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Monday,
August 25, 2003, Chandigarh, India  
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Hind Lever
to exit from non-core business, says Banga Dhindsa
seeks deferment of NFL disinvestment Ordinance
to convert IDBI into a bank ruled out SBI gives
option to fixed rate home loan customers Issue
white paper on FDI, Chautala told JM
launches JM MIP Fund |
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GRAPHIC: WHOLESALE PRICE INDEX
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Hind Lever to exit from non-core business, says Banga New Delhi, August 24 This restructuring initiative, cutting across all product segments, will focus on topline growth by creating mega brands backed by a “deep and shared understanding” with the consumer and less of freebie campaigns. “As part of our growth strategy, we have decided to divest our non-core businesses, like chemicals, seeds, oils and fats. Most of these while non-core, have been profitable businesses. We decided to secure the right of homes for them and have almost completed the exercise”, HLL Chairman M.S. Banga told The Tribune in an exclusive interview. Essentially, this means that there would be increased concentration on the home and personal care (HPC) and Foods and Beverages (F&B) business because “these are businesses we know best and have local and global scale”. “Within these businesses, we have chosen to concentrate our resources behind select brands, with competitive relevance and scale, which are the Power Brands”, Mr Banga pointed out. Presently, HLL have 30 national Power Brands, but as Mr Banga indicated, new entrants to the power brand category could be expected. “For example, we think that Ayush, our brand in ayurvedic health and beauty care, already demonstrates the potential of a power brand”, he observed. Mr Banga, a gold medallist from IIT Delhi and IIM Ahmedabad, has been with the company ever since he joined as a Management Trainee in 1977, believes that each mega brand of HLL is capable of generating a sale of Rs 1,000 crore in the foreseeable future. The top five brands of HLL together already account for Rs 3,000 crore. HLL has been facing stiff competition from low price competitors, especially in the rural and semi-urban areas, where smaller regional players dominate. But Mr Banga exuded confidence that HLL will compete by “playing to strengths — using our strong brands, leveraging technology and scale to cut costs and drive distribution”. For instance, he pointed out, in the laundry market, where there are over a thousand local players, HLL’s wheel is the market leader, and in the area of skin care, the FMCG major have recorded impressive growth despite low cost competition. “We are confident, that we will sustain growth in the face of such competition in other categories also, as we have done in the past”, he observed. At the same time, he acknowledged that freebie and ‘buy free get one free’ kind of campaigns shore up sales per se but do not help topline growth. “Ultimately, companies, irrespective of the categories they operate in, will have to ensure that their brands induce consumer pull because of differentiated benefits and value that they offer”, Mr Banga said. At the same time, however, after dismissing the value proposition offered by smaller toothpaste players as “brands that down the price and partially offset the cost by downsizing the packs”, HLL appears to have followed suit. It has recently launched new price points with its Pepsodent and Close-Up brands and also dropped prices. Was this reflective of the fact that smaller players have now started entering the once-exclusive domain of the multinationals? Mr Banga believes that the key objectives are to “increase the rate of share gain from the market leader and to charge a sustainable premium over the low cost players to drive growth”. The product portfolio of the company, especially in the home and personal care segment, implies that women are the single most important target consumer segment for the company. The company Chairman said that it has adopted a marketing approach which goes “well beyond listening to what the consumer tells us”. “Indeed we need to develop a degree of intimacy and understand what is deep in her sub-conscious mind and seldom or never articulated..... this will help deepen our collective intuition”, he said. Mr Banga drew attention to Lakme’s association with the annual Lakme India Fashion Week (LIFW) has helped significantly in the brand’s growth chart. “A beauty brand, like Lakme, must always remain contemporary and define trends. The LIFW has certainly helped Lakme acquire that position. Product ranges have been launched every year to coincide with the event and have met with considerable success”, he noted. To this effect, HLL has forayed into
experimental laundry services and beauty salons. “Our aim is to build mega brands, extending equities, wherever appropriate, to adjacent categories and services. In line with that thinking, we have launched Lakme Beauty Salons, extending the heritage of Lakme to out-of-home beauty services. We have met with good success, and have already established 44 salons so far across the country”, Mr Banga added. |
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Dhindsa seeks deferment of NFL disinvestment New Delhi, August 24 “I will put forth the ministry’s proposal before the Prime Minister”, Dhindsa told PTI adding his ministry was having a rethink on NFL disinvestment in order to assess the impact of new pricing policy for fertilisers on the sector. In case the government decides to heed to Dhindsa’s request, it would be the second PSU where disinvestment would be deferred in the last two months. Last month Prime Minister Atal Bihari Vajpayee had announced that Nalco disinvestment was not being pursued for the time being. Dhindsa said under new pricing policy for fertilisers the sector will be free of all controls in next two years and as a result impact of international market on India must be studied Since NFL is India’s leading producer of fertilisers and accounts for around 15 per cent of the country’s production, its privatisation should be put off for one to two years, he added. “Once the assessment of India’s fertiliser availability and NFL’s role thereof has been made vis-a-vis new pricing policy, we can then take up the issue of the PSU’s disinvestment,” the minister said. He said no decision in this regard has been taken, “it is just a proposal and I will take up the matter with the Prime Minister”. Paving the way for inviting financial bids in case of National Fertiliser disinvestment, the Cabinet Committee on Disinvestment had approved transaction document and decided to take out Rs 300 crore as dividend, last month. “There will be a dividend payout by NFL to the tune of Rs 300 crore to the government out of a total reserves of Rs 800 crore,” the Disinvestment Ministry had stated. However, the remaining reserves had been left untouched as the company’s two plants at Bathinda and Panipat would require at least Rs 150 crore each towards modernisation. At least four suitors, including Tata Chemicals, Deepak Fertilisers and Indo Gulf group, are reported to be in the fray for acquiring government stake. The government had earlier invited fresh bids for sale of the company after aborting the exercise earlier following changes in policy and pricing norms. It has offered 51 per cent stake in the company to strategic partner, thereby diluting its stake to around 46 per cent. It currently holds close to 97 per cent stake in the company. Rabo Bank has been appointed as global advisor for the deal.
— PTI
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Ordinance to convert IDBI into a bank ruled out New Delhi, August 24 “It’s unfortunate,” he said referring to the non-approval of repealing of IDBI Act at the recently concluded Parliament session. Asked whether the Centre was planning an Ordinance to repeal IDBI Act, the Minister replied in negative. He had said in Lok Sabha that the government would not be able to “guarantee the health” of the IDBI if the bill to convert it into a company was not passed by Parliament this session. Even after two days of debate over the no-confidence motion passed by the Opposition, Singh told PTI that there was still two days left and yet the IDBI bill could not be passed. The bill to repeal the IDBI Act was approved by the Parliamentary Standing Committee on Finance with some minor changes. But it could not be passed last week. The Industrial Development Bank (Transfer of Undertaking and Repeal) Bill, 2002, which was sent to the Standing Committee of Finance Ministry last winter, would be carried forward to the next Winter Session. Congress and CPI-M had made it clear that they would oppose any move to issue an Ordinance. IDBI was in financial stress mainly on account of the non-performing asset (NPA) worth over Rs 15,000 crore leading to a decline in its lending abilities. IDBI was also under financial strain as its cost of borrowing was higher than cost of lending. The Parliamentary Standing Committee, while approving the bill, had suggested that government should retain 51 per cent stake at all times even after IDBI is converted into a bank. The house panel also asked government to offer tax sops and come up with a VRS package for employees.
— PTI
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SBI gives option to fixed rate home loan customers Mumbai, August 24 “Those fixed rate customers who have taken home loans at higher interest of 10-12 per cent or even higher in some cases can now benefit by converting their loans to existing fixed rate or floating rate by paying a charge of 2 per cent of their outstanding loan amount”, a senior SBI official told PTI here today. This scheme, which has been devised to retain these customers and avoid them from switching over to other banks, would be available till December 31, 2003, he said. At present, the fixed rate home loan portfolio of the country’s largest banking entity was around Rs 800 crore, the official added. The interest rate in this category were 12 per cent and above for year ended March 2001, 12-12.5 per cent as at March 2002 and between 9.5 to 11.5 per cent in previous fiscal. The prevailing floating interest rate was pegged at 8 per cent for upto five years, 8.75 per cent for five to 10 years and 9.25 per cent for 10 years and above. The fixed rate is 0.25 per cent higher in all categories than that offered on floating rate basis. During the first quarter ended June 30, 2003, of the current fiscal, SBI’s housing loans portfolio was pegged at Rs 764 crore. In June, the bank had re-introduced the five-year bracket for home loans at 8 per cent floating rate of interest to target high networth individuals and customers seeking loans for repairs and reconstruction. Effective April 1, 2003, SBI had also realigned its interest rate on floating basis for old borrowers to bring them at par with new customers.
— PTI
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Issue white
paper on FDI,
Chautala told Chandigarh, August 24 While the state government claimed that the minister had erred in assessing the FDI in Haryana, the Opposition asked Chief Minister, Om Prakash Chautala to issue a White Paper on the FDI flow to the state in the monsoon session
beginning on September 9. A former Congress MLA, Mr Kuldip Bisnoi, has also demanded that the government should issue a white paper on the expenditure incurred on the foreign visits of the Chief Minister. In a statement here today, Mr Bhupinder Singh Hooda, leader of the Opposition in the assembly, expressed concern at Mr Jaitley’s disclosures. Mr Hooda alleged that the Chief Minister had been befooling people on the issue of FDI. Mr Chautala went abroad on at least three occasions to attract investors, even as the Opposition protested against these visits saying the trips were nothing but sightseeing trips Mr Hooda said that on January 29, 2003, the Chief Minister had claimed that Haryana had got FDI worth Rs 2800 crore. However, the Central Minister had exposed that Mr Chautala’s claims were false as not even Rs 1 crore had been invested by foreign companies in the
state. He said the CM must place all facts and figures on FDI in Haryana in the coming session of the Assembly and must also issue a White Paper. |
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JM launches JM MIP Fund Chandigarh, August 24 He disclosed that objective of the fund would be to generate regular income through investments in fixed income securities to provide periodical income distribution to the unit holders. Efforts would also be made to generate long term capital appreciation by investing a portion of the scheme’s assets in equity and equity related instruments. The Fund will invest between 85 to 100 per cent of the corpus of the scheme in debt instruments and the remaining zero to 15 per cent in equity market. The JM MIP Fund will be targeted, he said, at retail investors who are looking for a mix of growth and regular income. The investors would be offered free life insurance cover up to a maximum of Rs 7 lakh provided they invest during the initial offer period. He said the customers would be offered two plans — Growth plan and Dividend plan. Investors in the growth plan would have to invest a minimum of Rs 10,000 and could choose systematic withdrawal plan or growth option. In the dividend plan, they would be paid dividend on monthly, quarterly or annual basis depending upon their option.
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by R.N. Lakhotia Education expenses Q:
In the Budget proposal for 2003-04 a relief for education expenses up to Rs 12,000 per child was given. Under what section this relief is given? I am Punjab Government employee. My two children are studying in a convent school and I pay Rs 1200 per month as their fee, except annual charges which are nearly Rs 3000. Can I avail the relief? What is the procedure? What is the relief under Section 80L? What amount out of it is for Government
securities? — Joginder Singh ‘Malhi’, Amritsar Ans: The relief for education expenses of children is available to financial year 2003-04 relevant to Assessment year 2004-05. This relief is available by way of rebate under Section 88 of the Income-tax Act, 1961. Please enclose copies of the fee-paid receipts with your Income-tax return. Maximum rebate can be claimed at Rs 12,000 p.a. per child subject to maximum two children. The deduction under Section 80L is Rs 15,000 out of which the sum of Rs 3,000 is exclusively for interest on Government securities.
PAN requirement Q:
If we deposit salary amounting to more than Rs 50,000 in a bank, do we require PAN for the bank? I am a senior citizen and have no PAN. I am not tax-assessee. — Rameshwarlal Jain, Malerkotla Ans:
Merely for depositing in the bank your yearly salary in excess of Rs 50,000 p.a. you may not require PAN. You do not have a PAN, but it is recommended that you should now apply for PAN and get the card which may, otherwise, be useful for other matters as in due course many more transactions will be covered wherein the mention of PAN would be compulsory.
Tax at source Q: I am an agent of small saving postal-scheme. I am pensioner from H.P. Government and senior citizen of 75 years age. I submit income tax return with PAN but my income from all sources does not fall under the purview of income tax being less than 1.50 lakh. The postal authority deducts T.D.S. there and then at the time of my claim of commission daily, weekly and monthly for which I prepare a monthly statement of T.D.S. for submitting it annually with income tax return for its refund after awaiting for one year or so. Kindly guide me if I could get exemption of T.D.S. pertaining to above quoted facts from the Income Tax Commissioner and who will claim refund if any mishap occurs to me in between. — V.M. Bakshi, Parwanoo Ans: We have full sympathy with you but within the framework of the income-tax law, tax at source on your commission income will be deducted. You may file your Income-tax return in April and avail yourself fast refund of T.D.S. You cannot get exemption. |
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Inflation dips FII net buyers Havell’s in Lanka Morgan Stanley Allahabad Bank |
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New Delhi, August 24
