Sunday, November 8, 1998
today's calendar
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B U S I N E S S | Sunday, November 8, 1998 |
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spotlight today's calendar |
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C'wealth co investment in
India to go up
Hyundai
Motor starts components export |
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NHPC may go in for tie-up
with private sector
Hitachi
plans TV |
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Central
Bank deposits up 19 pc SEBI
norms for shares’ buyback FIPB
clears Enron proposal |
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Commonwealth co investment in India to go up NEW DELHI, Nov 7 — Irrespective of the international economic sanctions imposed on India after the Pokhran-II nuclear tests in May this year, the Commonwealth Development Corporation Company (CDC) is going to step up its equity investments in the country. Talking to mediapersons, the CDC Company Chairman, Lord Cairns, today said that “our new equity investments in India this year have already crossed US $ 80 million and will go beyond $ 100 million by the time year ends”. The CDC’s investments in India were to the tune of US $ 67 million, he said. “India has emerged as the single largest country where we operate”, Lord Cairns said adding that our operations here have grown during the last few years. Earlier, the CDC had its office only in New Delhi but now we have offices at Mumbai and Bangalore also, he said. The CDC, which is one of the world’s leading development finance institutions operating in 54 Commonwealth countries, has invested $ 80 million in 10 Indian companies from January to September this year, Lord Cairns said. “We are delighted that the development of CDC’s strength as a private equity player has led to a major shift in the CDC’s portfolio from 33 per cent equity and 67 per cent debt (total $ 215 million) at the end of 1995 to 57 per cent equity and 43 per cent of debt (total $ 350 million) today. The CDC in India is spearheading the market-driven changes throughout the CDC that will equip us to be major private investors in emerging markets into the next millennium”, Lord Cairns said. The Commonwealth Business Council, set up by the Commonwealth Head of the States at the Edinburgh CHOGM last year, is organising a meeting of the important politicians and businessmen from Commonwealth countries of Asia in February next year in New Delhi in association with the CII, Lord Cairns said adding that this would provide an useful forum for evolving an understanding between the governments and the business community. Lord Cairns expressed
satisfaction over India’s resilence and economic
performance at a time when the entire South East Asia is
undergoing a financial crisis. He said it is a great
source of confidence as it makes India an easier place to
invest. |
NHPC may go in for tie-up with
private sector NEW DELHI, Nov 7 — The public sector National Hydro Electric Power Corporation is likely to tie up with private players for the Parabti stage I and stage III projects in Himachal Pradesh, the Union Power Minister Mr P R Kumaramangalam said here today. The Parbati stage I project would have an installed capacity of 750 mw while the stage III project would have an installed capacity of 501 mw. Speaking to newspersons at the launch of the NHPC Internet website in Faridabad today, Mr Kumaramangalam regretted the fact the hydel power generation in the country was at a very low as compared to that of thermal power generation. NHPC currently has a total installed capacity of 2340 mw and the minister said the corporation should target the capacity in the range of 30,000 mw. What is required is more mws and not big offices, the Minister said while taking a dig at the offices of the corporation. Referring to the environmental concerns about mega power projects Mr Kumaramangalam said that issues like the Chipko movement were things of the past.The government would adopt measures so that NGOs with malafide intentions cannot act as a constrain in projects.As it is done in the USA, NGOs found to be obstructing work with malafide intentions would be made to pay compensation in accordance to the extent of the obstruction , the Minister said. NHPC Chairman Yogendra
Prasad said the corporation was negotiating to take up at
least two projects in the Cauveri Basin. NHPC is also
considering to establish a tidal power project of 900 MW
in Gujarat , Mr Prasad said. |
Hyundai Motor starts components
export NEW DELHI, Nov 7 — Hyundai Motor India Limited (HMIL) has begun exports of engine components from its Chennai plant from this month by bagging orders from its parent company Hyundai Motor Company, Korea. Hyundai Motor India has bagged total engine component export orders worth nearly $ 300,00 from its parent company till December this year. The company is exporting 500 units each of engine cylinder blocks and cylinder heads as 1200 units each crank shaft and connecting rod this month. From next month onwards , the company will export 700 units each of engine cylinder block, engine cylinder head, crank shaft and connecting rod every month to Korea. HMIL’s Chennai plant
has an annual capacity to manufacture 130,000 engine and
transmission sets and components. |
Puncom, PGCIL sign contract CHANDIGARH, Nov 7 — Punjab Communications Limited (PUNCOM) today formally signed a contract worth Rs 13 crore to implement northern region communication project of the Power Grid Corporation of India Ltd (PGCIL). The contract involves design, engineering, planning, manufacturing, supply, installation and commissioning of the Power Line Communication System (PLCC) and PABX systems covering voice and data communications. According to Mr AS Gill,
Managing Director, PUNCOM has won the PGCIL project
against stiff competition from MNCs backed companies.
PGCIL is augmenting their country-wide communication
network using modern telecommunication systems and
technologies comprising of digital microwave, optical
fibre, digital EPABXs and PLCC.
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Hitachi plans TV unit in India NEW DELHI, Nov 7 (UNI) — Hitachi of Japan is planning to set up a manufacturing unit for colour televisions in India in a joint venture with a local company. The company has already applied for land for the unit with the Greater Noida Authority (GNA), GNA Chairman Brijesh Kumar told UNI here today. However, he did not specify the Indian partner’s name or the amount of investments that would be made by the Japanese consumer goods major in India. However, Mr Kumar stated that the investment would be substantial. This is part of the Rs 7,000 crore worth of investment, both domestic and foreign, which the authority is expecting to flow into the Greater Noida region over the next four to five years. A large chunk of this investment, he said, would flow into the automotive sector followed by consumer durables. “We are also trying our bit to promote the automotive industry in Greater Noida, which already houses a large number of industrial houses from the sector.’’ Earlier, talking to
newspersons on the occasion of the announcement of
setting up of the Greater Noida Export Promotion
Industrial Park (EPIP), Mr Kumar said the authority would
invite applications for setting up units in the EPIP next
week.
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PSB net profit rises to Rs 32 crore NEW DELHI, Nov 7 — Punjab and Sind Bank (PSB) has achieved a net profit of Rs 32 crore for the half year ended September 30,1998 - registering a growth of 8 per cent as compared to the corresponding period of the previous year. Operating profits have increased to Rs 49 crore - a rise of Rs 3 crore as compared to last year. Deposits of the bank have grown by 18.70 per cent which increased to Rs 8,519 crore as on September 30, 1998 as compared to Rs 7,177 crore last year. The core deposits of the bank have grown up by 17.86 per cent as on September 30, 1998 from Rs 6816 crore during the same period in the previous year. The net advances of the
bank stood at Rs 3,687 crore registering an increase of
23.47 per cent over the figure of Rs 2,986 crore a year
ago.The total business of the bank has crossed Rs 12,500
crore as on September 30, 1998. |
Central Bank deposits up 19 per
cent CHANDIGARH, Nov 7 — The Central Bank of India earned an operating profit of Rs 132.88 crore for the half year ended September 30, 1998 as against Rs 102.15 crore for the corresponding half-year ended September 30, 1997. The aggregate deposits of the bank recorded in increase of 18.94 per cent from Rs 24.107 crore as on September 30, 1997 to Rs 28.673.00 crore as on September 30, 1998. The gross credit increased to Rs 12,452.00 crore. The net-investment of the
bank stood at Rs 14,381.00 crore reflecting an increase
of 11.96 per cent level of September 30, 1997. The income
and investment which was Rs 721.16 crore during the
half-year ended September 30, 1997, has gone up by Rs
72.26 crore to Rs 793.42 crore registering an increased
yield of 11.54 per cent from 11.48 per cent last year. |
India tops in milk production ANAND, Nov 7 (UNI) — India is now world’s largest milk producer. The country’s milk production has touched a whopping 74 million metric million tonnes during the current financial year which is three million metric tonnes higher than the United States — the second highest producers of milk, a report published in a magazine “Dairy” by National Dairy Development Board (NDDB) said. India witnessed three-fold increase in its milk production during last two and half decade, owing mainly to the initiatives taken by NDDB and its massive operation flood project which enhanced its production by 4 per cent. About 70 million milk
producers in the country have contributed to make the
operation flood programme a stupendous success, with
buffalo milk contributing to 50 per cent, the report
added. |
SEBI norms for shares’ buyback MUMBAI, Nov 7 (PTI) — The Securities and Exchange Board of India (SEBI) today announced stringent norms for buyback of shares by companies, including preventing promoters from tendering their shares through stock exchanges. SEBI suggested six routes of buyback, namely through a tender offer, open offer through stock exchanges, Dutch auction or reverse book building process, reverse rights issue, odd lots and employee stock options. However, it was against the promoters tendering their shares through stock exchanges. “In order to prevent a promoter from having an undue advantage, it was decided that he (promoter) should not be allowed to tender his shares through the stock exchanges”, said SEBI Chairman D R Mehta. The promoter would also be required to declare upfront his intent to sell his holding to the company and the exact amount of shares that would be tendered, so as to leave no room for manipulation, he added. Addressing newsmen after a day-long meeting of SEBI officials with lawyers, representatives of chambers of commerce and industry, accountants and company secretaries, Mr Mehta said while negotiated deals were considered, the committee felt it should not be encouraged. The regulator has suggested that a ceiling on prices, to be determined by shareholders through a special resolution, must be indicated in all cases of buyback. The implications of buyback on the takeover code would be separately examined by the Bhagwati Committee which is presently taking a relook on the code. However, if the promoter holding in a company increases on account of the buyback with no change in management control it would be granted a general exemption, Mr Mehta said. The committee was also of the view that the regulator should not be involved in pricing, but ensure transparency and protection of investor interests, he added. In case of a Dutch auction, preference would be given to the lowest bidder and the cutoff price made applicable to everyone. However, for a tender offer the exact price would necessarily be prescribed. All methods of buyback, except through stock exchanges would necessarily amount to the creation of an escrow account and handled by a merchant banker. Moreover, only those exchanges with electronic trading would be permitted to participate in an offer for buyback of shares by the company, Mr Mehta said. Promoter holdings with a lock-in clause would not be eligible for buyback, Mr Mehta said adding that buyback would cover only equity and that all payment would have to be made in cash. As in the case of an offer
for takeover, an offer for buyback cannot be withdrawn. |
FIPB clears Enron proposal NEW DELHI, Nov 7 (PTI) — The Foreign Investment Promotion Board (FIPB) today cleared 25 proposals worth Rs 392 crore, including that of Enron and Essar Shipping. The board cleared a proposal by Essar Shipping to bring in $ 50 million (Rs 133 crore) through foreign convertible currency bonds (FCCB) to be arranged by Union Bank of Switzerland. The FCCB is to fund the Rs 1,435 crore all-weather port and terminal facility at Vadinad in Gujarat for crude and petroleum, oil and lubricants (POL) imports, Industry Ministry sources said. The board also allowed TDF Mauritius to bring in Rs 89.7 crore to acquire 72 per cent stake in Whirlpool Apple Consumer Credit Private Limited, an existing non-banking financial company (NBFC) registered with the RBI. Enron India Private Ltd
the holding company for the US firm’s downstream
investments in power and LNG, has been allowed to
increase its paid up capital from $ 100 million to $ 114
million. |
DOMINATED by the non-banking financial companies (NBFCs), the major players in the industry are facing rough weather. The financial performance of the companies during the current financial year 1998-99 is expected to be dismal. A sharp fall in the disbursal is responsible for the lacklustre performance. The players in the industry have been restricted, with reference to raising of funds from the fixed deposit route, which is a major source for the NBFCs. The restrictions are a result of the RBI guidelines for NBFCs on deposit mobilisation. To add salt to the existing wounds, the slowdown in the automobiles industry has hampered the performance of the players in the industry. The auto-finance industry is responsible for the sale of as many as 60 per cent of the cars, with finance even more prominent in the premium car segment (80 per cent) and less in the small cars segment (50 per cent). The disbursals could have been lower if it was not for the respectable performance of the small cars segment. Industry experts opine that a shakeout in the industry is imminent. The small players are expected to shut shop on account of falling spreads and fund raising constraints. Sundaram Fin In existence for over four decades and recognised as the country’s largest hire-purchase and lease finance company, Sundaram Finance Ltd (SFL) is a leading player in the industry. The company has total receivable exceeding Rs 2000 crore. The company has branches all over the country. On the financial front, the company has been a decent performer. The company’s strength lies in its dedicated customer service, fair business practices, efficient management and conservative financial policies. The company also claims to offer easy financing schemes. Alpic Fin A leading financial company, Alpic Finance Ltd (AFL) is involved in diversified activities such as leasing, hire purchase, investment banking, international services, corporate and project consultancy, and foreign exchange bill discounting. The company has an excellent clientele base with over 100 corporate clients. On the financial front, the company’s results depict a satisfactory performance. This company has over 90 branches across the country. It is recognised as the only company in the country to offer a financial product for the medical profession. The company has numerous joint ventures all over the world. It appears that the company is benefitting from its diversified activities. Tata Fin Tata Finance is involved
in the business of asset and trade finance, investment
banking and vehicles finance. On the financial front, the
company recorded satisfactory performances. In March
1997, Telco Dealers Leasing and Finance Company was
merged with Tata Finance, which boosted the
company’s income and profits. As a result of the
merger, TFL can be expected to finance Telco’s newer
generation vehicles. This is expected to prove extremely
beneficial in the coming years. |
Reliance Ind A leading technical analyst has an ominous sounding warning for the shareholders of Reliance Industries. She opines that the share price of this pivotal will dip below its decade-low of Rs 77. Will the company’s management choose to undertake a market-intervention exercise to salvage its lost pride? Simply south AN interesting observation was recently made by a Hong Kong based FII research analyst. In the post-liberalisation era in India, it is the south based companies like Infosys Technologies, Dr Reddy’s labs, and TVS-Suzuki that have been the trail blazers, as compared to the Oswals, Jundals and Indo-Ramas from the north which flourished during the license Raj. Yashwant speaks Unfortunately for the Finance Minister, marketmen have yet to forgive him for presenting what they perceived to be a lacklustre Union Budget earlier this year. Every time he speaks about any market related issue, it being the US-64 imbroglio this time, the markets have plumetted. What a change from those heady days when Chidambaram was at the helm. UTIs sinking ship The grapevine has it that
UTI is robbing ‘Peter to pay Paul’, that is
diverting funds from its other schemes to fund its
sinking ship-the US-64 scheme. Now if this bit of gossip
were to be true, its ramifications for not only
UTI’s unitholders but also for the entire
stockmarket appear ominous.
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GONE are the days when cheap prints and blurred characters did small business for pirates, who targeted the not so affluent bookworm or thrived on publishers rejections. Thanks to sophisticated desk top publishing computers and quality printing, piracy is a megabuck business which has left many a publisher in doldrums. But bookworms are not complaining as they are getting their favourite authors from Arundhati Roy to Sidney Sheldon for a song. The book piracy industry in India which initially catered only to those looking for a quick glance before the book was out now attracts the most discerning readers. “This industry has really come up in a big way and is making lots of money at the cost of publishing houses like Orient Longman, Rupa, India Ink and others,” says Sanjeev Chawla, senior executive (sales) of Orient Longman. The publisher loses a lot and the effect is eating into the sales of bestsellers which have dropped tremendously, Mr Chawla says. “Earlier they used to print on bad quality paper but now they have acquired sophisticated equipment and the quality of the printing is just as good as the original one,” says Mr Chawla. The imitation of “God of Small Things”, for instance has been copied to the last with even page alignment, cover, paper quality and the original price printed on it. The author of the book is herself reported to have seen such a pirated edition and so have the publishers of the book, India Ink. — PTI Business city London is still Europe’s top business city, US magazine, Fortune has said in its yearly survey of business attitudes towards 35 cities on the continent. The survey found that more than 200 theatres, 225 museums and 100 cinemas helped elevate quality of life here above other European centres. The quality of the labour forces was also seen to be attractive to business. Paris was the second favourite among the business elite and the Scottish city of Glassow came in third place. — AFP Bonus issue Major international airlines have decided not to pay productivity linked bonus (PLB) to travel agents from December 1. The Board of Airlines Representatives, which met here recently, took the decision to monitor the enforcement of withdrawal of PLB. The board also suggested that if any travel agent continued transactions with any carrier, who was not a signatory to the agreement and were offering PLB’s other carriers, it would consider withdrawing their ticket stocks from the agents. TAFI president, Yatin Dossa, suggested that both airlines and travel agents should enter into an agreement and should not doubt each other’s integrity. — PTI Coffee cheers It’s cup that has begun to cheer up all again. Coffee growers, exporters and the government are all happy with the way the coffee sector is shaping up, buoyed as it is with record production and export performance. Commerce ministry officials say there is a valid case to bring down the prices of the beverage after prices in the global market has fallen drastically. After raising retail coffee prices to Rs 200 a kg last year following crop shortage and rising international prices, roasters have reduced the prices in phases. In August this year, they
reduced the prices further to Rs 150 a kg from Rs 170 a
kg. But officials say they have to do more than a cut in
price here and there. — PTI |
Q: I have constructed a house with a bank loan of Rs 1,25,000 and to let to @ Rs 1200 per month. My tenant has not paid rent since May 1993, and I have filed a case for eviction. In the court of Law he paid me Rs 40500 in April 97, without any detail and without any judgement how I should fix my tax liability. In such circumstances tax ought to be paid should not like this:- 1993-1994 Rent 1200x12=14400 less 20% i.e. 2880 = 11520 for Rs 1150 tax @ 20% = 2304 say 2300-00. Interest on loan paid to the Bank for 1993-94 = 4000-00 refund 1700-00, for 1994-95 refund 1700.00, for 1995-96 refund 1700.00. What is my correct tax liability. Yearwise and how to be shown. If it is a refund case how I should claim and what type of forms should be submitted to the I.T. Authorities. — R K Sharma, Distt Muktsar Ans: On the facts stated by you, from the rent received after deducting interest on loan paid, you are also entitled to claim a deduction in respect of irrecoverable rent. As and when the irrecoverable rent is realised in subsequent year, the same would be liable to Income-tax as per Section 25A. Q: A person born on 21.11.1933 completes 65 years on 21.11.1998 during the financial year 1998-99. Kindly intimate whether he is entitled to Income-tax rebate of Rs 10,000 given to senior citizens, during the financial/accounting year 1998-99. Also throw some light on the meaning of financial year, accounting year, relevant year and assessment year under the Income-tax law for the benefit of readers of The Tribune. — R S D Bansal, Sirsa Ans: As you are going to complete 65 years of age on 21.11.1998 i.e. during the financial year 98-99 you will be entitled to tax rebate for the senior citizen upto a maximum of Rs 10,000. This benefit will be available in respect of whole of your income irrespective of the fact that you become a senior citizen only on November 21, 98. Financial year or accounting year or income year is the period of 12 months starting from April 1, and ending on the next March 31. Assessment year is one year ahead of the financial year. Financial year is also known as previous year. For example, in respect of the financial year or previous year or accounting year 1998-99 the period will be starting from April 1, 98 and ending on March 31, 99. For this period the assessment year will be 1999-2000. Q: I am an old senior citizen lady and am illiterate. In 1985 I purchased the US-64 of the Unit Trust of India for Rs 20,000. Being an illiterate lady I kept the same with me and did not consult any one. With the result that in 1996 it was indicated in the statement furnished by the UTI “The Annual return be delivered to the Income-tax Officer. In the next year it was also repeated. Now let me know whether I have to submit the return as it is very difficult as annual year of the Trust begins from 1st of July and that of the Income tax begins from 1st April every year. Please guide me in this regard. I want to get the dividends encashed which will be near about 80,000. What amount of the Income-tax I have to pay. Whether it is exempted for the senior citizens. — Neela Sodhi, Ludhiana Ans: For showing the income from UTI you can show the income only for your financial year beginning from 1st April and ending on 31st March. The entire income from UTI although you may call it dividend is not fully exempt. The maximum amount exempted u/s 80L including the deduction for other specified investments is Rs 15,000. However, in your case as you are a senior citizen, the question of payment of any Income-tax will not arise because after granting rebate of tax the tax liability will be Nil. However, you must file your Income-tax return. Q: My wife has house in Haryana which was purchased by us in the year March 1992 for Rs 1.5 lakh. Now a price of about 4 lakh has been offered for that house. I want that the house be sold away and the proceeds be utilised towards cost of construction of a flat at Panchkula. (i) Can the sale proceeds of the house be utilised towards the cost of construction of the flat; (ii) If so, what procedure is to be followed legally so that I can use the sale proceeds without inviting liability of capital gains tax (or any other tax) and (iii) what arrangement will have to be entered into with my wife so as to use her amount in the construction of the flat without inviting any objection from the Income-tax authorities. — Ramesh Kumar, Chandigarh Ans: For
saving tax on capital gains you should invest the
longterm capital gains in the purchase of a residential
house either within one year before or 2 years after the
date of sale. If you like, you can also invest the
capital gains in the construction of a residential house
within 3 years from the date of sale. The unutilised
amount of capital gains should be deposited in a Special
bank account under the capital gains a/c scheme with the
bank. This deposit of the unutilised amount should be
made by the last date of voluntary filing of the
Income-tax return. On the facts stated by you the house
purchased with your funds but in the name of your wife
will legally be treated as your property because the
financing of the same has been done by you. If an
individual is interested to advance money to his own wife
for buying a property or for any other purpose in view of
Section 64 of the Income-tax Act dealing with clubbing of
the income, it is suggested that you should not make a
gift to the wife but should give a loan to the wife. Such
loan should also bear interest at a reasonable rate. |
Q: In determining the nature of work, mere recommendation of leave application, whether would make an employee, a supervisor? A: In Cricket Club of India v Baljit Shyam (Ms) ( 1998-II-LLJ-578) The Bombay H.C. held thus: The present writ petition was filed by employer — Cricket Club, challenging an order of the Industrial Court by which it held, in revision of the Labour Court’s order, that termination by petitioner of the first respondent’s services as a house-keeper was illegal and that she was entitled to be reinstated with full back wages and continuity of service. In the instant case admittedly the letter of termination does not show the termination was either for want of confidence or on account of misconduct. On the contrary it is the contention of the petitioner that the termination was simple termination and it was without any aspersion or allegation. In these circumstances, the question of giving an opportunity to the petitioner would not arise. Under the provisions of the MRTU and PULP Act, if the Respondent No. 1 is able to establish that the petitioner had committed unfair labour practice then in that event the Court under those Acts could issue a direction to the petitioner from desisting from committing unfair labour practice. This is not a case of dismissal for an act of misconduct as can be seen from the record. In these circumstances the Industrial Court arrived at the conclusion that the items of Sch. W had been attracted, the Industrial Court rightly directed the reinstatement of the Respondent No. 1 with other consequential benefits. Labour Court, it may be noted, has only proceeded on the footing that the Respondent No. 1 was recommending the leave application. But mere recommendation of the leave applications would not make Respondent No. 1, a supervisor, as the recommendations would not bind the company. In the instant case what is important to note is that non-consideration of the letter of appointment because the said letter would have made it clear that the Company itself has considered the Respondent No. 1 as a workman by making applicable the standing orders and service regulations. In that way, the H.C.
declined to interfere with the order of the Industrial
Court. |
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| Gold weak NEW DELHI, Nov 7 (PTI) — Both the precious metals, silver and gold turned weak on the bullion market on lack of buying support and closed lower. The quotations: Silver. 999 (ready) 7460, delivery 7490, coins buyer 10,800 and seller 11,000. Standard gold 4300, ornaments 4150 and sovereign 3700. Book
fair Insurance staff Canara Bank SBI IOC terminal |
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