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Energy major Reliance Industries said on Friday there was no evidence to suggest that costs in development of the country's key natural gas field in the Krishna Godavari (KG) basin were overstated. The Comptroller and Auditor General (CAG) has criticised Reliance and the government over development of KG-D6 basin and called for revamping profit sharing arrangements from oil and gas blocks. The offshore KG basin was expected to contribute up to one-quarter the gas supply for India, but lower-than-expected output has left the energy-hungry nation more dependent on expensive, imported LNG to fuel power and fertiliser plants. Global consulting firm Ernst & Young found no evidence suggesting KG D6 costs were overstated in purchases from third parties or from related parties, Reliance said on Friday, a day after the auditor submitted the report to parliament. The KG D6 project was completed in a timely manner despite hostile weather conditions and significant supply chain constraints, Reliance said. "The KG D6 project faced considerable physical and execution environment challenges as well as difficulties faced in the E&P capital projects market," it said, citing findings of IPA Inc, an independent project evaluation consultant. The auditor's report had said Reliance, the operator of the KG-DWN-98/3 block, was allowed to violate terms of its production sharing contract. The auditor does not have prosecuting power, but its findings can form the basis of any possible government action against Reliance, as well as future policy on exploration.
In the backdrop of alleged frauds involving investment products committed by staff of some foreign banks, Sebi Chairman U K Sinha today said the capital markets watchdog would soon come out with guidelines to regulate such activities. "There are distributors and there are advisros. One is masquerading as the other and the conflict of interest situation is not getting resolved," Sinha said while addressing the convocation function of the National Institute of Securities Markets here. A draft of the discussion paper will be put in public domain soon, he added. "The idea is that the investor should know if he is going to a particular advisor, that person is only working as an advisor. He has no vested interest in selling a particular product," Sinha said. Over the past year, there has been a spurt in allegations of mis-selling of investment products by wealth advisors, especially following the discovery of alleged frauds committed by wealth advisors or relationship managers of a couple of foreign banks. After the frauds, a need was felt to restrict such instances. As the activities of such advisors span the jurisdiction of multiple regulators like Sebi, insurance watchdog Irda and the banking regulator RBI, there was also talk of having a separate regulator for the space. Pension funds regulator PFRDA's Chairman Yogesh Agarwal had also recently mooted the idea of having a "lead regulator" to watch the space. Meanwhile, Prime Minister's Economic Advisory Council Chairman C Rangarajan, who was also present at the event, said the Government will achieve its target of raising Rs 40,000 crore through the disinvestment process this fiscal. On fiscal deficit, he said greater focus will be needed to keep it at the targeted 4.3% of the GDP this fiscal. The Government needs to be careful on the expenditure front, particularly on the subsidies, Rangarajan said. He said if the global crude prices continue to remain high, we should increase the domestic fuel prices.
"With the acquisition of ETA Star, we aim to achieve around 10% market share there," UltraTech Chairman Kumar Mangalam Birla told shareholders at the company's 11th annual general meeting here today. Last year, the company acquired ETA Star Cement to enter into markets like the United Arab Emirates (UAE),Bahrain and Bangladesh. Also Read: Ultratech to spend Rs 11K cr in 3 yrs on expansion says Birla "The acquisition is in line with long-term strategy of expanding our global presence across businesses and is consistent with our vision of taking India to the world," he said. The demand for infrastructure in the Indian Ocean Region (IOR) is growing, he said, adding, "we are focused on investing outside India in this region, where we see a large growth in infrastructure going forward. The investment in ETA is in line with our plan our strategy to leverage in IOR." "We are on the look out for opportunities by way of acquisition etc for expanding our business. The merger with Samruddhi Cement has not only helped us increase our presence pan-India but also resulted in UltraTech emerging as the largest cement company in India and 9th largest in the world," Birla said. On the dip in the growth of cement industry in FY 11 Birla said, "the prices will continue to remain subdued given the fact that the demand for cement is much lesser than the supply. In FY 12, the demand is likely to be around 228 mtpa and the supply would be 292 mtpa. Therefore, there will a surplus of around 64 mtpa. However, we expect the situation to correct in the next few years." The company plans to spend around Rs 11,000 crore over the next three years to enhance productivity and cost efficiency, Birla said. UltraTech has planned clinkerisation plants through brownfield expansion in Chhattisgarh and Karnataka together with additional grinding units, installing waste-heat recovery systems and instituting bulk packaging terminals and setting up of ready-mix concrete plants. "These expansions are expected to be operational by Q1 FY14 and will augment cement capacity by 9.2 million tonne per annum (mtpa). These projects will be funded through a judicious mix of internal accruals and borrowings," he said. UltraTechs current capacity stands at 52 mtpa. "I view the cement sector as one with a high growth potential. UltraTech is exploring both organic and inorganic growth to further strengthen its leadership position," he added.