Third-quarter profit drops by half on project delays and slowing order flows
Nothing seems to be going right for Hindustan Construction Company (HCC) these days. In November, the environment ministry asked it to stop work on its project at Lavasa, order flows have dried up. Worse, it has had to bear the cancellation of a project worth Rs230 crore.
"In the third quarter we have not received any new order and an order worth Rs230 crore from NTPC was cancelled due to environmental issues," Vinayak Deshpande, chief operating officer, HCC, told Moneylife.
The company had received a contract to construct a barrage and desilting chamber for NTPC's Loharinag Pala Hydro Electric Power Project (4x150 MW) in Uttarkashi district of Uttaranchal.
"The company has revised its 2010-11 (April-March) order book target of Rs25,000 crore due to persistent delays in infrastructure and power orders from the government," Mr Deshpande said. HCC's current order book stands at Rs18,505 crore and it expects to reach at Rs20,000 crore by the end of this fiscal year.
On the Lavasa project, HCC says it is open to sort out issues with the Ministry of Environment & Forests (MoEF). "We would like to resolve all issues over the Lavasa project with MoEF. I hope we will resume work soon," Ajit Gulabchand, chairman, HCC, said.
The MoEF issued a stop-work notice to the company's Lavasa project, citing environmental problems and the absence of approvals for construction of the 5,000 acre luxury hill city project near Pune. Lavasa Corporation, a subsidiary of HCC, subsequently challenged the notice in court, saying the order was against all laws of natural justice.
However, Mr Gulabchand said that the company would not withdraw the case against the ministry. He also refused to comment on any notification from the MoEF to pay substantial penalty for violation of environmental laws.
HCC today reported a 46% fall in net profit for the October-December quarter to Rs7.94 crore from Rs14.75 crore, due to slower project executions. However, revenues for the quarter increased by 9% to Rs1,028 crore from Rs945 crore.
The company has a cash balance of Rs281 crore, while the debt pressure amounts to Rs3,500 crore.
"During the quarter, we have witnessed a slowdown in infrastructure activity. Several project orders have been deferred by various government departments and private firms due to delays in acquiring land and related clearances," Mr Gulabchand said.
Mumbai: Concerned over rising incidents of cyber frauds, the Reserve Bank of India (RBI) will soon ask banks to shift to chip-based automated teller machine (ATM) cards from the existing magnet strips ones and upgrade the currency vending machines, reports PTI.
The RBI working group on information security, electronic banking and technology risk management has also made a case for setting up special cells on banking frauds in the state police departments to deal with bank related cyber crimes.
"It is recommended that RBI may consider moving over to chip-based cards along with requiring upgradation of necessary infrastructure like ATMs/POS terminals in this regard in a phased manner," said the report of the working group headed by RBI executive director G Gopalakrishna.
While pitching for chip-based cards, the report said, it is difficult to copy and make their duplicates as compared to the existing magnet strips ones, which are currently used.
Besides, the working group has recommended widespread changes in the existing IT system of the Indian banking industry to make banking services more safe and secure.
"The Reserve Bank will begin implementing the recommendations of the working group shortly," the central bank said in a statement.
In case of online frauds where jurisdiction is not clear and there is ambiguity on where the police complaint should be filed, the working group has recommended setting up separate cell on bank fraud in police departments.
"The matter of having a separate cell working on bank frauds in each state police department, authorised to register complaints from banks and get the investigations done on the same, needs to be taken up with respective police departments," said the report.
It has also suggested that for debit or credit card transactions at the POS (point of sale) terminals, PIN-based authorisation should be put in place instead of the signature-based system.
The non-PIN based POS terminals, it added, should be withdrawn in a phased manner.
The RBI had set up the working group in April 2010 to suggest guidelines for banks covering the entire gamut of electronic banking.
On cloud computing, the report said security and legal issues on it are still evolving and "a bank needs to be cautious and carry out due diligence to assess the risks comprehensively before considering cloud computing."
Cloud computing, which is internet-based, facilitates software applications and other technological resources to be shared online.
The working group report added that given the nature of the problem of cyber security, engagement is required at a wider level both nationally and internationally, with the government, law enforcement agencies, various industrial associations and academic institutions.
The report found that most retail cyber frauds and electronic banking frauds would be of values less than Rs1 crore.
But "since these frauds are large in number and have the potential to reach large proportions, it is recommended that the special committee of the board be briefed separately on this to keep them aware of the proportions of the fraud and the steps taken by the bank to mitigate them," the report said.
The special committee should specifically monitor the progress of the mitigating steps taken by the bank in case of electronic frauds and the efficacy of the same in containing fraud numbers and values, it added.
The experience of controlling/preventing frauds in banks should be shared between banks on a regular basis, it added.
Mumbai: Market leader Reliance Industries (RIL) today announced a 28.14% growth in its net profit at Rs5,136 crore for the third quarter of the current financial year compared to Rs4,008 crore in the same period last year, reports PTI.
Net turnover of the Mukesh Ambani-led company increased to Rs59,789 crore from Rs56,856 crore in the corresponding quarter of the year-ago period, RIL said in a filing to the Bombay Stock Exchange (BSE).
The RIL scrip ended the day with a gain of 1.73% at Rs986.50 apiece on the BSE.