Tuesday, April 27, 2010

Filing I-T returns to get easier with Saral II

 
Source:PTI:2010-04-27 15:06:08


 New Delhi: The Finance Ministry has come out with 'Saral-II', the new income tax returns form, that seeks to make tax filing easy on the assessee and gather information on TDS paid on salary and interest.

Tax special

The Saral-II, a two-page form, was mentioned by Finance Minister Pranab Mukherjee in his Budget speech for 2010-11.

"This form will enable individuals to enter relevant details in a simple format in only two pages," he had said.

Tax saving options under Section 80C

Besides the usual columns to elicit details of income chargeable under the head salaries and pension, house property and other sources for calculating gross income, the form also includes columns to furnish details of Advance Tax and Self Assessment Tax Payments and transactions reported through Annual Information Return.

Interns need to file tax returns

The form can be downloaded from income tax department's website www.incometaxindia.gov.in.

Wrong ATM debits can be rewarding


Compensation for banks' delay in attending to complaints.


Complaintspertaining to ATMs top all others in banks (file picture). 
 
Source:BL,ChennaiG. Naga Sridhar,Hyderabad, April 6

Got a wrong debit in an ATM transaction? Don't sweat. It might actually turn into a reward, though delayed, for the trouble that you have been put through.
Many banks are acting slowly in rectifying the mistakes in ATM transactions. This despite an April 2009 directive from the Reserve Bank of India that a compensation of Rs 100 a day should be paid from the 12th day after the wrong transaction till the date it is corrected.
Advantage for many
As a result, notwithstanding a temporary inconvenience to a customer, a wrong debit could finally end up as an advantage for many.
“We recently awarded a compensation of Rs 20,000 for a wrong debit of Rs 8,000. There are other similar cases as well,'' Mr M. Sebastian, Banking Ombudsman in Hyderabad, told Business Line here. There was a ‘concentration' of complaints pertaining to ATMs, he observed.
The complaints pertaining to ATMs top all other complaints in banks. “A majority of complaints we receive are on ATM transactions,'' Mr Shiv Kumar, Chief General Manager, State Bank of India, said. He added that special efforts were being taken to dispose them off.
While banks are tight-lipped about actual number of complaints, officials say that enclosures are created to tackle ATM complaints and there is also long pendency.
“When I complained to Andhra Bank on an ATM wrong-debit, I have been told to wait as complaints have been pending for the last two years,'' said Mr R Gopal, a customer of Andhra Bank.
Mr R.S. Reddy, Chairman and Managing Director Andhra Bank, however, said there was no such long pendency.
“As people are using other banks' ATMs, there are procedures to follow in establishing the authenticity of a complaint. As multiple agencies are involved, it takes time,'' he said.
Mr Asit Pal, Executive Director of Corporation Bank, and Ms Renu Challu, Managing Director, State Bank of India, also share a similar view.
‘poor awareness'
There are also allegations that banks are not prompt in payment of compensation according to RBI norms unless it is asked for as there is still ‘poor awareness' among the general public on the norm.
“Given the circumstances, it is not fair to ask us for compensation which will run into huge amount. The RBI should not have kept 12-day limit,'' said a top official of a public sector bank.

Have Union Bank home loan, get sops on other advances


Source:BL:K Ram Kumar:Mumbai,

Buy one shirt, get 50 per cent discount on the second. This is a common sales pitch adopted by outlets selling readymade garments. Now, a public sector bank has taken a leaf out of this popular retail sales strategy to push home loans.

Mumbai-headquartered Union Bank of India has unveiled a new campaign whereby it promises loyalty rewards to its home loan customers.

Under the loyalty reward scheme, the bank's home loan customers will get 50 basis points (one basis point equals 0.01 per cent) concession in interest rate on car loans and waiver in processing charges in the case of education loans.

Besides, the bank will also offer its customers, who have serviced their home loans regularly for three years, top up loans to the extent of the amount that has been repaid.

Portfolio growth

The bank, which recorded a 35 per cent jump in its retail lending portfolio from Rs 10,000 crore as of March-end 2009 to Rs 13,500 crore as of March-end 2010, is using the rewards scheme as a key differentiator to draw more retail customers into its fold.

According to a senior official, the scheme has been drawn up to ensure that along with the home loan portfolio, the car and education loan portfolios also grow.

“Through the recently launched loyalty rewards scheme for home loan customers, we want to carry forward the growth momentum we achieved in FY2010 in the retail lending portfolio,” said Mr S Govindan, General Manager, Union Bank of India.

As of March-end 2010, home loans accounted for 67 per cent (or Rs 9,000 crore) of the bank's total retail lending portfolio of Rs 13,500 crore. Education and car loans accounted for 11 per cent (or Rs 1,500 crore) and 9 per cent (or Rs 1,200 crore) respectively of the total retail lending portfolio.

Union Bank's credit portfolio increased by a robust 23.3 per cent (to Rs 121,000 crore) as against the Reserve Bank of India's non-food credit growth projection of 16 per cent for the banking sector for FY2010.

In order to attract savings bank (SB) deposits, the state-owned bank also plans to unveil a pre-sanctioned loan facility for its SB account holders. The loan amount in this case will be linked to the average balances maintained by them in the account.

The bank's current account, savings bank account (CASA) deposits nudged up to 31.68 per cent (30.06 per cent in FY2009) of the total deposits of Rs 170,000 crore as of March-end 2010. In FY2010, its deposits increased by 22 per cent.

According to Mr Govindan, the bank's latest ‘10/10' campaign on home loans, among others, focuses on features such as hassle-free documentation, extended repayment period (25 years), flexible equated monthly instalment facility and no prepayment penalty.

SAIL, JSPL and Tata Steel to benefit most from rise in iron ore prices


 Source:ML:Amritha Pillay:April 26, 2010 02:28 PM

With captive mines under their belts, SAIL, JSPL and Tata Steel could emerge as the biggest winners due to rising iron ore prices. These companies are well placed to cash in on the subsequent rise in steel prices, while their raw material costs will remain comparatively on the lower side

With iron ore prices skyrocketing, steel companies like Steel Authority of India (SAIL), Jindal Steel and Power ltd (JSPL) and Tata Steel are likely to make the most of the situation.

All three companies have access to assured iron ore supplies from their own private mines. Unlike others, these companies are not dependent on external iron ore purchases.

Last week, we had reported on how iron prices in the spot market had increased due to low supply from Indian mines. Softening of iron ore prices looks unlikely as supply bottlenecks continue to haunt Indian mining activities. Iron ore prices have touched a high of $192 per tonne, moving closer to the all-time high of $200 per tonne reached in 2008. Industry sources expect a further increase of 10% to 20%.

Amid such a scenario, SAIL, JSPL and Tata Steel are expected to emerge as the biggest winners. According to a PTI report published last week, steel companies like Tata Steel, SAIL and JSW Steel have increased the prices of their products by about Rs6,000 a tonne since February 2010. This increase for Tata Steel and SAIL will go straight to their respective bottom-lines.

Among the smaller steel companies, Prakash Industries and Ispat industries are expected to benefit. Both these companies don’t have access to their own iron ore mines, but have reportedly enough raw material supply through long-term contracts. However, there are concerns on whether Prakash Industries will be able to use its long-term deals to its advantage.

SAIL, JSPL and Tata Steel will be able to jack up their selling prices, and will enjoy greater margins, thanks to lower input costs.

Last week, steel secretary Atul Chaturvedi had indicated that further fluctuation in steel prices was likely. “Steel prices could rise or fall by Rs2,000-Rs2,500 a tonne mainly due to fluctuation in prices of raw material in the next six months,” Mr Chaturvedi was quoted as saying. On an average, any change in iron ore prices could lead to a doubling of steel prices.

India gains more say in the World Bank



Source:Moneylife Digital Team:April 26, 2010 02:36 PM


The country is now the seventh largest member in terms of voting power, with the United States leading the table with 15.85%, Japan (6.84%), China (4.42%), Germany (4%), France (3.75%) and the United Kingdom (3.75%)

India saw its say in the World Bank increasing a bit after member nations approved a shift in voting rights, while China’s voice in the funding agency grew louder than that of Germany, France and the UK.

Both India and China has enjoyed an identical 2.77% voting rights. While India’s voting power stands increased to 2.91%, China leaped to 4.42%—placing it third overall.

India is now the seventh largest member in terms of voting power, with the United States leading the table with 15.85%, Japan (6.84%), China (4.42%), Germany (4%), France (3.75%) and the United Kingdom (3.75%).
Membership of the financial institution gives certain voting rights that are the same for all countries, but additional votes are granted depending on a country’s financial contributions to the organisation.
Since 2008, emerging economies have overall gained 4.59% in voting rights.

“The change in voting power helps us better reflect the realities of a new multi-polar global economy where developing countries are now key global players,” said World Bank president Robert B Zoellick.
The member-nations also agreed to raise more funds for global aid at the annual spring meeting of the World Bank and the International Monetary Fund (IMF).

The change gives emerging nations more say in how the bank is run and how its funds are disbursed.
“This change in voting share, giving developing countries over 47%, is a significant step,” Mr Zoellick told reporters, hoping that shareholders will review the approach in 2015.

Mr Zoellick said that at a time when multilateral agreements between developed and developing countries have proved elusive, this accord is all the more significant.

This increase fulfils the Development Committee commitment in Istanbul in October 2009 to generate a significant increase of at least 3 percentage points in Developing and Transition Countries’ (DTCs) voting power.

“We, in calculating this, looked at the size of the world economy, using purchasing power but also exchange rate measures, but also, as a development institution, the contribution to development including the contribution to IDA, our fund for the poorest, the World Bank head said.

The governments also approved over $90 billion in extra money for the World Bank’s various arms that provide aid and capital to member countries.
Mr Zoellick said that the shift in voting powers was designed to try to reflect past contributions, citing the example of Japan that has been “a very gracious contributor” and to encourage new ones, including developing and transition countries.

The 186 countries that own the World Bank Group also endorsed boosting its capital by more than $86 billion for the International Bank for Reconstruction and Development (IBRD), the arm that lends to developing countries.

The increase would come from a general capital increase and a selective capital increase linked to the change in voting powers, including $5.10 billion in paid-in capital.

It further agreed on a $200-million increase in the capital of the International Finance Corporation (IFC), the World Bank Group’s private sector arm, as part of an increase in shares for developing and transition countries.

IFC will also, subject to board approval, consider raising additional capital through issuing a hybrid bond to shareholding countries and through retaining earnings.

The IBRD 2010 realignment will result from a selective capital increase of $27.80 billion, including paid-in capital of $1.60 billion.

Noting that this represents a dynamic transformation for the World Bank Group, Mr Zoellick said that the additional capital means that the bank will no longer face the possibility that it would have to cut back its lending later this year.

“We came into this crisis well-capitalised, thanks to sound financial policies. We have provided a record $105 billion in financial support since the crisis began to bite in July of 2008. This additional capital means that we will be able to continue to play the role that is demanded of us,” he said.

Limited customer concentration mars Mandhana IPO


Source:Moneylife Digital Team April 26, 2010 08:15 PM



Mandhana Industries Ltd hits the market on 27 April 2010. 

The company derived 77.79% of its exports from Europe compared to 83.62% as on 31 March 2010. As of 31 December 2009, exports constituted 17.13% of the company’s total sales. The company derived 55.34% (Rs243.07 crore) of its revenues for the nine-month period ended 31 December 2009 from its top 10 customers. Mandhana’s earnings per share (EPS) stands at Rs16.11 for the year ended 31 March 2009 while the average return on net worth is 27.35%.


The company recorded a net profit of Rs36.56 crore in FY09 compared to Rs35.30 crore in FY08 with total income of Rs463.25 crore and Rs406.93 respectively.

The company had negative cash flows from its operating activities in financial year 2007-2008 and for the nine-month period ended 31 December 2009 amounting to Rs4.32 crore and Rs11.68 crore respectively due to an increase in inventory holding and receivable levels and also due to sharp increase in debtors and advances paid. For the corresponding periods the company’s earnings before interest, depreciation, tax and amortisation (EBIDTA) were Rs73.09 crore and Rs93.28 crore respectively.

The company’s non-executive director Sanjay Asher, who was associated with Duck Tarpaulins Ltd (1 January 2002 to 31 March 2002) and Asian Electronics Ltd (31 March 2008 to 31 December 2009) appeared in the wilful defaulters list of the Reserve Bank of India (RBI).

Mandhana has obtained various export licenses under the Export Promotion Capital Goods Scheme (EPCG) wherein the company is required to export goods of a defined amount, failing which, it has to make payment to the Indian government equivalent to the duty benefit enjoyed by the company under the particular scheme along with interest. Promoters will own 62.21% equity post the issue. As on 31 December 2009, its export obligation was Rs317crore.

Ratings agency CARE has assigned ‘IPO Grade 3’ to the issue. According to the Red Herring Prospectus, the proceeds of the IPO will be utilised for setting up of a new garment manufacturing facility at Tarapur, for expansion of yarn dyeing and weaving facility at Tarapur, and to pump margin money for working capital and general corporate purposes. There are 11 litigations pending against the company and four litigations against the director in various categories including one criminal case.



The company’s top ten customers accounted for 55.34% of its revenue for the nine-month period ended 31 December 2009

The issue opens on 27 January 2010 and closes on 29 January 2010. The company plans to mop up Rs99.60 crore to Rs107.90 crore at a price band of Rs120-Rs130 per share by issuing fresh equity of 83 crore shares of Rs10 each.

Edelweiss Capital Ltd and Axis Bank Ltd are the lead book-running managers to the issue.