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Indiabulls buys landmark building in London’s Mayfair for £155m

Real estate developer Indiabulls Real Estate Ltd today said it had bought one of the best-known and most iconic buildings in London's Mayfair for Rs 1550 crore (£155 million).
 
A press release from the company said the 87,444sq ft 22, Hanover Square had been purchased from Scottish Widows Investment Partnership (now part of Aberdeen Asset Management) which put the building up for sale in April through H2SO.
 
Mr Sameer Gehlaut, Chairman, Indiabulls Group, said: “The building’s location in prime Mayfair adjoining Bond Street is truly exceptional and Hanover Square will become arguably London's 'best connected' square when the new Bond Street Crossrail station opens in 2018. The building has huge potential for redevelopment."
 
One of the Bond Street station's entrances will be on the north-west corner of the square and just 50 metres from 22 Hanover Square.
 
H2SO John Olney commented: "Freehold assets of this quality and scale are rare in Mayfair, and there was a very high level of investor interest in the building. Four parties were selected from the first round of bidding to participate in the final round. Indiabulls Real Estate emerged as the highest bidder in a closely contested bid process.”
 
Indiabulls Real Estate is part of the Rs 20,000 crore Indiabulls Group and one of the largest real estate companies in India with development projects spread across high-end offices, commercial complexes and premium residential developments with over 24 million sq ft of projects under construction.
 
H2SO - which has recently become part of Colliers International - advised Scottish Widows Investment Partnership on the sale, the release added.
 
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SEBI approves slew of reforms to revitalize capital markets

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Capital markets regulator Securities and Exchange Board of India (SEBI)  approved a series of reforms aimed at revitalizing the market at a meeting of its Board here yesterday, including revisiting the minimum offer to public  norm under Rule 19 (2) (b) of Securities Contracts (Regulation) Rules, 1957 (SCRR).
 
A press release from SEBI said that, in order to make regulatory requirements consistent across the companies irrespective of post issue capitalisation and to facilitate mid size issuers who may not be in need of large funds, it has decided to take up a proposal with th Ministry of Finance to carry out suitable amendments to SCRR.
 
Under the proposal, minimum dilution to public in an initial public offer (IPO) shall  be 25% or Rs. 400 crore, whichever is lower, for companies with post capitalisation of less than Rs. 4000 crore. 
 
"This will remove the anomaly that a company just short of Rs. 4000 crore market capitalisation, was required to dilute about Rs. 1000 crore while another company at Rs. 4000 crore market capitalisation was required to dilute only Rs. 400 crore," the release said.
 
In case of dilution of less than 25%, minimum public shareholding of 25% to be achieved within three years of listing, where required under the rules, according to the proposal.
 
SEBI has also decided to recommend to the Ministry of Finance that SCRR should be amended so that all the listed companies including public sector undertakings (PSUs) shall be required to achieve and maintain minimum public shareholding of 25% of the total number of issued shares, within a time period of three years.
 
The regulator said that it believed that rules for the market should be uniform across all the companies and should be promoter neutral.
 
Under the current rule, while non-PSUs are required to have minimum 25% public shareholding, PSUs are required to have only 10%, which it felt was discriminatory and inconsistent with the broader market design.
 
In order to increase the share of serious, committed investors, SEBI has decided to increase the anchor investor’s bucket to 60% from the current requirement of 30% of the institutional bucket.
 
The Board also approved a proposal to permit bonus shares issued in last one year prior to filing of the draft offer document to be offered for sale, provided that these bonus shares were issued out of the free reserves or share premium.
 
In order to bring consistency between various regulations and to clarify certain regulations governing the preferential issue norms, the meeting approved a proposal to replace the 'closing price' with 'volume weighted average price' in the pricing formula for preferential issues.
 
The release said the regulations concerning pricing of QIPs take into account the effect of stock split, bonus, and so on. However, this has not been explicitly provided for in the regulations concerning preferential issues. SEBI has decided to extend the same treatment to preferential issues also, it said.
 
The regulations concerning preferential issues do not provide specifically for pricing of infrequently traded shares. However, SEBI (SAST) Regulations explicitly specifies the pricing methodology in case of infrequently traded shares. It has been decided to extend similar treatment to preferential issues also, it said.
 
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The Board approved proposals to review the existing regulatory framework on Employee Stock Option Scheme (ESOS) and Employee Stock Purchase Scheme (ESPS) for listed entities and frame regulations for employee benefit schemes involving shares of the company, replacing the existing SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.
 
The proposed regulations intend to address issues regarding composition of Trusts, facilitate secondary market acquisitions, enhanced disclosures and better enforceability. The regulations cover employee benefit schemes which deal in shares of the company, in addition to ESOS and ESPS. Such schemes would also be permitted to acquire shares from secondary market under certain conditions so as to avoid forced dilution of capital and to be in line with international practice.
 
Certain safeguards have  been put in place to improve governance and transparency of the schemes and also address concerns regarding potential market abuse. These include requirement of shareholders' approval through special resolution for undertaking secondary market acquisitions; certain limits on secondary market acquisitions; and a limit of 10% of the assets held by general employee benefit schemes other than ESOS type of schemes on owning shares of the company / listed holding company.
 
The safeguards also include a condition that trusts shall undertake only delivery based transactions and not deal in derivatives; restrictions on sale of shares by the trusts; a holding period of at least six month for shares acquired from secondary market; classifying shareholding of such trusts separately from 'promoter' and 'public' category; and stricter disclosure and other regulatory obligations.
 
To ensure a smooth transition for complying with the new regulatory framework, the existing employee benefit schemes have been provided with a time period of one year from the date of notification.
 
Further, a longer transition period of five years has been provided for re-classifying shareholding of existing employee benefit schemes separately from 'promoter' and 'public' category; bringing down the level of shares acquired from secondary market within the permissible limits; and reducing own share component to 10% of the total assets of general employee benefit schemes.
 
In order to encourage retail participation in offer for sale (OFS), to enable all large shareholders including non-promoter shareholders to use the OFS mechanism and also to expand the universe of companies to whom OFS mechanism is available, presently being 100 top companies only, the Board  approved the following modifications to the existing OFS mechanism:
 
(1)  Reservation for retail individual investors
 
(i)  Minimum 10% of the issue size shall be reserved for retail investors i.e. for the investors bidding for amounts less than Rs. two lakhs. In case this percentage is not fully utilized, the unutilized portion may be offered to other investors.
(ii)  Seller of shares may offer a discount to retail investors in accordance with the framework specified from time to time.
 
(2) Allowing non-promoter shareholders to offer shares through OFS
 
Non-promoter shareholders having (shareholding) more thatn 10% or such percentage as specified by SEBI from time to time shall be eligible to use OFS.
 
(3)  Expanding the list of eligible companies
 
OFS mechanism shall be made available for shareholders of top 200 companies by market capitalization.
 
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RIL to invest Rs 180,000 crore in thee years: Mukesh Ambani

File photo of Mukesh Ambani.
File photo of Mukesh Ambani.
Reliance Industries Limited (RIL) Chairman and Managing Director Mukesh Ambani today said the energy and petrochemicals major planned to invest more than Rs 180,000 crore during its current three-year investment cycle.
 
"We are currently at the mid-point of the largest investment programme in Reliance's history," he told the 40th Annual General Meeting (AGM) of RIL here.
 
"The next two years, 2014-15 and 2015-16, will see us focussed on executing and progressively bringing these projects on-stream in petrochemicals, refining, retail and Jio (digital services). The year 2016-17 will be the first full year in which the complete benefits of all these investments will be available to our shareholders, consumers and the society. The next three years are transformational in RIL's journey," he said.
 
Mr Ambani noted that RIL had, in the past 37 years since becoming a listed company, invested Rs 240,000 crore.
 
"By the time we finish four decades since our first public offering we will again be a radically different company. We hope to accomplish as much in the next three years as we have achieved in the past 37 years," he said.
 
He told the shareholders that RIL had, in the last year, become the first company in the private sector to record revenues of over Rs 400,000 crore, touching its highest ever consolidated revenue of Rs. 446,339 crore and net profit of Rs. 22,493 crore.
 
He said the company had achieved its highest ever exports of Rs. 275,825 crore, accounting for 69% of its turnover. It is India's largest exporter, accounting for 14.7% of the total exports from the country.
 
Mr Ambani said RIL accounted for 4.7% of India's total indirect tax revenues and the largest income tax payer amongst private sector companies.
 
He said RIL would strengthen its plastics business by building a new integrated cracker capacity which will rank amongst the most competitive being built in the world in this decade. The company will also add to the aromatics chain by upgrading refinery light-ends into new paraxylene facility and alongside commission downstream PTA and polyester capacity.
 
"We are also building a new business in rubbers capitalising on feedstock integration and rapidly growing domestic markets," he said.
 
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Mr Ambani said the company had brought on-stream the polyester filament yarn facility of 395,000 MT capacity at Silvassa, which would strengthen India's position as a textile major.
 
He said the company had also commissioned a new world-scale facility of poly-butadiene rubber (PBR) of 40,000 MT capacity at Hazira, taking its total capacity to 115,000 MT.
 
"We are also making rapid progress on India's first butyl rubber joint venture project of 100,000 MT capacity at Jamnagar," he said.
 
He said that the company's refining and marketing business had processed more than 68 MMT of crude at the Jamnagar refinery.
 
"We continue to be the largest refiner in India and operate the largest refinery in the world at a single location. Jamnagar refinery continues to provide the much needed energy security for India. Today, a significant quantity of our products are exported to the world markets, from Australia to Brazil and the USA," he said.
 
He said the largest coke gasification project in the world being set up at Jamnagar would convert low-value petroleum coke from the refinery to useable, high-value fuel, making Jamnagar energy-efficient and self-sufficient.
 
Turning to the oil and gas business, Mr Ambani said the KGD6 fields had, over the past five years, supplied more than 2.3 trillion cubic feet of natural gas and about 25 million barrels of crude oil to various consumers in the country. They have substituted over US$ 33 billion of energy imports – saving the country precious foreign exchange, he said.
 
He said the RIL-BP joint venutre had stepped up its exploration campaign in the East Coast and made further discoveries in KGD6 and CYD5 blocks.
 
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"Timely regulatory approvals and market-based gas prices are the key to developing these resources. We along with our partners BP and NIKO have initiated the arbitration process seeking implementation of the 'Domestic Natural Gas Pricing Guideline 2014'," he said.
 
"We have an ongoing arbitration with Government on the issue of disallowance of cost recovery. We will endeavour to work with the Government for both the arbitrations to achieve prompt and efficient resolution on the matter," he said.
 
"Last year, we saw several false allegations, outright lies and half-truths against this business. We addressed all of the allegations with the truth and facts pro-actively. We have with your support weathered these ill-informed campaigns. We have put out on social media platforms the facts for everyone to see," he said.
 
Mr Ambani said RIL was proceeding with the development of two coal bed methane blocks in Sohagpur, Madhya Pradesh and was on track to start production from them in 2015-16. "We have received the authorization for building natural gas pipeline from Shahdol in Madhya Pradesh to Phulpur in Uttar Pradesh to transport gas from our CBM blocks. This pipeline will connect to major pipeline grid of the country for immediate utilization of this gas by various consumers," he said.
 
"With the development of CBM Blocks, Reliance will become the largest player in the unconventional energy sector in India," he said.
 
Mr Ambani had, during the last year, become India's largest retailer by revenues, operaing 1691 stores covering an area of 11.7 million square feet across 146 cities.
 
On Reliance Jio, the company's digital services initiative, Mr Ambani said limited field trials for broad band services were already under way and expanded trials would commence in August across multiple cities and continue till early 2015.
 
"The year 2015 will see the phased launch of Reliance Jio across India. Millions of customers would have started to use the digital platform and services in their daily lives. The fruits of the tremendous value created by this Rs. 70,000 crore initiative would start to flow. This value creation would be on a base of 1.25 billion Indians, with an opportunity to include all sections of our society in the exciting promise of the digital economy," he said.
 
"Reliance Jio will be one of the largest job-creating and wealth-creating business initiatives in India," he said.
 
Mr Ambani said the network and broadband services would be ubiquitous - initially covering all states, all the 5000 towns and cities accounting for over 90% of urban India and over 215,000 villages in India. Eventually, the network will encompass each of India's over 600,000 villages.
 
"Besides providing the base broadband connectivity to all citizens, the digital infrastructure and digital services have the potential to add significantly to India's GDP growth. Millions of new entrepreneurs and jobs can be expected to spring up in secondary and tertiary sectors in new and innovative digital enterprises and services," he said.
 
"The acquisition through an Open Offer of Network 18 Media & Investments Limited and its subsidiary TV18 Broadcast Limited by Independent Media Trust, the sole beneficiary of which is Reliance Industries Limited, is one aspect of the digital services play. This will differentiate and strengthen our 4G business at the unique intersects of telecom, web and digital commerce, and the media through a suite of premier digital properties," he added.
 
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Actress Preity Zinta files molestation case against former boyfriend Ness Wadia

Preity Zinta
Preity Zinta
Well-known Bollywood actress Preity Zinta has filed a complaint with the Mumbai Police alleging that she was molested by her former boyfriend Ness Wadia, with whom she co-owns Indian Premier League (IPL) cricket team Kings XI Punjab and who is the heir to the Bombay Dyeing business group, at Wankhede Stadium here on May 30.
 
Ms Zinta, 39, filed the complaint on Thursday night at the Marine Drive Police Station in south Mumbai which has turned her three-page letter into a first information report (FIR) under Sections 354 (Assault or criminal force to woman with intent to outrage her modesty), 504 (Intentional insult with intent to provoke breach of the peace), 506 (Criminal intimidation) and 509 (Word, gesture or act intended to insult the modesty of a woman).
 
Ms Zinta and Mr Wadia were in a relationship for about five years before they called it off in 2009.
 
The police said an offence had been registered and they were trying to collect more evidence by recording the statements of those involved and getting CCTV footage.
 
Mr Wadia has denied the allegations. "I am shocked at the complaint and the allegations made against me are totally false and baseless," he said in a brief statement.
 
Ms Zinta, who has since flown to the United States, issued a statement to the media this morning in which she said it was a very difficult time for her and requested the media to respect her privacy.
 
She also said she did not intend to harm anyone and was only trying to protect herself.
 
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L&T Construction wins orders valued at Rs 1027 crore in May-June

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Infrastructure major Larsen & Toubro (L&T) today said its construction division had won new orders worth Rs 1027 crore across various business segments in May and June this year.
 
A press release from the Buildings & Factories business had received orders worth Rs 967 crore, including a major order from a reputed developer for the construction of 19 residential towers (19 floors each) in Bangalore involving complete civil, structural and finishing works. 
 
In addition, the business has also received orders from various ongoing jobs, it said..
 
Additional orders worth Rs 60 crore have also been received from various ongoing jobs of Heavy Civil Infrastructure, Power Transmission & Distribution and Water & Renewable Energy Businesses.
 
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Tata Sons appoints Sunil Sinha as resident director, MENA region

Sunil Sinha
Sunil Sinha
Tata Sons, the investment holding company of the Tata group, today appointed Mr. Sunil Sinha as Resident Director, Middle East & North Africa (MENA) Region and announced its intention to establish an office in Dubai for the MENA region, in collaboration with Tata International. 
 
"The office’s objective is to further enhance and strengthen Tata Sons’ engagement with all stakeholders in the MENA region, facilitating business growth for Tata group companies, especially in focus sectors that are crucial to development in MENA and are of strategic interest to the group," a press release from the group said.
 
The MENA office will report into Mr. Madhu Kannan, Member, Group Executive Council, Tata Sons, it said.
 
Mr. Sinha has been in the Tata group for over 31 years, most recently as the CEO of Tata Quality Management Services (TQMS). 
 
He currently serves on the Board and Audit Committee of Tata Auto Comp Hendrickson Suspensions Pvt. Ltd. and the Advisory Board of the Symbiosis Centre for Distance Learning (SCDL). In 2009, 
 
Mr. Sinha was nominated by Businessweek magazine as one of the world’s 25 ‘Masters of Innovation’. During his Tata career, he has also worked in Tata Steel and Tata International and gained functional experience in the areas of International Marketing, Shipping and Chartering, Project Management and Human Resources.
 
Mr. Sinha graduated in mechanical engineering from the Bihar College of Engineering, Patna, in 1982. He completed the Advanced Management Programme from INSEAD, Fontainebleau, France, in 2004, and the Advanced Strategic Management Programme at IMD, Lausanne, in 2011.
 
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HCC builds India’s first tunnel using tunnel boring machine in Himalayan terrain

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Infrastructure major Hindustan Construction Company (HCC) today said it had successfully completed the first tunnel constructed using tunnel boring machine (TBM) in Himalayan terrain for the Kishanganga Hydroelectric Power Project in Jammu and Kashmir. 
 
The tunnel boring machine emerged out successfully yesterday after completing the 14.75 km tunnel well ahead of schedule, a press release from the company said.
 
The 330 MW Kishanganga Hydroelectric Power Project is located on River Kishanganga, a tributary of the Jhelum, in Bandipore district of Jammu & Kashmir. 
 
HCC, in a joint venture with Halcrow Group Ltd. U.K. (Halcrow), is executing the project for the National Hydroelectric Power Corporation Ltd. (NHPC). The project is run of the river scheme and involves transfer of water of Kishanganga river in Gurez valley to Bonar nallah near Bandipore in Kashmir valley.
 
The Kishanganga project is being constructed by HCC on engineering, procurement and construction (EPC) basis. It has a 23.65 km long head race tunnel (HRT) to carry the water from the dam to the powerhouse. The tunnel is constructed using two methodologies - 14.75 km tunnel is constructed by TBM and the remaining 8.9 km tunnel is constructed by conventional drill and blast method. This is one of the longest HRT in India with maximum overburden (height of mountain above tunnel) of 1470 m.
 
Mr A.I. Benny, Project Manager HCC said, “Using tunnel boring machine in young Himalayan mountains poses various geological and technical challenges. We are indeed proud of having a capable team that took up this challenge and with meticulous planning and precise execution overcome all hurdles to complete the tunnel well ahead of time.”
 
The release said that a state-of-the-art Double Shield TBM was ordered from SELI of Italy for this specialized job. The 225 meters long TBM with a cutter head of 6.18 meters was transported to the project location via Mumbai in 160 container shipment. Transporting the machine to project location in Jammu & Kashmir was a major logistical challenge which was completed in three months. The TBM commenced its first drive on April 20, 2011 and completed the tunnel yesterday with average monthly progress of around 500 meters. In November 2012, HCC made a national record of highest monthly tunneling progress of 816 meters at Kishanganga project.
 
The contract is on a turnkey basis valued at approximately Rs 2726.49 crore, the release added.
 
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Central Railway cancels 30 suburban services in Mumbai after tree falls on OHE

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The Central Railway's suburban train services were affected after a tree fell on an overhead electricity (OHE) line at a platform at Dadar station this evening, leading to the cancellation of as many as 30 services.
 
The incident resulted in diversion of several fast trains onto the slow line between Parel and Matunga, a press release from the railway said.
 
Fire brigade personnel were called in to cut the tree infringing the OHE and the down line was restored at 2010 hours and the up line at 2029 hours, it said.
 
"Due to this incident, 30 services were cancelled," the release added.
 
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RBI simplifies KYC norms for banks regarding 'proof of address' from customers

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The Reserve Bank of India (RBI) has simplified the Know Your Customers (KYC) norms for banks regarding the "proof of address" required while opening a bank account by individuals.
 
A notification sent by RBI to all banks yesterday said it had received representations from various quarters, especially migrant workers and transferred employees, regarding problems faced in submitting a proof of current and permanent address while opening a bank account.
 
The RBI said it had examined the manner in the light of amendment to the Prevention of Money Laundering Rules (Maintenance of Records), 2005, and decided to simplify the requirement of submission of ‘proof of address’.
 
Henceforth, customers may submit only one documentary proof of address (either current or permanent) while opening a bank account or while undergoing periodic updation. In case the address mentioned as per ‘proof of address’ undergoes a change, fresh proof of address may be submitted to the branch within a period of six months.
 
In case the proof of address furnished by the customer is not the local address or address where the customer is currently residing, the bank may take a declaration of the local address on which all correspondence will be made by the bank with the customer. No proof is required to be submitted for such address for correspondence/local address. This address may be verified by the bank through ‘positive confirmation’ such as acknowledgment of receipt of (i) letter, cheque books, ATM cards; (ii) telephonic conversation; (iii) visits; etc.
 
In the event of change in this address due to relocation or any other reason, customers may intimate the new address for correspondence to the bank within two weeks of such a change.
 
"Banks may revise their KYC policy in the light of the above instructions and ensure strict adherence to the same," the release added.
 
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IMFA starts production of eco-friendly low density aggregate

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Indian Metals & Ferro Alloys (IMFA), a leading fully integrated producer of value-added chrome, has started production of low density aggregate (LDA), which is an eco-friendly product made from fly ash generated by thermal power plants. 
 
IMFA operates 258 MW captive power generation capacity and own chrome ore mines, a press release from the company said.
 
LDA is a substitute for natural aggregates (stone chips), quarrying of which in itself adds to the pollution load. Moreover, LDA has the added advantage of being light weight so it adds mass to concrete without corresponding weight. Finally, the permeable surface of LDA pellets also enables better quality concrete as opposed to stone chips, it said.
 
Although LDA is in use globally, it is being produced in India for the first time. The composition is about 85% fly ash and this plant which has been put up at a cost of Rs 75 crore will gainfully utilize about 120,000 tonnes per annum of fly ash. 
 
IMFA also has 2 units of fly ash brick plant with collective capacity of 1,00,000 fly ash bricks per day, the release added.
 
“This investment demonstrates our commitment to the environment. We are also delighted to be a trailblazer yet again and are confident this product will be of great use to the construction industry," Mr. Jayant Misra, Director (Corporate) and COO, IMFA said.
 
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Reliance Jio Infocomm signs tower sharing deal with Ascend Telecom

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Reliance Jio Infocomm Ltd. (RJIL), a wholly owned subsidiary of Reliance Industries Ltd. (RIL), today said it had signed a telecom tower sharing agreement with Ascend Telecom Infrastructure Pvt. Ltd. 
 
Under the agreement, RJIL will utilize the pan-India tower infrastructure of Ascend to launch its 4G services, ensuring a faster and more efficient rollout to its customers, a press release from the company said.
 
Ascend is one of the leading innovators in the wireless infrastructure space, and has a portfolio of more than 4,500 towers across India, it said.
 
The release said Ascend had successfully deployed innovative and efficient solutions which reduce providers’ operating costs and carbon footprints. It is at the forefront of leveraging technology to manage infrastructure efficiently. Ascend is backed by New Silk Route Growth Capital, IL&FS and the TVS Group.
 
Mr Sanjay Mashruwala, Managing Director, Reliance Jio said, “Our partnership with Ascend Telecom is a continuation of our efforts to forge strategic partnership with key tower infrastructure companies with a view to build a formidable nationwide network. Ultimately it’s our network coverage footprint that will give our customers the geographical freedom they need to avail our high speed services.”
 
“Our 12 years’ experience in the market, coupled with strong relationships with mobile network operators and equipment suppliers, allows us to bring improvements right across the value chain. We are excited about the opportunity to partner with RJIL for the launch of their 4G services,” said Mr Sushil Kumar Chaturvedi, Director & CEO, Ascend Telecom Infrastructure Pvt. Ltd. 
 
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“Our network of more than 4,500 towers across the country will make higher quality, higher speed coverage available to RJIL’s mobile subscribers. Our focus on innovation has been recognized by the industry. At the same time, this agreement will benefit the environment by avoiding the impact of building new towers that duplicate existing infrastructure,” he added.
 
RJIL has already signed similar agreements with Tower Vision, ATC India and Viom Networks.
 
It has also signed an agreement with Bharti Airtel for a comprehensive telecom infrastructure sharing agreement to share infrastructure created by both parties to avoid duplication of infrastructure wherever possible. 
 
RJIL has also signed a key agreement for international data connectivity with Bharti to utilise dedicated fiber pair of Bharti’s i2i submarine cable that connects India and Singapore. 
 
The company has also inked agreements with Reliance Communications Limited for sharing of RCOM’s extensive inter-city and intra-city optic fiber infrastructure of nearly 1,20,000 fiber-pair kilometers of optic fiber and 500,000 fiber pair kilometers respectively and 45,000 towers.
 
RJIL is the first telecom operator to hold pan-India Unified License, which  authorises it to provide all telecommunication services except Global Mobile Personal Communication by Satellite Service. RJIL holds spectrum in 1800 MHz (across 14 circles) and 2300 MHz (across 22 circles) capable of offering fourth-generation (4G) wireless services.
 
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RBI keeps repo rate unchanged at 8%, CRR at 4% to rein in inflation

RBI logo
RBI logo
Committing itself to keeping the economy on a disinflationary course, taking consumer inflation to 8 per cent by January 2015 and 6 per cent by January 2016, the Reserve Bank of India (RBI) today decided to keep the key policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8 per cent.
 
"If the economy stays on this course, further policy tightening will not be warranted. On the other hand, if disinflation, adjusting for base effects, is faster than currently anticipated, it will provide headroom for an easing of the policy stance," RBI Governor Raghuram G Rajan said in the central bank's Second Bi-Monthly Monetary Policy Statement, 2014-15.
 
Dr Rajan said that, on the basis of an assessment of the current and evolving macroeconomic situation, the RBI had also decided to keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL).
 
The RBI also reduced the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points from 23.0 per cent to 22.5 per cent of their NDTL with effect from the fortnight beginning June 14, 2014.
 
It reduced the liquidity provided under the export credit refinance (ECR) facility from 50 per cent of eligible export credit outstanding to 32 per cent with immediate effect.
 
The central bank introduced a special term repo facility of 0.25 per cent of NDTL to compensate fully for the reduction in access to liquidity under the ECR with immediate effect.
 
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It also decided to continue to provide liquidity under 7-day and 14-day term repos of up to 0.75 per cent of NDTL of the banking system.
 
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.
 
Today's monetary policy statement was the first since the Narendra Modi government assumed office on May 26 and there was much speculation about whether Dr Rajan would persist with his hawkish anti-inflation stance or accommodate the new government's pro-growth policies.
 
The latest data shows that the Indian economy grew by just 4.7 per cent in 2013-14, the lowest level in nearly a decade. It was also the second straight year of sub-five per cent growth.
 
Since taking over as the RBI Governor in September last year, Dr Rajan, a former chief economist of the International Monetary Fund (IMF), has hiked interest rates three times which, among other things, helped to reduce the country's current account deficit and restore the stability of the rupee.
 
At the same time, Dr Rajan ended up disappointing business leaders who have been calling for lower interest rates to boost growth.
 
With consumer inflation hovering at 8.59 per cent in April and with fears that the monsoon may be weak this year, the RBI's room for manoeuvre was further limited.
 
The industry was, however, hoping for at least a small, if symbolic, cut in interest rate of 25 basis points.
 
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In his assessment, Dr Rajan said that, since the first bi-monthly monetary policy statement of April 2014, global activity was evolving at different speeds. 
 
"A broad-based strengthening of growth is gaining traction in the US and the UK, after a moderation in the first quarter of 2014 due to adverse weather conditions. However, in the euro area, recovery is struggling to gather momentum. The pick-up in sales in Japan in anticipation of the consumption tax hike has been followed by a sharp fall in consumer spending. Growth in coming quarters will depend on all three 'arrows' being put in play," he said.
 
"Structural constraints continue to impede growth prospects in emerging market economies (EMEs), with concerns about the slowdown in China as its economy rebalances. Financial markets across the world still remain vulnerable to news about the impending normalisation of interest rates in some developed economies, even as some valuations appear frothy," he said.
 
Dr Rajan said lead indicators pointed to continuing sluggishness in domestic economic activity in the first quarter of 2014-15. 
 
"The outlook for agriculture is clouded by the meteorological department’s forecasts of a delay in the onset of the south-west monsoon with a 60 per cent chance of the occurrence of El Nino. The ongoing contraction in the production of consumer durables and capital goods, coupled with moderation in corporate sales and non-oil non-gold imports, is indicative of continuing weakness in both consumption and investment demand. The decisive election result, together with improved sentiment should, however, create a conducive environment for comprehensive policy actions and a revival in aggregate demand as well as a gradual recovery of growth during the course of the year," he said.
 
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The RBI noted that retail inflation measured by the consumer price index (CPI) increased for the second consecutive month in April, pushed up by a sharp spike in food inflation, especially in the prices of fruits, vegetables, sugar, pulses and milk. CPI inflation excluding food and fuel has moderated gradually since September 2013 although it is still elevated, it said.
 
"For the year 2013-14 as a whole, India’s current account deficit (CAD) narrowed sharply to 1.7 per cent of GDP, primarily on account of a decline in gold imports, although other non-oil imports also contracted with the weakening of domestic demand, and there was some pick-up in exports. In April 2014, the trade deficit narrowed sharply due to resumption of export growth after two consecutive months of decline, and the ongoing shrinking of import demand. Robust inflows of portfolio investment, supported by foreign direct investment and external commercial borrowings, kept external financing conditions comfortable and helped add to reserves," the statement said.
 
According to it, with the unwinding of year-end window dressing, the corresponding decline in the size of excess CRR holding of banks as well as the sharp decline in Government cash balances with the Reserve Bank as a result of Government expenditure, liquidity conditions improved significantly in April and May 2014. The average daily access to liquidity from the LAF and term repos during this period has been close to 1.0 per cent of NDTL. 
 
"The Reserve Bank will continue to monitor liquidity conditions and will actively manage liquidity to ensure adequate flow of credit to the productive sectors," it said.
 
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Explaining its policy stance, the RBI said that, in March and April, CPI headline inflation had risen on the back of a sharp increase in food prices. 
 
"Some of this price pressure will continue into May, but it is largely seasonal. Moreover, CPI inflation excluding food and fuel has been edging down. The risks to the central forecast of 8 per cent CPI inflation by January 2015 remain broadly balanced. Upside risks in the form of a sub-normal/delayed monsoon on account of possible El Nino effects, geo-political tensions and their impact on fuel prices, and uncertainties surrounding the setting of administered prices appear at this stage to be balanced by the possibility of stronger Government action on food supply and better fiscal consolidation as well as the pass through of recent exchange rate appreciation. Accordingly, at this juncture, it is appropriate to leave the policy rate unchanged, and to allow the disinflationary effects of rate increases undertaken during September 2013-January 2014 to mitigate inflationary pressures in the economy," it said.
 
"Contingent upon the desired inflation outcome, the April projection of real GDP growth from 4.7 per cent in 2013-14 to a range of 5 to 6 per cent in 2014-15 is retained with risks evenly balanced around the central estimate of 5.5 per cent. The outlook for the agricultural sector is contingent upon the timely arrival and spread of the monsoon. Easing of domestic supply bottlenecks and progress in the implementation of stalled projects should brighten the outlook for both manufacturing and services. The resumption of export growth is a positive development and as world trade gathers momentum, the prospects for exports should improve further," it said.
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The RBI said that, in pursuance of the Dr. Urjit R. Patel Committee’s recommendation to move away from sector-specific refinance towards a more generalised provision of system liquidity without preferential access to any particular sector or entity, the Reserve Bank has decided to limit access to export credit refinance while compensating fully with a commensurate expansion of the market’s access to liquidity through a special term repo facility from the Reserve Bank (equivalent to 0.25 per cent of NDTL). 
 
This should improve access to liquidity from the Reserve Bank for the system as a whole without the procedural formalities relating to documentary evidence, authorisation and verification associated with the ECR. This should also improve the transmission of policy impulses across the interest rate spectrum and engender efficiency in cash/treasury management, it said.
 
"As the economy recovers, investment demand and the need for credit will pick up. To the extent that this contributes eventually to supply, it is important that banks have the room to finance it. A reduction in the required SLR will give banks more freedom to expand credit to the non-Government sector. However, the Reserve Bank is also cognisant of the significant on-going financing needs of the Government. Therefore, the SLR is reduced by 0.50 per cent of NDTL, with any further change dependent on the likely path of fiscal consolidation.
 
"With a view to improving the depth and liquidity in the domestic foreign exchange market, it has been decided to allow foreign portfolio investors to participate in the domestic exchange traded currency derivatives market to the extent of their underlying exposures plus an additional US$ 10 million. Furthermore, it has also been decided to allow domestic entities similar access to the exchange traded currency derivatives market. Detailed operating guidelines will be issued separately," it said.
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As a prudential measure, the eligibility limit for foreign exchange remittances under the Liberalised Remittance Scheme (LRS) had been reduced to US$ 75,000 last year. In view of the recent stability in the foreign exchange market, it has been decided to enhance the eligible limit to US$ 125,000 without end use restrictions except for prohibited foreign exchange transactions such as margin trading, lottery and the like. Operating guidelines will be issued separately.
 
At present, only Indian residents are allowed to take Indian currency notes up to Rs 10,000 out of the country. Non-residents visiting India are not permitted to take out any Indian currency notes while leaving the country. With a view to facilitating travel requirements of non-residents visiting India, it has been decided to allow all residents and non-residents except citizens of Pakistan and Bangladesh to take out Indian currency notes up to Rs 25,000 while leaving the country. Operating guidelines in this regard are being issued separately, the statement added.
 
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HSBC India PMI data points to rising production volumes at manufacturers

 
Production volumes at Indian manufacturers continued to rise, with growth of both total orders and new export business acclerating over May, leading to further job creation across the sector, the HSBC India Purchasing Managers Index (PMI) data indicated today.
 
The seasonally adjusted index was up marginally from 51.3 in April to 51.4 in May, pointing to a slight improvement in operating conditions and one that was weaker than the series average. 
 
"Output rose for the seventh consecutive month in May. That said, the rate of expansion was unchanged from the modest pace registered in April," a press release from HSBC India said.
 
A PMI reading above 50 indicates growth while a lower reading points to contraction. The index is designed to measure the performance of the manufacturing economy, signalled a solid and stronger improvement in business conditions across the country’s goods-producing sector.
 
The release said panellists highlighted stronger increases in new orders, although there were mentions that growth was stymied by powercuts and the elections. The latest rise in production was broad-based by sector, with the sharpest expansion signalled by consumer goods producers. 
 
May data highlighted further rises in incoming new work, marking a seven-month sequence of expansion. Moreover, the pace of increase accelerated to the quickest since February. Those survey respondents reporting higher new orders commented on the signing of new contracts and improved demand from both domestic and foreign clients. Growth of order book volumes was registered across the three broad areas of the manufacturing economy, led by consumer goods producers. 
 
The release said new orders from abroad also increased during May, thereby stretching the current period of expansion to eight months. New export business rose at a solid rate that was quicker than in April. Surveyed firms reported having benefited from favourable exchange rates. Overseas demand improved in two of the three sub-categories, the exception being investment goods.
 
"Staffing levels were raised in May, amid evidence of increased production requirements. Employment growth has maintained a broadly steady trend pace in the current eight-month expansionary sequence. All three monitored sub-sectors registered higher workforce numbers," it said.
 
Indian manufacturers indicated that purchasing activity increased further in May. Where input buying rose, this was associated with new order growth. Nonetheless, the rate of expansion was only slight and moderated since the previous month. Growth of quantity of purchases was noted across the three market groups, it said.
 
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The release said input costs continued to rise in May, albeit at the weakest rate in one year. There were reports of higher prices paid for some raw materials, although a number of panellists reported successful price negotiations with suppliers. Concurrently, output charges increased further. The rate of charge inflation was, however, marginal and weaker than the series average. 
 
While stocks of purchases were broadly unchanged, post-production inventories increased in May. Meanwhile, outstanding business rose further during the latest month, with monitored firms reporting power outages, the release said.
 
"The momentum in the manufacturing sector improved at the margin, thanks to higher domestic and export order flows. However, output growth held steady as frequent power cuts forced firms to accumulate backlogs at a faster pace," Mr Frederic Neumann, Co-Head of Asian Economic Research at HSBC, said.
 
"Encouragingly, input price pressures eased further, but with output prices still rising the RBI cannot take down its inflation guards," he added.
 
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Deccan Queen enters 85th year of service linking Mumbai and Pune

The Deccan Queen, the iconic train that links Mumbai and Pune and has over the past eight decades grown into a veritable institution with intensely loyal passengers, entered its 85th year today.
 
The introduction of the train on this day in 1930 was a major landmark in the history of the Great Indian Peninsula (GIP) Railway, the forerunner of the Central Railway. This was the first deluxe train introduced on the railway to serve two important cities of the region and was aptly named after Pune, which is also known as ‘’Queen of Deccan’’.
 
Initially, the train was introduced with two rakes of seven coaches each, one of which was painted in silver with scarlet mouldings and the other with royal blue with gold lines. The under frames of the coaches of the original rakes were built in England while the coach bodies were built in the Matunga Workshop of the GIP Railway.
 
In the beginning, the Deccan Queen had only first class and second class accommodation. First class was abolished on 1st January 1949 and second class was redesigned as first class, which continued upto June 1955, when third class was introduced on this train for the first time. This was later re-designated as second class from April 1974 onwards.   
 
The coaches of the original rakes were replaced in 1966 by anti-telescopic steel bodied integral coaches built by Integral Coach Factory, Perambur. These coaches incorporated improved design of bogies for better riding comfort and also improvements in the interior furnishings and fittings.  The number of coaches in the rake was also increased to 12 from the original seven, providing additional accommodation. Over the years, the number of coaches in the train has been increased to the present level of 17 coaches.
 
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From its inception, apart from providing high standards of comfort to the passengers, the train has witnessed various improvement such as introduction, for the first time in India, of coaches with roller bearings, replacement of end on generation coaches with self generating coaches with 110 volts system and introduction of first and second class chair cars providing increased accommodation to passengers.  
 
The distinctive colour scheme of cream and oxford blue with red band above the window level has been recently adopted as the colour scheme for this train, a Central Railway press release said.
 
The rake was changed in 1995 with the following special features:  
 
* All newly manufactured or about a year old, air brake coaches.
* The five first class chair cars in the old rake have been replaced by five AC chair cars providing an additional seating capacity of 65 in a dust-free environment.  Also the nine second class chair cars provide additional seating capacity of 120 seats compared to the old coaches. Thus, the new rake provides a total seating capacity of 1417 as against 1232 seats in the old rake, an increase of 15%.
* The dining car offers table service for 32 passengers and has modern pantry facilities such as microwave oven, deep freezer and toaster. The dining car is also tastefully furnished with cushioned chairs and carpet.
 
At present, Deccan Queen (12123/12124) runs with 17 coaches, including four AC chair cars, one dining car, 10 second class chair cars and two second class cum brake vans, the release added.
 
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India’s forex reserves decline by $ 2.269 billion

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India’s foreign exchange reserves  rose by $ 2.269 billion to $ 312.656 billion in the week ended May 23 after five weeks of strong gains, the Reserve Bank of India (RBI) has said.
 
The forex reserves had grown by $1.094 billion to $ 314.925 billion in the previous week.
 
In its weekly statistical supplement issued here yesterday, the central bank said that foreign currency assets, which constitute a major chunk of the forex reserves, fell by $ 2.255 billion to $ 285.561 billion during the week.
 
Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.
 
According to the bulletin, the country’s gold reserves remained unchanged at last week’s level of $ 20.966 billion, while its special drawing rights (SDRs) declined by $ 9.8 million to $ 4.453 billion during the week.
 
India's reserve position in the Indian Monetary Fund (IMF) went down by $ 3.7 million to $ 1.677 billion during the period, the bulletin added.
 
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Reliance to acquire control of Network 18 through Independent Media Trust

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The Mukesh Ambani-led Reliance Industries Limited (RIL) today said that its Board had approved funding of upto Rs 4000 crore to Independent Media Trust (IMT), of which it is the sole beneficiary, for acquisition of control in Network 18 Media & Investments Limited (NW18), including its subsidiary TV18 Broadcast Limited (TV18) and the open offers to be made consequent to the acquisition. 
 
NW18 is the owner of a suite of premier digital internet properties, e-commerce businesses and differentiated broadcast content. 
 
IMT would use the funds to acquire control over NW18 and TV18 resulting in ownership of about 78% in NW18 and 9% in TV18 and to acquire shares tendered in the open offers, a press release from RIL said.
 
Further, in terms of SEBI (Substantial Acquisition and Takeover Regulations), 2011, IMT would be making open offers to public shareholders for acquisition of equity shares of NW18, TV18 and Infomedia Press Limited. 
 
"IMT would be simultaneously making the Public Announcement under Takeover Regulations. RIL would be a Person Acting in Concert to the Open Offers," the release said.
 
"This acquisition will differentiate Reliance’s 4G business by providing a unique amalgamation at the intersect of telecom, web and digital commerce via a suite of premier digital properties. This suite includes In.com, IBNLive.com, Moneycontrol.com, Firstpost.com, Cricketnext.in, Homeshop18.com, Bookmyshow.com; the broadcast channels include Colors, CNN IBN, CNBC TV18, IBN7, CNBC Awaaz," the release added.
 
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L&T Construction wins orders worth Rs 2458 crore across various segments

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Infrastructure major Larsen & Toubro (L&T) today said its construction division had won new orders worth Rs 2458 crore across various segments in May 2014.
 
A press release from the company said here today that these included new orders worth Rs 1634 crore in the Power Transmission & Distribution Business.
 
One of them is an international engineering, procurement and construction (EPC) order from Qatar General Electricity & Water Corporation (KAHRAMAA) for the supply, construction and commissioning of 6 EHV substations in Qatar. The total value of the order is Rs 1470 crore ($ 251 million).
 
This order is part of the Qatar Power Transmission System Expansion – Phase XI – Stage I Addendum Project. The scope of L&T’s work includes supply, erection, testing and commissioning of gas insulated switchgear of 220/132/66kV, power transformers, 220/132/66kV EHV cables, 11kV air insulated switchgears, protection and automation systems, DC system and auxiliaries, the release said.
 
The contract includes design and construction of civil buildings with a complete set of utilities such as air conditioning, fire protection and lighting systems. 220/132/66kV EHV cable diversions and modification works at remote end substations also form part of the scope of the contract. The project is scheduled for completion in phases starting from 16 to 44 months. 
 
“The two packages (Phase XI Stage 1 & Phase X) which we are currently executing for KAHRAMAA are progressing well and this order, which has been won in the face of stiff global competition, reflects the growing confidence of L&T’s capability,” said Mr. S. N. Subrahmanyan, Member of the Board and Senior Executive Vice President (Infrastructure and Construction). 
 
“It also reflects L&T’s operational competence and customer goodwill 
garnered in GCC countries,” he added. 
 
On the domestic front, an order worth Rs 164 crore has been received for engineering, procurement and construction of 33 kV network substation along with SCADA & DMS system and other associated works in Puri town from the Orissa Power Transmission Corporation Limited. 
 
The company said its Buildings & Factories Business had bagged new orders worth Rs 517 crore. They include a contract for the construction of a convention centre at New Town, Kolkata, from the West Bengal Housing Infrastructure Development Corporation Limited. 
 
The scope involves civil, structural, mechanical, electrical, plumbing, finishes and other associated works. 
 
Another order has been received from a reputed client for the construction of a mall in Chennai. The scope involves civil and structural works, the release said.
 
The company's Transportation Infrastructure Business has received a new order worth Rs 307 crore for the design build and turnkey construction of a four-lane Elevated Corridor Project in Kolkata, West Bengal. The project has an approximate length of 4.3 kms from Garden Reach to Remount Road in Kolkata. The entire duration of the project will be for 18 months. The project shall be funded by the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for the client, Kolkata Metro Development Authority.
 
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Reliance denies ONGC's allegation of "theft" of gas from G4, KG DWN 98/2 blocks

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Energy and petrochemicals major Reliance Industries Limited (RIL) today denied the allegation of apparent "theft" of gas from G4 and KG DWN 98/2 block levelled against it by public sector Oil and Natural Gas Corporation (ONGC) and said it was "saddened" by the statement.
 
In a statement here, the Mukesh Ambani-led RIL said it could only attribute the allegation to the likelihood that some elements in ONGC had misled its new Chairman and Managing Director D K Sarraf in order to hide their own failure to develop discoveries made over the last 13 years in these blocks. 
 
The statement said ONGC approached RIL in mid-2012 to examine the possibility of sharing RIL’s KG D6 infrastructure in order to commercialize some of the discoveries in these blocks and a memorandum of understanding (MoU) was signed between the two companies in July 2013. 
 
"We continue to see ONGC as a valued Industry peer, worthy of collaboration, to whom we will continue to provide assistance to help develop its discoveries and start production of valuable gas locked beneath the Indian ocean to the benefit of the people of India," it said.
 
According to RIL, it was only in August 2013 that ONGC brought the issue of possible connectivity between reservoirs in RIL and ONGC blocks to the notice of RIL through the Directorate General of Hydrocarbons (DGH).
 
"Since then, as per international practice, ONGC and RIL have been engaged in the process of appointing an independent agency to investigate the issue of possible reservoir connectivity across the blocks. The two had met on May 9, 2014 and exchanged drafts regarding the scope of work to be assigned to such agency. On May 23, the parties again met and finalized the enquiry notice to be sent to four agreed international expert agencies. It was decided to issue the Enquiry Notice on May 26, 2014. Since the process for appointing this agency as per international practice was already well underway. it is indeed unfortunate that some elements in ONGC forced invocation of the Delhi High Court at this juncture," it said.
 
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"Resolution of such complex techno-commercial matters, that are not uncommon in the oil and gas industry, is best done through the help of experts rather than public posturing. In any case, ONGC having already filed a petition in the Hon’ble Delhi High Court, we would have expected greater restraint in a matter that has been made sub-judice by them," the RIL statement added.
 
The statement came after a media report quoted Mr Sarraf as saying that ONGC had sued RIL for the alleged "theft" to protect its commercial interests.
 
ONGC had, on May 15, filed a plea in the Delhi High Court accusing RIL exploiting gas from its block in the Krishna Godavari (KG) basin.
 
RIL sources explained that Cairn had made the first discovery in KG DWN 98/2(KG-D5) Block in 2001. RIL’s D1-D3 discoveries in KG DWN 98/3 (KG-D6) Block occurred in Oct 2002. All these deep water discoveries were in younger sediments of the Pliocene age. 
 
They said ONGC then farmed into Cairn’s KG D5 Block and took over Operatorship in 2005. ONGC, which had been operating the G4 nomination block since 1997, made its first Pliocene discovery in this block in early 2004. 
 
However, while RIL had brought its D1-D3 discoveries into commercial production by April 2009 after a mere six and a half years from discovery, ONGC is yet to commence development of any of the discoveries in its two blocks, they said.
 
"All wells drilled by RIL during the development of D1-D3 (in KG D6) are well within the block boundaries and approved in accordance with the production sharing contract (PSC) by the Management Committee consisting of Government representatives, who have the power to veto. 
 
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"In mid-2012, ONGC, in view of techno-economic challenges of developing the discoveries in its two blocks, had approached RIL to examine the possibility of sharing RIL’s infrastructure so that it could commercialise gas discoveries, some of which were discovered more than thirteen years ago. In July 2013, RIL and ONGC entered into a MoU following which RIL has been providing relevant data and information to assist ONGC develop its resources," they said.
 
"Notably, connectivity of reservoirs had never been raised as an issue by ONGC till then. RIL became aware of this issue in late August 2013 through DGH. In September, RIL began constructive discussions with ONGC and DGH. In the absence of any production data from ONGC’s blocks, connectivity could not be established straightaway. In fact, in 2007, ONGC had also acquired high resolution 3-D seismic data extending into KG-D6 Block. Thus ONGC was having data across both sides of the block boundaries. Had connectivity been an open and shut case, ONGC need not have waited so long to approach DGH or RIL. However, the issue has been raised, discussions commenced and the need for the appointment of an expert third party was recognised. 
 
"Both parties agreed to the appointment of an independent expert third party to look at the available data and reach a conclusion whether connectivity exists and possible volumes," they said.
 
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India’s forex reserves rise by $ 1.094 billion

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India’s foreign exchange reserves  rose by $1.094 billion to $ 314.925 billion in the week ended May 16, the Reserve Bank of India (RBI) said here today.
 
In its weekly statistical supplement issued here today, the central bank said that foreign currency assets, which constitute a major chunk of the forex reserves, increased by $ 1.266 billion to $ 287.816 billion during the week.
 
Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.
 
According to the bulletin, the country’s gold reserves remained unchanged at last week’s level of $ 20.966 billion, while its special drawing rights (SDRs) declined by $14.5 million to $ 4.462 million during the week.
 
India's reserve position in the Indian Monetary Fund (IMF) went down by $ 158.1 million to $ 1.681 billion during the period, the bulletin added.
 
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RBI allows banks to give advances of upto 10 year tenor to exporters

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The Reserve Bank of India (RBI) has allowed banks to provide export advances upto a maximum tenor of 10 years to exporters, who have a minimum of three years' satisfactory track record, for execution of long-term supply contractors for the export of goods, subject to certain conditions.
 
A notification issued by the RBI to all Category-I Authorised Dealer Banks yesterday said that this had been done in response to requests received from exporters.
 
Under a notification issued in May 2000, prior approval of the RBI is required to be obtained by an exporter for receipt of advance where the export agreement provides for shipment of goods extending beyond the period of one year from the date of receipt of advance payment. 
 
In terms of another circular issued in February 2012, banks were permitted to allow exporters to receive advance payment for export of goods which would take more than one year to manufacture and ship and where the 'export agreement' provides for the same.
 
The notification said the advances would be subject to conditions, including one that firm irrevocable supply orders should be in place. 
 
It said the contract with the overseas party /buyer should be vetted and clearly specify the nature, amount and delivery timelines of products over the years and penalty in case of non- performance or contract cancellation. 
 
Product pricing should be in consonance with prevailing international prices, it said.
 
The company should have capacity, systems and processes in place to ensure that the orders over the duration of the said tenure can actually be executed.
 
The notification said the facility is to be provided only to those entities, who have not come under the adverse notice of Enforcement Directorate or any such regulatory agency or have not been caution listed.
 
Such advances should be adjusted through future exports. The rate of interest payable, if any, should not exceed LlBOR plus 200 basis points, it said.
 
The notification said the documents should be routed through one Authorized Dealer bank only. The Authorised Dealer bank should ensure compliance with AML / KYC guidelines and also undertake due diligence for the overseas buyer so as to ensure it has good standing / sound track record.
 
Such export advances shall not be permitted to be used to liquidate rupee loans, which are classified as NPA as per the Reserve Bank of India asset classification norms. Double financing for working capital for execution of export orders should be avoided, it said.
 
According to the notification, receipt of such advance of $ 100 million or more should be immediately reported to the Trade Division, Foreign Exchange Department of the RBI.
 
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RBI eases gold import norms, allows import by star trading houses

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The Reserve Bank of India (RBI) has eased gold import norms and allowed star trading houses (STHs) and premier trading houses (PTHs), which are registered as nominated agencies by the Director General of Foreign Trade (DGFT), to import the metal under the 20:80 scheme, subject to certain conditions.
 
A notification issued by the RBI yesterday to all scheduled commercial banks which are authorised dealders (ADs) in foreign exchange and all agencies nominated for import of gold said it had been receiving representations from jewelers, bullion dealers, AD banks, and trade bodies to rationalise the guidelines for import of gold. 
 
"Taking into account such representations and in consultation with the Government of India, it has been decided to modify the guidelines for import of Gold by the nominated banks / agencies / entities," it said.
 
The revised guidelines have come into force with immediate effect, the notification said.
 
It said the STH/PTH should have imported gold prior to the introduction of 20:80 scheme. The STH / PTH should get the required verification done by the Department of Customs at any port where they have imported gold consignment in the past.
 
The first lot of gold under this scheme would be based on the highest monthly import during any of the last 24 months prior to the RBI’s notification dated August 14, 2013, subject to a maximum of 2000 kgs.
 
As in the case of other nominated agencies, the eligible quantity may be imported by STHs/PTHs from any port, subject to their eligibility limit/ maximum quantity allowed to them.
 
The notification said that, for proper compliance, before import, they must submit the import plan, port-wise and quantity-wise, to the concerned Customs office, where the verification of the figures of past performance was done. This information will be sent to all the other ports from which imports are permitted. The overall discipline of exporting 20% of each imported consignment before the next consignment is imported will be equally applicable to such STH/PTH importers.
 
Further, the RBI has decided to permit the nominated banks, to give Gold Metal Loans (GML) to domestic jewellery manufacturers out of the eligible domestic import quota of 80% to the extent of GML outstanding in their books as on March 31, 2013.
 
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India's first floating hotel inaugurated in Mumbai

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The Maharashtra Tourism Development Corporation (MTDC) has launched India's first floating hotel here as part of its efforts to boost luxury tourism in the state.
 
The "floatel" , AB Celestial, docked at the Maharashtra Maritime Board's jetty at Bandra under the Bandra-Worli Sea Link, was opened for the public by state Tourism Minister Chhagan Bhujbal at a glittering ceremony today.
 
Mr Bhujbal said the floating hotel would be a major attraction for the large number of foreign tourists who visit the city every day as well as affluent domestic tourists.
 
MTDC has partnered with WB International Consultants and AB Hospitality, who will be running the service.
 
The floatel has been imported from the United States and offers a 360 degree view of Mumbai city and the sea link.
 
It is a 3-tier luxury dining facility with a sky deck, two galleys and two multi-cuisine restaurants, includng a club lounge equipped with a 24-hour coffee shop.
 
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Demand for gold in India down 26% at 190.3 tonnes in Q1 of 2014

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Demand for gold in India was down by 26 per cent at 190.3 tonnes in the first quarter (Q1) of 2014 (January-March) as compared to the overall Q1 demand for 2013, which was 257.5 tonnes (t), due to the continued impact of higher import duties and supply curbs imposed on the gold market.
 
India’s Q1 2014 gold demand value was Rs 48,853 crores, a fall of 33% in comparison to Rs 73,183.6 crores in Q1 2013, according to the latest World Gold Council (WGC) Gold Demand Trends report, which covers the period January-March 2014.
 
The council said that, with the election of the new Bharatiya Janata Party (BJP) government and its declared pro-business approach, there was an expectation that the short term curbs on gold would be removed. 
 
The report said total jewellery demand in India for Q1 2014 was down by 9% at 145.6 t as compared to Q1 2013 (159.5 t).
 
The value of jewellery demand was Rs 37,377.8 crores, a fall of 18% from Q1 2013 (Rs. 45,331.2 crore).
 
Total investment demand for Q1 2014 was down by 54% at 44.7 t in comparison to Q1 2013 (98 t). In value terms, gold investment demand was Rs. 11,475.2 crores, a drop of 59% from Q1 2013 (Rs. 27,852.4 crores).
 
The report said total gold recycled in India in Q1 2014 was 21.3 t, marginally up, as compared to 21 t in Q1 2013.
 
According to the report, the 2014 full year expectations of gold demand was 900-1000 t.
 
Mr Somasundaram PR, Managing Director, India, World Gold Council said: “The Q1 2014 figures illustrate the continued impact of higher import duties and supply curbs 
imposed on the gold market in an effort to reduce the country’s Current Account Deficit. Policy makers and economists across the spectrum have acknowledged the risks of these types of policies. Gold continues to enter India through unofficial channels and whilst the estimates of the grey market vary, there is now a far great understanding of the adverse impact it is having on the Indian gold industry and genuine consumers. 
 
"With the election of the BJP and its declared pro-business approach, there is an expectation that the short term curbs on gold will be removed. The key, however, to a vibrant industry that has huge employment opportunities is a long term policy approach to gold that balances the demand and the macro economic factors. India should create a favourable system that deals with gold as a fungible asset category, reflecting its importance in Indian culture," he said.
 
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Globally, the report showed a return to the long-term quarterly average demand trends established over the past five years. Following an exceptional year in 2013 gold demand in Q1 2014 was 1,074 t, almost unchanged compared to the same period in 2013 - a clear demonstration that the fundamentals of the gold market remain robust.
 
The report said global demand for jewellery, the most significant component of overall demand, totalled 571t in Q1 2014, a 3% rise on the same period last year, representing the strongest start to the year for jewellery since 2005.
 
Most notably, there was a 10% rise in demand for jewellery in China, which became the largest global market for gold demand in 2013.
 
Central banks continued to be strong buyers, purchasing 122t in the quarter. While this represents a fall of 6% compared to Q1 2013, it is the 13th consecutive quarter in which central banks have been net purchasers of gold and indicates their continued commitment to diversifying their assets.
 
Overall investment demand dipped slightly, to 282t in Q1 2014, compared with 288t in the same quarter last year. Demand for bars and coins was 283t in the quarter, a fall of 39% on the same time last year. This coincided with the first rise in the quarterly average gold price seen since Q4 2012. 
 
The report said the fall was particularly noticeable in India, where investment in bars and coins dropped 54% to 45t.   
 
Factors including duty and restrictions on gold imports coupled with restrictions on the free movement of cash and other assets, such as gold in the run up to the election, had the effect of dampening down genuine purchases of gold using cash. However in contrast, outflows from gold-backed Exchange Traded Funds (ETFs) slowed to just 0.2t, compared to the more substantial fall of 177t seen in Q1 2013.
 
Consumer demand of 853t was unsurprisingly lower than the figures seen throughout much of 2013, when buyers took advantage of the lower gold price and drove consumer demand to record levels.  Q1 2014 data indicates a return to long term average demand trends and is in line with the 5-year quarterly average of 850t.
 
Mr Marcus Grubb, Managing Director, Investment Strategy, at the World Gold Council, said: “Following an exceptional year in 2013, Quarter 1 2014 signals a return to the long term average patterns of demand, holding steady at 1,074 tonnes.  It is clear that the longer term underpinnings of the gold market – such as jewellery demand in Asia – remain firmly in place demonstrating the continuing resilience of the gold market and the unique nature of gold as an asset class, rebalancing to reflect demand.” 
 
In value terms, gold demand in Q1 2014 was US$45bn, down 21% compared to Q1 2013. The average gold price of US$1,293/oz was down 21% on the average Q1 2013 price.
 
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Tata Global Beverages' UK subsidiary acquires 100% stake in Bronski Eleven

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The United Kingdom subsidiary of Tata Global Beverages has acquired a 100 percent stake in the equity capital of Bronski Eleven, Australia, engaged in coffee business under the MAP brand.
 
The investment was made in Earth Rules Pty Limited. Bronski is the holding company of Earth Rules, from whom the stake was acquired, the company explained.
 
MAP has significant presence in the roast and ground coffee and in the pods (single-service portions) category in Australia, a press release from Tata Global Beverages said.
 
According to it, the investment is in line with Tata Global Beverages’ vision to become a leader in natural beverages — tea, coffee and water. 
 
Tata Global Beverages is already present in the pods segment in the United States through an agreement with Green Mountain Coffee Roasters’ Keurig single-serve machines for Eight O’ Clock Coffee. It is also present in the single-serve segment in Canada with Tassimo, for Tetley tea.
 
“The acquisition in Australia will help Tata Global Beverages further expand its offering in Australia to include the coffee business,” stated Mr Ajoy Misra, MD and CEO, Tata Global Beverages.
 
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Leela Group founder chairman C P Krishnan Nair passes away

C. P. Krishnan Nair
C. P. Krishnan Nair
Capt. C.P. Krishnan Nair, founder chairman of The Leela Palaces, Hotels and Resorts passed away peacefully here today after a brief illness.
 
He was 92. He is survived by his wife Leela Nair, their sons Vivek Nair, chairman and managing director of the company, and Dinesh Nair, co-chairman and managing director, their wives Lakshmi and Madhu Nair, respectively, and their children.
 
His family was with beside him when he breathed his last, a statement from the company said.
 
The last rites shall be performed at 4 pm tomorrow at the Pawan Hans crematorium at Juhu here.
 
Capt. Nair, who had participated in the freedom struggle and then joined the Indian Army, went on to play a major role in the textile industry and the hospitality sector. The Leela Group has grown into one of India's leading luxury hotel chains.
 
"Capt. Nair’s singularly inspiring life was dedicated to the pursuit of excellence and advancement of tourism in India," the statement said.
 
He was honoured by the government with the Padma Bhushan in 2010. He was conferred the Global 500 Laureate Roll of Honour by the United Nations Environment Program. He was also the recipient of many prestigious accolades for his contribution to the tourism and hospitality sectors.
 
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