Nigeria Content Online

First Bank of
Nigeria Plc, suffering from huge post-audit losses like every other
bank in the country, refines growth strategy for the current fiscal
year.

First Bank in its
financial report for the nine month period ended December 31, 2009, in
line with the common year end required by the Central Bank of Nigeria,
reports 29 percent increase in gross earnings and 15 percent increase
in operating income.

However, profit before and after tax nose-dived deeply by 72.64 percent and 90.5 percent respectively.

Nonetheless, the
bank appears to be already making up for the losses as its first
quarter 2010 results recorded a 62 percent quarter on quarter increase
in profit, before tax and capital adequacy of 16.6 percent.

Although gross
earnings stood at N62.4 billion for the three months ended March 3,
2010, showing a year on year decrease of 10.6 percent, from N69.8
billion in March 31, 2009, profit before tax was put at N15.4 billion,
following a loss of N9.8 billion in March 2009. However, this is an
increase of 62.1 percent quarter on quarter (N9.5 billion December
2009).

On the other hand, shareholders’ funds stood at N310 billion, a decrease of eight percent from N337 billion in March 2009.

Stephen Olabisi
Onasanya, Group Managing Director of First Bank, while commenting on
the year end results, in a statement made available to NEXT, said: “We
have also refined our strategy based on four strategic themes and
priorities: growth via the diversification of assets and revenue
streams; service excellence by developing world class processes,
systems and capabilities; performance management to create a culture of
individual accountability at all levels; and developing talent with a
view to becoming the hub for the best talent in the industry.”

Financial highlights

The group’s
financial highlights show gross earnings of N196.4 billion during the
period in review, or an increase of 29 percent compared with N152.5
billion recorded in the corresponding period of 2008.

Operating income
was put at N130.5 billion (N113.2 billion December 2008), an increase
of 15.3 percent; profit before tax of N11.6 billion (N42.4 billion
December 2008), 72.64 percent fall impacted by an increase in
provisions for loan-losses post CBN-audit.

Profit after tax
stood at N3.2 billion (N33.9 billion December 2008), representing over
90.5 percent decrease, while shareholders’ funds fell to N310 billion,
a decrease of six percent from N331 billion year on year.

Also, full and
conservative provision against loans and advances rose to N40.6
billion, as at December 31 2009, compared to N18.9 billion a year ago.
Loan-to-deposit ratio fell to 81 percent, down from 84 percent during
the period in review, while non-performing loan ratio rose to 8.2
percent from 2.1 percent in December 2008. Also, cost/income ratio rose
to 60 percent, up from 56.4 percent in December 2008.

Basic earnings per share was put at 10.99 kobo for the nine month period, compared to N1.36 as at December end 2008.

Speaking on the
result, Mr. Onasanya said, “As highlighted in our results, 2009 has
been a tough year for the Nigerian banking sector as a whole and this
is reflected in our performance. We have also made full provisions in
compliance with the CBN requirement and I am pleased to say that our
operating performance and financial stability remain solid, with
operating income up 15.3 percent, against the prior year period and a
risk weighted capital adequacy ratio (CAR) of 15.8 percent, well in
excess of the regulatory minimum.”

Strategic Themes

Despite the huge
losses, Alex Otti, Executive Director, South, noted that total deposits
for the Group continued to grow over the period, albeit at a slower
pace. “However, since the year end, there has been a flood of liquidity
into the system, which has brought fixed income yields to record lows,
dragging deposit rates down with them, and potentially lending rates as
well, albeit at a much slower rate.” However, the bank is anticipating
a pick-up in mergers and acquisition activities, in the banking sector
with further growth in infrastructure funding.

The bank also said
it will focus more on investment banking, asset management, insurance
and international expansion, and plans “to consolidate our subsidiaries
within five business groups (First Bank of Nigeria, FBN Bank
International, Investment Banking & Asset Management, Insurance,
and Emerging Ventures),” which will be overseen by a new Group
Management Committee.

Transparency International, the global
corruption watchdog, wants member nations of the Group of 20 (G20) to
step up their efforts towards sustained financial sector reforms
against the background of growing corruption and negative impact on
economic recovery efforts.

Ahead of the
group’s two-day annual Finance Ministers and Central Bank Governors
meetings, which begins today in Washington D.C., United States of
America, the global anti-corruption body stated that reforms would
entrench ethical corporate governance in the face of growing prevalence
of financial frauds in the financial institutions of most members of
the group.

Good corporate
governance, according to its Chairman, Huguette Labelle, is critical to
sustainable financial institutions, adding that the integration of good
governance and anti-corruption measures are critical to the
sustainability and effectiveness of the reform measures.

“The time to act is
now to entrench good corporate governance culture. It is two years
since the onset of the financial crisis and the critically needed
reforms to protect the general public from fraud must be fully
implemented. The current scandals underline the need for better
oversight and efficient law enforcement,” he said.

Group’s resolutions

Mr. Labelle
recalled the group’s resolution calling on G20 members to ensure that
they implemented the financial regulations outlined at the end of its
meeting in 2008 as the main structural solutions to averting future
economic crises, warning that the complexities in new regulations on
derivative trading, hedge funds, “too big to fail” institutions or
prudential standards should not be a reason for any delay.

Stressing the need
for regulatory agencies to strengthen the transparency of all financial
products marketed to investors, the global body said this would ensure
clear requirements for comprehensive disclosure, and prevent abuses of
off-balance sheet instruments, while individuals and firms would be
sanctioned for fraud.

“Lack of corporate
governance, weak ethics and poor regulation was at the heart of the
financial crisis. This should not be allowed to happen again. Any
corporate communication to investors and to the general public should
be designed to inform them, and not to purposely sell weak products or
publish dressed up quarterly figures.

“If anyone has any
doubt about the urgent need for the G-20 to make integrity a crucial
issue in global financial reform, then they just have to look at
today’s newspaper headlines,” Mr. Labelle said.

World Bank statistics

Available World
Bank statistics, according to Mr. Labelle, indicates that the global
financial meltdown last year directly prevented over 50 million people
in the developing world from escaping abject poverty, adding that the
Finance Ministers and Central Bank Governors should use the occasion of
this week’s meeting to consider a comprehensive analysis of the G20
Action Plan to forestall a repeat of the global economic crisis.

As part of efforts
to entrench corporate governance in the nation’s financial system, the
Board of Directors of the Central Bank of Nigeria (CBN) late last week
rolled out an amendment of prudential guidelines on loan loss
provisioning first issued in 1990, prescribing a set of minimum
requirements for banks and other financial institutions.

The apex bank’s
governor, Sanusi Lamido Sanusi, said the review became necessary
bearing in mind the current dynamics in the industry to provide
measurement for loans, establishment of loan losses allowances, credit
risk disclosure and related matters.

The approved
amendment recognizes ‘Specialized Loans’ and ‘Other Loans’ as the two
provisioning categories, with the former using time-based approach,
while the current prudential guidelines for specific loans loss
provisions shall continue to be applied to other loans type.

According to Mr.
Sanusi, the time-based approach establishes longer time lines for
measuring asset quality, based on the gestational periods for projects
in sectors of the economy such as small and medium enterprises (SMEs),
agriculture and infrastructure.

The ‘Specialized
Loans’ comprise mortgage loans, margin loans, object finance, project
finance, real estate loans, SME loans and others, including corporate,
commercial and retail loans, advances, overdrafts, commercial papers,
bankers acceptances, bills discounted, leases, guarantees and other
contingencies connected with a bank’s credit risks.

The use of the .ng domain for online
business transactions with other countries is said to be affecting
business negatively, due to the high level of cyber crimes in the
country.

Bunmi
Akindele, a business woman, said, “Considering the way those in Europe,
United States, and Asia, among others, see Nigerians as a fraudulent
people to do online business with, using the .ng domain for your
business will certainly affect your business with organisations abroad.

“I
cannot register my company name with the .ng domain because it will
ruin my business as I cannot order for goods with that domain’s name
because it exposes my identity. The country has been portrayed in a bad
image because of the yahoo yahoo deals (Internet fraud) in Nigeria,”
added Ms. Akindele.

IP address, not .ng

However,
in a telephone interview with NEXT, Lanre Ayaji, the president of
Nigerian Internet Group (NIG) explained that the .ng domain name is not
the cause of failed online transactions, but the Internet Protocol (IP)
addresses from Nigeria.

“I
don’t really think that is the major reason why people are not using
it. I have been using the .ng domain for over 10 years now, and I have
not had any serious problem with it. People abroad who are scared of
doing business with Nigerians online are not using the domain name to
discriminate; they usually use the IP address to discriminate. The
discrimination is not done manually; it is done by the application
system that is operated abroad, and it is on that system that they list
the IP address which they don’t want to accept.

“The
moment an IP address is identified to be that of a Nigerian, that
person is barred from doing business online with that organisation. So,
it is not the domain name that causes the problem. Anybody that has a
perception that if he or she uses .ng, they will have problem doing
business online may have to re-examine that view. I think that is just
a mere perception, and not the reality,” said Mr. Ajayi.

Blame it on cybercrime

However,
operators agree that the high incidence of cybercrime is a major issue
that has also affected online transactions with Nigerians.

Mr.
Ajayi said, “I will encourage people to take up the .ng domain as it
may not affect their online transactions. But that is not to say that
the incidence of cybercrimes have not affected online transactions from
Nigeria.”

The
absence of policy to tackle cyber crime is a major problem. Jimson
Olufuye, the president of Information Technology Association of Nigeria
(ITAN), called on the federal government and regulators to put in place
appropriate legislations on cyber security to mitigate crimes. Mr.
Olufuye urged government to key into the toolkit recently launched by
the International Telecommunication Union (ITU) to reduce cybercrime
globally.

Benefits of .ng domain

Ugo
Akiri, an official of the Nigeria Internet Registrations Association
(NIRA), said the benefit of using the .ng domain are enormous,
particularly with regard to cleaning up the country’s image.

“The
.ng domain is a good instrument that will help to clean up Nigeria’s
image in terms of the negative use of the Internet these past years.
This will also help us to generate enough resources to invest in the
new generic top-level domain name (gTLDs) before foreigners overrun us
by taking up viable Nigerian geographical names for their new gTLDs.

“Access
to information is very important, as the world is developing daily by
new technologies and better ways of doing things. So, this would impact
on our access to information generally, and on education specifically,
as more Nigerian content will be available on the web,” she said.

Mr.
Ajayi also added that if Nigerians can register their businesses with
the .ng domain, it will help to improve the country’s economy without
the attendant capital flight.

“For
Nigerians, it saves foreign exchange. If you are not registered with
.ng, you would be registering with another gTLD and would be paying
dollar to the other country, but when you register with .ng, you are
paying naira to the registrar and you are saving money for the country,
instead for another country,” he said.

HTC Corporation,
which is popular for making high end Smart phones, has unveiled its
very first 4G phone named the HTC EVO 4G (codenamed supersonic).

The HTC Smartphone,
which supports the 4G technology, will offer a faster wireless
experience compared to the 3G phone technology. The 4G delivers
download speed up to 10 times faster than the 3G. As a result, users
will enjoy wireless internet connectivity at an extremely fast speed
and also provide access to downloading of music and pictures in seconds
instead of minutes.

The HTC EVO 4G will take mobile multimedia, video live streaming and gaming to a whole new level.

The HTC EVO 4G,
which was unveiled on March 23 2010, will have Google Android and
sprint as its service partners. The Android 2.1 OS (operating system)
will be powering the device, making the phone the very first 3G/4G
Android powered handset.

EVO features

The HTC EVO 4G
showcases as a sleek device with a large LCD capacitive touch screen of
4.3 inch display with 480 x 800 pixel resolution and pinch-to -zoom
display. It is built with a powerful list of features including a 1GHz
Qualcomm Snapdragon processor to support smooth and fast user
experience.

The HTC EVO 4G
guarantees lots of fun on the go, enabling users with speedy download
and upload of pictures and videos on social networking sites like
YouTube and Facebook and share moments or chat in real live on internet
with ease.

The device also
supports all kinds of messaging interface like IM (instant messaging),
text messaging and e-mails and Google mobile services including Gmail,
Google Talk, Google Voice and Google.

Maps and more

The device comes
with a dual camera at the front and back. It has a 8.0 megapixel
auto-focus camera/camcorderl, which allows for HD video recording at
720p and a front-facing 1.3 megapixel camera. It also has a 3.5mm
headset jack and mini HDMI output which allows connection to a large TV
for 720p video playback.

Other features
found in the device are GPS and digital compass for navigation and
location finding. A Micro SD card slots of 32GB which supporting higher
memory. There is also a Stereo Bluetooth wireless technology for easy
sharing/transferring of files among friends; also with Wi-Fi for
wireless connectivity and downloading.

The HTC EVO 4G also
has proximity and motion sensors. Its Android market enables it access
to more than 30,000 applications online. It comes powered via a
1,500mAh battery.

The device is expected to be available during 4th quarter of 2010.

The
Nigerian National Petroleum Corporation (NNPC) and the Nigerian
Liquefied Natural Gas (NLNG) say they would work closely towards the
realisation of Train 7 Liquefied Natural Gas Project, thereby creating
jobs for Niger Delta youth.

This
was one of the resolutions arrived at on Monday, when Chima Ibeneche,
Managing Director, NLNG, led a delegation to pay a courtesy visit to
the Group Managing Director of NNPC, Shehu Ladan.

Welcoming
the NLNG delegation to his office at the NNPC Towers, Abuja, Mr. Ladan
stressed that one of his priorities during his tenure is to ensure the
realisation of Train 7, which has been in the pipeline for a long time.
He said during his tenure he would mobilise resources to ensure that
the LNG Train 7 comes to fruition, after ensuring the availability of
gas for domestic use.

The
NNPC boss argued that the development of Train 7, complemented by the
Brass LNG, in the same region, will not only help in disarming
militants in the Niger Delta through the numerous job opportunities
they would create, but will also cause a ripple effect in both the
regional and national economy.

Mr.
Ladan said, “Luckily, the shareholders of the LNG project are not
asking us for money because they have money of their own for the
project. So the development of the project will not only disarm the
militants fighting in the region, but also generate a lot of industries
that will employ the youths and keep them occupied, and this will have
a multiplier effect in the economy of the region and of Nigeria.”

He
noted that the project is very significant to Nigeria’s economy, which
development has been hampered as a result of the shortage of gas to
satisfy local requirement.

The
LNG had, on July 2004, invested in Train 6. Volumes of LNG from train 6
were marketed by Endessa (Spain), Total, and Shell Western LNG for
destinations in Europe and the United States.

Other gas products

Also
expressing commitment to the Train 7, Mr. Ibeneche said the Liquefied
Natural Gas project is the most profitable additional capacity in the
LNG, stating that apart from the project, the NLNG is equally committed
to ensuring the availability of other gas products such as the
Liquefied Petroleum Gas (LPG).

To
this end, the NLNG boss sought the support of the NNPC to construct a
new LPG jetty and depot in Port Harcourt, Rivers State, for ease of
supply and distribution of the product in the country.

Mr. Ibeneche said, “There is one major LPG jetty in Lagos, but
because of congestion the jetty is not as effective as it should be in
product distribution. There is also a small jetty in Calabar, but there
is none in Port Harcourt. So if the NNPC with some of its partners can
deliver a jetty and a depot in Port Harcourt, we will have broken a
jinx on the availability of LPG in Nigeria.” Mr. Ibeneche said that
NLNG is promoting the expansion of LPG usage in Nigeria by guaranteeing
availability of the product, adding that there is every need to
increase existing facilities to bring LPG closer to the people. He said
that the company is equally ensuring the availability of gas for power
generation in the country by providing the means for Mobil Producing to
transport its gas to meet domestic supply needs.

Minister of State
for Power, Nuhu Wya, said yesterday that the federal government will
soon come up with a comprehensive blueprint on the development of our
nation’s power sector.

Though the minister
did not disclose when the stakeholders meeting is scheduled to hold, he
said the presidential committee on power meeting held last Monday in
Abuja reviewed and fine-tuned the content of the document expected to
be unfolded any moment from now, by the Acting President, Goodluck
Jonathan.

“Power (supply) is
a national issue. That is why the federal government wants all
stakeholders that have been identified to come together to contribute
ideas and agree on the blueprint being worked out for the sector. Once
the stakeholders have agreed on the blueprint, government will unveil
it to Nigerians soon,” he said.

Earlier, while
declaring open the seventh annual conference of the African Forum for
Utility Regulators (AFUR), the minister had called for the
consolidation of policy reforms in key sectors of the nation’s economy,
including power, telecommunications and transportation, saying
attaining sustained economic growth will remain elusive without it.

Noting that policy
reforms in themselves do not necessarily translate into automatic
improvements in sector development and economic growth, the minister
underscored the role of “a robust, efficient and effective regulatory
framework”.

Global economy and poverty reduction

Drawing a link
between global economic growth rate and poverty reduction, the minister
told participants at the conference that the level attained by most
African nations is still incapable of significant impact, blaming the
continent’s underdevelopment over the last two decades on inappropriate
domestic policy regimes in most countries.

“Based on this
view,” he argued, “the common denominator is centred on economic policy
reforms aimed at removing impediments to infrastructure development to
boost economic development. It is evident that economic growth and
performances have been better in countries that have undertaken and
sustained a reasonable measure of reforms in the key sectors of their
economy.”

Identifying the
major challenge Nigeria is facing as acute imbalance between
electricity supply and demand, the minister emphasized the need to
tackle the multifaceted problems of the country’s power sector in a
pragmatic manner, if sustainable, adequate and reliable electricity
supply is to be attained.

He said it was the
priority attached to the problem that informed the decision by the
Goodluck Jonathan administration to undertake several initiatives aimed
at redressing the problem within the shortest possible time, adding
that deregulation has been identified as the most viable option to
guarantee progress in the sector.

“This
administration is poised to pursue the sector reforms in line with the
provisions in the Electric Power Sector Reform (EPSR) Act, 2005. The
overwhelming objective of the electric power policy statement on total
liberalization, competition and private sector-led growth is to ensure
that Nigeria has an Electricity Supply Industry (ESI) that can meet the
needs of its citizens in the 21st century,” he said.

Removing investment barriers

Noting the crucial
role of the Nigerian Electricity Regulatory Commission (NERC) in
removing all barriers to investment and creating the enabling
environment for investors, the minister urged the regulatory body to
ensure that the tariff regime in the country is cost-reflective as well
as provide the necessary regulatory frameworks for feed-in tariff for
renewable power and distributed power generation alternatives.

The NERC
Administrator, Imamuddeen Talba, said the AFUR is a voluntary
organization of African Utility Regulators established in November 2002
through the instrumentation of clause 10 of the New Partnership for
Africa’s Development framework document for the promotion of principles
and approaches to the regulation of the utility infrastructure in the
continent.

Mr. Talba said the current strategic focus of the commission is to
encourage private sector participation through effective regulation,
pointing out that part of the initiative to help realize its objective
has been the approval of the multi-year tariff order (MYTO), currently
being reviewed for the sector, development of a regulatory framework
for distributed/embedded generation and independent electricity
distribution networks, as well as for renewable energy.

The Lagos State government has announced that its second fixed rate bond was subscribed in excess of 249 percent.

The announcement was made by the
state’s deputy governor, Adebisi Sarah Sosan, who represented Babatunde
Fashola, the state governor, at the completion board meeting of the
N57.5 billion Lagos State Fixed Rate Bond (Series 2) 2010/2017, issued
under the N275 billion State Debt Issuance Programme.

The deputy governor said the second
series of the N275 billion bond has recorded the highest level of
participation in any bond issued in the capital market.

The Lagos State first tranche bond of N50 billion, issued in 2008, was oversubscribed to the tune of N8.9 billion.

Mrs. Sosan, in a statement on Tuesday,
said, “There was much anticipation in our financial markets when the
announcement was made about the first tranche on December 24, 2008. The
public offer received a tremendous response from investors, both
individuals and institutional, and recorded an unprecedented 117.93
percent level of subscription. Applications in respect of the N50
billion tranche 1 offer amounted to N58,966,760,000.

“The result of the just concluded bond
offering is a clear indication that the investing public is keen to
partner with the government in the ongoing transformation,” she stated.

The tranche 2 bond issuance of the
required N50 billion was sold by Book Build method, solely opened to
institutional investors only.

“On April 7, 2010, when the Order Book
opened, our Book Runners, led by Chapel Hill Denham Management Limited,
were mandated to raise N50 billion. At the close of the Order Book on
April 13, 2010, the Book Runners had received bids in excess of 249
percent,” she explained.

State of firsts

Meanwhile, Mr.
Fashola, in his speech, said the completion of the board meeting scored
many “firsts” for the state: the first to establish a Bond Issuance
Programme, the first to undertake successive bond issuances during the
tenure of the same administration, the first to issue a bond without an
Irrevocable Standing Payment Orders, the first to issue a bond without
any underwriting arrangements, and the first to undertake an offering
by way of a book build.

“This
administration will continue to observe the strictest standards of
fiscal responsibility and take extremely seriously our responsibility
as managers of the state’s resources; regardless of whether they are
financial, human, mineral, agricultural or fall into other categories”,
he stated.

As explained, the
proceeds of the bond will be used to fund the upgrading of the
Lagos-Badagry Express Way into a 10-lane highway.

Also, the state
water transportation will be expanded, as construction work is already
going on at ferry terminals at Ikorodu, Badore, and Osborne.

“Our other plans to
develop Lagos include funding of Light Rail Transit Scheme. There are
other capital intensive projects that have been earmarked for execution
by this administration to develop Lagos into a global city and cater
for the welfare of the people,” he declared.

The governor
expressed appreciation to all the Issuing Houses, financial
institutions, and state lawmakers for enacting the enabling law of
Capital Raising Programme, without which the state would not have gone
this far in the provision of essential services.

The board meeting
witnessed the presentation of Debt Issuance Programme Documents to all
the representatives of the state government and the eventual signing of
the documents, after the verification of issuance questionnaire by the
representative of the state government.

Is the bond mispriced?

Reacting to this
development, analysts at Renaissance Capital, an investment advisory
firm, said, “In our view, the pricing of Lagos State’s Series II Bond
is less attractive than other recent state bonds that were placed in
the 14-15.5 percent range. And the 500 bpts yield differential with the
interpolated seven-year FGN tenure is somewhat irrelevant, as the
sovereign yield curve is fundamentally depressed.”

The experts said while the Lagos State’s bond will probably not
generate any sizeable secondary market activity, “we think it is
possible the instrument could ultimately trade at a discount should the
FGN curve correct as macroeconomic, and financial conditions improve in
the future.”

Despite the
escalating prices of food items in the country, figures from the
National Bureau of Statistics (NBS) indicate that Nigeria’s consumer
inflation fell to 11.8 percent year-on-year in March from 12.3 percent
the previous month.

The country’s
inflation rate recorded a decrease in March 2010, as it fell by 0.5
percent from what was obtainable for February. The figures from the
agency showed that there has been a steady decline in the inflation
statistics of the country in the last three months.

The inflation rate
stood at 12.3 per cent in January and February, but tilted toward a
single digit in March and this came as a surprise to many because of
the high price of food stuff due to transportation problems.

Previous data from
the agency indicated that the inflation rate dropped to 10.4 per cent
in September 2009, but climbed to 12.4 per cent in November 2009 and 12
per cent in December 2009.

Food items cause of inflation

The Central Bank of
Nigeria (CBN) and the NBS said the unpredictable change in inflation
rates had been largely driven by the changes in food prices.

The urban and rural
All Items index supported this figures, indicating that both increased
by 0.4 percent 0.1 percent, when compared to what was obtainable in
February.

This however had an
effect on the inflation rate as the year-on-year average consumer price
level as at March 2010, for Urban and Rural dwellers, rose by 7.7 and
13.8 percent respectively.

The report credited
the acceleration in the price of food items, which form the bulk of the
inflation index, as the reason for the increase in the rise, as the
Average Monthly Food prices rose by 0.4 percent in March 2010 when
compared with February.

This, some of the
traders blamed on the strike embarked upon by the Cattle Dealers
Association (CDA) and Food Stuff Merchants’ Association of Nigeria
earlier in the month, which led to scarcity of food items such as
tomatoes, pepper, cattle and others transported from the northern part
of the country.

The seven-day
strike had caused the price of food items in the market to escalate
over 500 percent in some cases as five pieces of fresh tomatoes was
sold between N400 and N500 in cases where they were at all available in
the market.

A balance

Though the agency
recorded a general drop in the monthly inflation, the report indicated
that Composite Food Index for the corresponding 12- month average
percent change for urban and rural indices rose by 8.4 and 13.6
respectively.

“This made the
level of the Composite Food Index (CPI) higher than the corresponding
level a year ago by 13.5 per cent putting the average annual index rise
to 13.7 percent for the twelve month period,” it stated.

The report
attributed the rise to increases in the prices of some food items like
yam, meat, sea foods, onions, fresh tomatoes and vegetables.

However, there was
a balance: the “All items less Farm Produce” index, which excludes the
prices of volatile agricultural products, fell by 0.2 percent for the
March when compared with the previous month.

According to the
report, the decline was due to reduction in the prices of cooking gas,
liquid and solid fuels, making the twelve-month index till March rise
by 9.5 percent while the average annual rate of rise of the index was
9.3 percent for the twelve-month period ending that same month.

Quarterly CPI change

A quarterly change
indicated that the ‘All Items index’ increased by 1.8 percent in the
first quarter of 2010 when compared with fourth quarter of 2009.

This is against the 1.5 percent rise recorded in the fourth quarter of the year 2009.

Ever since Google
disclosed in January that Internet intruders had stolen information
from its computers, the exact nature and extent of the theft has been a
closely guarded company secret. But a person with direct knowledge of
the investigation now says that the losses included one of Google’s
crown jewels, a password system that controls access by millions of
users worldwide to almost all of the company’s Web services, including
e-mail and business applications.

The programme, code
named Gaia for the Greek goddess of the earth, was attacked in a
lightning raid taking less than two days last December, the person
said. Described publicly only once at a technical conference four years
ago, the software is intended to enable users and employees to sign in
with their password just once to operate a range of services.

The intruders do
not appear to have stolen passwords of Gmail users, and the company
quickly started making significant changes to the security of its
networks after the intrusions. But the theft leaves open the
possibility, however faint, that the intruders may find weaknesses that
Google might not even be aware of, independent computer experts said.

The new details
seem likely to increase the debate about the security and privacy of
vast computing systems such as Google’s that now centralize the
personal information of millions of individuals and businesses. Because
vast amounts of digital information are stored in a cluster of
computers, popularly referred to as “cloud” computing, a single breach
can lead to disastrous losses.

Genesis of the theft

The theft began
with an instant message sent to a Google employee in China who was
using Microsoft’s Messenger programme, according to the person with
knowledge of the internal inquiry, who spoke on the condition that he
not be identified.

By clicking on a
link and connecting to a “poisoned” Web site, the employee
inadvertently permitted the intruders to gain access to his (or her)
personal computer and then to the computers of a critical group of
software developers at Google’s headquarters in Mountain View, Calif.
Ultimately, the intruders were able to gain control of a software
repository used by the development team.

The details
surrounding the theft of the software have been a closely guarded
secret by the company. Google first publicly disclosed the theft in a
January 12 posting on the company’s Web site, which stated that the
company was changing its policy toward China in the wake of the theft
of unidentified “intellectual property” and the apparent compromise of
the e-mail accounts of two human rights advocates in China.

The accusations
became a significant source of tension between the United States and
China, leading Secretary of State Hillary Rodham Clinton to urge China
to conduct a “transparent” inquiry into the attack. In March, after
difficult discussions with the Chinese government,

Google said it would move its mainland Chinese-language Web site and begin rerouting search queries to its Hong Kong-based site.

Company executives
on Monday declined to comment about the new details of the case, saying
they had dealt with the security issues raised by the theft of the
company’s intellectual property in their initial statement in January.

Google executives
have also said privately that the company had been far more transparent
about the intrusions than any of the more than two dozen other
companies that were compromised, the vast majority of which have not
acknowledged the attacks.

Extra security

Google continues to
use the Gaia system, now known as Single Sign-On. Hours after
announcing the intrusions, Google said it would activate a new layer of
encryption for Gmail service. The company also tightened the security
of its data centres and further secured the communications links
between its services and the computers of its users.

Several technical
experts said that because Google had quickly learned of the theft of
the software, it was unclear what the consequences of the theft had
been. One of the most alarming possibilities is that the attackers
might have intended to insert a Trojan horse – a secret back door –
into the Gaia programme and install it in dozens of Google’s global
data centres to establish clandestine entry points. But the independent
security specialists emphasized that such an undertaking would have
been remarkably difficult, particularly because Google’s security
specialists had been alerted to the theft of the program.

However, having
access to the original programmer’s instructions, or source code, could
also provide technically skilled hackers with knowledge about subtle
security vulnerabilities in the Gaia code that may have eluded Google’s
engineers.

The New York Times