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Sunday,
November 10, 2002, Chandigarh, India  
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SEBI board
approves delisting report World Bank
team arrives on Monday Chautala
offers investor-friendly climate to S. Africa Tanneries,
pollution board lock horns |
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Unfair
trade practices affect credit cards market 9 rice
millers get closure notices
IA, A-I
need to cut overhead expenses
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SEBI board approves delisting report
Mumbai, November 9 “The board has approved the delisting report while it felt the need for more discussion on the demutualisation and issues related to the derivatives,” SEBI Chairman G.N. Bajpai told reporters after the meeting. The SEBI board’s approval now paves the way for setting up a separate listing body Central Listing Authority (CLA), the sources said. Among the major highlights of the SEBI panel on delisting, headed by SEBI executive director Pratip Kar, had recommended reverse book building process for the companies seeking delisting of their shares from the stock exchanges. The panel had recommended that the open offer price should be determined through the book-building process. Although, the board has deferred the approval of Justice M.H. Kania Committee report on demutualisation, the SEBI board is expected to give final approval at its next meeting scheduled to be held on November 28, 2002, the sources said. “We will adhere by the timeframe we have committed for undertaking certain reforms,” SEBI Chairman said. It may be recalled here that the Union Finance Minister Jaswant Singh had announced that the Finance Ministry will give final nod to the demutualisation within next four weeks while speaking at a function organised by the Bombay Stock Exchange (BSE) on October 26, 2002. The SEBI board’s approval to the report was necessary prior to the final approval of Finance Ministry, market sources said. The SEBI board was to discuss and finalise the list of securities to be added in the existing 30 securities in derivatives segment on the boarses. However, the issue was also deferred for want of more discussion, the SEBI Chairman said. The SEBI board meeting was attended by the SEBI board members, Mr K. Muniappan (RBI nominee), Mr Swaroop (Government nominee). Mr Vinod Dhal (another government nominee) did not turn up.
UNI
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World Bank team arrives on Monday Ludhiana, November 9 The Punjab Government has already submitted eight major projects seeking World Bank assistance worth Rs 25000 crore for the development of the state. Mr K.R. Lakhanpal, Principal Secretary (Finance) Punjab told today that the world bank had felt encouraged by the latest decisions taken by the Punjab Government including the withdrawal of the free power supply to the agriculture and charging of irrigation water. The reforms taken by the State Government in its annual budget for the year 2002-2003 had also helped in changing the attitude of the World Bank. The World Bank team during its stay in Punjab will study the existing fiscal position of the state and future rate of fiscal reforms and whether reforms are going to be sustainable, said Mr Lakhanpal. The World Bank team would also study the development needs of the state and areas where the World Bank can provide capital. According to Mr Lakhanpal the focus of development will be on the power generation and agriculture infrastructure with special emphasis on diversification of the same. Besides, the state government has sought funds for providing drinking water to the entire population of the state and rural sanitation and the network for the roads in the state. Mr Lakhanpal claimed that the fiscal position of the state was improving following steps taken by the state government during the past few months.
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Chautala offers investor-friendly climate to S. Africa
Johannesburg, November 9 Haryana enjoyed the foremost position in the country in highway tourism and offered immense opportunities for the development of food processing industries being a primarily agrarian state, he said while addressing a high-level meeting in Johannesburg. Besides, cultural tourism was also being promoted to acquaint the domestic as well as international tourists with the rich heritage of the state, he added. In response to queries from CEOs of some companies, the Chief Minister said his state was providing land at reasonable prices to the investors for setting up their units. Besides, it was also assisting in providing technical and skilled manpower. The Haryana government was providing adequate water and power supply and other basic infrastructure facilities for the units, he added. Mr Chautala said that 60 per cent of the country’s cars, 50 per cent tractors and 60 per cent motorcycles were also being manufactured in the state. Mr Chautala further said Haryana was the only state in the country which “is free from the menace of terrorism” that had spread the world over. He said the investors in Haryana also directly benefited from its close proximity to the national capital bordering three sides. The international airport was a mere five-minute drive from the state. Haryana had also become the favoured destination for international entrepreneurs as it offered political and administrative stability and a pollution free environment. The meeting was organised by the Indian Embassy, Confederation of Indian Industries, National Small Scale Industries Federation, Indian Export Import Bank and State Bank of India and was attended by the representatives of world-renowned companies. Tracing the ties between India and South Africa, he said the Father of the Nation Mahatma Gandhi initiated his non-violent movement for truth and justice from Johannesburg which later inspired Martin Luther King in the United States and Nelson Mandela here in South Africa. Mr Chautala stressed that over 10 lakh Indians residing in South Africa were not only making a significant contribution towards the economic development of both the countries but were strengthening bilateral relations as well.
UNI
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Tanneries, pollution board lock horns Patiala, November 9 The tanneries are required to pretreat their effluents which should thereafter be treated at the Common Effluent Treatment Plant (CETP) which has, however, closed down while a second module of the CETP which was to be installed simultaneously is yet to come up. The PPCB had made it mandatory for all units to obtain an NoC, fixed certain norms for effluent discharge and asked the units to set up individual effluent treatment plants. Chairman of the PPCB Satish Chandra, confirming that the board has asked the Punjab State Industrial and Export Corporation (PSICD) to revive the CETP and establish another one, said the tanneries are producing effluents nearly three times more than the prescribed limit. The PPCB claims that the units do not pretreat the effluents whose quantity has increased manifold ever since extra business shifted here from Kanpur and Chennai tanneries which are facing shortage of water. As compared to 27 kilolitre of water used per tonne material the units are now using 70 kilolitres water per tonne to cope with the increased demand. There are about 65 tanneries in the complex which was designed by the Punjab State Leather Development Corporation as a pollution-free industrial centre with ultra-modern common effluent treatment plants for coordinate growth and expansion of the leather industry in the state. In 1992 the control of the complex was transferred to the PSIEC. The board had issued notices to all tanneries in May, 2000, to contain the quantity of effluent and set up ETPs to which the tannery owners had got stay orders after approaching the high court. The owners of tanneries on their part accuse the board of harassment and claim that the pollution norms are not binding on the complex and according to the agreement made with entrepreneurs, no NoC was required by individual units as they were discharging their effluents through an approved drain leading to the CETP.
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Unfair trade practices affect credit cards market Chandigarh, November 9 The senior officials in different banks lament that most of the shopkeepers do not accept plastic currency due to sales and income tax implications and rather demand payment through cash. Though banks have made heavy investments, they say, to introduce this technological product on the pattern of developed countries, but due to exorbitant interest rates, typical behaviour of the Indian customer and unfair trade practices, it has failed to a larger extent. Citi bank, HSBC, SBI, ICICI and HDFC are the major players in the credit market. Customers allege initially banks had issued credit cards as free service, but later on they would demand annual charges between Rs 500 and Rs 1,500 despite its limited usage. The ICICI bank officials, agree if the annual charges, renewal and other charges are taken into account, besides up to 36 per cent interest rate on withdrawing cash, the actual charges would turn up to 60 - 80 per cent. Surprisingly, the shopkeepers would quote different price of products for making cash payments or through credit cards. Bankers lament that despite their best efforts, credit cards have partially succeeded only in large towns like in Ludhiana, Chandigarh, Jalandhar and
Amritsar. Mr Amrik Singh Ahi, Manager (Personal Banking) State Bank of Patiala admits that due to higher charges few customers are using that facility. Further, the increasing facility of ATM and debit cards have badly affected their growth. Another official of the SBI says that SBI Visa card have made inroads in the market, and a large number of credit card holders are using them. Commenting on the slow growth of credit cards, Mr R.K. Kumaria, Head of the SBI Credit Card Division, claims, “The credit card is a privilege offered to limited customers with secure income and credit worthiness. The bank charges annually in the range of Rs 500 to Rs 1500 for providing this facility. The customers are also offered personal insurance policy of Rs 3 lakh to cover death and disability risk.” He feels since customers are not aware about its benefits so they take them sparingly. The banks would not charge anything if these are used for making payments at the specified outlets.
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9 rice millers get closure notices Jalalabad, November 9 In fact there is no other industry in this small border town except the par-boiling rice mills or three solvent extraction plants and a vanaspati plant. The par-boiling rice industry is mainly responsible for water as well as air pollution. However, most of these units have got installed all the prescribed pollution control devices to check the pollution. These units have also got required consents of the PPCB to run the industry. In order to check this menace, in the month of June, the PPCB had issued revised instructions to the millers to follow certain specified parameters, which included, the plantation of eucalyptus trees, so that the treated effluent may be used for the irrigation of these plants, disposal of fuel ash generated is disposed of in the safe and scientific manner and maintain the separate record of operation of pollution control devices. But even after the commencement of the kharif season, the department has taken very serious view of the violation of these instructions. When contacted Mr Najer Singh Environmental Engineer PPCB Regional Office Faridkot told that his office had only recommendation power whereas the action was to be taken by Chairman PPCB. He also disclosed that Chairman Mr Satish himself coming to Jalalabad on November 11 to take stock of the situation.
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by K.R. Wadhwaney IA, A-I need to cut overhead expenses Already besieged with multitude of internal problems, the aviation industry continues to face hazards, like hoax scare calls, which throw all flight operations topsy-turvy. For the third time in past 10 days, IGIA had to undergo an emergency alert. This was on account of a message from Hong Kong that two militants were in Air-India flight, which had already taken off from Mumbai. Following this message all outgoing flights were kept on hold. As the plane landed at the airport, it was taxied to an isolated bay amid emergency bandobast. Passengers were vigorously frisked after they were offloaded and the entire aircraft was searched. No objectionable material was found and the name of two passengers were also fake.
Fares raised As ATF price has been considerably hiked, Indian Airlines and Jet Airways have revised their fares on certain domestic sectors. IA has also increased inland air travel tax. This is understandable. But IA’s (as also of Air-India) blues will continue as long as overhead expenses remain as high as they are. Whatever the fare structure or passenger-load IA and A-I, will continue to encounter difficulties until they take drastic measures in cutting down their overhead expanses. Their staff ratio per aircraft is too steep and they will continue to be in the red whatever may be their assertions. The airlines woes may reduce only when new aircrafts are added and ageing fleet done away with. While domestic fares are being increased, heavy discounts are being offered on the international routes as the travelling has not yet stabilised post September 11, 2001. The round-trip to Thailand, Malaysia and Singapore, for a week is less costly than the trip to Goa or Kerala from Delhi or Chandigarh. As a result of such concessions in fares and other facilities, like accommodation and sight-seeing arrangements, many tourists are travelling foreign countries.
Yellow cards British Airways is planning to issue football-like yellow cards to rowdy ground passengers. This measure, according to airline officials, will prevent disruptive passengers from getting on to the flights. The airline has been operating the yellow card scheme on their flights since 1998. The exercise, it is claimed, is successful and even spirited passengers start behaving after receiving yellow card notice. The incidences of misbehaviour on flights have been on the increase. Maybe, all airlines will start using the yellow card scheme. This may force the passengers to behave on ground and also on flight. What happens when sky marshals misbehave? Nothing is known as to what happened to the sky marshals who misbehaved on the Alliance Air flights on eastern sector?
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by Praful R. Desai Is Gratuity Act applicable to educational institutes?
Q: Whether payment of Gratuity Act is applicable to educational institutions? Ans: The question arose before the Karnataka HC in General Secretary, Vokkaligara Sangha, Bangalore [2002-III-LLJ-399]. Petitioner is the educational society. First respondent was working as a Professor. He tendered resignation and appointed 2nd respondent for payment of gratuity. Feeling aggrieved by the order of the 2nd respondent and Dy Labour Commissioner, the present writ petition was filed. Petitioner contended that the Act is not applicable to an educational institution and hence they are not liable to pay the gratuity to the Ist respondent. This contention, according to the HC is wholly untenable in law in view of the notification issued by the Central Government. By that notification, those educational institutions wherein 10 or more persons are employed, the above Act would be applicable. Thus, the HC held that the Act is applicable to the petitioner’s institution. It is an admitted fact that Professor worked for more than five years from 1981 to 1999 and thus, he is eligible for the monetary benefits provided in the Act. 2nd respondent has rightly determined, the same and directed payment along with interest. 3rd respondent was also justified in confirming the same. There is no ground thus for any interference in the matter. Writ petition in the opinion of the HC is misconceived and devoid of merit. Third respondent has considered this aspect and having extracted Rule 7157 of the Rules, which permits entertainment of the applications for payment of gratuity after the expiry of the period specified. The Rules clearly spells out that the claim shall not be invalid merely because the claimant failed to present the application within the specified period. So far as the submission that the claim was not made in the prescribed form, the HC pointed out that what is to be borne in mind is that formats are being prescribed for convenience so that the requisite information is furnished. If the claim is not made in the prescribed form, the same will not take away the right of the claimant to prefer the claim on his own applications furnishing all the required information, in view of the fact that right of payment of gratuity amount under the Act is a benevolent provision and the Act is a social piece of Legislation. The HC held that the entitlement to the monetary benefit provided under the statute cannot be deprived to a person just because the claim was not made in the prescribed form. Such hyper-technical objections are wholly unwarranted and deserve rejection. Petitioners cannot escape payment of statutory amount to the first respondent on such flimsy grounds. The writ petition in that way came to be dismissed.
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by Ashok Kumar Long-term investors can hold Ceat shares Q: Should I hold or sell Ceat India? — H. Singh, Jalandhar Recessionary trends in the Indian economy continued to impact the tyre industry in FY 2001-02. The high-valued tyre industry remained depressed during a major part of the year and the demand-supply situation remained skewed towards an oversupply of tyres. Amidst this, the company was successful in making a turnaround with major market initiatives. Sales during 2001- 02 were up by 35 per cent in the truck tyre segment and 48 per cent in the LCV tyre segment. This was against an industry drop of 2 per cent in the truck tyre segment. Ceat’s market share in the truck tyre category is 17 per cent, in the LCV category 18 per cent, in the passenger car segment 11 per cent and in the two/three wheeler category 8 per cent. Truck tyre sales contribute around 60 per cent to the company’s total turnover. It is also the largest OEM supplier to Telco. HCL Super, RD-Super and Turbo-Rib were the three major truck tyre brands that were launched during the last fiscal. Their contribution to total revenues was about Rs 300 crore. Though the industry registered a 10 per cent growth in Ceat’s passenger car segment, Ceat’s share fell by 1 per cent. This was mainly due to the discontinuation of the sourcing from Goodyear. The company plans to enhance its market share in the radial tyre category in the current year. Ceat also plans to double its market share in the two-wheeler tyre category. For the fiscal ended March 2002 sales were Rs 1113.9 crore, PBIDT was 11.5 per cent, net profit was Rs 1.1 crore and the EPS was Rs 0.3. For the quarter ended June 2002 sales were Rs.284.4 crore, PBIDT was 9.6 per cent and net profit was Rs.6 crore. Ceat plans to increase sales to Rs 1500 crore in the current FY. Thereafter, the company wants to achieve a growth of 10-15 per cent every year as against 3 per cent y-o-y growth in the tyre industry as it plans to increase exports substantially. Long term investors could stay invested in this scrip. Q: Is it worth buying Indian Overseas Bank? — M. Najeeb, Bathinda Despite tough market conditions due to a squeeze on the interest spread ratio and the fierce competition in the banking sector owing to lack of demand for credit from the corporate sector, Indian Overseas Bank (IOB) has set itself a growth target of 20 per cent in the current financial. Over the past 15 months or so, IOB has been enjoying a healthy uptrend and has been improving upon its financial performance quarter by quarter. In fact, the bank has now grown to a size of Rs 30,000 crore. During the last financial, IOB’s capital adequacy ratio improved to a shade under 11 from 10.25 times at the start of the last financial. Its NPAs have also come down to a level of 6.3 per cent of outstanding debts, from 7 per cent at the end of financial year 00-01. During the last financial — the best that IOB has ever had — the management has used part of its fund inflows to offer a voluntary retirement scheme (VRS) to surplus workforce. And in the process, it has managed to successfully bring down workforce by around 3200 employees. For the fiscal ended March 2002 sales were Rs 3702 crore, PBIDT was 67.5 per cent, net profit was Rs 286.1 crore and the EPS was Rs 6.4. For the quarter ended June 2002 sales were Rs 933.3 crore, PBIDT was 71.5 per cent and net profit was Rs 89 crore. The stock has room for appreciation. |
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Battle lines Following the restriction imposed by a film industry association on the airing of new Bollywood films on television channels, the battle lines seem to have clearly been drawn. Those who have dealt with the tele-channel whose ‘premiere’ idea has been thwarted, swear that it will not take this derailment lying down.
Cement wars The grapevine has it that, far from cartelizing, the cement sector may soon witness an all out price war. The buzz is that declining sales and wafer thin margins have squeezed the juice out of these companies, and now it is a clear case of survival of the fittest.
Debt on top The recent interest rate cut has once again boosted the prospects of the rapidly growing debt mutual fund industry. Unlike their laggard equity peers, the debt mutual funds have been fairly consistent performers all round and have provided fairly attractive low risk returns to investors. The bottomline — bank on debt. |
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ICICI Bank Tata Indicom |
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