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3G auction on Dec 7
Nokia to provide telecom services
MSMEs seek revival of small stock exchanges
Tata BP Solar targets 50% growth in north
Haryana warehouses to have galvalum roofs
Market Update |
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| Tax Advice No cap on cash in hand in books Q. I am a professional and filing my IT returns regularly for the past so many years by showing my income on estimated basis (without any balance sheet, profit and loss a/c). My BCF (closing capital balance) as per my capital account for financial year 2007-08 is Rs 5,82,664.
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3G auction on Dec 7
New Delhi, September 13 With the pre-bid meet with the prospective bidders scheduled for October 12, the bidding process for the five slots could well be underway from October 26. The auction for EVDO (CDMA version of 3G) and Broadband Wireless Access would be held two days after of the 3G auction. The government hopes to get about Rs 25,000 crore from the auction. According to reports, the bids would be invited from October 26 to November 13. With the pre-bid scheduled for October 12, those interested would be able to submit their queries regarding the auction process by October 8. The pre-bid meet would discuss the process and schedule of the auction of spectrum or radio frequency, to roll out 3G services. These would allow data download on mobile phones at great speed. The Department of Telecom will issue a revised Information Memorandum on September 29. Keeping in mind the security concerns, it has asked for publications of ownership details of the applicants along with compliance certificates so that nothing goes wrong at the bidding stage. Aspirant companies would have to submit their authenticated ownership certificates by November 23. Before that they would have to give details of their shareholdings by November 18. The winners will have to pay their bid deposit amounts within five days of the closure of the auction and pay the balance after 15 days. A ministerial panel has fixed 3G spectrum auction base price for an all-India licence at Rs 3,500 crore and the number of slots at five, including one PSU, BSNL or MTNL. It had said that spectrum auction would be held within 90 days from the date of announcement of the decision by the Empowered Group of Ministers. Earlier, on Friday Cabinet Secretary KM Chandrasekhar held a meeting with the Defence and Telecom secretaries. With the ministerial panel having decided on the base price for 3G services, vacating of the spectrum by defence forces has become critical for the process of auction. The spectrum scenario is not very good, although the DoT claims that it can go ahead with the auction without the defence forces releasing any frequency.
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Nokia to provide telecom services
New Delhi, September 13 "Services is next big thing...we see people living their life 24x7 through applications on their mobile phones. Whether it is Twitter or Facebook, people live their life online," Nokia India MD D Shivakumar told PTI when asked about the company’s future plans. Nokia, one of the key developers of GSM (Global System for Mobile Communications), the second-generation mobile technology, is looking at providing various services and solution ranging from music downloads to games to financial services and information about prices and weather to the Indian farmers among many others. The company has already inked a location-based service deal with social networking site Facebook. Under the deal, people could update their location and status directly to the social networking site via a Nokia Ovi account. — PTI
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MSMEs seek revival of small stock exchanges
Ludhiana, September 13 The industrialists said the government had fixed the limit of Rs 5 crore for the small-scale industry and Rs 25 lakh for micro units. As such, the FDI could be a meagre $13,000 for micro units and $0.4 million for According to PD Sharma, president of Apex Chamber of Commerce and Industry, ground realities were rather different. Most micro or small enterprises lacked access to any sort of formal funds and were forced to rely on costly informal credit. Banks and other organised lenders, too, did not find them credit worthy as strength of their balance sheets did not meet the basic eligibility conditions. Sharma further added if the MSMEs had any easy access to bank credit, their balance sheets will improve considerably. Under the circumstances, the sector at the most could attract FDI in the form of venture capital that was very expensive, hence it was of no use. "Instead of FDI, MSMEs should have an access to small stock exchange from which they can raise risk capital from local investors who can better appreciate them than the foreign investment. This requires only revitalising the smaller stock exchanges. Despite SEBI's efforts, the regional exchanges have been a non-starter,” he said. The industrialists said the Prime Minister's declaration for doubling the credit flow to the sector could materialise if banks started lending to this sector in real earnest. At present, 75 per cent of bank lending was happening at sub-benchmark prime lending rates (BPLR) although the RBI was against this trend. As per RBI’s views, core deposits of the banks should not be used for lending below the prime lending rates. Despite the Prime Minister's declaration, the banks have announced that they may "It clearly means that smaller sector will have limited access to bank credit at a higher rate of interest. Instead of tokenism, the government should evolve firm policies that can benefit the small-scale sector,” Sharma said.
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Tata BP Solar targets 50% growth in north
Chandigarh, September 13 Amit Banerjee, general manager, marketing, who was here to launch the firm’s new range of solar water heaters, told The Tribune: “We are aiming at attaining a growth of 50 per cent in north India, which has a huge potential. “Last year we notched sales of 51 crore in solar thermals in Punjab, which is a very important market for us, and this year we have targeted a 50% growth there. “At present the country’s southern and western regions account for 70% of the company’s revenues with the north contributing only 15%.” Banerjee stated the Haryana government provides a subsidy of Rs 5,000 per solar system, while the Chandigarh administration gives 20-25% subsidy. In the industrial sector the natural renewable energy ministry offers a subsidy of Rs 2,400 per solar panel. He added that the Haryana government had made it mandatory for any house in the state more than 500 sq yards in area to install a solar water heating system. The company, which has four manufacturing units in Bangalore, achieved a turnover of Rs 1,147 crore in 2008-09 and has targeted a turnover of Rs 1,500 crore in the current fiscal. On the company’s plans for north India, Sanjay Sharma, senior manager, said: “We will soon launch a solar airconditioner, the prototype of which is ready”. Explaining the benefits of solar water heaters, he said “they are 100% safe, economically viable, pollution-free and work on solar energy that is freely available”. There are two types of solar heating systems - one is solar thermal and the other solar photovoltaic. While the former is used for heating water, photovoltaic systems are used for lighting and other electrical requirements. Banerjee hoped the market for solar heating systems will get a big push after the PM’s recent announcement to launch the National Solar Mission. “One key aspect for this sector’s growth is government support”, he averred.
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Haryana warehouses to have galvalum roofs
Chandigarh, September 13 In the first phase, 27 storage facilities being constructed for the Food and Supplies Department in Haryana are getting the new roofing (14 storage facilities and 13 godowns). The godown at Fatehabad is ready with its new roofing. Officials in the corporation said in the next phase, roofing would be done at all “The main idea behind replacing asbestos sheets was to do away with health hazards. Most of the countries have already discarded this material because it can cause cancer. Though the private sector has been replacing asbestos with more environment friendly galvalume, we are the first PSU to have done this,” said Ashok Khemka, managing director, Haryana Warehousing Corporation. Impressed with the Haryana model, the country’s premier agencies like the Food Corporation of India and Central Warehousing Corporation, too, have decided to use this new roofing material. Though galvalume is more expensive than asbestos, it has another inherent advantage that it is leakproof, which ensures there is no damage to food stocks. Khemka said all godowns being constructed with galvalume sheets would have turboventilators and skylights to maintain a suitable temperature inside. “Because of coating composition of aluminium and zinc on galvalume sheets, these are highly heat resistant,” he added.
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Market Update
Unexpected revival of rains towards the end of the season boosted the domestic markets during the week.
India’s reservoir levels and prospects for the winter crop received a boost after a downpour last week, which was in fact this season’s heaviest rain.
Markets also received boost from the industrial output data, which July showed growth of
6.8 per cent. As per the metrological department, rainfall was 21 per cent above average in the week to September 9 continuing the upturn since mid-August. The deficit for the June-September season narrowed to 20 per cent last week from 23 per cent in the previous week. Globally, markets have risen sharply this year on increased global risk appetite triggered by hopes of a recovery in the global economy after a setback from a financial sector crisis last
year. The Sensex is up 69 per cent in the current calendar year whereas it has almost doubled from three-year low of 8,160, which the Sensex hit on March 9 this year. Going forward, key benchmark indices are likely to see a consolidation in the absence of any major near-term trigger. Besides, movements in global markets, foreign funds activity and progress of India’s monsoon may continue to influence sentiment on the domestic bourses. Cipla
In the last six months the since the market started bouncing back, one stock that has underperformed the market is
Cipla. That may change going forward as the investors will flock to defensive stocks such as Cipla as the valuations of the other large-cap stocks become overstretched. Therefore, investor with lowrisk appetite may buy into
Cipla with a medium-term Cipla follows the low risk stratergy of entering into partnership with various global generic players for manufacturing and supplying bulk drugs or formulations to them while the latter take care of regulatory aspects and launch the drugs in the market. This model is relatively steadier business model as the stability in terms of revenue as compared to the generic model. Cipla has entered into partnerships for over 125 products with 8 companies in the US which includes Teva/Ivax, Watson, Eon, Morton Grove, Pentech Pharma, Paddock, Akorn and Metpoint. Keeping in mind the huge generic potential in the coming couple of years and consequently, an increase in product approvals of its generic partners, the company expects export revenue from the bulk drugs segment to show healthy growth. The company also enjoys near dominant position in the asthma segment (about 20% of sales). It is one of the few companies globally having the required technology to manufacture CFC-free inhalers. With CFC (Chloroflurocarbons) inhalers to be compulsorily phased out by 2010, this segment is expected to see growth in the future. Cipla is also a market leader in the domestic market. The company has a track record of launching new products faster than any other of its competitor in the highvalue therapeutic segments. This gives Cipla a firstmover advantage. The risk to our recommendation is the issues that the company faces with the National Pharmaceutical Pricing Authority (NPPA) and the liability associated with such claims could put pressure on the cash flows of the company going forward. |
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Tax Advice
Q. I am a professional and filing my IT returns regularly for the past so many years by showing my income on estimated basis (without any balance sheet, profit and loss a/c). My BCF (closing capital balance) as per my capital account for financial year 2007-08 is Rs 5,82,664.
I have three computers and two printers. Their bills are in my name. Please advise if I want to draft my balance sheet, profit & loss account, then how my assets side could be balanced because I have no property in my name.
My total fixed assets after claiming depreciation are worth Rs 38,511. I want to know how much cash in hand one can show in the balance sheet. Is there any maximum limit of cash in hand? Also, can I show any investments on assets side? Can ITO demand proof for the same? A. I hope you are aware that Rule 6F of the Income-tax Rules 1962 read with Section 44AA(3) of the Income-tax Act 1961 requires that persons carrying on any of the following professions to maintain the books of account and other document specified in the said rules. (i) legal, (ii) medical, (iii) engineering, (iv) architectural profession, (v) profession of accountancy, (vi) technical consultancy, (vii) interior decoration (viii) authorised representative, (ix) film artists. In my view, therefore, your filing the accounts on the estimated basis was against the provisions of the Act. Your queries are being replied in the light of the above provisions of law. It is suggested that an opening balance sheet as on April 1, 2008 covering the professional assets and liabilities be prepared. The values to be assigned to the fixed assets should be the written down values or in case no depreciation has been claimed, the same should be reflected at the cost price. The liabilities should be based on the actuals. The books of accounts for the year 31.03.2009 should be prepared on the basis of amounts received and the expenditure incurred during the year. The opening balances in the ledger should be based on the opening balance sheet. An Income & Expenditure Account should be prepared on the basis of such account books and the balance sheet as on 31.03.2009 may also be drawn up on the basis of the books of account. No, balance sheet can be drawn up without there being books of account and therefore you should not attempt to prepare such balance sheet on estimated basis. The cash in hand should be based on the withdrawals from the bank account and cash receipts less expenses, if any and/or payments made. There is no maximum limit for keeping cash except that the same should be based on actual withdrawals or receipts in cash less expenditure incurred and/or payments made in cash. The investment should also be recorded as the actual amount invested out of your professional earnings, which, if existing as at the beginning should be reflected in the opening balance sheet. The investments made should be based on withdrawals from your bank or books of account and should be duly supported. NRO account
Q. My son has gone to Australia for studying management course. His wife and children have also gone along with him. I have following queries: Since he is also doing a part-time assignment and is able to save some money, can he repatriate the sum to India. If so, how much? A. In accordance with the provisions of Foreign Exchange Management Act 1999 (FEMA), a person is considered to be resident outside India, if he is not a resident in India. A person resident in India means a person who is residing in India for more than 182 days during the course of the preceding financial year but does not include a person who has gone out of India or who stays outside India in either case: for or on taking up employment outside India, or for carrying on outside India a business or vacation outside India, or for any other purpose in such circumstances as would indicate his intention to stay outside India for an uncertain period. On the basis of facts in the query, your son, daughter-in-law and their children were not residing in India in the financial year 2008-09 for more than 182 days. Further, it is not possible to ascertain from the facts given in the query whether they have gone out of India with an intention to stay outside India for an uncertain period. Since the wife and children have also gone, it may be possible to conclude that your son has gone with an intention to stay out of India for an uncertain period. If that be the case, it would be necessary to convert his savings account into NRO i.e. non- resident ordinary account.
As far as India is concerned, there is no limit with regard to the receipt of amount from your son. Education allowance
Q. I am employed in a company which is giving me an education allowance @ Rs 500 per month for two children. Is the above amount taxable or exempt from tax in view of the fact that I have no children? A. Normally the children allowance @ Rs 100 per child per month is exempt from tax. Since you do not have any children, you would not be able to claim any deduction and therefore the entire amount of Rs 1,000 received by you would be taxable. Farm income exempted
Q. I am a family pensioner and a senior citizen and my income for the financial year 2008-09 is given hereunder: A. Your total income for the assessment year 2009-10 works out at Rs 1,75,000. The same is below Rs 2,25,000 being the maximum amount on which no tax is payable by a senior citizen. Accordingly, no tax is payable by you on total income. The agricultural income is exempt from tax. However, the same is aggregated for ascertaining the slab rate for taxability. Since the income from pension and interest is below the taxable income, the aggregation of agricultural income for rate purpose is also not required in this case. |
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BP
Solar, a joint venture between Tata
