PAINTS - NOT SO COLOURFUL AFTER ALL!

Article Abstract:

Despite the economic recession in 1997-98, the Rs40 billion paints industry of India recorded a growth of 8-9 percent. The industry's 2 segments - decorative and industrial - recorded a growth of 9-10 percent and 6 percent respectively. Poor growth in the industrial paints segment was mainly due to the lower demand from the automobile sector, which consumes nearly 50 percent of the total output. The demand from the capital goods sector also slumped with a negative growth of 1.1 percent. The demand from the white goods sector increased as it recorded a growth of nearly 25 percent. Decorative paints account for nearly 70 percent of the total paints industry and industrial paints the rest. This share of decorative paints is expected to fall to 50 percent in the next 2-3 years. The unorganised sector accounts for nearly 50 percent of the total Rs28 billion decorative paints segment. There are nearly 2,000 units in the unorganised sector against 26 large and medium size units in the organised sector. (gsh)

Sales & consumption, Paints & Allied Products, Paint and Coating Manufacturing, Coatings, Paints

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HOTEL LEELA VENTURE: MYSTERIOUS ACCOUNTING POLICIES

Article Abstract:

Hotel Leela Venture Ltd's (HLVL) accounting practices have been deemed questionable. Despite having a high loan fund of Rs421.40 crore, HLVL's interest outgo for 1997-98 was a paltry Rs4.12 crore. The company has attributed the lower interest outgo to capitalisation of interest cost. The interest cost works out to Rs55 crore or more on a conservative basis. However, its depreciation fell to Rs6.48 crore (Rs9.16 crore in 1996-97). Its net profit at Rs42.59 crore is overstated due to lower provisioning of financial costs. The company has borrowed heavily to lend to its subsidiaries. Though the company claims to meet these obligations via internal cash accruals, it is does not seem possible with sales of Rs117 crore during 1997-98. Various banks have alleged that HLVL is diverting funds forwarded by them to fund its Rs595 crore expansion projects at Bangalore, Bombay and Goa. (tsm)(vr)

Hotels & Motels, Hotels (except Casino Hotels) and Motels, Liabilities NEC, Hotels and motels, Hotel Leela Venture Ltd.

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