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Honda to exit JV with Hero group
ICICI ups deposit, lending rates
Claas India to invest 1m euros
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Aviation Notes
Regulatory upheaval to hit new telcos
M&M, Italian co in pact for farm equipment
Investor Guidance
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Honda to exit JV with Hero group
Tokyo, December 4 Honda Motor Co is expected to sell its entire 26 per cent stake in Hero Honda to its partner Munjals-promoted Hero Group and would earn $1.2 billion from the sale, Kyodo reported quoting Japanese Nikkei business daily. "Honda and the Hero Group have reached the basic agreement this week to dissolve the partnership," Nikkei said, adding that the two companies will seek final approval from their respective board of directors later this month for the break-up. The parting of ways comes 26 years after the joint venture was set up in 1984. The Japanese firm will offload its entire stake by as early as March next year and will no longer provide technical support to Hero Honda, the paper said. However, the two companies, which renewed the agreement for technology support from Honda to the JV in 2004, will let the pact run till its expiry in 2014, Nikkei said. Honda proposes to focus its resources on the new wholly-owned subsidiary Honda Motorcycle and Scooter India (HMSI). Hero Honda sold 4.5 million two-wheelers in the last fiscal, grabbing 48 per cent of the growing Indian two-wheelers market, which is the second biggest in the world after China. Honda and the Munjals-promoted Hero group holds 26 per cent each in Hero Honda, the world's largest two-wheeler maker. However, there has been market speculation that there is unease between the partners after the Japanese firm decided to enter the Indian two-wheeler market through its wholly- owned subsidiary Honda Motorcycle & Scooter India (HMSI). Currently, Hero Honda is finalising plans to set up the fourth plant in the country. It already has three facilities at Dharuhera and Gurgaon in Haryana and at Haridwar in Uttarakhand with a total capacity of 50 lakh units a year. On the other hand, HMSI has announced an investment of Rs 500 crore to set up its second plant near Bhiwadi (Rajasthan), with an annual capacity of six lakh units. Once the facility becomes operational, in the second half of 2011, the company's total annual capacity will reach to 22 lakh units. HMSI is also reportedly scouting for a location to set up its third facility. — PTI
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ICICI ups deposit, lending rates
New Delhi, December 4 The ICICI move comes a day after RBI Governor D Subbarao asked banks to hike deposit rates and lower lending rates, with a view to raising the level of national savings, as well as to encourage investments required for double-digit growth. ICICI Bank has decided to raise interest rates on fixed deposits of various tenors by 0.25-0.50 per cent, the bank said. However, contrary to RBI's suggestion that banks should lower lending rates, ICICI has decided to increase benchmark prime-lending rate and its Floating Reference Rate (FRR) for consumer loans (including home loans) by 50 basis points. The new rates would be effective from December 6, the statement said. The benchmark rates are used for determining interest rates on loans and advances sanctioned up to June 30, 2010, it said. — PTI
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Claas India to invest 1m euros
Chandigarh, December 4 The company is also exploring the possibility of creating an entire eco system around its plant in Morinda, by having its major vendors shifting base here. A meeting of the vendors, who supply various parts to the company, is scheduled for Tuesday so as to work out on how they can be helped to relocate their ancillary units near the Claas plant at Morinda. Talking to TNS here today, Pradeep Malik, president and MD, Claas India, said the company’s commitment to India was not just in making an investment here by setting up a manufacturing facility. “We are also committed to the growth of those associated with us in India. The Global Sourcing Group of Claas is procuring a number of goods from the vendors here, especially casting and forging parts and content for sheet metal parts. Last year (October 2009- September 2010), goods worth 2.2 million euros were sourced from the vendors here for our manufacturing plants in Europe, and this year we expect to source goods worth 4 million euros,” he said. The shifting of these vendors near the plant will not just reduce the transportation cost for Claas, but also create an eco system for the company where its Global Sourcing Group can get parts custom made from these vendors in less time. Malik added that the local content in their small wheel machines was as high as 95 per cent. Malik said in the second year of operation itself, Claas would manage to reach its full production capacity of 1,250 units per annum in this year (which ends in September 2011). We will then go ahead with our second phase of expansion, which will entail an investment of 1 million euro and increase our combine harvester manufacturing to 1,650 units per annum. The money will mainly be spent on expansion of paint shop. Jan Hendrik Mohr, member of Claas Group Executive Board, who was accompanying Malik at the Agro Tech 2010, organised by CII, said at present 10 per cent of their harvesters made in Morinda plant were being exported to Sri Lanka, Bangladesh, Pakistan, Malaysia and Thailand. “We are now going to start exports to Nepal, Phillipines and some countries in Africa and South America,” he said.
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Aviation Notes
Uncertainty has once again gripped the Directorate-General of Civil Aviation (DGCA). It is lying 'headless' since Naseem Zaidi took over as secretary in the Ministry of Civil Aviation.
The DG's post wears the stamp of 'technical post' but it seems it will again be a bureaucrat, who will hold the reigns of directorate bypassing the claims and seniority of the technical officials aspiring for promotion. The civil aviation is currently passing through a difficult phase. There is indiscipline all around. Despite raising new Terminal-III at the Indira Gandhi International Airport (IGIA), the functioning has not improved at all. Flights are being delayed; passengers are being inconvenienced. There is no trouble shooter at the IGIA where coordination is one of the major casualties. Many problems will be sorted out if the trouble shooter is inducted at the IGIA and technical official is appointed as DG. These are vital functioning areas, which need to be disciplined. The airlines, national, international and private, have turned lawless. The Internationl Air Transport Association (IATA) has lost its voice, while DGCA thus far has been a mere paper-tiger. The airlines scream that they are autonomous. They claim that in open skies they are free to stipulate their fares. "It is a matter of demand and supply and we have to think of our survival", say airline officials, adding: "We will notify fares, as stipulated by the DGCA but we cannot be barred from fixing fares. The latest move is to fix fares on the basis of distance. The longer the distance, the more will be the fare. The airlines have reduced paying omission to travel agents. Some are, however, paying to favourite agents. Here again passengers have to suffer because they are in the dark about fare structure and taxes charged from them. The passengers continue to be nobody's concern. They pay higher fares and get no facilities in return. Of late, they have been caught in a new web on jams on the routes leading to the IGIA. They have missed flights and have also paid penalties for 'no show'. The woes of passengers have multiplied instead of reducing after the construction of the new Terminal-III which, according to the Delhi International Airport Limited (DIAL), is world class, What is the use of the world class airport if the passengers and visitors are subjected to inconveniences? Keeping in mind the foggy season, Air India has done well in rescheduling some of the flights operating from Amritsar and Delhi. But the national carrier's physical health has deteriorated as losses continue to increase. |
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Regulatory upheaval to hit new telcos
New Delhi, December 4 According to the research note, with 85 of the total 122 licences issued being termed as ineligible by CAG there are likely to be regulatory issues for the new operators. It says this may impact these operators in raising debt to fund the rollout plans and cause delays in timelines of roll-outs. The report says that following the CAG report which has pointed to lapses in 2G spectrum allocation to new licencees there is likely to be a detailed investigation involving various ministeries, TRAI and DoT. This may delay the final regulation on pricing of excess 2G spectrum and re-farming of spectrum on renewal licences. GSM incumbents such as Bharti, Idea and Vodafone Essar are likely to have lesser need of spectrum as they possess 3G spectrum in key circles. The 3G spectrum may help them decongest the 2G network, especially in urban areas. New operators are likely to require 2G spectrum -the scarcity of spectrum may lead to an increase in costs, leading to elongated payback periods, the note adds. This will allow the GSM incumbents to strengthen their balance sheet and absorb the impact of incremental cash outgo. Also, the unfavourable regulatory environment for new operators may reduce the competitive intensity for GSM incumbents, it says.
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M&M, Italian co in pact for farm equipment
Chandigarh, December 4 Goenka said the agreement would help the Applitrac vertical of the company to get exclusive supply of rotary tillage equipment, thus giving farmers grater option for farm mechanisation. As part of this agreement, Maschio will manufacturer rotavators bearing Mahindra brand name. Maschio will also set up a manufacturing facility near Pune, with an investment of 3 million euros, which will become operational by 2013.
— TNS |
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Investor Guidance
Q: I have last month invested equal amounts in HDFC MIP LTP Growth Fund, Reliance MIP dividend reinvestment plan and Canara Robeco MIP quaterly dividend payout option. I intend to remain invested for 2/3 years. Kindly let me know what would be my tax liability in each of the three plans and what would be tax liability at redemption regarding appreciation in value?
— M Bahirwani A: Dividends from mutual funds are tax-free. The distribution tax in the case of non equity funds is paid directly by the MF and any dividend paid to the investor either directly or in the form of units (dividend reinvestment option) is tax-free. Upon sale, the long term capital gains will be taxable either @10% without indexing the cost or @20% after cost indexation. NRO account Q: We gave Rs 20,000 to our daughter-in-law as a gift and she invested the same in a fixed deposit. My wife and I are the second and the third holders respectively of the deposit. Subsequently our daughter-in-law left for the US and before leaving she had signed and discharged the FD receipt. When we contacted the company informing them that she has no bank account in India, they replied that total FD money along with interest will be paid by cheque only to our daughter-in-law, the first holder, even though fixed deposit receipt is anyone or survivor basis. Our banker has informed us that the person should be present personally to open an bank account. This will involve travelling expenses of Rs 2 lakh from and to the US. We shall be highly obliged if you please advise us in full details, proper procedure regarding obtaining the FD amount & interest in favour of either the second or third depositor. We are prepared to sign any document in this matter. — Waghe A: Anyone or survivor means that any of the depositors can submit the investment for redemption by signing the same, however, the redemption cheque will have to be compulsorily in the name of the first holder only. In other words, anyone or survivor merely adds the convenience of sharing the authority to sell but it does not change the ownership of the asset which is always in the name of the first holder. As an NRI, your daughter-in-law should ideally be opening an NRO account and not an ordinary resident savings account. An NRO account can be opened remotely - the NRI does not have to be physically present in India. You could inquire from your bank regarding this. Generally we find that private sector banks are more efficient in this regard. What you could do is the following - let the company know that the first holder has changed her status and she is now an NRI. Ascertain the steps required to get the bank details changed for the redemption proceeds. Then contact any bank and get an NRO account opened in your daughter-in-law's name. Provide the details of this account to the company and request the redemption proceeds to be credited to the newly opened NRO account. DP account
Q: My daughter has become a citizen of Nepal by virtue of her marriage with a person of Indian Origin but citizen and resident of Nepal. She is since marriage residing in Nepal. My daughter and son-in-law both are assessed to Income-tax in India as NRI under International Taxation Circle and have Indian PAN Card. People of Nepal do not need passport, visa to visit India like wise Indians too do not require so to visit Nepal. Indian currency is legal tender in Nepal. Money can be freely transferred between both countries. RBI has said that Nepal residents are allowed to maintain normal savings account in India. So my queries are: 1. Do my daughter and son-in-law also need to open demat account under PINS or normal demat account as they are Nepali citizen. 2. In IPO they have to make application under which category - normal retail or what? And which form they need to use? — Vishwanath Poddar A: Your daughter and son-in-law can hold ordinary savings accounts in India but will have to intimate to the bank that they are Residents of Nepal. Ditto for opening DP accounts for shares. They can invest in shares through IPOs, deal in secondary market purchases/sales directly for which, they should have a Resident DP account. Note also that NRIs, resident in Nepal and Bhutan as well as citizens of Nepal and Bhutan are permitted to invest in shares and convertible debentures of Indian companies under FDI Scheme on repatriation basis, subject to the condition that the amount of consideration for such investment shall be paid only by way of inward remittance in free foreign exchange through normal banking channels. For this purpose, they should have an NRI DP account. The authors may be contacted at wonderlandconsultants@yahoo.com |
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