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Anil sends 500-page note to RIL board on governance Keeping up the pressure on Mukesh Ambani, younger brother Anil has sent to the RIL board a detailed 500-page note concerning corporate governance in the Reliance empire, an issue he has repeatedly raised in the public feud between them since mid-November.
Hike in apple price to spell doom for HPMC
Reconsider DEPB, garment exporters urge FM
Bank account
Flowers are draped at the Bethesda-by-the-Sea Episcopal Church where Donald Trump married Slovenian model Melania Knauss in Palm Beach, Florida. This is Trump’s third marriage.
— Reuters Market scan
Quarterly results positive, market negative |
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Anil sends 500-page note to RIL board on governance
New Delhi, January 23 The bulky note sent to the corporate governance committee of the board of the flagship company RIL, of which Mukesh is the chairman and Anil the vice-chairman, deals extensively with what the younger brother regards as flaws in corporate governance within the group, informed sources said today. Anil’s document was sent days ahead of RIL’s board meeting in Mumbai on January 21. But, the issue of corporate governance did not figure in the discussions there. In fact, Y.P. Trivedi, an independent director of RIL, heading the corporate governance committee, had said that eminent retired judges had endorsed the corporate governance practices, thus, virtually giving a clean chit. But if “Anil has to write to the Board which would refer the matter to the corporate governance panel. There is no shying away from any issue raised or referred to us. We will go through it,” Trivedi said. When contacted on this issue, a spokesperson for Anil Ambani declined to comment. Anil has, in fact, made an issue of what he perceives to be a conflict of interest between the business interests of Anand Jain, a close associate of Mukesh, and various key positions he holds in the group. In fact, the younger brother had even resigned as Vice-Chairman and Director from the Board of Reliance group company IPCL, saying he would not share a seat on it with Jain, whom he has accused of conspiring to divide the family. Yesterday, Anil had virtually turned down IPCL’s request to reconsider his resignation, saying various issues, including corporate governance and disclosure need to be resolved before any rethinking on his decision. Requesting “appropriate steps” in the interest of RIL’s 30 lakh shareholders, Anil is believed to have expressed “deep concern that RIL has failed to adhere to highest standards of corporate governance, transparency and disclosure”. The extensive note is understood to have covered various issues, including RIL’s investment of Rs 12,000 crore in Reliance Infocomm. Meanwhile, Mr Y.P. Trivedi today said his committee was looking into all the issues relating to corporate governance practices raised by Anil Ambani. After the January 21 board
meeting, Trivedi had said that there was no violation of corporate governance norms and that everything was in place relating to issues concerning RIL’s investment in Reliance Infocomm, headed by Mukesh Ambani.
— PTI
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Hike in apple price to spell doom for HPMC Shimla, January 23 The corporation has been finding processing of apple uneconomical even at the earlier rate of Rs 2.25 per kg as the cost of production of its juice concentrate is over Rs 55 per kg. It is too high as the apple juice concentrate produced in Jammu and Kashmir is available in the market at Rs 40 per kg. The Chinese product is even cheaper. The reason for it, senior officers of the corporation point out , is that apple is being made available for processing at 80 paise per kg in Jammu and Kashmir. With the increase in rate from Rs 2.25 per kg to Rs 4.25 per kg, the cost of production will go up further to over Rs 75 per kg. There will be no takers for such costly apple juice concentrate. The high cost of apple forced the corporation to scale down its processing operations and it produced only 350 tonnes of juice concentrate this season as against the normal 500 tonne. The sale of procured apple in the market also turned out to be a losing proposition as the return was only Rs 2.40 per kg. The corporation has urged the government to review its decision and charge the last season rate of Rs 2.25 per kg. The BJP government had even supplied apple for processing free of cost as it saved a huge quantity of fruit from rotting. The increase in rates of apple has come at a time when the loss-making public sector undertaking had started looking up. It’s accumulated losses had crossed Rs 28 crore till March 31 ,2004 but it earned an operational profit of Rs 85 lakh in 2002-03 and Rs 1.25 crore the following year.
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Reconsider DEPB, garment exporters urge FM New Delhi, January 23 The ministry has decided to convert them to weight criteria in lieu of present ad valorem rates. “This is sudden death for garment exports. Entire scenario deserves to be revisited as it ignores the ground realities governing the garment exports potentials,” Mr Chand K. Anand, president of the Exporters Guild, said. In a memorandum submitted to the ministry, he said in the free quota regime, trade was expecting pragmatic measures to boost the market and business due to tariff free access granted by the neighbouring Sri Lanka, Bangladesh, Pakistan, Nafta and countries under Sub-saharan region. “This tariff disadvantage to Indian garment exporters, ranging from 15 per cent to 30 per cent needs to be bridged for their survival,” he said adding that eight per cent appreciation of rupee further adds to their uncompetitiveness. The exporters said the decision of reduction in drawback rates should be corrected otherwise it would damage their exports beyond repairs in coming months. Mr Anand said the new perception of drawback for garment sector by weight at Rs 42 per kg, as against the existing rates of 10.6 per cent of FOB value, subject to a maximum of Rs 40 per piece is lop-sided and unrealistic, as it suffocates the value addition aspect of Indian garment exports; the major portion of the exports. Ironically, the weight criteria will give more drawback to garment made of coarse and ordinary fabrics, he said, in contrast to garments made out of finer fabrics like double mercerised fabrics, which consume a lot of duty paid chemicals. Similarly, this new barometer will not distinguish between various counts, finishes, trimmings & embellishments and embroidery and other value additions, which are incurring heavy excise and customs duty. The weight of finer and better processed fabrics like georgette and chiffon are much less than unmercerised fabric. Thus, new drawback rates would place value added garment exports at a disadvantage and make it still more uncompetitive.
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Bank account New Delhi, January 23 The total income of the bank also declined by 6.4 per cent to Rs 1743.27 crore for the quarter ended December 31, 2004, from Rs 1862.05 crore for the same quarter last fiscal, the bank informed the Bombay Stock Exchange. Union Bank
Union Bank of India registered a 60.63 fall in net profit for the quarter ending December 31, 2004 at Rs 59.07 crore as compared to Rs 150.04 crore in the corresponding period of previous fiscal. Total income of the bank rose to Rs 1,480.18 crore during the quarter under review as against Rs 1,344.01 crore posted during the same period of the previous fiscal, it said.
Corporation Bank
The Corporation Bank today reported a 43 per cent growth in net profit at Rs 161.69 crore during the third quarter ended December 31, 2004 as against Rs 113.28 crore in the corresponding quarter in 2003. The total income of the bank grew by 15 per cent to Rs 772.52 crore during the October-December quarter this fiscal compared to Rs 673.57 crore in the year-ago quarter, it informed the BSE.
— PTI
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by S.C. Vasudeva
Capital gain from plot sold
Q. Kindly advise me on the following points: I purchased a plot on 20.04.1990 for Rs 30,000 plus Rs 3750 (registry charges) which I sold in January 2005 on power of attorney for Rs 2,00,000 (less commission of Rs 4000) (a) What would be the capital gain? (b) I am a senior citizen and my income for the year ending 31.03.2005 would be as under: Pension: Rs 76,800 Income from bank & post office: Rs 80,640 Deposited in PPF: Rs 50,000 What would be my tax liability? (c) Can I utilise the capital gain on the internal completion of a Chandigarh Housing Board flat which I purchased on power of attorney basis three years back, to save the IT on Capital gain? — Inderjit, Chandigarh A: 1 The answers to your queries are as under: (a) Computation of capital gain Amount (Rs) Sale consideration: Rs 2,00,000 Less: Expenses on transfer: Rs 4,000 Net consideration Rs 1,96,000 Less: indexed cost of acquisition: 33,750 X 480 Rs 89,010 182 Long term Capital gain: Rs 1,06,990 (b) Tax liability (without considering exemption of capital gain) Amount (Rs) Income under the head salary Pension: Rs 76,800 Less: Standard deduction: Rs 30,000 46,800 Income under the head capital gain Long term Capital gain (LTCG) 1,06,990 Income from other sources Bank interest: 80,640/- Gross total income without LTCG: 1,27,440 Less: 80L 12,000 Total income without LTCG: Rs 1,15,440 Tax on above: Rs 12,088 Add: tax on LTCG 20 per cent of Rs 1,06,990 Rs 21,398 Tax payable: Rs 33,486 Less: rebate u/s 88B Rs 20,000 Less: rebate u/s 188 15 per cent of 50,000 7,500/-27,500/- Tax payable: 5,986/- Add: Education Cess @ 2%: 120/- Total payable: Rs 6,106/- (c) From your query, the expression “internal completion” is not clear to me and therefore I am unable to give you a definite answer. For your benefit, I would like to state that the deduction under Section 54 F of the Act is available if the net consideration is utilised for the acquisition/construction of a residential house within a period of two years/three years from the date of transfer of the original asset.
Glaxo shares
Q: I have purchased 63 shares of Glaxo Smith Bombay at different rates and different dates since 1980. I got 63 shares as bonus. Total 126 shares. I have sold them in August, 2004 for about Rs 75,000. As I don’t have any record of dates and rates of purchase, how should I calculate the long term capital gain? I have used the whole amount in buying a built house for my son, within two months. Can this be useful in matter of capital gain calculation? Or how can I save this long-term capital gain Tax? — Ram Murti Abrol, Malerkotla (Pb.) A: (a) In case of bonus shares, the cost of acquisition is ‘Nil’ and therefore the sale proceeds in respect of 63 bonus shares would be chargeable to capital gains tax. (b) In respect of the original shares, since you do not have the record of date and rates of purchase, it is advisable that you consider the face value of the shares as cost and compute the capital gains. (c) If the entire net consideration (sale proceeds less expenses on transfer) has been utilised by you for purchase of a residential house property in your own name then there will be no liability to pay tax provided you satisfy the conditions laid down in Section 54 F of the Act.
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