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Sunday,
September 22, 2002,
Chandigarh, India  
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India seeks concessional pricing of oil
ONGC, BPCL may cut 5,600 jobs
Hughes sees Punjab as high growth sector |
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Rs 50 lakh for Bharti Chair in PUIET Ind-Swift
unveils medicine journal Why
industry pay for ‘excess PSEB staff’
Foreign interference hits A-I progress
IOC stocks to improve
Q: We are engaged in the business of manufacture and sale of readymade garments being a dealer registered under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956.
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India seeks concessional pricing of oil
Osaka (Japan), September 21 “In a high price scenario, there is a need for oil producers to extend concessional pricing and liberal credit terms to developing countries,” Petroleum Minister Ram Naik said in his address to the 8th International Energy Forum here. Discussions at the meeting, which bring together oil producing and major consuming countries, focused on current international issues like price volatility, limited transparency and reliability of data as well as long-term energy situation. Naik said the oil markets were in turmoil as the OPEC quota had fallen from about 5 million barrels per day between 1998 and 2002 while oil demand during the corresponding period has grown by 2.5 million barrels per day. “Speculative activity thrives in a market with deficit supplies and low inventories and there is a need for oil producers, with substantial spare capacity, to increase production and bring prices down to reasonable levels and minimise price volatility,” he said. Suggesting ways of reducing price volatility, the Minister suggested that the oil cartel (OPEC) implement caps and floors for physical cargoes when the price band mechanism is breached besides adjustment of supplies. He also suggested ignoring the abnormal price movement arising from speculative action while pricing physical cargoes. Seeking a mechanism to insulate developing countries from high volatilities, Naik said oil producers should extend discounted pricing to these countries while removing disparities in crude pricing. Crude oil prices have jumped 40 per cent this year to close to $ 30 a barrel while India is comfortable at $ 22-23 a barrel, he said. Naik, who was speaking at the first session on ‘World Energy Situation and Outlook’ which was chaired by Saudi Oil Minister Ali T. Naimi, stressed the need for sustainable and stable oil prices. Earlier in the day, Naik had bilateral meetings with the Japanese Vice Minister of International Affairs, Kuwaiti Oil Minister, Energy Minister of Sudan and UAE Minister of Petroleum. The Minister showcased investment opportunities in India particularly in areas of oil exploration, LNG projects and downstream petroleum infrastructure. An important issue taken up by Naik with Japanese Vice Minister related to the pricing pattern by the Middel East producers for North America, Europe and the countries located east of Suez. As per the extent methodology for fixation of official selling prices by the Middle East producers, on FOB basis, crude costs $ 1.50-2 per barrel higher in comparison to North American and European markets. PTI
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ONGC, BPCL may cut 5,600 jobs
Osaka, September 21 India plans to reduce workers at the ONGC, India’s biggest oil producer, by as much as 5,000 from 38,000, Petroleum Minister Ram Naik said here. BPCL will shed as many as 600 of its 11,000 workers, he said. “This will help both the companies to become competitive and more streamlined in their operations,” Naik said. The Cabinet had earlier this week decided to postpone Voluntary retirement scheme (VRS) for the two PSUs. The two companies will now re-submit improved VRS proposals. Naik said the government expects to make a decision on the sale of the state-owned refiners Hindustan Petroleum and BPCL in the next three months. The Cabinet Committee on Disinvestment had earlier this month postponed the privatisation decision on BPCL and HPCL due to lack of consensus among Cabinet ministers. Naik said the government expects to sign an agreement to invest $ 750 million in an oil field in Sudan that will give India an additional 3 million tonnes of oil a year. “It is in the final stages, we’ll sign an agreement as soon as the formalities are over,” he said. The government is also in talks with Iraq, Iran and Myanmar to secure stakes in oil and gas fields, Naik said. Bloomberg
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Hughes sees Punjab as high growth sector Chandigarh, September 21 “Satellites can deliver communications right down to any panchayat in North India. Today, satellites offer highly cost-effective communications options in places where traditional mediums such as leased lines are limited or unreliable. We anticipate a tremendous demand for DirecWay to enable the state governments in North India to run effective e-governance initiatives, for streamlining agricultural processes and for effective global communications for the manufacturing and service industries,” Mr Roach said. Hughes has invested over US $15 million in introducing DirecWay. HECL will be the first national satellite broadband service provider in the Indian market to offer services in over 800 cities and rural areas across the country. North India has traditionally been the agricultural centre of India. Satellite-based communications will allow quick-to-deploy, highly reliable and secure means of communications for corporations in this region. “Hughes has invested in educating the Indian market to the benefits of satellite broadband communications. With DirecWay, we believe that we have a solution at the ideal price-performance value to target the value-added telecom market,” he said. DirecWay is targeted at large enterprises, dealers/distributors, suppliers to corporations, professionals and small/home offices (SOHO). DirecWay will be available to customers in two versions- a two-way system that allows users to send and receive information via satellite (also called satellite return) and an economical one-way system that allows users to receive information via satellite at speeds identical to the two-way system. The one-way system sends information using your phone line. It is also known as dial return. The one-time hardware cost is Rs 30,000 for one-way and more than Rs 1 lakh for the two-way system. Recurring charges range from Rs 1,000 per month to Rs 20,000 per month, depending on the service plan chosen. |
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Rs 50 lakh for Bharti Chair in PUIET Chandigarh, September 21 The Bharti Foundation made the contribution in the name of Late Sat Paul Mittal. Mr Mittal happens to be a former fellow of the university senate. The Bharti Foundation was set up in 2000 to promote and support activities related to education, health, medical science, social welfare, population, environment, ecology and art and culture. The foundation also provides support for victims of calamities as war, riots, earthquakes and famine. Speaking on the occasion Mr Rakesh Bharti, Vice-Chairman and Managing Director, said: “Punjab has always been the land of enterprise, the land of opportunity. The sheer scale of enterprise, of commerce and energy that the land represents gives telecom the opportunity to develop and contribute to the economic development of the state. We are proud to be associated with PU for establishment of the chair which we believe will further enhance knowledge and facilitate research in the field of telecom technology”. Mr Bharti assured the institute of more help. Bharti has invested nearly Rs 20 crore at the school of telecom and information which has started operation with help of the IIT, Delhi. Prof K.N. Pathak, Vice-Chancellor, while thanking the Bharti Telecom, said this was probably the first time in the history of PU that an industrial house was tying up in such a big way. He said the university would look for other avenues with possibilities of tie-ups. Mr Vinod Sawhney, a CEO, said: “Bharti had revolutionised telecommunication in the country and its success story in most of the key markets in the country ratifies the belief in the virtues of customer-centric approach.” The Punjab mobile services endeavour of Bharti had elicited good response. It is claimed that Bharti mobile operations in Punjab in the name of Airtel had bagged 25 per cent of the market share in just seven months. Besides being the largest manufacturer of telephone instruments, it is also the first company to export its products to the USA. |
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Ind-Swift unveils medicine journal Chandigarh, September 21 Speaking on the occasion, Dr G.
Munjal, Joint Managing Director, Ind-Swift, said, “Working in the Indian pharmaceutical industry for the last 18 years, it has been observed that medical fraternity in small towns, rural and urban areas, are not updated about the latest advancements in the field of medicine. To bridge the gap and bring India on the level of the developed countries and update the medical professional in the field of medicine we introduced Trendz — the latest in medicine.” The Ind-Swift group which is catering to over 2,00,000 doctors would be circulating the journal free of cost to all the doctors and medical professionals through its strong team of 750 professional sales representatives all over India. The occasion was
inaugurated by Dr K.S.
Chugh, “The father of Nephrology” and the journal was released by Dr
S.K. Sharma, Director, PGI, Chandigarh. Dr K.S. Chugh appreciated the efforts taken by Ind-Swift to meet the academic requirements of the medical fraternity. A section of the journal titled “Alternative medicines” is specially created keeping in mind the growing importance and curiosity level for Herbal products and treatment. Information regarding the R&D, synthesising and any other development in the field of herbals worldwide will also be part of this section. For more information regarding “Trendz” log on to: www.indswift.com Ind-Swift Group consists of Ind-Swift Limited and Ind-Swift Laboratories Limited, a bulk drugs unit confirming to USFDA standards with six independent manufacturing facilities. The group has a turnover of over Rs 250 crore. |
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Why industry
pay for ‘excess PSEB staff’ Chandigarh, September 21 The Punjab State Electricity Regulatory Commission’s tariff order has not taken into consideration the factors of
overstaffing and the higher cost of loans which would have an adverse effect on the industry, said Mr S.P. Oswal, Chairman, Punjab State Committee of the CII, Northern Chapter, here today. Addressing a press conference on the implication of the commission’s order, he
said, 'the PSEB has16.90 employees in Punjab per 1,000 consumers as compared to 4.20 in Kerala, 5.72 in Andhra Pradesh and 7.40 in Gujarat. Consequently, the industry would have to pay for the overstaffed PSEB. Why we should pay for 14,000 employees of the Ranjit Sagar Dam, employed by the
board, even after they have been rendered jobless after the completion of the project.’’ Mr Oswal said the CII wanted that the board and the government should strictly check the power theft prevalent on large scale in the state. The board should rather ensure energy audit at the sub-station level and to fix the accountability of the field staff for the power theft. It would also cut down the cost of supply, besides adding additional revenue to the board. However, there was no need for separate legislation to check the power theft. Rather the government should strictly implement the existing laws. Mr Oswal said in the ARR submitted by the board, the total assets were valued at Rs 9,022 crore, however, the liabilities were valued at Rs 12,857.08 crore. The gap was accounted for by the past losses because of undisbursed subsidy by the government. As a first step to correct the situation, the government should waive off loans due on the board, amounting to Rs 4,782 crore.
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Foreign interference hits A-I progress Air-India and Indian Airlines are already plagued by their own peculiar problems which are halting their progress. What is hurting them more is uncalled for interference from foreign powers. As world’s two leading manufacturers, Airbus Industries and Boeing, are engaged in intense competition their governments are injecting a dose of politics for the sale of aircraft. If one national carrier opts for one manufacturer the other protests and tries to prevail upon the weakling Indian Government. In the Indian aviation sector, there are several renowned pilots and engineers who can provide dispassionate viewpoint about health and utility of aircraft but Indian politicians lend their ears to foreigners. The lack of faith in their own people is slowing down the progress and will continue to play havoc with Indian aviation. Indian Airlines is to buy over 40 aircrafts in five years from Airbus Industries. But India is allowing the USA to interfere in this affair. The fact of the matter is that India yields to super powers and get nothing from them in return in the world of aviation. It is not understood why Minister for Civil Aviation Shahnawaz Hussain should review IA’s aircraft acquisition plans at the behest of US official. If the Indian authorities continue to pay heed to these foreign powers, the Indian aviation will continue to stay at the bottom.
Renewed attempt Air Canada had pulled out of India last year while Air-India does not operate any flight to Canada. But the Shahnawaj-Hussain, on his recent visit to Canada, explored the possibility of direct air link between the two countries. According to airline officials, the exercise can be financially successful for both operators because of the huge Indian population in Canada. The direct connectivity will help save a lot of time.
No shows and offloadings As some foreign carriers have withdrawn operations from India following the September 11, 2001 tragedy, the capacity ex-India has reduced. This is the reason why there were several offloadings last month by some reputed airlines. Airline officials and travel agents justify over-bookings because there was an unduly high percentage of no shows by passengers on several flights in August and first fortnight of September. There is a mixed feeling about this sudden upsurge in traffic. Some officials reiterate that it is a temporary phase as outgoing traffic has increased because of reopening of schools and colleges in Europe and the USA. The ever optimistic officials, however, paint a different picture saying that the incoming and outgoing traffic is slowly regaining its pace. |
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IOC stocks to improve Q: How do you rate Indian Oil Corporation in the present scenario? — Kuldeep Singh, Amritsar With the dismantling of the administered price mechanism (APM), oil sector stocks were expected to hog the limelight on the bourses. While HPCL and BPCL have been in the limelight, scrips such as Indian Oil Corporation (IOC) have not yet received a comparative visibility. One of the most important issues for the stock has been liquidity in the scrip. Currently, government holding stands at 82.1 per cent while ONGC holds 9.1 per cent of equity. This leaves an effective free float of 8.8 per cent. There has been concern raised in the past about the low liquidity in the scrip, but with government planning to dilute its stake this concern might be addressed. However, in the short term, this might create negative impact on the counter. According to news reports, issue is being handled in such a manner that while being attractive to overseas investors, it also does not create any pressure on the scrip. The company holds 9.6 per cent stake in ONGC and a 4.8 per cent equity stake in GAIL. The company plans to sell its holding, though the final decision and the timing will be governed by the overall divestment policy of the government. But these holdings provide a cushion to the company as it can raise resources for its future expansion plans. For the fiscal ended March 2002 sales were Rs 114900.1 crore, PBIDT was 6.6 per cent net profit was Rs 2884.7 crore and the EPS was Rs 37. In case of HPCL and BPCL, expectations of divestment are at a much higher price than that of the current market price and subsequent open offer by the acquirer, which is driving the interest of investors. Therefore, while HPCL and BPCL are likely to see a re-rating in the post-divestment period, valuations accorded to IOC are also likely to improve. Q: What are the prospects of
Marico? — Rajesh Mishra, Gurdaspur In the last couple of years, the company has launched Parachute Jasmine, Shanti
Amla, Saffola Tasty Blend (Kardi-corn blended oil) and Saffola Nutri Blend (June 2002) to complement its existing product range. This has increased its market share in the total hair oil segment to 12.4 per cent for June ’01— May ’02 from 7.9 per cent in June’00 — May’01. Success of new products has reduced Marico’s dependence on its flagship brand Parachute from 70-75 per cent in early 90s to about 40 per cent now. It is looking at increasing the contribution of new products to double in the next two years. To increase penetration in rural market, MIL has introduced flexi packs at lower price points. To achieve this, the thrust will be on launching new products. MIL, after paying interim dividend of 140 per cent in FY02, has just declared the first interim dividend of 15 per cent for FY03. The bonus issue will provide liquidity. For the fiscal ended March 2002 sales were Rs 671 crore, PBIBT was 11.2 per cent net profit was Rs 49.4 crore and the EPS was Rs 33.2. For the quarter ended June 2002 sales were Rs 175.6 crore, PBIDT was 11.4 per cent and net profit was Rs 13 crore. The stock can be accumulated at current levels. Q: Should I buy Hughes Software? — Mandhoj Gurung Faridabad Hughes Software (HSS) has once again missed its earnings guidance for 1QFY03. The software company that has been focused on the providing software solutions for convergent networks (networks that can interoperate between telephones, Internet and new technologies like 3G) blames the advisory put out against India by western governments for the disastrous performance. The company posted an 18 per cent sequential drop in net profits and the drop in bottom line was a steep 65 per cent. On the brighter side, revenues from non-HNS clients grew by 12 per cent. The company saw an expansion of its relationship with NEC & Nokia and bagged its first direct orders from the satellite segment. While Hughes’ performance for 1QFY03 had some bright spots, what eclipsed them is the way management has communicated. Missing earnings guidance so consistently only hurts the management’s credibility. To conclude, the company has performed in the area where it should have i.e improving business from
non-HNS clients. Also, the downturn in the telecom segment is beyond the management’s area of influence. For the fiscal ended March 2002 sales were Rs 2340.9 crore, PBIDT was 33.9 per cent net profit was Rs 52.2 crore and the EPS was Rs 15.6. For the quarter ended June 2002 sales were Rs 47.4 crore, PBIDT was 21.7 per cent, and net profit was Rs 4.4 crore. The fact remains that the telecommunication technology is changing rapidly and there is likely to be a demand for service providers like Hughes Software. |
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By Praful R. Desai
Disciplinary proceedings
Q: Is initiation of disciplinary proceedings against an employee despite acquital by criminal court, barred? Ans: The Kerala H.C. was dealing with the point in Vijayan v Syndicate Bank (2002-II-LLJ-1095). An employee of the respondent - bank was acquitted in criminal cases from charges interalia of fraudulent with drawal of nearly Rs 3 lakh from the bank. After the acquittal, the bank initiated proceedings against him. He challenged them in a writ petition which was dismissed. Hence the present appeal. The H.C. referring to CI. 19.3 and 19.4 of Ch. IX of the Bipartite Settlement observed that the power of the bank to initiate disciplinary proceedings against a delinquent employee who was acquitted by the Criminal Court was in no way diluted by Cl. 14 which was only an enabling provision. The bank could take disciplinary action even after one year of the launching of the prosecution. It is settled law that albeit on same set of facts, criminal case and disciplinary proceedings operate on different footing in on different footing in on different planes. While the purpose of the first is to punish the guilty, the second is merit to “keep the administrative machinery unsullied by getting rid of bad elements.” Power of disciplinary action is wielded to ensure the maintenance of parity and morale of the administration. So, even after acquittal on technical grounds by a criminal court, delinquent employee can be proceeded against in departmental proceedings. The S.C. in Nelson Motis v Union of India (1992-II-LLJ.744) has held that so far as the first point is concerned, namely, whether the disciplinary proceedings could have been continued in the face of the acquittal of the appellant in the criminal case, the plea has no substance whatsoever and does not merit a detailed consideration. The nature and scope of a criminal case are very different from those of a departmental disciplinary proceedings and an order of acquittal, therefore cannot conclude the departmental proceedings. The contention of the appellant in this case, observed the H.C. that the bank should have initiated the disciplinary proceedings within one year of the launching of the prosecution and the delay is causing serious prejudice to him, is a contention on the merit of the disciplinary proceedings. All such contentions available to him are kept open and he may urge them before the disciplinary authority. In view of the above, the H.C. held that the present appeal lacks merit and the same was consequently dismissed.
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by A.K. Sachdeva Q: We are engaged in the business of manufacture and sale of readymade garments being a dealer registered under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. We carry finished goods sometimes to the places situated outside the state and sell them out on finding the customers. The goods remaining unsold are brought back to our place of business and entries to this effect are made in the books of account regularly maintained by us. We issue bill of sale to the customers on the spot as and when a deal is struck with them outside the state. We realise 10 per cent Central sales tax if a buyer happens to be an unregistered dealer while 4 per cent central sales tax is charged subject to form ‘C’ in case a buyer holds registration certificate under the Central Sales Tax Act, 1956. Now we are given to understand that these kinds of transactions do not attract sales tax under the Central Sales Tax Act, 1956. Kindly clarify. Ans: Section 3 of the Central Sales Tax Act, 1956 defines when a sale of goods can be said to take place in the course of inter-state trade or commerce. It lays down if a sale or purchase occasions the movement of goods from one state to another or that when a sale or a purchase is effected by way of transfer of documents of title to the goods during their movement from one state to another, the transaction so taking place will constitute an inter-state sale attracting tax liability in terms of sub-section (1) of section 6 of the Central Sales Tax Act, 1956. Tax liability, in other words, under the Central Sales Tax Act, 1956 arises only when a sale in the course of inter-state trade or commerce takes place. However, the transaction involving movement of goods from one state to another independent of the contract of sale does not amount to an inter-state sale within the meaning of section 3 of the Act ibid. Such kinds of transactions do come within the purview of section 4 that carries definition of “sale outside the state” and no tax becomes leviable on the transactions coming within this category. The fact that the goods are first carried to a place situated in the state without reference to any order from any customer implies that the sale that eventually takes place does not come within the parameters of section 3 of the Central Sales Tax Act, 1956. The tax, therefore, deposited on the transactions erroneously presuming them to be inter-state sales is liable to be refunded under the law. However, the tax so realised will have to be refunded to the parties from whom it came to be collected. The proper course is to make an application to the assessing authority explaining away the true nature of the transactions and requesting for refund on the ground that the sales so made constituted “sales outside the state” on which on tax really became payable under the Central Sales Tax Act, 1956. Q: We are given to understand that all kinds of declaration forms such ST-14 and ST-15 stand abolished by the state government and that it is now not mandatory for the registered dealers effecting sales on account of goods suffering tax at first state and supplies to registered dealers without payment of tax to furnish any statutory form. Kindly advise in this context. — P.K. Arora, Panchkula Ans: The state government vide notification No. G.S.R. 21/H.A.20/73/S.84/2000 dated April 20, 2000 dispensed with the mandatory requirement of furnishing statutory forms such as ST-14 and ST-15 and thereafter it became optional to the assessees claiming statutory deductions from the gross turnover without submitting in support of the returns the declaration forms. |
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