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Tuesday, Oct 28, 2003

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Voltas Q2 net at Rs 4.3 cr

Our Bureau

Mumbai , Oct. 27

AN accounting quirk depressed second quarter net profit at Voltas Ltd, even as net profit for FY04 first half rose by 40.81 per cent to Rs 14.49 crore (Rs 10.29 crore for the year ago period).

Voltas earned a net profit of Rs 4.30 crore (Rs 7.52 crore) in the second quarter on net sales/income from operations of Rs 288.69 crore (Rs 283.40 crore). Profit before tax and extraordinary income/expenses was Rs 5.60 crore (Rs 1.99 crore), it changing after extraordinary items of Rs 81 lakhs (Rs 10.42 crore) to a profit before tax of Rs 6.41 crore (Rs 12.41 crore).

"The company had last year applied to the Bombay High Court for adjusting the balance in deferred revenue expenditure (DRE) against the share premium account. Arising out of the Bombay High Court approval in September 2002, the company had during the quarter ended September 2002, reversed the amortisation of VRS charge (DRE) of Rs 8.87 crore resulting in higher extraordinary income/profit before tax for the said quarter. Excluding this one time credit, the extraordinary income for the quarter ended September 2002 would be Rs 1.55 crore and the profit before tax, Rs 3.54 crore, as against Rs 6.41 crore during the September 2003 quarter, which reflects an increase of 81 per cent,'' the company's official statement explained.

At a press briefing, Mr M.M. Miyajiwala, Executive Vice-President (Finance), Voltas, said that the company has reached an understanding with its unions whereby pending cases between the two parties would be withdrawn from Court. The unionshave also agreed to raise productivity and a fifth VRS is underway at locations excluding the Hyderabad plant. At the latter, which has 1,700 people in toto, no decision on VRS has been taken though there is likelihood of a scheme later this year or the next. Nothing has been firmed up.

An estimated 200-300 persons are projected to avail the current scheme at units except Hyderabad. The reduction it causes to the company's 3,900 existing employees, along with any future contribution by Hyderabad, should bring total workforce to the optimum level, Mr Miyajiwala said. Through the earlier four rounds of VRS, Voltas has shed roughly 2,600 employees.

On an average, the VRS entails per employee outgo of Rs 4-6 lakh, Mr Anil J. Gole, Vice-President (Human Resources), Voltas, said. Given the project business Voltas has come to shoulder, the need for permanent employees is less. Projects contribute 65 per cent of the company's revenue, a bit more than half of it coming from overseas.

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