ESSAR Energy, recently demoted from the FTSE 100, said yesterday its future was bright despite a tax dispute with authorities in India.
The company said January’s ruling against tax breaks had pushed it to a pre-tax loss of $1.1bn (£707m) for the 15 months to 31 March.
Essar changed its accounting period during the year but said the figure compared with a pre-tax profit of $365.5m in the 12 months to 31 December 2010. Excluding the exceptional charges, pre-tax profit fell to $195m.
January’s negative ruling by the Indian Supreme Court left the energy group liable for $1.2bn in taxes. The company is seek clarification on the timetable for payments.
Meanwhile Essar said it received provisional approval to clear forests at its Mahan coal block in India’s Madhya Pradesh state.
Essar Energy chief executive Naresh Nayyar said: “Things are improving in terms of regulation and there are lots of positives ahead.”
He said the company’s Vadinar refinery in India was key and that the firm was well placed to serve the growing power needs of India.
The company has raised its power capacity from 1,200 megawatts to 3,000 megawatts. Nayyar added: “Of course we would like to return to the FTSE 100, we think the coming years will be positive.”