JSW Ispat posts Rs 159.33 crore net profit in Q4

Helped by deferred tax benefits of Rs 159.33 crore, JSW Ispat Steel, an associate firm of JSW Steel, reported on Tuesday a standalone net profit of Rs 94.16 crore for the fourth quarter ended March, 2013.

The company, which is in the process of getting merged with JSW Steel, had reported a net loss of Rs 141.29 crore in the corresponding quarter last year.

However, total expenditure of the company at Rs 2,663.53 crore overshot its net sales at Rs 2,621.27 crore during the quarter, JSW Ispat said in a filing to the Bombay Stock Exchange.

The company said it has recognised deferred tax asset of Rs 159.33 crore for the fourth quarter and Rs 293.31 crore for the nine months period ended March 31, 2013.

The company has also recognised net deferred tax benefits of Rs 2,381.25 crore for last few years, when it was making losses.

"These are carried forward unabsorbed depreciation and business losses at March, 31, 2013", it said, adding, JSW Ispat has taken various measures for enhancing operating efficiency, including major savings in input costs and proposed merger with JSW Steel.

The company further said, "It is virtually certain that there would be sufficient taxable income in future to claim the above tax credit. These financial results have been drawn up as per the going concern assumption, which is appropriate in the opinion of the company."

However, JSW Ispat's auditors, S R Batliboi & Co said they are unable to comment on the management's claim of virtual certainty of recoverability of Rs 2,381.25 crore as deferred tax assets "in the absence of sufficient appropriate audit evidence".

The firm did not file the consolidated results for the last quarter.

For the fiscal year ended March 31, 2013, standalone net profit of the company stood at Rs 85.81 crore, while its consolidated net profit was Rs 104.67 crore.

However, the figures with previous year are not comparable as it changed its financial year from July-June to April-March last year and thereby, reported financial statements for only 9 months as full year's statement in the last fiscal year.

Consolidated net sales was at Rs 7,846.64 crore during the previous fiscal year.

However, the company's expenditure at Rs 8,150.13 crore overshot its net sales.

The company, in its filing, also said that Bombay High Court has approved its merger with JSW Steel but certified copy of the order is still awaited.

The merger also comprises amalgamation of JSW Building Systems Ltd into JSW Steel. Besides, both JSW Steel and JSW Ispat Steel will transfer some of their assets to JSW Steel Coated Products Ltd. As per the scheme, JSW Ispat shareholders will get one JSW Steel share for every 72 shares they hold.

Shares in JSW Ispat, on Tuesday, fell 1.58 per cent to close at Rs 9.32 apiece on the BSE.