Axis Hybrid Fund – Series 3 Announces Maturity

The maturity date of the scheme is 06 October 2014 

Axis Mutual Fund has announced that the Axis Hybrid Fund – Series 3 is maturing on 06 October 2014 (being the record date) and accordingly, units shall be suspended from trading on the NSE or the immediately following business day if that day is not a business day (as 06 October 2014 is non-business day, the maturity date has been extended to 07 October 2014). 

The maturity date / record date for determining unit holders entitled for maturity proceeds under Axis Hybrid Fund – Series 3 as per the stock exchange (NSE) requirement is 01 October 2014. 

Tata Tax Savings Fund Announces Introduction of Growth Option

With effect from 13 October 2014 

Tata Mutual Fund has proposed to introduce Growth Option under Tata Tax Saving Fund, an equity linked tax savings scheme (ELSS), with effect from 13 October 2014. 

Investments in growth option will be subject to a lock-in period of three years.

Tata MF Announces Change In Exit Load Structure Under Two Schemes

With effect from 01 October 2014

Tata Mutual Fund has announced change in exit load under Tata Ethical Fund and Tata Short Term Bond Fund, with effect from 01 October 2014. 

Accordingly the revised exit load will be: 

Tata Ethical Fund: If redeemed on or before 540 days from the date of allotment, the exit load will be 1.00%. 

Tata Short Term Bond Fund: If redeemed on or before expiry of 90 days from the date of allotment, the exit load will be 0.50%. 

SBI MF Announces Rollover of SBI Capital Protection Oriented Fund – Series III

The scheme shall mature on 10 November 2014

SBI Mutual Fund has announced rollover of SBI Capital Protection Oriented Fund – Series III. 

The scheme will be rolled over for a period of 32 days, accordingly the revised maturity date of the scheme will be 10 November 2014. 

UTI MF Announces Rollover & Extension of UTI Fixed Term Income Fund – Series XVI – VIII (368 Days)

The scheme shall mature on 25 October 2016 

UTI Mutual Fund has announced rollover and extension of maturity under UTI Fixed Term Income Fund - Series XVI - VIII (368 Days), a close ended income scheme which is scheduled to mature on 13 October 2014. 

The features of the proposed rollover are as follows: 

Period of rollover: The scheme has been extended by 743 days with total tenure of 1111 days. 

Date of Maturity for rollover: 25 October 2016.

Sundaram Fixed Term Plan – GL (1120 Days) Floats On

NFO Period is from 30 September to 07 October 2014 

Sundaram Mutual Fund has launched a new fund named as Sundaram Fixed Term Plan – GL, a close ended income scheme with the duration of 1120 days from the date of allotment of units. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue will be open for subscription from 30 September and closes on 07 October 2014. 

The objective of the Scheme would be to generate income by investing in debt and money market securities, which mature on or before the maturity of the scheme. 

The scheme offers growth and dividend payout (quarterly & half yearly) options. 

The scheme will allocate upto 30% of assets in money market instruments and invest 70%-100% of assets in short-term and medium term debt instruments with low to medium risk profile. 

The minimum application amount is Rs 5000 and in multiples of Rs 10 thereafter. 

The fund seeks to collect a minimum subscription amount of Rs 20 crore under the scheme during the NFO period. 

The scheme is proposed to be listed on NSE. 

Entry load: Nil 

Exit load: Not applicable. 

The scheme's performance will be benchmarked against Crisil Short Term Bond Fund Index. 

The scheme will be managed by Sandeep Agarwal. 

Birla Sun Life Fixed Term Plan – Series LZ (1099 Days) Floats On

NFO period is from 30 September to 08 October 2014 

Birla Sun Life Mutual Fund has launched a new fund named as Birla Sun Life Fixed Term Plan – Series LZ (1099 days), a close ended income scheme. The tenure of the scheme is 1099 days from the date of allotment of units. The new fund offer (NFO) price for the scheme is Rs 10 per unit. The new issue will be open for subscription from 30 September and close on 08 September 2014. 

The investment objective of the scheme is to seek to generate income by investing in a portfolio of fixed income securities maturing on or before the duration of the scheme. 

The scheme offers two options viz. growth and dividend option with Normal Dividend sub-option (Payout Facility) and Quarterly Dividend sub-option (Payout Facility). 

The scheme would invest 80%-100% of assets in debt securities (excluding money market instruments), invest upto 20% of assets in money market instruments with low to medium risk profile and invest upto 20% of assets in government securities with low risk profile. 

The minimum application amount is Rs 5000 and in multiples of Rs 10 thereafter. 

The fund seeks to collect a minimum subscription (minimum target) amount of Rs 20 crore under the scheme during the NFO period. 

Entry and exit load charge will be nil. 

Benchmark Index for the scheme is CRISIL Composite Bond Fund Index. 

The fund manager of the scheme will be Kaustubh Gupta. 

India's external debt stands at US$ 450.1 billion at end June 2014

External debt rises by US$ 7.9 billion in April-June 2014 

India's external debt, as at end-June 2014, was placed at US$ 450.1 billion showing an increase of US$ 7.9 billion or 1.8% over the level at end-March 2014. 

Of the total absolute increase of US$ 7.9 billion in total external debt, a marginal increase of about US$ 0.4 billion during the quarter was on account of valuation change, reflecting a marginal depreciation of the US dollar against the Indian rupee and other major currencies. 

The increase in total external debt was primarily on account of rise in commercial borrowings by US$ 6.3 billion over end-March 2014. Outstanding NRI deposits with a rise of US$ 2.4 billion over end-March 2014 were the second largest source of increase in India's external debt. 

In terms of major components, the share of commercial borrowings continued to be the highest at 34.2% of total external debt, followed by NRI deposits (23.6%) and short-term debt based on original maturity (19.5%). 

The share of short-term debt in total debt witnessed a decline over the preceding quarter as well as the corresponding quarter of the previous year. Short-term debt at US$ 87.9 billion accounted for 19.5% of the total external debt as at end-June 2014 as compared to 20.2% at end-March 2014. 

With decline in short-term debt, the ratio of short-term debt (original maturity) to foreign exchange reserves declined to 27.8% as at end-June 2014 from 29.3% as at end-March 2014. Similarly, on residual maturity basis, the ratio of short-term debt to foreign exchange reserves worked out to 55.3% at end-June 2014 as compared with 57.4% at end-March 2014. 

The US dollar denominated debt continued to be the largest component of India's external debt with a share of 61.1% as at end-June 2014, followed by Indian rupee (22.1%), SDR (6.8%), Japanese Yen (4.9%) and Euro (3.1%). 

Government (Sovereign) external debt stood at US$ 85.4 billion as at end-June 2014 as against US$ 81.5 billion as at end-March 2014. The shares of Government and non-Government external debt in the total external debt were 19.0% and 81.0%, respectively, as at end-June 2014.

FPIs resume buying

Net inflow of Rs 231.59 crore on 29 September 2014 

Foreign portfolio investors (FPIs) bought shares worth a net Rs 231.59 crore on Monday, 29 September 2014, as against outflow of Rs 245.94 crore on Friday, 26 September 2014. 

The net inflow of Rs 231.59 crore on 29 September 2014 was a result of gross purchases of Rs 2665.36 crore and gross sales of Rs 2433.77 crore. There was a net inflow of Rs 210.78 crore into the secondary equity market on 29 September 2014, which was a result of gross purchases of Rs 2644.55 crore and gross sales of Rs 2433.77 crore. The S&P BSE Sensex had lost 29.21 points or 0.11% to settle at 26,597.11 on that day, its lowest closing level since 25 September 2014. 

There was a net inflow of Rs 20.81 crore into the category 'primary market & others' on 29 September 2014. 

FPIs have bought shares worth a net Rs 5102.52 crore in this month so far (till 29 September 2014). They have bought shares worth a net Rs 4137.79 crore from the secondary equity markets in this month so far. FPIs bought shares worth a net Rs 5429.76 crore in August 2014. They bought shares worth a net Rs 3101.70 crore from the secondary equity markets in that month. 

FPIs have bought shares worth a net Rs 83437.70 crore in this calendar year so far (till 29 September 2014). They have bought shares worth a net Rs 75482.10 crore from the secondary equity markets in this year so far. 

Fitch: India Supreme Court Ruling to Hit Steel, Utility Earnings

The 24 September Supreme Court of India (SCI) decision to cancel almost every coal block allocation since 1993 will have a negative financial impact on a number of Indian power and steel companies, says Fitch Ratings. The decision is broadly credit negative for these sectors, but should have no impact on the ratings of any Fitch-rated steel or power sector corporates. 

The decision to cancel 214 of 218 coal licences follows a ruling in August in which the SCI declared the licence allocation process as arbitrary and illegal. The cancelled licences include 46 producing or near-production blocks, and are owned largely by power and steel sector companies. The producing mines will be allowed to continue operations until March 2015, at which point they will be handed back to state firm, Coal India Limited, until they are sold as part of a new auction process. 

Companies with cancelled licences will not receive any compensation on account of development expenditure incurred to date, meaning these will have to be written off. They can bid for the same coal blocks when they come back on the market, while it will be an open bidding process. Furthermore, they will now have to pay for externally sourced coal, resulting in higher operating costs. The SCI's decision also levies a fine of INR295/tonne on coal produced to date from the mines affected, which could amount to INR73bn (USD1.2bn).

The negative financial impact will vary significantly depending on the company. Current credit profiles are likely to remain intact for Fitch-rated steel and power companies. The ruling has no immediate direct impact on Tata Steel Limited (BB+/Stable) and Steel Authority of India Limited (SAIL, BBB-/Stable). All but one of their operational coal mines were allocated before 1993, which are exempt from the decision. In addition, SAIL's one operational mine which was allocated after 1993 was one of the four licences upheld by the SCI as valid. The cancellation of non-operational coal licenses will not hurt credit profiles, as these have not been factored into Fitch's long-term financial projections for these companies.

Power company NTPC Limited (BBB-/Stable) could be more vulnerable to the decision, though Fitch maintains that the broader impact will still be relatively small. Pakhri Barwadih, an NTPC mine nearing production, has been exempt from the cancellation. The status of the other nine of NTPC's 10 coal blocks is uncertain, as it is not very clear if they are also exempt - owing to the fact that NTPC is a state-owned entity. The company had expected that its captive mines would be able to serve 4.3% of its coal requirements in FY15 - rising further to 15% by FY17. 

The potential long-term effects of the decision on the wider power and steel sectors will depend largely on how quickly the government proceeds with re-auctioning the licences. This could lead to more efficient development of these coal blocks in the long term should the new process go quickly. Uncertainty regarding the original allocation process had previously contributed in part to the underdevelopment and utilisation of these blocks. 

However, it is important to highlight that a new and transparent auction process is just one factor needed to boost coal production in India. Other key challenges remain, including tough environmental clearances and regulatory approvals.

RBI maintains status quo, reduces the liquidity provided under the ECR to 15%

Fourth Bi-Monthly Monetary Policy Statement, 2014-15 

In the Fourth Bi-Monthly Monetary Policy Statement, 2014-15, on the basis of an assessment of the current and evolving macroeconomic situation, RBI has decided to: 

•keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0 per cent; 

•keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL); 

•reduce the liquidity provided under the export credit refinance (ECR) facility from 32 per cent of eligible export credit outstanding to 15 per cent with effect from October 10, 2014; 

•continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 7-day and 14-day term repos of up to 0.75 per cent of NDTL of the banking system through auctions; and 

•continue with daily one-day term repos and reverse repos to smooth liquidity. 

Consequently, the reverse repo rate under the LAF will remain unchanged at 7.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 9.0 per cent. 

RBI maintains key policy rates steady

Growth target maintained, still sees upside to medium term inflation objective 

The Reserve Bank of India has realsed the Fourth Bi-Monthly Monetary Policy review on 30 September. The key highlights of the monetary policy are as follows: 

* Repo rate unchanged at 8.0%; 

* CRR unchanged at 4.0% 

* Reduced export credit refinance (ECR) facility from 32% of eligible export credit outstanding to 15% with effect from 10 October 2014; 

* Liquidity under overnight repos at 0.25% maintained 

* liquidity under 7-day and 14-day term repos of up to 0.75% of NDTL Maintained 

Assessment
 
* Since the third bi-monthly monetary policy statement of August 2014, global activity has been recovering slowly from the setback in Q1 of 2014 

* Domestic activity appears to have come off somewhat after the stronger-than-expected upturn in Q1 of 2014-15. 

* Rainfall from the south west monsoon, now expected to be about 12% deficient, will weigh on the kharif crop, mainly due to its uneven spatial distribution. 

* In the services sector, constituents are moving at varying speeds and the purchasing managers' index points to uncertainty around future prospects. 

* The resumption of stalled projects should provide a boost to inventory and capex cycles, while reducing distressed bank loans and revitalizing growth. 

Inflation
 
* Food prices and the timing and magnitude of held back administered price revisions impart some uncertainty to an otherwise improving inflation outlook, where lower oil prices, a relatively stable currency, and a negative output gap continue to put downward pressure. 

* Base effects will also temper inflation in the next few months only to reverse towards the end of the year. The Reserve Bank will look through base effects. 

Liquidity conditions
 
* Liquidity conditions have remained broadly balanced through Q2 of 2014-15, except for transient tightness in the second half of July and early August due to delayed Government expenditure. 

Bank credit
 
* Non-food credit growth decelerated in September 2014, the lowest level since June 2001 

* Partly, this sharp deceleration is on account of a high base – monetary tightening to curb the exchange market pressures in July-September last year raised interest rates on alternative sources of funds and pushed up the demand for credit from the banking system. 

* Also, a few banks have sold stressed loans to asset reconstruction companies, and so these loans no longer appear as bank credit. 

* Net bank credit is also lower because of repayments of loans by entities that have received payments by government departments and public enterprises, and because oil marketing companies' borrowing is lower. 

* Going forward, as the investment cycle gathers momentum and overall demand picks up, banks will need to prepare to meet financing requirements as the credit cycle also turns. 

Current Account
 
* Current account deficit, placed at 1.7% of GDP for Q1 of 2014-15 may remain contained in Q2. 

Policy Stance and Rationale
 
* With international crude prices softening and relative stability in the foreign exchange market, some upside risks to inflation are receding. 

* Yet, there are risks from food price shocks as the full effects of the monsoon's passage unfold, and from geo-political developments that could materialise rapidly. 

* Turning to the medium-term objective (6% by January 2016) the balance of risks is still to the upside, though somewhat lower than in the last policy statement. 

* This continues to warrant policy preparedness to contain pressures if the risks materialise. 

GDP
 
* The momentum of activity in all sectors of the economy is yet to stabilize. 

* The projection of growth for 2014-15 is retained at 5.5% within a range of 5 to 6% around this central estimate. 

* The quarterly growth path may slow mildly in Q2 and Q3 before recovering in Q4. 

* The fifth bi-monthly monetary policy statement is scheduled on 02 December 2014.

RBI announces slew of regulatory and developmental measures

SLR-HTM to be reduced 200 bps gradually to 22% by Sept 2015 

The Reserve Bank of India (RBI) in its Fourth Bi-Monthly Monetary Policy Review has announced slew of regulatory and development measurers: 

Financial Structure
  
* Final guidelines on licensing of on Small Banks and Payments Banks will be issued by end-November 2014. 

* Changes in the regulatory framework for NBFCs will be introduced by end-October 2014. 

* Revised NBFC regulatory framework covers prudential regulations on core capital, asset classification and provisioning norms, regulation on deposit acceptance, corporate governance and consumer protection measures. 

* With these changes coming into force, the Reserve Bank will recommence registering new NBFCs. 

Regulatory and supervisory initiatives
 
* Final guidelines for monitoring tools for intra-day liquidity management will be issued in October 2014. 

* Revised guidelines on a leverage ratio (LR) framework and attendant disclosure requirements, drawing on the BCBS's January 2014 paper, will also be issued by end-October 2014. 

Early Warning System (EWS) 
 
* Along with early detection mechanisms for frauds, a Central Fraud Registry is also proposed to be created simultaneously as a searchable centralized database for use by banks. 

* Guidelines for declaring borrowers as “non-co-operative” will be put out by end-October 2014. 

Financial Markets
 
* Scheduled urban co-operative banks (UCBs) allowed access to liquidity adjustment facility (LAF). Detailed guidelines by mid-October 2014. 

Government securities market
 
* Bring down the ceiling on SLR securities under the HTM category from 24% of NDTL to 22% in a graduated manner i.e. 23.5% by 10 January 2015, 23.0% by 04 April 2015, 22.5% by 11 July 2015 and 22.0% by 19 September 2015. 

* Permit re-repo of Government securities subject to appropriate control measures and development of IT infrastructure. Detailed guidelines by end- January 2015. 

Foreign portfolio investors and long-term foreign investors
 
* Provide extended reporting timings for trade in government securities. Detailed guidelines by end-November 2014. 

Hedging of foreign exchange risk
 
* Increased the eligible limit for importers under the past performance route to 100% from the existing 50%.

PE investments in India continue the good run, up by 7% in Q2'14

PE exits surged over three times to US$ 1.06 billion in Q2'14 over Q1'14 

The private equity investments in India sustained their past performance for the second quarter of the year (April to June 2014). PE firms invested US$ 2.83 billion across 95 deals, registering a growth of 7% in value over the preceding quarter. However, there was a 20% drop in volume in this period. In the previous quarter (Jan-Mar 2014), investments were worth US$ 2.65 billion from 119 deals. The findings are part of the PwC MoneyTree India report, a quarterly study of private equity investment activity based on data provided by Venture Intelligence. 

Compared against the same period last year, i.e., Q2'13, the value of deals dropped by 41% and 23% by volume. In Q2'13, the value of investments were US$ 4.83 billion from 124 deals. 

Interestingly, with just eight deals the banking, financial services & insurance (BFSI) sector dominated the second quarter of 2014 in terms of value with US$ 977 million worth of investments, registering more than a ten-fold jump compared to the previous quarter and a 14% surge from the same period last year. During the first quarter of the year, the sector saw US$ 92 million in 11 deals, while it was US$ 857 million in the same period last year. 

The IT & IT-enabled services (ITeS) sector has emerged second in terms of invest¬ment 
value with investments of US$ 728 million and top in terms of volume with 42 deals. This is a 22% decline as compared to the previous quarter in value, but a 52% rise from Q2'13. In the previous quarter, the sector attracted US$ 939 million in 49 deals, while during the second quarter of last year, it saw US$ 480 million in 42 deals. 

Unlike previous quarters, the sector saw early-stage deals with better values. The average early-stage deal value for this quarter was US$ 5.4 million as against the 1 million to US$ 3 million deals during the last two years. 

Sandeep Ladda, leader, Technology, PwC India said, "The optimism in private equity investing is visible with the strong inflow of investments, which we hope will continue in the coming quarters. Within technology, the online services segment plays the role of differentiator as some of the companies have outpaced other sectors with astounding growth prospects. The recent large deals in Flipkart and Snapdeal can be seen as a beginning of this". 

The healthcare & life sciences sector has once again captured the attention of investors, with investments totalling US$ 576 million in 11 deals, an increase of more than six fold from the previous quarter's US$ 93 million from the same number of deals. In Q2'13, the investments in this sector were US$ 270 million from 19 deals. 

Energy, manufacturing and engineering & construction are the three major sectors that recorded a considerable decline in terms of deal value. 

In Q2'14, PE investments in the late stage have outshined both the growth stage as well as private investment in public equity (PIPE) investments with US$ 1.21 billion investments in 30 deals. Growth deals, with an investment of US$ 877 million from 28 deals, ranks second in terms of value. PIPE deals have shown over twofold growth in this quarter vis-à-vis the prior quarter in value, from 255 million to US$ 627 million from 11 deals as compared to the prior quarter's 21 deals. 

Mumbai has retained its top slot among regions in terms of attracting PE investments, despite a 26% and 60% drop in terms of value as compared to the last quarter and the same period last year, respectively. The city hosted funding of US$ 705 million in 22 deals. 

Chennai has emerged as the second best investment destination with US$ 547 million from just eight deals, a growth of more than fivefold from the previous quarter. The National Capital Region (NCR) has slipped to third position, recording US$ 491 million funding in 21 deals. 

Private equity exits
 
The exit activity in the second quarter of 2014 has achieved an improvement of more than threefold in terms of value and twofold in terms of volume. Total exits were worth US$ 1.06 billion in this quarter in 37 deals while in Q1'14, PE exits were worth US$ 300 million from 18 deals. When compared to the same period last year, exits have shown a decline of 45% and 12% in value and volume respectively. In Q2'13, there were 42 exits worth US$ 1.94 billion. 

The majority of the exits in Q2'14 came from the healthcare & life sciences and manufacturing sectors which together contributed almost 80% to the total exit value and 27% to the total volume. 

In this quarter, almost 50% of the exits by value have been through public market sale (US$ 519 million from 25 deals). Exits through strategic sale reported the next highest share, with US$ 334 million from nine deals. 

Ind-Ra: Coal Block Cancellation Could Impact GDP Growth Adversely

India Ratings & Research (Ind-Ra) believes that the coal block cancellation by the Supreme Court (SC) could adversely impact India's nascent economic recovery. 

On 24 September, the Supreme Court (SC) cancelled 214 coal blocks allocated since 1993.

However, it has allowed four coal blocks to continue operations, one belonging to The National Thermal Power Corporation and Steel Authority of India, each and the two allotted to Ultra-Mega Power Projects (UMPP). The SC has allowed these cancelled blocks to continue extracting coal till 31 March 2015. The central government and Coal India Limited (CIL) are expected to come out with a policy for the new situation. 

At the same time, the SC has imposed a levy of INR295/metric ton of coal extracted till now by all cancelled block holders and this has to be paid by 31 December 2014. The coal extracted between 1 January 2015 and 31 March 2015 will also attract a levy of INR295/metric ton. 

The SC ruling on coal blocks is similar to its earlier ruling of cancellation of 2G licences in February 2012. While the SC ruling may help in cleaning the rot and could pave the way forward for a transparent system of selling natural resources; it will have an immediate effect on a number of stakeholders and also the overall economy. The impact of this ruling will be felt across various channels and lead to a rise in non-performing assets of the banking sector, an increase in the cost of coal and in turn a rise in power tariffs, pressure on current account/currency and finally on overall inflation in the economy. Besides impacting economic recovery this could also pose challenges for the macroeconomic stability of the economy. 

While the ruling will have a direct impact on corporates with allocated coal blocks, the tremors will be felt on state governments as well. 

Here's a detailed analysis of the impact: 

Fiscal Impact: While there may be some windfall gain for the central government this fiscal from the additional levy imposed. However, six states' finances would be affected by this ruling. West Bengal is likely to be the worst affected, as six operating coal blocks allocated to various state government companies have been cancelled. One operating coal block allotted to each state government company from Arunachal Pradesh, Karnataka, Madhya Pradesh, Punjab and Rajasthan has been cancelled. These state government companies now have to pay an additional levy on coal extracted by them. These companies' accounts are not consolidated with the state's balance sheet; however, in case of stress on the individual balance sheet of these companies, the state governments have to support them for their operations. 

Impact on the Banking Sector: According to the counsel of Coal Producers Associations, investment of INR2.87trn has already been made in 157 coal blocks (as at end-December 2012). At the same time the investments in plants (which use coal from these mines) is estimated at around INR4trn. The banking and financial institution's exposure to these coal blocks is around INR2.5trn. The banking sector is already under stress, apart from commercial banks, rural electrification corporation and power finance corporation will also be impacted by the cancellation of coal blocks. 

Production Disruption: The Attorney General in his submission to the SC has submitted that the central government and the CIL would need some time to adjust to the changed situation. It is highly unlikely that the allocation process (through competitive bidding or any other process) will be complete by FYE15. In this situation, the CIL would take things forward. The CIL itself is struggling to achieve its own coal production targets, in FY14; the CIL achieved 95.96% of its production target and achieved 2.3% growth over FY13 production. To achieve the captive coal mines' FY14 coal production target, CIL will have to improve its production performance by 8.41%, which does not look too feasible. 

Increasing Import Dependence: The demand supply mismatch has increased India's dependence on import for coal supplies. In FY14, India imported 171 million tonnes (mt) of coal at USD16.41bn (FY13: 145mt at USD17.01bn). A halt in domestic production of coal would increase our import dependence further. In a scenario where CIL is not able to extract coal from captive coal mines of cancelled coal blocks, India's dependence on imported coal would increase significantly in FY16. Factoring in the increase in coal production in FY14 as compared to FY13 and FY14 and the average imported coal prices, the FY16 coal import bill is likely to widen by USD6.22bn. This would exert pressure on currency and affect macroeconomic stability. 

Impact on Inflation: The Indian power sector is under stress, both from the viewpoint of raw material (coal and gas linkage) availability, and infrequent and insufficient power tariff hikes. The renewed coal scenario most likely would lead to an increase in coal prices; this along with the revised gas pricing formula (under discussion) would increase fuel cost and thus electricity prices. Financial health of state power distribution companies (discoms) is already very fragile. In the scenario of insufficient fuel cost pass through to end users, the financial health of the discoms would deteriorate further. If insufficient pass through is compensated through budgetary subsidies, it will affect every state. In case the fuel price hike is passed through completely it will stoke inflation. With RBI pushing to bring down CPI inflation to 6% by January 2016 the time line for monetary easing under the emerging scenario becomes even more remote in the foreseeable future. 

Eight core infrastructure growth accelerates to 5.8% in August 2014

Growth figure for August 2013 revised upwards to 4.7% from 3.8% reported earlier 

The Eight Core Industries, comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP), has shown accelerated pace of growth at 5.8% in August 2014 up from 2.7% growth posted in July 2014. Meanwhile, the growth figure for August 2013 has been revised upwards to 4.7% from 3.8% reported earlier. 

The Eight Core Industries has recorded a growth of 4.4% in April-August 2014. 

1. Coal production increased 13.4% in August 2014 over August 2013, while moved up 7.2% in April-August 2014 over corresponding period of previous year. 

2. Crude Oil production declined 4.9% in August 2014 and 1.2% in April-August 2014. 

3. The Natural Gas production declined 8.3% in August 2014 and 5.8% in April-August 2014. 

4. Petroleum refinery production fell 4.3% in August 2014 and 2.7% in April-August 2014. 

5. Fertilizer production declined 4.3% in August 2014, while showed an increase of 2.8% in  April-August 2014. 

6. Steel production increased 9.1% in August 2014, while also rose 2.0% in April-August 2014. 

7. Cement production increased by 10.3% in August 2014, while jumped 11.0% in April-August 2014. 

8. Electricity generation jumped 12.6% in August 2014, while surged 11.3% in April-August 2014.

Stock Reports

The Byke Hospitality fixes record date for bonus issue

Record date is 10 October 2014 

The Byke Hospitality announced that 10 October 2014 has been fixed as the Record Date for the purpose of determining the members of the Company who will be entitled to receive one fully paid equity bonus share for every one fully paid equity share of Rs. 10/- each of the Company. 

 

Indag Rubber fixes record date for interim dividend  

Record date is 13 October 2014 

Indag Rubber announced that 13 October 2014 has been fixed as the Record Date for the purpose of Payment of Interim Dividend. 

 

Nifty October 2014 futures at premium

Turnover rises

Nifty October 2014 futures were at 7989.50, a premium of 24.70 points over spot closing of 7964.80. Turnover on NSE's futures & options (F&O) segment rose to Rs 197957.82 crore from Rs 121599.61 crore on Monday, 29 September 2014. 

State Bank of India October 2014 futures were at 2456, at a premium over spot closing of 2444. 

ICICI Bank October 2014 futures were at 1441, at a premium over spot closing of 1432.15. 

Aurobindo Pharma October 2014 futures were at 973.50, at a premium compared to spot closing of 969.50. 

In the spot market, the 50-unit CNX Nifty rose 5.90 points or 0.07% to settle at 7,964.80, its highest closing level since 26 September 2014. 

The October 2014 derivatives contracts expire on 30 October 2014.

Asia Pacific Market: Stocks fall for second day

Headline equities of the Asia Pacific market finished mostly down on Tuesday, 30 September 2014, as drop in US and European markets overnight, surprisingly weak f economic data from China and Japan, and caution over civil unrest in Hong Kong weighed down risk sentiments. The MSCI Asia Pacific Index slid 0.6% to 140.32.

Regional market opened lower today, following drop in the international market overnight amid concern over political unrest in Hong Kong as pro-democracy demonstrators continued to oppose China's plan for electoral reform in the territory. There were concerns that Beijing would direct the HK government to step up the suppressions, which could repeat the Tiananmen Massacre on June 4, 1989 and ruin HK's status as a global financial center. 

The decline in the regional market came amid concerns over the health of the world's second largest economy flared after release of disappointing China manufacturing PMI data for September. China's final HSBC/Markit Purchasing Managers Index for September came in at 50.2, unchanged from the August reading which was three-month low, but lower than a preliminary reading of 50.5. The official version of the September PMI is due on Wednesday. 

Meanwhile sell-off pressure accelerated after data from the Japan showed that industrial production world's third largest economy fell a seasonally adjusted 1.5% in August from the previous month indicated that demand following the nation's April consumption tax hike remains sluggish. Data released also from the internal affairs ministry on Tuesday showed the jobless rate fell to 3.5% in August from 3.8% in July and retail spending rose 1.9% after declining 0.5% in July.

Among Asian bourses 

Nikkei falls 0.84% on profit booking

Japanese market finished down, as drop in US and European markets overnight, surprisingly weak batch of economic data, and caution over political unrest in Hong Kong dragged down risk sentiments. The key benchmark Nikkei 225 index dropped 0.84%, or 137.12 points, to 16173.52, while the Topix index of all first-section shares fell 0.82%, or 11.01 points, to 1326.29. 

Exporters shares declined amid profit taking, with companies having major exposure to Hong Kong suffered the most amid heightened unrest. Daikin Industries, an air conditioner maker that gets about 18% of revenue from China, slumped 3.6% to 6,798 yen. Fanuc Corp., which gets 37% of its sales from Asia excluding Japan, lost 1.2% to 19,810 yen. Okaya Electric Industries Co., which gets about 20% of its revenue from Hong Kong, lost 1% to 390 yen. Toyota slid 0.4% to 6,463 yen. Hitachi Ltd. declined 1.9% to 837.5 yen. 

General trading companies also ended lower, led by Sumitomo Corp, falling 12% to 1,210.5 yen, after the trading company announced on Monday large losses across several projects, including a shale oil business in Texas. The firm said that the 170 billion yen impairment loss will push its full year consolidated net profit down 96% to just 10 billion yen. The company said it will set up a special investigation into how it lost almost $1.8 billion in Texas shale oil and Australian coal mining. Mitsubishi Corp. lost 2.9% to 2246 yen and Itochu Corp fell 3.4% to 1340 yen. 

Aussie market bounces 0.5% from seven-month low

Australian share market finished the session modest higher, as investors chased for bargain hunting across the board following recent selloff, with banks and financial stocks being major gainers. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both rose by 0.5% to 5292.80 and 5296.80, respectively. Turnover was relatively healthy with 1.94 billion shares worth of A$4.75 billion traded today. The market has suffered the worst in September in more than two years, losing almost 6% in value, or A$92 billion. 

Shares of banks and financial companies advanced the most in Sydney, led by top four lenders as bargain hunters snapped up the big four banks that have all been heavily sold-off in recent weeks. Australia's big four banks were amongst the biggest lags on the market during September with money being taken out of the local market as investors wind back yield plays, the Australian dollar slides and the Financial Services Inquiry clouds the sector. 

Among banks, Commonwealth Bank of Australia rose 1.2% to A$75.29, National Australia Bank 1.5% to A$32.54, Westpac Banking Corp 1.6% to A$32.14 and ANZ Banking Group 1.3% to A$30.92. 

Rare-earths mining company Lynas Corp dropped 7% to A$0.080, extending yesterday's 
25.2% drop after it reported a deeper full-year loss and said it planned to raise A$83 million from investors to shore up its balance sheet. 

Shares of Treasury Wine Estates dropped 5.8% to A$4.24, extending yesterday's 8.5% slump after the in Australia's largest winemaker rejected takeover proposals from two global private equity firms as they couldn't agree the terms and price for a deal. 

Shanghai Composite rises to 19-months high

Mainland China market advanced to for a sixth consecutive trading day to close at highest level in 19 months, as risk sentiment was buoyed by abundant liquidity in the market, speculation of government reforms measures and hopes an exchange link with Hong Kong may fuel fund inflows. The benchmark Shanghai Composite index advanced 6.16 points, or 0.26%, to finish at 2363.87, the highest close since 28 February 2013, when it finished at 2365.59. Mainland markets will be shut from Oct. 1 to Oct. 7 for the National Day holidays. 

The China Securities Journal reported on Monday that China might announces measure including tax cuts to manage the economy with a targeted-easing approach as economic growth in the third quarter is expected to slow from the previous quarter. 

Shares of coal producers advanced the most in Shanghai on the prospect that government reforms will support prices. China Shenhua Energy Co., the nation's largest coal producer, gained 0.6% to 15.56 yuan, after the government said it will levy a resource tax based on market prices. Datong Coal Industry Co rose 3.5% to 7.36 yuan and Shaanxi Coal Industry Co. surged 3.8% to 5.72 yuan. 

Hang Seng fall 1.28% amid Occupy Central protests

Hong Kong equity market extended losses for second day, as risk aversion selloff across the board, hit by the continued Occupy Central protests to oppose China's plan for electoral reform in the territory. Protest leaders set a Wednesday deadline for a response from the government to their demands for democratic reforms. The benchmark Hang Seng Index declined 1.28% to 22932.98, extending yesterday's 1.9% slump. Markets are closed for a two-day public holiday on Wednesday and Thursday, to mark China's National Day. 

Shares of property developers and shopping mall operator continued their decline on speculation that fewer tourists will visit the city as protests drag on and that property prices could fall if political risks increase. Wharf Holdings, which owns two of the city's most popular shopping malls, Harbour City and Times Square, closed steady at HK$55.20 after recouping early losses. Sun Hung Kai Properties fell 1.78% to HK$110.10. Henderson Land Development Co shed 1.9% to HK$50.30. China Resources Land erased 2.1% to HK$16. 

Shares of retailers closed steep lower, amid concerns protests across the city have had to shut many stores at a time when mainland Chinese tourists flock to the city. The National Day holiday on Wednesday marks one of the peak seasons for Hong Kong retailers. I.T. (00999) descended 3% to HK$2.61. Both Sa Sa (00178) and Bonjour Holdings dipped 2.7% to HK$1.07. The city's largest cosmetic retailer, Sa Sa International, closed steady at HK$5.22. 

Sensex ends marginal higher in volatile trade

Indian stock market surrendered most of its early gains before ending the trade on selling in interest-sensitive stocks of banking and realty stocks, after the RBI kept interest rates unchanged in its bi-monthly monetary policy. The S&P BSE Sensex rose 33.40 points or 0.13% at 26,630.51, while The CNX Nifty rose 5.90 points or 0.07% at 7,964.80. 

Interest rate sensitive banking and realty stocks declined after the RBI in its fourth bi-monthly monetary policy review today, 30 September 2014, kept key policy rates unchanged. PSU OMCs gained ahead of a fortnightly revision in fuel prices tomorrow, 1 October 2014. Tyre stocks rose across the board on persistent fall in rubber prices. Pharma stocks gained as rupee edged lower against the dollar. 

Elsewhere in the Asia Pacific region-- Taiwan's Taiex index rose 0.07% to 8966.92. South Korea's KOSPI index eased 0.32% to 2020.09. Indonesia's Jakarta Composite index sank 0.09% to 5137.58. Malaysia's KLCI eased 0.03 point to 1846.31. New Zealand's NZX50 slid 0.08% to 5255.04. Singapore's Straits Times index fell 0.39% at 3276.74. 

DWS Premier Bond Fund Announces Change In Exit Load

With effect from 29 September 2014

Deutsche Mutual Fund has announced change in exit load under DWS Premier Bond Fund, an open ended debt scheme with effect from 29 September 2014. 

Accordingly, if the investor redeemed / switched out within 18 months from the allotment of units, the exit load charge will be 1%.

HDFC MF Announces Change In Exit Load Structure Under Two Schemes

With effect from 01 October 2014 

HDFC Mutual Fund has announced change in exit load structure under HDFC Prudence Fund and HDFC Core & Satellite Fund, with effect from 01 October 2014. 

Accordingly the revised exit load will be: 

HDFC Prudence Fund: 

In respect of each purchase / switch-in of units, an exit load of 1.00% is payable if units are redeemed / switched out within 18 months from the date of allotment. 
 
HDFC Core & Satellite Fund: 

No exit load is payable if units are redeemed / switched out after 18 months from the date of allotment.

BNP Paribas MF Announces Change In Key Personnel

With effect from 01 October 2014 

BNP Paribas Mutual Fund has announced that Shridhar Iyer ceases to be the Investor Relations Officer & Key Personnel of AMC. Accordingly, Allwyn D'Silva Monteiro has been appointed as Investor Relations Officer, with effect from 01 October 2014. 

ICICI Prudential Equity Advantage Fund – Series 1 to 8 files offer document with Sebi

A close-ended equity scheme 

ICICI Prudential Mutual Fund has filed offer document with Sebi to launch ICICI Prudential Equity Advantage Fund – Series 1 to 8, a close-ended equity scheme. The New Fund Offer price is Rs 10 per unit. The scheme has series 1 to 8. Each Series under the scheme will have tenure between 3 years to 10 years from the date of allotment of units under the respective Series. 

Investment objective: The scheme seeks to provide capital appreciation and income distribution to the investors by investing in equities, fixed income securities and using equity derivatives strategies & arbitrage opportunities. 

Options/plans: Cumulative and dividend (payout with monthly and quarterly frequencies) options under both regular plan and direct plan. 

Benchmark: CRISIL Balanced Fund Index. 

Loads: Nil 

Minimum Application Amount: Rs.5,000 and in multiples of Rs 10 thereafter. 

Asset Allocation: The scheme shall invest 65-80% in equity and equity related instruments, 15-50% in derivative including index futures, stock futures, index options, stock options etc. and 20-35% in debt, money market instruments and cash. Investment in derivatives can be upto 50% of the net assets of the scheme. Investment in securitized debt can be upto 50% of debt allocation of the scheme. 

Fund Managers: S Naren and Rahul Goswami. The investments under ADRs/GDRs and other foreign securities will be managed by Ashwin Jain. 

Birla Sun Life MF Announces Change In Exit Load Structure Under Its Schemes

With effect from 01 October 2014

Birla Sun Life Mutual Fund has announced change in exit load structure under the following schemes, with effect from 01 October 2014. 

Accordingly the exit load will be: 

Birla Sun Life Dynamic Bond Fund: 

For redemption / switch out of units within 365 days from the date of allotment: 1% of the applicable NAV. 
For redemption / switch out of units after 365 days from the date of allotment: Nil. 

Birla Sun Life Short Term Opportunities Fund: 

For redemption / switch out of units within 365 days from the date of allotment: 1.50% of the applicable NAV.
For redemption / switch out of units after 365 days but within 540 days from the date of allotment: 0.50% of the applicable NAV.
For redemption / switch out of units after 540 days from the date of allotment: Nil. 

Birla Sun Life Income Plus: 

For redemption / switch out of units within 365 days from the date of allotment: 1% of the applicable NAV.
For redemption / switch out of units after 365 days from the date of allotment: Nil. 

Birla Sun Life MIP II – Wealth 25 Plan & Birla Sun Life MIP: 

For redemption / switch out of units within 365 days from the date of allotment: 2.00% of the applicable NAV.
For redemption / switch out of units after 365 days but within 730 days from the date of allotment: 1.50% of the applicable NAV.
For redemption / switch out of units after 730 days but within 1095 days from the date of allotment: 1.00% of the applicable NAV.
For redemption / switch out of units after 1095 days from the date of allotment: Nil. 

Birla Sun Life Monthly Income Plan & Birla Sun Life MIP II – Savings 5 Plan: 

For redemption / switch out of units within 365 days from the date of allotment: 1.50% of the applicable NAV.
For redemption / switch out of units after 365 days but within 540 days from the date of allotment: 0.50% of the applicable NAV.
For redemption / switch out of units after 540 days from the date of allotment: Nil.

UTI-Short Term Opportunities Fund files offer document with Sebi

An open-ended income scheme with no assured returns 

UTI Mutual Fund has filed offer document with Sebi to launch UTI-Short Term Opportunities Fund, an open-ended income scheme with no assured returns. The New Fund Offer price is Rs 10 per unit. 

Investment objective: The investment objective of the scheme is to generate regular income and capital appreciation over the short term investment horizon, from a portfolio of debt and money market instruments and government securities with average maturity of the portfolio not exceeding 36 months. 

Plans: Regular plan and direct plan. 

Each plan offers the following option(s): 

(i) Growth Option
(ii) Monthly Dividend Payout Option
(iii) Monthly Dividend Reinvestment Option
(iv)Quarterly Dividend Payout Option
(v) Quarterly Dividend Reinvestment Option
(vi)Half Yearly Dividend Payout Option
(vii) Half Yearly Dividend Reinvestment Option
(viii) Annual Dividend Payout Option
(ix) Annual Dividend Reinvestment Option
(x) Flexi Dividend Payout Option
(xi) Flexi Dividend Reinvestment Option 

Benchmark: CRISIL Short Term Bond Fund Index 

Entry Load: Nil 

Exit load: 

Less than or equa1 to 365 days – 1.00% 

Greater than 365 days – Nil 

Minimum Application Amount: Rs.5,000 and in multiples of Re 1 thereafter. 

Minimum Target Amount: Rs 20 crore 

Asset Allocation: The scheme shall invest 65-100% in debt including government securities) issued by central & / or state government and up to 35% in money market securities. Debt securities will also include securitised debt, which may go up to 50% of the portfolio. 

Fund Managers: Amandeep Chopra and Ritesh Nambiar. Arpit Kapoor is the dedicated fund manager for investment in foreign debt securities. 

Birla Sun Life Enhanced Arbitrage Fund Announces Change In Exit Load Structure

With effect from 01 October 2014 

Birla Sun Life Mutual Fund has announced change in exit load of Birla Sun Life Enhanced Arbitrage Fund, an open ended income scheme with effect from 01 October 2014. 

Accordingly, for redemption / switch-out of units within 90 days from the date of allotment: 0.50% of applicable NAV. 
 
For redemption / switch-out of units after 90 days from the date of allotment: Nil.

Birla Sun Life MF Announces change In Lumpsum Subscription Transaction Amount

With effect from 01 October 2014

Birla Sun Life Mutual Fund has decided to revise the maximum amount per lumpsum subscription transaction for Birla Sun Life Short Term Opportunities Fund and Birla Sun Life Medium Term Plan, with effect from 01 October 2014. 

Accordingly, the revised maximum amount will be Rs 25 crore per investor per day across all subscription transactions (i.e. fresh purchases, additional purchases, switch-in and trigger transactions such as SIP, STP and RSP trigger) as available under the schemes. 

Mirae Asset Balanced Fund files offer document with Sebi

An open ended balanced scheme 

Mirae Asset Mutual Fund has filed offer document with Sebi to launch Mirae Asset Balanced Fund, an open ended balanced scheme. The New Fund Offer price is Rs 10 per unit. 

Investment objective: The investment objective of the scheme is to generate capital appreciation along with current income from a combined portfolio of equity & equity related instruments and debt and money market instruments. 

Plans/ option(s): Growth and dividend (payout & reinvestment) options under both regular plan and direct plan. 

Benchmark: CRISIL Balanced Fund Index 

Entry load: Not applicable 

Exit load:
If redeemed within 6 months (182 days) from the date of allotment - 2.00% 

If redeemed after 6 months (182 days) but within 1 year (365 days) from the date of allotment - 1.00% 

If redeemed after 1 year (365 days) from the date of allotment – Nil 

Minimum Application Amount: Rs.5,000 and in multiples of Re 1 thereafter. 

Minimum Target Amount: Rs 10 crore 

Asset Allocation: The scheme shall invest 65-85% in equity and equity related instruments (equity and equity related instruments include convertible debentures, equity warrants, convertible preference shares, etc) and 15-35% in debt & money market instruments. 

Fund Managers: Neelesh Surana and Yadnesh Chavan 

Mutual funds step up buying

Net inflow of Rs 1300.70 crore on 26 September 2014

Mutual funds made substantial purchases of Indian stocks on Friday, 26 September 2014, as per the latest data released by the Securities & Exchange Board of India (Sebi). Mutual funds bought shares worth a net Rs 1300.70 crore on Friday, 26 September 2014, which was much higher than their purchases of Rs 440 crore Thursday, 25 September 2014. 

The net inflow of Rs 1300.70 crore on 26 September 2014 was a result of gross purchases of Rs 1766.50 crore and gross sales of Rs 465.80 crore. The S&P BSE Sensex had risen 157.96 points or 0.6% to settle at 26,626.32 on that day, its highest closing level since 24 September 2014. 

Mutual funds have bought shares worth a net Rs 3228.30 crore in this month so far (till 26 September 2014). They had purchased shares worth a net Rs 6957.40 crore last month. 

TARC Recommends CBEC Should Immediately Commence Work on the Development of a Customs Vision and Strategic Plan

Recommends that there is an Imminent Need to Institute a Robust Framework Which will Address Data and Information Exchange-Second Report of TARC Submitted 

Tax Administration Reforms Commission (TARC) submitted its second report yesterday. TARC in its Second Report addresses two important aspects of tax administration i.e. capacity building of customs department and data and information exchange. In its First Report, TARC had addressed four terms of reference. These terms of reference were related to customer focus, structure and governance, people's function, dispute management and key internal processes and ICT. 

In the face of the increasingly globalized world, customs today face multidimensional challenges. One the one hand, globalization, while affording opportunities for economic growth also provides opportunities for trans-border crimes. Customs, being at the frontline of the border have to play an important role in the country's physical as well as economic security. At the same time, they have to facilitate legitimate trade so as not to impair the country's competitiveness and attractiveness as an investment destination. The steady growth of international trade leading higher volumes and the emerging trends such as increase in regional trading arrangements etc., e-commerce, changing supply chain dynamics etc. are adding to the challenges faced by customs. These trends necessitate creation of new capacities in diverse areas without necessarily increasing the human resources. The demand on customs, therefore, is to do more with less. 

To face this challenge, Indian customs would need to move away from their traditional administrative approach towards a more proactive and wholesome compliance management approach. They would need to transform their governance, change their control paradigm and become a highly technology driven organization with a robust and reliable risk management based approach to governance. They will have to move away from excessive revenue orientation to be able to fulfil their mandate in relation to areas such as supply chain security, effective implementation of their responsibilities in trade related areas, IPRs, OGA requirements etc. and play a much more proactive and prominent role in trade facilitation. 

Hence their compliance philosophy needs to be oriented towards promotion of voluntary compliance based on a trust based approach towards the compliant trade coupled with very effective enforcement against noncompliance. This will require large investments in capacity building in human capital as well as physical and technological infrastructure. Trade facilitation in particular will need capacity building not only in customs but also in other regulatory agencies. By virtue of their strong background in cargo processing and high international alignment of customs processes, customs need to be given a lead role to achieve inter agency harmonisation and coordination in this area. 

To enable the transformative changes that are required, the government needs to empower and enable customs by according the CBEC functional and financial autonomy as recommended in the TARC's first report, subject, of course, to the restructuring and accountability as also recommended in that report. 

Due Date for filing of return of Income for Assessment Year 2014-15 Extended from 30th September, 2014 to 30th November, 2014 in Specified Cases

As per the provisions of the Income-tax Act, 1961 (‘the Act'), for an assesse, who is required to obtain Tax Audit Report (TAR) under section 44AB of the Act, the due date for furnishing his return of income is 30th September of the Assessment Year. 

The Central Board of Direct Taxes (‘the Board') vide order dated 20th August, 2014 extended the due date for obtaining and furnishing of Tax Audit Report under section 44AB of the Act for Assessment Year 2014-15 from 30th September, 2014 to 30th November, 2014. Subsequently, a number of representations were received in the Board requesting for extension of the due date for furnishing of return of income also. Writ petitions were also filed in various High Courts for directing the Board to extend the due date for furnishing of return of income from 30th September, 2014 to 30th November, 2014 in conformity with the extension of the due date for filing of Tax Audit Report. 

The Gujarat High Court vide judgement dated 22 September 2014 directed the Board to extend the due date for furnishing the return of income to 30th November, 2014, except for the purposes of charging of interest under section 234A of the Act for late filing of return of income. Other High Courts also directed the Board to look into the practical difficulties of the petitioners and take a just and proper decision in this matter. 

In compliance to the judgments of various High Courts and after considering the representations received for extension of the due date, the Board, in exercise of its power conferred by section 119 of the Act, has extended the `due-date' for furnishing return of income from 30th September, 2014 to 30th November, 2014 for the Assessment Year 2014-15 for all purposes of the Act in the case of an assesse, who is required to file his return of income by 30th September, 2014, and is also required to get his accounts audited under section 44AB of the Act or is a working partner of a firm whose accounts are required to be audited under section 44AB of the Act. 

There shall be no extension of the “due date” for the purposes of charging of interest under section 234A of the Act for late filing of return of income and the assesses shall remain liable for payment of interest as per the provisions of section 234A of the Act. 

For removal of doubt, it is clarified that for an assesse (other than working partner of a firm which is required to obtain and furnish Tax Audit Report), who is required to file its return of income by 30th September, 2014 but not required to obtain and furnish Tax Audit Report under section 44AB, the due date for furnishing of return of income for assessment year 2014-15 remains as 30th September, 2014. 

Ind-Ra: Government's Role Pivotal to ensure Minimal Disruption in Power Sector

The Supreme Court's (SC) judgment would bring in the much-needed transparency in the coal sector which has been marred with non-transparent ad-hoc allocations, India Ratings & Research (Ind-Ra) believes. Over the long-run, this will boost investments in the sector and lower India's dependence on imported coal, leading to energy security. However, the government must act promptly to ensure minimal operational disruption for the existing operational projects to further build investor confidence. 

Judgment in line with Expectations: The judgment is in line with our expectations expressed in the commentary Government Action Key Post Supreme Court's Coal Block Ruling dated 27 August 2014. Ind-Ra stated the possibility of a penalty linked to the total quantity mined. The agency had also highlighted the possibility of the government considering means to provide coal through the linkage route for operational plants if captive coal blocks (CCBs) were to be de-allocated. 

Government Action Key for Operational Mines: Ind-Ra expects the government to play a pivotal role in the resolution of coal supplies linked to operational end use projects (EUP). There exist three possibilities which could mitigate the impact of the de-allocation for operational EUPs. Firstly, the government could consider assigning coal linkages to EUPs through Coal India Limited (CIL). However, the ability to obtain coal linkage from CIL remains limited as the company is already struggling to increase its output. Even if the output is increased, CIL will prefer to supply to the existing plants to avoid penalty due to under-supply. 

Secondly, if the cost economics of the EUP allow, the developers could look at sourcing imported coal. Lastly, fast track auctioning of the de-allocated mines could alleviate the concerns. The agency opines that these players would try to bid aggressively in the auction to regain the same mines. However, the amount paid to get these mines through the auction route would alter the project economics. The outcome could also be a mix of these three possibilities. 

SC has refrained from immediate de-allocation of the operational CCBs with linked EUP. It has allowed a breathing period of six months ending 31 March 2015 to developers. Also, SC has imposed a levy of INR295/tonne for coal extracted by the developers till date. Ind-Ra expects that till March 2015, these operational projects would have to develop an interim arrangement to source coal through government support. 

Investments at Risk for Non-operational Mines: Mine allottees with non-operational CCBs face the risk of investments towards mine development as well as EUP being written down. Once the CCB auction begins, there remains limited possibility for the same mine to be re-allocated to the respective developer. Therefore, the investment made towards the mine will largely have to be written off, in the absence of any compensation from the new bidder of the said mine. Additionally, the investments made in EUP could be written off if the developer is unsuccessful in bidding for mines under auction mechanism or imported coal does not support economical operations of the EUP. 

The non-operational CCBs have been de-allocated with immediate effect. For such CCBs, there has been no explicit penalty on allottees in the judgment. However, some of the developers had already borne penalties in the form of bank guarantee invocation during the review by inter-ministerial committee in 2013 based on the progress of the CCBs. 

Merchant Power Plants Worst Impacted: Independent power producers (IPP) with merchant sales are likely to see significant profitability erosion FY16 onwards in the absence of coal linkage beyond March 2015; they will have to rely on imported coal or pay higher for the coal obtained under the auction mechanism. FY15 would see a one-time cash flow hit on such IPP's due to the penalty to be paid for coal extracted till date. The ability of these merchant IPPs to tie up for domestic coal under linkage route remains remote. 

PM meets Israeli PM Benyamin Netanyahu

Israeli Prime Minister extended an invitation to Narendra Modi to visit Israel 

The Prime Minister Narendra Modi met the Israeli Prime Minister Benyamin Netanyahu on Sunday. The two leaders reviewed the robust relationship, and rapidly growing trade. They also discussed how ties could be further expanded. The Israeli side briefed the Prime Minister on their perception of the situation in West Asia. 

Defence ties and cooperation in the field of computer software, and cyber security were also discussed. 
 
Issues of water management and agriculture in arid areas came up for discussion, with Israel offering to share its technology in this regard. The Prime Minister also outlined his vision of waste water management and solid waste management in 500 towns across India. 
 
The Israeli Prime Minister extended an invitation to Narendra Modi to visit Israel.

Kharif crop sowing touches 1019.26 lakh hectares as on 26 September

Area under cotton crop was higher at 126.55 lakh hectares as on 26 September 

As per the latest reports of sowing of kharif crops, kharif crop sowing area touched 1019.26 lakh hectares as on 26 September, compared with 1044.69 lakh hectares touched same time of the last season. 

The revival of southwest monsoon rainfall helped the kharif crops sowing to pick up and shorten the gap with the sowing in the last season. 

The rice crop was sown in 374.87 lakh hectares, which was marginally higher than the coverage of 374.27lakh hectares same time last year. Meanwhile, the pulses sowing at 101.05 lakh hectares and coarse cereals sowing at 182.34 lakh hectares was below last year's coverage of 108.13 lakh hectares and 196.05 lakh hectares as on date. 

The area under oilseeds crops at 177.56 lakh hectares as on 26 September 2014 was below the coverage of 193.22 lakh hectares same time of last season 

Sugarcane has been planted in 48.74 lakh hectares as on 26 September compared to 50.32 lakh hectares same time last season. 

The area under cotton was higher at 126.55 lakh hectares as on 26 September compared to 114.37 lakh hectares same time last year. 

Further, the area under jute and mesta stood at 8.15 lakh hectares as on 26 September 2014 compared to 8.34 lakh hectares a year ago.