Prajna Capital - An Investment Guide

With rising input costs and falling margins, it has become imperative for the company to cut costs and has decided to cut its employee strength by 20% in order to reduce its wage bills. Rather than retrench employees and invite litigation (and the wrath of trade unions), the company has advanced a more humane approach by instituting a voluntary retirement scheme ( VRS ) that is open to all employees. Here are the few things I have asked him to consider while making his decision: 1) NOT A PERMANENT RETIREMENT Although called “retirement”, a VRS does not stop the person from taking up another employment as long as the employment is not with the same company or group. 2) TAX BENEFITS A VRS designed in accordance with Section 10(10C) of the Income-tax Act, 1961 allows the recipient to enjoy tax exemption on his compensation up to a maximum of Rs 5 lakh once in his lifetime. 3) OTHER TERMINAL BENEFITS A VRS ideally should be over and above other terminal payouts auch as Provident Fund, g...

There is reason to believe that Canara Robeco can shake off its dreary past. Though around for 20 years, Canbank Mutual Fund failed to capitalise on its early mover advantage. Now, with a new name, partner and management team, it is attempting to establish itself as a major player. Last year, Robeco took a 49 per cent stake in the AMC. Robeco is the fund management arm of the Dutch co-operative bank Rabobank. As a result, Canbank Mutual Fund was rechristened Canara Robeco. It's not just a superficial change in name but a serious attempt to clean up up its act. A Voluntary Retirement Scheme (VRS) was introduced and now there is some fresh blood in. The new outfit appointed Rajnish Narula as CEO and MD (ex-DBS Chola), Ritesh Jain as head of fixed income (ex-Kotak Mutual Fund) and Anand Shah as head of equity (ex-ICICI Prudential Mutual Fund). Though the rebranding exercise currently underway will help in recall, the fund house will have to make its mark on the performance front. Its ...