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CHANDIGARH

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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Car exports surge 57 pc in FY 09
New Delhi, April 10
At a time when global auto majors are struggling, carmakers in India have been able to expand their overseas presence with exports from the country registering whopping 57.04 per cent growth in the last fiscal.

Create buffer stock, RBI tells banks
Mumbai, April 10
As G-20 nations came out with a declaration on strengthening the financial system to counter global crisis, the Reserve Bank has advised banks to create buffers in good times to avail them in adverse circumstances.

RBI modifies loan-revamp formula
Mumbai, April 10
With banks' margins already under pressure due to the global economic slowdown, the RBI has provided them a breather by revising the method of calculating the current value of restructured loans.

Nissan’s India plans on track: MD
Mumbai, April 10
Japanese auto major Nissan, which is setting up a Rs 4,500-crore car-manufacturing facility with Renault in Chennai, said that the project is on schedule and that its first car would roll out before summer 2010.





EARLIER STORIES



A sign at a Chevron filling station is pictured in Los Angeles
A sign at a Chevron filling station is pictured in Los Angeles on Friday. Chevron Corp. said on Thursday its earnings would be sharply lower for the first quarter due to falling oil and natural gas prices. — AFP

IDBI Bank cuts lending rates
Mumbai, April 10
A day after bankers met RBI Governor D Subbarao, state-owned IDBI Bank yesterday slashed its benchmark prime lending rate (BPLR) by 0.5 per cent to 13 per cent effective from April 15.

Rights Issue
Industry raises 31,000 cr in ’08
New Delhi, April 10
Corporate India mopped up an impressive Rs 31,069 crore via rights issue in 2008, a two-fold rise over the previous year, as fund raising from the debt market and through IPOs dried up amid the global economic crisis.

Amritsar Region
J&K tops in tax collection
Amritsar, April 10
Jammu and Kashmir has recorded the highest income tax collection in the Amritsar region during the financial year 2008-09.

MS inks $170-m deal with HCL
Houston, April 10
Computer giant Microsoft has signed a $170-million five-year contract with India's HCL for outsourcing work for its online business productivity suite.

Voice-based navigation service
Hyderabad, April 10
SatNav, the pioneers in GPS technology in India, has introduced India's first Voice-based Navigation Direction Service-"SatGuide LCU" to phone users across India.





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Car exports surge 57 pc in FY 09

New Delhi, April 10
At a time when global auto majors are struggling, carmakers in India have been able to expand their overseas presence with exports from the country registering whopping 57.04 per cent growth in the last fiscal.

According to the figures released by the Society of Indian Automobile Manufacturers (SIAM), passenger car exports from India touched 3,31,539 units in FY09 as against 2,11,112 units in the previous financial year.

The country's largest exporter, Hyundai Motor India, witnessed an export growth rate of 63 per cent at 2,35,345 units compared with 1,44,440 units in the year-ago period.

Domestic market leader Maruti Suzuki India was a distant second, registering 32.58 per cent growth in overseas sales at 68,834 units in 2008-09 as against 51,916 units in the previous fiscal.

Overall vehicle exports from India grew by 23.60 per cent at 15,30,660 units in the last financial year, while the same stood at 12,38,333 units in the previous fiscal, SIAM said.

Exports growth in the last financial year was robust also in the two-wheeler category, which registered 22.50 per cent rise at 10,04,174 units as against 8,19,713 units in the previous financial year.

The surge in two-wheeler exports was led by Honda Motorcycle & Scooter India (HMSI), TVS Motor Company and Bajaj Auto Ltd (BAL), with the sale of their motorcycles.

While HMSI's exports grew by 68.83 per cent at 41,769 units, TVS and BAL witnessed jumps of 55.07 per cent and 31.09 per cent at 1,77,993 units and 6,31,383 units, respectively, in their overseas sales, SIAM said.

Domestic market leader Hero Honda, however, saw its bike exports decline by 11.38 per cent at 78,176 units against 88,219 units in the previous fiscal.

Scooter and three-wheeler exports rose by 1.51 per cent and 4.84 per cent at 25,865 units and 1,48,074 units respectively in the last fiscal over the previous fiscal, SIAM said. — PTI

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Create buffer stock, RBI tells banks

Mumbai, April 10
As G-20 nations came out with a declaration on strengthening the financial system to counter global crisis, the Reserve Bank has advised banks to create buffers in good times to avail them in adverse circumstances.

In this connection, RBI will come out with detailed measures later this year to combat adverse financial situation after the global financial stability forums like Financial Stability Forum (FSF), Basel Committee on Banking Supervision (BCBS) and Committee on Global Financial System (CGFS) work out detailed measures on the issue.

The central bank, in a statement, has asked banks to understand importance of building buffers, such as floating provisions (which are in excess of mandatory requirements) in this regard to mitigate "procyclicality".

"RBI would also continue to take measures to mitigate procyclicality...it is necessary that banks do realise the importance of building buffers such as floating provisions in good times, so that they are able to use them in adverse circumstances," RBI said.

Besides, the central bank suggested to all banks to build floating provisions as a buffer for the possible stress on asset quality later.

Meanwhile, RBI has also decided to encourage banks to keep more provisions for NPAs — floating provisions — than required mandatorily. The central bank decided to continue giving choice to banks on their excess provisioning for NPAs in 2009-10 as well.

Floating provision is the fund that banks maintain in excess of their normal provisions for standard and bad assets.

Accordingly, banks can either deduct these provisions from gross NPAs to arrive at net NPAs or reckon them as part of Tier II capital, subject to overall ceiling.

The G-20 leaders at a meeting held in London had come out with a declaration on strengthening the financial system. The declaration included setting up of Financial Stability Board, strengthening international frameworks for prudential regulation and subject all systemically important financial institutions, markets and instruments to an appropriate degree of regulation and oversight. — PTI

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RBI modifies loan-revamp formula

Mumbai, April 10
With banks' margins already under pressure due to the global economic slowdown, the RBI has provided them a breather by revising the method of calculating the current value of restructured loans.

"The (existing) formula has resulted in higher provisioning due to rise in the rate of interest during the last few years...It has been decided to modify the formula for computing diminution in the fair value of restructured loan," the central bank said in a notification.

Diminution means the reduction in the value of loans that have come for restructuring, due to reduction in interest rate or rescheduling of repayment of principal.

At present, while restructuring the loans, banks take into account the benchmark lending rate, Prime Lending Rate, which have been on a rise during the last few years, the RBI said. It further said that it is adding to the financial difficulties being faced by banks due to the current downturn.

The proposed formula, according to the RBI, moderates the swing in the diminution of present value of loans with the interest rate cycle.

The RBI further said in the annual balance sheets for the year ending March 2009 that the banks will also have to disclose the amount and number of accounts in respect of which applications for restructuring are under process, but restructuring packages have not been approved. — PTI

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Nissan’s India plans on track: MD

Mumbai, April 10
Japanese auto major Nissan, which is setting up a Rs 4,500-crore car-manufacturing facility with Renault in Chennai, said that the project is on schedule and that its first car would roll out before summer 2010.

"There is no delay, our plans are on track and Nissan India will come out with its next-generation A-segment car — Micra — on schedule before summer 2010," Nissan Motor India's managing director and CEO Kiminobu Tokuyama told PTI here.

The 50:50 joint venture between Nissan and Renault at Oragadam near Chennai, will have a capacity to manufacture four lakh cars annually and Nissan will initially produce two lakh cars, which it then proposes to scale-up to manufacture up to three lakh cars in about four years time.

The Micra hatchback car is named March in Japan and the Indian version would be christened either Micra or March, he said.

As of now the joint venture stands, though Renault, which was to originally roll out its models by mid-2010, has not yet indicated when it would now launch its vehicles from the facility.

"As of now, we only know that their launch has been postponed," Tokuyama said.

Tokuyama said Nissan proposes to manufacture 4-5 models from its stable in the next 4-5 years.

The Ennore port in north Chennai would have a dedicated jetty for exports of Nissan cars and the company hopes to export 2-2.5 lakh cars annually in 3-4 years and sell 90,000-1,00,000 units in the domestic market.

Tokuyama made it clear that Nissan has no plans to manufacture a small car to take on the Tata's Nano at this facility, but Nissan-Renault would be collaborating with Bajaj Auto to manufacture a small car in the country. — PTI

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IDBI Bank cuts lending rates

Mumbai, April 10
A day after bankers met RBI Governor D Subbarao, state-owned IDBI Bank yesterday slashed its benchmark prime lending rate (BPLR) by 0.5 per cent to 13 per cent effective from April 15.

The bank also reduced its deposit rates by 0.25-0.5 per cent across various maturities, it said in a press release.

One to three year maturity deposits upto Rs 15 lakh will now attract a rate of 8.25 per cent as against 8.5 per cent while 1,100-days deposits will carry a rate of 8.75 per cent as against 9.25 per cent, the bank said.

SBI slashes deposit rates

Meanwhile, country's largest lender, State Bank of India, also cut its deposit rates by 0.25-0.5 per cent across different tenures from April 13.

The reduction in rates will be applicable for deposits below Rs 1 crore, SBI said.

With the reduction, deposits with one year to less than two years maturity will now attract a rate of 7.75 per cent as against 8.10 per cent earlier, the bank said.

Deposits with two years to less than 1,000 days and 1,000 days maturity deposits will carry rates 8 per cent, 8.25 per cent as against 8.25 per cent, 8.5 per cent respectively, the bank said. — PTI

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Rights Issue
Industry raises 31,000 cr in ’08

New Delhi, April 10
Corporate India mopped up an impressive Rs 31,069 crore via rights issue in 2008, a two-fold rise over the previous year, as fund raising from the debt market and through IPOs dried up amid the global economic crisis.

During the calendar year 2008, funds amounting to Rs 31,069 crore were raised through rights issue, up two-fold over the last year's figure of Rs 14,085 crore, as per data compiled by brokerage firm SMC Capital.

"With near frozen debt market and drying up of initial public offers, firms tried their luck with rights issue, as they were in need for funds to meet their expansion costs," SMC Capital Equity Head Jagannadham Thunuguntla said.

Some of the big ticket rights issue that hit the markets in 2008 include Tata Motors' over Rs 4,000-crore issue to fund acquisition of British marquee brand Jagaur Land Rover (JLR) and Rs 5,000- crore Hindalco rights issue."The two big issues of last year saw lukewarm response from investors with the remaining being subscribed by the promoters. It acts as an advantage for the companies, as the promoters fill in the remaining gap and there is no dampening effect on the prestige of the firm," Thunuguntla added.

However, in terms of number of issues, there was a marginal drop with 26 issues hitting the capital market in 2008, against 29 in 2007. Rights issue is an invitation to the existing shareholders for purchasing shares of the company. — PTI

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Amritsar Region
J&K tops in tax collection
Ashok Sethi

Amritsar, April 10
Jammu and Kashmir has recorded the highest income tax collection in the Amritsar region during the financial year 2008-09.

Giving details of the revenue collection, Sunil Chopra, Chief Commissioner, Income Tax of the Amritsar region, while talking to mediapersons said during 2006-07, the total income tax collection, including tax deducted at source (TDS), was Rs 199 crore from the J&K and the same has doubled to Rs 451.81 crore in 2008-09. He said the major contributors were the J&K Bank Ltd, which contributed Rs 192 crore, while Jammu-based Sun Pharma added Rs 100 crore to the IT kitty during the last fiscal year.

Chopra said it was indeed heartening that in spite of the economic meltdown, the area under their zone, including J&K and other 8 revenue districts of Punjab, have shown an increase of 15 per cent against their targets fixed by the Central Board of Direct Taxes.

According to statistics, the zone has collected Rs 668.16 crore, an increase of 13.5 per cent against the target of Rs 589 crore, while the TDS collection has also zoomed against the target of Rs 460 crore to Rs 540.50 crore.

He further said during the year, unaccounted income of Rs 56.3 crore was detected during the 102 surveys and searches conducted by the department. He said during the raids in the north-west region, including Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir and Chandigarh, the IT department has recorded unaccounted income of Rs 383 crore, an increase of Rs 160 crore, against the previous financial year.

He further informed that the number of IT returns filed in this region have gone up to 5,66,138 against 5,50,086 filed last year.

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MS inks $170-m deal with HCL

Houston, April 10
Computer giant Microsoft has signed a $170-million five-year contract with India's HCL for outsourcing work for its online business productivity suite.

HCL will provide 600 employees to support the contract and nearly 250 workers have already begun work on the project. Microsoft has not said whether this contract is to replace any existing agreement it has in India, or if this deal is an expansion of its current outsourcing scope.

Despite the recent job cuts, Microsoft has been expanding its online services business and has recently announced plans to make its Business Productivity Online Suite, a software-as-a-service offering, available for trial and purchase in 19 countries. — PTI

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Voice-based navigation service

Hyderabad, April 10
SatNav, the pioneers in GPS technology in India, has introduced India's first Voice-based Navigation Direction Service-"SatGuide LCU" to phone users across India.

SatNav Technologies is offering this unique solution to use for any common man. SatNav has simplified GPS technology that will ensure that millions of people never get lost, said A K Prasad, CEO. It has introduced a pre-paid voucher scheme with toll-free calling acccessibility and all phone users from any telecom provider will be connected to a live trained agent. — PTI

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BRIEFLY


Japanese Prime Minister Taro Aso answers questions during a press conference at his residence in Tokyo
Japanese Prime Minister Taro Aso answers questions during a press conference at his residence in Tokyo on Friday. Aso said the government would buy up to $500 billion worth of shares if market conditions deteriorate excessively amid a steepening recession. — AFP

SpiceJet insurance scheme
New Delhi:
Low-cost carrier SpiceJet on Friday said it has launched a ‘Home Away Insurance’ for all its customers in collaboration with insurance firm Tata AIG. The scheme would have a maximum cover of up to Rs 1 lakh and would cover damages, disappearance or destruction of furniture, clothes and electrical equipment on account of burglary at the passengers’ residence at a time when he or she is away, SpiceJet said in a statement. — PTI

Suzlon to foray into SA
New Delhi:
Wind power equipment maker Suzlon Energy on Friday said it would start operations in South Africa and expand in South America, where the company has a presence in Brazil. “We will expand our operations to 3-4 countries... in South Africa and South America... we have just started in Brazil. We are looking at Canada as another potential country,” Suzlon Energy CMD Tulsi Tanti said. — PTI

ITC plans 100 Fortune Hotels
New Delhi:
Fortune Hotels Pvt Ltd, a wholly owned subsidiary of ITC Ltd, is planning to have 100 hotels across the country with an inventory of around 8,000 rooms by 2012. “Our plan is to have a total of 100 hotels under the Fortune brand across the country by 2012 with an inventory of around 8,000 rooms,” ITC Ltd-hotels division vice- president Pawan Verma said on the sidelines of the inauguration of the Fortune Inn Grazia hotel in Noida NCR. — PTI

Verlicchi’s India foray
New Delhi:
Italian two-wheeler parts maker Verlicchi on Friday announced its India foray with the formation of a joint venture with Gurgaon-based component supplier Hema Group. The 50:50 joint venture, Verlicchi-Hema Automotive Co, will set up its first manufacturing facility at Hosur near Bangalore at an investment of Rs 17 crore. — PTI

Boeing to cut 777 output
Washington:
US aerospace giant Boeing has said it would slash production of its twin-aisle 777 aircraft to five planes per month from seven, citing “significant deterioration” in the airline industry. Boeing on Thursday said it decided to reduce 777 production, beginning in June 2010, “due to significant deterioration in the business environment for airlines and cargo operators driven by unprecedented global economic conditions.” — AFP

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