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Dabur Foods all set to take orders
Nitish ready to present early Railway Budget
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Raise margin on funding IPOs: RBI
Trade team to visit Pak on January 6
Tata Steel sales, production grow
Flights to US to have marshals
What does eligible equity share mean? GRAPHICS:
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Dabur Foods all set to take orders
New Delhi, January 3 “We want to become an integrated food services company with an end-to-end presence in food procurement, processing, branding and providing related consultancy and services to partners”, CEO of Dabur Foods Amit Burman said in an interview to The Tribune. There have also been reports that Dabur Food is planning a major foray in the ready-to-serve segment. Mr Burman acknowledged that there was a move in this regard but refused to elaborate. “Yes, there are plans but, cannot elaborate at this point of time. The ready-to-serve segment is currently under study within Dabur Foods”, he said. At the same time, the short-term goal of the company is to achieve Rs 100 crore in 2004-05, he said. On the second phase of corporate growth, the Dabur Foods CEO said the company had adopted the “unconventional strategy of first choosing to build a strong consumer brand, Real, which is India’s number one pure fruit juice today”. He said with the setting up of the multi-fruit processing unit at Siliguri, the company is now embarking on the second phase of growth strategy by integrating backwards. “This will result in higher profitability, enhanced access the best fruits and complete control of the production process”, he said. Mr Burman said the food services business, “which is an interface to catering to the Horeca (Hotels/Restaurants/ Caterers) segment, is a major area of growth”. In this segment there is a major need for convenient, hygienic and high-quality products, he added. Mr Burman disagreed with the line of opinion that the traditional grandma’s recipes are losing its taste as more and more people opt towards packaged food. “No. Grandma’s recipes are not losing taste even as people are opting towards packaged food. However, overall packaged food acceptance is very limited in the main meal segment. If at all we see any acceptance that is in the accompaniments’ segment”, he explained. “Women are not getting time to prepare chutney, pickles. Hence, they are willing to experiment with packaged supplements, which are not only hygienic but also expedite home cooking”, he said. The organised food industry is estimated at Rs 90,000 crore and Mr Burman believes that Dabur Foods, which was set up in 1996 as a 100 per cent subsidiary of parent group Dabur, “in the long run, we do hope to move towards a modest contribution to the same”. Even though imported brands are freely available Indian consumers have not really flocked to buy these products as was feared earlier when the floodgates were opened up in accordance with the WTO mandate. The Dabur Foods CEO said this is because the Indian consumer has a distinct palate. “Keeping this in view, we have always focussed on offering the taste that appeals to Indian sensibilities”. “We are not into manufacturing jams, ketchups, and ice-creams. Most of these products are not part of Indian food habits. Customising products according to Indian palate is an important driver for the growth of our organisation”, he said. Mr Burman also called for creating a favourable policy framework and revamp the agriculture produce market so that “farmers are allowed to sell, as they like” in order to push the food processing industry in a high-growth trajectory. India is the largest producer of fruits in the world at 46 million tonnes, but the domestic fruit industry is fraught with massive problems of wastage (more than 30 per cent). “Food processing gives vital linkage and synergies between agriculture and industry. Growth in food processing activities will benefit not only the consumer but also the primary producer”, he explained. Dabur have also been organising flair bar-tending events to popularise fruit-juices as a commodity to guzzle at parties. From a corporate growth perspective for Dabur Foods, the event has helped create awareness among institutional buyers that “Real is a fresh juice and not tinned juice and thus expand the reach of the food services division”. Freebie campaigns to shore up sales of FMCG products have been a major area of debate. Sales figures across the industry indicate that most organised players have drawn a blank from such offers in terms of incremental sales. Mr Burman said that freebies might be instrumental to shore up short-term objectives, “but in the long run it is the product quality and the value addition provided by the product to the consumer’s lifestyle, which gives a sustained sales growth”.
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Nitish ready to present early Railway Budget
New Delhi, January 3 Kumar's comments came amidst indications that the ruling coalition might go in for an early election in April-May, thus bringing forward the Railway Budget presentation that is normally held in February ahead of the Budget. "The budgetary exercise is going as planned and we have completed most of the consultation process," he told reporters on the sidelines of a ceremony to mark the signing of a memorandum of understanding for gauge conversion of the Gandhidham-Palanpur railway line. "We would be prepared for an early annual budget presentation and
vote-on-account, which is part of the annual budget process." Assuring that the Railway Budget would "please all", Kumar said among new features being proposed were "extension of more off-season concessions to passengers as the response to the scheme introduced in April in the Rajdhani Express has been very encouraging". As a result of cost-cutting measures and other rationalisation schemes, Kumar said, "The Railways will be in a position to pay not only its annual dividend of around Rs.30 billion but also part of the deferred dividend. "Though we had made a provision for Rs.500 million as deferred dividend payment in the Budget, we plan to pay a much higher amount to the central government," he said.
— IANS
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Raise margin on funding IPOs: RBI
Mumbai, January 3 The Reserve Bank of India said here today that it had asked banks to raise the minimum cash margin in respect of guarantees issued by the banks for capital market operations to 25 per cent, within the margin of 50 per cent. The Reserve Bank of India said the margin of 50 per cent would apply to all fresh advances and guarantees issued for the capital market operations. “The existing advances and guarantees issued may continue at the earlier margins until they come up for renewal,” the apex bank said. At present, the Reserve Bank of India said the banks were required to apply a uniform margin of 40 per cent on all advances against shares and financing of IPOs and issue of guarantees. A minimum cash margin of 20 per cent, within the margin of 40 per cent, is required to be maintained in respect of guarantees, the apex bank said.
— UNI
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Trade team to visit Pak on January 6 Chandigarh, January 3 Mr. Onkar Singh Pahwa, Director, Exports, Avon Cycles,
Ludhiana; Mr. Surinder S. Bhogal, Bhogal Exports, Ludhiana; Mr. Chetan Singh, Pioneer Sports Company, New Delhi, representatives of Escorts,
Faridabad; Mr. T.K.Pal, MD, Sohna Stearing Systems, Gurgaon; Ms Madulika Tripathi, MD, IT Education, Elquest, New Delhi; and Mr
S.C. Ralhan, Regional Chairman, Reengineering Export Promotion Council, will be members of the delegation. The delegates from Ludhiana include
Mr Avinash Gupta, MD, R.N. Gupta and Co; Mr Rajdeep Jain, MD, Deep
Tools; Mr Vipin Gupta, Director, Venus Industrial Corpn; Mr Ravinder Bawa, Kanik Tools
India; Mr Rajiv Sayal Director, Rajiv Metal Works; Mr Gandharv Raj, Sri Tools Industries. The delegation will visit Lahore, Karachi and Islamabad and will have one to one discussion with the industrialists.
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Tata Steel sales, production grow
Kolkata, January 3 “Domestic sales stood at 2.45 million tonnes between April and December which is 7 per cent higher than that of last year’s 2.30 million tonnes,” a company press release said here. The company’s steel exports stood at 0.46 million tonnes during the period. Crude and saleable steel production was 3.17 million tonnes and 3.05 million tonnes, which correspond to a jump of 6 per cent over last financial year’s figures for the same period.
— PTI
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by K.R. Wadhwaney Flights to US to have marshals The United States of America has not been able to get rid of the hangover of ghastly terrorist attacks on September 11, 2001. Even after 27 months, passengers are subjected to stringent security checks and frisking at all domestic and international airports. The passengers, men and women, are checked from toe to head. They are made to remove their shoes, irrespective of how much time it takes in this exercise. The passengers — quietly stand in queue and undergo checks without any murmur. When similar checks were introduced in this country, there were loud protests and ‘we were dubbed as backward country by even our own Indians’. There was time when foreign airlines posted their own security officials at Delhi and Mumbai airports doubting “our competence and integrity”. Now wheel of cycle has turned full circle! Still disturbed by those threats, the Bush Administration has issued order demanding that foreign airlines place armed air marshals on flights that travel into, out of the US, if officials determine there is a threat. This emergency order has been issued on the plea that the nation’s terrorist alert status has been raised to “high”. Under the new protocol and depending upon the intelligence information, the US will demand that the foreign airline carries armed and trained air marshals. Air-India, which operates 20 flights a week to US, has consented to comply with the US directive subject to prior information of threat perception on their flights. According to aviation experts and several airport officials, this kind of order should have come from the International Civil Aviation Organisation (ICAO) or international security body instead of US’s Homeland Security Secretary. “If every country issues similar kind of order, there will be virtual chaos in air and multiple of problems on ground”, said three senior aviation officials, adding: “An advisory from US is understandable, but certainly not mandatory order”. Indo-Pak flights The resumption of India-Pakistan flights is
laudable, but the entire exercise seems to have been taken in a haste. Opening offices and appointing and posting staff as also selling tickets are not problematic areas. The most vital area is posting of security personnel. India Airline’s flight IAC-814 from Kathmandu was hijacked through the connivance of the third party. Any such lapse because of careless handling can prove suicidal and Indo-Pakistan relations may deteriorate instead of improving. The skies continue to be vulnerable. An extra quantum of vigilance is essential to make the operations across the border successful. The pricing of fares is also very high. Indeed there will be high demand. But printed high fares will lead to heavy under-cutting. The bottom-line is steady and slow operations will be more beneficial than hasty exercise. There is yet another area that has not been tackled. Private airlines have been allowed to operate flights to and from neighbouring countries. Will private operators be granted permission to fly to Pakistan?
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by A.N. Shanbhag What does eligible equity share mean? Q:
Sec. 54ED provides one method of avoiding long-term capital gains tax arising out of the transfer of shares-by investing the capital gains in a listed security. What is not clear is whether the “specified equity shares” mean specifically an IPO or could it mean any listed share purchased on the stock exchange. My CA seems to think it is the former but I feel it is the latter. Condition A is clear — it should be from a listed company, but b) nowhere indicates that it should be a new issue. I feel that the explanation for b) is that the shares should not be those of special category viz. locked in shares, or those allotted to foreign partners, etc. which cannot be purchased by the public. If it means a new issue, why not say so? Since the meaning is unclear it must have been challenged and if so, is there a judgment on this? —
Shashi
A:
I am afraid that you are mixing up Sec. 10(36) and Sec. 54D. U/s 10(36) “any income arising from the transfer of a long-term capital asset, being an eligible equity share in a company purchased on or after the 1st day of March, 2003, and before the 1st day of March, 2004 and held for a period of 12 months or more. ‘Eligible equity share’ means — (i) any equity share in a company being a constituent of BSE-500 Index of the stock exchange, Mumbai, as on the 1st day of March, 2003, and the transactions of purchase and sale of such equity share are entered into on a recognised stock exchange in India; Or (ii) any equity share in a company allotted through a public issue on or after the 1st day of March, 2003, and listed in a recognised stock exchange in India before the 1st day of March, 2004 and the transaction of sale of such share is entered into on a recognised stock exchange in India. U/s 54ED “Where the capital gain arises from the transfer of a long-term capital asset, being listed securities or unit (the capital asset so transferred being hereafter in this section referred to as the original asset), and the assessee has, within a period of six months after the date of such transfer, invested the whole or any part of the capital gains in acquiring equity shares forming part of an eligible issue of capital the said capital gains shall be dealt with in accordance with the following provisions of this section…. ‘Eligible issue of capital’ means an issue of equity shares which satisfies the following conditions, (a) the issue is made by a public company formed and registered in India; (b) the shares forming part of the issue are offered for subscription to the public; I hope the matter is now clear to you.
Leave encashment Q:
I am working in HPCL. My last year income crossed Rs 5,00,000 due to encashment of 90 days earned leave. As you are aware, all rebates, standard deduction will not be available for those crossing Rs 5,00,000 lakh income limit. I asked my employer to issue form 10(E) to split the leave encashment into last 4 years. They refused to issue me the same. I consulted some tax consultants and I understand, for employees in service, as per the rule under section 89(1) relief, the leave encashment can be spread into previous years. But my employer hasn’t given certificate of 10(E). Can I proceed directly by declaring amount because I get 24 days of encashable earned leave every year. In such a case, will IT accepts my certificate & allow spreading leave encashment into last four years( 90/24). Is any case available earlier in which IT Dept. without the employer certificate allowed the leave encashment amount split into to earlier years by declaration of employee. Whether I can bring my income below Rs 5,00,000 lakh? —
A.V. Krishna Murthy
A:
Yes, leave encashment received during employment is chargeable to tax, irrespective of whether the employee is in government or private service. The employee can, however, claim relief in terms of section 89 (Circular 431, dt 12.9.85). I am afraid, there is a misconception on the subject. Form 10-E is required to be furnished by the employee to the employer getting the relief directly from the employer. On the other hand, ITOs are empowered to grant appropriate relief u/s 89(1), on receipt of an application from the assessee. Whether you get the benefit of Sec. 89(1) or not, your income for the last year will not change. Your tax liability may reduce but not the income. Unfortunately, there is no way you can change the figure of income at this stage.
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New Delhi, January 3
