3RD SEPT.

2012
Shared knowledge leads the way

VOLUME 1 (ISSUE 1.2)

THE CUNCH
News Platter
Economic Indicators
GDP Growth Bank Rate CRR SLR Repo Rate Reverse Repo Rate Inflation Exchange Rate Market Levels Nifty Sensex Gold Rate 5.5 % 9 % 4.75 % 23 % 8 % 7 % 6.87 % 55.43 (/$)

Economic & Political

Fiscal Deficit for April-July at . 2.64 Lakh cr Sourcing Norms for Single-Brand Retail to be Eased Rate Cut Alone may not Boost Investments Govt Plans Setting Up Agriculture Credit Risk Fund FM to revive banking licence guidelines

Corporate
Indian Aviation Worst Performer Sibal Confident of 2G Bid Success, says Price May Touch . 20,000 cr Tata Steels India Biz May Drag Global Play Motorola May Shut India Ops in Drive to Cut 20% Jobs

5250 17384.40 30106.50

Editorial
Mr Global Economys Health Focus on Tax Administration

as on 03/09/2012

Corporate Contents Economic issues...2 Corporate news3 Editorial Section..4 Corporate news5 Think-tank....6 Company Profile..7 (Deloitte)
Can Sahara Survive the . 17400-Crore Blow? Finmin Moves RoC Against IFCI Citi PE to Invest $125 m in Cox & Kings Arm

Hiranya : Think-tank
Students corner

Suggestions & queries.9

Company Profile :

THE CUNCH
Contacts: Prof. Asheesh Pandey (9999359772) Umesh Yadav (9650177022) Abhishek Pramanik (09711481262) E-mail : asheesh.pandey@jaipuria.ac.in umesh.yadav@jimnoida.net abhishek.pramanik@jimnoida.net Follow us on : https://www.facebook.com/jaipuriafinanceclub

Produced by :- HIRANYA (Finance club), Jaipuria Institute of Management, Noida

Economy
Fiscal Deficit for April-July at . 2.64 Lakh cr
Fiscal deficit during April-July reached 51% of the budgetary estimate of . 5.13 lakh crore, raising fears of the government breaching its fiscal deficit target of 5.1% of GDP for the current year. Governments total receipts in the first four months added up to . 1.73 lakh crore, only 17.7% of the budget amount, data released on Friday showed, while its expenditure climbed to . 4.37 lakh crore, 29.3% of the budgeted amount. This shows the slowing growth is taking its toll on revenues while government was unable to rein in its expenditure.

FM to revive banking licence guidelines

Sourcing Norms for Single-Brand Retail to be Eased

Earlier Rule :- Single-brand retailers with over 51% foreign stake must source 30% of goods from local SMEs NEW PROPOSAL :- Single-brand retailers should preferably buy 30% products from small vendors wherever it is feasible for them Earlier Rule :- Compliance to be ensured through self-certifi cation by company, to be subsequently checked by statutory auditor NEW PROPOSAL :- Quantum of domestic sourcing to be self-certified by company, which will be vetted by statutory auditor

Rate Cut Alone may not Boost Investments

Investments, the fuel needed to put the economy back in the 8% orbit, may not revive for more than a year even with lower interest rates. This is because the consumption and savings behaviour of individuals and companies has turned adverse. The RBI in July cut economic growth estimate to 6.5% from 7.3% and raised its inflation forecast for the year to 7% from 6.5%.

Govt Plans Setting Up Agriculture Credit Risk Fund

According to the Reserve Bank of India, bad loans from the agriculture sector have grown by 47% in the fiscal year 2011-12, which is higher than the 40% rise in such loans from non-agricultural sectors. We are looking at all options, the official said. An RBI committee headed by MV Nair had also recommended a Credit Guarantee Scheme for small and marginal farmers.

The Nair Committee had suggested that the scheme may be initially tried out for five years as a pilot project, and depending on its success, it may be expanded to cover bigger credits.

Produced by :- HIRANYA (Finance club), Jaipuria Institute of Management, Noida

3RD SEPT. 2012

VOLUME 1 (ISSUE 1.2)

COPOATE

Indian Aviation Worst Performer

Confirming the worst fears of airline companies and aviation analysts the global airline body International Air Transport Association (IATA - has 254 scheduled airline as members) said in its latest report that Indian domestic market contracted by 1.1% compared to last July and got itself a not so an envious position as it is the worst performer globally.

Sibal Confident of 2G Bid Success, says Price May Touch . 20,000 cr

The government is confident the upcoming auction of 2G airwaves will be successful even at a base price of . 14,000 crore as some telcos have hinted they will bid aggressively, taking the final price of a pan-India mobile permit to . 20,000 crore, said telecoms minister Kapil Sibal. There are people in the industry who have said they dont have an issue with . 14,000 crore. They will bid and I believe the final price may go up to . 20,000 crore, Sibal said Friday at the ET Telecom Awards, adding that different sets of players had varying perceptions about the airwaves sale and were thrashing out their bidding strategy in line with their own financial decisions. Sibal also said that mobile phone companies had spurned his offer to reduce the licence duration to 10 years from 20 and halve the licence fee to . 7,000 crore.

Tata Steels India Biz May Drag Global Play

For Tata Steel, Indias largest private sector steelmaker, its profitable domestic operations helped cushion much of the pain caused by its wholly-owned European subsidiary. It saw its bottom line fall 39% in the June quarter as jittery customers postponed purchases of automobiles and consumer durables. What is worrying investors is the companys bet that returns from its forthcoming greenfield project in Odisha would also contribute toward servicing the debt, which by the end of June totalled . 54,000 crore.

Motorola May Shut India Ops in Drive to Cut 20% Jobs

Cunch Corner: RCOM Bags Contracts Worth . 150 Crore Idea Launches 3G Cloud Dongle for . 1,799 Natural Gas Prices Dip up to 20% on Supply Glut Breather for Indian refiners, power and fertiliser producers Nalco Commercial Director Gets Additional Charge as CMD of PSU

3RD SEPT. 2012

Volume 1 (ISSUE 1.2)

Editoial
Mr Global Economys Health
Governments ran large budget deficits after the crisis. Interest rates worldwide were reduced to historic lows, zero or negative in many developed countries. Balance sheets of major central banks have increased from around $6 trillion to $18 trillion, an unprecedented 30% of global gross domestic product (GDP). Mr Economy is now addicted to monetary heroin. Increasing doses are necessary for the patient to function at all. Mr Economy has not made the changes necessary for a return to full health. Borrowing levels are unsustainable. Debt for 11 major nations has increased from 381% of GDP in 2007 to 417% of GDP in 2012. Debt has increased in Canada, Germany, Greece, France, Ireland, Italy, Japan, Spain, Portugal, the UK and the US. Global imbalances major current account surpluses and deficits remain. Little progress has been made in bringing the banking system under control. Physical examination revealed serious problems. The US is in a marginally better condition than other organs: the cleanest dirty shirt is the expression. Despite a $1-trillion annual budget deficit (6% of GDP) and expansionary monetary policy, growth is a tepid 2%. Attempts by nations to increase their competitiveness by weakening their currency also threaten tit-for-tat currency wars, trade restrictions and barriers to investment flows. Mr Economy now has a serious chronic condition requiring constant management. Treatment options other than palliative care are limited. The treat of a life-threatening seizure cannot be discounted. As a simple cure is unavailable, I advise that Mr Economy take rock star Steven Tylers advice: Fake it until you make it.

Focus on Tax Administration

Tax policy and tax administration are like Siamese twins. Unfortunately, while tax policy is much discussed, the other twin has received insufficient attention. While policymakers deliberate on the implementation of GST, there are major deficiencies in tax administration that warrant attention. Two in particular merit mentioning: performance measurement and taxpayer services. Both impact what happens in the field office. In the first, we have tax officers being evaluated on the basis of realisation of total revenue targets. This approach has encouraged a peculiar virus called Targetitis that strikes taxmen in December every year and lasts until March. A better option would be to evaluate officers on the basis of their contribution to the revenue augmentation effort by enforcement of better compliance verification measures through return scrutiny, audit, antievasion and arrears recovery, carried out throughout the year. This would reflect the individual efforts put in by senior officers instead of relying on a target-based approach where, in any case, the predominant influencing factor is the pace of economic growth. While tax policy gets much attention, tax administration is almost neglected Performance measurement and taxpayer services are two key deficiencies Among other measures, the idea of courtesy might do wonders for taxmen

Cunch Corner: Essar Oil, Cafe Coffee Day in Marketing Tie-Up Ford Names Piparsania as Marketing & Sales Head HP Unveils First Windows 8 Touch-Screen Laptop Corporation Bank to Cut Rates on Home, Car Loans Gold Import Crosses 1,000 Tonnes in 2011-12

3RD SEPT. 2012

Volume 1 (ISSUE 1.2)

COPOATE
Can Sahara Survive the . 17400Crore Blow?
Will Sahara run out of steam? One of the myster ies of the Indian business world, Sahara, which has mastered the art of staying afloat after repeated onslaughts, had its first brush with the regulator in the late 90s: the groups finance firm, and its money-spinner, found its discretionary investment powers slashed by the Reserve Bank. Start to Finish 2008 & 2009 Unlisted Sahara Commodity Services Corp and Sahara Housing Investment Corp with paid-up capital of about 10 lakh each start raising funds through optionally fully convertible debentures. Between them they mop up at least 17,400 crore DEC, 2010 Sebi bars the two, says they havent conformed to disclosure norms. Sahara moves Allahabad HC, which stays Sebi order APR, 2011 HC lifts stay after it comes to light that lakhs of investors have already put in money. Sahara moves SC MAY 12, 2011 SC tells Sebi to proceed with probe, dismisses Saharas claims. Says crux of the issue lies in the true meaning of OFCDs JUN 23, 2011 Sebi asks the cos to refund money with annual interest of 15%, but says order to take effect only after SC OK NOV, 2011 Sahara moves Securities Appellate Tribunal, which upholds SEBI order. Sahara appeals JANUARY 9, 2012 SC stays SAT order. Admits appeal by Sahara, which afdavit explaining how it will protect the interests of 23 million investors Legal Options Limited for Sahara An email query from ET to a Sahara spokesman went unanswered till the time of going to press.

Finmin Moves RoC Against IFCI

The finance ministry has filed a petition with the registrar of companies against the Industrial Finance Corporation of Indias failure to issue debenture certificates worth . 523 crore, a move aimed at fast-tracking the private firms conversion into a state-owned company. The ministry has also written to the IFCIs board to comply with last weeks Cabinet decision and issue equity share to the government, which is now the largest shareholder in the company with 55.57% stake, a senior ministry official told ET.

Citi PE to Invest $125 m in Cox & Kings Arm

The deal will help the company reduce its debt. Cox & Kings shares have fallen 6.5% so far this year compared with a 17% gain for the Sensex on investor fears that debt will squeeze cash flows. Cox & Kings and Citi Venture Capital (CVC) declined to comment on the matter. People close to the transaction said that Citi could end up owning a minority stake in the company. In May, the Cox & Kings board approved minority investment from an institutional investor of up to $140 million through a sale of shares. A few top private equity firms were in the race to buy stake in Prometheon.

SHARED KNOWLEDGE LEADS THE WAY

Produced by :- HIRANYA (Finance club), Jaipuria Institute of Management, Noida

3RD SEPT. 2012 HIRANYA THINK TANK

Volume 1 (ISSUE 1.2)

STUDENTS CORNER
Cashless e-payments future of tomorrow
Indian electronic payment industry has a huge opportunity in the coming decade. Many domestic and foreign players have invested in the electronic payment industry without achieving desired results. These companies need to look forward positively as the future seems to be bright for the industry. While financial inclusion is on the prime agenda of the government. Therefore one can estimate the potential of e payment with the progress of financial inclusion. Industry is still on the tip of the iceberg. Interestingly for the past sometime of RBI has focused on promoting cashless payments. The recent steps by RBI to cap the merchant fees for the debit cards have the ability to provide the much needed fillip to the payment business. There is an estimate that epayments will grow by 100 % year on year and that payments can all become pervasive. Finance minister in his last budget speech has also indicated that e- payments industry will be given certain e- payments industry will be given certain incentives . Development of e- payments system will bring in more efficiency and transparency in the monetary circulation. More money will come in the banking system. The risk of storing and transporting will be reduced as well. As a ripple effect banks will have more money for lending. The industry will also benefit due to high liquidity with the banks. The risk of storing and transporting will be reduced as well.

Prakhar Yadav Sec B PGDM(G)

P&G IMPROVES SALES GROWTH AND PROFITABILITY IN INDIA

Among the BRIC (Brazil, Russia, India and China) Nations, India saw the highest growth in the developing markets. Procter and Gamble Cos listed subsidiaries Procter and Gamble Hygiene and Health care Ltd & Gillette India Ltds did well in the June quarter to support the companys 21% of Organic sales. Procter and Gamble Hygiene and Health care Ltd, sells Vicks and Whisper Products in India, and its sales rose by 27.8% to 313crore. The advertising and sales promotion cost and material consumption cost rose 2.5% and 15%, However Royalty and other expenses rose substantially. But due to lower material cost, helped P&G to cover the increase in expenses .Also the Net Operating Profit grew to 44 crore, as compared to last year . As compared to last year, profit declined because of higher depreciation , lower other and tax written back .Hence the reported increase in sales Growth and the 3.8% increase in operating profit , shows a indication that it is doing quite well . Gillette India Ltd overall sales rose 15% and its growth by 20.4% in its saving products in India. Profitability in both the countries has mainly risen due to some relief on the material inflation front. P&G focus on the developing economies like India continues to be strong and seems to contribute towards much of the profits in the company.

NIRMALA GAUTAM Sec B PGDM (G) 2011-13

The Cunch
Note:- The Cunch familyis very happy with the students response to this newsletter and we are looking forward for more entries from students. The best article or analysis of a student will be published in this newsletter. You can send your article or analysis work at: umesh.yadav@jimnoida.net For any queries and issues call (9650177022)

Produced by :- HIRANYA (Finance club), Jaipuria Institute of Management, Noida

3RD SEPT. 2012 COMPANY POFILE

VOLUME 1 (ISSUE 1.2

ID I ank Limited SE: 11 ) is an Indian financial service company headquartered Mumbai, India. RBI categorised IDBI as an "other public sector bank". It was established in 1964 by an Act of Parliament to provide credit and other facilities for the development of the fledgling Indian industry.[2] It is currently 10th largest development bank in the world in terms of reach with 1514 ATMs, 923 branches including one overseas branch at DIFC, Dubai and 621 centers including two overseas centres at Singapore & Beijing.[3] Some of the institutions built by IDBI are the Securities and Exchange Board of India (SEBI), National Stock Exchange of India (NSE), the National Securities Depository Limited (NSDL), the Stock Holding Corporation of India Limited (SHCIL), the Credit Analysis & Research Ltd, the Exim Bank (India)(Exim Bank), the Small Industries Development Bank of India(SIDBI), the Entrepreneurship Development Institute of India, and IDBI BANK, which is owned by the Indian Government.IDBI Bank is on a par with nationalized banks and the SBI Group as far as government ownership is concerned.It is one among the 26 commercial banks owned by the Government of India.The Bank has an aggregate balance sheet size of Rs. 2,53,378 crore as on March 31, 2011. IDBI Bank's operations during the financial year ended March 31,

Career
In our continuous endeavor to improve the selection process for recruitment at all levels in IDBI Bank, we have carried out an in-depth study of the competencies required to succeed in IDBI Bank. As a rapidly growing organization we look to induct talent from various reputed business schools/educational institute across the country. Enthusiastic and talented youth form the backbone of our banking operations and will become our future leaders. What we offer is the grooming needed to be the best. We offer a wide range of careers in all functions including - Finance, Marketing, Operations and Human Resources. We are proud of our ability to nurture individuals and provide them the space and empowerment they need to hone their talents. Our size gives us the unique ability to Recent developments provide fast growth and high responsibility early in ones career as well as multiple With the Industrial Development Bankthe (Transfer avenues to reach top. of Undertaking and Repeal) Act, 2003, IDBI attained the status of a limited company viz. "Industrial Development Bank of India Limited" (IDBIL). Consequently, IDBI, formally entered the portals of banking business as IDBIL from 1 October 2004. The commercial banking arm, IDBI BANK, was merged into. In March 2008, IDBI Bank entered into a joint venture with Federal Bank and Fortis Insurance International to form IDBI Fortis Life Insurance, of which IDBI Bank owns 48 percent. The company ended the year with over 300 Cr in premiums as on 31 March 2009.The name of IDBI Fortis Life Insurance is now changed to IDBI Federal Life Insurance Co Ltd. Government of India now owns 70.52% stake in IDBI Bank. Hence IDBI Bank is also referred as 'The New Age Government owned Bank' It has bought 10% stake in upcoming commodity bourse Universal Commo-dity Exchange (UCX) for Rs 10 crore, the bank's top official said. "The idea behind acquiring equity is to push agriculture loans through this venture," said Malla. "The other advantage is IDBI will be the only bank among the promoters and therefore all transactions of the exchange will be routed through IDBI."[4] It was the winner in two categories in Dun & Bradstreet's Polaris Software Banking Awards 2011.[5] It has now a network of 977 branches, 661 centres and 1547 ATMs as on April 18, 2012. The 977th branch is located at Kagal near Kolhapur in Maharashtra.

3RD SEPT. 2012

VOLUME1 (ISSUE 1.2)

esouce Cente Previous years questions asked during placement activities

1. 2. 3. 4. 5. 6. 7. 8. 9. Retail banking a Boom or a Bubble. Is consumer really a king in India. Is Rural India strength for India. Should public sector be privatized? What was your summer internship project and title. What do you mean by Liquidity ratio, leverage ratio & Working capital cycle. What would you prefer door selling or proper work? Would you like to work in retail branch or corporate branch? Will you work in remote areas. How will you work?

10. Difference between marketing of service and product. 11. What is Micro controller 8085. 12. What is balance sheet and describe it in one sentence. 13. Losses are assets or liabilities. 14. Any project in economics. Questions from that project. 15. What is VSAT(B.TECH) 16. Difference between marketing and selling. 17. Inflation in short run and long run. 18. Interest rate and its impact on economy. 19. Why are private banks only offering more interest rate as compared to public banks. 20. How the performance of mutual funds can be judged. 21. Hertzberg motivational theory, BCG matrix. 22. CRR, Repo rate, Reverse repo rate & Bank rate. 23. Monterey policy (contraction and expansion effects). 24. Savings bank account. How to sell it. 25. European crises. Which countries come under euro zone. 26. What is banking. 27. Marginal utility and its example. 28. Contingent liability. 29. What is depreciation, calculation and its type.

THE CUNCH
Contacts: Prof. Asheesh Pandey (9999359772) Umesh Yadav (9650177022) Abhishek Pramanik (09711481262) E-mail : asheesh.pandey@jaipuria.ac.in umesh.yadav@jimnoida.net abhishek.pramanik@jimnoida.net Follow us on : https://www.facebook.com/jaipuriafinanceclub

Produced by :- HIRANYA (Finance club), Jaipuria Institute of Management, Noida

3RD SEPT. 2012

SUGGESTIONS AND QUEIES

VOLUME 1 (ISSUE 1.2)

3rd SEPT.2012

VOLUME 1 (ISSUE 1.2)

Faculty Incharge :Finance club - Hiranya Dr. Asheesh Pandey 9999359772 asheesh.pandey@jaipuria.ac.in

President :Finance club Hiranya Abhishek Pramanik 9999359772 abhishek.pramanik@jimnoida.net

Vice President:Research & Newsletter committee Umesh Yadav 9650177022 umesh.yadav@jimnoida.net

Produced by :- HIRANYA (Finance club), Jaipuria Institute of Management, Noida

Dear Readers, If you have any suggestions or queries feel free to respond us, as this newsletter belongs to the Jaipuria family where we all are family members. So, share your valuable thoughts and insights about this newsletter on the above mentioned details.

Best regards, Umesh Yadav Vice President (Research & Newsletter committee)

THE CUNCH

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