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  • 1. A SUMMER TRAINING PROJECT REPORT ON “A STUDY ON MULTINATIONAL COMPANIES AND ITS ASSISTANCE FROM CORPORATE BANKS” AT Submitted in partial fulfilment of the requirement For the award of degree Of MASTER’S OF BUSINESS ADMINISTRATION SESSION (2011-2013) SUBMITTED TO: - SUBMITTED BY:- MR.R. SHANMUGAM JEBASINGH EDWARD .K ASST.PROF. MBA I MBA-M SECTION SRM UNIVERSITY 3511110819 KATTANKULATHUR
  • 2. Reg No – 3511110819 DECLARATION BY THE CANDIDATE JEBASINGH EDWARD K Reg No – 3511110819 I MBA SRM UNIVERSITY KATTANKULATHUR I hereby state that the report entitled, “A study on MULTINATIONAL COMPANIES AND ITS ASSISTANCE FROM CORPORATE BANKS” was undertaken at HDFC CORPORATE BANK , R k salai, Mylapore, Chennai, submitted to SRM UNIVERSITY, Chennai in partial fulfillment of Master of Business Administration Degree is a record of original work done by me . The information and data given in the report is authentic to the best of my knowledge. THIS SUMMER TRAINING REPORT IS NOT BEING SUBMITTED TO ANY OTHER UNIVERSITY FOR AWARD OF ANY OTHER DEGREE, DIPLOMA AND FELLOWSHIP.
  • 3. ACKNOWLEDGEMENT It is my pleasure to be indebted to various people, who directly or indirectly contributed in the development of this work and who influenced my thinking, behaviour, and acts during the course of study. I express my sincere gratitude to DR JAYSHREE SURESH worthy DEAN for providing me an opportunity to undergo summer training at HDFC BANK, CORPORATE SECTOR. I am thankful to Mr NAVEEN VICTOR for his support, co-operation, and motivation provided to me during the training for constant inspiration, presence and blessings. I also extend my sincere appreciation to MR.R.SHANMUGAM who provided his valuable suggestions and precious time in accomplishing my project report. Lastly, I would like to thank the almighty and my parents for their moral support and my friends with whom I shared my day-to-day experience and received lots of suggestions that improved my quality of work. JEBASINGH EDWARD. K
  • 4. CONTENTS About HDFC Date of Establishment-08 1994 Revenue 0 ( USD in Millions ) Market Cap 1360896.82696875 ( Rs. in Millions ) Corporate Address Hdfc Bank House,Senapati Bapat Marg,Kamala Mills Compound Lower Parel (West)Mumbai-400013, Maharashtra www.hdfcbank.com Management Details Chairperson - C M Vasudev MD - Aditya Puri Directors - A N Roy, Aditya Puri, Anami N Roy, Arvind Pande, Ashim Samanta, Bobby Parikh, C M Vasudev, Gautam Divan, Harish Engineer, Jagdish Capoor, Keki Mistry, Pandit Palande, Paresh Sukthankar, Partho Datta, Renu Karnad, Sanjay Dongre, Shailendra Bhandari Business Operation Bank - Private Background The HDFC Bank was incorporated on August 1994 by the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. The Housing Development Finance Corporation (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, a Financials Total Income - Rs. 325300.466 Million ( year ending Mar 2012) Net Profit - Rs. Million ( year ending Mar 2012) Company Secretary Sanjay Dongre Bankers No Bankers Details in A.R Auditors Haribhakti & Co
  • 5. Company’s history The HDFC Bank was incorporated on August 1994 by the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. The Housing Development Finance Corporation (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 1416 branches spread over 550 cities across India. All branches are linked on an online real-time basis. Customers in over 500 locations are also serviced through Telephone Banking. The Bank also has a network of about over 3382 networked ATMs across these cities. The promoter of the company HDFC was incepted in 1977 is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment.
  • 6. The shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The Bank's American Depository Shares ( ADS ) are listed on the New York Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange. On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was formally approved by Reserve Bank of India to complete the statutory and regulatory approval process. As per the scheme of amalgamation, shareholders of CBoP received 1 share of HDFC Bank for every 29 shares of CBoP. The merged entity now holds a strong deposit base of around Rs. 1,22,000 crore and net advances of around Rs. 89,000 crore. The balance sheet size of the combined entity would be over Rs. 1,63,000 crore. The amalgamation added significant value to HDFC Bank in terms of increased branch network, geographic reach, and customer base, and a bigger pool of skilled manpower. In a milestone transaction in the Indian banking industry, Times Bank Limited (another new private sector bank promoted by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., effective February 26, 2000. This was the first merger of two private banks in the New Generation Private Sector Banks. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank COMPETITORS: Company Sales (Rs.Million) Current Price Change (%) P/E Ratio Market Cap.(Rs.Million) 52-Week High/Low h HDFC Bank 272863.52 580.90 0.56 26.34 1360896.83 588/400 ICICI Bank 335426.52 939.40 1.03 16.58 1071893.57 1084/641 Kotak Mahindra Bank 61802.36 597.30 0.34 40.74 442014.57 606/411 Axis Bank 219946.47 1057.95 2.22 10.11 428770.41 1367/785 Indusind Bank 53591.93 344.50 0.33 20.05 160960.89 352/222
  • 7. Yes Bank 63073.58 361.65 0.72 13.01 127087.89 389/231 Centurion Bk of Punj 12685.30 41.40 0.00 52.93 78932.68 43/41 Federal Bank 55583.92 446.65 0.07 9.83 76347.05 480/322 ING Vysya Bank 38568.08 381.55 2.47 12.26 55945.91 383/275 Karur Vysya Bank 32703.73 438.50 1.00 9.28 46567.61 479/322 J&K Bank 48355.77 936.00 -0.97 5.70 45818.79 1010/645 Bank of Raj 13594.89 212.10 0.00 0.00 34222.35 214/207 South Indian Bank 35834.25 25.10 0.80 7.04 28260.31 28/20 Standard Chartered 63524.25 100.15 0.10 1.17 24012.00 109/69 City Union Bank 16967.74 53.70 -0.46 7.87 22069.32 55/39 Karnataka Bank 31128.77 99.50 5.63 7.21 17737.12 128/64 Devp Credit Bank 7169.69 45.55 2.59 19.40 10685.83 66/31 Lakshmi Vilas Bank 15192.56 80.35 -1.47 7.43 7953.23 130/74 Product Name Year Month Sales Quantity Sales Value(Rs.Million) % of STO Interest/Discount on Advances / Bills 2012 03 0.00 205366.01 0.00
  • 8. Income from Investments 2012 03 0.00 65045.89 0.00 Interest on balance with RBI and Other Inter-Bank Funds 2012 03 0.00 1371.41 0.00 Others 2012 03 0.00 1080.20 0.00 Interest/Discount on Advances / Bills 2011 03 0.00 150850.11 75.70 Income from Investments 2011 03 0.00 46754.42 23.46 Interest on balance with RBI and Other Inter-Bank Funds 2011 03 0.00 1480.83 0.74 Others 2011 03 0.00 196.76 0.10
  • 9. BACKGROUND The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of RBI’s liberalisation of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of ‘HDFC Bank Limited’, with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. PROMOTER HDFC is India’s premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment. BUSINESS FOCUS HDFC Bank’s mission is to be a World Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank’s risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank’s business philosophy is based on four core values: Operational Excellence, Customer Focus, Product Leadership and People. CAPITAL STRUCTURE As on 31st March, 2012 the authorized share capital of the Bank is Rs. 550 crore. The paid- up capital as on the said date is Rs. 469,33,76,540 (234,66,88,270 equity shares of Rs. 2/- each). The HDFC Group holds 23.15 % of the Bank's equity and about 17.29 % of the equity is held by the ADS / GDR Depositories (in respect of the bank's American Depository Shares (ADS) and Global Depository Receipts (GDR) Issues). 30.68 % of the equity is held by Foreign Institutional Investors (FIIs) and the Bank has 4,47,924 shareholders. The shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The Bank's American Depository Shares (ADS) are listed on the New York Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global
  • 10. Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange under ISIN No US40415F2002. AMALGAMATION OF TIMES BANK & CENTURION BANK OF PUNJAB WITH HDFC BANK On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was formally approved by Reserve Bank of India to complete the statutory and regulatory approval process. As per the scheme of amalgamation, shareholders of CBoP received 1 share of HDFC Bank for every 29 shares of CBoP. The amalgamation added significant value to HDFC Bank in terms of increased branch network, geographic reach, and customer base, and a bigger pool of skilled manpower. In a milestone transaction in the Indian banking industry, Times Bank Limited (another new private sector bank promoted by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., effective February 26, 2000. This was the first merger of two private banks in the New Generation Private Sector Banks. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. DISTRIBUTION NETWORK HDFC Bank is headquartered in Mumbai. As on March 31, 2012, the Bank has a network of 2544 branches in 1399 cities across India. All branches are linked on an online real-time basis. Customers in over 800 locations are also serviced through Telephone Banking. The Bank’s expansion plans take into account the need to have a presence in all major industrial and commercial centres, where its corporate customers are located, as well as the need to build a strong retail customer base for both deposits and loan products. Being a clearing / settlement bank to various leading stock exchanges, the Bank has branches in centres where the NSE / BSE have a strong and active member base. The Bank also has a network of 8913 ATMs across India. HDFC Bank’s ATM network can be accessed by all domestic and international Visa / MasterCard, Visa Electron / Maestro, Plus / Cirrus and American Express Credit / Charge cardholders. MANAGEMENT Mr. C.M. Vasudev has been appointed as the Chairman of the Bank with effect from 6th July 2010. Mr. Vasudev has been a Director of the Bank since October 2006. A retired IAS officer, Mr. Vasudev has had an illustrious career in the civil services and has held several key positions in India and overseas, including Finance Secretary, Government of India, Executive Director, World Bank and Government nominee on the Boards of many companies in the financial sector. The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years, and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia. The Bank's Board of Directors is composed of eminent individuals with a wealth of
  • 11. experience in public policy, administration, industry and commercial banking. Senior executives representing HDFC are also on the Board. Senior banking professionals with substantial experience in India and abroad head various businesses and functions and report to the Managing Director. Given the professional expertise of the management team and the overall focus on recruiting and retaining the best talent in the industry, the bank believes that its people are a significant competitive strength. TECHNOLOGY HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. All the bank’s branches have online connectivity, which enables the bank to offer speedy funds transfer facilities to its customers. Multi- branch access is also provided to retail customers through the branch network and Automated Teller Machines (ATMs). The Bank has made substantial efforts and investments in acquiring the best technology available internationally, to build the infrastructure for a world class bank. In terms of core banking software, the Corporate Banking business is supported by Flexcube, while the Retail Banking business by Finware, both from i-flex Solutions Ltd. The systems are open, scaleable and web-enabled. The Bank has prioritised its engagement in technology and the internet as one of its key goals and has already made significant progress in web-enabling its core businesses. In each of its businesses, the Bank has succeeded in leveraging its market position, expertise and technology to create a competitive advantage and build market share. BUSINESS PROFILE HDFC Bank caters to a wide range of banking services covering commercial and investment banking on the wholesale side and transactional / branch banking on the retail side. The bank has three key business segments: Wholesale Banking The Bank’s target market is primarily large, blue-chip manufacturing companies in the Indian corporate sector and to a lesser extent, small & mid-sized corporates and agri-based businesses. For these customers, the Bank provides a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash management, etc. The bank is also a leading provider of structured solutions, which combine cash management services with vendor and distributor finance for facilitating superior supply chain management for its corporate customers. Based on its superior product delivery / service levels and strong customer orientation, the Bank has made significant inroads into the banking consortia of a number of leading Indian corporates including multinationals, companies from the domestic business houses and prime public sector companies. It is recognised as a leading provider of cash management and transactional banking solutions to corporate customers, mutual funds, stock exchange members and banks.
  • 12. Treasury Within this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the liberalisation of the financial markets in India, corporates need more sophisticated risk management information, advice and product structures. These and fine pricing on various treasury products are provided through the bank’s Treasury team. To comply with statutory reserve requirements, the bank is required to hold 25% of its deposits in government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio. Retail Banking The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her banking requirements. The products are backed by world-class service and delivered to customers through the growing branch network, as well as through alternative delivery channels like ATMs, Phone Banking, NetBanking and Mobile Banking. The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the Investment Advisory Services programs have been designed keeping in mind needs of customers who seek distinct financial solutions, information and advice on various investment avenues. The Bank also has a wide array of retail loan products including Auto Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading provider of Depository Participant (DP) services for retail customers, providing customers the facility to hold their investments in electronic form. HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the MasterCard Maestro debit card as well. The Bank launched its credit card business in late 2001. By March 2011, the bank had a total card base (debit and credit cards) of over 16.6 million. The Bank is also one of the leading players in the “merchant acquiring” business with over 120,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank is well positioned as a leader in various net based B2C opportunities including a wide range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc.
  • 13. ABOUT CORPORATE BANKING Corporate Banking reflects HDFC Bank's strengths in providing our corporate clients in India, a wide array of commercial, transactional and electronic banking products. We achieve this through innovative product development and a well-integrated approach to relationship management. Large Corporates We offer blue chip companies in India, a full range of client-focused corporate banking services, including working capital finance, trade and transactional services, foreign exchange and cash management, to name a few. The product offerings are suitably structured taking into account a client's risk profile and specific needs. Based on our superior product delivery, industry benchmark service levels and strong customer orientation, we have made significant inroads into the formal banking consortia of a number of Indian companies including multinationals, domestic business houses and prime public sector companies. Funded Services Working Capital Finance Short Term Finance Bill Discounting Structured Finance Export Credit Term Lending Non Funded Services Letter of Credit Bank Guarantees Collection of Documents Value Added Services Syndication Services Forex Desk Real Time Gross Settlement Money Market Desk Cash Management Services Derivatives Desk Channel Financing Employees Trusts Corporate Salary Accounts Cash Surplus Corporates Reimbursement Account Tax Collection Bankers to Right/Public Issue Online payment of Gujarat VAT Internet Banking Supply Chain Management Payment Gateway Services Corporate Internet Banking Supply Chain Partners At HDFC Bank we create Supply Chain Finance solutions that enable our clients to automate supply chain management resulting in operational efficiency and supply chain gains. Our vast array of services and supply chain solutions help in seamless transfer of funds, faster delivery of goods and reduction of processing costs. And all this from our website or our revolutionary service. Dealer Finance Vendor Finance
  • 14. OBJECTIVES OF THE STUDY • TO UNDERSTAND THE WORKINGS OF THE BANK • TO LEARN THE DESK JOB PRACTICALLY • TO TAKE A STUDY ON THE MULTINATIONAL COMPANIES • TO HAVE A CONVERSATION WITH THE FINANCIAL MANAGERS OF THE SELECTED MNCS • TO FIND OUT WHAT KIND OF ASSISTANCE THEY REQUIRE FROM CORPORATE BANKS • TO DATA MINE THE INFORMATION BASED ON ITS AREA AND REVENUE • TO INTERPRET THE DATA • TO GIVE SUGGESTIONS ON EXPANSION PLANS • TO KNOW ABOUT THE COMPANIES FINANCIAL STATUS.
  • 15. INTRODUCTION WHY DID MNC’S COME TO INDIA? There are a number of reasons why the multinational companies are coming down to India. India has got a huge market. It has also got one of the fastest growing economies in the world. Besides, the policy of the government towards FDI has also played a major role in attracting the multinational companies in India. For quite a long time, India had a restrictive policy in terms of foreign direct investment. As a result, there was lesser number of companies that showed interest in investing in Indian market. However, the scenario changed during the financial liberalization of the country, especially after 1991. Government, nowadays, makes continuous efforts to attract foreign investments by relaxing many of its policies. As a result, a number of multinational companies have shown interest in Indian market. PROFITS OF MNC’S IN INDIA It is too specify that the companies come and settle in India to earn profit. A company enlarges its jurisdiction of work beyond its native place when they get a wide scope to earn a profit and such is the case of the MNCs that have flourished here. More over India has wide market for different and new goods and services due to the ever increasing population and the varying consumer taste. The government FDI policies have some how benefited them and drawn their attention too. The restrictive policies that stopped the company's inflow are however withdrawn and the country has shown much interest to bring in foreign investment here. Besides the foreign directive policies the labour competitive market, market competition and the macro-economic stability are some of the key factors that magnetize the foreign MNCs here. Following are the reasons why multinational companies consider India as a preferred destination for business: • Huge market potential of the country • FDI attractiveness • Labor competitiveness • Macro-economic stability
  • 16. MULTINATIONAL CORPORATIONS • Multinational corporation(MNC) or transnational corporation(TNC) or multinational enterprise(MNE)or multinational organisation (MNO) • It is a corporation or business entity or enterprise that manages production establishments or delivers services in atleast two countries • Types of MNC’s – Multinational corporation MNC’s are often divided in 3 broad groups:  Horizontally integrated MNC’s  Vertically integrated MNC’s  Diversified MNC’s Multinationals have played an important role in globalisation. Given their international reach and mobility, many countries . and sometimes regions within countries. And sometimes compete with each other to have MNC’s locate their facilities and Subsequent Tax Revenue, Employment and economic activity within them. WHAT INDIA OFFERS • One billion plus population • India ranked 10th largest economy, 4th largest in terms of purchasing power parity • 250-300 million middle class • Gross Domestic product growing at over 8-9%, makes it one of the fastest growing economies in the world • Lucrative and diverse opportunities for U.S. exporters with the right products for services • Easier access to capital POLICIES THAT HELPED MNC’S GROW IN INDIA • FDI Policy: Most sectors including manufacturing activities permitted 100% FDI Under automatic route
  • 17. • Industrial licensing: Licensing limited to only 5 sectors(security, public health & safety considerations) • Exchange control: All investments are on repartition basis. • Original investment, profits and dividend can be freely repatriated • Taxation: Companies incorporated in India treated as Indian companies for taxation • Convention on Avoidance of double Taxation with 72 countries including Korea. FACTORS THAT ATRACT MNC’S IN INDIA • Economic liberalisation • The economic policy reforms • The Indian innovation system after 1991 • Government support for technological innovation • Geographical clustering About Korean companies in India: India–South Korea relations has been relatively limited, although much progress arose during three decades. Since the formal establishment of the diplomatic ties between the two countries in 1973, several trade agreements have been reached: Agreement on Trade Promotion and Economic and Technological Cooperation in 1974;
  • 18. Reason for the growth of Korean companies China's remarkable success in manufacturing is the result of a strategy to win, as was the growth of the other Asian industrial powerhouses, Japan and South Korea. Having built its manufacturing base, China is scaring the world with its strategy to build 'indigenous innovation'. India too has announced its intention to strengthen innovation. An innovation strategy must be closely intertwined with a manufacturing one. Science results in innovations when ideas are converted into real things that people can use. Therefore, it is not surprising that China's strategy to stimulate 'indigenous innovation' includes policies about what must be manufactured in the country, what the ownership of these enterprises must be, and what ownership rights these enterprises must have on the technologies used in their products. Indian policymakers are dancing around the same issues. The idea of an industrial strategy evokes fears of returning to a planned economy. India must be open to foreign investments and new technologies from abroad. But they must result in jobs, innovations, and manufacturing depth in India. Appropriate receptors are required within a developing economy to absorb foreign technology. The receptors are production organisations in the host country that use the technology to produce things for the market - domestic or export. Merely an R&D lab as a counterpart to a foreign R&D lab will not result in the absorption of technology. Indeed, even domestic R&D labs require production organisations to convert their ideas into usable innovations: hence the need for strong industry-lab partnerships. The quality of the industrial partner in the host country and its ambitions to learn, apply, and improve the technologies determines whether the technology is well absorbed or not. This has been empirically established by studies of the growth of technological capabilities within developing countries, including Indian experience in the auto and pharma industries. The local partner must have an 'industrial' orientation, not merely a 'trading' one: a long-term ambition to create an institution with technical depth, not merely an ambition to sell things and make quick profits. Therefore it is not surprising that absorption most often happens in private sector companies, which have ambitions to prove that 'it can be done in our country, and we will some day do it even better than you'. This is the spirit that drove the Japanese and Korean industrialisation strategies. In the absence of enough such private sector companies, governments turn to PSEs as the reliable receptacles for receiving the foreign technologies, which is the case in China. Indian strategy should wean itself away from PSEs. However, for India to succeed in strengthening 'indigenous' innovation, our policymakers must consider the question of who are good receptors.
  • 19. Organizational Structure for Research by Korean companies Content And Companies Main organizational sub-unit Role of sub-unit Global Local research institute in Hyundai Heavy R&D Headquarters, Shipbuilding & Ocean Research Institute, Industrial Research Institute, Machine- Electricity Institute, Techno Design Institute Under the Headquarter 4 institutions are working independently Local research institute in Hungry & Russia. Employ foreign manpower in drawing unit Hyundai Motor Planning & Coordination Office, Automobile development Institute (3 locations), Power train Development Institute, Design & Test Institute; in L.A., Detroit, Chiba in Japan, Germany, Sweden, Manage and Coordinate domestic and abroad institutions, R&D priority setting, No foreign researcher in domestic institute
  • 20. Contents and companies Main organizational sub-unit Role of sub-unit Globalization of R&D LG Chemical In LG Chem Research Park, Corporate R&D(New Biz Incubation Unit, Core Technology Platform, Process Innovation) and Business Unit Institute(Information Electronic Materials, Battery Tech Center, Industrial Material, Petrocemicals) Direction of Business Unit Institute(Cash Cow role): In house R&D and Joint Venture. Corporate R&D Institute: Find New Business Seed, Acquire World Best Core Tech Local research institute and operation Satellite lab in the USA Liaison office in Russia & Europe. 10 foreign researchers in domestic institute LG Electronics LG Electronics Institute of Technology as a central Research institute and several Culture Unit(CU) in several business units Cash cow business(Home appliances): Business related Innovation, LGEIT: Future oriented new business Local research institute in the USA & India. M&A or establish local start-up company. Few foreign researcher Hyundai Mobis Technical Research Institute consist of 20 team Research activities of 20 teams comprise development of core parts, engineering analyses, and test & evaluation.
  • 21. Decision Process of Strategy of Korean companies Contents Decision Process of Strategy Project Management Hyundai Heavy Make a Long-Term business Forecast in each business unit every later half of the year. Decide corporate level strategy in technology policy meeting(with the review of the council of Technology Development, members are CTO, business unit technology executive directors, president of each institute). 20% of projects are from researchers’ free idea, by strategic planning is the rest. Hyundai Motor Set up corporate strategy for 10 years and revise it each year. After completion of long-term products planning, make a development plan, and make a plan of each research institute’s role and function Select development model through various process including a review of deliberation of products council. Under the authority of project manager projects of each development stage are managed comprehensively and systematically. Samsung Electronics Long term technology strategy document exists. Select research topic from new technology (or product) map. For the selection of project related to current business, discuss topics with business unit every 3 month. For basic research, researchers hand in self-report and checked by self-control inside of institute. Apply stage gate method to project management. Invite business unit persons to take design review in each stage.
  • 22. Contents Decision Process of Strategy LG Chemical Make an alignment process of corporate strategy on corporate level. Reflect technology strategy in Corporate strategy to develop new technology and new market opportunity. Use scenario planning method, technology road map, technology portfolio LG Electronics Long term technology strategy and a year plan is decided by business technology strategy meeting every year. Conesus building process by regular meeting with business unit Hyundai Mobis Set up target technology by top-down and bottom up process. Focus on building up core technology capability in automobile module business and aerospace business Iljin On the criteria of customer needs and opportunity of future value Strategy is decided by investment council consists of executive directors Research Methodology for collecting the information’s. • The Korean trade centre • Interview with the General Manger of the Korean trade centre • Questionnaire • Informal interview with the financial manager of the MNCs • Just dial • Search engines (Google, ministry of corporate affairs)
  • 23. KOREAN MULTINATIONAL COMPANIES IN TAMILNADU • Hyundai Motor India Ltd. • JKM DAERIM AUTOMOTIVE LIMITED • DAESUNG Electricity • Dae-Jung Mop arts Pvt. Ltd • DONG-A INDIA AUTOMOTIVE PVT.LTD • MANDO • Visteon Automotive Systems India Private Ltd • TSAL (Technical Stampings Automotive Limited) • SHINHAN PLASTO INDIA PRIVATE LTD • Asian PPG Industries Limited • SL LUMAX LIMITED • WOORY AUTOMOTIVES INDIA Pvt.Ltd. • Wonjin Autoparts India Pvt. Ltd. • IN-JI Controls India • INFAC INDIA • ILJIN AUTOMOTIVE PRIVATE LIMITED. • JOIL AUTOMOTIVE PUT.LTD • JINO SYSTEM INDIA Pvt.Ltd. • PHC MFG(P) LTD. • POS-HYUNDAI STEEL FG.(I) PVT. LTD • HANIL LEAR INDIA PVT. LTD • HYUNDAI HEAVY INDUSTRIES CO., Ltd. • IHD INDUSTRIES PVT. Ltd
  • 24. • HIS AUTOMOTORS. LTD • Hwashin Automobile India Pvt. Ltd. • DAECHANG INDIA SEAT • MOBIS INDIA LTD. • SNY AUTO TECH PRIVATE LIMITED • KIML (Kyungshin Industrial Motherson Ltd.) • Yushiro Buhmwoo (India) Company Private Limited • Sodiff India Materials (P) Ltd • ENNORE FOUNDRIES LTD • AENEAS APPARELS PVT. LTD. • Korea international business corp. • KORINDO WORLD ENTERPRISES PVT LTD • Glovis India Private Limited • Korean Air • LOM LOGISTICS • EUKOR Car Carriers Inc. (India) • Geodis Overseas Pvt. Ltd • Hanjin Shipping • H&FRIENDS GTL PVT. LTD • DM WALL SYSTEM C0. (P) LTD • Amco India Construction Pvt. Ltd GERMAN MULTI-NATIONAL COMPANIES German Companies in India
  • 25. India Brand Equity Foundation (IBEF) commissioned KPMG to undertake a study to capture the experiences of German companies in India. A useful guideline for MNCs seeking to enter India, this report synthesises the insights and strategies of top German companies with an established presence in India. India is a large and growing market. More than 80 per cent of the companies stated that India is a large market with significant growth potential. India is emerging as a global manufacturing hub 65 per cent of the manufacturing companies included as part of the study have established manufacturing facilities in India and 30 per cent are planning to setup a manufacturing base in the near future. India is a services hub German companies in India have successfully leveraged the advantages that India offers to set up R&D facilities and Business Process Outsourcing (BPO) operations. Future Outlook German companies are positive about the future outlook of India and plan to strengthen their presence here. Their plans are in line with the role they envisage India to play in their global strategy. Indo-German Business Overview Till date, the economic relations between India and Germany have been strategic in nature. Both countries are democracies with a federal-structure and share a broad range of similar values as well as common views on international issues. Their ties which have traditionally been close and amicable are predominantly characterized by intensive co-operation in the field of economy. Economic relations between these two countries date back to the 16 century. In fact, between the 16 and 18 century, several German companies were established to trade with India and other East Asian countries. India and Germany- An Economic Overview-
  • 26. The Indian Economy India with its recent 'trillion dollar economy' status has seen remarkable economic growth over the last couple of years. Last fiscal, India registered a growth rate of 9.4 percent, making it the second fastest growing economy after China. Interplay of economic reforms combined with sound policy regime, favourable demographics and increased integration with the world economy, have been the prime drivers of this stupendous economic development. With positive indicators such as consistent 8-9 percent annual growth, rising foreign exchange reserves of close to USD 220 billion, a booming capital market, increasing Foreign Direct Investment (FDI) inflows of USD 15.7 billion in this fiscal, and more than 30 percent surge in exports, it is not hard to fathom why India is a leading destination for foreign investment. The Indian economy is expected to remain strong this year, driven by booming investment and consumption. The government's eleventh five-year plan (2007- 12) has an ambitious target of 9 percent average annual growth. The German Economy As Europe's largest economy and second most populous nation, Germany is a key member of the continent's economic, political, and defense organizations. After a long period of stagnation, with an average growth rate of 0.7 percent from 2001-05 and chronically high unemployment, heightened growth has led to a considerable fall in unemployment to about 7 percent at the end of 2006 . The German economy is expected to grow by 2.8 percent in 2007. In the near future, domestic demand is expected to make a stronger contribution to growth as compared to the recent past, as investment remains stronger and private consumption recovers.
  • 27. Bilateral Trade India and Germany are important partners on the international stage. In recent years, the political bilateral relations have intensified considerably. Bilateral exchanges, including at the highest level, are a regular feature of the relationship. Chancellor Merkel visited India on May 31, 2011 to co-chair the first Indo-German Intergovernmental Consultations (IGC). Several important Ministries like the Ministry of Foreign Affairs, Interior, Economics & Technology, Defense, Environment; Education & Research and Transport from both the countries participated in the IGC and discussed ways and means of further intensifying our bilateral cooperation in these sectors. Four important MoUs in the field of vocational education and science & technology were signed during the visit. Chancellor Merkel was awarded the Jawaharlal Nehru Award for International Understanding for the year 2009, during the visit. PM and Chancellor Merkel discussed a wide range of bilateral and global issues and decided to coordinate their efforts towards UN reforms, including efforts to secure permanent seats in the extended Security Council.India and Germany have a strategic partnership since 2001, which has been further strengthened with the first Intergovernmental Consultations (IGC) held in May 2011. India is the first country in Asia (besides Israel,) and the only country outside Europe to have Intergovernmental Consultations with Germany. The two countries also have several institutionalized arrangements like a Strategic Dialogue,Foreign Office Consultations, Joint Commission on Industrial and Economic Cooperation, Defense Committee Dialogue and a Joint Working Group on Counter- Terrorism to discuss various bilateral and global issues of interest.Germany is India’s largest trading partner in Europe. Indo-German bilateral trade has registered an increase of 20.8% to reach Euro 15.18 billion during Jan-Oct 2011. Indian exports grew over 25.93% over the same period of 2010 to reach Euro 6.37 billion, while its imports registered an increase of over 17.39% to reach Euro 8.81 billion. The trade surplus is in favour of Germany of aboutEuro 2.44 billion. Both countries are confident that the target of achieving bilateral trade of Euro 20 billion by 2012 can be met.
  • 28. • Today Germany is India's fourth largest trading partner (after U.S., U.K. and • Japan) • Germany's trade with India accounts for just over 0.5 percent of Germany's • total trade thus there's ample room for much growth • Textiles and leather remain the thrust areas within the composition of Indian • exports to Germany, followed by food items, chemicals, electro technical • Products, pharmaceuticals and machinery. • Important German exports to India are machinery (one third of the share of the • total German exports to India), electro technology as well as plants and metal • Products. Also on the list are plastics and plastic products chemicals and • Pharmaceuticals, and automobile products and components. Some of the major German companies in India Abicor Binzel Adidas Marketing Baerlocher Additives Bajaj Allianz Basf Baumuller Bayer Beiersdorf Bosch Group Braun Medical Burgmann Carl Bechem Carl Zeiss Daimler Chrysler DHL Express DMG Durr Fichtner Henkel Kluber Lubrication Knorr Bremse Lahmeyer International Lapp Pharmaplan Schuler Steag Encotec Stollberg Suspa Pneumatics Wurth Zeppelin Mobile Systems Zwick Roell
  • 29. German companies in Tamilnadu and Kerala • AGIS AWECA INDIA PVT LTD • ALLIANZ ALPIC INDUSTRIAL RISK MANAGEMENT SERVICES • ALTEK BEISSEL NEEDLES LTD • ANAND ZENNER CO.RIT.LTD • ASHOK LEYLAND LTD • BABCOCK BORSIG POWER • BAER SHOES INDIA PVT LTD • HANRAG-LAEIS MACHINE TEC PVT LTD • HENKEL SPIC INDIA LTD • HENSEL ELECTRIC INDIA PVT LTD • HOCHTIEF INDIA PVT LTD • HTL LTD • MICROCIRCUITS AND SOFTWARE TECHNOLOGIES PVT LTD • INDIA RADIATORS LTD
  • 30. • INVENTA TECHNOLOGIES PVT LTD • IVL INDIA PVT LTD • KAUTEX TEXTRON INDIA PVT LTD • KERALA MANUFACTUM PVT LTD • KLOSE ANTRIEB PVT LTD • KOB MEDICAL TEXTILES PVT LTD • KURINJI ORGANIC FOODS INDIA PVT LTD • LAKSHMI AUTOMATIC LOOM WORKS LTD • LAKSHMI MACHINE WORKS LTD • LAKSHMI SYNTHETIC MACHINERY MFRS LTD • LEATHER CRAFTS INDI PVT LTD • L & T-DEMAG PLASTICS MACHINERY PVT LTD • LUK INDIA PVT LTD • MAGNA INDIA LTD • MAGNETIC METER SYSTEMS INDIA LTD • MAN TAKRAF INDIA PVT LTD Findings Since India is a hub for MNC’s, many banks will be desperate to have relationship with them. But through this project I was able to get the financial information’s from the top MNC’s in Tamil Nadu and also I was able to get the details about procurement of raw materials capex and expansion plans, the company’s relationship with banks and also about their financial year turn over. Research Methodology for collecting the information’s. • The German chamber of commerce • Met the Manger of the German chamber of commerce and listed down the companies from the chamber’s directory. • Questionnaire
  • 31. • Informal interview with the financial manager of the MNCs • Just dial • Search engines for address and other details (Google, ministry of corporate affairs and fun do data). CONCLUSION: The main purpose of this project is to give financial assistance to the multinational companies.This was done by collecting the list of mnc’s that are sitiuated in Tamilnadu and kerala.I mainly focussed on the Korean and the German mnc’s.This study was kind of a research where the data collected was mined and refined according to the company’s paid up capital.So this will help the bank to have relationship with the top companies. Since the companies lists were kept very confidential by the chambers, various sources of research methods were used to find out the list of mnc’s. The analysed and interpreted list helped to collect the financial status of the companies. So this project was mainly focussed to give a different source of financial assistance from the bank to the companies apart from their existing financial relationships with other banks. ANNEXURE QUESTIONNAIRE THIS QUESTIONNAIRE WAS PREPARED FOR THE FINANCIAL MANAGERS OF KOREAN AND GERMAN MULTINATIONAL COMPANIES FOR THE DATA EXPLORATION WORK. 1. NAME OF THE FINANCE MANAGER 2. WHO ARE YOUR SUPPLIERS? 3. WHERE YOU PROCURE YOUR RAW MATERIALS? a) PARENT COMPANY b) DOMESTIC COMPANY 4. WHAT IS THE CREDIT PERIOD GIVEN? 5. WHAT ARE THE BANKS YOU DEAL WITH? 6. WHAT KIND OF RELATIONSHIP YOU HOLD WITH THEM?
  • 32. 7. DO YOU HAVE ANY CAPEX OR EXPANSION PLANS? 8. WHAT IS YOUR TURNOVER FOR FY11 and FY12? KOREAN AND GERMAN EXCEL SHEET jeba excel (1).xlsx (ctrl + double click the link )