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ONGC earns net profit of Rs 15,485 crore
Bankers see short-term interest rate hike
Mittal, Arcelor eye Chinese market
HPMC to lease out packaging houses
Central relief for poultry industry
Market may lose further
Advance money not taxable if property sale deed expires
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ONGC earns net profit of Rs 15,485 crore
New Delhi, April 16 Announcing provisional financial results of the group, its Chairman, Mr Subir Raha, told reporters that the flagship company Oil and Natural Gas Corporation was "India's most valuable corporate in terms of market capitalisation, net worth and net profit". The group turnover on a gross basis was put at Rs 86,414 crore, which is 21 per cent higher than Rs 71,627 crore recorded in 2004-05, while the ONGC Ltd clocked a revenue of Rs 50,900 crore and its profits rose by 9 per cent to Rs 14,175 crore. Reflecting the confidence of the investors in the flagship company, which ranks 15th among world's integration oil and gas companies, the market capitalisation of the ONGC crossed Rs 190,000 crore on March 30 this year, he said. Targeting to restore the production to 270,000 barrels a day by August, he said the production would then be stepped up to 300,000 barrels of oil per day on sustained basis in 2006-07. He said ONGC's wholly-owned subsidiary ONGC Videsh Ltd (OVL) recorded a 22 per cent rise in net profit of Rs 930 crore during last fiscal on a turnover of Rs 7,600 crore, up 26 per cent over Rs 6,026 crore during 2004-05. OVL committed cumulative investment of $4.9 billion, of which $3.97 billion have been invested. It made 10 acquisitions overseas, comprising two each in Vietnam and Cuba, and one each in Libya, Egypt, Qatar, Myanmar, Nigeria and Syria. OVL has made India's single largest investment abroad by pumping in $2.71 billion in Sakhalin-1 in Russia so far, he said. However, ONGC's another subsidiary MRPL's net profit reduced by more than a half at Rs 380 crore during last fiscal against Rs 880 crore during 2004-05. Raha attributed the fall in profit to decision by IOC, BPCL and HPCL to deviate from agreed Refinery Gate Price Formula, forcing discounts on invoiced prices of LPG, MS, SKO and HSD.
— PTI
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To buy Tide Water Oil
Mr Subir Raha said on Sunday it would acquire lube-maker-seller Tide Water Oil Company.
ONGC, which is entering fuel retailing business through ONGC Values Ltd, plans to open several outlets by December, and will buy Andrew Yule's 22.22 per cent share in Tide Water Oil Company. Sources said the takeover is subject to Nippon Oil continuing its existing agreement with Tide Water Oil on providing technology and licensing/branding rights. The corporation has also set a pre-condition that Nippon Oil Co should consent for continuity and extension of existing agreement with Tide Water Oil, including licensing/branding rights.
— UNI
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Bankers see short-term interest rate hike
New Delhi, April 16 The cash reserve ratio at 5 per cent is likely to be left untouched as the liquidity situation had improved, they said on the forthcoming RBI annual monetary policy to be announced on April 18. “There could be a 0.25 per cent increase in rates (repo and reverse repo - the rates at which RBI buys and sells funds),” Oriental Bank of Commerce Chairman K.N. Prithviraj said. The RBI had raised the reverse repo, the rate at which it absorbs funds from banks, by 0.25 per cent in January to 5.5 per cent, citing an upward movement in the prices of property, equity and gold. The central bank had also raised the repo rate, the rate at which it lends overnight funds to banks, by 0.25 per cent to 6.5 per cent. However, Mr Prithviraj said stability in interest rate was likely to be accorded priority in the monetary policy.”Interest rate is not a concern at the moment as the liquidity situation has improved since March,” he said. ICICI Bank Executive Director Nachiket Mor said: “I do not know if the rates will be raised or not. But, given the robust economic development and credit demand, I will be surprised if interest rates stay where they
are”. — PTI
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Mittal, Arcelor eye Chinese market
Beijing, April 16 Mittal Steel hopes to play an influential role in China’s steel market, Country Manager of Mittal Steel Sridhar Krishnamoorthy said. The company formally entered the Chinese market last October with its first acquisition of a stake in Hunan Valin Steel Tube & Wire for $338 million. China Business Weekly also ran a story on Arcelor, the Luxembourg-based steel giant, which is also keenly looking at expanding its operations in China. With investments in China already totalling over $70 million across more than 10 joint ventures, mostly producing steel for automotive use and supplying companies, Arcelor recently signed an agreement to acquire a 38.4 per cent stake in the Laiwu Steel Corporation, which is awaiting approval from the Chinese Government. Once approved, the 2.08 billion yuan ($260 million) investment will give Arcelor partnership in a plant producing heavy section steel for
construction. — PTI
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HPMC to lease out packaging houses
Shimla, April 16 The Board of Directors of the corporation, which met under the Chairman, Mr Ishwar Dass, decided to invite financial bids for the purpose shortly. The step would benefit both growers and the corporation. Mr C.R.B. Lalit, Managing Director, said the Board had approved the sale of corporation's land at Kundli border to the state civil supplies corporation for a consideration of Rs 2.25 crore. The corporation thanked the Chief Minister for providing funds to clear arrears of apple procured under the market intervention scheme.
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Central relief for poultry industry
Hyderabad, April 16 Under the relief measures announced, the principal and interest due on working capital loans and the instalments and interest on term loans, which have fallen due for payment can be converted into term loans, Arvind Kaushal, Joint Secretary of Union Animal Husbandry Department said at a seminar here. “The remaining portion of term loans can be rescheduled with a moratorium period up to one year. The rescheduled or converted loans can be treated as current dues and the borrower will be eligible for fresh need-based finance,” he said. Kumar said in view of heavy losses to the poultry industry, the banks have been asked to extend financial measures. “A contingency plan is also ready to tackle any problems in future,” he said. The plan includes surveillance sampling and stamping out in case of outbreak in future, Kumar said. He said there has been a demand for supply of excess food grains at subsidy to the poultry industry. — PTI
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by J.C. Anand Market may lose further
The stock market has suffered heavy blows. On April 7, when Sensex, which touched a new life-time high of 11930.66 points in intra-day trading, tumbled down to 11,589 points with a loss of 157 points from the previous day’s closing. The bloodbath continued next week. Though on April 10 (Monday), Sensex was up by 73.11 points, it was down by 307 points on April 12 and by 119 points on April 13. It is quite likely that there may be a further slidedown in the market indices this week.
The market correction was expected by almost every analyst but it was triggered mainly by heavy sales by FIIs. On April 7, the FIIs net sales in equity shares was Rs 427 crore, on April 10 it was around Rs 422 crore and on April 12 it amounted to Rs 725 crore. It would appear that FII sales in equity shares are even more than Rs 1,700 crore. FIIs have also made selling in “futures”. Foreign analysts have been stating that valuations in the Indian stock market are higher and more expensive than in the stock markets of other emerging markets. Even the P/E ratios in the bluechip shares are so high that a market correction seemed unavoidable. J.P. Morgan, an important investment firm, is of the view that the inflow of FII funds is likely to slow down, though the Indian economy is doing well and remains attractive for FII investments. The mutual funds have also been sellers in the tumbling stock market, though these have very large uninvested funds which may help the market to stabilise during the coming weeks. The market may continue to slide down further but may stabilise by the close of this week. Sebi has raised the margin money on trading and the news that the government has allowed the Postal Department to invest a part of its insurance funds in the stocks, may check a further decline in the stock market. It is estimated that the Postal Department may invest Rs 10,000 crore in the stock market. This, however, may take time and will be spread over months, if not years. The stock market revival, however, will take time and it is unlikely to scale up new heights in market indices for a long time. The mutual funds are likely to play an important role in stabilising the stock market. The fourth quarter results of the corporate sector are likely to be good but margins are likely to be under pressure and net profits and profitability might also be reduced to some extent because cost inputs are likely to grow because of the high international crude prices and higher operating expenses. The long-term investors should mark time and invest only in shares with reasonable P/E ratios, high growth prospects and trusted managements. |
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by S.C. Vasudeva Advance money not taxable if property sale deed expires
Q. I am sending my query and want a clarification from your end.
(1) That I have entered into an agreement of sale regarding my part of the residential house which is an ancestral property purchased in the year 1931 and comes into my hands in 1995 and falls in the city of Amritsar with XYZ for Rs 10 lakh and received Rs 2 lakh as advance in cash and paid Rs 20,000 as brokerage. Time for execution of sale deed has expired and as per terms of agreement earnest money paid stands forfeited. Now my questions are:- (a) Will this earnest money received is a capital receipt and comes under long-term capital gain where as no sale deeds were executed nor possession delivered. OR should I credit as advance received from XYZ against sale of property. (b) Am I liable to pay any tax on it? (c) If within a period of limitation of three years, the buyer files a suit for specific performance of an agreement/or for recovery of advance amount and court passes a decree in the suit later on, can I claim this amount of the tax if paid as tax in the year paid to the buyer as litigation may prolong for years. (d) Is income received from the Rs 2 lakh taxable? — K.K. Nayyar, Amritsar A. According to Section 51 of the Act, where any capital asset was on any previous occasion, the subject of negotiations for its transfer, any advance received and retained by the assessee in respect of such negotiations shall be deducted from the cost for which the asset was acquired or the fair market value thereof, as the case may be, in computing the cost of acquisition. In your case, therefore, the earnest money received will not be taxable in the year in which the amount has been forfeited. However, the said amount would go to reduce the fair market value of your property, which is to be ascertained as on 01.04.1981 for the purpose of working out the capital gains. Therefore, as and when you sell the property, the fair market value as on 01.04.1981 would be reduced by the amount of advance which has been retained by you. Any income earned on the amount of advance received and retained by you would be taxable in the ordinary course of things.
GPF deduction Q. I am a government employee and my gross emoluments for the Financial Year 2005-06 (Assessment Year 2006-07) is Rs 2.10 lakh. My annual subscription to GPF for the Financial Year 2005-06 is Rs 96,000. What will be my tax liability for Financial Year 2005-06? Whether whole of GPF amount i.e Rs 96,000 qualifies for rebate under Section 80C — Sanjeev Dhiman, Palampur A. The whole of contribution towards General Provident Fund would be deductible under Section 80C of the Act from your gross emoluments of Rs 2.10 lakh. Your total income after deducting the amount of your contribution to GPF would be Rs 1.14 lakh on which a tax of Rs 1,428 (including education cess) would be payable.
Tax on arrears Q. Due to wage revision, I am going to receive HRA difference and special area difference, for the past 36 months. Kindly clarify whether this amount can be excluded from taxable income or not. I have been living in rented house for the past 10 years and have been claiming HRA rebate. Calculation is here for your ready reference. —
H. Sharma A. It may not be possible to exclude the amount of difference in HRA received by you for the past 36 month from the total income. However, you may seek the relief under Section 89 of the Act, which provides where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than 12 months due to which the total income of the assessee is assessed at a higher rate than that at which it would otherwise have been assessed, the assessing officer shall on an application made to him in this behalf, grant such relief as prescribed under rule 21AA of the Rules. You can also furnish the particulars specified in form 10E of the Rules to your employer who can also grant the relief under the aforesaid section. I may add that although the Section 89 of the Act does not mention the term HRA specifically, the terminology "a sum in the nature of salary" can, in my opinion, be interpreted to include HRA which is a sum in the nature of salary.
Tax liability Q. I am reader of your esteemed paper since 1964. Please let me know my tax burden as on 31.03.2006. I am bank officer. — R.S. Negi, Chandigarh A. On the basis of the figures given by you, the total taxable income works out at Rs 3,17,500 on which a total tax (including education cess) would work out at Rs 46,155. The following presumptions have been made in computing the aforesaid total income: (a) The gross salary, including arrears of pay has been taken as part of the taxable income and benefit under Section 89 is ignored as the relevant data is not available in the query. (b) The figures of house property income have not been given. It is, therefore, presumed that the interest is payable in respect of self-occupied property. The same has been deducted while computing total income of Rs 3,17,500. I may add that you are entitled to a deduction of Rs 1,00,000 only under Section 80C of the Act as against the total amount of Rs 1,30,500, contributed by you towards the various schemes covered under the said section. |
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