|Tuesday, February 22, 2000,
Have independent audit
Will surcharge on income tax go?
Hind Lever may split shares into
IT pact during Clintons
National meet on IT
Tech mission for cotton
MUMBAI, Feb 21 (PTI) SEBI today made it mandatory for corporate boards to comprise not less than 50 per cent of non-executive directors and set up an independent audit committee as part of adhering to its corporate governance (CG) guidelines.
The regulator, in a circular to stock exchanges on corporate governance based on the recommendations of the Kumar Mangalam Birla Committee, asked them to make the necessary amendments to their listing agreements by incorporating a new clause Clause 49.
The SEBI board had approved the committee recommendations at its meeting on January 25, 2000.
However, the number of independent directors would depend on whether the chairman is an executive or non-executive director, SEBI said, adding that if they have a non-executive chairman, at least one-third of the board should comprise independent directors.
The company has to disclose all pecuniary relationship or transactions of the non-executive directors viz-a-viz the company, in the annual report and to publish a detailed report on CG in a separate section in the annual report.
Non-compliance of any mandatory requirement shall be highlighted citing reasons thereof and the extent to which the non-mandatory requirements have been adopted.
SEBI made it necessary for publication of the board discussion and analysis of the suggestions and views on CG as part of directors report in the annual report which includes industry structure and developments, opportunities and threats, segment-wise or product-wise performance and outlook.
In case of appointment of a new director or re-appointment of a director, the shareholders must be provided with a brief resume of the director, nature of his expertise in specific functional areas and names of companies in which the person holds the directorship and the membership of committees of the board.
The audit committees consisting of at least three non-executive directors and chaired by an independent director should meet at least thrice a year before finalisation of annual accounts and once every six months, SEBI said.
This committee will have powers to investigate any activity within terms of reference, seek information from any employee, obtain outside legal and other professional advice and secure attendance of outsiders with relevant expertise, if considered necessary.
The regulator also
defined the role of the audit committee in detail and
added that it will have such additional functions and
features as is contained in the listing agreement, if the
company had set up the panel pursuant to the provisions
of the Companies Act, 1956.
Run-up to Budget
NEW DELHI, Feb 21 As the countdown for the announcement of the Union Budget for 2000-2001 begins, one question that is uppermost in the mind of the common man is whether the Finance Minister, Mr Yashwant Sinha, would remove the 10 per cent surcharge on personal income tax he levied in the last Budget?
Though the widening fiscal deficit and the galloping Government expenditure give little scope for the Finance Minister to announce any large-scale concessions, a case is being made out that removing the surcharge may not be a bad thing after all.
The votaries of the surcharge, however, argue that even after the 10 per cent surcharge on Income Tax rates, the countrys highest slab works out to only 33 per cent, which by international standards is quite competitive. They argue that there is no need for removing the surcharge for the present.
However, there is another section of people who feel that Mr Sinha should eliminate the 10 per cent surcharge as it would be in the countrys long term interest. Several academicians, finance experts and industry representatives have argued that it was high time that the country moved towards a stable tax system and tax rates should be announced on a long-term basis.
According to a note submitted by CII to the Finance Minister, while it may be the case that an additional tax burden of 3 per cent at the margin need not adversely affect compliance, that is not an argument to continue with the surcharge.
In fact, the evidence points in the other direction. During the financial year 1999-2000, there was a definite buoyancy in personal income tax revenue. Income Tax mop-up up to October 1999 was Rs 10,365 crore, an increase of 19 per cent over the corresponding figures of the previous year.
Since this growth is 16 percentage points above the surcharge component on the highest tax slab, there is clearly a revenue buoyancy that exceeds the surcharge. Hence there is a solid case for removing the surcharge, CII has said.
Moreover, it is expected that 2000-01 would see a more concerted effort by the tax department to bring in a larger number of people under the tax net.
At present, the number of registered taxpayers is around 20 million. With somewhat greater effort, the tax net can be realistically increased to at least 25 to 28 million by the end of 2000-01. This would lead to further growth in personal tax revenue.
The chamber has recommended that given the present buoyancy in personal income tax revenue and the assumption that an additional 5 to 8 million people can be in the tax net in 2000-01, there is a case to eliminate the 10 per cent surcharge on income tax. This would not get in the way of growth in revenue and would send a positive signal to taxpayers.
There have also been suggestions to the Finance Minister that he should not increase Income Tax rates as it would indicate a reversal of reforms and send wrong signals to the investing community.
The Board of Directors of Hind Lever Limited (HLL) will discuss the issue of split in its shares at a board meeting to be held on February 23. HLL Ltd informed the Bombay Stock Exchange (BSE) today that the companys board meeting on February 23 will discuss sub-dividing the companys existing equity shares into 10 shares of Re 1 each.
HLL will be the fourth company after Wipro, Zee Telefilm and Infosys Technologies spliting its shares.
Kodak India: Kodak India Ltd has announced a healthy growth of approximately 18 per cent in its total sales of Rs 589.9 crore for the year ended December 31, 1999 as compared to the previous year. Kodak India has posted a net profit of Rs 24.92 crore as against Rs 5.18 crore in the previous year.
The Board of Directors has recommended a dividend of 80 per cent, including special dividend of 35 per cent, for the financial year ended December 31, 1999.
Wockhardt: The shares of newly formed pharmaceutical company, Wockhardt Limited, one of Indias top pharmaceutical majors, were listed today on the Bombay Stock Exchange in the A group.
The share opened at Rs 800, touching a high of Rs 1100 before closing at Rs 985. Wockhardt shares were allotted and listing formalities were completed last week. The companys shares were listed and traded on the BSE today.
Wockhardt had announced its de-merger last year in April, with a view to optimising the growth potentials of its businesses and created two different companies Wockhardt Limited comprising the knowledge-based pharmaceutical business and Wockhardt Life Sciences Limited comprising IV fluids, agrosciences and hospitals.
Hind Lever Chem: The Board of Hind Lever Chemicals Limited (HLCL) today recommended a dividend of 160 per cent for year ending December 31, 1999 following improved performance.
HLCL posted a 26.6 per cent increase in profit after tax at Rs 53.7 crore in 1999 as against Rs 42.4 crore in 1998 while there was a 60 per cent rise in turnover at Rs 1,475.6 crore in 1999 as against Rs 923.4 crore last year.
Profits for the year include Rs 5.88, crore, being the reduction in the estimated liabilities on account of rates and taxes, relating to the erstwhile companys detergents business.
Computech: Computech International Limited has decided to split its existing equity shares of face value of Rs 10 to Rs 5.
Company sources today said the decision was aimed at increasing liquidity in its shares in stock exchanges and was taken in a board meeting held last week.
The meeting also decided to voluntary delist its equity shares from Delhi, Ahmedabad and Jaipur Stock Exchange with immediate effect.
The decision regarding this would be informed to respective stock exchange immediately, sources added.
The company, which has already announced to offer shares to its employees under employees stock option scheme (ESOS), has constituted a compensation committee for administration and superintendence of shares to be offered to the employees of the company under SEBI guidelines.
Mastek: Software major Mastek Limited today announced the induction of three new Directors to its executive board Mr Daniel V. Ferranti, Mr Kishore Bhalerao and Mr Karl-Heinz Jauch.
NEW DELHI, Feb 21 (UNI) The Information Technology Bill comprising a comprehensive legal framework for the IT industry will be passed by this summer, Union Minister for Information Technology Pramod Mahajan said here today after presiding over a meeting of the IT advisory committee.
The committee, including
top IT industrialists, at its meeting today suggested
that the totalisation agreement with the USA should be
signed during the visit of President Bill Clinton. The
agreement will cover avoidance of double taxation on the
software industry in the USA. A high-level team of the IT
Ministry and IT industrialists will visit the USA in
May-June this year and project India as an investment
opportunity and promote the brand image of India as IT
meet on IT
CHANDIGARH, Feb 21 A three-day national workshop on information technology is being organised by the Institution for Secretarial Practices & Development at the CII Convention Centre here from February 25.
The workshop will cover the entire gamut of information technology, including office 2000, Internet e-mail, e-commerce, multimedia video conferencing and other IT utilities. Faculty members from Microsoft, Glide, CEDTI, Panjab University and NIC will provide the participants practical exposure for which a separate computer network is being setup.
Mr Ramesh Inder Singh,
Secretary, Industries & Commerce, Punjab, will
inaugurate the workshop, while Mr N.S. Kalsi, Special
Secretary, Information Systems & Administrative
Reforms, Punjab, will deliver the keynote address.
NEW DELHI, Feb 21 (UNI)
Mr Atal Behari Vajpayee launched a technology
mission for cotton here today aimed at boosting cotton
production and co-ordinating its research, extension
service, marketing and processing activities. Being a
commercial crop, cotton provides livelihood to about 60
million people involved in the farming, marketing and
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