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neoIT study: India, Canada, and China are top outsourcing destinations
New York: India, Canada, and China have emerged as the strongest destinations for the off shoring of technology operations, according to a report released Tuesday by outsourcing consulting firm neoIT.

Those countries garnered the top three positions in neoIT's ranking of 14 possible IT outsourcing destinations. According to the study, India took the No. 1 spot, offering "cost competitiveness, a highly skilled labor pool ... and a high level of service maturity.". The country is also tops in the world in IT services exports, with sales topping US$12bn last year.

neoIT ranked Canada second, noting its "geographic proximity to the U.S." and its "skilled labor force." Canada's IT services exports last year totaled US$8.2bn. China, with its "low cost," "large pool of skilled labor," and "rapidly improving infrastructure," ranked third. In its report, however, neoIT cautions that China's attractiveness is "negatively affected by the lack of English-language proficiency" in the country. China exported US$700mn in IT services last year.

Surveying up-and-coming off shoring destinations, neoIT ranked Poland fourth with its "low overall business operations cost" and "language and cultural connections with Western Europe." The sixth-ranked Czech Republic is "an emerging contender," neoIT says. Russia ranked seventh, as the consulting firm raised flags over the country's "unpredictable political and business climate.

Romania, Brazil, and South Africa are the least attractive among possible destinations for IT outsourcing, says neoIT, because of their lack of infrastructure and labor skills.
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Gartner: India top outsourcing destination even as global competition warms up
New Delhi: India maintains its top position among global sourcing destinations and the global market is likely to touch US$50bn by 2007, says research and analyst firm Gartner.

"Although more options for external service provision are becoming available worldwide, India remains the market leader with a majority of essential resources and a sufficiently robust technology infrastructure," the firm said.

"Strong government support is rapidly propelling China's capabilities into the frame, while Latin America, Brazil and Mexico are increasingly becoming attractive options. In eastern Europe, the Czech Republic, Hungary, Poland and Russia are among the countries to watch," Gartner said.

Though India is currently the clear leader, the research firm nevertheless recommends that organisations seeking an offshore service provider should consider multiple country options.

"It has the majority of essential resources and sufficiently robust infrastructure to deliver IT products and services successfully. Other countries, including China, Brazil and the Czech Republic, are making inroads, but they currently lack some of the attributes to qualify as leaders," it said.
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Bharat Forge buys out Swedish firm Imatra Kilsta
Mumbai: Maintaining the momentum of its acquisition spree, Bharat Forge, the world's second largest forging company, has announced that it had acquired Imatra Kilsta AB, Sweden, along with its wholly owned subsidiary Scottish Stampings, for an undisclosed amount.

According to industry sources, Bharat Forge may have paid Euro 47mn (around Rs250 crore) for the acquisition. The acquisition comes on the heels of the company buying out three global companies in less than 21 months.

The Imatra Forging group is the largest manufacturer of front axle beams and the second largest crankshafts producer in Europe, having manufacturing facilities at Karlskoga, Sweden and Ayr, Scotland. As a combine entity Imatra Kilsta AB-Scottish Stampings has a forging capacity of 100,000 tonnes per annum. With nearly 600 employees, it had an annual turnover of over 1 billion Swedish Kroners (about $132 million) in 2004. It is a major supplier to leading passenger car and commercial vehicle manufacturers Volvo, Scania, SAAB, DAF, Perkins, MAN and Iveco.

In June, the Kalyani group had bought Michigan-based Federal Forgings for nearly Rs40 crore. The company had also acquired a German aluminium forgings maker in December, 2004.

BN Kalyani, chairman and managing director, BFL, said, "The acquisition completes our global dual shore capability. We can now produce all of our core products -- crankshafts, beams, knuckles and pistons at minimum two locations worldwide and provide design and engineering, and technology front-end support, to customers for these products. This has been our core strategy to enhance our competitive advantage by providing a complete service and better value to our global customers and improve our share of business with them."

The company said that with this acquisition, Bharat Forge now has world-class manufacturing facilities across eight locations - two in India, three in Germany, one in Sweden, one in Scotland and one in North America.
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SC ruling: Software servicing to fall under service tax net
New Delhi: The revenue department has clarified that maintenance or repair or servicing of all computer software would be subject to service tax. The instructions have been issued following a Supreme Court ruling that such sale of computer software falls within the scope of sale of goods.

The SC had ruled that all the tests required "to satisfy the definition of goods are possible in the case of software and in computer software the intellectual property has been incorporated on media for the purpose of transfer. Software and media cannot be split up."

Resolving a dispute between Tata Consultancy Services and the Andhra Pradesh government, the court said sale of computer software, therefore, falls within the scope of sale of goods.
In case of branded software (canned software) sold off the shelf, the software is transferred in a medium and is sold as such. The apex court had said such cases fall within the definition of goods.
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ONGC to pump in Rs.16,000 crore towards capacity expansion at MRPL
New Delhi: Public sector giant Oil & Natural Gas Corporation plans to expand capacity and also build a 15 million tonne refinery at Mangalore, as well as one each in Barmer in Rajasthan and Kakinada in Andhra Pradesh.

"We plan to expand our refinery capacity in a big way. Apart from expanding the existing capacity of the Mangalore Refineries and Petrochemicals Limited (MRPL) we plan to set up two refineries in Barmer and Kakinada," chairman & managing director Subir Raha told reporters after addressing the 12th Annual General Meeting here.

For the MRPL project, ONGC will invest Rs16,000 crore, he said. "The new refinery at Mangalore will take its subsidiary Mangalore refinery and Petrochemicals Limited's (MRPL) capacity to 30 million tonnes per annum."

Raha also said that ONGC would tap the market and go for joint ventures with strategic partners in order to fund the new projects. While Cairn Enery of UK will partner ONGC in the Rajasthan refinery, details for Kakinada are yet to be worked out, he said adding capital investments to the order of Rs65,000 crore are under examination.
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Raha fires broadside: PSUs are not Govt. departments
New Delhi: At the 12th annual general meeting of the Oil and Natural Gas Corporation (ONGC) here today, chairman, Subir Raha, referred to the `identity crisis' suffered by public sector companies. "... The distinction between a company and a department gets diffused in the public sector domain," Raha said.
ONGC currently has a gross income touching Rs47,245 crore for the fiscal 2004-05.

Raha in his statement said, "Companies are not departments. Everyone expects companies to make profit, and everyone considers departments to be cost-centres. The companies by definition are governed by the Companies Act and departments are administered under executive rules and procedures.

Companies have shareholders; departments do not. Listed companies are legally liable for compliance with the Listing Agreement; there is nothing like a listed department. A listed company even in public sector remains a listed company, not a department."

Stating that administrative instructions could not override the law, Raha pointed out that under the concept of limited liability, each investor was obliged to share proportionate risk, and equally share proportionate reward.

"The purpose of a company is to create wealth. All business involves risk, except when protected by the State. If the State refuses to or withdraws protection, the choice is either to dissolve the company and carry out the purpose through a department, or let the company run as an enterprise," Raha said.

At the AGM the shareholders approved the re-appointments of N.K. Mitra (Director Exploration), N.K. Nayyar (Director Navratna), P.K. Sinha (Government nominee), Sunjoy Joshi (Government nominee) and A.K. Hazarika (Director onshore) to the company's board.
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DGH's exploration performance report card: Cairns tops - ONGC draws a blank
Mumbai/New Delhi: According to a exploration performance report card published by the Directorate General of Hydrocarbons (DGH), the Oil and Natural Gas Corporation (ONGC) could not make a single discovery during 2004-05, though it invested US$415.58mn (Rs1,822.64 crore) and drilled nine wells during the period.

DGH said that the domestic oil major was committed to drill 79 exploratory wells. Overall ONGC has been allocated 430,335 sq km for development.

Leading the pack of exploration and production (E&P) companies operating in India both in terms of investment and discoveries made during 2004-05 was Cairn Energy India Ltd. Cairn Energy made an investment of $645.6mn (Rs2,827.7 crore) and made eight discoveries during the period, at a success ratio of 37 per cent. The DGH report card will now be published every quarter as an effort to counter `speculative and premature reports' as recently published by national dailies. The first-ever quarterly report gives details of E&P companies operating in India under the New Exploration Licensing Policy (NELP) and pre-NELP regime.

Reliance Industries Ltd came second behind Cairn Energy, having invested US$566.79mn (Rs2,485.37 crore) during the year and made seven discoveries, at a success ratio of 47 per cent. The wells drilled included those in the nature of exploratory, appraisal and development wells. RIL has been allotted an acreage of 288,976 sq km for exploration. RIL was to explore 47 wells and Cairn Energy, 17 wells during the period.

Among the companies engaged in E&P activities were Oil India Ltd, Hindustan Oil Exploration Company, Gujarat State Petroleum Corporation, Joshi Oil and Gas, Gazprom, Canoro, Hardy Oil and Gas, Essar Oil and Phoenix. Gujarat State Petroleum was the fourth largest investor in Indian oil and gas fields at US$21.04 million (Rs92.28 crore), followed by Hardy.

Hindustan Oil Exploration recorded the highest success, having made discovery in one of the two wells that it drilled; its investment during the year was US$2.46mn (Rs10.78 crore).
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With investments in the power sector Tata's commit Rs.68,000 crore for Jharkhand
Ranchi: Tata Power has proposed the setting up of a 3,000 MW thermal power plant in Jharkhand and has lined up overall investments of Rs15,000 crore in the energy sector for the State.

The company is currently assessing two sites, at Lalpania and Latehar, for the greenfield power project. According to State govt. officials they have also asked the company to help renovate the ailing Patratu Thermal Power Station (PTPS). The power plant, with a production capacity of 840 MW, has been producing 90 MW of electricity on an average for the past many years.

In the meantime, Tata Power has also shown interest in taking up distribution in sections of Ranchi, East and West Singhbhum, Dhanbad and Hazaribagh. After their initial meeting with the state's bureaucrats, the company will now prepare a detailed project report on its proposal and submit it to the government. The next meeting is expected to be held a week later.

The Tata's had proposed a 2,500-MW power plant in their investment proposal for the State recently. Adding up everything, Govt. officials said that the Tatas have now made proposed an overall investment of Rs68,000 crore for the State.
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High-level Nasscom delegation arrives in China
Beijing: A high-level Nasscom delegation has arrived here seeking business opportunities as well as to survey the booming Chinese information technology market.

The 28-member delegation led by S Ramadorai, CEO of Tata Consultancy Services, who is also chairman of Nasscom, arrived on Wednesday to interact with the Chinese IT industry and seek avenues for mutually beneficial cooperation, sources said.

The delegation also includes Nasscom president Kiran Karnik, its vice chairman Ramalinga Raju (chairman of Satyam computer services), NIIT chairman Rajendra Pawar and other top CEOs.

The delegation's visit comes five days after Nasscom held an India-China software cooperation seminar in Bangalore on the occasion of the visit to the city by Li Yuanchao, communist party secretary of east China's Jiangsu province.

Opportunities for cooperation between the two large economies are immense and the volume of IT trade between India and China has been growing at a very healthy pace. Indian software firms are increasingly setting up operations in Beijing while Chinese are also establishing software operations in India and also selling hardware.
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Govt. may hike 20 per cent FDI cap in DTH ventures
New Delhi: The government is likely to raise the ceiling on foreign direct investment, now at 20 per cent, for direct-to-home ventures.

Currently such ventures are allowed a total foreign investment of 49 per cent, of which FDI can only be up to 20 per cent. The rest may be held by non-resident Indians, overseas corporate bodies and foreign institutional investors.

The government may also relax the restrictions on cross-media holdings in DTH ventures. The current norms cap the holdings of a broadcaster or a cable television company in a DTH venture at 20 per cent.

The broadcasting industry has been pressing for changes in the FDI norms for DTH companies to attract higher investments into the sector.
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OVL may get two exclusive oil blocks in Cuba
New Delhi: Officials from ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corporation (ONGC), have indicated that there was a likelihood of the company getting two additional blocks from Cuba. ONGC Videsh has already announced its pact with Spain's Repsol YPF to acquire a 30 per cent stake in seven blocks in Cuba.

Officials have said that the two blocks are being offered exclusively to the company by Cuba and they are in addition to what they have already received.

Officials have also said that ONGC Mittal Energy Ltd (OMEL), a joint venture, between ONGC and Mittal Investment SARL, is looking at bidding for an offshore block in Nigeria (A-1 21), and are in the final stages of discussion.

ONGC proposes to increase its spending in oil and gas exploration and production by 20 per cent to Rs12,000 crore during the year, beginning from April in order to meet a target of raising crude oil output by 11 per cent by end of the decade.
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IOC to bid for oil pipeline projects in Turkey
Kolkata: Indian Oil Corporation (IOC) will explore emerging opportunities for participation in the cross-country oil pipeline projects in Turkey in a joint venture with Calik Enerji Group of Turkey. Earlier, IOC had tied up with Calik to acquire majority stake in the Tupras Refinery, a US$8bn Turkish refinery company. However, they lost out to a consortium led by Shell.

Calik group is one of Turkey's leading industrial groups with interests in gas distribution, oil exploration, banking and textiles.
The chairman of IOC, Sarthak Behuria, told mediapersons here today, "Our joint venture partner has a few offers in the pipeline sector. We are reviewing the options." He emphasised that Indian Oil would explore such opportunities only through the joint venture route.

Located between the oil rich land-locked CIS countries and the Black Sea and the Mediterranean, Turkey is witnessing an increasing number of investment proposals in cross-country oil pipelines. The Baku-Tbilisi-Ceyhan pipeline (BTC pipeline) covering a distance of 1,760 km from the Azeri-Chirag-Guneshli oil field in the Caspian Sea to the Mediterranean will start functioning soon.
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SWC to merge with McDowell by 2006-end
Kolkata: UB Group chairman Vijay Mallya has announced that the merger of Shaw Wallace into McDowell will be completed by 2006-end. Operational merger, however, would be completed by October.

Shaw Wallace was acquired from the Chhabria family for Rs1,400 crore earlier this year.

Herbertsons and Triumph Distillers & Vintners will also be merged into McDowell, which will then be rechristened as United Spirits. The new entity will have retail sales of Rs14,000 crore.

The combined entity's large brand portfolio will also be rationalised, Mallya told reporters after chairing the 59th AGM of Shaw Wallace. Together, the two liquor companies have 130 brands of which around 35 fetch 90 per cent of the profit.
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