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Tata bid for Corus ‘undervalued’
Tatas defend Singur site
Cairn India to invest Rs 9140 cr in Rajasthan oil block
Safari Bikes to set up unit in MP
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Forex reserves dip
Market Update
Tax Advice
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Tata bid for Corus ‘undervalued’
London, October 22 Standard Life Investments, which owns 7.9 per cent of the company, noted that “the acquisition of Corus brings many advantages to Tata, including elevating it into the top five of global steel producers and an unquantified amount of synergy benefits.” “The offer from Tata does not attribute significant value to Corus shareholders from achieving what we understand to be the substantial savings available from the joining of the two businesses,” it said, according to a report in The Daily Telegraph today. Standard Life, however, declined to say if it would vote against the deal. But a spokesman for the investor said: “The 455pence-a-share offer... is lower than we would have expected the Board of Corus to agree to and recommend.” Tata said the deal valued Corus at 7.9 times underlying Ebitda (earnings before interest, tax, depreciation and amortisation), which is higher than Mittal’s takeover of Arcelor earlier this year. Herve Mangin, a fund manager at Axa, thinks the bid is too low and that Russian Severstal or Brazil’s CSN could react. “Corus is the only sizeable asset in Western Europe that can be bought. At the moment Tata’s bid multiple is at least 10 pc below average recent deals in the sector,” he said. As part of the deal, Tata is putting £126 million into the Steels Pension Fund and raising contributions to the main British Steel Pension Scheme from 10 per cent to 12 per cent until March, 2009. Meanwhile, unions representing more than 20,000 British steel workers are seeking urgent talks with Tata Steel in the wake of the agreed bid. The five-union National Steel Coordinating Committee will be seeking guarantees over their members’ jobs, pay and pensions as well as reassurances over the future of the UK’s steel-making capacity. The combined Tata and Corus would produce about 24 million tonnes a year, with the bulk coming from Corus, pushing it to number five in the global steel league. Corus Directors have recommended the deal and pledged their own holdings, including Chief Executive Philippe Varin’s £4 million stake, to the offer. Corus has agreed to pay a £43 million pound break fee if the recommendation is withdrawn. — PTI
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Kolkata, October 22 Many opposition parties, including the Trinamool Congress, had expressed opposition to the state government acquiring agricultural land for the proposed project. “We chose the site in Singur after having seen several other sites and our choice was made objectively on the basis of locational and connectivity attributes of the site,” company Managing Director Ravi Kant said in a letter to Congress leader Sudip Bandhopadhaya. “Our decision to locate the small car project in West Bengal is a reflection of our great faith in the state and our desire to play a role, however small, in the growth and development of skills and consequential job creation,” Mr Kant said in the letter. “We hope we will make West Bengal proud of having the small car plant at Singur,” he told Bandhopadhaya, Chairman of the standing committee on commerce and industries, industrial reconstruction and public enterprise of the West Bengal Assembly. Mr Kant invited Mr Bandhopadhaya to its Pune plant where he would be shown “our concepts and practice of participating in the development of the community where we are located.” The government announced on Friday that it had completed the acquisition of 1,000 acres. — PTI
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Cairn India to invest Rs 9140 cr in Rajasthan oil block
New Delhi, October 22 Cairn plans to invest Rs 6,900 crore in the giant Mangala field alone over the life of the field lasting 2014, according to the draft red herring prospectus (DRHP) filed by the company for an IPO in December. Mangala is the largest of the 18 discoveries the company has made in the Rajasthan block, where the company estimates 3.6 billion barrels of reserves. “We expect that the total gross capital expenditure over the field’s life is estimated to be approximately Rs 6,900 crore of which Rs 2,400 crore was incurred before July 1, 2006,” the DRHP said. Cairn expects to commence commercial production in the Mangala field during 2009 with initial production of up to 50,000 barrels per day and a plateau of 100,000 barrels per day. The field would reach 96,000 barrels per day within nine months of beginning production and would remain at the plateau for three years before the field starts to decline. — PTI
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Safari Bikes to set up unit in MP
New Delhi, October 22 The company already supplies bicycles to the Madhya Pradesh Government for its girl child welfare scheme. Hi-Bird Safari Group Chairman R.D. Sharma said, “The company already has its manufacturing unit in Ludhiana in Punjab. As part of the company to enter the domestic in a big way, it plans to set up a state-of-the-art unit in MP and talks are on with the state government”.
— UNI |
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Forex reserves dip
Mumbai, October 22 Foreign currency assets in dollars include the effect of revaluation of non-US currencies such as euro, sterling, yen held in reserves. The reserves position in the IMF also dipped by $ 119 million to stand at $ 643 million.
— PTI |
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Markets may stay firm
by Lalit Batra Markets cooled after getting within the striking distance of 13,000 last week. The market ended last week (including the muhurat trading) on a flat note. The BSE sensex finished the week at 12,736. The second quarter results have been a mixed bag. HDFC bank, Infosys, Wipro and TCS has delivered better than expected whereas Ranbaxy, Bajaj Auto and ONGC came out with results which just met expectations or were below expectations. The event of the week was Corus Group’s Board acceptance of Tata Steel’s takeover bid Tata Steel has offered 455 pence per share or about $8 billion, for Corus. This is the biggest-ever acquisition by an Indian company. The market is expected to stay firm on the back of buying support by FIIs and local funds. The volatility is expected to remain high on account of expiry of derivative contracts for the October series on this Thursday. Dabur Pharma
Dabur Pharma, incorporated in March, 2003, is an associate company of Dabur India Limited. The company is a leading player in cancer research and anti-cancer products in India and the international markets and also markets a range of products in the cardiovascular, anti-diabetic and gynaecology segments in the domestic market. Cancer is increasingly becoming one of the largest causes of death worldwide and is rapidly growing in all countries. This has led to oncology, which refers to the treatment of cancer, become the third largest therapeutic area worldwide in terms of market size. Further, with a sizeable number of oncology drugs expected to go off patent in the US during the next
few years, making them more affordable, this market is poised to grow at a faster rate than at present. Dabur Pharma is a strong player in the oncology space both in the domestic and the semi or less regulated markets across the world. Oncology accounts for over 68 per cent to the company’s total revenue. I believe that the oncology potential, especially in the generics space, is likely to augur well for Dabur Pharma going forward. Dabur Pharma has tied up with Hospira to foray into the US generics market in the oncology space. This tie-up would start contributing to the topline from the next financial year onwards. The contribution from the US market would also enhance the operating margins of the company. Given the fact that the company is a dominant player in the oncology space and the potential of the US oncology generics business, investors may accumulate on declines Dabur Pharma with a three-year perspective. |
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Invest LTCG in tax-saving bonds to get relief
by S.C. Vasudeva Q. Kindly provide the guidelines on the following: 1. I am having 1,000 units of SBI tax gain since 1994 @ of Rs 10 per unit. Now, the rate is Rs 58 per unit. If these are now sold, what shall be my income tax liability? — Surinder Nath A. The answer to your queries is as under: 1. In case the SBI tax gain units are pertaining to equity-oriented fund, the capital gain thereon shall be tax-free provided securities transaction tax has been paid thereon. An equity-oriented fund means a fund where the investable funds are invested by way of equity shares in domestic companies to the extent of more than 50 pc of the total proceeds of such fund and which has been set up under the scheme of mutual fund specified under clause (23D) of Section 10 of the Act. The percentage of equity share holding of the fund is required to be computed with reference to the annual average of the monthly averages of the opening and closing figures. In case it is not an equity-oriented fund, the capital gain earned on the sale of such units would be treated as a long-term capital gain and the benefit of the indexation would be allowed to you. The indexed cost of the units which were purchased in 1994 would be a
Rs 10,000 X 519 = 20,039/- 259 Section 80C Q. My son was doing a course in hotel management during the year 2005-06. I paid Rs 12,300 as tuition fees, Rs 2,400 as IGNOU fees, Rs 11,240 as training food/other laboratory material fees, Rs 14,840 as operations and other institutional fees and Rs 1,500 as examination fees. Please clarify which of the above components as fee are eligible for deductions under Section 80C. — Ashok Kumar A. Section 80C(1) of the Income-tax Act 1961 (the Act) provides that in computing the total income of an assessee being an individual or a Hindu Undivided Family, there shall be deduction, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums referred to in sub section (2), as does not exceed Rs 1,00,000. One of the items covered in sub section (2) is tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter to any university, college, school or other educational institution situated within India for the fulltime education of any two children of such an individual. Interest on NSCs Q. Please advise me whether the interest accrued for the financial year 01.04.2005 to 31.03.2006 on NSCs purchased up to 31.03.2005 can be treated as re-investment under the category “specified savings” within the overall limit of Rs 1 lakh under Section 80C of the Income-tax Act for the assessment year 2006-07. — Parshotam Lall, Ludhiana A. The accrued interest on National Saving Certificates can be covered within the overall limit of Rs 1,00,000 provided by Section 80C of the Act. Q. I am a retired Professor and drawing pension. I am also rendering professional scientific consultancy and charging consultancy fee as decided mutually based on days of work put in. My question is: If I am including all income from pension, consultancy and interest etc. in my total income and paying income-tax, am I required to pay additionally Service Tax also to the Deptt. of Customs, Service Tax and Excise. In their advertisements, they also mention of paying education tax along with Service Tax. I am paying the education tax with Income-tax. Will it not mean payment of education tax twice? — G. Dev, Ludhiana A. The service tax is leviable on receipts from the profession of consultancy. The service-tax so paid would be allowable as a deduction from your professional income for the purpose of computing the total income under the provisions of the Act. The education cess is payable by all assessee and is charged with reference to the taxes (both direct and indirect). It is not an education tax, but a cess on the tax. Accordingly, you are supposed to pay education cess on both income tax as well as on service tax. Rebate u/s 80 DD Q. An official working with me has a spouse with severe disability. He produced the medical certificate of CMO regarding this disability for claiming tax rebate under Section 80DD. But when I asked him to submit the expenditure receipts now, he submitted expenditure receipts of Rs 10,000 only. But wants full Rs 75,000 tax rebate. —
The Head Master, Shaheed Sepohy Dharamvir Kumar Sarkari High School, A. The deduction under Section 80DD of the Act is allowable where an assessee has incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant being a person with disability, or paid or deposited under the scheme framed in this behalf by the LIC or any other insurer or the administrator or the specified company subject to the conditions listed in the section.
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