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ANIL AMBANI GETS A SEAT ON ATLANTIC COUNCIL ADVISORY BOARD

NEW DELHI: Reliance Group Chairman Anil Ambani has been inducted into the international advisory board of global think-tank The Atlantic Council.

He joins News Corp Chairman Rupert Murdoch, former Spanish prime minister Jose Maria Aznar, Airbus CEO Thomas Enders and former Australian prime minister Kevin Rudd, among others, on the board.

“The Atlantic Council today announced the induction of Anil Ambani, one of India’s best-known business leaders, to its international advisory board – a prominent group of global corporate and political leaders,” a company statement said.

Welcoming Ambani, former Utah governor and Chairman of the Atlantic Council, Jon M Huntsman, said: “The Atlantic Council’s presence in South Asia and in particular India is growing at a rapid pace and Anil’s presence on our board could not be more timely. We look forward to working with him to make a difference.”

Other notable members of the board include Dr Zbigniew K Brzezinski, former US national security advisor; P.M. Carl Bildt, former prime minister of Sweden; Lord Robertson, former secretary general of NATO. The business leaders include Hakan Buskhe, President and CEO, SAAB; Stephen A Schwarzman, CEO of the Blackstone Group and Marillyn A Hewson, Chairman, Lockheed Martin Corporation.

Ambani said, “I am delighted to accept Jon’s invitation to join the advisory board of the Atlantic Council, which is undoubtedly America’s leading and most influential think-tank on global strategic affairs. This is a clear recognition by the Council of India’s growing geopolitical influence under Prime Minister Modi’s visionary and transformational leadership.”

SENSEX BACK ON RAILS, UP 127 POINTS

MUMBAI: Sensex registered a good beginning on Tuesday as it recouped over 127 points after yesterday’s loss, with Asia providing a positive backdrop amid sustained foreign inflows.

The 30-share index was trading higher by 127.47 points, or 0.43 per cent, at 29,364.62, with all indices led by technology, IT, power and healthcare trading in the green with gains up to 0.79 per cent.

The gauge had lost 184.25 points in the previous session.

The NSE Nifty rose by 46.35 points, or 0.51 per cent, to 9,091.55.

Retail investors got back to buying and foreign money kept coming in amid a firming Asian trend on renewed optimism for tax reforms in the US.

Major players that supported the recovery were Axis Bank, Sun Pharma, Tata Motors, Wipro, HDFC Ltd, Asian Paints, NTPC and ICICI Bank, gaining by up to 1.96 per cent.

Hong Kong’s Hang Seng was up by 0.50 per cent while Japan’s Nikkei rose 1.07 per cent in early trade today. Shanghai Composite, however, shed 0.23 per cent.

The US Dow Jones Industrial Average ended 0.22 per cent lower yesterday.

L&T CHIEF AM NAIK PLEDGES 75 PER CENT OF HIS INCOME TO PHILANTHROPY

MUMBAI: AM Naik pledged to devote 75% of his lifetime income to charity as he gets ready to step down from active leadership of the $16-billion engineering conglomerate Larsen & Toubro a year from now.

“Charity is a personal desire. In my case, giving has continued for three generations. My grandfather and father did not have money so they lived their lives for poor people,” Naik told ETin an interview. “I have committed to use 75% of my income for charitable purposes.”

He’s set up two charitable trusts — the Naik Charitable Trust for education and skill training and the Nirali Memorial Medical Trust, named after his grand daughter who died of cancer in 2007. Naik declined to give details of the amount spent so far and the money he will be directing to philanthropy going ahead.

According to the ET Intelligence Group, Naik took home nearly Rs 200 crore in compensation in 2010-16. In FY16, this included stock options awarded by L&T Infotech. According to a source aware of the matter, since 1995, when Naik made his first donation to a hospital in his native village in Gujarat, he has donated about Rs 125 crore to charitable initiatives.

An asset management company handles Naik’s money while his sister’s family assists him in philanthropy. Naik is currently engaged in building a school and hospital close to L&T’s Powai campus and is also keen on setting up a fire station there. “I want to carry out my charity work at my ‘janmabhoomi’ and my ‘karmabhoomi’,” Naik said.

Naik became the chief executive in 1999 and chairman in 2003.

His long stewardship ushered in rapid growth and diversification at Larsen & Toubro, transforming it into a global engineering conglomerate. His trusts run seven projects and two of these will be commissioned in 2017, one of them being a Vedic school named after his wife that will be inaugurated on her birthday.

Naik recounted how his father asked him to explain where he got Rs 4 lakh to donate to a hospital in his village in 1995 to add a floor. “He was such a principled man that he wanted to know the source of every penny,” he said. “I had to show him my passbooks! I started charity when I did not have much money.”

Naik said both his children are living overseas. “My son is with Google and my daughter has a medical practice,” he said. “Both of them are well settled in the US, and it is unlikely that they will return to settle down in India. As a father, I will always continue to hope that they will return to live in India.”

The succession plan seems to be moving seamlessly forward with SN Subrahmanyan, deputy managing director, seen as succeeding Naik when he retires in September 2017.

There have been hints that Naik may continue as non-executive chairman to guide the company, just as he plans to guide his charitable ventures.

NIRMA, LAFARGE CEMENT RS 9000 CRORE DEAL

MUMBAI: Did you know that detergent maker Nirma is in the cement business? You surely will after this deal. In one shot, 71-year-old Karsanbhai Patel, founder and chairman of Nirma, will make the soap-to-soda ash enterprise the sixth largest cement manufacturer in India, if the transaction goes through.

The Rs 7,000-crore-plus Ahmedabad company on Monday agreed to buy French cement major Lafarge’s local business for an enterprise value of Rs 9,400 crore ($1.4 billion), pipping bigger names like Piramal and JSW. Nirma will finance the acquisition, among the most profitable assets in the country, through a mix of equity and debt. The transaction will ramp up Nirma’s fledgling cement business to 13-million-tonne capacity from two million tonnes in Rajasthan.

Patel, who started his entrepreneurial journey in the late 1960s as a manufacturer of detergent, and cycling around towns and villages to sell it, is known for creating low-priced products. “This acquisition is a landmark and transformational step for the group’s cement business,” said Nirma’s MD Hiren Patel, son of Karsanbhai. “With a strong platform like Lafarge’s India business, we plan to take the cement business to the next level.”

He named his product Nirma after his late daughter Nirupama. Over the years, the low-priced Nirma became such a hit with housewives and captured a large market share, that it unsettled its MNC peers like HUL and P&G. In the 1990s it launched bathing soaps where it replicated its success in the detergent segment. Nirma is now one of the major players in the detergent and toiletries segments.

Over the years, it diversified into manufacturing of raw materials like soda ash, LAB and other related chemicals. Nirma has had a rough start with the cement business. It had originally planned to build a large-sized cement unit in Gujarat but that did not take off for years over environmental issues. The company eventually put the project in cold storage. Later in November 2014, it commissioned its first cement plant in Rajasthan.

The buyout will mark the second biggest acquisition in the cement sector after last week’s proposed purchase of Jaypee Cement by UltraTech for Rs 16,189 crore. Lafarge, the world’s largest cement maker, is divesting its domestic business so that it could conclude its global merger with Swiss’ Holcim and operate as one entity in India.

Earlier, Lafarge wanted to sell part of its domestic business to Birla Corp for about Rs 5,000 crore ($753 million), but the deal ran into regulatory trouble as laws then prohibited the sale of mines linked to cement units. These norms, however, were subsequently changed. The local business of Lafarge comprises three cement plants and two grinding stations. The latest move leaves LafargeHolcim with ACC and Gujarat Ambuja in India with a combined capacity of more than 60 million tonnes, making it the second largest cement manufacturer behind UltraTech.

“This deal is expected to make up for the time lost by Nirma,” said one of the bankers involved in the deal.

Revival hopes, after years of slow growth, have put India’s cement sector on the fast lane of merger & acquisition play. Prior to the Lafarge-Nirma and UltraTech-Jaypee Cement deals, Kolkata-based Birla Corp had snapped up Anil Ambani-led Reliance’s cement business.

BANKS SHUTTER ATMS AS CITIES GO DIGITAL, REMOVE 358 OVER JUNE-AUGUST

NEW DELHI: Here’s one more proof of Indians going off cash. Between June and August this year, the total number of ATMs in the country decreased by 358. By itself, it’s a minuscule dip of 0.16 per cent.

But it is a very significant change because ATMs increased at a compounded rate of 16.4 per cent over the past four years. Even though growth slowed to 3.6 per cent last year, this is the first time the number of ATMs has declined.

Decreasing ATM use in cities after demonetisation, and the increase in operational costs have forced banks to take a hard look at how they deploy ATMs. SBI, which has the largest ATM network in the country, reduced its ATM count from 59,291 in June this year to 59,200 in August, Punjab National Bank from 10,502 to 10,083, and HDFC Bank from 12,230 to 12,225.

Banks say rentals for a 7×5-sqft kiosk at airports and prime locations in Mumbai can go up to Rs 40,000 a month. Even in metros like Chennai and Bengaluru, ATM site rentals range from Rs 8,000 to Rs 15,000. Add to that the salaries of security staff and ATM operators, maintenance charges and electricity bills, and the total can range from Rs 30,000 to Rs 1 lakh a month. Electricity is a major expense as ATM kiosks have to be kept at 15-18 degrees centigrade through the day.

An SBI official said the bank closed some of the ATMs after the merger with its associate banks. “We had to decide whether the footfall at an ATM justified its running costs. Most of the ATMs we shut down were at places where another SBI parent or associate bank ATM was within a 500-metre radius. Our customers will not be greatly inconvenienced because of this. “

JAITLEY’S 10% TAX ON INCOME FROM CARBON CREDITS A MIXED BAG

MUMBAI/CHENNAI: The Finance Bill proposes to levy a tax of 10% on income earned on transfer of carbon credits. Such a tax will be levied on the gross income, without allowing for any deductions.

According to the explanatory memorandum to the Finance Bill, the income tax (IT) department has been treating the income earned on transfer of carbon credits as business income subject to tax at the rate of 30%. In this context, it seems like a favourable position on the face of it, but it is a mixed bag, say tax experts and industry specialists. Samir Kanabar, tax partner at EY, points out, “There have been several favourable cases at the tax tri bunal and high court levels, such as by the Karnataka High Court in the case of Subhash Kabini Power, where revenue on sale of carbon credit was treated as a `capital receipt’ not subject to any tax. These now stand overturned.” Direct taxes code had recommended that income from sale of carbon credits be treated as business income. Then the tax levy of 10% may be considered as beneficial, adds Kanabar.

He also points out that since 2012, new applications for grant of credit have not been entertained under the UN framework. However, companies in renewable energy sector, including wind farms, or those who adopted green technology , which had applied for it before this date, continue to accumulate credits. They can either adjust carbon credits against any manufacturing business, which is polluting, or can sell the excess credit.

Most sales are via private arrangements. Prevailing market price has dropped, but prior contractual arrangements have helped Indian companies who have such carbon credits to sell. According to industry experts, India is one of the top three sellers of carbon credits in the world, China and Russia, being the other big players.

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