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Coal India told to ink FSAs with power firms
Jewellers face survival test as taxes mount
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Corporate defaults hit 10-yr high
Mallya buys some more time for Kingfisher
Devinder K. Singla appointed director of Punjab National Bank
BSE CEO Madhu Kannan leaving to join Tata Sons
Renault launches diesel Fluence
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Coal India told to ink FSAs with power firms
New Delhi, April 3 The directive has been given to the PSU, as it did not meet the deadline of March 31, set by the Prime Minister's Office for Coal India to enter into agreements with power producers which were facing fuel crunch. "The government has this power reserved so that whenever there’s an emergency then that power can be used. As we saw an emergency.. there was a commitment by Coal India. Therefore, the government decided to sign the FSAs with 80% commitment. That’s why the directive was issued," Coal Minister Sriprakash Jaiswal told reporters. He said it would not take more than two-three days for the CIL to sign the FSAs with the power producers. However, the crucial clause of penalty on CIL in the case of its failure to meet 80 per cent fuel supply commitment, has been left to the PSU board, the minister said. "It is for Coal India to decide (penalty).They have full freedom (on it)," he said. The directive comes in the wake of resistance from some of the independent directors of CIL to agree to penalties. t is perhaps only the second time that the government has resorted to this option to force the maharatna PSU agree to its directive. The government had issued a Presidential directive to state-owned gas utility GAIL India Ltd in 2005 insisting on a particular technology for laying the Rs 1,800 crore Dahej-Uran pipeline. While the power producers welcomed the decision, analysts feel the Rs 50,000 crore CIL may stand to lose heavily in case it falters on its commitment to supply fuel to the energy firms. CIL share closed Rs 342.75, gaining 0.65 per cent.
— PTI |
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Jewellers face survival test as taxes mount
Mumbai, April 3 "Business has already gone down and with these taxes it will go down further. We will have to lower our margins," said the 65-year-old, whose shop along with hundreds of others in India's biggest gold market is shut in protest over the higher tax. In an effort to stem imports by the world's biggest bullion buyer and shore up its current account, New Delhi doubled import duty on gold to 4 percent of value in its March budget and slapped a 0.3% excise on unbranded
jewellery. The moves are game-changers for the $200 billion a year jewellery industry and experts are predicting they could cut India's gold imports by a third to 655 tonnes in 2012, allowing China to overtake it as the biggest gold importer. The strike has prompted Finance Minister Pranab Mukherjee to offer a review of the levies — yet another hesitation by the fractious coalition government which has retreated on policy from rail fare rises to cotton export bans. The meeting with the minister may happen in the next few days. While the government waits to see if the taxes curb imports in the way it wants, the industry frets that there could be worse to come, even a ban on imports. ‘INSPECTOR
RAJ’: In the half-empty alleyways of Mumbai's Zaveri Bazaar on the 18th day of the strike, shops' shutters carried posters of a padlock and slogans saying "Public protest as Inspector Raj set to return", a reference to hated tax inspections under British rule. "An extra 2,000 rupees on 10 grams of jewellery will hit the common man," read another placard. Indians' love affair with gold is well known and gold is at the heart of every Hindu wedding and festival. It is often the investment of choice in a country where millions have no bank for miles and as a defence against near-double digit inflation. At Doshi
Jewellers, a top-selling 10-gram finger ring costs about 30,000 rupees — about three months' wages for average employees. The margins are hardly 2% of the value. Family-run jewellers with small shops, often making items to order, handle about 90% of sales in India. Titan Industries, Rajesh Exports and Gitanjali Gems are the only listed players and have a miniscule portion of the country's trade. "The revenues of listed jewellery companies will be reduced to the tune of 20-25%," said Nayan
Pansare, an analyst who advises the jewellery industry. The small jewellers who are likely to suffer even more are willing to take on the losses of a strike to make their point. Manish
Jain, a sixth-generation shopkeeper at his family's Jain Jewellers, has refused to deliver orders even though it is the peak wedding season. He has lost Rs 4 billion turnover. "People won't continue with this business ... customers will say they are already paying so many taxes in value added tax, import tax," Jain said in his empty shop. CLOSURES?
A few metres down the road at the Mumbai Jewellers Association, vice-president Kumar Jain said many of the 10,000 jewellers he represented would have to close if the higher taxes stayed. "We’ll lose out on business, smaller jewellers will have to shut shop due to this," said the smartly dressed
Jain, who estimated the strike had cost the industry 80 billion rupees and the government at least Rs 1.25 billion in missed taxes.
— Reuters |
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Corporate defaults hit 10-yr high
New Delhi, April 3 These pressures are also reflected in the increase in banks’ gross nonperforming assets to 2.9% of advances from 2.3 per cent and in the quantum of debt restructured to 3.3% of advances from 2.5% between March 31 and December 31 of 2011. Downgrades exceeded upgrades in Q2 of 2011-12 as Crisil downgraded 292 ratings and upgraded 266 ratings. This marked a reversal in trend from the first half of FY12 when Crisil upgraded 313 ratings, which was higher than the 207 downgrades. The downgrades were driven by liquidity pressures and weakening demand. Significantly, one-third of the downgrades were to the default category. Says Crisil MD & CEO Roopa Kudva: “Weak liquidity caused by elongation of working capital cycles is the primary reason for the defaults. This trend is likely to persist with slowing demand.” Highly indebted industries, including textiles, steel, construction and engineering accounted for a fourth of the defaults. Textile exports have been hampered by weak demand, especially in the eurozone. Steel manufacturers have had to contend with higher input prices. Industries dependent on investment demand such as construction and engineering, and industrial machinery have been affected by weak domestic demand, stretched working capital cycles, and high interest rates. According to Crisil, the credit quality of India’s corporates will remain under pressure, given the slowdown in demand. |
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Mallya buys some more time for Kingfisher
New Delhi, April 3 For the umpteenth time in the recent months, the Kingfisher promoter assured employees that he would pay everyone in a staggered manner by April 10. Following prolonged negotiations that started Monday night and went on till wee hours of Tuesday, employees assured Mallya of cooperation and deferred their strike. Airline sources said employees accepted the assurance Mallya had given in his letter and decided that they would not go ahead with their ultimatum if a part of their dues were not paid by Tuesday evening. What also worked in his favour was a warning that any agitation could lead to cancellation of flying permit by aviation regulator DGCA. Kingfisher employees in Delhi are still waiting for a confirmation from the management on payments from the management. A senior pilot said so far there had been no written assurance regarding the payment schedule. He added that if they were paid their dues in the next couple of days, they would be left with no other option but to strike work, pointing out that earlier Mallya had assured them that they would be paid by February-end, which did not happen. The civil aviation regulator is keeping a close watch on the happenings, officials said. While the staff may get their salaries, the key question regarding the economic viability of the debt-ridden airline remains unanswered. Living on day to day basis, the carrier has terminated operations to half of its 56 destinations over the past few days and asked around 40-50% of its staff to stay at home till further orders. Lenders are now insisting that the company clear off all the interest dues before they even consider disbursing fresh loans. There are also reports of Mallya thinking of selling part of his stake in his flagship liquor business to Dutch brewery giant Heineken, but there has been no official confirmation of the deal. |
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Devinder K. Singla appointed director of Punjab National Bank
Chandigarh, April 3 This is the first time a chartered accountant from Chandigarh has been appointed a director of this major bank continuously for two terms. Singla is also a director of Chandigarh Industrial & Tourism Development Corp Ltd (CITCO). Singla has earlier been a director of PNB Gilts Ltd. He was also chairman of the Chandigarh branch of the Institute of Chartered Accountants of India. — TNS |
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BSE CEO Madhu Kannan leaving to join Tata Sons
Mumbai, April 3 Tata Sons, which controls the salt-to-software Tata Group, India's biggest business house, said in a statement that the 38-year-old Kannan will report to deputy chairman Cyrus Mistry, who is due to succeed Ratan Tata as chairman of the group at the end of this year. Neither Kannan nor a spokesman at the BSE could immediately be reached for comment. A senior BSE official, who declined to be identified, confirmed that Kannan had submitted his resignation and that a committee would be named to oversee the running of the exchange until a new CEO is identified. — Reuters |
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Renault launches diesel Fluence
New Delhi, April 3 The new Fluence will be powered by 1.5 litre diesel engine and the company claimed it would give a mileage of 20.4 km per litre. Unveiling the Fluence diesel, Renault India MD Marc Nassif said: "The Fluence was the first offering from Renault in India. The new upgraded variant is about our commitment to the Indian market”. The Fluence will compete for the market share in the mid-premium segment with the likes of the Volkswagen Jetta, Skoda Laura and Toyota Corolla Diesel. |
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