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Monday,
September 1, 2003, Chandigarh, India  
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Tyre industry outlook positive, says Onkar Kanwar
No buyer for Sugarfed stocks
PNB ties up with Principal group
BSNL postpones draw of lots for cell phones
Exhibition on Pak products approved
Inflation at 31-week low of 3.71 pc |
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FIIs net buyers in equities
‘Americans work more than Europeans’
Markets gain ground despite blasts
Computation of tax
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Tyre industry outlook positive, says Onkar Kanwar New Delhi, August 31 “Our goal remains to achieve a turnover of Rs 5,000 crore by 2005. The company is looking at reaching the desired goal through a combination of organic and inorganic growth”, Chairman and Managing Director of Apollo Tyres Limited (ATL) Onkar S. Kanwar said in an exclusive interview to The Tribune. While organic growth will be achieved by increasing the top line and managing efficiencies within the company, inorganic growth would emanate from alliances, mergers and acquisitions. “We believe that alliances offer the power of many companies working together for the benefit of the customer. This ultimately is of greater good for the market and the individual companies”, Mr Kanwar, an alumnus of the University of California, said. He, however, did acknowledge that instability in prices of raw materials such as rubber and crude aggravated by the Iraq war had adversely affected the performance of the tyre industry in the last quarter. At the same time “recent developments such as cut in excise duty, stability in input costs and appreciation in the rupee will certainly result in a direct impact on our profitability in the coming quarters. The outlook of the industry on the whole looks positive”, the ATL Chairman observed. The company has also initiated a slew of alliances aimed at positioning itself as a complete solution provider giving “holistic maintenance solutions to the commercial customers”. “We aim to provide a complete range of products and a host of services such as insurance, maintenance and technical counsel under one roof”, he said. Mr Kanwar did not appear perturbed about the possibility of India becoming a dumping ground to dispose of mountains of used tyres in developed countries. “Imports today are not a big threat to the domestic market primarily because of the price quality equation. International brands with the requisite quality are too expensive for the Indian consumer, and being a mission critical product, quality cannot be compromised for price”, he said. Apollo Tyres commands a considerable market share in the truck segment, where it is the market leader and Mr Kanwar sees significant growth happening in the commercial vehicle segment. But figures suggest the company has not yet made a major dent in the markets of southern India. Presently, about 30 per cent of the company’s business comes from the northern region, about 25 per cent from Rajasthan, Gujarat and Madhya Pradesh and about 20 per cent from Bihar and the Eastern region. Mr Kanwar believes that the market in the south is very different from the north and west and customer requirements are also different. “To cater to the region we are expanding capacity at our factory in Perambra, Kerala’s Thrissur district. This would incur an investment of Rs 70 crore. The plant presently has a capacity of 130 tonnes per day which will be enhanced up to 200 tonnes”. Besides, the products of specific attraction for the southern region customer are also being rolled out as part of thrust in the area. This will be supplemented by strengthening the dealership network by increasing the number of dealers. Currently, there are 4000 dealers in this region. The Apollo group has also recently announced its foray into the online lottery business through its arm Apollo International Limited (AIL). The line of business, which will commence from September 2003, and has committed an investment of Rs 250 crore over three years to establish leadership position in the online lottery business Lottus. “The online lottery business, currently estimated at 3 to 5 per cent of the Rs 50,000 crore lottery industry, is expected to grow at a rate 10 per cent annually. AIL will invest Rs 250 crore in Lottus over three years, and aims to achieve a turnover of Rs. 2,500 crores within five years”, Mr Kanwar said. The domestic tyre industry had also recently witnessed a lot of speculative activity on reports that Apollo Tyres was planning to sell four lakh shares of the company once held by Harshad Mehta and his family. The Supreme Court, however, had stalled further sale of these shares. Mr Kanwar clarified that “at the hearing before the court, the advocates representing the promoter group offered not to alienate with the 4.95 per cent shares bought from Harshad family till the disposal of the appeal”. The court recognised and accepted this offer pending the settlement of the appeal, he added.
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No buyer for Sugarfed stocks Chandigarh, August 31 The Punjab Sugarfed has failed to find a single buyer to dispose of its stocks even at a price of Rs 1050 per tonne, the minimum price expected by the state after subsidising by over Rs 300 per quintal. In fact, the cost of production of sugar in some mills is about Rs 15 per kg though the prevailing price in the international market is around Rs 800 or Rs 1,000 per quintal. Officials maintain that it can not sell more than 1.5 lakh tonne per month in the domestic market due to quota restrictions imposed by the Centre. The current price in the domestic market is around Rs 1,340 or Rs 1,375 per quintal. Mr T.R. Sarangal, Managing Director, Sugarfed, said due to the current market situation, the state cannot export the excess stocks to other countries. He said: "We have invited tenders from the interested parties last month for sugar export, but the highest prices quoted by the parties was Rs 950 per quintal. We cannot sell at this price since the production cost is as high as Rs 1,500 per quintal in some mills." He admitted that the Sugarfed had no other alternative except to wait for some improvement in the domestic and international market. Haryana and some other state governments are offering Rs 100 per quintal subsidy on the export of sugar. Due to high freight costs, the Sugarfed is finding it difficult to export sugar. Mr Sarangal admitted that the state government may not find it justified to bale out the Sugarfed, which had suffered over Rs 300 crore losses last year. It has already asked the Directorate of Disinvestment to look for the scope how sugarmills could be made profitable. The Directorate has invited bids to appoint consultants who will advise the government whether the mills can be revived through further investment or will have to lease out or sold to farmers or private parties. Mr Sarangal said the state is ready to sell the mills to farmers, who has the first right to buy them.
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PNB ties up with Principal group Jalandhar, August 31 This was revealed by Chairman-cum-Managing Director of PNB S.S. Kohli after inaugurating 24th branch of PNB Housing Finance here today. “PNB had recently signed an agreement with Principal Financial Group of the USA to set up a life insurance company. While PNB will have 37 per cent equity by investing Rs 100 crore, Principal Financial Group will have 26 per cent equity. Besides, Vijaya Bank will hold 12 per cent equity in the proposed company,” he said, adding that they were in the process of selecting fourth partner in the venture. He ruled out any public equity in the joint venture at this stage and said the bank would contribute Rs 100 crore. “It has been decided to constitute a pension fund, the fund would be soon get registered with the Pension Fund Regulatory and Development Authority. The Chairman said they have recently opened a representative office in England and two such offices would be shortly opened in Shanghai and Dubai to explore the potential of international opportunities. Regarding role of the bank in boosting the agriculture sector, Mr Kohli revealed that they have decided to set up 10 farmers training centres in the country by December, 2004. “While one such centre is near completion at Jind in Haryana, the work on construction of Rs 40 lakh STC project at Sirhind in Punjab will start next month for which the state government had already allotted us a piece of land.”
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BSNL postpones draw of lots for cell phones
Srinagar, August 31 BSNL had planned the draw of lots for September 2 but now has delayed it by two days as the state government is yet to provide the list of priority connections, company sources said here today. They said the state government was not even clear on how many connections they needed as the number changed between 300 and 400 from time to time. BSNL wants to give as many connections to the public as possible and at the earliest but the exercise has been delayed because of this, the sources said. — PTI
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Exhibition on Pak products approved New Delhi, August 31 In addition, the government also gave its concurrence to the establishment an India-Pakistan Chief Executive Officers (CEOs) forum and setting up of a Pakistan trade website. “The government has conveyed its concurrence to these proposals today,” an External Affairs Ministry spokesman said. The Confederation of Indian Industry (CII) had written to the External Affairs Ministry seeking its approval for these proposals.
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Inflation at 31-week low of 3.71 pc
New Delhi, August 31 The Wholesale Price Index inflation fell for the seventh consecutive week by 0.24 per cent to hit q 31-week low from the previous week’s level of 3.95 per cent, though prices of fuels and some manufactured products were unchanged. Inflation was 0.26 per cent higher in the latest reported week as compared to 3.47 per cent in the year-ago period, thus indicating that the government was able to keep the cost of living more or less around the previous year’s levels. The final point-to-point inflation and WPI for the week ended June 21 stood at their provisional levels of 5.21 per cent and 173.8 points.
— PTI
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FIIs net buyers in equities
Mumbai, August 31 Mutual funds (MFs) netted purchases of Rs 409.7 crore in equities but recorded heavy net inflows of Rs 2,538.2 crore in debt instruments during the eighth month of 2003, according to the data available with SEBI here. FIIs were net buyers in equities for 17 trading days while it was eight days in debt market, where they did not transact any activity for three days.
— PTI
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‘Americans work more than Europeans’ New Delhi, August 31 The study noted that part of the difference in output per worker was due to the fact that Americans worked longer hours than their European counterparts. US workers put in an
average of 1,825 hours in 2002 compared to major European economies, where hours worked ranged from around 1300 to 1800. In Japan, working hours dropped to about the same level as in the US. Growth in productivity per person employed in the world as a whole accelerated from 1.5 per cent during the first half of the 1990s, to 1.9 per cent in the second half. Most of this growth was concentrated in
industrialised economies — the US and some EU countries — and some in Asia — China, India, Pakistan and Thailand. In Africa and Latin American economies, available data has showed a decline in the total economy productivity growth since 1980s. In the agricultural sector, the study showed that
employment in the sector has rapidly declined in the developed economies, but not in the rest of the world. The agricultural sector remains a cornerstone for a large number of developing countries in terms of employment and poverty alleviation strategies. Productivity in agriculture shows continued growth in all economies. However, productivity levels in agriculture remains higher in developed
economies. Access to the domestic and international markets in agricultural goods and the development and implementation of environmentally sustainable technologies are important vehicles to raise productivity growth in agriculture.
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Markets gain ground despite blasts Markets shrugged off gruesome events of Black Monday and roared back to put on a solid performance, after having nosedived in the immediate aftermath of the Mumbai blasts. For the week, the 30-share Sensex gained 119.61 points to settle at 4,244.73, registering its highest close in nearly 30 months, while the NSE Nifty gained 33 points to end at 1356.55. With last week’s rise, the Sensex has soared by 19.4 per cent from its recent low of 3,554.13 on July 22, 2003. The booster dose for the market was provided by a 50 basis cut in the repo rate, fairly bullish GDP forecast by the RBI, and the inclusion of eight banks and the IT index in the NSE F&O segment. Though the market is gaining ground, it is the sheer momentum in the market that is driving stock prices up. The average market breadth is going steadily down with every upward move. We witness negative divergences on the charts but as long as the momentum is there in the market, short-term traders must use trailing stop-losses to protect their gains and maximize their profits. The divestment of HPCL and BPCL comes up for a hearing in the Supreme Court on Monday (today) and a decision in favour of the Centre allowing divestment of HPCL will spur the market rally further, though a correction is necessary to make the second largest ever market cap rally healthy.
Oil/Refineries HPCL surged by nearly 10 per cent to close at an all-time high on the news that bidders had begun due diligence for the disinvestment of the government’s stake in the oil giant. However, the Reliance group’s attempt to conduct a due diligence at HPCL’s Mumbai refinery was stalled by angry union members. The government has put its 34 per cent stake in HPCL on the block. A number of global oil majors are also in the fray for acquiring a control over HPCL. These include Shell, British Petroleum, Saudi Aramco (SA), Kuwait Petroleum (KPC) and Petronas of Malaysia. Reliance and Essar Oil are two the domestic bidders. In the divestment of HPCL at the apex court today, any favorable news will give a further boost to the stock. Traders are advised to trade cautiously on this counter as the stock is going to witness a lot of volatility.
Public sector banks PSU bank stocks slipped on Friday after the Supreme Court called for a review of the Securitisation Act, citing that it was tilted in favour of lenders. The areas, which the apex court wanted to be looked into are the takeover of borrowers’ assets without adjudication of claims, lack on reference in lenders responsibilities, absence of procedures in the Act and absence of provision for obtaining interim stay. The PSU bank stocks have witnessed a sustained rise on the bourses in the past few months following the Act, attractive valuations and cleansing of balance sheets by many PSU banks. The State Bank of India (SBI) lost 3.4 per cent to Rs 439.25 on August 29, 2003, from a all-time closing high of Rs 454.95 a couple of days before the apex court’s ruling. The investors should book partial profits in their holdings of the PSU banks. |
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Computation of tax Q: After availing VRS I have invested the amount like this, in MIP (Post Office) interest thereon @ 8 per cent i.e. Rs 48,000/- yearly, DSRGE Account with SBI Interest thereon @ 7 per cent i.e. Rs 21,000 yearly, NSC (6 years of dt. 8.12.2000 @ Rs 10,000 divident of shares of HDFC Bank @ Rs 300 and Union Bank @ Rs 210 respectively, interest on joint saving (E or S) account (half year) Rs 1429.25. I am also having LIC Policy Rs 2081.90 on yearly premium and also residing in a rented house for 1200 p.m. There is no other source of income. Pension on account of PSU employee will be payable to me w.e.f November 2003 (amount not intimated by office so far). Please guide me my tax liabilities, if there is any, since I am having PAN. — Dhrub Dev Kumar, Dharamshala (UP) Ans: On the facts stated by you, you will be liable to income-tax on your income from different sources. However, please remember that you will be entitled to standard deduction on your pension income so also deduction under Section 80L will be available to you to the tune of Rs 12,000. Please note that for the financial year 2003-04 relevant to the Assessment year 2004-05 the dividend income received by you is fully exempt from income-tax. You will also be entitled to get tax rebate under Section 88 of the Income-tax Act, 1961 at the rate of 20 per cent on the life Insurance Premium paid by you. As you are staying in rented premises deduction under Section 80GG would also be available to you.
TDS certificate Q: I resigned from Telephone Department on 5.12.98 and joined as lecturer at Government College, Ludhiana. A bank draft for Rs 32800 was sent to me by Telephone Deptt. in June ’99 on account of arrears of my pay revision for the period 1996 to 1998. Despite repeated reminders, Telephone Deptt. is not issuing me Tax Deducted at Source Certificate on Form No. 16 and yearwise break-up enabling me to revise my previous returns i.e. ’96 to 98. Please instruct (i) Whether it is not obligatory on the part of my previous employer to issue me TDS certificate on Form No. 16. (ii) How long I should wait for this certificate. (iii) Should I file my Income Tax Return for the Financial year 31st March 2001 without including this amount. (iv) What is my liability towards Income-tax. — Surinder K. Bhalla, Ludhiana Ans: As per Section 89 of the Income-tax Act, 1961 it is possible to enjoy relief when salary etc. is paid in arrears. Hence in respect of your arrear salary you can make an application to your Assessing Officer who shall grant the relief to you. The salary certificate in Form No. 16 should have been issued by the employer long back. In case you have still not received the same, you should write a letter to the Accounts Department of your employer to send you a copy of the same.
LIC commission Q: I am retired person from the Army and presently working as LIC agent. My earning as commission for the period from April 1 to March 31, 2003 was nearly 60,000. In addition, I am getting service pension about 60,000 per year. In this context, could you please kindly clarify the following points (a) Am I entitled for deduction of Rs 30,000
standard deduction for the FY 2002-03 or 50 per cent of my commission earned or whichever is beneficial in case my earning from commission goes up, in the light of my pension income Rs 60,000. (b) Am I required to maintain account books and show expenses accordingly to avail further benefits. If yes, what kind of expenses am I entitled for deductions from my commission income and upto which extent. I shall be grateful for your valued clarification on the above given points to enable me to get prepared for the IT return. — Gurbax Singh, Patti Ans: From your insurance commission you will be entitled to a deduction at the rate of 50 per cent of the first year’s commission received by you and the 15 per cent of the renewal commission received by you. If, however, separate figures are not available, then the deduction permissible to you would be at the rate of 331/3 per cent of the gross commission amount. However, do remember that the maximum deduction is limited to Rs 20,000 per annum. Please remember that the above deduction is in a situation where you do not maintain books of account. If, however, you maintain regular books of account, the deduction could be even higher than the above limit. There is no upper limit for deduction. A person earning commission can even get a deduction for higher amount if he incurs the expenditure and can subtrantiate such expenditure. In respect of your pension amount, you will be eligible to standard deduction.
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New Delhi, August 31
