XED CA Newsletter Week Aug 11 Aug 17

8/4/2019 XED CA Newsletter Week Aug 11 Aug 17

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11 Pages 11th AUG 2011 17th 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 THE

WEEK

COMPILED BY

INDUSTRY ANALYSIS

BSE SENSEX 16,446

NSE NIFTY 5,077

RS/$ 45.61

(as on 18th

Aug 2011)

ECONOMICINDICATOR

Honda Bets on 100-

cc Bikes for Rural

Drive

COVER STORY

MISCELLANEOUS NEWS

Indias beloved

Junglee no more

INTERNATIONAL NEWS

Italy Approves

$64-b to Balance

Budget by 13

XED NEWSLETTER a weekly news bulletin

INDIA: DOES IT MAKE BUSINESS

SENSE?


2/11

TOP 10 HEADLINES OF THE WEEK1. Honda Bets on 100-cc Bikes for Rural Drive.2. Your post office may double up as a bank soon.3. $12.5-BILLION DEAL TO HELP ANDROID MAKER ENTER HARDWARE.4. Exports buck slowdown, grow record 82% in July.5. A Big Ticket to Put Kingfisher Ahead of Rivals.6. In 2010 world rankings Officer's Choice stood 1st in terms of volumes growth.7. Italy Approves $64-b Plan to Balance Budget by 13.8. Bernanke Fails to Control Market Bent for Anxiety.9. Bollywoods Junglee who charmed millions is no more.10.From 2013, take only one test for MBA admissions.

ECONOMIC INDICATORS

AMERICAN RECESSIONS AND RECOVERIES

How the recovery in the United States compares with previous ones

The great recession hit America evenharder than previously thought. TheGDP data released today by the Bureauof Economic Analysis (BEA) show thaoutput rose by an annualized 1.3%over the second quarter of 2011, worsethan had been expected. But thedepartment's annual revisions toprevious figures contained still worsenews. Annual GDP growth for 2008 and2009 was revised down by 0.3 and 0.9percentage points; the 2010 figure wasrevised up, but not by enough tocompensate. The release means that

output in America is still at a lower levethan its peak before the recession, apoint earlier numbers said had beenpassed at the end of last year.

When compared to the three otherslowest post-war recoveries, the current

jobless recovery has been thoughtunique in its lack of employment growth.After previous recessions acceleration in

output had helped the employmentrecover to its initial level. The BEA's newfigures show that with output havinggrown less than previously thought,America's jobless may have longer towait for a similar boost.

Stock Market Indices as on 18th Aug11 Values

BSE SENSEX 16,446

NSE (NIFTY) 5,077

Current Market Rates as on 18th Aug11 Values

Rupee/US Dollar 45.61

Rupee/Pound 75.32


3/11

COVER STORY-INDIA: DOES IT MAKE BUSINESS SENSE?

India did withstand the US housing crisis well and its economy is robust enough to even bear the current speculativecrisis, thanks to its regulations. Having said that, does this fact make India a prospective business destination orsimply reduces it to a protected and secluded economy? An economy which staves off recession but does not makebusiness sense.

What keeps global businesses away:Political costs of doing business in India aremuch higher than expected. Corruption and bribery was highlighted by 37% of theglobal CFOs as a deterrent. The impact of trade unions and other pressure group

activity and inefficiency of courts was much more than anticipated.

CFOs also highlighted restrictions on cross-border capital movement as a keyimpediment. This is largely hurting cross-border mergers and acquisition activity in theIndian context. In case of ease of registering a legal title to land and property, its thenext pet peeve. Poor disclosure of material information is also an important concern of41% of the CFOs about India. This is significant from the standpoint of valuation ofassets that foreign companies look to buy. The other key risk is about assessing thepotential tax risk. It appears that CFOs are concerned about the uncertainty and

frequent changes in tax rules.

When a foreign company looks to enter a new market, it hires a bunch of consultants to do a due-diligence under theForeign Corrupt Practices Act (FCPA) of United States. It is a US law that prohibits pay-offs to foreign governments orbureaucrats. Global companies are increasingly seeking a compliance with this law prior to investing in a new market

Consultancy firm Ernst & Young says that it receives a request for a FCPA due diligence every other day for India.

Doing business in India: India ranks 134 among 183 nations in a survey called Doing Business 2011 thagauges the ease of doing business in a country and is ranked behind countries like arch rival Pakistan, Bangladeshand Sri Lanka. Singapore leads the pack, while Hong Kong grabs the second position in the list. The reportinvestigates the regulations that enhance business activity and those that constrain it. It takes into account areas likestarting a business, dealing with construction permits, registering property, gettingcredit, protecting investors, paying taxes, trading across borders, enforcing contracts,closing a business, getting electricity and employing workers. New Delhi ranks the topwhere it is easiest to start your own business, while Bangalore fares the worst amongthe top cities in India. When it comes to fastest in starting a Business it is the financialcapital of India, Mumbai along with another Industrial hub, Noida.

What it takes to get started: India has roughly 11 procedures, with most states

having 12-13 processes if one wants to start a company in India. This puts India at avery poor 137 rank when compared to other countries. Some European countries have

just a couple of process if they need to start a business. Even when it comes to number of days required, India isranked outside of top 100 countries. In New Zealand it takes just a single day to start a Business and just 0.4% of percapita income compared to 30 days and whooping 70% of per capita Income in India. The area in which India hasimproved is the amount of time it requires to deal with construction permits where it has a ranking of 19.

Corrective measures:India has continued to reform on the trading across borders indicator in World Bank reportDoing Business. Gujarat has come to limelight in the last few years for making the state more business friendly.Ahmadabad ranked at the top with heavy reforms in all categories of starting a Business, registering a property anddealing with Construction permits.

Business in a day:The Ministry of Corporate Affairs now simplified the procedures forincorporation to enable promoters to get their companies incorporated within 24 hours.

The ministry outlined several measures including online verification and clearance of thename of the company being incorporated, online submissions of statutory forms, andissuing digital certificates of incorporation. The simplified process is likely to beimplemented with effect from 11th Aug, 2011. On a brighter note, FDI in retail seemsto be more or less a certainty now and the fantastic success of domestic startups likesnapdeal.com & Cocoberry are good reasons to remain hopeful about India as abusiness destination.

Conclusion: India as a country in itself is in transition and so are the tax andinvestment laws. New guidelines, policies, programs and incentives for investment are

being introduced into the system frequently. The challenge in this emerging economy is to timely figure out whatopportunity to tap, when, where, & how. The government could do a lot of good to project India not only as a resilienteconomy but also as a cash cow for foreign and domestic entrepreneurs.


4/11

PERSONALITIES OF THE WEEK

PRASHANT JAIN: THE ENERGIZERMr. Prashant Jain, the 43 year old Executive Director & Chief Investment Officer, HDFCMutual Fund is the talk of the mutual fund industry. There is no reason why he shouldnot be. Two of his funds, HDFC Equity and HDFC Top 200 have delivered returns of 28percent over the last decade and are, without doubt, the best-run funds in India. He isthus actively followed by investors, analysts, the media & even those in his peer groups.

Conviction quantum:He follows his conviction, and at times it has meant underperforming in the short term;as he did in 2007. But, he has consistently emerged at the top. Not surprisingly he isoften voted as one of the best CIOs by research houses like Morning Star, Mercer and several media publications & iall that isnt enough, the gold standard in the business, Lipper, a mutual fund research and rating firm reckons thatHDFC Equity, has for each of the last five years, been the star performer in the 10-year category. HDFC Equity fundhas a total corpus of Rs. 6,734 crore; the Top 200 fund is now over Rs. 8,020 crore. CNBC-TV-18-Crisil Mutual FundAwards Winner 2011 has bestowed upon him the honor of being the Equity Fund Manager of the year.

The Moorings:It is rather hard to believe that Prashant Jain never planned to be a fund manager. He was just at the right place atthe right time. He spent his early years in small towns of Uttar Pradesh, where his father worked with the stategovernment. He completed his engineering from IIT Kanpur before moving to IIM, Bangalore. He joined SBI Capsfrom campus and was moved to its mutual fund department. He spent time with the fixed income team, rose tobecome a deputy manager and started assisting the equities portfolio manager. In 1991, when the mutual fundbusiness was still yet to take off, he met Chandresh Nigam and E.A. Sundaram, then his colleagues, now greatfriends. Once the private sector opened up in 1994, the three shifted to 20th Century Mutual Fund. A couple of yearslater, Zurich Financial Services (ZFS) bought the fund over and they were part of a new dispensation which becameZurich Mutual fund. This lasted until ITC Thread needle was bought out by Zurich Mutual fund where they allcontinued. It was an interesting time. Indian mutual funds were still to evolve and the trio was still figuring out theirinvestment philosophies.

At HDFC Mutual Fund, Jain worked closely with Sanjoy Bhattacharyya who was then heading the investment teamBhattacharyya, who now runs his own investment firm, Fortuna Capital says, I think he is the closest thing toAnthony Bolton in India." Bolton managed the Fidelity Special Situations fund for 28 years and returned 19.5% asagainst the market which delivered 13.5% in the same period. In 2006, his fund was split into two because it wasconsidered too big to manage. This is exactly the trade-off Jain may face soon.

PRAHLAD KAKAR: CREATIVE GENESISHe is a leading Indian ad film director. In the words of Albert Szent-Gyorgi, Genius isseeing what everyone has seen, and thinking what no one has thought. This is how onecan define India's finest ad filmmaker Prahlad Kakkar. Kakkar's journey is heralded bylimitless variety and innovation. He is the founder and main director for Genesis FilmProductions, one of Indias leading production houses, established in 1977. He isrenowned for his candid and outspoken nature. An avid scuba diver, in 1995 he set up'Lacadives', a scuba-diving school, along with his wife Mitali Kakar at Kadmat Island, incollaboration with the Govt. of Lakshadweep. He also runs a coffee shop, and CasaAmore, a wine bar and restaurant, set up in Mumbai in 2001.

Prahlad Kakar grew up in Mumbai and his father was an army colonel based in Pakistan. His mother is half Burmeseand half Marathi. In 1966, he passed out from Sainik School, Kunjpura, Karnal. A graduate from Fergusson College,Pune, he started work in 1972, with filmmaker Shyam Benegal. For six years, he assisted Benegal in making ad films

and art films, example Ankur, Manthan, and Bhumika.

POP Point of Persuasion:The difference was in the way he presented ads. In his words they were special, irreverent and over a period of time itbecame a style. According to Kakkar it's the human element in ad film that makes all the difference. Being able topick up mannerisms and emotions are the key to a successful film. The idea is to be able to relate to humanemotions. Presently, he directs TV commercials, trains assistants and sets them up. The one thing Kakkar detests is a"boring script''. However, if he happens to come across one that can put a smile to his face, he crafts it into amemorable film. He has no qualms about teaching youngsters his style. That's the only way to stay young. ForKakkar, being young at heart makes all the difference. Of all the ad filmmakers, Kakkar works for the youngest brandsin the market; Pepsi, Kit Kat, Nestle, Maggie Sauces and many more. He believes to understand the young, you haveto be young yourself.


5/11

BUSINESS NEWS

1) Honda Bets on 100-cc Bikes for Rural Drive-ET 16 AugJapans Honda Motor, the worlds largest motorcycle maker, is betting on the small capacity 100cc economy bikes as it embarks upon a rural push in the worlds second biggest two -wheelemarket, said people with knowledge of the development. The Tokyo-based firm has also starteddecentralizing its marketing set-up in India, from its earlier Manesar-based central head officeand has placed five Japanese led-management teams in Lucknow, Bangalore, Manesar, Pune andKolkata. Honda plans to more than double its sales in India to four million units by 2013.

The Japanese two-wheeler maker is working on a new version of the CD platform in the 100-ccsegment, where Heros CD Dawn and CD Deluxe have the highest sales. The thrust on rural market is a reversal osales strategy for Honda, which has so far been garnering most of its sales from cities and big towns. The 100-ccbikes laid the foundation for Hero Moto-Corp, erstwhile Hero Honda, to emerge as the worlds largest two-wheeler firmin terms of volumes.

2) Your post office may double up as a bank soon-TNN 15 AugYour friendly neighborhood post office may soon double up as a bank. The department ofposts is working on a plan to get a bank licence, which will be sent to the Cabinet forapproval. Once it gets a go-ahead, the postal department will formally seek a licence fromthe Reserve Bank of India. India Post, the largest postal network in the world, comprises 1.55lakh post offices out of which nearly 1.4 lakh are in rural areas.

It already has 23.75 crore individual savings bank accounts and offers a whole range of

financial services such as postal life insurance, pension payments and money transferservices. Globally, there are several successful examples. Frances postal service La Postebegan banking operationsLa Banque Postale in 2006. Similar examples are visible in Italy and Germany.

3) $12.5-BILLION DEAL TO HELP ANDROID MAKER ENTER HARDWARE-ET 16 AugIn a bid to strengthen its mobile business, Google announced on Monday that it would acquireMotorola Mobility Holdings, the cell phone business that was split from Motorola, for $40 a share incash, or $12.5 billion. Motorola manufactures phones that run on Googles Android softwareAndroid has become an increasingly important platform for Google, as global smartphone adoptionaccelerates.

The deal answers questions about Googles next strategic step in wireless. Google has been fighting Apple andMicrosoft over patents. Last month, Apple and Microsoft led a consortium of technology companies in a $4.5-billionpurchase of roughly 6,000 patents from Nortel Networks, the Canadian telecommunications maker that filed for

bankruptcy in 2008. Google, which lost out in the bidding, criticised the deal as anti-competitive. Several weeks laterGoogle paid $4.5 billion for more than 1,000 patents from IBM. Motorola holds more than 17,000 patents.

4) Exports buck slowdown, grow record 82% in July-TOI 12 AugDespite slowdown Apr-Jul 2011 exports up 54% from Apr-Jul 2010 figures of $70.3bn. Exportsgrew at their fastest pace ever, clocking an 82% rise in July to touch $29.3 billion at a timewhen there are renewed slowdown fears in the key markets of Europe and the US. A bulk ofthe increase was on account of a robust show put up by engineering, petroleum products andtextiles, which accounted for over half the exports during the month. Commerce secretaryRahul Khullar warned that the rapid growth would start slowing this month onwards due to theeconomic slowdown in developed economies. The steep increase is because of the lag between the time orders areplaced and when they are delivered, he said.

5) A Big Ticket to Put Kingfisher Ahead of Rivals- TOI 12 Aug

In a move that has caused disquiet among rivals, Kingfisher has turned to its bigconsolidators (so called because they buy tickets from all airlines in bulk at a discount and selthem to travellers) to raise money. With bank lending drying up and equity markets notconducive, Indias second-largest airline by market share is relying on money released aheadof the payments cycle by these consolidators to meet its expenses.

This is how it works: A big consolidator usually gets tickets from all airlines and sells it at adiscount to passengers. The payment is made every 15 or 21 days. About eight months agoKingfisher requested the consolidators to pay for tickets at the beginning of the month itself,

instead of in cycles. In return, the airline agreed to pay 3% interest every month to the consolidators. The strappedairline gets the money, while the consolidators get interest on the lines of a credit card issuing bank 3% a month o36% per annum. The airline has upset rivals who blame the practice for the losses they suffer through discountedtickets.


6/11

6) In 2010 world rankings Officer's Choice stood 1st in terms of volumes growth- ET 12 AugIndian liquor swept the 2010 list of top-10 global spirits brands in volumes growth, taking homethe first five spots almost entirely on domestic sales. Allied Blenders & Distillers' (ABD) Officer'sChoice came in as the fastest volume generator with 2.98 million nine-liter cases added in 2010,London-based research firm The IWSR said in its August report. The brand was ranked fourth in2009. At second spot was Vijay Mallya's McDowell's No1 brandy, which added 2.96 million cases.The third, fourth and fifth spots were taken by three other United Spirits products - Celebrationrum, Honey Bee brandy and Old Tavern whisky. The IWSR report specifically dealt with actualvolume increases rather than percentage growth and excluded brands considered low-priced ineach market this year. Allied Blenders said a four-year effort to plug weaknesses was paying off.

7) Pappu Now Clears the Test with Distinction-ET 15 AugCadbury made him popular, but it was a Bollywood chartbuster that gave him instantstardom. And to cash in on his celebrated status, the Election Commission roped him in topersuade people to come out and vote in large numbers. That was in 2009. Last year, hewas cast along King Khan for toothpaste commercial. And now, Maruti Suzuki India hasborrowed his services to dissuade people from using fake spare parts.

It seems they just can't do without Pappu, saala! From chocolates and toothpaste tomobile games and spare parts, the affable, if sometimes simpleton, Pappu has become a

darling salesman for marketers. The latest to jump on the Pappu bandwagon is Maruti Suzuki, which is trying hard tobattle the menace of fake spare parts that make up 35-40% of the 24,000 crore genuine spare parts market. India'slargest carmaker has come out with a radio advertisement to promote genuine parts, and it's doing it by narratingPappu Ki Kahani. The funny radio jingle ends by saying that Maruti Genuine Parts lagaoge to pappu nahi kahelaoge

8) Zuckerberg Makes Bharat Richer-ET 15 AugMona Sandhu, a lecturer turned costume jewellery designer, set up a jewellery store in her homecity of Karnal, Haryana, in 2006. The five-year-old store was doing well, selling about 70 pieces aweek, but the limited pool of customers was stifling for the ambitious businesswoman. On awhim, Sandhu set up a profile on Facebook at the end of last year with photographs of some ofher products. To her surprise, she bagged an order the same day from a customer in California.Ten months on, Sandhu, whose social media page has been liked by 17000 visitors, is busyplanning exhibitions in the US and UK. As business on social media gains rapid acceptance, small-town entrepreneurs are securing customers from across the world. Sandhu gets over 100 ordersa week mostly from customers in the US, Canada and the UK.

On an average, individual customers order 5-10 pieces at a time, while a wholesale order starts at 40. For scores ofentrepreneurs like Sandhu living in non-metros and towns with tight marketing budgets and no experience of running

a commercial enterprise, Facebook has emerged as a significant marketing and sales tool. In fact, many of them areusing their Facebook page as a substitute for a proprietary website. It costs nothing to set up a page, profile or groupand it provides space for displaying photographs to boot.

9) Android Apps make Phones Easy Targets-Reuters 15 AugA mobile security expert says he has found new ways for hackers to attack phones runningGoogles Android operating system. Riley Hassell, founder of boutique security firm PrivateerLabs, who caused a stir when he called off an appearance at a hackers conference last weektold Reuters he and colleague Shane Macaulay decided not to lay out their research at thegathering for fear criminals would use it to attack Android-based phones.

He said in an interview he identified more than a dozen widely used Android applications thatmake the phones vulnerable to attack. App developers frequently fail to follow security guidelines and writeapplications properly, he said. Google spokesman Jay Nancarrow, however, said Android security experts discussed

the research with Hassell and did not believe he had uncovered problems with Android. The identified bugs are notpresent in Android, he said, declining to elaborate.

10) Fake currency pumped into India as "policy matter": Pranab- ET 12 AugFinance Minister Pranab Mukherjee says 8 out of every 1 million notes are counterfeit. SaysPakistan pushes fake currency into India as a matter of policy to destabilise the Indianeconomy. Responding to concerns of members in the Rajya Sabha over the problem ofcounterfeit currency notes, Mukherjee said it was a serious threat. Though the Finance Ministerdid not name any country, concerns have often been expressed over fake currency coming fromPakistan routed through Nepal. He, however, said the counterfeit currency of the face value ofonly Rs 26.95 crore was detected in the calendar 2010, against Rs 23.01 crore in the previousyear. Up to June in the current calendar, fake currency with face value of Rs 10.62 crore hasbeen detected.


7/11

11) Cci Says Realtor Abused Market Dominance-ET 17 AugThe Competition Commission of India, or CCI, has slapped a 630-crore fine on DLFthreatening to turn an isolated dispute between flat buyers and Indias largest buildeinto a full-blown headache for the industry grappling with soaring interest costs anddwindling buyers. In a 237-page order, unprecedented in its scope and scale ofpunishment, the anti-monopoly watchdog accuses the Gurgaon-based firm of unfaipractices, abuse of market dominance and brutal disregard of consumer right. DLF, theCCI adds, rode roughshod over buyers interests and signed sale agreements that werehopelessly one-sided.

The commission found DLF guilty of beginning work on a residential project, The Belaire, in Gurgaon Phase V, withoutapprovals, increasing the number of floors mid-way through the project, delaying completion, and forfeiting thebooking amount of some buyers. The fine, more than half of DLFs 2010 -11 profit, has been calculated on the basis oa percentage of the average of the firms last three year sales. The move is likely to have wider implications for anindustry where the practice of one-sided agreements is common and where builders routinely delay or modifyprojects, increasing the costs for consumers.

12) Amul drags HUL in a lawsuit against Kissan Spreads punchline, better than butter-ET 12 AugIndias largest food brand Amul has dragged Hindustan Unilever in a lawsuit that challenges thepunchline "better than butter" used by the global FMCG company for its Mayonnaise-based productlaunched in April. The $2-billion Amul has a 90% share in Indias organised butter market and hasaccused HUL of portraying butter products inferior to mayonnaise. The multinational has launchedKissan Creamy Spread and got it endorsed by film actor Juhi Chawla for TV commercials which areon air. The product claims it is three times richer with essential nutrients and contains half the

calories as that of regular butter. The dairy cooperative has challenged the claims saying comparisonbetween mayonnaise and butter is not permissible under the law. In the lawsuit filed in Delhi HighCourt, Amul said: "This (advertisement) is sending a false and misleading message to the consumerswho may refrain from consuming butter." Benefits of butter are well-known and time-tested, it added.

13) IIP registers 8.7% growth in June; experts say data too volatile to be trusted-ET 13 AugIndias June industrial output grew at a better-than-expected pace propped by a robust rise incapital goods, but economists said the trend cannot be sustained as it did not correlate with aneconomy buffeted by high interest rates and inflation. Industrial output rose 8.7% in June from ayear ago after an upward revised 5.9% gain in May and well ahead of a median 5.5% estimate ina Bloomberg poll, data released. We will not read too much into the release, Deutsche Bankeconomist Taimur Baig said, pointing to the extensive revision in IIP (index of industria

production) data and volatility. The rebound was driven by a 10% surge in manufacturing output and a 37.7% rise inproduction of capital goods. It is increasingly becoming difficult to interpret IIP data due to its volatility and its

inability to explain production patterns, said HDFC Bank Chief Economist Abheek Barua .Finance Minister PranabMukherjee said June IIP data was encouraging. Output of intermediate goods expanded only 1.9%, suggesting adrop in growth ahead, as these goods are used as inputs. While the government is still holding on to its forecast of8.5% GDP expansion in 2011-12, most private forecasts are down to about 7.5%.

14) Mid-tier firms in small towns buy aircraft to save time and improve efficiency-ET 13 AugWith growing revenues, spreading business empire and surging aspirations, all this at afrenetic pace, India Inc is now budgeting to buy private aircraft to ease pressure andsave time for the senior management. The demand is strong from mid-tier firms inrelatively remote places such as Aurangabad, Coimbatore, Tirupur, Surat and Lucknow.The total number of private aircraft in the country today stands at 650 and is expectedto soar to 2,000 by 2020. In 2003, the number stood at 350. About 40-50% of thedemand is coming from small towns, says Rohit Kapur, MD, Arrow Aircraft, which sellsGulfstream in India. Kapur is also the president of Business Aircraft Operators

Association. "With poor roads, poorer connectivity and spread of businesses to interiorsof India and overseas, there is a strong demand," he adds. It is estimated that 40% ofthe private aircraft being bought in India are brand new and the rest are used.

15) Rent top of the line designer clothes-ET 13 AugWannabe upper crust who would have had to shell out at least Rs 1 lakh on an ensemble for asocialite evening can now pass off as well-heeled patricians for only Rs 15,000. Start-ups such asSecret Wardrobe in Mumbai, Trezo in Kolkata, Rent A Party Dress and Sunroh Creations in NewDelhi are putting out a wide range of designerwear for hire. Globally, used clothing segment is athriving business with stores either selling at one-tenth the original prices or simply giving theclothes on rent. In fact, during a recession, these stores tend to do brisker business. Online storestoo have mushroomed with inspired names like weartodaygonetomorrow.com

and renttherunway.com. In India, the apparel for rent is still a nascent concept.


8/11

16) Indiabulls Power Lines up 300 cr for Foray into Wind Energy Biz-ET 16 AugIndiabulls Power plans to foray into renewable energy to diversify its portfolio and hasearmarked an initial investment of around 300 crore in wind power projects. Indiabulls Powerplans to set up around 30 MW of wind energy capacity by 2013 and is also developing fourmedium-sized hydropower projects, totaling 167 MW, in Arunachal Pradesh. These hydro-power projects in the state are likely to be developed as run-of-the river projects.

Power utilities are increasingly looking at renewable energy to diversify their portfolio toreduce risks arising from high exposure to one source of energy. Difficulty in securing coal supply domestically,coupled with rising coal prices globally, have forced power utilities to rethink their strategy and look at fue

alternatives. Environmental clearance issues for power projects and mining sites have further aggravated the woes ofpower developers. Governments thrust on renewable energy sector and incentives like renewable energy certificatesand carbon credits make these renewable energy projects more attractive.

17) Mahindra Satyam begins takes action against employees who used fake certificates ET 13 AugMahindra Satyam has begun a countrywide crackdown against employees that joined theorganization using fake certificates and fraudulent means after it found some people hadcircumvented the company's background verification process, a senior official said todayAccording to Mahindra Satyam Chief People Officer Hari T, the background verification osome of the 21,000 employees currently working in India will be completed bySeptember-end and he warned that any employee found to have got into the companythrough fraudulent means will be slapped with a cheating case. We are now doingmultiple checks of the employees whom we suspect. We have instructed our background

verification agencies to personally visit the office where the candidate claimed to have worked earlier.

18) Google's Motorola Mobility bet may push Asian phone makers to rivals like Microsoft-ET 16 AugAsian handset makers using Google Inc's Android operating system might turn to rival platformssuch as Microsoft Corp's Windows after Google upended the mobile landscape with its $12.5 billionbid for Motorola Mobility Holdings.

Taiwan's HTC and Korea's Samsung Electronics have sold millions of mobile devices running on thefree Android system, catapulting Google to the top slot in the booming global mobile softwaremarket. But the acquisition of Motorola could turn Google from a partner to a competitor for morethan 30 other Android-handset companies. Android held a 43.4 per cent share of the smart-phonemarket at the end of the second quarter, ahead of Nokia's 22 per cent, according to data from research firm GartnerApple ranked third with 18 percent, the data showed.

19) Billionaire Buffett Wants More Taxes on Mega Rich in US-ET 16 Aug

Billionaire Warren Buffett urged Congress to raise taxes on the nations wealthiest individualsto help cut the US budget deficit, saying it wont inhibit investment or job growth. Buffettsadvocacy of higher taxes for the mega-rich may reinforce PresidentBarack Obamas call foan end to tax breaks for corporate-jet owners.

In 1992, the top 400 American earners had aggregate taxable income of $16.9 billion andpaid federal taxes of 29.2% on that amount, he wrote. In 2008, while the aggregate incomeof the highest 400 had soared to $90.9 billion, the rate paid had fallen to 21.5%.Buffett saidthe notion that high taxes discourage hiring and investment is false. I have worked withinvestors for 60 years People invest to make money, and potential taxes have never scared

them off, he said. The US unemployment rate has averaged 9.5% in the past two years, dropping to 9.1% in Julyfrom 9.2% a month earlier, a government report showed August 5

20) Once a nation of homeowners, U.S. turns to rentals-Reuters 17 Aug

Builders starting on new apartments are busier than ever these days as demand for rentalsclimbs and the once-sacrosanct American dream of home ownership fades. "The combinationof falling home prices, limited mortgage credit, continued liquidations and better rentaloptions is fundamentally changing the way Americans live," according to the Morgan Stanleyresearch report.

The percentage of people who own a home dropped to 65.9 percent during the secondquarter -- the lowest since the first quarter of 1998. The White House wants to rent, sell ordispose of foreclosed homes controlled by mortgage finance giants Fannie Mae and Freddie Mac. The goal is to "bringstability and liquidity" to the housing market, said Edward DeMarco, acting director of the Federal Housing FinanceAgency, in a statement. 100 million Americans are renters, whether they do so by choice or necessity. Currently,Fannie Mae and Freddie Mac, along with the Federal Housing Authority, guarantee about 90 percent of all U.S.mortgages. A recent survey by Fannie Mae shows more will choose to pay rents rather than buy.


9/11

INTERNATIONAL NEWS

21) Italy Approves $64-b Plan to Balance Budget by 13-ET 15 AugItalian prime minister Silvio Berlusconis cabinet approved 45.5 billion ($64 billion) indeficit cuts to balance the budget and try to convince investors that the country can tameits 1.9-trillion debt the second-biggest in the eurozone. The plan will raise the capitagains tax, increase levies on the highest earners, cut government spending and reducefunding to regional administrations. The decree must then be approved by parliament in 60days.

The European Central Bank (ECB) had asked Italy to make additional budget cuts before itwould buy the nations debt on the market in a bid to arrest surging borrowing costs. Yieldson Italys 10-year bonds have plunged 105 basis points since the ECB started the purchases

on August 8, after reaching a euro-era high of 6.3% on concern Italy would become Europe's next debt victim.

22) Bernanke Fails to Control Market Bent for Anxiety- TOI 12 AugFrance was the other big worry that unsettled world markets. Investors fear that after theUS, France may lose its triple-A status. It could come as a fresh blow to Eurozone, withFrench banks holding Italian debt facing the heat. The fate of France was unclear can turnthe tide. After the initial euphoria post Fed talk, they are dismayed at the thought that theUS with near zero interest rates may come to resemble Japan in its lost decade of the 90s. Some investors think the Feds promise to hold interest rates till mid-2013 is a hint thatthings may not look up till then. Thats bad news for several Asian economies, whose trade and market fortunes arelinked closely to the US.

23) Most Americans think US on wrong track, worst is yet to come: Poll TOI 11 AugAmericans by a large majority believe the United States is on the wrong track and nearly half thinkthe worst is yet to come in the economy, according to the Reuters/Ipsos poll. President BarackObama's approval rating dropped to 45 percent from 49 percent a month ago. The poll found that73 percent of Americans said the United States is on the "wrong track," and just 21 percent saidthe country is headed in the right direction. This is the highest figure measured so far sinceReuters/Ipsos began polling American public opinion in February 2009. The survey of 1,055 adultsfound that 47 percent of respondents said "the worst is yet to come" in the US economy, an

increase of 13 percentage points from a year ago when this question was last raised. This is the highest measuresince March 2009, when concern peaked at 57 percent, at the height of the recession. During the poll periodAmericans were also digesting new data showing stubbornly high unemployment and pointing to renewed weakness inthe economy, which sent US stocks into a tailspin.

24) Moody's and Fitch have shown restraint in downgrading US- ET 11 AugThe credit rating agencies are taking advantage of the country's financial problems toincrease their own political power. They want to ensure that regulators do not reduce theirautonomy and influence. They are not piling on all at once by downgrading the UnitedStates in concert. Standard & Poor's is the bad cop for now, taking the first swipe at theUnited States, and seeing its influence confirmed by the stock market's dramatic reaction.Moody's and Fitch are playing the good cop; exercising restraint about a potential downgrade, yet still flexing theirmuscles by criticizing the government both publicly and behind the scenes. If politicians ignore rating agencieswarnings, they risk a withering assault of additional downgrades that could undercut confidence in the governmentand inflict soaring interest rates. Politicians and pundits accused them of being asleep at the wheel, if not complicitwith issuers, in camouflaging risks and misleading investors during the run-up to the subprime mortgage crisis.

25) Federal Reserve creates crunch moment for Chinese Yuan-ET 12 AugSitting on $3.2 trillion of unmanageable amounts of foreign currency, China has no option

but keep buying zero interest US bonds. China's suppression of its currency creates moreproblems than benefits. The U.S. Federal Reserve's pledge to keep rates near zero for thenext two years provides the perfect reason to do something about it. The Yuans rise in thelast three days sets the right tone. The Fed's strategy is likely to drive the weak dolladownwards. Normally, China might be minded to follow to ensure that its exporters don'tbecome uncompetitive. The Yuan has appreciated less than 7 per cent against the dollar inthe past three years. The catch is that the cheaper the dollar gets, the harder China mustwork to maintain the peg. To mop up dollars, the central bank issues new Yuan, which itthen swaps for government bonds to avoid fuelling inflation. With Chinese one-year

Treasuries yielding 3.5 per cent, and U.S. Treasuries yielding next to nothing, that creates a drain on the economy.


10/11

MISCLLANEOUS NEWS

26) Bollywoods Junglee who charmed millions is no more-TNN 15 AugYahoo, the primate-like scream emitted exactly 50 years ago in J u n g l e e (1961), created anew modern hero; someone free from the hangover of a colonial past and without any trace ofNehruvian socialism. In him, the young and restless Westernized urban youth of the 1960s foundtheir poster boy. The boys loved him because he represented a new persona and a new attitudedistinct from the ruling holy trinity of Dilip-Raj-Dev.

According to boxofficeindia.com, his seven biggest hits between 1960 and 1969 are: J u n g l e e ,

Te e s r i M a n z i l, P r i n c e, R a j k u m a r, J a a n w a r, A n E v e n i n g i n P a r i sand K a s h m i r k i K a l i. There was one major exception B r a h m a c h a r i, where heplayed an orphan who takes care of other young kids without parents. The film won him his only Filmfare Award forBest Actor. But Kapoors place in the Bollywood pantheon is assured for breaking free from the looming shadow oDilip-Raj-Dev and creating an alternate template of the 1960s hero. He carved out his own place under the sun. Andhe did it in his own inimitable style, says Saira Bano.

27) From 2013, take only one test for MBA admissions-ET 17 AugIn a move that will cut down the multiple entrance exams that student are forced to takefor admission to management courses across the country, the All-India Council for TechnicaEducation (AICTE) has decided to conduct a common admission test from 2012-13. The testwill cover admissions to MBA and PG diploma in management courses in government andprivate colleges.

The decision to hold a pan-India Common Management Admission Test (CMAT) was takenat the executive council meeting of the AICTE, the umbrella body for professional courses.While CMAT will be one of the entrance exams to be held in 2012, the Council wants all itscolleges and institutes to admit students based on their CMAT scores from 2013.

28) GOVT CANT STOP AUGUST KRANTI-TNN 17 AugThe government on Tuesday was at sixes and sevens over Anna Hazares steelydetermination to carry on with his indefinite fast despite his unexpected arrest and hisequally sudden release in the face of mounting nationwide protests. Anna scornfully rejectedhis release, saying he would leave Tihar Jail only if the government unconditionally allowedhis protest for a stronger Lokpal bill. In any case, he said, he was fasting in Tihar.

The governments desperate attempt to cut its losses releasing Anna within 12 hours ofhis arrest and seven-day judicial remandfailed badly as it was outwitted by the Gandhian

and his growing band of supporters, who appeared to be thinking three steps ahead of government managersAccording to late night TV reports, the government offered Anna two options: leave Delhi or undertake to end his fastwithin three days. The activist was learnt to have rejected both options. His aide, Manish Sisodia, who was freed, saton dharna outside Tihar.

29) Duplicate expenditure will be the result if Census office & UIDAI do separate enrollments- TOI 12 AugTwo ambitious government projects are competing for your fingerprints. While the NationaPopulation Register (NPR) of the Census office has been tasked with the mandate of providingbiometric-based identity cards to all Indian residents, Nandan Nilekanis Unique IdentificationAuthority of India (UIDAI) has sought more funds to expand the UID enrollment exercise tovirtually cover the entire population over the age of five years. It would result in a duplicateexpenditure of Rs 10,000cr, which could go up to as high as Rs. 40,000 crore. According to the

original, proposal, the two agencies were supposed to work in tandem: unique identity numbers were to be issued bythe Authority based on the biometrics captured for the NPR. So, while every Indian resident was to finally have both

an NPR card and a UID number, large scale enrollment was supposed to be done by the Census office. But the UIDAIfirst got government nod to offer incentives to 10 cr citizens to register for UIDs. These incentives were later extendedfor 20 cr citizens to be covered by UIDAI by March 2012, involving a total expenditure of Rs. 3,023 crore. So far,about one crore residents have received UID numbers.

30) Jaya He! TOI presents full national anthem- TOI 12 AugRabindranath Tagore never intended Jana Gana Mana to be signed off with Jaya He! Hed actuallywritten four more verses of our moving anthem, which are hardly known about. Now, for the firsttime in the nations history, these four verses, set to music and produced by Saregama, will bepresented to the nation by The Times of India. At a special launch ceremony two days before thenation celebrates Independence Day, finance minister Pranab Mukherjee will release Jaya He! aunique, limited edition rendition of these verses. Thirty-nine of Indias best loved voices will besinging small strands from these riveting verses.
http://execlinktarget%28%27boxofficeindia.com%27%2C%27url%27%29/http://execlinktarget%28%27boxofficeindia.com%27%2C%27url%27%29/http://execlinktarget%28%27boxofficeindia.com%27%2C%27url%27%29/http://execlinktarget%28%27boxofficeindia.com%27%2C%27url%27%29/


11/11

CORPORATE INTELLIGENCE

THE HERO GROUP

Head Quarters: New DelhiRevenue: $3.2 billion (approx)

Group Companies: Hero Cycles, Hero MotoCorp, Rockman Industries, Munjal Showa (manufactures shockabsorbers in partnership with Showa Manufacturing, Japan), Shivam Autotech, Munjal Castings, Satyam AutoComponents, Hero Corporate Services, Hero Mindmine, Hero Global Design, Hero Fincorp, Arrow InfraHEROtsc (UK based Business Process Outsourcing firm), Easy Bill Limited (offers utility bill collection and retaiservices)

Key Person: Dr. Brijmohan Lall Munjal (Founder Director & Chairman)

Birth of the Hero:Hero has been a household name since the 1950s inIndia. In 1944, the four Munjal brothers Brijmohan Lall Munjal, DayanandMunjal, Satyanand Munjal & Om Prakash Munjal (hailing from a small townKamalia, now in Pakistan) started a business of bicycle spare parts inAmritsar. After the partition in 1947, the operational base was shifted to

Ludhiana. In 1954, the business moved from supplying to manufacturing key components ofbicycles like handlebars, front forks & chains and eventually to assembling the entire cycle at themanufacturing plant in Ludhiana. In 1956, the Punjab Government issued tender notices for 12new industrial licenses to make bicycles in Ludhiana. The Munjal brothers participated in the bid& won the contract. Hero Cycles Limited was registered as a large-scale industrial unit and itstarted production in the Ludhiana plant to manufacture bicycles. In the early days, the planthad a capacity for 25 cycles per day.Over the next few years, the company did a backward integration into its supply chain as well asclosely managed its distribution. By 1975, the Hero group had set up several ancillary unitssupplying to the cycle plant. The group then ventured into other businesses such as yarnspinning, exports and auto components. In 1984, Hero group joined hands with Honda Motors ofJapan & established Hero Honda Motors Limited to manufacture motorcycles with the firstmotorcycle "CD 100" rolled out in 1985. In 1986, Hero Cycles entered the Guinness Books ofWorld Records as the largest bicycle manufacturer in the world. By 2004, Hero Honda becamethe world's largest manufacturer of two-wheelers with over 48% market share in India.

The Hero Group Today: With over 10,000 retail touch points in India, over22 million motorcycles & 100 million bicycles sold, the Hero Group today is a

leader among Indian brands with its customer centric products - its threecornerstones being Automotive Manufacturing, Services Businesses and AutoAncillary Businesses. In 2006, Hero Honda entered scooter production withthe launch of its new model Pleasure. In 2006, it was one of the 8 Indiancompanies to enter the Forbes top 200 list of world's most reputed companiesThe Hero Group, besides being the worlds largest manufacturers of bicycles,motorcycles and chains to this date, has diversified into newer segments likeReal estate, Financial services, Information Technology enabled services

Consulting & Advisory, Integrated Learning & Education businesses. With investments in excess of Rs 4,500 croreearmarked for the next 5 years & plans to create 2 new plants in India in addition to the existing 3 at Dharuhera,Gurgaon & Haridwar, Hero MotoCorp aims to morph itself into an independent global two-wheeler company.

INTELLIGENCE BYTES:Group Chairman, Mr Brijmohan Lall Munjal has received the coveted "Ernst & Young Entrepreneur of the Year" award

in 2001. World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide studywhile the London Business School, UK, has done a case study on the Hero Group as model of entrepreneurship.The brand behind popular bikes Splendor, CBZ, Karizma, Passion, Hunk & Glamour - Hero Honda was adjudged the"Bike Manufacturer of the Year" at the Economic Times ZigWheels Car and Bike Awards in 2011. CNBC TV18 Overdriveawarded the 2010 'Hall of Fame' to Splendor.Hero Honda reported its highest-ever quarterly sales in Q1(April-May-June) FY12 selling 15,29,577 units compared toQ1FY11 when it sold 12,34,039 units, clocking a growth of 24 %. It registered five lakh-plus sales in each months ofthe quarter for the first time, selling 512,244 units in June11, 517,099 units in April11 and 500,234 units in May11.Going from Desh ki Dhadkan to Hum mein hai Hero, Hero Honda is now Hero MotoCorp, ending its iconic 27-yearpartnership with Honda. As the next big step, it has chosen brand & innovation specialist Wolff Olins to work on itsnew brand identity & creative partner Law & Kenneth to shape its brand communication & positioning with animpactful 360 degree campaign. Hero MotoCorp has officially unveiled its first motorcycle called "Impulse" for India inLondon alongside an all-new 110cc scooter named "Maestro". The unveiling was done by Bollywood star RanbirKapoor who will also endorse the new brand.

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