B U S I N E S S

Coolers gain in war of branded, unbranded ACs
New Delhi, March 28
Having established a reasonably strong brand equity in the organised air-cooling market, Symphony Comfort Systems Limited is developing a range of products suited for different locations for the export as well as the domestic market.

Steel magnate Mittal richest Asian in UK
London, March 28
London-based NRI steel baron Lakshmi Mittal is set to top a list of Britain’s wealthiest Asians with a rare distinction of more than doubling his fortune in the past year to £3.5 billion.

Destination Gurgaon for real-estate investors
New Delhi, March 28
After DLF Group’s announcement to invest Rs 300 crore in real estate in Gurgaon, the Vatika Group, a leading company in real estate business, has also announced to set up the largest-ever group housing development project — Vatika City here.

No roaming in Pak, says BSNL
New Delhi, March 28
At a time when most of the private mobile operators are offering roaming services for Pakistan to their subscribers, the state-owned BSNL has expressed its inability to do so in view of some technical stipulations like disclosing contents of SMS.

Tax advice

No rebate on funding sister’s studies
Q: I am a bank employee, I have taken a loan from bank for the higher studies of my daughter for which Rs 1,200 are deducted from my salary per month. Will I be entitled for deduction?

Market update

Good opportunity for long-term investors
Last week, the indices finally found some stability, after two consecutive weeks of profit booking on the bourses. Last week was ‘largely’ characterised by consolidation with the indices trading in a range for better part of the week before breaking out on Friday.

A model presents a creation by Portuguese designer Osvaldo Martins at the Lisbon Autumn Winter collections in Portugal on Sunday. — Reuters

	Timex Watches to tap rural segment March 28, 2004
	Bharti, IBM ink $750 million outsourcing deal March 27, 2004
	RBI, Finance Ministry peg higher inflation rate March 26, 2004
	EU slaps $611 m fine on Microsoft March 25, 2004
	Dollar falls below 45 mark against Rupee March 24, 2004
	Bharti to pump in Rs 2,000 cr March 23, 2004
	Archies to focus on retail distribution March 22, 2004
	India set to take lead in poultry sector March 21, 2004
	Bank of India told to pay $82 m in BCCI case March 20, 2004
	India leader of outsourcing: Gartner March 19, 2004

• Nicholas Piramal
• Tata Metaliks

Coolers gain in war of branded, unbranded ACs
Gaurav Choudhury
Tribune News Service

New Delhi, March 28
Having established a reasonably strong brand equity in the organised air-cooling market, Symphony Comfort Systems Limited is developing a range of products suited for different locations for the export as well as the domestic market.

“We are developing a product portfolio suited for specific geographies”, the Chairman and Managing Director of the company, Mr Achal Bakeri, told The Tribune in an interview.

Mr Bakeri said contrary to the common perception, this particular line of trade is increasingly becoming a round-the-year business.

“Round-the-year sustenance of this business has begun to come from exports, primarily from the Middle-East and Africa, even from Europe and America. In fact, Europe turned out to be a large market last year, essentially because of the severe heat wave conditions in France and adjoining areas”, he said.

Mr Bakeri, however, did not agree that low-priced air-conditioners are going to create any major impact.

“There is a lot of hype about low price ACs. A sub-Rs 10,000 AC in a place like Delhi, will not even cool one’s toes. There is going to be no major dent for the organised air-cooler industry. In fact, there is a high degree of possibility that the low-priced ACs could eventually dilute brand equity of the established players and bring customer dissatisfaction”, he said.

Mr Bakeri said the branding of air-coolers is “enormously difficult proposition”, especially in view of the large unorganised sector.

Presently, the size of the organised air-cooling industry is about 2.5 lakh units per annum. Symphony, which was initially positioned as a lifestyle product in the late eighties and early nineties, currently sells about 1.25 lakh units per annum.

Mr Bakeri said the complexity of the market and the difficulty of the branding market can be gauged from the fact that many big organised players “exited from the market after just a few seasons”.

“We have been constantly innovating our products. It was earlier seen as an up-market air-cooler. But now we have products in our portfolio to cater to every budget”, he said.

“We are perhaps the only air-cooler company, which has introduced 11 new models within a span of less than 14 months “, he said.

The company has been exporting its air-coolers in over 23 countries. In India, it has launched ‘Project Echo’ involving the setting up of more than 300 service centres across the country to attend to after-sales service “in an effective, efficient and professional manner”.

Mr Bakeri said the company has also been seeking to bring about innovations in marketing, during the off-season.

On the unorganised market, Mr Bakeri said for the branded players “ the situation was worst in areas in and around Delhi, where production of poor replicas is rampant”.

Mr Bakeri, who is an alumnus of the University of Southern California, Los Angeles, USA, and a member of the Executive Council of the Confederation of Indian Industry (CII), has established the “Symphony-AMA Centre for Innovation”. The centre is involved in supporting innovations in entrepreneurship and other related activities. Mr Bakeri is a also a former President of the Ahmedabad Management Association.

He said the company’s core area of business will continue to be the air-cooling segment, even though it produces other products such as water heaters and ventilation fans.

Steel magnate Mittal richest Asian in UK

Others in the race

Hinduja brothers — £ 2.1 billion Mike Jatania — £570 million Anil Aggarwal — £540 million Bhiku & Vijay Patel — £ 425 million Gulu Lalvani — £400 million

London, March 28
London-based NRI steel baron Lakshmi Mittal is set to top a list of Britain’s wealthiest Asians with a rare distinction of more than doubling his fortune in the past year to £3.5 billion.

According to a report in ‘The Sunday Times’, Mr Mittal has added more to his wealth than anyone else who would appear in this year’s ‘Sunday Times Rich List’ scheduled to be published this weekend.

Second in the list are the Hinduja brothers — Srichand and Gopichand — who have oil, banking and telecommunications interests. Their fortune is put at £2.1 billion, up from £1.8 billion last year, the report said.

Mr Mike Jatania, who runs Lornamead, a healthcare and cosmetics group with his three brothers, is third in the list. The family shares accommodation in the well-appointed block of flats near Marble Arch in central London. The Jatanias’ worth has risen to £650 million, up from £570 million last year.

The list, drawn up by Mr Philip Beresford, compiler of the Rich List, reveals huge fortunes being made by dynastic firms run by families whose origins are in the subcontinent.

Mr Mittal was born in a village in western Rajasthan that did not have electricity until the 1960s. After the family moved to Kolkata, he did his schoolwork from 6.30 am to 9.30 am before working full day in his father’s steel business.

The family life of the Mittals now centres on their home, the Summer Palace in the Bishops Avenue, north London. — PTI

Destination Gurgaon for real-estate investors
Tribune News Service

New Delhi, March 28
After DLF Group’s announcement to invest Rs 300 crore in real estate in Gurgaon, the Vatika Group, a leading company in real estate business, has also announced to set up the largest-ever group housing development project — Vatika City here.

The group is aiming to en cash the boom in real estate business in this industrial town on the outskirts of Capital.

Mr Gaurav Bhalla, Executive Director, Vatika Group, disclosed that apart from setting up the Vatika city, the group would invest additional Rs 35 crore to set up 15 operating express restaurants and five casual fine dining restaurants.

Among others, the Jain Estates, Rudraksh, Prithvi and Sri Balaji groups are also engaged in the real estate projects in this town.

According to a recent CB Richard Ellis Report, Gurgaon is the most preferred destination for the corporate executives and the multi-national companies that want space in Delhi. Falling interest rates coupled with the increase in foreign direct investment and a positive stock boom, has resulted in increased activity in the real estate market in Gurgaon along with Noida and Delhi.

Mr Bhalla said, the company was aiming to provide decent houses and shopping facilities to the couples working in the IT and ITES sector. He said the Vatika city would be spread over 53 acres of land and will feature a series of low-rise, mid-rise and high-rise buildings offering over 1800 apartments.

Located on the Sector Road near DLF Golf club, claimed Mr Bhalla, the project will be ready by 2005 end for accommodation. It will offer one of the best housing societies in Gurgaon.

A senior official in the Department of Industries, Haryana, said, “Besides other factors, the Haryana government’s decision to cut stamp duty rates from 15.5 per cent to about 6 per cent has also encouraged people to invest in the housing and commercial properties. It is the right time to buy residential or commercial property in this city,” he added.

No roaming in Pak, says BSNL

New Delhi, March 28
At a time when most of the private mobile operators are offering roaming services for Pakistan to their subscribers, the state-owned BSNL has expressed its inability to do so in view of some technical stipulations like disclosing contents of SMS.

It may not be possible to meet some of the technical and commercial terms and conditions, sources said adding that the BSNL has sought clarifications from the Department of Telecom in this regard.

The sources said the corporation had already finalised the rate for roaming, and was awaiting clarifications now.

Earlier this month, the government permitted roaming facility on mobile phones for Pakistan for a period of four months.

Following the announcement, operators like Airtel and Hutch had announced roaming facility for their subscribers. Airtel said it would provide roaming facility both to its pre-paid and post-paid customers.

While the company’s post-paid customers would be able to make and receive voice calls as well as send and receive SMS, the pre-paid customers can receive voice calls and SMS.

For the Indian roamers, local calls to any number in Pakistan would be charged Rs 25 per minute, while calls to any number back in India would attract an offpeak rate (applicable from 2130 hrs-0700 hrs) of Rs 35 per minute and a peak rate of Rs 45 per minute. — PTI

Tax advice

No rebate on funding sister’s studies
by S.C. Vasudeva

Q: I am a bank employee, I have taken a loan from bank for the higher studies of my daughter for which Rs 1,200 are deducted from my salary per month. Will I be entitled for deduction?

— M.G. Soni, Jagadhri

A: Under Section 80-E of the Act, the decution on account of repayment of loan taken for the purposes of higher education is only limited to the individual. Since the loan has been for the purpose of education of your daughter, you are not entitled to any deduction. However, you can claim a rebate on the tuition fee paid @ 15 per cent of the income tax payable in case your salary before giving deduction under Chapter VI-A is more than Rs 1.50 lakhs but less than Rs 5 lakh per year.

Q: The government had announced during the recent vote on account that the scheme [Section 10(36)] should continue further. The new government shall come into power after the expiry of the present day, viz 29 Feb, 2004. What is the legal position for the intervening period then? Has the government issued some notification in this regard? As per Section 10(36) (i) of the IT Act, eligible shares must have been traded through recognised stock exchange in India. I hold some shares of Balrampur Chini Mills (which is included in the BSE-500 index). The company is going to offer share to the shareholders on right basis. Will the subscription to these rights shares quality u/s 10(36)(i)? It may be mentioned that the listed companies have to allot shares in consultation with the stock exchange. Some companies offer shares under their book building exercise at heavy premium. Whether such share qualify under the scheme u/s 1036(ii)? These are not the initial public issues?

— Ashok Kumar Mittal

A: At present there is no notification issued by the government regarding the extension of section10(36). It is presumed that when the Budget will be presented in month of June or July 2004, the deadline provided for in Section 10(36) of the Act would be extended restropectively. This is evident from Paragarh 29 of the Finance Minister’s speech of February 3, 2004, which he made in the Parliament while presenting the interim Budget.

Section 10(36) of the Act exempts any income arising from the transfer of a long team capital asset being eligible equity share in a company purchased on or after March 1, 2003 and the before the first day of March 2004 and held for a period of 12 months or more. The right shares of Balrampur Chinni Mills if purchased by you will have to be held for a period of 12 months or more and any income on account of capital gains from the sale of such shares after 12 months may become eligible for exemption in case the provisions of Section 10(36) are extended for a further period of three years as promised by the Finance Minister in this speech. The book building is a process for the issuance of share to public and therefore would be covered in the term ‘public issue’. It may be added that Section 10(36)(ii) does not refer to any ‘initial public issue’

Q: I draw a salary more than 2 lakhs per annum. I just want to know whether I can get Rs 12,000 deducted from my gross income paid towards the expenditure on the study on my younger sister, who is dependent upon me or is this scheme only for sons and daughters.

— Raminder Singh, Gurdaspur

A: The rebate u/s 88 is only for the children of the individual and therefore in your case since the payment is being made for your sister, you would not be entitled to rebate.

Market update

Good opportunity for long-term investors
by Lalit Batra

Last week, the indices finally found some stability, after two consecutive weeks of profit booking on the bourses. Last week was ‘largely’ characterised by consolidation with the indices trading in a range for better part of the week before breaking out on Friday.

The Sensex from a 3-month low of 5,365.40 on March 22, 2004, surged 163.54 points to settle at 5,528.94 on March 26, 2004. The S&P CNX Nifty gained 1.3 per cent for the week to 1,747.50. Bargain hunting at lower levels by foreign institutional investors, buying by local funds, smooth expiry of March 2004 derivative contracts on Thursday and rebound in the US markets, aided recovery on the bourses.

The indices have undergone a significant correction during the last couple of months. The reasons include liquidity crunch created owing to the slew of IPOs (largely by the government) that hit the markets and financial year-end commitments by investors and uncertainty with respect to the general elections. It is a good opportunity for long-term investors for investing in stocks at these levels, which appear to be attractive.

According to technical charts, index is unlikely to go below 5495. Below 5495, the Sensex has support levels at 5472 and 5435. The index will face resistance on the upward move at 5564 and 5616. The market is likely to move up and test the 5616 level.

Nicholas Piramal

With a series of acquisitions, Nicholas Piramal India Ltd (NPIL) has grown to be the fifth largest player in the domestic formulations market. The company is now eyeing the emerging opportunities in outsourced manufacturing and research. The key to growth would be its, 2,000-strong sales force and the franchise that it has acquired from its partners. It marketing clout can also be put to good use to licence molecules for the domestic market.

A growth of 47 per cent in NPIL’s revenues is expected in the current fiscal and 17 per cent in the next financial year. Margins would continue to expand, as the company increases its exports and improves efficiencies in the domestic market. The stock is quoting at 11 times its next year’s earnings. This is a very attractive valuation for a company with NPIL’s steady growth in the domestic business and upside from the outsourcing opportunities in exports. It is recommended that investors can add the scrip to their folio at the current levels for long term gains.

Tata Metaliks

Tata Metaliks was established as a 90,000-tonne-per-annum (tpa) mini blast furnace (MBF) subsidiary of Tata Iron & Steel Company in 1990. It is a single product company operating in the commodity domain of pig iron.

Tata Metaliks painted a very grim picture not too long ago. The company through a well-defined business strategy, revolving around the broad focus areas of cost rationalisation and enhanced customer focus by offering value propositions in the form of one-stop-shop solutions package to its customers, has reached a threshold of exciting times.

The Kharagpur plant capacity has been raised from 1,30,000 tpa to 1,65,00 tpa.

BRIEFLY

FIIs net Rs 1,100 crore purchase
Mumbai, March 28
The foreign institutional investors (FIIs) netted purchases of Rs 1,100.5 crore ($ 242.3 million) in equities while remaining away from the debt market during the trading week ended March 26. Mutual funds (MFs) were more active in the debt market to net inflows of Rs 572.47 crore and recorded the net purchase of Rs 34.89 crore in equities during the period under review, according to the data available with Securities and Exchange Board of India (SEBI) here. — PTI

SBI scheme
Chandigarh, March 28
The State Bank of India has introduced a channel financing scheme for the industry majors financed by the corporate and the national banking groups. Under the scheme, the dealers of big corporate houses will be a given clean cash credit at low interest rates for financing advance payment for purchase of goods from the industry. Mr Anup Banerji, GM Commercial, State Bank of India (Chandigarh Circle), said the finances would be made available at a concessional rate of 8.5 per cent and industry majors located at 262 select centres in the country would be covered under the scheme. — TNS

ITC matchbox
Madurai, March 28
The multinational tobacco company, ITC Ltd, was in the process of entering into alliance with more cottage and mechanised safety match units for marketing their production, Mr Rajeev Gopal, CEO of the SBU-Safety Matches Business, said. — PTI