India at 40th in WEF

New Delhi: India has slipped four places to 40th position, out of 62 leading financial systems and capital markets, because of poor enforcement of contracts and low levels of liberalisation, says a World Economic Forum (WEF) report.

According to the fifth edition of the World Economic Forum's Financial Development Report 2012, India has been ranked 40th in the 2012 Index -- four-spot decline from last year (36 rank).

The report highlighted a poor record in enforcing contracts, low levels of liberalisation, inadequate IT and communications infrastructure and general high costs of doing business.

"Weak results in the institutional and business environment pillars continue to be driven by an inability to enforce contracts, a low degree of financial sector liberalisation, inadequate infrastructure, and a high cost of doing business" were largely responsible for the decline in India's ranking in the Index, the report said.

India has been ranked 9th out of the 15 Asia Pacific economies that were surveyed in the report.

India's comparative strength in the area of non-banking financial services was recognised in the report. It was ranked quite high in non-banking financial services (9th), but in terms of banking financial services it was placed in the 45th position.

The index was topped by Hong Kong for the second consecutive year, followed by the US, the UK, Singapore, Australia, Canada. There was no change in the ranking of the first six places this year as against last year.

"Globally, the Report found that a general stagnation in financial development, posing serious challenges to a global economic recovery," WEF said.

The general stability of the Index is further highlighted by Singapore, Australia and Canada maintaining their positions at 4th, 5th and 6th place, respectively.

The Netherlands fell two spots from 7th to 9th because of weakness in equity market development and banking system efficiency, while, Sweden jumped into this year's top 10 because of an improvement in retail access to capital.

"The Financial Development Report shows that financial systems in advanced and emerging economies are stalling," said Giancarlo Bruno, Senior Director at the World Economic Forum.

"Macroeconomic uncertainty, as well as concerns related to regulation, contributes to inhibiting the financial industry from funding much-needed growth," Bruno added

Oil Ministry Postpones CAG

The Oil Ministry has postponed a kick-off meeting scheduled for CAG to begin audit of Reliance Industries' KG-D6 spending, even as it continues to withhold approvals to the company's investment proposals.

The Comptroller and Auditor General of India (CAG) had called an Entry Conference with RIL and the Oil Ministry on Tuesday to begin its second round of audit that is to cover RIL's spending on KG-D6 gas fields during 2008-09 to 2011-12.

But the ministry on October 29 wrote letters calling off the October 31 meeting, sources privy to the development said.

The meeting, they said, was called-off due to differences over the nature and scope of audit to be conducted by CAG. 

RIL has sought written assurance that CAG scrutiny would be an "audit of accounting books and records" as provided under the Production Sharing Contract (PSC) and that the company would not be "required to provide documents, information or any clarification of matters which go beyond scope of audit under Section 1.9 of the Accounting Procedure of the PSC."

Also, it wants the audit to be carried at its premises and audit report be submitted to the Oil Ministry, as provided under PSC, and not to the Parliament.

The Ministry, however, wants RIL to give CAG "unfettered access to account books" and pending that it has not approved the company's investment proposals including annual budget for past three years.

Sources said the kick-off meeting was postponed so as to resolve these differences.

The Ministry had on October 23 written to RIL saying CAG would not do a performance audit of the company and that "all the government nominees" on the KG-D6 block oversight panel have "already approved" to all the development proposals made by RIL.

Sources, however, said the resolution approving annual capital expenditure on the KG-D6 block for 2010-11, 2011-12 and 2012-13 fiscal have not been signed yet.

While the Management Committee of KG-D6 block on August 7 approved annual plans pending for past three years, the resolution had not been signed. These capex included those on well interventions to reverse the trend of falling gas output.

Pending signing is the MC approved revised field development plan for MA oil and gas field in the same block. All these investments, RIL says, are necessary to reverse drop in output at the fields.

Also, at least three discoveries RIL has made in the block had not been declared commercial, a step necessary to begin production from them.

Sandy Strom Created Climate Change

WASHINGTON: Climate scientist Michael Oppenheimer stood along the Hudson River and watched his research come to life as Hurricane Sandyblew through New York.

Just eight months earlier, the Princeton University professor reported that what used to be once-in-a-century devastating floods in New York City would soon happen every three to 20 years. He blamed global warming for pushing up sea levels and changing hurricane patterns.

New York "is now highly vulnerable to extreme hurricane-surge flooding," he wrote.

For more than a dozen years, Oppenheimer and other climate scientists have been warning about the risk for big storms and serious flooding in New York. A 2000 federal report about global warming's effect on the United States warned specifically of that possibility.

Still, they say it's unfair to blame climate change for Sandy and the destruction it left behind. They cautioned that they cannot yet conclusively link a single storm to global warming, and any connection is not as clear and simple as environmental activists might contend.

"The ingredients of this storm seem a little bit cooked by climate change, but the overall storm is difficult to attribute to global warming," Canada's University of Victoria climate scientist Andrew Weaver said.

Some individual parts of Sandy and its wrath seem to be influenced by climate change, several climate scientists said.

First, there's sea level rise. Water levels around New York are a nearly a foot (0.3 meters) higher than they were 100 years ago, said Penn State University climate scientist Michael Mann.

Add to that the temperature of the Atlantic Ocean, which is about 2 degrees Fahrenheit (.8 degrees Celsius) warmer on average than a century ago, said Katharine Hayhoe, a climate scientist at Texas Tech University. Warm water fuels hurricanes.

And Sandy zipped north along a warmer-than-normal Gulf Stream that travels from the Caribbean to Ireland, said Jeff Masters, meteorology director for the private service Weather Underground.

Meteorologists are also noticing more hurricanes late in the season and even after the season. A 2008 study said the Atlantic hurricane season seems to be starting earlier and lasting longer but found no explicit link to global warming. Normally there are 11 named Atlantic storms. The past two years have seen 19 and 18 named storms. This year, with one month to go, there are 19.

After years of disagreement, climate scientists and hurricane experts have concluded that as the climate warms, there will be fewer total hurricanes. But those storms that do develop will be stronger and wetter.

Sandy took an unprecedented sharp left turn into New Jersey. Usually storms keep heading north and turn east harmlessly out to sea. But a strong ridge of high pressure centered over Greenland blocked Sandy from going north or east, according to the National Hurricane Center.

Jennifer Francis of Rutgers University, an expert in how a warming Arctic affects extreme weather patterns, said recent warming in the Arctic may have played a role in enlarging or prolonging that high pressure area. But she cautioned it's not clear whether the warming really had that influence on Sandy.

While components of Sandy seem connected to global warming, "mostly it's natural, I'd say it's 80, 90 percent natural," said Gerald North, a climate professor at Texas A&M University. "These things do happen, like the drought. It's a natural thing."

On Tuesday, both New York Mayor Michael Bloomberg and Gov. Andrew Cuomo said they couldn't help but notice that extreme events like Sandy are causing them more and more trouble.

"What is clear is that the storms that we've experienced in the last year or so, around this country and around the world, are much more severe than before," Bloomberg said. "Whether that's global warming or what, I don't know. But we'll have to address those issues."

Did cyclone Neelam reach in Tamil Nadu

Chennai: A weather department official informed that cyclone Neelam over Bay Bengal is expected to cross between Tamil Nadu and Andhra Pradesh coasts on Wednesday evening.

The cyclone is now around 340 km south-southeast of Chennai and is moving. "Neelam is expected to cross the coast between Cuddalore (Tamil Nadu) and Nellore (Andhra Pradesh) today (Wednesday) evening," the weather official said.

According to the weatherman, rainfall is expected at most places over coastal Tamil Nadu and Andhra Pradesh.

Wind speed would reach around 80 kmph and prevail along and off north Tamil Nadu, Puducherry and adjoining south Andhra Pradesh coasts as Nilam nears its landfall.

The sea condition will be rough along and off north Tamil Nadu, Puducherry and south Andhra Pradesh coasts during the next 36 hour. 

Storm surge of about 1 to 1.5 metre over the astronomical tide is likely to inundate the low lying areas of Chennai, Kanchipuram and Tiruvallur districts in Tamil Nadu and Nellore district of Andhra Pradesh.

Standing crops - paddy, groundnut and maize - in coastal districts of Tamil Nadu and Andhra Pradesh are likely to be damaged, said a weather bulletin.

The Tamil Nadu government has announced holiday for schools and colleges in the coastal districts.

9th Film Festivel of Tamil Nadu

International Tamil Film Academy in association with the famous
Tamil film production house Seventh Channel Communications organize their annual
FILM FESTIVAL OF TAMILNADU (INTL.) for the NINTH Consecutive year.

Film Director Mr.Ameer Inaugurates the function in the presence of
Ms.Lakshmi Ramakrishnan (Film Director)
Ms.Oviya Actress will light the “Kuthuvilakku”

VENUE : DEVISRIDEVI THEATRE

Apple 's iPad mini packs screen

SAN FRANCISCO: Apple Inc's entry in the accelerating mobile tablet race squeezes about 35 per cent more viewing space onto a lighter package than rival devices from Google or Amazon.com Inc, but it sports inferior resolution and a lofty price tag, two influential reviewers wrote on Tuesday.

The iPad mini, which starts at $329 versus the $199 for Google's Nexus 7 and Amazon's Kindle Fire HD, is easy to hold with one hand, eliminating a drawback of the 10-inch iPad, Wall Street Journal columnist Walt Mossberg wrote in one of the first major reviews of a gadget introduced last week.

Both Mossberg and New York Times columnist David Pogue offered kudos for cramming most of its full-sized cousin's functions onto a smaller device, as advertised.

But the iPad mini's 1024 x 768 resolution was a big step backwards from the iPad's much-touted Retina display, and underperformed the rival Kindle and Nexus, the two reviewers agreed.

Mossberg said Apple chose to go with a lower-quality display because the existing 250,000-plus iPad applications could only run unmodified in two resolutions - and the higher level would have sapped too much power.

"The lack of true HD gives the Nexus and Fire HD an advantage for video fans. In my tests, video looked just fine, but not as good as on the regular iPad," Mossberg wrote.

Votes Against JSPL

In a rare display of resentment against rising executive pay in corporate India, institutional shareholders of Jindal Steel and Power Limited (JSPL) have voted against a resolution authorising the chairman and managing director to revise the remuneration of wholetime directors.

Naveen Jindal, chairman and managing director, was the country’s highest-paid executive with a package of ~73.42 crore for the year ended March 31, 2012.

In the 33rd annual general meeting held in Hisar, Haryana, on September 26, 101.41 million or 97 per cent of the institutional votes polled were against the resolution, an exchange filing by the company showed.

HSBC Global Investment Funds, ICICI Prudential Life insurance and Lazard are the institutions which hold over one per cent in the company.

Institutional shareholders own 262 million shares in the company according to the filing accounting for 28 per cent in the company.

Of these, only around 40 per cent of the shareholders exercised their vote, with 104.56 million votes polled. Of these, 101.41 million votes were against the resolution, while the remaining three million voted in favour.

Of the non-institutional shareholders who participated in the poll, 132,355 or 99 per cent voted in favour of the resolution.

Though the resolution was passed because the promoter shareholders held 65 per cent equity and voted in favour, the results showed there is a case for interested parties to recuse themselves from such resolutions, say proxy advisory groups.

“In my opinion, such a move by institutional shareholders had not been seen before,” said J N Gupta, founder of Stakeholders Empowerment services, a Mumbai-based advisory firm.

Advisory firm SES had published an advisory against the resolution in September.

"The entire remuneration policy of the company is opaque...The resolution can lead to a conflict of interest situation," it had said in a client note.

Though some institutions seemed to have heeded this call as the poll results showed, promoter group shareholders, who hold 530 million shares, voted in favour of the resolution, taking it through.

“Although the resolution was carried through as the owners had majority, it shows that efforts can work,” Gupta added.

Total Votes Votes Votes % shares polled against for against Institutional 262.59 104.56 101.41 3.15 96.99

Non-institutional 120.47 0.13 0 0.13 0.52

Promoters 551.76 524.34 0 524.34 0

Numbers in million Source: Company filings UNWILLING TO PLAYBALL

Voting in JSPL’s AGM on a resolution to authorise CMD to revise directors pay

Sovereign, Pension Funds to get Special Treatment

To encourage sovereign wealth funds (SWFs) and pension funds to invest in the Indian debt market, the Securities and Exchange Board of India (Sebi) is working on a framework to give these preferential treatment. Currently, these investors, who typically invest for the long term, do not have significant investments in the Indian debt market.

Sebi has given in-principle approval to suggestions by market entities that preferential treatment be given to longterm investors, such as SWFs and pension funds while allocating debt limits. China gives preferential allotment to SWFs in debt limits for foreign institutional investors (FIIs).

According to people privy to the development, Sebi is working on an administrative framework to allow discretionary allotment to these investors. The regulator might consider a separate limit within the current FII debt limit. It might also have to set up a separate dispensation framework to differentiate these investors and provide them greater flexibility.

SWFs are government-controlled special purpose investment funds investing in a variety of assets. SWFs from select countries are given more flexibility while investing in listed companies. They have an investment cap of 20 per cent, against 10 per cent for other investors.

Experts said the move would encourage such funds to invest in high-yielding Indian paper. The domestic debt market would benefit, as these investors typically make large-size investments for relatively longer terms. “It is necessary to attract real long-term money into the country. Currently, only a small block of the investment limit is available to foreign investors. If SWFs and pension funds are to be attracted, a larger limit and greater flexibility would be needed,” said Hitendra Dave, managing director and head of global markets (India), HSBC.

“Sovereign funds are still not making any significant investment in the debt market. Preferential treatment would be good encouragement to ensure their participation,” said Ajay Manglunia, senior vice-president of Edelweiss Financial Services.

Chennai: The deep depression which had formed in the Bay of Bengal has intensified into a cyclone. The cyclone, which has been named Nilam, will cross Nagapattinam and Nellore (South Andhra Pradesh) tomorrow evening.

The wind speed will be around 80kmph and could rise to 100 kmph when the Cyclone Nilam hits. The IMD is expecting the storm surge to be around 1 metre. Low lying districts of Chennai, Kanjipuram are in danger of being inundated.  

Chennai is witnessing rains and the MET department has forecast heavy rain in the region till tomorrow. A holiday has been issued for schools and  colleges in Chennai, Nagapattinam, Cuddalore, Kanchepuram districts and Union Territory of Puducherry.

Fishermen in Nagapattinam, Chennai and Puducherry have been asked to not venture into the sea.

Authorities in both Tamil Nadu and Puducherry are gearing up for cyclone Nilam.

"The district has a clear contingency plan; each department including the police, fire and rescue services have been allotted specific work like clearing fallen trees, evacuating people etc. and  all 21 cyclone shelters are  ready," the Collector of Nagapattinam Mr T Munusamy told NDTV.

Chennai Corporation Commissioner Dr D Karthikeyan has said that the city is prepared for the cyclone. "All field officials have been asked to stay in their field offices at night; 280 corporation schools and 4 community kitchens are ready to be used as temporary relief centres; police and corporation officials would work together; we will move boats to vulnerable areas as well," Dr Karthikeyan said. 

Goods & Service Tax

The Centre should get out of commodity taxation, perhaps with the exception of items such as petroleum, tobacco and telecom.

The Centre should be more liberal if it wants to get the States on board to implement a nationwide goods and services tax (GST) from the coming financial year. There are two main reasons for it. The first is that the finances of most State Government are in a disarray today, after having registered significant improvement during the period from 2003-04 to 2007-08. That was also the time when they moved from a sales tax to a value-added tax regime. Since this transition happened while the Indian economy was booming, the revenue buoyancy accompanying it ensured that the States’ fiscal interests were more than taken care of. It is different now, with a slowing economy that has impacted revenue collections as well. The Centre has to, therefore, be flexible enough in addressing concerns expressed by the States, especially with regard to revenue losses arising from a switchover to GST. Here, it has to weight the trade-offs between compensating the States fairly for such losses and the gains for the overall economy resulting from a GST regime.

The second reason has to do with the existing scheme of taxation itself, which is rather biased in the Centre’s favour. The latter currently taxes manufacture (excise), imports (customs), incomes (both of individuals and companies) and even services. That largely leaves only taxation on sales with the States. This system is both iniquitous and distortionary, as it leads States to impose all sorts of cascading levies to make up for their otherwise limited powers of taxation. The proposed GST is certainly an improvement, as it gives equal power to the Centre and the States to tax all goods and services based on the ‘destination principle’. That essentially means only the final consumer of the good or service paying the full tax, with sellers collecting taxes at each stage and setting these off against what they paid on their inputs. By subsuming all taxes under just two heads – a Central GST and a State GST – the proposed multi-stage value-added tax on goods and services would avoid the problems of multiple and cascading rates inherent in the present regime.

Ideally speaking, it would be even better if the Centre were to leave commodity taxation entirely to the States, while retaining the powers to tax only personal/corporate earnings and select high-value items (petroleum products, tobacco and telecom services, say) with itself. The revenues from these should suffice for it to discharge essential functions relating to Defence or fiscal transfers to poorer States. But since we are in a far-from-ideal world, it makes sense to push for the second-best solution of a dual-GST now. Here, the lead should come from the Centre, especially when the main opposition Bharatiya Janata Party now seems more favourably disposed to the idea. Evolving a bipartisan consensus is something it should strongly strive for.

Section 159 of Companies Act,1956

The provisions pertaining to filing of Annual Return (Schedule V and Form 20 B) by a company are contained in section 159 of the Companies Act, 1956.

 

A plain reading of the section suggests that a company has to file complete list of its shareholders once in a block of five years.

 

However, the detail of all Share Transfers that took place after the last A G M till current A G M. has to be filed every year.