The government-run Coal India has set aside Rs 8,152.75 crore from its profit in the financial year 2022-23 to meet the expense of higher salary payments to its employees, which is due for revision from July 1, 2021. The company’s net profit dipped by 18 per cent year-on-year to Rs 5,528 crore for the quarter ended March 2023 mainly due to this surge in provisioning.
“PAT would have been the highest ever profit in any quarter had the provision not been made,” a statement issued by the company pointed out, after its board of directors met on Sunday to approve the financial results for the fiscal year 2022-23.
In January this year, Coal India and four central trade unions—BMS, HMS, AITUC and CITU — mutually agreed to recommend 19 per cent minimum guaranteed benefit (MGB) to its non-executive employees. The wage revision is under the National Coal Wage Agreement (NCWA)-XI. The revised wage will be for five years with effect from 1st July 2021.
The major part of this provision was made during the fourth quarter of the financial year ended March 2023. For the January-March 2023 quarter, the company’s provisioning for higher wage payments rose to Rs 5,870.16 crore, over 12-times surge from Rs 475.28 crore made in the corresponding period of the previous year.
Salaries of non-executive employees of Coal India are due for revision from July 1, 2021.
Centre of Indian Trade Unions (CITU) Secretary General Tapan Sen said Coal India and trade union have reached broad agreement on wage hike but details need to be worked out.
“Making provisions are internal matter of Coal India. They have to decide how they are going to pay it,” Sen said.
General secretary of All India Trade Union Congress (AITUC) Amarjeet Kaur said the wage revisions have been pending due to the government’s intervention in the management of Coal India. “We want it to be implemented as soon as possible. We are on alert and can go on strike if there is no clear deadline given,” she said.
CIL recorded PBT (profit before tax) of Rs 7,642 crore and PAT (profit after tax) of Rs 5,528 crore in Q4 FY 2022-23. Both PBT and PAT have shrunk by 18 per cent, compared to corresponding quarter of 2021-22 primarily due to increased provision towards the wages in NCWA-XI, Coal India said in a regulatory filing to the stock exchanges.
Due to the salary revision the annual wage bills of Coal India is estimated to increase by Rs 6,000 crore. During the fiscal ended 31st March 2023, the company’s wage bill stood at Rs 49,409 crore, which is more than a third of its total revenues.
The total workforce of Coal India is around 2.59 lakh, out of which around 15,000 are executive staff.
For the full fiscal 2022-23, the company’s profit after tax surged to Rs 28,125 crore, which is 62 per cent higher when compared with the previous year’s profit of Rs 17,378 crore.
Climbing to an all-time high, the annual PAT bested the previous high of Rs 17,464 crore recorded in 2018-19 by 61 per cent. Higher volume sales and increased premiums in e-auction bolstered the company’s profitability, Coal India said.
The company’s board on Sunday recommended the payment of a final dividend of Rs 4 per share. This is in addition to interim dividends of Rs 20.25 per share already paid in two tranches during the fiscal.
The world’s largest miner said its net sales surged by 27 per cent to Rs 1,27,627 crore in 2022-23 as compared to Rs 1,00,563 crore recorded in the previous year.