IT SEZ News: 24/7/09

MAYTAS VENTURES APPROACHES GOVT TO SURRENDER ITS SEZ
New Delhi
The Economic Times  The Statesman  The Financial Express  The Hindu  The Hindu Business Line  

Financially "poor" Maytas Ventures has approached the Centre to surrender its SEZ in Andhra Pradesh, citing economic slowdown and also requested for waiver of over Rs 31 lakh benefit it had availed during the setting up of the project.

Maytas Ventures SEZ Pvt Ltd has approached the Commerce Ministry for surrendering its 14.15 hectare sector-specific SEZ in Ranga Reddy district in Andhra Pradesh.

"The developer has submitted that due to financial recession they have decided to get their SEZ denotified," a source said, adding that the case would be take up by the Board of Approval (BoA) meeting on August 11.

Though the developer has not availed any exemption towards customs duty, excise duty and sales tax for their SEZ but has availed service tax exemption.

"They have availed service tax exemption for Rs 31,46,550 ... requested to waive off (need) to refund the said service tax.. in view of poor financial position," the source said.

Maytas, promoted by kin of B Ramalinga Raju - founder of Satayam Computer, has plans to set up six IT/ITeS SEZs in Andhra Pradesh of which three zones have already been notified by the government and rest are in the process of being granted formal approvals.

The developers of these SEZs are Maytas Enterprises, Maytas Ventures and Maytas Hill Country SEZ. Maytas Enterprises has also been granted one year extension to set up its IT/ITeS SEZ in the Ranaga Reddy district.

 

BOA TO MULL 5 SEZ PROPOSALS ON AUGUST 11
New Delhi
Business Standard  The Economic Times (Delhi edition)  

The Commerce Ministry will consider on August 11 five proposals for setting up SEZs, including those of Brooke Bond Real Estates and Deccan Infrastructure.

The 19-member inter-ministerial Board of Approval (BoA) headed by Commerce Secretary Rahul Khullar may also give formal approval to 25 developers who have been given more time to execute their projects.

The Board would also take a decision on requests of Lanco Solar and Cochin Airport International to set up special economic zones (SEZs), a source said.

Brooke Bond Real Estates plans to set up an IT\ITeS SEZ over 11 hectare in Karnataka, while Deccan Infrastructure has moved the BoA for permission to develop two tax-free zones in Andhra Pradesh.

The developers, including Ansal SEZ in Gurgaon (Haryana), Ranbaxy Laboratories in Mohali (Punjab) and Maytas Enterprises in Ranga Reddy (Andhra Pradesh), who have been given one-year additional time to go ahead with their projects, may get formal approval for the extension, sources said.

Two developers - Maytas Ventures and Sanvo Resorts - have requested the BoA to de-notify their projects.

So far 576 formal approvals have been given for setting up SEZs, of which 319 have been notified. Exports from SEZs grew by 36 percent to Rs 90,416 crore in 2008-09.

 

IT COMPANIES RECONCILING TO PAY MORE TAX AS STP EXEMPTION ENDS
Shamik Paul/Adith Charlie, Bangalore/Mumbai
The Hindu Business Line

IT firms such as TCS, Infosys and Wipro expect their effective tax rates to go up in the coming years as more of their delivery units come out of Software Technology Parks of India.

This would further impact the net profit of these companies, already under pressure because of the global economic crisis.

The actual taxes paid by a corporate divided by the net taxable income expressed as a percentage, gives the effective tax rates.

The vendors setting up delivery units in Software Technology Parks (STPs) enjoy a tax holiday for 10 consecutive years. However, after that period, they are no longer eligible for the exemption. The latest Budget gave the STPI scheme an extension of one more year; it will now end in March 2011. The extension will not benefit units that are more than 10 years old.

Infosys Technologies, which had an effective tax rate (ETR) of 17 percent last fiscal, expects the ETR to touch 20 percent this financial year.

“It is a natural conclusion that the ETR will go up in the next few years as more of our units come out of STPI,” said V. Balakrishnan, Chief Financial Officer, Infosys.

The company estimates its ETR at 24-25 percent in the next fiscal. “However, it is difficult to say because the tax rate would depend on how much of our growth will go into the SEZs,” Balakrishnan added.

For many companies, most expansion is happening in SEZs, which provide tax benefits on all profits from export for the first five years, and tax breaks for 50 percent of profits from exports in the next five years.

However, some companies might find it difficult to start work in an SEZ because it is more cost-intensive. Country’s largest software exporter TCS also expects its ETR for the fiscal to rise from 14.34 percent in 2008-09.

“We expect it to go up to 17 percent by the end of the current fiscal. Apart from this (the STPI ceiling), we do not see any other reason for the effective tax rates to go up,” S. Mahalingam, CFO and Executive Director, TCS, said.

For the quarter ended June 2009, Wipro had an ETR of 15.5 percent.

“We expect the ETR to be in the range of 15.5 percent for the remaining quarters. For fiscal 2011, we expect it to increase 100-200 basis points,” said a Wipro spokesperson.

Apart from the top companies, the small and mid-size firms also expect their ETR to go up. MindTree Ltd, which had an ETR of 12-13 percent in fiscal 2009, expects it to go up by two percentage points to about 15 percent this fiscal.

Sonata Software also expects its ETR to go up, but marginally. "We have some of the units coming out of STPI. But for us many are still within STPI," said B. Ramaswamy, Managing Director, Sonata. The effective tax rate currently is about 8-9 percent, he added.

IT SEZ News: 23/7/09

BUILDER'S NOVEL WAY TO DELIVER IT SPACE
D Govardan
Financial Chronicle

At a time, when several property developers across the country are sitting on large stock of unoccupied built-in IT space, Chennai-based India Land and Properties, part of Americorp Group, is going ahead with its Rs 320 crore, 1.8 million sq ft, IT special economic zone (SEZ) at Saravanampatti in Coimbatore.

But, instead of following the trodden path of getting the building ready and waiting for occupants, India Land adds space as and when it gets a client. Helping it to achieve this unique concept is the pre-cast concrete technology that ensures that the company gets the required space ready in record time.

Use of pre-cast concrete technology enables it to deliver the space, complete with glazing and air-conditioning, within three months after signing up a client.

"Normally, this technology is used in construction of bridges. For the first time, it is being used in buildings in a big way," said S Salai Kumaran, director, India Land.

The IT SEZ is being developed jointly with Coimbatore-based KGISL. According to him, pre-cast concrete technology is being increasingly used in countries such as Singapore, Dubai and Indonesia.

"The method not only ensures zero wastage, but also offers better quality and saves cost," he added.

Slabs are produced at the site using steel moulds. These are then lifted and fixed using high capacity cranes. "We have signed up contractors from Singapore and they have already completed 5 lakh sq ft of pre-cast concrete slabs," Kumaran said.

Using the pre-cast concrete technology, the builder is able to complete one floor in about seven to eight days, against 12­20 days taken in conventional method, where quality could be comparatively inferior and there's more wastage.

"We have used this technology for beams and floors. It can even be used for columns and pillars," he pointed out. In fact, impressed by the delivery standards of the contractors, Americorp Construction, the parent company of India Land, has taken them on its rolls.

Kumaran said the use of precast concrete technology has helped the company save up to 15 percent of the estimated Rs 320 crore project cost.

"Though the economic slowdown has delayed the completion of the project and the resultant interest charges may gobble up the purported savings from use of this technology, we expect to complete the project within the estimated budget. Had we opted for traditional construction method, the project would have cost us Rs 350 crore due to delay and interest burden," he explained. Of 1.8 million sq ft, about 1.3 million sq ft will be office space, with the rest would be reserved for basement parking and other facilities.

 

APOLLO TYRES MULLS RS 1,000 CRORE INVESTMENT IN KERALA
Kochi
Business Standard  The Economic Times  

Apollo Tyres was planning to invest about Rs 1,000 crore for setting up an IT park and a hotel complex in Kerala, Apollo Group Chairman Onkar S Kanwar today said.

There were plans to set up a five star hotel and IT park at the 30 acres land at nearby Kalamassery where it has a tyre unit, Kanwar said.

The company had decided to shift the unit to the Rubber Park at nearby Irapuram. But due to strong objection from the trade unions, it had been held up.

Kanwar said the unions have more or less agreed for shifting the factory.

Apollo Tyres is planning to double the capacity of the unit from 100 tonnes per day to 200 tonnes per day after it was shifted to the rubber park.

On the company's revenues, Kanwar said from the India operations, the total business revenue was Rs 4,100 crore and it was expected to grow to Rs 6,000 crore by 2011 fiscal.

Apollo's 60 percent turnover was from Indian operations and the target was to raise it to 70 percent, he said.

A Rs 2,000 crore new plant was coming up in Tamil Nadu and it was expected to be completed in another 11 months time where truck and bus radial tyres would be manufactured.

The company was planning to put in Rs 100 crore investments in its Perambra unit.

35 percent of the total tyre production was from Kerala. The company had invested about Rs 300 crore in the last two years for production, he said.

 

GREEN NOD FOR EFFLUENT PLANT AT FAB CITY SEZ
Hyderabad
The Hindu Business Line

The Andhra Pradesh Environment Impact Assessment Authority has issued environmental clearance for the proposed common effluent treatment plant (CETP) planned at the Fab City Special Economic Zone at Maheswaram near Hyderabad.

The Fab City SPV (India), a subsidiary of Andhra Pradesh Industrial Infrastructure Corporation (APIIC) and IL&FS, has established a CETP on build-own-operate basis through IL&FS Waste Management and Urban Services Ltd.

According to an IL&FS statement, the initial capacity of the CETP at the Fab City would be 1.1 million litres a day which would be scaled up to meet the future demand. . The first module would facilitate the photovoltaic cells manufacturing units being established in the initial phase.

 

IT PARK LOOKS FOR ‘ANCHOR PLAYER’
Vijayawada
The Hindu

Though recession is proving to be a little dampener, officials of the L&T Hitech City project at Kesarapalli near here are confident that a major software company will be attracted to fill the space of “anchor player” in the project.

Total space
So far, only two companies have come forward to occupy some space at the IT Park’s first tower, which will have a total space of nearly 2 lakh sq.ft. on completion of all works soon. The Extranet Software Solutions and the Tektraks Technologies have booked space here and they are going to occupy the same after the tower is inaugurated next month.

For giving a kick-start to the project’s entire operations, it will need at least one major software company initially and its role will be pivotal in enhancing the image of the IT Park as a potential software hub in the region.

The officials are also looking at the possibility of attracting small and medium players by offering space in blocks of 3,500 sq. ft. each.

The IT tower will have five floors, including the ground floor, each having 40,000 sq. ft. and providing the best infrastructure needed for software companies. A major company having the potential to occupy one entire floor of 40,000 sq. ft. should come to give the much-needed initial boost to the prospects of the IT Park.

At the recently conducted roundtable on ‘Industrial development in Vijayawada and surrounding areas’, Vijayawada MP Lagadapati Rajagopal cited the example of IT Park project in response to the concern expressed by some speakers over lack of industrial development in the district.

The MP said that a good IT Park was ready for occupation at Kesarapalli, but only two companies expressed interest so far. He said that the first priority should be to attract software companies and develop the city as a software hub, as it would not require huge tracts of land.

The officials of the IT Park say even big companies will slowly turn their attention to tier-two cities like Vijayawada in due course of time. They maintain that the companies can reduce costs significantly as space will be offered to them for a rental that is 40 percent cheaper than the same in metro cities. This is available with the same quality of infrastructure, says IT Park chief operating officer V. Udaya Bhasker.

He says consultations are on with three to four companies as of now, while enough space will be offered to attract small and medium players too.