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IPO Blues
Defence Sector
DefExpo – 2008
Tatas in pact with Israel Co
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Layoffs
Tax Advice
TVS restrained from making ‘Flame 125’
Punjab & Sind Bank’s NPA down to 1.1 pc
Indiabulls to raise $1 b
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IPO Blues
New Delhi, February 17 The decline in the Reliance Power stock prices has been compounded by a vicious and orchestrated campaign of market manipulation and market abuse, the company said. Investors in the company lost over Rs 1,700 crore on February 11, day the scrip listed on stock exchanges. While the company did not name anybody, who it felt had attempted to undermine the ADA Group's "fair name and reputation and caused losses to millions of genuine investors", the statement said that Reliance Power has formally written to SEBI seeking an investigation into the same. Even before launching the IPO, the group chairman Anil Ambani had said that it had written a complaint to SEBI but had not received any response on the same. In its earlier complaint, Reliance Energy, a promoter company of Reliance Power, had named over a dozen top executives and associates of Mukesh Ambani-headed Reliance Industries for allegedly sabotaging the IPO. At that time, a spokesperson of RIL had said that the company had nothing to do with Reliance Power and countered the attack saying Anil Ambani group was raising this to divert attention from the corporate governance issues. Reliance Power IPO was given a clearance by SEBI only in December, after a prolonged delay — which sources say was due to investigation into various complaints filed with the government and other authorities against the issue. In its statement today, Reliance Power said the company has the world's largest shareholder family of nearly 500 overseas and domestic institutional investors and over four million retail investors. In the run up to its IPO, the company had faced numerous litigations, filed in different courts by some investor group. Even two days before the launch of the IPO, a petition had been filed in the Gujarat High Court seeking a stay. But the company had moved the Supreme Court for relief and launched the issue on January 15.
— PTI |
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Defence Sector
New Delhi, February 17 The industry captains are keen that the FDI in Indian defence, which at present allows only 26 per cent, be enhanced up to 49 per cent in the automatic route, for indigenisation of superior defence technology. “The centre has been taking a number of steps to achieve the target of procuring 70 per cent of its defence requirements from indigenous sources by 2010. Despite its best efforts over the past two decades, India is nowhere near that objective as yet. We continue to depend on imports for all our major requirements, while the indigenous production is limited to low-tech low-end items and a few products based on bought technology,” Assocham general secretary D.S. Rawat told The Tribune here. “If India has to speed up its defence indigenous process, bring in superior technology and keep pace with the latest technology, and most importantly, save precious foreign currency, the government would have to enhance FDI in defence to 49 per cent, sooner or later,” Rawat said. “FDI is not just a question of getting funds, but access to the latest technologies. FDI pre-supposes a long-term commitment and lasting relationship between the foreign and local enterprise. FDI not only upgrades local technology, it attracts more FDI with higher technology, which is vital to the defence sector, being highly capital intensive and undergoes rapid obsolescence of technology,” he added. Though sources in the other two industry chambers, Ficci and the CCI, refused to come on record, sources in these two bodies maintained that they were in favour of allowing 49 per cent FDI “on case-to-case basis”, meaning a cautious and guarded approach on critical and sensitive sectors and liberal in other defence sectors. A couple of days back, the United Kingdom also suggested that India should raise FDI in defence sector up to 49 per cent. Suggesting this at a conference organised by the CII here on February 15, deputy British high commissioner Creon Butler said in the years to come, the defence procurement of India was going to see a quantum jump. India has gradually liberalised its defence trade by allowing 100 per cent private investment by domestic companies and increasing the number of licences granted to private players. Meanwhile, the government sources said the defence ministry was open to allowing more FDI in defence production “step by step” for enabling the public and private sectors to play a greater role in modernising the Indian armed forces. They pointed out that the government is ceased of the matter and is looking into the whole gamut of the FDI in defence and would take a “considered and appropriate” decision at an appropriate time. |
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DefExpo – 2008
New Delhi, February 17 Francois Dupont, corporate country director of Thales India Pvt Ltd, said here on the sidelines of the ongoing DefExpo-2008, that “deal was signed 10 days ago”. “Certification of the Catherene FC (thermal imagers) by (Russian defence equipment company) Rosoboronexport and the creation of Thales India Private Ltd as a local maintenance facility were decisive factors in this success,” Dupont added. He added that this growing relationship makes Thales as the main partner of the Russian industry within the optronics field. According to Dupont, the deployment of the Catherine FC on the T-90 'is the result of close cooperation and highly complementary industry know-how of the two partners'. Francois Hubert-Habart, sales director for Asia for Thales' land and joint systems, said, “we're proud to have the opportunity to work with such a demanding customer as the Indian Army”. “Cooperation between us is excellent. The difficulties we encountered at the outset were quickly resolved by getting the right structure in place — particularly a maintenance facility in India that guarantees extremely fast and efficient service,” Hubert-Habart added. This technology provides an effective day/night vision capability and can also see through dust, rain and smoke while remaining largely impervious to the dazzling effects of sunlight and explosions. |
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Tatas in pact with Israel Co
New Delhi, February 17 The JV company would be set up by Tata Industries' wholly-owned subsidiary Tata Advanced Systems and Israel Aerospace Industries (IAI). The company would develop, manufacture and support a wide range of defence and aerospace products, including missiles, UAVs, radars, electronic warfare systems and home land security systems. "We believe the coming together of the Tata and IAI will positively impact the growth of defence industry in India and compliment the efforts of our defence labs, ordnance factory board and defence public sector undertakings," Tata Sons Chairman Ratan Tata said in a
statement. — PTI |
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Layoffs
Bangalore, February 17 The IT industry in India is for the first time facing problem of layoffs, with TCS setting the trend by laying off 500 personnel. This was followed by IBM, which has shunted out 700 employees and recently Yahoo! has laid off 40 employees of its India operations. UNITES general secretary R Karthik disclosed that Nasscom should intervene to ensure that companies followed a proper procedure while sacking an employee. He said layoffs without assigning any reason would have an adverse impact on the morale of employees and also hamper the total industry in the country. He said since the industry was still maturing, it would find it difficult to attract new talent in case companies did not have clear cut rules of how and under what conditions employees could be dispensed off with. Karthik said employees in the sector were not covered by the labour laws. The S M Krishna government had exempted the IT sector from the labour law applicable to the Shops and Establishment Act, which itself had given an impetus to several IT multinationals to set up shop in Karnataka. Besides this, all appointments in the IT sector have a clause that states that they can sack the employee without assigning any cause. Companies, however, do pay compensation to employees who are sacked summarily with former Yahoo! employees getting four months pay as compensation for loss of job. |
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Tax Advice
Q. My son’s company has deputed him to the USA on HIB visa. He left India on 21.12.06. In the USA, his company pays him Base US pay + basket of allowances + India pay + other pay. From this, federal income tax, social security tax, medicare tax, NY state IT & NY SUI/SDI tax are deducted. After deducting these taxes, India pay is credited to his bank a/c in India and rest to his a/c in the USA. Federal taxable wages include India pay also.
My queries are: 1. Where to file IT return for FY 2006-07 and 2007-08 in India or in the USA? How the taxes paid in the USA to be treated? FY in USA is Jan to Dec. 2. Can the company deduct tax in India also on India pay which is already taxed in the USA? 3. Can he transfer his savings to India for investment? If yes, in which a/c. — R. Mohan, via e-mail A.
(i) Your son would be treated as resident in India for the financial year 2006-07 i.e. assessment year 2007-08. He will have to file the return for the said assessment year in India and tax, if any, paid in the USA in respect of the period 21.12.2006 to 31.03.2007, would be allowed as credit against tax payable in India in accordance with the provisions of DTA entered into with USA read with Section 90 of the Income-tax Act 1961 (the Act). (ii) Your son would be Non-Resident for the assessment year 2008-09 (Financial Year 2007-08). He is required to file return in India in respect of salary income, if any earned in India. (iii) The tax can be deducted in respect of the salary earned in India even if it is already taxed in the USA. (iv) He can transfer his savings to India without any limit. The money can be remitted to a NRE Account. Advance
tax
Q. I am a senior citizen and have income from pension, Senior
Citizen Saving Scheme and FD interest from banks. My income tax for the
year 2007-08 is about Rs 23,150. The TDS deducted by Sr. Citizen Saving
Scheme and F.D. works out to be Rs 17,150. My question is how
and what amount is to be paid towards advance tax, which is payable as
30 per cent by Sept. and next 30 per cent as December 15 and balance by
15th March. —Rajinder Kumar, Chandigarh A. The advance tax required to be deposited is net of TDS. Accordingly, you can deposit Rs 1,800 by 15th September, 2007 Rs 1,800 by 15th December 2007 and balance Rs 2,400 by 15th March 2008. Form 15H
Q. I am a senior citizen with my present total taxable income without availing any rebates under Section 80C is below Rs 1,95,000 p.a. I am filing my I.T. Return every year without any income tax liability. I have some interest income from SCSS A/c in a Bank. The bank has started deducting TDS on this. Is it permissible to file Form 15H with the bank for not deducting TDS and simultaneously continue filing the I.T. Returns every year? Can both these actions run together every year as long as needed in above case? — S.P. Gambhir, Karnal A. Section 197A of the Act permits you to file Form 15H with the bank. If the said form is filed, the bank is not supposed to deduct tax at source. The form will have to be filed every year to claim the benefit of such non-deduction. Govt accommodation
Q. I am a Haryana govt. employee. My total income from salary for f/y 2007-08 is Rs 2,89,930. I was allotted govt. accommodation from April 07 to Sept.07 which was under litigation and penal rent of Rs 7,000 p.m. (50 times normal rent, normal rent is 140 50) was being charged from me and total amount of Rs 56,000 (7 month) was deducted from my salary. Whether this amount is to be calculated while computing income tax or left out since I have not received this amount from my salary. Please advise. —Ajay Jindal, Hisar A. In accordance with the provisions of Rule 3(1) of Income-tax Rules 1962 where the unfurnished accommodation is provided by any State Government to their employees, the licence fee determined by the State Government in accordance with the Rules framed by such government is added as a perquisite to the salary. Such perquisite is reduced by the rent actually paid by the employee for the purpose of adding perquisite value to the total income of the employee. Since the amount of Rs 56,000 has been deducted for the period for which free accommodation was provided to you by the Government of Haryana, no further addition is required to be made in respect of the rent-free accommodation provided by the Government. The answer to your query is based on the presumption that you were provided rent-free unfurnished accommodation. |
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TVS restrained from making ‘Flame 125’
Chennai, February 17 In an interim injunction, Justice P Jothimani granted the stay order on a petition by Bajaj Auto, which claims to have patented the technology used in Flame 125. BAL had also sought a direction from the court to restrain TVS from manufacturing, marketing and selling the bike. The judge also dismissed a petition filed by TVS to restrain Bajaj from interfering with the manufacture and sale of its new bike. On February 4, the High Court reserved orders on the petitions filed by the two over allegations of infringement of patent rights by TVS. Originally, TVS Motor Company filed a petition, seeking to restrain Bajaj from issuing groundless threats to it. Bajaj had later impleaded itself in the case. A single-judge bench had directed maintenance of status quo on bookings for the new bike. However, on an appeal from TVS Motor, a division bench had stayed the single-judge's order.
— PTI |
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Punjab & Sind Bank’s NPA down to 1.1 pc
Chandigarh, February 17 The bank's chairman and managing director, R.P. Singh, said the bank recovered Rs 1,578.46 crore in the past two and half years. As per a survey conducted by a leading business magazine, the bank topped with a total score of 1,355.26 in terms of growth, size and strength. He said the bank has raised Rs 100 crore through private placement of bonds under tier II. The issue was opened on February 13 and closed on February 14. The bonds have a tenure of 123 months bearing coupon rate of 9.10 per cent per annum payable semi annually. As on December 31, 2007, the bank's total business stood at Rs 37,636 crore, net NPA to net advances has declined significantly at 0.48 per cent and capital adequacy at 12.85 per cent. |
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Indiabulls to raise $1 b
New Delhi, February 17 This domestic market offering comes close on the heels of the group having raised about $400 million through an equity placement with the likes of Lakshmi Mittal in its power arm last week and its real estate business's plans to raise $1.2 billion through the listing of a property investment trust in
Singapore. — PTI |
M&B Footwear SBI Capital REC plans JV |
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