Reliance employees get golden offer Mumbai: Coming close on the heels of the announcement of a share buy-back scheme, the country’s largest private sector company, Reliance Industries Ltd, has announced the introduction of an employee stock option plan (ESOP) for its employees.

The scheme, which will benefit over 20,000 employees of the company, was approved by the company’s board. The scheme will now be put for shareholder approval at the annual general meeting, scheduled to be held on June 13.

Under the ESOP scheme drawn up, the maximum number of shares to be offered to any employee will not exceed five lakh shares, and the aggregate of such offers will be limited to 5 per cent of the company’s outstanding equity capital. This means the scheme will be a rolling one and the aggregate stock options will increase in line with the increase in the capital. Any employee belonging to the promoter group will not be eligible to participate in the ESOP.

Announcing the scheme, the company’s managing director, Mr. Anil Ambani stated that the introduction of the ESOP scheme was in line with the international practice of our global competitors. The ESOP is expected to provide a transparent, reward mechanism for retention and motivation of people, and contribute to convergence of the interest of shareholders, employees and the company.

The board has finalised two schemes. Under the first scheme — stock options — employees will be offered RIL shares at a discount of 10 per cent to the average closing price of 26 weeks preceding the date of grant of the options. The second scheme — the Stock Appreciation Rights (SAR) — is a cashless exercise of options. SAR entitles the employee to receive the appreciation between the price computed for grant of options and the price for the exercise of options in the form of shares. The number of shares entitled under the scheme will be arrived at after dividing the appreciation value by the market price on the date of exercise.

The options granted to an employee will not be transferable to any person, and shall not be pledged or hypothecated. Vesting of options may start after one year from the date of grant and may extend up to five years. The exercise period may start from the date of vesting and expire not later than seven years from the grant date. The appraisal for determining the eligibility of employee will be specified by the ESOP Compensation Committee appointed by the board of directors. The directors had obtained shareholders' okay for ESOPs way back in ’93. However, it could not be introduced earlier because of the lack of an efficient mechanism for its implementation.
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Global giant, Charles Schwab, tests Indian waters
Mumbai: One of the biggest players in the world in the arena of internet securities trading, Charles Schwab & Co Inc., the San Francisco-based pioneer of discount broking and now online trading, is firming up plans to enter the country.

In a report appearing in the Economic Times, a delegation from the famed firm is supposed to have travelled to India to do a 'search and survey' on the scenario here. The delegation, led by Aliza Knox, senior vice-president, global expansion, met senior Securities and Exchange Board of India (Sebi) officials, heads of the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), most top financial institutions and broking outfits and some prominent telecom players as also portals desirous of offering internet trading.

Apparently, the intention of the team was to find out more about the Indian market, the legal issues as well as the infrastructure. The firm, which has 3 million customers and a large number of non-resident Indians feature on their customer base, could be looking at offering an opportunity to their global customers to buy Indian equities.

Sources said that the team had exhaustive discussions with several leading internet players, and they even visited some broking outfits to see their plans on the ground.

The largely US-focused Charles Schwab has assets worth $774 billion under management and 7.1 million active investor accounts.
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Cairn Energy strikes dry methane gas in Gulf of Cambay
Mumbai: Cairn Energy India, the Indian arm of the UK-based Cairn Energy plc, has struck a "fairly large" reserve of gas in the CB-OS/2 offshore block in the Gulf of Cambay. The Indian company has been operating for some time now and has been producing oil and gas from the Ravva fields.

It has a majority stake of 75 per cent in the CB-OS/2 block, in a consortium that consists of Tata Petrodyne with 15 per cent and ONGC with 10 per cent stake. The company has a production sharing contract with ONGC for this block, which was awarded to it in the fifth round of bidding by the union ministry.

The find in the Gulf of Cambay is estimated at a potential reserve is about 400 billion cubic feet of gas at a depth of about 800 meters in the first well that was spudded in the block. Cairn has permission to market the gas and plans to sell it to users in Gujarat.

The gas was found to be dry methane without any trace of carbon dioxide or hydrogen sulphide. The prospect also has an oil zone which has not been tested yet. The gas has been found in a region that is producing most of India’s natural gas today. The OS/2 block is a 6,000 square-km region located between the Hazira and the North Tapti fields. The gas was found in one of the five prospects shortlisted by the consortium. Drilling on other wells is expected to begin soon though monsoon is in the offing, sources said. Better estimates of the reserves will be obtained only when more wells are drilled.

Cairn Energy and the Tatas began working on the block with a 45 per cent stake each in the venture. The Tatas later reduced their stake to 15 per cent.

By virtue of being the state oil company, ONGC has the option of upping its stake from the existing 10 to 40 per cent if it finds it commercially viable. If it exercises this option, Cairn’s stake will reduce to 50 per cent and the Tatas will be left with 10 per cent.
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International giant, Philips, to use Pune as hub for Asia-Pacific
Penang: Consumer electronics giant, Philips, plans to convert its Indian manufacturing base near Pune into one of its two major bases for manufacturing colour televisions for the Asia-Pacific region, when the WTO regime of uniform duties are in place worldwide. This was announced by the company’s executive vice president, for consumer electronics, Asia-Pacific, Middle East and Africa, Mr Franz van Houten.

The Pune plant, which currently assembles audio products, will, till such time, become the local hub for its Indian subsidiary’s activities like PCB assembly and CTV assembly. Apart from Pune, Bangalore would be developed as a sourcing centre for Philips’ worldwide software needs. At present, Bangalore supplies all the software requirements of the company's DVDs.

As a part of the company’s strategy in considering India as a growing market, it has decided to launch all its high end products in India almost simultaneously with its worldwide launch.
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Cox & Kings and Ford join hands to offer "josh" to customers
Chennai: Travel industry major, Cox & Kings (India), which caters to over 200 large companies in the country and Ford India, which has launched the original "josh machine" – the Ikon -- have joined hands to launch the "Travel with Cox & Kings and Win a Ford Ikon" campaign.

The campaign, launched on May 10 and to be open till November 10, will enable all travellers, both domestic and international to participate in the contest. The best of the entries for the contest will bag a Ford Ikon. The contest has been conceived to generate interest amongst people for both Cox & Kings as well as the `josh machine'.

The travel company’s executives believe that the Ikon is on the crest of its market success and with the travel industry in its boom period, the joint campaign will be complimenting each other.
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Delphi Automotive to set up software centre in Bangalore
New Delhi: Delphi Automotive Systems of the US has announced the establishment of a software technical centre, later this year, at the international technology park in Bangalore. The new technical centre would meet the increasing demand for vehicle software to be applied in Delphi's worldwide vehicle applications. The project is likely to employ about 250 persons.

A major part of the project would be to develop microprocessor software used in embedded controls for electronic systems such as engine and powertrain controllers, antilock brakes, radios, instrument clusters and air control systems.

Delphi's technical centre in India will be part of a concerted effort at Delphi Automotive Systems to meet the increasing demand for and growth of software in the automotive environment, in light of the rapid increase in demand for mobile multimedia products in vehicles.

The initial focus of the Bangalore technical centre will be on automotive embedded systems that depend on software as the medium for providing product features, differentiation and adaptability to different vehicle customers, the release said.

The centre is also expected to become a part of Delphi's global competency that links all its engineering structure and resources around the world. The centre would also expand to offer additional expertise in computer aided engineering, electrical computer aided design, mechanical computer aided design and more research and development.

The centre will house approximately 15 systems, mechanical, electrical and manufacturing engineers from other Delphi divisions. Other divisions represented at the Bangalore technical centre will include Delphi Energy & Chassis Systems, Delphi Thermal Systems, Delphi Steering Systems and Delphi Research and Development.
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Increased demand forces Hyundai to plan third shift to meet demand
Mumbai: The Indian subsidiary of the Korean giant, Hyundai Motor India Ltd., is planning to introduce a third shift at its plant by August 2000, in a bid to increase car capacity to 10,000 cars per month. It has also put on hold plans to launch the diesel variant of Accent by at least two months due to production-related constraints.

Currently, Hyundai's monthly car production stands at 7,400 cars working on two shifts, with Santro accounting for 6,200 cars and Accent 1,200 cars. As the increasing demand for the Accent model, is cutting down on the production of the Santro, the company has decided to introduce the third shift.

The increase in production by introducing a third shift is primarily to meet with the export targets. The company continues to remain bullish on the car market for the next two to five years.

In its bid to bridge the gap between the Accent and the Mercedes Benz, the company is also planning to introduce its upper end luxury car Sonata, expected to be priced in the range of Rs 10-12 lakhs, in the last quarter of the current fiscal. The company hopes to sell at least 2,000 Sonatas in the first year itself.
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Single largest order for IBM from Skumars.com
Mumbai: In what is being stated as the single largest private sector order for the computer giant, IBM India will supply 30,000 high-end multimedia personal computers (PCs) to Skumars.com for installation in their e-business kiosks across the country. The order, which is in excess of Rs 100 crore, is part of the massive program of Skumars to create a all-India shopping network. The IBM PCs will be developed to suit the specific requirements of the Skumars.com project.

The execution of the order will however depends on the number of franchisees Skumars.com will be able to sign on. The first phase of 30,000 franchisee kiosks are expected to be ready by September.

Skumars.com is also holding talks with two large cable companies for alternative ways of Internet access in addition to the very small aperture terminal technology (Vsat) currently being used for providing Internet access to its franchisees.
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Tata Engineering to launch Spatio soon, but Magna is likely to be only by 2002
Mumbai: Truck and car maker, Tata Engineering, is ready to roll out a new multi-utility vehicle (MUV), styled the Tata Spatio – targeted at the semi-urban and rural segment -- in barely a week from now.

The Spatio, considered an upgrade to the Tata Sumo and the Tempo Trax, will be fitted with a three-litre diesel engine which will make it the most powerful in the MUV category. A ten-seater vehicle, it is tentatively priced at Rs 3.31 lakhs (ex-factory) which will work out to an on-road price of slightly over Rs 4 lakh in Mumbai and it will carry a 300,000 km, three-year warranty. The company hopes to get a substantial portion of the rural markets with its attractive price tag.

Further, the first full size sedan from the Tata Engineering stable, which will compete with the likes the Hyundai Sonata and the Skoda Octavia, is likely to roll out in 2002.

Brand named, Magna, the car is expected to get the brand new Telco petrol engine - a 2200 CC, 135 bhp unit - developed for the Safari and other Telcoline products exported to European markets. What is, however, noteworthy, is that the new car is to be built on a monocoque design.
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Bajaj Auto approaches Firodias for stake transfer via buyback
Mumbai: In a bid to clear the convoluted cross-holdings between the companies, Bajaj Auto has approached the Firodias of Bajaj Tempo to transfer its 9 per cent stake in Bajaj Auto-valued at around Rs 400 crore at current prices. In return, Bajaj Auto will transfer its 23 per cent holding in Bajaj Tempo to the Firodias.

Even if the Firodias accept the offer, the agreement on the transfer price will turn out to be a contentious issue. Bajaj Auto maintains that transfer of its holding in Bajaj Tempo will give the Firodias the crucial majority control, while the same is not true for the transfer of the Bajaj Auto shares.

Another problem area has been that the Firodias' holding in Bajaj Auto, at current market price, is valued at around Rs 400 crore, which is close to seven times the valuation of Bajaj Auto's holding in Bajaj Tempo. This, analysts say, rules out the settlement of the issue through a stock swap.

The Firodias and the Bajaj family have been locked in a bitter battle following a formal split over 30 years back. The Firodias had, in fact, refused to transfer Bajaj Auto's holding in the company, and the matter was resolved by the Supreme Court in Bajaj Auto's favour.
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BMW forecasts profit growth after Rover sale
Munich: After selling off its loss making British Rover subsidiary to Britain’s Phoenix, Germany’s third largest car maker, BMW AG, reaffirmed its expectations for a strong rise in net profit this year. Addressing the group general meeting, the company’s chairman also reassured shareholders that its dominant shareholder, the Quandt family, did not intend to sell its stake in the group.

Both Ford Motor and General Motors are seen as likely predators keen to snap up the Quandt family's 48 per cent BMW stake.
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