Halt inter-divisional transfers prop, Sebi tells Rolta

The Securities and Exchange Board of India (Sebi) has ordered Rolta India to discontinue reflecting inter-divisional transfers in its sales books as has been the company's practice in the past.

Rolta has been under Sebi scrutiny for the same since July 2002 for recording capitalised items in its profit & loss accounts but the order was passed only in July 2004.

Rolta was raided by the income tax department earlier this month allegedly for claiming depreciation on fictitious assets and recording bogus sales.

But K K Singh, chairman and CEO of Rolta, refuted the allegation saying "All indications we are getting from the Income Tax Department point towards an investigation on our export activities as per Section 10 A of the Income Tax Act, which has happened with many technology companies. The Sebi order and the income tax raid are not connected in any way." The tax department is still investigating the company.

Rolta has appointed Beharilal, an ex-member of the Income Tax Tribunal and a tax advocate as an independent director of the company. It also appointed V K Agarwala as an independent director and Aditya K Singh as the joint managing director of the company.

For the quarter ended June 30, 2004, the company posted a net profit of Rs 16.82 crore, a 277 per cent growth over Rs 4.46 crore recorded in the quarter ended June 30, 2003. The company's revenues were up 34 per cent at Rs 92.63 crore against Rs 69.10 crore posted in the same quarter of the previous year.

Rolta has announced a net profit of Rs 80.50 crore for the year ended June 30,2004. Its profit for the 18 months ended June 30, 2003 was Rs 112.28 crore. Revenue for the year ended June 30, 2004, stood at Rs 301.05 crore, while that for the 18 months ended June 30, 2003, was Rs 383.57 crore.