New Delhi, October 24
After months of intense stand-off, the oil ministry has given nod to Reliance Industries’ plans to raise natural gas output from the flagging KG-D6 oilfield and agreed the Comptroller & Auditor General of India could not do a performance audit of the company.

The ministry sent a letter on Tuesday to Reliance Industries Ltd (RIL) RIL stating “all the government nominees” on the KG-D6 block oversight committee have “already approved” to all the development proposals made by RIL, sources said.

Also, it relented and agreed to RIL stand that an audit by the Comptroller & Auditor General of India (CAG) of its spending on the KG-D6 block has to be a financial audit and not a performance audit.

“...The proposed audit would be under Section 1.9 of the accounting procedure of the production sharing contract (PSC), and not a performance audit of the operator (RIL),” the ministry wrote.

On the same day, the ministry also wrote to the principal director of audit (economic & service ministries), CAG stating that “subject to certain conditions, RIL has agreed for an audit under Sector 1.9 of the accounting procedure to the PSC by CAG and to cooperate with such audit without prejudice to any of their rights and contentions.”

The oil ministry had been withholding approvals to RIL’s investment plans saying the company must first agree to CAG doing a second round of audit of the KG-D6 field for the 2008-09 to 2011-12 period.

RIL had stated that it was ready for a CAG audit if done under the PSC which provides for checking of the contractor’s accounts in order to verify the charges and credits but not questioning efficacies of processes or technology used in the complex deep sea operations.

The ministry finally agreed to Reliance Industries’ position.

The sources said the ministry wrote to RIL “to take necessary actions” on the items approved by the management committee. While the management committee of the KG-D6 block in August approved annual capex plans pending for the past three years, the resolution had not been signed. These capex included those on well interventions to reverse the trend of falling gas output.

Also, at least three discoveries RIL has made in the block had not been declared commercial, a step necessary to begin production from them. Besides, the management committee. had approved the revised field development plan for MA oil and gas field in the same block in August but formal orders had not been issued. — PTI

New Delhi, October 24
The finance ministry is expected to take a decision next month on the proposal of the 25 billion euro Swedish home furnishing major, IKEA, to invest Rs 10,500 crore to set up single-brand retail stores in the country.

"We are examining IKEA's proposal. We will forward it to Foreign Investment Promotion Board (FIPB), which will take it up next month and take a decision," a senior official in the Department of Industrial Policy & Promotion (DIPP) told reporters.

The official said after FIPB's clearance, the proposal will have to be finally approved by the Cabinet Committee on Economic Affairs (CCEA) as the board can clear investment applications worth up to Rs 1,200 crore only.

IKEA, which manufactures and sells home and office furnishing products, proposes to invest in single brand retail trading in India through a 100% subsidiary. This would be the largest investment in single-brand retailing. — PTI

Mumbai/New Delhi, Oct 24
Prolonging the deadlock over payment of salary dues, Kingfisher Airlines employees on Wednesday rejected the management's fresh offer and demanded payment of four months’ backlog in lump sum before Friday.

"The chief executive's (Sanjay Aggarwal) claim is grossly incorrect. As a matter of fact, as many as 90 per cent of the employees have outrightly rejected the offer. We adhere to our demand for payment of four months' salary by October 26," airline employee Subhash Chandra Mishra, who is spearheading the agitation in Delhi, told PTI.

Rejecting the airline CEO's claim that most of the employees have agreed to resume duty by October 26, he said, "When employees from Delhi, Bangalore and Chennai have rejected the management's offer of staggered payment schedule, how can it claim that most of them have given their consent to join work?"

In response to Aggarwal's mail to all employees offering staggered payment of three months' salary dues, the airline's Delhi-based engineering staff shot off a letter, asking the management to "pay the salary from March to June in one go on or before Oct 26/10/12 1800 hrs." — PTI

Mumbai, October 24
Capital markets watchdog Securities & Exchange Board of India has asked the government to frame a strong central legislation to tackle the menace of companies collecting large amount of money from the public without requisite regulatory approvals and for dubious investment projects.

Stating the existing legal provisions are weak and allow such companies to benefit from certain loopholes in the regulatory framework, SEBI chairman U.K. Sinha told PTI that the market regulator takes action against such entities whenever it suspects anything wrong and gets evidence.

"People make all sorts of excuses — in some cases they claim they are under the state government, some cases they are saying they are registered with the ministry of corporate affairs, some cases they are saying they are housing companies and in some cases they claim to be NBFCs. And in most cases, they say that we are not under the SEBI jurisdiction," Sinha said in an interview.

"But wherever we suspect and we get information and evidence, we take action against them. But the legal provision is relatively weak on this front and I agree that there is need for one strong central legislation because big amount of money is being collected from the citizens of the country," he said.

Giving an example, Sinha said he was recently in Assam and there he was told that all the mutual funds put together have a combined AUM (assets under management) of less than Rs 1,000 crore in the state.

At the same time, there is a company that launched one scheme and managed to collect more than Rs 1,000 crore, he said, without naming the company. "So if you make the comparison, you’ll see the dimension is quite big”, Sinha added. — PTI

New Delhi, October 24
Rising incomes in rural India are fuelling greater spends on protein products such as milk, eggs and meat in the hinterland. Overall spending by Indians on protein foods doubled to Rs 2 trillion in 2009-10 from 2004-05. Two-thirds of this spending came from rural households. But while more rural Indians are getting protein in their diets, the concern is that supply shortages are driving up prices and impacting overall food inflation, according to Crisil Research.

Crisil estimates that in 2009-10, around 11-16%, 15-21% and 18-25% of the demand for direct consumption of milk, eggs, and meat respectively was unmet due to the shortfall in supply. The supply shortfall has led to prices of protein-food contributing nearly 50% to overall food inflation in India. Unless this shortfall is addressed, protein affordability in rural areas could be adversely impacted if wages undergo a correction from their current high growth trajectory, the research adds.

Driven by rising incomes and population growth, nearly 17 million more rural households bought milk and milk products in 2009-10 as compared to 2004-05, taking the proportion of rural households purchasing milk and milk products to 80% in 2009-10, almost 5 percentage points higher than 2004-05.

Similarly, the proportion of rural households purchasing egg, fish and meat increased to 62% from 58% over the same period. However, rural per capita consumption of milk, eggs and proteins continues to remain lower than in urban areas, reflecting a potential for significant further growth in rural demand for proteins.

Rural per capita (annual) consumption of milk in 2009-10 was 49.4 litres versus 64.3 litres in urban areas. The same holds true for meat and eggs where per capita rural consumption stood at 5.7 kg and 20.8 eggs in 2009-10 as against per capita urban consumption of 6.7 kg and 32.1 eggs. Even if the share of rural households purchasing milk remains at the 2009-10 level, another 17 million more rural households would purchase milk and milk products by 2014-15.

The lack of effective cold storage infrastructure has contributed to the supply shortfall. Says Crisil chief economist Dharmakirti Joshi: “The recent government move to allow FDI in the retail sector would help develop a more effective cold storage chain, thus reducing wastage and increasing supply of highly perishable protein foods.”

New Delhi, October 24
Taking a leaf out of its Japanese partner Nippon Life's book, private sector insurer Reliance Life has begun its post-sales service drive across the country and plans to cover over 10 lakh customers by March next.

Reliance Life Insurance Co (RLIC) has asked its 1.5 lakh representatives, including staff, advisors and channel partners to meet about 10% (over one million) of its existing customers the end of current fiscal to provide services beyond premium collection.

RLIC, part of Anil Ambani-led Reliance Group's financial services arm Reliance Capital, has begun this drive under its 'Reliance Life Plus Club' initiative.

According to RLIC, it is the first insurance company in India to introduce a structured post-sales customer service platform.

Commenting on the new initiative, RLIC president and executive director Malay Ghosh said: "Our post-sales service drive is already in force and action is part of our daily business routine. We have instructed over 1200 pan-India branches to implement it like sales targets. We hope to meet one million customers by March 2013".

The initiative is inspired by 'Zutto Motto' (Forever More Service) service at Nippon Life, Japan's leading insurer and Reliance Life's strategic partner with a 26% stake.

"We hope to replicate the success that this model enjoys in Japan," Ghosh said.

Post-sales service is a widely prevalent practice in a host of consumer-focused businesses, including consumer goods and home appliances. It involves a continued relationship between the company and its customers. Stressing on the need for an after-sales service, Ghosh said life insurance is a long-term product and the customers' needs may change over a period of time.

"It is very important for sales agents to periodically visit the customers to find out their diversifying needs in their various life stages. This is the key point in enhancing customer satisfaction," he added.

"We have made it a rule that all our sales people visit every customer periodically at least once a year. Such visits also help in selling new products to the existing customers and in acquiring new clients,"Ghosh said. — PTI

New York City, October 24
Facebook Inc grew mobile advertising revenue several times in the third quarter, a faster-than-expected pace that helped drive shares in the world’s No. 1 social network nearly 13% higher.

Facebook said it now gets 14% of its advertising revenue from mobile ads, helping to reassure investors that the social network is beginning to figure out how to earn money off smartphone and tablet users.

Mobile ad revenues totalled roughly $150 million, up from an estimated $40 million to $50 million in the second quarter and almost nothing in the first.

“This certainly dispels the most bearish view, that Facebook couldn’t monetise people on phones or tablets,” said Colin Sebastian, an analyst with Robert Baird & Co.

"In about a six-month period they've actually started to generate decent revenues form their mobile applications," Sebastian added, though he said Facebook still needs to show that its mobile ads can command the same rates as its traditional ads and that they can deliver results for marketers.

Mobile advertising has been among the key investor concerns hanging over Facebook, helping slash more than $40 billion off its market value since its May IPO. As its users increasingly access the social network with their smartphones, Facebook has struggled to transition its business to mobile devices.

The mobile ads helped reignite Facebook's overall advertising business during the third quarter, following several consecutive quarters of slowing revenue growth that raised questions about Facebook's long-term prospects.

Advertising revenue increased 36% to $1.09 billion, up from 28% growth in the second quarter. But revenue from its payments and other businesses increased just 13% to $176 million.

Mark Zuckerberg, the 28-year-old chief executive who created Facebook in his Harvard dorm room, said mobile was the “most misunderstood aspect” of the company and took issue with the “myth” that Facebook could not earn money on mobile.

“Over the long run we're going to see more monetisation per time spent on mobile than on desktop," Zuckerberg said. The company's shares leapt nearly 13% to $21.97 in after-hours trading on Tuesday. — Reuters