Tata Sponge Q1 net down 83.98% at Rs 7.09 crore

Income of the company stood at Rs 141.93 crore, down 26.57%

Tata Sponge Iron, an associate firm of Tata Steel, today reported 83.98% plunge in standalone net profit at Rs 7.09 crore for the quarter ended June 30, 2015, due to sharp fall in sales.

The company had clocked Rs 44.28 crore net profit in the corresponding period a year ago.

Income of the company stood at Rs 141.93 crore during the quarter under review, down 26.57% compared to Rs 193.3 crore in the April-June period of the last fiscal, it said in a BSE filing..

Tata Sponge Iron's total expenses also declined to Rs 141.1 crore in the June quarter of the current fiscal, down 4.55% as against Rs 147.83 crore in the year-ago period.

The company said it has disclosed Rs 32.50 crore as "contingent liability" with regard to the bank guarantee (BG) towards a coal block in the wake of a High Court order to keep the BG valid till August 31, 2015 by which the Court had asked the government to take a decision on it.

Coal Ministry in November 2012 had issued notice to the firm for invoking BG towards a block but the Court had granted a stay.

It also said that during the pendency of the matter, the Supreme Court had cancelled allocations of 214 coal blocks including the Radhikapur (East) Coal Block alloted to it in which it had made investments of Rs 180.63 crore as on June 30 this year.

As per the Ministry's directive to furnish expenses by previous allottees, the company said it has submitted the details.

The company's shares were trading 2.75% down at Rs 520.65 per scrip during the morning trade on the BSE.