription

of Debentures

The Issuer shall ensure that the following

documents are executed/ activities are

completed as per time frame mentioned

elsewhere in this Private Placement Offer

Letter:

1. Ensuring that the payment made for

subscription to the Debentures is from

the bank account of the person/ entity

subscribing to the Debentures and keep

record of the bank accounts from where

payments for subscriptions have been

received and in case of subscription to

the Debentures to be held by joint

holders, monies are paid from the bank

account of the person whose name

appears first in the Application Form;

2. Maintaining a complete record of private

placement offers in Form PAS-5 and filing

the such record along with Private

Placement Offer Letter in Form PAS-4

with the Registrar of Companies, National

Capital Territory of Delhi & Haryana with

fee as provided in Companies

(Registration Offices and Fees) Rules,

2014 and with Securities and Exchange

Board of India, within a period of thirty

(30) days of circulation of the Private

Placement Offer Letter;

3. Filing a return of allotment of

Debentures with complete list of all

The Issuer shall ensure that the following

documents are executed/ activities are

completed as per time frame mentioned

elsewhere in this Private Placement Offer

Letter:

1. Ensuring that the payment made for

subscription to the Debentures is from

the bank account of the person/ entity

subscribing to the Debentures and keep

record of the bank accounts from where

payments for subscriptions have been

received and in case of subscription to

the Debentures to be held by joint

holders, monies are paid from the bank

account of the person whose name

appears first in the Application Form;

2. Maintaining a complete record of private

placement offers in Form PAS-5 and filing

the such record along with Private

Placement Offer Letter in Form PAS-4

with the Registrar of Companies, National

Capital Territory of Delhi & Haryana with

fee as provided in Companies


2014 and with Securities and Exchange

Board of India, within a period of thirty

(30) days of circulation of the Private

Placement Offer Letter;

3. Filing a return of allotment of

Debentures with complete list of all

96

Debenture holders in Form PAS-3 under

Section 42(9) of the Companies Act,

2013, with the Registrar of Companies,

National Capital Territory of Delhi &

Haryana within fifteen (15) days of the

Deemed Date of Allotment along with

fee as provided in the Companies


2014;

4. The credit of Demat account(s) of the

allottee(s) by number of Debentures

allotted within the stipulated time period

from the Deemed Date of Allotment;

5. Obtaining listing permission from stock

exchanges within 15 days of Issue

closure date in case where investors

include foreign investor and with 20

days in case of domestic investors.;

6. Submission of Debenture Trust Deed

with BSE and NSE within five working

days of execution of the same for

uploading on their website.

7. Filing of Form PAS-4 and PAS- 5 with

SEBI, if applicable.

Besides, the Issuer shall perform all

activities, whether mandatory or otherwise,

as mentioned elsewhere in this Private

Placement Offer Letter.

Debenture holders in Form PAS-3 under

Section 42(9) of the Companies Act,

2013, with the Registrar of Companies,

National Capital Territory of Delhi &

Haryana within fifteen (15) days of the

Deemed Date of Allotment along with

fee as provided in the Companies


2014;

4. The credit of Demat account(s) of the

allottee(s) by number of Debentures

allotted within the stipulated time period

from the Deemed Date of Allotment;

5. Obtaining listing permission from stock

exchanges within 15 days of Issue

closure date in case where investors

include foreign investor and with 20

days in case of domestic investors.;

6. Submission of Debenture Trust Deed

with BSE and NSE within five working

days of execution of the same for

uploading on their website.

7. Filing of Form PAS-4 and PAS- 5 with

SEBI, if applicable.

Besides, the Issuer shall perform all

activities, whether mandatory or otherwise,

as mentioned elsewhere in this Private


Mode of

Subscription

Successful bidders are required to do the

funds pay-in from their same bank account

which is updated by them in the BSE Bond –

EBP Platform while placing the bids. In case

of mismatch in the bank account details

between BSE Bond -EBP Platform and the

bank account from which payment is done by

the successful bidder, the payment will be

returned back.

Payment should be made by the deadline

specified by the BSE. Successful bidders

should do the funds pay-in to the bank

accounts of the clearing corporation of the

relevant Exchanges as further set out under

“Particulars of the Offer’ Section of the

Private Placement Offer Letter.

Successful bidders are required to do the

funds pay-in from their same bank account

which is updated by them in the BSE Bond –

EBP Platform while placing the bids. In case

of mismatch in the bank account details

between BSE Bond -EBP Platform and the

bank account from which payment is done by

the successful bidder, the payment will be

returned back.

Payment should be made by the deadline

specified by the BSE. Successful bidders

should do the funds pay-in to the bank

accounts of the clearing corporation of the

relevant Exchanges as further set out under

“Particulars of the Offer’ Section of the

Private Placement Offer Letter.

Mode of

Settlement

Mechanism

Settlement of the Issue will be done through

Indian Clearing Corporation Limited (ICCL)

and the account details are given in the

section on Payment Mechanism of this

Private Placement Offer Letter

Settlement of the Issue will be done through

Indian Clearing Corporation Limited (ICCL)

and the account details are given in the

section on Payment Mechanism of this

Private Placement Offer Letter

Allocation

Option

Uniform Yield Uniform Yield

97

Governing

Law and

Jurisdiction

The Debentures are governed by and shall be

construed in accordance with the existing

laws of India. Any dispute arising thereof

shall be subject to the jurisdiction of courts of

Mangaluru.

The Debentures are governed by and shall be

construed in accordance with the existing

laws of India. Any dispute arising thereof

shall be subject to the jurisdiction of courts of

Mangaluru.

* As per the SEBI circular no. CIR/IMD/DF-1/122/2016 dated November 11, 2016, if the interest payment date falls on a

holiday or Sunday, the payment may be made on the following working day without including the interest for holiday or Sunday and the dates of the future coupon payments would be as per the schedule originally stipulated at the time of issuing the security. The said Provision shall be applicable for the debt securities issued, in accordance with SEBI (Issue and Listing of Debt Securities) Regulations, 2008, on or after January 01, 2017.

Illustration of Debenture Cash Flows for Series-1A

Company Mangalore Refinery and Petrochemicals Limited

Face Value (per security) ₹ 10,00,000/-

Date of Allotment January 13, 2020

Tenure 3 years and 3 months and 1 day

Coupon Rate [●]

Frequency of the Interest Payment with specified

dates

First interest payment on January 13, 2021,

thereafter January 13 of every mumbairy year and

final redemption payment on April 14, 2023.

Day Count Convention Actual/Actual

Particulars Original Date Revised Date No. of

Days Cash Flow

1st Coupon Wednesday, January 13, 2021 Wednesday, January 13, 2021 366 [●]

2nd Coupon Thursday, January 13, 2022 Thursday, January 13, 2022 365 [●]

3rd Coupon Friday, January 13, 2023 Friday, January 13, 2023 365 [●]

4th Coupon Friday, April 14, 2023 Friday, April 14, 2023 91 [●]

Principal Friday, April 14, 2023 Friday, April 14, 2023

TOTAL: - [●]

Illustration of Debenture Cash Flows for Series-1B

Company Mangalore Refinery and Petrochemicals Limited

Face Value (per security) ₹ 10,00,000/-

Date of Allotment January 13, 2020

Tenure 10 years 2 months and 30 days

Coupon Rate [●]

Frequency of the Interest Payment with specified

dates

First interest payment on January 13, 2021,

thereafter January 13 of every year and final

redemption payment on April 12, 2030.

Day Count Convention Actual/Actual

98

Particulars Original Date Revised Date

No. of

Days Cash Flow

1st Coupon Wednesday, January 13, 2021 Wednesday, January 13, 2021 366 [●]

2nd Coupon Thursday, January 13, 2022 Thursday, January 13, 2022 365 [●]

3rd Coupon Friday, January 13, 2023 Friday, January 13, 2023 365 [●]

4th Coupon Saturday, January 13, 2024 Monday, January 15, 2024 365 [●]

5th Coupon Monday, January 13, 2025 Monday, January 13, 2025 366 [●]

6th Coupon Tuesday, January 13, 2026 Tuesday, January 13, 2026 365 [●]

7th Coupon Wednesday, January 13, 2027 Wednesday, January 13, 2027 365 [●]

8th Coupon Thursday, January 13, 2028 Thursday, January 13, 2028 365 [●]

9th Coupon Saturday, January 13, 2029 Monday, January 15, 2029 366 [●]

10th Coupon Sunday, January 13, 2030 Monday, January 14, 2030 365 [●]

11th Coupon Friday, April 12, 2030 Friday, April 12, 2030 365 [●]

Principal Friday, April 12, 2030 Friday, April 12, 2030 89 [●]

TOTAL: - [●]

99

There has been no material development which shall impact the present issue of the private placement

of Debentures.

SECTION XIII MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE

100

SECTION XIV

CREDIT RATING & RATIONALE THEREOF

CRISIL Limited (“CRISIL”) vide letter dated December 30, 2019, has provided credit rating of “CRISIL

AAA/Stable” to the long-term borrowing programme of ₹ 3,000 crore. Instruments with this rating are considered

to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry

the lowest credit risk. A copy of rating letter from CRISIL is enclosed elsewhere in this Private Placement Offer

Letter.

ICRA Limited (“ICRA”) vide letter dated December 30, 2019, has assigned a credit rating of “ICRA AAA

Stable” to the long-term borrowing programme of MRPL aggregating to ₹ 3,000 crore. Instruments with this

rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such

instruments carry the lowest credit risk. A copy of rating letter from ICRA is enclosed elsewhere in this Private


Other than the CREDIT ratings mentioned hereinabove, MRPL has not sought any other CREDIT rating from

any other CREDIT rating agency(ies) for the Debentures offered for subscription under the terms of this Private


The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own

decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agencies and

each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at

any point of time in the future. The rating agencies have the right to suspend, withdraw the rating at any time on

the basis of new information etc.

101

SECTION XV

NAME OF DEBENTURE TRUSTEE

In accordance with the provisions of Section 71 of the Companies Act, 2013, Companies (Share Capital and

Debentures) Rules 2014 and Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993,

MRPL has appointed SBICAP TRUSTEE COMPANY LIMITED to act as Debenture Trustee (“Debenture

Trustee”) for and on behalf of the holder(s) of the Debentures. The address and contact details of the Trustees are

as under:


Registered Office: 202, Maker Tower 'E', Cuffe Parade, Mumbai - 400 005.

Corp Office: Apeejay House, 6th Floor, 3, Dinshaw Wachha Road, Churchgate, Mumbai - 400 020

Tel: +91 22 43025555

Facsimile: +91 22 43025500

Contact Person: Ms. Savitri Yadav



A copy of the letter dated November 15, 2019, from SBICAP Trustee Company Limited conveying their consent

to act as Debenture Trustee for the current issue of Debentures, is enclosed elsewhere in this Private Placement

Offer Letter.

MRPL hereby undertakes that the rights of the Debenture holders will be protected as per the agreement/deed

executed/to be executed between MRPL and the Debenture Trustee. The Debenture Trustee Agreement/Deed

shall contain such clauses as may be prescribed under Section 71 of the Companies Act, 2013, Companies (Share

Capital and Debentures) Rules, 2014 and those mentioned in Schedule IV of the Securities and Exchange Board

of India (Debenture Trustees) Regulations, 1993. Further, the Debenture Trustee Agreement/Deed shall not

contain any clause which has the effect of (i) limiting or extinguishing the obligations and liabilities of the

Debenture Trustee or MRPL in relation to any rights or interests of the holder(s) of the Debentures; (ii) limiting

or restricting or waiving the provisions of the SEBI Act; SEBI Debt Regulations and circulars or guidelines issued

by SEBI; and (iii) indemnifying the Trustees or MRPL for loss or damage caused by their act of negligence or

commission or omission.

The Debenture holder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to

the Debenture Trustee or any of their agents or authorized officials to do all such acts, deeds, matters and things

in respect of or relating to the Debentures as the Debenture Trustee may in their absolute discretion deem necessary

or require to be done in the interest of the holder(s) of the Debentures. Any payment made by MRPL to the

Debenture Trustee on behalf of the Debenture holder(s) shall discharge MRPL pro tanto to the Debenture

holder(s). The Debenture Trustee shall protect the interest of the Debenture holders in the event of default by

MRPL in regard to the timely payment of interest and repayment of principal and shall take necessary action at

the cost of MRPL. No Debenture holder shall be entitled to proceed directly against MRPL unless the Debenture

Trustee, having become so bound to proceed, fail to do so. In the event of MRPL defaulting in payment of interest

on Debentures or redemption thereof, any distribution of dividend by MRPL shall require the approval of the

Debenture Trustee.

102

SECTION XVI

STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED

The Fixed rate Unsecured Fixed Rate, Rated, Taxable, Redeemable, Non-Convertible Debentures (Series-1) are

proposed to be listed on the Wholesale Debt Market (WDM) segment of the BSE and NSE. The Company has

obtained the in-principle approval of BSE and NSE for the listing of the Debentures. MRPL shall make an

application to the BSE and NSE to list the Debentures to be issued and allotted under this Private Placement Offer

Letter and complete all the formalities relating to the listing of the Debentures within the stipulated time (as per

applicable law) from the date of closure of the Issue. If the permission to list and trade the Debentures is not

granted by the stock exchange, our Company shall forthwith repay, without interest, all such amounts of money

received from the Applicant in pursuance of this Private Placement Offer Letter, Section 42 of Companies Act,

2013 and other applicable provisions of law. If the default is made, our Company and every officer in default will

liable to fine as prescribed in Section 42 of the Companies Act, 2013 and other applicable provisions of the law.

In connection with the listing of Debentures with BSE and NSE, MRPL hereby undertakes that:

• It shall comply with conditions of listing of Debentures as may be specified in the Listing Agreement with

BSE and NSE.

• Ratings obtained by MRPL shall be periodically reviewed by the CREDIT rating agencies and any revision

in the rating shall be promptly disclosed by MRPL to BSE and NSE.

• Any change in rating shall be promptly disseminated to the holder(s) of the Debentures in such manner as

BSE and NSE may determine from time to time.

• MRPL, the Debenture Trustee and BSE and NSE shall disseminate all information and reports on

Debentures including compliance reports filed by MRPL and the Trustees regarding the Debentures to the

holder(s) of Debentures and the general public by placing them on their websites.

• Debenture Trustee shall disclose the information to the holder(s) of the Debentures and the general public

by issuing a press release in any of the following events:

(i) default by MRPL to pay interest on Debentures or redemption amount;

(ii) revision of rating assigned to the Debentures;

• The information referred to in para above shall also be placed on the websites of the Trustees, MRPL and

BSE and NSE.

103

(₹ in crore)

Particulars Pre-Issue* Post-Issue#

Debt

Short Term Debt 4,856.76 4,856.76

Long Term Debt 4,274.28 5,774.28

Total Debt (A) 9,131.04 10,631.04

Equity

Share Capital 1,752.66 1,752.66

Reserves & Surplus 8,974.37 8,974.37

Total Equity (B) 10,727.03 10,727.03

Term Debt / Equity (A/B) 0.85 0.99

* Pre-issue figures are audited figures as on March 31, 2019.

Note: 1. We have not considered any debt other than proposed issue after March 31, 2019, for calculation of post-issue debt-

equity ratio.

2. We have considered that the entire issue has been subscribed for the purpose of the above calculation.

.

SECTION XVII

DEBT EQUITY RATIO (On standalone basis)

104

Neither the Issuer nor any of the current directors of the Issuer have been declared as a wilful defaulter.

Name of the

bank

declaring

entity to be

a wilful

defaulter

Year in

which entity

is declared

as wilful

defaulter

The

outstanding

amount at

the time of

declaration

Name of the

entity

declared as

wilful

defaulter

Steps taken

from the

removal

from the list

of wilful

defaulters

Other

disclosures

Any other

disclosure

Nil Nil Nil Nil Nil Nil Nil

SECTION XVIII

WILFUL DEFAULTER

105

MRPL hereby confirms that:

a) The main constituents of MRPL’s borrowings have been in the form of borrowings from Banks and

Financial Institutions, CP etc.

b) MRPL has been servicing all it's principal and interest liabilities on time and there has been no instance

of delay or default since inception.

c) MRPL has neither defaulted in repayment/ redemption of any of its borrowings nor effected any kind of

rollover against any of its borrowings in the past.

SECTION XIX

SERVICING BEHAVIOUR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS

106

SECTION XX

UNDERTAKING REGARDING COMMON FORM OF TRANSFER

The Debentures shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the

NSDL/CDSL/Depository Participant of the transferor/ transferee and any other applicable laws and rules notified

in respect thereof. The normal procedure followed for transfer of securities held in the dematerialized form shall

be followed for transfer of these Debentures held in electronic form. The seller should give delivery instructions

containing details of the buyer’s DP account to his depository participant. The transferee(s) should ensure that the

transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/

redemption will be made to the person, whose name appears in the records of the Depository. In such cases,

claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with MRPL.

107

SECTION XXI

MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE

ISSUER

By very nature of its business, MRPL is involved in a large number of transactions involving financial obligations

and therefore it may not be possible to furnish details of all material contracts and agreements involving financial

obligations of MRPL. However, the contracts referred below (not being contracts entered into in the ordinary

course of the business carried on by MRPL) which are or may be deemed to be material have been entered into

by MRPL. Copies of these contracts together with the copies of documents referred below may be inspected at

the Registered Office of MRPL between 2 pm to 5 pm on any working day until the issue closing date.

MATERIAL DOCUMENTS

1. Memorandum and Articles of Association of the Company, as amended to date.

2. Certificate of Incorporation

3. Copy of shareholders resolution obtained for overall borrowing limit.

4. Credit Rating letters issued by ICRA and CRISIL respectively.

5. Auditor’s Report and standalone financial statements prepared under IND-AS for the financial year

ending March 31, 2019, 2018, 2017

6. Annual Report of the Company for the last three Fiscals (FY 2019, FY 2018, FY 2017)

7. Board Resolutions dated November 4,20199 authorizing the issue of Debentures offered on a private

placement basis.

8. Shareholders’ Resolution dated November 4, 2019, under Section 42 of the Companies Act, 2013

authorizing issue of Debentures offered on a private placement basis.

9. Letter of consent from Trustee dated November 15, 2019, for acting as Trustees for and on behalf of the

holder(s) of the Debentures.

10. Tripartite Agreement between Registrar, NSDL and MRPL for the issue of Debentures in Dematerialized

form.

11. Tripartite Agreement between Registrar, CDSL and MRPL for the issue of Debentures in Dematerialized

form.

12. Debenture Trustee Agreement between the Company and Debenture Trustee.

13. Debenture Trust Deed in favour of Trustee.

108

SECTION XXII

DECLARATION

The Company undertakes that this Private Placement Offer Letter contains full disclosures in conformity with Form PAS-4 prescribed under Section 42 and rule 14 of Companies (Prospectus and Allotment of Securities) Rules, 2014, Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 6, 2008, as amended, Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular no. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012, as amended, Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2014 issued vide circular no. LAD-NRO/GN/2013-14/43/207 dated January 31, 2014, as amended and SEBI Letter no. SEBI/DDHS/TD/OW/P/2019/32928/1 dated December 11, 2019 received vide DIPAM OM No. 3/2/2018-DIPAM-II (Vol.V) dated December 18, 2019.

The Company has complied with the provisions of the Companies Act, 2013 and the rules made thereunder. It is

to be distinctly understood that compliance with the Companies Act, 2013 and the rules do not imply that payment

of interest or repayment of Debentures, is guaranteed by the Central Government.

The Company undertakes that the monies received under the Issue shall be utilized only for the purposes and

‘Objects of the Issue’ indicated in the Private Placement Offer Letter.

The Issuer accepts no responsibility for the statement made otherwise than in the Private Placement Offer Letter or in any other material issued by or at the instance of the Issuer and that anyone who places reliance on any other source of information would be doing so at his own risk. The undersigned has been authorized by the Board of Directors of the Company vide resolution dated November 4, 2019, to sign this Private Placement Offer Letter and declare that all the requirements of Companies Act, 2013 and the rules made thereunder in respect of the subject matter of this form and matters incidental thereto have been complied with. Whatever is stated in this Private Placement Offer Letter and, in the attachments, thereto is true, correct and complete and no information material to the subject matter of this form has been suppressed or concealed and is as per the original records maintained by the Promoter subscribing to the Memorandum of Association and Articles of Association of the Company. It is further declared and verified that all the required attachments have been completely, correctly and legibly attached to this Private Placement Offer Letter.

For and on behalf of the Board of Directors of MRPL

Dinesh Ranjan Mishra

Company Secretary and Compliance Officer

Place: New Delhi

Date: January 9, 2020

109

SECTION XXIII

ANNEXURES

A. CONSENT LETTER OF TRUSTEE AND REGISTRAR

Annexed as Annexure – I

B. CREDIT RATING LETTERS & RATING RATIONALE

Annexed as Annexure-II

C. COPY OF SPECIAL RESOLUTION DATED AUGUST 3, 2019, AND BOARD RESOLUTION

DATED NOVEMBER 4, 2019

Annexed as Annexure- III

D. HALF YEARLY LIMITED REVIEW ENDED ON SEPTEMBER 30, 2019

E. APPLICATION FORM ATTACHED SEPARATELY

Date : 18.11.2019 To Mangalore Refinery and Petrochemicals Limited Scope Complex, 7th Floor, Core -8, Lodhi Road, New Delhi - 110003 Dear Sir/Madam, Sub.: Consent to act as Registrar to the Proposed issue of “secured / unsecured Non - Convertible Taxable Debenture up to maximum of Rs. 3,000 Crore in one or more trenches on private placement basis We refer to the subject issue and hereby accept our appointment as ‘Registrar’ for Electronic Connectivity Provider to issue of secured / unsecured Non - Convertible Taxable Debenture up to maximum of Rs. 3,000 Crore in one or more trenches on private placement basis and give our consent to incorporate our name as “Registrar to the Issue” in the offer documents.

Our Permanent SEBI Registration No.: INR000004058.

Ratings

MANREFII23(1033 INCD/112920 1911December 30, 2019

"Is. I'omil:l .hspalDireclor Fin.lllec:\Iangalore Refinery and Petrorhl'mrrals Limit('dKuthcthur P.O.,Via Katipalb.Mangalore - 575030

Dear Ms. I'omila Jaspal.

CRISILAn S&P Global Company

He: CRISIL R;ltin~ for the Rs.3lJlJIJCruTe ;'\oll-Comcrlible Debenture of Man~alore Refinl"T)' andl'l'trnchelllical.~ Limited

All ratings assigned by CRISIL are kept under continuous surveilhmcc and review.Please refer to our rating letters tbled November 29. 2019 bearing Ref. no.: MANREFI/236033INCDIl1292019

Please find in the table below the rating outstamling for your company.

S.No.I

InstrumentNon-Convertible Debentures

Rat"d Amount Rs. ill Crore3000

Ratin OutstandillCRISIL AAA/Stable

In the event of your company nol making the issue within a period of 180 days from the above date, or in theevent of any change in the si/e or structure of your proposed issue. a fresh letter of revalidation from CRISILwill be necessary.

As per our Rating Agreemenl. CRISIL would disseminate the rating along with outlook through its publicationsand other media, and keep the rating along with outlook under surveillance for the life of the instrument.CRISIL reserves the right to withdraw, or revise the rating I outlook assigned to the captioned instrument at anytime, on the basis of new information, or unavailability of inlormation, or other circumstances which CRISILbelieves may have an impact on the rating.

As per the latcst SEBI circuf<lr (referclJ(;e number: CIRtI~lD!DFII7/2013; dated October 22, 2013) oncentralized database for corporate bomlsldehentures. you arc required to providc international securitiesidentification number (ISIN; <Jlong \vith the rderence number ami the date of the r<Jting letter) of allbond/debenture issuances made against this rating Iener to us. The circular also requires you to share thisinformation with us within 2 day .• alier the allotmcnt of the lSIN. Wc rcquest you to mail us <111the nccess<lryand rclevant information ilt debtisslle@.;crisi1.com. 1;his will enable CRISIL to verify and confirm to thedepositories, including NSDL and CDSL, the ISIN (!ctails of debt rated by us. liS required by SEBI. Feel free tocontact us for <lnyclarilicatiuns you may havc at Jehtissue(U;crisil.colll

Should you require any c1"rilicatiolls. please feel free to get in touch with us.

With warm regards,

¥.W'",........Yours sincerely.

I~"")l "/lA-JL ...,-))-",::-~Manish Kumar GuptaSenior Director - CRISIL Ratings

.;;:~:-----.•.•-<;~ ••..~.

"-NivcJit;1 ShibuAssociate Director - CRISIL Ratings

"ACC"R""'S;;IL;-;"",C.,oOgC,o.'n~;;;;,,0c'iR"'''ST.IL-;.,C,CoC,;;;,.Oo;;,ooop"m"'oOo"o;;;o'"mo.",""o.;;"n''''''':::'o;;,",'''m;;.'',",oPo,c,,;;oo.;;oI'o;;;,","n;;.Oo;;'''lig;;,'',O"ooo,cooO"d;;.,'',;;no.c,o,",.o,",o,,;;,"/OCm".;;o;;;,C,oo;;'"does not cOllstitute an audit of the rared enMy by CR!SIL. CRtS!L riJlmgs are based on information provided by /he issuer or obtainedby CRISIL from sources it considers reliable. CRISIL does not guarantee /lIe completeness or iJccumcy of the information on which therating is based. A CRISIL raring is not a recommendatl011 10 buy, se/t. or hold tile raled instrument; it does not comment on the marketprice or suitability for a par/lcular investor. All CR/SIL ralmgs are under surveJllance. CR/SIL or I/S associates may have olhercommercia/transaclions wllh Ihe company/entity Rillmgs are revised as iJnd when circumstances so wa"anl. CRIStL IS not responsiblefor any errors and especially slates Ihat JI has no fin<1nClala;~ loin.1ite>ljver10 Ihe subSCflbers / users / transm>tters / dJSlfPbulorsofthis product. CRtSIL Ralings fiJlmg c"'ena ale aViJi/ab!e wlthOllt charge 10 tile pllblic on Ihe CRISIL web site, www.crisil.com For thelilIes! ratmg informiJtion on any inslfllrr(lotp:d,&'JJ 1:dmltlas"l'lctl'MJl!blU~'1<V8'lMFJ,~eI2G61<stomer Service HelpdesJ<al 1800.267.

CRISIL HOl,lse, Central Allenue, Hiranandani 81,1siness Park, Powai, Ml,lmbai - 400076. Phone: +91 2233423000 I Fax: +91 22 4040 5800www.crlsll.com

mailto:debtisslle@.;crisi1.com.

http://www.crisil.com

http://www.crlsll.com

12/2/2019 Rating Rationale

https://www.crisil.com/mnt/winshare/Ratings/RatingList/RatingDocs/Mangalore_Refinery_and_Petrochemicals_Limited_November_29_2019_RR.… 1/3

Rating RationaleNovember 29, 2019 | Mumbai

Mangalore Refinery and Petrochemicals Limited'CRISIL AAA/Stable' assigned to NCD

Rating Action

Rs.3000 Crore Non Convertible Debentures CRISIL AAA/Stable (Assigned)Corporate Credit Rating CCR AAA/Stable (Reaffirmed)

1 crore = 10 millionRefer to annexure for Details of Instruments & Bank Facilities

Detailed RationaleCRISIL has assigned its 'CRISIL AAA/Stable' rating to the Non-Convertible Debentures of Mangalore Refinery andPetrochemicals Limited (MRPL). CRISIL has also reaffirmed its corporate credit rating (CCR) 'CCR AAA/Stable'.

The rating continues to reflect the strong operational, financial and managerial support from parent, Oil and Natural GasCorporation Ltd (ONGC) and its favourable business profile. These strengths are partially offset by the company's moderatebut improving financial risk profile and exposure to risks related to volatility in crude oil prices.

Analytical ApproachThe rating centrally factors in the strategic importance of the company to, and strong support from its parent, ONGC. CRISILhas taken a consolidated view of MRPL and ONGC Mangalore Petrochemicals Ltd (OMPL; rated CRISIL A1+). MRPL holdsa majority stake in OMPL and both companies have operational synergies, common management control, and operate inthe same line of business. MRPL increased its stake in OMPL to 51% in February 2015 from 3% as on March 31, 2014,through the acquisition of a minority stake and then subscription to the rights issue. OMPL's merger with MRPL is underprocess. The merger has already been approved by MRPL's board of directors and the request is under consideration bythe Ministry of Petroleum and Natural Gas.

Please refer Annexure - List of entities consolidated , which captures the list of entities considered and their analytical treatment ofconsolidation.

Key Rating Drivers & Detailed DescriptionStrengths:* Strong support from parent: MRPL benefits significantly from the operational, financial, and managerial support ofparent, ONGC, which owns a 71.6% stake in the company. The company is critical to ONGC's goal of becoming anintegrated oil and gas entity with presence in both exploration and refining. MRPL's majority stake in OMPL increases itsstrategic importance to ONGC, which aims to be the leader in the oil and gas value chain. * Favourable business profile: MRPL has a high Nelson complexity index (NCI) of 9.78 (refineries with high NCI have the necessary flexibility to process avariety of crude oils and can record high value addition). High operating efficiency enables processing of sour crude andoptimises distillation yield. Capacity utilisation has been 100% over the years and GRMs higher than other public sectorstandalone refiners. The GRMs reported for fiscal 2019 have however weakened to $4.06/bbl (as compared to $7.54/bbl reported for fiscal2018), mainly on account of heightened volatility in the crude oil prices and lower product cracks realised. Operatingperformance for H1FY20 further weakened due to temporary disruption in operations caused by scarcity in water supply(impacted operations in Q1FY20) and occurrence of landslide caused by heavy rainfall (impacted operations in Q2FY20).Operations have however resumed in October 2019. Weaknesses:* Moderate financial risk profile: Capital structure remains moderate with gearing of 1.58 times as on March 31, 2019.Debt coverage indicators have weakened in fiscal 2019 with adjusted interest coverage ratio of 2.55 times (as compared to5.13 times in fiscal 2018) and net cash accruals to total debt of 0.05 times (as compared to 0.10 times in fiscal 2018). Theweakening of the financial risk profile has mainly been on account of recent decline in the operating performance of thecompany. The company has debt repayments of around Rs 1,000-1,200 crores per annum in H2FY20 and fiscal 2021,which are partially expected to be refinanced. * Exposure to risks related to volatility in crude oil prices: Crude oil prices have fluctuated in the past few years: theyincreased to around $86 per barrel (bbl) in October 2018 and reduced to $57 per bbl during December 2018; later settling to$67 per bbl as on year end. Such volatility in crude oil prices resulted in substantial inventory losses, thus hamperingoperating performance. Recent increase in crude oil rates led to larger working capital requirement. MRPL imports around80% of its crude oil requirement. Large import dependence exposes MRPL to volatility in foreign exchange rates.

Liquidity SuperiorThe parental support received from ONGC benefits the financial flexibility of MRPL, enabling it to access funding sources atattractive rates. On an average, MRPL generates healthy cash accruals of Rs 1000 crores, although performance hasweakened recently. MRPL also has access to fund based limits Rs. 900 crores, with minimal utilisation. The company hasrepayment obligations of around Rs 1,000 - 1,200 crores per annum approximately in H2FY20 and fiscal 2021. CRISILbelieves MRPL will have to partially depend on refinancing its repayment obligations.

Outlook: StableCRISIL believes MRPL will remain strategically important to, and will continue to receive operational, managerial, andfinancial support from parent, ONGC.

Rating sensitive factors Downward factors:* Deterioration in credit profile of ONGC* Sustained deterioration in the GRMs reported to below $4/bbl

About the CompanyMRPL, a standalone refinery, is a 71.6% subsidiary of ONGC. The refinery is located near Mangalore port, on the westcoast of India. In fiscal 2012, MRPL's nameplate capacity increased to 15 million tonne per annum with commissioning ofthe crude and vacuum distillation units of its Phase-III expansion project. OMPL's plant, commissioned in fiscal 2015, hascapacity to produce around 920 kilo tonne per annum (ktpa) of paraxylene and around 280 ktpa of benzene, along withother by-products. The plant has one of the largest paraxylene manufacturing capacities in India. It will utilise feedstock(naphtha and aromatic streams) from MRPL's refinery adjacent to the plant. OMPL's entire capacity has beencommissioned and utilisation is ramping up.

For the six months ended September 30, 2019, MRPL incurred a loss of Rs 1559 crore on revenue of Rs 22,308 crore,against a loss reported of Rs 69 crore on revenue of Rs 29,718 crore for the corresponding period of the previous fiscal.

Key Financial Indicators - (Consolidated Financials)



Particulars Unit 2019 2018Revenue Rs crore 63,215 49,036Profit after tax (PAT) Rs crore 351 1,774PAT margin % 0.56 3.62Adjusted debt/adjusted networth Times 1.58 1.49Interest coverage Times 2.55 5.13

Any other information: Not applicable

Note on complexity levels of the rated instrument:CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are availableon www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider forinvestment. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)ISIN Name of instrument Date of

allotmentCoupon rate

(%)Maturity

dateIssue size

(Rs cr)Rating assigned

with outlook

NA Non-ConvertibleDebentures* NA NA NA 3000.0 CRISIL AAA/Stable

*Not yet placed Annexure - List of entities consolidated

Names of Entities Consolidated Extent of Consolidation Rationale for ConsolidationONGC Mangalore Petrochemicals Limited Full Business and financial linkages

Annexure - Rating History for last 3 Years

Current 2019 (History) 2018 2017 2016 Start

of2016

Instrument Type OutstandingAmount Rating Date Rating Date Rating Date Rating Date Rating Rating

-- CCR 0.00 CCRAAA/Stable 28-03-19 CCR

AAA/Stable 29-03-18 CCRAAA/Stable 20-03-17 CCR

AAA/Stable 14-04-16 CCRAAA

CCRAAA

NonConvertibleDebentures

LT 0.0031-12-19

CRISILAAA/Stable -- -- -- -- --

All amounts are in Rs.Cr.

Links to related criteriaCRISILs Approach to Financial RatiosRating criteria for manufaturing and service sector companiesRating Criteria for Petrochemical IndustryCRISILs Criteria for ConsolidationCriteria for Notching up Stand Alone Ratings of Companies based on Parent Support

For further information contact:Media Relations Analytical Contacts Customer Service Helpdesk

Saman KhanMedia RelationsCRISIL LimitedD: +91 22 3342 3895B: +91 22 3342 [email protected]

Naireen AhmedMedia RelationsCRISIL LimitedD: +91 22 3342 1818B: +91 22 3342 [email protected]

Sachin GuptaSenior Director - CRISIL Ratings CRISIL LimitedD:+91 22 3342 [email protected]

Nitesh JainDirector - CRISIL Ratings CRISIL LimitedD:+91 22 3342 [email protected]

Joanne GonsalvesRating Analyst - CRISIL Ratings CRISIL LimitedD:+91 22 4254 4071 [email protected]

Timings: 10.00 am to 7.00 pmToll free Number:1800 267 1301

For a copy of Rationales / Rating Reports:[email protected] For Analytical queries:[email protected]

http://www.crisil.com/complexity-levels

http://www.crisil.com/Ratings/SectorMethodology/MethodologyDocs/criteria/CRISILs%20Approach%20to%20Financial%20Ratios.pdf

http://www.crisil.com/Ratings/SectorMethodology/MethodologyDocs/criteria/Rating%20criteria%20for%20manufaturing%20%20and%20service%20sector%20companies.pdf

http://www.crisil.com/Ratings/SectorMethodology/MethodologyDocs/criteria/Rating%20Criteria%20for%20Petrochemical%20Industry.pdf

http://www.crisil.com/Ratings/SectorMethodology/MethodologyDocs/criteria/CRISILs%20Criteria%20for%20Consolidation.pdf

http://www.crisil.com/Ratings/SectorMethodology/MethodologyDocs/criteria/Criteria%20for%20Notching%20up%20Stand%20Alone%20Ratings%20of%20Companies%20based%20on%20Parent%20Support.pdf










Note for Media:This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper / magazine / agency. The rating rationale may beused by you in full or in part without changing the meaning or context thereof but with due credit to CRISIL. However, CRISIL alone has the sole right ofdistribution (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites, portals etc.

About CRISIL Limited

CRISIL is a leading agile and innovative, global analytics company driven by its mission of making markets function better. Weare India’s foremost provider of ratings, data, research, analytics and solutions. A strong track record of growth, culture ofinnovation and global footprint sets us apart. We have delivered independent opinions, actionable insights, and efficient solutionsto over 1,00,000 customers. We are majority owned by S&P Global Inc., a leading provider of transparent and independent ratings, benchmarks, analyticsand data to the capital and commodity markets worldwide. For more information, visit www.crisil.com

Connect with us: TWITTER | LINKEDIN | YOUTUBE | FACEBOOK

About CRISIL RatingsCRISIL Ratings is part of CRISIL Limited (“CRISIL”). We pioneered the concept of credit rating in India in 1987. CRISIL isregistered in India as a credit rating agency with the Securities and Exchange Board of India (“SEBI”). With a tradition ofindependence, analytical rigour and innovation, CRISIL sets the standards in the credit rating business. We rate the entire rangeof debt instruments, such as, bank loans, certificates of deposit, commercial paper, non-convertible / convertible / partiallyconvertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backedsecurities, partial guarantees and other structured debt instruments. We have rated over 24,500 large and mid-scale corporatesand financial institutions. CRISIL has also instituted several innovations in India in the rating business, including rating municipalbonds, partially guaranteed instruments and microfinance institutions. We also pioneered a globally unique rating service forMicro, Small and Medium Enterprises (MSMEs) and significantly extended the accessibility to rating services to a wider market.Over 1,10,000 MSMEs have been rated by us.

CRISIL PRIVACY CRISIL respects your privacy. We may use your contact information, such as your name, address, and email id to fulfil your request and service youraccount and to provide you with additional information from CRISIL.For further information on CRISIL’s privacy policy please visit www.crisil.com.

DISCLAIMER

This disclaimer forms part of and applies to each credit rating report and/or credit rating rationale that we provide (each a “Report”). For the avoidance of doubt, theterm “Report” includes the information, ratings and other content forming part of the Report. The Report is intended for the jurisdiction of India only. This Report doesnot constitute an offer of services. Without limiting the generality of the foregoing, nothing in the Report is to be construed as CRISIL providing or intending to provideany services in jurisdictions where CRISIL does not have the necessary licenses and/or registration to carry out its business activities referred to above. Access oruse of this Report does not create a client relationship between CRISIL and the user.

We are not aware that any user intends to rely on the Report or of the manner in which a user intends to use the Report. In preparing our Report we have not takeninto consideration the objectives or particular needs of any particular user. It is made abundantly clear that the Report is not intended to and does not constitute aninvestment advice. The Report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation ofany kind or otherwise enter into any deal or transaction with the entity to which the Report pertains. The Report should not be the sole or primary basis for anyinvestment decision within the meaning of any law or regulation (including the laws and regulations applicable in the US).

Ratings from CRISIL Rating are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell anysecurities / instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are onlycurrent as of the stated date of their issue. CRISIL assumes no obligation to update its opinions following publication in any form or format although CRISIL maydisseminate its opinions and analysis. CRISIL rating contained in the Report is not a substitute for the skill, judgment and experience of the user, its management,employees, advisors and/or clients when making investment or other business decisions. The recipients of the Report should rely on their own judgment and taketheir own professional advice before acting on the Report in any way.CRISIL or its associates may have other commercial transactions with the company/entity.

Neither CRISIL nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, “CRISIL Parties”) guaranteethe accuracy, completeness or adequacy of the Report, and no CRISIL Party shall have any liability for any errors, omissions, or interruptions therein, regardless ofthe cause, or for the results obtained from the use of any part of the Report. EACH CRISIL PARTY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIEDWARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSEOR USE. In no event shall any CRISIL Party be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequentialdamages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any partof the Report even if advised of the possibility of such damages.

CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities,securities or from obligors. CRISIL’s public ratings and analysis as are required to be disclosed under the regulations of the Securities and Exchange Board of India(and other applicable regulations, if any) are made available on its web sites, www.crisil.com (free of charge). Reports with more detail and additional information maybe available for subscription at a fee – more details about CRISIL ratings are available here: www.crisilratings.com.

CRISIL and its affiliates do not act as a fiduciary. While CRISIL has obtained information from sources it believes to be reliable, CRISIL does not perform an audit andundertakes no duty of due diligence or independent verification of any information it receives and / or relies in its Reports. CRISIL keeps certain activities of itsbusiness units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of CRISILmay have information that is not available to other CRISIL business units. CRISIL has established policies and procedures to maintain the confidentiality of certainnon-public information received in connection with each analytical process. CRISIL has in place a ratings code of conduct and policies for analytical firewalls and formanaging conflict of interest. For details please refer to: https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html

CRISIL’s rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For latest rating information on anyinstrument of any company rated by CRISIL you may contact CRISIL RATING DESK at [email protected], or at (0091) 1800 267 1301.

This Report should not be reproduced or redistributed to any other person or in any form without a prior written consent of CRISIL.

All rights reserved @ CRISIL

http://www.crisil.com/

https://twitter.com/CRISILLimited

http://www.linkedin.com/company/crisil

https://www.youtube.com/user/CRISILLimited

https://www.facebook.com/CRISILLimited

https://www.crisil.com/en/home/crisil-privacy-notice.html

http://www.crisilratings.com/

https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html

1

November 27, 2019

Mangalore Refinery and Petrochemicals Limited: Ratings assigned to NCDs and enhanced

bank lines

Summary of rating action

Instrument* Previous Rated Amount (Rs. crore)

Current Rated Amount (Rs. crore)

Rating Action

Issuer Rating - - [ICRA]AAA (Stable); outstanding Non-Convertible Debentures - 3,000.0 [ICRA]AAA (Stable); assigned Fund based Limits 4,500.0 6,000.0 [ICRA]AAA (Stable); assigned/

outstanding Term Loans 1,371.4 1,371.4 [ICRA]AAA (Stable); outstanding Non-fund based Limits 5,000.0 6,600.0 [ICRA]A1+; assigned/

outstanding Commercial Paper / Short-term Debt

900.0 900.0 [ICRA]A1+; outstanding

Total 11,771.4 17,871.4 *Instrument details in Annexure

Rationale

The assigned ratings favourably factor in the majority ownership of Oil and Natural Gas Corporation (ONGC; [ICRA]A1+)

in Mangalore Refinery and Petrochemicals Limited (MRPL) and ONGC’s continued support to MRPL, which is expected to

be sustained given its strategic importance to ONGC’s forward integration plans. The capacity utilisation levels at MRPL’s

refinery were impacted in H1 FY2020 due to loss of planned and unplanned shutdown in different phases of the refinery

due to shortage of fresh water in Q1 FY2020 and excessive rainfall in Q2 FY2020. Notwithstanding these disruptions, the

operational performance of MRPL’s refinery has remained healthy in the past with utilisation levels consistently above

100% and the healthy ramp up of operations at its polypropylene unit that achieved close to full capacity utilisation in

FY2019. The ratings also take into account the strong financial flexibility of MRPL due to its strong parentage, coupled

with its standalone healthy liquidity profile characterised by sizeable unutilised working capital limits. The ratings also

factor in the location advantage enjoyed by the company being located close to the Mangalore port as well as its

diversified crude sourcing.

ICRA, however, notes that the company’s profitability would remain vulnerable to the import duty differential,

commodity price cycles and the INR-USD exchange rates. The refinery’s gross refining margins (GRM) have declined

significantly to $0.23/bbl in H1 FY2020 from $6.29/bbl in H1 FY2019 owing to decline in throughput and weak crack

spreads for light and middle distillates during the period. The decline in GRMs has resulted in deterioration in MRPL’s

financial performance for H1 FY2020 and weaker-than-expected debt coverage metrics. Nonetheless, the company has

successfully refinanced part of its debt obligations that were falling due for repayment in FY2019 and is expected to do

the same going forward. While ICRA expects the GRMs to recover in the medium term, the company’s profitability could

be impacted to some extent with Iranian oil imports reduced to nil (from 25–30% of its crude procurement prior to the

US sanctions), given the relatively cheaper cost of Iranian oil to Indian refineries compared to similar grades from other

Middle East sources. Further, MRPL has sizeable capex outlined in the medium to long-term to achieve Bharat Stage (BS)

2

VI compliance, enhance refinery capacity to 25 MMTPA and set up a desalination project to safeguard its operations

against water shortage. The large-scale projects would entail execution risks, while the timelines and funding mix would

remain a rating sensitivity. The company is also exposed to asset concentration risks as its refining presence is limited to

Mangalore (Karnataka).

While assigning the ratings, ICRA has noted MRPL’s plans to merge its subsidiary, ONGC Mangalore Petrochemicals

Limited (OMPL; [ICRA]AA+ / [ICRA]A1+ / under rating watch with developing implications) with itself. The process is

currently underway, but has been delayed by regulatory approvals. OMPL currently operates an aromatic complex

adjacent to the refinery complex of MRPL. OMPL reported its first year of profitable operations in FY2019, since its

commissioning in FY2015 owing to healthy paraxylene-naphtha spreads, however, the company’s performance in H1

FY2020 has been adversely impacted by weak spreads for its key products, Paraxylene and Benzene. In ICRA’s view the

synergy benefits of the impending merger are expected to remain strong in the long run.

Key rating drivers

Credit strengths

Strong sponsor profile resulting in high financial flexibility - MRPL has a strong parentage with about 72% of its equity

held by ONGC and about 17% by Hindustan Petroleum Corporation Limited ([ICRA]AAA (Stable)/ [ICRA]A1+). MRPL is

strategically important to ONGC and is essentially managed by ONGC through its nominee directors and senior

management. The chairman of ONGC acts as the chairman of MRPL’s board of directors. ONGC had also extended loans

to MRPL at favourable terms for part-funding of the large-size capital expenditure undertaken for refinery expansion.

The company enjoys high financial flexibility on account of the parentage of ONGC.

Healthy operational profile - MRPL’s refinery has been operating at more than 100% capacity utilisation for the last four

years. The refinery has witnessed a healthy ramp up in operations since the commissioning of the Phase-III expansion

and its polypropylene unit too was operating close to 100% utilisation in FY2019. While the refinery’s capacity utilisation

was lower at 83% in H1 FY2020 due to shortage of fresh water in Q1 FY2020 and excessive rainfall in Q2 FY2020, the

company is expected to achieve healthy utilisation levels in H2 FY2020 which would help offset the loss of production in

H1 FY2020 to some extent.

Location advantages of being a coastal refinery for sourcing of crude as well as exports - The company’s refinery is

located on the western coast of the country close to the Mangalore port. The company’s location is logistically

advantageous for sourcing of crude as well as export of products.

Healthy liquidity profile - The company’s liquidity profile remains strong supported by adequate buffer in the form of

unutilised working capital limits. The company has been able to refinance its debt obligations in FY2019 and therefore

does not have any sizeable repayments over the next 2-3 fiscals.

Credit weaknesses

Vulnerability of profits to the import duty differential on the domestic sales, commodity price cycles and forex

fluctuations – Given the nature of the business, the company remains exposed to the movement in the commodity price

cycles and the volatility in the crude prices. The company’s GRM levels witnessed a considerable decline in FY2019 owing

to weak crack spreads for light and middle distillates and further in H1 FY2020 due to weak spreads and partly due to

decline in throughput levels. Any adverse changes in the import duty on its products would also have an impact on the

company’s domestic sales. The company’s profitability is also exposed to the forex rates (INR-US$) given the company

3

imports its crude requirement, though it also exports certain proportion of its sales (25%~30%) which provides a natural

hedge to some extent.

Execution risks associated with the on-going and future capex - MRPL is currently in the midst of a capex to upgrade its

refinery to be Bharat Stage (BS)-VI compliant, which is required to be completed by April 1, 2020 by all refineries as per

the directive of the Government of India (GoI). MRPL has estimated a capital outlay of ~Rs. 1,810 crore to achieve the

same and expects to complete it before the GoI’s deadline. MRPL plans to expand its refining capacity to 25 MMTPA

from the existing 15 MMTPA gradually after the capex for BS-VI compliance is completed and is currently undertaking a

viability study for the same. It is currently in the process of acquiring land for the expansion, part of which has already

been paid for. In addition, MRPL is setting up a desalination plant, which is expected to be completed by October 2020.

The sizeable projects of MRPL expose it to high execution risks.

Weak financial performance of its subsidiary, OMPL – The financial performance of OMPL was depressed, post-

commissioning of its aromatics complex, as reflected in sizeable losses mainly due to subdued crack spreads and sub-

optimal utilisation of the plant in the past. However, utilisation of OMPL’s paraxylene capacity improved in FY2019

especially after the completion of the revamp of MRPL’s Continuous Catalytic Reforming (CCR)-II unit in September 2018

that ensured regular supply of adequate quality feedstock to OMPL. OMPL’s performance has also benefitted from

healthy paraxylene-naphtha spreads in FY2019. Given improved utilisation, OMPL’s financial profile is expected to

improve considerably in the near to medium term, however, the same remains exposed to the volatility in the spreads

for Paraxylene and Benzene. MRPL is currently in the midst of merging OMPL with itself, though the merger process has

been delayed due to pending regulatory approvals. The merger once completed, would be beneficial for both the

entities, given the synergies in their operations.

Liquidity Position: Adequate The company has a healthy liquidity profile supported by healthy cash balances of Rs. 458 crore as of March 31, 2019

and adequate buffer in the form of unutilised working capital limits and steady cash flows. The company has refinanced a

part of its debt obligations in FY2019 thereby lowering its repayment obligations in the medium term. While the cash

flows have been weaker in FY2019 owing to the low profitability levels, ICRA expects improvement in the GRMs over the

medium term. MRPL has also extended support to OMPL through equity infusion of ~Rs. 150 crore in FY2019 and

another ~Rs. 255 crore in Q1 FY2020. MRPL is also in the midst of sizeable capex plans with multiple projects in different

stages of planning and execution. However, the company has received the board’s approval for issuance of NCDs of Rs.

3,000 crore and plans to raise the first tranche of the same soon. ICRA expects the company to utilise these proceeds to

refinance any short-term obligation and to support its capex plans.

Rating Sensitivities

Negative triggers – In case the linkage between ONGC and MRPL weakens, or if there is further deterioration in MRPL’s

performance leading to high losses.

4

Analytical approach:

Analytical Approach Comments

Applicable Rating Methodologies Rating Methodology for Downstream Oil Companies

Parent/Group Support

Parent - Oil and Natural Gas Corporation Limited We expect MRPL’s parent, ONGC [rated [ICRA]A1+], to be willing to extend financial support to MRPL, should there be a need, given the high strategic importance that MRPL holds for ONGC for meeting its diversification objectives

Consolidation / Standalone For arriving at the ratings, ICRA has considered the consolidated financials of Mangalore Refinery and Petrochemicals Limited. As on March 31, 2019, the Company had 1 subsidiary and 1 JV, that are enlisted in Annexure-2.

About the company: Mangalore Refinery & Petrochemicals Limited (MRPL) was set up as a joint venture (JV) between the AV Birla Group

and Hindustan Petroleum Corporation Limited (HPCL). MRPL operates a refinery at Mangalore (Karnataka), with a

nameplate capacity of 15 million metric tonne per annum (MMTPA). The refinery project was initially implemented in

two phases during a period of administered pricing, where the regulatory framework provided assured returns on

capital employed. However, since the deregulation of the refining sector in 1998, the company had been exposed to

low and volatile international refining margins, which affected its operating profitability quite significantly. Together

with high debt service commitments, this resulted in MRPL posting large losses in the past. Oil and Natural Gas

Corporation Limited (ONGC) acquired a 51% stake in MRPL in March 2003, and later increased its stake to 72%. With a

change in management, funds infusion by ONGC and upturn in the refining margin cycle, the company made a

financial turnaround in the subsequent period. The refining capacity was enhanced to 15 MMTPA from 11.82 MMTPA

in March 2012 with the commissioning of Phase-III. It also commissioned a 440 KTPA polypropylene unit. In July 2015,

MRPL’s board approved the merger of its subsidiary, OMPL, with itself, which is currently in process. MRPL had

acquired a controlling stake in OMPL in February 2015 by increasing its stake to 51% from 3%, while the remaining

stake is held by ONGC.

Key Financial Indicators - Consolidated (Audited)

FY2018 FY2019

Operating Income (Rs. crore) 49,055 63,421

PAT (Rs. crore) 1,773 351

OPBDIT/ OI (%) 9.3% 4.4%

RoCE (%) 15.7% 7.1%

Total Debt/ TNW (times) 1.4 1.5

Total Debt/ OPBDIT (times) 3.3 5.6

Interest coverage (times) 5.0 2.6

NWC/ OI (%) 6% 6%

https://www.icra.in/Rating/ShowMethodologyReport/?id=584

5

Status of non-cooperation with previous CRA: Not applicable

Any other information: None

Rating history for last three years:

Instrument

Current Rating (FY2020)

Chronology of Rating History for the past 3 years

Type

Amount Rated (Rs. crore)

Amount Outstanding (Rs. Crore)

Date & Rating Date & Rating in FY2019

Date & Rating in FY2018

27-Nov-19 24-Jul-19 09-May-19

16-Aug-18 04-Apr-18 02-Nov-17

19-Apr-17

1 NCDs Long Term

3,000.0 - [ICRA] AAA (Stable)

- - - - - -

2 Fund Based Limits

Long Term

6,000.0 [ICRA] AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

3 Term Loan Long Term

1,371.4 1,371.4 [ICRA] AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

-- -- --

4 Non-fund Based Limits

Short Term

6,600.0 [ICRA]A1+ [ICRA]A1+ [ICRA]A1+ [ICRA]A1+ [ICRA]A1+ [ICRA]A1+ [ICRA]A1+

5 Commercial Paper

Short Term

900.0 [ICRA]`A1+ [ICRA]`A1+ [ICRA]A1+ [ICRA]A1+ [ICRA]A1+ [ICRA]A1+ [ICRA]A1+

6 Issuer Rating

Long Term

-- [ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

Complexity level of the rated instrument:

ICRA has classified various instruments based on their complexity as "Simple", "Complex" and "Highly Complex". The

classification of instruments according to their complexity levels is available on the website www.icra.in

https://www.icra.in/Rating/ShowRatingPolicyReport/?id=1&type=new

6

Annexure-1: Instrument Details

ISIN No Instrument Name Date of Issuance / Sanction

Coupon Rate Maturity Date

Amount Rated (Rs. crore)

Current Rating and Outlook

-- Non-Convertible Debentures

Yet to be placed

-- -- 3,000.0 [ICRA]AAA (Stable)

-- Fund Based Limits -- -- -- 6,000.0 [ICRA]AAA (Stable) -- Term Loans FY2019 -- FY2021 1,371.4 [ICRA]AAA (Stable)

-- Non-fund Based Limits

-- -- -- 6,600.0 [ICRA]A1+

-- Commercial Paper -- -- 7-365 days 900.0 [ICRA]A1+ -- Issuer Rating -- -- -- -- [ICRA]AAA (Stable)

Source: Mangalore Refinery and Petrochemicals Limited

Annexure-2: List of entities considered for consolidated analysis

Company Name Ownership Consolidation Approach

ONGC Mangalore Petrochemicals Limited 51.00% Full Consolidation Shell MRPL Aviation Fuels and Services Limited

50.00% Limited Consolidation

Source: Mangalore Refinery and Petrochemicals Limited

7

ANALYST CONTACTS

K. Ravichandran

+91 44 4596 4301

[email protected]

Anubha Rustagi +91 22 6169 3341 [email protected]

Prashant Vasisht +91 124 4545 322 [email protected]

RELATIONSHIP CONTACT

L. Shivakumar +91 22 6114 3406 [email protected]

MEDIA AND PUBLIC RELATIONS CONTACT

Ms. Naznin Prodhani Tel: +91 124 4545 860 [email protected]

Helpline for business queries:

+91-9354738909 (open Monday to Friday, from 9:30 am to 6 pm)

[email protected]

About ICRA Limited:

ICRA Limited was set up in 1991 by leading financial/investment institutions, commercial banks and financial services

companies as an independent and professional investment Information and Credit Rating Agency.

Today, ICRA and its subsidiaries together form the ICRA Group of Companies (Group ICRA). ICRA is a Public Limited

Company, with its shares listed on the Bombay Stock Exchange and the National Stock Exchange. The international Credit

Rating Agency Moody’s Investors Service is ICRA’s largest shareholder.

For more information, visit www.icra.in



http://www.icra.in/

8

ICRA Limited

Corporate Office Building No. 8, 2nd Floor, Tower A; DLF Cyber City, Phase II; Gurgaon 122 002 Tel: +91 124 4545300 Email: [email protected] Website: www.icra.in

Registered Office 1105, Kailash Building, 11th Floor; 26 Kasturba Gandhi Marg; New Delhi 110001 Tel: +91 11 23357940-50

Branches

Mumbai + (91 22) 24331046/53/62/74/86/87

Chennai + (91 44) 2434 0043/9659/8080, 2433 0724/ 3293/3294, Kolkata + (91 33) 2287 8839 /2287 6617/ 2283 1411/ 2280 0008, Bangalore + (91 80) 2559 7401/4049

Ahmedabad + (91 79) 2658 4924/5049/2008

Hyderabad + (91 40) 2373 5061/7251

Pune + (91 20) 2556 0194/ 6606 9999

© Copyright, 2019 ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA.

ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA ratings are subject to a process of

surveillance, which may lead to revision in ratings. An ICRA rating is a symbolic indicator of ICRA’s current opinion on the relative capability of the issuer

concerned to timely service debts and obligations, with reference to the instrument rated. Please visit our website www.icra.in or contact any ICRA

office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to

be accurate and reliable, including the rated issuer. ICRA however has not conducted any audit of the rated issuer or of the information provided by it.

While reasonable care has been taken to ensure that the information herein is true, such information is provided ‘as is’ without any warranty of any

kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such

information. Also, ICRA or any of its group companies may have provided services other than rating to the issuer rated. All information contained

herein must be construed solely as statements of opinion, and ICRA shall not be liable for any losses incurred by users from any use of this publication

or its contents


Notes to Standalone and Consolldated Flnanclal Results: 1 The Audit Committee has reviewed the above results and the same have been subsequently approved by the Board of Directors in their meetings held on

November 4, 2019.

2 The financial results have been reviewed by the Statutory Auditors as required under Regulation 33 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

3 The financial results of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended). These financial results have been prepared in accordance with the recognition and measurement principles of Ind AS, prescribed under Section 133 of the Companies Act 2013 read with the relevant rules Issued thereunder end the other accounling principles generally accepted in India.

4 The Company has adopted Ind AS 116 'Leases' effective 1st April 2019 and applied \he standard to its leases on a prospective basis. This has resulted in

recognizing a right-of-use asset off 470.80 crore and lease liability off 215.65 crore as at 1st April 2019. The impact on !tie profit for the quarter rs not material.

5 Purchase or Stock-in-trade for the three months ended 30th September, 2019, three months ended 30th June, 2019, Half Year ended 30th September, 2019 and

year ended 31st March, 2019 includes purchase of crude oil for f 871.22 crore, p1,1rchase of petroleum products for f 329.39 crore, purchase of crude oil & petroleum products for f 1,200.61 crore and purchase of crude oil for" 526.09 crore respectively towards sale of traded goods.

6 Other Expenses for the three months ended 30th June, 2019 includes net exchange fluctuation gain of"' 26.17 crore.

7 Other Expenses for the three months ended 30th September, 2019, three months ended 30th Sep1ember, 2018, Half Year ended 30th September. 2019, Half Year ended 30th September, 2018 and year ended 31st March, 2019 includes net exchange fluctuation loss oft 224,04 crore, t 401.69 crore, f 197.87 crore, " 787.30 crore and t 281.94 crore respectively.

8 The exceptlonal item for the period ended March 31, 2019 includes -a) Expense of f 22.87 crore is towards differential contribution to "MRPL Defined Contribution Pern;lon Scheme" for Management Staff (pertaining to the period January 2007 to March 2018) and Non Management Staff (pertaining to the period Aprll 2007 to March 2018). b) Expense of" 33.97 crore is on account of estimated cost of purchase of Renewable Energy Certlfi.cate (REC) from Indian Energy Exchange (IEX), as per the direction received from Karnataka Electricity Regulatory Commission, for meeting Renewable Energy Purchase Obligation (RPO) from the financial year 2015-16 io 2017-18 based on company's captive and auxiliary consumpVon. c) Income of 1l' 42.05 crore relating to reclaim of input iex credit under Goods and Service Tax Act (GST Act) for the financial year 2017-18 represents the credit taken based on annual mhc of products covered under GST and produru not covered under GST.

9 The Company has recognised deferred taic asset off 583.27 crore for the half yeer ended 30th Sep1ember, 2019.

1 o Figures for the previous periods have been re-grouped wherever necessary.

11 The Company operates only in one segment i.e Petroleum products. As such, reporting is done on a single segment basis.

12 During the quarter the refinery has b.een affected by a minor landslide es en aftermath of the intensified monsoon in Dakshina Kannada District, hence as a precautionary measure, structured shutdown of the Phase-Ill process units of the refinery from 18th August 2019 to access the condition of the facilities in the vicinity and for Immediate stabilisation and after taking necessary corrective action Phase Ill operations of the refinery have resumed in a phased manner by 17th

September 2019.

13 On September 20, 2019, vide the Taxation Laws (Amendment) Ordinance 2019, the Government of India inserted Section 115BAA in the Income Tax Act, 1961 which provides domestic companies .a non-reversible option to pay corporate tax at reduced rates effective April 01, 2019 subject to certain conditions. The Company is curren�y in the process ot evaluating this option.

14 The above results are available on the websites of NSE and BSE at www.nseindia.com and www.bseindie.oom respaclively, and on the Company's website at www.mrpl.co.in.

�. � �

Place : New Delhi Pt:. J\S:AL Date : 04/11/2019 Director (Finance)

DIN: 08436633