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Mangalore Refinery and Petrochemicals Ltd (MRPL) has said that the impact of Covid-19 on the physical and financial performance of the company for 2019-20 was lesser as compared to April and May of 2020, as the nationwide lockdown was announced in last week of 2019-20.
The company informed the stock exchanges on Monday that the entire oil industry, including MRPL, witnessed a significant drop in crude oil prices and general fall in demand for products due to lockdowns caused by Covid-19 pandemic.
The company informed the stock exchanges on the impact of Covid-19 on its business for April and May 2020 under the parameters such as ‘liquidity position of the company’, ‘ability to service debts and other financing arrangements’, and ‘assets’.
Liquidity
MRPL said the liquidity position of the company is sound and good. The company has committed line of both fund-based and non-fund-based credits from its empanelled consortium bankers as well as outside to honour its commitments so as to come out of the Covid-19 pandemic in the reasonable period of time.
“The company has met all the financial commitment on its due date,” the statement to stock exchanges said.
On the ‘ability to service debts and other financing arrangements’, it said till date the company has not breached any of covenants of loan agreements and met the obligations well within the due dates. The company also do not foresee any breach in the covenants/obligations of the loan agreements in the near future.
The company secures highest credit rating from Crisil, ICRA and CARE which indicates the highest degree of strength with regard to honouring debts obligations, it said.
Assets
On ‘assets’, the company said that Covid-19 has caused significant disruptions to businesses across India.
It said that the management has considered the possible effects, if any, that may impact the carrying amount of assets such as property, plant and equipment, capital-work in progress, goodwill, other intangibles assets, investments, loans, inventories, trade receivables and other financial assets.
“In making the assumptions and estimates relating to the uncertainties in relation to the recoverable amounts, the management has considered subsequent events, internal and external information and evaluated economic conditions prevailing as on date.
“The management expects no impairment to the carrying amounts of these assets. The management will continue to closely monitor any changes to future economic conditions and assess its impact on the operations,” it said.
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