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Reliance net up 14 pc in Q1


Our Bureau

MUMBAI, July 31

RELIANCE Industries Ltd has reported a 14 per cent increase in net profit at Rs 618 crore for the first quarter ended June 30, 2001 against Rs 543 crore for the same period last year.

Total sales for the quarter were lower at Rs 6,390 crore as compared to Rs 6,615 crore in the corresponding previous quarter, which included a `trading sales' of Rs 479 crore.

Analysts said the company has done better than expected.

``With the company facing weak product prices and low sales, the increase in net profits has been a bit of a surprise,'' an analyst said.

``The combined impact of major capacity additions globally, weak international demand and sharp volatility in feedstock costs led to unprecedented pressures on margins and profitability,'' Mr Anil Ambani, Managing Director, Reliance Industries Ltd, said while announcing the results.

The company has changed its method of providing depreciation in respect of some assets at Jamnagar. For the quarter, Rs 396 crore has been provided for depreciation as against Rs 366 crore last year.

Due to the change in the depreciation method, an additional charge of Rs 442 crore has been adjusted against the amount withdrawn from general reserves.

The company said the net profit would have been higher by Rs 58 crore had it not changed the method of providing depreciation from straight line to written down value for the assets at Jamnagar.

The company had a higher other income of Rs 127 crore (Rs 78 crore). Exports were lower at Rs 749 crore (Rs 832 crore).

RIL's total expenditure was Rs 5,215 crore (Rs 5,458 crore). Interest was Rs 257 crore (Rs 298 crore). As part of restructuring of its textiles business, the company had announced a voluntary retirement scheme for its workers and staff at Naroda. Of the 4,900 people offered VRS, 4,600 accepted for which Rs 77 crore were disbursed during the quarter.

The company has made a Rs 30 crore provisions for current tax (Rs 28 crore) and Rs 1 crore provision for deferred tax.

The company plans to focus on joint ventures, acquisitions of distribution assets and setting up its own marketing infrastructure in the oil sector, Mr Ambani said.

The company's share closed at Rs 319.75 (Rs 313.60) at the Bombay Stock Exchange.

Related links:
Reliance Q4 net down 21 pc -- Full year's profit increases 10 pc to Rs 2,646 cr

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