Microsoft to challenge Google again

Microsoft Corp. has announced that it had reached out to Yahoo Inc. with a possibility of a fresh deal that does not involve an acquisition of the Internet company.

“Microsoft is considering and has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo,” Microsoft said in a brief statement.

The announcement comes on the heels of Yahoo shareholder and billionaire investor Carl Icahn launching a proxy fight to wrest control of the Yahoo board at the upcoming July three annual shareholders meeting.

Microsoft withdrew its unsolicited $33-a-share buyout bid on May three, after the two sides failed to agree on a price.

Icahn has called the Yahoo board’s decision to reject Microsoft offer as irrational and wants to force Yahoo to return to the bargaining table with Microsoft.

Microsoft did not elaborate on the new proposal. Microsoft said that it was not proposing to make a new bid to acquire all of Yahoo at this time, but was continuing to explore and pursue its options to improve and expand its online services and advertising businesses.

“Microsoft reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or  Mrosoft or with other third parties.” Microsoft noted that there could be no assurance that any transaction will result from these discussions.

The New York Times cited “people involved in the confidential discussions” as saying that Microsoft has in mind a partnership or joint venture for search-related advertising

PM rules out price controls to check inflation

Prime Minister Manmohan Singh on Monday ruled out price controls to rein in inflation that has a scaled a 44-month high, but assured more administrative steps to ease the burden on the average citizen. During a meeting with Finance Minister P. Chidambaram and Reserve Bank of India Governor Y.V. Reddy in New Delhi, the prime minister said the imposition of price controls would send a wrong signal to the world regarding India’s economic reforms.

Yet, he hoped that steps taken by his government and the central bank over the past month - such as the ban on export of some commodities and duty cuts on some imports - would take effect soon and bring down the inflation rate from the present 7.83 percent. Imposition of price controls has been among the demands made by the opposition as also the Left parties - that propped the UPA government - to rein in prices.

The prime minister maintained that the focus of the United Progressive Alliance (UPA) government was on controlling inflation without interrupting India’s high economic growth of 8-to-9 percent over the past four years.

The meeting was called to review the price situation in the country, which has become a major source of worry for the government that is entering an election year

Mukesh Ambani enjoys Rs 44 crore pay package

Top business house Reliance Industries has given its chief Mukesh Ambani, the country’s richest person and presumably top-paid executive, a hefty pay hike of about 45 per cent to take his annual remuneration to over $10 million.

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, got a total payout of Rs 44.02 crore in financial year 2007-08, marking an increase of about Rs 13.5 crore from the previous fiscal.

In fiscal 2006-07, Ambani’s annual remuneration had increased to Rs 30.46 crore, from Rs 24.77 crore previously.

However, a large part of Ambani’s full-year pay cheque comes in the form of commissions that the company pays to select executives as a ratio of its net profits.

Perquisites and allowances

According to the company’s annual report being sent to shareholders, Ambani got a salary of Rs 60 lakh (Rs five lakh per month) and another Rs 48 lakh (Rs four lakh per month) in the name of “perquisites and allowances”.

In addition, he got Rs 18.75 lakh under the head of “retiral benfits” and Rs 4,275.44 lakh toward commission on net profit, taking his total to Rs 4,402.19 lakh for 2007-08.

RIL Chief was the top-paid executive in fiscal 2006-07, followed by Madras Cement’s Chairman and MD P R R Rajha, who had an annual payout of about Rs 24.8 crore.

Mukesh Ambani world’s fifth richest

However, Ambani, who was ranked as world’s fifth richest by Forbes magazine earlier this year with a net worth of $43 billion, may not find a place even among the 200 most paid chiefs globally.

In a separate list, Forbes named Oracle’s CEO Larry Ellision at the top of 500 most paid CEOs in the US with a pay cheque of $192.9 million. A total 177 CEOs in the list had a salary of over $10 million.

It is not yet clear whether Ambani would be highest paid executive in India for 2007-08, as most of the companies are yet to disclose the remuneration figures for that year.

Top-management salaries of other Indian firms

Among the Indian companies that have disclosed their top-management salaries so far for 2007-08, Managing Directors of Merck, ICI India and Crisil have their annual pay cheques running into crores – but they are way behind Ambani.

Merck’s M Dziki got Rs 2.02 crore, while ICI India’s Rajiv Jain and Crisil’s Roopa Kudva got Rs 1.25 crore and Rs 1.1 crore respectively in the latest fiscal.

Mukesh Ambani has been CMD of RIL since July 31, 2002. His current term expires on April 18, 2009. RIL’s board of directors at a meeting held on April 21, 2008 approved re-appointment of Ambani for a further five years at a remuneration determined by the concerned committee.

The shareholders would vote on these board decisions at the company’s 34th AGM to be held on June 12, 2008.

Addressing the shareholders, Ambani said in the annual report that the company “set new records for turnover, net profits and dividend payout.”

He said that RIL has become India’s first private sector company to surpass cash profit of Rs 25,000 crore and net profit of Rs 15,000 crore.

Ambani’s pay hike of about 45 per cent is even higher than the rise in total managerial remuneration given by RIL in the latest fiscal

Maruti raises car prices by up to Rs 18,000

Reeling under increasing input costs, especially steel, country’s biggest car maker Maruti Suzuki India has hiked prices of its products across various models between Rs 1,000 and Rs 18,000.

The company has hiked the price of its latest model Swift Dzire by Rs 18,000. It had launched the sedan with an introductory price ranging Rs 4.49 lakh and Rs 6 lakh across different variants.

It has also hiked the prices of all petrol variants hatchback Swift by Rs 9,000 along with SX4, Gypsy; while the diesel version of Swift has become costlier by Rs 15,000.

MSI has also increased the price of all variants of Zen Estilo and WagonR LPG by Rs 1,000 while Alto and M800 has become costlier by Rs 1,500.

Prices of all variants of Omni and WagonR Petrol has also been hiked by Rs 2,000 and that of multi-utility vehicle  Versa by Rs 8,000. 

The company has, however, spared its SUV Grand Vitara from the price hikes.

Power Finance Corp net profit declines 20.4 per cent

State-run Power Finance Corp on Saturday posted a net profit of Rs 295.4 crore for the fourth quarter of FY’08, a 20.4 per cent decline over the same period a year ago.

The company had a net profit of Rs 371.2 crore in the fourth quarter of FY’07, PFC said in a filing to the Bombay Stock Exchange.

PFC’s board of directors has also recommended a dividend of 35 per cent of the paid up capital of the company for the financial year 2007-08.

The company posted an annual net profit of Rs 1,206.7 crore in FY’08, compared to Rs 986.1 crore in the previous financial year.

The total income of the company in the last financial year rose to Rs 5,040, from Rs 3,927 in the year-ago period, it added.

PFC on March 31, 2008 floated a wholly-owned consultancy arm to provide services in the power sector. The subsidiary, PFC consulting, would provide consultancy services in the power sector and in related areas.

The company would also carry out services related to ultra mega power projects, including formation of special purpose vehicle. Further it would conduct bidding process for awarding projects of state utilities.

Freight charges hit Pakistani cement exports to India

Pakistan’s cement exports to India have slowed down because of rising freight charges and non-availability of railway wagons despite increasing orders, say exporters.

Officials of the cement manufacturing companies in Pakistan told that freight charges to India on cement had been increased by almost 200 percent in the last two months.

They also said that they were facing difficulty in getting wagons to export cement by train.

“The freight charge from Karachi port to an Indian port was just $3 per tonne about two months back, now it is $9,” Saifuddin Khan, general manager marketing of Lucky Cement told.

He said there was no particular reason for the massive increase. “When the shipping lines realised that they can get business from Pakistan to India, they increased the price,” he said.

Khan said his company had received more orders from India.

“Our cement is cheaper than Indian cement and the quality is much better,” Khan said, adding that Lucky Cement was sending 40,000 tonnes cement to India every month.

Tasneem Ilyas, operation manager of SGS (Society General Surveillance), which inspects most of the cement consignments sent from Pakistan to India, admitted that cement export has slowed down but said he was not aware of the reason.

She said that most consignments were tested by her company for quality and the cement being exported to India “is of higher quality than the standards set and required by the Indians”.

“According to our reports, not a single consignment has been found below standards,” Ilyas said.

She said they were in touch with India’s Minerals and Metals Trading Corp (MMTC).

With the export of cement, trade between the two countries has taken a significant step forward. At least five Pakistani companies approved by the Bureau of Indian Standards (BIS) have started to export cement to India while five more manufacturers have applied for certification.

Cement goes to India by sea route or train. The traders want both the governments to allow road transport as well.

According to the two governments, only a truck of 10 tonnes can cross the border. This is not viable in the case of cement.

Pakistan produces about 100,000 tonnes of cement, of which 40,000 tonnes is more than what is consumed locally. The surplus cement is exported to several countries.

Ilyas said Pakistan was exporting cement to at least 11 countries.

According to manufacturers, the capacity of the cement industry in Pakistan would touch 40 million tonnes by the end of the year and could reach 44 million tonnes in another year.

“We believe there is great demand for cement in India and importers would continue to prefer Pakistani cement, being close to their country and because of competitive rates,” Khan said.

Cement export from Pakistan was proposed during a meeting between Prime Minister Manmohan Singh and Pakistan’s former prime minister Shaukat Aziz in 2005.

Pakistani exporters were encouraged by the Indian government’s steps to abolish countervailing duty and additional customs duty, making imports viable.

Manufacturing sector growth falls to 15.38%

India’s manufacturing sector witnessed a decline between April 2007 and March 2008, says a survey conducted by a leading industry chamber.

While 21.73 per cent of all units in the manufacturing sector recorded over 20 per cent growth in 2006-07, the figure declined to 15.38 per cent in 2007-08, according to the Confederation of Indian Industry (CII)-Association of Council (ASCON) Survey.

The study says 30.77 per cent units in the sector recorded 10 to 20 per cent growth in 2007-08 against 36.73 per cent in the previous year.

The manufacturing units that recorded over 20 per cent growth were in the following categories – sponge iron, power cables, electric motors, power transformers, personal computer, groundnut oil, and transmission line towers.

The manufacturing units that witnessed a moderate growth of up to 10 per cent increased to 37.5 per cent during 2007-08 against 30.61 per cent, while 16.35 per cent recorded less than zero per cent growth against 11.22 per cent in the previous fiscal.

Negative growth categories

The categories recording negative growth included fertilisers, machine tools, tractors, the vehicle industry, including three-wheelers and motorcycles.

The survey says the segments like asbestos, cement, ball and roller bearings and vanaspati were all in the moderate growth category.

“It is a cause of concern that there is a clear shift of sectors from excellent and high growth category to moderate and negative growth category,” said Surinder Kapur, chairman, CII Manufacturing Council, while releasing the survey on Monday.

He, however, said that the results should not cause panic as the latest quarter of 2007-08 showed that the number of sectors recording over 20 per cent growth was almost the same as the last quarter of 2006-07.

Rupee rise

“The results of the latest survey show that the manufacturing industry is trying to stabilise, absorb and adjust its growth to issues of high interest rates, reduced credit availability and rupee appreciation,” said Sarita Nagpal, deputy director general, CII.

Though growing very fast, the manufacturing sector’s contribution to India’s GDP is only around 17 per cent, against 25 to 35 per cent in some East Asian economies.

Since manufacturing has been recognised as the main engine of growth for the economy, the CII has prepared an action plan to increase its contribution to the GDP to 25 per cent.

The government’s National Manufacturing Competitiveness Council (NMCC) has also prepared a national strategy for manufacturing to increase its share in the GDP.

“After the boom in IT sector, there is a continuous growth in the manufacturing sector. Its average growth during 2004-08 has been 9 per cent, with a record 12.3 per cent in 2006-07,” an official in the ministry of commerce and industry said

Gold rises further on aggressive buying

Gold prices surged further by Rs 150 per 10 gram on the bullion market in New Delhi on Wednesday on increased buying influenced by firming trend in overseas markets.

The gold, which gained Rs 150 on Tuesday, rose further by Rs 150 to Rs 11,820 per 10 gram on heavy buying by stockists and jewellery fabricators, marketmen said.

The buying activity picked up on reports that the gold rose in Asia for a fourth day as crude oil traded near $122 a barrel, boosting the appeal of the precious metal as a hedge against inflation, they added.

Gold has gained 5.2 per cent this year in overseas markets, while oil soared 27 per cent. Bullion for immediate delivery gained $5.03 to $881.43 an ounce. The domestic bullion market normally take guidance from global markets.

Standard gold and ornaments rose by Rs 150 each to Rs 11,820 and Rs 11,670 per 10 gram respectively. Sovereign held unchanged at Rs 9875 per piece of eight gram.

Silver also rose further on brisk buying by funds. Silver ready rose further by Rs 320 to Rs 22,620 per kg and weekly-based delivery by Rs 500 to Rs 22,450 per kg. 

Silver coins, on the other hand, continued to be asked at previous levels of Rs 26,600 for buying and Rs 26,700 for selling of 100 pieces.

MindTree hikes stake in Aztecsoft to 26.19%

IT company MindTree Consulting on Wednesday said it has further increased it stake in software engineering services firm Aztecsoft to 26.19 per cent through open market transactions at an estimated Rs 11.64 crore.

The company acquired 15 lakh shares representing 2.63 per cent in Aztecsoft, it said in a disclosure to the Bombay Stock Exchange.

Calculated on the basis of Wednesday’s closing price of Rs 77.65 per share of Aztecsoft, the value of the shares acquired is worth about Rs 11.64 crore.

Prior to the buyout, MindTree’s stake in the firm stood at 23.56 per cent. on Tuesday, the firm had bought shares representing 14.67 per cent stake in Aztecsoft for about Rs 51 crore through market transactions. 

Earlier this week, the IT firm had said that it would buy 32.57 per cent stake in Aztecsoft at Rs 80 per share, which values the company at $90 million.

Shares of MindTree closed at Rs 481.25, up 1.85 per cent on the BSE.

Govt may divest residual 26% in VSNL

The government is considering divesting its 26 per cent residual stake in Tata Communications Ltd (formerly VSNL), a deal that could fetch the exchequer about Rs 3,650 crore at current market prices.

The government holds 26.12 per cent stake in Tata Communications Ltd and going by the market price the value of the residual stake is a little over Rs 3,650 crore as the company shares are changing hands at Rs 491 a share.

Telecom Commission headed by Secretary Siddhartha Behura is meeting in New Delhi on Thursday to discuss divestment of the stake in the Tatas’ owned company, among other items on the agenda, an official in the Department of Telecom (DoT) said.

The meeting would also be attended by Finance Secretary D Subbarao and Secretary in the Department of Industrial Policy and Promotion (DIPP), besides other members of the Telecom Commission.

Issue of surplus land

Last year, Tatas had an option to acquire the remaining stake but the same could not be done as the two parties – government and Tatas – could not resolve the contentious issue of surplus land with the company.

Tata Communications Ltd has 773 acres of prime land, which has been put in the surplus pool, and is valued at over Rs 1,000 crore.

According to shareholders’ agreement between the government and the Tata group, post disinvestment, VSNL is to be de-merged into two companies. One would be the telecom company under the control of Tatas and the second a government-controlled company to administer the land.

Asked whether the government would sell the entire 26.12 per cent stake in Tata Communications Ltd or retain part of it till the issue of surplus land was resolved, sources said all options are open and the Department of Telecom may deliberate upon it on Thursday.

Stake sale

Government had divested majority stake in the company in 2001, while retaining 26.12 per cent stake that gave it a controlling power and two nominees on the board of Tata Communications Ltd.

According to sources, DoT had proposed setting up a new company to which the surplus land held by Tata Communications Ltd would be transferred, but no decision has been arrived at till now.

Sources said that the Telecom Commission may first consider resolving this issue and then proposing selling the residual stake.

Or, the government may agree to dispose off the residual stake, but ask for a “golden share” in the company.

A golden share means that the government would sell its stake in the company and in return ask for a single share with controlling stake at least till the controversial issue of surplus land is resolved.