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Higher tax outgo prunes SAIL's net

Special Correspondent

NEW DELHI: The Steel Authority of India Limited (SAIL) has achieved yet another record for the first quarter this fiscal with the profit before tax (PBT) surging to Rs. 1,701 crore, an increase of 41 per cent over the same quarter in 2004-05.

The profit after tax at Rs. 1,123 crore shows a marginal increase as compared to same period in the previous year. This is owing to a significantly higher tax outgo that soared to Rs. 578 crore from Rs. 94 crore in the same period last fiscal, according to a company statement. Till last year, SAIL was under the ambit of the Minimum Alternative Tax (MAT) due to the brought-forward losses and unabsorbed depreciation. Having wiped out the entire accumulated losses, the company has now come under the regular corporate tax net.

Continuing its status as a virtual debt free company, SAIL further reduced its interest charges by around Rs. 57 crore, achieving a reduction of 30 per cent over April-June 2004.

Commenting on the results, the company Chairman, V. S. Jain, said: "SAIL has acquired the competence and the strength to withstand downturn as the steel industry is cyclical in nature. The company has assumed the right ambience to encash future growth potential, particularly in areas of infrastructure development."

The Cabinet recently granted approval for IISCO's merger with SAIL, its parent company.

The completion of the merger process will further strengthen SAIL and IISCO in their respective growth plans through inter-plant synergy and resource optimisation, the SAIL statement said.

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