Chennai, July 1
SAAG-RR Infra Ltd has reported a net profit of Rs 58.89 lakh for the year 2004-05, more than double than its previous year's figure of Rs 27.45 lakh.
The company's turnover also increased to Rs 15.92 crore (Rs 11.58 crore).
Profit before tax was Rs 99.37 lakh (Rs 30.29 lakh). But the company had to make a provision for taxation of Rs 39.94 lakh (Rs 2.84 lakh).
At a press conference here, SAAG-RR Infra's Managing Director, Mr R. Sriram, said that in 2003-04, the company had only to provide for the minimum alternative tax, while for last year it had to pay the regular tax.
Interest charges amounted to Rs 91.49 lakh, which is considerably more than the net profit. Asked about this, Mr Sriram explained that SAAG-RR, being in civil construction and infrastructure, had to lock up considerable amounts of money as earnest money deposit, while bidding for projects. Hence, the company's requirement of working capital, and consequently the interest costs, was higher.
Mr Sriram said that the current year would be better as the company already had projects worth Rs 20 crore on hand, executable this year. Besides, it had bid for projects worth another Rs 30 crore.
Last year, the SAAG group of Malaysia bought the majority stake in a Chennai-based company which was then renamed SAAG-RR Infra Ltd. SAAG has strengths in the oil and natural gas sector it undertakes jobs such as pipeline laying and repair and refurbishment of oil rigs and platforms. It has tie-ups with several European companies for accessing expertise.