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Sunday,
February 16, 2003, Chandigarh, India  
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L&T
seeks ICRA help to resolve row Appointment
of Anil Ambani as BSES chief approved CM for Taj
Hotel in Patiala McDonalds
to open outlet in city PlastIndia
begins |
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Abolish
fee on rice: chamber
Q:
I am employee of a Public Ltd. Company and am in receipt of HRA. I am
staying in Mumbai with my wife & children who are dependent on me.
I am living in a rented house for which I am paying the rent.
Delay in
payment
Proposed
Bill to benefit power firms
Will
AAI upgrade 4 metro airports?
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L&T seeks ICRA help to resolve row
Mumbai, February 15 The mandate to ICRA, reliable sources in L&T said, is to study both proposals of the Aditya Birla group and the UK-based CDC Capital Partners and give its opinion to help the L&T Board to take a final decision on the matter. They said though no time-frame has been set up for ICRA to submit its report, it was hoped that it would be done in due course. With this decision, the L&T management had bought sometime to mull over the whole issue again. At the meeting, the L&T Board had to go through a detailed presentation made by the Aditya Birla group — headed by their two nominees Kumaramangalam Birla and his mother Rajshree Birla — with its vertical demerger plan offering a price of Rs 130 per share compared with the investment proposal of CDC Capital Partners, having the backing of the top L&T management. Birla’s argument was that though the CDC offer was Rs 158 per share, the effective offer price, after taking into account the 6 per cent coupon on forex bonds, worked out to only Rs 122 per share. Besides this, they argued the CDC had set stringent terms for investing in L&T. It was argued that 36 per cent shareholders — crucial for Grasim to reach 51 per cent in the cement company — would get the offered price of $ 65 a tonne, while the 49 per cent equity held by the remaining shareholders, excluding the Grasim holding of 15 per cent, would be traded at just around $50 per tonne. At the last Board meeting on January 28, the Directors took the proposal of Grasim Industries on record and discussed a proposal of CDC, which offered to pick up a 6.86 per cent stake in the demerged entity. The offer was, however, valid only up to December 31, which was extended by a month. The Birla group entity has been vehemently protesting the entry of CDC as a strategic investor. The issue was referred to a special meeting today, which however, remained unresolved.
PTI, UNI
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Appointment of Anil Ambani as BSES chief approved
New Delhi, February 15 At the extraordinary general meeting, the shareholders also cleared the appointment of Mr S.C. Gupta as Director (Operations), and Mr J.P. Chalasani as Director (Business Development). Reliance’s second open offer to purchase another 20 per cent equity in BSES also closes today.
RIL, together with Reliance Power and Reliance Industrial Investments and Holdings Ltd, currently holds 44.43 per cent stake in BSES and is the single largest shareholder in the power entity. The Rs 65,000-crore Reliance Industries had, on December 20 last, announced an open offer to acquire 20 per cent equity in BSES at Rs 230.10 per share. RIL plans to spend Rs 743 crore to finance the acquisition.
UNI
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CM for Taj Hotel in Patiala Patiala, February 15 Talking to TNS before inaugurating the Crafts Mela here, the Chief Minister said the Taj group planned to open a few hotels in Punjab and he would ask it to set up its first hotel in Patiala. At present there was a single hotel which would cater to the international tourist. The Chief Minister said the need to create more hotel had been highlighted at a seminar before the Heritage Festival and he hoped tourist operators would also take steps in this regard. Capt Amarinder Singh said besides Patiala, the state government would also concentrate on having tourism-related activities in Anandpur Sahib, Kapurthala and Amritsar. While Patiala was being targeted as a heritage site, other cities would be presented as tourist destinations. He said for Anandpur Sahib Heritage Complex, the government needed around Rs 150 crore more to complete it by September, 2004. The state government had spent Rs 70 crore till now on the project and another Rs 17 crore had been promised by the centre. He would visit the USA on Baisakhi to appeal to NRIs to contribute towards the construction of the heritage project.
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McDonalds to open outlet in city Chandigarh, February 15 Mr Goel said that food was just one of the floors of a four-storeyed complex which will be an integrated ‘young-adult entertainment centre’. The multi-complex will be in place of the existing complex of the Dhillon theatre in Mani Majra. The top floor will house four theatres for the movie-buffs with an approximate capacity of 200 each. Reacting to the ongoing slump in the cinema, Mr Goel said that “the theatre complex here will offer a never before seen luxury which will definitely attract crowds in far greater numbers than the traditional theatres”.
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PlastIndia begins New Delhi, February 15 “I believe globalisation is not just for increase of trade.... there are poor countries and their problems have also be addressed”, he said while speaking at the inaugural session of PlastIndia 2003. He said that the compassion, fellow feeling, cooperation and human values will lead to the adoption of such an approach. “Then alone will our global actions will be for the good of the humanity and promoting a better world order”, the Vice President said. PlastIndia-2003, the five-day plastic industry expo began here today with more than 1,200 exhibitors, including 200 from 35 countries, showcasing their products and technology. Over 10 lakh visitors are expected to attend the show. Business worth Rs 600 crore is expected to be generated during the fair. Alongwith the exhibition, leading overseas experts will share their experiences at an interactive conference on exploring global opportunities in plastics with their Indian counterparts.
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Abolish fee on rice: chamber Chandigarh, February 15 In a representation submitted to the Chief Minister of Haryana, Mr P.K. Jain, President, PHDCCI, said, rice millers in Haryana were losing business volume to the neighbouring states as Punjab and Uttar Pradesh were not charging any fee. Mr Jain said in comparison to Punjab and UP, rice mills in Haryana were losing the competitive edge in inter-state trade and international market due to higher cost of procurement. These higher input costs were affecting the export of basmati from the state. He urged the state government to abolish the market fee and rural development fee on rice to boost the trade.
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rc
by A.N. Shanbhag Q:
I am employee of a Public Ltd. Company and am in receipt of HRA. I am staying in Mumbai with my wife & children who are dependent on me. I am living in a rented house for which I am paying the rent. Recently, the company asked me to attend the office at Pune for 4-5 days in a week and remaining days at Mumbai office. To discharge my duties at Pune, I have taken another house for my accommodation. This second house is also on rent. Please advise me whether I can claim the total rent paid by me for both houses against the receipt of House Rent Allowance from my company. My HRA is Rs 16,000 and basic salary is Rs 40,000 per month. Actual rent paid by me for the house of Mumbai is Rs 12,000 and for Pune house, it is Rs 8,000 per month. What will be the amount of rent paid by me? Is it Rs 20,000 or Rs 12,000 or Rs 8,000 to claim the deduction as per Sec. 10 (13A)? — Ajay Maheshwari A: Yours is a peculiar problem, unique in nature. I feel you should be entitled to claiming relief on the Rs 20,000 rent you pay for both the houses. The department can take a view that the Act states, “.... on payment of rent in respect of residential accommodation, occupied by the assessee....” The words ‘rent’ and ‘accommodation’ used are singular and therefore, the employee would be required to take any one accommodation of his choice. I do not agree with this view because you are forced to occupy two houses because of the nature of your job and the situation is out of your control.
Q:
I am not regular reader of your expert articles. I heard that policies issued by LIC is backed by govt sovergine guarantee, as per LIC Act. Is it ture? Please explain. — Rajesh Patel A: I am amazed at the misconstrued idea of safety that not only you, but the public at large carry with them. All that I have to ask you is that if LIC is not safe, with or without the guarantee, what is safe? I throw the same request you have thrown at me in the concluding sentence of your note — Please explain. Do you really feel that the govt sovereign guarantee gets higher safety rating than the unrated since and trustworthy management? Have you heard that some companies who floated their Bonds or Debentures with highest ratings at their launch because of the guarantee given by state government are today rated as junk? Today it is the state government guarantee and tomorrow it may be the Central government guarantee which will be looked at with several question marks, but I feel that LIC will get the highest rating for all the times to come. The only query you have to ask yourself on this issue is — Do I really need to insure my life and if so, by how much?
Q:
I am a salaried employee. So far I was not getting tax deduction in my salary. That may happen in the near future. Now the question. I am investing in shares in secondary market. Most of the scrips I had sold for losses. Can I show that Income from other sources as a negative balance (i.e. loss) and reduce my taxable Income. In that case, TDS deducted if any can be claimed as refund? Please advise, I know a person who is salaried employee and TDS is deducted upto Rs 25,000 p.a.. In his income tax returns, he shows that Income from Profession as negative balance (i.e., loss) and deduct the amount from Income from Salary thus resulting in lowered Taxable Income. He claims refund and getting refund warrant from the Department. — C. Ramesh A: If you are doing only trading activity (without taking delivery) it is speculative business. Sec 71 allows balance losses under one head of income to be setoff against income under any other head with 3 exceptions - a) Capital gains b) Speculative business and c) Business of owning and maintaining of horses for horse races. In these cases, the net loss can be carried forward for setoff against the profits and gains only from the same source. If this loss cannot be wholly set off, the remaining part of the loss can carried forward to the subsequent year. Such a carry forward is allowed for only 8 years (4 years for horse races) immediately succeeding the year for which the loss was first incurred. If you are investing in shares i.e. taking delivery, you may earn Long Term (LT) or Short Term (ST) Capital losses or gains. ST/LT loss cannot be set off against income under any other head. It has to be carried forward. The case of your friend does not fall under the three exceptions mentioned above and therefore, he is allowed the set offs.
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by Praful R. Desai Delay in payment Q:
Are the necessary requirements as per S: 4-A (3) (b) met with in the impugned award of imposing penalty for delay in payment of
compensation? Ans: In Oriental Insurance Co. Ltd. v Chotelal Mahato (2003-1-LLJ-102) Jharkhand
H.C. was considering the point. The accident in question occurred on 16.10.93 and the complaint petition was filed under the provisions of Workmen’s Compensation Act, 1923, sometime in the year 1994. S:-4-A (3) (b) of the Workmen’s Compensation Act, 1923 as it presently stands was inserted through an amendment in 1995, being effective from 15.9.95. Clause (b) of S: 3, supra reads thus: “If in his opinion, there is no justification for the delay, direct that the
employees shall, in addition to the amount of the arrears and interest
thereon, pay a further sum not exceeding fifty per cent of such amount by way of penalty: Provided that an order for the payment of penalty shall not be passed under
cl. (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed.” First of all, therefore, there should be a clear finding of the Tribunal with respect to the absence of any reason for the delay and only based on such finding the Tribunal can direct that the employer shall pay the penalty as stipulated in sub-section (3). Secondly, the penalty amount is to be paid by the employer only after a proper show cause notice has been issued to the employer and he has been afforded a reasonable opportunity of explaining as to why the penalty be not imposed against him. Both these requirements of law, being mandatory, not having been met in the award under challenge in this appeal, the part of the award which imposes penalty is declared to be null and void, as per the HC.
H.C. accordingly set aside the award. To that extent, the H.C. allowed the appeal.
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by Ashok Kumar Proposed Bill to benefit power firms The markets continue to remain volatile, with the two major events in recent times being the ( forced ?) decision by the Alliance group to remain invested in India and the evidence against Iraq presented to the U.N.by Colin Powell. The market viewpoint is that it is the erosion of Rs 871 crore of assets under management that prevented the Alliance group’s exit from India rather than any new found interest in Indian stocks. Its asset base has reduced from Rs 3,271 crores in December to Rs 2,500 crore in January. We are also now into the Budget month, and though there is a fair amount of optimism on that account the overhang of the war continues to act as a sentiment dampener. The positive news on the Alliance front helped stocks identified with it such as Digital GlobalSoft and Hinduja TMT to rebound, while the Sensex has been shored up by a resurgent Reliance Industries which declared exceptionally good results and indicated the intention to raise prices of its petrochemical products. HPCL, too, has gained ground on news that the government was on the verge of calling in for bids to sell its 34 per cent stake. Buying was also witnessed at select PSU counters on hopes of speedy disinvestment in SCI and Engineers India. There was some renewed hope on realisation that Colin Powell had failed to convince UN Council members conclusively about the need for a war in Iraq, although the same can be likened to an uneasy calm before the storm. Let us now zero in on a few stocks which have been “buzzing”, of late. Tata Power is likely to benefit from the proposed Electricity Bill which will lift restrictions for power generating companies. The cost-effectiveness of the company is known and the only concern which the markets had about the company was its exposure to the non-core area of telecom. However, this exposure too will soon be cut down as there is a buzz that it will be transferred to Tata-Teleservices, which should enhance Tata Power’s valuations. The news making rounds is that the Electricity Bill will be cleared in the Budget session, which will benefit power generating companies and also its allied industries. BHEL being into the capital goods power sector business, can be a major beneficiary. The Balaji Telefilms scrip recovered sharply from the lower price levels. Many of its new serials are hitting the block over the next few weeks and public acceptance of those will bring in strong support for the counter. However, with the World -Cup fever beginning to pick up, a wait and watch approach might help. While most analysts have talked about HLL being an under performer in the market, the scrip witnessed strong support at the Rs.163 level. HLL at levels of Rs.160 odd is not a bad buy after all it’s the largest FMCG, the underlying fundamentals of which are strong and backed by a good distribution network. |
sti
by K.R. Wadhwaney Will AAI upgrade 4 metro airports? Air India and Indian Airlines will continue to fly through turbulent weather as the Ministry of Civil Aviation has suddenly stayed its decision on route rationalisation. Non-rationalisation of the international routes means duplicity which causes heavy losses to the two airlines because of needless utilisation of costly aviation turbine fuel (ATF) and wastage of manpower. Instead of supplementing each other in the national interest, the two carriers continue to be intense rivals. No plan concerning these two airlines succeeds. The merger move has failed while disinvestment has been delayed. This is because the two airlines refuse to come on the same wave-length. A survey shows that Indian Airlines has often received step-motherly treatment from the ministry. This is perhaps because the ministry secretary is also ex-officio Chairman of Air India. It is not understood why should secretary, who has many duties and responsibilities to discharge, should be given additional charge of Air India. Minister of State for Civil Aviation Shripad Naik has said the reforms in this sector will be result oriented. But he seems to forget that reforms in the industry cannot be achieved till the two carriers are in fighting mould. The tussle between the two has given better playing-field to foreign carriers. There is now “nothing private about four metro airports”. Shahnawaz Hussain and Finance Minister Jaswant Singh are reported to have decided that the AAI will be entrusted with the responsibility upgrading these airports. Can the AAI undertake this difficult job when its own house continues to be in mess? The AAI has indeed more than Rs 1,000 crore in reserve. Is it prepared to invest it for the promotion of civil aviation? The government is keen to upgrade the metro airports. Atal Behari Vajpayee has often said that “our airports should be world class? Indeed they should be. But it is possible only when the right people are entrusted to do the right job for the right cause. The ship, it is said, is greater than the crew. But it is not so in Air India where officials think they are greater than the airline. Some of them are now busy filing FIRs against their colleagues. When such is the situation, is there any possibility of renaissance starting in Air India?
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