CPCL says company is out of reporting to BIFR

Indian Oil Corporation's (IOCL's) arm Chennai Petroleum Corporation (CPCL) said it will be out of reporting to the Board for Industrial and Financial Reconstruction (BIFR) because of turn around in its performance.

In 2014, CPCL has reported erosion of more than 50 per cent of the peak networth of the company in the financial year (FY) March 31, 2014, over the previous four FYs. In October 2015, the company reported further reduction of networth at the end of FY15. Then the first improvement in the networth as on September 30, 2015 was informed to the BIFR in November 2015.

In an announcement to the NSE on Friday, CPCL said that it has seen the turn around during the FY16 after four years of consecutive losses by registering a profit before tax of Rs 787.45 crore and profit after tax of Rs 770.68 crore.

It was mainly due to improvement in operational performance, financial performance, reduction in financing cost , support from holding company, IOCL and softening of prices.

Networth of the company  (standalone) improved from Rs 1,655.08 crore as on March 31, 2015 to Rs 3,296.67 crore as on March 31, 2016 — which includes the prefernece share capital of Rs 1,000 crore raised in FY16 — which is 50 per cent more than the peak networth during the immediately preceding four FYs as on March 31, 2016.

The provision of section 23 of the Sick Industrial Companies Act would no longer be applicable to the company effective April 1, 2016. The company is required to report the same to the BIFR within 60 days of adoption of accounts.

"We hereby report the improvement in the company networth as on March 31, 2016 which is more than 50 per cent of the peak networth of the company during the immediatley preceding four FYs as on March 31, 2016 in Form C and request to take the same on record that CPCL will be out of reporting to the BIFR from April 1, 2016," the company said in the announcement.