Mumbai/Seoul, April 22
Indian and South Korean car makers are on track to post solid growth in revenues for the January-March period, driven by strong volume and demand and because they have emerged little scathed by the supply disruption caused by the Japan earthquake in March.

South Korea’s Hyundai Motor and its affiliate, Kia Motors, are expected to post strong results for the January to March period driven by new models.

Indian auto makers, however, will see pressure on operating margins as commodity prices continue to rise. The rising costs of steel, rubber and other inputs have forced some Indian car makers to raise prices in recent months.

India’s largest car maker, Maruti Suzuki, has raised prices twice this year, while utility-vehicle maker Mahindra & Mahindra and Tata Motors have raised prices by up to 2 per cent on key models.

“Though OEMs continue to face input cost pressure, price hikes coupled with strong volume growth should help to largely offset input cost pressures,” said Ajay Shethiya, an auto analyst with Centrum Broking.

Maruti, 54.2 per cent owned by Japan's Suzuki Motor Co, is expected to report an 8 per cent fall in quarterly net profit and is facing pressure from competitors such as Hyundai Motors, the second-largest car maker in India.

Shethiya expects the car maker to register an EBITDA margin of 9.7 percent in the quarter, down 349 basis points compared with the same period a year ago.

Tata Motors, which produces everything from the premium Jaguar and Land Rover brands to the Nano, the world's cheapest car, is expected to report 15 percent growth in net profit. The increase is supported by higher sales at its Jaguar and Land Rover unit, which it bought from Ford Motor Co in 2008. — Reuters

New Delhi , April 22
Toyota Kirloskar Motors (TKM), the Indian joint venture between Toyota Motor Corp and Kirloskar group, today announced that it would make production adjustments due to component supply difficulties after Japan’s March 11 earthquake and tsunami.

The company has said that it would suspend production at its facilities on all Mondays and Fridays and the company’s plants near Bangalore in Karnataka will work at 30 per cent capacity between April 25 and June 4.

Bangalore-based Toyota Kirloskar, has a production capacity of about 150,000 units per annum at its two plants

The first plant with an annual capacity of 80,000 units rolls out Corolla Altis, Innova and Fortuner and the 70,000 units per annum second plant makes Etios Sedan and Hatchback Liva. Liva will go on sale this month.

“It is important to note that this is a necessary response to a short-term supply issue and we intend to restore the normal operations as soon as possible,” Managing Director Hiroshi Nakagawa said.

“Our focus is on ensuring optimum stock management to reduce the impact on our customers from the immediate production shortfalls,” he said while adding, “We intend to restore the normal operations as soon as possible.”

Deputy Managing Director (Marketing) Sandeep Singh said: “It may be difficult to avoid the inconvenience caused to our customers, and we deeply apologise for the same. We will try to minimise any delivery delays.” The production schedule post-June 4 will be decided later. 

New Delhi, April 22
The Telecom Ministry will soon seek a review of the recommendations by sectoral regulator Trai for cancelling 69 licences as operators had failed to roll-out networks, in view of DoT's finding that only 17 cases required such stringent action.

Last year, Trai recommended cancellation of 69 licences of six operators, including five new ones, who were sitting on spectrum and failed to provide services in the circles allotted to them.

"Department of Telecom (DoT) has identified 17 such cases for sending out termination notices for failing to meet roll-out timeline. After this, the department will re-send the rest of the Trai's recommendations asking them to review them once again," a DoT official said.

As of now, the ministry has identified 17 cases for sending out the notices. Of these, it has already sent 8 notices to various telecom operators including SSTL, Aircel and Etisalat DB and soon it will send to others in few weeks.

According to Trai recommendations, the companies under the scanner were Etisalat DB (earlier Swan) that has failed to roll out services in 15 circles, Videocon Communications (earlier Datacom Solutions) in 10 circles, Uninor (the Unitech Group) in 8 circles and Aircel in 5 circles, among others.

As per the conditions, the licensees are required to roll out the services in 90 per cent service area in metros and 10 per cent of district headquarters in other service areas within 12 months from the date of the award of licences. — PTI

New Delhi, April 22
Concerned over fall in output at India's biggest gas field, oil regulator DGH will summon Reliance Industries to seek explanation on its failure to meet drilling commitments that were a few years back used to justify over $8.8 billion expenditure on KG-D6 field.

Reliance in 2006 won government nod to invest $8.836 billion on its eastern offshore KG-D6 field after promising to produce 61.88 million cubic meters per day of gas from 22 well by April 2011 and 80 mmscmd from 31 wells by 2012.

But the situation on ground has been markedly different with Reliance producing about 42 mmscmd from 16 out of the 18 wells drilled so far on Dhirubhai-1 and 3 (D1 and D3) field in the KG-D6 block, Directorate General of Hydrocarbon (DGH) Director General S K Srivastava told PTI.

Another 8 mmscmd is being produced from MA oilfield in the same block, taking the total output to around 50 mmscmd as against committed 69.88 mmscmd, he stated after a review meeting oil ministry had called yesterday evening.

"The reasons they have so far given (for not fulfilling their commitment) are far from convincing. We intend to call Reliance and its partner Niko Resources (of Canada) in first week of May to explain failure of meet commitments," he said.

Reliance says output has dipped after touching 61.5 msmcmd achieved in March last year on falling pressure at wells and that drilling more wells will not help the problem as it will tap the same resource.

Srivastava said Reliance has not kept up with the approved field development plan (FDP) but stopped short of saying what action the government can take against it.

"We will come to that stage (imposing penalties or taking action) after hearing Reliance," he said.

Reliance has drilled two more wells but not yet connected them to production system, he said. DGH wants Reliance to drill 11 wells this fiscal, including two wells that were to be drilled last year.

In 2007, allegations of gold-platting or inflating the cost were levelled against Reliance when it jacked up the investment required for developing D1 and D3 gas field to $8.8 billion from $2.47 billion proposed in 2004.

Reliance, which is allowed to recover all capital and operating expenditure from sale of gas before sharing profits with the government, had denied all allegations saying cost of drilling 31 wells had gone up since 2004.

It had also used the high cost involved to justify the $ 4.205 per million British thermal unit price fixed for natural gas produced from KG-D6 fields. — PTI

Singapore, April 22
Spot gold surged to a lifetime high on Friday in thin holiday trade, hitting a record for a sixth consecutive session on a weak dollar and factors ranging from geopolitical uncertainty to inflation concerns.

Silver also raced to its loftiest in 31 years, notching the milestone for a seventh straight day and outstripping gold's weekly gains by a huge margin.

The ongoing euro zone sovereign debt crisis, unrest in West Asia and North Africa, rising global inflation, and most recently worries over the fiscal stability of the United States have fueled the record-breaking rally in these precious metals.

Spot gold rose to an record of $1,512.50 an ounce, before easing to $1,507.69, on track for a weekly gain of 1.5 per cent — its sixth consecutive week of gains. Spot silver hit $46.69 an ounce, its highest since 1980, on course for a weekly rise of 8.4 percent, its biggest weekly increase in two months.

Silver has gained 51 percent so far this year, and gold 6 per cent. This compares with a corresponding 1 percent rise in the London Metal Exchange price of copper, the bellwether of the industrial metals complex.

Supporting precious metals, the dollar was languishing near a three-year low against a basket of currencies, and could take a run at the all-time low hit in 2008, pressured by record low interest rates and the crushing weight of the US budget deficit.

So long as the overall environment stays supportive and the dollar remains weak, gold is expected to retain its strength. Price of bullion is seen to rise to $1,700 an ounce by 2015, analysts polled by Reuters said.

However, a correction might be on the horizon after the recent rapid ascent, traders and analysts said. “Gold is likely to consolidate around the $1,500-level next week,” said Li Ning, an analyst at Shanghai CIFCO Futures.

“The angle of the recent rally is very sharp, and we are bound to see some correction in the near term.” — Reuters

Seoul, April 22
Surging gold prices have forced South Koreans to cut down on traditional rings given to mark the first birthday of the children of friends and relatives, making jewellers to come up with a lighter and cheaper alternative to boost sales.

A gold ring is a traditional present to wish a baby good luck and fortune, but a rise in gold prices to a record $1,508 an ounce on Thursday has priced even the most devoted out. The rings are sized to the baby's finger and its name may be engraved inside.

"On average, monthly sales of dol (first birthday) rings is only one-tenth compared to last year," said Yoo Dong-soo, chairman of the Korea Precious Metals Association.

A new one-gram ring, much lighter than the customary baby gift weighing an eighth of an ounce or 3.75 grams, would help lift sales and preserve the long-standing tradition, he added.

The first birthday is a huge ceremonial occasion in Korean tradition that includes a birthday party. During the party, a baby, sometimes wearing gold rings, selects an item from among things such as thread, a pencil or money to predict their future, while families and guests watch.

"The one-gram ring sounds just doable for both party hosts and guests, we don't have to feel it's a burden," said Park Su-yeon, a 34-year-old mother who's planning her baby's first birthday party in May.

But sentiment only goes so far. Some parents have actually sold the rings engraved with their infant's name to take advantage of rising gold prices. — Reuters

Mumbai, Apr 22
Private sector lender Axis Bank clocked 33.5 per cent jump in net profit at Rs 1,020.11 crore for the fourth quarter ended March 31, 2011.

The bank had a net profit of Rs 764.8 crore in the same quarter in the previous fiscal, Axis Bank informed the Bombay Stock Exchange.

Total income of the bank rose by 48.3 per cent to Rs 5,817 crore in the January-March quarter compared to Rs 3,922 crore in the same period previous fiscal.

Interest Income improved to Rs 4,366.6 crore against Rs 2,988.4 crore in the same quarter a year ago.

The bank proposed a dividend of 140 per cent, or Rs 14, per share for 2010-2011.

For the entire fiscal ended March, 2011, the bank's net profit grew by 34.7 per cent at Rs 3,388.4 crore, compared to Rs 2,514.5 crore in the previous financial year.

Total income increased to Rs 19,786.9 crore during the year, compared to Rs 15,583.8 crore in the previous fiscal.

Consolidated net profit increased to Rs 3,339.9 crore in 2010-2011 compared to Rs 2,478.14 crore in the previous fiscal.

Net Interest Margin (NIM) was 3.65 per cent at the end of March 2011. At the same time, Capital Adequacy Ratio of the bank stood at 12.65 per cent.

Total advances rose by 36.4 per cent Rs 1,04,341 crore during the year as compared to Rs 1,42,408 crore in the previous fiscal. — PTI

New Delhi, April 22
The Securities & Exchange Board of India (SEBI) may soon frame a stringent set of rules for funds investing in art works, antiques, coins and stamps. This is expected to check black money flow into these products and safeguard the interest of genuine investors.

The regulator considers investment funds focused on art works, antiques, coins and stamps as "Collective Investment Schemes", which come under the ambit of the capital market regulator.

Fearing flow of illicit wealth into these funds and also a high level of risk posed by these to the general investors, SEBI is now considering framing a specific set of regulations for these funds, a senior official said.

Globally, art funds are very famous as an alternative class of investments for rich investors and have started gaining some ground in India over the past few years. However, there are no specific regulations in India for art and other such funds, which collect money from numerous investors, most of whom are high-net worth individuals to invest them into art works, antique pieces as also old and rare coins and stamps.

SEBI will soon begin a consultation process with various stakeholders, including the central government and RBI, with an aim to frame the specific regulations for these alternative investment vehicles this fiscal, the official added.

Earlier in 2008, a time when the art funds first became visible in India, the regulator had issued a public notice to warn the investors against putting their money into art funds or schemes of entities not registered with SEBI.

At that time, SEBI had said that its analysis of various art funds has found them to be 'collective investment schemes' and were being launched by various entities without registering with SEBI in accordance with the SEBI (Collective Investment Schemes) Regulations, 1999.

According to the existing regulations, only an entity registered with SEBI as a Collective Investment Management Company is allowed to offer any collective investment fund or scheme, including those focused on art works.

However, there are no specific regulations for art funds and the need has been felt now to have a distinct set of rules for such investment vehicles, the official added. Globally, alternative investment avenues are quite in vogue among rich investors. — PTI

New Delhi, April 22
Mukesh Ambani-led RIL has said it will capitalise on the core strength of its businesses and expertise of global investment major DE Shaw in its proposed foray into the financial services sector.

Reliance Industries Ltd (RIL) has entered into a joint venture with DE Shaw as part of its plans to enter the fast growing financial services sector in the country.

“This JV (with DE Shaw) will incorporate DE Shaw's expertise in investment and related technology with Reliance's operational knowledge and extensive presence across India to offer a wide array of financial services to Indian consumers,” RIL said last evening while announcing its annual results.

RIL chief Mukesh Ambani said the company was fully geared to participate in India's growth and continued global recovery in the coming years.

“Our committed investments in core business and new initiatives are expected to result in sustained earnings growth,” he noted.

RIL is working on some significant initiatives for the financial services business, especially those where it can utilise its expertise and presence in sectors like energy and retail, as also its proposed telecom and power ventures.

Emailed queries to both RIL and DE Shaw were not answered.

Besides DE Shaw, RIL would also look at some other partners for various specific financial service businesses, as it has done in its retail business and to some extent in its energy operations, sources have said.

The businesses that Reliance Industries could undertake include energy trading, private equity, mutual fund, distribution of financial products, infrastructure funding and various other consumer and corporate-focussed financial service offerings.

The group would look at serving both corporate and individual customers through its financial services offerings.

RIL has been working on its financial sector foray for about a year now and a final blueprint on this front may be finalised in the next few weeks. The finer contours of its partnership with DE Shaw and other potential alliances may have been discussed at RIL's board meeting yesterday, sources said.

Between the two Ambani brothers, financial services hitherto has been the domain of younger sibling Anil Ambani, but abolition of their non-compete agreement last year paved the way for Mukesh to pursue this business. — PTI

Chandigarh, April 22
Bajaj Finserv today said it would start its wealth management services in Chandigarh and Ludhiana.

The company plans to set up its branch offices in Panchkula, Delhi, Faridabad and Jalandhar by the end of this year. By March 2012, the financial advisory company is looking at opening seven other branches in major Tier-1 and Tier-11 towns by this year. Almost 200 people have already been roped in.

Arpit Agarwal, CEO, Bajaj Financial Solutions, said, “ Till now, wealth management services were available only to the High Net Worth population, who was willing to invest large sums of money and were primarily being serviced by large commercial banks or brokers. We will offer this service to all at a cost of just Rs 3,000 per annum,” he said.

Bajaj Finserv will assist clients by preparing a comprehensive, long-term financial plan based on their current investments, saving potentials, risk profile and time horizon, he said. — TNS

Mumbai, April 22
Non-banking lender Indiabulls Financial Services said net profit for fiscal 2011 more than doubled to 7.43 billion rupees, helped by growth in long-term, low-risk mortgage loans and falling delinquency levels.

Diversified and long-duration liabilities and decreasing cost income ratio have also contributed to the growth in profit and revenue for the financial year ended March 31, Indiabulls said.

The lender’s income from operations for the year rose 56 per cent to Rs 2,256 crore, while other income rose 33 per cent to Rs 2170 crore.

The firm's share of mortgages in total loans rose to 71 per cent from 64 pe recent in FY10, while business loans saw a decline from 8 percent of the total loan book in FY10 to 2 per cent in FY11, it said.

If the state of health of civil aviation has been fast deteriorating in the country, the physical well-being of the general aviation has turned pathetic. While most of the 'blues' in civil aviation, including fudging of pilot-licences are buried in the corridors of the Directorate General of Civil Aviation (DGCA), the sectors woes in general are locked in the cup-boards of the government-owned Pawan Hans. The shocking aspect is that both the apex bodies refuse to learn from tragedies and improve their functioning.

The recent Pawan Hans' M1-17 helicopter crash, in which 17 precious lives were lost in Tawang, Arunachal Pradesh, was waiting to happen. The age-old aircraft (15 years) and poor maintenance were main factors for the crash.

Both Capt Barun Gupta and Capt AK Tewari, according to flying records, had possessed the requisite experience.

Sadly, the machine was old and the government had repeatedly asked Pawan Hans for replacement.

Pawan Hans refuses to reform, even after casualties have occurred. This accident is far more shocking than previous tragedies because Pawan Hans had refused to pay heed to the written cautions sent by the Arunachal Pradesh ger ment.

While categorically blaming Pawan Hans for this horrible tragedy, the Arunachal Pradesh government has gone on record saying that its letters and cautions were ignored.

An inquiry has been ordered. But the fate of this probe will be the same as findings of previous crashes. No action will be taken on the findings.

The DGCA has removed its top air safety officer, RS Passi for his alleged involvement in the scam. He is not the only guilty person in the DGCA. There are many.

The certificates of pilots, who have obtained diploma and degree from foreign countries, including US, are now being examined.

In fact, officials of the foreign academies and officers of the DGCA were reportedly hand-in-glove in providing certificates to the candidates. More dirty ‘fish’ are expected to tumble out soon.

Q: I am working female, single (45 years) and living with my mother who is a housewife and senior citizen and has no regular source of income, except few FDs and post office scheme. Recently I have transferred Rs 3 lakh from my account to her name getting a joint FDR in her name and mine would this amount be added to her total income or only the interest of the FDR will be considered as her income.

— Reeya

A: As we understand from your query, you have given a gift of Rs 3 lakh to her. If that be the case, the entire amount of Rs 3 lakh belongs to her and consequently, the income arising therefrom is taxable in her hands. You being her close relative, there is no income tax payable on the gifted amount. We hope you have taken the precaution of having her name as the first holder in the FDR.