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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

HP Tourism opens doors to private parties
Shimla, July 31
Stepping into the role of a facilitator, the Himachal Pradesh Tourism Department is rolling out a red carpet welcome to entrepreneurs, including big industrial houses and NRIs, to invest in over 100 properties in the state with good tourism potential, as joint ventures with the government or private individuals.

Friendship Day brings gifts, bands… and business
New Delhi, July 31
There's Valentine's Day, Children's Day, Mother's Day, Father's Day... an exhaustive list that covers most crucial relationships in life. And friends get their turn on Sunday when the world celebrates Friendship Day.

Import duty hike cheers IT players
Chandigarh, July 31
The IT industry is upbeat about the decision of the government to impose an additional duty on finished PC imports. Industry players aver that it will promote manufacturing within the country and increase PC penetration in India.

Cell operators’ revenues fall: Trai
New Delhi, July 31
Intense competition among cellular operators over the past four years has had a major impact on the companies’ revenues with the average revenue per user coming down significantly between 2000 and 2004.

IA to phase out Boeing 737, induct Airbus A319
Kolkata, July 31
State owned domestic air carrier Indian Airlines has decided to replace Alliance Air’s 11 200 -seater Boeing 737 with Airbus A-319. “The tender has already been called and the bids were opened yesterday.

West Bengal Chief Minister Buddhadeb Bhattacharjee with Sunil Kant Munjal, president of CII, during an interaction on 'Resurgent Bengal' in New Delhi

West Bengal Chief Minister Buddhadeb Bhattacharjee (right) with Sunil Kant Munjal, president of CII, during an interaction on 'Resurgent Bengal' in New Delhi on Saturday. — PTI photo





River prawns sit on a net after being pulled out of a water tank at a seafood restaurant in Ayutthaya, Thailand
River prawns sit on a net after being pulled out of a water tank at a seafood restaurant in Ayutthaya, Thailand, on Saturday. Thailand is among four countries the USA has recently slapped with shrimp import duties. The anti-dumping duties will be imposed on frozen and canned warm water shrimp from Brazil, India, Ecuador and Thailand by the end of next week, the US Commerce Department said in a preliminary ruling.
— Reuters

EARLIER STORIES

 

CORPORATE NEWS

Bajaj Auto net climbs 2 pc
New Delhi, July 31
Two-wheeler major Bajaj Auto today said its net profit in the fiscal first quarter rose 2 per cent to Rs 163.07 crore from Rs 159.32 crore in the year-ago period. Its total income in the quarter ended June 30, 2004, increased to Rs 1,332.56 crore from Rs 1,183.91 crore in the corresponding period last year.

  • Century Textiles

  • Sun Pharma

  • Hindalco

  • NHPC

AVIATION NOTES 

Delhi, Mumbai need new terminals
Restructuring, upgradation and modernisation of airports are music to air-travellers. The expenditure of Rs 91 crore (Rs 45 crore on Delhi and Rs 46 crore on Mumbai) also impresses the flyers. But these changes at this late state will not reduce congestion as they are no more than mere cosmetic alterations.

Investor guidance

Chit fund: repent at leisure
Q: I heard Shriram chit amount is not coming under tax because it is a savings by month, I started the chit two years before every month I am paying Rs 20,000 it is for 25 months, that time they told me that there will not be any tax after the chit finish, with that guarantee only I put the chit, let me see your mail for that reason of tax.

  • Shares and tax

  • Gifts from NRIs

GRAPHICS: MARKET WATCH
WEEKLY STOCK MOVEMENT

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HP Tourism opens doors to private parties
Pratibha Chauhan
Tribune News Service

Shimla, July 31
Stepping into the role of a facilitator, the Himachal Pradesh Tourism Department is rolling out a red carpet welcome to entrepreneurs, including big industrial houses and NRIs, to invest in over 100 properties in the state with good tourism potential, as joint ventures with the government or private individuals.

A directory is being prepared by the Confederation of Indian Industry (CII)on behalf of the Department of Tourism and Civil Aviation where about 100 private properties and a dozen government properties have been listed for investment from the private sector. The Tourism Department has received a good response to the advertisement for developing new tourist centres and hubs all over the state with the help of private investment.

In the government sector, there is the offer for setting up a golf course at Baddi in Solan on a 400-bigha piece of land. Similarly, 103 bighas of land is on offer at Raisan, Baragraon in Kulu for setting up a mini golf course. The government has also put on offer the proposal for setting up a ropeway to the famous Hanuman temple at Jakhoo, the highest point, giving an aerial view of the hill town. The property owned by Raja Mandi at Jhatingri in Mandi district is another site which will be offered for setting up a tourist destination in complete wilderness.

“We got a good response from private individuals, who have offered almost 100 properties, including old villas and houses with heritage importance in Kulu, Kangra and other parts of the state,” informed a tourism official. For the first time, the Department of Tourism and Civil Aviation, is organising a Tourism Conclave in association with CII in September, where interested private parties and property owners can meet face to face and work out the details.
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Few takers for properties
Rakesh Lohumi
Tribune News Service

Shimla, July 31
The efforts of the Himachal Pradesh government to bring the State Tourism Development Corporation (HPTDC) out of the red by offering some of its loss-making properties to the private sector have evoked a lukewarm response from investors.

While there were no takers for the five greenfield properties, there were no responsive offers for two out of the six cafeterias which were put on sale. The offers received for cafe Bhairav at Baijnath and Dundhiara in Chamba district were well below the reserve prices. The greenflies properties offered for setting up tourism ventures at Baddi, Jhatingari, Badagraon, Shoja and Rajgarh failed to evoke any response.
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Friendship Day brings gifts, bands… and business
Shruti Rajan

Winnie the Pooh is the Ambassador of Friendship
Winnie the Pooh is the Ambassador of Friendship

New Delhi, July 31
There's Valentine's Day, Children's Day, Mother's Day, Father's Day... an exhaustive list that covers most crucial relationships in life. And friends get their turn on Sunday when the world celebrates Friendship Day.

Delhi has embraced the day, just like it does most other occasions, be it birthdays, festivals or special days like this one.

Shops are flooded with friendship bands, the most traditional way of celebrating the day, colourful banners, gifts, chocolates and cards - gifts to suit every kind of friend and every kind of pocket.

Though the day has grabbed the fancy of mostly schoolchildren, others are getting into the act, too, spending hundreds of rupees and sometimes even thousands on that special gift.

Said Vijayant Chhabra, director of Archies chain of gift stores: "Delhi is a shopper's haven and the city records the maximum sales during this season. From simple friendship bands costing between Rs 7 and Rs 25 to a giant teddy bear costing Rs. 10,000, this 'season of friendship' finds all kinds of takers."

"During 'friendship season', sales more than double, even treble," he said, adding that it could take over even Valentine's Day sales in two or three years.

"Friendship Day comes after New Year's and Christmas when it comes to sale of cards. And in gifts, they are led only by Valentine's Day," Chhabra asserted.

To mark the day this year, Archies has come out with as many as 150 new varieties of friendship bands, 25 kinds of soft toys, six different books with friendship quotes, five new mug designs and over eight kinds of photo frames.

Archies, which has outlets in over seven countries around the world, has 500 stores in India alone. In Delhi, the chain has over 41 exclusive shops and 80 franchise outlets.

"Friendship Day came into existence here barely three to four years back. But it has picked up considerably with each year," said Manoj Gupta who owns a Hallmark card shop in Delhi.

Shops and related businesses, be it card manufacturers or cottage industries that have sprung up to supply friendship bands, are smiling all the way to the bank as another fad catches on in the city.

Even grocery stores and medical shops have stocked themselves with the appropriate gifts.

The first friendship day was celebrated when the US Congress proclaimed National Friendship Day on the first Sunday in August in 1935.

In 1997, popular cartoon character Winnie the Pooh was named the Ambassador of Friendship by the US.

The day has caught on across the globe just as much as Pooh bear has. — IANS
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Import duty hike cheers IT players
Peeyush Agnihotri
Tribune News Service

Chandigarh, July 31
The IT industry is upbeat about the decision of the government to impose an additional duty on finished PC imports. Industry players aver that it will promote manufacturing within the country and increase PC penetration in India.

The Finance Ministry has announced an additional duty of 7 per cent on the imports of finished computers and 6 per cent on stand-alone CPUs. The excise and countervailing duties continue to remain at 16 per cent. A finished CPU includes the whole unit - central processing unit, mouse, monitors and keyboard. IT experts say that this will reduce the PC price to the pre-Budget level.

"The government's decision is a positive sign for indigenous players as it will give them the opportunity to compete on an equal footing with international manufacturers. Peripherals being such an important part of the total computing experience, we are looking forward to the zero duty regime as per the General Agreement on Tariffs and Trade (GATT) regulations that is due in April, 2005," says Mr Mohit Anand, Home and Entertainment Division, Microsoft India.

The government's aim is to neutralise the inverted duty structure. The move has brought the domestic manufacturing industry on a par with the imported finished goods industry.

"The move puts all players on the same footing, be they MNCs, local assemblers or national brands. They can now leverage their core strengths, thus getting some equilibrium back into the industry," is what Mr Neeraj Chauhan, Director, International Operations, eSys, a New Delhi-based IT component distribution MNC, opines.

"This move will also aid the penetration of PCs. Since UPS (uninterrupted power supply) equipment are a derived demand, we expect more growth in this segment as well," says Mr Pankaj Sharma, country general manager, APC India, a Bangalore-based UPS manufacturing global company.
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Cell operators’ revenues fall: Trai
Tribune News Service

New Delhi, July 31
Intense competition among cellular operators over the past four years has had a major impact on the companies’ revenues with the average revenue per user (ARPU) coming down significantly between 2000 and 2004.

While the ARPU of cellular operators was Rs 1319 per month in the year 2000 it has come down to Rs 469 per month in 2004, latest figures released by Trai show.

“It is almost one-third of what prevailed in the year 2000 signifying the fact that competition in mobile telephony is intense. The ARPU for post-paid services alone has declined from Rs 1560 per month to Rs 1056 per month in the past five years, thereby showing a decline of 32 per cent.”

“For pre-paid service, there has been a sharp decline of 65 per cent in ARPU in the past five years from Rs 822 per month to Rs 288 per month”, Trai said.

The subscriber base of mobile telecom operators grew 159.15 per cent year-on-year to 3.37 crore as on March 31, 2004, 75 per cent of whom opted for pre-paid services, the report said.

Of the total mobile figures, Reliance Infocomm, Bharti, BSNL and Hutch have achieved a subscriber base exceeding 50 lakh each, according to Trai.

During 2003-2004, 2.07 crore mobile subscribers were added compared to 66 lakh during the preceding financial year.
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IA to phase out Boeing 737, induct Airbus A319

Kolkata, July 31
State owned domestic air carrier Indian Airlines (IA) has decided to replace Alliance Air’s 11 200 -seater Boeing 737 with Airbus A-319.

“The tender has already been called and the bids were opened yesterday. The decision will be formally taken shortly,” IA Chairman-cum-Managing Director Sunil Arora said during an interactive session organised by the CII here today.

The Boeings became uneconomical after the air crash at Patna despite the Air Marshall Rajkunor Committee report giving a clean chit to the mechanical soundness of the aircraft, he said adding that all over the world around 1,699 such types of Boeings were at present flying. — UNI
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CORPORATE NEWS

Bajaj Auto net climbs 2 pc

New Delhi, July 31
Two-wheeler major Bajaj Auto today said its net profit in the fiscal first quarter rose 2 per cent to Rs 163.07 crore from Rs 159.32 crore in the year-ago period.

Its total income in the quarter ended June 30, 2004, increased to Rs 1,332.56 crore from Rs 1,183.91 crore in the corresponding period last year.

Bajaj group has posted a 7 per cent rise in income attributable to consolidated group at Rs 181.54 crore for the April-June quarter of the current financial year as compared to Rs 169.59 crore a year ago.

Century Textiles

Century Textiles and Industries Limited's net profit went down by 4.96 per cent at Rs 23.45 crore for the quarter ended June 30, 2004 against Rs 28.41 crore in the corresponding period last year.

Sun Pharma

Drugmaker Sun Pharmaceutical Industries Ltd on Saturday said its net profit in the fiscal first quarter grew 37 per cent to Rs 75.06 crore from Rs 54.69 crore in the corresponding period last year.

Its total income in the quarter June 30 rose to Rs 323.32 crore from Rs 216.39 crore a year earlier.

Sun Pharma said the group has posted a net profit of Rs 88.40 crore in the April-June quarter of this fiscal against Rs 63.75 crore in the year-ago period while total income increased to Rs 322.88 crore from Rs 257.19 crore.

Hindalco

India's largest aluminium producer, Hindalco Industries Ltd, has posted a net profit of Rs 195 crore in the quarter ended June 30, up 1 per cent from a year ago.

Its net sales in the April-June quarter of this fiscal increased to Rs 1,719 crore from Rs 1,231 crore in the corresponding period last year, Hindalco said on Saturday.

NHPC

The National Hydroelectric Power Corporation Limited (NHPC) has registered a net profit of Rs 186.19 crore during the quarter ended June 30, 2004, up 20 per cent over the corresponding period last fiscal.

The gross sales of the corporation increased to Rs 526.27 crore in Q1 2004-05 from Rs 394.77 crore, up 33 per cent in the year ago period.

The increase in sales and profit are mainly due to commissioning of 300 MW Chamera Stage-II project in Himachal Pradesh in November last year, a company statement said, here on Saturday. — Agencies
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AVIATION NOTES 

by K.R. Wadhwaney

Delhi, Mumbai need new terminals

Restructuring, upgradation and modernisation of airports are music to air-travellers. The expenditure of Rs 91 crore (Rs 45 crore on Delhi and Rs 46 crore on Mumbai) also impresses the flyers. But these changes at this late state will not reduce congestion as they are no more than mere cosmetic alterations.

The need of the hour is altogether new modules which should be constructed on a war footing. Civil aviation is one of the most complex and exacting areas, which should be managed, administered and maintained by technically qualified people for the good of the travelling public and for the uplift of the image of the country.

Indira Gandhi International Airport (IGIA) has no room for expansion or improvement, except renovation. It is in dire need of a new terminal and extended runway for international flights and wide-bodied aircrafts. There is suitable land available. It has been earmarked for the second module, which should be constructed keeping the future in mind. The existing international airport should be utilised for domestic operations — Indian Airlines, Alliance Air, Jet Airways and Sahara Air in addition to new carriers wanting to operate on domestic routes.

The existing building in use of private operators has outlived its life. It should be razed and a new one built. It should consist of an aviation museum and a terminal for domestic cargo.

The Airports Authority of India (AAI) has reserves of more than Rs 2,000 crore. It has the provision of Rs 1500 crore for the development of the Delhi and Mumbai passenger terminals in the Tenth Five-Year Plan. It is public money which should be utilised for the public good instead of keeping it in the AAI lockers.

The AAI should also upgrade several other airports which are in a state of neglect. If these airports are upgraded, the traffic flow will increase, resulting in an increase in revenue and tourism.
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Investor guidance

by A.N. Shanbhag

Chit fund: repent at leisure

Q: I heard Shriram chit amount is not coming under tax because it is a savings by month, I started the chit two years before every month I am paying Rs 20,000 it is for 25 months, that time they told me that there will not be any tax after the chit finish, with that guarantee only I put the chit, let me see your mail for that reason of tax.

— Taxpayer

A: It is difficult to understand what you are asking. Please revert if the following answer does not satisfy you:

As dictated by the Doctrine of Mutuality, a person cannot make a taxable profit out of a transaction with himself. Income must, therefore, come from outside. A surplus arising to a mutual concern cannot be regarded as income chargeable to tax. In other words, where all the participators in the surplus/benefits are contributors to the common fund, as is the case in most chit funds, surplus if any, received by a member cannot be brought to tax. -CIT v. Bankipur Club Ltd. [1981] 6 Taxman 47 (Pat.).

It is perhaps this aspect that tempts lay individuals join a chit fund in a hurry only to lament later.

Shares and tax

Q: For the past two or three years, shares purchased are free of tax if kept for a year. Now I read in year column that all shares purchased much earlier have no capital gains to be paid. There is no clarification for accumulated losses of previous years. What about bonus shares when they are sold? For senior citizens, a scheme is being launched to give yield of 9 per cent. Will that be free of tax, or like post office scheme of 8 per cent where it is subject to tax but benefit of 80L. Any limit on the investment amount?

— Kersy Bhagat

A: I am afraid you have misunderstood me somewhere. The Budget has proposed the following:

Long-term capital gains tax on shares would be exempt if bought and sold on a recognised stock exchange. Short-term capital gains tax would be @10%. There would be a turnover tax of 0.15% to be levied on the purchaser and seller equally. However, these changes would only come into effect after the Bill is passed and an announcement made in the official gazette. If it happens, carried forward loss from the past years will have to be set off against capital gains arising out of assets, other than securities, such as real estate or jewellery or even units of debt-based MF scheme.

"Since last 2/3 years shares purchased are free of tax if kept for a year" is a misconception. Only shares of companies of BSE500 purchased on or after 1.3.2003 and before 1.3.2004 enjoyed the exemption from long term capital gains if sold after a year. The scheme is likely to be launched in August 2004 with a term of five years. The scheme will be open to persons over 60 years of age. The ceiling on investment will be Rs 15 lakh. There may be lock-in of 2 years. The interest will be fully taxable and may be operated through post offices. The complete details are not available.

Gifts from NRIs

Q: I read your column on the tax implications after the recent Budget announcements. I have a few queries in this regard:

1. If I receive Rs 25,000 or above from an unrelated person (close NRI friend) as gift by cash/ cheque before Sep 1, 2004; then will it be taxed?

2. How is it clubbed as a gift? Does he need to send me in writing that he is giving me a gift? Is there any paperwork that can shown as evidence to ITO so that they understand that it is a gift? Or is it just verbally claimed?

3. What happens if an unrelated person gifts me a property? It seems like that these new provisions are applicable to cash gifts and not to immovable property gifted.

I would be grateful if you could throw some light on these issues.

— Sidharth

A: 1. Before 1.9.04, all gifts are tax-free. After that date, gifts up to Rs 25,000 are tax-free.

2. There must be an offer and acceptance. You have covered the first part. It will be necessary for you to react to his letter of offer.

3. This gift is covered by the old provisions. It is tax-free.
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BRIEFLY

Bank of Punjab
Chandigarh, July 31
The Bank of Punjab has entered into a bancassurance tie-up with Iffco-Tokio General Insurance Co. Ltd. Nineteen Iffco-Tokio General Insurance kiosks have been set up on the bank branch premises for issuance of policies, claim registration and handling. — TNS

SBI
Chandigarh, July 31
State Bank of India Chairman A.K. Purwar yesterday handed over a cheque for Rs 345.77 crore to the Reserve Bank of India Governor, Dr Y.V. Reddy, representing the dividend for 2003- 04 on SBI shares held by the RBI. The State Bank of India declared a dividend of 110 per cent 2003- 2004 compared to 85 per cent in the previous fiscal year. — TNS

Larsen & Toubro
Chandigarh. July 31
Larsen and Toubro Limited achieved gross sales and service income of Rs 2689 crore for the three months ended June 30, recording a growth of 64 per cent over the same period last year. Profit before tax and profit after tax for the quarter amounted to Rs. 116.01 crore and Rs.80.13 crore respectively, posting an increase of 28 per cent and 26 per cent, respectively, over the first quarter of 2003-04. — TNS

IndusInd
Chandigarh, July 31
IndusInd Bank has launched personal loans for those holding salary accounts at Global Trust Bank (GTB). The moratorium declared by RBI on withdrawals from GTB has affected a large number of employees having their salary accounts with GTB and who suddenly find their liquidity frozen. This scheme will provide temporary liquidity to many salary account holders who are in such need and who at the same time are willing to move the salary arrangement to a new bank. — TNS

UCO Bank
Kolkata, July 31
The city-based UCO Bank today announced downward revision of interest rates on NRE deposits with effect from tomorrow. Accordingly, the rate of interest for NRE term deposits in the bank for a period of one year to less than two years has now been fixed at 2.40 per cent from the present 2.50 per cent. — UNI

VSNL
New Delhi, July 31
Internet gateway and services provider Videsh Sanchar Nigam Ltd has posted a 92.7 per cent rise in net profit at Rs 126.8 crore in the first quarter ended June 30, 2004, compared to Rs 65.8 crore posted during the year-ago period. However, the company's total income fell to Rs 819.2 crore for the quarter under review. — UNI

ICI
Mumbai, July 31
ICI India Ltd has posted a net profit of Rs12.65 crore for the quarter ended June 30, 2004, whereas it was Rs 7.65-crore for the quarter ended June 30, 2003, an increase of 65 per cent. — UNI
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