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Plant Closure
Bajaj Auto, M’rashtra govt on warpath

Mumbai, September 9
The management of Bajaj Auto and the Maharashtra state government are on a collision path over the closure of the former’s iconic two-wheeler manufacturing plant at Akurdi in Pune.

Punjab, Haryana new Knowledge Valley: Assocham report
Chandigarh, September 9
The erstwhile Sarswati Valley, comprising undivided Indian Punjab, has the potential to become country’s Knowledge Valley by attracting investments worth Rs 50,000 crore in next five years and generate employment for 25 lakh people, says an Assocham report.

Pay licence fee to DoT, TDSAT to HECL
New Delhi, September 9
Telecom tribunal TDSAT has asked Hughes Escort Communications Ltd (HECL) to clear outstanding dues to the Department of Telecom (DoT) after it was found that the company under-reported the number of VSAT terminals.

12 Indian cos among best in Asia
New Delhi, September 9
Powered by their robust revenue growth and profitability as well as shareholder returns, 12 Indian entities have made it to the list of Asia’s 50 best performing companies the maximum for any country in the region. 

 


EARLIER STORIES

 
A model presents a creation by Indian designer Ashish Pandey during the Wills India Fashion Week in New Delhi on Sunday.
A model presents a creation by Indian designer Ashish Pandey during the Wills India Fashion Week in New Delhi on Sunday. Seventy-one designers are taking part and 30 shows are taking place during the spring-summer Wills India Fashion Week. — AFP photo

Market Update
Markets gain ground on FII buying
by Lalit Batra
Markets continued to claw back as foreign financial investors (FII’s) resumed their buying spree. Sensex gained over 270 points last week, to close at 15590. FII’s comeback can presumably be on the back of assurances from Federal Reserve chairman Ben Bernanke and US President George Bush that they would not let the US economy collapse.

Tax Advice
Yearly simple interest, simple interest per annum are same
by Lalit Batra
Q. 1 Do annum and year have the same meaning?  2 Is simple interest per annum and yearly simple interest have the same meaning? 3 You have calculated yearly simple interest on a sum of Rs 15 lakh at the rate of 8.5 per cent, which works out at Rs 1,27,500 for one year. In case the user has not paid this interest amount, then on what amount simple interest per annum will be calculated for next year? — Kuljeet Singh, Chandigarh

 


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Plant Closure
Bajaj Auto, M’rashtra govt on warpath
Shiv Kumar
Tribune News Service

Mumbai, September 9
The management of Bajaj Auto and the Maharashtra state government are on a collision path over the closure of the former’s iconic two-wheeler manufacturing plant at Akurdi in Pune.

The company has decided to close down the 45-year old Akurdi plant, which rolled out the workhorse Bajaj Chetak modified from the Italian Vespa, which symbolised the emerging Indian middle class for more than three decades.

According to the Bajajs the plant and machinery are outdated and high rates of octroi and sales tax makes it expensive to build scooters and bikes here.

Rajiv Bajaj, company’s MD, who was instrumental in shifting the company from scooters to motorcycles by setting up the state-of-the-art plant in Aurangabad, wants to develop the property after paying off the workers, say observers. Pune city is emerging as India’s newest IT hub and the land on which the Akurdi plant sits offers immense potential.

The only hitch is the future of the 2700-odd workers still employed at the plant. Most of them live in Baramati nearby, the constituency of NCP leader Sharad Pawar. The Maratha strongman has now come out to bat for his voters.

At a meeting with workers’ representatives in Mumbai over the weekend, Pawar and Rajiv Bajaj agreed that the workers would be paid six days’ wages for every week till their retirement in return for their co-operation to shut down the plant. The company is also offering these employees jobs with two-wheeler dealers as compensation.

However, the labour union headed by the Shiv Sena-run Bharatiya Kamgar Sena is unhappy and demanding that the plant remains in operation.

With even Chief Minister Vilasrao Deshmukh threatening to stop the plant’s closure, Rajiv Bajaj has turned aggressive. “Nothing can compel us from shutting down Akurdi as long as there we are paying the wages to the workers,” Bajaj told reporters in Goa on Sunday. He went on to say that workers would be paid till the day they died.

The company has so far reduced the number of workers at Akurdi by half after several Voluntary Retirement Schemes.

Pawar has now mooted a meeting between workers’ representatives and the management in Pune next week to resolve the issue.

Launches 125-cc bike

Bajaj Auto today announced the launch of its Digital Twin Spark Swirl Induction (DTS-Si) engine-powered 125 cc motorcycle XCD at a price of Rs 41,000 (ex-showroom), which the company claims, offers features of 150 cc bike with the mileage of a 100 cc motorcycle. The company says the new product runs up to 109 km per litre. Meanwhile, unfazed by a possible threat to two-wheeler sales by the Rs 1 lakh car by the Tatas, MD Rajiv Bajaj said a majority of the automobile purchases were covered by EMI and it is the overall running cost in the end, that makes the real difference. “Ownership cost of a car comes to about Rs 10,000 per month whereas it is only Rs 3,000 per month in case of bike.”

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Punjab, Haryana new Knowledge Valley: Assocham report
Tribune News Service

Chandigarh, September 9
The erstwhile Sarswati Valley, comprising undivided Indian Punjab, has the potential to become country’s Knowledge Valley by attracting investments worth Rs 50,000 crore in next five years and generate employment for 25 lakh people, says an Assocham report.

Educational institutions, pharmaceuticals, biotechnology and nano-technology are the promising areas for investment, both in Punjab and Haryana, says Venugopal N. Dhoot, president, Assocham.

“We have been impressing upon the Union Government to come out with a new education policy by impressing upon states and the Union territories to change with the changing requirements. We are supporting 100 per cent foreign direct investment in education,” says Venugopal N. Dhoot.

“High purchasing power, highest per capita income with excellent quality of life, abundant power and water supply, strong infrastructure including transportation and telecommunication with international linking, fully developed export base with strong agricultural and well developed small and medium scale industry makes Punjab the most favoured destination for any investor.

“Haryana has also witnessed significant changes in last 41 years. Manufacturing and trade sector have been growing constantly. Both Punjab and Haryana have the potential to emerge as the Knowledge valley not only of the country but also of the world,” added Dhoot.

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Pay licence fee to DoT, TDSAT to HECL

New Delhi, September 9
Telecom tribunal TDSAT has asked Hughes Escort Communications Ltd (HECL) to clear outstanding dues to the Department of Telecom (DoT) after it was found that the company under-reported the number of VSAT terminals.

The TDSAT accepted the report of a committee it had appointed to look into the issue and asked the two sides to settle their dispute as per the report.

“We direct the parties to work out the payment of licence fee for the pre-migration period on the facts and figures given by the commissioner... we find that the report of the commissioner is fair and needs no interference,” the TDSAT bench headed by Justice Arun Kumar said. HECL, which got licence in 1994 for Very Small Aperture Terminals (VSAT), was to pay Rs 50,000 per year per VSAT as license fee to DoT. Later, during inspection, DoT found that HECL had under- reported 250 VSATs and did not pay licence fee for these. The DoT then slapped fee on these VSATs from January, 1995 when its service was activated. — PTI

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12 Indian cos among best in Asia

New Delhi, September 9
Powered by their robust revenue growth and profitability as well as shareholder returns, 12 Indian entities have made it to the list of Asia’s 50 best performing companies the maximum for any country in the region.

The list, compiled by US magazine BusinessWeek includes housing finance giant HDFC, automakers Hero Honda and Tata Motors and two other Tata group firms software company TCS and world’s sixth largest steelmaker Tata Steel.

Besides, three companies Siemens India (4th), Sterlite Industries (6th) and Cipla (10th) have made to the top ten of BusinessWeek Asia 50, which has been published in the latest September 17 issue of the magazine.

Among these 50 companies, Tata Consultancy Services (23rd) is on top in terms of stock market value with a market capitalisation of about 27.5 billion dollars. Besides, Sterlite, BHEL (44th) and ITC (24th) also figure in the list of top 10 firms in terms of market value.

The ranking of other Indian firms are Suzlon Energy (16th), Hero Honda Motors (20th), Tata Motors (28), Tata Steel (40), HDFC (45th) and Sun Pharmaceutical Industries (48th). — PTI 

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Market Update
Markets gain ground on FII buying
by Lalit Batra

Markets continued to claw back as foreign financial investors (FII’s) resumed their buying spree. Sensex gained over 270 points last week, to close at 15590. FII’s comeback can presumably be on the back of assurances from Federal Reserve chairman Ben Bernanke and US President George Bush that they would not let the US economy collapse. Inflation dipped to a 16-month low at 3.79 per cent in the week ending August 25, 2007 as against 3.94 per cent in the week ending August 18, 2007.

This week is expected to be volatile as the first meeting of the UPA-Left committee on the Indo-US nuclear deal is likely to take place. It may be recalled that the government had put on hold the operationalisation of the nuclear deal pending the findings of a committee constituted to go into the objections raised by the Left parties.

A lot will also depend on how global markets pan out. Caution may also to prevail in the global markets ahead of the US Federal Reserve meeting scheduled to be held on September 18, 2007. Market men speculate an interest-rate cut.

Power Grid Corpn

Power Grid Corporation of India Ltd (PGCIL) is coming out with a book-building offer in the price range from Rs 44 to Rs 52. The issue is open from September 10 to September 13. The initial public offering (IPO) by PGCIL is primarily to fund its transmission projects and to partly disinvest the government stake. Power Grid Corporation is India’s principal power transmission company. It has been designated a mini-ratna category-I public sector undertaking since October 1998.

This provides it with powers to undertake new projects without the Government of India (GoI) approval, subject to an investment ceiling set by the government.

PGCIL has been designated as the nodal agency by the Government of India for the development and consolidation of the inter-state and inter-regional electric power transmission assets of the country. It owns and operates most of the country’s interstate and inter-regional electric power transmission system.

With the government’s plan of adding near 80,000 MW of power generation capacity during the Eleventh Five Year Plan and the necessity of achieving a national power grid with inter-regional power transfer capacity of more than 37,000 MW, the PGCIL, being the nodal agency, will benefit tremendously. The company possesses capabilities across the transmission spectrum — from the conceptualising to the commissioning of projects. Its experience and expertise in project implementation will, serve well as it undertakes substantial expansion in the next few years.

By creating a telecommunications network principally using its overhead transmission infrastructure, PGCIL has also diversified into the consultancy and telecommunications business, it owns and operates a fibre-optic cable network of over 19,000 km. The company has been leasing out bandwidth on this network to more than 60 customers, including major telecom operators such as BSNL, VSNL, Tata Teleservices, Reliance Communications and Bharti Airtel. In July 2006, it also received a licence to provide telecommunication services to end-users and is currently exploring options for providing these services.

Valuations

At the upper band the price to earnings is close to 20 on the basis of 2007 earnings. There is no exactly comparable listed entity. NTPC, which is a power transmission company, commands a similar discounting. Worldwide such premium valuations are not accorded to power transmission/ power generation companies but growth prospects of power in India over the next five years will ensure that such valuations are sustained. As such investor may apply for the PGCIL IPO at cut off.

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Tax Advice
Yearly simple interest, simple interest per annum are same
by S.C. Vasudeva

Q. 1 Do annum and year have the same meaning?

2 Is simple interest per annum and yearly simple interest have the same meaning?

3 You have calculated yearly simple interest on a sum of Rs 15 lakh at the rate of 8.5 per cent, which works out at Rs 1,27,500 for one year. In case the user has not paid this interest amount, then on what amount simple interest per annum will be calculated for next year? — Kuljeet Singh, Chandigarh

A. Yes, annum and per year have the same meaning.

1. The simple interest per annum and the yearly simple interest will also have the same meaning.

2. The answer given on June 4 was with reference to the fixed deposit made for a period of nine years. In case of such fixed deposits, usually the interest earned for one year is added to the principal in the second year so on and so forth. In this manner, the return on such fixed deposits works out at more than 8.5 per cent per annum. It is not clear from your query as to whether the terms of the agreement provide for simple interest per year or the terms provide that in case the amount of interest is not paid, the amount of unpaid interest would become a principal amount for the purpose of computing interest at the rate of 8.5 per cent per annum. The answer to the query posed by you would thus depend upon the terms of the agreement.

Income tax

Q. I am a senior citizen. Following income will be accrued to me in 2006-07 (assessment year 2007-08).

1. Annual pension Rs 1,23,684

2. Interest on N.S.C. Rs 37,260

3. Bank interest Rs 88,414

4. Agricultural Rs 4,02,520

Kindly compute my total income tax on June 20, 2007 (assessment year 2007-08). I have invested Rs 1,00,000 in ICICI Prudential Life Insurance during 2006-07. I am an income tax payee with PAN. — Amarjit Singh, Ludhiana

A. After availing the benefit of deduction under Section 80C of the IT Act 1961, your total income works out at Rs 1,49,358. The same being below the amount of Rs1,85,000 (the amount up to which no tax is chargeable in case of a senior citizen). No tax would be payable in respect of the above income, including the agricultural income.

Form 16

Q. I have retired from the government service on January 31, 2007. The salary for January, 2007 has been paid to me in February, 2007 by my D.D.O.

My D.D.O. (employer) has not issued (supplied) me Form 16, which is required to be attached with the IT return. He only gave me the details of salary drawn and deductions made from salary from April 1, 2006 to January 31, 2007. I want to know:

i) Whether Form 16 (supplied by the D.D.O.) is compulsory to attach with the return of Income-tax for the Financial Year 2006-07 (A.Y. 2007-08) or not?

ii) Whether the salary statement supplied, instead of Form 16, is sufficient for the purpose?

iii) Whether the amount received by pensioner as benefits on account of payment of DCRG, leave salary GIS, commutation of pension etc, which is non-taxable, is in favour of the pensioner to show this amount in the return or not? — Nachhattar Singh, Barnala

A. In accordance with the amended rules regarding the filing of tax returns, it is not essential to attach any paper along with the new form of return prescribed for assessment year 2007-08. The applicable form for your case would be ITR - 2. This is on the basis of a clarification provided by the officers of CBDT. It has been clarified that in case a person has an income, which is not chargeable to tax except exempt interest income, the return should be filed in ITR -2. You should specify in the relevant column of the return form the amounts of commuted pension, leave salary payment etc; i.e. the amounts which are claimed to be exempt from tax.

Interest on NSCs

Q. I am a senior citizen and Haryana government pensioner.

1. During the financial year ending March 31, 2007, my total income from all sources was Rs 2,04,000. To save income tax, I purchased national saving certificates (NSCs) (8th issue) in February, 2007 for Rs 20,000.

2. I want to know as to how the yearly income of interest on these certificates is to be worked out commencing from the assessment year 2008-09 so that the entire amount of interest of Rs 12,000 is fully shown on the maturity of these certificates in February, 2013. — Rajinder Singh, Panchkula

A. The accrued interest on NSCs is to be included on the following basis in respect of the NSC purchased after March 1, 2003. The amount given below is in respect of denomination of NSC of Rs.100:

1st year8.162nd year8.833rd year9.554th year10.335th year11.176th year12.08 On the above basis you can compute the interest for other denominations.

ITR form

Q. For the financial year 2006-07 i.e. assessment year, the government has prescribed new ITR forms for IT return. I have been three sources of income.

1. Pension

2. Interest

3. Rent from the house owned by me and partly self-occupied and partly rented.

Kindly intimate which number ITR form will be applicable in my case. — Narian Singh, Mohali

A. You would be required to file your return in form ITR-2.

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