Xed CA Finance Newsletter July14 July20

7/31/2019 Xed CA Finance Newsletter July14 July20

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11 Pages 14th

JULY 2011 20th

JULY 2011 www.xedintellect.com

BUSINESS NEWS

ECONOMIC INDICATORS 2 COVER STORY 3 PERSONALITIES OF THE WEEK 4 BUSINESS NEWS 5-8

INTERNATIONAL NEWS 9 MISCELLANEOUS NEWS 10 GENERAL AWARENESS 11

NEWS DIGEST

IN BRIEF

PERSONALITIES OF THE

WEEK

COMPILED BY

INDUSTRY ANALYSIS

BSE SENSEX 18,446

NSE NIFTY 5,541

RS/$ 44.43

(as on 21st July 2011)

ECONOMICINDICATOR

India may no

longer be

outsourcing hub

COVER STORY

FINANCE NEWS

No to deregulate

savings rate: RBI

INT. & MISC. NEWS

FB Vs Google Plus

tech wars

XED NEWSLETTER

ANYTHING FOR NEWS


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COVER STORY: ANYTHING FOR NEWS

Fall of an empire: News Corp CEO Rupert Murdoch knew something about power and how towield it. In Britain, the media magnate's backing was long seen as a prerequisite for anyonehoping to become prime minister. In the US Murdoch's Fox News has helped drive debate and thegrowth of the right-wing Tea Party. But 7/7 which also coincides with the terror attack on Britainmarks the death of the biggest-selling English-language newspaper on earth with 2.6 million dailyreaders.

News of the world faces a spate of phone hacking charges. It was exposed that its journalists had

paid a private investigator to hack into the mobile phones of a murdered 13-year-old girl, victimsof the 7/7 terrorist bombings, 9/11 victims, Iraq war officials. Murdoch claims he was unaware that the company wasalso paying the legal fees of Glenn Mulcaire, a private investigator under contract to The News of the World who wasconvicted in 2007 of hacking into the phones of staff members of the royal family.

Selling News worldwide: When Rupert Murdoch first entered India in the mid-1990s with the launch of Star India,the network's mix of cricket, MTV, Bollywood and soap operas proved a wildly popular cocktail of entertainment withmany of the country's 1.2 billion people. Murdoch saw Asia's potential at a time when regional broadcasting wasn'tconsidered viable across a highly fragmented and culturally diverse region. It is estimated that Star India made $106

million in profits last year off revenues of $545 million, glowing results in a market withrampant piracy of cable signals and low fees. He owns 26 percent of the popular Hindi-language news channel Star News, meeting the needs of many of India's 138 million TVhouseholds.

With Murdoch now facing a parliamentary inquiry in Britain, an FBI probe in the UnitedStates, and a possible review of media laws in Australia, some sayhe might face fresh scrutiny in India and Asia.

Anything for News: News of the World's relationship to scandal long predates Murdoch'sownership. In 1996 the paper began paying celebrities to disclose personal secrets aboutthemselves; often with disastrous consequences for them and their associates. The actress DianaDors -facing debt and unpaid taxes - allowed the paper to write an expose about her life for35,000. Serialized over 12 weeks, the film bombshell divulged details about her dead husband'ssex addiction. It was a huge sell among audiences.

News of the World reporter Mazher Mahmood would masquerade as Arab sheik. Behind velvetropes at VIP after-parties, the fake sheikh made friends with celebrities and their hangers-on.And he'd often catch them behaving in horrific ways. Stars were exposed doing drugs - and selling them.

Back in 2000, News of the World came up with a campaign to "name and shame" child abusers. The paper beganpublishing the names and photographs of known sex offenders in the country. The outing spawned a spate of mobattacks on the homes of the people named. In one instance an innocent man who was mistaken for one of thephotographed pedophiles in the paper had his home vandalized.

Time to regulate? It is true that all media organizations from time to time use tactics that may, to some, seemmorally dubious like paying to elicit information or subterfuge. In a country like Britain orfor that matter any, there is sometimes no other way to obtain information of vital publicimportance. Had The Daily Telegraph not paid its sources, all common public wouldhave seen of the MPs' expenses would be acres of blacked-out paper. The clear dangernow is that some would push hard for a regulatory system criminalizing payments foofficial information, for instance. That would be wrong, because the failure here was not

of regulation. Phone hacking is already against the law. It is the collective failure of the broader political system and ofthe journalists.

According to blogger Paul Stains, Consumer power has already proven itself as a way to regulate the press. In the endMurdoch closed the News of the World because he feared an advertiser and consumer boycott. If you disapprove of anewspaper don't buy and read it. That is simply the most powerful restraint you have on newspaper proprietors in afree democracy. Even Rupert Murdoch fears his customers.

Lesson for Indian Media: It is understandably difficult to adhere to high moral principles to expose plain wrong-doing let alone criminality. Indias News of the world moment came with the Cash for Votes scam wherein oppositionparty leaders collaborated with a certain media to expose the rampant buying of MPs by the government. Ideally,soliciting information even for public good should be done by just means because we assume a bribe giver is as muchan offender as a bribe taker. Or perhaps change our definitions to give media a bit more freedom. However freedomdoesnt mean irresponsibility. The media as the fourth estate and a pillar of democracy must realize that with thegreat power of information comes greater responsibility to people.


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PERSONALITIES OF THE WEEK

Shahrukh Khan: The BaadshahShahrukh Khan the inimitable king of the silver screen is also thebaadshah of the biggest brands. Right from TAG Heuer to ITCSunfeast biscuits to Airtel he is a favorite of many brands. He has alsobeen roped in as the brand ambassador for the B school IIPM. His lifehas been an inspiration for the youth. The fact is that you cannot misshis name while you scroll TV channels or newspaper. He is undeniably

an instant brand reminder. There are no qualms in referring him as agiant of the silver screen.

Capturing the silver screen:The journey of Shahrukh Khan to becoming the King Khan startedwith TV serial called "Fauji" (1988), that won him instant recognition.He made his debut on the silver screen with the film Dewaana andsince then there is no looking back. Today, he charges around 12crore for a movie. In 2005, the Government of India honored him with the Padma Shri for his contributionstowards Indian Cinema. Though Shah Rukh Khan believes that he is an actor not a businessman, his ventures speakotherwise. He has made some smart business moves.

The Extravagance:Shahrukh Khan lives for a purpose and believes that he is born for a purpose. He believes he needs to give back to

the entertainment industry which made him so successful. Though he believes he is not a businessman he has alwaysbeen entrepreneurial. He started his production company, Red Chillies Entertainment, and produced and starredin Main Hoon Na, which has been a hit. He further carved the path of a shrewd businessman when his productionhouse in 2008, Red Chillies Entertainment became the owner of the Kolkata Knight Riders in the BCC

backed IPL cricket competition. His extravagance has been under the scanner of the IT department. The I-Tdepartment has questioned whether the Rs. 17.84 crore Signature Villa on The Palm Jumeirah was a gift, as the actorclaims, or payment for Shah Rukh Khan's endorsement of the Palm Jumeirah.His latest movie RA One is anticipated to be in 3D. To cash in on the movies popularity Ra One is all set to become aSony Playstation Game. The video game version will simply be called Ra. One The Game and it has been developedexclusively for PS2 and PS3 by Sony in London. With so many successful ventures Shahrukh Khan surely seesbusiness in all his ventures.

Rebekah Mary Brooks: Brute PowerReferred to as the flame haired Queen of Fleet Street Rebekah Brooks wasthe chief executive of News International from 2009 to 2011. She hasserved as the youngest editor of a British national newspaper, News of theWorld and is the first female editor of The Sun. Her thirst for beingassociated with the big wigs led to being questioned for her allegedinvolvement in the News International phone hacking scandal and isaccused of corruption. Her rise up the corporate ladder reflects a mix ofruthlessness and dazzling charm.

The mercurial rise:Rebekah Brooks started her life as a secretary and 22 years later sheended up as the right hand woman of the most powerful man in the world of journalism, Mr Rupert Murdoch. Coupledwith her charm she has an extraordinary ability to make friends in high places which was evident in the guest list toher wedding, two years ago which read like a Who's Who of modern Britain. Her proximity to the Rupert Murdochfamily is evident in the fact that it took 12 days to finally let her go from the News International. After Brooks tookover as an editor of The News International at the age of 31, she broadened the appeal of the newspaper by flashingthe front page with celebrity news. Rebekah Brooks the fifth daughter of the Murdoch family wrote to the Scotland

Yard offering to be interviewed as a witness in phone-hacking scandal. She was later on arrested.

The fall:Mrs. Brooks was defended by both Rupert and James Murdoch during the investigations of the News of the Worldscandal. But she was arrested by the police for her involvement in the phone hacking scandal and the policecorruption investigations. Liberal Democrat MP Adrian Sanders questioned the timing of the arrest. Just two daysbefore she had to appear in front of the various MPs she was arrested. Bury your mistakes, Rupert Murdoch is fond osaying. This time it surely will cost a lot for him. Life of Mrs. Brooks has been like a rollercoaster ride from a swift rise

to a sudden fall. With the support offered by her boss she might be left scot free.


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BUSINESS NEWS

1) India may no longer be outsourcing hub- ET 15 JulyIndia may no longer be outsourcing hub as UK companies such as Aviva, BT &Santander move work to home country. A high UK jobless rate & a need to betterconnect with their customers, coupled with rising costs in India compel Aviva, BT &Santander to move work back home. Last week, another UK-based telecom firm NewCall Telecom decided to move its call centre back to Lancashire from Mumbai. OnTuesday, shares of MphasiS fell over 6% as banking group, Santander, moved its

retail banking-related call centre services from the Indian vendor back to the UK. Fo

many, having a UK customer call centre has also become a differentiator incommoditised markets such as voice telephony services, say experts. It is also

viewed as 'patriotic'.

"The whole issue around accents just became really big in the UK, for some reason it was never seen as a problem in

the US. It just got highlighted a lot in the UK and then some companies started using it as marketing tool too," saidPramod Bhasin, ex-CEO and non- executive vice chairman of the country's largest BPO firm Genpact.

2) IIM graduates choose manufacturing over finance roles- TOI 14 July10% more students across IIMs choose manufacturing over finance. The figure is set togo up further in next 3 years.The slower-than-expected growth in the country's factory output may send markets in atizzy every now and then. But, management graduates passing out of premier B-schoolsare betting big on manufacturing. Volatility in the global financial markets is pushing

fresh graduates to brick and mortar industries. An increasing number of students passingout from the Indian Institutes of Management (IIMs) are choosing careers inmanufacturing over traditional finance roles post-slowdown. On an average, 10% morestudents across IIMs have taken up jobs in core sectors this year as compared to previous yearsTraditionally, MBAs prefer services sector with finance, marketing and consulting roles.

3) Global slump in economy a boon for India, only if it doesn't get worse- ET 16 JulyTogether with China, India will stand out as an island of growth in an otherwise bleak globaleconomic landscape, helping it attract more capital flows and investments. The renewedcrisis of confidence in the global economy could well benefit India, if it does not blow upinto something bigger. Recent evidence points towards a moderation in global growth asthe developed world is struggling with debt and unemployment, and the emerging marketsare fighting inflation by sacrificing growth. Search for returns is likely to send investorsscurrying to India, expected to expand at about 8% in 2011-12 while the rest of the world

sees a moderation in growth to 3.2% during 2011.

India's relative insulation from the rest of the world is another tick mark in its favourExports have a small 13% share in GDP, though rising fast at over 30% after the financia

crisis, and its public debt is mostly internal. Public and private consumption combined has a 70% share in India'sGDP. The strong domestic orientation of the economy was largely the reason India managed a 6.8% growth in 2008-09, the high point of the financial crisis.

4) Vodafone, Bharti Airtel, Idea in pact to offer Pan India 3G services-ET 14 JulyIn an effort to reduce cost and offer Pan India 3G service, Vodafone, Bharti Airtel and IdeaCellular have started sharing their networks to provide seamless service to theircustomers. The three will now use each other's networks through inter and intra-circleroaming arrangements where they do not have licences. " Vodafone has entered into abilateral roaming agreement, both inter and intra circle, with Idea and Airtel to provide 3G

services to our customers in the circles where we have not built our own 3G network, inorder to bring a pan-India experience of 3G services to our customers," Vodafone said in astatement. However, nobody divulged the revenue sharing arrangement among the

operators.

5) Final 'Harry Potter' wields big wand at box office- Reuters 17 JulyDeathly Hallows II is the 8th & final movie in the Harry Potter franchise & the first in 3D. It raked in

$82.5 mn worldwide in 3 days. Harry Potter's final film adventure has bolted to a big start at worldwidebox offices, breaking the record for midnight screenings in the U.S. and Canada with $43.5 millionand setting the stage for a massive weekend debut. Box office watchers predict domestic (U.S. andCanada) sales for the three-day weekend will hit $125 million to $150 million, but with the midnightrecord that range could be low. Even if the box office total hits that forecast, it would be the highest-

grossing "Harry Potter" debut and put the movie within striking distance of the biggest opening weekend ever.


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6) Indias share in global video gaming business set to increase - WSJ 15 JulyIndias share of the $67bn global video gaming business is just $0.2bn, but muchof that is set to change with improved connection speeds & bandwidth as now wehave 3G. India's gamers and mobile-phone companies are betting that the rest of

the world's fascination with mobile-phone games and applications will catch onhere, and are looking for a cricket-based game that could become all the rage likeAngry Birds (a game developed by Finland-based Rovio Mobile). India plays asmall part in the world's video-gaming industry -- 10 billion rupees ($225.12million) in 2010, according to KPMG, vs. $67 billion globally, according to Gartner,-- but much of that is set to change with third generation telephony. The next

phase for mobile phones was launched this year and has improved connectionspeeds and bandwidth that are needed for online and mobile gaming the mainreasons that gaming in India hadn't picked up. Mobile operators view has changed toward mobile gaming. "They areslowly realizing the importance of games as a premium (value-added) segment, especially to drive the adoption ofaster data speeds provided by 3G," according to the Ernst & Young report on India's gaming industry released in2010.

7) Realty Market Crisis Throw Up Opportunity for Group-Buying Sites- TOI 15 JulyJitendra Rathod had spent almost three months looking for an apartment inMulund, a fast growing suburb in central Mumbai. He knew that developers werestruggling to find buyers and were sitting on huge inventories, so he expected agood discount. Much to his surprise, no builder was willing to budge an inchRathods luck changed when he joined a group buying portal that brings buyerstogether for bulk deals. A few rounds of negotiations later he bought an apartment

from the same builder at a price 10% lower than what he was offered barely twoweeks ago. New players such as GemiDeals.com, dealflats.com, 21flats.com

groopoffers.com have popped up overnight.

8) IFFCO Kisan Sanchar Ltd wins Coffey International Award for 'm-Powering Farmers' -ET 14 JulyA unique mobile technology based concept to improve the yield, productivity, incomeand quality of living of illiterate farmers in rural India has scooped the CoffeyInternational Award as part of Business in the Community's 2011 Awards forExcellence on 5th July, 2011. Now in its 14th year, the Awards for Excellence is aprestigious annual showcase by UK of the best responsible businesses in action. TheAwards highlight the best examples of the positive impact businesses are having inthe environment, amongst their employees, through the supply chains and in thelocal communities in which they operate.

9) Trai adamant wants 74 permits cancelled- ET 16 July

The Telecom Regulatory Authority of India has told the government that about 210 MHz, orunits, of valuable 2G spectrum can be freed up if the telecom department accepts itsrecommendations for cancelling 74 mobile service licenses.

The telecom regulator has told the government that about 210 MHz, or units, of valuable 2Gspectrum can be freed up if the telecom department accepts its recommendations for cancelling74 mobile service licences for failure to roll out services. The regulator has reminded thegovernment that airwaves thus freed up can be auctioned, which will bring in revenues for the

exchequer.

10) NSSO survey shows poverty is coming down and rural wages are rising - TOI 16 July

Real spending by each person in rural India rose 6.3% in 5 years of Congress rule ascompared to 1.2% during 5 years of BJP rule according to the NSSO survey. Finally, theressome good news for the United Progressive Alliance government. Consumption numbers forthe past six years show that real incomes have grown much faster under the Congress-ledcoalition than during the National Democratic Alliance era. Whats more, poverty is trendingdown and rural wages are growing smartly. The 2009-10 survey by the National StatisticalSurvey Organisation (NSSO) shows real spending by each person in rural India rose 6.3% inthe five-year period from 2004-05 to 2009-10, when the UPA in power.

Urban Indians did even better. The average persons spending in urban areas went up 12.9% under the UPA (2004-2009) compared to a 6.7% jump under the NDA regime (1999-2004). The numbers also show that the percentage ofpoor Indians, using the Suresh Tendulkar methodology, also fell to about 32% of the population in 2009-10 from 37%in 2004-05. This seems to validate the UPA governments claim that its policies and schemes have eased poverty.
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11) Borrow it Bindaas Offers Online Sari Rental- WSJ 14 JulyBorrow it Bindaas, a U.S.-based online sari rental boutique helps US guests & Indians dress up indesigner saris for Indian Weddings in USA. Riddhi and Siddhi Khara, twins and two of thefounders of Borrow it Bindaas, hope their service will help solve the perennial clothing conundrum

faced by Indian wedding-goers across the United States: What to wear, and more importantly,where to get it?

With 2,000 members since its launch in late May, the site currently displays almost 100 saroptions at rental costs that range from $40 to $200, though clients also have the option to

purchase for a higher price. The cost includes a sari, two blouses, and a petticoat the latter two items being vita

foundation garments.

12) Indian consumers still most bullish globally: Nielsen-Reuters 17 JulyGlobal consumer confidence fell in the second quarter to its lowest level in a year and a halfas an uncertain economic outlook, a deepening euro zone debt crisis and rising inflationmade people more cautious, a survey showed on Sunday.

Indian consumers were still the most bullish globally but less so than in the first quarter.Consumers in Asia generally remained much more optimistic than in other regions -- withthe notable exception of the Japanese and South Koreans who were among the mostpessimistic globally -- but rising inflation tempered Asian purchasing power. India's score in the Nielsen GlobalConsumer Confidence Index fell 5 points from the previous quarter to 126. It was well below the country's record 137index reading in the second half of 2006, the highest reading for any country in the index's six-year history. Theindex's global average reading dipped 3 points from the first quarter to 89, its lowest since the fourth quarter of 2009

A score below 100 signals pessimism about the outlook.

13) AI faces Rs 67,000 crore worth losses and debt-BT 18 JulyFacing a massive cumulative loss and debt burden totalling about Rs 67,000 crore,Air India hopes the government would take an expeditious decision to infuse morefunds to boost its rapidly dwindling financial position.

What is worse is that the ailing national carrier would have to repay a whopping Rs20,415 crore worth of loans before the end of this fiscal year. If it defaults, theamount would invite loan loss provisioning which the banks may oppose, officiasources said. A meeting of the Group of Ministers slated for tomorrow is expectedto decide on moving the Cabinet Committee on Economic Affairs soon for additiona

equity infusion of Rs 1,200 crore and take a series of other steps to soar up the airline's financial position. Latestestimates show that the ailing carrier was facing a net cumulative loss of Rs 20,320 crore between April 2007 and

March 2011.

14) Are E-Retail Firms in India Building a Bubble Again?-ET 19 JulyFlush with cash from venture capital and private equity funds, online retailers are pursuing asingle minded strategy of acquiring as many customers as they can as soon as they can. Tostake out the largest possible territory, they are cutting prices so deep that even costs arenot being covered, he says.

Finally this is why ecommerce is hot. The growth is there and profits too -when businessesscale after 3-4 years, Vaitheeswaran says. One of Vaitheeswarans competitors is SachinBansal, a former Amazon India employee and the co-founder of Flipkart.com, one of the countrys largest onlineretailers for books and electronics. He is now racing to set up a delivery network that will ship goods to the doorstepof customers. In the next few weeks, Flipkart Logistics will start operations in 15 cities, shipping items such astelevision sets and washing machines. Bansal is hoping this flurry of activity will raise revenues at his four-year-old

firm to 500 crore at the end of March 2012.

15) NREGS may be Informally Shut Down in Peak Season-ET 19 JulyThe UPA government has advised states to suspend its rural job guarantee programme during peakfarming periods, adopting a wink and a nod strategy to stay legally clear and yet head off complaints

the vote-winning scheme was causing a shortage of hands on farms.

The UPA government has advised states to suspend its rural job guarantee programme during peakfarming periods, adopting a wink and a nod strategy to stay legally clear and yet head off complaintsthe vote-winning scheme was causing a shortage of hands on farms. The rural development ministryhas informally asked states that they should consider deferring the Mahatma Gandhi National RuraEmployment Guarantee scheme (NREGS) during sowing, transplantation and harvesting in their

region.


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INTERNATIONAL NEWS

21) FB vs Google Plus tech wars: Why Facebook should begin to worry-ET 17 JulyGoogle, the most popular Web site on earth, is worried about the second mospopular site. That, of course, would be Facebook. Why else would Google keep trying,over and over again, to create a social network of the same type? At first, Google+looks like a shameless Facebook duplicate, but there's one towering, brilliantdifference: Circles. On Google+, you put the people of your life's different sociacircles into - well, into Circles. That is, groups or Categories. You drag each contact

into an on-screen circle, where they tumble into place. You can drag a person into

more than one circle. From now on, every time you share something - a news item, athought, a photo, a chat invitation -you can specify exactly which Circles receive it.

In one fell swoop, Google has solved the layers-of-privacy problem that has dogged Facebook for years. Google+ hasa few more attractions, though, besides this clever privacy control feature. There's Sparks, which is like a personal

press-clipping service (and akin to Google Alerts).

22) Mercedes Tiny Smart Takes on Big Boys in China-TNN 20 JulyDong Han is an ideal customer for Mercedes Benz's booming car sales in China. A 27-year-old advertising agent with a double-income household and no children, she'supwardly mobile and highly conscious of style. But it's not Mercedes' SLK sports car ortop-end S class that strikes her fancy. Like a fast-growing number of affluent, hipChinese, Dong is enamored with Daimler's other brand, Smart, the tiny but nimble,colorful two-seater that looks almost more toy than transport.

Smart, along with the compact A class and B class, is part of Merc's drive to transformitself from a luxury car maker into a full-range producer. The division tallied 5,440 salesin China in the first half of this year, surpassing its entire 2010 total, and challenging sales in US, which have stalledafter a promising start.

23) Lupin Looking for Buyers to Sell its Unit in India- Bloomberg 19 JulyLupin, the worlds largest tuberculosis drug maker, is considering selling its unit that marketsdrugs in India, said two people with knowledge of the matter. Founding shareholders who own acombined 47% of the Mumbai-based company have started the process of finding a buyer for theoperations. The Indian business may be worth at least $1 billion, one person said.

57.1 billion of revenue in the year ended March 31, may help finance investments in moreprofitable markets overseas. Lupin is the fifth-largest supplier of generic drugs in the US based on

prescriptions and US sales jumped 27% to. 20.5 billion last year. Lupin said it has no plans to sellits domestic operations. By the start of the next decade, Indias drug sales will be the largest after the US, Japan andChina, helped by rising household incomes, population growth and improved health insurance coverage.

24) Daimler to Launch Finance Co Next Week to Lift Sales- TOI 15 JulyGerman luxury car and commercial vehicle-maker Daimler will launch its non-bankingfinancial business, or NBFC, early next week to boost sales of its cars and commercialvehicles. Siddhartha Nair, former executive with Daimlers corporate headquarters inGermany, will head Mercedes Benz Financial Services. The company, with an initialinvestment of $50 million, will support the sales of Mercedes-Benz cars and, subsequently,Daimler trucks in the country. Bharat Benz is the truck arm in India.

Initially, the financial services arm will provide for the Mercedes Benz passenger carbusiness which will be followed by Daimler trucks sometime next year. With business activities in over 40 countries,

Daimler Financial Services (DFS) is one of the leading captive automotive financial services companies in the world.

25) Huawei may Bag $120-m Aircel Deal- ET 16 JulyChinas Huawei is in advanced talks to land a four-circle managed services (MS) contractvalued in excess of $120 million from the countrys fifth largest mobile phone company,Aircel, two people with direct knowledge of the matter told ET.

Indications are the Chinese telecom gear maker may ink a three-year MS deal for handling the gamut of networkmanagement, planning and maintenance of Aircels GSM networks in Maharashtra & Goa, Karnataka, Andhra Pradeshand Kerala circles. Huawei will also be responsible for the upkeep of key performance indicators (KPIs) and servicelevel agreements (SLAs). Deal details remain under wraps but people familiar with the talks said the multi-yearcontract was likely to be benchmarked at roughly $15-20 million a year per circle, a senior executive familiar with thematter told ET.


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MISCELLANEOUS NEWS

26) Sachin Tendulkar on Coca-Cola cans as part of 100th century celebrations-ET 18 JulyThe world's largest beverages brand plans a grand tribute to Sachin Tendulkar who is one century

short of becoming the first batsman to score 100 international centuries: launch some 6.5 million

special Coca-Cola cans with pictures of the master batsman.

The move will help the cola giant make the most out of its Rs 12-15-crore endorsement deal withTendulkar signed early this year, and make up for not leveraging the association during the CricketWorld Cup that India won. Coca-Cola is printing the cricketing legend's pictures along with statisticsof his select 10 centuries on about 6.5 million cans of brand Coke to celebrate Tendulkar's hundredthinternational century which everyone expects in England, where India will play four tests and fiveone-day internationals starting July 21.

27) Bombs explode at rush hour in Mumbais crowded business areas TOI 14 JulyRepeatedly hitmore than ten timessince 1993, citizens of Indiasfinancial capital are soft targets for terror outfits. Mumbaikars watchedwith impotent rage and sorrow as three explosions shook the citybetween 6.54pm and 7.06pm on Wednesday. People vented their angerat the Mumbai police who seem to be more interested in harassinginnocent patrons at a pub.

They also vented agear at politicians for their empty rhetoric and at the unknown faces behind yet another terrorattack. India Inc showed its resilience as business and corporate heads expressed shock, but followed up withassurances that Indias economy will not be affected. Former city police commissioner M N Singh said Mumbai hasa strong network of Indian Mujahideen and SIMI. While the police upgraded its infrastructure and equipment after26/11 attack, the real focus should be on how to curb radicalisation of youth from the minority community.

28) Decade of low literacy growth slows down economic growth- ET 15 July

The 2011 census shows that literacy in the country is up from 65% in 2001 to 74%in 2011. Many have hailed that as good news: the right direction, a substantialincrease. It is completely agreed that it is the right direction, but we need to askourselves whether the increase is really substantial enough - enough in terms of thereturn on all the efforts being put behind education, enough in terms of meeting our

economic growth goals and enough in terms of moving us towards a society whereeveryone is literate. In fact, the rate of growth of literacy has slowed down from thelast decade to this decade, and this has serious implications on how we need to go forward.

29) Don't corrupt our people, Antony tells defence companies- TOI 14 JulyAfter eliminating American, Russian & Swedish cos from race for supplying 126 fighter aircrafts,Defense Minister AK Antony warned defence companies, not to try to corrupt our people. He also

said that government would not hesitate to take extreme steps if it detects corruption in thedefence acquisition process. Antony said the defence acquisition process in India is not propelledby political decisions. Up to the trial stage, technical soundness of a product will determinewhether it will remain in race and after that it is the price which will determine its ultimateselection for procurement, he said.

The primary objective must be to "stay competitive and yet remain cost efficient, as well astechnologically and strategically reliable", he said. For this to happen, defence industrialization

will have to be accelerated. He also said the private sector will have to play a bigger role in collaboration with thepublic sector.

30) Rocked by Explosion, Diamond Traders may Shift to New Bourse- TOI 15 JulyRocked by explosion, 50% diamond traders to shift to Bharat Diamond Bourse, Bandra, whichis like a fortress. Foreign buyers from the US, Japan, Hong Kong and Belgium are likely to viewWednesdays tragic bomb blasts with greater trepidation and may postpone forthcoming visitsby a few weeks. After Wednesday, there is a growing feeling that a majority of the trade mayprefer to hasten their imminent relocation to Bharat Diamond Bourse (BDB), 15 km away insuburban Bandra, to alleviate fears of overseas clients and for better security of the trade.

Overseas clients of Indian diamond merchants come here to buy cut and polished diamonds

"Nonetheless, we will speed up the process of moving to BDB. By Diwali, I expect 50-70% of trade to shift to the newpremises. Each (trader) was waiting for the other to movenow I think we will witness a more concerted exodus."


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CORPORATE INTELLIGENCE

TATA CONSULTANCY SERVICES

Head Quarters: MumbaiRevenue:$8.2 billion

Company Statistics:A subsidiary of Indian multinational conglomerate, the Tata Group, Tata Consultancy Services (TCS) is an IT servicesbusiness solutions and outsourcing company offering a consulting-led integrated portfolio of IT and IT-enabledservices to global businesses, delivered through its unique Global Network Delivery Model. TCS has over 198,500 ITconsultants in 42 countries and more than 142 branches across the globe. As on March 31, 2011, TCS had a total of54 subsidiaries.

Key People:Ratan Tata (Chairman);

N Chandrasekaran (Chief Executive Officer and Managing Director)

TCS the IT Pioneer: Founded by JRD Tata in 1968, TCS began as the "Tata Computer Centre"for the Tata Group. Faqir Chand Kohli, an Indian businessman often referred to as the "Father ofthe Indian Software Industry" was the first General Manager of TCS. In its early days, TCS, with astaff of 10 consultants and 200 operators, undertook IT assignments with other Tata Groupcompanies like managing the punch card operations of Tata Iron and Steel Company (TISCO). In1969, TCS bagged the first banking software project - the Inter Bank Reconciliation System

(IBRS) from the Central Bank of India (CBI). Its successful implementation enabled TCS to get similar orders from 14

other banks. In the early 1970s, TCS started exporting its services with its first offshore client in 1974. TCS's firstinternational order came from business computer manufacturers Burroughs. TCS wrote code for the Burroughsmachines for several US-based clients. In 1979, TCS delivered an electronic depository and trading system calledSECOM for SIS SegaInterSettle, Switzerland, one of the most complex projects undertaken by an Indian IT company.

In late 1998, the company decided to concentrate on new revenueopportunities including Y2K and Euro conversion. A major area of focus inthe late 1990s was e-business. All TCS products and platforms were web-enabled. It also decided to specialize in e-business consulting offering ebusiness solutions in various functional processes including customerrelationship management (CRM), supply chain management (SCM)enterprise resource planning (ERP), business intelligence andmanagement information systems (MIS).

TCS Today:In 2008, the company went through an internal restructuringexercise to make the organization more responsive. Described by the

media as India's best kept secret, a serious challenge faced by the company was the business process outsourcing(BPO) backlash in the US. Today it is the largest provider of information technology services in Asia and secondlargest provider of business process outsourcing services in India. It has strategic partnerships (partnerships withmajor technology players) with Cisco, Google, HP, IBM, Microsoft, Oracle, RIM, SAP, Sun and Xerox. It has solutions

partnerships (partnerships with niche players) with Adobe, Red Hat, SAS, Symantec, TIBCOand Universal KUBE Inc.

INTELLIGENCE BYTES:TCS was the country's first infotech company to record a turnover inexcess of $1 billion.On 9 August 2004, TCS became a publicly listed company, much laterthan its rivals, Infosys, Wipro and Mahindra Satyam.TCS introduced the concept of Offshore Development Centres, where

TCS engineers based in India worked on projects for clients abroad andsaved costs for both TCS and its clients.TCS pioneered several best practices in the Indian IT industry, followinga unique factory approach in managing its functions including productdevelopment, creating new infrastructure and human resource

management.TCS set up India's first software research and development centre, theTata Research Development and Design Center (TRDDC) in Pune in1981.TCS entered into an agreement with Ferrari in December 2008, for an enhanced technology and marketingpartnership. As part of the deal, the Tata logo was displayed on the Ferrari F1 car for the 2009 Formula 1 season.In 2011, the company entered the Small and Medium Enterprises (SME) market with cloud-based offerings.


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FINANCE NEWS

1. Banks not in favour of savings rate deregulation now Reuters 14 JulyBanks are not in favour of Reserve Bank of India's (RBI) proposal to deregulate savingsdeposit rate--the only regulated one in the system now--citing the current volatilemarket environment. Savings deposits that are a source of low-cost funds for banks form22% of banks' total deposit base. Already banks' cost of funds have gone up after theRBI mandated that banks calculate interest paid on savings deposits on a daily basis andlater in May raised rates on such deposits to 4%.

Bankers feel if the savings deposit rate has to be deregulated, they must be allowed to

charge for services provided like ATMs, fund transfers & cheque books as banks havewitnessed their credit growth easing due to the rise in interest rates, and higher deposit rates would add to thepressure on margins. While established banks are against it, savings rate deregulation would have helped newerbanks to compete in the market & increase their share of savings deposit by offering more attractive rates.

2. EPFO names SBI, I-Sec, HSBC & Reliance Capital to manage its Rs 3.5-lakh-cr fund ET 15 JulyState bank of India, ICICI Securities Primary Dealership (I-Sec PD), Reliance Capital and HSBCAsset Management Company have been appointed as fund managers for the Employee'sProvident Fund Organizations (EPFO) more than 3-lakh- crore corpus for the next 3 years. Thefour asset management companies were chosen by the Central Board of Trustees-the EPFO's topdecision making body-out of five shortlisted by the EPFO's financial advisory committee. ICICIPrudential AMC, the 5th contender, was dropped despite being the best performing fund manageron account of its fees being higher than others.The performance of the fund managers will be reviewed after one year by the CBT and if they do

not come up to expectations, they could be dropped. The EPFO had appointed multiple fundmanagers for the first time in July 2008 for earning better returns on deposits for its 4.72 crore subscribers. The termof the four fund managers, ICICI Prudential AMC, HSBC AMC, Reliance Capital and SBI expired on March 31 2011.

3. Banks get more spend of your card Financial Express 14 JulyIn 2010-11, transactions through credit cards in the country went up by 22.15% to touch Rs75,515.68 crore in value. In 2006-2008, banks went in for aggressive competition launchinga new credit card almost day, leading to worsening credit quality & delinquency rates oncards shot up to almost 10%. Banks were then forced to cancel cards and cut credit limits,shifting focus to debit cards and secured loans.Banks have again started marketing their cards aggressively. With income levels rising,consumer spends on credit cards have also started rising. Debit card transactions considered safer for both banks and customers went up by 46.46% in the last fiscal to Rs38,691.88 crore. The latest jump in debit and credit card transactions signals a continuation of the growth observed in

the last fiscal. Debit card use is expected to rise sharply as Indian customers generally prefer to be safe and cautiouswhile dealing with plastic money.

4. Bank can't just cancel credit card: Court Financial Express 14 JulyA District Consumer Disputes Redressal Forum bench held ICICI Bank guilty of deficiency inservice and criticized the bank for misbehaviour by its staff with the consumer. The order cameon a complaint filed by Delhi resident G L Aggarwal, who had tried to make a payment at apetrol pump, when the card was rejected by the swiping machine indicating that the card wasblocked.On contacting the customer care, the banking officer used derogatory language. The forum saidthe bank was bound to inform the consumer before blocking the card. It noted that the bankhad put the consumer in an embarrassing situation which caused him mental agony andharassment and awarded a compensation of Rs 50,000 to the complainant.

5. NPAs highest in smallest home loan bracket Business Standard 13 JulyHigh inflation and the sharp rise in interest rates by banks after the Reserve Bank ofIndia's (RBI) monetary tightening has taken a toll on small borrowers ability to repayloans. According to recent finance ministry data that captures the performance of publicsector banks, instances of home loan defaults contributing to gross non-performingassets (NPAs) was the highest in the category of loans up to Rs 2 lakh. Since borrowersin this category primarily belong to the low-income group, the rise in rates has hurt theirrepayment ability, said a senior State Bank of India official.RBI has increased policy rates 10 times in the last 15 months. The substantial rise inmonthly instalments, coupled with inflation, lead to an erosion in repayment capacity.Instances of defaults were lower in case of loans in the higher brackets like Rs 5-10 lakhand above Rs 25 lakh loans. Loans of above Rs 25 lakh are taken by borrowers who are salaried employees or runestablished businesses, indicating a greater ability to absorb a rise in easy monthly instalments.


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6. Mobile transactions to soar in India: BCG Business Standard 14 JulyPayments and banking transactions through mobile phones in India are expected to touch $350billion (Rs 1,560 crore) by 2015, according to The Boston Consulting Group (BCG), a globalmanagement consulting firm. This will provide banks, telecom operators, device makers and

service providers an opportunity to earn fee income of $4.5bn. It is far less costly to offerbanking and payment services using mobile technology than to build new (bank) branches in acountry that, outside of major cities, is still largely rural, BCG said in its study, Digital India The rush to mobile money: madness or masterstroke?.While State Bank of India has joined hands with Bharti Airtel, ICICI Bank, has formed apartnership with Vodafone for mobile banking ventures. Axis Bank and Idea Cellular have also

set up a similar venture. Nokia recently teamed with Union Bank of India and Obopay to offer mobile bankingservices.

7. RBI asks banks to open 25% new branches in unbanked rural areas ET 15 JulyThe Reserve Bank of India (RBI) advised banks, while preparing their annual branchexpansion plan, to allocate at least 25% of the total number of branches proposed to beopened during a year in unbanked rural centres. The authorization for branches in Tier 1

and Tier 2 centres will now factor in whether at least 25%, of total number of branches tobe opened, are in unbanked rural areas.Unbanked rural centres (Tier 5 and Tier 6 centres) are those that do not have a brick andmortar structure of any commercial bank. At present, banks are permitted to openbranches in Tier 3 to Tier 6 centres (having population up to 49,999 as per census 2001)

without prior permission from the RBI. However, opening branches in Tier 1 and Tier 2 centres (with population50,000 and above) require prior permission of the RBI except in north eastern states and Sikkim.

8. Finance ministry bars SEZ developers from selling controlling stake in their ventures ET 16 JulyIn a move to prevent special economic zones (SEZs) from turning into real estate projects,the finance ministry has barred SEZ developers from selling controlling stake in theirventures. The SEZ law prohibits sale of land but some developers have tried to offloadcontrolling stake in their ventures, forcing the finance ministry to take up the issue. SEZs,which were envisaged as enclaves of export infrastructure excellence, enjoy substantial taxconcessions from the government. But dilutions in tax benefits over the years have madethem less attractive for developers. The latest restrictions, which deny the developers an exitoption, would add to their woes.Diversion of land acquired for industrial use to residential projects would become increasinglydifficult after the Supreme Court took strong exception to such change in land use in the caseof Noida Extension where the court has asked that land such acquired be returned to thefarmers from whom it was purchased.

9. Citi has $22 bn exposure to five crisis-hit European nations ET 17 JulyBanking major Citigroup, which fought the financial meltdown with Americantaxpayers' money, has exposure of at least $22 billion to five European nations --Greece, Ireland, Italy, Portugal and Spain (GIIPS)-- grappling with debt woes. Thedebt turmoil in all these five nations has raised alarming concerns for the overalhealth of global economy. Among them, Greece and Portugal are fighting severefinancial crisis, which even threatens to result in sovereign defaults.Citi's $13 billion exposure includes $2 billion worth assets held in various tradingportfolios that are marked-to-market daily. According to Citi, it also has a $9 billionunfunded exposure, primarily to multinational corporations which are headquartered

in GIIPS countries. Citi's latest quarterly profit of $3.34 billion came on the back of lower credit costs and improvedshowing in investment banking segment.

10. Banks set goals for their branches to sell equity mutual funds ET 19 JulyBank managements have set aggressive sales targets for their branches across the country tosell equity SIP (Systematic Investment Plan) schemes. State Bank of India plans to sell 25lakh SIP units this financial year ending March 31, 2012. Axis Bank intends to sell 5 lakh SIPunits. Banks including Punjab National Bank and Union Bank, which partly own mutual funds,

are also selling schemes through their extensive branch network. This will boost banks' feeincome, which includes commission from selling mutual funds and insurance.Rather than lump sum investments, distributing SIPs is relatively risk-free and easy to sell.Banks' focus to sell mutual fund schemes will be a huge relief to the asset managementindustry that has been reeling under the impact of a slew of regulations in the past two years.In August 2009, SEBI (Securities and Exchange Board of India) banned mutual funds from charging investors to paydistributors, resulting in distributors selling fewer equity schemes as they claimed marketing these products were no

longer viable for them.


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Xed CA Finance Newsletter July14 July20

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