Infrastructure developer IVRCL Ltd has incurred a net loss of ₹131.37 crore in 2016-17 resulting in the accumulated losses mounting to nearly ₹2,173 crore and substantial erosion of its net worth.
The net loss for the fiscal, however, was lower compared to ₹1.067 crore in 2015-16. The total income declined by 13.87% to ₹2,054.19 crore (₹.2385.23 crore).
The reduction in the losses was in view of recognition of deferred tax assets of a little over ₹957.05 crore. It also led to the company posting a net profit of ₹626.06 in the quarter ended March as against a loss of ₹265.57 crore in the corresponding period of previous fiscal. The total income during the quarter increased to ₹686.35 crore (₹655.19 crore).
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The independent auditor’s report said “in absence of convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised, such recognition is not in accordance with Indian Accounting Standard...”
According to the notes accompanying results for 2016-17, IVRCL has obligations towards borrowings totalling ₹5,347.42 crore, including an amount ₹1,768.24 crore falling due over the next 12 months.
The company is required to “generate additional cash flows to fund the operations as well as other statutory obligations notwithstanding the current level of low operating activities and difficulties with respect to realisation of its current assets, including litigation in various projects.
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The lenders may exercise certain rights available as per CDR/SDR, including withdrawal of concessions earlier granted by them.”
The company is hopeful of completing the divestment plan and meeting its obligation in due course of time with the help of a new investor.
“The management believes that the lenders have been approached by an investor with a non-binding offer to acquire the stake of the lenders,” the company said.