Capital gains restored for unlisted company ESOPs
New Delhi: Employee stock option plans (ESOPs) will be treated as capital gains for unlisted companies as well, according to the amendments made to the Finance Bill 2001.

Earlier, there was some confusion when the Finance Bill 2001 had announced that ESOPs would come under the purview of Sebi, which had led to the impression that capital gains tax on ESOPs would apply only to listed companies, and that ESOPs would be treated as perquisites in unlisted companies, and taxed as such. Until 2000, ESOPs were taxed as perquisites, which was shifted to capital gains in Budget 2000.

Following a representation from managements of unlisted companies who made a case for the necessity of ESOPs in start-ups to attract and retain talent, the government has included an amendment to say that the capital gains tax facility would apply to "any employee stock option plan or scheme," which now includes unlisted companies as well.
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Enron willing to renegotiate
Mumbai: Although there is no official confirmation, US energy major Enron is believed to be willing to renegotiate the power purchase agreement with the Maharashtra State Electricity Board.

The Madhav Godbole panel has been asked to negotiate with Dabhol Power Company.

The terms would include separation of LNG facility and bringing down the tariff. It will also negotiate with DPC for direct sale of surplus power, not needed by MSEB, to third parties including the Government of India or their agencies.

The panel has been given a month’s time to finish its task. Besides Mr Godbole, other members on the panel include Deepak Parikh, RK Pachauri, Dr EAS Sarma, Kirit Parikh, Central government’s nominee, state’s energy secretary Vinay Mohan Lal, finance secretary SK Srivastav, chairman MSEB Vinay Bansal and the chairman of the central electricity authority. The Infrastructure Development Finance Company will be assisting the panel.

The Godbole panel has found fault with Enron for clubbing around $500m, the cost of LNG facility, with the project cost and has recommended the separation of two.

The LNG facility, which is part of the second phase (1,444 mw) of DPC, includes a receiving terminal, with infrastructure to supply 130,000 cubic metres of natural gas, storage tanks and a re-gassification plant.
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