Coal India Ltd, which is hoping to conclude the eleventh version of the national coal wage agreement (NCWA-XI) within a month, on Wednesday, said that the ₹5,870 crore provision made on account of wage revision dragged down the company’s net profit and excluding that its profit during Q4 would have been around ₹9,920 crores.
Of the total provision of ₹8,153 crores charged to profit and loss account on account of wage revision during FY23, the last quarter alone took up 72 per cent at ₹5,870 crores as compared to the provisioning of ₹475 crores made in Q4 FY22, which is almost 12.4 times higher. Such a high provision was necessitated during the quarter because the company had inked a Memorandum of Understanding under the wage pact recommending a 19 per cent minimum guaranteed benefit after Q3 FY23, the company said in a press statement.
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“Excluding the provision on wage cost due to NCWA-XI, CIL’s Q4 PAT during FY23 would have been about ₹9,920 crores, an all-time high for any quarter till date. On a like-to-like comparison, it would have reflected a robust 40 per cent growth over ₹7,071 crores of Q4 FY22 instead of 18 per cent shrinkage,” it said.
The company is hoping to conclude the eleventh version of the national coal wage agreement (NCWA-XI), within a month, benefitting close to 2.38 lakh non-executive manpower. The next round of talks is scheduled on May 19.
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Pending conclusion, an upfront wage cost was provisioned in the accounts every quarter since July 1, 2021, the date of commencement of NCWA-XI, it said.
“With only other allowances yet to be agreed upon, shaking hands on the NCWA-XI between the company’s management and the unions at the earliest would ease the pressure. The company’s bottom line in the ensuing quarters would be steady with no provisions required in the accounts,” it added.