 |
|
Investors
gained during Reliance imbroglio
The worth
of subsidiaries Decks
cleared for signing of Posco MoU |
|
|||||||||||||||||||||||||||||||||||||||||||||||||
IFFCO
releases dividend to HAFED Investor
guidance
Aviation
Notes
|
|
Investors gained during Reliance imbroglio
New Delhi, June 18 Between November 22 and announcement of the settlement by mother Kokilaben, the flagship RIL's market capitalisation rose by about 13 per cent to Rs 83,729.05 crore from Rs 74,399 crore, as per the latest scrip price of Rs 600.85, which was 52-week high. However, Nimesh Kempani of Morgan Stanley, who helped ICICI chief K V Kamath in the valuation process, is believed to have pegged the RIL's share at Rs 750. The "proxy" battle, fought through "cronies" and media, saw the investors fortune losing in IPCL, which would go to Mukesh. Its market capitalisation fell to Rs 4,035.12 crore yesterday from as high as Rs 4,629.41 crore on November 22. In the case of other listed entities, Reliance Energy and Reliance Capital, which Anil Ambani would own, the wealth creation was phenomenal. Reliance Capital's m-cap surged by close to 64 per cent to Rs 3,032.92 crore yesterday from as low as Rs 1,849.12 crore on November 22. In the case of Reliance Energy, m-cap rose by nearly 3 per cent to Rs 11,553.62 crore yesterday from Rs 11,238.38 crore on November 22. Kempani is believed to have valued Reliance Infocomm, a privately held company, in the range of Rs 23,000-25,000 crore. The bone of contention was the valuation of family holdings and that of Reliance Infocomm. In his report, Kamath aided by investment banker Kampani in evaluating group companies and family assets, is reported to have fixed a value to about Rs 25,000 crore for Infocomm and up to Rs 750 a share for RIL equity, an issue that dominated the negotiation process. However, the report comes in stark contrast to Mukesh's views that RIL was over-valued and Reliance Infocomm was under-valued. There were reports that Reliance Infocomm was valued at around Rs 55,000 crore. Mukesh had given up Rs 50 crore shares at a face value. The 12 per cent sweat equity, given up by the elder brother Mukesh, was estimated at about Rs 5,000 crore going by the valuation of the Infocomm business done by RCIL through merchant bankers. Infocomm needs listing, says expert
Even as the Board of RIL today announced the amicble settlement to the company's ownership issue, market analysts and corporate lawyers observe that the ''Kokilaben's announcement is only the end of the beginning and not the end of the story'' by itself. Corporate lawyer H P Ranina said the major problem in the settlement issue was the capital gain tax, which was going to be very huge in the case of Reliance Infocomm (RIC) at 22.44 per cent for not being a listed company. Explaining on capital gain tax, Mr Ranina said as the shares held by the promoters in RIC (procured) at par value of Re 1 and considering the current estimated values of those shares, ''the capital gain tax is going to be huge for any company at the time of transfer to any company and even to Reliance also.'' The only option available to avoid the capital gain tax, the Group should seek the listing of Reliance Infocomm before it transfers the shares, he added.
India Inc welcomes settlement
Company Affairs Minister Prem Chand Gupta said that the settlement will provide a "big relief" to shareholders. "Since the settlement is already there, I think all issues are resolved", he said. The Indian industry also welcomed the reconciliation between the Ambani brothers. The Confederation of Indian Industry (CII) said the move would provide strength and stability to the Reliance empire. It said the move would benefit the stake holders of the company and would carry forward the legacy and vision of late Dhirubhai Ambani. The president of Federation of Indian Chambers of Commerce and Industry (FICCI), Mr Onkar S Kanwar, said he was "happy that the Ambani brothers have arrived at an amicable settlement of pending issues. The entire corporate world and Reliance Group shareholders were keenly looking forward to such a development at India's finest and most dynamic private sector companies". Welcoming the settlement reached between the Ambani brothers, Mr K N Memani, president, PHDCCI, has said that the early settlement was important not only to keep the interest of its stakeholders intact but also because the group of industries has substantially contributed to the national economy. In a statement issued today, Mr Memani said the management of the Reliance Industries has done well by extending preeminence to the interest of 3 million investors who have reposed their faith in the long-term viability of the
group. — TNS, Agencies
|
|
Following
are facts related to interests
and performance of companies divided between Mukesh (Reliance Industries
Ltd, IPCL) and Anil (Reliance Energy Ltd, Reliance Capital, Reliance
Infocomm) in that order. RIL (Reliance Industries Limited): The
group flagship, is the second largest company by market capitalisation
on the BSE after ONGC, having an m-cap of Rs 83,729.05 crore as on June
17. RIL, in which foreign funds holding is 21.55 per cent, posted net
profit of Rs 7,572 crore for the year ended March 31, 2005, and operates
the world’s third largest refinery in a single location, in Gujarat,
with a capacity of 6,60,000 barrels per day. IPCL (Indian
Petrochemicals Company Ltd): With net profits of Rs 786 crore in FY
05, is India’s second-largest petrochemicals company, operating a
naphtha-based petrochemicals complex and two gas-based complexes. REL
(Reliance Energy Ltd): Had a net profit of Rs 520.29 crore in fiscal
2005 is India’s largest integrated private sector company with an
installed capacity of 941 MW. The company plans to commission a 3,740
MW power plant in Uttar Pradesh at Dadri. The plant is said to be the
world’s largest gas-based plant. It will get its gas supply from RIL.
Reliance Energy has drawn up further plans to invest Rs 180 crore in
transmission. Reliance Infocomm: It is the country’s largest
mobile phone service provider having more than 11.50 million subscribers
as in June 2005. It acquired undersea cable company, Flag Telecom, in
2004 and prior to the split, RIL held 45 per cent in Infocomm. The
company is currently unlisted while the settlement has raised
speculation that the company may go in for an IPO. Reliance Capital:
With net profit of Rs 105.81 crore in fiscal 2005, is engaged in
asset financing and also operates a mutual fund. — PTI
|
|
Decks cleared for signing of Posco MoU
Bhubaneswar, June 18 The controversial project was cleared at a meeting of the state government's Project Clearance Authority yesterday with the Koreans expected to sign the MoU on June 22, the Industries minister Biswabhushan Harichandan said. The meeting discussed the various aspects of the proposed 12 million tonne project to be set up over a period of 10 years.
— PTI
|
|
|
IFFCO releases dividend to HAFED Chandigarh, June 18 Mr Sidhu said IFFCO had released a dividend of 20 per cent to HAFED for the financial year 2004-05 on its share capital of Rs 20.78 crore and added that it had planned investments worth Rs 4,000 crore for its different future projects.
|
|
FBT applicable on official journey of business partner by A.N. Shanbhag
Q:
This question is on Fringe Benefit Tax (FBT). In the case of a partnership firm, if any amount is paid for the private travel/journey of a partner and his family, will it be subject to FBT? What if the journey is on an official basis? Instead of a partner, if the amount is spent on the private trip of one of the directors of a company, will the treatment change? — Jaywant Rele
A:
Amount spent for personal travelling of a partner in a firm is not allowed as a deduction while computing the business income of the firm. Therefore, the same will not be treated as a fringe benefit. If it is for an official purpose, then the same will be a fringe benefit in terms of Sec. 115WB(2)(F) the value of which would be 20 per cent of the expenses. As far as a director in a corporation is concerned, it would depend upon whether such director is an employee of the company or not. If he is an employee and the company has spent any money on his personal travel, then the same would be taxable in his hands as a perk. As per Sec. 17(2)(iv), any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee is treated as a perquisite. Therefore, such amount will not be treated as a fringe benefit. However, if such director is not an employee of the company then the expenditure will be treated as his income chargeable to tax under the head ‘Income from other Sources’. In this case, under Sec. 115WB(3), this expenditure will be treated as a fringe benefit since it is not a perk on which an employee is paying tax. In the case of an official journey, whether such director is an employee or not, the expenditure will be subject to FBT.
Tax on savings Q:
In the new Budget there is a provision to invest in Equity Linked saving scheme. But I found that the entire ELSS-based scheme has a high NAV. Which scheme is better to invest? What about Templeton Pension Plan. As I also found that in this scheme if you invest up to Rs 70,000 you will get tax rebate. Is this true? 2) Is the PPF is taxable when I withdraw the money from PPF. I will invest Rs 20,000 in this current year (2005) and after seven years when I want to withdraw money, would it be taxable? — Kshitij
A:
Financially, investing in a scheme with a high NAV is no different than investing in a scheme with a lower NAV, as it is your percentage returns that are relevant. ELSS and Pension Plans of MFs are two different products. ELSS invests in equity and hence is equity-oriented schemes where the returns could be high and so is the risk. Pension plans are essentially debt-based schemes, where the returns are far more moderate. The taxation also differs. As far as PPF maturity goes, the FM clearly stated that it is the intention of the government to move to an EET based system of taxation. This means, investments like those under Sec. 80C which enjoy a deduction from income would be taxed upon maturity. As of now, there is no proposal to tax such investments.
Investing in IPO Q:
I made investments in IPO issues of TCS and NTPC. Are these investments eligible as qualified investments u/s 54 ED of Indian income tax? — Aniket Deshpande
A:
The deduction is available against contributions to ‘eligible’ issues. An ‘eligible issue of capital’ means an issue of equity shares which satisfies the following conditions, namely: — The issue is made by a public company formed and registered in India; The shares forming part of the issue are offered for subscription to the public; You are advised to read the offer document carefully, which will have the answer to your query. Normally, the exemption is available but a notification or approval from the authorities is necessary, before the issue is launched. The author may be contacted at wonderlandconsultants@yahoo.com
|
|
Aviation Notes
IT will be simply great if Naresh Goyal’s Jet Airways wins the lawsuit against American name-sake-Jet. If the American court gives verdict in favour of the Indian Jet, it will not only whitewash several allegations against Mr Goyal but also enhance India’s reputation in the world of international aviation. An indepth study of Indian Jet’s history shows many ‘ifs and buts’ during the last 25 years. Its American rivals claim that they have positive ‘CD’ proof of Indian Jet’s direct links with some under-world dons. But, then, such accusations against Mr Goyal have dropped up off and on and he has so far weathered the storm bravely and boldly. There is no cause for worry if the operations to the USA do not start on June 23. There is however, no truth in the rumour that some Indian outfits are instructing American Jet to ‘expose Indian Jet’s doings’.
Change of guard When Sunil Arora was handed over reins of Indian Airlines (IA), there was turmoil on ground and turbulence in air. The airline was passing through a critical phase. His ‘feeling of pulse’ made him realise that there was ‘fire’ all-around. He immediately chose to wear a low profile. His philosophy was to talk less and work more. He spoke to mediapersons only when spoken to and seldom held a press conference during his tenure. During his eventful five-year innings, Mr Arora achieved many milestones. If Arora’s entry was smooth and serene, his exit was virtually noiseless. He even handled the vexed pilots issue with wisdom and firmness. Some commanders may continue to opt for private airlines but there is peace in the airline, which is on a firm road to recovery. The consensus in the aviation sector is that Mr Arora has stabilised the airline. In early nineties, for example, the minister concerned had asked the IA ‘boss’ to deal ruthlessly with pilots. Suddenly, the minister ‘softened’. The chairman and managing director, Air Marshal Shashi Ramdas, saw the writing on the wall and chose to walk out of the airlines. In the present context, the Minister of State for Civil Aviation Praful Patel and played safe. From Mr Arora, the reins of the airlines have passed to Ms Sushma Chawla. A post-graduate from the Delhi School of Economics and a topper throughout, a management trainee in 1971, she became the first woman director in 1996. She was then elevated to become Deputy Managing Director (Finance). Now she becomes the first woman in the history of Indian aviation to hold top position in the national carrier.
|
| HOME PAGE | |
Punjab | Haryana | Jammu & Kashmir |
Himachal Pradesh | Regional Briefs |
Nation | Opinions | | Business | Sports | World | Mailbag | Chandigarh | Ludhiana | Delhi | | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail | |
