ITC net profit up 18%
Gold at six-year high
Corporation Bank net growth flat
First shoots of recovery
Sebi raps Morgan, 2 others
Eight services in WTO trade-off
Accounting noose tightens on brokers
Polaris approves Orbitech merger
Pajero fuels HM dreams
Foreign Exchange, Bullion, Stock Indices

Calcutta, May 22: 
ITC today unveiled a net profit of Rs 1,189.72 crore in 2001-02, an increase of 18 per cent over Rs 1006.26 in the previous year. Gross income from operations grew 13 per cent to Rs 9,982.44 crore during the year.

The company’s board, which met here today to finalise the annual results, recommended a dividend of Rs 13.5 per share as against Rs 10 in the previous year.

The earning per share for the year was a shade over Rs 48 compared with Rs 41 in 2000-01. Profit in the fourth quarter of the year at Rs 296.21 crore was 7 per cent higher than in the same period last year.

ITC’s net cash flow from operations shot up by 79 per cent to Rs 1,770 crore, which enabled the company to retire debts. ITC’s interest cost declined substantially from Rs 95.91 crore in 2000-01, to Rs 66.91 crore in the last financial year.

The results of the year include those of erstwhile subsidiary ITC Bhadrachalam Paperboards Ltd, which was merged with ITC in March last year. The amalgamation of Bhadrachalam contributed Rs 511 crore to ITC’s gross turnover, and Rs 101 crore to its cash profit.

Gross income from the tobacco business was Rs 8,020.92 crore, while that from other fast moving consumer goods — which include branded garments, greetings cards and packaged food — was Rs 22.06 crore.

ITC said it had scaled up the operation of its lifestyle retailing business. There are 42 Wills Lifestyle outlets across 35 cities in the country. The greetings card business was also being expanded by fostering new partnerships, both in India and abroad, the company added.

The hotels run by ITC, however, suffered from the ongoing recession in the industry. The hotel business posted a marginal loss on an income of Rs 162.38 crore during the year.

During the year, the company earned Rs 535 crore from export of agri-commodities other than tobacco. This was 48 per cent higher than the previous year’s income of Rs 361 crore. The total income from the segment was Rs 1,147.78 crore.

ITC said, this was largely due to the success of its click-and-mortar sourcing platform e-choupal, which was being scaled up and extended to cover other commodities.

The company is also considering use of the platform to distribute other products and services, including insurance. Deveshwar had earlier said ITC had already made a presentation to the Life Insurance Corporation on the success of its e-choupal network.

Value-added products of the paper and packaging segment posted an 18 per cent growth. The total income from the segment Rs 1,031 crore.

Volume dips

ITC’s cigarette sales in the domestic market declined by 8 per cent in 2001-02 financial year. The decline for the overall industry was 11 per cent during the year.

ITC said, the decline was largely due to the 15 per cent hike in excise duty and substantial increase of other state level taxes, which made cigarettes more expensive vis-à-vis other forms of tobacco and contraband cigarettes.

Income from the tobacco business was Rs 8,020.92 crore, including Rs 171 crore earned from export of leaf tobacco.


Mumbai, May 22: 
Gold prices soared today in the domestic markets, hitting a six-year high on concerns that India and Pakistan are on the brink of another war.

Standard gold shot up Rs 55 per 10 grams to Rs 5,290 from Rs 5,235 on Tuesday as stockists piled up. Ten-tola gold bar (.999 purity) rose to Rs 62,000 from Rs 61,500. Gold bar prices opened at Rs 61,700, which analysts said was the highest level since February 1996.

With today’s spurt, prices have jumped Rs 2,000 per 10 tola bar since the previous week. The gains come close on the heels of a study that pointed out that gold demand in the country was poor even in the marriage season.

The firm prices of the metal mirrored the trend in overseas markets. Spot gold surged to a 27-month high of $ 316.95 per ounce in Europe early Wednesday, against its previous New York close of $ 315.80 per ounce. Sources said prices had firmed up to around $ 318 levels. This has led to a feeling in some quarters that an increase to the $ 320 mark in the immediate term was close.

Prices of silver also strengthened in the domestic market. Ready silver (.999 fineness) moved up by Rs 30 per kilo to Rs 8,240.

In the stock market, the reaction to Prime Minister Atal Bihari Vajpayee’s call for a “decisive fight” was panic, but in an indication that the markets were taking the convulsions in their stride, the Bombay Stock Exchange sensex closed with a modest 11-point loss at 3175.49.

On Tuesday, bourses were smothered by a selling avalanche triggered by a tough-talking Vajpayee, and growing instances of skirmishes on the western border.

Later in the day, things looked up a little on Dalal Street, where institutions stepped in for good bargains. The recovery was also attributed to some short covering by speculators on the lookout for good picks.

Today, the 30-share index fell to intra-day low at 3144.18, but bounced back and stabilised around its overnight closing levels before finishing at 3175.49 against Tuesday’s close of 3186.53, a decline of 11.04 points.

Brokers day bourses will continue to be spooked by war and share values will be driven by events on the frontier.

Rupee firm

The rupee was a shade higher against the dollar today, closing at 48.97/98 compared with Tuesday’s finish of 48.98/99. It had rallied by around 4 paise yesterday, backed by strong dollar supplies from export proceeds and some determined central bank intervention.

Operators were reluctant to take large dollar positions on fears that the central bank would intervene with dollar sales through state-owned banks to support the rupee, a dealer said. Meanwhile, the RBI fixed the reference rate for the dollar at Rs 48.98 and for the euro at Rs 45.14.

Forward dollar premia ended higher. The six-month forward dollar premium, payable at the end of October, fell to 143-144 paise, but shot up to 148-146 paise at close.


Mumbai, May 22: 
The Mangalore-based Corporation Bank Ltd has posted a flat growth in net profit at Rs 45.37 crore for the fourth quarter of the financial year ending March 31, 2002, largely on account of increased provisions. Net profit a year ago stood at Rs 45.33 crore.

Chairman and managing director K. Cherian Varghese said the bank’s net profit for the year ended March 31 improved by 17.7 per cent to reach Rs 308.10 crore, from Rs 261.84 crore a year ago. He added that despite adverse conditions and stiff competition, total business of the bank increased from Rs 25,226 crore to Rs 29,911 crore, a growth of around 19 per cent. Total income in the reporting year was higher at Rs 2,327.61 crore, from Rs 2,096.63 crore.

The board has proposed a 40 per cent dividend for financial year 2001-02 subject to the Reserve Bank of India’s approval, resulting in an outgo of Rs 52.11 crore. Provisioning for bad debts in the fourth quarter rose to Rs 64.13 crore, (Rs 39.52 crore) and for the full year stood at Rs 139.13 crore (Rs 98.77 crore).

Net non-performing asset (NPA) level marginally increased in the year to 2.31 per cent from 1.98 per cent. The bank attributed this trend to industrial recession and the crisis faced by coffee growers.

For the year, while gross NPAs in absolute terms increased to Rs 587 crore (Rs 485 crore), net NPAs also rose to Rs 253 crore (Rs 171 crore).

Non-interest income in 2001-02 improved by Rs 89.85 crore at Rs 381.94 crore with major contributions from treasury operations, cash management services, exchange income and recovery of bad debts. Income from treasury operations was Rs 135 crore, Varghese said. Aggregate deposits for the year stood at Rs 18,924 crore, an absolute growth of Rs 2,364 crore. Net advances increased by Rs 2,321 crore to touch around Rs 11,000 crore, a growth of 27 per cent. For the current year, the bank expects advances to touch Rs 13,000 crore.

Among its subsidiaries, Corp Bank Homes Ltd reported a net profit of Rs 3.38 crore (Rs 1.6 crore) while Corp Bank Securities Ltd recorded a net profit of Rs 66.01 crore (Rs 14.79 crore). The housing loan portfolio increased from Rs 270 crore to Rs 675 crore, which the bank aims to double in financial year 2002-03 as part of the focus on retail segment, he said.

The prime lending rate was at 11.5 per cent and the bank had lent Rs 1,900 crore at sub-PLR, which constituted 17 per cent of total lending portfolio. “We expect the loan growth to be at 18-20 per cent in 2002-03,” he added.

Corp Bank executive director P. K. Gupta said the bank had cut the interest rate for deposits of three years and above by 25 basis points to 8 per cent with effect from May 27. The bank has also transferred Rs 82.5 crore to the investment fluctuation reserve, he added.

Restructuring plan

Meanwhile, the bank’s board will meet on May 27 to discuss the recommendations of its internal committee on the bank’s restructuring.

“The committee of general managers set up to study the structure of the bank has submitted its report but the board was unable to take a final decision today,” Varghese said after an analysts’ meet here today.

“We want a design which will enable the bank to take faster decisions in the growing competitive market,” he said.


New Delhi, May 22: 
Bouncing back from a negative growth of 0.3 per cent last year, six infrastructure industries achieved a 5.9 per cent growth rate in April, signalling that a recovery has started.

According to the latest crop of monthly numbers, the spurt in industrial production was mainly due to a 10.1 per cent growth in crude petroleum and a 10.6 per cent rise in cement. While coal production grew at 6.3 per cent against 2.1 per cent last year, production of petroleum refinery products was up 7.8 per cent against a negative 1.4 per cent in April last year.

The other key sectors — electricity and finished steel — recorded a moderate increase of 4.9 per cent and 2.6 per cent. Finished steel output increased to 2.45 million tonnes in April 2002 against 2.38 million tonnes in the same month last year. The industry, which had been struggling to cope with a global slowdown for long, had produced 4.7 per cent less in the same month last year.

Production of crude petroleum went up to 2.8 million tonnes in April 2002 against 2.5 million tonnes in April 2001. Coal production increased to 25.4 million tonnes in April 2002 compared with 23.9 million tonnes in April 2001. Cement production went up to 9.8 million tonnes in April 2002 from 8.9 million tonnes in the same month last year.

Electricity generation of hydro, thermal and nuclear put together rose to 43342 million kilowatt per hour in April 2002 against 41307 million kwh in April 2001. Production of petroleum refinery products increased to 7.9 million tonnes in April from 7.4 million tonnes a year ago.

Tyre production up

Domestic tyre production rose 10 per cent in March, helped by a growth in the car, truck, bus, utility vehicle and motorcycle segments.

According to data released by the Automotive Tyre Manufacturers’ Association (ATMA) today, total production increased to 38.78 lakh tyres from 35.35 lakh in March 2001. The average monthly tyre production was up by 2 per cent in 2001-02 to 36.26 lakh tyres from 35.39 lakh tyres in the previous year, the data said..


Mumbai, May 22: 
The Securities and Exchange Board of India (Sebi) today let off J.M. Morgan Stanley, IL&FS Merchant Banking and Ketan Parekh’s Triumph International Finance with a warning for violating merchant banking norms in the planned merger of Balaji Telefilms (BTL) and Nine Network Entertainment.

This breach of due diligence rules was the first case against the companies. In its inquiry against the three firms, lead managers to Balaji Telefilm’s IPO, the market regulator found that none of them had raised the implications of a merger proposal on the disclosure made in the prospectus, nor questioned the company on the development when they became aware of it.

The merger never took place, for entirely different reasons, but it had generated a lot of interest, propelling the Balaji scrip 20 per cent in a single session.

On Monday, Sebi cancelled the registration of Triumph for manipulation of Global Trust Bank and Lupin Laboratories’ shares by creating artificial volumes last year.

Sebi said the lead managers did not alert the regulator “as soon as” they came to know of the merger proposal. In an offer document prepared for a public issue in October 2000, Balaji said it did not plan to alter capital structure within six months of the floatation.

Despite the disclosure, the Balaji board gave an “in-principle” nod for a merger with Australian media Moghul Kerry Packer-promoted Nine Network on November 21, 2000, barely a month after the IPO.


New Delhi, May 22: 
India will press for market access in eight services at forthcoming World Trade Organisation (WTO) talks aimed at opening up markets. On this list are banking, accountancy, computer science, education, health, audio-visual and maritime services.

These have been identified by the commerce ministry after a study conducted by ICRIER, an economic think-tank, found them to be potential money-spinners.

The government has already set up what it calls “stakeholders’ consultation forums” to finalise the wish-list to be put before the June 30 meeting in Geneva. While asking other countries to allow more Indian services, the government has not been able to pick up the ones that it would open to MNCs.

“We will resolve the issues depending on the requests made to us. Different countries want us to open up different sectors. But this will only depend on the reasonableness of their demands. Some service sectors have already been opened up. There are others where we are very strong, but need to reorganise before letting foreign multinationals in. The research on what we can possibly offer other nations is still going on,” sources in the ministry of commerce said.

Earlier, the government made up its mind on asking its trading partners to allow Indian firms into financial services, construction and planning, engineering and technical services, project exports, techno-economic services, telecom service and energy related services. It dropped some of these areas when it woke up to the “incompetence” of Indian firms in certain sectors, and the unorganised manner of their operations.

“The world has always appreciated the education system in India. Though we are contemplating something in the education sector, we have not finalised anything so far because we are trying to find out how well this has worked in other countries,” he said.

The government will appoint a team of experts for each negotiation. In a paper submitted to the WTO, it has said the meetings should be held only in Geneva — instead of all the mini-ministerial conclaves that the developed nations are trying to hold around the world. It has insisted on drafts before the ministerial meeting, voiced opposition to last-minute changes in blueprint and tried to resist eleventh-hour pressures in talks.

“If not checked at the right moment, developing countries will face negotiating pressure which may force them to make mistakes. It is best to clear up issues before ministerial proceedings start,” the official said.

India has also decided to stick to its stand on issues related to trade, investment and competition as well as labour issues in the meetings scheduled for July, September and November. “These have been the contentious issues in Doha. We have requested them to keep these out of trade talks, but this has not happened. If anything, we want bilateral discussions on this, not multilateral talks,” he said.


New Delhi, May 22: 
Alarmed by various scams involving brokerages, the Institute of Chartered Accountants of India (ICAI) has come out with fresh guidelines on auditing accounts of stock broking firms. The new norms call for strict separation of broker’s own dealings and that done on behalf of clients.

Vijai Kapur, secretary, auditing practices committee of ICAI, who was involved in preparing the guidance note, said, “In India, the problem of mixing up of accounts by brokers is rampant, and it’s the accountant’s job to ensure that it is not so...We are laying down rules here to be more careful on this score.”

Though “the recent Home Trade scam has brought to light the menace of non-delivery of securities and diversion of funds,” Kapoor said the problem is quite widespread.

The guidance note, which was released recently, highlights that the auditor should verify entries appearing in the stock broker’s own trading account with respect to the bills raised for own account trading. The balance appearing in this account should be identified as profit or loss or closing stock-in hand, as the case may be.

The note stipulates that a member of a stock exchange is required to maintain a separate bank account for the client’s money and another for their own money. No payment for a transaction in which the member has traded on his own account should be made from client’s account.

It further states that no money can be paid into client’s account other than money held or received on account of the client or a cheque or draft received from the client. No money can be paid from a client’s account other than the money required for payment to the clearing corporation on behalf of the client.

However, in either case there is a provision for replacement of any sum which may by mistake or error be drawn/deposited from or into the client’s account.

The guideline says that while scrutinising the register, the auditor should analyse the stock balance appearing in this register and segregate the same into ‘client stock’ and ‘own stock’.

The auditor should inquire into reasons for client’s stock remaining with the member.

It may be recalled that the Home Trade scam came to light only when a co-operative bank’s accounts were checked and it was found by an inspection party that it did not have the government securities that Home Trade was supposed to have bought for it.

Further, the guidelines state, the auditor may also, on a random basis, physically verify the stock available with a member in certain scrips, if so desired.

Elaborating the point, Kapur says, “it is established by law that brokers are not the right people to hold securities. It can be kept with them only for short periods and out of necessity but not after that.”. The authorised custodians of securities are banks or they should be in ‘strong rooms’ of companies or other places of safe keeping, he added.


Mumbai, May 22: 
The board of Polaris Software Labs Ltd today approved the proposal for its merger with foreign bank major Citigroup’s unlisted technology subsidiary Orbitech Solutions Ltd, creating an entity which will be the country’s sixth-largest software services exporter by sales.

The proposal entails a swap ratio of 14 shares of Polaris for 25 shares of Orbitech.

“The board has approved the memorandum of understanding on the merger of Orbitech Solutions Ltd with the company,” a Polaris statement informed the Bombay Stock Exchange.

The board approved the signing of the final agreement, subject to the due diligence evaluations and appropriate court and shareholder approvals.

The know-how of Polaris’ banking solutions delivery combined with that of Orbitech will provide the new entity a delivery platform for future customer acquisitions, analysts said.

Orbitech known in the markets for its Orbisuite banking software product, is wholly owned by Citigroup. The foreign banking major owns a 6.25 per cent stake in Polaris and the software latter has substantial orders flowing every year from the banking group.

Analysts expect the new entity to benefit from the synergies —Orbitech’s strength in developing banking applications are seen combining well with Polaris implementation capabilities and extensive overseas client base.

Polaris began by providing software services for Citigroup’s Indian operations and its other Asia-pacific entities. Its other key clients include AIG Inc, and it has 30 clients in the banking and financial services sector.

For the fiscal year 2001-02, Orbitech posted a profit of Rs 102.9 crore on sales of Rs 333 crore in sales, while Polaris earned a profit of Rs 58.8 crore on sales of Rs 283.22 crore.


New Delhi, May 22: 
It’s finally arrived. One of the most admired utility vehicles across the world—Pajero GLX—was launched in the country last night by Hindustan Motors, which is importing the vehicle as a completely-built-up unit.

“It is an umbrella brand. After the Lancer, the Mitsubishi Pajero will give HM the required boost. It is a very strong brand world-wide, whereas HM is known only for its Ambassador. We believe the Pajero will provide us with the thrust to take on the market,” said C. K. Birla, chairman, Hindustan Motors Ltd.

“There are already over 500 Pajeros on Indian roads. We feel the premium SUV market will grow quickly with the increasing level of maturity of the Indian automobile industry,” Birla said here last night.

Powered with a 3.2 litre, 16 valve DOHC, inter-cooled, turbo-charged DI-D (diesel) engine, the ‘Mountain Cat’ (as it has been nicknamed by Birla), beat the heat by appearing from a waterfall among the mountains that was acting as the launch stage.

“We wanted to project it as a rough terrain vehicle. It should have been an outside event. Because of the heat, we had to arrange the event inside the hall, but we tried to replicate the image inside the hall, down to the dresses of the attendants,” said Birla.Though the GLX, billed as a sports utility will not be made in the country, HM plans to eventually indigenise the GL and GLS versions at its Chennai plant after a launch this September. The all-terrain vehicle, which comes with a price tag of Rs 33.8 lakh (ex-showroom Delhi), will be assembled at HM’s Thiravallur (Tamil Nadu) plant where it currently produces Mitsubishi’s premium mid-size car ‘Lancer’.

HM expects to sell 300-350 Pajeros annually, he said, adding the vehicle would be delivered over a period of 60 days after booking against full advance payment. The Pajero will be available in select dealerships in Delhi, Mumbai, Chennai, Bangalore, Hyderabad, Cochin and Chandigarh in the initial phase.

HM also plans to produce a lower-end 2800cc diesel engine version of the vehicle at Rs 20-25 lakh from September-October this year by importing completely-knocked-down units (CKDs), executive director B. K. Chaturvedi said.

The Pajero will be followed by a host of other entrants in the same category — Hyundai Terracan, Honda’s CR-V and Toyota’s Prado. However, with a ground clearance of 225 meters and a fuel efficiency of 7-8 km per litres, the 7-seater Pajero with a horsepower of 158bhp is reputed to be one of the best in its segment.



Foreign Exchange

US $1	Rs.48.98	 HK $1	Rs.  6.20*
UK £1	Rs.71.57	 SW Fr 1	Rs. 30.70*
Euro	Rs.45.37	 Sing $1	Rs. 27.00*
Yen 100	Rs.39.33	 Aus $1	Rs. 27.00*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 5400	Gold Std(10 gm)	Rs. 5290
Gold 22 carat	Rs. 5100	Gold 22 carat	NA
Silver bar (Kg)	Rs. 8300	Silver (Kg)	Rs. 8240
Silver portion	Rs. 8400	Silver portion	NA

Stock Indices

Sensex		3175.49		- 11.04
BSE-100		1604.24		-  1.76
S&P CNX Nifty	1045.30		-  3.90
Calcutta		109.92		-  1.27
Skindia GDR	 525.74		- 14.88

Maintained by Web Development Company