Monday, March 29, 1999
today's calendar
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B U S I N E S S | Monday, March 29, 1999 |
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spotlight today's calendar |
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Indian cars fare badly in
export markets IT
Department mops up 500 crore from MNCs |
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Government to modify export
schemes
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Zee to raise share capital MUMBAI, March 28 — Zee Telefilms Ltd shareholders yesterday approved an increase in the company’s authorised share capital from Rs 50 crore to Rs 75 crore to safeguard itself from any fund shortfall required for the ambitious projects envisaged in the face of technological convergence. Vadilal to pay 12.5 per
cent Inflation
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Indian cars fare badly in export markets NEW DELHI, March 28 (UNI) — Sales of made-in-India cars, especially Mercedes-Benz and Maruti, and even two-wheelers, skid off tracks in the export markets even as multi-utility vehicles (MUV) and three-wheelers bucked the recession and raced ahead with improved sales during the first eleven months of the current fiscal. While the entire passenger industry sales in foreign markets shrunk by 16 per cent, MUV sales spiralled by 14 per cent, latest figures released by the association of Indian Automobile Manufacturers (AIAM) revealed. The commercial vehicles segment continued to reel in the grip of recession across the globe, with total sales dropping by over 20 per cent during the April-February 1998-99 period. Meanwhile, retails in the entire two-wheeler industry, including scooters, motorcycles and mopeds dropped by 24.5 per cent even as three-wheelers closed the period with a 9.6 per cent growth in sales. In the passenger car segment, Mercedes-Benz saw a major crash in its E-class’ retails abroad. Sales dropped by 78 per cent to 494 units from 2,314 units a year earlier. Telco followed with a 39 per cent drop in its overseas sales at 1,451 units as against 2,398 units a year ago while market leader Maruti Udyog Limited’s passenger car exports skid by 7.3 per cent at 19,347 units from 20,892 units in April-February last year. Maruti was, in fact, the only manufacturers in the MUV segment to have witnessed a drop in sales while Mahindra and Mahindra and Telco whizzed ahead recording a significant growth. MUL’s MUV sales dropped 35 per cent at 529 units from 818 a year earlier while m and m sales looked up by 41 per cent at 881 units and Telco surged ahead with a 31 per cent growth offloading 895 units, the AIAM figures stated. In the entire two-wheeler
industry, mopeds led the slide with a 34 per cent drop in
sales overseas. Motorcycles, who have been spearheading
the growth track in the domestic markets, were also major
losers in the export markets with retails dropping 24.9
per cent during the period. Scooter sales, however,
dropped only marginally at 6.3 per cent. |
Government to modify export schemes NEW DELHI, March 28 (PTI) — The government is likely to modify export promotion schemes, allow unrestricted imports of another 300 items and continue the 9 per cent RBI pre and post shipment credit for exporters in the export-import policy modifications to be announced on March 31. An effort would be made to cut down delays in exports and thus cut transaction costs being incurred by exporters, official sources said. Commerce Minister Ramakrishna Hegde was likely to announce a scheme wherein state governments would be encouraged to take part in export promotion in a big way. Focus on gem and jewellery, software, leather, electronics and drugs and pharmaceuticals was likely to continue to maintain the momentum in export growth being witnessed since November last after a slump for nearly one and a half years. Though Hegde and the other ministry officials have ruled out discontinuation of export promotion schemes like the duty entitlement passbook (DEPB) and the export promotion capital goods schemes, modifications were necessary to conform to the multi-lateral trading norms. This was also to ensure that more items did not come under the purview of anti-subsidy proceedings as initiated by the European Union (EU). The EU had slapped anti-subsidy duties on broad spectrum of antibiotics and stainless steel bright bars. The reason for the government to go in only for modification rather than any discontinuation of the schemes was in view of the Commerce Ministry’s opinion that frequent changes would lead to uncertainty among exporters. Hegde, while asserting that the export promotion schemes would not be discontinued, said “frequent changes in policies would lead to atmosphere of uncertainty. Moreover, exporters have to enter into an agreement on long-term basis and such changes would lead to disadvantage for them.” The ministry sources said they were not bothered about the anti-subsidy duties slapped by the EU as the percentage of exports hit by the levy was negligible. The government, in an effort to meet its obligations to remove quantitative restrictions on imports, would allow imports of about 300 items under the open general license (OGL). Last year, about 400 items were brought under OGL in the exim policy modification to keep up India’s commitment to WTO. Quantitative restrictions were imposed on balance of payment (BoP) grounds but as India’s BoP position was comfortable in 1996, WTO has impressed on the country’s need to relax the restrictions. Under OGL, unrestricted imports are allowed to a licence holder though the importer will have to pay specified duty. The government plans to cut down transaction costs of exports in an effort to provide level-playing field for Indian exporters. Hegde is of the view that transaction costs are a big factor against export growth. “Enormous time and money are spent on exports. Unless we provide a level-playing field to exporters how can we compete with other countries?” he said recently. Explaining efforts of the Commerce Ministry for further exim policy modification, Hegde had said this time the government would try to benefit exporters to the “maximum possible extent”. He has already held talks
with Finance Minister Yashwant Sinha for allocating Rs
500 crore in the annual plan for states to promote
exports on March 24. |
IT Department mops up 500 crore from MNCs NEW DELHI, March 28 (UNI) — The Income Tax Department has mopped up a total of Rs 500 crore from about 60 multinationals, mostly Japanese, as a follow-up of its tax evasion detection drive. The amount has already been declared by the multinationals and paid-up as arrears, a senior IT department official told UNI here. Some of the major companies detected on this count include Suzuki Motor Corporation, Bank of Tokyo-Mitsubishi, Samsung Electronics, Sumitomo Corporation and Hyatt Hotels. The IT Department had been conducting surveys at the offices of most of the MNCs as part of its effort to plug the non-compliance by these companies in tax deduction at source (TDS). While Suzuki Motor Company (SMC) officials and nominees in Maruti Udyog Limited (MUL) have evaded taxes to the tune of about Rs 100 crore, Bank of Tokyo-Mitsubishi officials have been alleged to have evaded Rs 50 crore as taxes. The official stated that the IT Departments of Delhi, Gurgaon and Faridabad are working jointly to crack down on major corporate houses who are evading taxes by not declaring the income of their foreign employees in Indian operations. Regarding the investigations of Suzuki employees, the official said summons have already been issued to all senior directors, including MUL Chairman Yoshio Saito on suspicion of tax evasion via under-declaration of their foreign income received in Japan. It has been alleged that Suzuki officials working with MUL are getting two salaries — one paid by MUL in Indian rupees and the other paid by SMC in Japan. As per Indian Income Tax law, foreigners working in India have to file a declaration of any income earned by them abroad with their Indian employer. The Indian employer is then responsible for deducting tax at source on the total income of the foreign employee. Though some of the Japanese employees have been declaring some foreign income to MUL, no such declarations were being filed prior to 1995. Further, it was also found that there was gross under-declaration of the foreign income by these employees. The official further stated that despite having asked Mr Saito to be available in office for questioning, he left for Japan the same day. He had come to Delhi to attend the MUL board meeting on March 15 and was originally supposed to be here till March 18. The surveys were conducted
under Section 133-A of the IT Act. |
World-watch WORLD Voices, an international coalition of young people from around the world, is organising a global campaign “Tell the World” urging young people to write about issues important to them. Five best entries will be sponsored to participate in an international seminar “Awakening” to be held in London in the second week of September. The contributions will also be published in a book “Nodebate” addressing the state and future of the world at the millennium. Ranica Barua, the representative from India for the World Voices core team, says, “At the core of World Voices is a passion for encouraging alternative to the mainstream systems and values that currently diminish humanity, the earth and the future. It’s about believing in your voice being powerful. It’s about your values and ideas being crucial. With this initiative we hope to start a dialogue and spark the thinking process among young citizens of the world that would go a long way in inspiring a change in the existing systems and values”, Ranica adds. The entries can be an essay, a letter, speech, a poem or an extract from your diary Photographs and art as a form of expression are also legible for inclusion in the book. The entries can be about * Social, environmental, or political issues of relevance to you, your community or your country. * About the attitudes, values or lifestyles of the people around you. * About your own personal experiences. * About what is going wrong or about solutions and alternatives. “Some have made us privy to their view on beggars, others on child labour, the deforestation, the breaking up of communities. Telling others what you believe can inspire change — that what makes you immensely important”, adds Ms Barua. Entries may be sent by snail mail, Email or fax latest by May 1, 1999, to World Voices India, E-1/6, Vasant Vihar, New Delhi-110057 or Email; Ranica @ worldvoices. org. “World Voices” is run by young people from homes and offices in Canada, Germany, India, Malaysia, Norway, South Africa and the UK involving young people in 70 countries and are working with and supported by organisations, including Amnesty International, The Schumacher Society and Oxfam. — TNS Successful duo Twenty four-year-olds Mohan Hira and Dunston Almeida didn’t exactly become millionaires — at least not yet — even though they rode the dizzying dream of an Internet initial public offering (IPO). And the two Mumbai-born men aren’t “going around to that Ferrari dealer out there,” too, as Almeida pointed out. But one thing is sure: They are two happy men after village, which operates websites for women, made its IPO. Hira started out at a gaming company, Interactive Imagination, and then spent time at a service firm that built websites for major corporations such as Avon and Budweiser. Almeida is village’s Director of Business Development and Finance. Only a little over a year ago he was losing money rapidly in trying to partner his old roommate in a computer consulting venture in San Francisco. He grew up mostly in Oman where both his parents are doctors, and went to the US seven years ago. At village, he has “focussed on establishing alliances with media companies to make sure that when the day of reckoning came, when big guys like Time Warner and other came, we wouldn’t be left alone, “During his stint, village has won over NBC to its side giving it substantial content and clout and, as Almeida pointed out, it has got Tele-Communications Inc. and its parent, AT&T, as partners. Meanwhile, village will continue to focus on women in the age group of 24-49 to the exclusion of every other segment, explained Almeida, because it is this group that enjoys the most purchasing power, making 80 per cent of the household spending decisions. — IANS ‘Fat cat’ pay Jan Leschly, the chief executive of drugs group SmithKline Beecham, now has a pay, perks and shares package worth more than US $ 144 million. The record-breaking pay package, which has risen in value by more than US $ 32 million in the last 12 months, is the biggest ever awarded by a public company in the UK. It dwarfs all previous fat-cat rewards and is bound to provoke fury among shareholders and workers. The 30 per cent increase in his vast wealth compares to the 10 per cent increase in profits SmithKline chalked up last year. Details of Mr Leschly’s mega-pay package come just weeks after the company announced 3,000 manufacturing job cuts, some of which are expected to fall in the UK, where SB employs 4,000 staff in six factories. The huge pay package also comes in the wake of an expensive about-turn in strategy at SmithKline. The company has recently announced it is selling off two US healthcare companies at a loss of some US $ 2.24 billion. He owns shares in the company worth some US $ 17.3 million. He also has share options in the UK and US worth US $ 96 million. In addition he has a mid-term incentive scheme — which provides awards of free shares — which is currently worth US $ 14.7 million, and a long term incentive plan currently valued at more than US $ 17.6 million. Other perks such as
company car and pension benefits make the package worth
some US $ 147 million. He also has use of a company
mansion in London’s smartest area Belgravia,
complete with the services of a butler. — The
Guardian |
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MUMBAI, March 28 (PTI)
— Zee Telefilms Ltd shareholders yesterday approved
an increase in the company’s authorised share
capital from Rs 50 crore to Rs 75 crore to safeguard
itself from any fund shortfall required for the ambitious
projects envisaged in the face of technological
convergence. Keeping in mind the move from analog
satellite broadcasting to digital, direct-to-operator and
direct-to-home broadcasting and the launch of internet
services and to raise debt at competitive rates. |
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NEW DELHI, March 28 (UNI)
— Vadilal Industries Limited has announced 12.5 per
cent dividend to its shareholders on the enlarged equity
share capital of Rs 7.19 crore. The company with a
networth of Rs 37.68 crore has logged Rs 3 crore net
profits for the 18-month period ending September 30,
1998. The sales turnover during the period under
consideration increased by 51 per cent to reach Rs 104
crore
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Asia Pacific Asia Pacific Investment Trust Ltd has not been making repayment of FDR No TC-1251900269 & TC-125190027 & TC-1251900265 despite repeated reminders. N.P. Garg Design Fin I was alloted 500 shares of Designs Finance Ltd, a subsidiary company of Design Auto Systems Ltd., vide Regd Foilo No-595, Distinctive No-977401 to 977900, Certificate Nos 3831 to 3835 dt 30.03.1995. The issue was put in abeyance due to some reasons. I have not received any appreciation/interest for that despite many reminders till to date. Narinder Mohan
Dewan Touchwood I hold 10 units (Folio CK0011, Certificate No 10466) of Touchwood Ltd, 32-A, N.S. Road, Calcutta since 10.1.1994. I have never received any annual report of this company. Letters written to them are returned un-delivered. I do not know the fate of my investment. Ritu Kumar DCM Fin I deposited RS 5,000 for 18 months with the DCM Financial Services Ltd, New Delhi vide Folio No 391813 and Certificate No 21183 on November 1, 1996. The company has not released the payment on redemption despite many reminders. Subhash C. Taneja Kuber Benefits Certificate Nos 171907 & 171908 issued by Kuber Mutual Benefits Ltd, Ambala (H.O. S-32 Greater Kailash Part I, New Delhi-110048) matured on 28.2.99. The certificate has not been encashed despite many reminders. Yadukul Bhushan Padmini Polymer I applied for transfer of share certificate No 354981 (total 100 share) Folio No 30041, Distinctive Nos: 24924726-24924825 with Padmini Polymers Ltd, 240 Okhla Industrial Estate, Phase III, New Delhi on 20.2.98. But till today, I have not received the said share certificate duly transferred in my name. Dinesh Kumar
Sharma |
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Carrier Aircon CARRIER Aircone is one of country’s leading manufacturers of window, room and split air-conditioners. The company has emerged as a leader in the room AC segment with a dominant 30 per cent market share. Now it is making its presence felt in the high-margin central AC business. On the financial front the company’s performance has been satisfactory. The company plans to increase its capacity for room ACs and also it’s compressor manufacturing capacity. CAL’s range of products and increasing presence in the central AC business will help it to consolidate it’s total market share. Overall, the company’s prospects seem encouraging. Hence, one could consider investing in this company. IOC THE largest commercial undertaking in the country, Indian Oil Corporation (IOC) is one of the “Navratnas” of corporate India. It is ranked 20th in sales among the world’s refining companies. The company owns and operates six of India’s 14 refineries having a share of about 40 per cent of the total refining capacity. It meets 55 per cent of the consumption of petroleum products. One of its wholly owned subsidiaries manufactures over 400 grades of lubricants. The company continues to be a leader in the aviation fuel business with a market share of about 69 per cent. On the financial front the company’s performance has been excellent. During the financial year that ended in March 1998, the company posted sales and net profits of Rs 59,832.08 crore and Rs 1687.83 crore,thus yielding an EPS of Rs 43.3. The company’s performance has also been very good thus far. IOC has projects worth Rs 8,000 crore on hand which are to be completed in a couple of years. These include the 6 MLN grassroot refinery at Panipat, the Haldia-Barauni crude oil pipeline matching secondary processing facilities at Mathura and expansion of the Gujarat refinery by 3 MLN tonnes. Apart from this the company has also decided to set up 5 power projects on a commercial basis. The overall prospects of this company thus seem to be fairly bright. Hence, a long term investment in this scrip could be considered. Cadbury INCORPORATED in 1948, Cadbury India Ltd is a dominant player in the chocolate and malt food segment. The company has several reputed brands such as Dairy Milk, Eclairs, Perk etc. due to which it dominates the chocolate segment with a market share of 70 per cent. In the chocolate-based drinks segment, its brand Bournvita enjoys over a 50 per cent market share. On the financial front the company’s performance has been satisfactory. The company has set up new
processing plants at Pune for crumb, chocolate making and
moulding capacity expansion for wafer products. Cadbury
is one of the leading advertisers and its brands enjoy
tremendous visibility and recognition. The company’s
latest launch of Picnic in the chocolate segment has been
well accepted and the company’s entry into sugar
confectionery with a national launch of Googly has a
larger market than the market for chocolates. This is
mainly due to the parent company’s strong position
in this field. On the whole, the future prospects of the
company appear to be fairly secure. |
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NEW DELHI, March 28 (PTI)
— Annual rate of inflation continued to fall for the
second consecutive week and stood at 5.14 per cent for
the week ended March 13, registering a 0.9 percentage
points decline over previous week mainly due to easing in
prices of non-food articles and food products. Inflation,
based on wholesale price index (WPI), decreased to 5.14
per cent (provisional) from 5.23 per cent (P) a week ago. |
The rally fizzles out DURING the last fortnight, the sensitive index shed 205.2 points. This is in line with what had been said in this column last fortnight. The market rally which had been expected to boom up and cross 3900 points by many analysts has fizzled out. This may indeed be due to technical correction but a number of other factors are also responsible for the petering out of the rally. The economy is still in the doldrums with no early prospect of industrial revival. The fact that the current financial year is closing on March 31 has also discouraged traders from making any large commitments. The political uncertainty hangs like a dark cloud over the stock market. I do not expect any improvement in the stock market during this fortnight. At best, the market may move within a narrow range. An encouraging feature of market during the last fortnight, however, was improvement in the market prices of some second — rate scrips in the B-1 and B-2 lists. It is almost certain that the annual results of the corporate sector to be announced during April-June this year would not be any better than those announced last year. In a large number of companies, these results may be a trifle lower. A recent poll by the Reuters news agency also confirms this analysis. This poll had sought views of 25 leading stock market broking and securities firms on the likely performance of some top corporate giants for the accounting year 1998-99. The average of forecasts for 24 of the 30 companies included in the poll showed that the net profits were expected to grow by just one per cent and sales by 8 per cent. The profits would have declined but for the strong performance from companies in software, pharma and consumer goods. Heavy engineering and infra-structure companies are still in trouble. According to this poll, the companies which are expected to improve their net profits are: ACC (by 318.54 pc), Hindalco (by 13.37 pc), Infosys (by 119.70 pc), ITC (by 19.44 pc), MTNL (by 21.08 pc), Novarties (by 86.01 pc), Reliance (8.04 pc), SBI (5.35 pc), Glaxo and Nestle are also expected to do well. The net profits of Telco, Tisco, Tata Chemicals, Indian Hotels, Larsen & Toubro, M&M and Ranbaxy are expected to be lower than in the corresponding period of the last year. When the top brass of the corporate sector are not expected to do well what can we expect of the relatively weaker section of the corporate sector. Another factor which is expected to depress the market during April-May would be profit-booking by long-term investors to take advantage of reduced long-term gains tax at 10 per cent (without taking advantage of cost inflation index). Bonus shares, which do not have any cost and cannot participate in the cost inflation index advantage, would be on sale first due to the lower L.T. Capital Tax proposed in the Budget proposals. There are also some reports that the mutual fund securities would not participate in the 10 per cent L.T. Capital Gain tax category and would continue to be taxed on the basis of 20 per cent tax (as in the previous year) with cost inflation index advantage. There are also indications that the UTI would reduce the dividend of UGS-64 to 17 per cent (from 20 per cent) in order to put this scheme on a sound footing during the next three years. Another argument advanced for cutting down of the dividend on UGS-64 is that the return in the hands of the Unit holders would not much suffer because now this dividend would not put any income tax burden on them. There was another rumour that the UTI may also cut down return on existing monthly income schemes by 1 per cent regardless of the interest specified and guaranteed in these scheme earlier. But there is also a news that the SEBI would not allow the UTI and other mutual funds to renege in this respect. It is, however, on the
cards that the interest rates would be further scaled
down in the coming months and the new monthly income
scheme of the UTI would carry about 11.6 per cent
interest on the annual collection-of-interest basis. |
7 air links for northern region THE Central Training Establishment (CTE) at Hyderabad has gone from strength to strength in the past five years. It provides training to all Indian Airlines’ staff including pilots and cabin crew and fulfil the needs of more than half-a-dozen foreign airlines. The CTE, run under the auspices of the Indian Airlines, is equipped with ultra-modern gadgets. It made a modest turn-over of Rs 5 crore in 1997-98. Often its simulators were used by other carriers, like Air Lanka, Sahara and Blue Dart. Similarly, national carrier’s jet engine shop at Delhi has become self-sufficient, to overhaul engines of new Boeing family like B-737s. The national carrier, it is learnt , was to acquire aircraft from this family some years ago but frequent changes in government and shuffling of bureaucrats prevented airline from buying any new aircraft. The workshop, one of the best in South-Asia, overhauls Airbus A-320 engines. It can undertake major portion of the overhaul work in-house. As rates for overhaul are reasonable, quite a few foreign airlines prefer this to other workshops in more affluent countries than India. The national carrier is also refurbishing its fleet with eye-catching interiors which will please even those, who have been detractors of the carrier. This is saying a lot but analysts feel it is ‘true’. The airline has taken effective measures to improve its snacks and meal service as also more courteous service on board than has been the case at present. More capacity The airline now provides 11,158 seats a week from Delhi to Mumbai in its summer schedule. This is 2,212 seats more than the existing capacity. The airline’s northern region will provide seven new links. They are Lucknow-Varanasi, Lucknow-Mumbai, Varanasi-Mumbai, Delhi-Coimbatore, Delhi-Calicut, Raipur-Mumbai and Rampur-Bhubaneswar. It will also operate a daily flight between Delhi and Vizag instead of three flights a week. Similarly, the airline has increased its capacity on Delhi and Guwahati sector. Sahara Airline Mr Parvez Damania, unsuccessful in his family airlines that was floated when open skies policy was introduced some years ago, has now jumped on the bandwagon of the Sahara Airlines which, has several innovative schemes to widen its wings. Mr Damania, a new Director of Sahara Airlines, has always known to be full of new ideas. He is, however, considered ambitious and aggressive in his outlook resulting in that his many plans get caught in “mid air”. Sahara Airlines, master-minded by a Gorakhpur’s chit-fund expert, operates 36 flights with four Boeing 737 aircraft. The airline has experienced pilots, some of them from Indian Airlines. Its cabin crew is also good. The airline has sought permission to acquire a few small aircraft to fly on the north-east as also on non-trunk routes. These are not the routes to bring in cash-flow. The play-field on the
domestic sectors has been level. Indian Airlines
continues to have a lion’s share. Most of the
private operators have closed down. Two or three are
surviving. Modiluft, which had problems with Lufthansa
before discontinuing operations, may return to the flying
network with another foreign partner. When will its plans
materialise is not yet known. |
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