B U S I N E S S

Valvoline Cummins plans pacts in India
New Delhi, February 14
Global motor oil and lubricant producing major Valvoline Cummins has drawn out ambitious plans for the Indian market, including focus on OEM agreements with vehicle manufacturers and exclusive retail tie-ups with transport fuel marketing companies.

Gail public issue on February 27
New Delhi, February 14
The government said today the public offer of Gail would hit the market on February 27 followed by the ONGC public float on March 5.

LG’s Dehradun unit inaugurated
Dehradun, February 14
LG Electronics India will invest Rs 118 crore in Uttaranchal by the end of this year, a top company official today said. The investment would include a Rs 25 crore factory to be set up in Dehradun by September for manufacturing LG’s top-end products like projection TV, 25 and 29 inch colour TVs, SN Rai, General Manager (corporate logistics and commercial), said at the inauguration of the company’s original equipment manufacturing unit at Selaqui Industrial Estate near Dehradun.

Aviation notes

Be cautious on open sky policy
The private airlines have been caught in ‘another air pocket’. They have been rightly barred, though ‘ban’ may be lifted as vested interests in political and bureaucracy circles are working over-time to help them enter into foreign air space.

Investor guidance

Guidance on capital gains problem
Q: I will be very grateful if you kindly guide me for the following capital gains problem. The facts of the matter are as under. An investment in REC Bonds of Rs 15.20 lakh u/s 54EC was made on 12-06-02 to cover the net of L/T Gain of about Rs 15 lakh for 1-04-02 to 30-04-02.

Supermodel and Bollywood actress Katrina Kaif at the launching of RIM Prepaid Vintage Car Calvacade to promote the prepaid service, in Mumbai on Friday. — PTI

	Common economic zone for North proposed February 14, 2004
	Industrial production grows 6.2 pc in Dec February 13, 2004
	India hub for Linux initiative February 12, 2004
	Hike in cane SMP suggested February 11, 2004
	GDP growth pegged at 8.1 pc for this fiscal year February 10, 2004
	Sportking to invest 50 cr on expansion plans February 9, 2004
	Infocomm to be thrust area for Salora February 8, 2004
	Govt awards 14 oil blocks to ONGC February 7, 2004
	J&K selects 396 units for revival February 6, 2004
	Tatas to invest 5,000 cr in 11 telecom circles February 5, 2004

Valvoline Cummins plans pacts in India
Gaurav Choudhury
Tribune News Service

New Delhi, February 14
Global motor oil and lubricant producing major Valvoline Cummins has drawn out ambitious plans for the Indian market, including focus on OEM agreements with vehicle manufacturers and exclusive retail tie-ups with transport fuel marketing companies.

“We will launch a suite of products researched and formulated with expertise from Valvoline USA and customised for engines in India. The company is also focussing further to strengthen the distribution and marketing network to enhance its reach in the lube market”, CEO of Valvoline Cummins Naveen Gupta said.

Outlining the company’s road map for leadership in engine oil and lubes market in the country, Mr Gupta said it will work towards maintaining its leadership position in the CNG vehicle segment .

“We are uniquely positioned to leverage the expertise and technical knowhow of our global parents which will enable us to bring to India, a suite of products, specially designed for hi-end, state-of-the-art automotive diesel engines. We are also working on further evolving our OEM relationship with local vehicle manufacturers”, Mr Gupta said.

To this effect, the company is targeting a sales target of Rs 250 crore during 2004-05. The company has been registering a cumulative annual growth rate (CAGR) in excess of 30 per cent over the last few years.

Valvoline Cummins is a 50:50 joint venture between Valvoline International Inc US and Cummins Diesel Sales Service (India) (CDS&S).

Valvoline International Inc is a division of Ashland Inc and a $12 billion player in road construction, refineries, lubricants and chemicals.

It is a leading marketer, distributor and producer of branded automotive and industrial products and services.

Worldwide its products range includes automotive lubricants, transmission fluids, gear oils, hydraulic lubricants, automotive chemicals, greases and cooling system products.

The sixth largest lubricant company in the world, Valvoline operates the second largest quick-lube chain in the USA.

CDS&S is a diesel engine manufacturer having 25 facilities across the world. Elaborating on the new products that will be rolled out from the company’s stable, Mr Gupta said the Valvoline Cummins will launch a new range of filters, Eagle I Car Care products, Tectyl range of rust preventives used both in industrial and automotive segment, environmental friendly lubricants, and Champ 4T Premium — a synthetic blend of four stroke engine oil meant for premium motorbikes.

“Outside of public sector units engaged in the manufacture and marketing of lubes and engine oils, Valvoline Cummins is the third largest player in the North India. We expect to end the current financial year with revenues in excess of Rs 215 crore”, he said.

The Indian operations have shown very encouraging results over the last couple of years. “While there is not denying the potential of the Indian market, our technically superior products, global experience and proven standards of research and development internationally have stood us in good stead in what is one of the world’s most competitive markets. We are committed to bring to India the best products and proven technology”, he said.

With the importance of CNG as a transport fuel growing in importance, especially in the SAARC countries, Valvoline Cummins, is gearing up for the emerging scenario.

“We will also be focusing on the Eagle One range of car care products as a key consumer focus driver in addition to the off-highway and on-highway lubes market”, he said.

In the off-highway range, it will launch Premium Blue — an environment friendly lubricant catering to the “highest specification levels” and meant for off-highway application such as Gensets etc.

The company at present has three manufacturing units and 53 depots. Besides, it has over 500 distributors and more than 1,000 retailers. It has a tie-up with the IndianOil Corporation (IOC), while there are more than 1,000 industrial customers, including several leading automobile manufacturers such as Ashok Leyland.

“Today we service India’s top brands, including Tisco, Telco, Cummins, LG, Infosys, HLL, Nestle, HCL, SAIL, ONGC, Indian Railways, LML, and Hero Honda among others”, Mr Gupta said.

Gail public issue on February 27

New Delhi, February 14
The government said today the public offer of Gail would hit the market on February 27 followed by the ONGC public float on March 5.

“After a detailed meeting with stock exchanges and merchant bankers yesterday, it has been decided that Gail public offer will now open on February 27,” Disinvestment Secretary Dhirendra Singh told PTI when asked about the new schedule drawn up by the government.

As per the revised schedule chalked out yesterday, Gail public offer would now precede the ONGC’s IPO which is slated for March 5, to enable the government to complete the six IPOs by March 13.

Sources associated with the process said initial placement of Gail IPO for March 13 may not have given enough time for completing the procedural formalities.

“There needs to be enough time for shares to get listed, and also there are formalities with various stock exchange, and work to be done by the registrar of the issues,” the sources said, adding that there were concerns that the original schedule of IPOs may not have left sufficient time for completing all these procedures in a proper manner before March 31, 2004.

As per the new schedule, IPCL public offer will open on February 20, while that of CMC will hit the market on February 23.

“IBP and Dredging Corporation public offers might be timed for February 26. With IPCL public offer slated for February 20, the roadshows will start on February 17, in Mumbai.''

Sources said the sequence of IPOs had been drawn out in such a way that public offer of government equity in already disinvested companies like IBP, IPCL and CMC would hit the market first.

The government would offload 10 per cent equity each in ONGC and Gail, while in the case of IPCL, IBP and CMC, it would make a public offer for its residual equity. government would also offload, through a public float, about 20 per cent stake in DCIL. — PTI

LG’s Dehradun unit inaugurated

Dehradun, February 14
LG Electronics India will invest Rs 118 crore in Uttaranchal by the end of this year, a top company official today said.

The investment would include a Rs 25 crore factory to be set up in Dehradun by September for manufacturing LG’s top-end products like projection TV, 25 and 29 inch colour TVs, SN Rai, General Manager (corporate logistics and commercial), said at the inauguration of the company’s original equipment manufacturing unit at Selaqui Industrial Estate near Dehradun.

The Rs 15 crore OEM unit was inaugurated today by Chief Minister N.D. Tiwari.

LG had earmarked Rs 47 crore for establishing a vendorbase at Selaqui which would also be the distribution hub of the company’s goods, Rai said.

“This will give opportunity for creating a local vendor base for supplying components locally, which in turn would generate job opportunities and local revenue for the state government,” he said. The OEM unit at Selaqui has started producing window and split air-conditioners and commercial air-conditioners. Around 3 lakh units of ACs would be manufactured in 2004 with a total turnover of Rs 400 crore, Rai said.

The LG is also contemplating setting up manufacturing units of fully automatic washing machines and microwaves, Rai said. — PTI

Aviation notes

Be cautious on open sky policy

The private airlines have been caught in ‘another air pocket’. They have been rightly barred, though ‘ban’ may be lifted as vested interests in political and bureaucracy circles are working over-time to help them enter into foreign air space.

If they are allowed to fly internationally it will be yet another government blunder in the civil aviation sector.

No genuine promoter of civil aviation in the country was against private airlines flying on routes outside India. But only those who had right credentials should be allowed this facility.

Way back in 1986, Naresh Goyal, chief of Jet Airways was ‘arrested’ for FERA violations in Mumbai.

The government should examine this case thoroughly. If Goyal was innocent, acquit him because no agency had the right to defame any ‘honourable citizen’.

If the agency had erred in its findings and its home work, the officials responsible for such sensitive assignment should be cautioned to exercise greater care in submitting their reports to the Home Ministry.

Since Independence, several committees and commissions had been formed to provide befitting ‘face-lift’ to the vital aviation (also tourism) sector.

Unfortunately, most of these reports had been buried deep in Rajiv Bhavan or DGCA office as they had been subsequently found lacking in ‘balance’. Those, which had semblance of ‘truth and sense’ were unacceptable to new set of ministers and bureaucrats.

The net result was that Indian civil aviation stayed imprisoned at bottom in comparison to small nations, like, Singapore, Malaysia, Thailand and several other developing countries.

What did ‘open sky’ mean? Did it mean ‘openness’ of ‘commercial trends’ or did it mean ‘operation of hidden agenda’?

There were carriers, Indian and foreign, which posted their foreign officers not as ‘resident of this country’ for the period of their postings but ‘tourists’. This dubious function helped airlines to ‘launder’ money and it also helped officials to evade paying taxes.

Modern technology had rendered jets sturdy and safe. But airline business was a tricky adventure and operators were even trickier.

The need of the hour was openness of heart and mind more than dubious and meaningless open sky policy merely on paper.

Investor guidance

Guidance on capital gains problem

Q: I will be very grateful if you kindly guide me for the following capital gains problem. The facts of the matter are as under. An investment in REC Bonds of Rs 15.20 lakh u/s 54EC was made on 12-06-02 to cover the net of L/T Gain of about Rs 15 lakh for 1-04-02 to 30-04-02. Similarly an investment in Nabard bonds of Rs 2 lakh u/s 54EC was made on 27.9.02 to cover the net of L/T gain of about Rs 35,000 for 13-07-02 to 26-09-02. Thereafter the net of L/T gain/loss from 28-09-02 to 31-03-03 was not covered u/s 54EC as there was net of L/T Loss of Rs 3.25 lakh. Kindly confirm whether the exemption u/s 54EC as stated above can be rightly claimed and also the net of L/T loss of Rs 3.25 lakh so claimed which has to be carried forward to next year. If I am right, how it can be explained if the assessing officer raises any objection at any time.

—-Taxpayer

A: The following is an extract from my book, ‘Taxpayer to Taxsaver’:

Take the case of an individual who has earned LT capital gains and has invested immediately thereafter the gains in Nabard bonds to come down to nil tax on capital gains. Later, during the same FY he has incurred a long-term capital loss.

Sec. 71 (3) stipulates that if the net result of computation under “Capital Gains” is a loss, the assessee will not be entitled to have such loss setoff against income under other heads. Does this mean that the loss will have to be setoff against the gains in spite of the assessee having invested in the Bonds u/s 54EC? Does this also mean that the loss will not be allowed to be carried forward u/s 74?

Sec. 54EC/ED are exemptions and not deductions. In other words, if an income is eligible for exemption, it is not to be included in the computation of income. On the other hand, deductions (Secs. 80L, 80G, 80D, 80U etc.) are to be claimed after having aggregated the incomes from different sources.

The argument is fortified by Sec. 45 (1) which states “Any profits or gains arising from the transfer of a capital asset effected in the previous year shall save as otherwise provided in sections 54, 54B, 54D, 54E, 54EA, 54EB, 54F, 54G and 54H, be chargeable to income tax under the head ‘Capital Gains’, and shall be deemed to be the income of the previous year in which the transfer took place.”

After having claimed the exemption u/s 54EC/ED, such income ceases to be taxable and will not be included in the total income. As such, the full amount of capital loss can be carried forward, unless the assessee earns some further capital gains in the remaining course of the financial year. For greater clarity, even if the capital loss was incurred prior to the capital gain during the same financial year, there would be no dispute arising from the assessee investing in Sec. 54EC or ED within 6 months, claiming the exemption and carrying forward the loss.

BRIEFLY

Sony slashes prices by 16 pc
Chandigarh, February 14
Sony India today slashed the prices of its products by 5 to 16 per cent. Sony has decided to pass on the benefits of the recent customs duty out made by the Centre to its customers. The price reduction in MRP will be in the range of 5-10 per cent for the WEGA flat colour televisions, 8-10 per cent for Sony hi-fi systems and 8-16 per cent for camcorders and digital still cameras. — TNS

New LIC plan
Chandigarh, February 14
The LIC today announced launching of a new unit-linked flexible plan from February 16 in tune with the modern day requirement. Senior Divisional Managrer Debashree Varma said here people between 12 and 60 years can join in the scheme. — TNS

Master Trust
Chandigarh, February 14
The Master Trust group’s managing director H.S. Arora today, launched online trading in commodities, through its group company Master Commodity Services. He said commodity trading business in India will go global as with convertibility of ruppee there will be arbitrage opportunities across all other international commodity exchanges worldwide. — TNS

Arrow awarded
Chandigarh, February 14
Arrow has won the award for the “Most admired shirt brand of the year” at the Images Fashion Awards, 2004. The award was given away at a function held in New Delhi on Thursday. This is the second year in succession that Arrow has bagged the award. — TNS

PTC IPO cleared
New Delhi, February 14
The power Trading Corporation today said yesterday that it had approached the Registrar of Companies seeking clearances for initial public offering of shares following approval by Sebi for the ensuing issue slated to hit the market on March 1. — PTI

Petronet IPO
New Delhi, February 14
The IPO of India’s first liquefied natural gas importer Petronet LNG may be postponed by a week as differences between promoters and merchant bankers delayed fixation of price band for the issue of 261 million equity shares. The IPO, which was scheduled to hit market on February 19, may now come on February 26. — PTI

Export status
Chandigarh, February 14
After the announcement made by the Finance Minister in his mini-Budget reducing the basic customs duty on goods imported for power transmission, sub-transmission or distribution projects the Ministry of Commerce has issued a notification allowing deemed export status for the domestic industry if the international competitive bidding procedure is followed by the purchaser. — TNS