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PM sends another
missive to ministers Govt rapped over
fraud by cos
TCS share
allotment
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Lalu’s
‘kulhars’ enrich potters Tax
advice Foreign firms and
tax
Stock market
likely to dip further
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PM sends another missive to ministers New Delhi, August 22 In a letter to his colleagues, Dr Manmohan Singh said ministers in charge of PSUs were custodians of the resources of the country and it is their duty to lead them by their example of efficiency, rectitude and austerity. “We must correct the perception that PSUs are profligate and also that administrative ministries tend to treat them as their fiefdoms,” he said. Dr Manmohan Singh, who had earlier written a similar letter against misuse of PSUs, said there had been disquieting reports about some of the PSUs ignoring the ground rules of good corporate governance and conduct. Allegations of extravagance in expenditure on the part of some of their senior officials had been brought to the notice of the government, he said. He said while granting full operational autonomy to the PSUs to enable them to compete and succeed in the global market, the concerned ministries had a responsibility to ensure accountability of PSU executives for their performance in conformity with established norms of conduct. Observing that PSUs have a pride of place in the country, the Prime Minister said they perform valuable functions in several core sectors of the economy and their efficient management contributes to generation of wealth, overall development and social well-being of the people. “We are committed to improving their standards of efficiency and competitiveness and expect them to be model employers,” he said. Dr Manmohan Singh asked the ministers to convey the concerns to the PSUs under their ministry for appropriate follow up. |
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Govt rapped over fraud by cos New Delhi, August 22 The committee headed by Major-Gen B.C. Khanduri (retd), has expressed concern over the fact that “out of about 6,52,000 registered
companies operating in the country, not even one per cent of the companies are being inspected by the government agencies.” The Ministry of Company Affairs submitted before the Standing
Committee that during the past four years the number of inspected companies have rather declined. The investors associations have often lamented that leniency on the part of government, inefficient regulatory mechanism have caused huge financial loss to them. For instance, between April 1992 and March 1996, about 4000 companies, including hundreds of forest, agricultural plantation and finance companies from Punjab, Haryana raised about Rs 54,000 crore through public and hybrid issues. Investors have lost thousands of crores in the stock scams as well. Another 1500 companies raised about Rs 34,000 crore through rights issue at very high premium during that period. Most of these companies later vanished from the market. But neither the
Security Exchange Board of India (Sebi) nor the Ministry of Company Affairs took adequate steps to deal with the situation. Only last month, the Ministry of Company Affairs issued a list of 229 companies and have initiated action against some of them. The Standing Committee also noted that the Serious Fraud Investigation Office (SFIO) set up in October 2003, has been able to complete its investigation only in one case, out of six cases referred to it. |
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Tata Steel cuts price to
arrest pressure
Kolkata, August 22 Stating this today, Tata Group Chairman Ratan Tata said the company had endeavoured to hold prices during the year for its direct customers through long-term contracts and these prevailing prices had remained below those of its major competitors despite the rise in global steel prices. “To take the initiative in displaying its corporate responsibility at this critical time, Tata Steel will reduce prices of its main products for its direct and bona fide customers with effect from midnight tonight,” Mr Tata said. “It is expected that this price reduction by Tata Steel will, in turn, contribute in arresting the pressures on price increases by major users of their products,” he said. “The Indian economy has seen a turnaround last year after three years of an economic downturn. The recent upward spiral of prices will, definitely, dampen the current robust consumer demand for goods,” he said. Global steel prices have increased significantly over the past two years, “converting the industry from a ‘sunset’ industry to an industry attracting investment in new capacity. Steel price increases have been driven mainly by the phenomenal demand for steel from China, which is investing substantially in its infrastructure,” he said. Mr Tata added that Indian steel prices had tracked these increases, although having remained below international levels.
— UNI |
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The artist in Saboo drew him to watches, paints Peeyush Agnihotri Tribune News Service Chandigarh, August 22 Mr Yashovardhan (Yash to his friends) was born in the family of needle magnate R.K. Saboo. But he preferred to create an empire of watches, high-precision electronics gadgetry and paints because the needle business didn’t interest him. Mr Saboo did his matric from St John’s School, Sector 26, Chandigarh, in 1974, with distinction. He then shifted to New Delhi to pursue BA (Hons) in economics from St Stephen’s College. Egged on by parents, he went on to do a management course from the IIM, Ahmedabad, even though photography, art and classical music held his interest. “I didn’t like the needle business on two counts — one it didn’t gel with my artistic mindset and second, my ideas were different from the German firm, Groz Beckert,” he says. “I settled for the watch business in 1983 as it was a hi-tech affair and had an artistic element in it. HMT was importing a lot of hi-precision stuff for making watches then. I saw an opportunity and it clicked instantly.” The Saboo group and Groz Beckert’s parted ways in the early nineties. “When the goals of business partners are different, it’s best to part ways,” he says. Today, Kamla Dials of Saboo group has business interests in watch dials, hand, bracelets manufacturing, precision stamping that includes manufacture of high-precision pressed components, connectors and electronics goods making. The group also has a tie-up with a Swiss firm for manufacture of paints and coatings under the brand name, Saboo-Berlac. The factories are located in Chandigarh, Derabassi, Parwanoo and Bangalore. The total turnover of the group is Rs 100 crore. “Kamla Dials’ total turnover is Rs 50 crore,” says Mr Saboo. About the watch market in India, he opines, “It is growing at 10 per cent at the lower end and 20 per cent at the higher end since the markets opened up in 1999 when watch imports were allowed with price restrictions. In 2001, the $ 1000 price barrier also was eased and competition picked up. That’s why now you have so many national and international players vying for the pie. Rado Tag Heur and Titan,” he says. Kamla Dials, which is the only Indian company to export watch components, also has a multi-brand shop, Ethos, and the market share of the company in the watch-component business is more than 60 per cent in India. It is 3 to 5 per cent, globally. In paints, the national market share is nearly 2 per cent. Discussing the future plans, he says, “Growth is on the agenda. Paint business has the potential to grow 20 to 25 per cent and we hope to achieve Rs 30-40 crore target within next four to five years. Watch business has the potential to grow at 10 to 20 per cent.” “I believe in speciality niche-business. It is better to foray into small things and do them well rather than try to do big things and be one among many,” he says. Besides business, the group has several philanthropic assignments on hand. Voluntary blood donation, polio immunisation, education of children, teacher recognition business, technical training service and night schools are just a few of them. And what about photography? “In the din of business, it just receded to the background. But some day I plan to revive it.” Just wait err… watch. |
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TCS share allotment
Mumbai, August 22 The company, which will list its stock on NSE and BSE on August 25, has also decided to exercise the green shoe option comprising over 80 lakh shares. The retail portion of IPO was oversubscribed by 2.9 times. The issue price was fixed at Rs 850 per share.
— PTI |
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Lalu’s ‘kulhars’ enrich potters
The chamber said its analysis was based on the fact that each of the 16 zones of the Indian Railways spent about Rs 100 crore each on plastic cups for serving beverages in trains, totalling Rs 1,600 crore. Assocham President M K Sanghi said the effective implementation of this decision would lead to the shift of plastic industry’s business to the potter industry during 2004-05. It also pointed out that railways purchased bedclothes and curtains worth Rs 1000 crore, which the department had been sourcing from Mumbai based companies. This order was likely to go to Khadi.
— UNI |
by S.C. Vasudeva
Foreign firms and tax
Q. Whether the provisions of Section 115JB relating to Minimum Alternate Tax (MAT) are applicable to foreign companies? — Parminder Singh A. Section 115JB of the Act, provides that “Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April 2001, is less than seven and one-half per cent of its book profit, such book profit shall be deemed to be the total income of the assessee. As per Section 2 (17) of the Act, ‘company’ means any body corporate incorporated by or under the laws of a country outside India. Since the term ‘company’ includes a foreign company, therefore, the provisions of Section 115JB would be applicable to a foreign company as well. The Authority for Advance Rulings has in one of the cases also held that the provisions of Minimum Alternate Tax are applicable to a foreign company.
Mediclaim
Q. What is the maximum amount that I can claim as a deduction in respect of mediclaim? —
Ashok Jain A. As per the provisions of Section 80-D of the Act, the maximum eligible amount of deduction is Rs 10,000. However, if the premium is paid to effect or to keep in force an insurance on the health of the assessee who is the senior citizen, the maximum amount eligible is Rs 15,000.
Car sale
Q. I am a retired person having only pension and interest income. I want to sell my old car. I have been told that I shall have to pay capital gains on the sale of the car. Please advise? —
Jaswant A. As per the provision of the Act, capital gains tax is payable only when a capital asset is transferred by an assessee. In your case, the car that you own would be treated as a ‘personal effect’ and, therefore, no capital gains tax would be chargeable on the sale of such a car. |
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Pointing to reports about some Public
Sector Undertakings (PSUs) not following norms of good corporate governance,
Prime Minister Manmohan Singh has asked his ministers to change the perception
that the administrative ministries treat PSUs as their “fiefdoms.”
New Delhi, August 22