Innholdsfortegnelse for 31 December 2017 i Business Today

The number of companies that have been referred to the National Company Law Tribunal for resolution under the Insolvency and Bankruptcy Code (IBC) has crossed 400. A great many of these are small and medium companies that are most likely to go into liquidation. However, all the attention is on the big 12 companies that have been taken to the Tribunal by the banks after being nudged by the Reserve Bank of India. (See The Dangerous Dozen, BT, August 13, 2017). These 12 companies accounted for an estimated 25 per cent of the total non-performing assets (NPAs) of roughly ₹8 lakh crore in the banking system. Though they defaulted on their loans, the market consensus is that most of them have good assets and the businesses ran into trouble because…

US TAX CUT The US Senate approved a tax overhaul that brings Republicans and President Donald Trump a big step closer to slashing taxes for businesses and the rich. It aims to reduce corporate taxes from 35 per cent to 20 per cent and encourage repatriation of earnings. It offers Americans a mixed bag of changes. In what would be the largest change to US tax laws since the 1980s. CVS' AETNA ACQUISITION Chain drugstore operator CVS will be buying health insurer Aetna in the largest corporate acquisition of the year – at $69 billion. CVS intends to use its existing network of budget clinics to cater to Aetna’s 23 million members. Industry experts have been quoted as saying that CVS would effectively become a one-stop-shop where patients could get…

THE GOVERNMENT has decided to change the rules to attract more private investors to the mining sector. The plan involves streamlining the Pradhan Mantri Khanij Kshetra Kalyan Yojana and setting up district mineral foundations in all 12 mineral-rich states. India amended the Mines and Minerals Act in 2015, making the auction route mandatory for mine allocations. It introduced the ‘three bidders’ rule, and auctions got annulled without the required number of bidders. Bidding had to be carried out for three rounds, and the state used to get a free hand only in the fourth round. But now, there will be flexibility from the second round itself and the net worth of bidders has been reduced by one-fourth to widen eligibility criteria. ₹15 LAKH CRORE aggregate revenue of India Inc. in…

The much-awaited midterm review of India’s Foreign Trade Policy (FTP) 2015-2020 is out. It covers steps needed to help exporters tide over the problems associated with the Goods and Services Tax. It also offers additional incentives to promote medium and small scale sectors and labour-intensive industries. An annual revenue incentive of ₹4,567 crore for product exports, and ₹1,140 crore for services exports, may not be huge but sends the right signal. There has been a thrust on trade facilitation and trade across borders. This should help exports as well as imports. The original goal of achieving $900 billion exports by 2020, set two years ago, has not been revised, or re-emphasised. It might have been sensible, perhaps, to junk the target since exports declined from $310 billion in 2014/15 to…

China has decided to temporarily stop giving funds for at least three major road projects in Pakistan, being built as part of the $50 billion China-Pakistan Economic Corridor, or CPEC, following reports of corruption, a decision that has left officials in Islamabad "stunned", a media report said. The decision by the Chinese government is likely to hit over ₹1 lakh crore worth of road projects of the Pakistan's National Highway Authority, and initially, may delay at least three such ventures, Dawn newspaper reported.…

KEY NUMBERS Founded: 2013 Funding: $2 MILLION Customers: 140 Revenue in FY2015/16: ₹2.8 CRORE 1) Founders Asokan Sattanathan, who had worked as the supply chain head for companies such as Bharti Airtel and Eicher Motors, learnt the nuances and pain points of the business in his 34-yearlong career. He joined hands with Rajaraman Sundaresan and Harish Kannan to launch Aahaa Stores, an online platform to sell office supplies, in 2013. The start-up caters to businesses and helps them procure materials at affordable rates. 2) Big Idea The e-commerce boom has led to the emergence of several B2C marketplaces, which ensure quick and affordable buying. Aahaa founders wanted companies to gain from that e-business model and came up with a marketplace for office supplies. The start-up claims to have 140 customers,…

39% SUN PHARMA’S 10-year compounded annual growth rate in US sales The way India’s largest drug maker Sun Pharmaceutical rose and fell in the US, a country that accounts for 44 per cent of the $1.1 trillion global drug market, is an indication of the challenges that the Indian pharmaceutical industry is facing in that market. Sun entered the US in 2008/09 by acquiring Caraco and ramped up its business in the next few years, launching complex generics and coming up with many first-to-files (FTFs) to reap exclusive generic sales opportunities. In FY2010, Taro Pharmaceuticals was also acquired. Between 2006/07 and 2013/14, Sun Pharma’s US sales grew steeply, from ₹500 crore to ₹9,800 crore. In 2014/15, it reached ₹13,700 crore, around 60 per cent of the firm’s total revenue, even…

MOST organisations use customer surveys to measure satisfaction, pinpoint areas for improvement, or simply allow disgruntled patrons to vent. The approach is framed by a pessimistic mindset – one focused on problems. “Customers have been conditioned to always look for what’s wrong,” says Sterling Bone, an associate marketing professor at Utah State’s Huntsman School of Business. Indeed, the vast majority of research on customer service deals with “service recovery” – how to react when a customer complains. During a Bible study course nearly a decade ago, Bone found himself reflecting on the power of gratitude, and he began wondering what would happen if that emotion was incorporated into customer surveys. What if instead of asking customers what had gone wrong, companies asked them what had gone right? Since then Bone…

ART HAS strictly been the domain of the expert and the experienced. Where the uninitiated wouldn’t know a reproduction from a real painting, a connoisseur will spend time with the masterpiece, examine it carefully, and be able to tell the difference. But now, technology, powered by Artificial Intelligence, can spot forgery faster. Unthinkable at one point of time, it is now easy enough to understand how a neural network can study millions of brush stroke patterns and link them to an artist. When the system sees a painting, it doesn’t need to spend time thinking as a human would. A quick search for a match and a conclusion can be reached — and it’s never wrong. Researchers from Rutgers University and the Atelier for Restoration and Research Of Paintings in…

HOW DO 99 per cent of runners finish up a marathon long after they are ready to give up? The US’ Navy SEAL’s ‘40 per cent rule’ may explain this. It states that when you think you’ve done enough, you’ve actually only done 40 per cent of what you’re capable of. There’s a lot more energy, ability and strength where that 40 per cent came from. The rule comes from the legendary endurance athlete David Goggins who transformed his own body for military grade fitness. Living for a month with millionaire Jesse Itzler, Goggins taught him how to use the 40 per cent rule to develop an unprecedented level of mental toughness. When your brain signals to you that you’re tired, stop a moment and then go on. In a…

Timepieces Watch Out It’s the time for new watch launches as the world waits for the Salon International De La Haute Horlogerie in Geneva in January 2018. Audemars Piguet is all set to present its new line of Millenary timepieces, first launched in 2015, to suit women’s lives, which are anything but linear. In 2018, new ‘second-skin type’ metal bracelets have been added to the white and pink gold cases. The bracelet’s polish finishing completely transforms the watch, giving it a vintage look that matches the oval shape of the case. As a brand, first started in 1875, Audemars Piguet makes every attempt to ensure it updates its history with an always timely splash of innovation. Fashion THREE DECADES OF STYLE In the early days of fashion when designers were…

Ashutosh Kumar Mishra, a 32-year-old IT professional, stays in Mumbai with wife Smriti, 31, a former entrepreneur. Just like other young couples, the newlyweds are planning their financial future, with the focus on immediate and long-term goals. These include building a retirement corpus, a fund for their child’s higher education, buying a car and going on a dream vacation next year as both of them love to travel. They have already bought a house and created a contingency fund, some really good money moves considering their age (see table Assets and Liabilities). But their life insurance cover is not adequate and solely depending on employer-provided health insurance is not a good choice either. Ashutosh has a take-home annual salary of ₹9.84 lakh while their annual expenses, including insurance premiums, amount…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday@BT_India All Well, Says FM; GST Pains Persist: Exporters Finance Secretary Adhia attributes the delay to errors in refund claim submissions of exporters under the new tax regime. businesstoday.in/gst-exporters What Good Comes from Putting Kharola at the Helm of Air India? P.S. Kharola is a turnaround expert. And there is no point in appointing a turnaround expert when AI is up for sale. businesstoday.in/kharola-ai Kirana Stores in Tier-II/III Towns Embracing Digital Payment Modes It is mobile payment that is actually seeing a surge. Even consumers living in smaller towns are quite excited about buying through mobile wallets. businesstoday.in/kiranastores-digital.payment Did Zomato Learn a Lesson, or Did It Get Away with Its Pun on Cuss Words? Before any ad campaign, there are always internal debates, and Zomato…

Despite warnings from central banks and prominent investors from across the world, Bitcoin, which has a market capitalisation of over $300 billion (the total value of the 16.6 million Bitcoins in circulation) is breaking new price barriers on a daily basis. Even as the status of Bitcoin – whether it’s a commodity or a currency – is still being debated, what’s causing this meteoric rise? One of the biggest reasons is the inherent nature of Bitcoins. There can only be 21 million Bitcoins in the world. Even the process of creating new Bitcoins is tedious and complex. The coins are “mined” through high-end computer machines (and software programmes) and then stored in a digital wallet. People are betting on Bitcoins for various reasons – some compare it with gold since…

THE TELECOM Regulatory Authority of India (TRAI) is leaving no stone unturned to speed up consolidation in the telecom sector. The telecom watchdog recently issued some measures, titled Ease of Doing Business (EoDB), to make it easier for the proposed mergers – Vodafone- Idea Cellular, Bharti Airtel-Tata Teleservices and Bharti Airtel-Telenor – to clear the regulatory hurdles. The EoDB norms come right after suggestions to the department of telecom, or DoT, to relax the caps on spectrum holding, which will trigger further consolidation. Under the proposed measures, TRAI has said that the merged entity should get a definite timeline from the DoT for written approval within 30 days of receiving clearance from the National Company Law Tribunal. The regulator also says that telcos should get up to a year to…

ON 17 NOVEMBER, a 27-member team from Londonbased ArcelorMittal drove into Essar Steel’s 10 million tonne (MT) steel manufacturing complex at Hazira in Gujarat. The team, led by Aditya Mittal, 41, son of steel baron Lakshmi Mittal and CFO of the world’s largest steelmaker, had come for a first round of due diligence. Mittal asked for safety gear—yellow hard hats and steel toe leather boots— to walk through the plant. Mittal, who looks much younger than his years, took a close look at how steel was being made and discussed processes that Essar follows. It was a first step towards identifying and verifying records and processes at Essar Steel. For Essar Steel employees, Mittal and team were just one group of visitors to question them and check out the plant.…

“How did Tata Motors keep missing so many signals for our competitors to exploit? Complacency is the answer… nothing else” GUENTER BUTSCHEK, CEO, Tata Motors WHEN 53-YEAR-OLD Natarajan Chandrasekaran took charge as Tata Sons chairman in February this year, he perhaps knew the job wasn’t a bed of roses. He also most likely knew that one of the big thorns was Tata Motors, a once dominant player struggling to arrest a debilitating slide. At his first annual general meeting (AGM) of Tata Motors in August, just six months after taking over, he got a taste of the disgruntlement among shareholders. For 2016/17, Tata Motor’s India operations reported a net loss of ₹2,480 crore, after a loss of ₹62 crore in 2015/16. Lack of dividend in the last fiscal might have been…

Q: How has the hotel business changed? BAZIN: What has changed is probably a confirmation that if you don’t move, you will die. The pace, size and strength of digital players such as Booking, Expedia, Airbnb and Ctrip have never been better. And clients have never been more demanding of seamless journey and mobile payments. Accor, too, has never been as strong in the last 50 years as it is today. Fairmont Raffles Hotels was a major acquisition for us. So are the acquisitions of Onefinestay, John Paul, Travel Keys, Squarebreak and Gekko. We made several acquisitions, one every month, in the past three years, and invested over €4 billion, of which €3.5 billion went into hotels andin the last 50 years as it is today. Fairmont Raffles Hotels was…

Q: How did JetBlue discover that the way it asked for feedback changed customers’ perceptions? A: When I joined JetBlue, its CEO had just resigned. We were focused on rebuilding consumer trust. The idea of “nudging” was just hitting the mainstream. We were curious about how you can influence perceptions and behaviour and how we might use our voice-ofthe- customer programme to do so. In graduate school I had learned of Kristen DeTienne’s work on customer surveys and perceptions. Through trial and error we found it worked well to invite customers to share positive experiences, not just complaints. Q: Was there any concern that customers might feel manipulated? A: We discussed that a great deal. There are a lot of psychological tricks companies can use to alter customer perceptions, and…

TERABYTES OF DATA have been published on serious health consequences from overuse of gadgets. Long-term exposure to smartphones may lead to mild depression, memory loss or cancer. Gazing at a PC monitor for long causes dry eyes, headache or blurred vision. And you tend to get stiff joints or muscle pain for sitting too long. Do not worry, though. There are ways to minimise these health issues. Here we go. SMARTPHONE: Use speakerphones. If the office setting does not permit it, get headphones. Better still, use the landline. It is safe, and your calls won’t drop. DESK/WORKSTATION: Using gadgets here over long periods may cause repetitive strain injury or RSI, as per physiotherapists. “These are pains that you experience in your fingers, wrists, neck, shoulders or the lower back after…

By Geoffrey West Penguin Pages: 496 Price: ₹699 BEFORE STARTING to write this review, I was compelled to check the section in which this book was placed at airport bookshops. Geoffrey West’s Scale – a tome that attempts to tease out the universal laws of growth, innovation and sustainability in organisms, economies, cities and companies – defies the simple classification into sections for science, economics, philosophy, technology or governance; or self-help, business or fiction, for that matter. More on that later. Here are the key takeaways from this expansively enriching read. Seduced by the seemingly unending ways in which organisms, cities and companies of vastly different sizes seem similar to each other, physicist Geoffrey West summarises the extensive work on ‘complex adaptive systems’ undertaken by his team at the fabled…

ON THE CARDS Aadhaar- Property Linking Just like other financial assets, it could soon be mandatory to link Aadhaar with all property transactions which will help crack down on benami properties and curb black money in real estate. Prime Minister Narendra Modi recently mentioned the linkage but did not give any timeline for its implementation. Experts think such a move will make the industry more transparent and benefit genuine buyers. All-time-high price of Bitcoin on December 7, 2017, after starting the year below $1,000 per digital token. But considering there is no underlying asset and central authority involved, the volatility factor remains high in the cryptocurrency space. The Reserve Bank of India has time and again flagged its concerns about Bitcoins amid the surge in its valuation and increasing interest…

18-19 SUSTAINABLE ENERGY WHAT: Workshop on Sustainable Energy and Managing Green Technology WHEN: December 18-19, Seoul WHAT TO LOOK FOR: High economic growth in Asia and the Pacific has spurred rising demand for energy. Tackling the energy shortage in developing countries in the region needs systematic, sustainable energy policies and energy-efficient industries. It will discuss how policies to make solar, wind, geothermal and hydropower energy sources marketable. 19 CONNECTING WITH SMEs WHAT: NASSCOM SME SESSION WHEN: December 19, Hyderabad WHAT TO LOOK FOR: Nasscom wants to bring the eMarketplace portal discussion with SMEs. The event will look at helping create market access for SMEs so that they can take advantage of market opportunities. It will also look at how SMEs can train and reskill their workforce to handle new solutions.…

The government has set in motion the process to build an institutional framework for dealing with bankruptcy of banks and insurance companies, akin to the newly operational bankruptcy code for the corporate sector. The Financial Resolution Deposit Insurance Bill 2017 provides for setting up of a Resolution Corporation to deal with financial institutions which are on the verge of collapse by way of restructuring, merger, acquisition or eventual liquidation. But the biggest question depositors are asking is – why is the government not bailing out these institutions and instead leaving them to market forces? What it also means is that depositors’ money will be used to pay for the liabilities in a liquidation scenario. India hasn’t seen any bank failure. Instead, there have been mergers of weak banks with stronger…

THE GOVERNMENT has set up a seven-member task force to ‘overhaul’ direct tax laws, draft new laws in accordance with the changing economic climate, and incorporate the best international practices. However, the committee has been given just six months for this exercise. Will it just be another look-in exercise with no disruptions? The committee can take three broad directions – improve existing laws, complete the unfinished agenda of the Direct Taxes Code (DTC), or work on an overhaul to facilitate the ease of doing business. The government had set up a committee two years ago to work on tax simplification and most of its recommendations were accepted. These, however, did not significantly alter the working of the tax administration or how taxpayers are treated. The DTC, on the other hand,…

5% Improvement in market share in commercial vehicles by the end of 2017/18 ₹4,000 crore investment in 2017/18 for passenger and commercial vehicles ₹1,500 crore rise in profitability through operational efficiencies 2 Targeted car platforms. Present number is six. Product plan ready till 2021/22 3 Targeted position in the passenger vehicle market; Tata is currently 4th behind Maruti, Hyundai and M&M. 9.23% Growth in sale of passenger vehicles in 2017/18 so far as against the industry growth of 7.67% 5.07% Growth in sale of commercial vehicles in 2016/18 so far as against the industry growth of 6.04 per cent…

The India pharmaceutical industry is incredible in more ways than one. On the one hand, it takes pride in the fact that India is home to the largest number of drug-making facilities outside the US that are approved by the US Food and Drug Administration (USFDA) – over 600 of them. And in the fact that Indian companies lead in the number of applications for generic drug approvals – Abbreviated New Drug Applications (ANDAs) – in the US. About 40 per cent of the generics supplied to the US, by volume, come from India. On the other hand, the number of Indian companies getting pulled up by the USFDA for noncompliance with good manufacturing practices is rising. One reason is the increasing dominance of Indian companies. India and China lead…

What will you prefer if you have to choose between a medical doctor and a robot with artificial intelligence (AI) to examine, diagnose and prescribe medicines and treatment? Will you allow the robot to carry out surgery on you? It is no longer stuff out of science fiction. All over the world, robotics, Big Data, Internet of Things (IoT) and related technologies are transforming healthcare and pharmaceutical sciences in a manner that has never happened before. AI and robots, which support diagnosis and treat people, are already in homes, workplaces and clinical environments. It is yet to become common in India, but technologies that are more basic, the ones that capture and analyse data, are quite commonplace in the country. The buzz words are mobile apps, analytics, standardisation, Big Data,…

For a long time, humans believed they were the only species blessed with selfawareness. Chimpanzees and orangutans soon planted a seed of self doubt. But now, seeing as we are developing robots in our own image, machines are already beginning to have some sense of self awareness. Like much else with technology, this, too, is a doubleedged sword. Elon Musk and Stephen Hawking have been among those who’ve warned the world again and again that humans are probably shooting themselves in the foot with their advances in artificial intelligence. One only need think of Skynet, the fictional neural net-based conscious group mind and artificial general intelligence system that features centrally in the Terminator franchise and serves as the franchise’s main antagonist. It gains self-awareness after pervading millions of computer servers…

THERE’S EVEN an app for that. Or rather, several. In our headless-chicken routines, most of us don’t stop to take a breath, let alone stop to notice what’s going right in our lives. Of late, the sheer value of looking back at each day, if only just for a moment, and thinking of what went right and what one is grateful for, is beginning to emerge as important to one’s overall mental well-being. People are actually scheduling time for gratitude; some, like Oprah Winfrey, are even writing regular gratitude journals. She says if you can’t think of anything, start with your breath and think of being grateful for being alive to begin with. The idea is to focus on what you have versus on what you don’t. “Focusing on the…

YOU CANNOT SIT erect for eight hours. But there is a school of thought that says there has to be a correct alignment between your bones and joints. What you need is a change of posture – a walk really – every half hour. Others say the spine must move at an inclination of 80-120 degrees while you are sitting. Another debate is around ‘Text Neck’, a phone/ tech-induced ailment that can cause neck pain and muscle spasms. Then there is the smartphone and the debate around its harmful effects. “Multiple studies say that the use of smartphones should be minimised and people should be encouraged to use landlines,” says Dr C.H. Mohana Vamsy, an oncologist and founder of Omega Hospitals in Hyderabad. He says longterm use of smartphones is…

A total of 88 keen golfers teed off on a bright and sunny afternoon at the Poona Golf Course for the LLOYD Business Today Pro-Am of Champions. The Pune Golf course, one of the oldest in the country, has been around since 1920. Strategically positioned in a prime part of the city, the golf course is spread over 94 acres with wellmaintained fairways and very fast greens with interesting undulations and slopes. Playing on this golf course calls for accuracy and the ability to play on tricky greens. While the water is in play in a few holes and the 38 bunkers offer challenges, the real test is to manage to keep out of the trees that line most of the fairways and holes. The golf course is one of…

The insurance industry in India is coming of age. Even though the country is largely underinsured – only around 3.4 per cent people are insured and that, too, mostly for life, as against the US (7.3 per cent), the UK (10 per cent), Japan (10.8 per cent) and South Africa (14.7 per cent) – the industry has started seeing a lot of action, the latest being a series of initial public offers or IPOs. It has been just 17 years since India opened the industry to private players and allowed foreign direct investment, or FDI, up to 26 per cent. From a clutch of state-owned players back then, India now has a total of 24 life insurers and 33 general insurers. Better still, foreign investors are raising stakes in Indian…

The real estate industry in India is passing through a slowdown as a huge inventory of premium homes are lying unsold. In stark contrast, the affordable housing segment, most coveted by the lower- and the middle-income groups, is set to grow at a faster clip as the government’s policy directive – Housing for All by 2022 – is finally seeing some serious action on the ground. Harshil Mehta, Joint Managing Director and Chief Executive Officer of DHFL, tells Teena Jain Kaushal how affordable housing can play a crucial role in reviving the industry amid faltering bank credit growth. Edited excerpts: Q: Banks are now struggling due to huge nonperforming assets and corporate lending is down. Could home loan push revive credit growth? A: Housing finance in India is perceived to…

Investment Pawandeep Singh: I am 44 and have ₹80 lakh in NRE deposit. I have a corpus of ₹1.9 crore that can be invested for the next 10 years and an apartment worth ₹1.3 crore, which will be sold within a year and the money will be put into liquid assets. I also have a term plan of ₹3 crore and substantial medical insurance. How should I invest to make sure that the amount I get can fund all my expenses after 10 years? Meanwhile, I will get a job or start a venture to meet my expenses, but I can’t afford to lose the above corpus. Ashish Shanker, Executive Vice President and Head, Investments, Motilal Oswal Private Wealth Management, replies: Setting goals and having a well-thought-out approach are crucial for…