Innholdsfortegnelse for 9-Sep-2018 i Business Today

JAGUAR AND Land Rover started life as independent ventures, both born in the UK a few years apart. In the early 1900s, the S S Company made a number of cars that were branded Jaguar. In 1945, the company renamed itself Jaguar Cars. It quickly became known for building sporty and beautifully designed cars. Land Rover was born as a part of the Rover group in either 1947 or 1948. It developed the reputation for building some of the toughest off-road vehicles – maybe even better than the legendary Jeep that was considered its inspiration initially. Land Rovers entered the luxury SUV segment much later through the Range Rover label. Both cars made names for themselves but neither were financial successes. Jaguar and Land Rover became part of the Leyland…

WHEN IT RAINS, it pours. The country’s largest bank, the State Bank of India (SBI), is caught in the provisioning mess. If it was bad loan provisioning eating away its profits earlier, it is now investment depreciation (Mark To Market losses for fall in bond prices) that is applying pressure on SBI’s profitability. In the first quarter (April-June) of 2018/19, the bank has reported a loss of ₹4,875 crore. This is also the third consecutive quarterly loss. The bank clocked a loss of ₹6,500 crore plus in 2017/18. It, however, appears to have fully provided for both bad loans as well as investment losses. The financial performance will certainly improve from third quarter.…

THE RUPEE breached its crucial 70-mark against the dollar to close at 70.16 despite Reserve Bank of India’s intervention. The recent fall came after a sharp slump in the Turkish Lira and the Russian Ruble. In theory, the rupee’s fall should benefit Indian exports. But can it really give an extra edge when other EM currencies are also depreciating versus the dollar? Besides, most manufacturing exports are dependent on imported inputs, thus the net effect on exports is limited. In Q1FY19, the total oil import stood at $32.85 billion, while export was $9.1 billion. For gems and jewellery, the total import came in at $7.6 billion, while export at $7.95 billion. Meanwhile, there are concerns Russia and Turkey may reduce steel prices drastically to make the most of their devalued…

Some state-level schemes and what they offer MAHARASHTRA MAHATMA JYOTIBA PHULE JAN AROGYA YOJANA Health insurance benefits up to ₹1.5 lakh/year for families belonging to any of the 36 districts of Maharashtra and holding Yellow Ration Card, Antyodaya Anna Yojana Card, Annapurna Card and Orange Ration Card, and farmers from 14 agriculturally distressed districts; Premium is ₹12/day for coverage of ₹4 Lakh ANDHRA PRADESH AAROGYA RAKSHA Premium for the entire family for one year @ ₹1,200 KARNATAKA YESHASVINI COOPERATIVE FARMERS HEALTH CARE SCHEME Members of rural co-operative societies; member contribution is ₹300/year for Rural Yeshasvini and ₹710/year for Urban Yeshasvini KERALA COMPREHENSIVE HEALTH INSURANCE AGENCY OF KERALA Extends to absolute poor as per the Planning Commission’s guidelines; beneficiary contribution is ₹30 per family per annum…

LEADING THE WAY WHAT: CII Leadership Conclave WHEN: SEPT 6, INDORE WHAT TO LOOK FOR: The event will bring together statesmen, political and business leaders, thinkers and writers, stars and savants, heroes and youth icons in a microcosm of the kind of exceptional minds that will enrich the multitude. It is an opportunity for the business community of Madhya Pradesh to learn from the leaders of today. GOURMET’S DELIGHT WHAT: Annapoorna World of Food India WHEN: SEPT 27-29, MUMBAI WHAT TO LOOK FOR: The 13th edition of Annapoorna World of Food India will be synchronised with the world’s No. 1 trade fair for the food and beverage industry- ANUGA. It is an extraordinary B2B platform for the Indian food and beverage market, organised by Koelnmesse YA Tradefair and FICCI. GOING…

With the emphasis on putting America first and making America great again, President Donald Trump signed a broad tax reform legislation called Tax Cuts and Jobs Act. This comprehensive tax reform is termed as the biggest change to the tax code since 1986 and has been effective from January 2018. It aims to boost employment of Americans while discouraging shifting of jobs overseas and encouraging repatriation of offshore profits to regain domestic economic momentum. Considering the position of the US in the world economy, such changes are bound to impact local businesses with global operations and inbound investments. So, let us look at the key implications for India-headquartered groups with a presence in the US or US groups with Indian presence or those exploring such opportunities. Tax rates: The Federal…

BREXIT As the UK's largest automaker, it is vulnerable to a hard Brexit deal that can potentially cause a £1.2 billion impact to its bottom line each year. DIESEL GATE Drop in diesel car demand in Europe and the UK is a cause for concern. JLR's sales mix is skewed towards diesel than most peers. ELECTRIC MOBILITY It has just launched its first all-electric SUV, iPace, in the UK. Needs to quickly develop and launch more electric cars but it will be costly. TRADE WARS Its production is heavily concentrated in the UK and Europe, which stunts capability to circumvent higher tariffs in case of a full-blown global trade war. NARROW PRODUCT PORT FOLIO It still doesnt have compact SUVs like BMW X1 and Audi Q3 or entry level sedans…

After the conflict of interest case involving ICICI Bank CEO Chanda Kochhar came to light, the bank, on March 28, issued a statement defending its credit approval processes and the role of its CEO. “The credit approval authorisation framework is laid down by the Board of Directors. The larger exposures are approved by the Credit Committee of the Board. The majority of Credit Committee members are independent directors of the bank. The Chairman of the Credit Committee, till as late as June 2015, was always a non-Executive Director,” it said. of its non-executive directors to convince shareholders, media and others interested in the developments that “there are adequate checks and balances in loan appraisal, rating and approval processes within the bank, both from control as well as from governance perspective.”…

₹ 9,57 CRORE RANBAXY DEAL Fortis's Noida hospital Reckless expansion Failed international foray Takeover battle for Singapore’s Parkway RHT Trust a drain on Fortis financials Failed attempts to sell assets Money to firms allegedly without approvals Reckless expansion Emerging market investment banking strategy failed Entered lending, capital markets, wealth management, asset management, insurance, housing finance, commodities Most businesses incurred losses Losses in subsidiaries Allegedly gave loans without due diligence Massive write-off in ABG loans Investment in real estate Leveraged loans for more loans Real estate business went into slowdown Loan repayment failed Interest and debt piled up…

BALANCE How well a team understands the importance of diversity of skills and strengths and is willing to incorporate them ENERGY How ambitious the team is, and how much it takes the initiative and maintains long-term momentum at a high level ALIGNMENT How well team members understand the larger team purpose, and focus their actions and those of the team on that objective RESILIENCE How well a team can hold itself together even under severe internal or external stress and remain effective EFFICIENCY How well a team understands the need to optimise resources and time and drives efficiently for results OPENNESS How much a team values engaging with the broader organisation and the outside world and builds the connections do so…

1-800-Worlds: The Making of the Indian Call Centre Economy By Mathangi Krishnamurthy Publisher: OUP Pages: 256 Price: ₹795 I STARTED READING 1-800-Worlds a few months ago and then left it bookmarked and unfinished for a while as other commitments took over. But a chance conversation with a journalist friend in Pune – about the new economy and the unconventional lives of call-centre workers whom she knew – pulled me back to the book. We all understand public secrets (things that we know but would not discuss) but what will happen if we invert it and talk about the ‘secret public’? This inversion is at the heart of Mathangi Krishnamurthy’s brilliant ethnography about the makings and the inner workings of the call-centre ecosystem in Pune in the first decade of this century.…

REAL ESTATE Land Title Disputes Come Under Insurance Cover HDFC Ergo, a general insurance company, has recently launched title insurance, made mandatory under the Real Estate (Regulation and Development) Act, or RERA. This kind of insurance cover protects developers against any cost/loss arising out of title claims on the land of the project by any third party. Earlier, several projects were delayed or stalled due to title disputes, resulting in a delay in possession and rise in costs due to the compensation paid. The policy can be purchased by developers and then assigned to the association of allottees or allottees/members of housing societies who will be the ultimate beneficiaries. INVESTMENT Sukanya Samriddhi’s Minimum Deposit Lowered Sukanya Samriddhi, one of the most popular schemes launched by the government for the welfare…

Technology has made it easy for you to leave your legacy the way you want. Many companies are now providing Will drafting services over the internet. “Increase in digital penetration and changing social structure have increased online Will volumes,” says Nandkishore Purohit, Head – Digital Strategy and Analytics at HDFC Securities. A Will is a critical part of estate planning but most people keep delaying it — what if my family members figure out that I am making multiple visits to the lawyer’s office to make a Will? How will my family members react to my distribution choice if, just in case, the Will gets leaked? The e-commerce companies that have entered the space are riding piggy-back on these concerns. Apart from the above, a bunch of other beliefs like…

INDIA’S AVIATION sector is down and out. A three-year long run of good times seems to be making way for hardships. The two major airlines – IndiGo and SpiceJet – have reported decline in financial performance while Jet Airways has deferred its first quarter results to an unspecified date. IndiGo’s profit tanked 96.6 per cent to ₹ 28 crore and Spice-Jet registered losses of ₹38.06 crore in the quarter ending June 2018. There are four culprits, in no particular order: high Aviation Turbine Fuel price, rupee depreciation, rising maintenance costs, and elevated competition. The biggest agony for airlines is that the first three factors are beyond their control, and as for soaring competition, airline managements hope the current level of fares is unsustainable over a longer period. With most airlines…

OVER A DECADE has passed since India mandated that every company that qualifies certain turnover, net worth, and net profit criteria spend at least two per cent of average net profits of the three preceding years on Corporate Social Responsibility initiatives. Two issues that commonly crop up when enforcing CSR rules have been the quantum of spending, and the quality of spending. The Comptroller and Auditor General (CAG) of India recently pulled up five PSUs for diverting CSR funds to non-CSR activities. The Registrar of Companies also issued notices to 272 companies for alleged non-violation of its provisions in 2015-16. In this backdrop, establishing a Centralized Scrutiny and Prosecution Mechanism to track violation of CSR provisions in April 2018 is a welcome move. It is also time to fine tune…

107TH ANNUAL GENERAL MEETING, ITC LTD, 27TH JULY, 2018 Over the last two months, reports published by the World Bank and the IMF reaffirm what economy watchers have been predicting for a while. India will sustain its mantle as the world’s fastest growing major economy in 2018. This growth trajectory is expected to continue for a while powered by growing consumption demand and an expected upswing in private capital investment. In the last two decades, your Company has indeed traversed a remarkable journey of transformation. A vibrant organisation has been built with immense vitality that today empowers millions of farmers, delights consumers in both rural and urban markets and enriches the nation in myriad ways. Building on these foundations, a promising tomorrow is unfolding. A future that is being shaped…

MUSK WANTS TO TAKE TESLA PRIVATE EV major Tesla has been in hot water after CEO Elon Musk tweeted that he had “funding secured” to take it private. The announcement came shortly after a report that Saudi Arabia holds a large stake in the company and its sovereign wealth fund could finance the move. While a three-member panel is evaluating the move, U.S. SEC has reportedly sent a subpoena to Tesla regarding its take-private plan. PEPSICO CEO INDRA NOOYI TO STEP DOWN Indra Nooyi, the India-born PepsiCo CEO, will quit in October after 12 years at the helm. The company’s global operations chief Ramon Laguarta will succeed her. Nooyi, a trailblazer in many respects, took PepsiCo’s revenue from $35 billion to $63.5 billion during her tenure and focussed on a…

BMW Leads in electrification with one pure electric and eight hybrid vehicles already on sale. It has sold over 2.5 lakh electric or hybrid cars so far and has set a target of selling 1.4 lakh units in 2018. By 2025, it will launch 12 new fully electric cars and 13 hybrid cars. MERCEDES BENZ Is investing Euro 10 billion to electrify its entire range of cars by 2022. Plans to produce EVs in six factories across three continents. Will convert its Smart into a completely EV-led brand in the US and Europe by 2020. VOLVO All new cars will have an electric motor from next year. Plans to launch five pure electric cars by 2021.…

The documents given to independent directors may not have all the information required to take a ‘correct’ stand on an issue. The documents and information are sometimes given too late and they do not get time to prepare for board meetings Independent directors often do not have clarity on their role as companies hire them more for their networking skills than experience There is no standardisation in drafting of agenda paper and other documents, making the work of independent directors tough…

For India Inc., the first quarter of 2018/19 is turning out to be exactly what the doctor ordered. It delivered what every investor had been hoping for years — strong signs of an earnings revival. An analysis of 717 listed companies (excluding oil & gas and banking, financial services and insurance companies) whose first quarter data was available with database AceEquity throws up encouraging results. The sample registered year-on-year revenue growth of 10.8 per cent, the fastest in 16 quarters. Harendra Kumar, Managing Director, Institutional Equities of Elara Capital, says the strong performance seen thus far in Q1 is a big positive. “We entered this fiscal with expectation of compounded annual growth rate of 20-22 per cent in earnings over 2018/19 and 2019/20. This is a good start as it…

What has been the focus of Incredible India 2.0? What are you trying to achieve with that? A: K.J. Alphons: I want people to come and see India. We are an amazing country. The new slogan is not just inviting people to see and experience India; we are saying that come to India and get transformed. We believe anybody who comes to India will go back transformed. The promotions relate to yoga, Ayurveda, wildlife, cuisine and luxury. We released four movies on them. In one month of the yoga [movie], three weeks of wildlife, and one week of luxury, we had 65 million views. We are redefining promotion. Our promotion on Ayurveda is among the top three globally. We are beating Apple and Samsung in this game. In another two…

Last fiscal, contracts to build highways peaked and the pace of construction was twice as fast as in the previous five years. The government achieved this through policy reforms, which made EPC (engineering, procurement and construction) and HAM (hybrid annuity) models of highway construction attractive – so much so that they now account for 90 per cent of the contracts awarded. In the process, the government has partly resolved a logjam that had its roots in the FY2008-2012 period, which saw aggressive bidding combined with a high-risk build-operate-transfer (BOT) model. Ultimately, developers lost interest in the sector. EPC and HAM are relatively less risky for developers and contractors, and these involve materially substantial – and upfront – skin in the game from the government. Such leaning on higher public spending…

UNTIL NOW IT HAS been the stuff of science fiction, movies and nightmares. With the startling advances in artificial intelligence (AI) over the past two-three years, could we soon reach a stage where we would be deftly manipulated by the technology we created? The answer is, almost certainly, yes. After outsmarting humans on so many fronts and starting to master the domains that humans believed were theirs alone (such as creativity), smart machines are likely to rule in the near future. But it is quite frightening when humans fall prey to scheming robots. Whether we like it or not, AI is already being used to manipulate people, mostly to get them shopping. Was there an occasion when you were about to buy an item online but left it in the…

NEW DEVICES are now available to deal with migraines, says Dr Gowda. Cefaly, for instance, is a nondrug, non-invasive treatment for coping with the severe complication. Approved by the U.S. FDA, it is a nerve-stimulating device and looks like a headband. New drugs are also being developed to deal with migraine attacks. The FDA has recently approved Aimovig for preventive treatment. It is one of the new group of drugs that can block calcitonin gene-related peptide (CGRP), a molecule which spikes during migraine attacks and sensitises the nerves in the face, head and surrounding areas, thus intensifying the pain. However, there could be unpleasant side effects and such medicines may not be effective for all. So, avoiding headache triggers seems to be the best solution, at least for the time…

The Subtle Art of Not Giving a F*ck By Mark Manson Harper Collins Price: ₹499 The Power of your Subconscious Mind By Joseph Murphy Amazing Reads Price: ₹199 Attitude Is Everything: Change Your Attitude Change Your Life! By Jeff Keller Collins Price: ₹199 Thinking, Fast and Slow By Daniel Kahneman Penguin Price: ₹499 Elon Musk: How the Billionaire CEO of Spacex and Tesla is Shaping Our Future By Ashlee Vance Virgin Books Price: ₹699 *Top books by sales for Aug 1-Aug 15, 2018; includes only books released after Jan 1, 2015; information provided by…

Managing your money is a necessity in this day and age, but it has never been this convenient as India heads towards a heavily digitised, less-cash society. Thanks to the rapid growth of the Internet and mobile Internet across the country, data cost has dipped dramatically, and the shift to online is growing bigger and better. Plus, there is no shortage of innovation in the digital space, making money management easier, faster and more cost-effective. Be it banking, budgeting or payment, insurance, borrowing or investment, everything can be done now from your PC or mobile. Here is what you can do to stay in control of your finances. Banking and Payment Systems Giving the traditional Indian banking a digital edge was no easy task, but the ecosystem has evolved in…

Returns are as of 7th Aug'18 Equity funds are ranked on the basis of 5-year performance Debt funds are ranked on the basis of 3 year performance AUM filter of minimum ₹500 Cr is applied on Equity and Liquid funds AUM filter of minimum ₹100 Cr is applied on rest of the funds All portfolio related data is as of June'18 end; unless specified Returns of time-period SIX months and one year are absolute, while returns of time-periods more than one year are annualised Average Credit Quality calculation is as per Morningstar's methodology Source: Morningstar…

₹ 8,000 CRORE WASHED AWAY THE WORST flood in the past century hit Kerala and wreaked devastation. Initial estimates of economic losses - damaged buildings, roads washed away, and destroyed agricultural crops – place the figure at over ₹8,000 crore. The severely hit areas are where the fragile ecosystem has been tampered with – paddy fields turned into human settlements, flood plain agriculture in the backdrop of receding waters from dammed rivers, landslides in ecologically sensitive, hilly terrains ravaged by quarrying, have seen the maximum destruction. This is not the first time the relationship between climate change and extreme climatic conditions and unpredictable weather patterns is in the spotlight. The Chennai floods reminded us of the disappearance of swamps and lakes, the Uttarakhand disaster pointed to the problems of unplanned…

THE GOVERNMENT, banks, and power producers are all working together to save stressed power loans from bankruptcy. Banks’ power sector exposure is around ₹ 5 lakh crore; stressed loans are in the region of ₹ 1 – 1.25 lakh crore. Refusing sector specific relaxation, the RBI has held that for even a single day default on loans with over ₹ 2,000 crore exposure, a resolution must be found in 180 days OR they face bankruptcy. The solution: the Scheme of Asset Management and Debt Change Structure (SAMADHAN) to save about a dozen power projects that are in good shape. The going, however, will be tough for the rest. Existing ARCs want heavy haircuts from banks and are not buying. And strategic players or distressed funds aren't interested. The new proposed…

While P.V. Narasimha Rao and Dr Manmohan Singh are credited as being the architects of India’s economic reforms, it was Atal Bihari Vajpayee who rolled out the economic template and policies that would be followed by prime ministers who succeeded him. While Vajpayee is known for his dignity, his unfailing courtesy, his wit and oratorical skills and ability to take opposition parties along, the economic contribution of his government is often overlooked. He attracted some brilliant, committed and highly educated followers, gave them critical portfolios and set about fixing many of India’s long standing problems. So you had Arun Shourie rolling up his sleeves and chalking out a blue print for selling off ailing PSUs, which the government should never have been running. You had Yashwant Sinha moving to simplify…

JAGUAR LAND ROVER JLR, Halewood, UK JLR, Solihull, UK JLR, Castle Bromwich, UK JLR, Warwick Manufacturing Group, UK JLR, Itatiaia, Rio de Janeiro, Brazil JLR, Graz, Austria (Contract manufacturing; operational 2018) JLR, Changshu, China JLR, Nitra, Slovakia JLR Pune, Maharashtra TATA MOTORS INDIA TML, Jamshedpur, Jharkhand TML, Pantnagar, Uttarakhand TML, Dharwad, Karnataka TML, Pune, Maharashtra TML, Ahmedabad, Gujarat TML, Lucknow, Uttar Pradesh Tata Marcopolo, Dharwad, Karnataka TATA DAEWOO TDVC, Gunsan, South Korea…

AN INFLUENTIAL ‘BABA’ and his family with a weakness for materialism; two young businessmen loaded with nearly ₹10,000 crore from an asset sale; and a family confidante have together cooked a cauldron that Bollywood potboilers are made of. Their machinations wrecked a flourishing empire and vapourised nearly $3.2 billion (₹22,500 crore then) into thin air. Business chatter has been abuzz ever since brothers Malvinder and Shivinder Singh’s debt pile of nearly ₹13,000 crore came to light two years back. That was shocking considering that, as recently as June 2008, they had hit gold with ₹9,576 crore in cash from Japan’s Daiichi Sankyo for the sale of India’s then largest pharmaceuticals company Ranbaxy Laboratories—an inheritance from father Parvinder Singh. How could they squander ₹22,500 crore, lose control of prized possessions such…

26 per cent equity cap removed for financially strong asset reconstruction companies, which want to take management control of sick companies Infrastructure status to logistics sector, to help companies borrow funds at a lower cost High-level empowered group of secretaries is working to clean up the mess in the thermal power sector Implementation of the UDAY Scheme is increasing demand for electricity Construction of roads and railway tracks has picked up pace. Decent progress in railway electrification Hybrid-Annuity Model is giving confidence to road construction companies to bid for projects. Under this, NHAI releases 40 per cent project cost according to milestones. The balance is raised by the developer. The developer invests 20-25 per cent of the cost (as against 40 per cent or more before…

WITH SMARTPHONE cameras getting as good as they are, videographers are beginning to use them instead of bulky filming equipment, at least in some situations. The only problem: The sound is not half as good as the video because the moment you step back a few feet, the quality deteriorates. So, Sennheiser has come out with a solution – a Memory Mic that could be a game-changer, especially as it is meant for the masses and costs $200 (around ₹14,000). The wireless mic attaches magnetically on to clothes and connects to a smartphone via Bluetooth and a special app. Even if the person taking the video moves further back, the mic can be clipped on to the subject or placed close to it for clear audio capture. The audio and…

THIS ULTRA-THIN SMARTPHONE is an excellent combination of Xiaomi's hardware and Google’s unmodified Android Oreo/Android One operating system out of the box. Unlike many, Xiaomi has not adopted the fancy all-glass rear or the notch display. Instead, the A2 sports an aluminium unibody, a 5.99 inch full HD+ screen with an 18:9 aspect ratio, and thick bezels on the top and the bottom. Protected by 2.5D Corning Gorilla Glass 5, the screen looks bright with deep blacks. In spite of the big display, the curved edges at the rear make it easy to hold. The thin side panel houses the volume key and the power button on the right, the SIM tray on the left, the IR blaster on the top and the Type C charging port and the speaker…

HOROLOGY ETHNIC EXCELLENCE WHEN ONE GOES searching for that perfect watch, it has to be Swiss as Swiss brands are rated as the best in the business. But closer home, independent watch brands have started making their mark. Jaipur Watch Company is one such brand that reflects the modern Indian aesthetics to the hilt through its bespoke creations. For instance, its new ruby Ganesha watch in 18 carat gold was a personalised piece based on a customer’s request and a solid ruby was hand-carved over a period of two weeks to create the divine Ganesha figurine. The watch runs on a small automatic movement from the house of Seiko and the bezel is embellished with VVS1 diamonds. With a mother-of-pearl dial and a handcrafted strap, such creations are ideal for…

“UNDERSTAND THE WHY… AND THE WORK BECOMES AMAZINGLY ENJOYABLE.” Q. The biggest challenge you faced in your career A. Growing a small company into a particular size brings a lot of challenges. When I started heading the company 15 years ago, I faced the challenge of aligning the team with my vision. I had to make them believe that it is possible to build strong brands even in a fiercely competitive market if it is pursued with the right product and strategy by people with unwavering passion. The challenge was to develop the right talent to lead these efforts. Q. Your best teacher in business A. The best teacher in business, as in life, is various situations. A company’s CEO has to face unique challenges for which no business school…

When the Nifty is being powered by a handful of stocks and individual portfolios are far from all-time highs, one needs a marvellous pair of eyeballs to become a good stock-picker. At present, with markets volatile and investors uncertain about which sectors and companies will do well, one way to sift through the rubble is to look at companies with good corporate governance standards. While every market rally throws up its own theories and rationale to justify businesses and value stocks, one simple mantra to stay in the game is corporate governance! Corporate governance the flavour! Data shows that 66 per cent of Nifty returns between June 2017 and June 2018 have come from just five stocks. These include Reliance Industries, Kotak Mahindra Bank and Infosys, which have given 29…