Monday, June 30, 2008

'Today’s youngsters have en entire plethora to choose their career options from'

‘Employees spill the beans in exit-interviews with outsiders’

He was one of the first, and also among a few, who made it big. How he started off with a ‘princely’ sum of Rs 60,000 way back in 1991 to start of Ma Foi is a part of folklore in the HR industry. On the way, he helped create career opportunities for more than 175,000 individuals in 35 different countries and has coordinated with over 204 Fortune 500 organisations. Yes, we are talking about none other than Mr K. Pandia Rajan, Managing Director, Ma Foi Management Consultants.

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Thursday, June 26, 2008

'There is no ‘one size fits all’ approach to corporate governance'

Conflict between dominant and minority shareholders

While the term corporate governance has found a place in the annual reports and media advisories sent out by India Inc., ground realities are very different. Governance, for most companies, starts and ends with forming committees. The skeletons in the cupboard come out for all and the sundry to see during times of earnings misses, corporate developments and information-sensitive deals. So much so for CG, as it is called.
Is the board of directors doing its job, then? “The board is not really central to the corporate governance malaise in India.
The central problem in Indian corporate governance is not conflict between the interests of the management and owners as in the US and the UK, but more in terms of a conflict between the dominant shareholders vis-À-vis minority shareholders” says Mr Monish Chatrath, Leader (National Markets), Grant Thornton, New Delhi.

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'Consumers must pay the economic price of fuels they consume than the artificially controlled one.'

Has easing of price control made oil boil?

The task of pricing fuel in India would be equivalent to accomplishing the great Indian rope trick without a blemish. On one side are consumers (also the voters) and, on the other, are companies such as refiners, fuel marketers, etc. Can price control help?
At an OPEC meet organised in Saudi Arabia recently, the Finance Minister, Mr P. Chidambaram, suggested crude oil price be regulated by means of fixing a price band. While suggestions such as these may be borne out of sheer desperation for a country fighting with inflation at a 13-year high, experts see solid reason behind such a step, if implemented.
For one, volatility would be taken away and so would be the daily oil shock of the commodity surpassing one record after the other. "Oil producers or OPEC do not ostensibly exercise any price control. Slackening of control has actually commoditised crude even further," says Mr Deepak Mahurkar, Associate Director, PricewaterhouseCoopers, Gurgaon.

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Monday, June 23, 2008

'E-commerce in India is still very much in its infancy.'

Meeting point

Travel less. Meet online. It’s easy and affordable — and a great way to work green.” So urges the Web site of WebEx, which offers online meeting applications. Founded in 1996, the company was acquired by Cisco in May 2007. And now, “WebEx products are being integrated into Cisco’s expanding portfolio of collaboration products and services based on Web 2.0 technologies.”
When one chooses WebEx, there’s no need to worry about ports, platforms, versions, firewalls — or even the Internet, says the company. “All you need to run effective online meetings is a browser and a phone.”
For more on what’s happening at the ‘meeting’ point, eWorld met Kiran Datar, Managing Director, WebEx Communications India Pvt Ltd.

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'Every skill is in demand, but whether demand exceeds supply is the question.'

Bad people-managers can ruin an organisation

While you wonder at why your employees look de-motivated, they are silently eating away your precious human resources. They are a dangerous type of ‘human virus,’ known as bad people-managers. “Bad people-managers can ruin an organisation and it starts with bad recruitment and is sustained by bad talent management,” says Mr Bharathan Prahalad, Head-Human Resources, KLA-Tencor Software India Pvt Ltd, Chennai.

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'Entrepreneurs invent themselves'

‘Talent needs to be humble, hungry and smart’

Numbers and people: today that’s what defines a company. When a big player enters a market, it usually helps smaller entities to grow. Who is great — the tree or the plants that start growing around it? The first big contract or the company which got ‘the’ contract? Entrepreneurs usually fall in the second kind, mostly. They have a vision but perhaps not the means. “A coach is required who will help in realising the full potential and creating a fine entrepreneur. The basic DNA has to be present already,” says Mr Arun Jain, Chairman and CEO, Polaris Software. In a sense, employees are entrepreneurs working for the same company, isn’t it?

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Thursday, June 19, 2008

'The mutual fund and insurance sectors will see more of greenfield joint ventures.'

‘Banks now have greater ability to absorb credit losses’

Incomes have risen and so have lending rates. This has affected the borrower’s repayment capacity and today many banks are ‘less’ inclined to dole out consumer loans as quickly as they did earlier. Are banks facing the heat? “Customer leverage has also gone up in both the retail and corporate segments, and there is increasing vulnerability to further rises in interest rates given the inflationary situation and the pressure on margins,” says Ms Sonali Sinha, Associate Director, Transaction Advisory Services, Ernst & Young.

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Monday, June 16, 2008

'Adoption of IFRS will have an impact on the profitability and net worth of most companies.'

Accounting convergence to help desi companies raise funds abroad

We are living in a world where watertight compartments are increasingly becoming extinct. Companies are acquiring overseas, selling local and, hence, are aptly called ‘glocal’. However, money spent or earned is accounted in different ways.
Not only is this a cumbersome exercise, but it may lead to problems that could be avoided otherwise if we had convergence. Convergence, as we know, leads to a common view or opinion.

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'The foreign companies contend that no income should be attributed to the buying operations in India'

Liaison collision in the tax office

Just Do It! That's what Nike was told if you were to interpret the recent ruling by the Bangalore Income-Tax Appellate Tribunal (ITAT). The Tribunal reasoned that the US-headquartered Nike Inc. was purchasing goods by using the services of its liaison office.
So, the office was only rendering services for the `purpose' of exporting goods. Such an activity does not create any taxable presence because of an exclusion provide for in the Indian laws.

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Thursday, June 12, 2008

'On the cost side, the steepest increase will come from player salaries and acquisitions.'

‘IPL franchisees may have better margins than Arsenal, Man U’

Fans maketh the sport, as many marketeers say. Even as people wait for the next edition of IPL, there are signs that this tournament would have to be accommodated as a permanent fixture in International Cricket Council (ICC) calendar. What makes it so compelling? Pure business logic, says Mr Dushyant Singh, Associate Director, Strategic and Commercial Intelligence, Transaction Services of KPMG India.

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'Education in art management is one area where Indian institutes need to buck up ...'

Valuing art: The role of provenance and auction

The French verb provenir means to come from/stem from, referring to the source. Art is perhaps one of the very few asset classes where valuations depend so much on its source. This explains why ‘provenance’ (pronounced as ‘prov-uh-nuhns’) attains overriding logic.
Comparative techniques, expert opinions, written and verbal records and the data from scientific tests are time and again used to help ascertain ‘provenance’ of a work of art. Like accounting, it’s all in the detail.
Sellers would want to discover the ‘real’ worth of a Ravi Varma work based on history, while buyers would look for future promise. Ask Mr M. Maher Dadha, Chairman and Managing Director of home-grown fine art auction house Bid & Hammer.

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Monday, June 9, 2008

'The Indian aviation sector has changed dramatically, particularly in the last three years.'

Singapore Airlines sees phenomenal traffic growth

Ask Mr Bharath Mahadevan, Manager Southern India for Singapore Airlines (SIA) at Chennai, about the values of his organisation that come to the top of his mind, and he remembers the former Singapore Prime Minister Mr Lee Kuan Yew who had said that the Government would not subsidise the airline and that it had to stand on its own feet. “The then Chairman Mr J. Y. Pillay decided to use service and hubbing as the prime values SIA stands for, given that there was no domestic market and the Singapore population was limited. Bold decisions like offering free headsets in the Economy Class helped put us on the global map,” Mr Mahadevan recounts, during a recent lunch-hour interaction at Business Line.

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'India needs to step up action to reap benefits of IFRS convergence'

IFRS implementation issues

The derivatives issue seems to have been forgotten with inflation now hogging the limelight. The implementation of accounting standards, however, can neither be forgotten nor can it wait for long. Many major stock exchanges across the world today require or accept IFRS (International Financial Reporting Standards), a common accounting language for preparing financial statements. “It is expected that more than 150 countries would follow IFRS by 2011. The US already allows IFRS for foreign filers. More importantly, by 2011, it is expected that the US will follow IFRS even for local filers. India needs to step up action in order to reap benefits of IFRS convergence,” says Mr Dolphy D’Souza, Partner & National IFRS Leader, Ernst & Young.

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'In case of petrol and diesel, the demand is largely price-inelastic'

‘Taxes are the smallest factor influencing fuel prices’

Will the impact of the duty reductions on the retail price of petrol and diesel really bring in any change, apart from short-term price reduction? Not much, if you ask Mr Vivek Mishra. Vivek is a tax partner based in New Delhi and leads the indirect tax practice of Ernst & Young in India. “In our view, these types of questions are slightly misplaced for one key reason. In a scenario of rising crude oil prices, the taxes on pe trol and diesel are a small component of a much bigger phenomenon,” says the expert, who has worked with several leading companies assisting them make the transition into the VAT regime. Business Line caught up with him over the email to quiz on the tax angle affecting fuel prices. Here’s what he had to say…
Excerpts from the interview:

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'Over the past few years we have observed a positive correlation between remittances and migration'

‘Expats remit $26.5 b, higher than combined FII, FDI flows’

Mr Anil Kapur, Managing Director of Western Union operations in South Asia, has been with Western Union for over six years now. Under his leadership, the business in India has grown significantly, with Western Union becoming a visible player in the remittance business .
Mr Kapur commenced his career over 16 years ago when he joined ANZ Grindlays bank and spent the next 8 years with them in different parts of the retail banking business in India. In his last assignment, he was heading the Non Resident Indian business for the bank in UAE and Oman.

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'Test cricket is and will always remain the real thing'

IPL vs ICL: A real contest is possible only in a free market!

The old adage of first mover advantage does not hold true. Ask the Indian Premier League! Despite coming late but well-armed and neatly packaged, the newest avatar of cricket has caught on like wild-fire, much to the chagrin of the supporters of the ‘unofficial’ Indian Cricket League, the under-dog. Despite claiming to be progressive, does the new breed of couch-potato Indians still give in to the allure of ‘officialdom’? “Given that the IPL i s “official”, it is inevitable that it will have more clout than the ICL. A real contest is possible only in a free market. This isn’t a free market. In this fight, one side has an advantage,” reasoned cricket historian, Dr Boria Majumdar when Business Line asked him.

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Thursday, June 5, 2008

'There is ample testimony that the public at large wants to watch great cricket'

‘Business part of IPL franchisees may be outsourced to specialists’

With the curtains down on the drama of the Indian Premier League the focus will now be on next year’s edition. Big teams funded by huge war chests of ‘moolah’ need to be managed well to deliver returns on investment. Can the franchisees do it alone? One expert thinks, ‘No.’
“Since the IPL had to be turned around in record time and because egos were larger than budgets, huge captive teams were hurriedly put together. However, the franchisee owners are bound to realise that with the next IPL being so far away, they do not need monoliths to manage the event. The business of the franchise is going to be outsourced to specialists and organisations with their ear to the ground,” says Latika Khaneja, Director of celebrity management firm Collage Sports Management, New Delhi ( http://www.collageindia.com/).

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'The RBI has been very proactive about financial inclusion'

Financial inclusion from an opportunity angle

The more one hears the phrase ‘financial inclusion’ the more one wonders if a 100 per cent financial inclusion is achievable in India. A tall task, indeed, considering that only 30 to 35 per cent of households in India are financially included, as Mr Saurabh Tripathi, Partner and Director, The Boston Consulting Group, Mumbai, informs, citing a recent research by the firm. He is, however, hopeful that financial inclusion can happen.
“We found that there is a very large segment that could potentially be included in an economically viable manner with appropriate business model innovations,” adds Mr Tripathi, during a brief interaction with Business Line.

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Monday, June 2, 2008

'Security is of paramount concern as far as the mobile is concerned'

Mobile as financial advisor

How you use your mobile may change forever! Yes, that’s what INXS Technologies says it could do if it has its way.
Led by Venkat Rangan, CEO and Co-Founder, the Chennai-based start-up specialises in developing solutions in the area of financial services. Its latest product is ‘Market Simplified,’ a wealth management solution to access what you need t o know about your stock market investments, on the mobile. For people on the move who cannot have access to a TV or Web site, the product sends alerts on stocks and mutual funds, technical charts, company news, etc.

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'Deregulating prices would mean that prices would move in tandem with global prices.'

How best to tackle the fuel price

Fuel price hike? Or tax the private oil companies? Possibilities like these are being thrown around even as the who’s who of Government are reportedly huddling together to thrash out a decision to counter the stupendous climb in crude oil price. As India’s dependence on imported crude continues to remain over 70 per cent, rising oil prices in the international markets pose a serious threat to India; the Indian basket of crude oil touched an all-time high of $121.71 per barrel on May 20.
If you are only thinking of scenarios where prices of oil can be kept steady, then you must listen to Mr Gokul Chaudhri, a partner and leader of the Energy and Infrastructure practice at BMR Advisors, New Delhi. In an email interaction with Business Line, he offers three different ways in which oil could be prevented from puncturing the Great India story.

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'Like all relationships, deals need time, space and attention.'

Why big deals crumble

Indian telecom companies have had a bad record of sealing up large acquisition attempts. Bharti continued this infamous legacy when its attempt on an `African Safari' turned out to be a missed call. Reliance Communications is still hot on the trail - some hope there. But what's the big deal about big deals? Ms Sairee Chahal, Co-Founder, SAITA Consulting (www.saitaconsulting.com), feels that big deals are like marriages - few are happy but we still have a lot of marriages.
"If they weren't, they wouldn't be such a big deal. So expecting all large deals to work out and be successful in entirety is very utopian," she tells Business Line in an email interaction. True that for every large deal that works out, there are at least 10 canned in the dark. Are Indian companies good at the game?

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'Competition law prohibits agreements that result in cartel formation and restraint of trade.'

A review of competition law from an M&A perspective

While failures are an integral part of mergers and acquisitions (M&A), Indian industry has realised in the recent past that operating in a global environment with globalised competition requires scaling and ‘skill-ing’ rapidly. Do big M&A deals stifle competition? What should the competition law promote and avoid?
“We believe that while it is important to ensure competition and prevent monopolisation, it is critical that in the process of doing so, impediments are not placed to growth,” feels Mr Harish H. V., Partner Specialist Advisory Services, Grant Thornton. He shares his views (with key inputs from Mr Arun Kumar M. K., Vice-President, Specialist Advisory Services) on the competition law from an M&A perspective with Business Line.

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