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Sunday 10 November 2013
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IT : Where foreign travels of directors/executives of assessee were necessary for business of assessee and all relevant bills were produced for such expenses, foreign travels expenses to be allowed
Indian Oil, Coal India Stake Sale Likely Next Month: Report
India has revived plans to sell stakes in two state-owned companies to raise about $2.3 billion to boost public finances, aiming to push through a sale by mid-December to take advantage of a share market rally.
Two sources with direct knowledge of the matter said investor roadshows will be launched in the United States on Tuesday for a 10 percent stake in state refiner Indian Oil Corp (IOC).
The government's Department of Disinvestment (DoD), which oversees stake sales in state companies, has also completed most of the overseas roadshows to sell a 5 percent stake in state miner Coal India, which could fetch about $1.5 billion, the sources told Reuters.
The department hopes to launch the stake sales in the two state companies before December 15, they said, after which overseas investors typically start to wind down for Christmas and New Year holidays.
"We would like to launch both before mid-December, but not sure if we will be able to do that," one of the sources said.
The government's planned sale of stakes in Indian Oil and other state companies including Coal India is critical to relieving pressure on public finances that could put the country's investment-grade credit rating at risk.
India has targeted raising $6.4 billion from selling stakes in state companies in the fiscal year ending March 2014, but has so far managed only $233 million, as ministries squabbled over the timing of the issues and the rupee fell against the dollar.
IOC's share sale had been set for October, but planned roadshows were cancelled after the oil ministry pulled out, citing the weak share price and uncertainty over a new fuel-subsidy formula.
The Coal India stake sale has been halved from 10 percent to 5 percent after union opposition.
"IOC (Indian Oil Corp) roadshows are starting from the 12th (of November), even though it is a difficult issue to market because of the sector problems," the source said, referring to losses that state oil retailers incur because of selling diesel, kerosene and cooking gas at state-capped rates.
The sources declined to be named due to the sensitivity of the matter. DoD officials, as well as officials at Indian Oil and Coal India could not be reached for comment.
Indian Oil, India's largest refiner and fuel retailer, on Friday reported an 82 percent fall in net profit on account of foreign exchange losses and lower compensation from the government for losses on fuel sales.
India's oil ministry has forecast revenue losses of 803 billion rupees for state fuel retailers IOC, Bharat Petroleum and Hindustan Petroleum in the second half of this fiscal year, up from 623 billion in the first half.
The divestment department is keen to push through the stake sales to take advantage of a share market rally that sent India's benchmark stock index to a record high this month on the back of strong foreign inflows. The index is up 6.4 percent this year.
The Indian Oil investor roadshows will be held in New York and Boston. The Indian cabinet cleared the sale in August.
At current market prices, the 10 percent stake sale in Indian Oil could fetch New Delhi around $800 million. The government owns nearly 79 percent in Indian Oil, and 90 percent in Coal India.
So far, officials have pitched the Coal India offering to investors in the United States and Britain, and will proceed to Australia and South East Asia this week, a third source said. Roadshows for local investors will be held after that, he added.
Source:- profit.ndtv.com
Exim Bank Identifies 15 African Countries For Good Investment.
The Export-Import Bank of India has identified 15 African countries, including Egypt, Kenya, South Africa and Nigeria, as good investment destinations, a top official has said.
Many Indian companies keen to take advantage of the opportunities in Africa were holding back because of a lack of information on African economies, Exim bank's executive director David Rasquinha said.
He said the top countries identified by Exim Bank were Algeria, Angola, Cote d'Ivoire, Democratic Republic of Congo (DRC), Egypt, Ghana, Kenya, Morocco, Mozambique, Nigeria, Kenya, Tanzania, South Africa, Zambia, and Uganda.
Major projects of Exim Bank on the continent include vehicle financing of the Tata Group and wind turbine ventures of the Suzlon Group in South Africa; electrification projects in the DRC and Mozambique; assisting the sugar industry in Ethiopia and housing development in Gabon.
The bank has representative offices in Addis Ababa, Senegal and Johannesburg, where it started operations in 1998, not long after the first democratic elections in 1994.
But despite initiating many projects from its Johannesburg office, Rasquinha expressed concern that a fifth of India's exports to Africa were to South Africa.
India still lagged behind China, Germany, the US and Japan in exports to Africa in areas where the country had expertise, such as optical and medical apparatus, footwear, meat and ceramics, Rasquinha said.
Exim Bank's stated objectives of financing development plans have seen it assisting similar ventures in several African countries.
In South Africa, Exim Bank has helped the Industrial Development Corporation in the application of export finance programmes.
In Nigeria, home to Africa's largest film production industry, Exim Bank has assisted the Nigerian Export-Import Bank in developing funding models for projects that hold the promise of foreign exchange earnings.
Source : economictimes.indiatimes.com
Finmin Keen On Indian Oil Disinvestment In November.
The Finance Ministry wants to sell 10 percent of the government's stake in Indian Oil Corp (IOC) by end of the month in a bid to achieve its Rs 40,000 crore disinvestment target.
"We want to push the IOC stake sale first, within November itself. This will pave the way for disinvestment of other oil sector PSUs like Engineers India," a senior Finance Ministry official told PTI.
Last month, the Department of Disinvestment put off overseas roadshows for the IOC stake sale following opposition from the company and the Petroleum Ministry, which cited poor market conditions. The roadshows were planned in London, US, Singapore, Hong Kong and Dubai.
IOC shares rose 1.62 percent to Rs 213.20 at the close on the BSE on Friday. They have fallen 43 percent from the 52-week peak of Rs 375 on January 18.
At the current price, the sale of 19.16 crore IOC shares, equivalent to 10 percent of the government's holding in the company, would fetch more than Rs 4,000 crore, which is 10 percent of this financial year's disinvestment target.
The government held a 78.92 percent stake in the country's largest oil refiner as of September 30.
Citibank, HSBC and UBS Securities are among the five merchant bankers selected to manage the IOC share sale.
IOC Chairman R S Butola had written to the Oil Ministry in September, saying, "Current share price of IOC, already undervalued, may not fetch the fair value in the prevailing uncertain environment and investors in all probability are likely to factor in huge discount in their assessment of share price."
A share sale under present conditions could fetch a low price and would further dent IOC's efforts to raise loans for crude oil imports.
IOC posted an 82.5 percent drop in net profit to Rs 1,683.92 crore for the July-September quarter after losses from foreign exchange and sales of diesel, cooking gas and kerosene below cost.
The government is waiting for disinvestment in IOC before going ahead with plans to sell 10 percent in Engineers India Ltd (EIL).
At the current market price of Rs 175.10, the sale of 3.36 crore EIL shares would fetch about Rs 600 crore.
So far, the government has raised about Rs 1,325 crore from stake sales in six companies.
Source : zeenews.india.com
Sugar Industry Says Exports Crucial To Reverse Current Bearish Trend
10-Nov-2013
While the Food and Agriculture Organisation (FAO) has struck a bullish note on sugar in its recent outlook, the Indian industry is striking a different note.
The industry feels that unless 3-4 million tonnes are shipped out of the country, sugar prices are unlikely to stabilise, reversing the downtrend.
FAO last week said that global sugar prices would rise in the coming days on unfavourable weather conditions impacting harvest in Brazil, the largest sugar producer.
Global prices
“Sugar quotations increased by 9 per cent from July to October 2013. Although early in the season, the size of the production surplus remains uncertain, indications are that it will be much smaller than early estimates and not as large as the past two years. If these early assessments prove true as the season progresses, it will certainly lend some upward support to world sugar quotations,” it said.
Global raw sugar prices averaged 19.31 cents a pound during January-June, down 20 per cent over the corresponding period a year ago. However, in September, prices averaged at around 17.4 cents a pound and rose to around 18.7 cents a pound in October.
FAO estimates the global sugar output for 2013-14 at 180.2 million tonnes, marginally higher than last year. It expects bulk of the growth in global output to come from developing countries, such as India, Thailand and Pakistan.
However, FAO said: “India’s competitiveness on the international market is being constrained by rising production costs and falling world prices, which may limit further gains in world markets”. It has pegged India’s sugar output at 25.5 million tonnes for the 2013-14 season, while forecasting exports at 2.1 million tonnes.
Unviable exports
The Indian industry has begun the 2013-14 season with a huge opening balance of 8.5 million tonnes, which is weighing on sugar prices that are in the bearish phase.
Mills are under pressure to liquidate stocks – that’s resulting in excess market supplies dragging the price. “Exports are currently not viable from India, but sugar can be pushed out, provided there is some support from the Government, say, in terms of transport subsidy for both inland and oceanic freight,” said Abinash Verma, Director-General of Indian Sugar Mills Association.
The Government had provided export subsidy in 2006-07 to ship out about 60 lakh tonnes of sugar. Mills in coastal areas then received a subsidy of Rs 1,350 a tonne, while those in the hinterland got Rs 1,450 .
“A subsidy of Rs 1,000-1,500 is good enough to help us export the surplus sugar,” said Verma. Also, the Government could help millers by providing interest-free loans to tide over the current crisis.
Earlier, the Government had extended such interest-free loans in 2007-08 to an extent of Rs 3,500 crore.
Sugar mills currently owe about close to Rs 4,000 crore to farmers for cane purchases made last year. Crushing for the current season is yet to start, as mills are seeking clarity on cane pricing, while farmers are demanding a higher price for their produce. An estimated half a million tonne raw sugar from the new crop has already been contracted for exports, mainly from Maharashtra.
Source:- thehindubusinessline.com
A New Gold Standard For Imports
Is there a win-win situation for gold imports? At the heart of this problem is the government's objective of containing gold imports to, say, 600 tonnes on an annualised basis against over 1,000 tonnes in 2011-12.
The recent policies on the 20/80 ratio (requiring 20 per cent of imported gold to be used for exports) and the abolition of credit have ensured that gold imports in August, September and October have been a fraction of normal levels. So, the target will certainly be achieved in the 12 months starting August 2013.
However, with a 10 per cent customs duty on a commodity like gold and such complex procedures on legal imports it is natural that smuggling will increase, as it seems to have in the last few months. Three aspects confirm that this is indeed the case:
(i) the industry does not seem to be facing any kind of supply constraint, despite the crash in official imports;
(ii) incidents of smugglers getting caught have sharply risen; and,
(iii) there was a 6 to 7 per cent difference between the price at which you could import gold through the regular channels and the price at which gold was available in the local market.
Smuggling has to be funded by dollars outside India in exchange for rupee payments within India. This would mean that dollars that would otherwise have come into India will not come in now. Non-resident Indian (NRI) remittances would be a good part of these dollars.
If the situation continues, it is possible that actual imports (official and unofficial) could significantly exceed the 600-tonne goal and make the nation spend, directly and indirectly, more foreign exchange than we could have.
So how can the government create a win-win situation? Here are some suggestions:
The government should issue a licence equivalent to about 50 tonnes per month to all importers who have been importing gold, and use their track record to pro-rate their share of this 50 tonnes. We would end up capping the legal import into India at 600 tonnes through this mechanism.
The government should immediately remove the 20/80 procedures, which complicates legal imports significantly and consequently make other routes even more attractive, given that the official route does not meet domestic demand satisfactorily.
With steps 1 and 2, gold would flow freely into the country but only at the rate of 50 tonnes per month. And because it flows freely, the incentive for importing goal via the unofficial route will be reduced.
It would be naive and certainly impractical to think of reducing the customs duty since each one percentage point of duty fetches the government nearly Rs 2,000 crore of revenue. So, the price of reducing or scrapping it is perhaps too large to pay on the fiscal side. Instead, if we take a small percentage of the customs duty income and create a very attractive incentive programme for customs officers, it will make a large number of honest and vigilant officers even more so, creating an effective deterrent effect against smuggling.
The government should get the State Bank of India (SBI) (which is already familiar with the gold deposit scheme successfully targeting temples) to conceive and launch a visible and persuasive gold deposit scheme - with a catchy name and TV advertising - with a one- to three-year tenure for individuals. The government should define an annual cap of 200 tonnes for this scheme, to limit its effect on our current account deficit in the future since we will have to import later to pay these individuals back. As soon as we get traction on this scheme, the government should reduce the monthly licence limit from 50 tonnes correspondingly, so that total imports (current import for current consumption plus future import for current consumption) are together contained within 600 tonnes.
Many factors favour the success of this 200-tonne mobilisation. First, this amount is less than one per cent of total gold deposits in India and under 10 per cent of the likely coin/bar stock that customers can get back in the same form after the tenure of the scheme.
Finally, the government should bring in a regulation to temporarily ban the sale of coins and bars (it has banned their import but not yet their sale). And in their place, the government should introduce gold options that provide the same benefit (investment) to the public, without burdening the seller with the need to underpin the sale with physical gold. This means that the gold-investment market can thrive without the need to import gold for it.
Why should these steps create a win-win situation? First, the 20/80 rules make it quite complex for the smooth daily flow of gold into the country. This, combined with the 10 per cent customs duty, will continue to make smuggling very attractive (even necessary!) to feed domestic demand. Also, the unofficial supply can well feed the coin demand. The combined real flow of gold into the country could well exceed the 600-tonne target, though the concomitant reduction in NRI remittances can never be pinpointed. The government may congratulate itself on achieving its 600-tonne target but the reality may be something much higher. These suggestions will enable the industry to look at legal imports as the first option, thus making smuggling much less attractive, remove the coin and bar demand unequivocally, bring the total import bill (visible and invisible) under control and simultaneously make it easy for the industry to go about its work.
Source:- business-standard.com
sec. 434 notice need not be served on respondent co. as only requirement is to send notice to Regist
CL : There is no requirement that statutory notice envisaged by section 434(1)(a) has to be served on respondent company as only requirement is to send notice to registered office of company
Appeal To Govt To Lift Ban On Potato Export
10-Nov-2013
Potato traders in Hooghly and Burdwan, the two biggest producers of the crop in Bengal, have appealed to the government to lift the ban on export of the tuber to other states as they have taken advance payments for consignments.
The traders said they were losing goodwill for their failure to deliver the consignments within the stipulated time.
The potato traders in the two districts sell half their produce every year to Odisha, Bihar, Jharkhand, Assam, Andhra Pradesh and Tamil Nadu.
The Bengal government has banned the export of potatoes after a shortage pushed up prices of the tuber in the state.
Earlier this week, police stopped at the Duburdih checkpost in Burdwan’s Kulti 23 trucks carrying 300 tonnes of potatoes to Jharkhand. The trucks had valid challans.
The traders were paid Rs 11.60 a kg and the potatoes were sold in retail markets in Asansol at Rs 13 a kg, a price pegged by the chief minister. The traders were supposed to sell the consignment at Rs 15 a kg in Jharkhand.
Sagar Sarkar, the president of the Burdwan chapter of the West Bengal Progressive Potato Traders’ Association, said: “We have appealed to the agri-marketing department to allow us to export potatoes to other states as many of us have already taken advance payments for consignments.
“Over the years, we have developed good working relations with potato traders in other states. But we are losing goodwill because of the ban.”
Asked if export of potatoes would push up prices in Bengal further, Sarkar said around 25 lakh tonnes of the crop were lying in 440 cold storages across the state. Denying there was a shortage, he said the stocks were enough for Bengal’s consumption in the next two months.
“Cultivation of potatoes for this season has begun. The new crop will reach the markets in two months. On top of that, 25 lakh tonnes of potatoes are lying in cold storages. A huge quantity of the crop will rot if we don’t export now,” Sarkar said.
Traders said the demand for potatoes in Odisha, Andhra Pradesh and Tamil Nadu had shot up as cultivation there had been affected by Cyclone Phailin in September.
The association said around 17,000 potato traders in Hooghly and Burdwan would incur a loss of Rs 250 crore if the ban was not lifted.
“We usually export the super S1, super six and K22 varieties of Jyoti potato to other states as their demand in Bengal is less,” said Ashok Makal, the secretary of the association’s Hooghly chapter.
An agri-marketing department official in Burdwan, Priyadarshi Sen, said he had received a letter from the potato traders, requesting that the ban be lifted. “I have forwarded the letter to my superiors,” he said.
Agri-marketing minister Arup Roy declined comment, saying the chief minister was looking after the department.
This year, the agri-marketing department has set a target of producing 22.18 tonnes of potatoes in Burdwan and 33 lakh tonnes in Hooghly. Traders said both districts were expected to exceed the target.
People protesting Bengal’s decision to ban potato export blocked two national highways in Odisha’s Balasore for three hours yesterday, stopping trucks carrying fish and other commodities to Bengal.
The Odisha government said no truck carrying potatoes reached the state from Bengal today.
Bengal Opposition leader Surjya Kanta Mishra of the CPM accused chief minister Mamata Banerjee of “inept handling” of the potato crisis. “The decision to stop trucks going to Odisha and Jharkhand with pototoes is a step in the wrong direction,” he said.
Source:- telegraphindia.com
Import Of Raw Jute Rises As Local Production Falls
Jute factories in eastern Nepal have been sourcing raw jute from countries like India and Bangladesh as local production of this cash crop is decreasing with each passing year.
According to Nepal Jute Mills Association (NJMA), local production can meet only around 20 percent of the demand.
If jute mills in the country are to operate to their full capacity, they consume around 100,000 tons of jute a year. Annual production of raw jute hovers around 18,000 tons.
“Jute mills in Sunsari-Morang industrial corridor are not operating to their full capacity because of the shortage of raw materials. They are utilizing only around 60 percent of their installed capacity,” Rajkumar Golchha, president of the NJMA, told Republica. “Most of the mills in the corridor are importing raw jute from India.”
The demand for raw jute increased further after Biratnagar Jute Mill recently resumed operation after a hiatus of five years. Arihant Multi-Fibers - the largest jute mill in the corridor - alone consumes around 75-100 tons of jute every day.
Though industrialists and farmers have been putting pressure on the government to promote jute farming, the government has been turning deaf ear to their demands, according o the officials of NJMA.
Shyam Paudel, general manager of Biratnagar Jute Mills, said the government should come up with fresh incentives to encourage more farmers toward jute farming. “Earlier, Nepal used to export raw jute to India and Bangladesh. The situation has become opposite now,” he added.
Industrialists say Nepal´s raw jute production is declining because of the primitive farming method which is costly. As the rate of return is low, many farmers have stopped jute farming and started cultivation of other crops which give better yields.
According to Trade and Export Promotion Center, Nepal imported raw jute worth Rs 2.3 billion in fiscal year 2012/13.
There are 10 jute mills in Sunsari-Morang industrial corridor. They employ more than 20,000 workers.
Source:- myrepublica.com
Volkswagen Revs Up Exports From India, Ships Vento To Mexico
German carmaker Volkswagen is ramping up exports from India and is shipping its mid-sized Vento, a sedan, to Mexico to add to Asian and African markets where it sells cars made at its Pune facility. The company's Indian arm, which started exporting the left-hand drive Vento to Mexico in October, said the country is already its biggest export market.
"The total units exported so far from Pune are over 27,000 units as of October 2013...Almost every second car from the export volumes is going to Mexico currently...The biggest export market for Volkswagen India is currently Mexico," Mahesh Kodumudi, president and managing director of Volkswagen India, told PTI in an e-mailed interview.
With the entry in Mexico, Volkswagen India is marking its foray into a third continent - North America.
Currently, the carmaker is exporting the Polo and Vento models from India. Volkswagen India began exports in 2011.
"Currently, we are exporting to 32 countries across three continents...We have been adding more markets and hence the number is going up and there is no annual number that can be given," Mr Kodumudi said when asked how many cars are produced annually for exports.
"As of now, up to 20 per cent of the production at Volkswagen Pune plant is for export markets."
About the plant's output, he said, "For 2012, the production was approximately 96,000 cars from Pune plant. By the end of 2013, we should have similar number, but it depends on how the demand is from the market."
He also said production could be increased, depending upon demand from the market.
"In case there is increase in demand, we have the capacity to ramp-up the production for increased exports," he added.
When asked if the company planned to add more models to the export line-up, he said, "We do not have any plans for other products as of now."
On whether the company planned to enter new markets, he said, "For now, we do not have any more markets decided after Mexico."
Source:- profit.ndtv.com
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