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| Monday,
April 23, 2001, Chandigarh, India   
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Bill Gates no longer world’s richest
Can’t evict for office at home: SC Pagers still on growth track In-flight e-mail, Internet launched BSE verifying Sterlite’s claim
Why SAS Nagar scores over Panchkula |
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Pitfalls on growth route
Software story
is for real
Q. My wife and I are the joint owners of our house. My wife is a college lecturer and draws H.R.A. from her college. I was also a college lecturer and retired from service on December 12, 99. I am not receiving any pension after retirement. Is my wife eligible for house rent exemption under income-tax rules in case I give her receipt of house rent? In case she gets exemption from house rent, is she eligible to get loan from her contributory provident fund for further extension/construction or renovation of the house? 
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Bill Gates no longer world’s richest London, April 22 Early editions of The Sunday Times newspaper, which compiles an annual list of the richest people in the world, said Gates had lost pole position to Sam Robson Walton, the head of the supermarket chain. For three years Gates beat all-comers with a fortune that rose to 53 billion pounds ($76.50 billion) in 2000, but plunged to 37.5 billion pounds ($54 billion) this year. The decline was due to the worldwide slump in high-technology stocks, the newspaper said. Walton is now said to be worth 45.3 billion pounds ($65.4 billion). The chain of stores on which the fortune was founded started from a single shop in Rogers, Arkansas in 1962. The Wal-Mart empire now boasts more than 4,000 outlets worldwide. Queen Elizabeth's personal fortune comes nowhere near the top — she is worth around 300 million pounds ($430 million), the newspaper reported. This does not include the crown estates, or her collection of 9,000 paintings and 3,000 miniatures. If these were included, she would be one of the richest people in Europe, the newspaper said. Famous names from the recording industry and film business figure prominently on the list of 1,000 richest people in Britain. Former Beatle Sir Paul McCartney is said to be worth 713 million pounds ($1.03 billion), while bandmate George Harrison weighs in with 120 million pounds ($173.2 million). Actor Sir Sean Connery, best-known for his role as secret agent James Bond, has a fortune of 75 million pounds ($108.3 million), the newspaper said. Setback to Indians Srichand and Gopichand Hinduja and steel tycoon Lakshmi Mittal have each suffered a sharp decline in their personal wealth, according to the Rich List 2001 brought out by the Sunday Times newspaper. The authoritative rich list published this weekend, said to be the definitive guide to the richest 1,000 in Britain and Ireland, has been drawn up by analyst Philip Beresford who analyses company accounts, land holdings, art treasures and other assets. Earlier this month, he drew up a list of Britain’s wealthiest Asians that was published by the ethnic Asian media in the country. Mittal was ranked number one on that list and the Hinduja brothers were not far behind. In both cases, the value of their personal fortunes had dipped. On the other hand, every cloud does have a silver lining. The downsizing of the Hinduja brothers and Mittals’ assets puts them in the exalted company of fellow sufferer Bill Gates who has also seen his money ebb away in the past 12 months. Beresford says Gates, the brain behind Microsoft, is no longer the richest man in the world. He claims S. Robert Walton, head of the American Wal-Mart retail chain, said to be worth 45.3 billion pounds, can now claim that title. This is nearly eight billion pounds more than Gates who has been badly battered by crashing shares. Like Gates, the Hindujas too have been badly affected by the end of the high-tech boom. Their assets this year are valued at a mere 700 million pounds, down from the 1,950 million they were estimated a year ago. “Their crown jewel continues to be Gotco, an oil business that controls the Gulf Oil brand worldwide outside North America and Iberia,” says Beresford. “They plan to bring the brand to Britain through a chain of filling stations.” In Mittal’s case, his business performance has been affected by rising energy costs and depressed prices of the world steel industry. Beresford notes that in 1999, Mittal helped to launch B4U, the Bollywood For You, the television channel aimed at Britain’s 1.5 million Asian community. “We wait to see what is happening there before putting any significant value of the investment,” Bereford said. He estimates Mittal is worth one billion pounds this year, compared to 2,200 million pounds a year ago. Reuters,
IANS |
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Can’t evict for office at home: SC New Delhi, April 22 Narrating the pressure of work in the Internet age, a Bench of Justice D.P. Mohapatra and Justice Shivaraj V. Patil said it was not uncommon that officials, executives, officers, businessmen, industrialists and people engaged in other vocations might have some home work to do. “In these days computers, Internet and other facilities are kept at home for convenience and use. In residential buildings where persons live with family members, a room may be used for the purpose of doing home work relating to office files or study of children of allied or
ancillary use in a building leased for residential purpose,” it said. The Bench said it was not possible for the landlord to take the ground that the residential character has changed if “there is no regular commercial activity or carrying on of business and regular office with interaction of the public and customers.” “It is not possible to say that the use of one room for doing home work or study itself will change the user of the building and that the classification and character of the building is changed,” said Justice Patil, writing the judgement for the Bench. The court said the use of a room in a residential building for personal purpose should be distinguished from use of such a room for business, industry or other commercial activity or as a regular public or professional office. By this order the apex court set aside the judgement of the Punjab and Haryana High Court which had held that the use of part of the residence for office work was good enough ground for the landlord to seek eviction of the tenant. However, the Supreme Court clarified that “each case has to be considered on its own facts on the basis of the pleadings and evidence to find out as to whether there has been a change of user in the building from residential to non-residential as it is not possible to give exhaustive list of situations as to change of user of buildings.” Section 13(2)(ii)(b) of the East Punjab Urban Rent Restriction Act provided for situations where tenant committed such acts as were likely to impair materially the value of utility of the building or the rented land or where the tenant has been guilty of such acts as were a nuisance to the occupiers of the building in the neighbourhood. The Bench said interpretation of this provision “must be purposive and not unduly restrictive or narrow” otherwise it will be difficult for any tenant occupying a residential building to protect himself from arbitrary eviction and even to have freedom to use the building for residential purpose as he wanted.
PTI
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Pagers still on growth track Chandigarh, April 22 The number of subscribers in Punjab and Chandigarh is around 35,000. The industry has retained this number even after it received a setback with the entry of mobile phones. With their efforts towards better services at economical rates, despite a shift in the consumer segment, representatives of pager companies expect the market to grow at more than 10 per cent annually. Some paging companies have also entered into the business of call centres which they look upon as immensely profitable venture in the coming days. Easy Call (ABC Communications) which covers Chandigarh, Amritsar and Ludhiana has nearly 17,000 subscribers at these places which include 5,000 subscribers in Chandigarh. This figure was nearly 9,000 in 1999-2000. The company is, reportedly, covering the maximum places in the country and also has the widest network here. Modi Page has around 5,000 subscribers here as compared to 3,800 subscribers last year. The share of other companies in Punjab which includes subscribers of several companies which are on the verge of closure is around 15,000. "The cellular companies hit pager service as our clients who belonged to mainly upper income group at that time shifted to mobile phones" says Mr A S Virk Regional Head Punjab, Easy Call. "However with the paging services getting extremely cheaper, we have been able to retain our share in the market, though of course the consumer segment has now changed", he adds. Stiff competition from mobile phones brought many changes in the services . The new pager, which came for Rs 15,000 in 1995-96, is available for Rs 1,600. The companies are also promoting sale of second-hand pagers for nearly Rs 500. Apart from these web-based services are also available on pagers. These include receiving an e-mail on the pager and options like inter city mails etc . Modi Page, for instance, is also providing caller identification on the pager. And these services, in most cases are free of cost. "We will continue adding to the facilities for our clients", says Mr J S S Nicholas, Business Operations Manager, Modi Korea Telecom. For instance, Modi Page is planning to flash beauty tips , facts for children on the pagers. A shift in the segment has been there but most people still prefer pager since these are cost effective, says Mr Virk. Government organisations and corporates continue to hold a major portion of the sales by these companies. "Subscribers, who had earlier stopped using pagers but had not given them up have started re-using them, though it is either their children or even workers who are the actual users. A revival has thus been there", says Mr Nicholas. Easy Call recorded a growth of almost 100 per cent in one year after closure of several paging companies. Modi Page has also recorded more than 25 per cent growth in Chandigarh. "The market, however, will be almost stagnant now and we expect marginal growth of around 10 per cent per annum", Mr Virk says. With the number of players in the market having reduced, these companies are focussing their attention towards other business also. The number of players in this industry, which five-six years back was almost 40 is now less than eight. Easy Call is now focussing on its call centre business from which the company is earning more than Rs 20
lakh (Delhi, and Punjab) . |
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In-flight
e-mail, Internet launched Singapore, April 22 The satellite-based service is the “world’s first global airborne e-mail system” to go into use, said Michael Tan, Executive Vice-President of the airline’s commercial division. The system is produced by Seattle-based Tenzing Communications, Inc., a company that provides Internet services for travellers. Passengers will be able to plug their laptop computers in to portals at their seats and surf selected web sites or send and receive e-mail, Tan said. Singapore Airlines launched the service today on its flight from Singapore to Los Angeles. The national flag-carrier plans to install it on 80 planes covering about 95 per cent of its flights over the next two years, Tan said. The service will be free of charge until September, Tan said, adding that Singapore Airlines and Tenzing were still working out details of the charges. Singapore Airlines’ e-mail and Internet service is part of a 300 million-Singapore dollar ($ 165,380 million) upgrade to its in-flight entertainment system, Tan said.
AFP |
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BSE verifying Sterlite’s claim Mumbai, April 22 Sources at the BSE said they did not find any proof at their end to confirm the claim made by Sterlite Limited. However, they said that the BSE is verifying the claim. Meanwhile, sources close to the BSE Governing Board expressed possibility of the involvement of two top BSE officials in the episode. ‘’The facts are being verified at our end before reacting to the statement of Sterlite’’ the sources said. Sterlite Limited on last Friday stated that the company had purchased six lakh shares at the request of the BSE authorities.
UNI |
Pitfalls on growth route THE stock market moved up in a big way last week. The sensex rose by 12.5 per cent from 3183.77 points to 3583.04 points. It was partially a technical correction but some good results announced by the corporate sector also contributed to it. There was also some other good news regarding growth productions of the GDP for the financial year 2001-02. The Reserve Bank of India projected a growth rate of 6-6.5 per cent. The Asian Development Bank forecast a 6.2 per cent growth for India in 2001 and 7 per cent in 2002. The balance of payment, as the forecast stated, would continue to be stable with the current account deficit slightly higher at about one per cent. Since last week’s upsurge was largely due to technical correction, the market is not expected this week to repeat last week’s performance. Moderate gains are, however, possible in some select growth-oriented scrips. Despite encouraging and optimistic forecasts about the possible growth rate of GDP during the current financial year, there are many possible pitfalls on the growth route. The unseasonal rain damaging the Rabi crop in Punjab and Haryana, the uncertain behaviour of the monsoon in the coming months, political wrangles among major parties, the impact of global economic depression on the Indian economy, the continued slump in many sectors of industry, notably the automobile industry, are “danger” signs for the economy. The Reserve Bank of India has announced its credit policy. There is no change in the CRR and bank rates. Export credit would cost less. Urban cooperative banks have been barred from lending against shares. “Now banks will be able to provide loans at below the PLR (primary lending rate) to exporters or other creditworthy borrowers, including public enterprises, on the lines of transparent and objective policy approved by their respective boards.” Higher rates of interest may be allowed to senior citizens. It is not yet clear whether it will be done in the case of bank deposits alone or even in public provident fund
deposits and in post-office deposit schemes. This clarification is likely to be made in the coming months. Last week, software and ICE companies have announced their results. For the annual accounting year Wipro has registered a growth of 122 per cent. Addressing a press conference, Mr Azim Premji, Chairman of WIPRO, has stated that during the current year, Wipro aims at a faster growth rate than the industry average of 40 to 45 per cent. HCL Technolgies, another software company, has also announced excellent results. For the nine months ended March 31, 2001, the net profit is Rs 5487.72 lakh as against Rs 5284.61 lakh for the corresponding period last year. The EPS (not annualised) is Rs 17.20. NIIT has, however, declared a meagre growth rate of 3 per cent in its operating income. The future projections are also low. Last week, the scrip first hit the 16 per cent upper freeze at Rs 663/- but by the evening it had slumped to be traded at 16 per cent lower circuit rate at Rs 480/- There is hardly any doubt that the ICE companies will continue to lead the market even during the current financial year and maintain good, though not as good as in the previous years, growth rate. It is also certain that their scrips will not be able to register even 50 per cent of the market price they had last year. Invest in these shares but book profit when these scrips are attractively priced. The old economy companies are likely to languish. I do not expect encouraging first quarter results from these companies. It is yet to be seen whether the cheaper import would make any serious dent on the profitability of these companies, but the general expectation is that it would depress their sales and profitability. The pharma companies, however, are expected to do well. Judicious buying may be made in blue-chip companies but book profit at the appropriate time before the first quarter results are announced. For good return in the form of dividends, investment is possible in Mahavir Spinning, Vardhman Spinning, Tata Finance, Canfin Homes. The dividend return is expected to be more than 10 per cent in a period of six months. The Vardhman group companies paid 42 per cent dividend, Tata Finance paid 45 per cent, and Canfin Homes paid 23 per cent. |
Software story is for real IT
has finally happened. A foreign brokerage house downgraded all software stocks, including Infosys, to a “hold” from a “buy”. Now that the downgrade has come, investors have turned doubly cautious. For long, Indian software stocks defied gravity, despite the fact that their key markets (including the USA) were witnessing an economic slowdown. Even Microsoft has done it. Company after company in the USA issue profit warnings and, among other reasons, they are blaming sluggish technology spending. All eyes now seem to be fixed on the Q1 results of the Indian companies as the global IT bigwigs issue profit warnings. Nevertheless brokerage firms pushed these stocks, and, indeed, some had a “buy” rating on these stocks even at those insane levels. Now, however, after these stocks have corrected by anywhere up to 300 per cent, brokerage firms have come out to say that these stocks are highly valued! Long-term investors would do well to ignore such calls from the brokerage houses. These recommendations seem to be driven by factors beyond the comprehension of sane investors. In the meantime, long-term investors should position themselves such that they can swoop down on good stocks, once the market over reaches itself on the downside. And yes, the software story is for real. Its not that it was all hot air. The Federal Reserve’s blunt warning about a weakening economy renewed fears of a looming recession. There have been concerns about the slowdown in the US economy of late. Successive increases in the US interest rates have ended the run. Instead, there are fears about “hard landing” (recession, rising unemployment and inflation). Cheer brought about by good corporate earnings remains short-lived whereas every earnings warning triggers a sharp fall of Nasdaq and resultantly our BSE Sensex. Zydus Cadila has entered into a definitive agreement, through its wholly owned subsidiary Recon Healthcare, to acquire a combined 27.72 per cent controlling stake from Asta Medica AG (Asta) and Heller Vermogensverwaltungs GmbH (Heller) in German Remedies (GRL) at a price of Rs. 650 per share aggregating Rs 1,486 million. With this deal and its several other initiatives, Zydus Cadila has proven that the MNC’s can be beaten in India just like the all conquering Aussie cricket team was by Ganguly’s tigers. Raise a cheer to that ! |
Q. My wife and I are the joint owners of our house. My wife is a college lecturer and draws H.R.A. from her college. I was also a college lecturer and retired from service on December 12, 99. I am not receiving any pension after retirement. Is my wife eligible for house rent exemption under income-tax rules in case I give her receipt of house rent? In case she gets exemption from house rent, is she eligible to get loan from her contributory provident fund for further extension/construction or renovation of the house? Yash Dev, Ludhiana Ans: Your wife can get the tax benefit in respect of rent paid by her to you. This should be possible on your giving the rent receipt to her. However, such rent received will become your income. The eligibility for getting loan will depend on the facts and circumstances of the case. Q: I am a Central government employee. I have received arrears of Rs 6,668 pertaining to financial year 99-2000 in August, 2000. I have filed my income-tax return. I have invested Rs 51,460 in GPF, NSC, GIS, PPF and LIC in 99-2000 and was entitled to tax rebate and relief Rs 10,292. My tax on total income was Rs 9,112. Since tax rebates and relief were more than my tax on total income I did not pay any income-tax. I had invested Rs 5,900 more than those were required to save tax. Can I claim the benefit of excess money I invested against the arrears I received in August, 2000, related to the financial year ‘99-2000. Pradeep Singh, Hoshiarpur Ans: Excess income-tax paid by you in one financial year cannot be adjusted against the tax payable for another financial year. However, you can revise your income-tax return for the financial year ‘99-2000 and show therein the salary received in arrears and thereby adjust the excess tax paid by you. Q: I am a Central Government employee. I have taken final withdrawal of Rs 85,000/- from my GPF in the end of November 1999 for renovation of my house which is self-occupied. I have spent the money on renovation in the financial year 2000-2001. Please advise whether any income-tax rebate is admissible on this account or not. If admissible — how much? G.S. Saini, Jalandhar Ans:
On the facts stated by you no tax benefit would be available to you on the amount spent on the house property by withdrawing G.P.F. amount. You should have taken loan and spent the money on renovation of the
house.
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