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An exceptional income of Rs 99.88 crore has contributed to Tamil Nadu Newsprint and Papers Ltd reporting a steep jump in net profit for the third quarter of the current year as compared with the corresponding quarter previously.
TNPL has reported a net profit of Rs 63.49 crore (Rs 36.45 crore) on a total revenue of Rs 298.93 crore (Rs 267.54 crore) for the quarter ended December 31, 2011. The profit before tax of Rs 74.64 crore (Rs 47.05 crore) includes an exceptional item of Rs 99.88 crore due to the unwinding of hedge instrument related to long-term foreign currency loans.
If not for this item the profit before tax would have been lower by Rs 95.24 crore.
Hedge instrument
The company has taken refuge under a recent notification by the Department of Company Affairs providing for capitalising foreign exchange losses on long-term foreign currency loans in relation to depreciable fixed assets with effect from April 1, 2011, to capitalise Rs 122.32 crore. The depreciation of Rs 45.09 crore (Rs 28.36 crore) would have been lower by Rs 4.64 crore.
The exceptional item has helped the company buck the industry trend, which has seen its peers report a dampened performance during the quarter on low demand and falling prices.
On the NSE the company's shares of face value of Rs 10 closed at Rs 94.55 against the previous close of Rs 94.20.
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