CORPORATE NEWSApollo Tyres net profit drops 30
pcNew Delhi, July 26
Apollo Tyres Ltd today announced an almost 30 per cent drop in net profit at Rs 9.11 crore for the quarter ending June 30, 2001 on 30 per cent higher turnover at Rs 455.19 crore.
The company has posted Rs 12.93 crore net profit in the same period last
fiscal over Rs 350.88 crore sales turnover.

LSE approaches SEBI for trade in derivativesLudhiana, July 26
The Ludhiana Stock Exchange has approached the Securities and Exchange Board of India
to allow its members to trade in derivative products. The trading volume of the LSE and other regional stock exchanges has drastically come down after the ban on badla system on July 2 this year.

Haryana to set up road development
fundGurgaon, July 26
The Haryana Government has decided to set up a high-powered “road development fund” for construction and upkeep of roads in the state. Also, the government is studying the feasibility of levying entry tax on vehicles coming into the state.

India & World Bank
sign 3 agreementsNew Delhi, July 26India and the World Bank today signed three agreements for projects in Karnataka, including an economic restructuring project.

Disinvestment of Goa Shipyard opposedNew Delhi, July 26The proposed disinvestment of Goa Shipyard Limited has been opposed by the Parliamentary Committee on Public Undertakings on the ground that it is a Defence-related enterprise.

Overcharging by PSIEC flayedLudhiana, July 26The industrial associations here have condemned the decision of the Punjab Small Industries and Export Corporation
to charge Rs 22 per square yard from the persons who were allotted industrial plots in the Phase V, Focal Point, Ludhiana during 1990.

Incoming calls to be charged nowShimla, July 26About 17,000 mobile telephone users in Himachal Pradesh will lose the privilege of free incoming calls and will be charged Re 1 per minute from August 1. Both mobile phone service providers, Airtel and Reliance, have decided to withdraw the facility of free incoming calls to their subscribers.

ROUND-UP

Sony Corp posts
slide in earningsTokyo, July 26
Sony corp, the world’s largest audio-visual electronics maker, reported on Thursday a more than 90 per cent slide in earnings for the April to June quarter, hit hard by the slowing global economy.

New Delhi, July 26
Apollo Tyres Ltd today announced an almost 30 per cent drop in net profit at Rs 9.11 crore for the quarter ending June 30, 2001 on 30 per cent higher turnover at Rs 455.19 crore.

The company has posted Rs 12.93 crore net profit in the same period last fiscal over Rs 350.88 crore sales turnover.

Rising raw material costs coupled with lower sales realisation impacted the net profitability of the company, it said in a statement here adding high crude oil prices in turn hiked prices of all petro-based raw materials used by the tyre industry like nylon cord fabric, carbon black and synthetic rubber.

Spencer & CoThe turnover of Spencer & Company Limited, the retailing outfit of RPG Group, has registered a 11 per cent rise in turnover at Rs 78.41 crore during the first quarter ended June 2001.

Dabur India
Dabur India Limited has recorded a growth of 23 per cent in net profit for quarter ended June 30, 2001. The company clocked a net profit of Rs 8.80 crore for the period up from Rs 7.15 crore for the corresponding period last year.

SKF Bearing
SKF Bearings Ltd has recorded a 54.28 per cent rise in net profit at Rs 5.4 crore for the second quarter ended June 30, 2001 as compared to Rs 3.5 crore in same period last year.
The net profit and net income for the January-June 2001 stood at Rs 7.1 crore (Rs 6.9 crore), Rs 170.6 crore (Rs 181.2 crore) respectively.

Rhone PoulencRhone Poulenc (India) Ltd has posted an 18.17 per cent increase in net profit at Rs 8.39 crore for the first quarter ended June 30, 2001 as compared to Rs 7.1 crore in the same period last fiscal.

Blue DartThe Board of Directors of Blue Dart Express Ltd has approved the investment by FIIs upto a ceiling of 49 per cent of the paid up equity of the company, subject to approval by shareholders of the company.

Century TextilesCentury Textiles and Industries Ltd has posted a 83.68 per cent growth in net profit at Rs 12.27 crore for the first quarter ended June 30, 2001, compared to Rs 6.68 crore in corresponding period of previous fiscal.

Carrier AirconCarrier Aircon Limited’s net profit fell by a whopping 75 per cent to Rs 2.55 crore for the quarter ending June 30, 2001 on a 4 per cent fall in sales turnover at Rs 145.03 crore.

Nicholas PiramalNicholas Piramal India Ltd has posted 10.85 per cent at Rs 16.85 crore for first quarter ended June 30, 2001, compared to Rs 15.2 crore in the same period of previous fiscal.

Bank of BarodaBank of Baroda today reported a 20.31 per cent growth in net profit at Rs 182.61 crore in the first quarter of this fiscal as against Rs 151.78 crore during the same period last fiscal.

Monsanto IndiaMonsanto India Ltd has reported a 14.12 per cent drop in net profit at Rs 10.46 crore for the first quarter ended June 30, 2001, compared to Rs 12.18 during the period last year.

Philips IndiaPhilips India Ltd has posted a higher net loss of Rs 8.73 crore for the second quarter ended June 30, 2001, compared to net loss of Rs 3.49 crore for the corresponding period of previous fiscal. Agencies

IN
a globalised economy, progressively being developed under the WTO regime, subsistence farming is fast losing its moorings. Unless a farm unit is enabled to operate within the framework of a closed economy, which is impossible within a globally interactive growth oriented socio-economic systems, trickle down impact of global market in terms of kind, quantity and quality of goods and services demanded and traded is bound to be felt by any farm enterprise. Under the regime of tariffs and physical controls, the domestic markets could be protected or even insulated in the same way as regional or local markets could be enabled to operate in a segmented market. Yet, the segmented market is always an inefficient market in its conduct and performance.

As the development of a national market through integration of segmented markets improves the efficacy of factors of production, the same way the trade related agreements under the regime of world trade organisation are, in principle, aimed at integrating the national markets into a single global market so that competitive strengths of national economies, delinated by their natural resource endowment, technological development and managerial skills, can be optimally exploited.

This in turn is assumed to augment the levels of gainful employment and income of the people and improve the capital base of producing units in all the participating economies of the world.

A typical example of a highly segmented market in a partially closed economy was the grain market of the erstwhile Soviet Union with more than one hundred price levels for different producing units (collectives) in the country. It insulated their inefficiencies because administered prices for different units were decided on the basis of their individual costs of production. Prices determined by demand and supply were not allowed to play any role.

This led to a serious misalignment of the production system with the resource endowment of different farm enterprises in different regions and areas of the country and left no incentive for improving production technology and application of modern management skills by individual farm enterprises. As a consequence the production system did not respond to the rightful signals from the market. Food production, therefore, failed to meet the national requirements. This, inter alia, was one of the strong reasons for the collapse of the Soviet system.

It is the captive market nurtured by the system of support prices and government procurements that these otherwise unviable farms could adopt high yielding crop varieties, use modern inputs and some improved farm practices that created a situation of spurious foodgrain surpluses characterised by supply exceeding demand. This has in turn led to the serious problems of market clearance, resulting in build up of huge stocks of foodgrains procured by the government and consumers lacking the needed purchasing power.

Channels of distribution having been almost choked due to the lack of demand at the prices the foodgrains cost, the
bludgeoning stocks are causing a strong back pressure on the production system. Yet, on political grounds, the support prices are pushed up year after year bypassing the recommendations of Commission for Agricultural Costs and Prices and government remain committed to purchase all the stocks that are brought to the market, though often reluctantly.

Consequently, farmers in spite of facing severe inconveniences in the produce markets, keep growing more and more of foodgrain. There is no economic rationale in the situation that has emerged in the domestic foodgrains market. On one hand, it continues to be remunerative for the farmer to keep producing foodgrains in excess of demand and on the other, he carries no compulsions and gets no motivation to diversify his product-mix to meet the shortage of commodities like edible oils, pulses, milk and milk products.

In such a structurally distorted domestic market, where the farmer has been enfeebled enough to operate on his own strength, he cannot be expected to compete cost-effectively in a competitive globalised market. Under such a dismal situation, the WTO regine is bound to cause catastrophic tribulations in the farm sector. Yet, the WTO is a fait accompli. Fortunately, however, the WTO regime while posing some serious challenges to the farm sector, also offers some
opportunities that await exploitation to our advantage. Not withstanding the possibilities of getting some modifications made to our advantage or to minimise our disadvantage through periodical ministerial meetings, the veritable answer to the problem is to create conducive environment in in our agriculture sector that promotes
commercial farming and minimises the recourse to subsistence farming.

The first pre-requisite is that an effective land market must be developed that allows the viable farm units to grow. A land lease market must remove existing apprehensions of losing the land if leased out for longer periods. Also to the extent, through the earlier phases of land reforms, the surplus lands have been distributed amongst the landless families, these so called farmers must be helped to exit their tiny unviable pieces of land held by them in fractions of acres through providing them with an access to gainful employment outside the farm sector.

Once this process gains momentum, the farm units that become commercially viable through purchase and/or long term lease of adjoining lands, will start generating more employment within the farm sector also. For this purpose the agrarian laws of the land must get suitably amended that facilitate creation of effective land market. In the absence of such an enabling environment, other actions and steps taken to remedy the situation will remain only inconsequential palliatives.

The second essential requirement is that our administered pricing policy and procurement system must play a pro-active and complementary role within the stipulations of the WTO regime to encourage production that relates to the market demand. We import edible oils worth more than Rs 8000 crore annually and pulses too remain in short supply. The structure of support prices and procurement system must get so restructured and realigned that production of oilseeds and pulses get the needed incentive and the prices of cereals, specially wheat and rice get frozen for a couple of years in order to prompt the farmers to bring in much needed shifts in their production patterns.

It is of paramount importance that farm production gets adequately related to the changing market demand in order to improve farm incomes, build capital base for the farm units for adoption of improved production technology and facilitate market clearance to avoid heavy burden of producer and consumer subsidies on the government and ameliorate hardship to the growers in the market place. The product-mix which is not related to the market demand, is neither in the interest of the producers, nor is beneficial for the economy. Such a production-mix is unsustainable and goes irrelevant in the globalised market.

Gurgaon, July 26
The business tour of the high-powered delegation from Haryana will leave for Hong Kong, China and Malaysia on July 28.

According to the founding member of the Gurgaon Chamber of Commerce and Industry and Chairman, Malt Company (India) Ltd, Mr P.K. Jain, who is part of the delegation, said today the tour was a joint effort by the Haryana Government and the PHD Chamber of Commerce and Industry (PHDCCI).

The
delegation would be jointly led by Mr L.M. Goyal, Chief Secretary of Haryana and Mr Sushil Ansal, president of the PHDCCI.

The other members of the delegation are Mr Depinder Singh Deshi, Additional Principal Secretary to Chief Minister Om Prakash Chautala and Mr Pawan Kumar Sahni and Mr Shashi Ranjan Parmar (both members of the Haryana Vidhan Sabha).

The Chairman of Himachal Pradesh Committee of the PHDCCI, Mr Satish Bagrodia, the Chairman, LNJ Bhilwara Group, Mr Ravi Jhunjhunwala, the Chairman of Sawhney Tyres, Mr B.L. Sawhney, the Managing Director of Asia Resorts Ltd, Mr Akash Garg and the Area Director of MGRM Medicare Ltd, Mr Nalin Goyal, are also part of the delegation.

Ludhiana, July 26
The Ludhiana Stock Exchange (LSE) has approached the Securities and Exchange Board of India (SEBI) to allow its members to trade in derivative products. The trading volume of the LSE and other regional stock exchanges has drastically come down after the ban on badla system on July 2 this year.

Mr R.C. Singhal, President, LSE said,‘‘ With a view to help the brokers and investors in the region, the management has proposed to commence trading in derivative products via the NSE and the BSE through its wholly owned subsidiary, LSE Securities Ltd. A proposal has been already submitted to SEBI to allow the exchange brokers to trade in derivatives.’’

He disclosed that SEBI has assured to consider the proposal sympathetically though under the prevalent rules the sub-brokers of the regional stock exchanges were not allowed to trade in derivatives. The LSE has asked SEBI to allow its brokers, who were also sub-brokers of the LSE Securities Ltd, to trade in derivative products.

Mr Singhal further said two years back, LSE had conceived the deal of subsidiary route for the survival of regional stock exchanges (RSEs) which had worked well. Following the lead taken by LSE many other RSEs such as Rajkot, Pune, Chennai, Hyderabad, Jaipur, Kanpur and Vadodara had also set up their own subsidiaries for getting membership of NSE and BSE which had helped them survive.

Gurgaon, July 26
The Haryana Government has decided to set up a high-powered “road development fund” for construction and upkeep of roads in the state. Also, the government is studying the feasibility of levying entry tax on vehicles coming into the state. This was disclosed here by the Financial
Commissioner and Secretary, Government of Haryana, PWD (B and R), Mr Prem Prashant.

The need for the fund is on account of firming of the view in the higher echelons of the government to institutionalised mechanism for prompt repair and construction of roads by the agencies concerned of the state.

Also, about half a dozen teams have been constituted at the state level to conduct surprise checks on the use of standard of materials used in the construction of roads. The Deputy Commissioners in the districts have been asked to inspect the roads to ensure the use of quality materials used for construction. Moreover, a decision has been taken to create a new division in the PWD exclusively for Gurgaon for better maintenance of roads.

To ensure use of high quality of materials for construction and repair of roads, the state has taken a policy decision to discard the practice of providing bitumen to the contractors engaged by the department, Mr Prashant added.

He said the ongoing construction works for upgradation of all state highways in Haryana as well as the works on the roads in the districts will be completed by the end of this year.

New Delhi, July 26
India and the World Bank today signed three agreements for projects in Karnataka, including an economic restructuring project.

Other projects include the Karnataka State Highway Improvement Project and the Karnataka Watershed Development Project.

The Karnataka Economic Restructuring Project was signed for IDA soft credit of $ 75 million and World Bank loan of another $ 75 million.

The entire assistance would be in the form of a fast disbursing loan meant for budgetary support to cover the fiscal cost of the reforms, including the cost of power sector restructuring, introduction of Value Added Tax, civil services reform, PSU restructuring and voluntary
retirement scheme.

The total cost of the Karnataka State Highways Improvement Project is estimated at $ 447 million with a World Bank loan of $ 360 million and the counterpart funding of $ 87 million by the Government of India.

The total project cost of Karnataka Watershed Development Project is $ 127.60 million out of which the World Bank is providing IDA credit of $ 100.4 million.

New Delhi, July 26
The proposed disinvestment of Goa Shipyard Limited has been opposed by the Parliamentary Committee on Public Undertakings on the ground that it is a Defence-related enterprise.

The Committee said that the transfer of the management control of Goa Shipyard Limited to a strategic partner could prove problematic. Since the main customers of the public sector undertaking were the Navy and the Coast Guard, Government control of the enterprise should continue, the Committee opined.

The Committee did not agree with the views of the company that the disinvestment of the PSU would lead to improved efficiency and increased turnover.

It recommended that the company be considered for grant of shipbuilding subsidy to enable it to compete in the international market and fetch more export orders.

The Committee also suggested that a corpus fund be created to enable the company to supply ships on liberal payment terms. This would encourage export to third world countries, it felt.

It recommended that 30 per cent subsidy be given for export of warships, irrespective of the size and type of the vessel.

Ludhiana, July 26
The industrial associations here have condemned the decision of the Punjab Small Industries and Export Corporation (PSIEC) to charge Rs 22 per square yard from the persons who were allotted industrial plots in the Phase V, Focal Point, Ludhiana during 1990.

The PSIEC has imposed addition charge on the allottees after the Punjab and Haryana High Court granted imposed enhanced compensation of Rs 2.13 crore to the farmers whose land was acquired by the government.

Mr Joginder Kumar and Manmohan Singh Ubhi, President and Secretary of Electroplaters Association respectively have strongly decried the imposition of the extra charges on the industrial units by the PSIEC.

Shimla, July 26
About 17,000 mobile telephone users in Himachal Pradesh will lose the privilege of free incoming calls and will be charged Re 1 per minute from August 1. Both mobile phone service providers, Airtel and Reliance, have decided to withdraw the facility of free incoming calls to their subscribers.

It is learnt that Reliance has decided to charge Rs 1.20 per minute for each incoming call.

The monthly rental for Airtel subscribers has been reduced by Rs 50 and shall now pay Rs 250 against the rental of Rs 300. The cost of outgoing calls has also been reduced to Rs 2.50 per minute from the existing Rs 3 per minute.

The new rates will be applicable to the existing subscribers in two slabs with effect from August 16 and September 4.

ROUND-UP

Sony Corp posts slide in
earnings

Tokyo, July 26
Sony corp, the world’s largest audio-visual electronics maker, reported on Thursday a more than 90 per cent slide in earnings for the April to June quarter, hit hard by the slowing global economy.

Group operating profit tumbled to 3.00 billion yen ($ 24.27 million) in the quarter — far below analysts expectations of between 26 billion and 37 billion yen and compared to 30.59 billion yen a year ago.

Sales rose 4.4 per cent year-on-year to 1.64 trillion yen.

On a net basis, it saw a loss of 30.08 billion yen, compared to a loss of 92.44 billion yen in the same quarter a year ago.
Reuters

One country, two ratings?

Hong Kong, July 26
China’s robust economic growth underpins Hong Kong’s solid A-grade investment rating, but exposure to the mainland’s political risks is ruling out an upgrade for the territory.

Though Hong Kong has one of the region’s more robust banking systems, no external debt, and temporary fiscal deficits of less than one per cent of gross domestic product, its ratings are below those of Taiwan — whose finances are in a worse state — and close to those of developing China.

Some economists say the former British colony deserves at least an AA rating like neighbouring Singapore, given its similar fundamentals and current risk profile.
Reuters

Australia’s Internet
economy blossoms

Sydney, July 26
Only one firm in a 100 is earning all its income online, a survey of Australia’s Internet economy released Thursday showed.

But more than half are players in e-commerce and sharing in a sector that generated revenues of a $ 28 billion ($ 14 billion) last year, the report from the Allen Consulting Group found.

The report, commissioned by Internet infrastructure giant Cisco Systems, estimated that revenues from the internet economy would rise to 6.7 per cent of Gross Domestic Product in 2003 from the current 4.3 per cent.
DPA

Tanishq’s rakhisChandigarh, July 26
Tanishq, today launched rakhis in gold and silver as part of their rakshabandhan collection. The Tanishq rakhi collection priced between Rs 200 and Rs 1200 comes in colorful, ornate and dazzling designs available at 30 Tanishq boutiques across the country.
TNS

Bajaj AutoChandigarh, July 26
Bajaj Auto has launched three new models of motorcycles in the market. Caliber Croma, Boxer CT and Kawasaki Aspire are the latest of enter the market. Mr R.L. Ravichandran, Vice President Marketing of Bajaj Auto Limited launched the new
models. TNS

Online tax returnsNew Delhi, July 26
A portal has launched free services for online filing and auditing of income tax forms. File MyReturn.com, India’s first G2C portal, has started the free service for customer convenience from July 25 to July 31, the last date for filing of returns.
UNI

Reliance refineryNew Delhi, July 26Reliance Petroleum Ltd’s (RPL) refinery at Jamnagar operated at an average rate of 108 per cent during the first quarter of the current financial year. RPL’s refinery operating rates have increased over the last five quarters since the commencement of commercial operations in April 2000.
PTI

Damani deadMumbai, July 26Former Bombay Stock Exchange, President Madan Gopal Damani died of a massive heart attack here today.
Mr Damani, President of BSE, for two successive terms during 1996 and 1998 was the brain behind the country-wide expansion of the bourse.
UNI

Canada 3000New Delhi, July 26
A leading air carrier, Canada 3000 Airlines, which will begin operating in India from October, plans to start its operations from Amritsar. The inaugural flight from Delhi to Vancouver is scheduled to takeoff on October 8, using the polar
routes. TNS

PNB HousingNew Delhi, July 26
PNB Housing Finance Limited, a subsidiary of Punjab National bank, today opened its 17th branch in Gurgaon.
TNS