Coal India Q4 net up 35% at Rs5,414 cr; pays 140% dividend

State-run Coal India Ltd (CIL) has reported a 35-per cent year-on-year increase in its fiscal fourth quarter net profit, at Rs5,414 crore, against a net profit of Rs4,013 crore during the January-March 2012 quarter.

CIL, the world's largest coal company, said its fourth-quarter profit was boosted by strong sales and lower-than-expected costs.

Net sales rose 2.5 per cent to Rs19,905 crore during the January-March 2013 quarter.

For the full year 2012-13, CIL reported a standalone net (after-tax) profit of Rs9,794.32 crore, up 21.44 per cent from Rs8,065.10 crore net profit during the previous financial year.

Profit before tax (PBT) for the 2012-13 financial year stood at Rs10,338.03 crore against Rs8,599.95 crore, up 20.21 per cent from the previous year.
CIL board also recommended a final dividend of Rs4.30 per equity share of face value Rs10, ie, 43 per cent of the face value totalling Rs2,716.04 crore. This is in addition to the interim dividend of Rs9.70 per equity share paid during March 2013. The total dividend for the year 2012-13 works out to Rs14 per equity share (140 per cent), absorbing Rs8,842.91 crore, which is the highest ever in the history of the company.

Meanwhile, a commit of secretaries will consider coal ministry's proposal to provide performance-linked pay to executives of CIL subsidiaries from consolidated funds.

The Department of Public Enterprises has opposed the coal ministry's proposal.

In the absence of sufficient profit before tax, loss making CPSEs are not allowed to distribute performance related pay (PRP) and there is no concept of providing PRP based on the consolidated account of holding company.

The coal ministry has sought permission for allowing CIL to determine the corpus of PRP due since 2007 on profit before tax based on its consolidated accounts and not from the individual accounts of its subsidiaries as required by the Department of Public Enterprises (DPE).

Coal India (CIL) would have to shell out about Rs200 crore on account of PRP to its loss making subsidiaries, including Eastern Coalfields Ltd (ECL), if the proposal is accepted. The coal major has already incurred an additional Rs6,500 crore burden on account of recent pay revision.

As per the 2007 pay revision formula, PRP is directly linked to PBT and rating of a PSU besides performance of individual executives.

CIL which accounts for over 80 per cent of the domestic coal production has eight subsidiaries: ECL (West Bengal), BCCL (Jharkhand), Central Coalfields (Jharkhand), South Eastern Coalfields (Chhattisgarh), Western Coalfields (Maharashtra), Northern Coalfields (Madhya Pradesh), Mahanadi Coalfields (Orissa) and Central Mine Planning and Design Institute (Ranchi).