LICN's First Dividend
Life Insurance Corporation Nepal, the subsidiary of India’s public sector insurance company LIC, has for the first time decided to distribute dividend to its shareholders. According to the decision taken by the recently held 7 th Annual General Meeting of the company, the shareholders will get 15 percent cash dividend this year.
The company collected 'first premium' of Rs 113.23 million in the first six months of the current fiscal year which the company says is a 48.70 percent increase over the same period of the previous year.
Cosmos Multiplies Capacity
Cosmos Cement Industry established at Dhanusha’s Naktajhij some five years ago has increased its production capacity to 400 tons per day (tpd) from 300 tpd. According to the company’s Managing Director Dhruba Thapa, the industry has also completed setting up the plant for manufacturing clinker, the major raw material required for the production of cement. The clinker factory with a production capacity of 1000 tons of clinker per day is located at Udaypur’s Katari where the limestone will be brought from Udaypur’s Ghyampathumka (Nepaltar).
Ghee Export
Procedure to India Simplified
The Indian government has simplified the procedure for the duty-free export of vegetable ghee from Nepal to India by removing the system of Indian canalizing agent. Now onwards, the Department of Commerce of Nepal government is entrusted the responsibility to ensure that the annual 100,000 MT quota is spread evenly throughout the year and across different parts of India. Earlier, Indian government agency was appointed the canalizing agent for this purpose.
According to the new arrangement, Nepal government’s Department of Commerce will fix the annual and quarterly quota to different Nepali producers of vegetable ghee specifying the different Indian states where they can export it. The department is also required to submit the quota distribution details to the Indian Ministry of Commerce and Supply within 15 days of the beginning of the Indian financial year. The Indian financial year starts on 1 st of April and ends on 31 st of March.
The Indian government has also fixed Birgunj, Biratnagar, Kakkadbhitta, Bhairahawa, Nepalgunj and Mahendra Nagar as the customs points through which Nepal’s vegetable ghee under the tariff quota can enter Indian market.
SEBON Issues New Directive
Securities Board of Nepal (SEBON) has revised the provisions governing the issue of securities. According to the newly issued Security Issuance Directives 2065, a company will now be permitted to issue right shares only once in a fiscal year.
More importantly, new shares will be allowed to be issued only after 180 days have passed after the previously issued shares of the company are listed in the stock exchange.
In another provision, the new directive requires the promoters to pay up their portion of the right shares before the right shares are issued to the public shareholders. It has also made it mandatory to cancel all the shares that are not subscribed by the public shareholders within the stipulated time. Till now the practice was to allot the unsubscribed shares to the employees of the respective companies.
In case of issuing debentures, the new directive has made it mandatory to specify if the debenture holders are going to have first or second charge on the company’s assets. In case they are going to have second charge, the directive requires mentioning the name of the party who has the first charge.
Similarly, from now onwards, the companies will have to issue their securities within two months after receiving permission from the SEBON. The new directive also requires the investors to attach their photographs on the application form they file to buy the securities issued for the public .
NRB's green signal for Narayani & National Finance Merger
Nepal Rastra Bank has granted permission in principle to Narayani Finance Company and National Finance Company to go ahead with their proposed merger. According to the merger committee’s coordinator Ram Krishna Tamrakar who is also the Chairman of National Finance, the NRB issued the permission in late March. After the merger, the company will be called National Finance Company, according to the MOU signed by the two companies some nine months ago. Manandhar says that the merged company will be later converted into a national level development bank and function under the name of National Development Bank. At present, the combined paid-up capital of the two companies is Rs 440 million.
New Stock Exchange in the Offing
Nepal Stock Exchange is likely to have a competitor soon. According to sources, when two groups of investor approached the Securities Board of Nepal seeking permission to set up two separate new stock exchanges, the Board has asked them to merge together and file a single proposal.
Among the two proposals one was for ‘Kathmandu Stock Exchange’ with KIST Merchant Banking and Finance Company, IME Financial Institute and Elite Capital Finance Company as the major promoters. They had proposed to set up the company with an authorized capital of Rs. 1 billion and paid up capital of Rs. 200 million. They also had proposed to bring in a foreign investor.
Also proposed to the Board was National Stock Exchange with retired senior bankers Ram Babu Pant and Num Nath Poudel as the major promoters.
Following the SEBON advice, both groups are reported to have joined hands to file a single proposal to set up Kathmandu Stock Exchange’. According to a source, 20 financial institutions including International Money Exchange, Global Bank, ICFC Finance Company, Prudential Insurance, Surya Life Insurance, Bank of Asia and Standard Chartered Bank have backed the proposed stock exchange. It is also learnt that the new exchange will start with online trading system and a Central Depositary System (CDS). The new company is planning to have a paid up capital of Rs 200 million, out of which Rs 50 million will be invested on developing the software.
FNCCI Offers Recommendation to the CA
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has demanded that the proposed new constitution must ensure the economic rights of all the citizens.
The set of recommendations prepared by constitutional law expert Dr. Bhimarjun Acharya, and put forth for discussion in the recently concluded 43 rd Annual General Meeting of the Federation, suggests to include in the new constitution the right to earn private wealth and protect it, right to carry out economic activities, right to carry out entrepreneurial activities and right to get compensation for any loss suffered by anyone from the actions of the government or any other party.
Among the other rights that the Federation wants to be included in the new constitution are: right to get impartial administrative services from the government, right to take up any business, operate it, earn profit from it and close it as per the need, right to unhindered competition, right to negotiate, right against the government monopoly, right to free movement of the products, right against double taxation and constitutional guarantee about the interrelationship between the entrepreneur, investor, employer and the employees.
3 More Airlines
Looking at the growing business prospects, investors are preparing to bring three more domestic airline
companies. Among them Guna Air is being promoted by Guna Group which is planning to start operation beginning the Nepali New Year 2066. The company has purchased two Beech aircrafts from Buddha Air and plans to expand its fleet size to eight within a year.
Also planning to start operation on the occasion of Nepali New Year is Air Kasthamandap which will focus on chartered cargo flights to remote places with Pilatus Porter aircrafts. According to Krishna Prasad Gyawali who is the major promoter of the airline, Air Kasthamandap will compete with the helicopter service operators. According to him, chartering Kasthamandap aircraft will cost USD 1400 per hour as compared to USD 1700 for a helicopter charter. Meanwhile, UK based Non Resident Nepalis (NRNs) are also reported to be in the process of registering an airline company. Dambar Ghale, the President of NRN Association ( UK), and Aash Bahadur Gurung are leading a group of NRNs to launch the new company, according to the source.
