India Business Journal

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RIDING HIGHYohan Poonawalla is steeringthe multi-diversifiedPoonawalla Group’s newventures into the big league.

APRIL 2012, Rs 35EDITORAMIT BRAHMABHATT

ASSISTANT EDITORSS SIVASUBRAMANIANSHRIVATSA JOSHI

CONSULTING EDITORSHARMILA CHAND

CORRESPONDENT (AUTOMOBILE)JAY KORADIA

ADVERTISING MANAGERWILLIAM RUMAO

ADVISORY PANELSHASHIKANT PATELJITENDRA SANGHVI

REGISTERED OFFICE102, RAJASTHAN TECHNICAL CENTRE,PATANWALA ESTATE,GHATKOPAR (W),MUMBAI 400 086. INDIAPHONE: 6703 0250/6703 0251FAX: +91 22 6703 0251EMAIL: [email protected]

BUREAU CHIEFSALLAHABAD: S K BISWASBHOPAL: VINAY DATARDELHI: RANJANA ARORAHYDERABAD: B SATYAMUK: ABHIJEET ROY

Printed and published byAmit Brahmabhatt for Issues Analysisand Research Pvt Ltd and publishedfrom 102, Rajasthan Technical Centre,Patanwala Estate, Ghatkopar (W),Mumbai 400 086 and Printed atGraphtone (India) Pvt. Ltd.,A1/319, Shah & Nahar Indl. Estate,Lower Parel, Mumbai 400 013Processed at Graphtone (India)

Editor: Amit Brahmabhatt

Volume VII, No 10Issue date April 1-30, 2012Released on April 1, 2012

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CONTENTS

Mail Box ..........4

Viewpoint ..........6Railway Budget 2012-13

News Round-Up ..........8A brief on news, tie-ups,appointments and awards

Realty ..........22Reality bites: Housing projects intop metros crawl at a snail's pace.

Corporate Reports .Mega revamp: Vedanta Group's

ambitiousrestructuring planis aimed atcreating a globalgiant. ..........24

Well-oiled plans: Smart strategiesand global acquisitions transformMarico into a powerful MNC. .....26

International Business ..28Upping the ante: India andIndonesia set a new $25-billionbilateral trade target.

Disinvestment ..........36Crucial lesson: The governmentshould get its pricing right tosucceed in divestment programme.

Pharmaceutical ..........38US gets tough: Regulatory rapsand rising litigations spoil Indiandrug-makers' American party.

Face To Face ..........42Sankey Prasad, Chairman and

Managing Direc-tor, SynergyProperty Devel-opment Services:Mechanisation

will expedite projectsManagement Mantra .......44Srinivas Chari, Co-Founderand CMO, XeragoBanking ..........46Mutual gains: White-label ATMsfacilitate banks to reduce costs andenhance customer satisfaction.Global Wrap-Up ..........48A quick, monthly round-up of newsand current affairs across the worldReaders' Lounge ..........50Catch up with new book launches.- Emerging India- Tax Shastra- Inside Coca-ColaEvents Calendar ..........52An update on national andinternational exhibitionsStar Talk ..........54Forecast by Bejan DaruwallaKnowledge Zone ..........56- Anant Goenka- Indian Patent Office- Spiritual Corner: Money MattersHot Seat ..........58Rajiv Vastupal, CMD, Rajiv Group

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SPECIAL REPORT

POLITICALLY CORRECTDespite its small, yet bold,measures, Union Budget 2012-13clearly signals that reforms havegot a decent burial, at least for thenear future.

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Publisher’s StatementStatement about ownership and other particulars aboutIndia Business Journal required to be published under Rule 8 of theRegistration of Newspapers (Central) Rule, 1956.

FORM IV (See Rule 8)1. Place of publication : Mumbai2. Periodicity of publication : Monthly3. Printer’s name : Amit M Brahmabhatt Whether citizen of India? : Yes4. Publisher’s Name : Amit M Brahmabhatt Whether citizen of India : Yes Address : 102, Rajasthan Technical Centre,

Patanwala Estate, Ghatkopar, Mumbai 400086

5. Editor’s name : Amit M Brahmabhatt Whether citizen of India : Yes Address : 102, Rajasthan Technical Centre,

Patanwala Estate, Ghatkopar, Mumbai 400086

6. Names and addresses of : Amit M Brahmabhatt individuals who own the 102, Rajasthan Technical Centre, newspaper and partners or Patanwala Estate,Ghatkopar, shareholders holding more Mumbai 400086 than one per cent of total capital

I, Amit M Brahmabhatt, hereby declare that the particulars given above aretrue to the best of my knowledge and belief.

Sd/-Dated: 1st March, 2012 Amit M Brahmabhatt

Publisher


As expected, Mukul Roy, the new railway minister, undid what his prede-cessor, Dinesh Trivedi, intended to do. Erasing off the very essence of

Mr Trivedi's Railway Budget 2012-13, Mr Roy rolled back most of the pas-senger fare hikes, except those of AC first-class and AC two-tier.

The new railway minister also scrapped several of Mr Trivedi's far-reach-ing reform proposals. A committee to examine the possibility of getting anindependent tariff-setting authority was nixed. A move to restructure theRailway Board with a member for marketing - aimed at breathing life intopublic-private partnership projects - and a member for safety was trashed. Aproposal to set up an Indian Railway Station Authority for modernisation ofrailway stations with restaurants and malls was given the go-by. In short, itwas back to miserable square one for the Indian Railways.

Mr Trivedi's Railway Budget was unparallelled in many ways. For the firsttime in ages, a railway minister spoke of India instead of the parochial ap-proach displayed by most of his predecessors. Not giving in to mindlesspopulism, Mr Trivedi actually bit the bullet and hiked passenger fares acrossclasses after ten long years. With this move, he sought to address the issueof cross-subsidisation of the railways' passenger business by freight andcross-subsidisation of the highly loss-making ordinary and sleeper class travelby the AC segments.

The former railway minister's larger efforts were concentrated on tryingto fix the railways' trajectory. He laid paramount significance on safety andit was not mere lip service. He proposed the highest-ever Plan outlay ofRs 60,100 crore for safety of passengers and for sprucing up tracks, bridges,signalling, rolling stock, stations and freight terminals. The railways got aGross Budgetary Support of Rs 24,000 crore, while Mr Trivedi planned tomeet the rest of the capital expenditure through market borrowings ofRs 15,000 crore and Rs 18,050 crore from internal resources.

However, all of Mr Trivedi's initiatives have come to nought. Ironically,his Budget was unparallelled in yet another way: He got sacked for doing avery good job. The mercurial Trinamool chief, Mamata Banerji immediatelydemanded her colleague's head and the UPA government meekly accepted it.No wonder that Mr Roy, Ms Banerji's staunchest loyalist, has rubbed offMr Trivedi's reformist fingerprints from the Railway Budget.

The Indian transport behemoth was staring at an annual loss of Rs 15,000crore on passenger services. Mr Trivedi, according to his own admission,"tried to bring the Indian Railways out of ICU" by proposing the fare hike andprojecting a total incremental revenue of Rs 7,000 crore from passengerservices. But the new railway minister's rollback means that the railwayswill get just Rs 200 crore more from retaining the AC classes fare hike.

The Indian Railways missed its surplus target of Rs 5,258 crore for 2011-12 by a whopping 71.6 per cent, amounting to a mere Rs 1,492 crore. Overthe years, inefficient management and crass populist measures - Ms Banerjias railway minister planned to have bottling plants, catering service and ahost of such non-core businesses - have led to erosion of the railways' sur-plus. Besides, the operating ratio of the railways has slipped to a dismal 95per cent for 2011-12 from the targeted ratio of 91.1 per cent.

Mr Roy has called for innovative measures to get the Indian Railwaysback to its glory. One only hopes that he will not follow in the footsteps ofhis leader in thinking up many more non-core businesses for the railways.Meanwhile, the Indian Railways is swiftly turning into another Air India!

Back into ICU

Dinesh Trivedi's RailwayBudget was unparallelled inmany ways. For the first timein ages, a railway ministerspoke of India instead of theparochial approach displayedby most of his predecessors.He bit the bullet and hikedpassenger fares acrossclasses. He laid paramountsignificance on safety and itwas not mere lip service.Ironically, his Budget wasunparallelled in yet anotherway: He got sacked for doinga very good job.

Railway Minister Mukul Roy hasrubbed off Mr Trivedi's reformistfingerprints from the Railway Budget.

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Uttar Pradesh to announce new SSI policy The UttarPradesh government plans to develop a new industrial policy onthe lines of Uttrakhand to promote the small industries in the Stateand a special scheme for Bundelkhand, according to the Stateminister for small industies, Bhagwat Sharan Gangwar. He alsoadded that closed industires will be reopened and a new industrialarea would be developed in Bareilly.A policy would be formu-lated to promote cane, wood, bamboo and mentha industries.

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Haryana to accordindustry status to majorhealth projects Topromote medical tourism inHaryana, the State govern-ment has decided to accordthe status of industry to healthsector projects with invest-ments of Rs 100 crore,according to the Haryanahealth minister Rao NarenderSingh. The government is alsoexploring possibilities ofdeveloping Haryana as acentre of medical tourism andnecessary provisions havebeen made in the newindustrial and investmentpolicy 2011, Mr Singh said.

India takes over thechair of ASO SAI India hasrecently took over the chair ofthe governing board ofAssociation of Supreme AuditInstitutions (ASOSAI), wichis the largest regionalorganization of governmentauditors. The Comptroller andAuditor General of India,Vinod Rai, is now thechairman of this 45 nationstrong Asian organization of

India and Iran haveagreed to enhancecooperation in the field ofrenewable energy. In ameeting with the IranPresident MehmoudAhmadinejad in Tehranrecently, Union Minister ofNew and RenewableEnergy Farooq Abdullahcalled for stepping upbilateral ties and economiccooperation with Iran.

Kerala Tourism won theGolden Gate award at ITBBerlin, the world's leadingtravel show. The campaigntitled "Your Moment isWaiting'' won the silverprize in the print categoryat the Das Golden StadttorAwards.

the Institution of the Accoun-tants General. Mr Rai takesover this prestigious post fromPakistan's Auditor General,Muhammad Akhtar BulandRana.

Maharashtra to pro-motes wildlife tourismThe government ofMaharashtra has decided tocreate a sustainable tourismmodel on the lines of South

Africa's Kruger national park.A pilot project, on the lines ofthe Kruger park, offeringhomestay and jungle lodgefacilities for tourists andwildlife enthusiasts has beenstarted by the department inthe buffer zones of Tadobanational park and Nagzirawildlife sanctuary. Theproject is seeking to providean alternative livelihood to thevillagers based on tourism and TIE-UPS

horticulture rather than thetraditional cattle and farmingmodel.

CCEA approves 16 oil,gas blocks The CabinetCommittee on EconomicAffairs (CCEA) gave its nodfor 16 of the 33 oil and gasblocks that were bid for theninth round of auctions. TheCCEA also cancelled twoblocks offered under theeighth round of NewExploration Licensing Policy.The bids for 16 blocks underNELP-IX were recom-mended by the EmpoweredCommittee of Secretaries.The prime minister alsodedicated to the nation, the2,200-km Dahej-Vijaipur-Dadri-Bawana-Nangal-Bhatinda cross-countrypipeline of GAIL India thatruns through the North-Westcorridor of the country. Theambitious Rs 13,000 crorepipeline project coverseight States.

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India hopes to get $100 bn in nuclear energy India isexpected to get foreign investment of over $100 billion in nuclearenergy in the next 20 years, of which a quarter would come fromFrance, according to the Commerce and Industry minister AnandSharma. Addressing the India-France CEO Forum, he said, Indiavalues the French partnership in the energy sector, especially innuclear power. French nuclear energy majors Areva and Alstomare actively pursuing business interest in India.

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MSME sector demandsmore funds The Micro,Small and Medium Enter-prises ministry has asked thefinance minister to take stepsto increase funds for the smallscale industry. "More fundsshould be made available toSMEs, financing should bemore transparent. Hurdleswhich are being experiencedby the sector at present to getfinances from the banksshould be smooth,'' theMSME minister VirbhadraSingh.

Guidelines for formingdefence JVs The govern-ment has made a significantstep for bolstering domesticdefence industrial base byclearing of guidelines for itsdefence public sector units(DPSUs) to establish jointventures with private firms.The ministry will issue theguidelines to harness theemerging dynamism of theprivate sector in India andincreasing opportunities toobtain advanced technologiesfrom foreign sources though

Invest India, a jointventure between Federa-tion of Indian Chambers ofCommerce and Industry,Department of IndustrialPolicy and Promotion andState governments, and theBoard of Investment ofMauritius, have signed anMoU for cooperation onbilateral investmentpromotion and facilitation.

Lax man Das, an IndianRevenue Service officer of1974 batch, has beenappointed as chairman ofCentral Board of DirectTaxes in place of M CJoshi, who retired recently.He will hold for now thepost of member(revenue) on the board.

Arun Sharma has takenover as chairman andmanaging director ofIndian Register ofShipping.

adoption of appropriatepartnership approaches byDPSUs. According to theguidelines, DPSUs will retainthe affirmative rights fortaking key decisions in the JVcompany.

Bengal mulls Africansafari model forSunderbans The WestBengal government willprepare a comprehensive

Sunderbans tourism develop-ment package coveringPatharpratima, Jharkhali,Pakhiralaya, Gosaba,Hingalganj areas, with thehelp of World Bank assis-tance, according to the statechief minister. A team ofofficials from infrastructureleasing and financial sectorsfrom Delhi, entrusted by thestate government, had visitedthe Sunderbans to explore its

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tourism potential.

Assam, Meghalaya topNorth-East ex im tradeAccording to Donlad D Ingty,chief commissioner ofcustoms, central excise andservice tax, northeast region,Assam has registered itsexports worth Rs 476.59crore and MeghalayaRs 383.95 crore worth goodsand over 88.16 per cent ofexports came from two items,tea from Assam and coalfrom Meghalaya, while otherexports included primaryproducts like boulder-stone,limestone and fruits. Assamand Meghalaya haveregistered its imported goodsat Rs 34.55 cr and Rs 9.45respectively. The two Stateshave emerged as leaders inexport-import trade in theNorth-East during 2010-11.

GAIL eyes mediumterm gas contracts GAIL(India) Ltd is looking atmedium-term importedcontracts from countries likeRussia, West Asia and SouthEast Asia, which are for oneto 12 months, to meet thegrowing gas demand,according to B C Tripathi,GAIL chairman.

O NGC plans Rs 33k crcapital ex penditure TheOil and Natural Gas Corpora-tion (ONGC) has planned acapital expenditure of Rs33,065 crore for the nextfinancial year 2012-13,according to ONGC chairmanSudhir Vasudeva. MrVasudeva said ONGC isseeking to expedite work on amajor oil and gas project inthe Krishna Godavari basin bytaking up works simulta-neously with regard toexploration, development andgetting approvals from thegovernment. The Corporationhas commenced productionfrom GS 15 offshore projectin August 2011 whichproduces about 2000 barrelsof oil per day and 0.18 cubicmetres of gas. Another site isalso expected to contribute bythe first quarter of 2013. Asper estimates, the KG basin

Singareni Collieries mulls capacity e x pansionSingareni Collieries Co Ltd (SCCL) plans to implement a capitalexpenditure programme of Rs 3,500 crore to enhance its coalmining capacity from 52 mt to 57 mt. The miner has proposed aninvestment of Rs 2,000 crore, as part of its overall spending plans,to shore up its underground coal mining capacity to 18 mt in thenext five years. SCCL chairman Narsing Rao said the company,as part of its plans entry into power generation, is investing aboutRs 7,000 crore to set up a 1,200 mw power unit in Andhra Pradesh.The first unit of 600 mw is expected to be commissioned by Feb-ruary 2015 and the second unit three months after that. Lastfiscal, the company's turnover touched Rs 2,050 crore, the high-est in its history and 14 per cent more than the previous year,he added.

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Two Indian Railway arms -Ircon International andRail Land DevelopmentAuthority - have signed anMoU to set up a specialpurpose vehicle, RailwayStations DevelopmentCorporation, that willundertake redevelopmentand maintenance of stations.

Airports Authority ofIndia (AAI) has signed anMoU with Jharkhandgovernment for establish-ing airports in both the cities,

Singareni Collieries coal mines

Jamshedpur and Bokaro. TheState will provide land to AAIfor developing the airports.

Cochin Shipyard Ltd hasbagged the MoU ExcellenceAward for the year 2009-10for the third consecutive yearfor its outstanding perfornceunder the MoU entered intowith the government of India.K Subramaniam, the CMD ofCochin Shipyard, has receivedthe award from PrimeMinister Manmohan Singh.

G J Rao, Paradip Port Trust

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managed by RailwayProtection Force at 202stations in the country at acost of about Rs 353 crore.There are 10 stations in Delhidivision, including New Delhi,Nizamuddin and Old Delhi,which are to be coveredunder the project at anestimated cost of Rs 22 crore.New Delhi station, whichhandles about 5 lakh passen-gers and nearly 300 trains aday, will be the first station inthe country to have thecomplete integrated securitysystem.

Kandla Port awardsRs 1,060-cr dry bulkterminal project TheKandla Port Trust hasawarded the Rs 1,060-croredry bulk terminal developmentproject, off Tekra near Tunato Adani Port and SEZ Ltd.The project will bring in 14 mtof cargo annually to KandlaPort. The Adanis woulddevelop the satellite port intwo years.

Rs 2 0,000-cr network toconnect 2 .5 lakh grampanchayats BharatBroadband Network Ltd, aSpecial Purpose Vehicle wasset up by the government forimplementing the Rs 20,000-crore national optical fibrecable network project. TheSPV will be initially funded bythe government and thenprivate players may beallowed to pick stake. TheNational Optical FibreNetwork (NOFN) aims toconnect 2.5 lakh grampanchayats across the countryand NOFN is expected to beoperational by November2013. Public sector compa-nies, which have optical fibrecable infrastructure, includingBharat Sanchar Nigam Ltd,RailTel and Power Grid, willplay a crucial role in thisproject.

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chairman, has received theBusiness Leader of theYear-Major Ports SMP2012 Leadership andExcellence Award inrecognition of his excep-tional and repertoire ofdistinguished work in themaritime industry.

Command Hospital AirForce Bangalore has beenranked the best armedforces hospital for 2011. Itwon the award in 1991, 2004and 2009, according to arelease of the Ministry ofDefence.

reserves which ONGC holdsare about 93 billion cubicmetres, Mr Rao explained.Railways tightenssecurity system Aiming toensure security at crowdedstations, Indian Railways

plans to install CCTVcameras at more than 200sensitive stations across thecountry. Railways haddecided three years back toimplement the security systemproject, which will be

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Paradip Port plans todevelop one morefacility The Paradip PortTrust is planning to developan additional cargo-handlingfacility at Bahuda Mohananear Berhampur in Ganjamdistrict of Odisha, accordingto G J Rao, PPT chairman.The proposed satellite port,with a capacity of 20 mt,would handle mainly bulkcargoes, he added. The portauthorities, according to thechairman, have ambitiousexpansion plans to augmentthe capacity to 250 mt with 29berths by 2020. The estimatedinvestment could be aroundRs 10,000 crore.

NTPC to set up 5 mwsolar power farm Powermajor NTPC Ltd plans to setup a 5 mw photovoltaic powergeneration unit close to PortBlair airport in Andaman andNicobar Island. The state-owned company will invest Rs57 crore for the solar PVplant. Photon Energy hasbeen chosen to implement theproject. Work will commencenext month, according to

Air India announces special offers Air India has announcedspecial offers for its passengers who fly from abroad with twodomestic flights for $200 or up to nine flights for $920 under itsVisit Incredible India Pass scheme. The scheme is being mar-keted only in the overseas market and allows a passenger flyingwith Air India from abroad to travel domestically to any onlinedestination to which the carrier operates. The airline operates to64 online stations in the country. The tickets will be valid for 180days of in-bound international travel.

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R Venkateswaran, regionalexecutive director of NTPC.The company has internallytargeted a capacity of about1,000 mw from renewableenergy projects in the nearterm. NTPC is setting up a 25mw solar photovoltaic powerplant at Ramagundam inAndhra Pradesh. InKarnataka it is setting up2x50 mw power plants. InKerala, the renewable energyarm is setting up wind arms atIdukki and Palakkad.

Chennai port plans newbarge facility The ChennaiPort Trust plans to develop abarge handling facility at acost of Rs 26 crore, inBharathi Dock through public-private partnership. This willbe on a design, build, finance,operate and transfer basis.This has necessitated theneed to augmenting thebunkering capacity. Theproposed length of the jettywill be three times the lengthof the present facility. Thejetty could accommodatebarges with carrying capacity

of 1,000 tonne to 3,000 tonne.The port handled about 61million tonnes of cargo in theyear 2010-11.

O NGC & Cairncommence productionONGC and Cairn India havecommenced production fromthe Bhagyam fields inRajasthan, which is a keymilestone towards achievingthe target production rate of1,75,000 barrels of oil a day(bopd) by end of financialyear 2011-12. Bhagyam is thesecond largest of 25 discover-ies made so far by Cairn inthe Barmer Basin in BlockRJ-ON-90/1. The Mangala,Bhagyam and Aishwariya(MBA) fields have grossrecoverable oil reserves andresources of approximatelyone billion barrels. TheRajasthan joint venture willcontribute more than 20 percent of current domesticcrude production when theyreach the currently approvedplateau rate of 1,75,000 bopd.Sudhir Vasudeva, ONGCchairman said "beginning of

oil production from Bhagyamfield is a significant steptowards further developmentof MBA fields.''

BSNL plans to raiseRs 15 ,000 cr thru' loansCash-strapped BharatSanchar Nigam Ltd (BSNL)is looking to raise up toRs 15,000 crore through long-term loans from banks. Thetelecom company hasappointed SBI CapitalMarkets to arrange the loans.The state-run company has tobuy GSM equipment forwhich it has floated a tender.The tender is for buyingequipment to support 14million subscribers, whichcould cost about Rs 5,000crore. Separately, BSNL hasalso asked the department ofTelecommunications for aone-time grant of Rs 5,000crore as immediate relief. Thecompany has suggested othermeans to raise funds includingleasing out its tower andnetwork infrastructure toprivate players.

NLC mulls Rs 40,000-crexp ansion plan NeyveliLignite Corporation (NLC)has proposed to set up a plantusing a new Germantechnology to convert ligniteinto pellets. Lignite has amuch shorter spontaneousheating time when comparedto coal and converting ligniteinto pellets will prolong itsspontaneous heating time."We are keen on this project,as converting lignite intopellets will give us an edge tocompete with coal in terms ofpricing, properties andlogistics,'' said A R Ansari,CMD of NLC. NLC has linedup a Rs 40,000-croreexpansion plan for the nextfive years, involving anincrease in its mining capacityfrom 28 mt to 45 mt andpower production from 2,500mw to 10,000 mw.

NMDC has signed acontract for a by-productplant package for theupcoming 3-million tonneintegrated steel plant atNagarnar with a consor-tium led by ShriramEPC Ltd.

Viren Sinha has takenover as the chairman andmanaging director ofBalmer Lawrie & Co Ltd.Prior to his appointment asthe chairman, Mr Sinhawas director (servicebusinesses), overseeing thetours and travel andlogistics business of thecompany.

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Japan eyes Indian roads & maritime sector invest-ments After investing in the railways and metro rail transporta-tion in India, Japan is looking to invest in the roads and maritimesectors in India. Recently, a Japanese delegation led by TakeshiMaeda, Japanese minister for land, has met its Indian counter-parts in highways and shipping. The team was particularly keenon port connectivity, draft, new berths, terminals and other facili-ties at the Ennore and Chennai ports. Japanese firm Nissan hasan interest in exporting cars from Ennore port. The team has alsomet the union shipping minister G K Vasan for bilateral issuesconcerning the port and shipping sectors. As Japan wants to in-vest in road transport management systems, the ministry is in theprocess of finalizing a memorandum of cooperation.

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TN plans spending oninfrastructure The TamilNadu government is planningto spend Rs 6,654.03 crore toupgrade basic infrastructurein major cities and towns. Theproject to be implemented inthe city corporations andmunicipalities to upgradedrinking water supply,drainage, sewerage, solidwaste management, parkingfacilities and public transportinfrastructure in line with theincreasing urbanization inthe State.

Aviation sectorregisters record growthAccording to Centre for AsiaPacific Aviation, India is thefastest growing aviationmarket in the world with the2011-12 fiscal likely to recorda growth of 17-18 per cent -among the highest in theworld. In November 2011,when 54 lakh people took theIndian skies, aircraftoccupancy ranged from 76per cent to 88.7 per cent."Domestic travel is growingvery fast now. December

The West African nationof Mali has signed a $100million line of credit withthe Ex im Bank of Indiaand it will be used fortransmission of powerfrom Cote D'Ivoire, Mali'sneighbour, to the capitalcity of Bamako.

R V Kamath, chairmanand managing director ofKanoria Chemicals andIndustries Ltd, has takenover as president ofFICCI. He succeedsHarsh Mariwala.

saw huge growth of 15-20 percent over same month in 2010and there is no sign of

slowdown here'', said BensonSamuel of Riya Travels.Other travel industry and

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airline officials also confirmthis fact.

Tallest ATC tower to bebuilt in Delhi Delhi willhave one of the tallest airtraffic control (ATC) towersin the world. The CivilAviation Minister Ajit Singhhas laid the foundation stonefor the 102-metre tall towerthat will be built adjacent tothe present ATC tower. Onceready, it will be the tallest inthe country and seventhtallest in the world.

New Delhi to hostIndia-EU annualsummit India and theEuropean Union are to hold itsannual summit and ministerialmeetings in New Delhi in thismonth. Addressing a jointmeet to day, the externalaffairs minister S M Krishnaand the foreign minister ofEuropean Union, BaronessCatherine Ashton, said Indiaand the European Union areto hold annual meeting as wellas numerous official levelinteractions, which provideopportunities to discussbilateral issues and provide arobust framework forreviewing global challenges.

Takeshi Maeda, Japan's infrastructure minister, andUnion Transport Minister C P Joshi

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India and Nepal strengthen ties India and Nepal havedecided to take forward the proposal to build a 41-km petroleumpipeline between Raxaul in Bihar to Amlekhgunj in Nepal at acost of around Rs 100 crore. After a meeting with his Nepalesecounterpart Purushottam Ohja, the commerce secretary, RahulKhullar said, ̀ ` it is a project we have to look at and find moneyfor.'' Both countries also discussed ways to increase trade andinvestment as well as the security concerns expressed by Indianinvestors investing in Nepal.

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New card for differentmodes of transport TheUnion urban developmentminister, Kamal Nath, hasrecently launched therechargeable pre-paid nationalcommon mobility card calledMore which can be used onvarious modes of transporta-tion such as metro, bus, train,taxi and ferry including to paytoll across the country. "Thecard will benefit publictransport organizations bysignificantly increasing overallefficiency, providing controland better management oftariff structure, reducing cashhandling and hence lesserpilferage and fraud," saidSanjeev Kumar Lohia, officeron special duty in the urbandevelopment ministry.

Maharashtra to set upfirst manufacturingzone The government ofMaharashtra plans to set upthe first large integratedindustrial manufacturing zonecalled the National Investmentand Manufacturing Zone(NIMZ) in Vidarbha region of

The Aluminium Asso-ciation of India and itsUS counterpart, TheAluminium Association,concluded an MoU topromote the use of metalin emerging sectors. TheMoU will be promoting thebenefits of metal in threekey sectors, transportation,packaging andconstruction.

The Gujarat government'sTourism Departmenthas been decorated withthe annual award of TravelAgents Association ofIndia for being thecountry's best tourismdepartment for 2011.

the State. "We have identifiedland around Nagpur andAmravati where the potentialfor development is stillunexploited," Yuvraj Poman,deputy CEO, MIDC said.This is the first phase ofdevelopment of suchtownships under the provi-sions of the NationalManufacturing Policy

announced in October.Meanwhile, the Stategovernment has also notified50,000 hectares of land forbuilding cities near Dighi port,Dhule, Aurangabad andNashik under the DelhiMumbai Industrial Corridorproject, Mr Poman said. "Wewill be setting up a SpecialPurpose Vehicle (SPV) to

manage these cities," headded. In another develop-ment, the proposed DraftIndustrial Development Policyof the Maharashtra govern-ment has suggested anamnesty scheme for small andmedium industries which havebeen closed. Around 49,000small and medium industrialunits, out of a total 1.61 lakhin the State, have shut downdue to their inability to repayloans taken from thegovernment agencies. Theclosed units can pay theprinciple amount and simpleinterest.Govt to reduce lock-inperiod for FIIs in infrabonds With a view toattracting more foreign fundsinto the economy, thegovernment is weighing thepros and cons of reducing thelock-in period of long-terminfrastructure bonds for FIIsto one year. RBI has recentlyliberalized the norms allowingFIIs to invest up to $25 billion,up from the earlier limitedRs 5 billion, in bonds anddebentures of Indianinfrastructure companies.

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BHEL bags Rs 40-crorder BHEL has entered inthe Ukrainian market with anorder for a 27 mw steamturbine generator packagevalued at nearly Rs 40 crorereceived from Arcelor Mittalgroup. The equipment willmeet the captive powerrequirements of ArcelorMittal's steel plant at KryviyRih in Ukraine.

BEML eyes Rs 1-lakhcrore rail rolling stockbusiness The State-ownedBEML Ltd, the only Indiancompany making metro railcars, is to hive off its railbusiness into a separatecompany to tap the businessin rail rolling stock of nearlyRs 1 lakh crore over the nextten years, according to BEMLchairman V R S Natarajan.BEML will supply the firstorder of 150 cars by Decem-ber 2012 to Bangalore Metroand the cost per 136 cars isRs 918 crore. It has alsobagged a Rs 1,000-crore dealfrom Delhi Metro to manufac-ture additional intermediate

SAIL-led group plans to invest $11-bn in Afghanmines The Afghan Iron and Steel Consortium (AFISCO) con-sisting of public sector SAIL, NMDC and RINL, and the privateplayers include JSW Steel, JSW Ispat, Jindal Iron and Steel Ltdand Monnet Ispat, proposes to set up a 6.12 million tonne perannum steel plant in two phases of 3.06 mpta each with an invest-ment of $7-7.5 billion, said SAIL chairman C S Verma. Besides,it proposes to set up a 800-mw power plant and establish a 200km each of road, rail and transmission network from the mines tothe steel project and develop other required infrastructure. TheSAIL-led consortium, the preferred bidder for Hajigak iron oredeposits in Afghanistan, plans to invest about $11 billion in devel-oping the mines over 10 years.

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coaches for them. Thecompany is also expecting ahuge order from Jaipur Metro,

the chairman added. ̀ ` Weexpect that in the next five tosix years, this business could

touch nearly Rs 4,000 crore.It is better to have a separatecompany with a separatemanaging director,Mr Natarajan explained.

NPCIL to allow globalscrutiny of plantsNuclear Power Corp of India(NPCIL) plans to allowinternational inspectors into itsplants, which could eventuallypave the way for setting up anuclear liability pool to insureagainst nuclear disaster risks.The insurance pool willprovide financial aid to victimsof nuclear disaster, operatorsand suppliers againstunwarranted, huge losses.

With Sipat plant,NTPC's capacitycrosses 36,000 mw Withthe commissioning of Unit 2of 660 mw of NTPC-SipatSuper Thermal Power Projectin Chhattisgarh the totalinstalled capacity of NTPChas become 36,104 mw. FiveStates and two UnionTerritories will get powerfrom this Sipat plant.

C S Verma, SAIL chairman andRakesh Kulshreshtha, ED

Kandla Port Trust hasbeen selected for the MajorPort of the Year Award forthe second consecutiveyear. The prestigiousSamudra Manthan Award isorganised jointly byBhandarkar Shipping Eventsand State Bank of India.The final nominees for theaward were the JawaharlalNehru Port Trust and theKandla Port Trust, said P DVaghela, KPT chairman,who received the trophy inMumbai.

Jawaharlal Nehru PortTrust has been awarded theContainer Handling Port ofthe Year award at theSamudra Manthan Awards

2011 for handling 4.27 millionTEU's in the year 2010-11.The award was received bythe chairman JNPT, LRadhakrishnan.Rashtriya Chemicals &Fertilisers Ltd has baggedfirst position in NationalEnergy Conservation Award2011. RCF CMD R G Rajanhas received the award.SAIL Chairman C S Vermareceived the CEO of the Year2011 award from UnionMinister of State for RoadTransport and HighwaysDr Tushar Chaudhary.BPCL has been awarded theAqua Excellence Award 2011for outstanding contributiontowards the cause of water -public sector at the 5th WorldAqua Congress held in New

Delhi recently, in recognitionof Project Boond - CSR RainWater Havesting initiatives.

A K Garg, director, HR,Bharat Sansar Nigam Limited,has been appointed aschairman and managingdirector of MahanagarTelephone Nigam Limited,replacing acting CMD KuldipSingh, who was givenadditional charge of CMDfollowing the resignation ofR S P Sinha in January.

Rajeev Sharma, who hasheld the position of director(projects), Power FinanceCorporation, assumed chargeas the new chairman andmanaging director of RuralElectrification Corporation.

TIE-UPS AWARDS

APPOINTMENTSGAIL (India) has tied up afive-year term loan of $100million from Bank ofTokyo-Mitsubishi UFJ.The loan, first in the seriesof three tie-ups for a totalECB of $300 mn, will beused to partly fund theongoing expansion/newprojects of GAIL of around$9 billion.

State-run NTPC has inked apact with ElectricityGeneration Company ofBangladesh to provideoperation and maintenanceservices for the 2x120 mwgas-based SiddhirganjPeaking Power Plant nearDhaka, the capital ofBangladesh.

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India funds Sri Lankan railway lines India is funding a$150-million railway line to connect for the first time in decadesthe former war-torn north ofSri Lanka with the country's south.An agreement for the restoration of the Pallai-Kankesanthurairailway line in the Northern Province was signed between SriLanka and India. This project would be funded as a part of an$800-million credit line extended by the Indian government atconcessional rates with a repayment period of 20 years.

NEWS ROUND-UP

Maharashtra mullsmanufacturing zone TheMaharashtra governmentplans to set up a manufactur-ing zone spread over 5,000hectares under the NationalManufacturing Policy, whichwas announced recently.National Investment andManufacturing Zones (NIMZ)will be developed asGreenfield industrial town-ships, benchmarked with theglobal manufacturing hubs.They will address theinfrastructural bottleneck andthey would be different fromSEZ in terms of size, level ofinfrastructure planning andgovernance structures relatedto regulatory procedures.

Bengal woos investorsThe West Bengal governmentplans to initiate an investmentpromotion campaign calledRising Bengal for bringing ininvestments across varioussectors and for all-rounddevelopment of the State. Thecampaign will focus ondeveloping the smaller towns,adopting cluster approach for

S K Goel has taken overcharge as the CentralBoard of Excise &Customs chairman. Hejoined the Indian RevenueService in 1975 and hashandled various assign-ments in the Departmentof Revenue and theMinistry of Finance acrossthe country.

the micro and small enter-prises and encouraginginvestments into the educationand healthcare sectors, saidthe minister for commerceand industry ParthaChatterjee.

Govt plans to set upRs 2,500-croredevelopment fund Thegovernment of India plans to

set up a special fund - Rs2,500 crore - meant fortechnology and modernizationof auto component industry.The new initiative calledTechnology Upgradation andDevelopment Scheme wouldaim to give the $40-billiondomestic component industryaccess to finance at reducedrates of interest. With manyglobal automakers setting up

base at home and the marketshowing steady growth, sucha fund is expected to makethe domestic industry muchmore competitive in terms ofhigh technology componentdevelopment.Social-security schemefor unorganisedworkers The FinanceMinistry is working on acomprehensive social-securityinsurance scheme for lakhs ofworkers in the unorganizedsector, wherein majority shareof the premium would beshared by the government.The scheme seeks to providelife, health and retirementpension schemes under onecover. LIC, and the fourpublic sector generalinsurance companies wouldmanage the corpus.Pakistan grants IndiaMFN status To facilitatetrade, Pakistan has liftedbarriers to imports from India,by agreeing to grant India theMost Favoured Nation (MFN)status. Now imports fromIndia would enjoy the sameterms as its other tradepartners. It will allow importof most goods from thecountry instead of just ahandful of items. Granting ofMFN status will raise bilateraltrade from $2.6 billion to $6-8billion in a few years.Commerce minister AnandSharma said the move willherald a ̀ paradigm shift' inbilateral relations.

APPOINTMENTS

JNPT to allow cos to setup coal terminals Thecountry's largest containerport, Jawaharlal Nehru PortTrust (JNPT) will allow port-based companies to set upcoal terminals for the firsttime at its facility to capitalizeon the growing power needsin the country. "As soon asthe government allows thecapitive use of waterfrontareas, we will invite interestfrom operators to set up coalberths as we see hugepotential in the sector. Wehave taken anticipatory stepsand we believe that in recenttimes, the demand for powerwill rise and we can benefitfrom it,'' JNPT chairman LRadhakrishnan said. A coalterminal is a facility dedicatedto handle coal at the port fromwhere it is distributed tovarious power plant operators.Besides, the port is alsolooking at setting up a logisticspark at JNPT in associationwith the Dedicated FreightCorridor Corporation.

Inkel to investRs 5,00 0 cr InfrastructuresKerala Ltd (Inkel), a Keralagovernment initiative, haslined up various infrastructureprojects in the State at aninvestment of Rs 5,000 crorein the next four years. Theseinclude 11 projects comprising

NPCIL's generation up Nuclear Power Corporation of In-dia Ltd (NPCIL) has increased its power generation to about 32,000million units during 2011-12, up from 26,000 mu last year. NPCILrevenues are likely to go up from Rs 5,000 crore last year to overRs 8,000 crore this fiscal, according to the corporation's chairmanDr S K Jain. "The stage is now set for major expansion of nuclearpower generation in the country. After the Fukoshima nucleardisaster, we had to revisit all our plants before taking up expan-sion and new projects," he added. NPCIL has drawn up a com-prehensive road map for the XII and XIII Plan periods, whichenvisages total outlay of about Rs 2,50,000 crore. Dr Jain saidthat India has the potential to become a supplier of nuclear sub-assemblies to the world as it makes it possible to produce similarequipment for about 25 per cent less compared to any Europeanmanufacturer.

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The 1,500-mw NathpaJhakri Hydro Power Stationof Sutlej Jal Vidyut NigamLtd has bagged Gold Shieldaward for 2010-11, institutedby the Ministry of Powerrecognising meritorious

performance in power sector.Union Minister for PowerSushil Kumar Shinde haspresented the award toR P Singh, CMD, SJVN Ltd,in New Delhi recently.

The Marine ProductsEx port DevelopmentAuthority (MPEDA) hasentered into an agreementwith the Malaysia-basedinternational bodyINFO FISH for the develop-

TIE-UPS

Nigam (UJVN) plans toinvest Rs 2,500 crore to setup two gas-based powerplants in a joint venture withGAIL. According to G PPatel, UJVN managingdirector, the company has gotland in Kashipur and hasidentified another land inHaridwar for the two gasplants. This project isexpected to be completed by2015-16. Initially, these twoprojects will be of 350 mwbut later the capacity wouldbe increased to 450 mw,he added.

BHEL commissionspower gear units BharatHeavy Electricals (BHEL)has commissioned thermaland hydro power equipmentwith a cumulative capacity of7,900 mw during 2011-12.Four of the projects - 525 mwunit-2 of Maithon Power, 500mw unit-2 KPCL Bellary, 500mw unit-2 of DVC Durgapurand 100 mw unit-4 THDCKoteshwar weresynchronised and achievedfull load.

NMDC to buy Brazilianiron ore co India's largestiron-ore producer NMDC hasagreed in principle to acquirea majority stake in Brazilianiron-ore firm Amplus, withone of the world's largest orereserves. It involves aninvestment of $150 million fordevelopment. The Brazilianfirm's mine is located around150 km close to the coast withhuge reserves of over 1.5billion tonne. N K Nanda,CMD of NMDC, said theacquisition will help NMDCsecure large scale orereserves to meet its long-termrequirements. NMDC is nowactively looking to acquirethree overseas coal mines,one each in Russia,Mozambique and Australia, arock-phosphate mine inAustralia and an iron ore minein Brazil.

AWARDS ment and marketing of freshwater fish in India.

Rear Admiral (Retd)R K Shrawat took over asthe chairman and managingdirector of Mazagon DockLtd. Earlier, he wasdirector-general, Weaponsand Electronic SystemsEngineering Establishment.He has 36 years ofexperience in the IndianNavy to his credit.

a tourism complext at Veli inThiruvananthapuram and anayurveda manufacturing unitat Punalur, according to TBalakrishnan, Inkel managingdirector. Inkel is developing alogistics park andcommpercial space atAngamally. An investment of

Rs 235 crore on PURAprojects at Thalikulam andTirurangadi and these areawarded to several otherinfrastructure companies.

UJVN to set up twogas-based power plantsUttarakhand Jal Vidyut

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to set up unit inKarnataka Followed by anagreement with the govern-ment of Karnataka, UK-based premium bike-makerTriumph Motorcycles hasidentified about 40 acres ofland at Narasapur on theBangalore-Chennai highway.The company is looking toassemble the Bonneville,Street Triple, Speed Tripleand Daytona 675 modelslocally. Its third such facilityglobally after the UK andThailand, the Indian plant willhelp Triumph price its modelsmore competitively in theIndian market.

Japan's Kobe to pick upstake in Man IndustriesJapanese steel maker KobeSteel will invest Rs 30 crorein Man Industries to pick up aminor stake in the Indian pipemaker. "This is the first of itskind alliance in the worldwhere a Japanese plate / coilmanufacturer and one of theleading Indian pipe manufac-turers have joined hands toexplore the market potential,''said R C Mansukhani,chairman of Man Industries.Kobe, the fourth largestJapanese steel maker is alsoin the process of setting up ajoint venture with SAIL.

Ambuja Cements mullsinvestment plans ofRs 1,8 00 cr AmbujaCements plans to investRs 1,800 crore by December2013 to expand its productioncapacity. The company willset up a 2.2-mt clinkerisationunit at Nagaur in Rajasthan. Italso proposes to set up a newbulk cement terminal atMangalore. A new brownfieldexpansion project to enhancecapacity at its Sankrailgrinding unit in West Bengalhas also been initiated. Thecompany, along with ISTSteel and Lagarge India, wasallotted a coal block in

NEWS ROUND-UP

Tata Motors to set up a Rs 1,000-cr plant in KarnatakaTata Motors will invest around Rs 800-1,000 crore setting up aplant in Dharwar, Karnataka with a capacity of around 90,000units annually. It will exclusively manufacture the Tata Ace Zipand Magic Iris and is expected to reach full capacity by end ofthe next fical. The Tata Ace Zip saw total sales of 3,000 lastmonth, while the Magic Iris saw sales of around 1,000 units.


Maharashtra and Ambujaholds a 27.27 per cent stakein the joint venture and plansto invest Rs 95 crore in theproject.

JSW to set up electricalsteel manufacturingunit JSW Steel plans to setup a 0.6 mt a year electrical

steel manufacturing facility atits existing Vijayanagar plantin Karnataka. The companyhas joined hands with JFESteel of Japan for thetechnology know how. Thefirst phase of the facility toproduce 0.2 mtpa cold rollednon-grain oriented electricalsteel will be commissioned in

24 months from the date ofreceiving the requisiteapprovals.

Ranbax y opens factoryin Morocco Ranbaxy hasrecently opened its newmanufacturing facility atCasablanca, Morocco andalso plans to extend thesupply from this manufactur-ing unit to other Africancountries in the coming years.With this, the company nowhas three manufacturingfacilities in Africa.

Thermax acq uiresGerman Co's divisionThermax has acquired VirgoValves & Controls India'ssteam division which includesthe steam unit's Germansubsidiary Rifox-HansRichter. Rifox, headquarteredin Bremen, Germany, is aleading steam traps andstream accessories manufac-turer. Virgo's steam division isat Chakan, near Pune. "Thehigh brand value of Rifox inEurope, South East Asia andthe Middle East will help us inour selective internationaliza-tion programme and enhance

Hyderabad-based pharma-ceutical manufacturerCheminnova has enteredinto a joint venture withBrisbane-basedneutraceuticals firm RapidNutrition Ltd. The jointventure will result in theaddition of significantbusiness, brands of RapidNutrition and intellectualproperty rights toCheminnova.

The Rs 5,000-crore KKModi Group companyIndofil Industries Ltd hasformed a joint venture withShanghai Baijin ChemicalGroup of China. The 51:49venture will set up a carbon

di-sulphide plant called IndoBaijin Chemicals at Dahej inGujarat with an investment ofRs 200 crore.

The Gujarat-based Steelcast,a castings manufacturer, hasentered into an agreementwith global major CaterpillarInc for setting up a dedicatedmanufacturing facility to makecastings conforming toCaterpillar's specifications.

DLF Brands and Americanfashion accessories brandClaire have entered into afranchise agreement to open30 stores across the countryin the next three years. Theretail arm of DLF Group hasa slew of international brandsunder its umbrella includingBoggi Milano, Alcott,

Sunglass Hut, Mothercare.

Suzlon Group subsidiaryRE-power Systems SE hassigned contracts to supplywind turbines for two windfarms in England -Armistead wind farm inSouth Cumbria, owned byBanks Renewables andCarsington Pasture windfarm owned by InternationalPower - for a total of 20 mwof power.

Tata Power and SouthAfrica-based diversifiedresources company Ex x aroResources have formed ajoint venture Cennergi tofocus on building powergenerating projects in SouthAfrica, Botswana andNamibia.

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the efficiency of our customerprocesses,'' said M SUnnikrishnan, MD and CEO,Thermax.

L&T bags Rs 2 ,446-crorders L&T's powertransmission and distributiondivision secured orderstotaling Rs 514 crore,including contracts fromPower Grid Corporation ofIndia and the building andfactories division got ordersworth Rs 451 crore for theconstruction of residentialtowers. L&T secured anorder worth Rs 220 crore forthe construction of a 23-mwsolar plant in Rajasthan andKolkata Metro Rail hasplaced an order worth Rs 121crore with L&T for theconstrction of a 2.7-kmviaduct. The company'sbuilding and factories divisionhas also secured an orderworth Rs 970 crore for designand construction of a large ITcampus facility in Kolkata.L&T Oman has won acontract of Rs 170 crore fromthe Oman ElectricityTransmission Co.

Apollo Tyres plans tobuild two units abroadApollo Tyres plans to investover Rs 2,500 crore to set uptwo new facilities in EastEurope and Brazil in the next3-4 years. The company'scurrent European subsidiary -Apollo Vredestein - is also

Aditya Birla Retail to open hyper markets Aditya BirlaRetail, an unlisted company owned by Kumar Mangalam Birla,will set up 15-18 hyper markets. The Group chairman Mr Birlawill invest Rs 400 crore over the next two years mainly to set upthese hypermarkets that sell everything from pasta to detergentsunder one roof. The retail venture3, which started operations in2006, used most of its money in setting up small supermarket storesunder the brand name "More''. The company invested close toRs 2,000 crore and the group now runs 550 supermarkets and12 hypermarkets under its belt. The company has tied up withsome global consultants to find ways to strengthen the supplychain system.

keeping its options open toacquire a tyre firm in theLatin American market tocommence its operationsthere, according to companychairman Onkar S Kanwar.Recently, Apollo Tyres hasintroduced a new brand -Aspire 4G - for the

IT major Infosys has enteredinto an MoU with theMaharashtra governmentfor developing a 142-acrefacility at Nagpur with a totalinvestment of about Rs 450crore. The facility will belocated in an SEZ, which is apart of the mammoth 4,354-hectare Multimodal Interna-tional Hub Airport at Nagpurproject.

Essar O il Ltd has inked anagreement with IndraprasthaGas Ltd to set up thecompressed natural gaspumping facilities at Essar'soutlets in the National CapitalRegion.

The Chennai-based Tractorsand Farm Eq uipment Ltdhas entered into a strategic

alliance with Rajkot'sCaptain Tractors Pvt Ltdfor manufacturing tractorswith up to 20 HP engines.

L&T's wholetime director andpresident, Hydrocarbons,K Venkataramanan, hasbeen appointed as chiefexecutive officer andmanaging director of L&Tfrom April 1. However,Mr Naik, who is now thechairman and managingdirector, will continue asexecutive chairman of thegroup for five years.

K K Maheshwari has beenappointed as the managingdirector of Grasim Industries,an Aditya Birla Group

company. Mr Maheshwariwas transferred to Grasim inApril 2010 as business head,Pulp and Fibre Business, andinducted on the companyboard as whole-timedirector.

Nitin Prasad has beenappointed as the newcountry head of ShellLubricants India, a 100 percent subsidiary of Shell.Mr Prasad has held severalroles within Shell acrossstrategy and portfolio,project management, sales,marketing and operations.Shell Lubricants'customers in India includeWartsila, Maruti Suzuki,Hyundai, Ford andThermax.

European market.

UIC to set up unit inGujarat Kolkata-based UICUdyog Ltd has proposed toset up a facility for themanufacture of steel wiresand wire products with aninstalled capacity of 1,80,000tonnes per annum. This wouldinclude galvanizing capacityof 1,00,000 tpa at Bharuch inGujarat at a total investmentof Rs 508 crore. Thecompany proposes to partfund the project cost with apublic issue of Rs 108 croreand it has filed draft redherring prospectus with SEBI.

Suzuki Motorcycles toset up unit in JapanSuzuki Motorcycles plans toset up a Rs 2,000-cr unit atRohtak in Haryana. The firstphase of the project will entailan investment ofRs 500 crore and will becompleted in 2014 with anannual capacity of 5-lakhunits. Total cost of the 3-phase project is estimated tobe Rs 2,000 crore, with acapacity of 2 million unitsby 2019.

SEC Industries winsFrench contract TheHyderabad-based SECIndustries, a manufacturer ofkey defence components andthe company has a partner-ship with IAI of Israel formanufacturing a number ofproducts including shippingcontainers, ground dataterminal trailers, refuelingcarts, and hook arrestingsystems, has won a contractworth Rs 310 crore from theFrench defence major DCNSfor the manufacture ofScorpene submarine compo-nents. The company hassigned agreements to makeequipment for heavy-dutylaunchers from Belarus andother defence productsfrom Ukraine.

APPOINTMENTS

D KMehrotra,actingchairman, hasbeen selectedby the

government to headLife Insurance Corporationof India.

Madhukant GirdharlalSanghvi has been appointedas chairman and managingdirector of Syndicate Bank.He has over 31 years ofexperience in various fieldsof banking. Mr Sanghvi wasthe executive director ofBank of Maharashtra.

ICICI Group, LifeInsurance Corporation,

Ax ix Bank offers multi-currency travel card AxisBank is planning to offer travelcard in multiple currencies andwith valued added services.The bank is also working onother specialized products in thetravel cards segment - abundled product that can beused for public transport inSingapore and a special card forstudents going abroad, they canavail themselves of discounts atmerchant outlets. The bank,which is the biggest issuer oftravel cards in India, hasroughly four lakh active cardswith a usage volume of over $2billion. A travel card is a pre-paid card which can be loadedwith foreign currency. It can beused like a debit or credit cardwhile travelling overseas. Cur-rently one travel card allowstransactions only in one cur-rency. Axix Bank is working ona multi-currency card whichwill allow transactions in morethan one currency.LIC pays Rs 1,137 .9 9 crdividend Life Insurance

NEWS ROUND-UP


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L&T Finance Holdings on acq uiring spree L&T Fi-nance Holdings (LTFH) is entering the housing finance businessby acquiring Indo Pacific Housing Finance. Indo Pacific HousingFinance had a loan book size of Rs 193.5 crore. It has 34 branches,primarily in the southern and western regions. According to NSivaraman, president of LTFH, the company chose the route ofacquiring a small, operating business as its route to entry in thismarket, because it brings with it a fully functional operating plat-form, is registered with National Housing Bank and has a wellexperience team of mortgage experts.Besides, the company hasagreed to buy Fidelity's Indian funds, becoming the tenth-biggestequity fund house. The deal will immediately boost L&T's assetsto Rs 13,500 crore, making it the 13th biggest fund and the 10th-largest on the basis of equity portfolio. "A large part of the L&TFinance business is lending. This is part of the move to increasefee-based income which is a steady business over mid-to-longterm,"said Y M Deosthalee, L&T Finance Holdings CMD.

Corporation of India has paidRs 1,137.99 crore to thegovernment as dividend for2010-11. LIC current-incharge chairman D KMehrotra has recently handedover the dividend cheque tothe finance minister PranabMukherjee. For 2010-11, LICreceived a total premiumincome of Rs 2,03,358 crore,against Rs 1,85,986 crore theprevious year, up 9.34 percent. The total life fund ofLIC stood atRs 11,51,200.58 crore againstRs 9,99,517.59 crore theprevious year.

ICICI Bank launchesnew credit card ICICIBank has launched a newcard "Sapphirois", the third inthe bank's gemstone collectionof credit cards, targeting thesuper affluent and wealthmanagement clients. Card

members will receive twocards - the ICICI BankSapphiro Platinum AmericanExpress Credit Card and theICICI Bank SapphiroPlatinum Chip MasterCardCredit Card, linked to a singlecard account with a singlestatement and fee. It willprovide access to privilegesfrom American Express andMasterCard, as well as frombrands such as LeadingHotels of the World Ltd,Atlantis the Palm, Dubai andAir France - KLM. It costsRs 25,000 to join, with anannual fee of Rs 3,500 fromthe second year onwards.

UBI to open office inMyanmar United Bank ofIndia (UBI) plans to soonopen a representative officein Yangon, Myanmar, tofacilitate Indo-Myanmarbilateral trade, according toBhaskar Sen, CMD, UnitedBank of India. Th office willbe operational during firstquarter of the next financialyear.

IDBI Federal Lifelaunches new plan IDBIFederal Life InsuranceCompany has launched a"Bondsurance Plan" withguaranteed returns and lifecover. Customers in the eightto 32 years age bracket wouldget a guaranteed maturityamount of Rs 1,38,293 for asingle premium of Rs 1 lakhfor a 5-year term. Theeffective tax-free returnwould work out to 14.89 percent. The guaranteed maturityamount is in addition to gettinga life cover of Rs 5 lakh toensure financial security forthe family in the unfortunateevent of death of thesubscriber. Investment in theplan is eligible for deductionunder Section 80C and theguaranteed maturity amount istax-free under Section 10(10D) of IT Act.

APPOINTMENTS

TIE-UPS

Citicorp Finance Indiaand Bank of Baroda havejoined hands to launchIndia's first infrastructuredebt fund to be structured asa non-banking financecompany. This company willhave an initial equity sharecapital of Rs 300 crore.

NABARD, UIDAI andNPCI have come togetherto set up a Centre ofExcellence of RuralFinancial Institutions tosupport the RRBs forlaunching Aadhar-enabledpayment service as a part ofthe larger financial inclusionprogramme of doorstepdelivery of financial servicesand products to the so farexcluded population as wellas payment of varioussubsidies from the Centraland State governments.

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Politically CorrectDespite its small, yet bold, measures, Union Budget2012-13 clearly signals that reforms have got a decentburial, at least for the near future.

"WE ARE NOW AT A JUNCTURE, WHEN IT IS NECESSARY TO TAKEHARD DECISIONS. WE HAVE TO IMPROVE OUR MACROECONOMIC

ENVIRONMENT AND ACCELERATE THE PACE OF REFORMS."PRANAB MUKHERJEE, UNION FINANCE MINISTER

IBJ RESEARCH BUREAU

Coming two days after therevolutionary RailwayBudget - which has sincebeen rolled back to in-consequence - the

Union Budget 2012-13 wasdamp and dreary. There were neitherbig-ticket reforms nor any big-bangproposals.

As expected, the markets gave athumbs-down and slumped. Most ofthe analysts were their usual self,criticising the Budget for not takingthe big plunge. India Inc, diplomaticas ever, played safe and called it amixed bag, pragmatic, realistic andso on. The Opposition, more aamaadmi-friendly than the UPA govern-ment, went on an endless tirade overthe Budget proposals.

So, was Finance Minister PranabMukherjee's Budget as bad as it ismade out to be? The answer wouldand should be an emphatic no if onewere to look closely at the annualfinancial statement and attempt to un-derstand the constraints and compul-sions that the finance minister had tonegotiate.

The Congress Party's miserableperformance in the recent State elec-tions was the latest in a string of re-versals for the UPA government. Yetto complete its third year in office,the UPA-II already resembles a lame-duck government. No government,perhaps, has had such a frosty rela-tion with the Opposition as this oneand the latter should also take a fairshare of blame for the mess.

Amid charges of corruption andpolicy paralysis, every bit of reformsintroduced by the government hasbeen bulldozed by an uncooperativeOpposition. Worse, some of thegovernment's allies have beenshriller than the Opposition in forc-ing the government to retreat. Con-sequently, amid global uncertainties,the domestic economic growth isfloundering.

SPECIAL REPORT


PARAMETERS FY12BE FY12RE FY13BEGROSS TAX REVENUE RECEIPTS 9,32,439 9,01,663 10,77,611NON-TAX REVENUE RECEIPTS 1,25,435 1,24,737 1,64,613NON-DEBT CAPITAL RECEIPTS 55,020 29,750 41,650TOTAL RECEIPTS 11,12,894 10,56,150 12,83,874

PLAN EXPENDITURE 4,41,546 4,26,604 5,21,025NON-PLAN EXPENDITURE 8,16,182 8,92,115 9,69,900TOTAL EXPENDITURE 12,57,728 13,18,719 14,90,925

REVENUE DEFICIT 3,07,270 3,94,951 3,50,424FISCAL DEFICIT 4,12,817 5,21,980 5,13,590GDP GROWTH (%) 8.5-9 6.9 7.6FISCAL DEFICIT TO GDP(%) 4.6 5.9 5.1

MACROECONOMYBEYOND ROSY NUMBERS

The Big Picture Rs crore

BE - Budget estimate RE - Revised estimate

Reality CheckAlthough the finance minister's fiscal deficit target seems achievable, ithinges on a very crucial factor of whether the government will take toughdecisions to curb fuel and fertiliser subsidies. Given the vitiated politicalatmosphere, the government may find it difficult to bite the bullet.

Food Subsidy Fuel Subsidy Fertiliser Subsidy Interest Outgo

Fund-Guzzlers

Rs crore

2,67

,986

60,5

72

75,0

00

2,75

,618

FY12BE FY12RE FY13BE

It was in these challenging timesthat Mr Mukherjee presented his re-cent Budget, placing him secondamong Indian finance ministers tohave presented the highest number ofBudgets. With eight Budgets, he isnext only to Morarji Desai, who haspresented 10 Budgets. Pranabda dida tough balancing act and unveiled apolitically-correct Budget. "I must becruel only to be kind," said the fi-nance minister, quoting WilliamShakespeare's Hamlet. Yet, he turnedout to be kinder than the Danishprince.Positive movesThe Budget did cheer taxpayers a bit.With an increase in exemption andchanges in Income Tax (I-T) brack-ets, the salaried class got some re-lief from inflation. Mr Mukherjee in-creased the exemption limit fromRs 1.8 lakh to Rs 2 lakh. He stuck tothe exemption limit prescribed by theDirect Taxes Code (DTC) and re-fused to heed the Standing Commit-tee on Finance's recommendations toraise it to Rs 3 lakh.

Taxpayers were also allowed a de-duction of up to Rs 10,000 for in-terest on savings bank accounts. Thefinance minister exempted employ-ees earning up to Rs 5 lakh salaryand up to Rs 10,000 interest fromsavings bank accounts from filing I-T returns.

As expected, Mr Mukherjeerolled back the tax stimulus that hehad administered to heal theeconomy, plagued by the slowdownin 2009. Consequently, both the Ex-cise Duty and the Service Tax wereraised from 10 to 12 per cent. Dur-ing the pre-crisis period, the ExciseDuty was as high as 14 per cent. ButMr Mukherjee desisted from revis-iting that peak rate. Instead he optedto raise both the taxes to 12 per centand align them to the rates prescribedin the forthcoming Goods and Ser-vices Tax (GST).

Apart from hiking the Service Tax,the finance minister also widened the

tax net by including most of the ser-vices, except a small negative list of17 services. The decision was wel-comed by most of the economistsand analysts, given that the servicesector today accounts for about 59per cent of the nation's Gross Do-mestic Product (GDP).

The direct tax proposals will re-sult in a revenue loss of Rs 4,500crore for the government, while theindirect tax proposals are expectedto bring about a revenue gain ofRs 45,940 crore. The tax proposalslead to a net gain of Rs 41,440 crore,

with Service Tax alone expected toyield an additional revenue ofRs 18,660 crore.

Though Dalal Street ended in thered on the Budget day, it was initiallyenthused by Mr Mukherjee's propos-als. The finance minister introducedRajiv Gandhi Equity SavingsScheme, a purely, equity-linkedscheme for new investors. All first-time investors in the stock market,with an annual income below Rs 10

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MEASURE: Tax-free bond issues doubled to Rs 60,000 croreIMPACT: More funds to flow into infrastructure projects

MEASURE: 14 per cent hike in allocation for roads to Rs 25,360 croreIMPACT: Facilitating meeting of target of awarding 8,800 km road contractsunder NHDP

MEASURE: ECB market thrown open to highway developers withWithholding Tax cut to 5 from 20 per centIMPACT: Easy access to cheaper funds to build roads faster

MEASURE: Customs Duty exemption on equipment used for roadconstructionIMPACT: Facilitating highway developers access to superior technology atlower cost

MEASURE: Set-off benefits on Dividend Distribution Tax paid by multi-tieredholding companiesIMPACT: Removing cascading impact of tax on holding companies,especially infrastructure entities designed as many special purposevehicles under a holding company

MEASURE: Bringing many segments under viability gap fundingIMPACT: Making PPPs a viable business proposition and bringing in much-needed finance and expertise of the private sector into these vital sectors

MEASURE: Weighted deduction of 150 per cent of capital expenditure fromIncome Tax in various vital segments and skill developmentIMPACT: Greater private sector participation, boost to enhancing skill

INFRASTRUCTUREBIG TAKEAWAYS

Reality CheckOverall, the infrastructure sector has got a big boost from the Budget.With half of the Rs 50,00,000-crore infrastructure funding estimated forthe 12th Plan period expected from the private sector, the financeminister's incentives set the stage for big private participation.

"WE HAVE TO BITE THE BULLET.THERE IS NO OTHER WAY INWHICH YOU CAN REDUCESUBSIDIES. I SINCERELY HOPETHAT WHEN THE TIME COMESTO TAKE TOUGH DECISIONS,WE WILL TAKE ALLIES ONBOARD."

MANMOHAN SINGH, Prime Minister

lakh, are eligible to invest up toRs 50,000 directly in equities. Theseinvestors can deduct 50 per cent oftheir investment from their incomewhen computing their Income Taxover and above the Rs 1 lakh invest-ment exempted from the tax.

The investment scheme, whichwill lock in equity investment forthree years, has been hailed as amasterstroke by many equity ana-lysts. The scheme, the detailedguidelines for which are still awaited,is expected to bring about 1.5 crorenew investors into the stock marketand deepen the market.

However, some analysts have ex-pressed concern that the schemecould mislead new investors. Theyhope that the scheme could be mean-

ingful if new investors route theirmoney through mutual funds. "I hopethat when the details of the new eq-uity scheme are, mutual funds are apart of the definition. Otherwise, toencourage inexperienced investors tobuy stocks directly with a three-yearlock-in period could end up being di-sastrous investment experience andgive Rajiv Gandhi a bad name," opinesValue Research CEO DhirendraKumar.

The Budget also lowered the Se-curities Transaction Tax (STT) by 20per cent from 0.125 to 0.1 per cent.However, the market, which waslooking for the abolition of the tax,

was disappointed that the STT cut isapplicable only for delivery-basedtransactions. Most of the trades arenot based on delivery, but are squaredoff, limiting the benefit of the tax cut.Besides, proposals related to two-way fungibility of Indian DepositaryReceipts (IDRs) and permittingqualified foreign investors (QFIs) incorporate bonds gladdened investors.

The finance minister left the Cor-porate Tax rate untouched and chosenot to tweak the peak Customs Duty.He also provided a slew of tax con-cessions to key infrastructure seg-ments such as power, airlines, roads,bridges, hospitals, cold-chain facili-ties and affordable housing. Focus-ing on domestic demand-drivengrowth recovery, Mr Mukherjee tookmany, small, but bold, steps to ad-dress bottlenecks in many sectorsand create conditions for a rapid re-vival of high growth in private invest-ments. "We are now at a juncture,when it is necessary to take hard de-cisions. We have to improve our

SPECIAL REPORT


"India either needs to implementanother burst of reforms to lift itsunderlying economic growth back toan 8 to 9 per cent pace to help fundits ambitious welfare dreams oraggressively cut back spending toprevent a fiscal train wreck down theroad. This Budget unfortunately didnot chart either of those paths."

"The finance minister has showedresolve to address infirmities ingovernance and plug leakages in taxcollection. A range of anti-evasionproposals, widening of Service Taxthrough a negative list andharmonisation of Service Tax andExcise Duty are clear signals in thisdirection."

MUKESH AMBANI, RELIANCE INDUSTRIESRUCHIR SHARMA, MORGAN STANLEY

MEASURE: Power companies permitted to tap ECB, Withholding Tax cut to5 from 20 per centIMPACT: Access to cheaper funds for cash-strapped power producers

MEASURE: Customs Duty on coal, natural gas scrapped, CountervailingDuty on coal cut to 1 per centIMPACT: Relief to coal- and gas-based power producers depending oncostly imports

MEASURE: Tax holiday under Section 80-IA of I-T Act extended byanother yearIMPACT: Tax exemption for power producers up to 10 years from the dateof project commissioning

Reality CheckTax incentives apart, the sector is facing a severe shortage of fuel inIndia, leading to increased dependence on costly imports. Structuralreforms in coal and gas sectors could prove more beneficial for powerproducers.

POWERA SILVER LINING

macroeconomic environment andaccelerate the pace of reforms,"noted Mr Mukherjee in his two-hour-long Budget speech.

The Budget threw a much-neededlifeline to the beleaguered powersector. It allowed external commer-cial borrowings (ECBs) to part-fi-nance the rupee debt of existingpower projects. It also slashed theWithholding Tax from 20 to 5 percent to boost overseas investmentsin the sector. It scrapped CustomsDuty on coal imports and slashed theCountervailing Duty on coal to 1 percent to facilitate power producers,who have had to depend on costlycoal imports on the back of deplet-ing production of Coal India. TheBudget also provided a balm to gas-based power producers by withdraw-ing Customs Duty on natural gas.Besides, the tax holiday, under Sec-tion 80-IA of the Income-Tax Act, hasbeen extended by another year toMarch 2013, giving power compa-nies huge relief.

There were some positive propos-als for the ailing airline industry too.The Budget permitted the airline in-dustry to tap ECBs cumulatively forone year, subject to a total ceiling of$1 billion, to meet the working capi-tal requirements of the industry. Pro-viding a leg-up to the nascent main-tenance, repair and overhaul (MRO)sector, it also proposed to allow fullexemption from Customs Duty andCountervailing Duty on aircraftspares, tyres and testing equipment.

The Budget further reinforced thegovernment's commitment to the in-frastructure sector. The finance min-ister reiterated that infrastructure in-vestment during the 12th Plan period(2012-17) would go up toRs 50,00,000 crore, with half of theinvestment expected from the privatesector. He doubled the amount oftax-free bonds to be issued in 2012-13 from Rs 30,000 crore toRs 60,000 crore for funding infra-structure projects.

The road sector got a good fillip,with the Budgetary allocation risingby 14 per cent to Rs 25,360 crore.Fixing a target of awarding contractsfor 8,800 km of roads under the Na-tional Highway DevelopmentProgramme in 2012-13, he offereda slew of sops for highway develop-ers, including the option to tap theECB market, reduction of Withhold-ing Tax from 20 to 5 per cent andCustoms Duty exemption on some

equipment used for road construc-tion, among others. The finance min-ister also tweaked norms related toDividend Distribution Tax for multi-tiered holding companies, removingthe cascading impact of the tax andproviding relief to many infrastruc-ture companies.

Mr Mukherjee tinkered with a few


"India's public finances are in greatshape. The debt-to-GDP ratio standsat 63 per cent as against 85 per centeight years ago. The interest burden-to-GDP ratio too has lowered to 31per cent from 46 per cent earlier.These measures, and not fiscaldeficit, are the correct ways to assessfinancial risk in an economy."

SHANKAR SHARMA, FIRST GLOBAL

MEASURE: Industry cumulatively given access to $1 billion ECB for a yearto meet working capital requirementsIMPACT: Access to global funding for ailing Indian airlines, some of whichhave turned NPAs and struggling to get funding in India

MEASURE: Customs Duty and Countervailing Duty exempted on aircraftspares, tyres and testing equipmentIMPACT: A leg-up to nascent MRO industry

AVIATIONNEW FLIGHT PLAN

Reality CheckThe aviation industry is reeling under several policy glitches andmismanagement. With 49 per cent FDI in airlines, a political hot potato,still under consideration, air carriers continue to bleed. Thegovernment's move to allow airlines to import aviation turbine fueldirectly is of little help unless broad-based policy reforms are effected.

norms to recharge public-privatepartnership (PPP) and research anddevelopment (R&D), thereby givinga boost to a number of sectors. Hewidened the ambit of viability gapfunding (VGF) to a host of sectors,including irrigation, terminal mar-kets, common infrastructure in agri-culture markets, soil-testing labora-tories, capital investment in fertiliserprojects, oil, gas and LNG storagefacilities, oil and gas pipelines andfixed network for telecommunica-tion and telecommunication towers.The VGF, which makes PPPs a viable

business proposition, brings in much-needed finance and expertise of theprivate sector into these vital sec-tors. Moreover, a five-year extensionfor 200 per cent weighted deductionfor in-house R&D, increased deduc-tion of 150 per cent of capital ex-penditure incurred for skill develop-ment, hospitals, hotels, warehousesand cold-chain facilities, among oth-ers, provides a big impetus to a hostof sectors in removing bottlenecksand improving efficiency.

The Budget provided a lot ofsuccour to the agriculture sector,which has been lagging with paltry2.5 per cent growth expected in2011-12. Extension of 3 per cent in-terest subvention scheme and addi-tional interest subsidy of 3 per centfor timely loan repayment, raisingfarm credit target by Rs 1,00,000crore to Rs 5,75,000 crore, an 18 percent hike in outlay for the sector atRs 20,208 crore, along with PPPs inirrigation projects and tax incentivesfor constructing warehouses andcold-chain facilities augur well forthe sector.

There were some welcome pro-posals for the small and medium en-terprises (SMEs), the real engines of

economic growth. The finance min-ister proposed to float a Rs 5,000-crore venture fund with Small Indus-tries Development Bank of India(SIDBI) to enhance availability ofequity to the sector. He also pro-posed to exempt Capital Gains Taxon sale of residential property, if thesale consideration is used to buy eq-uity of a manufacturing SME for pur-chase of new plant and machinery.In one stroke the measure not onlyprovides investors with another tax-free investment option, but also ad-dresses the funding needs of smallenterprises.

There were some good measuresfor the banking sector as well. Thefinance minister announced plans toinfuse Rs 15,888 crore in public sec-tor banks and financial institutionsduring 2012-13 to strengthen theircapital base. He also put forward pro-posals to set up a holding companyto recapitalise State-owned banks, aCentral Know Your Customer(KYC) depository to avoid multiplic-ity of registration and data upkeep andunfurled many measures to promotefinancial inclusion.

Besides, Mr Mukherjee unveileda number of proposals to set rightanomalies in the economy. He

SPECIAL REPORT


"I hope that when the details of thenew equity scheme are out, mutualfunds are a part of the definition.Otherwise, to encourageinexperienced investors to buy stocksdirectly with a three-year lock-inperiod could end up being disastrousinvestment experience."

DHIRENDRA KUMAR, VALUE RESEARCH

"It is perhaps a little worrying that keyreforms in the current tax regime -introduction of DTC and GST - haveonce again been postponed. Thefinance minister could have provideda future roadmap for these importantreform initiatives."

"This Budget is anchored in India'spolitical and macroeconomic realityand moves away from the last year'smore aspirational Budget. The focuson domestic demand, privateinvestment and infrastructure willprovide a boost to Bharat."

MEASURE: Rajiv Gandhi Equity Savings Scheme: Up to 50 per cent incomeexempted from tax for first-time stock investors with less thanRs 10,00,000 annual income investing up to Rs 50,000 with three-yearlock-in periodIMPACT: About 1.5 lakh new investors likely to enter stock market

MEASURE: STT on delivery-based transactions slashed from 0.25 to0.1 per centIMPACT: Negligible impact as most trades not delivery-based, butsquared off

MEASURE: Two-way fungibility of IDRs, subject to ceilingIMPACT: Allows swapping of IDRs with underlying stock; likely to attractmore foreign companies to list in India

MEASURE: QFIs permitted to invest in corporate bondsIMPACT: Infusing life and deepening corporate bond market

MEASURE: Change in stance related to TRC and GAAR provisionsIMPACT: Effective tool to curb round-tripping of black money as FIIinvestments

MARKETSLINGERING CONCERNS

Reality CheckMarkets remain unenthused, owing to lack of big-ticket reforms,regressive provisions such as I-T Act amendment to retrospectively taxVodafone-like cases and concern over further fiscal deficit slippage.

doubled the Customs Duty on stan-dard gold bars and coins and platinumfrom 2 to 4 per cent and on non-stan-dard gold bars and coins from 5 to10 per cent. The move is aimed atcurbing Indians' craze for the yellowmetal, whose imports shot by awhopping 54 per cent to $45.5 bil-lion, next only to oil imports, caus-ing a huge current account deficit.

The finance minister also intro-duced a number of small, yet far-reaching, measures to curb blackmoney. The change in stance with re-lation to Tax Residency Certificate(TRC) and providing for GeneralAnti-Avoidance Rule (GAAR) in theIncome-Tax Act will go a long wayin curbing round-tripping of blackmoney as foreign institutional in-vestment (FII), from tax havens, es-pecially Mauritius.

Besides, 1 per cent tax deductionat source by the buyer in any trans-fer of immovable property, exceptagricultural land, worth over Rs 50lakh in urban areas and over Rs 20lakh in rural areas and 1 per cent taxcollection at source by the seller oncash transaction of bullion andjewellery worth over Rs 2 lakh areaimed at curbing black money in re-alty and gold sectors. "The financeminister has showed resolve to ad-dress infirmities in governance andplug leakages in tax collection. Arange of anti-evasion proposals, wid-ening of service Tax through a nega-tive list and harmonisation of Servicetax and excise Duty are clear signalsin this direction," notes Reliance In-dustries Chairman Mukesh Ambani.

Mr Mukherjee was very candidabout the fiscal deficit for 2011-12,which overshot the Budget estimateby 1.3 percentage points from 4.6 to5.9 per cent of the GDP. The net ef-fect of lower-than-targeted tax re-ceipts, low disinvestment proceedsand higher spending, mainly on sub-sidies for food, fuel and fertiliser,led to slippage of the fiscal deficit.

Compared to the previous year's

over-optimistic Budget estimate ofthe fiscal deficit, Mr Mukherjee hasbeen quite realistic in pegging it atRs 5,13,590 crore for 2012-13,which works out to 5.1 per cent ofthe GDP. He has also scaled down thedisinvestment target to Rs 30,000crore from Rs 40,000 crore last year.He has slashed fuel and fertiliser sub-

sidies, but assured full provision forfood subsidy. "India's public financesare in great shape. The debt-to-GDPratio stands at 63 per cent as against85 per cent eight years ago. The in-terest burden-to-GDP ratio too has

SUNIL MITTAL, BHARTI ENTERPRISES UDAY KOTAK, KOTAK MAHINDRA BANK


MEASURE: I-T exemption limit hiked, changes in tax bracketsIMPACT: Rs 2,000 savings at lower tax bracket and Rs 22,000 savings athighest tax slab

MEASURE: No tax on interest from savings bank, post office accounts up toRs 10,000IMPACT: More benefit for savers, especially senior citizens

MEASURE: Those earning annual income of not exceeding Rs 5,00,000 andinterest less than Rs 10,000 exempted from filing I-T returnIMPACT: Free from annual I-T return hassles, less paperwork for taxofficials

TAXPAYERSSOME GAIN, SOME PAIN

Reality CheckGoods and services get costlier on hike in Excise Duty across manygoods and Service Tax on most services by 2 per cent each.

New Tax StructureRate of Tax Below 60 Years Above 60 Years Above 80 Years

Nil 0-2,00,000 0-2,50,000 0-5,00,000

10% 2,00,001-5,00,000 2,50,001-5,00,000 ---

20% 5,00,001-10,00,000 5,00,001-10,00,000 5,00,001-10,00,000

30% Above 10,00,000 Above 10,00,000 Above 10,00,000

lowered to 31 per cent from 46 percent earlier. These measures, and notfiscal deficit, are the correct ways toassess financial risk in an economy,"points out First Global Vice-Chair-man and Joint Managing DirectorShankar Sharma.

The finance minister has commit-ted to restrict expenditure on Cen-tral subsidies under 2 per cent of theGDP in 2012-13 from the current 2.4per cent. He has also set a target tobring it down further to 1.75 per centof the GDP in the next three years.Fully endorsing the Unique Identifi-cation Authority of India (UIDAI),Mr Mukherjee has announced set-ting up of a mobile-based FertiliserManagement System designed toprovide end-to-end information onmovement of fertilisers and subsi-dies by 2012. The finance ministeralso added that UIDAI ChairmanNandan Nilekani's recommendationsrelated to Aadhaar-enabled cash pay-ments for various government

schemes would be rolled out in atleast 50 districts within six months.Nagging concernsThe Union Budget 2012-13 is well-intentioned, to say the least.Mr Mukherjee has attempted topresent a Budget as best as it can be,given the vitiated political atmo-sphere. With small, yet bold, mea-

sures to attract the private sector intovarious vital sectors, remove bottle-necks and improve efficiency, MrMukherjee's Budget does stand outsingularly. "This Budget is anchoredin India's political and macroeco-nomic reality and moves away fromthe last year's more aspirational Bud-get. The focus on domestic demand,private investment, infrastructure andgovernance will provide a boost toBharat," emphasises Kotak MahindraBank Vice-Chairman and MD UdayKotak.

However, the Budget leaves a lin-gering taste of disappointment,which, at times, turns to despair. Astrikingly-negative feature of theBudget is to bring in an amendmentto the Income-Tax Act, 1962, and taxold, Vodafone-like cases retrospec-tively. The move is aimed at gettingpast the adverse Supreme Court's ver-dict in the Vodafone tax case on saleof capital assets in India outside thecountry. The amendment aims at ret-rospectively taxing offshore sharetransfers of foreign companies thatderive their value substantially fromassets located in India.

"Changes in law with retrospectiveeffect could be a complete disaster.Even if the Parliament has the abil-ity to amend laws retrospectively, itshould not be done as it will impactthe credibility of the government,"opines Ernst and Young's SudhirKapadia. This proposal threatens toreopen at least half a dozen suchcases like Aditya Birla-Nuvo deal, thepurchase of AT&T's stake by Idea Cel-lular India, SAB Miller's acquisitionof Foster and Vedanta's deal to buy amajority stake in Sesa Goa fromMitsui, among others. The amend-ment will send out negative signalsto foreign investors, who are alreadywatching India with extreme caution.No doubt, most of these cross-bor-der deals are structured with the veryintent of avoiding taxes. The move toplug loopholes in the I-T Act and netrevenue to the exchequer is certainly

Besides SMEs, Budget has beengenerous to the textile sector.

SPECIAL REPORT


Figures in rupees

"Changes in law with retrospectiveeffect could be a complete disaster.Even if the Parliament has the abilityto amend laws retrospectively, itshould not be done as it will impactthe credibility of the government."

"If the growth target does notmaterialise, the fiscal situation willaggravate. Liquidity will remain tighton continued overhang ofgovernment borrowings and pressureon long-term bond yields."

SUDHIR KAPADIA, ERNST AND YOUNG NIRMAL JAIN, INDIA INFOLINE

welcome, but applying it retrospec-tively is a retrograde measure.

The Budget has once again missedthe deadline of introducing the DTCand GST, the progressive direct andindirect tax regimes that will have aprofound bearing on the economy. "Itis perhaps a little worrying that keyreforms in the current tax regime -introduction of DTC and GST - haveonce again been postponed. The fi-nance minister could have provideda future roadmap for these importantreform initiatives," rues Bharti En-terprises Chairman Sunil Mittal.

The DTC seems all set to debutfrom 2013-14, with a few provisionsalready put into implementation inthe current financial year. However,the GST appears to be a long-drawnbattle, yet another victim of partisanpolitics. One cannot squarely blamethe government for the delay in roll-ing out the GST. Mr Mukherjee haspromised to operationalise the na-tionwide GST network by thisAugust. This does indicate thegovernment's firm resolve in usher-ing in this piece of tax reform. It istime the other political parties turnedreasonable, at least for the sake ofnational interest.

The Budget also mentions conten-tious issues like foreign direct in-vestment (FDI) in retail and airlinesand adds that efforts are on to takeall the stakeholders concerned onboard. There is little that the govern-ment can do in these issues in thelight of vicious politicking. Themuch-needed amendments to a num-ber of crucial financial Bills relatedto banking, insurance and pension toosuffer from the same fate. "India ei-

ther needs to implement anotherburst of reforms to lift its underly-ing economic growth back to an 8 to9 per cent pace to help fund its am-bitious welfare dreams or aggres-sively cut back spending to prevent afiscal train wreck down the road. ThisBudget unfortunately did not charteither of those paths," adds RuchirSharma, the MD (Emerging Markets)of Morgan Stanley.

Another major concern is on thefiscal consolidation front. The Bud-get does throw in a realistic fiscaldeficit figure. But that target too ap-pears tough, considering the sharprevision of the Budget estimates forfuel and fertiliser subsidies that MrMukherjee did for 2011-12. More-over, he has sharply slashed subsidyoutgo for fuel and fertiliser for 2012-13. This would be a near-impossibletask on the back of rising crude oiland fertiliser prices. The only way tocurb the subsidies stringently is tobite the bullet, which the government

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has been reiterating. "We have to bitethe bullet. There is no other way inwhich you can reduce subsidies. I sin-cerely hope that when the timecomes to take tough decisions, wewill take them on board," stressesPrime Minister Manmohan Singh.But the reality suggests that the gov-ernment lacks teeth to bite the bul-let as was quite evident in the Rail-way Budget fiasco.

This was an excellent opportunityfor the finance minister to unveil areforms Budget. The next one will bequite tough as the nation will be head-ing for general elections in 2014. Ofcourse, a lot of reforms can still beunveiled outside the Budget, in day-to-day administration. However, themiserable rollback of the RailwayBudget and a politically-correct gen-eral Budget clearly indicate that re-forms have got a decent burial, atleast for the near future. And that is amajor setback for the India story.


MANVENDRA JHA

A large number of home buy-ers in the National CapitalRegion (NCR), Mumbai and

Bangalore will not get possession oftheir apartments on time. A survey byPropEquity, a property research firm,reveals that about 45 per cent of thehousing projects in theseregions are facing sig-nificant delays, affectingthe prospects of scoresof home buyers.

The study, which sur-veyed 1,920 projectslaunched between Janu-ary 2007 and June 2009in these three regions,with expected deliveryby January 2012, pointsout that the NCR was theworst performer out ofthe three regions, with just 23 percent of the projects completed bythis January. In Bangalore andMumbai, the situation is better, with66 and 61 per cent of the totalprojects completed respectively.

The research firm mainly at-tributes the delay in construction tocash crunch faced by developers anda slowdown in housing demand. "Sev-eral developers launched a slew ofprojects in the pre-2008 crisis andare now facing severe funding woes,increased borrowing costs, falling,global, macro-economic trends anddwindling housing demand,"observes PropEquity Chief Execu-tive Officer (CEO) Samir Jasuja inthe survey.Lagging NCRThe NCR has contributed a lot to thedelay and the major reason is that thenumber of projects that were

Reality bitesHousing projects in major metros crawl at a snail'space, souring dreams of scores of home buyers.

launched in the NCR are very largecompared with those in Mumbai andBangalore metropolitan regions, thesurvey further adds. The executiontimelines have been further extendeddue to delays in obtaining regulatorysanctions in the region. Besides, thedevelopers do not have the executionbandwidth to complete so many

prices and supply, notes PropEquity.Within the NCR, affordable housinghas faced the major brunt as 92 percent of all projects have been de-layed, followed by 76 per cent in themid-end housing projects and 72 percent in the luxury housing segment.

In the Bangalore region, 33 percent of affordable housing projectshave been delayed, followed by a 31per cent delay in the mid-end hous-ing projects, while about 45 per centof luxury housing projects have been

crawling. Similarly, inMumbai, 37 per cent ofaffordable housingprojects have been de-layed even as a 36 percent delay is seen in themid-end housing projectsand a 48 per cent delay inthe luxury housing seg-ment.Boosting demandOf the total delayedprojects in the three re-

gions, the research firm expects that40 per cent may get delivered by theend of 2012. About 12 per cent ofthe delayed projects are expected tobe delivered by the 2014-end as theyare most likely at the excavation stageand will need around three years forcompletion. The survey also revealsthat small-sized projects (under 300units) have seen 62 per cent comple-tion rate compared with just 23 percent completion rate for large-sizedprojects (above 300 units).

The rising interest rates, coupledwith bullish property prices, trig-gered by speculation, have kept genu-ine home buyers away from the prop-erty market. As interest rates appearto drop, realtors should make con-scious efforts to bring down propertyprices to boost genuine housing de-mand. This can revive the dormantrealty market.

45 per cent of projects inNCR, Mumbai andBangalore facingsignificant delays

NCR worst performer withjust 23 per cent of theprojects completed

Bangalore with 66 per centand Mumbai with 61 percent projects completedfaring better

Affordable housingprojects hit hardest inthree regions

HOME TRUTHS

large-sized projects and that has ledto delays, points out Mr Jasuja.

Last year, farmers' protest againstland acquisitions prompted the Su-preme Court to cancel the construc-tion of residential flats in Noida Ex-tension, which tanked absorption,

REALTY


Bank of Baroda has signedan MoU with rating agencyCredit Analysis andResearch for rating ofmicro, small and mediumenterprises, which are eitherprospective or existingcustomers of the bank.

Y ES Bank has tied up withthe Buldana UrbanCooperative CreditSociety to help the societywith its new customerservice initiative, NanoTeller, entailing door-steppara-banking services. Thebank is seeking to leverageits relationship with thesociety to source agricultureand micro and smallenterprise loans to fulfil thestatutory priority sectorlending targets.

Private sector banks getnod to handle govt bizThe Reserve Bank of Indiahas permitted all privatesector banks to handle anycentral/state governmentbusiness at par with publicsector banks. So far, thefacility was limited to onlythree private sector banks -ICICI Bank, HDFC Bank andAxis Bank. The move willimprove customer conve-nience by increasing thenumber of customer serviceoutlets and broad basing therevenue collection andpayments mechanisms ofgovernments.

SBI gets capital boostThe Centre has approvedcapital infusion of Rs 7,900crore into the country'slargest commercial bank,StateBank of India, by way ofpreferential allotment ofshares. With this, the Centre'sstake in SBI would go up to65 per cent. Currently, theCentre has 59.4 per cent

NEWS ROUND-UP


FIN

AN

CE

KVG Bank lights up 100 villages Karnataka VikasGrameen Bank (KVG), a Dharwad-based regional rural bank hasmade rapid progress in converting villages to complete "solar vil-lages'. The Bank is expected to shortly declare the 100th village,Devagiri, near Dharwad as a complete solar village, according toC Sambasiva Reddy, chairman of KVG Bank. In the current fi-nancial year, KVG Bank installed 5,000 solar lighting units anddisbursed Rs 9 crore and in the heating segment, 2,800 solar wa-ter-heaters, costing Rs 7 crore have been disbursed.

stake in the bank. The capitalinfusion would also help raisethe Tier-I capital of the bankto 8 per cent.

RBI to permitnon-banking entities toset up ATMs In a bid to

accelerate the growth andpenetration of ATMs in thecountry, RBI plans to permitnon-banking entities to set up,own and operate ATMs.ATMs rolled out by non-banks will be like White LabelATMs and will provide ATM

services to customers of allbanks.

Karur Vysya Banklaunches co-brandedcard Karur Vysya Bank hasrecently launched a co-branded credit card with SBICards. The KVB-SBI co-branded cards will beavailable in two variants -Gold and Platinum - and willhave both magnetic strip anda chip which is said to providea high level of security tocardholders. Besides commoncredit card services, the bankoffers cash points for everyRs 100 spent on cards,Rs 3,000 worth apparelvoucher on joining, compli-mentary access to airportlounges and fuel surchargewaiver across all petrolpumps.

Unclaimed deposits tobe put on website TheReserve Bank of India hasdirected banks to disclose thelist of unclaimed andinoperative deposit holders ontheir Web site, in a bid to helpsome claimant trace theirdeposits. The list will includenames of depositors who havenot operated their accountsfor the last ten years. At thesame time, RBI has said thatbanks should not disclosedetails about the accountnumber, its type and the nameof the branch. As of end-December 2010, scheduledcommercial banks had 1.034crore unclaimed deposits withbalance aggregatingRs 1,723.15 crore.

Corporation Bank keenon lending to SMEsAccording to the CorporationBank chairman Ajai Kumar,the bank is targeting to lendaround Rs 15,500 crore to thesmall and medium enterprisessector this fiscal. He said thatSME credit portfolio of thebank was at aroundRs 12,500 crore at the end ofDecember, 2011.

APPOINTMENTSR V Verma, chairman andmanaging director of NationalHousing Bank, has beenelected as the chairman of theAsia-Pacific Union forHousing Finance, a represen-tative body of lead mortgagefinance institutions/housingfinance regulators, includingcentral banks of somecountries. Mr Vermasucceeds Abdul Qader Fitrat,former governor, CentralBank of Afghanistan.

Verghese Jacob has beenappointed as ombudsman ofSKS Microfinance Ltd. MrVerghese has over 30 yearsof experience, spanning thecorporate and social sectorsand held senior executive andboard-level positions withgroups such as Godrej.

Sunil Kaushal has beenappointed as regional chiefexecutive of StandardChartered Bank for Indiaand South Asia regions. Hehas taken charge fromNeeraj Swaroop. Beforetaking charge, Mr Kaushalwas president and CEO ofStandard Chartered Bank,Taiwan.

The Central Bank ofIndia has bagged theGolden Peacock Award,instituted by the Institute ofDirectors, for innovativeproduct/service for its retailproduct, Cent Sahayog,launched in 2011. Designedto strengthen the micro andsmall manufacturers andservice providers through aprocess of fast creditdelivery.

TIE-UPS

AWARDS

Mega revampVedanta Group unveils an ambitious restructuring planaimed at creating a global metal and mining giant.

SURYA SARATHI RAY

Billionaire Anil Agarwal-ledVedanta Resources has de-cided to merge all its busi-

nesses in India and abroad - exclud-ing the African copper mine - into asingle entity, Sesa Sterlite. Themerger, which is aimed at simplify-ing the group structure, will turn theconsolidated entity into the world'sseventh-largest natural resourcescompany. BHP Billiton, Vale, RioTinto, Glencore Xstrata, AngloAmerican and Teck are the top-sixglobal natural resources companiesaccording to their EBITDA (earningsbefore interest, tax, depreciation andamortisation) in 2011.

This is the second time that themining and metal major has proposedto restructure its businesses. Theearlier attempt in 2008 had failed inthe face of mounting protests from

shareholders on the issue of inclu-sion of Africa's Konkola CopperMine into other businesses.

The latest attempt is in line withthe company's strategy to consoli-date and simplify the group structureand eliminate cross-holdings. It willalso improve capital structure andcash fungibility besides allocation ofand access to capital. "The vision be-hind merging the assets is to createa giant resource company in India inline with BHP Billiton of Australiaand Rio Tinto of Brazil," emphasisesVedanta Group Chairman AnilAgarwal.

Learning from the earlier mis-takes, Vedanta Resources has kept theAfrican operations outside the pur-view of the merger proposals andplans to keep it as a direct subsid-iary, in which it has a 79.4 per centstake. Vedanta discloses that themerger will be completed by the end

of 2012, subject to approvals fromregulators and shareholders. It addsthat the amalgamation will ensure anannual Rs 1,000-crore synergy ben-efit for the consolidated entity.Merger planThe consolidation plan, which themanagement hopes to be earnings-accretive for Sesa Goa, Sterlite andVedanta, includes merger of Sterlitewith Sesa Goa at a share-swap ratioof 5:3 to form Sesa Sterlite. Accord-ingly, shareholders of Sterlite willget three shares of Sesa Goa for ev-ery five Sterlite shares held by them.

Besides, Vedanta Aluminium(VAL) and Madras Aluminium Com-pany (MALCO) will be consolidatedinto Sesa Sterlite. Vedanta's directholding of 38.8 per cent in Cairn In-dia will also be transferred to SesaSterlite, together with the associateddebt of about Rs 30,000 crore ($5.9billion), a company statement re-veals. Post-merger, Sesa Sterlite willinclude Cairn India, Hindustan Zinc(HZL), Skorpion and Lisheen, Bharat

CORPORATE REPORT

The New Structure

Source: Vedanta Resources

KonkolaCopperMines POWER

Talwandi SaboBALCOJharsugudaMALCO

ZINC-LEAD-SILVER

HZLZinc Int’l

IRON ORE

Sesa GoaWCL

OIL & GAS

Cairn India

COPPERTuticorinCMT

ALUMINIUMBALCOVAL

Sesa Sterlite

Vedanta Resources


Aluminium (BALCO), Talwandi SaboPower, VAL Power, MALCO Power,Western Cluster and Australian Cop-per Mines as its subsidiaries.

After the share transfer, SesaSterlite will be listed in India and thecompany will also list American De-positary Shares in New York. Vedanta,which will own 58.3 per cent in SesaSterlite after the restructuring, nowcontrols about 55 per cent each inSterlite Industries and Sesa Goa.Balancing actThe question is whether Mr Agarwalwill be able to sail through themerger this time? Rating agencyStandard and Poor's (S&P) opinesthat the merger may not materialisesoon as the company may face ob-stacles in getting approvals fromshareholders as well as regulators.However, it adds that theorganisational restructuring may im-prove the debt service coverage ra-tio of the holding company. "The pro-posed restructuring is subject to ap-provals from a number of minorityshareholders and regulators in theUK and India. In our opinion, the re-structuring will take time to imple-ment because it could face difficul-ties in getting these approvals,"notes Vishal Kulkarni, a credit ana-lyst of S&P.

On a consolidated basis, the pro-posed corporate restructuring willnot by itself reduce debt. TheRs 45,000-crore debt of VedantaResources, the Vedanta Group hold-ing company, remains subordinatedto that of its operating subsidiaries.Until the restructuring is complete,the company will have to pay Rs2,500-crore interest per year for thedebt from cash dividends paid by itssubsidiaries, point out analysts.

Global rating agency Moody's alsoadds that Vedanta's restructuring is a"mild positive" for the metal and min-ing conglomerate as its debt burdenwill get reduced by Rs 30,000 crore.However, the agency retains its"negative outlook" and adds that apart

from about Rs 900 crore of savings,primarily from group tax efficien-cies, there is no reduction in group'sdebt level, currently at aboutRs 82,500 crore. However, reduc-tion of indebtedness by someRs 30,000 crore at the thinly-capit-alised parent company is an improve-ment achieved by pushing down bor-rowings and assets to the new Indianholding company, Sesa Sterlite, theagency notes.

Observations of rating agenciesand analysts were reflected on thedomestic bourses as shares of bothSesa Goa and Sterlite plummeted,while share price of Vedanta Re-

sources saw an increase on the Lon-don Stock Exchange.

The merger will equip Vedantawith a broader portfolio of ferrousand non-ferrous metals under thesame umbrella. This will give it ashape more similar to other globalmining companies like BHP Billitonand Rio Tinto.

The merged entity has iron ore,zinc, aluminium, copper, oil and gasand other natural resources in itsportfolio, barring coal, the most de-sired fuel in any developing nation.Mr Agarwal reveals that Sesa Sterlitewill be looking to buy out coal as-sets in Latin America to plug themissing link in its portfolio and alsobid for coal assets in India when thegovernment starts auctioning ofblocks.

The proposed merger will makeVedanta the world's seventh-largestnatural resource company. Besides,it will facilitate in slashing debts, im-proving capital structure and cashflows as well as creating synergies.But the restructuring is fraught withproblems and shareholders are hardlyexpressing unalloyed joy.Mr Agarwal's rich experience in ne-gotiating hurdles can play a construc-tive role here by balancing thegroup's ambitions with its sharehold-ers' aspirations.

ADVANTAGE MERGEREliminating cross-holdingsand simplifying groupstructure

Building a global resourcesbehemoth

Broader portfolio of ferrousand non-ferrous metals

Improve capital structureand cash fungibility

Effective allocation of andaccess to capital

Annual Rs 1,000-croresynergy benefit

Superior debt servicecoverage ratio

Anil Agarwal is eyeing to create a giant resource company in India in line withBHP Billiton of Australia and Rio Tinto of Brazil.


CORPORATE REPORT

Well-oiled plansSmart strategies and aggressive global acquisitionstransform Marico into a powerful Indian multinationalcompany.

MUNISH SHEKHAVAT

Marico, the domestic fast-moving consumer goods(FMCG) giant, is back in

the acquisition mode. The companyplans to strengthen its product port-folio further, with its latest purchaserecently. The over Rs 3,100-crorecompany is known for brands likeParachute coconut oil, Kayaskincare service and the Saffolabrand of oats and wheat flour, amongothers.

In February, the Mumbai-basedcompany acquired the Paras brand ofpersonal-care products from ReckittBenckiser. Last April, the UnitedKingdom-based consumer goods ma-jor had acquired home-grown ParasPharmaceuticals for Rs 3,260 crore.Reckitt Benckiser had bought bothpharmaceutical and personal-careproducts of Paras, but decided to sellParas' personal-care business toMarico.

As a part of Ahmedabad-basedParas Pharmaceuticals' acquisition,Reckitt had acquired brands likeMoov pain relief ointment, Krackheel-care lotion and D'Cold and per-sonal-care brands such as Set Wetand Zatak and hair-lotion brand Livon.Reckitt's own brands include Dettolsoap and liquid, Strepsil throat loz-enges, Mortein pest control aerosolspray, Lizol floor cleaner, Vanishstain remover and Harpic toiletcleaner.

In recent times, Paras Pharmaceu-ticals, a private company owned byfounder Girish Patel and his family,had become a significant player toreckon with. With strong portfolios

of over-the-counter health and per-sonal-care products and state-of-the-art manufacturing plant in Baddi,Hiamchal Pradesh, it had attracted at-tention of major investors. In fact,private equity investors such as Actisand Sequoia Capital had also boughtstake in the company.

ment on the deal size at this point,"points out Saugata Gupta, Marico'sconsumer products business CEO.According to the scheme of arrange-ment, Reckitt will transfer the per-sonal-care division to a separatecompany called Halite Personal CareIndia, in which Marico will acquire a100 per cent equity stake.

According to Mr Gupta, the dealis likely to be sealed in a couple ofmonths and will be funded throughinternal accruals, debt and equity. "Itfast-forwards our journey towardscreating a portfolio for the futurewith a significant presence in themale-grooming and post-wash,hair-care segments," adds Mr Gupta,referring to the latest among a stringof acquisitions undertaken byMarico.Ex citing journeyWith over 3,000 employees, 15manufacturing facilities - eight inIndia and seven overseas - a clutchof powerful brands and presence inmore than 25 countries across Asiaand Africa, Marico is an FMCG be-hemoth today. But the companytraces its humble roots to 1948,when it started off as Bombay OilIndustries (BOIL), a regional oiltrader, in Mumbai. BOIL hadthree main operational lines - fattyacids, spice extracts and consumerproducts.

In 1971, Harsh Mariwala, the cur-rent chairman of the Marico Group,joined the family business, infusinga whiff of fresh air into BOIL. MrMariwala, taking charge of thecompany's consumer products divi-sion, was quick to spot the untappedpotential of its oil business. He trav-elled extensively and studied BOIL'sdistribution and retail operations. Herealised that BOIL's customers wereother companies and intermediaries,who resold to retail outlets, who, in

Harsh Mariwala: On a shopping spree

Latest dealMarico's deal with Reckitt, whosedetails were not disclosed, is ex-pected to conclude by the end of thesecond quarter of 2012. Dabur Indiaand Emami were among the playersin the race to acquire the Parasbrands, which are expected to gen-erate a turnover of Rs 150 crore dur-ing this financial year. By clinchingthe deal with Reckitt amid stiff com-petition, Marcio it is set to reaprich dividends from Paras' strongbrand equity and modern manufactur-ing facility.

"We are not in a position to com-


turn, sold the oil in loose, unbrandedform to consumers.

Mr Mariwala spotted the oppor-tunity for branding and introducedconsumer-friendly packs for bothcoconut oil - Parachute - and refinededible oil - Saffola. In 1990, BOIL'sconsumer products division washived off into a separate company,leading to the birth of Marico.

Over the next two decades,Mr Mariwala turned Marico into apowerful, trendsetting FMCG jug-gernaut. He replaced tin cans withshapely, plastic containers for oil,which the industry soon adopted. Hepitched Saffola on the heart-careplatform, making it the country's firstedible oil brand, promoting healthand wellness about two decades ago.Towards the end of 2002, Maricoforayed into beauty and wellnesssegment with Kaya Skin Clinic,which has over 100 clinics acrossthe world.Going globalFor Marico, going global was not justa means of opening up new avenuesof growth, but also an opportunity forcross-border learning. That, in part,explains the shopping spree and theamazing growth of its internationalbusiness group. With a footprint inWest Asia, North Africa, South Af-rica, Bangladesh, Malaysia and Viet-nam, the international division hasgrown manifold, accounting forabout a quarter of the MaricoGroup's total turnover.

Last year, it acquired an 85 percent stake in International Consumer

been prompting consumer productcompanies to expand their presenceglobally. No wonder, Marico's rivals- Godrej Consumer Products, Daburand Emami - have been equally ag-gressive in global acquisitions andexpansion.

Meanwhile, opportunities areopening up for FMCG companies inIndia on the back of reasonably-higheconomic growth, rising disposableincomes, rapid growth of the ruralmarket and exciting developments inthe organised retail segment, drivenby the growing mall culture. Thegrowing emerging markets of Asiaand Africa too are also beckoningFMCG players with open arms. Thetrend-setting FMCG, Marico, seemsto have taken a brief break beforeplotting its next move.

Marico: A Fact File

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Origin:1990

Headquarters:Mumbai

Business:FMCG, health and wellness

Major brands:Parachute, Saffola,Kaya Skin Clinic

Facilities:15 (including seven overseas)

Employees:3,000+

Global presence:25 countries

Turnover (FY11):Rs 3,100+

SAUGATA GUPTACEO, Consumer Products Business

"THE PARAS DEAL FAST-FORWARDSOUR JOURNEY TOWARDS CREATINGA PORTFOLIO FOR THE FUTUREWITH A SIGNIFICANT PRESENCE INTHE MALE-GROOMING AND POST-WASH, HAIR-CARE SEGMENTS."

Products, a Vietnamese company, foran undisclosed sum. In 2010, theconsumer products major had boughthair-styling brand, Code 10, fromColgate-Palmolive apart from buy-ing out the aesthetics business ofSingapore-based Derma Rx Asia Pa-cific in the same year.

Marico has been looking at acqui-sitions for about Rs 1,000 croreboth in the domestic and overseasmarkets. We have grown almost 26to 27 per cent. We will try and main-tain our high growth rates throughboth organic and inorganic routes.We will tap new opportunities avail-able through acquisitions," stressesMr Mariwala.

Cut-throat competition in theRs 1,30,000-crore domestic FMCGmarket and rising input costs have

With a clutch of powerful brands and presence in more than 25 countries, Marico is an FMCG behemoth today.


TRIPTI AGARWAL

India and Indonesia are set to reachtheir target of bilateral tradeworth $25 billion by 2015 ahead

of schedule. The bilateral trade be-tween the two Association of South-East Asian Nations (ASEAN) mem-bers has already crossed $20 billionby 2011. Bilateral trade between thecountries has grown at an annual rateof 30 per cent and was $20.13 bil-lion in 2011.

INTERNATIONAL BUSINESS

Upping the anteIndia and Indonesia set a new $25-billion bilateral tradetarget, triggering a virtuous cycle of mutual growth.

tion of India-ASEAN FTA last year,the trade and investment flows be-tween our countries would acceler-ate and help achieve and exceed thetarget easily," Mr Sharma told report-ers in Jakarta. Both the sides alsoagreed to speed up negotiations onthe bilateral Comprehensive Eco-nomic Cooperation Agreement(CECA). "Opening up the two econo-mies for service trade would be a win-win situation for both the countries,"Mr Sharma added during his three-

cover trade in goods, services andinvestment. Mr Sharma also raisedthe issue relating to non-tariff barri-ers in pharmaceutical sector and bo-vine meat exports. The Indonesianminister said that it was important forthe island-nation to have a more openregime for trade.

Besides, Mr Sharma expressedconcern over the new mining laws ofIndonesia that have affected Indianmining and independent powerprojects (IPPs). Currently, Indianmining companies are obliged to ex-port coal at benchmarked prices an-nounced monthly by. This hasupset the calculations of a large num-ber of IPPs.

Mr Sharma also asked Indonesiato improve its offer on services inthe ongoing negotiations for an FTAin services and investments betweenIndia and the 10-member ASEAN. Hesaid that movement of professionalswould help in boosting investmentopportunities. In order to further theeconomic cooperation, both thesides decided to institute five newworking groups in the fields ofhealthcare, pharmaceutical and bio-technology, mining, agro and foodprocessing, R&D and skill training.

There is a huge demand for pro-fessional services in Indonesia'shealthcare, education and accoun-tancy sectors, which, at present, ismet by countries like Australia, NewZealand and, to some extent, China.India certainly stands to gain in a bigway if the CECA between the twocountries materialises. Besides, In-donesia is an important source ofcoal to energy-starved India and thebilateral ties can power up thecountry's energy sector, which is fac-ing severe shortage of coal. As thetwo Asian nations inch closer to eachother, they could set off a virtuouscycle of mutual growth.

The two countries have decided torevise the trade target and widen theproposed free-trade agreement(FTA) by including more service sec-tors like health and banking. The newtrade target was set last month, whenCommerce, Industry and TextileMinister Anand Sharma reviewed thebusiness ties between the two coun-tries with his counterparts in Jakarta,the Indonesian capital.Enhancing ties"We now see ourselves achieving thenext target of $25 billion by 2015comfortably. With the implementa-

day visit to the Asian nation.Currently, Indonesia does not al-

low movement of professionals inhealth and banking sectors. The ser-vices sector is of key interest to In-dia as it contributes over 59 per centto its Gross Domestic Product(GDP). Indonesian Trade MinisterGita Wirjawan has agreed to take upthese issues with the health depart-ment and the Central Bank of Indo-nesia.Mutual gainsLast October, both the sides startednegotiations for CECA, which would

Anand Sharma and Gita Wirjawan explore ways to strengthen bonds betweenIndia and Indonesia.


IBJ RESEARCH BUREAU

Think Poonawallas and thethoughts inevitably leadup to exquisite horsesand racing. Prod the minda little harder and luxury

cars and flashy, private jets come tothe fore. Taxing the brain any furtheronly draws a blank.

Minute details of the

Poonawallas, one of the nation's old-est business families, have been inpublic domain for years now. Reamsof newsprint have been devoted tothe jet-setting, high-flying lifestylesof Pune's best-known corporatehouse. Yet, few would be familiarwith the diverse businesses of thePoonawalla Group.

"Two of our group companies aremarket leaders in their respective

fields of industrial valves and pneu-matic actuators. Our products areemployed across a range of core sec-tors, both in India and abroad,"stresses Yohan Poonawalla, theyoung and dynamic scion, who headsthe group's engineering and hospital-ity ventures. Like his illustrious busi-ness house, Mr Poonawalla is a veryfamiliar public figure. The 40-year-old Poonawalla's passion for horses,

COVER STORY


Yohan Poonawalla: Doing business hands on

RIDINHIGA decade after taking cYohan Poonawalla is stenew ventures into the

Poonawalla Empire

Origin: 1946Business: Horse breeding andracingLocation: Hadapsar, Pune

Intervalve IndiaOrigin: 1987Business: High-quality valvesExisting plant: Manjri, PuneUpcoming plant: Hadapsar, PuneUser industry: Refinery, petroleum,fertiliser, chemical and other coreindustriesClients: RIL, BHEL, BOC India,Essar Construction, Finolex Indus-tries, L&T, NPCIL, South PacificViscose, Monetic Valve Corp, etc

EL-O-Matic IndiaOrigin: 1989Business: Pneumatic and electricactuators and valve automationsystemsPlant: St Patrick's Town, PuneUser industry: Pharmaceutical,textile, sugar, paper & pulp, food &beverages and other core industriesClients: ABB, Alstom India, BARC,Asian Paints, Orchid Chemicals,Sterlite Industries, VisakhapatnamSteel Plant, Emerson, etc

HospitalityGrayshottBusiness: Health spa and resortLocation: Surrey, UKArea: 47 acresFawsley HallBusiness: Heritage hotelLocation: Silverstone, UKRooms: 58Suites: 13

Poonawalla Stud Farms

luxury cars and private jets are allwell chronicled.

Yet, the Poonawallas are muchmore than their luxurious lifestyle.Over the last six decades, they havebuilt a sprawling business empire,ranging from horse racing and breed-ing to biosciences, engineering andhospitality.Poona, circa 19 46…The Poonawallas trace their legacy

back to a little over a century. Theirancestors, belonging to the Parsi gen-try, owned large tracts of land in andaround Pune or Poona, as it used tobe called during the British Raj days.Over a period of time, the family,which was mainly into trading, ac-quired the name Poonawalla (liter-ally meaning inhabitants of Pune).

In 1946, the late Soli Poonawalla- the father of Zavaray and grandfa-ther of Yohan - ventured out of thefamily's trading business and starteda stud farm across 15 acres, with adozen mares and a stallion inHadapsar on the outskirts of Pune.Breeding was still in its infancy inIndia, with hardly any Indian thor-oughbreds. With a strong passion forhorses and racing, Soli Poonawallasingle-handedly built the stud farmand sowed the seeds of horse breed-ing in the country.

For about two decades, SoliPoonawalla's sons - Zavaray and hisbrother - built on their father's legacyand expanded the Poonawalla StudFarms. Today, the stud farm has ac-tually redrawn the country's land-scape of horse breeding and racing.The stud farm is divided into twoseparate units - the young stock di-vision situated in Hadapsar and thebreeding division located in Theur,about 10 km away from Hadapsar. Itboasts of winning 11 ChampionBreeders' Awards - nine in a row -since the award was instituted 16years ago. The stud farm is also fa-mous for its most-coveted event,Poonawalla Breeders' Multi-Million,which is the country's richest juve-nile race.

Besides, the stud farm's thorough-breds are in big demand across theglobe, with many of them exportedto Dubai, Hong Kong, Malaysia,Singapore, the USA and many othercountries. The horses fromPoonawallas' stables have been win-ners all the way, bagging 332 Clas-sic races, including nine Indian Der-bies and 66 Indian Classics. Reckoned


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INGGH

king charge,a is steering his group'so the big league.

Yohan Poonawalla respects hisfamily legacy. But the young

and dynamic businessman is not theone to rest on past laurels. A hands-on planner and manager, he hasplaced the Poonawalla Group's en-gineering ventures on a high-growth trajectory since takingcharge a decade ago.

Taking risks should not be dif-ficult for the young Poonawallascion, given his family business ofhorse racing. No wonder, he sur-prised many in business circles byacquiring stakes in two UK hotels.These acquisitions did not justmark the Poonawallas' entry intohospitality, but was the group'smaiden foreign venture.

Tight business schedule apart,Mr Poonawalla, who sits on theboards of some of the reputedcompanies and charitable trusts, isindeed the real king of good times.With a fleet of luxury cars and pri-vate jets, he is one of the mostpopular faces of young India Inc.But save for these indulgences,Mr Poonawalla is a very privateperson, committed family man anddoting father to his son and daugh-ter. In a free-wheeling interviewwith India Business Journal,Mr Poonawalla talks about his en-gineering ventures, foray into hos-pitality and the group's future plans.Excerpts:

How was the going for yourengineering businesses lastyear, given the uncertainties andnegative sentiments plaguingthe economy?

During the last quarter of 2011,we did notice some signs of aslowdown. There were fewer or-ders during the period in question,chiefly because many big projectswere put on hold. But the situation

"Passion should not override business"seems to be improving in the newyear with many infrastructureprojects getting revived.

With considerable ex ports, hasthe current global economic cri-sis not impacted your business?

We have always been looking fornewer markets across different ge-ographies and clients. Besides, apartfrom our traditional forte of butter-

businesses from economic crisis.What made you to diversify into

the hospitality sector?I visit the UK quite often and I was

fascinated by these two propertiesthere. Greyshott is a spa and healthresort. Today, detoxification andother health and beauty treatmentsare becoming hugely popular acrossEurope. The second acquisition,

fly valves, we have diversified intocheck, gate, globe and ball valves tocater to a diversified client base. Wewant to be in the widest possiblerange of valves and actuators as aone-stop solutions provider for ourcustomers under a single roof. Ournew valve plant coming up at theHadapsar Industrial Estate will movea step closer in this direction. Withthis strategy of spreading riskswidely, we are able to insulate our

Fawsley Hall, is a 700-year-old heri-tage hotel nestled around pristinenatural beauty. I have always beenpassionate about hospitality and thetwo UK properties gave me a goodopportunity to live the passion. It wasalso exciting as this happens to be thePoonawalla Group's first overseasventure.

So, are there any plans lined upfor the hospitality sector in India?

There are too many hotels in Pune.

“We target to maintain our leadership positionand grow at a long-term annual growth of about20 to 25 per cent. I will still keep my eyes open

for new opportunities.”


COVER STORY

Poonawalla Stud Farms has redrawn the racing landscape by introducinggenerations of Indian thoroughbreds to the world.

Mystical, the wonder horse

In fact, there is a surplus supply ofhotels in the city and businesswould not be viable. It is very im-portant to ensure that passionshould not override business con-siderations.

What sectors will drive thegroup's future?

I would be sticking to the corebusiness of engineering and hos-pitality in the near future. We tar-get to maintain our leadership po-sition and grow at a long-term an-nual growth of about 20 to 25 percent. I will still keep my eyes openfor new opportunities, as and whenthey arrive. I am passionate abouthorse breeding and racing. Besides,it is a family legacy, which shouldcontinue for the years to come.

What are the secrets behindyour group's immense success?

There are several factors behindthe success. A good team of em-ployees, without whom it would bedifficult to reach this point. My par-ents have always advised me to give100 per cent of whatever you do.You will have to put your heart andsoul into any work that you take up.It is always very important to fol-low ethics and maintain integrityand reputation at all costs. Thesequalities pay off in the long run.

O n a personal note, apartfrom horses and cars, what arethe other interests that keep youoccupied?

Work, of course, takes up mostof time these days. So far, it hasbeen a hands-on approach as far aswork is concerned and hence youneed to devote a lot of time. But Iam seriously contemplating del-egating a part of my work to ourdedicated staff. I am trying my bestto balance between work and fam-ily. I want to spend as much timeas possible with my young childrenbefore they grow up.

as the highest stakes-earning estab-lishment in the country, over 378horses from the Poonawalla StudFarms have earned stakes of overRs 10 lakh.

The Poonawalla brothers sharedtheir father's passion for horses. Butthey went a step ahead and venturedinto biosciences, establishing a syn-ergy between the stud farm and thenew vaccine business. "Retiredhorses from our stud farm were do-nated to government-owned HaffkineInstitute in Mumbai, which made vac-cines from horse serum. A veterinaryexpert at our farm suggested that wetoo could enter the vaccine-manufac-turing business and thus was bornSerum Institute of India," recountsMr Poonawalla.

It was quite by chance that thePoonawallas diversified into indus-trial engineering. "A family friend ofours, who was running an industry inVapi, manufacturing mechanicalseals, actually led us into this sec-tor," recalls Mr Poonawalla. The fam-ily friend in question owned SealolHindustan in Vapi. As he was on thelookout for a buyer for his business

and when the intention was disclosedto the Poonawallas, they did not thinktwice but seized the opportunity.The group thus forayed into engi-neering. Today, the PoonawallaGroup is one of the country's lead-ing diversified conglomerate, grow-ing at a rapid pace and making foraysinto new ventures.New focusDuring the late 1970s, thePoonawalla Group turned its focusto engineering soon after taking overSealol Hindustan. In less than a de-cade, the group's engineering busi-ness got a big push following its tech-nical and financial alliance with twoDutch giants, leading to setting up ofIntervalve India in 1987 and EL-O-Matic in 1989. Over the years, thetwo companies have built aformidable clientele, comprisingsome of India's and the world's big-gest companies.

With a wide range of valves, in-cluding butterfly, check, gate, globeand ball valves, Intervalve India, anISO 9001-certified company, hasbecome synonymous with high qual-ity. The company's modern manufac-


Long before corporate socialresponsibility (CSR) became

the norm, the Poonawalla familyhas been engaged in giving back tosociety. The Poonawallas have con-tributed towards various socialcauses such as health, educationand social infrastructure.

The group widened and resur-faced the Hadapsar Road, besidewhich most of its operations arelocated, and the road has beenchristened as the Soli PoonawallaRoad. The family has also builtand is maintaining the GoolPoonawalla Garden in SalisburyPark.

Besides, the group has givengenerous donations to several hos-pitals. The Zavaray Poonawalla

Group with a big heart

Cancer Building, with ultra-mod-ern facilities devoted to treatmentof cancer patients, in the premisesof Ruby Hall Clinic in Pune standstestimony to the contributions ofthe Poonawalla Group. The familyhas also contributed immensely toschools, the needy and weaker sec-tions of society.

Ultra modern cancer facility at RubyHall Clinic, Pune

turing facility in Manjri, near the studfarm, caters to most of the core in-dustries, including refinery, petro-leum, fertiliser and chemical,pharmaceutical, textile, sugar, paperand pulp, food and beverages, amongothers.

Intervalve's superior Dutch tech-nology and high standards of designand accuracy have enabled it to cor-ner a major market share of the do-

mestic process industries. Besides,its valves, which boast of the CEmarking, conforming to the stringentquality standards of the EuropeanUnion, are in great demand across theUK, the USA, Germany, South-EastAsia, Middle East and other majorcountries.

The establishment of EL-O-MaticIndia, in collaboration with anotherDutch industrial leader, gave a shot

in the arm for the Poonawalla Group.With its pneumatic and electric ac-tuators and valve automation sys-tems, the group has been able to ca-ter to a host of niche companies thatare going in for automation of theirprocesses. "Pneumatic actuators andvalve automation systems are the fu-ture of process industries. EL-O-Matic's products are a natural exten-sion of the valves. Pneumaticactuators enable industries to con-trol their processes automaticallyfrom a remote destination," addsMr Poonawalla.

Automation may be the buzz wordtoday. But the Poonawallas enteredthis high-technology industry twodecades ago, much before the tech-nology could capture the world'simagination. EL-O-Matic Interna-tional, which was set up in 1973 inthe Netherlands, pioneered theworld's first electric actuator in1987. By the 1990s, the Dutch com-pany had expanded to about six coun-tries, tying up with the Poonawallasfor the India venture in 1989. EL-O-Matic International, which became apart of Emerson Electric, a largeAmerican multinational conglomer-ate, in 1995, is today one of theworld's largest specialised manufac-turers of valve actuators. With a state-of-the-art manufacturing plant inPune's St Patrick's Town and a net-work of 18 dealers and 15 branchesacross India and six internationaldealers, EL-O-Matic India hasbecome a leading player in processautomation.Big leapThe group's engineering division hasseen robust growth since 2002 withYohan Poonawalla taking charge aschairman and managing director ofthe two companies from his father,Zavaray Poonawalla. Armed with anMBA degree from the UK and freshwith new ideas, the young Poonawallabegan infusing new life into the groupcompanies. "Mr Poonawalla is a kind-hearted man with innovative ideas.


COVER STORY

Yohan Poonawalla in conversation with Dr A P J Abdul Kalam, formerPresident, at the inauguration of the Zavaray Poonawalla Cancer Building

Yohan Poonawalla’s acquisition of stake in two UK hotels marks the group's first overseas foray.

Fawsley Hall, Silverstone Grayshott spa, Surrey

The engineering companies' valvesand actuators cater to the who's whoof domestic and global companies.

He is running a legacy of traditionand has a challenge to strike a bal-ance between the old and the newschools of thought, the art of whichhe has mastered," points out AijazHussain, a senior core committeemember of the Poonawalla Group.

Mr Poonawalla drew up winningbusiness strategies to take the engi-neering companies to the new level.Betting big on diversification, heguided Intervalve and EL-O-MaticIndia in widening their productbaskets, moving into newer mar-kets and broadening their clien-tele. He also trimmed the compa-nies' inventory, outsourced manynon-core operations and cut costsdrastically. In a short span of time,there was a sea change in the twoengineering companies.

In 2004, Mr Poonawalla movedinto uncharted territory by gettingthe group to enter hospitality. Thegroup bought stakes in two UKhotels, marking its first overseas ex-pansion. The first acquisition wasGrayshott, a luxury spa in Surrey, anhour's drive from London. Spreadacross 47 acres of gardens, woodsand sweeping lawns, the spa boastsof some of the best natural therapies,beauty treatments and fitnessprogrammes.

The other acquisition, FawsleyHall, a 700-year-old heritage man-sion-turned-countryside hotel, isclose to the Formula-1 racing track

in Silverstone. The 58-room hotel,accompanied by 2,000 acres of roll-ing hills and parklands, recently un-derwent renovation by adding 13 newsuites. The Great Hall of the hotelwas originally commissioned in1537 and its South Wing was usedby Queen Elizabeth-I during her visitin 1575. The hotel, which has beenpatronised by the rich and famous of

the world, is a prized possession forthe Poonawallas.

Meanwhile, it is an exciting timefor the Poonawalla Group's engineer-ing division. The Rs 7,000-crore In-dian valve and actuator industry hasbeen growing at about 15 per centannually and is quite bullish of thenear future. A small, but critical, sup-port devise in almost every industry,

valves and actuators are turning nicheby the day as projects get bigger andmore complex.

Having supplied over 5,00,000valves to the Indian industry so far,Intervalve has reached a critical mass.Mr Poonawalla has set in motion anexpansion plan to focus more onhigh-margin valves such as gate,globe, check and ball valves. A plant

is coming up at the Hadapsar In-dustrial Estate to manufacturethese high-value valves and theunit is expected to go on streamin the next three months. "Thereare more than 300 types of valves,based on the parameters of pres-sure, size and material. I want mycompanies to become a one-stopsolution, making available alltypes of valves under a singleroof," emphasises Mr Poonawalla.

As the economy surges and in-dustries embark on ambitiousprojects of huge size and scale,

there is a big rush for high-quality,niche valves and actuators. ThePoonawalla Group's engineeringcompanies, in the meantime, have anedge over their peers, consideringthat they have the first-mover advan-tage of embracing technology a longtime ago. With Mr Poonawalla at thehelm, it would be a matter of timebefore Intervalve and EL-O-Maticgallop to glory like Mystical, Ace,Adler and many of his prized thor-oughbreds.


SUMEDHA SHANKAR

It is a fair price, and not themethod, that can ensure successin the government's disinvest-

ment drive, note market experts.Their observation comes in the wakeof share sale of Oil and Natural GasCorporation (ONGC) by an innova-tive auction barely scraping throughlast month.

After many initial hiccups and thenan intervention by the governmentand market regulator Securities andExchange Board of India (SEBI), saleof about 5 per cent promoter equityin ONGC, the public-sector behe-moth, sailed through on March 1,fetching about Rs 12,700 crore to theexchequer in its disinvestment kitty.This was the first time that a one-dayauction method was tried by the gov-ernment in its disinvestment drive

DISINVESTMENT

Irrespective of the process, the government should getits pricing act together to succeed in its divestmentprogramme.

and it was widely expected that a suc-cess for the ONGC issue could leadto shares being sold in other publicsector undertakings (PSUs) throughthis method.

However, a tepid response to theONGC shares from investors otherthan State-run entities has led toquestions being raised about thisunique auction route. Market ana-lysts, although, do not find fault withthe method as such and say that thepoor response should be mainly at-tributed to a high floor price fixedfor the auction.O NGC fiascoAs the ONGC auction was takingplace at the floor price of Rs 290 ashare, the company's share priceslipped below the floor price in thenormal trading on the National StockExchange (NSE) and the BombayStock Exchange (BSE). Faced with atepid response, the offer for sale of42.77 crore ONGC shares at a floorprice of Rs 290 a share had to be res-cued by Life Insurance Corporationof India, the State-owned insurancebehemoth, which is said to have putin a vast majority of the bids.

According to experts, until half anhour before the close of markets,neither the NSE nor the BSE saw bigmoney coming in. It was only whenit became clear that the issue wouldfail to get its Rs 12,000 crore targetthat the government panicked andprobably arm-twisted some of itscash-rich entities to somehow put inthe money to rescue the auction fromignominy.

The auction took a mysterious turnwhen stock exchange websitesstopped updating the bids 10 minutesbefore the scheduled close. The gov-ernment said the system was jammedbecause of a rush of last-minutebids. Market watchers said the tech-nical glitch was a blessing for the


Crucial lesson

The ONGC auction took a mysterious turn 10 minutes before the scheduled close.

"The instrument for ONGCstake sale was good, but theonly problem was the pricingof the offer."

JAGANNADHAM THUNUGUNTLAHead (Research),

SMC Global Securities

ONGC oil platform

government because it wouldbe almost impossible to findout if some bids came after thescheduled closing time. How-ever, the next day, both thestock exchanges denied thatthere was any technical glitch,shrouding the whole share saleaffair in mystery.

"The government is tryingevery way possible to meet thedisinvestment target. The in-strument for ONGC stake sale wasgood, but the only problem was thepricing of the offer," points outJagannadham Thunuguntla, strategistand head of research of SMC GlobalSecurities. "If the issue is properlypriced, there would be a lot of de-mand. We had expected a discount onthe floor price, but Rs 290 per sharecame as a surprise," he adds.Right pricingAgainst its disinvestment target ofRs 40,000 crore for 2011-12, thegovernment could manage to garneronly around Rs 14,000 crore, withthe follow-on public offer (FPO) ofPower Finance Corporation, theONGC auction and the initial publicoffer (IPO) of National BuildingsConstruction Corporation. Consid-ering the poor disinvestment show,Finance Minister Pranab Mukherjeeset a more realistic target for 2012-13 of Rs 30,000 crore in his recentBudget.

On the same day of the ONGCflop show, the Union Cabinet ap-proved a share buyback route for itsdisinvestment programme, underwhich cash-rich PSUs can purchasethe government's stake and helpmeeting its disinvestment target."The government is desperate to getthe fiscal deficit under control, butthe sentiment is not permitting it togo whole-heartedly with the disin-vestment programme," opinesUnicon Financial Services CEOGajendra Nagpal. If market senti-ments remain positive, the preferredroute will be to get the money from


outside investors rather than buybackby the PSUs themselves, he adds.

The cash lying with the PSUsshould be meant for their future ex-pansion and not for buying back the

"All the four options - auctionroute, share buyback, IPOand FPO - have their ownfaults. The government mayagain fall back upon IPOsand FPOs for its futuredisinvestments."

KISHORE OSTWALCMD, CNI Research

would come after some timeas the government will taketime to put another issue onthe block."

The traditional fund-rais-ing processes like IPOs andFPOs for share sale are rela-tively more time-consumingand require at least four to fivemonths to complete. Expertspoint out that the auctionroute is good as long as pric-

ing is done appropriately.CNI Research Chairman and Man-

aging Director Kishore Ostwalpoints out that all the four options -auction route, share buyback, IPOand FPO - have their own faults andthe government should go straight forprivatisation and that should be thebest way. He, however, notes that thegovernment may again fall back uponIPOs and FPOs for its futuredisinvestments. Undeterred by thecriticism over the ONGC auction is-sue, the Disinvestment Departmenthas said it is comfortable with theprocess and will consider sellinggovernment equity in more PSUsthrough the same method.

Meanwhile, the Union FinanceMinistry has begun inter-ministerialdiscussions on listing subsidiaries ofprofit-making, State-owned enter-prises, raising hopes that the govern-ment may look at all options to meetits divestment target of Rs 30,000crore in 2012-13. The governmentplans to focus on companies, inwhich it has more than 90 per centstake such as Minerals and MetalsTrading Corporation of India, StateTrading Corporation, Neyveli Ligniteand Rashtriya Chemicals and Fertil-izers. It has already secured theCabinet's approval for stake sale infour State-run companies - Steel Au-thority of India, Hindustan Copper,Bharat heavy Electricals andHindustan Aeronautics. As the gov-ernment gears up for another roundof share sale, it should take care toprice the issues fairly.

Falling short

*Estimates

TARGET MOP-UP2009-10 25,000 23,553

2010-11 40,000 22,145

2011-12 40,000 14,000*

2012-13 30,000 --

Government fails to meet disinvestment target.

shares and therefore buyback shouldnot be a preferred route, notes MrNagpal, adding: "I do not think that ifthe ONGC stake sale emerged as aflop show, others will also bear thesame brunt. I think the next issue

(Rs crore)

US gets toughRegulatory raps and rising litigations spoil Indiandrug-makers' American party.

The regulatory rap on Ranbaxy sounds a sinister note of caution for the domesticpharmaceutical industry.

MUNISH SHEKHAVAT

Indian generic drug-makers, whichgenerate most of their revenuesfrom the lucrative US market,

have been at the receiving end re-cently. The domestic pharmaceuticalcompanies are grappling with a hostof issues, with a multinational com-

pany demanding millions of dollarsin damages. Meanwhile, a domesticcompany has initiated a voluntaryrecall of products from the world'sbiggest pharmaceutical market.

India is a huge source for genericdrugs or less expensive medicinesthat are not covered by patent pro-tection, unlike original, innovativemedicines. Generic drugs have al-ways had to battle with voices in de-veloped markets, which questiontheir quality for reasons not alwaysbased on sound reasoning.

The over Rs 1,00,000-crore do-mestic pharmaceutical sector hasmaintained its number-one position

in the US generics market, led byGlenmark, Aurobindo and SunPharma. Despite the recent troubles,the US continues to remain the larg-est global market for generics as aslew of patented medicines go off-patent in the coming years.Sun Pharma's woeIn a recent development, Sun Phar-

maceutical Industries has been askedby US-based Wyeth Pharmaceuticalsfor damages worth $960 million re-lated to their ongoing patent disputeover a generic version of Protonix,which is used to treat heartburn.Protonix is a registered trademark ofWyeth, which was acquired by Pfizerin 2009.

Sun Pharma reveals that Wyeth hassubmitted to the District Court ofNew Jersey confidential expert re-ports claiming damages against SunPharma and Teva, arising out of theirearlier at-risk launches. Wyeth's ex-perts have estimated the purporteddamages from Sun Pharma to be

$960 million. The experts have alsoclaimed that Teva may be liable forsome of Sun Pharma's damages andvice versa.

However, Sun Pharma believesthat it has sound reasons to disagreewith these overstated claims ofWyeth and also continues to believethat the patent is invalid and unen-forceable and will pursue all avail-able legal remedies, including ap-peals. Sun Pharma adds that in duecourse, it will also come out with itsexpert reports, providing assessmenton the purported damages.

In 2010, the District Court ofNew Jersey had turned down SunPharma's request to "reverse the juryverdict that the patent is not invalid".Wyeth and Nycomed, the companyfrom which Protonix was licensed,had initiated the legal action againstSun Pharma and Teva over allegedpatent violations in 2004.Glenmark's recallGlenmark Pharmaceuticals, anotherIndian company that also sells itsproducts in the US market, has issueda voluntary nationwide recall in theUS for seven lots of its oral contra-ceptive, Norgestimate and EthinylEstradiol tablets, owing to a packag-ing error. The recall is issued by thecompany's US arm, Glenmark Ge-nerics, for tablets in strength of 0.18mg/0.035 mg, 0.215 mg/0.035 mgand 0.25 mg/0.035 mg.

According to Glenmark, the recallis being implemented because of apackaging error, where select blis-ters were rotated 180 degrees withinthe card, reversing the weekly tabletorientation and making the lot num-ber and expiry date visible only onthe outer pouch. The company addsthat as a result of the error, the dailyregimen for the oral contraceptivecan leave women consumers in theUS at risk of unintended pregnancy.

PHARMACEUTICAL


LAXMI DEVI

Amid reports that the UnionFinance Ministry is mullinga tax on commodity deriva-

tives in the forthcoming Budget,Union Food and Consumer AffairsMinister K V Thomas has written aletter to the finance minister, sayingthat any such move will distort thenascent market. "I would like to de-fer if there is an intent of introduc-tion of Commodity Transaction Tax(CTT) on the commodities deriva-tives market in the ensuing FinanceBill 2012," Mr Thomas notes in hisletter to finance minister.

Pointing out that a CTT on com-modity derivatives on the lines ofSecurities Transaction Tax (STT) willhamper growth of the organised com-modity market in India, the ministeradds: "In the era of reforms, intro-duction of CTT will act as a deter-rent and distort the market, having anadverse impact not only on stake-holders, but also the economy."

The minister also makes refer-ence to the views of then ConsumerAffairs Minister Sharad Pawar andPrime Minister's Economic Advi-sory Council (PMEAC) Chairman CRangarajan, who had opposed theCTT when it was announced in the2008 Budget.Stiff oppositionMeanwhile, commodity players arealso opposed to introduction of theCTT as they fear that it will diverthedgers and speculators to rampantdabba trading (illegal trading). Thetax will also impact the volume andliquidity of commodity exchanges,they warn. They argue that whilestock markets are to channel invest-

Misplaced taxTraders and many experts are unconvinced on the moveto introduce CTT on commodity futures trade.

ments for capital formation, com-modity markets are platforms forprice discovery and risk manage-ment. The commodity, before itcomes for trading on exchange plat-forms, is already taxed to the tune ofalmost 12 per cent, with taxes such

bourse, which became the country'sfirst commodity exchange to tap thecapital market recently, notes: "Theturnover has shifted from equity fu-tures to equity options and not com-modity futures as there is no STT inequity options. The equity cash seg-ment rightly attracts the STT or capi-tal gains as it is an income from in-vestments, but commodity deriva-tives are hedging instruments, whichprovide insurance against price vola-tility of commodities." He furtherpoints out that unlike equity markets,commodity markets do not have op-tions. Thus levying transaction tax oncommodity markets will causemigration of volumes to illegalplatforms.Adverse impactExperts note that revenue generationfor the government from the CTTmay be minimal as many studies con-clude that negative effects of trans-action tax outweigh revenue gains forthe government. Barring Taiwan, nocountry has transaction tax on com-modities.

The Ministry of Consumer Affairsregulates the commodities marketthrough the Forward Markets Com-mission (FMC). Currently, there arefive national and 18 regional com-modity exchanges. The total turnoverof India's commodity futures market,which has been in existence since2003, rose by 63 per cent toRs 144.31 lakh crore in the April-December period of the current fi-nancial year.

The commodity bourses have beenrecording unprecedented turnoversince their reintroduction in 2003.A section of policy-makers is mull-ing scrapping the STT on equity mar-ket transactions. Amid this move, aproposal to introduce the CTT seemsmisplaced.

A STRONG NO TO CTTMove to distort nascentmarket

Likely to give fillip to illegaltrading

Commodities taxed by manylevies before trading

Commodity bourses, unlikestock markets, platforms forprice discovery

Negative effects of CTToutweigh revenue gains forgovernment

as Mandi Tax, cess, handling costs andwarehousing charges, they add.

Nevertheless, a group of nationalstock exchanges is in favour of theCTT because it claims that volumesin equity futures segment have de-creased and shifted to the commod-ity segment. Reacting to the argu-ment of stock exchange representa-tives, a senior executive of the Multi-Commodity Exchange (MCX), thecountry's leading commodity

COMMODITY MARKET


At VARUN, we believe that the pursuit of excellence has deep roots in integrating the right values with

the right vision. A business conglomerate involved in diversified businesses, Varun aims to realise its

vision of becoming a true Indian MNC by creating sustained value for all its stakeholders, and in turn

bring value to India & its economic growth.

We are people with values, we are people who deliver value

Registered Office : 13, Shankheshwar Darshan, A. G. Pawar Cross Lane, Byculla (E), Mumbai - 400 027. India

Tel. : +91 22 23727400 / 23745858 Fax : +91 22 23748686 Website : www.varun.com

STAINLESS STEEL OIL & GAS GEMS & JEWELLERY COMMODITIES MINES & MINERALS WIND ENERGY

INDUSTRIES LIMITED

Where alues meet Excellence VWhere ssociation meets PotentialAWhere esponsibility meets GrowthRWhere nity meets IntegrityUWhere ecessity meets Innovation N

Rs 1,000-crore domestic air coolermarket, which is set to grow mani-fold with demand for industrial cool-ers turning out to be a game-changer.Symphony has also entered themuch-coveted pages of the GuinnessWorld Records by making the world'slargest functioning air cooler.

Extending its innovation fromproducts to processes, Symphonyhas ushered in a touch of novelty inall its operations. For instance, thecompany's annual reports have madea welcome departure from the usualdrab tomes and instead turned out tobe insightful reports, handy in sizeand concise in presentation. In fact,Symphony's annual report of 2009-10 bagged the excellence award forfinancial reporting from the Instituteof Chartered Accountants of India.

Besides, the VAVS model boostedthe company’ s growth. "This asset-light approach has increased our vi-ability and set in motion a virtuouscycle of growth and profitability,"points out Mr Bakeri. The new modelenabled Symphony’ s air cooler ca-pacity to rise eight-fold in five yearsfrom about 1,00,000 units in 2005-06 to 8,00,000 units in 2010-11.During the same period, thecompany's revenue and net profitgrew by a CAGR of 60 per cent and120 per cent to Rs 290 crore (fromRs 25 crore) and Rs 51 crore (fromRs 3 crore) respectively.

The air cooler market is governedby seasons and cyclical. "Seasonal-ity is a reality that the air cooler in-dustry cannot escape. Instead of get-ting trapped by seasonality, we mas-

tered it and the growth was inevi-table," adds Mr Bakeri. Symphonyemerged out of the seasonality trapby widening its global footprint. Withpresence across 54 countries, thecompany is able to enjoy a profitablesummer throughout the year.Big plansA little over two decades ago,Mr Bakeri accidentally forayed intothe air cooler business. But what fol-lowed was anything but accidental.With superior strategies, Symphonyquickly captured the air cooler mar-ket and established its leadershipfirmly.

Symphony has many big plans onthe cards. The company is targetingits revenue to cross Rs 500 crore by2012-13. It is planning to ramp upits distribution network by enhanc-ing the number of distributors from550 to over 800 plus in the next one-and-a-half years. It is also gearing upto increase the number of retail deal-ers from 10,200 to more than 20,000in the same period.

A cursory glance at the domesticair cooler market will show thatSymphony's big plans are certainlynot unfounded. The Indian rural mar-ket is passing through an interestingphase of development, with eco-nomic prosperity sweeping acrossthe countryside. The company isrightly tapping the value at the bot-tom of the pyramid to cater to thegrowing aspirations of the masses.Besides, the country's large, lucra-tive industrial and commercial mar-ket is waiting to be tapped and Sym-phony is leveraging Impco's technol-ogy to make deeper inroads here.

"Air Cooler is in our DNA and weunderstand it very well," notesMr Bakeri. The Symphony chief isnot exaggerating as air coolersare his burning passion. ThoughMr Bakeri did briefly flirt with otherconsumer durables, he soon returnedto his first love and the bond has onlygrown stronger.

CORPORATE REPORT

Symphony has successfully leveraged Impco's technology to gain access to thelucrative industrial air cooler market.

Air coolers at Baba Ramdev’s Patanjali Yog Pith in Haridwar

THE GROWTH TRAJECTORY

FY07 FY08 FY10 FY11 FY07 FY08 FY09 FY10 FY11FY09

20 FEBRUARY 2012 INDIA BUSINESS JOURNAL

TOTAL INCOME

Rs crore

42.1 73

.3

124.

2

190.

2

290.

5

NET PROFIT

Rs crore

2.2

14.9

29.3

37.0

51.2

Despite recent troubles, the US continues to remain the largest global market forIndian generics.

It, however, does not mention the fi-nancial implications of the recallexercise.

The tablets are manufactured andpackaged by Glenmark Generics In-dia and distributed by Glenamrk Ge-nerics USA only in the US. The com-pany points out that it discovered theerror when it received a complaintfrom a consumer, stating that she re-ceived one blister pack, in which thetablets were packaged in reverse or-der, and it immediately decided torecall the drug. The companyremains confident of supplying theproduct and adds that there is suffi-cient supply of unaffected lots of themedicine in the market to support

Santarus and Depomed to resolve thepending patent litigation involvingGlumetza in the strength of 1,000 mgand 500 mg. According to the com-pany, the settlement agreementgrants Lupin the right to begin sell-ing a generic version of Glumetza onFebruary 1, 2016, or earlier undercertain circumstances. The companyadds that the settlement agreementis subject to review by the US De-partment of Justice, the FederalTrade Commission and the US Dis-trict Court of California.

Lupin had received the tentativeapproval for generic Glumetza fromthe United States Food and Drug Ad-

ministration (USFDA) this January.The company points out that it is thefirst applicant to file an abbreviatednew drug application for Glumetza1,000 mg and 500 mg and as such isentitled to 180 days of marketingexclusivity in the US market.

Depomed had sued Lupin in 2009,alleging that Lupin's application tomarket a generic version ofDepomed's diabetes drug Glumetzainfringed its patents. According toIMS Health data, Glumetza tablets of1,000 mg and 500 mg had annual USsales of around $71 million for thetwelve months ending December2011.

Ranbax y's troublesRanbaxy Laboratories, India's largestpharmaceutical company, recentlyfiled a consent decree with a UScourt as a part of its settlement withthe American authorities regarding aban on certain manufacturing plantsoperated by the company in India. TheGurgaon-based company signed theconsent decree with the USFDA onDecember 20, 2011, which has beenfiled with the United States DistrictCourt of Maryland.

In 2008, the USFDA had banned30 generic drugs produced byRanbaxy at its Dewas (MadhyaPradesh), Paonta Sahib andBatamandi (Himachal Pradesh) units,citing gross violation of approvedmanufacturing norms. In the sameyear, the US Department of Justicehad moved a motion against the com-pany in a local court, alleging forg-ery of documents and fraudulentpractice.

Under the terms of the consentdecree, which is subject to approvalby the court, Ranbaxy has commit-ted to further strengthen proceduresand policies to ensure data integrityand comply with current good manu-facturing practices. Ranbaxy facesthe possibility of a permanent injunc-tion, which requires it to make fun-damental changes to its plants bothin the US and India. This will alsoprevent it from manufacturing drugsat certain facilities in the US.

The injunction follows the US Jus-tice Department's unprecedented ac-tion in filing a ground-breaking con-sent decree in the Maryland court atthe request of the USFDA. "This ac-tion against Ranbaxy is ground-breaking in its international reach. Itrequires the company to make fun-damental changes to its plants in boththe US and India," notes Tony West,the assistant attorney general for theJustice Department's Civil Division."Our commitment to ensuring thatthe drugs the American people relyon are safe, effective and manufac-

PHARMACEUTICAL


the demand.Relief for LupinMeanwhile, Lupin, the Mumbai-based drug-maker, has reached apatent litigation settlement agree-ment with US-based companiesSantarus and Depomed involving dia-betes drug Glumetza. The develop-ment, which can help the Indian com-pany launch its generic version of thedrug by 2016, will, however, be sub-ject to a review by the US Depart-ment of Justice, the Federal TradeCommission and other regulatoryauthorities.

The company and its subsidiary,Lupin Pharmaceuticals, have enteredinto the settlement agreement with

Indian drug-makers need to adopt stringent quality measures, given the hugeglobal demand for generic medicines.

tured according to the USFDA's stan-dards extends beyond our borders,"adds Mr West.

Ranbaxy reveals that under theterms of the consent decree, it iscommitted to further strengthen pro-cedures and policies to ensure dataintegrity and to comply with the cur-rent good manufacturing practices."The announcement is the next stepin the process of finalising ouragreement with the USFDA to re-solve this legacy issue," admitsRanbaxy CEO and Managing Direc-tor Arun Sawhney.

The consent decree requiresRanbaxy to hire an outside expert toconduct a thorough internal reviewat the affected facilities, to audit ap-plications containing data from thosefacilities and withdraw any applica-tions found to contain false data. Italso requires the pharmaceuticalcompany to set up a separate officeof data reliability within Ranbaxy andhire an outside auditor to audit theaffected facilities in the future.These are a part of a wide range ofactions to correct its violations andensure that they do not happen again.

The consent decree preventsRanbaxy from manufacturing drugsfor introduction to the US market andfor the President's Emergency Planfor AIDS Relief Programme at thePaonta Sahib, Batamandi, Dewas andGloversville facilities until drugs canbe manufactured at such facilities incompliance with US manufacturingquality standards. "Because this com-pany continued to violate currentgood manufacturing practice regula-tions and falsify information on drugapplications, the USFDA took theseactions in an effort to protect con-sumers," adds Dara Corrigan, theUSFDA's associate commissionerfor regulatory affairs.

According to the USFDA,Ranbaxy has agreed to relinquish any180-day marketing exclusivity that itmay have for three pending genericdrug applications. The company has

further agreed to relinquish any 180-day marketing exclusivity that it mayhave for several additional genericdrug applications if it fails to meetcertain decree requirements byspecified dates. The consent decreealso contains damages provisions tocover many potential violations ofthe law and the decree.

If the company submits an untruestatement in connection with any ap-plication filed with the USFDA,Ranbaxy will have to pay up to $3million in liquidated damages foreach such statement, not to exceed$30 million in any one calendar year.Once the consent decree is approved

by the court, it becomes a court or-der, with which Ranbaxy must com-ply or face contempt.Wake-up callThe regulatory rap on Ranbaxy comeswith severe ramifications to the com-pany, besides sounding a sinister noteof caution for the domestic pharma-ceutical industry. The unfortunatetake-away for the industry is that thelatest incidents strengthen the voiceof those who already view genericdrugs with suspicion.

The concern is if Ranbaxy, con-sidered the poster boy for Indian ge-neric drug-makers, can be in the dockfor violations, a question mark maywell be raised over other manufac-


INDIAN PHARMA Vs USASun Pharma faces$960-million damages fromWyeth over Protonixpatent violation.

Glenmark recalls sevenlots of oral contraceptive,owing to packaging error.

Lupin patches up withSantarus and Depomedover Glumetza patentinfringement dispute.

Ranbaxy signs consentdecree with USFDA overviolation of manufacturingnorms at Indian plants;likely to face courtinjunction.

turing plants of the company. Worse,the same brush could be used to tarproducts from other Indian compa-nies as well.

India boasts of the largest numberof USFDA-approved plants in theworld - more than 100 - outside theUS. This means that products madein these plants by Indian companiesor foreign ones that contract outwork to local manufacturers are safeto be sold in the US. Regulators inother global markets take theUSFDA's certification seriously. Soa black mark from the USFDA candeeply impact the Indian pharma'sglobal plans.

SHARMILA CHAND

Sankey Prasad, the chairman and managing directorof Synergy Property Development Services, seemsto be quite pleased with his company's progress.

The Bangalore-based property management consultancyhas grown by leaps and bounds since its inception in 2003.The company recently achieved a landmark of facilitat-ing frontline developers and builders and delivering 100million sq ft of property development across India andoverseas.

Starting off in 2003 with around 40 employees, theproperty management services provider boasts of a strongteam of over 700 people. With pan-India presence, theRs 300-crore company has spread wings overseas withoffices in Malaysia and the UAE. In 2008, BlackstoneReal Estate Partners, an affiliate of the BlackstoneGroup, picked up 35 per cent stake in the company.

Despite the trail-blazing growth, Mr Prasad is not rest-ing on his past laurels. He is looking at more than tri-pling the company's revenue to Rs 1,000 crore by 2015.With over 25 years of experience in real estate develop-ment in India and aboard, Mr Prasad has played a crucialrole in delivery a number of landmark projects. He isplanning to make Synergy a single point project manage-ment services company. In an exclusive interview withIndia Business Journal, Mr Prasad shares his views oninfrastructure and realty projects, challenges before de-velopers and contractors and benefits of modern tech-nology. Excerpts:

What, according to you, is the status ofinfrastructure projects?

In December 2009, the Union Statistics andProgramme Implementation Ministry released disturb-ing figures that of the 601 projects undertaken between2004 and 2009, only 54 projects were either completedon time or ahead of schedule. The factors for the delayinclude delay in supply of equipment, fund constraints,land acquisition issues and so on. I believe that projectpromoters, both in the government and private sectors,have to factor in mechanisation from the planning stageitself. Introduction of new technology in the construc-tion sector is entirely owner-driven. It is only when theydemand quality and are prepared to pay the price that thecontractors would have the incentive to adopt better tech-nology. It may, therefore, be necessary to introducehigher specifications and technical conditions in the bid-ding process to encourage adoption of superior technol-ogy. With increased usage, it is hoped that the executingagencies will be able to maintain project deadlines.

The challenges before the infrastructure sectorare as many as the opportunities. Could you throwsome light on how to deal with the growth pangs?

There is no doubt whatsoever that the infrastructuresector is getting attention, although delayed. Massiveinfrastructure projects are coming up across the coun-try, bringing along with them several challenges. Theyare not insurmountable. One of challenges the industryis facing is that of adhering to rigid time stipulations.This needs discipline and it is happening. Also, anotheraspect that is noticeable is that promoters now demandbetter quality and enhanced safety standards. One of thebiggest challenges is that of dealing with inventory, keep-ing in mind volatility, both in availability and price ofconstruction material. These issues can be dealt with onlyby a professional management approach to projects. Pro-fessionalism at all levels would be a major differentiator.

"Mechanisationwill expediteprojects"

SANKEY PRASAD

FACE TO FACE


As projects are becoming bigger and greater innumber, how can India keep pace with suchdevelopments? Do you think mechanisation is theanswer?

The shift in India towards mechanisation is not goingto be a paradigm one as there are several factors - social,cost, mindset, etc - that come into play. But sure enough,mechanisation is happening due to a fast-shrinking labourforce. It is estimated that the percentage ofmechanisation in India is around 20 per cent, while indeveloped countries, it is between 60 and 70 per cent.We see mechanisation happening here and there, but forIndia to be on the infrastructure map, there has to be rapidmechanisation. Mechanisation is addressed in the areas

of mass applicability so that there is less dependency onskilled labour.

Do you think that the perception of labour beingcheap and mechanisation costly is leading to theslow off-take of mechanised construction?

Yes, that is true to an extent. However, that perceptionis changing, forced by a shrinking labour force. Accord-ing to a World Bank study, labour crisis in the construc-tion sector is going to be massive with a shortfall ofskilled and semi-skilled workers in the medium termexpected to be in the range of 18 to 28 per cent. Thestudy paints an alarming picture of the shortfall going upto 65 per cent in the next decade. In such a scenario,certainly the way out is mechanisation. With the Centralgovernment insisting that the labour component in an in-frastructure project has to be 33 per cent, it opens upopportunities for those in the equipment business. Withdemand for labour going up, wages will also go north andrightly so. While it is a fact that there will be a marginalincrease in manufacturing cost with mechanisation, onehas to look at the benefits that accrue in the medium andlong terms.

Could you highlight the benefits of mechanisationfrom an Indian perspective?

Considering the surge of the Indian economy, the needfor rapid implementation of infrastructure projects can-not be understated. Mechanisation would accelerate thepace of overall infrastructure growth and development.One of the key advantages of mechanisation would be

"IT IS ESTIMATED THAT THE PERCENTAGEOF MECHANISATION IN INDIA IS AROUND20 PER CENT, WHILE IN DEVELOPEDCOUNTRIES, IT IS BETWEEN 60 AND 70 PERCENT. WE SEE MECHANISATION HAPPENINGHERE AND THERE, BUT FOR INDIA TO BE ONTHE INFRASTRUCTURE MAP, THERE HAS TOBE RAPID MECHANISATION."

that project management companies can have more con-trol over delivery time schedules over projects. As weare all aware, maintaining delivery time schedules is aproblematic area in the construction sector.Mechanisation would result in increased production andefficiency and, above all, enhance quality of construc-tion. Importantly, with the scale of infrastructure andhousing projects taking enormous proportions, there isno choice but to use equipment on a large scale. World-class batching plants, tower cranes, hot plant mixers,earth-moving equipment and stone crushers are readilyavailable and already in use. The advantages are speed,quality, strength and standardisation of construction,which are of paramount importance.


Lead by Example

Send feedback to [email protected]

Ganesh Mandalam during a dinnerdiscussion led him to be a part of themarketing services company's found-ing team.

In the past nine years, Mr Charihas managed multiple process andproduct cycles apart from boom-bustbusiness cycles for Xerago. Cur-rently, he drives consulting, clientengagement, marketing and brandingat Xerago. In a lively chat with IndiaBusiness Journal Mr Chari shareshis management style, strategies andwinning solutions. Excerpts:

Five management mantrasI believe in…Based on experience, I haveadopted five critical managementfunctions of planning, organising,staffing, directing and controlling,which are as follows:Plan and expect to be surprised:Despite the surprise element, you stillneed to plan because your brain needsthis dart board. Else, what would you becommitting your darts to? I refuse tostart without a plan, no matter what.Break your plan into small task goals.Expect course correction. Even whenthe sunny side is up, carry your umbrellaas it helps you either way, sun or rain.Be passionate about every task thatyou are working on: There is no excusefor not loving what you do and viceversa. Reward self and others for smalltask victories with a pep talk and ensurethat you and your team look forward toevery working moment.Keep an eye for talent: Each of us isgifted uniquely to do awesome thingsand some quirk of fate brings us on aplane, where we need to team up for aunified goal. People demonstrate nativeability to do certain things effortlesslyand one needs to be sensitive andcognizant of such talent. Base decisions

on meritocracy rather than hierarchyand refuse to suffer

mediocrity.Slot job instruction orinterpretation: Each

SHARMILA CHAND

A finance professional by ex-perience, Srinivas Chari isone of the co-founders of

Xerago, a direct and interactive mar-keting services company. Withstrong skills in finance, operations,technology and processes, Mr Charihas played an instrumental role indrawing up Xerago's business strat-egies and building its operations andtechnological capabilities.

Mr Chari, currently Xerago'sChief Marketing Officer (CMO),began his career as a business ana-lyst at ANZ Grindlays Bank and sub-sequently moved over to HDFC Bank.A chance encounter with Xerago CEO

job comes with its inherent demands.Unfortunately, a lot of jobs or tasks arestiff with objective outcomes that requireroutine rigour and not creative thinking.First things first, prepare yourself vis-a-vis whether you are working on a taskthat is an instruction or an interpretation.Lead by example: What you can't lead,you can't manage and what you can'tmanage, you can't control and finallywhat you can't control you can't grow. Ifyour team is sweating it out, lead fromfront and don't leave them in the cold.Don't preach austerity and fly businessclass, when your team is flyingcabin class.

Lot to learn from cricket…Cricket and, funnily every aspect ofthe game, is connected with work.Team work that leverages individualstrength, giving your best shot,fielding for your colleagues andfinally letting go of failures to revup again because you got tocontinue being in the game if youwant to win are common to bothcricket and work.Turning point in my life…The chance dinner meeting withGanesh convinced me that life istoo amazing to be wasted ona day job!Secret of my success…Decisions that make your timefulfilling…. For example, don'tplay golf when you love playingcricket, don't pretend readingPhilip Kotler at the airport loungeif you love Calvin & Hobbes.My philosophy of work…Love it or leave it! If you're notfully turned on, don't commityourself to doing that work becausesomeone else depends on you anddefinitely there is someone outthere who can do it far better andstill love it.

MANAGEMENT MANTRA

Srinivas ChariCo-Founder and CMOXerago


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MutualgainsWhite-label ATMs

facilitate banks to reducecosts and enhance

customer satisfactioneven as they expand

banking services tounbanked areas.

THE BANKINGSECTOR HAS SEEN

CONSIDERABLEGROWTH IN ATMs

DURING RECENT YEARS,WITH AROUND 87,000

MACHINESOPERATIONAL

ACROSS THE COUNTRY.HOWEVER, THEY ARELARGELY RESTRICTEDTO URBAN AND METRO

AREAS.

BANKING

KUMAR DIPANKAR

The Reserve Bank of India(RBI) has issued draft guide-lines for permitting non-

banking entities to set up, own andoperate money-dispensing machinesto accelerate growth and widerspread of automated teller machines(ATMs) in the country. The centralbank reveals that it has reviewed theextant policy on ATMs.

"It has been decided to permit non-banks to set up, own and operateATMs to accelerate growth and pen-etration of ATMs in the country. SuchATMs will be in the nature of white-label ATMs (WLAs) and will provideATM services to customers of allbanks," the draft guidelines add.WLAs are not owned by banks, butby private ATM service providers.Customers from any bank can depositor withdraw money from such ATMs.New normsNon-bank entities proposing to setup such service will have to have aminimum net worth of Rs 100 crore,the RBI notes. The apex bank hassought views and comments on thedraft circular from banks, authorisedATM network operators, non-bankentities and members of public.

The draft guidelines add that non-bank entities proposing to set upWLAs will have to apply to the RBIfor seeking authorisation under thePayment and Settlement SystemsAct, 2007. It suggests that only cardsissued by banks will be permitted tobe used at WLAs initially and accep-tance of deposits will not be permit-ted. "The WLA operator will be theacquirer for all transactions at theWLA and earn his fee accordingly,"it states.

The WLA operator will be permit-ted to earn extra revenue through ad-vertisement and by offeringvalue-added services. The advertise-ments placed on such ATMs will be

subject to the Advertising StandardsCouncil of India codes and otherregulations.

"Being non-bank-owned ATMs,the guidelines on five free transac-tions in a month for using other bankATMs would not be applicable fortransactions effected on the WLAs.The charges for the transactionsshould be displayed on the screenbefore the customer initiates thetransaction," the guidelines note.

According to the draft guidelines,the WLA operator will not be entitledto any fee from the issuer bank otherthan the inter-change fee payable tothe acquirer bank similar to thepresent bank-owned ATM situation."The WLA operator shall also not bepermitted to charge any fee fromcustomers for use of the ATM re-sources," the guidelines clarify, fur-ther adding that regulatory guidelinesrelating to compensation for failedATM transactions will apply to trans-actions at WLAs. "General guide-lines governing the operations of thebank-operated ATMs would applymutatis mutandis to WLAs," thedraft guidelines notes.

The operator will have one spon-sor bank, which will serve as thesettlement bank for all the transac-


CONDITIONS FOR WLA OPERATORS

Rs 100 crore minimum net worth for starting operations

Only cards issued by banks to be permitted initially

Operators allowed to earn extra revenue throughadvertisement and value-added services

Five free transactions a month norm not applicable fortransactions on WLAs

Charges for transactions to be displayed on screen

Operator only entitled to inter-change fee

Maintenance and servicing of WLAs sole responsibility ofoperators

Sponsor banks to be responsible for cash managementat WLAs

tions at the WLAs. Settlement of allthe transactions at the ATMs will bedone only in the books of the spon-sor bank through the ATM network,with which the operator has estab-lished connectivity.

The maintenance and servicing ofWLAs will be the sole responsibil-ity of the operator. The sponsor bankwill be responsible for cash manage-ment at WLAs. "For the purpose ofcash management, the sponsor bankmay enter into tie-ups with otherbanks for loading and reconciliationof cash at various WLAs at locationswhere it has no presence," the guide-lines propose.

While the primary responsibilityto redress grievance of customersrelating to failed ATM transactionswill vest with the issuing bank, thesponsor bank will have to providenecessary support in this regard, in-cluding making available relevantrecords and information, the guide-lines stipulate.Right moveThe banking sector has seen consid-erable growth in ATMs during recentyears, with around 87,000 machinesoperational across the country. How-ever, they are largely restricted tourban and metro areas. "Althoughthere has been about 30 per centyear-on-year growth in the numberof ATMs deployed in the countrysince 2008, ATM penetration on aper capita basis continues to be lesscompared with other countries. Thereis, therefore, an abundant scope anda felt need to deploy more ATMs,particularly in tier-III to tier-IV ar-eas of the country," points out theapex bank.

Banks love WLAs for a particularreason. The machines are said to re-duce per-transaction cost and evenhelp in reducing overall costs. Man-aging a payment channel like ATMsis a big problem for banks. If a thirdparty is ready to manage the opera-tions entirely, it reduces the capitalexpenditure for banks considerably.

Besides increasing banking services,WLAs will help sponsor banks to setup ATMs without incurring capitalexpenses for owning money-dis-pensing machine.

Except in the US, in all marketsthat allow WLAs, the share of suchATMs is no more than 25 per cent ofthe entire ATM network. They are al-ways complementary to bank ATMs.WLAs will bring more efficiency andhelp keep ATM set-up costs down. Inthe last two years, India has seen alot of brown-label ATMs oroutsourcing of ATM services bybanks. At present, brown-labelATMs are allowed in the country. Insuch cases, the hardware as well asthe lease is under the ownership ofthe service provider, while connec-tivity and cash handling and manage-ment are the responsibility of the

sponsor bank.Today, there are managed-services

outsourcing companies that performsuch functions as switching, cashmanagement and technical manage-ment for banks. About 50 to 60 percent of the ATMs in the country arealready outsourced in some way orthe other. The development of ATMservices in any market goes throughcertain phases. Banks use ATMs firstfor product differentiation andbranding and, in the next phase, forcustomer acquisition and retention.With outsourcing of ATMs gainingcurrency, it was only a matter of timefor the RBI to permit WLAs. Withseveral banks outsourcing ATM man-agement, WLAs are a natural exten-sion. It is a win-win situation for bothbanks and customers.


GLOBAL WRAP-UP

Apple announcesdividend, share buybackApple Chief ExecutiveOfficer (CEO) Tim Cookrecently fulfilled a long-standing desire of investors byinitiating a quarterly dividendand a share buyback that willpay out $45 billion over threeyears. The world's mostvaluable company will startpaying its first dividends since1995 - a regular quarterlypayout of $2.65 a share - inJuly and buy back up to $10billion of its stock beginning inthe next financial year.However, some fundmanagers expresseddisappointment, given a 1.8per cent dividend and itsmodest size versus a $98-billion war chest that Applehas accumulated sellingMacintosh computers andiPhones.


Encyclopaedia Britannica ends print editionE n c y c l o p a e d i aBritannica has said thatit will stop publishingprint editions of itsflagship encyclopaediafor the first time sincethe sets were originallypublished more than200 years ago. Thebook form ofE n c y c l o p a e d i a

Britannica has been in print since it was first published inEdinburgh, Scotland, in 1768. It will stop being available whenthe current stock runs out, the company said. The Chicago-based company will continue to offer digital versions of theencyclopaedia.

GM to buy 7% stakein PeugeotGeneral Motors (GM) plans toextend a $335-million lifelineto struggling French auto-maker PSA Peugeot Citroenas a part of a tie-up, whicheach hopes will aid turn-arounds at their strugglingEuropean car operations. GMwill take a roughly 7 per centstake in Peugeot as a part ofan effort by the Paris-basedauto-maker to raise cashthrough a share sale. Underthe deal, the two companieswould jointly buy supplies,build engines and, potentially,entire vehicles in Europe andelsewhere.

O'Neill to succeedParsons as Citi chairmanCitigroup Chairman RichardParsons, who helped the bank

Australia imposes 30% mining taxAustralia's parliamentpassed laws for a new 30per cent tax on iron ore andcoal mine profits recently,after a bruising two-yearbattle with mining compa-nies. The mine tax is con-sidered a major victory forPrime Minister Julia Gillardand her struggling minoritygovernment. The tax willaffect about 30 companies, including global miners BHP Billiton ,Rio Tinto and Xstrata, and aims to raise about $11.2 billion in itsfirst three years. The tax, which is being closely watched by otherresource-rich countries, is designed to spread the benefits ofAustralia's resources boom to other sections of the economy.

become a behemoth thatalmost collapsed in thefinancial crisis and then led itsrecovery, will be replaced byfellow director MichaelO 'Neill. Mr O'Neill will takeover after the bank'sshareholder meeting in April,New York-based Citigroupsaid recently. Mr Parsons, 63,spent 16 years on the board,becoming chairman in 2009after the bank's $45-billionbailout by US taxpayers. MrParsons's successor inherits aboard, grappling with a slumpin revenue, higher costs andnew regulations as CEOVikram Pandit pushes thefirm into emerging markets.

China slashes 2012growth target to 7.5%China recently pared thenation's economic growthtarget to 7.5 per cent from an8 per cent goal in place since2005. The cut in growth targetis a signal that leaders aredetermined to cut reliance onexports and capital spendingin favour of consumption. TheChinese government is alsoaiming for inflation of about 4per cent this year, unchangedfrom the 2011 goal, accordingto a state-of-the-nationspeech of Chinese PrimeMinister Wen Jiabao. "The

government will maintain aproactive fiscal policy and aprudent monetary policy," theprime minister added.

Greece clinches debtdeal with investorsGreece averted the immediatethreat of an uncontrolleddefault after winning strongacceptance from its privatecreditors for a bond-swapdeal. The deal will eat into itsmountainous public debt andclear the way for a newbailout. With eurozoneministers set to approve the$172-billion bailout, FrenchPresident Nicolas Sarkozydeclared that the Greekproblem had been settled.However, Germany said thatany impression that the crisiswas over would be a bigmistake.


UPS to buy TNT Express for $6.8 billionUnited Parcel Service(UPS) has agreed tobuy TNT Expresswith a sweetened bidof $6.8 billion. Thedeal, the biggest pur-chase in the UScompany's 105-yearhistory, is aimed atchallenging Deutsche

Post in Europe. UPS reached an agreement to buy Netherlands-based TNT Express after raising its bid for Europe's second-larg-est express delivery service. UPS, already the world's largestpackage-delivery company, will double in size in Europe andvault to equal footing there with Deutsche Post's DHL, the mar-ket leader.

Bentley drives into SUV segmentBentley has un-veiled plans to buildits first ever sportsutility vehicle(SUV) in a breakwith tradition forthe luxury car-maker. BentleyMotors ChairmanW o l f g a n gDuerheimer recently unveiled the EXP 9F design concept atthe Geneva Motor Show, branding it "a historic moment forBentley Motors". The EXP 9F is set to be the next big step inthe history of the Crewe-based company, which has expandedits model lines to three, alongside the bespoke Mulsanne andthe high-performance Continental GT and Flying Spur.

Joachim Gauck isGermany's new presidentJoachim Gauck, a rightsactivist and former Lutheranpastor, was overwhelminglyelected as Germany's 11th

post-war president recently.Mr Gauck, a former EastGerman like ChancellorAngela Merkel, emerged asthe consensus candidate torestore a sense of respectabil-ity and authority to the officeof the president. His prede-cessor, Christian Wulff,stepped down in Februaryafter being accused ofaccepting favours frombusiness executives when hewas governor of LowerSaxony. "With all of my heartand my strength, I will affirmthe responsibility that youbestowed upon me," saidMr Gauck after being electedto office.

Asia beats America,Europe in rich listThe number of Asian centa-millionaires (people who ownmore than $100 million indisposable assets) surpassedthat in North America for thefirst time, according to areport released by Citigroup inpartnership with KnightFrank. By the end of 2011,18,000 centa-millionaires werefrom South-East Asia, Chinaand Japan compared withabout 17,000 in NorthAmerica and about 14,000 inWest Europe, the bank said inits Wealth Report 2012.Asia is set to play a vital rolein the global economy as theeconomic centre continues itseastern shift. The report alsopredicted that the number ofAsian centa-millionaires willrise to 26,000 in 2016, 21,000for North America and 15,000for West Europe.

Deutsche largestEuropean bank againDeutsche Bank, adding assetsas other lenders trim theirbalance sheets, leapfroggedFrance's BNP Paribas toreclaim the title of Europe'slargest bank. Assets of theFrankfurt-based bank rose 14per cent to $2.9 trillion in2011, making it the largest

publicly-traded bank in Europefor the first time in five years.Chief Executive Officer JosefAckermann, who has calledproposals to limit bank size"misguided", will leave behinda balance sheet about 40 percent larger than in 2006 andmore than 80 per cent as bigas Germany's economy, whenhe steps down in May.

BMW to recall 1.3million cars globallyBMW is set to recall about1.3 million cars for checksbecause of a potential faultthat could cause electricalproblems or a fire. TheGerman car-maker said that itwas taking the steps because

of "remote" cases of anincorrectly-fitted battery cablecover in the boots of aprevious generation of 5 and 6Series models. BMW saidthat it was not aware of anyaccidents or injuries stemmingfrom the fault. The companyadded that the recall wouldapply to vehicles builtbetween 2003 and 2010 at aplant in Germany.

Swatch to buildfuel-cell carSwatch, the world's biggestwatch company, is looking atbuilding a car that runs onhydrogen and oxygen. "Wealready have a test-car with afuel cell," revealed SwatchChief Executive and Chair-man Nick Hayek in a recentinterview. The fuel-cellvehicle is not Swatch's firstattempt at building a greencar. In 1997, it teamed upwith Daimler-Benz to buildthe two-seater Smart, but thewatch company later sold itsshares to Daimler-Benz."Liquid hydrogen and oxygenare used as fuel, producingvery efficient combustion.What we don't know iswhether it would be cost-efficient to build one," addedMr Hayek.

READERS' LOUNGE

A reformer's take

As India completes 20 years of economicliberalisation, some concerns about the country'sfuture prospects as an emerging power are be-

ginning to be voiced. Often, these stem from the pasthistory of sharp swings inIndia's fortunes. Bimal Jalanhas closely followed the pathof India's economic policiesacross its changing trajecto-ries, from before the time theeconomy was liberalised tothe very present

Mr Jalan's new book is acompilation of articles thatwere all written during thelast 20 years, with the excep-tion of three prescient notesfrom the mid-1970s, high-lighting the need for eco-nomic reforms to fostergrowth. The principal thought

behind these essays is that in the past 20 years, India'scapacity to grow faster than ever before has increasedsubstantially because of its comparative advantage in re-lation to other countries.

However, the author points out that for the country toseize the opportunities that lie ahead, it is essential tobring about further reforms in the running of India's poli-tics and administration in order to ensure inclusive and

AuthorBIMAL JALAN

PublisherVIKING

Pages: 298

Price: Rs 599

EMERGING INDIA

Bimal Jalan offers interesting facets of the delicate relationship between politicaland economic reforms in India.

incremental economic growth. The book offers facetsof the delicate relationship between political and eco-nomic reforms in India.

The author attempts to find an explanation to scamsand corruption cases that have hogged the limelight overthe past decades in the political system of India. He ex-amines lacunae in our political system, which are pull-ing down economic reforms, and how we may have lostthe basic premise of the reforms on the way.

Although Mr Jalan has been an astute and conserva-tive central banker never given to belligerence either inaction or in words, he is more forthright when comment-ing on the polity - even though he is politically correctin never taking names. He praises India for having a de-mocracy and freedom and traces the growth of the sys-tem through four phases, with the present one beingframed with coalition parties, which is the crux of thecountry's political problems.

He rightly points out that there has been a tendencyfor the role of the Parliament to diminish over time andthe bureaucracy to get politicised, factors that have hin-dered governance. The growth of regional parties andcoalitions has blunted the accountability of governments,which have a limited time horizon in mind. Reforms evi-dently are required here.

The book quite extensively covers the banking sector,which starts with a recollection of the Asian crisis andhow India managed it through some conservative poli-cies followed by the Reserve Bank of India (RBI). Though

Smart tomeTax Shastra is a comparative account of the tax admin-

istrations of three countries - India, the UK and Bra-zil. The author has worked extensively in these countriesand uses his invaluable experience to advocate for Indiaa system that adopts the strengths and discards the lacu-nae of the three countries. He advocates a model struc-ture that maximises administrative efficiency andminimises the tax gap.

Mr Shome believes that an efficient tax administra-tion rests on three pillars: management and structure oftax administration, information and communication tech-nology and customer focus. He brings out the need fordefining objectives of tax administration that are spe-

cific and measurable with keyperformance indicators.

The author points out thatin advanced jurisdictionssuch as the UK, the adminis-trative focus is on minimisingtax gaps through gap analysisinstead of maximising rev-enue. He examines the seg-regation of roles of the UK'streasury and revenue and cus-toms departments and how itfacilitates the UK's focus ontax gaps and administration.He shares the UK experience, where every change in

AuthorPARTHASARATHI SHOME

PublisherBUSINESS STANDARD BOOKS

Pages: 230

Price: Rs 450

TAX SHASTRA


About the authorBimal Jalan is one of India's well-known economists. Hewas governor of the Reserve Bank of India from 1997 to2003. He has held several top positions in the Ministriesof Finance and Industry and in the Planning Commission.Educated at Presidency College, Kolkata, and Cambridgeand Oxford universities, Mr Jalan has penned severalthought-provoking research papers and critically-ac-claimed books.

he sounds self-laudatory on occasion, he highlights someof the concerns at that time that are, quite ironically, alsothe issues that germinated the recent financial crisis. Ina way, the RBI did display foresight in attempting tostrengthen these inherent processes.

Mr Jalan finally does a round-up of economic reforms,which actually were seen in the 1970s through automaticlicensing for imports and elimination of price controls,which moved across diversification, delicensing, broad-banding and so on. Although he is appreciative of the re-forms that have happened so far, he is critical of the tardypace of change in the public sector. There is novelty whenhe talks of the politics of reforms. Quite interestingly,he talks of a corruption multiplier, which is around fourin India's context in terms of value of destruction due toincorrect choices that are motivated by greed.

About the authorNeville Isdell is the former chairman and CEO of Coca-Cola, where he worked for 43 years. Mr Isdell took theworld's largest beverage company to new heights duringhis tenure. A management graduate from Harvard Busi-ness School, Mr Isdell serves on the boards of a numberof non-profit organisations, including the World WildlifeFund, and is a member of General Motors' boardof directors..

Neville Isdell was a key player at Coca-Cola for morethan 30 years, retiring in 2009 as its CEO after re-

building the tarnished brand image of the world's leadingsoft-drink company. This first book by a former Coca-Cola chief tells an extraordinary personal and profes-sional world-wide story, ranging from Northern Irelandto South Africa to Australia, the Philippines, Russia, Ger-many, India, South Africa and Turkey.

Mr Isdell helped put out huge public relations fires inIndia and Turkey, openedmarkets in Russia, EasternEurope, Philippines and Af-rica, championed MuhtarKent, the current Turkish-American CEO, all while liv-ing the ideal of corporate re-sponsibility.

When Mr Isdell agreed inMay 2004 to come out ofretirement to become theglobal beverage giant's chiefexecutive, little did herealise that many peoplewere keenly watching to seewhere his first overseas tripwould be to. To the surprise of many, however, he choseIndia, which Isdell felt offered great growth potential forthe company that was troubled by dipping sales volumes.

The book is unique in other respects, being the firsteffort by a CEO, whose more than 40-year career at thecola giant saw him deal with key decision-making, in-cluding the purchase of Thums Up and allied brands likeLimca and Maaza as well as a well-thought out corporatestrategy to re-enter India in the mid-1990s.

Mr Isdell's and Coke's story is newsy without beinggossipy; principled without being preachy. It is filled withstories and lessons appealing to anybody who has evertaken "the pause that refreshes."It's also a readable and importantlook at how companies can mar-ket and govern themselves moreethically and to great success.

Full of fizz

AuthorNEVILLE ISDELL

PublisherPAN MACMILLAN

Pages: 272

Price: 499

INSIDE COCA-COLA

About the authorParthasarathi Shome is director and chief executive ofICRIER, New Delhi. He was chief economic adviser toIndia's Finance Minister between 2004 and 2008 and laterserved as chief economist of the UK's revenue andcustoms department between 2008 and 2011. He hasauthored several books and research papers in variouspublications.

policy is supported bya 30-page report onall relevant aspectsof the policy. In short,the book is a mustread for tax authori-ties in India.


EXHIBITION PARTICULARS PERIOD CITY/ ORGANISER COUNTRY

MosBuild Design and decor 02/04/2012 to Moscow ITE Group05/04/2012 Russia www.mosbuild.com

Syroil Forum for oil, gas and 02/04/2012 to Damascus Allied Expopetrochemical industries 05/04/2012 Syria http://www.syroil.com

Pulp, Paper & Tissue New technologies & 02/04/2012 to Moscow Restec® Exhibition Companysolutions in paper industry 05/04/2012 Russia www.restec.ru

Buildex New developments in 03/04/2012 to Moscow Internationaler Messe-construction industry 06/04/2012 Russia www.imag.de

Modern Machine Shop Trade show on engineering 05/04/2012 to G Noida IMTMAindustry 08/04/2012 India www.mmsinfo.in

MosBuild Building and architecture 10/04/2012 to Moscow ITE Group13/04/2012 Russia www.mosbuild.com

SinoCorrugated South Developments in corrugated 11/04/2012 to Dongguan Reed Exhibitionsmanufacturing industry 13/04/2012 China www.sino-corrugated.com

China Electronics Fair Platform for electronics and 11/04/2012 to Shenzhen The Organizing Committee of ChinaICT industry 13/04/2012 China www.iCEF.com.cn

SinoFoldingCarton Electronics and ICT industry 11/04/2012 to Dongguan Reed Exhibitions13/04/2012 China www.sino-foldingcarton.com

Mechanical Electrical Mechanical, electrical and 12/04/2012 to Mumbai INIS Enterprisesand Plumbing Expo plumbing services 14/04/2012 India www.mep-india.com

Metal Buildings & Steel Technologies in building & 12/04/2012 to Mumbai INIS EnterprisesStructures Expo construction industry 14/04/2012 India www.mep-india.com

International Exhibition of Latest products & technologies 14/04/2012 to Shanghai Shanghai Yihan ExhibitionSurfactants & Detergents in detergent industry 16/04/2012 China www.iesdexpo.com

China Import and Industrial machinery and 15/04/2012 to Guangzhou China Foreign Trade CentreExport Fair equipment exhibition 19/04/2012 China www.cantonfair.org.cn

IFPEX Platform for hydraulic & 17/04/2012 to Birmingham DFA Mediapneumatic sectors 19/04/2012 UK www.ifpex-expo.com

Metal & Steel Innovations in metal and 17/04/2012 to Cairo Arabian German For Exhibitionssteel sectors 20/04/2012 Egypt www.arabiangerman.com

PaintExpo Opportunities in paint 17/04/2012 to Karlsruhe FairFairindustry 20/04/2012 Germany www.fairfair.de

Secutech New Developments in security 18/04/2012 to Taipei Messe Frankfurt New Era Businessand safety sector 20/04/2012 Taiwan www.secutech.com

Surface Transport Developments in 18/04/2012 to Mumbai Confederation of Indian Industrytransportation sector 20/04/2012 India www.cii.in

Chinaplas Latest technologies in 18/04/2012 to Shanghai Adsale Exhibitionplastic and rubber industries 21/04/2012 China www.chinaplasonline.com

Subcon China Manufacturing, metal 19/04/2012 to Chongqing Chongqing Exhibition Centerand plastic processing 21/04/2012 China www.subcon.cn

Diemould India Platform for die and mould 19/04/2012 to Mumbai Tool & Gauge Manufacturers Assn.industry 22/04/2012 India www.tagmaindia.org

International Risk New trends and ideas in risk 19/04/2012 to Almaty Eurasia Insurance CompanyManagement Conference management 20/04/2012 Kazakhstan www.theeurasia.kz

Paper Today Latest technologies in paper 20/04/2012 to Chennai Buysell Interactionsindustry 22/04/2012 India www.nprintech.com

Hannover Messe Industrial technologies, new 23/04/2012 to Hannover Deutsche Messeproducts and materials 27/04/2012 Germany www.hannovermesse.de

EVENTS CALENDAR


EXHIBITION PARTICULARS PERIOD CITY/ ORGANISER COUNTRY

DISCLAIMER: The list of events is indicative and dates mentioned are subject to changes. We request readers to contact respective organisers for details.

You may send us details of your forthcoming events for listing in this column to [email protected]

Mining World Russia New trends in metal mining 24/04/2012 to Moscow ITE Group& processing 26/04/2012 Russia www.miningworld-russia.primexpo.com

Nepcon China Electronics manufacturing & 25/04/2012 to Shanghai Reed Exhibitionsthe SMT industry 27/04/2012 China www.nepconchina.com

Green Lighting Shanghai Opportunities in LED 25/04/2012 to Shanghai Reed Exhibitionslighting industry 27/04/2012 China www.reedexpo.com.cn

Food & Bev Tech Platform for food & beverage 25/04/2012 to Mumbai Confederation of Indian Industryprocessing sector 27/04/2012 India www.cii.in

ChemProTech India Platform for chemical process 26/04/2012 to Mumbai Koelnmesse YA Tradefair technology & equipment 27/04/2012 India www.chemprotechindia.com

CRTS China Focus on rail transit 26/04/2012 to Beijing HNZ Industry Media Group market 28/04/2012 China www.crtschina.com

Chemspec India Fine and speciality chemical 26/04/2012 to Mumbai Quartz Business Media industries 27/04/2012 India www.chemspecevents.com

IPR Focus on parallel imports 27/04/2012 to Delhi ASSOCHAM27/04/2012 India www.assocham.org

India Warehousing Show Opportunities in warehousing 26/04/2012 to G Noida Manch Communications and supply chain industries 28/04/2012 India www.manchcommunications.com

Southern Asia Ports, Container-handling 26/04/2012 to Colombo Transport Events ManagementLogistics and Shipping technologies & products 27/04/2012 Sri Lanka www.transportevents.com

Coal Prep Coal preparation and 01/05/2012 to Kentucky Penton Business Media,processing industry 02/05/2012 USA www.coalprepshow.com

Fabtech Mexico Opportunties in Metal 02/05/2012 to Mexico City American Welding Societyforming and fabrication 04/05/2012 Mexico www.fabtechmexico.com

Glass World Products,solutions and 03/05/2012 to Cairo Nile Trade Fairstechnologies in glass industry 05/05/2012 Egypt www.nilefairs.com

Lightexpo Decorative, outdoor, industrial 05/05/2012 to Nairobi EXPOGROUPand lighting accessories 07/05/2012 Kenya www.expogr.com

Buildexpo Building construction and 05/05/2012 to Nairobi EXPOGROUPmaterial-handling sectors 07/05/2012 Kenya www.expogr.com

Bias Trends in manufacturing & 08/05/2012 to Milan F & M Fiere & Mostreprocess automation 11/05/2012 Italy www.fieremostre.it

PCIM Europe Power electronics and 08/05/2012 to Nuremberg Mesago PCIMapplications 10/05/2012 Germany www.pcim.de

Chemspec USA Fine and speciality chemical 08/05/2012 to Philadelphia Quartz Business Mediaindustry 09/05/2012 USA www.chemspecevents.com

Plast Developments in plastics and 08/05/2012 to Milan PROMAPLAST rubber industries 12/05/2012 Italy www.plastonline.org

China EPower Power generation, 09/05/2012 to Shanghai MP Zhongmao Internationaltransmission and distribution 11/05/2012 China www.epower-china.cn

Smart Gridtec China Focus on IT, automation 09/05/2012 to Shanghai MP Zhongmao Internationaland interaction 11/05/2012 China www.smartgridtec-china.com

Green IT Expo Power-saving and environment- 09/05/2012 to Tokyo Reed Exhibitions Japanresponsive IT products 11/05/2012 Japan www.grix-expo.jp

Inamarine Shipbuilding, offshore and 09/05/2012 to Jakarta PT. Gem Indonesiamarine machinery 12/05/2012 Indonesia www.inamarine-exhibition.net


STAR TALK

ARIES Mar 21-Apr 20

Your focus should be on getting back in shape,staying fit and getting rid of all your healthwoes once and for all. Expect eventful timeson the career and financial fronts too. A job

switch or a transfer is likely for professionals, whilebusinessmen may be recruiting new people. The Sun en-ters your money House by mid-April, making it an ex-tremely prosperous phase for you. Love may hover inyour proximity and grant you chances to flirt and enjoy.Have fun while it lasts, but don't expect much. Make timefor family.

It's time to adopt a wait-and-watch policy inthe love domain. Ganesha advises you to avoidor at least postpone taking any major deci-sions related to love or relationships at this

point in time. Allow your spouse or beloved some spaceand utilise the leftover time to pamper yourself. On thebrighter side, your health will be good and you may be intop shape. Be ready to receive compliments and ardentattention of the opposite sex. At work, you will do well.However, don't let others bully you. Money comes, butthrough a lot of hard work, so use your financesjudiciously.

TAURUS Apr 21-May 21

Friends and colleagues will form an integralpart of your life as you begin to increasinglyseek their guidance in myriad matters. Theywill only be happy to oblige as you'll prove

to be a good host. Your social life looks set to be rock-ing; love too may be on the horizon. As the Sun entersthe Taurus, you will see other domains of your life get-ting a boost, including marital harmony and career. Singlesmay be ready to seal their love bond. Ganesha advisesyou to keep an eye on lucrative opportunities.

May 22-Jun 21GEMINI

CANCER Jun 22-Jul 22

Alter your focus this month and fix your gazeon matters related to your health and fitness.On the career front, you have been makingsteady progress, though it may not be very

noticeable. Some of your planets are still retrograde andthat may be the cause of your dissatisfaction. As the Marsembarks on its forward journey from the 17th onwards,things will start clearing up for the better. Your financialposition will the same, but be careful as facing a crunchtowards the end of the month is possible. Eschew specu-lative transactions like the plague. Love life will improve.

Your yearly career peak begins this month.You will take full control of your life and yourfamily will heed your advice more than theyusually do. However, some planets will now

begin a retrograde motion, owing to which unwanted fam-ily issues may crop up. Careful thought is called for be-fore taking any decisions. Financially, things may be on astable ground and business partnerships are a possibility.Take care of your health though, especially after the 20th.

LEO Jul 23-Aug 23

Aug 24-Sep 23

Planetary positions may shortly begin a pro-cess of reinvention in your sign. You willspend more time in identifying areas need-ing new direction. It could be repairing your

relationships or focusing more on your work. Many ofyou may also pay more attention to your health and willfind it easier to get fitter this month. You realise nowthat before anything can be renewed, the problem itselfwill have to be rooted out. Your love life will be happy.Possibility of a sudden career change can't be ruled out.Most of the developments are likely to be positive.

VIRGO

It's time for some real action. The scene shiftsfrom planning boards to the practical field.Get rid of your old self and turn a new leaf.And for all your endeavours, stars will favour

you amply. Pay more attention to your outer life andworldly ambitions. You will see your popularity and all-round happiness surging. Planets related to your loveHouse are set to move forward, so don't hesitate in tak-ing a few important decisions. Increased sexual activi-ties and visits to gyms, spas and spiritual centres for per-sonal transformation are also likely.

LIBRA Sep 24-Oct 23

Your communication planet is the Saturn andit is retrograde this month too. So, continueexercising caution in communicating and re-lated matters. You are set to enter a yearly

love and social peak this month. A few propositions formarriage or even business may be in the offing. Your per-sonal charm will be heightened. Employ your powers ofpersuasion, especially when seeking help from others.You may notice a dip in your confidence. But don't worry.This vulnerability will, in fact, add to your charm.

SCORPIO Oct 24-Nov 22


Relationships look set to take a turn for thebetter. It's now best to forgive and forget theturbulent past and you may see your belovedalso following suit. Social stars also look

promising and the month holds some great opportuni-ties for the ones pursuing someone and for singles. Sud-den, unexpected career opportunities may crop up fromnowhere. Make the most of them. A romantic opportu-nity at the workplace is also a possibility now. However,dramas and sudden career changes in the lives of yourparents or parent figures may boggle you.

SAGITTARIUS Nov 23-Dec 21

CAPRICORN Dec 22-Jan 20

You will stumble upon new sources of in-come, which will boost your financial posi-tion. Interesting job opportunities, especiallythe ones involving foreigners or foreign

lands, may appear on the horizon. Your spouse or partnerwill be more supportive than usual. The moment you seeany sign of bad health, you will have to become extracareful about your hygiene and food habits. The last weekof the month may be especially stressful health-wise, butwith caution and care, you will be able to avert the worstof these health problems. Maintain emotional harmonyand don't take any major family decisions before the 11th.

The past month may have been slightly con-fusing for you, with miscommunication anddelays becoming the norm. Expect these ar-eas to improve this month, all thanks to Mer-

cury and Mars assuming their forward movement. Thisis the right time to engage in activities that have commu-nication at their core. However, you may experience alull of sorts on the career front. Don't let that stop youfrom working towards your goals. Health issues maybother you this month. Lie low and spend time with fam-ily and friends to give a boost to your personal power.

AQUARIUS Jan 21-Feb 18

Past efforts to resolve family disputes willbear fruits now. Positive planetary positionswill help you sort out complex matters. Thegood news is that money as well as job of-

fers may start pouring in during this period. You may hityour annual financial peak around the 14th of April and adream job or a business partnership too may be in theoffing. Your relationship with your spouse or love part-ner will benefit from benign stars. But you must con-tinue to avoid confrontations and ego clashes if you wantto strengthen your relationship. It's a propitious time forsingles too.

PISCES Feb 19-Mar 20

Adhik maas (extra month), isbased on a concept similar to

a leap year, there are 13 months inthe lunar calendar instead of 12months. The year 2012 is a leapyear and it also consists of theadhik maas. In the past two decades,there were five leap years - 1992,1996, 2000, 2004 and 2008.

Let's begin with the momentousyear of 1992. In 1992, the markethad closed on a positive note aftera lot of struggle. It was the sameyear, in which Harshad Mehta'sscam was later brought to light.The stock market had seen a cor-rection of 42 per cent due to thescam.

In 1996, the result again was notvery different. Investors receiveda marginally-negative result in the

Will 2012 buck bearish leap year trend?

stock market. The year 2000 too hadbeen a negative one for investors,with the dot.com bubble burst and theKetan Parekh scam.

The leap year of 2004 had, moreor less, been a positive year for thestock market. However, there hadbeen a lot of panic and chaos in themarket on May 17, 2004, as the UPA

came to power defeating the NDA.The stock market had tremen-dously fluctuated. The leap year in2008 due to global financial melt-down. In the earlier leap years, Ju-piter had been in a fire sign, thatis, Aries, Leo or Sagittarius. Thetremors that had been felt on thestock market in the past leap yearshad a strong connection with theJupiter-Fire combination. The cur-rent leap year of 2012 has thesame Jupiter-Fire combination.Going by the past trends, it can besafely said that whenever there isa combination of a leap year andJupiter in a fire sign, the marketdoes not favour the investors. Evenif the market is buoyant, therewould be some news that wouldrattle the market sentiments.

The leap year of 2012 has the sameJupiter-Fire combination of the past.


F A C T SF O R Y O U

The number of patent grants has almostdoubled every year since the new patentregime came into force in 2005.

Anant Goenka is the latest entrantto the young, elite club of India

Inc. Taking charge as managing direc-tor of Ceat, the over Rs 3,500-croretyre major, he joins the long list ofscions - including Wipro's RishadPremji, Godrej Properties' PirojshaGodrej, Piramal Healthcare'sNandini Piramal, among others - tak-ing charge of their family businesses.

The 30-year-old son of RPGGroup Chairman Harsh Goenka isyoung, but certainly not a novice.Having joined his family business at25, Mr Goenka has worked up hisway in many RPG Group companies.With an MBA from the KellogSchool of Management and a BSc ineconomics from The WhartonSchool, young Goenka had briefstints with Hindustan Unilever,Accenture and Morgan Stanley.

After his business studies,Mr Goenka has joined group com-pany KEC International as its corpo-

INDIAN PATENT OFFICE

In a recent landmark order, the Con-troller General of Patents, Designs

and Trademarks (CGPDTM) - alsocalled the Indian Patent Office -granted Natco Pharma a CompulsoryLicence (CL) to manufacture andsell generic version of Bayer'sNexavar, a drug used in treatmentof liver and kidney cancer. The CLhas been granted under Section 84of the Indian Patents Act, 1970.In fact, this is the first time thatsuch an order has been passedsince the Act was promulgated.

Nexavar is patented by its in-novator Bayer, the German drug-maker, which sells it at a little overRs 2.8 lakh for a month's dosagein India. Given the exorbitantprice, less than 9,000 patients are

sales to Bayer.The Nexavar order is a path-break-

ing development in the country's pat-ents history since the new regimecame into force in 2005. TheCGPDTM or the Indian Patent Of-fice reports to the Department ofIndustrial Policy and Promotion,which comes under the Union Min-istry of Commerce and Industry.The patent office has five main ad-ministrative sections - Patents, De-

signs, Trademarks, GeographicalIndications and Patent Informa-tion System.

The office of the CGPDTM islocated in Mumbai, while theheadquarters of the Indian PatentOffice is in Kolkata, with branchoffices in Chennai, New Delhi andMumbai. The Trademarks Regis-try is located in Mumbai and hasbranches in Kolkata, Chennai,Ahmedabad and New Delhi. TheDesign Office is located inKolkata, while the offices of The

distribution business. He was laterelevated as KEC's executive direc-tor in charge of supply chain and wasresponsible for manufacturing, pro-curement, planning, logistics andquality functions.

Mr Goenka joined Ceat, the flag-ship company of the RPG Group, ashead of its speciality tyre business.Soft-spoken and friendly, he was suc-cessful in changing the product mix,with greater emphasis on passengercar radials. He also took several ini-tiatives to improve the margins of thecountry's fourth-largest tyre com-pany. In January 2010, Mr Goenkawas promoted as deputy managingdirector of Ceat. Since then, he hasbeen pushing limits to grow the tyremajor across the world. In the sameyear, he successfully oversaw thecompany buying the global rights ofthe Ceat brand from Italy's Pirelli forRs 55 crore. With this, Ceat can mar-ket its products in Europe, Latin

KNOWLEDGE ZONE

rate vice-President in July 2007. Hewas in charge of KEC's telecom busi-ness, business development in NorthAmerica and integrated planning andmonitoring of the transmission and

AT THE HELM

estimated to be using it right now.With the CL, Natco plans to make themedicine accessible and affordableat Rs 8,800 a month. Natco has beenordered by the patent office to pay aroyalty of 6 per cent of the drug's net

ANANT GOENKA


Indian Patent Office, Kolkata

How are obstacles to charity created?

Dadashri: If a man is giving charity to a poor man andanother man interferes with his intellect (buddhi) andasks him why he is giving to the poor man, he createsan obstacle for himself by interfering. This obstacle willprevent him from getting any help from others when hecomes across hard times himself. In whatever situationa person creates an obstacle, that obstacle will surfaceand hinder him under the same situation.

What if the obstacle was created through mind andnot through speech?

Dadashri: The obstacles created through mind have an even greater effect.These effects will be experienced in the life to come, whereas the effects ofobstacles created through speech will give visible results and will be experi-enced in this life.

So, should we make sure that we do not have any negative thoughts?

Dadashri: That is not possible. You cannot help having such thoughts. How-ever, your job is to erase them. The decision not to have such thoughts iscalled nischaya. You cannot stop your thoughts, they will continue to come.You must, however, erase them before they create a new karma for yournext life. If you were to have a thought that a person should not be givenany help because of this knowledge that you received about creating ob-structions, you will have the awareness and you will erase that thought.This is similar to erasing the contents of a letter before you mail it. Then theproblem is solved. But without gnan, you cannot erase anything. A worldlyperson (who has not taken gnan) will never erase his mistakes in this way.On the contrary, he will say; "Such thoughts are necessary, you don't under-stand." Thus he only complicates his life further. By saying and maintaining

this, he doubles his faults and reinforcesthem. The ego does the wrong thing, itcauses harm to the owner. It is like slash-ing your own legs with an axe. It is self-destructive. From now on, you can eraseeverything through repentance. If you hurtsomeone through your speech, first makea decision that you should not speak thatway again and then ask for forgiveness.This will erase your bad deeds. Your initialnegative thought on charity is nowchanged to it is good to give charity. Inthis way, your initial thought gets erased.

To give charity, to help others, to have an obliging nature and to care forothers are considered relative dharma. One binds merit karmas by doing this.And by stealing, fighting and hurting people, one binds demerit karma. Wher-ever there are either merit or demerit karmas, there is no real dharma (thereligion of the soul). Real religion goes beyond both these dualities.

What should we do in this life to earn merit karmas for the next life?

Dadashri: Donate a fifth of your earnings to temples or spend a fifth of yourwealth for happiness of others. At least this much of an 'overdraft' will carryforward into your next life. In this life, you are enjoying the 'overdrafts' fromyour past life. Merit karmas of this life will carry forward to your next life.Whatever you earn as merit karmas in this life, will help you in your next life.

The Marwadis are businessmen and they have found the key to profits intheir business. They have a custom of donating 25 per cent of their incometo the darasars and temples every year. Do they need to be told to do any-thing? You can only harvest what you sow. How can you expect fruits with-out planting a seed? The Marwadis customarily give towards religion, gnandaanand other charitable causes. They do not give to schools or individuals.

Spiritual Corner

For more details, log on to www.dadabhagwan.orgAlso visit kids.dadabhagwan.org

PUJYA DADASHRI

Patent Information System and theNational Institute of IntellectualProperty Management are in Nagpur.The Geographical Indications Regis-try has been established in Chennai.

The CGPDTM awards patents andtrademarks to products of innova-tion. It supervises and administersrules related to patents, designs andtrademarks, the important types ofintellectual property rights that havebecome the cornerstone of any mod-ern, industrial economy.

The Patents and Designs Protec-tion Act, 1856, based on the BritishPatent Law of 1852, laid the founda-tion of patents in India. The IndianPatent Act, 1970, amended in 2005,ushered in the new patent regime andunveiled product patent instead of theearlier process patent. The numberof patent grants has almost doubledevery year since 2005, aggregatingto 37,334 patents as of March 2010,the latest official data available.

America and Africa, where it wasearlier exporting tyres under Alturabrand.

"I want to make Ceat among themost profitable tyre companies inIndia in the next five years bystrengthening the Ceat brand and im-proving operational efficiencies,"stresses an upbeat Goenka. An avidsquash player, who also enjoys run-ning and travelling, the new Ceat chiefhas a lot of work cut out for him.

The company is betting big on thenewly-built, Rs 650-crore Halol ra-dial tyre plant, which can make3,00,000 passenger car and 40,000truck tyres a month. With interestrates and raw material costsshooting up, there is also the chal-lenge of maintaining margins andboosting bottom line. Meanwhile,Mr Goenka is drawing up plans andstrategies to keep Ceat rollingswifter and swifter.

MONEY MATTERSEDITED BY DR NIRU MAA


HOT SEAT


How do you define yourself?A helping person

What is your philosophy of life?Be happy and keep happy

What is your passion in life?Work for growth in a positivemanner

Your management mantra?Do things now

The business leader you admirethe most…Pankaj Patel, the CMD of ZydusCadila Healthcare

Your strength…Untiring perseverance

Your weakness…Expecting results too fast

What upsets you easily?Work done untimely

Your kind of a movie…Mainly comedy

Any favourite one…Zindgi Na Milegi Dobara

Any favourite places you like togo for dining…House of Ming, a Chinese restau-rant of Taj Mahal Hotel in Delhi

Your favourite gadget…BlackBerry

One thing you cannot travelwithout…Cell phone

Your stabilising factor…Pranayam

Your mantra for success…Work hard with focus

Your dream…To become the most leadingindustrialist and philanthropist

You to be remembered as…Philanthropist

Ten years from now, where dowe see you?As a leader of a globalmanagement forum

A first-generation entrepreneur, Rajiv Vastupal has over the last three decades set up the Rajiv Group, a large,diversified entity, encompassing a dozen companies in trading and manufacturing. Starting out at the young age of22 with a mere Rs 39,400 as his initial investment in 1979, the group has scaled great heights and posted revenueof Rs 550 crore in 2010-11. A successful businessman apart, Mr Vastupal is active in philanthropy and has beencontributing to several social and charitable causes. A prominent figure in trade and business circles, Mr Vastupalis equally passionate about health and fitness. Exercises, including aerobics every morning and swimming everyevening, are an essential part of his daily regimen. In an exclusive interview with Sharmila Chand, Mr Vastupalshares his views on life, business, interests and passions. Excerpts:

Send feedback to [email protected]

Your kind of music…Drum, guitar and Indian old classicalmusic

Favourite actors…Dev Anand

Favourite holiday destination…Zermatt, Switzerland

Golf or Bridge or…Billiards

Formal suit or casual attire…Casual attire

You are a tough, serious boss or…Motivating and delegating

What do you enjoy the most in life,generally?Exercise with music

How do you de-stress?Music, exercise and swimming

Your fitness regime…Regular yoga and aerobics andswimming

Your favourite cuisine…Gujarati, Chinese, Thai and Italian

RAJIV VASTUPALCMD, RAJIV GROUP

FIGHTING FITFIGHTING FIT

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