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Sunday,
April 6, 2003, Chandigarh, India
  
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Season for
shareholders’ confrontations Postpone
VAT implementation Kalam
calls for focus on technology ‘Cut
transaction cost of banks’ Sun
launches rival of Microsoft Office |
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WWICS
plans to sue Immigration Deptt of Canada Bollywood
is a rough ride for corporate India
Abolish
Periphery Control Act
Airports
await modernisation
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Season for shareholders’ confrontations LONDON: “My message to shareholders who have voted against resolutions such as the reappointment of key directors such as myself is simply that they should find another company to invest in.” Few company bosses would be quite as robust in their dismissal of investors as Donald Gordon, chairman of property company Liberty International, at the group’s annual meeting last week. But over the next few weeks, quite a few of them are likely to be quietly sharing his sentiments. The annual general meeting season is getting into full swing and it looks set to be a vintage season for spats between companies and their shareholders. A corporate governance specialist from one of the largest institutional investors identified four main factors for this. First, shareholders are on notice from the Government that, if they do not take a more active role, they will face legislation forcing them to do their corporate duty. While voting is only one - and, some would say the least effective - method of taking action, it is also one of the most visible. Second, dismal stock markets and a poor economy are exposing the fact that many of our companies are performing badly while their executives are still doing rather well. This has been a particularly sore point at Reuters and is also likely to rankle at Aviva, which sent out its annual report last week. Shareholders have suffered a 40 per cent dividend cut, its shares are little over half last year’s peak and bonuses to policyholders have been cut yet chief executive Richard Harvey saw his pay packet rise by 45 per cent. Third, companies now have to produce a detailed remuneration report, disclosing their policies. ‘That is flushing out useful information, especially on service contracts, said the corporate governance specialist. ‘And often the devil is in the detail.’ The final flashpoint is Higgs. While his recommendations on non-executive directors are not yet enshrined in the Takeover Code — and many companies hope there will be significant changes before they get there — some of the more assiduous investors already expect companies to comply, much to the chagrin of bosses like Gordon. At the root of most of the serious conflicts, however, is money. Long-term bonus schemes, devised during the glory years, are now maturing and, all too often, are paying out handsomely despite plunging share prices and falling profits. That is making investors far more careful about the new schemes they are prepared to sanction. Most companies consult shareholders on their schemes before they are actually put to the vote, and, as GlaxoSmithKline will testify, many are forced to make big concessions, or even withdraw proposals completely. But issues can still arise at annual meetings.
The Guardian
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Postpone VAT implementation Hisar, April 5 In a statement issued here today he said there were a lot of lose ends which needed to be tied up before the new tax proposals could be successfully implemented. Firstly, the new pattern would raise taxes on items on daily use by at least 4.5 per cent. This would adversely affect all sections of the society since the VAT was proposed to be levied on almost every conceivable item of use. Secondly, he said, the present proposals would only boost corruption and evasion since the bureaucracy had devised a very complicated method of tax calculation. This would lead to unwarranted harassment of smalltime shopkeepers and traders. Mr Garg said the need of the hour was to simplify the whole thing and make the proposals rational. This required time and there was no alternative to postponing implementation of VAT. He said the forthcoming meeting of State Finance Ministers in Delhi on April 8 should concentrate on simplification of the proposals and their implementation. Mr Garg warned that if the Centre rushed through the implementation, the entire trading, business and industrial community would oppose it tooth and nail.
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Kalam calls for focus on technology New Delhi, April 5 Inaugurating the conference of Chief Executives of public sector enterprises organised by the Standing Conference of Public Enterprises (SCOPE) and the Department of Public Enterprises (DPE) here, Dr Kalam said “technology and knowledge will play an important role in value addition to our core competence of natural and human resources, a must for achieving our vision of 2020, that is of sustained economic development”. He called for giving appropriate focus on the major areas of agriculture, food processing, education and health care, information and communication technology, reliable and quality electric power and strategic sectors to increase GDP growth to 9 per cent per annum. The President said the present knowledge society had evolved from the earlier agrarian, industrial and information societies and this would continue for the next 20 to 25 years. Value addition in these major sectors with the help of technology and knowledge will form the essence of this knowledge society.
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‘Cut transaction cost of banks’ New Delhi, April 5 Suggesting that the Reserve Bank of India may impress upon the banks to reduce expenditure through rationalisation of branches and of staff opt for newer technological tools to bring down the intermediation costs, the Chamber emphasised on the need to review the costs being charged by the banks . “The high level of transaction costs in our financial system puts the Indian industry and trade at competitive disadvantage”, said Chamber President Mr P.K. Jain. He said the reason of these high costs is un-remnurative branches, considerable over manning and archaic methods of operation. The Chamber also pointed out that the system of quick collection of outstation funds with most of the nationalised is still not operative. PHDCCI also said that maximum ceiling for lead bank charges may be prescribed.
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Sun launches rival of Microsoft Office
New Delhi, April 5 The Linux-based StarOffice will cost Rs 4,500 against Rs 13,000 for Microsoft Office. “Apart from the price, we are exploring all options to penetrate the market,” Mr Alok Sharma, Director, Partner Sales, Sun Microsystems India Pvt Ltd told UNI at the StarOffice 6.0 here yesterday. The company is also talking to personal computers manufacturers for loading the software on to their machines. “We are talking to different computer manufactures in this regard and talks are in various stages,” Mr Sharma said.
UNI
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WWICS plans to sue Immigration Deptt of Canada
Chandigarh, April 5 He claimed that the new Act stipulated that applications for permanent residence filed before January 1, 2002, which have not undergone a selection decision by March 31, 2002, will be assessed under revised selection criteria. Under the new regulations, the applicants had to get 75 points instead of 70 points as required earlier. The new law had been implemented ‘‘retroactively’’ meaning that the old cases would be now assessed as per the new regulations. Two lakh prospective immigrants would suffer because of the new law.
TNS
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Bollywood is a rough ride for corporate India NEW DELHI: Corporate India woke up to the immense potential of Hindi films two years ago, but it has since had a roller coaster ride in Bollywood. Enthused by the record-breaking success of Zee’s maiden production, “Gadar — Ek Prem Katha”, the corporate world rushed to cash in on Bollywood as a business and sales promotion avenue. Companies ranging from fashion labels to biscuit makers announced a spate of cinematic ventures. 2002 saw an increasing trend among corporate houses such as Pantaloons, Britannia, P.P. Jewellers, Electrolux and Pepsi to sponsor movies. Pantaloons entered film production with “Na Tum Jaano Na Hum”, starring Esha Deol and Hrithik Roshan; Tata Infomedia with “Aitbaar”, starring Amitabh Bachchan, Bipasha Basu and John Abraham; Venus financed Abbas Mastan’s “Humraaz”; and Tips produced “The Legend of Bhagat Singh”; Kundan Shah’s “Dil Hai Tumhara” and financed Aishwarya Rai’s maiden home production “Dil Ka Rishta”. Balaji Telefilms, headed by queen of soap operas Ekta Kapoor, produced two big-budget films within a year. Zee Telefilms also acquired 64 percent stake in Padmalaya Telefilms with a view to becoming an animation powerhouse in Asia. Sahara also entered film production with several projects. None, however, have replicated the success of “Gadar” or “Lagaan”. Pantaloon’s second attempt at film production has fared worse than the first. At least the company’s maiden film had distributors willing to bet their money on it. But “Chura Liya Hai Tumne”, starring newcomer Zayed Khan and Esha Deol, couldn’t even get a single distributor interested, says trade analyst Komal Nahata. “When all attempts to sell the Rs 70 million-film failed, producers had to entrust its distribution on commission basis to Rajshri that have an all-India network. But the film bombed at the box-office,” he said. The fact that the already poor collections declined further Monday, the trade realised the film had been clean-bowled. Pantaloon had shared its burden with the Dainik Jagran group of newspapers that had forayed into the entertainment industry with Rave multiplex in the small city of Kanpur. Similarly, all three ventures by Tips have bitten the dust despite the presence of Aishwarya in the last one. And not much has been heard from Tata Infomedia Ltd, which had announced plans to enter the world of movie production last year. The company had unveiled plans to produce “Aitbar” at a cost of Rs 120 million and three other scripts, costing around Rs 30 million to Rs 40 million each. Subhash Ghai, a veteran industry horse, had to face a volley of questions about the unsuccessful introduction of corporatisation in the Indian film industry at a press conference called for the release of his latest venture — “Ek Aur Ek Gyarah”. Admitting that things had not gone according to plan, he said: “Ek Aur Ek Gyarah” will start the rebuilding process of a corporate industry.” “Everything that goes up has to come down. And then it comes up again, to more realistic levels,” Ghai said while addressing the press on the release of the film under the banner of his Mukta Arts Production. He was hopeful that serious players would rejuvenate the new corporate structure of the film industry after all the fly-by-night operators bottomed out. The stakes are high. Experts say big business will plough around Rs 3 billion into various movie projects over the next couple of years. Funding from top firms is expected to give the film world a much-needed break after widespread allegations that gangsters fund Bollywood. Needless to say media is a sunshine industry and the business is expected to grow to about Rs.60 billion in the next five years.
IANS
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Abolish Periphery Control Act The Committee on Subordinate Legislation of the Punjab Vidhan Sabha, has recommended in its report that the Act should be repealed for the convenience of the public at large. The committee took note that the Lal Dora of villages has not been extended for more than half a century. Thus the existing provisions of the act has virtually put a full stop to the development and growth of rural population denying electricity and water connections on the pretext of being outside the Lal Dora. On the long pending demand of the people and keeping these aspects in view, the then Chief Minister Punjab S.Prakash Singh Badal, announced the formation of NAC for four villages in the periphery of the city. These villages included Naya Gaon, Kansal, Nada and Karaur. Since the existing Firni of the villages was not extended for over 50 years, the population in the villages increased more than 10 times forcing residents to shift outside the earmarked red line. Despite demands by villagers to extend the redline/firni, nothing was done in this direction. On the direction of Punjab and Haryana High Court, PUDA came into action and started demolishing the constructions outside the red line. Some thoughts needs to be given to the present condition to extend the red lines to accommodate the villagers falling outside the area. For the last decades, Chandigarh Administration is busy in rehabilitating migrant labourers occupying prime government land in the city. After getting dwelling unit, they sell it and move to another place, encroach upon government land. People who are unable to get a suitable house in Chandigarh for financial reasons or otherwise, preferred to buy a small piece of land in the periphery area and constructed houses which now under the purview of the Act. At one side Chandigarh Administration. has been providing free land to jhuggi dwellers, though not entitled and on the other PUDA has been demolishing houses constructed by people are spending the saving accumulated in decades. This will not be justified with over one lakh people who have constructed houses in this area. The existence of Panchkula, Mohali and Zirakpur are again in total violation of the Act. At the same time, many unauthorised colonies in Chandigarh were regularised by the UT Administration. Under these circumstances, it will be fair to repeal the Periphery Act, to save the masses from un-necessary harassment at the hands of government officials and basic amenities like electricity, water and sewerage connections provided to them. A.P. BHARDWAJ Chandigarh
Variation in cane prices Twelve out of the 15 sugar mills in Haryana are in Cooperative and three including the biggest Sarswati Sugar Mills in private sector. All the sugar mills commissioned crushing in the month of November-December 02 except the Naraingarh sugar mill which started crushing recently on March 16. The private sector mills are making payment to the cane growers at the rate of Rs 87 whereas the state cooperative mills are giving the State advised prices of Rs 110, 106, and 104 per quintal. It is for the first time in Haryana that uniform rates are being denied to the cane growers. The issue in question is whether the differentiation in price is justified and judicious. The farmers allotted to the private sector mills are feeling disappointed as they are getting lower rates than the three years back level rates. They are of the view that the govt is financially aiding the cooperative mills to enable them to abide by the state decision regarding SAP. If there is any reality in this version the state govt should also extend financial assistance to the private mills to pass it on further to the cane growers so that govt in rates is rectified. It the cooperative mills are paying the SAP of their own capacity the variation should discuss the matter with the mill management to ensure the same rates to the farmers of private mill area. RAVI DATT SHARMA Jagadhari
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Airports await modernisation Jaswant Singh, in his Budget speech, has made pointed references about the modernisation of four international airports in Delhi, Mumbai, Chennai and Kolkata. This is, indeed, a happy news for the aviation sector. But aviation and tourism will get the much-needed boost only when the modernisation is undertaken and completed on a war footing. History reveals, because of red-tapism, the government’s oft-repeated plans do not take off beyond drawing-boards for years and, by the time inauguration ceremonies are organised, the terminal buildings become “monuments” instead of the high-profile operational areas. The aviation segment is the fastest moving sector. What is modern today becomes obsolete the next day. The need of the hour is a long-term planning and the building should look ultra-modern and it remains ultra-modern even after a decade. To make lofty promises is one thing but to translate them into reality is quite another. The Indian aviation scenario is quite depressing in relation to many countries like Singapore, Kuala Lumpur, Tokyo, Bangkok and Hong Kong. This is because governments of these countries have realised the importance of aviation and tourism while the Indian Government is still at the “talking stage”. The airports worldwide wear the tag of townships which have all types of facilities for passengers and workers. These are humming with activities round-the-clock and generate revenues from several sources other than aeronautical functions. Maintenance through parkings and takings-off aircraft is not enough. What is required is that the controller of the terminal building — the Airports Authority of India (AAI) — is able to generate revenue through commercial exercises to keep on developing and progressing. International airports are the gateways to the country. The immigration and customs authorities make or mar the reputation of the country. Only when airports function efficiently and the authorities are courteous, the visitors feel inclined to travel to the country. It is essential that the baggage should be waiting for passengers by the time they arrive around the conveyor belt after completing immigration formalities. It often does not happen in this country’s airports where passengers are required to wait for sometime. This causes irritation. This should be the prime concern while modernising the airports instead of trying to spend money and time in making the buildings’ architectural beauties. The visitors do not visit this country to appreciate terminal buildings but they come here to enjoy sightseeing.
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