Price swings bite into Reliance net
ACC cements growth, net soars 175%
IFCI becomes risk-prone
SMIFS Capital offloads BSL stake
CII hatches plan to raise Destination East slogan
Virtual watchdog ready to shock power stealers in states
Sun Life to pump more funds into Birla venture
LIC beats competition, posts record growth
Infosys in expansion mode
Foreign Exchange, Bullion, Stock Indices

Mumbai, April 23: 
Reliance Industries� (RIL) gave the market more than it was looking for: a net profit of Rs 2,814 crore in 2001-02 and Rs 672 crore in the fourth quarter.

As the country�s largest private conglomerate took the wraps off its numbers, it beat analysts� expectations, but conceded that the three months to March had been a wrench.

The net profit of Rs 672 crore represents a decline of 11.46 per cent over Rs 759 crore in the same quarter of 2000-01.

The strain on the bottomline was the result of a fall in international prices of petrochemicals, the company�s bread-and-butter business rocked by volatility. Fourth-quarter sales slid 4 per cent at Rs 6,195 crore from Rs 6,444 crore in the same period of 2000-01.

Analysts had forecast a net profit of Rs 450-550 crore. Some were at loss to explain how the company did better than most had thought, others said one of the factors could have been the large contribution of trading sales, which stood at Rs 447 crore for the quarter.

For 2001-02, net profit at Rs 2,814 crore was higher than Rs 2,646 crore in 2000-01, while sales at Rs 24,286 crore shrunk 5.61 per cent from Rs 25,731 crore.

Combined with a trading sales of Rs 746 crore, the fall was 10 per cent at Rs 25,032 crore against Rs 28,008 crore.

Managing director Anil D. Ambani said his company had held up well in the face of tough market conditions. �We are encouraged by Reliance�s performance in one of the most challenging times for the global and domestic petrochemicals industry,� he said.

The year, he said, was marked by uneven demand conditions, increased volatility in feedstock prices, and sharp declines in product prices caused by excess supply.

Sibling�s report card

Overshooting market estimates, Reliance Petroleum (RPL), which is to be merged with Reliance Industries, announced a 5 per cent rise in fourth-quarter net profit at Rs 405 crore compared with Rs 384 crore in 2000-01.

The modest gain came on the back of a rise in sales to Rs 7,620 crore from Rs 7,506 crore in the same quarter of 2000-01.

Net profit for 2001-02 shot up 12.5 per cent to Rs 1674 crore from Rs 1,464 crore in the previous financial year. Sales inched up 7 per cent to Rs 33,117 crore from Rs 30,963 crore.

Reliance Petroleum�s capacity utilisation was a recore 107 per cent, helped by strong exports, which were valued at Rs 8,476 crore in 2001-02.

The company said domestic demand for petroleum products grew only 1 per cent in the year. The offtake of diesel dropped 2.2 per cent, while kerosene sales fell 8.7 per cent. On the other hand, sales of LPG grew about 10 per cent while that of gasoline was up 6.3 per cent.


Mumbai, April 23: 
Associated Cement Companies (ACC) today unleashed a scorcher � a 175 per cent surge in 2001-02 net profit at Rs 130 crore from Rs 47 crore in 2000-01.

What was remarkable was that the bottomline boost came on a modest 10 per cent rise in sales. Buoyed by the stellar performance, the board has decided to reward shareholders with a dividend of Rs 3 per share in a gesture that would cost the company Rs 51.24 crore.

Total income was Rs 3,322 crore compared with Rs 3,032 crore in the previous year, an increase of 10 per cent. Sales volume, including those of traded cement, was higher at 12.18 million tonnes against 11.06 million tonnes in the previous year, an increase of 10 per cent again.

Fourth quarter numbers were not compiled separately, but calculations based on figures available for the first nine months show that net profit for Jan-March was Rs 52.52 crore � better than market forecasts.

ACC said average sales realisation for cement remained almost unchanged from the previous year. The highlight was the sharp reduction in production costs and a steep increase in throughput, the company said.

The impact of a rise in cost of major inputs was offset by improvements in operational efficiency. Depreciation was higher at Rs 151 crore compared with Rs 141 crore in the previous year.

Clinker production stood at 8.75 million tonnes for the year, up from 8.21 million tonnes recorded in 2000-01. Production of cement was higher at 11.47 million tonnes compared with 10.21 million tonnes in the previous year. This represented a growth of 11 per cent.

Turnover from the ready-mix concrete business was marginally lower at Rs 88 crore against Rs 91 crore in the previous year, mainly because work on some dedicated projects were completed, the company said.

ACC�s strong performance comes at a time when the cement industry logged a robust growth of 9.6 per cent in 2001-02 against a negative growth of 0.6 per cent in 2000-01.

HCL net up 1.7%

An average 2.35 per cent pressure on billing rates forced HCL Technologies to post a meagre 1.7 per cent rise in its net profit for the third quarter at Rs 131.2 crore.

�It is primarily the billing pressure which was 1.8 per cent for the onsite work and 2.9 per cent for the offshore projects that forced us to post a marginal increase,� S. L. Narayan, vice-president (finance), said today.

The company expects an average 2 per cent pressure on billing rates in the current financial year, he said.

Revenues during the quarter stood at Rs 409 crore, up 12.6 per cent in the same period of the previous accounting year.


New Delhi, April 23: 
IFCI Ltd has tumbled into the risk-prone category with Icra revising its short-term rating two notches down to A4 from A2(+) earlier.

The A4 rating signifies low safety and that the FI is likely to default in case of adverse changes in business/economic conditions.

The Delhi-based financial institution�s long-term rating has also been downgraded by two notches to LBB from LA(-). The long-term rating is now just one notch above the risk-prone category. LBB denotes inadequate safety�which means that timely payment of interest and principal is more likely to be affected by present or prospective changes in business/economic circumstances.

IFCI�s medium-term rating has been brought down by one notch to MB from MA. The medium-term rating is also just a notch above the risk-prone category. MB denotes inadequate safety which mean that timely payment of interest and principal is more likely to be affected by future uncertainties.

This is the fourth time that IFCI�s credit rating has been downgraded. Last September, its long-term rating fell three notches to LA(-) from LAA(-). The short-term and medium-term ratings were downgraded by one notch from A1(+) to A2(+), and from MAA(-) to MA respectively.

The revised Icra ratings have been placed on rating watch with negative implications. Icra had placed the earlier ratings on a rating watch in September last year, as IFCI was taking various measures to restructure its liabilities and improve its financial fundamentals.

When reviewing the rating, Icra took into account any support that the government was likely to extend to IFCI. The revised ratings factor in IFCI�s efforts, duly supported by the government due to the FI�s position in the Indian financial system, to restructure its liabilities.

As part of this exercise, the government has already implemented a financial package, which includes infusion of funds by the Government of India, State Bank of India, Life Insurance Corporation, and Industrial Development Bank of India, to improve IFCI�s capital adequacy.

The government has infused Rs 400 crore as Tier I capital into IFCI, while SBI and LIC have contributed Rs 200 crore each. IDBI has contributed approximately Rs 145 crore to the Tier I capital of IFCI.

The revised ratings also take into account the continued pressure on liquidity due to asset liability mismatches, and low recoveries from assets due to high NPAs, resulting in delays in meeting some of its obligations. High NPA levels resulted in income loss and increased the provisioning/write-offs over the years.

For the nine months ended December 2001, IFCI reported a negative net income with interest expenses higher than the total income.


Calcutta, April 23: 
Calcutta-based investment firm SMIFS Capital Services has offloaded its 6.33 per cent stake in textile major BSL Ltd (formerly known as Bhilwara Synthetics), while jute baron Ghanshyamdas Sarda has built up a 10 per cent stake in it.

Sources in SMIFS Capital confirmed that the firm had sold the shares of BSL�a company promoted by the L. N. Jhunjhunwala group.

�We bought the shares from the market while SMIFS Capital sold,� Sarda said.

The shares held by SMIFS Capital had devolved on it from a rights issue of BSL about five years ago. Officials of SMIFS Capital alleged that the BSL management had promised to buy back the shares from them, but reneged on the commitment.

BSL�s chairman and managing director Arun Churiwal could not be contacted. The promoters of the company have in the recent past increased their stake by close to 3 per cent, buying the shares from the market. According to the disclosures made by BSL in December last, they held 34.29 per cent in the company.

Sarda continues to buy the BSL stock from the market. �Even today we bought 55,000 shares from the market. As long as it is available for a reasonable price, we will buy. BSL is a good firm with healthy financials, and a brand worth nothing less than Rs 200 crore,� Sarda said.


Calcutta, April 23: 
The Confederation of Indian Industry (eastern region) has drawn up an action plan to introduce better governance in the eastern states and create a positive image to attract investments.

CII�s priority in the eastern states is to encourage better governance through state-level reforms, restructuring and disinvestment of state PSUs, improving city administration and urban finance and improving effectiveness of the administrative machinery to speed up decision making.

Addressing a press conference here today, Dipankar Chatterjee, the newly-appointed chairman of CII (eastern region) said, �These are of critical importance for the eastern states if they want to attract new investments and revive existing industry.�

CII is supporting each state to take advantage of their inherent strengths in order to leverage a more competitive position. For example, the focus of CII�s initiatives is on developing the services sector in West Bengal.

In Jharkhand, Orissa and Chhatisgarh, it is taking steps to promote the development of the mining and mineral-based industry and in Assam and the north-eastern states, CII�s efforts this year will be to promote tea, tourism and petroleum sectors.

CII feels that Bengal�s initiative to develop an alternative model of growth is an effort in the right direction. �We will help the government in its endeavour to develop an alternative model,� Chatterjee said.

Though there has been some perceptible change at the top level of administration in Bengal, Chatterjee said there has been hardly any change at the lower levels of the bureaucracy. �The message has not penetrated to the grassroots levels,� he said. The second major area of focus for CII this year would be on gaining competitive advantage through technology upgradation and better use of IT. This will require networking with technology institutions and other centres of learning to improve knowledge.

CII feels that there is a need for restructuring companies and is taking certain initiative to strengthen counselling, especially for the small and medium entrepreneurs members through a consultancy division.

�There has been inadequate leveraging of these natural disadvantages. CII has been carrying on a series of unusual initiatives to restore the competitive advantage of this area. Such initiatives include taking study missions to remote villages in backward districts of Bengal to study the problems of industry, assisting the state government in implementing self-employment schemes, and commissioning a study to improve the designs of traditional handicrafts in north east India,� he said.

Infosys chief

CII has taken the initiative to bring in Infosys chief N. R. Narayana Murthy on August 20 to Calcutta. �We are planning to hold an interactive session with him which will be attended by budding young entrepreneurs,� Chatterjee said.


New Delhi, April 23: 
Power stealers beware � a virtual watchdog is ready to byte.

The state electricity boards (SEBs) �which have been wringing their hands to find ways to plug the huge transmission and distribution losses that are as high as 45 per cent in some cases � have roped in the best brains from the world of information technology to trace every unit of power generated from its source to the end user.

�We want to track each unit of power from the stage of its generation till it reaches the homes. This will involve accurate billing and efficient distribution of power. Companies like TCS, Wipro and Infosys have already done some work abroad on such projects,� said Nandan Nilekani, chief executive officer, managing director and president of Infosys who now wears another hat as head of IT task force on power.

IT solutions have already been used successfully by the Andhra Pradesh State Electricity Board and Mumbai-based BSES Ltd. The experiment will serve as a benchmark for the IT task force on power, which has been assigned the task of drawing up a road map to improve power sector using information technology.

�The challenge is to develop a model based on the experience of the success stories in power sector using IT. It is important that IT is used to bring down the distribution losses which is a major problem faced by a number of state electricity boards.� Nilekani said.

The task force has been asked to prepare a roadmap for introduction of IT in power sector to reduce transmission and distribution losses in SEBs. Powergrid Corporation of India Limited (PGCIL), the monopoly power transmission company, will be chief sponsor for the work to be undertaken by the task force.

Speaking on the sidelines of a seminar on �IT-Energising the Power Sector� here today, Nilekani emphasised the need to set up the infrastructure like proper meters and reliable power lines, before IT could be used to streamline the power sector.

In addition, the task force will focus on four areas � to review the existing practices regarding the use of IT in the power sector; to identify new developments in the IT sector that could be successfully applied in the power sector, especially in the area of distribution; to prepare a management information system exclusively designed for power sector; and to undertake pilot projects to demonstrate the utility of IT use in the power sector.

The task force consists of representatives from the PGCIL, Central Power Research, Central Electricity Authority, representatives of the Meter Manufacturers Association, Karnataka Power Transmission Corporation, Maharashtra State Electricity board, ministry of information of technology, IDFC and the Union power ministry.

The entire exercise will help the state electricity boards to increase efficiency in billing and revenue collection, to keep a tab on 100 per cent metering and energy flow in the system and put in place a better management information system.


Mumbai, April 23: 
Buoyed by the success of its insurance joint venture with the AV Birla group, Canadian financial services major Sun Life Financial Ltd has decided to increase its investment in the venture to $ 100 million from over $ 65 million presently.

Birla Sun Life Insurance�the joint venture� which is looking at entering the pension fund arena for which a separate company could be created, aims to be among the top three life insurance companies in the country over a period of five years.

The AV Birla group, which has identified financial services as one of its core areas,also plans to increase investment in the life insurance sector.

Speaking to reporters today on the occasion of the first anniversary of the insurance venture, James Prieur, president and chief operating officer, Sun Life Financial said, �We are planning to raise our investment to the maximum level allowed by the regulatory authorities�. Prieur added that the performance of the venture�s life insurance in the country was better than that of Sun Life�s operations in Hong Kong and Indonesia combined.

S. K. Mitra, director, financial services, AV Birla group, explained that additional capital was constantly needed in the life insurance business as it would take at least six years for a company to make profits. �Our group is prepared to invest more in this sector and it will be to the tune of hundreds of crores,� he added.

During the year, Birla Sun Life Insurance achieved a total sum assured of more than Rs 1,600 crore, with annualised premium surpassing estimates by more than 30 per cent. Mitra said the venture has drawn up a plan to treble its performance this year.

The company has so far opened 12 branches in nine cities and this year it aims to set up 22 branches in the country.


Mumbai, April 23: 
The Life Insurance Corporation of India (LIC) today announced a 137 per cent growth in first premium income, a 54.34 per cent growth in sum assured and a 16.24 per cent growth in the number of policies for the financial year 2001-02, the highest ever growth in the history of the corporation.

LIC sold 2.32 crore policies for a sum assured of Rs 1,92,575.36 crore. The first premium income alone raked in by the insurance major was to the tune of Rs 14,844.05 crore. Jeevan Shree accounted for almost 40 per cent of the new premium income. Out of this, almost 61 lakh policies are sold in the month of March.

The performance comes in the first year of competition from the 11 private sector insurance companies.

During the year, LIC settled 85.27 lakh claims in all, both maturity and death, as against 73.47 lakh settled in the previous financial year. �By far we believe this should be the largest number of claims settled by any life insurance company anywhere in the world,� managing director A. Ramamurthy said.

Confident that LIC will continue to post an impressive growth this year, Ramamurthy said the corporation has set itself a growth target of 40 per cent. �The market is set for a huge expansion,� he said. It has an investible corpus of Rs 2,20,000 crore.

Out of the 2.32 crore policies sold during the year, 14.03 lakh policies have come under Bima Nivesh/single premium and individual pension plans. Ramamurthy said that out of the total first premium income of Rs 14,844.05 crore, Rs 6917.84 crore has come under individual assurances (excluding Bima Nivesh and individual pension plans) alone, Rs 5,364.85 crore under Bima Nivesh/single premium and Rs 2561.35 crore under the individual pension plans.

Speaking to reporters, N. C. Sharma, managing director LIC said: �We would have done still better if it had not been for the state of Gujarat. A majority of the new accounts (30 per cent) are opened during the last month of the financial year and unfortunately the state was gripped at that time by tension due to the communal flare-up.�


New Delhi, April 23: 
Infosys Technologies is on an expansion spree. The infotech powerhouse has sought the government�s approval to set up a 100-acre campus near Bangalore in addition to its eight campuses across the country.

The facility will be used for its new company that will focus on developing software solutions for the financial sector with a special focus on companies and institutions dealing with mortgage and claims.

Speaking on the sidelines of a seminar on �IT�Energising the power sector,� Infosys president and managing director Nandan Nilekani said, �We have made a request to the government for an additional 100 acres of land around Bangalore. We will take up the facility at an appropriate time.�

The company currently has facilities in eight cities including Bangalore, Bhubaneswar, Chennai, Hyderabad, Pune, Mangalore and Mysore. It also has offices in the US, Europe and Asia.

When quizzed about the company�s acquisition plans, Nilekani said acquisition was an �intended strategy� of Infosys and it will look for companies that will enhance its objective of offering end-to-end services.

�There were certain things which needed to be done organically and some inorganically. We would like to grow in both ways,� said Nilekani.

�We have not decided about the number of companies we would like to acquire, so there is no question of shortlisting. It could be firms in the US Europe or India,� he added.

Infosys Technologies offers end-to-end consulting for global corporations. The company has partnered several Fortune 1000 companies providing a wide range of services for technology-driven business transformation initiatives.

These services include e-strategy consulting and solutions, large application development and enterprise integration services. Infosys also has product co-development initiatives with numerous communication and internet infrastructure companies that are creating the building blocks for the digital economy.

The Global Delivery Model of the company leverages talent and infrastructure in different parts of the world to provide high quality, rapid time-to-market solutions.



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