SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI


THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

REL clears buyback scheme @ Rs 525 per share
Mumbai, December 26
Reliance Energy Limited, a Reliance Group company, today announced a share buyback scheme at a maximum price of Rs 525 per share, valid until March 17, 2005. A decision to this effect was taken by REL board at a meeting here today, said an official press release here.

Revellers join the grapes crushing festival to mark the beginning of the wine making season in Mumbai
Revellers join the grapes crushing festival to mark the beginning of the wine making season in Mumbai on Sunday. — PTI

McDonald’s eyes HP and so does Taj
Shimla, December 26
The initiative taken by the Department of Tourism in inviting big corporate houses and entrepreneurs by organising a Tourism Conclave seems to have borne fruit as big names like McDonald’s and the Taj Group have shown keen interest in taking over some private and government properties in the state.



EARLIER STORIES

 

Thousands of people behind a 100-pound cake to made the fifth anniversary of Millennium Park and also to celebrate the River Festival in Kolkata
Thousands of people behind a 100-pound cake to made the fifth anniversary of Millennium Park and also to celebrate the River Festival in Kolkata on Sunday. — PTI

WB: Punjab should tap philanthropic NRIs
Ludhiana, December 26
Recommending the leveraging of philanthropic activities of Punjabis settled abroad for the larger interest of the state, the World Bank has said that Punjab’s economic problems would have been more severe had it not been for the large flow of remittances from the state's diaspora.

Bank of Punjab to boost forex biz
Chandigarh, December 26
While opening more branches across the country this fiscal, the Bank of Punjab will lay emphasis on its techno-savvy ebank services as well as consolidate its position in the foreign exchange business.

Software exports up
New Delhi, December 26
Computer software exports, including the IT-Enabled Services, for the first six months of the current fiscal is estimated to have reached Rs 35,000 crore registering a growth of 29.6 per cent, according to the Electronics Computer Software Export Promotion Council.

Opinions page: Bulls, bears and the common man


TAX ADVICE

Filing return must even if tax nil
Q. I am a senior citizen aged 65 years. My only source of income is retirement pension and interest from bank FDRs and Post-Office

  • Interest on FD

  • Pension arrears

MARKET SCAN

Bull charges on strong fundamentals
During the last fortnight both Sensex and Nifty have been leaping up to set new records. The Sensex crossed 6400 points during the week ending December 19 and it closed at 6498 points after touching 6500 points record last Friday.
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REL clears buyback scheme @ Rs 525 per share

Mumbai, December 26
Reliance Energy Limited (REL), a Reliance Group company, today announced a share buyback scheme at a maximum price of Rs 525 per share, valid until March 17, 2005. A decision to this effect was taken by REL board at a meeting here today, said an official press release here. The REL Board has approved the share buyback for an amount of up to Rs 350 crore as required under the Companies Act, 1956 and Sebi regulations.

The objective of the buyback scheme, REL claimed, was aimed at reducing volatility of the company’s stock prices, deter speculative activity in the scrip and impact on REL scrip price, contributing to the maximisation of the its stock price.

That apart, REL claimed that the buyback scheme sends a strong signal to the capital market on the undervaluation of REL’s stock price and reiterate confidence of the management in future growth prospects of the company.

The share price of REL has closed below the buy back price for just eight trading days out of 140 trading days that the programme has been in existence. This fall below buy back price was only during the last five weeks, on account of extra ordinary events and developments related to the Reliance Group reported widely in the media.

During this time, the REL board through a consultative process reviewed the buyback programme.It was decided that no buyback will be affected at this stage as the recent fall in share price is due to above stated extra ordinary events. The Board also decided that the terms of the buyback will remain unchanged and will be reviewed from time to time.

In implementing the share buyback programme, the company will not take any steps that will allow speculators to take advantage of the current period of extra ordinary events related to the group. — UNI

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All eyes on RIL board meeting today
Shiv Kumar
Tribune News Service

Mumbai, December 26
Monday’s board meet of Reliance Industries Ltd is being watched with much interest by its 35 lakh shareholders and financial institutions alike since the future of the country’s biggest industrial group is likely to be determined here.

Though RIL sources hint that the meeting of the entire board is being held to determine the price for a share buyback, the agenda is confidential.

RIL Chairman-Managing Director Mukesh Ambani and Vice-Chairman Anil Ambani, now in the eye of a storm over their public spat over ‘ownership issues’ of family holdings in the Rs 90,000 group, are both expected to attend the meeting. Last week, Anil Ambani called for a detailed discussion on the shareholding pattern of Reliance Infocomm in the board meeting, giving rise to speculation that the proceedings would be stormy.

The industry is hoping that the spat between Mukesh and Anil Ambani is settled peacefully. The last trading session on Friday saw the Sensex brush the 6500 mark in hopes of a quick settlement.

Spurring on the bulls is Mukesh’s decision to give up his 12 per cent sweat equity in Reliance Infocomm. The 500 million shares he picked up for a pittance is worth nearly Rs 7,000 crore. Anil Ambani, who had questioned Mukesh’s decision, is being persuaded to now join hands with his elder brother and work out a truce.

Analysts expect RIL to announce a share buyback at the rate of Rs 550 or so per share at a time when the price of the Reliance scrip rules at around Rs 523 each.

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McDonald’s eyes HP and so does Taj
Pratibha Chauhan
Tribune News Service

Shimla, December 26
The initiative taken by the Department of Tourism in inviting big corporate houses and entrepreneurs by organising a Tourism Conclave seems to have borne fruit as big names like McDonald’s and the Taj Group have shown keen interest in taking over some private and government properties in the state.

It is reliably learnt that McDonald’s is keen to have its joint on the Mall Road here and its officials have undertaken a survey to spot a prime location for its restaurant. “They are very keen to take over the Himachal Pradesh Tourism Development Corporation (HPTDC) owned ‘Ashiana’ restaurant located on the Ridge,” informed officials.

The Confederation of Indian Industry (CII), with whom the Tourism department had jointly organised the conclave for inviting private partnership in promoting the state as a popular destination, have prepared a document listing the interest shown by various participants in properties.

The representatives of McDonald’s, during their stay here, undertook a survey about the most popular restaurant and the number and kind of tourists visiting it in a day. “They have zeroed down on Ashiana, Himani and Davicos restaurants, all located on the Mall Road,” informed an official.

On the other hand, the Taj Group is keen on taking over the HPTDC-owned Palace Hotel at Chail. Even though this property is running in profit but the thinking in the government is that by involving a private group the profitability can go up much further. The Taj Group has so far no major hotel in North India and with the scenario in Jammu and Kashmir still being uncertain, they are very keen on having a project here in Himachal.

The Taj Group is also keen on taking on the project of setting up the proposed Golf course at Baddi in Solan district.

Even though more than 100 private property owners had offered their hotels, old havelis, orchards and bungalows of the British Raj for being converted into resorts with the help of private partnership, it is the one dozen government properties, as a part of disinvestment plans in the HPTDC, which have attracted the attention and interest of big names in the hospitality industry.

These include setting up of another Golf Course at Baragaon village in Kulu district and promoting water sports at the Pong Dam in Kangra.The Himalayan Ski Village, owned by the Ford Motor Company, has already expressed desire to set up a Rs 2,000 crore winter sports resort in the state.

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WB: Punjab should tap philanthropic NRIs
Shveta Pathak
Tribune News Service

Ludhiana, December 26
Recommending the leveraging of philanthropic activities of Punjabis settled abroad for the larger interest of the state, the World Bank has said that Punjab’s economic problems would have been more severe had it not been for the large flow of remittances from the state's diaspora.

A report by the World Bank says that the state probably ranks behind only Gujarat and Kerala in terms of migration as measured by the number of people of Indian origin (PIO) living outside India.

Among the 20-million strong Indian diaspora it is believed that 10-5 per cent are PPOs, the report says. Mentioning the general belief that Punjabi migrants have a higher per capita income level than the average Indian migrant, the bank says they harbour a strong commitment to maintain their own cultural and linguistic heritage and seek to preserve their links with their families in India.

According to the report, Punjabi migrants have risen to become one of the highest earning and best educated groups in their host countries and have achieved eminence in a variety of fields.

“Many wealthy Punjabis have individual trusts and charities for projects pertaining to health, education or infrastructure in their villages in Punjab.” Emphasising on leveraging their philanthropic activities, the World Bank says the Punjab Government can play a vital role in strengthening links between PPOs and their families in the state and thereby leverage such activities of its diaspora to the greater benefit of the state.

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Bank of Punjab to boost forex biz
Tribune News Service

Chandigarh, December 26
While opening more branches across the country this fiscal, the Bank of Punjab will lay emphasis on its techno-savvy ebank services as well as consolidate its position in the foreign exchange business.

Mr Tejbir Singh, Executive Director, Bank of Punjab, said the bank today is the number one exporter of foreign currency in the country. It did foreign exchange business of Rs 1,700 last year. It will double its foreign exchange bureaus over the next three years.

“Our exchange bureaus are handled as a separate product and are a bank within a bank. We intend to offer office/home delivery of currencies and travellers cheques beyond office hours. We are also reaching out to NRIs and other clients, offering them better rates and personalised service,” he added.

In another service bound to help foreign tourists and NRIs, the bank has tied up with Western Union Financial Services to provide money transfer in Bank of Punjab locations.

Going a step ahead, the bank has opened a representative office at Toronto in Canada. According to Mr Tejbir Singh, “Going forward fee income and products will take centrestage in business and profitability of the bank. Our focus is on such new avenues as cash management services, facilitating faster transfer of money of India, travel-related foreign exchange, insurance and other activities which would provide the bank additional sources of income.”

The bank will open eight more offices — in Tanda, Mahilpur, Samana, Hisar, Sirsa, Baddi and Bikaner, by March 2005. It had recently opened branches at Muktsar, Fazilka, Mansa, Barnala, Ropar, Baghapurana and Tarn Taran, thus retaining the doubling of its network every three years.

The branches will offer ebank services through the Internet, mobile phone, ATM; mobile wallet (payment through mobile phone), 24-hour telebanking and utility bill payments through ATM/Internet.

The bank has started distributing LIC products and expects to generate a substantial premium from this line.

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Software exports up
Tribune News Service

New Delhi, December 26
Computer software exports, including the IT-Enabled Services (ITES),for the first six months of the current fiscal is estimated to have reached Rs 35,000 crore registering a growth of 29.6 per cent, according to the Electronics Computer Software Export Promotion Council (ESC).

In a press statement issued here today, Mr D.K. Sareen of the ESC said,”the total exports of computer software and ITES are likely to cross the annual target this year. The exports have grown by 46.55 per cent during the first six months this fiscal (April-September 2004) as against a target of 44.5 per cent. Most of the exports take place during the second half of the financial year.”

Mr Sareen said that according to ESC projections, software and ITES exports are pegged at Rs 78,650 crore for 2004-05.That will be 36 per cent higher than the exports achieved during last fiscal, Rs 58,000 crore.

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TAX ADVICE

by S.C. Vasudeva

Filing return must even if tax nil

Q. I am a senior citizen aged 65 years. My only source of income is retirement pension and interest from bank FDRs and Post-Office MIS vide below: -

Pension Rs 87,000

Interest from

Bank FDRs 18,000

P.O. (MIS) 14,400

Deposits in PPF 50,000

The tax liability for the year 2004-05 remains nil being a senior citizen.

(a) Am I supposed to file tax return? If so, in which Form?

(b) Is PAN required in my case. If so, how to arrange it and the papers required?

(c) Kindly enlighten in detail about AIR in what specific cases it is required to be submitted?

— HARISH CHANDER

A (a) Section 139 of the Act provides that every person being a company or being a person other than a company if his total income under the Act during the previous year exceeded the amount, which is not chargeable to income tax shall, on or before due date of furnish a return of income in the prescribed form and verified in prescribed manner and setting forth such other particulars as may be prescribed. It would, therefore, be incumbent upon you to file the return of income even though the tax liability in your case would be nil on account of rebate allowed under Section 88B of the Act. The return can be filed in Form 2D (Saral) by you.

(b) The Permanent Account Number should be obtained by you as it would be required to be indicated in the income tax return as also for some other transactions in case the values thereof exceed the specified limit. The application for obtaining the PAN No. is required to be filed these days with National Securities Depositories Ltd. Form No. 49A is required to be filed for obtaining PAN.

(c) This question is not clear. You may kindly elucidate the same so that the necessary reply can be given.

Interest on FD

Q. (a) How will the interest income of Rs 15,000 from fixed deposits, (earnings from service while in India) be taxed (Now NRI)?

(b) Is there any limit of gift, (from gift tax point of view) a son can give to his mother, as per the Budget passed for 2004-05?

— TARSEM JAIN

A (a) The interest income of Rs 15,000 from fixed deposits will be included in the total income of the person who is an NRI. However, a deduction of Rs 12,000 would be allowed under Section 80-L of the Income Tax Act, 1961 against the interest.

(b) The newly introduced Clause 56(i)(iv) of the Act, which provides for the taxability of any sum of money exceeding Rs 25,000 which is received without consideration by an individual or a Hindu undivided family from any person on or after the 1st day of September 2004, does not apply to any sum of money received from a relative. The definition of relatives includes mother. Therefore, any sum received by the mother of his son, as a gift would not attract the aforementioned clause.

Pension arrears

Q. I am a government pensioner and senior female citizen having income from pension for financial year 2003-04 as Rs 97,000. I am entitled for standard deduction of Rs 30,000. During the financial year 2003-04, I received arrears of family pension from August 1, 1994 to March 2003 and family pension for the period April 2003 to March 2004 (other sources)

My query is: - 1. Whether relief under income tax Clause No. 5.42 given F/ Pensioner @33/1/3rd% or Rs. 15,000 whichever is less; can be claimed by me yearwise while filing income tax returns for the previous year under section 89?

2. If yes, for query no. 1 shall this deduction/ relief as per Clause No. 5.42 apply in addition to my standard deduction of Rs. 30,000/-?

— B.D. GUPTA

A (1) The provisions of Section 89 of the Act do not require the filing of income tax returns of the previous years for which arrears of family pension have been received. The aforesaid Section provides for the granting of relief in case the family pension is paid in arrears due to which total income is assessed at a rate higher than that it would otherwise have been assessed. The application for claiming such a relief has to be made in Form 10E of the Income Tax Rules, 1962.

(2) The deduction under Section 57 of the Act in respect of income in the nature of a family pension is allowed in addition to standard deduction allowed under Section 16 of the Act, 1961.

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MARKET SCAN

by J.C. Anand

Bull charges on strong fundamentals

During the last fortnight both Sensex and Nifty have been leaping up to set new records. The Sensex crossed 6400 points during the week ending December 19 and it closed at 6498 points after touching 6500 points record last Friday. There are many analysts who expect the Sensex to cross the 7000-point mark in the long run. Merrill Lynch has stated, after a brief survey of fund managers, that 64 per cent expect the Sensex to cross 7000 points, with 27 per cent expecting the Sensex to be 6999, and 9 per cent expect it to be 6200 - 6599 points.

The general view is that the FII funds are driving the bull to the record levels. But there are some other factors too that are sustaining the bull market.

An interesting analysis made by the Economic Times, based upon a survey of 200 companies, ranked in terms of market cap on December 15, 2004, indicates that about 3/4th of the companies in the sample have witnessed an increase in their stock prices on the basis of their higher EPS ratios. The PE ratios are still reasonable low.

In other words, apart from the inflow of FII funds, the fundamentals of the corporate sector are strong and sound. The textile sector companies have scored almost 50 — 100 per cent gains in their market prices more on the expectation that their export earnings would jump up after January 1, 2005 when the quota limits are lifted in the USA and European countries than on their present performance.

The news that the Reliance Industries would announce a buyback of its equity shares on December 27, after its Board of Directors meets is another factor for the bullish flavour in the market. Reliance Industries has a high weight in the composition of the Sensex index. But it is not known as yet what would be the nature of the buyback announcement. Even in 2000, Reliance Industries had announced a buyback at a price not exceeding Rs 303, but did not buy back the shares even when the market price went below Rs 303.

Sesa Goa has announced a bonus issue in the ratio of 1:1 and an interim dividend of 50 per cent. ONGC has announced an interim dividend of 200 per cent. Gail’s interim dividend is 40 per cent and BPCL’s interim dividend is at 50 per cent.

There has been an announcement that the Reserve Bank of India has given an in-principle approval to the proposed merger of the Bank of India with the Union Bank of India. This has moved up the market price of the Union Bank share to a record level. The long-term shareholders who hold stakes in bank shares should not book profit at present for there is a strong move for the consolidation in the bank sector. Karur Vyasya Bank scrip has also moved up to Rs 468.

UK-based Scottish and Newcastle Company (SNN), the fifth largest brewer in the world, will pick up 37.5 in the equity holding of United Breweries (UB) — 17.5 per cent directly from the UB and another 20 per cent in open offer of the Indian shareholders. This means that both SNN and UB will have equal holding in the company — 37.5 per cent each.

Selective profit booking is advised in those shares which have weak fundamentals and doubtful managements. However, Tata group companies should be held on a long-term basis. At least, for the present, Reliance Industries shares should not be sold and the December 27 announcement of buyback should be awaited.

Many of scrips recommended in this column have perked up. The shares of Balmer Lawrie Van Leer, BOC, Gujarat NRE Coke, N. Lignite, Glaxo Pharma, Tisco and Larsen & Toubro have moved up.

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BRIEFLY

DLF plans malls in Punjab, Chandigarh
New Delhi, December 26
The DLF Group will invest Rs 3,000 crore to develop 19 retail malls, including 10 in the National Capital Region (NCR), across the country in the next three years. “At present, we are executing 19 projects in India, primarily in Northern parts, with an investment of Rs 3,000 crore within three years. Some of the projects valued at about Rs 1,000 crore will be implemented by mid-2006,” DLF Retail Developers Ltd Managing Director Pia Singh said.
Besides Delhi and Gurgaon, where four to five retail malls each are planned, DLF Retail, a part of DLF Group, has also decided to construct city shopping centres in Jalandhar, Ludhiana, Kochi, Chandigarh, Noida, Mumbai and Kolkata. “We have already acquired land in these places and submitted our plans in some cases,” she said, adding that the company was also eyeing Chennai, Bangalore and Jaipur for expanding their retail business. — UNITop

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