Mumbai: Grasim Industries Ltd has posted a net profit of Rs 792.30 million for the quarter ended 31 March 2002 as compared to Rs 1,333.60 million for the corresponding period last fiscal. The total income has decreased from Rs 11,943.80 million in MQ 2001 to Rs 11,698.60 million in MQ 2002.

The company has posted a net profit of Rs 3,029.60 million for FY-02 as compared to Rs 3,779 million for FY-01. The total income has dropped from Rs 45,611.90 million in FY-01 to Rs 45,012.60 million in FY-02. The board has recommended a dividend of Rs 9 per share, aggregating to Rs 825 million.

The company has sold its entire holding of 97,91,350 equity shares in Birla Technologies Ltd, its subsidiary, at Rs 11.50 per equity share. The resultant loss of 181.10 million has been charged to the profit-and-loss account.

The company has sold (as on the closing of 31 March 2002) its textiles manufacturing units and undertakings at Gwalior as a going concern at a consideration of Rs 0.10 million. The move was pursuant to the resolution of its shareholders passed by the postal ballot on 27 April 2002. The company has also agreed to pay Rs 150 million to purchasers for taking over certain liabilities, including employees liabilities. The total resultant loss of Rs 319.30 million has been charged to the profit-and-loss account and is shown under the exceptional item.

Three major factors have contributed to Grasims improved performance. Firstly, growth-in-turnover volumes, along with higher realisation in cement. Secondly, improvement in operational efficiency resulting from ongoing modernisation efforts, plant upgradation and energy optimisation. Thirdly, reduction in financing costs through reduction or substitution of high costs debts, coupled with effective working capital management.

The economic slowdown has constrained the working of the companys chemical, textiles and sponge iron businesses during the year under review. This was offset by the enhanced performance of the cement business. To rationalise its manpower, the company has offered a voluntary retirement scheme (VRS). A total of 1,004 persons have opted for VRS. They were paid Rs 280 million besides their regular retirement benefits.

Despite various factors affecting the economy, Grasim has recorded a good performance during the year. Grasims inherent strength, strong fundamentals, a continual stress on operational excellence, cost optimisation measures, effective financial management, continuous restructuring of business process, aided by an expected improvement in the cement sector, bode well for the company. It is poised for a significant growth in the years ahead and its overall outlook continues to be positive.