Wednesday, October 31, 2007

High integrity and a record of accomplishment - The basic traits

Wanted, women directors

“It is not enough for best-employers and HR (human resource) leaders to simply focus on increasing the ‘number’ of women in the workforce — either at the entry-level or at the mid-executive level. The priority should also be on including women in top-management positions at the board of directors, president-level or CEO-level.”

Thus reads a snatch from the ‘mandate’ of ‘Forum for Women in Leadership’ (WILL Forum), which is to hold its launch meeting on November 23-24 at the Infosys Technologies campus in Bangalore, with about 40 women business executives in leadership positions nominated from across corporate India expected to participate in ‘an open dialogue on their aspirations, opportunities, nurturing mindsets, mentoring, and harnessing the rewards of collective thinking for improving the workplace.’


Thursday, October 25, 2007

PNs have been exploding in India

All you wanted to know about PNs

A search for PN on yields 37 results, beginning with ‘pain’ (physiology). The rest include part number, Pitcairn Island, planetary nebulae, pseudo noise, peripheral neuropathy, practical nurse, proton neutron, portable network, primitive notion, and project nothing.
“Participatory note or PN was a fairly unknown term to most people, including those who invested in the stock market,” observes Mr Sunil Rongala , a PhD in economics, in a discussion with Business Line on the currently hot topic.
It has been about a week since the market regulator SEBI (Securities and Exchange Board of India) decided to crack down on PNs. And suddenly we realised the power that PNs have over the Indian stock market. “They (the holders of PNs) decided to go in for a mass sell-off after SEBI decided to impose sanctions on them,” recounts Mr Rongala.
Excerpts from an e-mail interview, in which he dwells upon what it is about PNs that has inspired so much fear and loathing.

“Look for the hated, the unloved and the distressed business.”

‘Indian market is overridden with greed’

Nobody likes sober messages when the Sensex is hurtling from one high to another, and an eager crowd cheerily goads the index on for the ascent to the next K.
But Mohnish Pabrai, Managing Partner of the US-based Pabrai Investment Funds ( ), is different. He sombrely observes, “Currently the Indian market is overridden with greed and there isn’t much fear. The Sensex is up over 5x in four years.”
Pabrai is the author of The Dhandho Investor (Wiley, 2007), a book that distils ‘the Dhandho capital allocation framework of the business savvy Patels from India’ and guides the intelligent individual investor in applying the framework successfully to the stock market. For starters, dhandho (pronounced dhun-dhoe), literally translated, means “endeavours that create wealth,” says Pabrai. The Hindi word dhanda, as you may know, means ‘business’.

Tuesday, October 23, 2007

PNs in a sense are extra-territorial instruments

Participatory note policy driven by a short-term view of market

The proposed policy changes about PNs (participatory notes) seem to be a reflex action in an attempt to contain the inflow and thereby the Sensex that seems to be gaining momentum of a runaway train, says Mr Vipul R. Jhaveri, Partner-Direct Tax in Deloitte, Haskins & Sells, Mumbai.

The proposal of the market regulator SEBI (Securities and Exchange Board of India), as you would remember, triggered an immediate reaction in the market, causing a big fall in the indices in the opening session, and trading had to be suspended for an hour. The Finance Minister had to quickly make a statement to pacify the market sentiments, and he has since then been, in response to high volatility in the bourses.


Three requirements for a VPN solution are: authentication, integrity and confidentiality

Hackers are just a step behind

Like many organisations, American Century Casualty Co (ACCC), an insurance company based in Houston, US, used to insist that its network access be restricted to users on the corporate LAN (local area network), as narrates Charlie Rubin in a recent article in Communications News (

ACCC had to think of a policy change ‘during the year-end holiday break in 2006, when some of the state-wide claims managers asked if they could do some work from home’. However, Stephen Gentilozzi, the company’s IT manager, had no real solution for the managers at the time.

Employees are the lifeline of any organisation

Psychometric tests minimise human bias in selection

What are the qualities that an employer looks for in a prospective employee? Employers usually look for traits specific to ‘that’ particular role. For instance, to hire a bank professional at the administrative level, you would l ook for good numeric skills, high attention to detail and being agreeable; while for a senior level manager you might look for strategic and independent thinking, result-orientation, ability to work under pressure, etc.

“Having a well-planned list of desired characteristics goes a long way in ensuring that the process of assessment is sound. This is what makes an assessment valid and objective,” says Mr Vikas Dhawan , Psychometrician at The Psychometrics Centre, Cambridge Assessment, UK (, sharing his personal views with Business Line, over the e-mail.

Excerpts from the interview.

There’s an important distinction between a ‘workship’ and a friend

‘Work relationships, a key concern today’

Can you be friends with your boss and should you be friends with your boss? What about someone you meet at work and become friends with — does that friendship have different rules and considerations because you work together, compared to a friendship that is personal or with someone you met when you were both in school together? How can friendship help you advance in your career without being called an opportunist?

These are just some of the questions that Jan Yager explores in Who’s that Sitting at My Desk? (

A PhD in Sociology from the City University of New York, Yager is adjunct sociology professor in the University of Connecticut, Stamford campus. On, you will find a long list of books she has authored.

Excerpts from an e-mail interview:

Thursday, October 18, 2007

ODIs are generally issued by foreign securities brokering houses and foreign banks

If ODI is not one-day international, what’s it?

Chennai, Oct. 17 Participatory notes or PNs are back in the news, with the SEBI (Securities and Exchange Board of India) issuing a draft discussion paper on ODIs (offshore derivative instruments).

If that is too much of an alphabet soup to start, on a day that saw the markets in a tizzy, here is Ms Bahroze Kamdin, Director, BSR & Co, a firm of chartered accountants, explaining things about the new animal that has been let loose on the bourses!

Excerpts from an e-mail interview.


Never ‘marry’ the stock. Divest at the right time to reap the profits.

‘You are part of the herd if you act on market rumours’
When the Sensex is galloping from K to K, at the rate of more than 1,000 points a week, there is little time to invest in thinking.
“Invest in the human soul. Who knows, it might be a diamond in the rough,” exhorts Mary McLeod Bethune, but her plea is sure to fall on deaf ears, especially when bulls move faster than usual on Dalal Street these days, rough-riding the bears, and allowing the Doppler effect to play out on any cautionary suggestions.
For the few who may like to take time off for heeding to counsel, here is Ranjit Kapadia, a Mumbai-based investment expert, who shares his insights with Business Line over the e-mail.

Most crises occur due to liquidity needs

Market crises have a life of their own, separate from value
“While it is not strictly true that I caused the two great financial crises of the late twentieth century — the 1987 stock market crash and the Long-Term Capital Management (LTCM) hedge fund debacle 11 years later — let’s just say I was in the vicinity.”
With these solemn lines begins A Demon of Our Own Design – Markets, Hedge Funds and the Perils of Financial Innovation (Wiley, 2007), by Mr Richard Bookstaber.
“If Wall Street is the economy’s powerhouse, I was definitely one of the guys fiddling with the controls. My actions seemed insignificant at the time, and certainly the consequences were unintended…”
Arguing that market crises — like what the US has seen with the subprime mess — are an inevitable result of the market’s penchant for leverage and its abuse of derivatives and other innovative securities, the Demon created a stir on Wall Street.

Wednesday, October 17, 2007

Automotive industry is set to have a major impact on India’s future economic growth

Increased dieselisation in cars

What is the most significant trend in the Indian passenger car segment? The increased adoption of diesel, says Mr Sanjay Sondhi , Managing Director, Honeywell Turbo Technologies.
“In Europe, more than 50 per cent of passenger cars are diesel, and all indications show that India is following this trend,” he adds, in a recent e-mail interaction with Business Line. Mr Sondhi estimates the penetration of diesel vehicles in India to increase from 37 per cent today to 42-45 per cent over the next 5 years.
Two other major trends that he sees are:
The increasing popularity of small-sized diesel engines, driving both Indian and global OEMs (original equipment manufacturers) to develop low-cost cars to bridge the price gap between the two-wheeler and the current range of small cars available in the market; and
A significant share of the three-wheeler commercial vehicles being upgraded to four wheelers such as the Tata ACE, driven by tightening emissions and safety regulations.

Excerpts from the interview.

Tuesday, October 16, 2007

Banking services to the unbanked rural population

Thumbs up

One in every nine persons on earth is a rural Indian, nearly 70 per cent of Indian villagers do not have a bank account, and tapping them would require multiple banking channels, says P.P. Manjunath Rao, Country Manager Sales, Financial Solutions Division, NCR Corporation.

“Low-cost ATMs (automated teller machines), smart cards and mobile payments are some of the solutions,” he adds in an e-mail interaction with eWorld. “The recent directive from the Reserve Bank of India (RBI) on financial inclusion (‘banking for the common man’) is a key driver for the growth of such solutions in India.”

A clean power

‘Nuke deal has come at the most opportune time’

Chennai, Oct. 11 The Indo-US nuclear deal is the only way to increase the share of nuclear power in the total electricity generation in the country, says Dr R. Kalidas, former Chief Executive of NFC (Nuclear Fuel Complex), Hyderabad.
“I also strongly feel the deal will be good for many companies in the country. Once the gates for nuclear trade open, many foreign companies will come in with their merchandise,” he adds, in a recent e-mail interaction with Business Line.

“This will increase competition for Indian firms. Even NFC, the only manufacturing unit in India for nuclear fuel and many hardware items, may not be spared from competition.”
Dr Kalidas is of the view that NPCIL (Nuclear Power Corporation of India Ltd), the public sector undertaking that spearheads India’s nuclear power programme, may then look for other suppliers.

Stock market indices reflect the state of the economy in the longer run

Honestly, who is making money these days?
Like Cade in King Henry VI, you may fear ‘neither sword nor fire,’ but being ‘whipped three market-days together’, as the Bard’s Dick says, could be real trouble.
To help, Boult volunteers in Pericles, Prince of Tyre, “Shall I search the market?” It is doubtful, though, if Boult’s exercise would yield answers that you badly look for, especially if, like Launce in The Two Gentlemen of Verona, you are frightened of ‘the hangman boys in the market-place’ who had stolen ‘the other squirrel’!
So, we go to Krishna Kumar Karwa, Managing Director of Emkay Share & Stock Brokers Ltd, Mumbai, to get clarity on pressing questions about the soaring bourses.
He is a chartered accountant with about two decades of experience in the capital market across research and risk management, portfolio and corporate advisory, who co-founded Emkay in 1995 along with Prakash Kacholia.
Well, here is Krishna handling, over the e-mail, a rapid volley of posers from Business Line.

`No impulsive action; only deep breathing!'

Seven axioms for investors

Retail investors must understand that the present frenzy on stock markets is largely confined to big companies, and that the high prices are due to massive FII (foreign institutional investor) buying in large companies, cautions Mr Kanu Doshi, a Mumbai-based chartered accountant.
“FIIs are drawn to our capital markets because of our strong Indian rupee and buoyant economy coupled with the weakening US dollar,” he explains, during the course of a recent e-mail interaction with Business Line.
“By definition, big size companies are part of all indices and hence the unabated rise in the Sensex. Exit from big size companies for a large investor is much smoother than from smaller companies, should it become necessary on account of any unexpected contingency.”
While there is no sign of a scam or a bubble at this stage in the markets, small investor should be well advised to refrain from buying anything at these high prices, insists Mr Doshi. His counsel to the retail investor is to book profits by selling 50 per cent of holdings, only to repurchase at a correction that is to come sooner than expected.

Excerpts from an interview.

The sole selling agent promotes the sale of the lottery tickets

Will the lottery agent fall into service tax net?

A bumper draw of sorts is currently on, with more than Rs 2,000 crore as the sum at stake. And, the amount seems to be only a teaser of what can be bigger jackpots that the taxman is gunning for, from the lottery industry.
“The lottery industry has been contributing significantly to the exchequer of the governments, particularly the States running the lottery,” observe Mr D. Arvind and Mr J. V. Niranjan, Chennai-based indirect tax experts associated, as partner and senior manager, respectively, with BSR & Co, a firm of chartered accountants.
“State governments have been angling for a slice of the pie by seeking to levy sales tax on the sale of lottery tickets happening within their State,” they add, in a recent e-mail interaction with Business Line.

Friday, October 12, 2007

In Brazil, the shareholders are not responsible for the company’s liabilities.

On how to set up business in Brazil

With qualified professional advice, a well-prepared market plann and a good tax strategy, investments in Brazil can be rewarding, say Mr Gilberto Ayres Moreira and Mr Fabio Appendino , Partner and Associate attorney-at-law, respectively, in Gaia, Silva, Rolim & Associados (, a law firm based in Brazil.

The firm is active in several areas of corporate legal services, “such as environmental protection, restraint of trade, mining, shipping, aviation, oil and gas, finance, insurance, communications and telecommunications regulations.” Apart from a team of more than one hundred professionals, in key Brazilian cities like São Paulo, Rio de Janeiro, Belo Horizonte, Curitiba and Brasília, the firm also draws on the support of correspondents in many foreign countries.

Tuesday, October 9, 2007

Effective advertising helps build the relationship between a company and its customers

‘Brand-asset due diligence needed in acquisitions’

Hutch became Vodafone through a series of high-voltage ads across media, recently. The pug has been retained, assures Vodafone, as an ‘endearing symbol’ that signals the continuation of ‘the good things’ even as the new company builds on ‘strong fundamentals’. But it may be some time before the ne w brand name gets etched in the minds of people, and the customers connect with the old pug in its new house. For, rebranding is always a major exercise, especially in the context of big-ticket acquisitions that result in brand changes, as happened in the case of Hutch.

Man’s ambitions are reflected in one’s style of time management

Work-life balance: The crux of time management

Time management is life management, says Ramesh K. Arora. “Managing time better, therefore, implies a philosophy and a strategy to apportion equitable time for physical, mental, emotional, spiritual, familial, social and professional demands and responsibilities of life, and to get the best value of time through proper planning and prioritising,” he explains, in a recent e-mail interaction with The New Manager.

Arora, who has a Masters in Public Administration and a PhD from the University of Kansas, Lawrence, US, is Chairman, Management Development Academy, Jaipur. He has been a consultant and trainer in the fields of management, government systems and behavioural sciences for the past three decades. He is the author of Time Management: For Happiness and Success ( Excerpts from the interview:

Friday, October 5, 2007

An asset is considered impaired when its book value becomes irrecoverable

Impairment drill that churns oil and gas accountants

Chennai, Oct. 4 Even as the field personnel of oil and gas (O&G) companies continue to battle with many complexities to get us the fuel, their accounting colleagues are toiling with a different difficulty: how to apply the Accounting Standard on asset impairment.

“The requirements of the standard create many complications for companies in the O&G sector, not the least of which is the application of the CGU (cash generating unit) concept,” says Mr Sandeep Sharma, a Senior Professional in a member firm of Ernst & Young Global. “Given that each operation is unique, it may be some time before a clear industry practice is established.”

While the requirements of IAS (International Accounting Standard) 36, and more recently AS 28 (of the Institute of Chartered Accountants of India) on impairment of assets have endeavoured to clarify general ambiguities and provided direction in this matter, the finer points are yet to be understood and documented in the form of a complete accounting policy, adds Mr Sharma, during a recent interaction with Business Line.

The two broad divisions of Intelligence

Good intelligence prevents major calamities

A book that seems to have touched raw nerves is “India’s External Intelligence: Secrets of Research and Analysis Wing (RAW)’’ ( by Major General (Retd) V. K. Singh. It discusses “several lacunae in the functioning of the country’s top intelligence agency” and calls for “an increase in accountability of our top intelligence agencies” since “the Indian taxpayer has a right to know how his money is spent”. And, now, the book’s publisher and the author have come under the lens of the Central Bureau of Investigation (CBI).

How does the “right to know” work with regard to intelligence? “Most countries have a 30-year period after which all documents are automatically declassified. If this were not so, we would have never come to know about Enigma — the Ultra Secret code being used by Germany in the Second World War which the Allies had broken,” answered Mr Singh, when recently interacting with Business Line, over the email.


Thursday, October 4, 2007

Most of our real estate companies are still closely held or family run

Real estate developers looking at newer financing options

Big residential townships, SEZs (special economic zones) and mega retail malls are prominent among the recent trends in the real estate landscape. To cope with these mega developments, the developers are looking at various options of financing, says Mr R. Venkatesh, Regional Director, Transaction Advisory Services, Ernst & Young, Chennai.

"While debt funding, private equity (PE), IPO (initial public offer) route shall continue to happen, though at realistic and reasonable valuations, new avenues such as listing of REITs (real estate investment trusts) at overseas exchanges are expected to attract developers' attention to plan their fund raising exercise," he adds, during an email interaction with Business Line.

The B2B brand stands for quality, reliability, and performance

Business-to-business or B2B marketing may not be visible to most of us, happening as it does away from the barrage of ad spots on primetime TV.

For starters, B2B means ‘business that sells products or provides services to other businesses,’ as defines. “For example, a company that makes chicken feed would sell it to a chicken farm, another company, rather than directly to consumers,” explains Wikipedia. A business-to-consumer (B2C) transaction, in this example, would be ‘a consumer buying grain-fed chickens at a grocery store’. Business-to-government or public administration is B2G.

“B2B marketing is generally considered to be more complex than B2C marketing, as there is often more than one decision-maker involved in a B2B sale on the buyer’s side,” notes

What then is the most influential factor in B2B marketing strategy? “It would be easy to say something like ‘personal selling excellence’, or ‘managing your distributors effectively’, or other similar things,” say Ross Brennan, Louise E. Canning and Raymond McDowell, the authors of Business-To-Business Marketing (

Monday, October 1, 2007

Rupee-dollar movement continues to be an issue of high criticality for Indian exporters

‘Rupee appreciation here to stay’

When everything is rising — rupee, wage costs, attrition, billing rates, etc — isn’t the IT industry facing a tough time?

“Yes, but this is one of the realities of globalisation and hence, while it may be a cause of concern in the short term, it is definitely not wholly unexpected,” says in answer, Rajiv C. Mody, Chairman and Chief Executive Officer of Saske n Communication Technologies Ltd, a telecommunications software services and solutions company.

“We have been enjoying the advantages of the difference till now, and eventual balancing out was natural. Rupee appreciation is here to stay and likely to appreciate further,” he adds, in a recent e-mail interaction with eWorld.

One should keep focus on action and process rather than fruits or results

To grow organically, corporates must have ‘soul’

What is a company? Is it a building made of brick and mortar, structure, systems, plant and machinery? Or is it people? These are the questions that Moid Siddiqui asks in a recent interaction with The New Manager. And he answers: “People make a company, for this reason it is called a ‘living organisation’. If the corporate world is to grow organically, it must have a soul. An organisation without soul, without people is a dead body, and I am sure, no one would like to lead the dead ones.”

Siddiqui is the author of Corporate Soul ( and managing director of the Secunderabad-based Intellects Biz, an organisation into management education and consulting that he floated after leaving the Nagarjuna Group as Executive Vice-President. He has worked in senior and board level positions in BHEL, NHPC, CCI, HMT and BEML. Excerpts from an e-mail interview:

The export rules are specific to services that are “taxable”

How ‘export of services’ is mired in tax complexity

Service exporters have something more to worry about than rupee appreciation: the lack of clarity on the service tax front.

“Not something that augurs well for the growth of the Indian economy,” says Mr Satya Poddar , indirect tax partner, Ernst & Young. “More so as the service sector has been the key driver of our growth.”
To send a positive signal to the exporters, the Ministry of Finance (MoF) needs to simplify the rules for defining export of services, and for granting timely refunds of input taxes, he adds, in a recent email interaction with Business Line.