B U S I N E S S

Infocomm to be thrust area for Salora
New Delhi, February 7
Homegrown consumer electronics and component manufacturing major Salora International Ltd has worked out a multi-pronged re-structuring plan with major thrust on its infocomm division.

BIMSTEC agree on free trade treaty
Phuket (Thailand), February 7
India and six other countries forming BIMSTEC economic grouping today agreed on a draft treaty that would abolish tariffs and throw open their resources for free trade among them.

STONA 2004 opens new trade opportunities for Indian businessmen. (28k, 56k)

Govt to amend FEMA
New Delhi, February 7
To reduce transaction costs and simplify procedures, the government has decided to amend the Foreign Exchange Management Act and empower the Reserve Bank of India to impose penalties in case of violation of forex deals, barring hawala transactions.

• Lintas chairman

AVIATION NOTES

Jet Airways in an upbeat mood
The Jet Airways balancesheet for the year ending March 31, 2003, shows that it sustained loss before tax Rs 2,456,373 and after tax Rs 2,444,501. But whatever may be its financial health and turbulence in Indian skies, Naresh Goel and his officials stay in upbeat mood.

• Bangalore airport

Is farm income tax free?
Q: The interest on agriculture income is taxable or non-taxable?
— Taxpayer
A: Agricultural income is tax-free but is aggregated with the other income only for the rate, if it exceeds Rs. 5,000. To illustrate, take the instance depicted hereunder: If there were no agricultural income, the tax would have been Rs. 32,500 on an income of Rs. 1,95,000. Agricultural income of Rs. 30,000 pushes tax up by Rs. 4,000.

GRAPHIC : WEEKLY STOCK MOVEMENT

Infocomm to be thrust area for Salora
Gaurav Choudhury
Tribune News Service

New Delhi, February 7
Homegrown consumer electronics and component manufacturing major Salora International Ltd has worked out a multi-pronged re-structuring plan with major thrust on its infocomm division.

‘‘The infocomm division will be the main revenue earner for Salora International Ltd. We see the best possibilities of growth and returns from this line of business”, the Managing Director of the company, Mr Gopal Jiwarajka, told The Tribune in an interview.

The company’s infocomm division is the exclusive Indian distributors for Sony Erricson mobile phones and national distributors for Acer Computers, Panasonic fax and printers and Samsung peripherals.

It has also recently tied up with Telecom FM (TFM), a British company, to distribute its Least Cost Routing Solution Products in India.

“We are looking for similar tie-ups for other synergetic products”, Mr Jiwarajka said.

This year ( 2003-04) the company was aiming at a total sales of Rs 440 crore and had targeted a topline figure of Rs 600 crore in the next financial year.

Last year the company achieved a net sales of Rs 341.67 crore, out of which Rs 139 crore came from the consumer electronics division.

“The infocomm division will be the main revenue earner as its contribution in total sales is estimated to be over 60 per cent and balance 40 per cent will be equally shared by the consumer electronics and components division,” he said.

On the consumer electronics line of business, Mr Jiwarajka said that the company was in the process of restructuring the operations focusing on manufacturing, product and marketing strategies.

“We are going to focus on markets where we are already present. We do not enter into newer markets as of now. The cost of entering new markets is quite high and consumer electronics is a highly competitive business,” he said.

The company had identified seven focus markets, including Uttar Pradesh, Rajasthan, Punjab, West Bengal, Bihar, Madhya Pradesh and Maharashtra “where we aim to double our sales volumes”.

“We are strengthening the dealer network to get more penetration and depth in these seven states and various promotional schemes, including combo offers, are being offered in these markets,” he said.

On exports, the company was focusing on exports of television to Bangladesh, Singapore, Sri Lanka and “exploring other export possibilities.”

“Objective of the new manufacturing strategy is to rationalise the production cost. With in-house development, we have been successful in cutting down material cost by 10 per cent in the recent past and remain competitive in comparison to other players of TV and audio industry in the market,” he said.

The company would soon launch new models for 21 and 29-inch flat TVs and new DVDs and home theatre systems. “Initially, we are going to launch two models of home theatre systems in the price basket of Rs 8,000 to Rs 10,000,” he said.

Salora was also a major component manufacturer of critical TV components such as fly-back transformers (FBT), reflection yorks and speakers.

At present, the company was supplying components to television producing majors, including LG, Samsung, Sony, Panasonic, Phillips, Thomson, Onida, BPL and Videocon among others.

“We are looking aggressively towards exports in the component division. Once the additional capacities are in place we would be looking out,” he said.

To this effect, the company had laid out a capacity expansion plan, which would be complete in the next six to nine months. The present capacity was 3.5 million in FBTs, seven million in speakers and three million in reflection yorks per annum.

“Seeing the buoyant demand for these critical components in the domestic market and in view of huge export potential, we are in the process of enhancing the production capacity of FBTs to five million and speakers to 10 million per annum,” Mr Jiwarajka said.

BIMSTEC agree on free trade treaty

Phuket (Thailand), February 7
India and six other countries forming BIMSTEC economic grouping today agreed on a draft treaty that would abolish tariffs and throw open their resources for free trade among them. Commerce Minister Arun Jaitley discussed the draft of the Framework Agreement with his counterparts from Bangladesh, Myanmar, Sri Lanka, Thailand, Nepal and Singapore, and they would sign it tomorrow at the end of their two-day meeting here.

The BIMSTEC was formed in 1997 and was yet to hold its first summit. A summit, which was proposed to be held on February 9 but had to be postponed as Prime Minister Atal Bihari Vajpayee could not attend due to the coming elections in India.

Officials said with the combined market of over 1.3 billion consumers and an aggregate GDP of almost $ 800 billion (US), the establishment of a Free Trade Area would greatly increase inter-regional and intra-regional trade.

A meeting of senior Foreign Ministry officials, including Indian Foreign Secretary Shashank, earlier reviewed the progress of cooperation under priority projects The officials discussed Thailand-Myanmar-India Road linkages under which the three countries would jointly develop road linkages starting from Amphoe Maesod of Thailand passing through Pagan in Myanmar and connecting with Moreh in India. — PTI

Govt to amend FEMA

New Delhi, February 7
To reduce transaction costs and simplify procedures, the government has decided to amend the Foreign Exchange Management Act (FEMA) and empower the Reserve Bank of India (RBI) to impose penalties in case of violation of forex deals, barring hawala transactions. FEMA would be amended to empower the RBI to compound contraventions except in case of hawala transactions, which would remain with the Enforcement Directorate, an official statement here said. The government has decided to simplify and rationalise current account transactions by removing restrictions.

Remittances by artists and for advertisements, royalty payments, purchase of trademarks, commission to real estate agents and health insurance from abroad would not require the RBI clearance now. Commission to agents abroad for sale of residential and commercial plots not exceeding 5 per cent or $ 25,000, would not require the RBI clearance. — UNI

Lintas chairman

Chandigarh, February 7
“With the death of Dr Ranjan Banerjee (82), chairman of the company, an era has come to an end at Lintas India,” said Prem Mehta, vice-chairman of the company. Dr Banerjee passed away in Mumbai last week. Dr Banerjee led the Board of Lintas for over 23 years. — TNS

AVIATION NOTES

Jet Airways in an upbeat mood
by K.R. Wadhwaney

The Jet Airways balancesheet for the year ending March 31, 2003, shows that it sustained loss before tax Rs 2,456,373 and after tax Rs 2,444,501. But whatever may be its financial health and turbulence in Indian skies, Naresh Goel and his officials stay in upbeat mood.

During the year under review, signed by chairman Naresh Goel, the number of passengers carried increased from 5.82 million in the previous year to 6.41 million in the current year (increase of 10.14 per cent). At the end of the year, company’s fleet was 41, with 33 Boeing and eight ATR.

The balancesheet said that the turnover was Rs 29,421,203 while expenditure was Rs 31,877,531. Despite this, the company’s review said: Operations have resulted in a cash profit situation and it is in a financially-viable condition. It has fulfilled all its financial commitments.

The review further said: The company enjoys the largest market share in the domestic aviation factor and to consolidate its position it is planning to augment its operations through fleet modernisation/expansion programmes.

The review said: Mr Shatrughan Sinha and Maharaja Gaj Singh have resigned as directors. The board places on record its appreciation of the contribution made by them during the tenure. It, however, did not say why had they resigned.

According to business reports, Jet Airways total assets were Rs 1,965.04 in the fiscal year 2000-01 but in the year 2001-02, requirements of the Companies Act, 1956.

Bangalore airport

All hurdles have at long last been removed, the preparation for the Rs 1200-crore Bangalore Airport at Devanahilli has begun. The Chief Minister S.M. Krishna, who laid the inauguration stone, said that the work would be completed in 33 months.

The consortium would have a single-window officer for speedy execution. “We will, however, add sub-windows, if necessity arises”, said Mr Krishna. The consortium include Germany’s Siemens Group.

The consortium held 74 per cent stake in the airport company, Bangalore International Airport company. Two other partners — the Karnataka Government and the Airports Authority of India — had 13 per cent stakes each. The airport, constructed on 4200 acres, would be ultra modern. It would initially handle 40 lakh passengers annually. There would be 10 lakh international passengers.

The airport would have independent cargo unit, which would handle 1,30,000 tonnes of cargo annually.

Those, who had had an opportunity to see designs and plans, were of belief that it would be a much better airport than Delhi and Mumbai. Despite a lot of tall claims and assurances, the plans for these two busy airports continued to remain on the drawing board.

Now since Lok Sabha elections were scheduled, all plans for airports and fleet expansion of two national carriers would have to be buried in cold storage.

Strange were the ways of functioning of the Civil Aviation Ministry.

INVESTOR GUIDANCE

Is farm income tax free?
by A.N. Shanbhag

Q: The interest on agriculture income is taxable or non-taxable?

— Taxpayer

A: Agricultural income is tax-free but is aggregated with the other income only for the rate, if it exceeds Rs. 5,000. To illustrate, take the instance depicted hereunder: If there were no agricultural income, the tax would have been Rs. 32,500 on an income of Rs. 1,95,000. Agricultural income of Rs. 30,000 pushes tax up by Rs. 4,000.

It does not enjoy as much freedom from tax as is the general impression. Moreover, all states levy their own tax on income from agriculture. Thankfully, this is deductible. The interest on investments made out of this source is chargeable to income tax, unless, these are also in tax-free avenues.

How to invest money

Q: I am an employee, who has availed of the VSS offer. I have been relieved as on 30.9.03. I request you to kindly guide me as to how to invest my VSS money. I am 39 years old lady having a 13-year old son . My husband is not with me. At present I am planning to do multi-media course and hence not scouting for a job immediately. I will be getting around 16-17 lakh as full amount including ex-gratia, PF, gratuity etc. I am planning to invest a major chunk of the amount in POMIS and RBI bonds. My main query: 1. Under POMIS, it is mentioned that Rs 3 lakh is the limit for a single a/c and Rs 6 lakh in case of joint a/c. What I would like to know is, can I have a single a/c with my son's name and myself as the guardian for 3 lakh and also a joint a/c with my mother for another 6 lakh ie totally can I invest 9 lakh in POMIS.

2. Regarding RBI bonds, there are two types of bonds ie 6.5 per cent and 8 per cent. Which I should invest sir? I also have a PPF account; can I invest some amount in that also?

I understand that for this financial year as my total income will exceed 8.5 lakh, I will not be able to claim any tax rebate or interest exemption under 80L. Then can I invest in POMIS and RBI bonds, now itself or should I wait for the next financial year. I will be really grateful, if you could reply to my queries as early as possible.

— Taxpayer

A: 1. MIS can be opened by a minor who has attained the age of 10 years directly; a guardian is required on behalf of a minor or a person of unsound mind. The maximum limit of deposit in joint account is Rs 6 lakh 1.2.00. The account of the minor will not affect the prescribed ceiling in the joint account or single account of an adult. I personally feel that you are making a mistake in planning for MIS and RBI savings bonds if you are likely to get a job in future.

BRIEFLY

Model-turned-actress Malaika Arora Khan poses for a photograph during the launch of "Lauret", a designer bathroom brand, in Mumbai on Friday. — PTI

PHDCCI for common market
Chandigarh, February 7
The PHD Chamber of Commerce and Industry (PHDCCI) has called upon the chief ministers of the northern states to develop the region as a single market by withdrawing all hurdles in the free movement of goods. The emergence of single common market would attract investors to the region and would help the country achieve high growth rate up to 10 per cent per year. To discuss the issues concerning states, PHDCCI was organising a conference of chief ministers at New Delhi on February 13. The conference would be addressed by Chief Ministers of Jammu and Kashmir, Punjab, Himachal Pradesh, Uttaranchal, Uttar Pradesh, Chhattisgarh
and Administrator, Chandigarh. — TNS

Housing rates
Nagpur, February 7
The rates of interest on housing loans may be at an all-time low, but the honeymoon may not last forever, if experts in the housing finance industry are to be believed. “The interest rates on housing loans have bottomed out. They are not likely to decrease further. However, it is not certain how long these low rates will last,” General Manager (North), Housing Development Finance Corporation Ltd (HDFC) Madhumita Ganguli said here today. “The present levels are rock bottom, and from here the rates can only go up”, she said. — UNI

AI fares
Dubai, February 7
Threats by Indian expatriate workers to boycott Air-India in protest against “high fares’’ to Kerala destinations appears to have yielded results, with officials pledging to cut fares within 10 days. The offer includes restructuring the fares on direct flights to Calicut in line with the Jeddah-Bombay-Calicut route. According to travel industry sources, this would result in a cut in the price by Saudi Rayal 400. — UNI

Canara Bank
Bangalore, February 7
Canara Bank has entered into a strategic partnership for electronic funds transfer services of Western Union Financial Services Inc., USA, through its Indian agents AFL WIZ. Through this tie-up, Canara Bank will provide in-bound money transfer services from about 169,000 Western Union agent locations in more than 195 countries. — PTI

Forex reserves
Mumbai, February 7
India’s foreign exchange reserves rose by a further $ 761 million (US) to near the $ 105 billion mark for the week-ended January 30, according to Reserve Bank of India’s weekly statistical supplement released here today. — PTI

PNB investments
Mumbai, February 7
Punjab National Bank will invest in the equity of the National Multi-Commodity Exchange of India (NMCE) and National Commodity and Derivatives Exchange (NCDE) up to Rs 1 crore and Rs 1.78 crore, respectively. — UNI

SBI fund tie-up
Mumbai, February 7
SBI Mutual Fund has signed up a distribution arrangement with Lord Krishna Bank for selling the mutual fund products through the bank’s 103 branches. SBI Mutual Fund which has an investor base of 8-lakh with assets worth of Rs5,500-crore under management, has also formalised an understanding with its parent firm to sell the mutual fund products at State Bank of India (SBI) branches. — UNI