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ONGC, Mittal Group sign MoU

New Delhi, July 23
ONGC, India’s state-owned oil sector giant, and the global steel major, Mittal Group, today signed memorandum of understanding to set up two overseas joint venture companies — ONGC Mittal Energy Ltd., and ONGC Mittal Energy Services Ltd.
Chairman & CEO of Mittal group L.N. Mittal addresses a press conference after signing an agreement with the ONGC in New Delhi on Saturday. — Tribune photo by Mukesh Aggarwal

Magnate eyes Jharkhand for steel plant
Global steel giant Mittal Group today announced to set up a 10 million tonne steel plant in Jharkhand, for which an MoU with the state government would be signed within a few weeks.

Weston launches low-cost CTVs
New Delhi, July 23
Weston TV is once again ready to take on the domestic market with its low-priced product range. The company has shown steady growth and has achieved exports of over 3 lakh TV sets during last year.

SAT chief quits over UBS controversy
Mumbai, July 23
Securities Appellate Tribunal chief Justice Kumar Rajaratnam has resigned amid controversy over the UBS Securities case relating to the stock market crash last year.

Aviation Notes

Discipline errant pilots, DGCA
The poaching of pilots will continue as long as the country’s regulatory authority, the Directorate-General of Civil Aviation blatantly dithers in enforcing discipline in the highly-pampered and the highest-paid community of captains and commanders.

ATC autonomy likely

Corporate Results

Canara Bank net dips
New Delhi, July 23
Canara Bank Ltd today reported 44 per cent dip in net profit of Rs 186.90 crore for the quarter ended June 30, 2005, as compared to Rs 336.44 crore for the corresponding quarter in previous year.

BRIEFLY

Visitors look at electronic products from Japan, Korea and China at an exhibition in Jakarta on Saturday. Japan had backed US-led pressure on China for a bigger revaluation, arguing that Chinese exports were artificially cheap because its currency was undervalued. — AFP

EARLIER STORIES

	Too early to measure yuan revaluation impact: Govt July 23, 2005
	Trade unions to push for 9.5 pc interest July 22, 2005
	Essar bags stake in BPL for Rs 4,400 cr July 21, 2005
	Air Sahara joins price war July 20, 2005
	Rajasthan has oil reserves of 2.5 bn barrels: Cairn July 19, 2005
	NTPC sets terms for Dabhol acquisition July 18, 2005
	India, US to push power reforms July 17, 2005
	ONGC to shell out Rs 2,876 cr for LPG, kerosene subsidy July 16, 2005
	IA to negotiate with Airbus July 15, 2005
	India, Pak to start gas pipeline by 2006 July 14, 2005

ONGC, Mittal Group sign MoU
Tribune News Service and PTI

New Delhi, July 23
ONGC, India’s state-owned oil sector giant, and the global steel major, Mittal Group, today signed memorandum of understanding (MoU) to set up two overseas joint venture companies — ONGC Mittal Energy Ltd., (OMEL) and ONGC Mittal Energy Services Ltd. (OMSEL).

The companies will make efforts for jointly acquiring overseas oil properties and other energy-related ventures in the Central Asian and African countries, including Kazakistan and Indonesia. Canada-based PetroKazakhstan might be the joint entity’s first target.

The joining of the two titans is a preparation for Indian bids for global oil giants like Unocal, Petroleum Minister Mani Shankar Aiyar said at the MoU signing ceremony here.

Addressing a press conference after signing the MoU, ONGC CMD Subir Raha said: “In the first 98 per cent stake, ONGC will have a 51 per cent equity stake in the joint venture while the Mittal Group will have a participation of 49 per cent.” The remaining 2 per cent stake shall be held by the ICICI.

He said both companies would be set up in one of the European Union countries’ after considering the tax management issues.

The joint venture companies will look into two sets of countries. One company will specifically cater to acquiring oil and gas acreages abroad, while the second will focus on trading, shipping and other energy-related ventures, ONGC Chairman Subir Raha said.

The ONGC Chairman said the first phase of the joint venture would look into countries where the Mittal’s have a presence. ‘’In the second phase we will look into new opportunities,’’ he said.

Mittal Steel Company is the world’s largest and most global company operating in 14 countries with a turnover of $ 22.2 billion. Speaking on this occasion, Mr Mittal said: “We are convinced that there is a strong volatility in steel and oil commodities. With a vast experience in steel, we are hopeful that the new companies would help India in attaining energy security, vital for its economic growth in the coming years.”

Replying to reporters’ queries, Mr Raha said ONGC and its subsidiary OVL would continue to have tie ups with other strong partners to have stake on foreign oil fields. Collaboration with the Mittal Group is expected to give a boost to the Indian energy sector.

Declining to give an investment projections, Mr Mittal said: “We have not yet discussed the details of investment. But since I am an impatient man, we will immediately like to invest in some countries. Further, group will also invest in the steel sector in India.”

Mr Mittal said out of the 14 countries where his group had business interests, six to seven had oil and gas opportunities. “We are basically focussing on Central Asia and Africa.” The target countries include Kazakhstan, Azerbaijan, Turkeministan, Uzbekistan, Indonesia, Angola, Trinidad and Tobago and Malaysia.

Weston launches low-cost CTVs
Tribune News Service

New Delhi, July 23
Weston TV is once again ready to take on the domestic market with its low-priced product range. The company has shown steady growth and has achieved exports of over 3 lakh TV sets during last year.

After hibernating for over a decade, the brand is all set to make a comeback in the Northern India market by focusing on Punjab, UP, Uttaranchal and other states. It has launched a new range of digital video disc (DVD) players and plans to launch air conditioners, microwave ovens and washing machines as well in the domestic market.

According to Mr Sunil Vachani, Chairman and Managing Director of the company, " the company through its in-house R&D efforts has recently launched low cost flat range of colour televisions in various sizes with the price range varying from Rs 3,990 for 14" CTV to Rs 12,790 for 29" CTV."

With an annual turnover of Rs 450 crore, the company is manufacturing 1.7 lakh TV sets monthly at its seven plants, based in Dehradun, Noida and Mohali." If we can give competition to the MNCs and Chinese manufacturers in export markets, we are confident that soon Weston will have a significant share in domestic market," asserts Mr Sunil Sethi, the company vice-president.

SAT chief quits over UBS controversy

Mumbai, July 23
Securities Appellate Tribunal (SAT) chief Justice Kumar Rajaratnam has resigned amid controversy over the UBS Securities case relating to the stock market crash last year.

The resignation coincides with the market regulator SEBI rejecting the suggestion from SAT to allow UBS' “plea bargaining” for a possible amicable settlement and comes within days of Justice Rajaratnam excusing himself from the case.

Asked as to why he has put in his papers, Rajaratnam said: “I have no comments to offer. There is no difference with SEBI, and SEBI has cooperated with us.

“I do my judicial duties and they (SEBI) do theirs. UBS issues will go in accordance with the law,” he said on whether his action had anything to do with the differences between SAT and SEBI over the UBS case. — PTI

Aviation Notes

by K.R. Wadhwaney

Discipline errant pilots, DGCA

The poaching of pilots will continue as long as the country’s regulatory authority, the Directorate-General of Civil Aviation (DGCA) blatantly dithers in enforcing discipline in the highly-pampered and the highest-paid community of captains and commanders.

The DGCA has the stick to wield to instill a sense of discipline among pilots from their behaviour in the cockpit to flying. Renewal of licences is one of its responsibilities. It has several provisions to ground pilots instead of their taking-off with their fat salaries and fatter perks ranging from Rs 10 lakh to Rs 25 lakh.

Some ill-informed officials believe that the DGCA is a ‘mute referee’ as pilots walk out of the national carriers of Air-India, Air-India Express, Indian Airlines and Alliance Air to private operators.

Highly-informed analysts are of the view that the ‘poaching’ is subtly rendered ‘permissible’ by the DGCA by relaxing regulatory yardsticks for their own kith and kins, favourites and ‘blue-eyed men’ of politicians.

The in-depth study shows that most of the politicians during the last 10 to 12 years have been more inclined towards private operators than the national carriers. This hidden agenda has led to corruption, which has become rampant in the government agencies — the Airports Authority of India (AAI), the DGCA, and the Civil Aviation ministry. Shocking, but it is a fact, that Air Traffic Controllers, provide better level to foreign pilots waiting in queue for landing than the Indian ones. This is because of fringe benefits provided by foreign carriers to the ATCs.

Like ATCs, the DGCA is accused of adhering to ‘double standards’. Its ‘inspectors’ punish pilots with minor lapses but grossly overlook favourites who have been involved in major accidents and incidents. This kind of attitude by the apex authority leads to indiscipline among pilots.

Air-India Express has reduced from 38 flights a week to 32 ex-Delhi and Mumbai to the Gulf because of the shortage of pilots, who have resigned without serving the mandatory six-month notice. Some ‘insiders’, however, say that it is not wholly true. They say that pilots have indeed walked out of the airline but reduction of flights from 38 to 32 is because of the reduction in passenger-load.

ATC autonomy likely

The Minister of State for Civil Aviation Praful Patel has hinted that the Air Traffic Controllers (ATCs) will soon be an independent entity instead of being a part of the AAI. This may be a healthy development because the ATCs need their own ‘trouble shooter’ instead of being a part of the AAI. This may be a healthy development because the ATCs need their own ‘trouble shooter’ instead of being a part of the AAI. The ATCs are the most important link for pilots and this move is likely to improve the efficiency of pilots.

The AAI is said to have expressed reservations about this ‘hive off’. But the AAI is no longer a service-oriented unit and the ATCs deserve to have their own independent body.

Investor guidance

by A.N. Shanbhag

Error in NSO-declared KVP rates

Q: I retired in March 2004 and received gratuity and PF. I am filing Income Tax return regularly. Which is the best long-term investment free from any risk? I do not want to invest in PPF and mutual fund. Can I invest the amount in KVP (kisan vikas patra) with my son? Please let me know the rate of accrued interest every year on KVP, which may show in my IT return.

— R. K. Gaur, Karnal

A: Yes, if you do not need any liquidity and are not a senior citizen, the KVP appears to be one of the good options. The term is 8 years and 7 months. The interest accrued during the years on KVP of Rs 1,000 denomination within its term is

1st year- Rs 60

2nd year- Rs 70

3rd year- Rs 78

4th year- Rs 103

5th year- Rs 125

6th year- Rs 108

7th year- Rs 170

8th year- Rs 137

9th year- Rs 149

Total- Rs 1,000

These are the figures declared by the NSO. Obviously, there are errors in these declared rates. The mathematically correct figures are:

1st year- Rs 84

2nd year- Rs 91

3rd year- Rs 99

4th year- Rs 107

5th year- Rs 116

6th year- Rs 126

7th year- Rs 137

8th year- Rs 148

9th year- Rs 92

Total- Rs 1,000

I hope the authorities take a notice of these errors and take corrective actions, sooner the better.

PNB’s fault?

Q: We have invested Rs 45,000 in fixed deposit on joint "B" in PNB on May 22, 2002, in first name of my wife for three years. Accrued interest on it for the year 2004-05 is Rs. 4,735. The PNB authority has now deducted TDS on maturity/renewal i.e. on May 22, 2005, to the tune of Rs 539 i.e.10.2 per cent i.e. SC by including interest which is to be accrued during 2005-06 i.e. for month of April and May 2005 to make it more than Rs. 5,000. In fact, accrued interest is to be taken every year (year wise). Is it income tax return?

(1) Whether TDS as deducted by this bank is in order as per law of income tax?

(2) What are fundamental basic/procedure to deduct the TDS when accrued interest is less than Rs. 5,000 during the financial year?

— Surinder Nath, Hisar

A: TDS is to be applied on accrual basis. As per the facts supplied, the bank appears to have made an error. However, it is hard to believe that the bank of the stature of PNB has made such an error and must be having a good reason for having done so.

Benefit to NRIs

Q: If CG is Rs. 50,000, do I have to invest this amount in REC/Nabard bonds? My income this assessment year i.e. 2005-2006 (FY 01.04.04 to 31.03.05) has not exceeded Rs. 1 lakh as I am not a salaried professional and have started some consultancy work.

If CG tax is to be paid can it be paid in next year return?

— S. Venugopalan

A: For a resident individual or an HUF, where the total income as reduced by short-term or long-term capital gains on which tax is eligible falls below the minimum tax threshold, the gains would be reduced by the amount by which the total income so reduced falls short of the threshold and the balance of the gains would be taxed at the rates applicable. In short, where the tax liability arises only because of inclusion of such capital gains in the total income, tax is levied on the excess over the minimum taxable limit.

Unfortunately, the above benefit is not available to NRIs.

If income is earned in the current year, the tax has to be paid during the current year only.

Visually challenged

Q: My client is blind since last 20 years. Is he entitled for deductions? If yes what documents are required. Is he considered handicapped for all practical purpose?

— Sachin

A: Provisions of Section 80U are given below —

Deduction is available if the following conditions are satisfied —

7 The taxpayer is an individual

8 He is resident in India (maybe ordinarily resident or not ordinarily resident). Deduction under this section is not available if he is non-resident in India for the relevant assessment year.

Person with disability- It means a person suffering from not less than 40 per cent of any disability given below—

i. blindness;

ii. low vision;

iii. leprosy-cured;

iv. hearing impairment;

v. locomotor disability;

vi. mental retardation;

vii. mental illness.

Blindness — "Blindness" refers to a condition where a person suffers from any of the following conditions, namely :—

i. total absence of sight; or

ii. visual acuity not exceeding 6/60 or 20/200 (snellen) in the better eye with correcting lenses; or

iii. limitation of the field of vision subtending an angle of 20 degree or worse.

Low vision — "Person with low vision" means a person with impairment of visual functioning even after treatment or standard refractive correction but who uses or is potentially capable of using vision for the planning or execution of a task with appropriate assertive device.

Certified by medical authority — The taxpayer shall have to furnish a copy of the certificate issued by the medical authority along with the return of income. Where the condition of disability requires reassessment, a fresh certificate from the medical authority shall have to be obtained after the expiry of the period mentioned on the original certificate in order to continue to claim the deduction.

"Medical authority" for this purpose means any hospital or institution specified by notification by the appropriate Government for the purpose of the Persons with Disabilities (Equal Opportunities, Protections of Rights and Full Participation) Act, 1995.

Amount of deduction - If the aforesaid conditions are satisfied, then a fixed deduction of Rs. 50,000 is available. A higher deduction of Rs. 75,000 is allowed in respect of a person with severe disability (i.e., having any disability over 80 per cent).

The author may be contacted at wonderlandconsultants@yahoo.com

BRIEFLY

A member of Royal Thai dance troupe presents a show at the inaugural function of the three-day Thai week in New Delhi on Friday evening. — PTI

MG Rover deal
Beijing, July 23
Chinese carmaker, Nanjing Automotive, has acquired Britain's collapsed auto giant, MG Rover for an unknown sum after a three-way bidding battle over the past months, media reports said here today. "Nanjing will now begin to take control of the assets and develop its plans for the future," said PriceWaterhouseCoopers (PwC), which took over the administration of Rover when the automaker filed for bankruptcy in April. The Nanjing Automobile secured the deal after beating two other competitors over the sale of all or part of MG Rover, Chinese Shanghai Automotive Industry Corporation and British businessman David James. — PTI

Forex reserves
Mumbai, July 23
India's foreign exchange levels rose by $ 662 million for the week ended July 15, according to the RBI’s weekly statistical report released today. The forex reserves stood at $1,37,561
million, a rise of $662 million, during the week under review. — TNS

Ravalgaon payout
New Delhi, July 23
Food-processing company Ravalgaon Sugar Farm Ltd today declared a 100 per cent dividend for the financial year 2004-05. The board of directors declared a dividend of 100 per cent on 68,000 equity shares of Rs 50 each, the company informed the BSE. — PTI

Crop insurance
New Delhi, July 23
ICICI Lombard General Insurance has launched a weather insurance policy for 'Stevia' crop in Punjab against damage due to adverse weather. Stevia, a sweet herb belonging to sunflower family, yields a popular natural sweetener and temperatures below 10°C and over 42°C can harm the plant, the company said in a press note today. The crop can be harvested every three months, hence the policy cover will be available for the entire year. — TNS

No to merger
New Delhi, July 23
Matrix Laboratories Ltd and Strides Arcolab Ltd today said they had called off the proposed merger as the two companies were unable to reach an agreement on valuation. — PTI

IOB-Jeevan
Chandigarh, July 23
Indian Overseas Bank will launch its new scheme — IOB-Jeevan — from Monday. The scheme provides insurance cover of Rs 1 lakh with nominal premium to all its account holders between the age of 18 to 55 years and is being launched in collaboration with LIC of India. The account holder is eligible for tax benefits under Section 80 C of the Income Tax Act. It also provides cover on death due to accident at no extra premium and will be available at all branches of the bank. — TNS