Laxmi Capital News
NOC allocates Rs 770m bonus, decides not to distribute it

Nepal Oil Corporation (NOC), the state-runoil monopoly of the country, has allocated Rs 770 million as bonuses and otherincentives for its staff. 
The state-owned enterprise which has been running in profit of late allocatedthe hefty amount for distribution as bonuses to its employees as per the bonusprovision of the four-decade-old Bonus Act of the corporation. 

Based on NOC'sprofit of Rs 9.45 billion last year and also the income tax of Rs 3.41 billionpaid to the government, the NOC has allocated Rs 770 million for staff bonusesand other incentives. The NOC is in profit for the past three years and thebonus amount allocated from the profits for employees has crossed over Rs 2.93billion. However, the NOC has not distributed the bonus for the past threeyears. 

Acting ExecutiveDirector of NOC Sushil Bhattarai said that the NOC has allocated Rs 770 millionas bonus based on last year's profit but has not distributed the amount. 
“We allocated the amount as provisioned in the law. However, we have also madea decision of not distributing the bonus amount,” he added. 

He said there wasno point in distributing the bonus since the Ministry of Finance has directedthe NOC not to distribute the amount. According to the Bonus Act 2030 BS, theNOC can distribute at least 6 percent of the net profit or salary of threemonths to the employees in lump sum as bonus. 

According to NOCofficials, the NOC has to allocate the bonus even if it doesn't distribute itto its employees due to the compulsion of maintaining record in the auditreport as per government rules. “Because of the bonus provision in the law, thebalance sheet for the NOC has a bonus column. As our corporation is in profit, wehave an obligation to allocate it for paper works,” said Narenda Sah, actingdeputy director of the NOC. The NOC last week finalized its audit report forthe last fiscal year.  

After the NOC'sdecision to distribute hefty amount as bonus to its employees courtedwidespread criticism, it has not distributed bonus to its employees for threeyears now. 
The total bonus amount allocated in the fiscal years 2014/15 and 2015/16 is Rs2.52 billion. 

Source:My Republica, 25th January 2018

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