Hint of rethink on LPG, kerosene prices
Trademark Act to tighten noose on copycats
Ranbaxy lists six markets for growth
Special court to auction 5 lakh shares
Duncans brew to enliven packet tea business
Publicis move may spark local shakeup

New Delhi, March 9: 
Finance minister Yashwant Sinha will meet Prime Minister Atal Bihari Vajpayee to discuss a possible rollback of kerosene and LPG prices that were increased last month.

�I am going to meet the Prime Minister on the issue. But I am neither ruling in nor ruling out the possibility of a rollback,� Sinha said.

In his budget speech on February 28, Sinha had announced an increase of Rs 40 in cooking gas cylinder prices and raised kerosene prices by Rs 1.5 a litre.

Earlier reports have said that it is petroleum minister Ram Naik who has been insisting on a meeting to thrash out the issues involved.

Sinha said: �I will discuss the issue and whatever the decision is taken will be announced on the floor of both houses of Parliament. The budget I presented was approved by the Government of India. So, I have no opinion on it. It was solely the government�s decision that I announced.�

Sinha, however, defended the budget document saying: �To avoid taking loans from the International Monetary Fund, we must learn to manage our affairs and achieve poverty elimination targets. Sacrifices at this level are called for.�

Dividend tax

The finance minister ruled out any relaxation in dividend tax norms. �The small investors may be assured that there will be no harassment in the process of dividend tax collection. The tax department will not ask for any TDS certificates after they get dividends. For those above the 10 per cent slab, a refund would be given. Those who are out of the 10 per cent income tax slab would also be refunded the tax amount.�

�But the companies have come out in very poor light by trying to circumvent the dividend tax. They declared such huge dividends, and now will they stop doing it for the next four years?� he said.

He said the government was alarmed at the spate of interim dividend announcement by as many as 250 companies just after the budget announcement of a 10 per cent tax on recipients of dividends as against the previous system of imposing the tax on companies and mutual funds paying the dividends.

Fiscal deficit woes

The finance minister voiced concern over the mounting fiscal deficit and said: �The strength of the economy lay in strong macro economic fundamentals. A large fiscal deficit has the problem in spilling over to the external sector and create a balance of payment crisis. The largest import bill is in petroleum products, which has the potential of destabilising the economy.�

Citing the examples of Brazil and Argentina, Sinha said, �The comfortable forex reserve of $ 50 billion could evaporate in no time if the external sector is not managed well. One never knows when the tornado will hit; so we should be on our guard. Compared with our neighbours, we are in a commanding position and can discuss issues as equals in the multilateral agreements.�

Brazil, which had a comfortable $ 75 billion forex reserves, witnessed an outflow of $ 25-30 billion within 15 days forcing it to approach the International Monetary Fund for structural adjustment loans.

FII investment

Sinha refused to concede requests to allow foreign portfolio investment by foreign institutional investors (FIIs) in the insurance sector above the sectoral cap of 26 per cent.

�There is no question of raising the investment cap in the insurance sector. It is bound by the law passed in Parliament,� he said. At present, foreign players, including FIIs, are allowed a maximum 26 per cent stake in an insurance company as per the insurance regulatory and development Act.

But at the same time he said: �The increase in FII limit in telecom is under discussion. These announcements would be made at an appropriate time.� The FII sectoral cap on telecom services is currently at 49 per cent.

In the budget, Sinha had proposed that FII portfolio investment would not be subject to the sectoral limits for foreign direct investment (FDI) except in specified sectors.


New Delhi, March 9: 
Copycats beware. The new Trademarks Act, which has been passed by Parliament and is awaiting notification, broadens the scope of trademark registration by bringing in shapes, colour schemes and even smells under its ambit.

Intellectual property lawyer Pravin Anand said under the Trademarks Act, 1999, which replaces the Trademarks Act of 1958, the time period for registration of trademarks will also be substantially brought down. The notification is expected within a month or two, he said.

The new Act will come as a boon to the Indian pharmaceutical industry where counterfeiting and look-alike products are rampant.

According to intellectual property advocate Pratibha Singh, the new definition of trademark in the new Act has very positive safeguards for the pharmaceutical products.

�Trademark means a mark capable of being represented graphically and which is capable of distinguishing the goods of one person from another and may include shapes of goods, their packaging and combination of colours,� says the new Trademark Act. The 1958 Act did not provide such a broad scope definition.

One estimate puts the incidence of sub-standard drugs as high as 20 per cent in India. Some other overseas studies have shown that 90 per cent of fake drugs in the world are from India and China.


Mumbai, March 9: 
Ranbaxy Laboratories Ltd, the Delhi-based pharma giant, has identified six core markets that include India, the US, China, the UK, Germany and Brazil for its future growth. These markets are expected to contribute around 80 per cent of the business in the next three years.

The drug major is also in talks with three companies for out-licensing its new chemical entity (RBx 2258) that will treat benign prostratic swelling and is now in Phase II of clinical trials.

This was indicated at an analysts meet here on Friday by the top management of the company. Senior officials from the company added that while agreement will be signed by the end of the second quarter in the next fiscal, Ranbaxy is planning to retain marketing rights in some countries, including India and China.

Speaking to reporters after the analysts meet, Ranbaxy CEO D.S. Brar said the company�s global turnover is likely to exceed $ 750 million in the next fiscal following good performance in the generic arena, particularly in the US markets. The company has placed a target of $ 1 billion revenues by the year 2004 and it presently has a global turnover of close to $ 600 million.

�We could touch $ 200 million in the US in 2002 if we hit some big breaks there,� Brar said, pointing out towards the optimism which the company had placed on its strong research pipeline. Ranbaxy officials here added that it already has attained a critical mass in the US market, with turnover from the country put at close to $ 113 million.

In the US, Ranbaxy is planning to sell the generic version of isoretinoin (anti-acne). Though this product has come under certain �labelling issues�, the approval is likely to be obtained by June this year.


Calcutta, March 9: 
The special court will auction five lakh shares of Ranbaxy Ltd which were in the possession of deceased broker Harshad Mehta. This is the first time that the special court will be auctioning Mehta�s shares after his death. Mehta, the protagonist of the multi-crore securities scam that surfaced in 1991-92, died on the new year�s eve. These shares of Ranbaxy were seized from the possession of Mehta, his family and associates.

The market value of these shares is close to Rs 43 crore. Market experts feel the block deal of 502,988 shares could fetch a small premium on the current market price of Rs 853 per share. The auction is open to all, including domestic and foreign institutions.

The special court, however, will give preference to the promoters of the company over other bidders, if they want to buy the shares. The special court will make an offer to the promoters of Ranbaxy on completion of the bidding process, at the highest price offered by the bidders. The promoters hold 32 per cent stake in the Delhi-based company.

Foreign institutions have a significant interest in the shares of Ranbaxy. Foreign institutional investors hold 16 per cent stake in the company, while the total foreign shareholding (including global depository receipts) is pegged at 26 per cent.

The special court had seized from the possession of Mehta and his associates, various assets, including a large number of shares of different blue chip companies, for recovery of the funds allegedly embezzled by him and his group. The court has since been disposing of these shares and assets in the market.

In November last year, the Central Bureau of Investigation (CBI) hauled up Mehta and his two brothers, Sudhir and Ashwin, on a welter of fresh charges including forgery and misappropriation of over 27 lakh shares of 90 different companies. These included Associated Cement Companies, Tata Tea, Ashok Leyland, Reliance Industries, Apollo Tyres and Larsen & Tuobro. Harshad, along with his brothers, was remanded in custody where he eventually died on December 31.

The Mehta brothers had allegedly told the custodian of the special court that they had lost these shares. The court ordered the CBI to investigate their claim. The CBI claimed that these shares were transferred to benami accounts and subsequently diverted to the market.


Calcutta, March 9: 
Duncans Industries Ltd, the G.P. Goenka flagship, is stirring a strong brew to enliven its packet tea business. As part of the rejig strategy, the company has set up a blending unit in Faridabad and has decided to look beyond its own gardens to source leaves for its packet tea operations.

At the same time, Duncans has decided to give liberty to its tea gardens to create their own demand. �This will yield encouraging results for the company,� a senior company official said.

The blending unit at Faridabad has been set up to enhance ready supplies to north India and further reinforce distribution logistics.

�In the last financial year when sales volumes were under pressure, Duncans did well to maintain and further increase operational niches. The tea business made significant headway in toning up supply chain management so as to effect judicious cost reduction,� the official said. The company produced 27.31 million kg of tea in the last financial year. During the 18-month period, the profit after tax was lower at Rs 2.89 crore compared with Rs 31.94 crore for the year ended March 31, 2000.

�Though the company had made some progress in tea business, it had to pass through difficult times. The company�s fertiliser business also faced difficult times. Finance charges went up substantially during the period primarily because of delay in receipt of retention price scheme remittances from the central government. The initial losses of the infotech business (handled by Pentoville Software) also contributed to the poor profitability,� the official further added.

As far as the prospects in respect of the current year are concerned, perceptible improvements have not yet been noticed in the company�s main business. The company�s fertiliser unit is located at Panki in Uttar Pradesh. The company produces 675 tonne of urea.

The company has entered into a memorandum of understanding with Gas Authority of India Limited (GAIL) to supply regassified liquified natural gas to Panki as a replacement of naphtha as feedstock.

�Discussions are on for a proposed long-term gas sale purchase agreement. Capital investment decisions concerning possible switchover from naphtha to gas will, however, have to await the announcement by the government of a definitive long-term fertiliser policy framework,� the official added.


New Delhi, March 9: 
The global merger of Publicis SA of France and BCom3 of the US could lead to the consolidation of the media-buying divisions of the two ad giants� local ad agencies.

Thursday�s $ 3 billion all-stock deal will see control of Leo Burnett shift from BCom3 to Publicis SA, which will now be its holding company.

Though Publicis has acquired 100 per cent of the capital of BCom3 to form the world�s fourth-largest ad holding firm, in India, it will only mean the merger of the holding company and not of the agency brands, which will continue to operate as separate units within the Publicis structure, said Anisha Motwani, vice-president of Leo Burnett.

Sources, however, did not rule out the possibility of a merger between Starcom�the media outfit of Leo Burnett�and ZenithMedia�that of Publicis.

Starcom handles the media accounts of Leo Burnett and the Mumbai-based Ambience D�Arcy�whose parent D�Arcy is owned by BCom3.

Publicis� agency network includes Saatchi & Saatchi and the media outfit ZenithMedia, where it has a majority stake along with CCG. It also owns the Publicis ad agency and its subsidiary Maadhyam Publicis.

Motwani said it was not clear whether it would be possible to synchronise the media functions of the partner agencies of the two groups, like WPP did with Mindshare and Maxima. These two media outfits of WPP combined the media functions of its agencies in India�HTA, O&M, Contract and Equus. While she said the statement from Publicis does not suggest such a move right now, she did not rule out the possibility in the future.

�In India, the agencies of BCom3 and Publicis are now partners, but they will continue to be separate brand entities,� she said, adding it was too premature to say if the merger will lead to changes in the management of the Indian agency. �In terms of internal synergies, we do not know how the scene will unfold.�

Ambience D�Arcy refused to give the equity stake of BCom3 in the company.


Maintained by Web Development Company