Govt plans to pool central schemes
Bright Star ups price, size of VST offer
Electrolux on cost-cutting drive
Vizag Steel hopes to turn around in two years
Pepsi ready to bottle Apple
Stinger in convergence battle
ICSI to probe cases of misconduct

New Delhi, June 3: 
The government is working out a plan to announce a mega merger of centrally-sponsored schemes (CSS) by Independence Day.

The idea is that each ministry should run about four schemes whose budget should be at least Rs 100 crore.

At present, the majority of central schemes have budgets of less than this amount.

A note prepared for the committee of secretaries wants the number of such schemes to be cut drastically to 20 per cent of the current 210 and odd projects through a series of mergers. Finance ministry officials said, “The whole idea is for government to do fewer things in a better way.”

Very often, officials pointed out, a good plan fails merely because it is spread “too thin, ” that is too little money tries to achieve too much over too large an area. “Instead we will concentrate resources in chosen areas,” they said.

The note points out that there are a number of plan schemes with similar objectives targeting the same population group. “These should be converged and the schemes that do not yield results should be weeded out,” it adds.

This would also lead to reduced plan spending. Officials estimate this could mean a reduction in expenditure of up to Rs 5,000 crore.

A clutter of small projects meant poor monitoring and low priority to many which were not fashionable or which meant harder work.

The central government has long been trying to cut down the plethora of social schemes and pass on their control to state governments.

This note also says that ultimately the implementation of these schemes should be the responsibility of individual states and central ministries should confine themselves to capacity building, inter-sectoral co-ordination, monitoring and impact studies “so that gains from public spending can be maximised.”

The note also suggests that CSS funds could be used to increase the scope of successful state programmes.

The note says the inability of central ministries in controlling execution of schemes in a cost-effective manner was the main reason for their failure.

Ministries have tended to confine their role to just releasing funds without checking on how “big a bang” their rupee had bought them.

The government departments were also more concerned with attaining expenditure targets rather than objective fulfilment, which often meant cost overruns, as extra funds were later requisitioned to complete half completed projects.

The note also calls for giving field officers actually implementing projects greater freedom. It argues that a top-down approach where the minute blueprint of the projects are prepared at higher levels meant uniformity in project plan across the country but it also meant ignoring local factors.


New Delhi, June 3: 
The tussle between the Damani-owned Bright Star Investments and ITC-promoted Russell Credit for the control of Hyderabad-based VST Industries is fast snowballing into the biggest ever takeover drama in the country’s corporate history.

After dropping broad hints yesterday that another price revision is in the offing, Bright Star today stunned all by not only raising the offer price to an eye-popping Rs 151 per share but also increasing the offer size to 30 per cent of VST equity. Considering the fact that the VST scrip closed at Rs 125.20 on the Bombay Stock Exchange (BSE) on Friday, today’s offer of Bright Star is a neat 21 per cent more.

After two rounds of revision, the Russell Credit offer price for 20 per cent stake in VST presently stands at Rs 125 per share. Today was the last day by which both Bright Star and Russell Credit, a wholly-owned subsidiary of ITC, could have made any changes to their open offer. The earlier offer by Bright Star was for acquiring 20 per cent stake in VST at Rs 118 per share.

Bright Star, promoted by R. S. Damani and G. S. Damani, today also claimed that it had mopped up 16 per cent equity through open market purchases in VST.

“We hold 16 per cent stake in VST as of today, excluding the tendering under the open offer,” said John Band, CEO of ASK Raymond, lead managers of the Bright Star open offer.

While he declined to comment on how much equity stake had been mopped up through the open offer, it now seems possible that the financial institutions (FIs), which hold a 15 per cent stake in VST, are likely to favour Bright Star in case they decide to offload VST shares.

Asked if Bright Star had opened negotiations with the FIs, Band said the talks have been fruitful. “FIs have told Bright Star that they are waiting to see which is the best final offer. So, had we not increased the offer price, we would have lost,” he said.

As of today, British American Tobacco Plc holds 32 per cent in VST, FIs 15 per cent, Bright Star 16 per cent and Andhra Pradesh government another 4 to 5 per cent. The remaining stake is widely held by the public.


New Delhi, June 3: 
Electrolux India, the multi-brand company, has started to pare costs to improve operational efficiency even as it consolidates its business through the merger of its three outfits — Electrolux Kelvinator, Electrolux Intron Limited and Electrolux India.

Ram S. Sunder, CEO of Electrolux India said: “We have decided to amalgamate the three outfits in order to increase operational efficiency and consolidate our commitment to the indigenous market. The process of amalgamation is on at present.”

Electrolux entered the country in 1994 and immediately embarked on a number of takeovers and mergers. Maharaja International, a refrigerator plant, was its first target. Intron, a plant that manufactured front-loaded washing machines, was acquired soon after. The consumer goods giant later acquired the right to use the Kelvinator brand from Voltas and bought two refrigerator plants that the latter had in Nagpur. The string of takeovers was rounded off with the acquisition of two refrigerator plants owned by Hyderabad-based Allwyn.

At present, Electrolux is importing some of its products like air-conditioners, microwaves and oven-toaster-griller (OTGs).

Sunder said, “We will definitely keep an open mind on future acquisitions though we don’t have any definite plan on the table right now.”

“In future, Electrolux will start plants to manufacture the products that are being imported at present,” said Anand Bharadwaj, executive vice president (marketing).

“We are differentiating our products under four brand names. While Maxclean will be the brand that defines the washing machine in the middle segment, Allwyn will represent better food quality (both hot and cold). Kelvinator will comprise a range of products covering a wide spectrum, while Electrolux will be the brand targeted at the affluent.”

Sunder said: “We want Electrolux to feature in all consumer goods segment and will work accordingly. The company is reviewing its entire Asia strategy.”

The company has registered a profit of Rs 30.45 lakh for the first time in India. Though its real profit posted for this year is Rs 2.5 crore, the loss account of last year has made it lower. The company will consolidate its stand in India with a view to increase its profit share.


Calcutta, June 3: 
Rashtriya Ispat Nigam Ltd (RINL), which runs the sick public sector Vizag Steel Plant, expects to turnaround in two years.

For the last financial year, however, it is set to report a net loss of around Rs 300 crore on a turnover of Rs 3,441 crore.

RINL chairman and managing director B. N. Singh said, the company, which has been neck-deep in losses ever since its inception, has performed exceedingly well over the past two years.

“If the situation remains same and the market looks up further, we will certainly be able to turn the corner in the next couple of years,” he said.

RINL, which will finalise accounts next week, is also expected to double its operating profit at Rs 500 crore from Rs 252 crore in 1999-2000. The cash profit is likely to shoot up to Rs 150 crore against a cash loss of Rs 130 crore in the previous fiscal. Singh said, as the prices of steel is rising 7 to 8 per cent annually, RINL is confident of achieving Rs 4,000 crore turnover in the current fiscal.

He is confident that the company will be able to pay its debts to the financial institutions within the next 10 years. “Earlier, we were completely unable to meet our interest burden, let alone the payment of principals. But now we are not only paying interest before time but also part of the principals.”


New Delhi, June 3: 
Pepsi is going to launch a new carbonated drink. An extension of its present brand Mirinda, it will be called Mirinda Apple. The product will be launched by the end of June, said a source.

Pepsi will also launch a 500 ml bottle for its mineral water brand Aquafina around the same time.

At present, Mirinda is sold in orange and lemon flavours. Recently, Pepsi launched its Mirinda Apple drink in China and Saudi Arabia and, according to a Pepsi spokesperson, the drink is doing very well.

“The flavoured drink market is growing in India and we want to tap that market,” he said. Pepsi worldwide has many other flavours including tea and coffee-based drinks.

It may be recalled that Coke has already announced that it is going to launch more flavours for its hitherto mango-only fruit pulp-based drink Maaza. “Right now the plan is to launch two more fruit flavours by the third week of June.”

Coke refused to divulge the exact flavours. However, all the flavours of Maaza are going to be fruit pulp-based and in the existing pack size of 250 ml, priced at Rs 10. Pepsi has not yet decided on pricing points for Mirinda Apple.

Pepsi’s bottled water brand Aquafina is launching its half litre bottle by the end of June. Its price will vary between Rs 6 and 7 depending on where it is sold.

At present, Aquafina is available in the 1 litre (Rs 12) and 750 ml (Rs 10) pack sizes. “The half litre pack will be first launched in UP and thereafter extended to other parts of the country,” he said.

“The half litre pack is ideal for consumers who are travelling and there is good potential in this pack size,” said the spokesperson. Arch rival Coke already has its brand Kinley available in the 500 ml apart from its 1 litre pack.

However, Pepsi maintains that while it is making bottled water available in smaller packs, it does not intend to go for the bulk water segment which, it says, is primarily for industrial and not for individual or even household consumption.


New Delhi June 3: 
It’s called the Stinger — and no it isn’t the missile used in Kashmir with chilling effect.

Small and nifty — it’s about the size of a pizza box — the device developed by Lucent Technologies is all set to open up the brave new world of convergence by providing telephone links, streaming video and internet access to the remotest areas in India.

Lucent is doing all this through a digital subscriber link (DSL) access concentrator. DSL is the latest name of the game in remote access technologies because it isn’t dogged by the problem of poor quality transmission that plagues other existing technologies.

DSL provides broadband capacity over traditional copper wires of the telephone companies — unlike other technologies that use either wireless, satellite or cable connections. The technology overlays data onto a high speed analogue signal so that both voice, data and video can be carried on a single wire.

The product, which will be available worldwide in the third quarter of this year, is ideal for deployment within office buildings, apartments and hotels — a market often that is referred to as the multiple tenant unit (MTU), multiple dwelling unit (MDU) and the hospitality segment.

“Lucent’s DSL strategy will expand exponentially the reach of the simple telephone line. We are helping carriers and service providers extend their coverage in a number of ways,” says Ashok Dhawan, president of Lucent’s broadband access division.

He added: “We have developed products in support of new standards in the industry, and introduced new equipment that can be placed in outdoor environments closer to the customer. Our goal is to provide service providers economical ways to expand their DSL serving areas (telecom service areas) and to provide more ubiquitous coverage in the areas they already serve.” By working with the digital loop carrier (DLC) systems widely used to provide regular telephone service today, the new product will enable telephone service providers to reach out to more customers while leveraging existing equipment investments.

These products can be deployed in new housing condominiums in both suburban and rural areas. By deploying the products, service providers will be able to deploy broadband services in areas that are otherwise inaccessible today.

The introduction of the Stinger Micro-Remote Terminal (MRT) brings Lucent’s Stinger portfolio to six models. Combining 36 asymmetric DSL (ADSL) ports and integrated splitters in a 1U high chassis with flexible mounting options to maximize available space, the Stinger MRT is Lucent’s DSL access concentrator solution for low to medium density applications.


New Delhi, June 3: 
The Institute of Company Secretaries of India (ICSI) has decided to investigate any instance of misconduct that is brought to their notice by shareholders or any officials associated with the company.

As an institutional body, it does not investigate any company directly but can take up the case to the Company Law Board on behalf of their members.

ICSI secretary S. P. Narang said: “We don’t hound any company as that will not achieve any purpose, but most definitely we listen to any complaint made by shareholders and report it to the company board. After that it is their duty to investigate and take action.”

Narang said: “Only 20 per cent of the companies generally defy the law outright. About 50 per cent would like to abide by law but are unable to do so either because of time constraints or the lack of awareness of the procedures. More than prosecuting a company, we would like to make them aware of the penalties that they will have to pay if they don’t follow law. About 50 per cent of the corporates are ignorant about law and compliance rules.”

The companies in India are divided into three categories according to their paid-up share capital. Companies with a paid-up capital below Rs 10 lakh do not need to keep a company secretary.

Companies with a paid-up capital between Rs 10-50 lakh need to hire independent secretaries on a retainer basis to certify that their records are all right.

Narang said, “This method has been appreciated as a whole and is a cost efficient way to deal with legal matters.”


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