 |
| Monday, April 10, 2000, Chandigarh, India  
|
IT
Dept hauled up for PAN delay
Making economic zones effective |
|
||||||||||||||||||||||||||
| Tax hits exports from Haryana The existing provisions of the Haryana General Sales Tax Act, 1973, corresponding rules, schedules and the statutory notifications which otherwise are intended to provide complete tax immunity to exporters in Haryana have become the source of harassment to them. Maruti Alto launch by August NEW DELHI, April 9 (UNI) — Maruti Udyog Limited (MUL) is planning to infuse Rs 600 crore fresh capital over the next two to three months to set up production lines for its next-in-line small car Alto and for expanding and modernising existing capacities. PNB cuts PLR NEW DELHI, April 9 — Punjab National Bank (PNB) today announced a reduction in its prime lending rates (PLR) by 0.5 per cent to 11.5 per cent per annum from tomorrow, PNB’s Executive Director K.R. Chabria said in a statement here.
|
IT Dept hauled up for PAN delay New Delhi, April 9 (PTI) — The Standing Committee of Finance has criticised the Income Tax (IT) Department for laxity in computerisation of operations leading to shortfall in the allotment of permanent account numbers (PAN) to applicants. “The department has issued PAN only to 1,00,21,366 applicants out of a total number of 1,70,73,861 applicants,” the committee said in its report on “Demands for grants” for 1999-2000. The committee said: “The main constraints that came in way while issuing PAN were shortage of technical personnel and the problem of inter-connectivity.” The Revenue Department under the Ministry of Finance, however, said that as against the 1,76,36,474 applications received for allotment for PAN as on April 1999, PAN has been allotted to 1,19,92,972. The balance applications were to be cleared by August 1999 but could not be done due to an acute shortage of technical manpower, the Revenue Department said in its reply to the Standing Committee. As on December 1999, the Revenue Department allotted PAN to 1,52,06,832 of the total 1,86,55,825 applications. In order to overcome the problem, the committee asked the IT Department to expedite inter-connectivity through fibre-optic cables of MTNL and the Department of Telecommunication (DoT) should be seriously pursued without any time loss. Referring to its earlier recommendations to accord automation top priority and a time-bound programme, the Standing Committee said “no concrete measure were taken to remove bottlenecks (in computerisation of IT operations) and the process was not completed.” The department continued to reel under the problem of interconnectivity of procured terminals. The Revenue Department, however, said that certain areas of work relating to computerisation were made part of the “Central Action Plan” of the Central Board of Direct Taxes (CDDT) with specific targets in the current year. It also said the poor performance of the 64 kbpp dedicated leased data circuits of MTNL and DoT connecting the computer centres at three cities — Delhi, Mumbai and Chennai were taken at various levels at DoT. “Suitable alternatives to these lines like the ICDN lines have been under consideration and 11 applications have been made to MTNL and DoT,” the department said. About technical manpower shortage, the committee said the Revenue Department should identify and redeploy the existing work force by providing them suitable training. The Revenue Department said 22,251 employees have been trained out of the 51,914 employees. “The proposal for creating additional 1,080 technical posts is still under consideration,” it said. CBDT has decided to
constitute a multi-disciplinary team to recommend
redeployment of work force after conducting study it
said. |
Ranbaxy shelves plans for China NEW DELHI, April 9 (PTI) — Ranbaxy Laboratories has shelved its plans to enter over-the-counter (OTC) product market in China following unfavourable market feasibility reports, a top company official has said. Ranbaxy, which already has a joint venture operational in China, had earlier planned to enter the huge OTC market there. Confirming the development, Ranbaxy Senior Vice-President D.K. Raizada told PTI that the company was now “not so keen on the project.” “Initial market feasibility studies conducted on the Chinese market have not been very encouraging,” Raizada said, adding that “however, the company might conduct some more studies with a different product mix.” Although China offered a huge potential in terms of market, he said that it had so far proved very tough due to its entry norms. Ranbaxy’s Chinese
joint venture — Ranbaxy (Guangzhou China) Ltd —
was the first Indian enterprise with investment from
Chinese companies. |
Reliance scrip outperforms BSE Sensex MUMBAI, April 9 (PTI) — Reliance Industries Ltd (RIL) scrip has outperformed the Bombay Stock Exchange’s (BSEs) Sensex since the beginning of the year by posting a 39.09 per cent rise from Rs 252.35 on January 3 to Rs 351 on April 7. During this period, the BSE Sensex has witnessed a slide of 2.90 per cent from 5375.11 points on January 3 to 5219.20 points on April 7. The fact that the scrip is likely to move northward could be discerned from the scrip that was experiencing net long position some time back has turned to be a scrip with net short position of over eight lakh shares, of late, according to analysts. The scrip’s aggregate long position of 13 lakh shares and an aggregate short position of 21 lakh shares on the BSE, resulting in a short position of eight lakh scrips. Meanwhile, the company’s Global Depository Receipts (GDRs), representing two underlying shares traded in the domestic market, are trading at an all time high of $ 27.50. At this price, which is equal to about Rs 600 per local share, it was a 70 per cent premium to the local price. The scrip price moved up by 16.6 per cent from Rs 301 per share on April 5 when the company announced that its board would meet on April 12 to consider share buyback. This proposal made leading stock analysts like Jardine Felming, Merrill Lynch and Goldman Sachs-Kotak Securities (GSKS) to reiterate their strong “buy” recommendation. “We think it (buyback) would improve Return on Equity (RoE) and therefore drive valuations upward. We continue to be positive on the company,” Merrill Lynch says. GSKS in its latest report said “Our positive stance that they (RIL scrip) have meaningful upside potential results from improving business fundamentals, attractive valuation and incremental positive news of buyback and strong results of fiscal 2000”. Jardine Fleming says “buyback will enhance shareholder value and short-term floor for the share price”. On the other hand, the
RIL management has been expressing a view that the market
price is much below the company’s intrinsic worth
and the scrip is grossly under-valued. |
Lakshmi
Overseas plans to diversify CHANDIGARH, April 9 — Lakshmi Overseas Industries Ltd, a rice-exporting company, has decided to introduce different varieties of rice in the domestic market and expand its product range to include wheat flour, edible oils, spices etc. Announcing this at a press conference here last night, Mr Balbir Singh Uppal, company Chairman, said the Lakshmi group also plans to set up an IT unit at Mohali, but declined to give details. The Rs 200 crore turnover listed company, which exports rice to the USA, Europe and various Asian countries, has a large 1,200 metric tonnes capacity rice processing plant at Khamano on the Chandigarh-Ludhiana road and an oil refinery imported from Germany. The company plans to open offices in Dubai, Singapore and Mauritius. The company has launched
packaged food products under the brand name of
Lakshmifoods. To be marketed by LOIL Continental Foods
Ltd, a part of the Lakshmi group, five varieties of rice
launched yesterday were: Superior Basmati rice, Punjabi
Basmati rice, Punjabi white rice, Long grain white rice,
and premium parmal rice catering to different segments of
consumers. |
FII’s investments cross 5,000 cr mark MUMBAI, April 9 (PTI) — Foreign institutional investors (FIIs) have pumped in Rs 1217.2 crore ( $ 279.2 m) into capital markets (both equities and debt) during the week ended April 6, the highest for any week during 2000, taking their total investments in the country during the year above the Rs 5,000-crore mark. Their net investments during the previous week were a meagre Rs 201.5 crore ($ 46.3 m). Total FII investments
during the year till April 6 have touched Rs 5,696.7
crore ($ 1.31 b, as per monthly averages forex rates),
according to the latest figures with SEBI. |
Making
economic zones effective THE Exim Policy for 2000-2001 is as per expectations, thanks to feelers on broad issues before its announcement. Attempt has been made to face the challenge of odds to be faced during the year. Lifting of import restrictions on some sensitive items is surely to embarrass the SSI sector as well as the Government. The Commerce Minister’s trump card of the policy is the announcement of setting up two Special Economic Zones one in Gujarat and the other in Tamil Nadu. All restrictions of import and excise will be absent in SEZ. Four existing export processing zones (FTZs) — Santa Cruz; Kandala, Vizag and Kochi will be converted into SEZ. Last year’s policy had envisaged the setting up of Free Trade Zones which remained only a wishful thinking. The distinction between SEZs and FTZs is only semantic. The Minister has tried to emulate China on SEZ. He should be aware that exports from EPZ and EoU are only 4 per cent of our total exports. In the case of China it is 40 per cent. Our export zones do not enjoy the facility required to make exports competitive. Exporters should get inputs at international prices. East Asian countries, including China, had this advantage due to its proximity to Japan which is a major supplier of capital and intermediate goods. They have also the advantage of the West Coast of the U.S.A. which is a major market. The Labour Ministry does not agree to change labour laws within zones. The Finance Ministry also does not want to lose control on SEZs. Apart from these intrinsic disadvantages, the size of our zones is not viable. China’s FTZ cover a contiguous area which in some cases is equivalent to 3-4 Indian States. On the contrary our zones cover just about 400-500 hectares. In China local labour laws do not apply in the zones. There FTZ authorities are required to only report to the country’s National Employment Bureau without any restrictions on hiring and firing of workforce. Import restrictions on 714 items have been lifted. Of these 58 items are those which are reserved for the SSI sector. Another list of 198 items will come up next year when other 1429 tariff lines are thrown open. From here a vital question has arisen. Should these items remain reserved for SSI? Logically there is no stance to continue with reservation when these can be imported. Why deny our industry the economy of scale when industry in other countries can compete? We have now to think of upgrading our SSI sector to face this challenge. The Government has set up working group to redefine the SSI sector vis-a-vis investment limit. The SSI sector may have three categories: tiny, medium and large. Investment limit for larger section within SSI may go up to Rs 3 crore or even more with up grading of tiny with Rs 50.00 lakh. Those who were opposing higher investment limit have now to think that with easy imports they face industry in other countries with unlimited investment limit. The Government is proposing other measures also to prepare SSI sector for competition. It is proposed to have single legislation for the SSI sector against 52 laws it is facing now. The Government should have simplified the procedure of Central Excise as applicable to SSI units. The exemption limit is Rs 50.00 lakh but interference of Central Excise with sales of Rs 40 lakhs. Branded goods attract excise duty. These two irritants should be removed immediately. Banks charge very high
interest from small units based on parameters which are
applicable to large units. Working arrangement of SSI and
large units is very different. So parameters for SSI
units should be softened in tune with the actual working
so that these units pay interest close to PLR. |
Tax hits
exports from Haryana The existing provisions of the Haryana General Sales Tax Act, 1973, corresponding rules, schedules and the statutory notifications which otherwise are intended to provide complete tax immunity to exporters in Haryana have become the source of harassment to them. What is really leading to the avoidable inconvenience precisely is the levy of first stage sales tax on raw-material and other consumables when purchased by manufacturers engaged in export business. There are a number of items constituting essential inputs and consumable stores which the State Government placed into the net of “first point taxation”. As a result of these amendments the sales tax at the first point from the manufacturers-exporters on the authorities started realising tax transactions involving purchase of raw-material and other inputs which are usually required in the manufacture of finished products. Despite the general scheme of the statute that no tax from exporters on raw-materials as well as finished products will be charged to ensure competitiveness in the market, the State Government unfortunately made no attempt to keep the export-related transactions away from taxation at first point. As per the provisions contained in Section 15-A of the Haryana General Sales Tax Ruels, 1975, the amount of tax realised on raw-material and consumables at first point, of course, is subsequently allowed to be refunded to the exporters at the time of finished goods being exported out of India. But the question that comes in one’s mind is what is the point of collecting tax on inputs and consumables in the name of “First Stage Levy” when the same is to be eventually refunded to the exporters? Similar difficulties came to be experienced by the exempted units as in their case also the intention of the State Legislature was to provide full exemption from payment of tax on inputs as well as finished goods. Considering the representations made by the trade and industry, the State Government mentioned in the statutory notification that no tax shall be levied on the goods leviable at the first sale when sold to a registered dealer who is availing exemption from tax under the industrial policy of the State Government. The question, therefore,
that arises why can’t similar benefit of tax
exemption from payment of tax on inputs be extended to
the manufacturers-exporters? |
|
NEW DELHI, April 9 (UNI) — Maruti Udyog Limited (MUL) is planning to infuse Rs 600 crore fresh capital over the next two to three months to set up production lines for its next-in-line small car Alto and for expanding and modernising existing capacities. Alto, scheduled to be launched by July-August this year, will be available in two versions — 800CC and 1000CC. This would be followed
by the roll-out of the station wagon version of Baleno in
September, the sources added. |
|
NEW DELHI, April 9 (PTI) — Punjab National Bank (PNB) today announced a reduction in its prime lending rates (PLR) by 0.5 per cent to 11.5 per cent per annum from tomorrow, PNB’s Executive Director K.R. Chabria said in a statement here. The bank has slashed its PLR as well as its prime term lending rate (PTLR) by 0.5 per cent from the present level of 12 per cent to 11.5 per cent. Interest rates on domestic and non-resident term deposits have also been revised, it said. The revised rates for
domestic term deposits are 5 per cent for 15 to 45 days. |
|
NEW DELHI, April 9 (PTI) — International hotel chain Carlson Hospitality Worldwide is planning a major expansion in India by opening 16 hotels over the next four years with five of them to begin operations in 2000 itself. While all of these
properties will be developed and owned by its Indian
partners. Carlson would be lending its brand names
“Radisson” and “Country Inns and
Suites”, Jack Geddes, Managing Director (Sales and
Marketing-Asia) told PTI. |
ty
Nasdaq blues Noticed something interesting? While no one complained while the Nasdaq upswing triggered a Sensex bull run, now that both are falling, fund managers are crying themselves hoarse about there being no correlation between the two. Zee Telefilms The grapeving has it that the share price of Zee Telefilms is being hammered down through a seemingly never ending flow of sales by a couple of foreign funds who are very miffed about being bypassed while deciding the ADR mandate. Mauritius route Our grapevine was the earliest to point out that something fishy was on at Mauritius with the rumour doing the rounds in closed circuit board rooms at the BSE that the New Bull had registered several bogus FIIs. The CBDT’s latest missive is a confirmation of the same, we believe. Shri Niranjan This ayurveda company,
if the market buzz is to be believed is on the way to
registering a patent which should dramatically alter its
future prospects. Perhaps that explains the penchant of a
veteran BSF broker to accumulate this scrip, which is
quoting below par. His price projection for one year
— Rs 100! Any takers? |
sti
by K. Garima Archana Software Issue
opens/issue closes: 06.04.2000/10.04.2000 Analysis: Archana Software Limited (ASL) is presently engaged in activities such as development of the domain e-com website and constant additions to site content, development of interactive, interface software to educate the use of various operating systems in regional languages, software solutions in internet applications and e-commerce, customised software solutions for shipping, and marketing an informative and educative CD multimedia titled Kuralamudhu. The company, which was incorporated in May 1994 as SSL Finance Ltd., is making the current foray into the capital market to finance its software development, software solutions, upgradation of software solution and system integration. The project requirement has been appraised by Lord Krishna Bank, which has appraised its fund requirement at Rs. 6.7 crore, of which Rs. 70 lakh has been sanctioned as term loan to the company by it. First and foremost, the shift from the finance sector to the software industry is not reassuring. Secondly, like the finance sector, the software industry too appears to be bordering on the saturation limit given the intense competition existent therein, not to mention the steady rise in the number of new entrants therein. The financial track record appears erratic with there being the conspicuous absence of any steady growth trend. In view of the same, the projected profitability figures for the accounting year ended on 31 March, 2000 appear optimistic. The pricing of the issue
appears to be pegged well above what its fundamentals
suggest it should merit. |
co
Coates of India THE company is catering the printing inks segment. Its loss of focus has resulted in a slip in its financial performance. Its strong cushion of reverves and wide network along with its almost 50 years of exposure to the subcontinent, imparts it with all the capabilities to recover from its illness. Taking aside the packaging, coatings business, the company has managed a decent growth both in terms of value and volume. On the financial front, the company’s performance has been satisfactory. During the year that ended in December 1998, the company posted sales and net-profits of Rs. 144.5 crores and Rs 6.8 crores respectively thus yielding an EPS of Rs 9.4 and an OPM per cent of 12.6. In the nine months ended September 1999, sales was Rs 118.8 crore and net profit was Rs 7.9 crore translating into an OPM per cent of 14.2. The hive-off of the packaging coatings division to a fully owned subsidiary for a consideration of around Rs 30 crore is just one aspect of the restructuring gameplan. Besides, the company has recently moved into another joint venture project with Cray Valley of Finance, which is likely to go onstream later this year. Of late, with the emergence of a couple of new entrants from the organised sector, Coates of India needs some aggressive marketing strategies to sustain its marketshare and leadership status. Also the company’s dilution of focus by trying its hand at too many ventures is a cause of concern. Barring this its performance has been satisfactory. Binani Indus Binani Industries (BIL), has pioneered the manufacture of electrolytic zinc in India in 1962, BIL has been promoted by Binani Metals Limited, the flagship company of Binani group. It has entered into technology tie-ups with Lurgi of Germany and UM engineering, Belgium, for Zinc division, Bishop Technology Inc, USA, for glass fibre division and FL, Smidth & Company, Denmark for cement division, Binani now plans to tie up with large mineral and mining companies in non-ferrous metals for mining and exploration during the current year. The company has chalked out a plan to expand its zinc division capacity to meet the increasing demand for zinc in the country. The unit’s current capacity of 30,000 tonnes per annum will be increased to 60,000 tonnes per annum. Simultaneously, Binani is putting up a green-field smelter on the Gujarat coast. Plans are afoot to increase its capacity in the fibres and cement divisions too. This will help the company increase the market share. On the financial front, the company’s performance has been satisfactory. During the year that ended in March 1999, the company posted sales and net-profits of Rs 238.3 crore and Rs 8.4 crore respectively thus yielding an EPS of Rs 2.8 and an OPM per cent of 20.9. In the half year ended September 1999, sales was Rs 120.8 crore and net profit was Rs 11.6 crore translating into an OPM per cent of 23.2. Considering the expansion plans and prospects, the scrip has very good potential to move up. EIH Hotels EIH Ltd. formerly and known as East India Hotels, is one of leading companies in the Hotel industry. The company’s name was changed to EIH from East India Hotels to enhance its offshare image. EIH has become synonymous with class and style. The company has come a long way and is now one of the most recognised names in the industry. EIH owns and operates the Oberoi chain of star hotels in India and abroad. On account of its management efficiency and customer friendly attitude, some of the hotels of the group have even found a place in the “Leading Hotels of The World” List. The impressive bottomline can be attributed to the company’s much improved performance on all parameters. Future plans of the company include a Rs 200 crore expansion plan which includes setting up of five star hotel in Jaipur and four star hotels in Jaipur, Udaipur and Kochi. The capacity expansion is aimed at achieving a 95 per cent occupancy rate in the coming year as against present rate of 71 per cent. This could augment the company’s growth rate between 20 to 30 per cent. It targets a net profit
of Rs 195 crores for the current the fiscal. The hotel
industry is currently riding a high and the signs point
towards better times ahead. Besides increase in
commercialisation will also lead to a better growth. |
cr
by Ashok Kumar Cipla prospects encouraging Q: Kindly comment on the prospects of V.M. Jog Engineering. Do you recommend an investment in the shares thereof? — Badri Prasad Narayan, Shimla, Raghav Singhvi, Haryana Incorporated in 1978, VM Jog Engineering (VMJE) is engaged in various engineering projects including bridges and flyovers, foundation engineering, industrial constructions, pre-fabricated mass housing, manufacturing and laying of MS pipelines and pre-stressed concrete pipelines and waste water treatment plants. On the financial front, the company’s performance has been satisfactory over the years. Overall the long term prospects of the company appear fair, in view of which a close watch over its future performance is recommended. However, an investment herein is not recommended at this juncture. Q: Could you please comment on the prospects of Cipla? —Bharathi Reddi, Noida Cipla Ltd, which was incorporated in 1935, is a pioneer in India’s effort to attain self sufficiency in pharmaceuticals. Among its major successes are the introduction of ampicillin, salbutamol, norfloxacin and the oral iron chelator for thalassaemia, deferi one. It has five manufacturing locations in the country two in Mumbai (at Bombay Central and Vikhroli) and one each at Kurkumbh, Pataiganga and Bangalore. These are built to conform to CGMPs and its bulk drug units at the last three sites have USFDA approval, in addition to clearances from other international regulatory authorities. In recent times, Cipla has laid stress on formulation exports. It has entered into a number of JVs to this end and has obtained products’ registrations in over 70 countries. However, unlike Ranbaxy of Dr Reddy’s it never had any significant presence in bulk drug exports and its total export turnover currently constitutes only 15 per cent of sales. On the financial front, the company has recorded a steady growth in bottomline over the years. Considering the same together with the sound fundamentals of the company, Cipla comes across as a company with encouraging future prospects. Q: Kindly comment on Nuclear Power Corporation. — Shalin Jha, Chandigarh When new products from Procter and Gamble’s global stable were launched through its wholly — owned subsidiary, doubts were raised over Procter and Gamble India (PGIL’s) ability to sustain its sales and consequently its profit levels. However, PGIL was able to put to rest all doubts with a sharp growth in its bottomlines which was attributed to the strong growth in their core business, tax management and efficient cost control measures. PGI’s core businesses feminine hygience, healthcare, detergents and haircare, all fared well. In the faminine hygiene market, the better performing and differentiated sanitary product, Whisper Extra Dry, has been enhancing the market share of the Whisper brand which has become the No. 1 brand dis-lodging Johnson & Johnson’s brand. In healthcare, its Vicks brand, continues to be rated the numero uno brand by the A&M-Marg survey. The company has continued to upgrade and extend the Vicks franchise to products like Vicks Sinex, thus strengthening the Vicks brand as a whole. Vicks Inhaler and Clearsil lead their respective segments and face little competition. PGIL manufactures shampoos and Ariel concentrate for P&G Home Products, the parent’s wholly-owned Indian subsidiary. It is compensated on a cost-plus basis, and the margin works out to around 6 to 7% at the PBT level. Ariel, Whisper, Pantene and now Head & Shoulders, all have stepped into a market where other MNCs already have a strong presence. To further enhance its core strengths, P&G has completed a Rs 100 cr investment programme to set up manufacturing bases for haircare and healthcare products at Hyderabad and Goa, and for detergents in Madhya Pradesh. Boasting of strong fundamentals, PGIL is a company, the shares of which one would do well to hold on to. Q: Kindly comment on the future prospects of Tata Power. — Shraddha Powar, Haryana Tata Power, was
incorporated almost eight and a half decades ago and is
presently ranked as one of the main players in the power
segment. The company recently diversified its activities
by venturing into the construction of power projects even
in the overseas segment in the USA, Africa and Far East.
The company has undertaken 450 MW Bhivpuri combined cycle
power projects in Maharashtra and a 300 MW project at
Valavandi. Over the years the company has fared well on
the financial front despite the impasse state of affairs
in the power segment and the same is a clear reflection
of its potential. Furthermore, the company has a sound
standing in the industry on account of its strong
parentage. In view of the slowly but surely improving
scenario in the power industry, the future prospects of
the company appear fair.
|
bb
FII’s threat NEW DELHI, April 9 (PTI) — Mauritius-registered American Foreign Institutional Investor India Fund Inc. today said it would “vigorously appeal” against the Income Tax Department’s move to issue notices to the Fund for double taxation. The New York-based Fund which primarily invests in shares of Indian companies said in a statement that it would take “any action necessary to have the notice rescinded”. Inflation static NEW DELHI, April 9 (PTI) — After four weeks of continued mercurial rise, the inflation rate remained unchanged at 3.74 per cent for the week ended March 25, despite a marginal fall in the wholesale price index. Aided by sharp increase in prices of primary articles and petro goods, the annual rate of inflation had risen to a 43-week high of 3.74 per cent (provisional) for the week ended March 18. ITDC shops NEW DELHI, April 9 (PTI)
— The Duty Free Trade Division of the Indian Tourism
Development Corporation (ITDC) is planning
diversification by setting up duty paid shops and
offering Indian goods at its existing duty free shops at
international airports. The division is hoping to achieve
a 32.5 per cent growth in its turnover to Rs 110 crore in
2000-01 through the diversification. Chandni Luthra,
Vice-President of Duty Free Trade Division, told PTI. |
 |
| Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Editorial | | Business | Sport | World | Mailbag | Chandigarh Tribune | In Spotlight | 50 years of Independence | Tercentenary Celebrations | | 119 Years of Trust | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail | |
