Xed CA General Newsletter Aug 18 Aug 24

8/4/2019 Xed CA General Newsletter Aug 18 Aug 24

1/11

11 Pages 18th AUG 2011 24th AUG 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 TH

WEEK

COMPILED BY

INDUSTRY ANALYSIS

BSE SENSEX 16,235

NSE NIFTY 4,860

RS/$ 46.12

(as on 25th

Aug 2011)

ECONOMICINDICATOR

Coal India topples RIL

as Indias most

valued firm

COVER STORY

MISCELLANEOUS

NEWS

I will die but won't

take drips: Anna

INTERNATIONAL

NEWS

HP to Switch Off Tabs

& Phones, Log Out of

PC Biz

XED NEWSLETTER a weekly news bulletin

Tech Wars: Google buys Motorola


2/11

TOP 10 HEADLINES OF THE WEEK

1. Coal India topples RIL as Indias most valued firm.2. India plans manufacturing policy to boost job creation.3. For the 1st time in 120-year-old history, Mumbai's dabbawalas to take a break for Anna Hazare4. Infosys chairman Narayana Murthy calls it a day.5. India-born S&P chief who cut US rating quits.6. Indian toy industry worth Rs 1700 cr.7. Hp to switch off tabs & phones, log out of pc biz.8. Secede Rise of Chinese cos rattles US.9. I will die but won't take drips: Anna Hazare.10.TOI most searched on internet.

ECONOMIC INDICATORS

Of the Worlds biggest employers, who has shed the most jobs?

UBS, Switzerlands biggest bankannounced 3,500 staff reductions onAugust 23rd in efforts to save costs. Lastweek, Bank of America reported it wouldcut 3,500 jobs (adding to the 2,500 ithad already made this year) and lastmonth Cisco, the worlds largest makerof networking equipment, announced itwas shedding 6,500 jobs.

But of the worlds biggest corporateemployers (our chart excludes statebehemoths like China's army) the USPostal Service shed the most jobs

between 2009 and 2010, cutting itsworkforce by 6%. The contrast betweenthe two charts is striking: the biggestemployers include several Chinese state-backed companies that may beunfamiliar to readers outside China. Thecompanies that have shed most jobs, onthe other hand, are almost all Westernoutfits with famous names.

Stock Market Indices as on 25th Aug11 Values

BSE SENSEX 16,235

NSE (NIFTY) 4860

Current Market Rates as on 25th Aug11 Values

Rupee/US Dollar 46.12

Rupee/Euro 66.52


3/11

TECH WARS: GOOGLE BUYS MOTOROLA

The Deal:Google purchased Motorola Mobility, the consumer electronics division ofMotorola for $12.5bn. It agreed to pay $40 per share in cash, over 60% more thanthe stock's value. In addition to Android smartphones, Motorola Mobility producestablets, Bluetooth accessories, set tops, digital video recorders, and other products.

Reasons for buying Motorola:

1)Patents: Motorola mobility has over 14,000 patents and another nearly 7,000

pending, all of which can help protect Google's Android mobile OS platform and all theAndroid hardware OEMs from the plethora of lawsuits filed by Apple, Microsoft, andothers trying to gun down the Google juggernaut. These patents cover technologyessential to the mobile-device industry, including location services, antenna designs,e-mail transmission, touch-screen motions and third-generation wireless. MotorolaMobility had asserted 18 patents against Apple. These lawsuits targeted Apple'siPhone, iPad, Apple TV and even the Mac Book Air. 4 of these 18 patents were also used against Research in Motion,resulting in the BlackBerry manufacturer to pay royalties.

2) Google TV:Motorola is the leading manufacturer of set-top boxes used by major cable services. This might giveGoogle a new way to push in Google TV & make it more mainstream after it s not so successful debut. The major U.Snetworks (ABC, CBS, NBC, Fox) had blocked early Google TV adopters access to online content, essentially makingGoogle TV unable to live up to its billing as an all-in-one solution.

Microsoft responds: Soon after the deal, Microsoft accused Motorola Mobility of infringing 7of its patents and called for a ban on imports to the US for some of its handsets like Droid 2,Droid X, Cliq XT, Devour, Backflip and Charm. Motorola Mobility had also earlier claimed thatMicrosoft infringes some of its patents over video technology and is seeking to block importsof the Xbox video-game console.

Vertical integration: The marriage of Google and Motorola mobility underscores thethinking that for a company to be really successful in tablets and smartphones, they have toown the ecosystem of hardware, software and services. As Google studied the ingredients ofApples success, it became obvious that Apples ownership of the OS and then its ability tofine-tune the hardware to deliver a seamless user experience was critical to consumersstrong acceptance of the iPad and iPhone. Apple uses this ownership to drive amazinginnovation.

What could be future developments?

Microsoft buying Nokia: It would be tomfoolery to assume the same thinking has escaped Microsoft. Microsoftclearly wants Windows Mobile Phone 7 to become a worldwide hit and at this moment, Nokia is just anotherdistributor of Windows Phone 7 in the same way HTC and others are. But if they decide to keep this OS as a purelicensed property and trust the hardware partners to innovate on their own, this will be stuck. They too will come tothe conclusion that if they want Windows Mobile 7 to be the third major alternative to Apples IOS and GooglesAndroid, they will need to own the hardware as well as the software and services.

Room for an open source third operating system: A couple of years ago, whenvarious handset makers were looking for a mobile OS to back up their devices,Google would provide an open source version of Android and with it allow thevendors to customize and add their own features so that they could differentiatetheir products from other Android licensees. Now that Google has bought Motorola,

many Android licensees believe Google will exercise tighter control over Android andwith Motorola develop a more vertically integrated approach to the market.

The major fallout from this is that there is now room for a third mobile OS, otherthan Apple IOS and Android, to come out that would give vendors a broad solutionthey can use without having to compete with Google/Motorola. Windows mobile andHPs Palm Web OS can be probable alternatives. However supporting Microsoft is equal to just supporting AndroidMicrosoft would still control the OS and dictate the terms of use, development and give licensees very little room toinnovate at either the hardware or software level. It is also not clear where Palm Web OS is going after HP closeddown making Web OS devices. We also dont know if it will ever be an open OS that licensees can freely customize ornot. So it is probably not wrong to expect the tech war among Apple, Google and Microsoft to enter another level withnew equations, new alignments and new gadgets.


4/11

PERSONALITIES OF THE WEEK

BEN BERNANKE: SCULPTING THE RESERVEBen Shalom Bernanke is an American economist, and the current Chairman of theUnited States Federal Reserve. Bernanke, a Republican who was appointed by PresidentGeorge W. Bush in October 2005 and who had briefly served as chairman of PresidentBushs Council of Economic Advisers, succeeded Alan Greenspan on February 1, 2006.He was nominated for a second term by President Barack Obama in 2009 as theChairman of the Federal Reserve.

Jewish belief:Bernanke was born in North Augusta, South Carolina, and was raised in a ranch-stylehouse on East Jefferson Street in Dillon, South Carolina. His father Philip was apharmacist and part-time theater manager, and his mother Edna was an elementaryschoolteacher. As a teenager in the 1960s, Bernanke used to help roll the Torah scrolls(handwritten copy of the holiest book within Judaism) in his local synagogue. Although he keeps his beliefs private,his friend Mark Gertler, chairman of New York University's economics department, commented in 2005 that, "it isreally embedded in who he (Bernanke) is. Bernanke attended Harvard University, where he lived in WinthropHouse and graduated in economics summa cum laude in 1975. He received his Ph.D. in economics fromthe Massachusetts Institute of Technology in 1979.

Guiding an abyssal recovery:From 2002 until 2005, he served as a member of the Board of Governors of the Federal Reserve System. Here heoutlined the Bernanke Doctrine and first spoke of the Great Moderation, where he postulated that we are in a new era,

where modern macroeconomic policy has decreased the volatility of the business cycle. Since he was selected in 2005to replace Alan Greenspan as chairman of the Federal Reserve, Bernanke has made bold, unprecedented moves in anattempt to bolster the U.S. economy. Presently Bernanke faces a dilemma. If he cuts rates too far, too fast, he will beaccused of caving in to Wall Street's Masters of the Universe. If he fails to act, and America's housing crash, combinedwith a tightening of credit conditions, tips the economy into a full recession, he will take much of the blame.Disentangling the impact of the mess the banks are in, and the housing market slowdown, would flummox even themost adept number-cruncher. Bernanke has made his name in Ivy League classrooms; now he must pluck the globaeconomy from the abyss.

ALYQUE PADAMSEE: DREAM MERCHANTAlyque Padamsee is an Indian theater personality and ad film maker. He isprobably best known for playing Muhammad Ali Jinnah in the film Gandhi.Besides being involved in Indian theatre as an actor and producer,Padamsee is well known as an advertising professional who headed the

advertising company Lintas.

Triggering inferno:Alyque has unearthed the talent of Shyam Benegal, Kabir Bedi and ShiamakDavar. As the chief of the films department at Lintas, he was looking for anassistant and found this copywriter under Gerson da Cunha. He told Gerson:'I see possibilities in Shyam. He will be better off in my department than inyours.' Gerson said: 'Give him a try.' Evita (the play directed by Aleque Padamsee) became a landmark production inmany ways. It created a galaxy of stars - Sharon; Shiamak, who had a small dance role; Rachel Reuben, who becamea model; Suneeta Rao and Alisha Chinai, who are pop stars now.Flourishing year:Alyque was born in a Kutchi business family. His father, Jafferseth, owned 10 buildings and also ran a glasswarebusiness. His mother, Kulsumbai Padamsee, ran a furniture business. Anything he wanted was there for the askingThey were eight children in all but he, being born after three daughters, was pampered the most. His brother Sultan

initiated the family into theatre: Sultan, his eldest brother set the theatre trend among the Padamsees. He studiedtheatre at the Royal Academy of Dramatic Arts.

Multifaceted genius:On television he takes the credit for introducing the detective serial Karamchand a peculiar character from theDoordarshan days. He has been conferred the Life Time Achievement Award by the Sangeet Natak Academy. His mostfamous advertising campaign was Lalitaji for Surf, which became a household name. He has been conferred

Padmashree for his contribution in the field of advertising. In 1999, he published his autobiography, A Double Lifewhich is now a best seller. Alyque says this about himself in one of his interview s, I believe that ageing is all in themind. A cynical attitude never helps. I follow the path of the heart. I hate status quo; there should be a sense ofexcitement in what I do. Having lived the life I have, I have no regrets. I wouldn't exchange my life for anything elsein the world.


5/11

BUSINESS NEWS

1) Coal India with a market cap of Rs2.5 lakh cr topples RIL as Indias most valued firm-TOI 18 AugCoal India, a rank newcomer in the elite list of 30 companies that constitutes the sensexand which listed on Dalal Street less than a year ago, replaced Reliance Industries (RIL)as the most valued Indian company. The nearly four-decade-old Kolkata-headquarteredCoal India now boasts of a market capitalization of Rs 2.5 lakh crore, or $ 55.3 billion,compared to RILs Rs 2.47 lakh crore. A close third is ONGC, with a market value of Rs2.37 lakh crore. Listed on the eve of Diwali in 2010 following a blockbuster IPO that wasoversubscribed over 15 times, the stock price of Coal India, the worlds largest coa

miner, has gained about 62%, compared to a 32% fall in RILs stock price over the sameperiod. On Wednesday, the coal miners stock on BSE closed at Rs 398, up 2.6%.

2) India plans manufacturing policy to boost job creation-ET 20 AugIndias Manufacturing Policy sets an ambitious target of boosting manufacturing from 15%of GDP to 25% by 2025. India aims to sharply crank up its manufacturing base to helpprovide jobs to 100 million young people who will join the workforce by 2025, a ministersaid Friday. The "National Manufacturing Policy", to be unveiled in a few weeks, plans toboost the share of manufacturing in the country's economy to 25 percent from a current 15to 16 percent, Sharma said. The proposals will include a policy aiming for creation of worldclass manufacturing infrastructure by setting up special manufacturing zones, Sharmasaid. India's Crisil Research, a private research house, said in a report earlier in the weekthe country needs to generate at least 55 million new jobs by 2015 to maintain currentlevels of employment in the country of 1.2 billion people. India's government has been

seeking to promote industrial expansion and shift its economy away from service-sector led growth to create jobs.

3) For the 1st time in 120-year-old history, Mumbai's dabbawalas to take a break for Anna Hazare-ET 19AugFor the first time in their 120-year-old history, Mumbai's famous dabbawalas, who delivertiffins service to over two lakh customers daily, will be taking a break tomorrow, to supportsocial activist Anna Hazare in his fight against corruption. "To support Hazare, as the wholecountry is doing so, the 5000 dabbawalas in the city would hold a rally from Churchgate toAzad Maidan tomorrow," Mare said. Anna Hazare is on an indefinite hunger strike and not afast-unto-death, his associate Kiran Bedi said today. "As long as he can fast, he'll continuethe fast. But the moment Dr Naresh Trehan's team is of the view that he needs medical

attention, he will get medical attention because the object is that it is an indefinite fast and not a fast-unto- death,"she said. Permission has been given to Anna Hazare and his associates for his fast at Ramlila Maidan till Septembertwo and it is conditional, Home Secretary R K Singh said today. He said the government was not involved in any

discussion with Team Anna and it was the Delhi Police which held the talks and resolved the issue "amicably".

4) Infosys chairman Narayana Murthy calls it a day- ET 19 AugTo figure why Infosys caught the public imagination like few others, one doesnt have to look furtherthan the riches it brought lakhs of ordinary shareholders and its mainly middle-class employees. Ifyou had bought 100 shares at the offer price of Rs 95 per share in 1993, today it would be worth Rs2.30 crore. Given that Infosys pays out 30% of its net profit, you would have earned a tax-freedividend income of Rs 5.76 lakh last fiscal on that modest Rs 9,500 investment. Murthy is retiringwhen the gloss is wearing off Infosys. Competitors are snap ping at its feet. Its long-held premiumpricing is under stress. Of course there are those who believe that Murthy won't be fading into thesun set anytime yet and that even as chair man emeritus his shadow will loom large on Infosys. Butin an Indian culture where people are loathe to let go of their chairs well into dotage, that he's officially walking in hismid-60 s makes for powerful symbolism.

5) India-born S&P chief who cut US rating quits-TNN 24 AugThe Jharkhand-born Indian-American analyst who shook the world economy with anunprecedented downgrade of US credit rating earlier this month is stepping down as president oStandard & Poors. Deven Sharma, who has been S&P president since August 2007, and was littleknown outside financial circles before his epic call on August 5, will leave on September 12 to takeup new challenges, the rating agencys parent company Mc-Graw-Hill said on Monday. DouglasPeterson, the current chief operating officer at Citibank, will replace Sharma.

Most market mavens said S&P had been laying the groundwork for the change for months and itwas unrelated to the recent developments involving the US downgrade from AAA to AA+, a movewhich was slammed by the Barack Obama administration. The downgrade resulted in turmoil in

the world financial markets that is yet to subside.


6/11

6) Indian toy industry worth Rs 1700 cr-ET 23 AugIf you don't know who Lightning McQueen, Marlena and Sebastien are, ask any preteenin your neighbourhood and they will probably show you one or more of them. These arecar characters from Hollywood computer animated film Cars 2 which kids know all about.Cars 2 is the latest success story in India's booming toy economy that has become ahuge money spinner for toy makers, retailers, some Hollywood studios and children'stelevision channels.

The stats speak the story: the Indian toy industry is estimated to be worth Rs 1,700crore and growing 15-20% a year. According to a Euromonitor study, spending on toys

and games in India is set to grow at 157% between 2009 and 2014, much faster than other Asian countries such asChina (84%), Taiwan (35%), South Korea (33.1%) and Singapore (17.2%). Funskool, a joint venture between tyremaker MRF and US toy maker Hasbro Inc, recently introduced two high-end block games - Mindstorm and Taj Mahal-carrying price tags of Rs 22,000 and Rs 27,000, respectively. It clocked revenues of Rs 80 crore in the year endedMarch 2011, while Mattel, which sells toys under Fisher-Price, Barbie and Hotwheels brands, has an India turnover ofapproximately 300 crore.

7) Sensex may Dive Another 13% in Choppy D-Street-ET 22 AugStock investors need to brace for more turbulence ahead, with the outlook for equities turninggrimmer as Europes plagued banking system threatens to implode and the US economy stares athe possibility of another recession. Benchmark indices, after dropping almost 15% in a month,could fall as much as 13% in the next few weeks, an ET poll of fund managers and brokers said.

The market will continue to remain under pressure because the worsening problems in

developed economies and lack of clarity about domestic growth (amid rising inflation, tighteningmonetary policy and uncertainty over policymaking) are hurting investor confidence, said AnandShah, chief investment officer, BNP Paribas Asset Management. Investors see Europes deb

problems as a bigger concern than the US economic crisis and await the next move by German Chancellor AngelaMerkel to stabilize the continents financial markets. A failure to cobble together a rescue plan for Europe soon couldbe calamitous for the global markets, fund managers said. The recent firming up of inter-bank rates in the US andEurope has doomsayers likening the ongoing crisis to the one after Lehman Brothers blew up.

8) Only e-payments by PSBs from Sept 01-BS 22 AugMove aimed at speeding up process, checking corruption in funds transfer. The Unionfinance ministry has told all state-owned banks and financial institutions to makepayments only electronically from next month. The move is aimed at checking corruptionin transfer of funds through cheques and making the entire process transparent andfaster. In a circular to all 35 state-run banks and financial institutions, the ministry said

they must not make any payment through cheques from September 1.

The ministry is in touch with insurance companies as well, to extend the scope of e-payment to all their payees. As part of its e-governance initiative, the ministry says it has asked these bodies to gofor paperless fund transfer so that irregularities in payments through cheques to various parties, such as employees,vendors, customers and social sector schemes can be checked.

9) Shailesh Saraf, VP Morgan Stanley, is fasting along with campaigners for the Jan Lokpal bill-TOI 18 Aug29-year-old Shailesh Saraf has never blindly followed a popular trend. Currently on "FLor fasting leave", Saraf, a vice president of a global bank, is down from Hong Kong tocampaign for the Jan Lokpal bill. Saraf was among the 72 protesters who were fastingfor the second consecutive day at Azad Maidan; two new recruits joined the fast onWednesday. At the maidan, Saraf intermittently checks his Blackberry, not forinvestment updates or market movements but for news of Anna Hazare's release. For

the most part, he sits on the stage, listening to people unspooling long speeches aboutthe corruption they'd faced. Corporate India is making its voice in favour of Hazareheard loud and clear. While Anand Mahindra tweeted that the anti-corruption sentimentis a scream, not a whisper, Deepak Parekh said the need for a Lokpal bill was a given,

but Team Anna should debate it democratically.

10) Sensex, Nifty crash nearly 2% as FIIs dump Rs900cr shares- ET 20 AugWealthy investors are waiting for stocks to dip further. Insurance companies and mutual funds arebuying in small doses too scared to stick their neck out. Offshore funds that specialise inemerging markets are pulling out to park cash in US treasury bills papers that are once againbeing perceived by global investors as a safe haven. Foreign investors dumped Indian shares worthRs. 900 crore, according to provisional data, taking their sales tally for the month to almost Rs.8,000 crore. Indias spot gold prices crossed Rs. 28,000 per 10 grams, a new high.


7/11

11) Indian cos, make a rush to launch tablet PCs -TOI 20 AugIf iPad is the only word that comes to mind when someone says tablet, heres news foryou. Its not just the Apples and Samsungs that are dishing out these fancy mobile PCswith a flat touch screen not much larger than your cell phone. A number of Indiancompanies big and small, well known and obscure are launching tablets almost on adaily basis; a few of them are putting out several models in a day. The best part: theyare being launched at mouthwatering prices to seduce first-time buyers and steer themaway from laptops and net books. The smaller the company the more ambitious is thelaunch. Take, for instance, Lakshmi Access Communications Systems (LACS). TheBangalore-based equipment maker, earlier unknown to the Indian tablet scene, launched

14 tablets starting from Rs. 6,999 on Friday. During the week, Reliance Communications (RCOM) and Bharti Airtelshandset arm, Beetel Teletech, shattered price barriers by launching tablets starting at Rs. 12,999 and Rs. 9,999,respectively, within days of each other.

12) DLF, guilty of unfair practices, will shell out 7% of 3 years turnover as penalty- ET 18 AugThe countrys competition regulator is planning to initiate an investigation to findwhether the practices for which it fined DLF Rs. 630 crore are the norm at other realestate companies too. If the regulator does initiate action and finds more companiesguilty, it could levy penalties similar to that imposed on DLF; 7% of average turnoverfor the last three years. The anti-monopoly watchdog, in its 237-page order againstDLF, was critical of 15 terms and conditions in the contract the company had signedwith the buyers of The Belaire, a residential project in Gurgaon. It said these werestacked in favour of the developer. DLF, in its defence, said these were industrypractices and it was merely adopting the same; it even showed buyer agreements of

other builders to the CCI, which examined them.

13) Superstar Anna Leaves Shahrukh Behind-ET 22 AugAnna Hazare, the diminutive ex-soldier who has rallied people from all walks of life inhis fight against corruption, has now stormed the virtual world too, where his fanfollowing on social networking sites is growing by the minute. Hazare, who began hishunger strike on Friday to demand inclusion of the Prime Minister, judges and topbureaucrats in the planned Lokpal's ambit, is also among the top 10 names searchedon Google; and was watched by 40,000 people on YouTube on Friday. OnIndependence Day, Anna had over five lakh mentions through status updates andcomments across top social networking sites, including Facebook and Twitter in thecountry.

The Capital and India's Silicon Valley, Bangalore, topped the list of Anna posts on

Facebook, Twitter and other similar sites. Delhiites mentioned the 74-year-old in over nine lakh posts, Bangloreans innearly eight lakh, Mumbaikars in over seven lakh, Gurgaon 4 lakh, and Pune with 2.3 lakh mentions. Anna was amongthe top 10 most-searched terms on Google from August 15-18. As per Google Insight, Jan Lokpal Bill, Kiran Bedi andArvind Kejriwal were also among the top searches. On Friday, Anna logged 1.64 crore Google results while Bollywoodsuperstar Shahrukh Khan trailed at 1.38 crore. On YouTube, over 40,000 people watched the video shot by Kiran Bediinside Tihar Jail in which Anna has addressed his supporters. Facebook has 542 fan pages by Anna's name.

14) New Ulips sales rules force 35%, or 10.45 lakh insurance agents to quit profession in 2011-ET 18 AugMore than 10 lakh insurance agents quit the profession in fiscal 2011 as new rules on saleof Ulips made it unviable to remain in business. Data compiled by IRDA for the first timeon addition and deletion of agents in any year showed the number of agents leaving wasabout 35%, or 10.45 lakh of the total number of agents at the beginning of the year.Another 5.4 lakh left the segment during the second half of the year, just after theregulator reduced commissions for agents and brought a host of stringent norms,

including a cap on policy lapses. Some 100-odd policies vanished from the market sincethey were rendered ineligible under the new norms.

15) Start ups find funding much easier than hiring right talent at right price- ET 19 AugA talent crunch is turning out to be a concern even as entrepreneurship is goingmainstream and dozens of start-ups are raising millions of dollars in venturecapital. According to some estimates, freshers can be paid just Rs. 13,000-15,000 atstart-ups. In comparison, large IT, telecom services and consumer goods companies pay20% more. They also offer job security and clear growth paths. A smart executive canclimb up to a monthly salary of Rs. 70,000 in three years. Multiple estimates suggeststart-ups are already spending anywhere from a fifth to half their revenues on peoplecosts and cant afford any more. Even though venture capital funding has improvedsignificantly in the past few years, young firms still struggle to pay for the best talent.


8/11

16) 5 lakh truckers to go on indefinite strike from midnight- ET 19 AugOver five lakh truckers from southern states and Maharashtra, affiliated with AllIndia Motor Transport Congress (AIMTC), will go on an indefinite strike frommidnight to protest non-compliance of its various long pending demands.

Sunil Kale said. "Transport industry is already in turmoil due to ever increasingcosts of diesel, tyres, insurance premium and exorbitant toll charges. In addition,faulty policy on toll charges, tyre imports, diesel pricing etc has made the entireroad transport business unviable "We have made several representations to thegovernment to abolish the provision of collection of toll in perpetuity, but the

ministry has neglected our demands.

17) Food processing sector in India in an "appalling" state: Parliamentary panel-ET 23 AugA Parliamentary panel expressed concern over the "appalling" state of the food processing sectorand pointed out that fruits and vegetables worth more than Rs 50,000 crore are wasted everyyear due to lack of storage and processing facilities.

The benefits of a strong agriculture production base are being "frittered away" due to lack ofstorage and processing infrastructure, the committee said in its report on the Ministry of FoodProcessing Industries (MOFPI). "The gravity of the situation can be realised from the fact thatthe post harvest losses of fruits and vegetables are as high as 35 per cent, valuing more than Rs50,000 crore per annum," the committee pointed out. Comparing the food processing levels,

which in India stand at 2.5 per cent, the committee said that the same is 78 per cent in Philippines, 65 per cent inUSA and 23 per cent in China.

18) Soon, education loan to have tenure of 15 years- Hindu Business Line Aug 22Student-borrowers may soon have something to cheer about. Banks are likely toallow extended repayment period of upto 15 years for education loans, against 5 to7 years now. The extended period, according to Mr K. Unnikrishnan, Deputy ChiefExecutive, Indian Banks' Association, is along the lines of the education loan schemein the UK.

The extended loan repayment period is expected to ease the burden of instalmentson student-borrowers, especially those who enrol in private professional colleges butare unable to get good job placements. Banks too will benefit from the extendedperiod. Once the load of high installments is taken off, loan defaults will come down,thereby saving banks from making provisioning, say bankers. The scheme was firstintroduced in 2001.

19) GVK to Buy BIAL Stake for 614 cr - ET 23 AugHyderabad-based GVK Power and Infrastructure will become the largest shareholder inBangalore International Airport (BIAL) after agreeing to bite the bullet and pay a premiumin difficult market conditions to buy Siemens 14% stake. GVK, which was given time tilAugust 20 to exercise its right to buy Siemens shares, said on Monday it had agreed to thetransaction for 614 crore. After approvals and documentation are complete, GVK will own43% in BIAL while Siemens will hold 26%. GVK already runs the airports day -to-dayoperations.

The deal values BIAL at 4,384 crore, an 8.6% premium over the price of 105 per share GVK had paid in 2009 foracquiring the stakes of L&T and Zurich Airport. GVK had resisted doing the transaction on the 2009 valuation, but hadto give ground as the prospect of rivals entering the fray appeared imminent. GVK, which as the second-biggestshareholder had the first right to buy Siemens stake, was offering only 60 per share as it felt that the 2009 valuations

were no longer valid due to change in business conditions.

20) Accenture plans to acquire Zenta - ET 23 AugIT major Accenture is planning to to acquire residential and commercial mortgage processingservice provider Zenta for an "undisclosed amount". The acquisition would help Accenture to helplenders and real estate investment trusts streamline their operations, enhance customerexperience and improve profitability, a company statement issued here said.

According to the terms of the agreement, Accenture would launch 'Accenture Credit Services', afull-service consulting, technology and BPO operations in residential, mortgage and commercial real estate business.Zenta's mortgage processing capabilities would be the key component for this service. US-headquartered Zenta is oneof the top three providers of mortgage processing services in the USA. Following the acquisition, 3,700 employees oZenta are expected to join Accenture, the statement added.


9/11

INTERNATIONAL NEWS

21) HP to Switch Off Tabs & Phones, Log Out of PC Biz- TOI 20 AugHewlett-Packard is surrendering in smartphones and tablet computers and has put itspersonal computer division up for sale, as new CEO Leo Apotheker tries to transform theSilicon Valley stalwart into a twin of East Coast archrival IBM Corp. The restructuring containsan unmistakable message: HP has failed to cater to both consumers and corporations. As aresult, it needs to exit most of its consumer businesses, just as IBM did six years ago.

The overhaul will have three parts. One, HP will stop making tablets and smartphones by

October. Two, it will try to spin off or sell its PC business, the worlds largest. By the end ofnext year, HP computers could be sold under another companys name. Three, it plans to buy

business software maker Autonomy Corp for $10 billion in one of the biggest takeovers in HPs 72 -year history. HPthe worlds largest technology company by revenue, will continue to sell servers and other equipment to busi nesscustomers, just as IBM does.

22) Secede Rise of Chinese cos rattles US-ET 18 AugIn 2005 China had just 16 companies in Fortune 500 & US 176. Now Chinahas 61 & US 133. Rise of China state-owned firms rattles US companiesincluding at least one, Lehman Brothers, no longer around. In Fortunemagazine's 2011 list of the 500 largest companies, the United States leadswith 133, four more than Japan's 68 and China's 61 combined. But aglance back at the 2005 list would give you more of a reason to smile.That year China had just 16 companies in the top 500 and the United

States had 176, including at least one, Lehman Brothers, no longeraround. What American business finds disturbing is that most of theChinese companies are state-owned, including the three in Fortune's TopTen -- China Petroleum and Chemical Corp (also known as Sinopec), ChinaNational Petroleum and State Grid "

23) US & Europe dangerously close to recession-ET 19 AugUS markets panicked with dismal job data while stocks in Europe collapsed as politicaleaders failed to liven up investor confidence. Back home, markets are beginning tosense a political uncertainty as a helpless government faced Team Anna. With Dowtrading 4% lower in early trades and European markets tumbling 5%, Dalal Street maybattle fresh selling. The Sensex fell 2.2% to end at 16,470 while Nifty closed below5,000 for the first time since June 2010. Lowering its global growth forecast, MorganStanley said the US and Europe are dangerously close to recession.

24) China pips US as largest personal computer market-ET 24 AugChina probably overtook the US as the largest personal computer market last quarter, after threedecades of US dominance in an industry pioneered by Apple and International Business Machines.Personal-computer shipments in China rose 14% to 18.5 million units during the second quarter,the first time they surpassed the number in the US, where they fell 4.8% to 17.7 million, BryanMa, an analyst at research firm IDC, said in an interview on Tuesday. The shipments were worthUSD 11.9 billion and USD 11.7 billion, respectively.

During the April-June period, China's market share of global PC shipments increased to 22percent, surpassing the 21 percent share held by the world's biggest economy. The data includes desktops, portablesand mini-notebooks, but not handhelds, such as tablets, the research firm said in a global quarterly report. IDCforecast that 85.2 million units will be shipped in China in 2012, compared to 76.6 million in the US. On a full yearbasis, China will likely pass the US in 2012, he said. The estimates highlight the growing importance of China's

consumers to the global economy after the country passed the US in 2009 as the largest auto market.

25) BPOs to grow by 18 % in Asia, Asia-Pacific in 2011-ET 22 AugThe worldwide business process outsourcing (BPO) market is forecast to grow by 6.3 per cent globallyand 17.9 per cent in the Asia-Pacific during the year 2011, says a study by market research firmGartner.

Gartner said that growth in the Asia and Asia-Pacific BPO markets would be positive and was expectedto be 17.9 per cent in dollar terms during the year 2011. Gartner expects higher demand for servicesrelated to customer management (CM) BPO, HR outsourcing, banking, financial and billing BPOservices and supply management BPOs through 2015. Most growth will centre on the key regiona

economies of India, Australia and China, the statement said. The firm identified scalability, the infusion of newprocesses and technology as the key drivers for the outsourcing business in emerging economies within the region.


10/11

MISCELLANEOUS NEWS

26) Anna gives a call for a jail-bharo campaign-TOI 20 AugEmboldened by the swelling crowds at Ramlila Maidan, Gandhian anti-corruption crusaderAnna Hazare upped the ante within hours of emerging from Tihar Jail. He set a three-week deadline for Parliament to pass the Jan Lokpal bill, pending which he wouldntbudge from the grounds. This was not only contrary to his groups commitment to vacatethe protest site by August 31, but was also seen to be brushing aside parliamentaryprocesses as no such deadline is set for standing committees to study draft legislations indetail. Anna also gave a call for a jail-bharo campaign if the deadline was not met. The

ultimatum marks a hardening of stand which could queer the pitch for negotiations and asettlement to the dramatic face-off.

27) TOI most searched on internet-ET 22 AugKerala was never a popular destination with Americans. But in the last six months, it has

Bangalored Bangalore to make it to the most-searched list of US internet users, thanksto its temple wealth. Even the French seem to be awed by Indian temples. And then thereare the fashionistas who trawl the internet to find a good place to buy human hair forwigs. Spirituality, cricket and judiciary are also high on the ladder.

The top three sites that follow the search for India, are wikipedia, Google maps Indiaand the National Portal of the Indian Government. The survey reveals that in the US, UKand Hong Kong, the top two searches are Times of India and India. In the US, the mostlooked up Indian city is Bangalore, thanks to their President Barack Obamas vitriolic

speech against job outsourcing. The Indian state that has got the highest number of hitsis Kerala, not because of its soul-stirring backwaters, but because of Padmanabhatemples wealth of Rs 60,000 crore. Treasure found in India was the seventh on US

netizens list.

28) 517 out of 518 would-be judges flunk law test-The Hindu 22 Aug Criminal. A hoax. A malicious joke. Unbelievable. Whatever be your initialreaction, it's a hard fact of numbers. Yes, only one out of 518 lawyers whoappeared for a written test conducted by the Karnataka High Court for directrecruitment of district judges has cleared it. The test was conducted to fill 13vacancies of district judges under the Karnataka Judicial Officers (Recruitment)Rules. Advocates with a minimum of seven years of legal practice were eligible toapply. A committee comprising senior judges of the High Court set the questionpaper and evaluated the answer scripts.

Former Advocate-General Uday Holla described the results as a sad reflection on the Bar. He, however, saidmeritorious graduates, particularly from prominent law schools, might not be showing interest in joining either the Ba(law practice) or the Bench (judiciary). They appeared more attracted to corporate jobs.

29) Indian knowledge outsourcing ind to reach $5.6 bn by FY 2015-PTI 2 AugIndia's knowledge services outsourcing industry is expected to touch USD 5.6 billionmark by 2015, a Nasscom-Crisil study said today. "...the knowledge services outsourcingindustry here is expected to grow at a CAGR of 22.2 per cent over FY 2010-15 from USD2 billion in 2010 and touch USD 5.6 billion," Nasscom President Som Mittal said whilereleasing the report.

Globally, the knowledge services landscape is expected to grow from USD 2.9 billion in2010 to USD 7.9 billion by fiscal year 2015. According to the study, North America would

continue to be the dominant sourcing destination, given its longer experience withservices outsourcing.

30) I will die but won't take drips: Anna Hazare-ET 23 AugSpeaking in feeble voice, the 74-year-old said that he had been told that his kidneys showedsigns of weakening and that he needed drips. "I consulted my inner conscience... My innerconscience does not allow me to take saline drips," he said, speaking from the raisedplatform where he has been on hunger strike that began Aug 16. "It doesn't matter if I die,"he said, as aides standing near him bowed their heads, some with tears in their eyes. If Idie, so many Annas will emerge," he added, pointing his hand towards the roaring, flag-waving crowds. "If they try to take me away forcibly, park yourself at the gates and don't letme taken away," he said, as the mass of supporters again roared in his support. "But thereshould be no violence," Hazare went on. "Whatever we do should be done non-violently. Violence is a crime."


11/11

THE CONSULTANCY INDUSTRY

The business of giving expert advice, management consulting refers to the industry andpractice of helping organizations improve their performance through the analysis ofexisting organizational problems and development of plans for improvement. Companiesavail the services of management consultants for gaining external and presumablyobjective advice as well as access to the consultants' specialized expertise.

Leveraging Expertise: Consulting firms are said to be aware of industry best practices asa result of their exposure to and relationships with numerous organizations. Consultancies

have evolved today to provide organizational change management assistance,development of coaching skills, technology implementation and strategy development oroperational improvement services. Management consultants generally bring their own, proprietary methodologies oframeworks for identification of problems and recommendations for more effective or efficient ways operforming work tasks. As per Marvin Bower, McKinsey's long-term director, the focus and experience of consultantsin gathering information worldwide and across industries makes their research more cost-effective than clientsundertaking these activities themselves.

Overview: Management consulting grew with the rise of management as a unique field of study. The firstmanagement consulting firm was Arthur D. Little, founded in 1886 by the MIT professor othe same name. Incorporated in 1909, it originally specialized in technical research. BoozAllen Hamilton was founded by Edwin G. Booz, a graduate of the Kellogg School oManagement at Northwestern University, in 1914 as a management consultancy - the first toserve both industry and government clients. The first wave of growth in the consulting

industry was triggered by the Glass-Steagall Banking Act in the 1930s and was driven bydemand for advice on finance, strategy, and organization. After World War II, many newmanagement consulting firms were formed, most notably Boston Consulting Group, foundedin 1963, which brought a rigorous analytical approach to the study of management andstrategy. Boston Consulting Group, McKinsey, Booz Allen Hamilton and the Harvard Business

School developed the tools and approaches that have provided the groundwork for many consulting firms to follow.

Stalwarts in the business: While the then Big Eight, now Big Four, accounting firms (PricewaterhouseCoopersKPMG; Ernst and Young; Deloitte Touche Tohmatsu) started focusing on corporate strategy & organization apart fromtheir traditional services, big accounting firms entered the IT consulting segment in the second half of the 1980s. Anindustry structural trend in the early part of the 21st century was the spin-off or separation of the consulting andaccounting units of the large diversified professional advisory firms most notably Ernst & Young, PwC and KPMG. Forthese firms, which began operation as accounting and audit firms, management consulting was a new extension totheir organization. But after a number of highly publicized scandals over accounting practices, such as the Enron

scandal, these firms began divestiture of their management consulting units to more easily comply with the tighterregulatory scrutiny that followed.

Industry Outlook:Management consulting had industry growth rates exceeding 20% in the 1980s and 1990s. As abusiness service, consulting remains highly cyclical and linked to overall economic conditions. The consulting industryshrank during the 2001-2003 period, but grew steadily until the recent economic downturn in 2009. Since then themarket has stabilized. Currently, there are three main types of consulting firms. Large, diversified organizations,Medium-sized management consultancies and Boutique firms which have focused areas of consulting expertise inspecific industries, functional areas, technologies or regions of the world. Companies also set up internal corporateconsulting groups formed around areas as strategy, organizational development, process management, informationtechnology, design services, training and development.

The Flip side of Expert Advice: Despite consistently high and growing revenues,management consultancy also attracts significant criticism from clients as well as

management scholars.Management consultants are often criticized for overuse of buzzwords,reliance onand propagation ofmanagement fads and a failure to develop plans that areexecutable by the client.Disreputable consulting firms are often accused of delivering empty promises,despite high fees. They "state the obvious" and lack the experience upon whichtheir advice is based. Instead of innovations, these consultants offer generic andpre-packaged strategies & plans that are irrelevant to the clients particular issue.Consultants are also criticised for disassembly of the business (by firingemployees) in a drive to cut costs, only providing analysis reports, junior consultantscharging senior rates, reselling similar reports to multiple clients as custom work, overbilling for days not worked,speed at the cost of quality, unresponsive large firms & lack of (small) client focus and lack of clarity ofdeliverables in contracts.
http://en.wikipedia.org/wiki/McKinseyhttp://en.wikipedia.org/wiki/McKinsey

Xed CA General Newsletter Aug 18 Aug 24

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