Tata Steel net profit skids 60% at Rs 4,950.90 crore

Even this consolidated net profit at lower level for the year under review was achieved by Tata Steel after effecting a change in the accounting practice — which is legally permissible by Accounting Standard 21 instead of the practice followed in the previous years — under which it transferred the actuarial gains and losses on funds for pension plans of Tata Steel Europe (earlier Corus Group Plc).

Tata Steel in its notes to financial statements conceded that had the company followed the practice of recognising changes in actuarial valuations of pension plans of Tata Steel Europe in the profit & loss account, the consolidated profit after taxes, minority interest and share of profit of associates for fiscal 2009 would have been lower by Rs 5,496.58 crore. 

Technically, Tata Steel has suffered a consolidated net loss of Rs 545.68 crore — which is the difference between the figure of Rs 5,496.58 crore (mentioned in aforementioned para) minus the consolidated net profit now shown and validated by the board at Rs 4,950.90 crore.

Total income during the period increased from Rs 1,32,009.49 crore as compared to Rs 1,47,594.93 crore for the year ended March 31, 2009.

While Tata Steel did not release quarterly figures, an informal calculation put by analysts shows that it suffered a consolidated loss of over Rs 4500 crore in the last quarter of last fiscal.  In fact, nine month consolidated profit of Tata Steel in the previous fiscal stood at Rs 9486 crore.

Briefing reporters Tata Steel Managing Director B Muthuraman said “the recession in world demand looks deeper than what we thought six months ago.”
Further Muthuraman said but for the 10 million tonne expansion plan, which is on track, the company is revisiting most of its capex plans.