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Cairn India reports net loss of Rs 1,044 cr in Q4 on crude slump

Total income also dipped 44% to Rs 1,665 cr; for the financial year 2014-15, the net profit slumped 82%

BS Reporter New Delhi
Last Updated : Apr 24 2015 | 12:23 AM IST
Cairn India Ltd, petroleum exploration arm of London-listed Vedanta Resources, has reported a net loss of Rs 1,044 crore in the quarter ended March as lower crude oil prices impacted margins. The company had reported a net profit of Rs 1,755 crore in the same quarter last year.

Total income during the quarter also dipped 44 per cent to Rs 1,665 crore from Rs 2,993 crore in the same period of 2013-14. The revenue was down “on account of lower crude prices and lower volumes by three per cent,” the company said in a statement.

During the quarter, Cairn India’s profit petroleum for Rajasthan block stood at Rs 398 crore ($64 million) and the royalty payment was Rs 462 crore ($74 million).

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“The operating expense during the quarter was higher at Rs 345 crore due to higher well maintenance cost,” the statement said. Overall gross capital expenditure incurred during the quarter was lower at $282 million.

For the financial year ended March (2014-15),  net profit slumped 82 per cent to Rs 1,320 crore as compared to Rs 7,454 crore in the previous financial year (2013-14). Total income for the full year also dipped by a fourth to Rs 8,855 crore.

“Despite record low oil prices and substantial cut in capex, we will at a minimum maintain Rajasthan production,” said Mayank Ashar, managing director and chief executive officer of Cairn India, adding “detailed work” is ongoing to allow the company to respond faster to the recovery in global oil prices.

During the quarter, Cairn India was served an order from the income tax department for not deducting withholding tax on capital gains arising during 2006-07 in the hands of Cairn UK Holdings Limited (CUHL), its erstwhile parent company, a subsidiary of Cairn Energy Plc.

This was in respect of the transaction of CUHL transferring the shares of Cairn India Holdings Limited to Cairn India Limited as part of an internal group reorganisation in 2006-07 to facilitate the initial public offering of Cairn India Limited.

A demand of around Rs 20,495 crore comprising tax of around Rs 10,248 crore and interest of Rs 10,247 crore is alleged to be payable. “The company does not agree with this alleged demand and is pursuing all possible options to protect its interest. Income tax assessments including transfer pricing assessment were duly completed for FY 2006-07 earlier,” Cairn India said. It has filed a writ petition before the Delhi High Court..

Its parent Vedanta Resources Plc has also filed a notice of claim against the Indian government under the UK-India bilateral investment treaty in order to protect its legal position and shareholder interests.

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First Published: Apr 24 2015 | 12:23 AM IST

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