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Monday,
July 23, 2001, Chandigarh, India  
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Wipro exits financial services business How much can you lose in the present sluggish stock market? Everything, if you had it in September, 1994. There was 40 per cent probability that by the end of 1999 you would have lost almost everything you had invested just five years earlier.
Sack Morgan Stanley from A-I selloff: Cong
Traders oppose move to introduce VAT IIT alumnus behind Intel's latest chip |
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| Maruti to hike prices New Delhi, July 22 Maruti Udyog will hike prices between Rs 4,200 and Rs 24,000 from the end of this month, company officials said today. Concept of value added tax Exports to China zoom 50.9 pc BSNL to upgrade customer services
Q: I am a state government employee, living in a rented accommodation, but not getting any house rent. I do not own my house in any part of India. I purchased a piece of land away from my place of posting, then secured a loan from IDBI Bank during October 2000 to construct the house which is to be completed by March, 2001. I want to know in detail about the benefits available to me while repaying the loan instalments to the bank under the following circumstances:- 1. The house is kept vacant (some watchman is engaged for its safety). 2. Part of the house is rented out and I may keep a part of it for my occasional visits.
Modernise airports
and earn more
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Wipro exits financial services business New Delhi, July 22 “In December 2000, the company sold off all its investments in Wipro Finance Ltd except for Rs 300 million redeemable
preference shares in WFL,” according to Wipro’s latest annual report listing out sale of investments during the year 2000-01. While in December 1999, Wipro had reduced its shareholding in WFL to 50 per cent, in fiscal 2001, Wipro sold the balance 50 per cent equity interest in Wipro finance, the report said. The report said the company sold equity shares of Rs 56 crore and convertible preference shares of Rs Rs 52.2 crore. It said in fiscal 1999-00, the company had carried out a comprehensive review of the financial position of WFL and in March 1999, it decided to exit the financial services business and approved winding-up of operations of WFL. Under the exit plan, WFL would not accept any new business and the existing assets and
liabilities would be liquidated as per the contractual term. “The company estimated the shortfall in servicing liabilities of WFL through its assets and decided to fund the
shortfall through a fresh infusion of equity and preferred stock amounting to Rs 950 million,” the report said. “On the basis of its review, the company infused an additional equity of Rs 45 crore convertible preference shares of Rs 20 crore and redeemable preference shares of Rs 30 crore, to discharge all its obligations,” the annual report stated. The report said in fiscal 2000, “the company had divested a significant portion of its holding in Wipro Finance Ltd, resulting in an extraordinary loss of Rs 80.9 crore.” Following the divestment, WFL ceased to be a subsidiary of the company.
PTI |
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Sensex ignores good results How much can you lose in the present sluggish stock market? Everything, if you had it in September, 1994. There was 40 per cent probability that by the end of 1999 you would have lost almost everything you had invested just five years earlier. Out of 3,162 stocks listed on the Bombay Stock Exchange in September, 1994 only 1,884 were being traded in September, 1999. The rest of 1,278 scrips had turned into the tissue paper. The story gets even murkier if the below-par scrips are analyzed. Out of every 100 below-par stocks being traded in September, 1994, almost 85 were not traded in September, 1999. Compare this with the stocks whose value in September, 1994, was more than Rs 100. The survival rate in that category was in excess of 95 per cent. We thought that easy money could be made in low priced scrips. On the contrary low priced scrips are now a bottomless pit. Intuitively it looks that a Rs 9 stock can be doubled more easily than a Rs 100 stock. The moot point to ask yourself is why should the market valuing a stock below par? Is there anything wrong with the company and its management? Never buy a stock, which quotes below par until you have some very strong reasons to believe that it is undervalued. Therefore buy a stock only if it is undervalued and not because it is low valued. Meanwhile, the stock market has continued to drift lower on fresh bout of earnings warning from Microsoft in the U.S.A. and lower than expected results from Indian software major NIIT. Tata Steel has also disappointed investors by reporting an 80 per cent fall in its net profit at Rs 20.53 crore compared to the first quarter last year. The sentiment also took a hit last Friday on the rumours of the CBI raids on some senior official of the Unit Trust of India. The market has continued to ignore better than expected results from Satyam Computers, Infosys, Digital Equipment, Hughes Software and Larsen and Toubro (L&T). The market even now looks weak and the crucial support to the sensex at 3350 has been broken. The next lower support is 3275. If that fails to hold then the market may breach 3096 and we may see this year’s low. So traders would do better to trade in the FMCG stocks like Hindustan Lever, ITC and Colgate. The most interesting corporate news of the week was the ADR issue of HDFC Bank. It was priced at $13.83. Each ADR represents three equity shares. The issue was priced at a 3.5 per cent discount to the closing price of Rs 225 at the BSE. HDFC Bank is a private sector bank promoted by HDFC. The bank, according to its management, will continue to grow at 25 per cent per annum. Talking all factors into account the bank looks to be rightly priced in the range of Rs 200-225. Foreign financial investors will look to liquidate the stock in the Indian markets and buy it in the form of American Depository Receipts as it is easier for them to buy and sell without any constraints in the USA. Therefore, the investors may exit at current levels and re-enter it when the stock seeks lower levels on the FII selling. |
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Sack Morgan Stanley from A-I selloff: Cong New Delhi, July 22 “The presence of JM Morgan Stanley Chairman Nimesh Kampani on the Tata group’s India Hotels Board for a brief period pointed to a conflict of interest since the Tatas are the sole bidder left,” Congress leader Priya Ranjan Dasmunsi told a newspersons here. “Quite clearly sensitive information must have been passed from them (JM Morgan Stanley) to the Tatas-led consortium,” he said. Demanding that the disinvestment of Air-India be referred to the Parliamentary Standing Committee on Finance, he made a case for immediate sacking of JM Morgan Stanley. Dasmunsi, in a letter to Prime Minister Atal Behari Vajpayee, contending the rewarding of A-I disinvestment to a single bidder would result in its undervaluation, sought that the exercise be shelved immediately. Stating that the current “single bidder” approach would pave way for under-evaluation of A-I, he said the national carrier was worth Rs 9000-10,000 crore as opposed to the reserve price of Rs 2000 crore fixed by the global adviser. |
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Traders oppose move to introduce VAT Chandigarh, July 22 A press statement by Dr N C Jain and Mr R P Gupta, respectively, the Chairman and the General Secretary of the federation, which was faxed to the Tribune office here, said representatives of the Haryana Government held a meeting with industrialists and traders at Panchayat Bhavan, Ambala, on July 19. Mr M Shankar, Financial Commissioner and Secretary, Excise and Taxation Department and Mr Raj Kumar, Commissioner of the Department, told at the meeting that the state government would impose VAT from April 1 to improve the state exchequer in a big way. Subsequently, the traders held an emergency meeting on July 20 to review the proposal. A large number of representative of the various organisations of industry and trade attended the meeting presided over by Dr N C Jain. The proposal was discussed at length and it was unanimously decided to reject introduction of VAT in Haryana. It was informed that 85 per cent tax was being collected at first stage in Haryana and the government was collecting big amount by way of first stage tax. The proposal of imposition of VAT was nothing but to harass small traders who had already paid the tax at the first stage. It was decided at the meeting to demand immediate withdrawal of the proposal.
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IIT alumnus behind Intel's latest chip New York, July 22 As events unfold now, the protagonist behind the high-tech potboiler is an alumni of the IIT, Kharagpur, Rajiv Gupta. According to Gupta, Hewlett Packard's (HP) 37-year-old compiler whiz kid, he had visions of Itanium nearly a decade ago and his contributions were absolutely critical to the development of the final product. Intel, however, merely identifies HP as a co-developer of the chip architecture. The story had all the ingredients of a Steven Spielberg movie — secret meetings, technical brainstorming, burning of midnight oil in high security laboratories and finally the climax where the winner, indeed, takes it all. But what is this Itanium chip that has been making the headlines in several high-tech magazines? It is a new family of Intel processors co-developed by HP, which is expected to become 'The Platform' for the next generation of 64-bit computing, whether one uses UNIX, Windows, or Linux operating systems. In February this year, the Aberdeen group, a technology market consulting and research firm, said the Itanium architecture would be the foundation for 42 per cent of all worldwide server revenue by 2005. Eight years ago, HP concluded that it could not spend more than $1 billion towards development investment that Gupta's chip required. But when HP decided to partner with Intel, the chip giant apparently demanded total credit for the invention, recalls Gupta, who also has a master's degree in science from the California Institute of Technology. "Back in 1992, I envisioned Itanium as a processor from HP that would unseat Intel as the company that was most successful in the processor business. At that time the intent was to kill Intel and not partner with it," he told IANS. "We were looking at that processor coming out in 1994 — code named - PA94 (precision architecture), eight years before it actually came out. This was my intent at least," Gupta said, adding that his team also created the software that allowed existing applications to execute on the new architecture faster. "And then the company made the decision — since it would cost HP more than $1 billion, plus the overall risk and investment profile, we decided it would be cogent for us to instead try to do it ourselves, to partner with somebody, with Intel, to be a co-creator." In late 1993, Gupta and top HP officials had a secret meeting with Intel's tech leader Albert Yu and four other Intel fellows. "We decided to form two teams to jointly work on it." Gupta led the HP team, while John Crawford was chief of the Intel team. "Once we decided to get married, one of the prenuptial agreements was that Intel would be recognized as premier, and HP's involvement would be subterranean," he revealed. "If I wasn't there, it would have been a very different piece than what it is today. If you look at some of the key seminal patents on this, out of the 40 or so patents I have, about 20 to 25 patents are from the Itanium. They are absolutely fundamental to the chip," Gupta claimed. On Gupta's role in developing the Itanium chip, Bill Kirkos, spokesperson for Intel, said: "Hundreds of engineers from both companies played a critical role, including Rajiv. It is better to ask HP about his individual efforts." For Gupta, however, it was a two-year involvement with Intel's Itanium. Then he chose not to continue with the implementation phase.
IANS |
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Maruti to hike prices New Delhi, July 22 “The prices will be increased by between 2 and 3 per cent from July-end,” the officials told PTI here. The Maruti officials attributed increased production costs as the reason for the latest price hike, its third in this year. They, however, said a final decision had not been taken whether the hike would be effected on all or some of the models among its vast portfolio of six car models, a multi-utility vehicle Gypsy and the Omni van. In May 2001, the company had increased prices of select car models by up to 1.5 per cent, including the entry model Maruti 800, Omni, Zen (petrol), Alto and WagonR.
PTI |
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Concept of value added tax The process of introducing the new system of taxation on the sale of goods commonly known as VAT (value added tax) both in Punjab and Haryana seems to have commenced following virtually the directives of the centre issued in the recent past. Fifty-three years old provisions of the Punjab General Sales Tax Act, 1948 and their corresponding rules governing the levy of tax on purchase and sale of goods inside the state are likely to become inoperational from April 01, 2002 with the introduction of the proposed Punjab valued Added Tax Act. As far as Haryana is concerned, the state too has initiated the preparatory exercise for the substitution of the three-decade old enactment, namely, the Haryana General Sales Tax Act, 1973 and the statutory rules. Presiding over a meeting with the representatives of the trade and industry held on July 19, 2001 at Ambala City. Mr M. Shanker, Financial Commissioner and Secretary to Government, Excise and Taxation Department, Haryana, Chandigarh, disclosed that VAT will be introduced from the commencement of the next financial year. Now let us understand as to what does VAT actually mean? And how it is different from the old system of levying tax on the purchase and sale of goods? In the case of production and distribution; goods normally pass through a number of stages before reaching the final consumer. Primary materials go through successive stages of processing or manufacture before they are eventually converted into finished goods. At each stage, an element of value is added which represents the outlay of the manufacturer on wages, salary, electricity and other incidental charges together with profit. On the contrary, in the case of a trader an element of value in the form of purchase inward expenses and profit is normally added to the price of the goods traded by him. VAT is levied on the value added to the goods at each stage in the chain of transactions. In other words, VAT in its comprehensive form means a tax-payable by all sellers, excluding those specifically exempted, on the basis of value added by their respective prices. In fact the basis of VAT is the value of the output minus the value of inputs in the case of a person engaged in the manufacturing or processing activities while the traders will have to bear the burden of VAT on the difference of the amount between purchase price of the goods and their sale price. It is equally important to mention here that the VAT payers will not be entitled to any kind of deduction from the gross turnover on account of sales to registered dealers, sales of goods suffering tax at first stage, sales to exempted units, etc as all sales effected within the state will attract tax liability under the new system of tax which is proposed to be introduced and that the procedure of issuing declaration forms and submitting them along with the returns will be discontinued. It is, however, proposed to keep as many as 25 items away from the net of taxation under the VAT system. These changes will, however, not affect the taxability of inter-state sales under the Central Sales Tax Act, 1956 which is an enactment of Parliament. VAT involves multi-point tax as opposed to the old system of single-point levy under the existing general sales tax Acts. Every VAT payer will be entitled to realise full tax on its sales from its customer with the facility of claiming credit of the amount of tax paid on the goods bought as his liability will be restricted to the difference between the tax payable on supplies less tax paid on inputs. What is significant is the fact that no let-off would be allowed to the VAT payers against CST paid on inter-state purchases and the benefit of adjustment will be restricted to payment of tax within the state on inputs. |
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Exports to China zoom 50.9 pc Beijing, July 22 According to latest Customs figures released by China’s general administration of Customs, Chinese imports from India touched $ 759.835 million during January-May, up 50.9 per cent over the corresponding period in 2000. Mineral products accounted for nearly half of India’s total exports to China. This sector contributed to $ 312.795 million while base metals and products exports amounted to $ 41.997 million. Plant products accounted for $ 5.851 million food and beverage $ 5.575 million and pulp, paper products and cardboard $ 3.291 million. China’s exports to India during January-May amounted to $ 719.707 million, up 34.3 per cent compared to the same period last year. China’s no 1 export item to India during the first five months was chemical products. It exported $ 189.746 million worth of chemical products. Machinery and electronic products and audio and video equipment came second with exports amounting to $ 157.954 million. The third slot went to minerals, which was worth $ 145.793 million.
PTI |
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BSNL to upgrade
customer services Amritsar, July 22 He said the latest equipment to be installed in the state would provide uninterrupted service. Mr Kapoor said they had created a new website, amritsartelecom.com, where the billing facility would be available on Internet. The customers could download their bills and make early payment of their dues. However, the services were being added on an experimental basis and would be extended to the consumers after receiving proper feedback. |
R. N. Lakhotia Q: I am a state government employee, living in a rented accommodation, but not getting any house rent. I do not own my house in any part of India. I purchased a piece of land away from my place of posting, then secured a loan from IDBI Bank during October 2000 to construct the house which is to be completed by March, 2001. I want to know in detail about the benefits available to me while repaying the loan instalments to the bank under the following circumstances:- 1. The house is kept vacant (some watchman is engaged for its safety). 2. Part of the house is rented out and I may keep a part of it for my occasional visits. — Deepak Puri, Talwara Township Ans. On the facts mentioned by you, you would be eligible for tax rebate u/s 88 on maximum sum of Rs 20,000 p.a. on account of repayment of the amount borrowed by you from the bank for residential house. It is immaterial whether you use the house for your self-occupation or you let it out. Similarly, the interest on loan for self-occupied house property would be allowed
up to maximum Rs 1,50,000 in a year in case the loan has been taken on or after 1st April, 1999. For part of the house which is let-out, entire interest for that portion will be allowed. Q: Kindly clarify if the concession of extra Rs 5000 to women employees is to be deducted from the total tax payable for the year 2000-2001 or Rs 55000 from total income as is Rs 50,000 for men. — Amarjit Singh, Dasuya Ans: The concept of tax rebate to women u/s 88C amounting to Rs 5,000 means that no income-tax will be payable by a woman tax payer
up to Rs 5,000. Thus, this sum of Rs 5,000 will be deducted not from the income of the woman tax payer but from the tax payable by the woman tax payer. Supposing the total income of a woman tax payer is Rs 80,000, the tax payable on this amount comes to Rs 5,000. Now the woman tax payer by taking advantage of section 88C in respect of tax rebate for a woman tax payer will get a tax rebate
up to Rs 5,000 and thus no income-tax will be payable on her total income of Rs 80,000. |
K.R. Wadhwaney Modernise airports and earn more The government, through AAI, will spend Rs 550 crore for development of airports. This is being done with a view to handling ever-increasing pace in the world of aviation and tourism. The renowned aviation officials world over emphasise that if India can build necessary ultra-modern infrastructure at several centres. — Goa and Kerala — it can earn far more quantum of foreign exchange than it has been doing. The work on the Rajahmundry Airport (Hyderabad) has already begun. The runway, new apron and taxiway, have been given priority so that wide-bodied aircraft can operate without any problem. An amount of Rs 50 crore will be spent on the development of Hyderabad airport while Rs 130 crore for the Visakhapatnam airport. An amount of Rs 15 crores has been set aside for the upgradation of the Tirupati airport. In the southern region, some other airports in Shamshabad (AP), Devanahalli (Bangalore) will be developed in collaboration with private consortiums. There is a thinking that four international airports in Delhi, Mumbai, Kolkata and Chennai may be given to private parties on lease basis. PR exercise As a measure of confidence-building exercise, Air-India took an “army” of journalists on the relaunched Delhi-London-Delhi sector. The new flight on every Friday/Saturday will be popular any way but journalists have been uplifted on the inaugural flight with a view to “extracting” favourable ‘press’ after several rounds of negative exposures. On the initial three flights, there will be lucky draws and paid ticket holders will be provided benefit of ‘mileage club’. The new flight will cater to the needs of the northern India passengers, particularly from Punjab and Himachal Pradesh. Promotional fares will soon be introduced to woo passengers. Best Airline Singapore Airlines has been named as the “best managed global carrier”. This verdict has been announced by the IS based magazine, Aviation Week and Space Technology.
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Inflation rises FII net buyers Nasscom projection Dupont plans Amara Raja Telco in talks |
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