71
G.
Benefits to shareholders of the Company under the Wealth Tax Act, 1957
Shares of the Company held by the shareholder will not be treated as an asset within the meaning of section
2(ea) of Wealth Tax Act, 1957. Hence, shares are not liable to wealth tax.
NOTES:
1.
In the above statement only basic tax rates have been enumerated and the same is subject to surcharge and
education cess, wherever applicable.
2.
The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary manner
only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership
and disposal of equity shares.
3.
All the above benefits are as per the current tax laws. Legislation, its judicial interpretation and the policies
of the regulatory authorities are subject to change from time to time, and these may have a bearing on the
benefits listed above. Accordingly, any change or amendment in the law or relevant regulations would
necessitate a review of the above.
4.
Several of these benefits are dependent on the company and its shareholders fulfilling the conditions
prescribed under the provisions of the relevant sections under the relevant tax laws.
5.
This statement is only extended to provide general information to the investors and is neither designed nor
intended to be a substitute for Professional Tax Advice. In view of the individual nature of tax
consequences, being based on all the facts, in totality, of the investors, each investor is advised to consult
his/her/its own tax advisor with respect to specific tax consequences of his/her/its investments in the shares
of the Company.
6.
The provisions of The Finance Bill of 2011 have been considered as the same have been enacted into law as
on the date of this statement. However benefits proposed by Direct Taxes Code Bill, 2009 (which becomes
law, only if passed in the Parliament) have not been considered.
7.
No assurance is given that the revenue authorities/courts will concur with the views expressed herein. Our
views are based on the existing provisions of law and its interpretation, which are subject to change from
time to time. We do not assume responsibility to update the views consequent to such changes. We shall not
be liable to any claims, liabilities or expenses relating to this assignment except to the extent of fees relating
to this assignment, as finally judicially determined to have resulted primarily from bad faith or intentional
misconduct. We will not be liable to any other person in respect of this statement.
M. M. Nissim and Co.
Chartered Accountants
N Kashinath (Partner)
Membership No.: 36490
Date: August 11, 2011
Place: Mumbai
72
(A) INDUSTRY OVERVIEW
The information in this section is derived from various government publications and other industry sources.
Neither we nor any other person connected with the Issue has verified this information. Industry sources and
publications generally state that the information contained therein has been obtained from sources generally
believed to be reliable, but their accuracy, completeness and underlying assumptions are not guaranteed and
their reliability cannot be assured, and, accordingly, investment decisions should not be based on such
information. Industry sources and publications are also prepared based on information and estimates as of
specific dates and May no longer be current. The data may have been re-classified by us for the purpose of
presentation.
The Indian Economy
India had an estimated GDP on a purchasing power parity basis of approximately US$ 4.05 trillion in 2010,
making it the fifth largest economy in the world after the European Union, United States of America, China and
Japan. (Source: 2011 CIA World Fact book)
The overall growth of Gross Domestic Product (GDP) at factor cost at constant prices, as per Advance
Estimates, was 8.6 per cent in 2010-11 representing an increase from the revised growth of 8.0 per cent during
2009-10, according to the Advance Estimate (AE) of Central Statistics Office (CSO).
At disaggregated level, this (AE 2010-11) comprises an increase of 5.4 per cent in agriculture and allied
activities, a growth of 8.1 per cent in industry and 9.6 per cent in services as compared to a growth of 0.4 per
cent, 8.0 per cent and 10.1 per cent respectively during 2009-10. Real GDP grew by 8.2 per cent in the 3rd
quarter of 2010-11 following identical growth of 8.9 per cent in the first two.
(Source:
www.ibef.org
, Indian Economy Overview)
In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong
domestic demand - and growth exceeded 8% year-on-year in real terms. Merchandise exports, which account
for about 15% of GDP, returned to pre-financial crisis levels. An industrial expansion and high food prices,
resulting from the combined effects of the weak 2009 monsoon and inefficiencies in the government's food
distribution system, fueled inflation which peaked at about 11% in the first half of 2010, but has gradually
decreased to single digits following a series of central bank interest rate hikes. New Delhi in 2010 reduced
subsidies in fuel and fertilizers sold a small percentage of its shares in some state-owned enterprises and
auctioned off rights to radio bandwidth for 3G telecommunications in part to lower the government's deficit.
The Indian Government seeks to reduce its deficit to 5.5% of GDP in FY 2010-11, down from 6.8% in the
previous fiscal year. India's long term challenges include widespread poverty, inadequate physical and social
infrastructure, limited non-agricultural employment opportunities, insufficient access to quality basic and higher
education, and accommodating rural-to-urban migration.
(Source: 2011 CIA World Factbook)
Indian Real Estate Sector
Indian real estate sector plays a significant role in the country’s economy. This sector is second only to
agriculture in terms of employment generation and contributes heavily towards the gross domestic product
(GDP). The size is estimated at US$ 16 billion, growing at the rate of 30% per annum. Total size of the industry
in terms of economic value of development activity is estimated at US$ 40-45 billion representing about 5% of
India’s GDP. In the next five years, this contribution to the GDP is expected to rise to 6 per cent. It is expected
to reach a size of US$ 180 billion by 2020.
India’s lack of dependence on foreign demand from consumers has been the key advantage for this country as it
has managed to avoid the severe recession that has hit most other Asian countries.
According to the report of the Technical Group on Estimation of Housing Shortage, an estimated shortage of
26.53 million houses during the Eleventh Five Year Plan (2007-12) provides a big investment opportunity.
Growing penetration of mortgage finance into the urban housing finance market is now evident. According to
the data released by the Department of Industrial Policy and Promotion (DIPP), housing and real estate sector
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