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Shareholding norms: SEBI cracks whip on defaulters
BIZ TALK
Mercedes Benz to come up with traffic alert system
Current account deficit to narrow in FY’ 14: Analysts
Rupee worst among Asian currencies in Q1; sinks 8.6%
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Tax Advice
PERSONAL FINANCE
How much insurance is enough for you?
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Shareholding norms: SEBI cracks whip on defaulters
New Delhi, June 30 At the same time, SEBI has also stepped up its efforts to engage with about a dozen listed public sector companies, which need to achieve minimum 10 per cent public float by sale of shares worth an estimated Rs 3,000 crore before a separate deadline of August 8. The deadline for private sector listed companies to achieve minimum 25 per cent public shareholding expired on June 3, following which SEBI had taken interim actions against 105 companies that failed to comply with the norms. As per SEBI’s interim order dated June 4, these companies were given 21-day time to present their case before the regulator with regard to their non-compliance. "As the time to respond to the SEBI show-cause notice has expired, the regulator is now considering further actions against defaulters for the minimum public holding norms," a senior official said. While some companies made genuine efforts to meet this regulatory requirement of having minimum 25 per cent public float, SEBI has also come across certain "wilful defaulters" who did not make any visible attempts to increase the public shareholding, he added. Since the time SEBI passed its interim order, about two dozen companies have initiated steps to comply with the minimum public holding norms and some of them have already complied with the norms. However, even these companies face the risk of further action as they failed to meet the deadline. However, the final SEBI action against the defaulter companies and their promoters would be taken after taking into account the efforts made by them in meeting the norms, the official said, adding the regulator would also try to safeguard the interest of minority shareholders. The actions being considered against defaulter companies and their promoters and directors include levying of monetary penalties, initiating of criminal proceedings, moving their shares to restricted trade categories, among others. In its June 4 interim order, SEBI had cracked the whip on promoters and directors of 105 companies by barring them from dealings in shares and from holding any new position on boards of listed entities. Besides, SEBI had also ordered freezing the voting rights and corporate benefits of promoters of these companies, in proportion of their non-compliance to the minimum public holding norms that require at least one-fourth of the share capital to be held by the non-promoter public shareholders. In the run-up to the expiry of deadline for private sector companies, SEBI had held consultations with the non-compliant companies to encourage them meet the deadline and had also sent them reminders. Besides, various relaxations were given to them to help them comply with the norms. A similar process is being followed to help about a dozen PSUs meet the norms within the due date, an official said, while adding SEBI has already written to various government departments in this regard. Initially, the government had assured SEBI that all PSUs, except for loss-making ones, would meet the deadline, but the regulator insisted on compliance by loss-making PSUs as well. The norms for public sector entities were relaxed later on August 9, 2010 and they were asked to attain minimum 10 percent public holding in three years and that deadline would end on August 8 this year. — PTI new guidelines |
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Direct selling industry needs exclusive legislation: Expert
Q. What is your take on the current scenario of direct selling industry? A. Direct selling has emerged as one of the major business opportunities in India and more than 7 crore consumers and distributors are dependent on the use of products sold by these companies. It also provides livelihood to many of them, as they are directly engaged in the business. But over the years, a large number of unscrupulous people have also entered the market resulting in frequent cases of fraud and cheating. The police is wrongly interpreting the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, which was formulated for protecting depositors of money in fraudulent chit funds and money circulation schemes and not meant to be used for direct selling business. I find that instead of prosecuting the culprits for carrying out fraudulent business in money circulation and chit funds, the police is more keen on taking action against genuine companies selling quality products to consumers. This law has nothing to do with genuine direct selling companies. Consumers are now unable to access the products and services because of the harassment and closure of offices of these genuine companies. Consumer organisations are planning a massive national campaign to mobilise support and educate the consumers about the irresponsible manner in which the state governments are functioning to encourage the culprits to flourish and genuine business to close. The government needs to take immediate steps to stop such arbitrary police action and come out with a law to regulate the direct selling business as seen in other countries. Q. Why is it important for the Government of India to have an exclusive legislation for direct selling industry? A. The Government of India should immediately come out with an exclusive legislation in order to differentiate between genuine direct selling industry (DSI) companies from the fraudulent organisations. We have to bring the law as soon as possible to protect the consumers, distributors and the companies which are working in the interest of the nation and its citizens i.e. consumers. Q. What do you plan to do as a consumer body to prevent such issues? A. We are planning a joint forum of consumers, distributors and direct-selling companies to come together to get an exclusive legislation to regulate the direct selling business in the interest of all the stakeholders similar to the laws existing in other countries like Malaysia, Singapore, United Kingdom, the US and other countries across the world who have already established DSI business with comprehensive law legitimising the industry. It is to be noted that the recession in most of these countries were greatly overcome by the DSI business in those countries. Q. Why is there a delay in formulating a legal framework for direct selling industry in India despite the fact that various industries have been lobbying with the government for an early action to resolve the issues? A. The inter-ministerial committee that was formed last year has been working at various levels to define the direct selling sector but still there is no clarity to differentiate between direct selling and ponzi schemes. Legitimate DS companies need to get recognised as they have themselves demanded operational clarification and clear distinction at the Central level and urged the government to bring amendment to the Prize, Chits and Money Circulation Schemes (Banning) Act. To date, the government has not been able to distinguish and clarify the kind of activities which don’t attract the provisions of the Prize, Chit and Money Circulation Schemes (Banning) Act (PCMCSA), 1978, and how to bring a directive in this regard to protect the consumers, distributors and the companies to provide options of choice to access quality products and services at the most affordable price.
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Mercedes Benz to come up with traffic alert system
Hyderabad, June 30 "You get more and more connectivity between cars as well as between manufacturer and driver. We are developing an integrated system called 'My Mercedes'. This system gives all participants using an automobile a possibility to communicate (with one another). "There will be more and more communications coming up," Eberhard H Kern, Managing Director and CEO, Mercedes Benz India told PTI during his recent visit here. Kern added that their Research and Development centre in Bangalore would play a key role in developing the technology. According to a press release issued earlier this month by the company, each vehicle will be fitted with Car-to-X communication and it can transmit information on dangers to other road users and therefore contribute to enhancing the road safety. — PTI |
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Current account deficit to narrow in FY’ 14: Analysts
Mumbai, June 30 Although rupee is depreciating, lower prices of gold and crude would help reduce CAD, identified by the RBI as a key risk for the country, they said. "We expect the overall CAD to moderate to 4.3 per cent of GDP in FY14, as lower gold imports and lower commodity prices are likely to more than offset the impact of rupee depreciation," brokerage firm Nomura said. While its peer Bank of America Merill Lynch expect that CAD would narrow to 4.4 per cent. "It should ease to 4.4 per cent of GDP in FY14 on lower oil and gold prices," it said. Ratings agency Crisil estimated CAD to come at around 4.5 per cent this fiscal. Incidentally, policymakers have stated that CAD of around 3 per cent is sustainable from the financing perspective. With expectation of CAD being 4.3 per cent to 4.5 per cent, there are concerns over financing of CAD given the record outflows from the country's markets recently. "Financing CAD is a bigger challenge this year," Crisil said, noting that a possible winding up of bond purchases by the US Federal Reserve and waning interest in India as an investment destination can be the detrimental factors. Crisil, however, expressed optimism on the rupee front, saying the recent fall in rupee, with the currency breaching the Rs 60 to a dollar mark, is a temporary phenomenon. "Current flight of capital and plunge in rupee is a short term phenomenon and largely in response to the uncertainty around the impact of the Federal Reserve's pullback of quantitative easing," it said, adding that Government measures to prop up sagging growth will also help attract more capital. — PTI
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Rupee worst among Asian currencies in Q1; sinks 8.6%
Mumbai, June 30 The rupee lost 8.6 per cent in the quarter as foreign investors sold a whopping $7 billion in June alone in debt and equities, recording the worst fall in a decade among the Asian currencies, as per an analysis of the currency. The rupee closed at an all-time low of 60.72 against the US dollar last week on June 26 on heavy capital outflows and month-end dollar demand from importers. Since May 27, FIIs have pulled out nearly $8 billion, from the domestic market after pumping in over $15 billion into the country since January, according to SEBI data. At the close of the last trading day of Q1 on Friday, the rupee had lost a whopping 8.6 per cent against the dollar, the steepest percentage fall since 2003. Among other weak Asian currencies, Thai baht has lost 5.8 per cent in the quarter, the Philippine peso shed 5.6 per cent, the South Korean won lost 2.7 per cent, the Singaporean dollar lost 1.9 per cent, and the Malaysian ringgit slid 2.5 per cent. Rupee is the second worst performer among the BRICS currencies after the South African rand. At the third slot is the Brazilian peso. The rupee had attempted a recovery on Friday with 91 paise gain, or 1.4 per cent, to close at 59.385. This was on the unexpected improvement in the current account deficit, which in the March quarter fell to 3.6 per cent against 6.7 per cent in the December quarter of last fiscal. The RBI action came a day after the rupee plunged to its life-time low of 60.72 to the dollar despite the central bank intervening thrice in the market on June 26. Many traders said on June 26 they had shorted the rupee and had put a stop-loss at 60. So once it breached the psychological level, it soon slipped further to a low of 60.78. Analysts say the rupee could see some consolidation in the near term, with the Unilever' open offer for HUL and Diageo's open offer for United Spirits would bring in good dollars coupled with the government reform measures like gas and coal pricing and getting stalled projects restarted. — PTI
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Senior citizen not liable to pay advance tax
by SC Vasudeva Q. I am retired and a senior citizen. I had following incomes during the financial year 2012-13: a) Pension b) Interest on FDs in banks I had paid advance tax on March 12, 2013 Please advise whether I have to pay advance tax on September 15 and December 15 also. ii) Which type of tax i.e. advance tax or self assessment tax is to be paid by me during FY 2013-14. iii) On which date/when tax mentioned in (ii) above is to be paid by me during FY 2013-14. — JR Goyal A. In accordance with the provisions of Section 207 of the Income Tax Act 1961 (The Act), an assessee who is of the age of 60 years or more at any time during the previous year, is not liable to pay advance tax in case he doesn’t have any income chargeable under head ‘profit and gains’ of business or profession. Since you are not carrying on any business and are not having any income from such a source, you are not liable to pay advance tax. The amount of tax payable, if any, on your total income can be paid at the time of filing the tax return, which in your case should be July 31 for financial year 2012-13 (assessment year 2013-14). You can thus discharge your tax liability by payment of self assessment tax at the time of filing the tax return. For the financial year 2013-14 (assessment year 2014-15), tax would be payable along with the return to be filed by July 31, 2014. Q. I am a pensioner. My income during the year 2012-13 was as under:- (a) Pension: Rs 2,13,140 (b) Interest on savings account: Rs 45,045 (c) Interest from FDs: Total: Rs 3,39,871. My queries are as under: (a) If the fixed deposit is for three years, whether the interest for tax purpose is calculated on an yearly basis or is it calculated cumulatively at the time of maturity i.e. after three years? (The above quoted FDs’ interest is calculated on an yearly basis). (b) Am I supposed to submit form 15-H? (c) If I am not supposed to submit form 15-H, do I need to acquire a TDS deduction certificate from the bank? (d) Is it mandatory to file an income tax return if TDS is deducted even if the income is well below the Rs 5 lakh limit? — Chander K Gupta A. You have an option to adopt cash method of accounting and therefore pay tax on the amount of interest at the time of maturity of the fixed deposit. You also have an option to pay tax on such interest which becomes due on an yearly basis. You can exercise this option as and when such income is earned for the first time. It seems you have been paying tax on an yearly basis on the amount of interest earned on fixed deposits. It may, therefore, not be possible at this stage for you to change the method of accounting so as to declare the interest income on receipt basis. In case you are of the age of 60 years or more, you can submit Form 15-H to the bank for non-deduction of tax at source. In case you don’t file the aforesaid Form, the bank will have to deduct tax at source. The limit of Rs 5 lakh is applicable to a person who is of 80 years of age. In case of persons below that age, income tax return is required to be filed if the income exceeds the applicable limit of Rs 2,50,000 up to which tax is not payable by a senior citizen. Since your income is more than the said amount, you will have to file a return of your income.
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Travel insurance a must for holiday
Amit Bhandari
With a travel insurance policy, there is an assurance in case of an unforeseen event or unexpected changes in plans. An insurance cover provides the option of cancelling a trip, medical assistance and a host of other benefits in case of an emergency, mitigating the risk of financial burden and the accompanying inconvenience. It is available with several covers as summarised below: Natural disasters During a planned holiday calamity can strike e.g. unexpected storm or earthquake. During such a natural disaster, it becomes impossible for people to leave from or to reach that place for weeks. In such cases, air fares usually skyrocket due to lack of alternative options. Having a travel insurance policy protects the insured from many unnecessary expenses. The cover of trip cancellation and interruption indemnifies the insured (up to the sum insured) of financial loss incurred on account of official cancellation charges, actual additional transportation expenses if the cancellation is due to an earthquake, storm, flood or cyclone. In such a scenario, the insured misses the connecting flight (provided there is a gap of at least 3 hours in the next flight), he or she will be reimbursed (up to the sum insured) for the official cancellation charges and additional cost of transportation. The insured can also claim under emergency hotel extension for actual additional expenses, for lodging and boarding up to the sum insured if the departure gets delayed due to a natural disaster like earthquake, floods, storm or cyclone. Medical assistance While holidaying, there are chances of a medical emergency wherein one either needs to be hospitalised or return home as soon as possible. This would result in additional and unexpected costs. Availing a complete travel insurance policy not only takes care of the extra cost but also provides the right medical assistance at reputed hospitals, including transferring the policyholder to the nearest hospital even if it is in another country. Missed flight In case one misses his or her flight, a travel insurance cover again bails out the traveller of the hassle. Let alone be reimbursed for additional transport expenses to join the trip, the policy also covers the basic cost of hotel room, reasonable meals and cost of return flight or cruise to one’s home country etc. However, the policy will certainly not cover instances where one has missed flight or cruise because the alarm didn’t ring and the person overslept. Political risk & catastrophe evacuation In a situation where the insured is abroad and a catastrophe (flood, earthquake, hurricane, explosion, epidemic due to contagious disease) strikes, it is essential for him or her to evacuate immediately. During such an instance, the travel insurance policy reimburses the cost of an economy class ticket to return home or to nearest place of safety. Also, the insured is reimbursed for reasonable accommodation costs if he or she is unable to fly out (as per sum insured specified in the plan). Compassionate visit If the insured is hospitalised beyond five days and requires a family member to be with him or her, the travel insurance policy covers the cost of an economy class air ticket for the travelling family member. In case the insured is travelling with minor children and gets hospitalised, the cost of economy class tickets for sending the children (maximum two) back home also gets reimbursed up to the sum insured. Terrorism The impact of a terror attack is immeasurable. From chaos to the travel plan getting haywire, the schedule usually gets suspended for days. In such a scenario, it is very frustrating to see one’s hard-earned money go down the drain. In the absence of a travel insurance policy, it is impossible to ask for a refund from the hotel. If one is already at his or her destination and needs to return home early, the travel insurance policy covers the additional transportation expenses (such as a new flight) to get one back home. Factors like weather, sickness, strikes or any other disaster are beyond our control. Any untoward event at any point of time can force a disruption or cancellation. However, now with travel insurance, it is much easier to deal with such uncertainties and mitigate the unforeseen risks. The author is Vice-President, Health Underwriting & Claims, ICICI Lombard GIC Ltd. The views expressed in this article are his own
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How much insurance is enough for you?
Firstly, insurance should provide a minimum protection amount so that a particular level of income is maintained for the family even when the breadwinner is not around. One must take into account inflation and take policies for higher amounts to maintain the same standard of living for the family in the future. How much insurance one needs depends on consideration and balance of the above factors. The need for minimum protection may be quite high, but one needs to consider current disposable income available. Hence, the amount of insurance cover that you may be able to buy initially may not be adequate to cover your minimum amount required. Also, your present age is a critical factor in deciding the quantum of insurance that you can afford. The rates of premium go up with the advancing age of the life assured. Hence, one can buy more insurance for the same premium at a younger age than at an older age. It is therefore advisable to buy as much as you can afford to pay currently and then buy additional cover as and when your payment capacity increases. How much insurance you need also depends on which stage of life you are. For example, the need for maximum insurance cover arises during the mid-phase, when one is married and has children. Not much insurance cover is required at initial stage in life where you do not have family responsibilities and at later stages in life where your children have settled down and are independent. You may chose to look at insurance products which offer investment growth opportunities but a lower cover early on in life and you may choose products which provide a regular and steady income during the later stage in life. There are several simple methods available to broadly estimate your life insurance amount needs. The most basic rule of thumb is provided by the income rule which holds that individual insurance cover should be at least around eight to 10 times of one's gross annual income. For example, a person earning a gross annual income of Rs 1 lakh should have about Rs 8 to 10 lakh in life insurance cover. However, there is no ideal answer to the question and you must consult your financial planner to share your income status and your current lifestyle to arrive at an ideal insurance cover amount. While this seems easy to do, it is surprising to note that a majority of the policy holders in India don’t have an adequate insurance cover amount. Hence, even if one is already an insurance policy holder, one should re-evaluate whether one has an adequate amount of insurance cover. One should also keep in mind that your status and family need to evolve over time. Hence, your earnings may increase significantly in future leading to an enhanced lifestyle. Your insurance cover may have been adequate 5 years ago but it may have become inadequate in your current status and you may need to increase the insurance cover amount accordingly. Insurance is a long-term commitment and there is an outflow of disposable income in the form of insurance premium. One must buy a policy keeping in mind the repayment capability over a long period of time to ensure that you can continue to avail the benefits of the policy and provide an adequate insurance cover for your family. The author is Chief Agency Officer, Edelweiss Tokio Life Insurance. The views expressed in this article are his own
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Online PF claim settlement HP to re-enter smartphone race SBI to charge for SMS alerts
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Over the past few years, direct selling has become an important part of the Indian economy and has emerged as a multi-crore business industry. But it has also brought with it a number of anomalies which are being exploited by many to cheat innocent people. Bejon Misra, an international consumer policy expert, talks to
Girja Shankar Kaura regarding the direct selling business in India.
Most unforeseen situations arise when we least expect them. The last thing one wishes to worry about before heading for a vacation is any untoward event that could ruin the much cherished holiday. This is where travel insurance plays an important role in protecting one’s vacation or business trip.
The basic role of insurance is to provide a financial cover so that dependents are financially secured if something happens to the earning member. Hence, anyone who is earning and has family members who are dependent on him/her needs life insurance. But how much life insurance does one need depends on many relevant factors such as earning potential, current lifestyle, inflation, etc.
