Companies issuing Bonus debentures instead of bonus shares

NTPC has recently preferred issuing bonus debentures to its shareholders instead of bonus shares due to number of reasons. There are many benefits of issuing bonus debentures some of which are:

a.             Interest on bonds issued by company are tax-deductible and hence resulting in lower taxes.

b.            Issue of debentures does not increase the base of equity capital and hence there is no dilution of equity shares.

c.             The bonus debentures issued to shareholders is deemed dividend u/s 2(22) and hence companies are liable to pay dividend distribution tax on the same and hence no burden of tax on the shareholder.

A very few companies have earlier issued bonus debentures some of which are Blue Dart, Coromandel International, Dr. Reddy’s etc.  

'Make-in-India’ vision looks good but not feels good to PC makers

Modi’s government vision of ‘Make-in-India’ and his furious promotions of Vibrant Gujarat and other states in the row, the PC makers of the country are still not satisfied with the government. The reasons why PC makers such as Dell, Acer, etc. are avoiding manufacturing in India and preferring to import the components:

a.      High rate of Tax: The rate of duty on manufacture is 16% along with the VAT varying from 4 to 12 percent depending upon the state as compared to mere 17.42% duty levied on imports.

b.      High Rate of Interest: Rate of interest on finance if obtained from within the country is around 15% whereas the same in global financial markets is not more than 2 to 4 percent.

c.      Costlier Power: Electricity is much costlier in the country as compared to other countries. Irregular supply of electricity causes further troubles to the manufacturers.

All these factors along with some other hurdles has made manufacturing less preferable. The maximum units established in the country are used most of the times only for assembly of the PCs and the capacity is underutilized. India imported an estimated $38 billion worth of electronics last year while only about $19 billion worth of goods were manufactured here.

After e-commerce and m-commerce, now it’s time for neighbourhood commerce

Companies who are already providing on demand delivery of goods to doorstep as well as new companies are eager to start delivery of groceries, flowers, meals, etc. Bengaluru’s Delyver and Gurgaon’s Grofers deliver groceries and meals. These companies have tied up with hypermarkets, meat shops, flower shops and restaurants for delivery to doorstep. The growing trend of home sitting shopping has encouraged the growth of such ‘neighbourhood commerce’.

Grofers: Delivers grocery, fruits & vegetables, bakery, meat, flowers. Operates in NCR, Bengaluru, Mumbai. Approximately 1500 deliveries per day.

Delyver: Delivers meals from restaurants, grocery. Operates in Bengaluru. Approximately 1000 deliveries per day.

Scootsie (Meals on wheels): Delivering meals from restaurants. Operates in Mumbai. Approximately 200 deliveries per day.

Amazon India aims at linking offline stores through Junglee

Amazon India aims at linking offline stores by allowing such offline stores to publish their listings on the Junglee website so that the buyer can select the seller and make arrangements for either delivery or pickup from the stores of offline sellers. The initiative is in sync with strategy to get small offline businesses into the digital economy.

E-tailers trying innovative ideas to woo customers

Flipkart is trying to increase its customer base to 3,4 & 5 tier cities by establishing pickup locations. The concept is such that the concerned customer will be sent a text message regarding details of the orders and the pickup location for the same. The step is to be taken as a very big portion of demand is from such cities due to non-availability of infrastructure and logistical facilities create hurdles for the e-tailers. Flipkart aims at establishing 270 such pick-up or collection centers by the end of March 2017.

Time span for closure of cases to be reduced to not more than 5 years

• The apex level judiciary committee headed by Chief Justice HL Dattu has recommended that any litigation must end within a period of 3 to 5 years. Also the judiciary is planning to become part of much evolved information technology by incorporating practices like sending summons and notices by email and updating about progress of cases via text messages.
• With an intention to reduce the overburdened courts, the committee has suggested formation of dispute redressal systems as the normal time per litigation on an average sometimes goes beyond a term of 10 years causing residents as well as non-residents serious amount of trouble.
• The time limits for disposal of a case may depend on the type of case, i.e. the time limit will depend on the facts and circumstances of each case.

Use of modern means of communication such as emails and text messages have become part of various State level government departments as well as country level departments. Use of such means will enhance the connectivity among courts and will result in effective and efficient delivery of justice.