Financial Daily from THE HINDU group of publications
Friday, Sep 19, 2003
Financial Daily from THE HINDU group of publications Friday, Sep 19, 2003 |
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Corporate
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Human Resources Maruti offers VRS again Our Bureau
New Delhi , Sept. 18 THE country's largest car maker, the Rs 9,426-crore Maruti Udyog Ltd, has announced a two-phased voluntary retirement scheme for its employees, which will be completed during this financial year. The scheme will be available to permanent employees at all levels. The company said in a statement that this scheme is in line with Maruti's focus on improving its competitiveness in various fields. It would be Maruti's second VRS in less than three years. The effort to cut jobs is part of the company's three-year strategy called Challenge 50, announced last year, in which the company is seeking among other things to achieve global standards by reducing the cost of production by 30 per cent per vehicle. Maruti had previously offered a VRS in October 2001 at a cost of Rs 65 crore. As many as 1,050 employees, or 19 per cent of the total strength, had opted for the scheme and the number of employees in the company had come down to 4,596. According to the company, the spend on VRS would be covered in a little over two years due to lower wage bills after the VRS is completed. However, company officials declined to comment or elaborate on the budget allocated towards the scheme. Meanwhile, the company's share price fell at the stock exchange today. The share closed at Rs 205.25 on the Bombay Stock Exchange (BSE), down Rs 10.50 from the previous day's closing of Rs 215.75. Market analysts feel that the approval, given by the Board of Directors of Maruti, to introduce the scheme is likely to have a bearing on the company's bottomline this year. Analysts pointed out that Maruti would have to expense out (take it to profit and loss account) the outgo on VRS as ICAI's Accounting Standard on Intangible Assets and other items (AS-26) require expenditure on intangible items to be recognised as an expense when incurred by listed companies after April 1, 2003.
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