During the financial year 2018-19, the company had provided for Rs 197.27 crore due to delay in implementation of Modified New Pricing Scheme -III (NPS-III) for payment on account of additional fixed cost to urea units by the Ministry of Chemicals and Fertilisers, Government of India (MOCF).
During the quarter ended 31 March 2020, MOCF has amended Modified NPS-III. Accordingly during the quarter and financial year ended 31 March 2020, the company has reversed the aforesaid provision of Rs 197.27 crore and has also written off an amount of Rs. 91.70 crore towards subsidy receivables accrued during the previous years, in pursuance of such amendment in Modified NPS-III. Accordingly the company reported an exceptional income of Rs 105.57 crore during the quarter.
The company has written back taxes to the tune of Rs 40.30 crore in Q4 March 2020 after the company opted for the lower tax rate permitted under the Taxation Laws (Amendment) Act, 2019 and re-assessed its deferred tax liability. The firm has reported a tax expense of Rs 24.46 crore in Q4 March 2019.
After making all accounting adjustments, the chemicals maker reported 115.13% jump in consolidated net profit to Rs 197.55 crore on 24.6% decline in net sales to Rs 1969.09 crore in Q4 March 2020 over Q4 March 2019. Profit before tax (PBT) stood at Rs 160.77 crore in Q4 FY20, up by 41.4% from Rs 113.66 crore in Q4 FY19.
Net profit jumped 107.8% to Rs 1226.19 crore on 20.9% increase in net sales to Rs 12205.95 crore in the year ended March 2020 (FY20) over the year ended March 2019 (FY19). PBT stood at Rs 1327 crore in FY20, up by 59.4% from Rs 832.27 crore in FY19.
Anil Kapoor, managing director of the company, said, Our newly commissioned urea plant achieved the rated capacity during the first full year of operation. Towards the end of the last quarter, the company faced the challenge of COVID-19 pandemic. The priority was to continue operations of all the three Urea plants. Since we took many pro-active steps before and after the lock down to keep all the critical employees within our factory premises, we were able to keep the plants running.
During the last year, the Government met the long pending demand of the Urea industry by approving additional fixed cost of Rs 350 per MT of Urea. Although not sufficient enough, the increase does mitigate some of the concerns of the Industry. The effect of the increase has been accounted in the last quarter of the FY 2019-20.
In its outlook, the company said farming sector is likely to get a boost this year, with the forecast of good monsoon. The firm expects production in all its plants to be normal. The demand of the products looks encouraging and the firm is comfortable on the logistics side also. The company does not foresee any challenge in terms of availability of manpower. It expects to comfortably meet all its obligations towards interest and term loan repayments for the current year.
Chambal Fertilisers & Chemicals manufactures ammonia, urea, pesticides and other products for farming and other agricultural applications. The company also provides consulting services to farmers on their seeding programs.
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