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Tata plans to raise £1 billion to revive JLR
London, May 10
Indian conglomerate Tata group-owned Jaguar Land Rover (JLR) is planning to raise up to £1 billion by September to keep the cash-starved company afloat without the British government's help, media report said.

Anti-offshoring, H-1B cap may affect biz: Infosys
New York, May 10
Expressing concerns over the possible measures by foreign countries, especially the US, to restrict off-shoring and movement of work visa-holders, Indian IT bellwether Infosys has said such steps could adversely impact the company's business.

DoT notifies mobile number portability
New Delhi, May 10
Come September, mobile phone users in some parts of the country, including Delhi, Mumbai, Kolkata and Chennai, will have the facility to switch operators even while retaining their existing number.



EARLIER STORIES



Employees work at a railway yard in Mumbai.
Employees work at a railway yard in Mumbai. The Railways is expected to show gross traffic earnings of Rs 931 billion for the coming fiscal year. This is up 11 per cent from the previous year. — AFP photo

Hindustan Unilever net up 3.68 pc
Mumbai, May 10
FMCG major Hindustan Unilever Ltd today reported a 3.68 per cent increase in standalone net profit for the quarter ended March 31, 2009, at Rs 394.99 crore as against Rs 380.95 crore in the corresponding quarter of the previous fiscal.

Market Update
Poll results to dictate trend
After the conclusion of the fourth phase of polling, there is still no clear trend as to which alliance will come to power.

Tax Advice
Tax relief admissible on leave encashment arrears
Q: I retired from BSNL on March 31, 2007. In the financial year 2008-09, I received leave encashment arrears, commutation arrears and pension income.

 





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Tata plans to raise £1 billion to revive JLR

Ratan Tata London, May 10
Indian conglomerate Tata group-owned Jaguar Land Rover (JLR) is planning to raise up to £1 billion by September to keep the cash-starved company afloat without the British government's help, media report said.

According to British newspaper the Guardian: “Tata is trying to raise up to £1 billion pound by September to keep JLR afloat without government help”.

As per the report, the Tatas have mandated financial adviser Citigroup to find banks with solid credit rating prepared to underwrite some of the £340 million loan pledged by the European Investment Bank (EIB).

The Tatas are also seeking to tap the debt markets to help secure the £500 million to £1 billion short-term financing package needed, the newspaper added.

“Even if Tata can raise more debt and find banks willing to underwrite part of the EIB loans, the cost of the financing will be very high,” the Guardian said.

The report further said the Tata Group, which controls Jaguar Land Rover through its subsidiary Tata Motors, will cut or freeze investment plans for new models. More redundancies from its 15,000-strong workforce are also likely.

Meanwhile, the government had revealed its conditions for underwriting part of the EIB loan for the Tatas.

These included giving the government the right to appoint a chairman to Jaguar Land Rover, a guarantee that the Tatas would not make any redundancies and provide an additional large injection into the firm.

The Tatas have, however, rejected the government’s conditions for underwriting some of the EIB loan to secure immediate and short-term help.

“The Indian firm, which remains committed to Jaguar Land Rover, believes it can secure better terms independently,” the daily said.

Besides, talks are continuing about putting together a longer-term financing package involving a consortium of banks, led by the state-controlled Lloyds Banking Group, the Guardian said.

The conditions for the loans are believed to be more conventional than the terms demanded by the government this month for the short-term package and the Tatas are confident that progress is being made.

The report added that the Tatas are reviewing its spending plans for its UK subsidiary, which it bought 18 months ago, after it became apparent that it would not receive the level of financial backing from government it had hoped for.

‘We want access to credit, not bailout’

Criticising the British government for ignoring the manufacturing sector, Indian industrialist Ratan Tata has said he was not asking for a bailout but only a “facilitation of access to credit on commercial terms’ for his businesses in the UK.

In an interview published in British newspaper Sunday Times, Tata said: “We are responsible for the fortunes of the company but this is a bone-dry situation in terms of access to credit. Nobody can operate on that basis unless you have large cash balances, which we don't. My concern is that the government doesn't appear to care about manufacturing.”

The comments follow reports about the UK government denying financial aid to Jaguar and Land Rover, the iconic car brands acquired by Tatas last year.

“I would like to see the British government playing only one role. It controls the banks, and all I seek is the facilitation to provide access to credit on commercial terms. It's not a bailout,” Tata said.

‘Corus, JLR deals ill-timed’

Ratan Tata has said his two acquisitions - Anglo Dutch steelmaker Corus and British Marquee Jaguar Land Rover - were done at an “inopportune time” and his company might have gone “too far too fast”.

In an interview published in the Sunday Times , Tata admitted with hindsight that he might have gone too too fast, but that nobody saw the economic recession coming.

“If one had known there was going to be a meltdown, then yes (Tata went too far), but nobody knew. Both acquisitions were made, I would say, at an inopportune time in the sense that they were near the top of the market in terms of price,” Tata said.

Recession is making Tata's recent international spending spree look ill-timed as he bought Corus and JLR just as the boom reached its peak.

Tata Steel paid £6.7 billion for Corus, which, when measured as a multiple of the target company's earnings, made it the most expensive steel deal to date. A year later Tata Motors paid £1.15 billion for JLR. — PTI

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Anti-offshoring, H-1B cap may affect biz: Infosys

New York, May 10
Expressing concerns over the possible measures by foreign countries, especially the US, to restrict off-shoring and movement of work visa-holders, Indian IT bellwether Infosys has said such steps could adversely impact the company's business.

The Obama administration has restricted the hiring of H-1B visa-holders by companies bailed out by the Federal government and recently announced a plan to end tax incentives for American entities generating jobs overseas.

Both moves are expected to impact the Indian IT sector, whose major chunk of revenues come from the US.

Infosys has said in the prevailing economic environment, there could be a change in existing laws or the enactment of new legislation, restricting ‘offshore outsourcing” or imposing restrictions on the deployment of work visa holders at client locations.

Such actions "may adversely impact our ability to do business in the jurisdictions in which we operate, especially with governmental entities," the IT firm said in its annual filing with the US Securities and Exchange Commission.

Nearly 60% of Indian IT-BPO industry caters to the US companies, according to the latest figures. — PTI

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DoT notifies mobile number portability

New Delhi, May 10
Come September, mobile phone users in some parts of the country, including Delhi, Mumbai, Kolkata and Chennai, will have the facility to switch operators even while retaining their existing number.

The Department of Telecom (DoT) has issued a notification in this regard saying: “Mobile number portability (MNP) is to be implemented in Delhi, Mumbai, Maharashtra and Gujarat service areas of zone-I and Kolkata, Tamil Nadu, Chennai, Andhra and Karnataka of zone-II within six months of award of licence by September 20, 2009, and in the rest of the country by March 20, 2010”.

Syniverse Technologies (zone-I) and MNP Interconnection (zone-II) are the two companies who have been licenced by the DoT to carry out the MNP exercise.

The DoT further said TRAI would decide on all kinds of tariffs related to MNP like the transaction fee to be charged from the customer for seeking change of number.

But sources said number portability charges were likely to be below Rs 300 and it would take maximum two days to change the service provider.

TRAI is learnt to be keen to keep the cost at a reasonable level so as not to discourage subscribers willing to change their service provider and at the same time make it a viable business model for the service providers. — PTI

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Hindustan Unilever net up 3.68 pc

Mumbai, May 10
FMCG major Hindustan Unilever Ltd today reported a 3.68 per cent increase in standalone net profit for the quarter ended March 31, 2009, at Rs 394.99 crore as against Rs 380.95 crore in the corresponding quarter of the previous fiscal.

The firm's total income went up to Rs 4,035.37 crore during the reporting quarter as compared to Rs 3,839.88 crore during the quarter ended March 31, 2008, the company said in a statement here.

Sales from the FMCG sector in the domestic market were up by 11.82 per cent for the quarter ended March 31, 2009, at Rs 3,715.81 crore as against Rs 3,322.96 crore in the corresponding quarter previous fiscal.

The home and personal care segment clocked sales of Rs 3,023.84 crore and the
foods segment Rs 691.97 crore during the quarter as compared to Rs 2,711.72
and Rs 611.24 crore in the same quarter of the previous fiscal, respectively, in the
domestic market.

Net sales increased to Rs 3,988.33 crore for the quarter ended March 31, 2009, as compared to Rs 3,762.58 crore in the corresponding quarter previous fiscal.

Exports fell to Rs 218.56 crore during the quarter ended March 31, 2009, as against Rs 397.32 crore in the same quarter previous fiscal.

Sales of soaps and detergents on a standalone basis were up 15.76 per cent to Rs 2,012.19 crore, personal products 1.75 per cent to Rs 1,038.6 crore, and beverages 13.53 per cent to Rs 489.29 crore during the reporting quarter over the one ended March 31, 2008.

Others, including chemicals and water sales, during the quarter were at Rs 67.5 crore during the quarter as compared to Rs 44.13 crore in the corresponding quarter of the previous fiscal.

HUL consumed raw material worth Rs 1,604.56 crore during the quarter ended March 31, 2009, as against Rs 1,691.85 crore in the year-ago period.

Lower raw material costs helped the company to increase its margin by 200 basis points on a year-on-year basis, he said. — PTI

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Market Update
Poll results to dictate trend
by Lalit Batra

After the conclusion of the fourth phase of polling, there is still no clear trend as to which alliance will come to power.

This uncertainty will continue to haunt the markets this week as well and could potentially check sharp gains temporarily.

The counting will take place on May 16, 2009. Opinion polls carried out before the voting began predicted neither the Congress-led United Progressive Alliance (UPA) nor main opposition bloc led by the Bharatiya Janata Party (BJP) would win a clear mandate, leaving both to find new allies in order to form a government.

Besides the anxiety over future political developments, the market will continue to be at the mercy of global cues and, of course, overseas investors.

Among Friday’s big news, the US unemployment rate hit a 25-year high of 8.9 per cent in April, but reports say there are further signs of hope as the monthly job loss tally fell to the lowest level in six months. This helped boost the US and other western markets on Friday.

Srei Infrastructure Finance Ltd

With strong focus on infrastructure, and particularly on the sectors of power, ports, roads, and renewable energy, Srei Infrastructure Finance is well poised to benefit from this opportunity being a financial one-stop shop.

The company has robust presence not only in financing of infrastructure equipment and projects, but also in linked value-added services such as infrastructure advising, insurance, equipment database, capital market advisory, foreign exchange broking and retail finance.

The current rate of infrastructure investment in India, at four per cent of GDP, is well below the target rate of eight per cent proposed by the Expert Group on Commercialisation of Infrastructure Projects (Source: ADB).

This indicates significant opportunities for further infrastructure development and financing in India, particularly as regulatory, legal and market frameworks evolve and become more supportive of private investment.

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Tax Advice
Tax relief admissible on leave encashment arrears
by S.C. Vasudeva

Q: I retired from BSNL on March 31, 2007. In the financial year 2008-09, I received leave encashment arrears, commutation arrears and pension income.

In ITR Form I, will the amount of leave encashment arrears and commutation
arrears be exempt?

According to my CA, these would not be exempt but since these are part of my earlier benefits, I feel that these will be exempt.

I want to know that in future if I received these arrears, then will it be exempt. Also I have no proof from my employer that it is exempt.

— Desilva, Kurukshetra

A: Your queries are replied hereunder:

(i) Any payment received by an employee as a cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement on superannuation, is exempt from tax under the provisions of the Act in case the amount of such encashed leave does not exceed the amount for 10 month leave calculated on the basis of the average salary drawn by the employee for the period of 10 months immediately preceding the retirement. Therefore, in case the amount of leave encashment is within the permissible limit, the same will be exempt from the leviability of tax.

(ii) Any payment in commutation of pension received under any scheme of the employer to the extent it does not exceed (a) in case where the employee receives any gratuity, the commuted value of one third pension which the employee is normally entitled to receive and (b) in any other case, the commuted value of one-half of such pension would be exempt from tax. In case the commuted pension in your case is within the above norms the same would be exempt from tax.

iii) There is no other supporting document required except the salary certificate, which should indicate the aforesaid facts by way of an annexure to such certificate.

LIC policy

Q: I have submitted a sum of Rs 1 lakh by cheque to the LIC under a single payment policy taken in favour of my married daughter.

Whether this payment would automatically become a gift given to my daughter or some other formality is required to be completed?

How the maturity proceeds of the policy would be treated for IT purpose in her hands? Is she required to file a return, in case her income is less than the maximum amount, which is not chargeable to income tax?

If a sum of Rs 1,00,000 given to my son-in-law as a gift would attract any tax on my or his hands?

— Surinder Sharma, Chandigarh

A: Your queries are replied hereunder:

(i) It would be better to make out a letter with regard to the gift of Rs 1,00,000 in the shape of single payment to the LIC for a policy taken in favour of your married daughter. The gift so made is also required to be accepted by your daughter.

(ii) The maturity proceeds of the policy would be treated as capital in her hand in case the premium payable does not exceed 20% of the actual capital sum assured.

(iii) She need not file a tax return in case her income does not exceed the maximum amount chargeable to tax without claiming deduction under Section 80C of the Act.

(iv) The gift of Rs 1,00,000 received by your son-in-law would not attract the payment of Income tax under any provisions of the Act.

Online payment of tax

Q: I paid self-assessment tax of my assessee online on March 31, 2009, at about 8:30 pm. When I printed copy of challan, instead of March 31, 2009, the date mentioned was April 1, 2009.

Now my problem is if I was to e-file my return before 12:00, i.e. on March 31, 2009, then the date of challan should also be March 31, 2009, because date of challan cannot exceed date of filing return.

Now, on bank challan date is April 1, 2009. Then in my return I gave date of challan as March 31, 2009, instead of April 1, 2009, and e-filed my return.

I want to know will there be any problem regarding matching of challan. I did this because there was no other option. Is there any penalty for this under any section?

— Saha

A: According to a circular issued by the Central Board of Direct Taxes, tax is deemed to have been paid on the date on which cheque is tendered with the collecting bank for the purposes of making the payment of the income tax.

The date put in by the relevant bank will have no bearing on the date of payment of tax. The payment in your case having been made on March 31, 2009, the same should be adjustable against likely demand for the assessment year 2009-10.

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BRIEFLY

Maruti not to phase out 800, Omni yet
MUMBAI:
Maruti Suzuki on Sunday said had not yet taken a call on phasing out its successful cars 800 and Omni. "We have not yet taken a call on phasing out 800 and Omni. The decision to phase out the models or not will be taken by our marketing division,” Maruti Suzuki managing executive officer IV Rao said. The company is working on upgrading the Maruti 800 and Omni to meet Bharat Stage 4 emission norms, which will come into effect from 2010. — PTI

BoB on expansion spree
NEW DELHI:
Undeterred by the global economic slowdown, Bank of Baroda, the bank with the largest overseas presence, on Sunday said it was planning to open about 10 foreign branches in the current fiscal. "We are planning to open about 9-10 overseas branches during the year," Bank of Baroda chairman and managing director MD Mallya said. Overseas expansion plan includes opening of a subsidiary in Malaysia, a branch at New Zealand, he said. — PTI

BHEL cuts prices
NEW DELHI:
Stiff competition from Chinese power equipment manufacturers has forced state-run BHEL to slash the prices of its products by up to five per cent to bag orders from the private power producers. Besides lowering its prices, BHEL has been benefited by favourable rupee-dollar movement vis-a-vis Chinese currency making overall impact on prices by about 25 per cent downward. — PTI

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