Andersen gets a Young look
The pangs of name dropping
Reliance sews grand retail network plan
Hindalco Q4 net up 26%
ICICI Bank net up 60% to Rs 258 cr
Caltex gets go-ahead to lift 100% in local unit
Rai Bahadur legacy lives on for heir apparents
Khaitans sell Bhopal property
Discovery discovers recast plan
Foreign Exchange, Bullion, Stock Indices

Mumbai, May 3: 

New firm dwarfs PwC in India

Ernst & Young today said it was taking all partners and employees of Arthur Andersen India in its fold, spawning the largest accounting firm in the country.

According to a joint statement issued this evening, Bobby Parikh, Andersen�s country managing partner, will be the new firm�s chief executive officer. Kashi N. Memani will serve as its chairman and country managing partner.

Ernst & Young will absorb all Andersen India employees, except the 140 individuals who work for its consulting arm, Parikh said.

The announcement, about a relationship cautiously being described as a tie-up, was made by the top-brass of both accounting companies at joint press conference here today.

Senior officials laboured to remove the obvious perception that it is a merger or an acquisition.

The coyness could be the result of a circumspect Ernst & Young brass trying to avert the possible fallout of Andersen�s legal problems in the Enron case on the combined entity. Andersen�s role in the fall of the Houston-based energy giant is still being probed in the US.

The Indian partners and employees of the beleaguered Arthur Andersen will leave behind the Andersen name and join E&Y to create the biggest professional services firm that could dwarf PricewaterhouseCoopers as the leading accounting and audit house.

�It will create the leading professional services firm in India, with over 60 partners, over 2,000 employees and an enviable client base,� the firms said in their joint statement.

Ernst & Young snapped up Andersen�s operations in more than 40 countries since the Chicago-based Big Five accounting and consulting major began to disintegrate under the weight of the implosion at Enron.

Andersen goes on trial next week for obstructing justice by allegedly destroying thousands of records relating to its auditing of Enron, which became the biggest US corporate house to go file for bankruptcy last December.

As its image took a beating, Andersen lost more than 200 key clients abroad, forcing many of its overseas units to stay float through mergers or buyouts.

In India, Wockhardt, a leading pharmaceutical company, became the first company to dump Andersen for another audit firm.

However, Paul Ostling, Ernst & Young Global executive partner, said 40 per cent of companies that had fired Andersen world-wide signed up with Ernst & Young.

On being asked about redundancies, Ostling said the healthy growth recorded by the two companies would keep layoffs away. �Revenues of both firms had been growing at the rate of 20 to 40 per cent a year,� Ostling said.

Discussions about the future of Andersen�s consulting unit are under way, Parikh said, hinting that an announcement to the effect could be days away.


Mumbai, May 3: 
For many at Arthur Andersen, partners and employees included, shedding the Andersen tag will not be easy. For, the name brings back a flood of memories of the years spent in corporate fame and how their lives unravelled along with Enron. Bobby Parikh, Andersen�s dapper country managing partner and the new firm�s CEO, said the decision to shift loyalties was a deeply emotional change.

�When things started crumbling, it became a deeply emotional thing as for many, including myself. Andersen was the only life we knew,� he said. Turning philosophical after a few moments, he went on to add: �We have to learn to look at the future and not at the past.�

One of the big five accounting firms, Andersen faces US courts from May 6, charged with obstructing justice by allegedly shredding sheaves of documents related to its auditing of Enron. The one-time energy giant based in Houston became the biggest US corporate to file for Chapter 11 bankruptcy in December.

Asked about the new alignment with Ernst & Young, Parikh was more circumspect. �Ours is a peoples� game. We have people, skills and clients but no brand. E&Y, on the other hand, has all these, and a brand.

Paul Ostling, the executive partner of E&Y London and the man who lead efforts to induct Andersen partners and employees, was more forthcoming. Speaking in defence of Andersen employees here today, he said �It�s not a horror story here at all. In fact, even in the US, there are thousands who had nothing to do with Enron. We are privileged to have the Andersen team with us. It is very hard to get good professionals. It is a win-win situation for all as India is a growing market.�

Ostling flew into Delhi from London last Wednesday to start deliberations with E&Y partners, Andersen partners and lawyers.


New Delhi, May 3: 
Reliance Petroleum is planning to open 5,000 petrol stations across the country to take on the state-run oil giants like Indian Oil Corporation, Hindustan Petroleum Corporation, Bharat Petroleum and IBP.

Reliance, which is moving aggressively to retail its own brand of diesel and petrol that it produces at its Jamnagar refinery, has sought the government�s permission to set up its own retail network which will be in place over the next two years. The Jamnagar refinery is the largest in the country with a capacity of over 27 million tonnes of throughput.

Reliance is reported to be buying up large tracts of land along the national highways where it plans to build its petrol stations. The company has elaborate plans to open petrol stations with large convenience outlets and restroom facilities for tired travellers on the highways.

Petroleum minister Ram Naik said others seeking to enter what many see as one of the most lucrative segments in the oil industry include Oil and Natural Gas Corporation (ONGC), Essar Oil and Numaligarh Refineries Ltd.

Addressing the Gastech 2002 seminar here today, Naik said all four companies had applied for authorisation to retail transportation fuels like petrol and diesel.

The entry of private sector players like Reliance and Essar became possible after the government relaxed its administered price mechanism (APM) regime for the petroleum industry which kept oil retailing as an exclusive preserve for state-owned oil PSUs.

IOC has the largest network of retail outlets followed by HPCL and BPCL. Last month, IOC picked up a strategic stake in IBP, which has the smallest of the retail networks, when the government put up its stake in the company for sale. The government plans to sell similar strategic stakes in HPCL and BPCL over the next few months and both Reliance and Essar are keen to acquire a readymade petro-product retailing chain.

Reliance has an arrangement with IOC under which the state-owned giant will retail 50 per cent of its petro-products over the next two years till the Ambani-owned giant establishes its own retailing network. It also has worked out similar arrangements with HPCL and BPCL.

Naik said the oil exploration firm ONGC had applied for the marketing rights of the transportation fuels on April 30. ONGC has applied for marketing rights to sell petrol and diesel in India through a retail chain in the states of Gujarat and Maharashtra, the minister said. Sources in the ministry said ONGC has applied for authorisation to set up 400-500 retail outlets. However, the minister did not specify the number of outlets that ONGC had applied for.


Mumbai, May 3: 
Hindalco Industries Ltd has posted a rise of 26 per cent in net profit for the fourth quarter of the financial year ended March 31, 2002. Net profit rose to Rs 192.2 crore compared with Rs 152.1 crore for the corresponding period in the previous fiscal.

While net profit growth in the fourth quarter beat market expectations, Hindalco said total income for the quarter increased to Rs 727.9 crore from Rs 626.9 crore a year ago. Of this, net sales rose over 8 per cent to Rs 648 crore, from Rs 598 crore in the fourth quarter of the previous year.

However, net profit for the full year ended March 31, 2002, rose marginally to Rs 678.1 crore, from Rs 686 crore in the previous year. Similarly, the total income increased from Rs 2,406.90 crore to Rs 2,542.30 crore. Of this total income, net sales grew to Rs 2,331 crore from Rs 2,275 crore.

Hindalco, a leading aluminium producer, has a smelter with an over 2.42 lakh tonnes capacity at Renukoot. The company, in a bid to increase its presence in the sector, is now planning to hike its aluminium capacity to 3.42 lakh tonnes annually and the alumina capacity to 6.60 lakh tonnes.

Colgate-Palmolive to pay 17.5%

Colgate-Palmolive India Ltd today declared a second interim dividend of 17.5 per cent at Rs 1.75 per equity share of Rs 10 each for the financial year 2001-02.

The decision was taken by the company�s board here and interim dividend would be paid on equity share capital of Rs 135.99 crore involving a total payout of Rs 23.8 crore, the company informed the Bombay Stock Exchange here.

The company had, on February 15, had declared a first interim dividend of 25 per cent at Rs 2.50 per equity share for the 2001-02 financial year.


Mumbai, May 3: 
ICICI Bank Ltd, the combined entity arising out of the merger of ICICI with ICICI Bank which came into existence from today, has reported a net profit of Rs 258 crore for the financial year ended March 31, 2002, a 60 per cent rise from Rs 161 crore a year ago.

As the merger has come into effect only on March 30, ICICI Bank�s profit of Rs 258 crore for the fiscal includes only two days profit of ICICI and its subsidiaries amounting to Rs 8 crore.

Addressing newspersons here today, K. V. Kamath, managing director and CEO, ICICI Bank, said that in view of the transfer of ICICI�s assets to the books of the bank, it has written down assets of ICICI to the extent of Rs 3,780 crore, which he pointed out was towards the �higher end of the spectrum�.

This amount included creation of additional provisions in respect of ICICI�s non performing loans to the extent of Rs 902 crore, increasing the coverage (provisions and write-offs against NPLs as a percentage of gross NPLs) to 63 per cent on ICICI�s non-performing loans. It also covers additional provisions of Rs 1,953 crore to provide for any future impairment of ICICI�s legacy assets and marking to market ICICI�s equity and related investment by Rs 925 crore.

Detailing the bank�s future plans, Kamath reiterated that while retail banking will continue to be a major growth area (the bank already amasses retail deposits of Rs 1,500 crore per month), it has placed a target of attaining leadership status in all the product segments in two years.

Here he added that in the housing finance category, the recent monetary policy which has brought the risk weightages could lead to a further reduction in interest rates.

Given the bank�s plans in the retail finance direction, ICICI Bank is planning to leverage its strong corporate relationships, brand strength and technology, apart from cross-selling, to achieve a leadership position.

In the sphere of priority sector targets, Kamath revealed that while the bank�s disbursements in housing finance will qualify for priority sector lending, equal focus is now being levied in agri-lending where the bank is in talks with various state governments, apart from also considering direct lending to farmers and small and medium enterprises.


New Delhi, May 3: 
Caltex Oil Corporation has been permitted to raise its stake in its Chennai-based subsidiary from 51 per cent to 100 per cent with an equity infusion of Rs 219 crore.

The Chennai unit imports, stores and distributes liquefied petroleum gas. The government also permitted Franklin Templeton Holding Limited, the US asset management company, to invest Rs 290 crore in Templeton Asset Management (India) through the issue of optional convertible preference shares.

The two proposals were among a batch of 37 foreign direct investment (FDI) proposals worth Rs 580 crore cleared by commerce minister Murasoli Maran here today.

An intriguing proposal cleared today was by Springer-Verlag Gmbh, the German publishing giant, which sought to invest Rs 2.56 crore and pick up a 95 per cent stake in an as yet unnamed entity which will publish and reprint scientific, technical, medical and non-fiction books, articles and journals in electronic or printed form for marketing, export-import licensing of books/articles/journals.

Last week, the I&B ministry tried to move a proposal to allow foreign publishing houses to invest in India to bring out non-new non-current affairs magazines and journals.

The Union Cabinet referred the proposal back to the ministry, underscoring the government�s resolve not to allow FDI in the print media which was a decision taken by the Nehru regime back in 1955.

There was no word from the commerce ministry or the I&B ministry on how the proposal was cleared and whether it marked a fundamental change on the FDI policy in print.

Springer-Verlag had had an arrangement with a small Delhi-based house in India called Narosa in the early nineties to publish scientific books. It is not known whether the arrangement had been scrapped.


Calcutta, May 3: 
The Oberoi family remains true to its tradition of bringing up senior executives from the entry level, even with the Rai Bahadur�s grandchildren, Vikram and Arjun.

The two sons of P.R.S. Oberoi are now in their early thirties. They have been involved in the family business for the last 10 years, having joined as assistant managers in properties in Calcutta and Mumbai.

Today, they are directors on the board of EIH Ltd, and are actively involved in the management of the company�s operations. The older of the two, Vikram, looks after the super-deluxe boutique hotels, while Arjun concentrates on development and planning of the group.

Rai Bahadur�as M.S. Oberoi was better known�had for the last few years distanced himself from the company, though he continued to be the non-executive chairman of the company.

�His loss would not affect the day-to-day management of the company. It�s a loss of a visionary, not only for the company, but for the entire industry,� EIH deputy managing director S.S. Mukherji said.

Vice-chairman and managing director P.R.S. Oberoi is set to become the next chairman of the company. He and Mukherji are now responsible for the macro-level management of the company.

�Like Rai Bahadur, it was same for us as well,� Mukherji recounts. �I started as a junior executive in the company. Rai Bahadur believed that to become an expert in the trade, you must start from peeling potatoes in the pantry.�

Rai Bahadur himself had started at the bottom and climbed his way up the ladder. The standards were evidently same for his son and even his grandchildren.

EIH is at crossroads today. Not only has its performance been suffering from the recession in the industry, rival group ITC has been breathing down the neck of the company�s promoters.

ITC has built up a stake exceeding 13 per cent in EIH with an investment exceeding Rs 150 crore. ITC maintains it is an investment, but the promoters of EIH do not appear to be comfortable with it. They have scaled up their holding by close to five per cent in the last two years since ITC entered the scenario.


Calcutta, May 3: 
The Khaitans of Eveready Industries India (EIIL) have sold out their Bhopal property inherited from the acquisition of Union Carbide.

They have also put on block a seven-acre plot in North Calcutta, along the River Ganges, which belonged to the company�s cinema arc carbons unit, a business that was found to be unrelated to Eveready�s core operations.

The Bhopal property, spread over 10.27 acres in a prime location, houses a research and development centre. The company says the sale fetched it a few crores, though market sources indicate that it could have changed hands for anything between Rs 6 crore and Rs 7 crore.

�We have sold the Bhopal property to a local buyer, and floated tenders for selling our prime property in North Calcutta,� Deepak Khaitan, Eveready executive vice-chairman and managing director, told The Telegraph.

EIIL�s flats in upscale South Mumbai have also been sold off. �We have already sold 6 to 7 flats. We are left with two to three, and looking for buyers,� Khaitan said.

The property sales are part of the strategy to get rid off non-performing assets and generate cash flows. Saddled with a debt Rs 840 crore, the company has been handed a favourable restructuring package from ICICI with an interest rate of 10 per cent, down from 16 per cent.

�EIIL, which grew 7 to 8 per cent in 2001-02, has sold 770 million batteries. We expect to maintain the same level of growth in the current financial year. We have targeted sales of 840 million batteries this year,� Khaitan said.

The company makes the entire range of batteries � alkaline, rechargeables and zinc carbon. He said launch of alkaline cells marked a turning point for a company that had been importing them from a Japanese firm.

Batteries are exported to 14 countries in Latin America, Africa, West Asia, Europe and Mexico under the Lava brand-name since the Khaitans cannot use the Eveready brand-name overseas. However, the Eveready brand will be re-launched at home soon, and advertisement agency Rediffusion has been enlisted for the job.

Meanwhile, the company has embarked on an aggressive cost-cutting drive. �We have already saved Rs 10-15 crore on raw materials. Steps are being taken to improve plant efficiency and overhead cost. But the dumping of low-priced Chinese batteries bothers us,� Khaitan said.

Commenting on the flashlights business, Khaitan said the sales in the business are stagnating at 10 million, partly because of a flood of illegal imports, he said.


Calcutta, May 3: 
Discovery Communications India (DCI), the Indian subsidiary of Discovery Networks International, has worked out a restructuring of its programme schedule in a bid to increase advertisement revenue.

�Earlier, there was no clear pattern in the programme schedules. Since April this year, we have brought order into scheduling of the programmes based on viewing patterns of different members in the family,� reveals Deepak Shourie, managing director of Discovery Communications India. �The idea was to bring in variety in the programmes and air them at a time convenient for the target audience.�

Shourie added that the revamp would result in a 2.5 times ad flow compared with the last financial year. He, however, refused to give details regarding the revenue generated last year.

�Our focus is on offering the viewer a variety of programmes which are entertaining and educational. With Discovery, the attempt is to provide intelligent entertainment relevant to the target group,� says Shourie.

The Discovery channel presently is rated fourth on the viewership ratings. Shourie adds that the channel is the sixth-most widely distributed channel and reaches almost 21 million homes. Discovery is also the world�s largest producer and buyer of documentary programming.

The new-look Discovery has been on air since April this year and Shourie says the results are already being felt. �We have lined up a number of promotional activities to increase awareness regarding the channel,� says Shourie. He was in the city to felicitate former football stars Chuni Goswami, Shyam Thapa and Jamshed Nassiri as part of a promotional activity to leverage the football season.

DCI is also planning a strategy for Animal Planet, the second offering from the Discovery basket of channels. �We have been working on a restructured schedule for Animal Planet and are expected to finalise a strategy in two to three months,� adds Shourie.

Besides revamping its programme schedules, DCI also plans to commence programmes in Tamil and Telegu in July, to expand its reach. �With the introduction of these two regional languages, we will be able to reach out to a wider audience in the southern states,� says Shourie. Globally, Discovery is viewed in 155 countries and offers entertainment in 33 languages, reaching 400 million households.

Regarding the 74:26 joint venture between Sony Entertainment Television (SET) and DCI, Shourie said that the proposal is awaiting approval from the government, which is imperative, as both are foreign firms. The joint venture will enable both partners to offer consumers a comprehensive and diverse bouquet of programming choices and enhance the distribution strength of both channels. The joint venture will offer the entire package � SET, SET Max, AXN, CNBC, Discovery and Animal Planet�at a premium price. Currently, Discovery is available at Rs 6.50 per subscriber per month, while SET offers its package at Rs 26.50.



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