Companies & Sectors
Bharat Forge sells entire stake in JV to FAW group

Bharat Forge’s unit sold its entire 51.85% stake in its eight year old JV with China-based FAW group for Rs175 crore

Bharat Forge Ltd (BFL), said its unit sold its entire 51.85% stake in its joint venture with China-based FAW group for Rs175 crore. The company’s unit, Bharat Forge Hong Kong Ltd, has divested its entire stake in FAW Bharat Forge (Changchun) Co Ltd to FAW Corp Ltd, ending its eight year partnership with the Chinese group.

Since inception of joint venture in 2006, Bharat Forge had invested Rs178 crore in the JV in four tranches.

In a regulatory filing, Bharat Forge said, “The disinvestment will have a positive impact on BFL cash flows and profitability on a consolidated basis.”

Bhart Forge surged Monday by 5.8% to hit a 52-week high of Rs351 on the BSE. At 3.43pm, it was trading 4.2% higher at Rs345.6 on the BSE, while the 30-share Sensex was 1.8% up at 21.134.


DGH disagrees with Kelkar Committee report on exploration contracts

DGH Choubey, who was part of the Kelkar Committee, has said that the panel had exceeded its brief and quoted data that had no attributable author or source

The Director General of Hydrocarbons (DGH) has put in a strong note of dissent against the Vijay Kelkar Committee suggestion to continue the present regime of allowing oil and gas producers to recover costs before paying the government its share.


RN Choubey, the DGH, who was also part of the Kelkar Committee, said in the note that the panel had exceeded its brief and quoted data that had no attributable author or source.


Sources with direct knowledge of the development said the panel, in Chapter 2 of its report, recommended continuation of the present production sharing contract (PSC) framework for the oil and gas sector, which allows for cost recovery by exploration and production (E&P) companies before they pay the government its share.


This was in contrast to the suggestion by the Prime Minister-appointed Rangarajan Committee to shift to a revenue-sharing model that would require companies to share a biddable amount of oil or gas output with the government from the first day of production, irrespective of cost.


Sources said Choubey in the note pointed out that the Oil Ministry had initially asked the Kelkar panel to review the recommendation of the Rangarajan committee but later withdrew that from the terms of reference.


The Kelkar panel, which was essentially asked to suggest ways to increase oil and gas output, also said there was little incentive for investors to "gold plate" costs or go for "wilful under-production," an apparent reference to the controversy around cost escalation at Reliance Industries' KG-D6 field and production falling below target.


Kelkar, who was oil secretary from 1995 to 1997, submitted the first part of his report last week.


Choubey, was of the view that since the review of the Rangarajan panel report was outside its purview, the Kelkar Committee should not have included Chapter 2.


Incidentally, an association of oil and gas operators such as Reliance Industries Ltd (RIL) and BP have opposed dumping the cost-recovery model in favour of the revenue-sharing framework.


Choubey also contested the Kelkar panel conclusion that developing projects under the PSC regime would result in an additional 7 billion barrels of oil equivalent compared with the revenue regime, saying it wasn't clear how and who made these calculations.


Incidentally, Chapter 2, which concludes that "There is little incentive for the investor (i) to 'gold plate' or (ii) for wilful under-production," is not mentioned in the committee's executive summary.


EPFO raises provident fund interest rates to 8.75% for FY14

The EPFO had surplus funds, which enabled it to raise interest rate to 8.75% for 2013-14 from 8.5% in the previous financial year

Retirement fund body Employees' Provident Fund Organisation (EPFO) on Monday decided to increase the rate of interest on provident fund (PF) deposits to 8.75% for 2013-14, a move that will benefit about five crore subscribers.


Labour Minister Oscar Fernandes told reporters after a meeting of the EPFO trustees that "We have decided to recommend to the government 8.75% rate of interest for 2013-14 to its subscribers".


The Central Board of Trustees, which is the apex decision-making body of the EPFO, met on Monday and approved the interest rate.


According to sources, the body had surplus funds, which enabled the interest rate to be increased from 8.5% in the previous financial year (2012-13).


The EPFO's recommendation will be vetted by the Finance Ministry. Once the ministry approves the decision, the interest would be credited to the accounts of subscribers.


According to sources, the decision to enhance the rate was taken in view of the forthcoming Lok Sabha polls.


The EPFO is estimated to have an income of Rs20,796.96 crore in the current financial year.


Payment of interest at the rate of 8.5% to subscribers would have required Rs20,740 crore and left a surplus of Rs56.96 crore, according to earlier projections.


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