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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

B U S I N E S S

PNB to dilute govt stake to 51 per cent
New Delhi, May 23
Punjab National Bank will dilute government holding in it from 57.1 per cent to 51 per cent this year to meet Basel II norms and to meet capital requirement for its overseas expansion.
Chairman & managing director of PNB addresses a press conference in New Delhi on Wednesday.
Chairman & managing director of PNB addresses a press conference in New Delhi on Wednesday. — PTI photo

TV on mobile now a reality
New Delhi, May 23
Watching TV on mobile phones became a reality from today. The new era in television started with the Doordarshan services becoming available on phone sets based on a new technology called Digital Video Broadcast-Hand held (DVB-H).

NDTV to raise Rs 400 cr
May dilute up to 10 pc equity
Mumbai, May 23
Television broadcaster NDTV, which has announced plans to float lifestyle and entertainment channels, will raise Rs 400 crore through a mix of debt and equity.



EARLIER STORIES

 
In this picture, Italian Queen Marie-Jose’s antique diamond and enamel bangle is displayed. This bracelet and 41 pieces of jewellery will be sold at London Christies’ auction on June 13.
In this picture, Italian Queen Marie-Jose’s antique diamond and enamel bangle is displayed. This bracelet and 41 pieces of jewellery will be sold at London Christies’ auction on June 13. — AFP

Service tax net widened
New Delhi, May 23
Seven new services like rents for commercial purposes and ring tones supplied by content providers to telecom firms will become expensive from next month with the government bringing these under the tax net.

Corporate Results
PTL profit down 39 pc

Chandigarh, May 23
Punjab Tractors (PTL) has reported 39.7 per cent dip in net profit for the year ended March 31 at Rs 77.98 crore as compared to Rs 129.34 crore in the previous fiscal. The net profit for the fourth quarter ended March 31, also dropped by 17.4 per cent to Rs 17.38 crore as compared to Rs 21.04 crore in the same period a year ago. 

Airtel user base crosses 40 m mark
New Delhi, May 23
Bharti Airtel today became the first Indian telecom firm to cross the 40 million subscriber mark and it has become the 10th company across the globe to have such numbers from one country.

Quarter that saw red and turnarounds
New Delhi, May 23
While the current earnings season has brought good fortune for a large number of firms by way of return to profitability, a larger number went into the reverse gear and plunged into the red in the latest quarter.
Toshiyuki Shiga, COO of Nissan Motor, introduces its all-new mid-size crossover SUV “Dualis” in Tokyo on Wednesday. Nissan launched sales of the 2-liter SUV all over Japan at prices from $20,000 to $16,000.
Toshiyuki Shiga, COO of Nissan Motor, introduces its all-new mid-size crossover SUV “Dualis” in Tokyo on Wednesday. Nissan launched sales of the 2-liter SUV all over Japan at prices from $20,000 to $16,000. — AFP

Govt plans JVs abroad to boost fertiliser supply
New Delhi, May 23
Union minister for chemicals and fertilisers Ramvilas Paswan today said the government was trying to augment the supply of fertiliser in the long run through establishment of joint ventures (JVs)abroad.

New Act for food processing sector worries industry
New Delhi, May 23
The food processing industry awaits the implementation of the Food Safety and Standards Act (FSSA) with the hope that it would curb inspector raj-led corruption, unify multiple laws, and lead to science-based standards. However, industry players are apprehensive of the massive penalties proposed under the Act, difficulty in meeting certain processed food standards when raw material violates norms and lack of information, according to a study.

Gold at 7-month low
Mumbai, May 23
Gold today fell to a seven-month low and closed at Rs 8,755 per 10 gm with a loss of Rs 50, while silver fell by Rs 135 per kg on weak global advices on the Bombay Bullion Exchange.

 

 

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PNB to dilute govt stake to 51 per cent
Tribune News Service

New Delhi, May 23
Punjab National Bank (PNB) will dilute government holding in it from 57.1 per cent to 51 per cent this year to meet Basel II norms and to meet capital requirement for its overseas expansion.

The bank is also slated to raise Rs 500 crore through tier II bonds by June 30, 2007, as part of its exercise to meet the need of around Rs 2,000 crore during the current fiscal for overseas as well as domestic expansion plans and meeting Basel II norms.

This was disclosed at a press conference by PNB chairman and managing director S C Gupta while releasing the banks fourth quarter results of 2006-07 here.

"We need capital of around Rs 2,000 crore to meet Basel II norms, overseas and domestic expansion and to cater to credit expansion during this year, therefore, we need to dilute the government shareholding," Gupta said.

Though the exact mode of dilution will be decided by the bank’s board, which has already approved the dilution from 57.8 per cent to 51 per cent, he said the bank was likely to come out with public offer.

"I do not think that the money will be raised from overseas market, it will be raised domestically,” he said.

He also disclosed that the PNB has got a licence to open its full-fledged branch in Hong Kong, which was likely to be operational by July end.

As far as opening of bank’s branch in Canada, Gupta said the bank was yet to finalise whether to have a full-fledged branch or a subsidiary like the one opened recently in the United Kingdom.

Meanwhile, on year-on-year basis, operating profit of the bank increased by 10.8 per cent to touch Rs 3,231 crore during financial year 2006-07. Operating profit of the bank for the fourth quarter of (Jan-Mar 2007) amounted to Rs 1,035 crore.

Net profit rose by 7 per cent to Rs 1,540 crore during 2006-07, after providing for necessary provisions of Rs 1,691 crore towards income tax, wealth tax, NPAs, standard assets, depreciation, gratuity, pension, leave encashment, etc, as compared to Rs 1,478 crore in the previous year, he said.

Last year the bank had paid 90 per cent dividend, this year the board has approved 100 per cent dividend.

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TV on mobile now a reality

New Delhi, May 23
Watching TV on mobile phones became a reality from today.

The new era in television started with the Doordarshan services becoming available on phone sets based on a new technology called Digital Video Broadcast-Hand held (DVB-H).

To begin with, only Delhiites will be able to enjoy the TV on mobile, but soon the service will be extended to other parts of the country, minister for information and broadcasting Priya Ranjan Dasmunsi said after inaugurating the service.

As many as eight DD channels will now be available.

Signals will be available within 12 km of the Akashwani Bhawan which is situated on the Parliament Street here. It will be free-to-air service. — UNI

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NDTV to raise Rs 400 cr
May dilute up to 10 pc equity

Mumbai, May 23
Television broadcaster NDTV, which has announced plans to float lifestyle and entertainment channels, will raise Rs 400 crore through a mix of debt and equity.

The company’s board of directors has approved the fund-raising scheme through preferential issue, Qualified Institutional Placement (QIP), follow-on issue, or rights issue constituting a combination of equity shares, convertible debentures, convertible preference shares and warrants etc.

NDTV, which had recently announced it would launch three channels under its new entertainment venture called NDTV Imagine, said it was open to dilution of up to 10 per cent of its present paid-up capital.

This, the company said, would be carried out at the option of the holders seeking conversion of securities into equity shares.

The fund-raising proposal is subject to shareholders’ approval through postal ballot, it added.

“The proposed structure should also allow growth opportunities through acquisitions and strategic tie-ups in India or abroad and benchmark the operations with global peers to enhance shareholder value,” NDTV said in a communique to the BSE.

Ex-Star India chief Samir Nair had joined hands with the Pranoy Roy-promoted NDTV group to head the new entertainment venture.

The company has also declared 20 per cent dividend at the rate of Re 0.80 per share on shares having a face value of Rs 4 each, it added. —PTI 

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Service tax net widened

New Delhi, May 23
Seven new services like rents for commercial purposes and ring tones supplied by content providers to telecom firms will become expensive from next month with the government bringing these under the tax net.

The services, which also include asset management by individuals and work contracts for commercial and residential construction, are taxable as per the Finance Act, 2007, and notified by the Central Board of Excise and Customs today.

Tax on these services will be effective from June 1, according to the notification issued by the Central Board of Excise and Customs.

With the addition of these seven services, the number of taxable services has increased to about 100. Service providers will have to pay 12 per cent service tax in addition to 3 per cent education cess, taking the total tax to 12.36 per cent.

Various telecom services like telecom connection, pager, leased circuit, communication through telegraph, telex and fax will also come under tax net.

However, property owners have been given a marginal relief as property tax would be deductible for the purpose of service tax on commercial rentals though any penalty paid under the property tax cannot be deducted.

The notification also broadened the existing services tax net to include maxi-cab capable of carrying more than 12 persons for educational bodies or vehicles for driving schools.— PTI

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Corporate Results
PTL profit down 39 pc
Tribune News Service & Agencies

Chandigarh, May 23
Punjab Tractors (PTL) has reported 39.7 per cent dip in net profit for the year ended March 31 at Rs 77.98 crore as compared to Rs 129.34 crore in the previous fiscal.
The net profit for the fourth quarter ended March 31, also dropped by 17.4 per cent to Rs 17.38 crore as compared to Rs 21.04 crore in the same period a year ago. Total revenue of the company during the quarter decreased to Rs 220.83 crore for the January-March quarter, down by 12.6 per cent from Rs 252.50 crore in the corresponding period in 2006, Punjab Tractors informed the BSE. Meanwhile, Mahindra & Mahindra has appointed Anjani Kumar Choudhari and Bishwambhar Mishra on the PTL board.

The duo have been nominated by Mahindra & Mahindra Ltd. and Mahindra Holdings & Finance Ltd. and have replaced Dr S. Narayan and Sachit Jain.

The board was informed that during the last fiscal, the company’s focus was towards increasing retail sales, improving collections, expanding dealer network and introducing new-look tractors.

As a result, retail sales were significantly higher than billing volumes of 30,045 tractors for April 2006-March 2007 period. The total revenue for the last financial year reached Rs 954.6 crore as against Rs 964.1 crore recorded last year. In addition, there was an extraordinary income of Rs 11.1 crore being profit on sale of units of Canfortune 94 Scheme.

Karur Vysya Bank

Karur Vysya Bank (KVB) has recommended a 100 per cent dividend to its shareholders for the fourth successive year.

The bank had declared an additional dividend of 20 per cent in FY 2005-06 as part of its 90th year celebrations.

KVB’s total business touched Rs 14,443.44 crore in FY06 whereas total deposits stood at Rs 8,342.14 crore during the period.

Pidilite Inds

Pidilite Industries has reported a 75 per cent jump in net profit to Rs 24.5 crore for the three months ended March 31 as compared to Rs 14 crore in the same period a year ago. Total income (net of excise) of the company increased 31 per cent to Rs 274.8 crore for the fourth quarter, as compared to Rs 210.2 crore in the corresponding quarter in 2006, Pidilite Industries informed the BSE.

The company said its board of directors has recommended 150 per cent tax-free dividend on equity shares.

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Airtel user base crosses 40 m mark
Tribune News Service

New Delhi, May 23
Bharti Airtel today became the first Indian telecom firm to cross the 40 million subscriber mark and it has become the 10th company across the globe to have such numbers from one country.

This landmark customer base was achieved in just 12 years, making Airtel one of the fastest companies to make it to this exclusive list. It took Airtel 11 years to reach the 20 million customer mark and just another 13 months to add the next 20 million customers, a company release said.

Currently, Airtel is present in nearly 4,700 census towns and over 200,000 non-census towns and villages.

The company’s overall wireless market share catapulted to over 23.2 per cent as of April 2007.

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Quarter that saw red and turnarounds

New Delhi, May 23
While the current earnings season has brought good fortune for a large number of firms by way of return to profitability, a larger number went into the reverse gear and plunged into the red in the latest quarter.

A total of 112 companies have posted turnaround results for the January-March quarter, marking their return to profit from a net loss in the previous quarter. This includes 25 firms having been in the red for four consecutive quarters.

However, as many as 170 companies have reported net losses for the same quarter, as against their net profit after tax in the previous quarter. This includes 61 firms that were reporting net profit for the past four consecutive quarters.

While a total of 1,231 companies have so far reported a net profit for the quarter, there have been as many as 435 companies witnessing net losses for the same quarter.

The companies that saw their quarterly figures dipping into the red from profitability in the previous quarter include firms like Development Credit Bank, Deccan Aviation, DCM Shriram Industries, EID Parry, Kinetic Engineering, Mid-Day Multimedia, Sandesh, Shopper's Stop and Tech Mahindra.

On a positive front, most of the turnaround results in the latest quarter are from small-cap and mid-cap firms. However, they also include a large number of firms owned by domestic corporate giants or Indian subsidiaries of some global majors.

The companies that reported positive profit after tax figures, after losses in the previous quarter, include Tata group's Tata Metalliks, Mahindra Composites, Nandas' promoted Escorts Ltd and mobile service provider Shyam Telecom.

The turnaround stories of the January-March quarter also include the Indian subsidiaries of Korean consumer goods major Whirlpool, German consumer goods maker Henkel and US auto parts major Federal Mogul.

Besides, state-owned telecom equipment maker ITI Ltd and PSU engineering firm Andrew Yule & Co also reported their return to profitability in the quarter. The latest quarter also saw Bihar Sponge and Mysore Cements, where state governments hold stakes, coming back into the black.

About one-quarter of the companies reporting turnaround results in the latest quarter were those reporting net losses for the four consecutive quarters.

These companies include Sterlite Holiday Resorts, Shiva Cements, Empee Sugars, Mysore Cement, Mafatlal Industries, KEC Infrastructure, Steel Tubes India, SAL Steel and TPI India.

Among major turnaround results, Escorts reported Rs 671 crore in PAT for the March quarter, a sharp turnaround from a net loss of Rs 304 crore in the previous quarter.— PTI

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Govt plans JVs abroad to boost fertiliser supply
Tribune News Service

New Delhi, May 23
Union minister for chemicals and fertilisers Ramvilas Paswan today said the government was trying to augment the supply of fertiliser in the long run through establishment of joint ventures (JVs)abroad.

Initial talks have been held for joint ventures for production of urea in Saudi Arabia, Kuwait, Nigeria, Egypt and Mozambique. The government is considering joint venture projects in phosphorous rich countries like Tunisia, Algeria, Morocco and Jordan, he told reporters here.

He said concerted efforts were made to increase domestic production of fertilisers and improve timely availability of major fertilisers in adequate quantity during the three years of the UPA government.

The demand of ferilisers as assessed by the Department of Agriculture was fully met by the Department of Fertiisers during the last three years.

He said the backlog of fertiliser subsidy amounting to over Rs. 8,000 crore will be cleared by this month end.

The minister said in spite of increase in cost of fertilisers, the government has completely kept the farmers insulated from this increase in cost and have increased the subsidy allocations to meet the consumption needs of the farmer at subsidised level of prices.

In 2004-05, the total subsidy on fertilisers was Rs 15,779 crore. It was increased to Rs 18,299 crore in 2005-06 and Rs 25,952 crore in 2006-07, to ensure that there is no shortage in availability of fertilisers. The likely requirement in 2007-08 will be Rs 50,284 crore.

He said new initiatives had been taken to streamline distribution and movement of fertilisers at the consumption points.

Subsidy will be paid only when fertilizer reaches the districts.

Panel on subsidy

Faced with a staggering Rs 50,000 crore fertiliser subsidy bill this fiscal, Prime Minister Manmohan Singh has set up a committee comprising finance minister P Chidambaram and agriculture minister Sharad Pawar to look into ways of rationalising these subsidies.

Besides, Chidambaram and Pawar, Paswan would also be member of the committee.— PTI

 

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New Act for food processing sector worries industry
Tribune News Service

New Delhi, May 23
The food processing industry awaits the implementation of the Food Safety and Standards Act (FSSA) with the hope that it would curb inspector raj-led corruption, unify multiple laws, and lead to science-based standards. However, industry players are apprehensive of the massive penalties proposed under the Act, difficulty in meeting certain processed food standards when raw material violates norms and lack of information, according to a study.

The Ficci study, based on the first-ever industry-wide survey on industry’s perspective on the implementation of the FSSA, collates the existing concerns as also throws up worrying revelations that could become the starting point of reference for ironing out the rough edges.

The study reveals major problems that industry would face during the course of the implementation of the Act. These are anxiety due to lack of information, massive penalties proposed under the Act and difficulty in meeting certain processed food standards when raw material violates standards.

Based on the responses by food industry players, the study observes that since the tiny, small and medium scale industries do not have the technical expertise to track the regulatory changes, they will find it difficult to identify the procedural and compliance changes brought in by the Act.

The study suggests that the ministry of health and family welfare (nodal ministry) needs to launch awareness and capacity-building programmes. These will be extremely beneficial to enable effective implementation of the Act.

Industry feels that whilst in other sectors, introduction of Food Safety and Standards Act would remove multiplicity of laws, in alcoholic beverages sector it would lead to multiplicity of authorities. Manufacturers of alcoholic beverages feel that implementation of the Act would pose problems. 

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Gold at 7-month low

Mumbai, May 23
Gold today fell to a seven-month low and closed at Rs 8,755 per 10 gm with a loss of Rs 50, while silver fell by Rs 135 per kg on weak global advices on the Bombay Bullion Exchange.

Standard gold (99.5) and pure gold (99.9) opened weak at Rs 8,720 and Rs 8,770 per 10 gm, respectively on lack of fresh demand.

Later, the yellow metals fell to a seven-month low and closed at Rs 8,705 and Rs 8,755 with a loss of Rs 50 each from their yesterday's close.

Simiarly, silver fineness .999 opened low at Rs 18,230 per kg on poor demand. Later, it closed at Rs 18,215 with a huge loss of Rs 135 from its last close. — UNI 

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BRIEFLY

Reliance cuts tariff to Gulf
New Delhi, May 23
The tariff war now spills to all possible segments, with Anil Ambani group company Reliance Infocom today announcing a 36 per cent reduction in ISD rates to all Gulf countries at Rs 6.99 a minute. Earlier it had announced a drop in the calling rates to the United States and Canada at Rs 1.99 a minute on its Reliance Global call card of Rs 1900. The company officials said the reduction in call rates to Gulf would also be on the same Gobal calling card of Rs 1900. —PTI

Mukand plan
Mumbai, May 23
Specialty steels major Mukand Ltd has lined up a Rs 450-crore major expansion plan for its steel and industrial machinery businesses over the next two to three years. The company proposes to increase its steel capacity from the present 3.1 lakh tonnes per annum (TPA) to five lakh TPA within the next two years. —PTI

Triton Corp
Mumbai, May 23
Triton Corp today said it would acquire two UK-based firms — West Talk Corporate Ltd and New Beginnings Finance Ltd — for an undisclosed amount. The IT and ITeS services provider has purchased the entire share capital of West Talk Corporate and 80 per cent of New Beginnings Finance from their existing shareholders respectively, Triton Corp said in a communique to the BSE. —PTI

Rajesh Exports
Mumbai, May 23
Rajesh Exports today said it bagged a Rs 286-crore gold jewellery export order from Excel Goldsmiths of Sharjah. “The research and development team of REL is carrying on path breaking work and has developed global jewellery designs which have ensured a consistent flow of orders to the company from across the world”, REL executive chairman Rajesh Mehta said. —PTI

Fortza Motorsport
New Delhi, May 23
Microsoft Game Studios today launched the upgraded version of its motor sports game, Fortza Motorsport 2, in India priced at Rs 1,895. “The launch of Fortza 2 marks a new price point that Microsoft has introduced in the Indian market. We were earlier selling our titles for Rs 2,599 and have brought this popular title for just Rs 1,895,” Microsoft Country Manager Entertainment and Devices division Mohit Anand told reporters here. — PTI

Kobe Steel
Tokyo, May 23
Japan’s Kobe Steel Ltd plans to launch Indian production of steel by 2009 using its technology to keep raw material costs down to a third of current levels, a report said today. Kobe Steel is in talks with India’s Chowgule Group to build a steel mill in the southwestern state of Goa, the Nikkei business daily reported. — AFP

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