Tata Steel said it was likely to write down a total of Rs 65 billion for the 2014-15 fiscal mainly due to impairment of a unit in the UK, a part of its European operations, and a coal project in Mozambique. The company expects to recognise a non-cash writedown of the goodwill and assets in the consolidated financial results in the fourth quarter for the year ended March 31, 2015 of approximately Rs 50 billion, mainly relating to the Long Products UK business in Tata Steel Europe which will now be fully impaired, the company said in a BSE filing.
The impairment also includes a write-down of investments in overseas raw materials projects in Mozambique, Ivory Coast and Taconite project in Canada because the economic viability of these projects remains uncertain at the current level of commodity price, it added.
“Additionally , the company undertook a non-cash impairment charge of Rs 15.77 billion in the first quarter of the FY 2014-15 towards its investment in the Mozambique Coal Project,” Tata Steel said. The company said it has substantially completed its year-end impairment of goodwill, property, plant and equipment review for the consolidated financial statements for the financial year ended March 31, 2015 as required under the Indian accounting standards.