Calcutta, April 7: Mangalore Refinery and Petrochemicals Ltd (MRPL) is all set to report a net profit for the year ended March 2004, exactly one year after Oil and Natural Gas Corporation (ONGC) took over a stake in the company from the AV Birla group.

Sources said due to a last-minute financial engineering, the company paid upfront Rs 261 crore as central sales tax, resulting in a waiver of Rs 290 crore. The original tax, shown in the book of accounts, stood at Rs 551 crore.

“The amount, which has been waived, will be shown under the other income head. It will thus have a positive impact on the bottomline,” a source said. The company top brass, however, could not be contacted for confirmation, despite several attempts by The Telegraph. The company will register a 46 per cent growth in the topline at Rs 12,490 crore against a turnover of Rs 8,580 crore in 2002-03, sources said. However, the net profit may be very small compared with the losses of Rs 412 crore in the previous year, they added.

While the upfront payment of the central sales tax helped the company make a turnaround, other factors like reduction in interest cost and a substantial increase in productivity have contributed largely to the bottomline. The average borrowing rate for the company stood at 13.61 per cent before the ONGC picked up the majority stake.

Now the rate has come down to around 9.15 per cent leading to a huge savings on the account. The company’s total interest outgo was 567.07 crore in the year ended March 2003.

The company, which had been deep in the red since inception because of high interest rates on loans, started doing well ever since ONGC pitched in March 2003 by picking up AV Birla group’s 37.39 per cent stake.