Gujarat Narmada Valley Fertilizers & Chemicals Ltd has announced a rise in Q4 FY20 profits however its annual sales and profit went down in FY20. The company reported a jump of 152.11% and its Q4 FY20 profit stood at Rs 240.01 crore as against Rs 95.20 crore during the corresponding period last year. Sales declined 6.18% to Rs 1342.47 crore as against Rs 1430.94 crore last year.

 

For the full year, net profit declined 32.24% to Rs 508.01 crore in 2020 as against Rs 749.74 crore in 2019. Sales also went down by 12.44% to Rs 5162.42 crore as against Rs 5896.02 crore during the previous year.

 

One of the key industrial products i.e. Toluene Di Isocyanate (TDI) has witnessed very sharp price erosion since mid of firiancial year 2018-19 and has continued its downward spiral till March 31, 2020 and still is yet to recover. Since the cornpany has made heavy investments in TDI-II facilities at Dahej, it has in pursuance of India Accounting Standard (Ind AS - 38) - Impairment of Assets" carried out impairment assessment of its TDI Dahej plant. The recoverable amount of the relevant assets has been determined on the basis of then- value in use. In estimating the future cash flows, rnanagement has based on externally available informafon, made certain assumptions relating to the future raw material prices, future TDI prices, operating parameters and the assets useful life which management believes reasonably reflects the future expectation of these items. The company has also carried out sensitivity analysis of the assumptions used white estimating the future cash flow to derive the value in use. Accordingly the management has concluded that no impairment is required to be recognised in respect of the TDI Dahej Plant during the year ended March 31, 2020. However the assumptions on which the assessment was made are being rnonitored on a periodic basis by the management.

 

The company's board has recommended a Dividend of Rs. 5/- per equity share of Rs.10/- each for the Financial year ended March 31, 2020.