Bar on using Castrol brand NEW DELHI, June 13 — The Delhi High Court has barred a city-based company from manufacturing and selling lubricants under the brand name of Castrol and imposed penalties for the infringement of trade mark.

ICSI syllabus to be recast
TIRUCHIRAPALLI, June 13 — The Institute of Company Secretaries of India has proposed to formulate a new curriculum with a view to giving a directional change to the profession of Company Secretaries, ICSI President Virender Ganda said today.

Multi-storey car park for Jammu
JAMMU, June 13 — The city will soon have a modern multi-storeyed parking-cum-commercial-complex, first of its kind in the state, with car-lift facilities, an official spokesman said here today.

Policy hits credit card industry
BANGKOK, June 13 — India’s “inward looking policy” is hampering the credit card industry in the country despite its exponential growth potential, Mastercards Senior Vice-President and General Manager of South and South-East Asia Sonny Sannon said.

Inflation declines to 3.86 per cent
NEW DELHI, June 13 — The annual rate of inflation fell to 3.86 per cent for the week ended May 29, despite a marginal increase in the wholesale price index.

Daewoo to overtake Maruti ?
NEW DELHI, June 13 — Daewoo Motors India Ltd has claimed it will overtake the Maruti Udyog Limited’s number one position in the next five years.

Mastek unit for Japan
MUMBAI, June 13 — Mastek Ltd will embark on a massive expansion plan by setting up subsidiaries in Japan, Belgium and Switzerland, Company Chairman and Managing Director Ashank Desai said.

ICICI may reduce safety bond rates
MUMBAI, June 13 — ICICI Ltd may reduce the interest rates on its next issue of Safety Bonds in line with the general regime of reducing interest rates.

Unitech to invest Rs 100 crore
NEW DELHI, June 13 — A real estate company Unitech Limited, will pump in at least Rs 100 crore to develop three luxury hotels in the country as part of a massive programme to double its turnover to Rs 500 crore within the next three years.

Credit rating may go up
NEW DELHI, June 13 — The Indian Government is hopeful that the US Senate’s decision to waive sanctions against India would lead the international credit rating agencies to reverse the lowering of the country’s sovereign rating.

Demand for reduction in interest rates by 3 per cent

NEW DELHI, June 13 (PTI) — The PHD Chamber of Commerce today called for a reduction in interest rates by at least 2 to 3 per cent in view of the decline in the inflation rate.

In a communication to the government and the RBI, the Chamber said the real rate of interest was still very high as compared to prevailing rates elsewhere.

Despite recent measures by the RBI to ease the liquidity position and soften the lending rates, there is no perceptible change in the off-take of bank credit because of its high real cost and hesitancy on the part of bankers to lend to corporates particularly in the small and medium sectors.

The decelerating growth of non-food credit is not a healthy sign for the economy, the Chamber said in a statement.

Tax on mutual funds

FICCI has suggested that the proposed 10 per cent tax on the income distributed under the assured return scheme of the UTI and other mutual funds should be prospectively applicable in respect of schemes launched on or after March 1, 1999.

The payment of a 10 per cent tax on the income distributed under assured return scheme will make it difficult for UTI and other funds to keep up their promise to investors of assured returns, the Chamber said in a communication to Finance Minister Yashwant Sinha.

FICCI said any attempt by the mutual funds to cut the assured return due to the dividend tax liability would also be viewed as breach of commitment to the investors, majority of whom are pensioners, widows and middle class householders.

Liberalise FDI norms

The CCI has asked the government to liberalise norms for foreign direct investment (FDI) in urban infrastructure to attract the much-needed foreign capital.

Advocating involvement of private sector in urban infrastructure, the CII said on Sunday lack of a clear policy framework and operational guidelines have resulted in reduced investor confidence whereby there were few takers for several projects.

“Infrastructure is a crucial driver of growth. And without much development of infrastructure sector, India would not be able to achieve a growth rate of 7 to 8 per cent,” it said in a statement.

IOC for bonus before elections
Divestment by December

NEW DELHI, June 13 (PTI) — Indian Oil Corporation (IOC) is seeking government nod for a bonus issue before the September poll for increasing the liquidity and value of its stock in the capital market before considering part disinvestment of government equity in the company by November-December.

Although no firm proposal has been made or considered at the navratna oil company’s board, top company officials are in the process of taking the Petroleum Ministry’s opinion in favour of 1:2 bonus issue (a bonus share for every two shares), highly placed company sources said.

Company officials indicated that exceptionally good financial performance during 1998-99 and expectations of even better results in the first half of the current fiscal could improve the prices of the IOC stock and the government should wait for such time before deciding on the timing of disinvestment.

Officials explained that lack of liquidity had hampered trading of the IOC stock and the present price was not a real indicator of the strength of the company’s scrip.

Therefore, a bonus issue could increase the floating stock by half to about five 550 lakh shares which could be easily traded, they said adding that IOC staff and financial institutions were holding about 9 per cent of the company’s stock.

Bar on using Castrol brand

NEW DELHI, June 13 (PTI) — The Delhi High Court has barred a city-based company from manufacturing and selling lubricants under the brand name of Castrol and imposed penalties for the infringement of trade mark.

In an ex-parte order, Justice MK Sharma said “A permanent injunction is issued restraining the defendants, their agents, servants and all other persons acting on their behalf from infringing the trade mark and copyright of the petitioner (Castrol).”

The court order came on a petition filed by Castrol India Limited through its counsel Manmohan Singh seeking to restrain Prem Plastics from manufacturing and selling lubricants, multi grade engine oil, greases, gear oil and filled or unfilled brake and clutch fluid bearing the Castrol trade mark.

Counsel contended that Prem Plastics was passing off its inferior quality products as the goods of Castrol causing damage to the goodwill and reputation of the petitioner.

He submitted that during the raids on Prem Plastics’ premises, a huge quantity of lubricants and other allied products of several other leading brands were also recovered.

“It is pertinent to note that even oil drums, screen printing machines, empty containers, cardboard boxes and sealing machines were seized by police,” Castrol counsel said.

ICSI syllabus to be recast

TIRUCHIRAPALLI, June 13 (UNI) — The Institute of Company Secretaries of India (ICSI) has proposed to formulate a new curriculum with a view to giving a directional change to the profession of Company Secretaries, ICSI President Virender Ganda said today.

Addressing a press conference here, he said a sincere endeavour would be made to revamp the syllabus, encompassing the propounding areas for a company secretary, both in employment and practice and new developments in the wake of the World Trade Organisation (WTO) agreement and intellectual property rights. While the ICSI board had approved the proposal, the government’s clearance was awaited, he added.

He said the ICSI proposed to embark upon a substantial public relations exercise to create awareness, particularly among the chief executives of banks and financial institutions, chambers of commerce and other agencies about their profession.

To provide placement to every member, the Institute had created a placement cell and also a sub-committee for placement and training.

Financial institutions and the State Governments including Gujarat, Andhra Pradesh and Kerala, had agreed to amend the existing laws for disbursement of loans and comply with the services of the company to avail loans. The Security and Exchange Board of India (SEBI) had also directed the stock exchanges in the country to appoint Company Secretaries in every stock exchange or to utilise the services of the practising members of the society, he added.

Certain companies with a paid-up capital of Rs 50 lakh and above had not appointed secretaries required under the Companies Act, 1956. The Institute had therefore sought the intervention of the Department of Company Affairs for the strict implementation of the Act.

Multi-storey car park for Jammu

JAMMU, June 13 (PTI) — The city will soon have a modern multi-storeyed parking-cum-commercial-complex, first of its kind in the state, with car-lift facilities, an official spokesman said here today.

Chief Minister Farooq Abdullah gave a nod to the project conceived by the Jammu Municipality to be taken up on self financing basis in the busy Indira Chowk in Jammu city last evening, the spokesman said.

Dr Abdullah, however, suggested the addition of another floor and installation of two more lifts in the complex. The complex will have parking space for 400 vehicles and spacious accommodation for a restaurant overlooking this temple city.

The parking capacity will be increased gradually to accommodate 600 vehicles.

The Administrator of Jammu Municipality, Mr K.B. Jandial said the project is estimated to cost Rs 8.88 crore. The commercial building will have eight floors.

Policy hits credit card industry

BANGKOK, June 13 (PTI) — India’s “inward looking policy” is hampering the credit card industry in the country despite its exponential growth potential, Mastercards Senior Vice-President and General Manager of South and South-East Asia Sonny Sannon said.

“Growth of credit and debit cards, effective in checking black money has been hit badly by the regressive government policy of high customs duty on electronic terminals and inclusion of credit cards as one of the six criteria for the mandatory filing of income tax returns,” Mr Sannon told a three-day annual Mastercards conference here.

In India, electronic point of sale terminals installed in shops accepting credit and debit cards were cost prohibitive because of a customs duty of 80 per cent.

These terminals cost about Rs 40,000 in India as against a mere Rs 25,000 in other Asian countries, increasing banks’ investment on plastic money business.

Pleading for a reduction in customs duty on electronic terminals, Mr Sannon said Mastercards also wanted government to bring in a legislation to punish wilful default in the payment of credit card dues.

At present, there was no legislation in India unlike in several other countries where default in card payment was punishable in the same manner as dishonouring of bank cheques, he said, adding that he had requested the vendor banks to pursue the matter with the government.

This had created a “fear psychosis” among the people, who were now hesitant about going in for new cards, a senior Central Bank official said, adding that instead of arresting black money, the government was facilitating its growth by discouraging plastic cards.

Twenty five senior bank officials from India, including the Bank of India, Times Bank, Central Bank, Bank of Baroda, Bank of Madura and UTI Bank attended the conference, which concluded on Thursday.

Meanwhile, Times Bank announced that it would launch Mastercard ‘debit’ cards, called ‘Maestro’, by the middle of next month.

Inflation declines to 3.86 per cent

NEW DELHI, June 13 (PTI) — The annual rate of inflation fell to 3.86 per cent for the week ended May 29, despite a marginal increase in the wholesale price index.

The rate of increase in prices fell by .09 percentage points to 3.86 per cent (provisional) compared to 3.95 per cent (P) last week and 6.89 per cent a year ago.

The downward movement halted a two-week rise in inflation after it touched an 84-week low of 3.67 per cent on May8.

Meanwhile the Industry Ministry, which releases data on wholesale prices, said the final inflation rate for the week ended April 3 remained the same as the provisional rate at 4.6 per cent.

Daewoo to overtake Maruti ?

NEW DELHI, June 13 (PTI) — Daewoo Motors India Ltd (DMIL) has claimed it will overtake the Maruti Udyog Limited’s number one position in the next five years.

DMIL, with a car market share of about 2.4 per cent against an overwhelming 75 per cent of MUL, is buoyant about its growth prospects and is willing to increase its investment from the present level of Rs 4000 crore, a top company official said.

“We will acquire the top slot in the Indian car market in the next five years,” DMIL Managing Director S.G. Swasthi told PTI while emphasising that DMIL, with 92 per cent equity of parent Korean company, was “in India to stay and to expand its operations.”

Stating that the Indian car market was in for a major change in the near future both in terms of players and re-segmentation of vehicles in terms of small, medium and luxury cars, Awasthi said DMIL would offer a complete range of vehicles to Indian customers in every segment.

“More than numbers, we would like to be number one in terms of quality and customer satisfaction. We will have at least 25 to 30 per cent of market share in five years,” he said.

Mastek unit for Japan

MUMBAI, June 13 (PTI) — Mastek Ltd will embark on a massive expansion plan by setting up subsidiaries in Japan, Belgium and Switzerland, Company Chairman and Managing Director Ashank Desai said.

“Apart from converting its branch office in Japan into a wholly-owned subsidiary, Mastek will set up subsidiaries in Belgium and Switzerland to consolidate its operations in Europe,” Desai told PTI here today.

During 1998-99, the company had formed a subsidiary in Germany and set up an office in Japan as part of global expansion plans.

As part of expanding its software development capacity, the company took additional space at the Seepz, an export processing zone in North-West Mumbai and added 500 more software engineers during 1999-2000 accounting year, beginning June 1999.

However, the company would not tap the market for the purpose, he said, adding it would meet the total cost of expansion plans with its internal resources.

The company would also seek dematerialisation of its shares, even though there was no such compulsion from the regulator, SEBI, to do so, Desai said.

Mastek, which has its own product portfolio and involved in selling third party software, would also address emerging markets for e-commerce and customer relations management software in future.

Mastek’s own software products include Goldmine, a depot sales system; Elixir, a package for life insurance companies; Laps 2000, an automated loan processing package and Jaal, a tool for building interactive Internet applications, besides providing services on a host of other applications.

In line with the corporate governance code released by the CII, the company would go in for consolidated accounts of group companies and appoint independent specialists on its board.

“Mastek’s turnover for the year ending June 30, 1999, is expected to grow by 60 per cent to Rs 160 crore, and it is likely to maintain its streak of 65 per cent growth in profitability, as witnessed in the first three quarters, during the fourth quarter,” he said.

Mastek posted Rs 3.78 crore profit for the first nine months period of 1998-99 against Rs 3.13 crore for the year 1997-98, he added.

The company would report 90 per cent growth in exports crossing the Rs 150-crore mark during the year, he said, adding that export focus of the company, particularly to the USA and the UK, has helped achieve this.

ICICI may reduce safety bond rates

MUMBAI, June 13 (PTI) — ICICI Ltd may reduce the interest rates on its next issue of Safety Bonds in line with the general regime of reducing interest rates.

ICICI is planning to raise around Rs 20,000 crore this year partly through the issue of Safety Bonds and other resources.

“We usually fix the interest rates just before the issue and we take into account the rates being offered by other institutions such as UTI and HDFC,” a senior official of ICICI told PTI.

In fact in its last tranche of bonds issued in May this year, it had already decreased the interest rates on its bonds offering 12.75 per cent on a five year regular bond against the 13.75 per cent it had offered in its previous issue in March, 1999.

While officially ICICI was reluctant to commit itself, the indications are that its next edition (scheduled for July according to the trend) under the Safety Bond series will see lower interest rates — probably in the region of 11 per cent, sources said.

Unitech to invest Rs 100 crore

NEW DELHI, June 13 (PTI) — A real estate company Unitech Limited, will pump in at least Rs 100 crore to develop three luxury hotels in the country as part of a massive programme to double its turnover to Rs 500 crore within the next three years.

Unitech already owns the property of Delhi Radisson through a joint venture company A.B. Hotels Limited, in which it holds the controlling 55 per cent equity stake, the rest being held by two individual investors, a senior Unitech official said.

“We plan to own two more Radisson hotels, in Ahmedabad and Kathmandu respectively, for which project details have already been finalised,” Managing Director of Unitech Limited R. Chandra said here today.

A third hotel would be developed with participation from another realtor, but Mr Chandra declined to divulge further details of this venture at present.

While the first two hotels will involve an investment of Rs 35 crore each by Unitech, the investment details for the third are still being worked out, he said.

The decision to develop new hotels follows Unitech’s plans to get aggressive in the hospitality business, he said.

Credit rating may go up

NEW DELHI, June 13 (UNI) — The Indian Government is hopeful that the US Senate’s decision to waive sanctions against India would lead the international credit rating agencies to reverse the lowering of the country’s sovereign rating.

According to Finance Ministry officials, this along with the fact that the World Bank and Asian Development Bank have resumed lending in a full-fledged manner would result in rethinking on the part of these agencies.

Escorts Tractors

I have written six registered letters (dated December, 1995, 9.1.96; 28.2.96; 18.4.98; 1.5.98; 26.5.98) regarding FDR No 011733 dated 16.1.93 to Secretary, Escorts Tractors Ltd, Faridabad for Rs 3000/- (fixed for a period of three years, at the rate of 15 per cent interest per annum, which matured on 16.1.96. I have not received the renewal/refund of the FDR till to date.

Mrs Lily Lawrence (Mrs)
Kathgodam (Nainital)

UTI

I paid the ninth instalment of membership No 34311948 in Shimla branch on 3.6.97 which was sent to UTI ULIP Deptt. New Delhi on 7.7.98 and again with subsequent reminder during August,1998. The Department has neither accounted for the money paid nor supplied the annual statement of units for the subsequent period.

S.B. Mehta
Ambala Cantt

Modern group

Myself and my wife deposited with M/s Modern group of companies, having its corporate office at 709, Ansal Bhawan, 16 K.G Marg, New Delhi, accepting FDRS amounting Rs 45,000 under Regd FDR No. MD-15441,MT-16303 and MS - 8102 falling due for the repayment in July & August 98, but to our surprise and astonishment the said company paid us only 10 per cent of the FDR amount in January and February 99 against full payment due in July & August 98.

J.K. Kapoor
Ambala city

by K.R. Wadhwaney
Air India bans recruitment

AIR India’s Managing Director Michael Mascrenhas has played a pivotal role in rolling back the retirement age from 60 to 58 years. The decision has been liked by a majority of employees of the of the airline. Apart from saving of more than Rs 50 crore for 1999-2000, a lot of dead wood, which has been biting the national carrier, will automatically be thrown out. The saving will also help reduce losses of the airline.

According to analysts, the saving may be about Rs 70 crore if the airline’s management decides to leave the posts unfilled. Majority of those, who have continued in the service, have been either redundant or “good for nothing” to the airline.

Recruitment in the airline has been stopped. Many officials, based in foreign countries, are being recalled. All-out efforts are being made to reduce the over-head expenses. While cabin-crew has been asked to provide more courteous service to passengers their lay-over perks have been considerably reduced. Unprofitable routes have been discontinued and revenue-earning sectors introduced.

“There is absolutely nothing wrong in re-scheduling our flights”, says an official, adding: “If foreign carriers can discontinue their operation through this country because of non-profitability, why can’t we re-schedule our lights?

Air Canada, for example, has decided not to recommence operations to New Delhi from October this year. Airline’s General Manager, India, Geoffrey Beckett says: “The service to New Delhi did not generate an acceptable return on investment and the aircraft will be deployed on more profitable routes such as Canada to the UK.

Kelkar Proposals

The Kelkar Committee proposals may be put ‘on hold’ until the formation of the new government. This is said to have been done at the behest of the President, Mr K.R. Narayanan, who, in an unprecedented move, sought operation details from Indian Airlines Chairman and Managing Director Anil Baijal. The disinvestment plan or infusion of Rs 325-crore government equity may thus wait for a while. Another unforeseen problem seems to have arisen. It pertains to buying of a particular aircraft. While the powers that-be want a particular aircraft to be purchased immediately, the IA officialdom thinks otherwise.

One thing is clear. Two national carriers will be able to carry on their operations successfully if only they are allowed to function as commercial outfits without any interference from politicians. Why should ill-informed politicians or bureaucrats decide which aircraft should be purchased? The purchasing should be entrusted to technical experts, who are in a better position to evaluate for the utility of aircraft than politician and bureaucrats.

Upbeat mood

Tourists, Indian and foreign, as also travel agents, who returned from Leh said the mood of the Indian jawans and villagers around Kargil was upbeat. It was seen to be believed how enthusiasts they were. Each family staying around Kargil offered a male member to carry the load for 11 days.

by Ashok Kumar

Q. Do you recommend an investment in the shares of Chicago Pneumatic?

— Rajendra Bhalla, Shimla

Ans: A 51 per cent subsidiary of Chicago Pneumatic Tools, US (a part of the Atlas Copco group, Sweden), Chicago Pneumatic India (CPI) has been a steady performer over the years. One of the prime reasons for its better performance could be that it has been a sourcing base for the parent company and hence, the effect of the industrial slowdown in the economy is offset to a certain extent. Engaged in the manufacture of compressors and pneumatic tools, the company has created a niche for itself in pneumatic tools. Its products find application in a number of industries construction, mining, water well development and automobiles. The expected infrastructure boom will further boost CPI’s prospects. In view of the company’s potential and FERA status, investors with a medium to long-term perspective could consider investing in this scrip.

Q. Kindly comment on the prospects of Cabot India?

— Surender Mehta, Chandigarh

Ans: Cabot India has been badly affected by the winds of recession blowing over the economy. There has been a series of price drops for in carbon black since April ‘97. Reduction in import duty, excess capacity in the industry and sluggish growth in tyre industry the main user segment, have all contributed to its decline. Noticeably, things could get even worse as there has been perceptible rise in imports from South Korea and Thailand which have witnessed massive currency depreciations against US$. With the rupee remaining relatively firm against the US $, imports from South East Asian countries have become cheaper and exports uncompetitive. However, in the ongoing shakeout only the strong players will survive and Cabot India in which Cabot, USA holds a 60 per cent equity stake is one of them. The parent’s strong product portfolio and technical capability will help Cabot India pass through this bad phase and emerge stronger. Hence the long term prospects could improve, although the fact remains that its immediate prospects appear moderate at best.

Q. Would you recommend an immediate investment in the shares of Daewoo Motors?

— Balbir Singh, Ludhiana

Ans: Originally a joint venture between the Delhi-based DCM group, Toyota Motor Company of Japan and Daewoo Corporation of Korea, Daewoo Motors has become a 91.63 per cent subsidiary of Daewoo Corporation. This followed a mega Rs. 688.77 crore rights issue (5.1; at Rs. 15 per share) in January ‘97. The company introduced its Cielo brand of luxury cars in July’ 95. Cielo cashed in on its early entry in the premium-car segment. Moreover, the company indulged in aggressive marketing of the product. However, the returns therefrom did not measure upto expectations. This is attributed to the increased competition from General Motor’s Opel Astra and Mahindra Ford’s Ford Escort, besides the economic slowdown. The company has now decided to focus on exports. The parent, Daewoo Corporation, is a strong player, and has pumped in over Rs. 3000 crore into the company. The future growth will come mainly from the introduction of new models. Moreover, the company is known to be an aggressive marketeer. Though the equity base of Rs 551.04 crore is very high, the floating stock is very low at less than 7 per cent. Yet, overall an immediate investment is not recommended.

Q. How would you rate the long term prospects of Esab India?

— Gurmeet Bagga, Patiala

Ans: Esab India is engaged in the welding industry, the fortunes of which are wholly dependent on steel consumption which has stagnated due to the sluggish state of the economy. Not surprisingly then, the growth rate of Esab India, one of the major manufacturers of welding equipment and consumables in the country, has been unexceptional. Lower price realisation has resulted in a drop in margins and the selling price has been under pressure due to decrease in demand and cheap imports. Esab is a subsidiary of the UK-based Charter group which holds a 38 per cent stake in the Indian company. It has operations in over 25 countries, employs over 9,000 people and has a turnover of about SEK 8 bln (Rs. 4,440 cr) in India, Esab India has, over the years, grown at a rate higher than that of the industry. Esab India has performed well on certain counts, especially in working capital management. This in turn has reduced its interest costs. It has repaid part of its debt and is aiming at becoming a zero long-term debt company. Given its better performance high-end products, Esab India is expected to grow at a better rate than its contemporaries. In the meanwhile, Esab India continues to broadbase its product portfolio and would be introducing the latest high speed fastening technology called stud welding. It has also started marketing medical gases equipment anaesthesia machines, gas regulators, etc. Overall, this company retains the potential to do well and should fare even better once the economy stabilises.

Q. Will the prospects of Gontermann Peipers improve or will it decline?

— Mrigank Sharma, Nalagarh

Ans: A constituent of the Mittal group of companies since its takeover in 1981. Gontermann Peipers India Ltd (GPIL) is engaged in the manufacture of iron and steel base rolls and has a capacity of 8000 tps. Also recognised for its exports, the company now proposes to diversify into textile manufacturing activities and facilities for the same are being set up in Himachal Pradesh. Having a capacity of 1,00,800 ring spindles, the unit is expected to be the largest spinning mill in India. On the financial front, the company’s performance has been on a decline in recent times. Currently adding to its product mix of forged rolls with a capacity of 3300 tpa, GPIL’s future prospects will depend to a great extent on its textile division which the company has projected will account around 77 per cent of the total turnover. Notably, GPIL’s cotton exports presently accounts for a major portion of its product mix. Overall, the long term prospects of GPIL which had entered the capital market in December 1997 to raise funds for its various projects, could perhaps improve. However, the same cannot be said about its prospects in the short or medium terms.