Gacl To Export Half Gujarat Unit Output To Lanka

The company recently told analysts that it was planning to ship around 5 lakh tonne to Sri Lanka rather than sell it in the local markets. The prices in the region have taken a hit due to excess supply.

The Ambujanagar unit is being expanded to 4 million tonne from 3 million tonne, and could have put further pressure on prices if the entire production was to be sold in the region.

Anil Singhvi, executive director, declined to comment on the development. Other senior officials declined to share details of its marketing plans owing to "strategic reasons", but said that a part of the production will be sold in Maharashtra, Gujarat and the nearby markets.

 

Analysts said the move to sell half the production in Lanka was critical as price realisation in the island country would be higher. Moreover, because of its fleet of ships, the additional freight cost borne would not be too high.

In recent times, there has been an inclination from Indian cement majors to actively look at the Sri Lankan market. Larsen & Toubro has already set up a subsidiary there.

According to analysts, the other reason is to get sales tax exemption in Gujarat as the state does not justify additional expansion of capacity.

...4.60 lakh shares for Esops

Gujarat Ambuja has granted stock options in respect of 4.69 lakh shares including those for employees of its subsidiary companies and whole-time directors. The exercise price was fixed at Rs 250 per share, that is, the average annual price of the shares at BSE quoted during the year ended June 30, 1999.

Adjusted for bonus, the price works out to Rs 125 a share, while the average market price during the period was Rs 323 (ex bonus). The total discount of Rs 198 (i.e. the difference between the two) aggregates to Rs 9.22 crore. In accordance with Sebi guidelines on Esop, Rs 4.74 crore has been debited to its profit and loss account.

The company has changed the method of accounting for value of inventory to be in accordance with Accounting Standard II', issued by Institute of Chartered Accountants of India. Due to the change inventory and profits for the year are lower by Rs 5.07 crore. The net effect is a profit dip of Rs 9.81 crore.