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Tuesday, February 26, 2008

DG - Integrating steel giants: An interview with the ArcelorMittal postmerger managers

Dear All:

 

Find time to read the attached article on “Integrating steel giants: An interview with the ArcelorMittal postmerger managers”.

 

Article at a glance:

v  A key challenge of any merger is the integration of everything from management and sales teams to operating assets and procurement divisions.

v  Few industrial companies have tackled this challenge on the same scale as has ArcelorMittal, the giant steel group formed in 2006 through the combination of Arcelor and Mittal Steel.

v  In this interview, the two managers who led the integration effort discuss the nuts and bolts of the merger—the way the new organization was structured and how it identified synergies and addressed cultural issues. Speed and energy emerge as two vital success factors.

Thanks & regards

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Posted by nsivaa at 9:47 AM 0 comments

DG - Fringe Benefit Tax (FBT) : Please Do Your Homework Too

Fringe Benefit Tax (FBT)

For the Assessment Year 2007-08

 

The following amendments will be in effect from 1 April 2008:

·         In respect of any allotment or transfer of any specified securities or sweat equity shares, either directly or indirectly, by the employer to its employees (including former), FBT will be levied.

·         On the difference between FMV of securities FBT will be payable, for both on the date of exercise and the amount recovered from the employee.

·         The FBT will be computed according to the prescribed method of CBDT.

·         The benefits which are subject to FBT will henceforth be considered as cost of acquisition for coputing of capital gains tax in the hands of the employee at the time of sale of specified securities.

·         Section 17(2)(iii) for the beneficial proviso for computing the perquisite value in the hands of the employees is deleted.


The undermentioned expenses will be excluded from Sales Promotion & Publicity:

·         Expenses on display of products.

·         Expenses on distribution of samples, either free of cost or at a concessional rate.


The following amendments is in effect from 1 April 2007:

·         Equal proportion and due dates for the payment of advance tax on income will be applicable to advance FBT.

·         Consequential change will be made in the process of computing interest for delay in the payment of advance FBT.

 


As per Assessment Year 2006-07


Fringe benefit tax retained at 30%

According to P. Chidambaram's announcement in the Lok Sabha, a FBT of 30% will be levied on 20% of the fringe benefit expense. In simpler terms, FBT will work out to be 6% of the total amount.

But in end, the effective FBT turned out to be just 2% for regular companies and 0.5% for special-category companies like IT and pharmaceuticals. What's more, India Inc can avoid paying even this minuscule amount of tax if their auditors certify an expense as a genuine business expenditure.

According to industry sources, there will be 1.5 to 2% additional tax burden to companies due to items covered under FBT account for about 10-15% of total corporate profits.

Taxable or Exempted items under Fringe Benefit Tax (FBT)

 

Taxable

Exempted

Use of telephones, including mobile phones, the base for valuation will be 20%

Expenses on advertising

The base for valuation of FBT will be 20% for expenses on entertainment, hospitality, sales promotion and publicity, employee welfare, conveyance, tour and travel (including foreign travel) and use of hotels.

Expenses on leased lines will.

50% for expenses on festival celebrations, use of clubs, scholarships and so on.

Charitable institutions, trusts and funds.

For superannuation funds, FBT will be levied on the entire contribution made by the employer for employees.

Individuals and Hindu Undivided Families (HUFs) engaged in a business or profession.

Tax on foreign tour and travel. Infosys, for instance, spend about 4% of its revenues on foreign travel. Phone bills account for close to 1%, another expense attracting the fringe benefit tax.

Conference expenses, only the fee for participation

Repairs and maintenance of cars have also been brought under the purview of fringe benefit tax now. The only saving grace is that only 5% of maintenance costs for transport companies will now be subject to FBT.

Employee welfare expense, only the expenses incurred to fulfil any statutory obligation or to mitigate hazards or to provide first aid facility that too only in a hospital or dispensary run by the employer.

Any privilege, service or amenity provided directly or indirectly by an employer by way of reimbursement or otherwise to employees will attract FBT, which is to be paid by employers.

Guest houses for training.

Fifty per cent of expenses on club facilities.

Expenses incurred due to sales promotions

Expenses borne by companies on foreign travel of their employees will be under the purview of FBT. FBT on travel expenses has been cut to 5%.

Medical expenses.

Any free or concessional ticket provided by the employer for private journeys of employees or their family members and any contribution to an approved superannuation fund for employees will come under the purview of FBT.

Companies that are loss making.

Expenditure on employees welfare will attract FBT, but not the expenditure incurred or payment made to fulfil any statutory obligation or mitigate occupational hazard or provide first aid facilities in hospital or dispensary run by employers.

 

Other expenditures that will come under FBT are conveyance, tour and travel including foreign travel, use of hotel, boarding and lodging facilities, repair, running, maintenance of motor cars and aircraft and the amount depreciation on them.

 

Maintenance of any accommodation like guest house except those used for training purposes, festival celebrations, use of health club and similar facilities, use of any other club facilities, gifts and scholarships will come under FBT.

 



% of expense under the fringe benefit tax

 

Earlier

Now

Use of telephone (other than leased lines)

10%

20%

Entertainment

50%

20%

Scholarship to children of employees

Actual

50%

Hospitality

50%

20%

Maintenance of accommodation like guest houses

50%

20%

Conference

50%

20%

Employee welfare

50%

20%

Sales promotion, including publicity

50%

20%

Festival celebration

50%

50%

Gifts

50%

50%

Use of club facilities

50%

50%

Use of health clubs, sports and similar facilities

50%

50%

Conveyance, tour and travel,
including foreign travel

20%

20%

Hotel, boarding and lodging

20%

20%

Repair, running (including fuel), maintenance of motorcars and depreciation thereon

20%

20%

Repair, running (including fuel), maintenance of aircraft and depreciation thereon

20%

20%


Tax of 30% will be levied on the value of the fringe benefit calculated at the above rates

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Posted by nsivaa at 9:44 AM 0 comments

DG - Pre-Budget Info 2008

Have A Close Eye :

 

29-02-2008 is the Final Show of the Movie..i.e. Central Government's Budget.....

 

Dear Friends, Investors & Group Members,

 

World's biggest democracy India's budget is going to be announced on 29th Feb.'08 from the bags of Shri P.Chidambaram, finance Minister. Common people of India, Media, Industrialists of India & abroad, FII's,Inst.Investors, Mutual Funds, HNIs, all are looking towards eyes of Shri P.Chidambaram. Whole World's Big Financial Heads are keenly waiting for 29-02-2008,cause U.S. and Euoripean Economies are struggling against fear of economy and industrial slowdown, Where as Emerging Markets like India, China,Brazil, Russia are doing good since last 4-5 Years.


Lawyer from Chennai, Shri P.Chidambaram had given the budget for the financial year 1997-98 & since last 3-4 years. All were super-duper budgets for all common people, Industrialists, Economy,Development & also for the Stock-Market. This year also, people from all over India & abroad hoping for repetition of history. Even I also believe that Central budget would be as good as P.Chidambaram's & Dr. Manmohansingh's image .Simultaneously he has to take care of Inflation,Sub-prime effect to Indian Economy, Rising Crude Oil Prices, Slowing Economic as well as Industrial growth,Further push to Agriculture growth so as to achieve agri sectors targets,Volatality of Foreign Markets & its effect on indian economy,market, Tax-payer's Expactations,Liquidity Flow Control,Interest Rates and Keep GDP Growth above 8.5 or 9 in coming years...etc.

This time finance minister will get the full support of Prime minister who himself was a finance minister & was the promoter of the Economic Reforms.Lalooprasad's Rail Budget is going to favourable.It seems that, this Central Budget is also people,Investor,Industry & Market Friendly. But he has to take care of Left parties, Tax plannings,Inflation,Economic Reforms,PSU Disinvestments,Employment,Fresh investments,support to Indian industries for development & growth in India & abroad. Many Sectors are Waiting for good announcement. Many sectors are struggling against severe competition, so that sectors really needs to boost up and some good relief in taxation. Last few figures of Economic data, Industrial Data was poor but Tax Collection data is coming out with mind blowing figures... roughly 42% up…Record Break tax collection which fullfills Finance Minister's last year budgetary expactations.

 

29-02-08's budget will be well balanced,likely to focus more on Employment,Rural Development,Agriculture growth,Infrastructure Growth. Coming Budget can be called as " Comman-Man Budget "....

In coming budget following Industries likely to gain on good announcement from the FM. Keep a close eye on stocks belonging to these sectors.Undoubtly this year budget is likely to focus more on common people,Farmers cause of Elelctions are nearby in India & Shri P.Chidambaram has to take care of Smt. Sonia Gandhi's view for forthcoming political events.

Here are the few hot scripts sector wise. If these sectors related news is positive then these companies will be in lime light & may create firework in coming days.

 

Sector :                   Co.'s Will Be benefited if Good Announcement :

 

Oil and Gas :

HPCL,BPCL,IOC,ONGC, Cairn,Gail, Essar Oil

Infrastructure :

IVRCL, Nagarjuna Construction, DLF, Jai Corp,

Telecom :

MTNL, R Com, Bharti Tele, IDEA,Spice Tele, GTL Infra

Aviation :

Jet Air, Air Deccan, Spice Jet

Media & Entertainment :

Cinemax, Zee, NDTV,Dish Tv, Zee news.

Banking :

SBI, ICICI, HDFC, Union Bank, BOI, Dena, Vijaya, Indusind Bank, Fedral Bank

Agriculture :

KS Oil, Ruchi Soya, Zuari Agro, Excel Crop, Usher Agro, Nutraplus Products

Pharma :

Surya Pharma, Sandu Pharma, Glenmark,Ranbaxy, Nutraplus Products, Wanbury

Biotech :

Jupitor Bio, Sharon Bio, Biocon, Mediaman

IT :

TCS, Zensar, Prithvi, Infosys, Tutis Tech, Aftek Info, D-link, Tech Mahindra, Fin.Techno

FMCG :

Colgate, ITC, Hind.Lever, Nestle

Oil Exploration :

Hind.oil, Selan Exploration

Fertilizers :

RCF, GSFC, GNFC,Nagr.Fert, Godavari, Chambal

Tyres :

TVS Shrichakra, CEAT, MRF, Apollo

Gems & Jewellery :

Rajesh Export, Vaibhav Gems

Finance :

Continental Credit, TFL, Ind.Lease

Mining & Minerals :

Hind.Copper, RNRL, Kachch Mineral, Sesa Goa, Hind.Zinc,GMDC,VBC Ferro Alloys.

Metals :

Tisco, Jindal Stainless, Kaamdhenu,Ferro Alloy, Hindalco

Retails & Textile :

Arvind, Life Style Fashion, Timex, Santogen Export, Super Spinning, Suryajyoti

Shipping :

Mundra Port, SCI, GE Shipping, SEAM

Const. Material :

Hyderabad Industries

Chemicals,Paints :

Asahi Songwan, Vikram Thermo

Hotels & Tourism :

Hotel Leela, Indian Hotel, EIH Associated, ITH

Insurance & Housing Finance :

LIC Housing, HDFC, ICICI, GIC, Ind. Lease

Sugar :

Renuka, Riga Sugar, Bajaj Hind.,Uttam Sugar

Cement :

OCL, ACC, India Cement, Birla Corp

Engineering :

Rolta, Hind-Door, Batliboi

Food( Agri Base) :

Britannia, Nestle,GTC,ITC, Nutraplus,ADF Food

Logistics :

Aegis Log., Gati, GDL

Irrigation :

Rungta Irrigation, Jain Irrigation

Elect.Goods :

Salzer Electr.

E-Governance & IT Education :

Prithvi Info,NIIT, Aptech, NIIT Tech

Auto :

Maruti,Telco, Punjab Trac, M&M, VST Tillers

Pumps :

KSB Pump,Roto Pump

Paper :

BILT, AP Paper, Sirpur Paper

Medical Services :

Indraprasth Mediacal, Apollo Hospital, Span Diag.

Leather:

BATA, Mayur Leather, Liberty Shoes

Pesticides :

Excel Crop, Zuari Agro, Bayer Crop

Plastics :

Nilkamal,

Printing & Stationery:

Navneet Publications

Food Processing:

Usher Agro, Agro Dutch Ind., Ravalgaon Sugar, Quality Dairy, Satnam Overseas, Dawat.

 

 

 

Also Keep Eye on Jayaswal Neco, Hitachi Home, Rohit Ferro, Asian Oil Field, Assam Co., Sathwahna Ispat,Pyramid Retail, Ankur Drug, Oswal Chem, Crest Animation, Mphasis, DCB, Kabra Extrusion, India Glycol, VIP Ind,Viceroy Hotels, Max Ind, Voltas, Amar Raja, Garware Off, Sunil Hi-tech, GTL, BRFL, Jyoti, Tata Sponge, Shilp gravures, Avental Soft, Gujarat Gas from respective sectors.

 

May u all get profits in all scripts u have or u r going to trade.

With Best Wishes & Regards

__._,_.___
Regards

BigGains !!
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Posted by nsivaa at 5:42 AM 0 comments

DG - Highlights of Indian Railway Budget 2008-09

Highlights of Railway Budget 2008-09

February 26, 2008

Union Railway Minister Lalu Yadav presented the Railway Budget for 2008-09
in Indian Parliament on Tuesday.

Following are the highlights:

Review of performance: 2007-08

* Double digit growth in traffic earnings maintained in first nine
months.
* Growth in passenger earnings 14%.
* Expected growth in goods earnings 14%.
* Gross Traffic Revenues 16% higher than the previous year and 2%
higher than the Budget Estimates.
* Operating Ratio likely to improve from the budgeted 79.6 to 76.3 per
cent - best in last four decades.
* Return on Capital - an all time high of 21 per cent.
* Cash Surplus before dividend expected to be a record Rs.25,000 cr.
* Net Revenue expected at Rs. 18,416 cr and surplus after payment of
dividend expected at Rs.13,534 cr.

Budget estimates 2008-09

* Freight loading target: 850 million tones.
* Revenues in Freight earnings to be Rs.52,700 cr;? Passenger earnings
to be Rs.21,681 cr.
* Gross Traffic Receipts to be Rs.81,901 cr - an increase of 12.6 per
cent over RE.
* Cash surplus before Dividend to be Rs.24,783 cr after making an
ad-hoc provision of nearly Rs.5000 cr for anticipated recommendations of the
VI Central Pay Commission.

Annual Plan 2008-09

* The Annual Plan of Rs.37,500 cr is the largest ever Annual Plan so
far.
* Thrust areas include enhancement of high density network routes,
improvement and expansion of traffic facility and network, construction of
flyovers, bypasses and upgradation of goods-sheds.
* New Lines? - Rs.1,730 cr, Gauge conversion - Rs.2,489 cr,
Electrification - Rs.626 cr, Metropolitan Transport Projects - Rs.650 cr.
* Track renewal - Rs.3,600 cr, Bridges - Rs. 600 cr, Signal &
Telecommunication works -Rs.1,520 cr, Road over/under bridges - Rs. 700 cr
and manning of unmanned level crossings - Rs.600 cr.
* Passenger amenities - Rs. 852 cr, the highest so far.
* Targets : New Lines - 350 kms, Gauge conversion - 2,150 kms,
Doubling - 1000 kms.

Passenger services

Trains

* 10 new Garib Raths to be introduced.
* 53 pairs of new trains.
* Extension of trains : 16 pairs.
* Increase in frequency : 11 pairs.
* 300 additional services in Mumbai suburban.
* Special train from Anandpur Sahib and Patna Sahib to Gurudwara
Sachkhand Sahib during tercentenary function of Shri Guru Granth Sahib of
Gurta Gaddi.
* Special train between Pune and Delhi for Commonwealth Youth Games
being held in Pune from 12th-18th October this year.

Amenities

* Provision of on-line coach indication display board; on-line train
arrival departure information board; on-line reservation availability
information board.
* Provision of discharge-free green toilets in all 36,000 coaches in
XI Plan period at a cost of about Rs.4,000 cr.
* LHB design coaches for all Rajdhani and Shatabdi trains over next
few years.
* Provision of LHB coaches with stainless steel bogies in Mail/Express
trains.

Concessions

* Senior citizen concession for women enhanced to 50% from existing
30%.
* Free Monthly Seasonal Ticket to girl students up to graduation level
in place of 12th standard and for boys up to 12th standard in place of 10th
standard.

Improvements in ticketing

* Termination of queues at ticket counters targeted in two years.
* Ticket booking on mobile phones;? E-ticket for waitlisted
passengers.
* Increase in Unreserved Ticketing Systems counters to 15,000 and
ATVMs to 6000.

Reduction in passenger fares

* One rupee discount per passenger for fares up to Rs.50 in non
suburban Second Class (ordinary and mail/express)
* 5% discount across the board for passenger fares beyond Rs.50 for
all non suburban Second Class (ordinary and mail/express).
* Increase in discount for travel in new design high capacity reserved
coaches.
* Reduction in fare - AC-I : 7%; and AC-II : 4% (the reduction will be
half for popular trains and during peak period).

Freight business

Reductions & Concessions

* 5% reduction in freight rates for Petrol and Diesel.
* 14% reduction in freight rate of Fly-ash.
* Liberalisation of Traditional Empty Flow direction incentive scheme
* 30% discount on entire traffic in place of incremental traffic
booked from goods shed.
* Increase in discount on incremental traffic booked from private
sidings from 30% to 40%.
* 6% freight concession for traffic booked from other States for
stations in North Eastern States.

New Initiatives

* Target for loading fixed at 850 MT in 2008-09.
* Blue - Print prepared for High Density Network.
* Top priority being given to port rail connectivity projects.
* New and dedicated iron ore routes to be upgraded/constructed.
* Work on Eastern freight corridor from Ludhiana to Dankuni (Kolkata)
and Western freight corridor from Delhi to JNPT to start in 2008-09.
* Procurement of Rolling Stock: All time high of 20,000 wagons, 250
diesel and 220 electric locomotives to be manufactured.
* New Wagon Leasing Policy and Wagon Investment Scheme formulated to
increase availability of wagons in the system.
* Discounts for development of bulk and non-bulk goods terminals.

Safety & security

* Multi-pronged scheme to strengthen railway safety through various
automatic devices like anti-collision device etc.
* Rail accidents have reduced remarkably despite substantial increase
in gross traffic volumes.
* Fire resistant material to be used in coaches.
* Unmanned level crossings at busy sections to be manned on a fast
track basis.
* Integrated security plan drawn up through installation of CCTVs,
metal detectors etc.

Welfare measures

Social Welfare

* 99%? backlog vacancies for SCs/STs filled up in special campaign
launched since 2004.
* Appointment of candidates from SCs/STs/OBCs exceeded their
respective quotas in?Group D appointments.
* Minorities welfare cells to be opened at Railway Board and Zonal
Railways.
* One time exercise of appointing Railway Porters as gangmen and to
other Group D posts.
* Mother-Child Health Express to be run on a pilot basis at
concessional fares in collaboration with Rajiv Gandhi Foundation for
providing medical facilities to mother and child.

Staff welfare

* Per-capita contribution to Staff Benefit Fund to be increased by ten
times from Rs.35 to Rs.350 for 2008-09.
* Northern Railway Central Hospital at Delhi to be made centrally
air-conditioned.
* Two divisional hospitals at Jaipur and Hubli to be upgraded to
central hospitals.
* A new divisional hospital at Ranchi and an OPD block at Integral
Coach Factory to be constructed.
* Employees who joined Railways from other agencies/PSUs etc and are
eligible for pensionary benefits, would now be eligible for post retirement
complimentary passes as per the norms being set.

Future vision

* Vision 2025 document aims at setting the roadmap for coming 17 years
?omer centric and market responsive strategic initiatives.
* Information Technology Vision 2012 aims at radical changes in IT
applications on a common platform with focus on improvement in operational
efficiency, transparency in working ad better services to the customers.
* Multi-Departmental Innovation Promotion Group at Apex Level.
* Public-Private Partnership schemes to be launched for attracting an
investment of Rs.1,00,000 cr over the next five years for developing world
class stations, rolling stock ad other logistics.
* Commercial use of Railway land by Rail Land Development Authority to
give a boost to Railway Revenues.

Other important announcements

* A new rail coach factory to be set up in Kerala.
* A new wagon re-construction unit to be set up at Garkha in Chapra
District.
* Modernisation and development of Workshops at Jamalpur, Lilluah,
Perambur and Ajmer.
* Taking over of Mokama and Muzaffarpur wagon factories.
* Setting up of a 1000 MW thermal power plant, a joint venture of
Indian Rail Bijli Company Ltd. with NTPC,? at Nabinagar District of
Auragabad, Bihar.

__._,_.___
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Posted by nsivaa at 5:37 AM 0 comments
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