Derrick 16 th edition[1]


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Derrick 16 th edition[1]

  1. 1. RBI PROJECTS HIGHER INFLATION EVEN AS RISKS TO“Progress is often GROWTH EMERGEequal to the difference There were no surprises in the Reservebetween mind and Bank of India‘s (RBI) mid-quarter reviewmindset.” of monetary policy on Thursday. That is seen from the behaviour of the rate- sensitive sector indices in the stockINSIDE THIS market. The index that fell the most on Thursday was the Bombay StockISSUE: Exchange‘s (BSE) FMCG index, followed by the IT index. The rate-sensitives didn‘tRBI’s MID QUARTER do too badly. True, BSE‘s auto index also fared badly, but that was mainly onREVIEW account of Maruti Suzuki India Ltd, which was beaten down on fears of a strongCORPORATE watch yen. Clearly, a 25 basis points (bps) hike in the repo rate had already been factored into prices. Indeed, the BSE Bankex is actually up a bit this week. A few analystsECONOMY watch believe the revision of the expected inflation rate to 8% in March from 7% earlier is an indication of hawkishness on RBI‘s part. We would think it‘s merely anINDUSTRY watch acknowledgement of reality. Nevertheless, it does underline the fact that high inflation is not going to go away in a hurry.FACT OF WEEK The headline inflation number for April may be lower, thanks to a high base, but thatINTERVIEW base effect is going to wear off soon, as inflation fell from 10% in July to 8.8% in August. Add to that pressures due to higher crude oil prices, with reports saying thatZARGONOMICS retailers are facing losses of Rs15.79 per litre of diesel sold. The chances are the government will soon be forced to raise diesel rates, perhaps after the state elections.ENTREPRENEUR And then we have the pressures on the core inflation in non-food manufactured products—the RBI review says, ―Producers are able to pass on higher input prices to consumers‖—in other words, they now have pricing power and will pass on higherANSWERS TO BIZ WIZ-9 input costs. Small wonder then RBI‘s guidance says it is likely to persist with the current anti-inflationary stance, which means more rate hikes in future. How much more? Taking the one-year OIS (overnight indexed swap) at the current rate of around 7.4%, or around 65 bps more than the current repo rate of 6.75%, which means the market is expecting a further 50-75 bps hike in the repo rate over the next year. At the same time, RBI has also acknowledged that risks to growth are emerging, in particular in investment demand. It says that the pace of credit growth has moderated since December. And finally, RBI echoes the widespread scepticism about the projected fiscal deficit for the year, when it says ―this will materialize only if commitments to contain subsidies are adhered to‖. For the equity markets, the central bank‘s review offers little comfort, as it paints a picture of both high inflation as well as challenges to growth.
  2. 2. THE DERRICK CORPORATE WATCHINDIA WILL BE KEY PART OF TOYOTAS GLOBAL VISION PLAN Toyota Kirloskar Motors recent move to increase capacity at its Bangalore facilities is keeping in line with its parents global vision for emerging markets. The idea is to generate demand from region-specific models which will include compact cars, and vehicles such as the Innova and Fortuner from the IMV (innovative international multipurpose vehicle) platform. The company has earmarked a bigger script for India which will be the launch pad for the Etios compact in June. Brazil would see something similar where India will supply transmissions as part of the global business plan for the Etios. This is precisely what Toyota had done with the IMV model where Thailand,Indonesia, Argentina South Africa are its production hubs which met the needs of over 100 countries. It isonly natural that India will take the role of the lead country for the Etios given the sheer size of the compactmarket here coupled with the benefits of low costs and high quality. In fact, exports could also be envisagedto South Africa while Brazil will cater to Latin America. In its global vision plan for 2015, Toyota has its goalsset for each region from Japan, China, Europe and North America to Asia/Oceania and West Asia/LatinAmerica/Africa. There will be greater levels of self-reliance in North America while Asia/Oceania will be keyto product development, specifically the IMV and compact car programmes. The rapid growth of China andIndia has also convinced carmakers that they need to adopt region-specific strategies if they have tosucceed. The Etios is, therefore, an important chapter for Toyota as it sets about building a base in theAsia-Pacific region with Latin America to follow in due course. Its Japanese counterpart, Honda, is also inthe same trajectory with its Brio compact scheduled for launch in Thailand and India in the coming months.CORPORATES TAKE TO REBRANDING TO REACH TARGET AUDIENCERebranding has becoming a strategy for the cororates to reach the target audience. The youth is animportant customer base, but there are other motives too. Companies are aiming create a unified brandidentity among global customers, employees and stakeholders because of their diverse businesses.Companies are also battling clutter by distancing themselves from competitors and this is done by changingthe logo or going green. Companies also view rebranding as effective tool to draw talent and customers. Anew brand is also a springboard to respond to trouble. The Tata Nano, for instance, ditched the peoplescar tag to portray itself as a vehicle that is more affordable and durable. Nano is also trying to shed the badpress it got after many of the cars caught fire. Indian companies expanding overseas think a new image iskey to their growth plans. Telecom powerhouse Bharti Airtel, for instance, rechristened itself as Airtel lastyear after it acquired Zains operations in Africa and Warid Telecom in Bangladesh. The companys aimwas to create a new, modern, more friendly and accessible image in the minds of all users in thesecountries. Rebranding exercises typically cost between Rs 100 crore and Rs 300 crore. However in mostcases it is a painstaking effort as companies have to first take employees and customers into confidencebefore execution.
  3. 3. VODAFONE STILL BELIEVES NO TAX TO PAYVodafone continues to believe that it had no tax liability over its 2007 purchase of Hutchison WhampoaLtds mobile business in India. Vodafone, which has been fighting a $2.5 billion tax bill in India over thedeal, stated that its position had not changed with regard to the tax case. Every adviser they haveconsulted, both during the transaction and since, is in common agreement that no tax liability shouldarise. Indias Supreme Court will hear the tax case on July 19 and Vodafone stated it would continue to"defend its position vigorously."RELIANCE POWER GETS 5 HYDEL PROJECTS IN HIMACHAL PRADESHCorporate giants like Reliance Power and Tata Power-SN Power joint venture have been allottedhydropower projects in Himachal Pradesh. However, other companies like Larsen and Toubro (L&T), EssarPower, Moser Baer and GVK Energy did not get any project. Reliance Power has got five out of the 18projects for which global bids were invited by the state. One project was withheld by the government asthere was only one bidder. Reliance Power was allotted the 300 MW Purthi, 94 MW Teling and 44 MWShangling, all in Lahaul and Spiti district, 130 MW Sumte Kothang and 104 MW Lara Sumta projects inKinnaur district. Tata Power-SN Power was allotted the 236 MW Dugar project. The other companies thatgot hydropower projects in the state are Capital Consortium, BMD, ABG Shipyard , AMR Mitra JointVenture, Bell Spun Energy, Green Infrastructure and BLA Industries. The allotted projects would generatepower with an aggregate capacity of 1,325.5 MW. Himachal Pradesh has abundant water resources with apower potential of about 23,000 MW. About 6,672 MW have been harnessed till now by the central andstate governments, private players and joint venture companies.CANON INDIA TO SELL 1-LAKH DIGITAL SLR CAMERAS IN 2011In a sign of maturity of the Indian photography market, segment leader Canon is targeting to more thandouble the sale of high-end digital SLR cameras to 1 lakh units this year. The companys President andChief executive in India stated that company is planning to sell one lakh units of digital single lens reflex(SLR) cameras, which accrue in higher revenues. Courtesy the good numbers expected from DSLRs, thecompany has also set a higher target for its overall revenues from India. The company also sells printersand photocopiers. Canon controls over 50 per cent of the DSLR market presently and the average cost of asingle units sale is Rs 40,000 in the category as compared to around Rs 7,000 in the lower end consumerdigital cameras. The companys entry level offering retails at around Rs 22,500 and over 70 per cent of thecameras sold will be in the entry level category.HCL INFOSYSTEMS SURGES NEARLY 7% ON WINNING IAF ORDERShares of IT hardware firm HCL Info systems on Friday jumped by nearly 7 per cent in the morning trade onBSE after the company bagged an Rs 300-crore order from the Indian Air Force. The companys stockadvanced by 6.61 per cent to Rs 108 on Bombay Stock Exchange, while on National Stock Exchange thestock surged by 7.23 per cent to Rs 109 a piece. The company, had (on 18th March, 2011) received anorder from the Indian Air Force to deploy Wideband CDMA-based portable wireless network. According tothe deal, the WCDMA network will provide backbone connectivity and ensure video interactivity for videocalls, cross connectivity with other communication platforms like IP-based communication within the AirForce Network.HYUNDAI RECALLS 190,000 CARS IN USSouth Koreas largest automaker, Hyundai Motor Co., has recalled 190,000 cars with faulty airbags in theUnited States, Yonhap news agency report revealed. Hyundai recalled 190,000 Elantra passenger carssold between 2006 and 2008 in the US as they have defective airbag sensors. The recall is expected tobegin next month and recall repairs will be provided at dealer service centres.
  4. 4. CAIRN HEAD SAYS SEES VEDANTA DEAL DONE BY APRIL 15Cairn Energy stated that it was hopeful of concluding a long-delayed deal to sell its Indian assets toVedanta Resources by April 15. Cairn Energy agreed six months ago to sell up to 51% in its Indian unit toVedanta, but the deal has been delayed as the government looks into issues of royalty payments. The rowhas reached the cabinet which will rule on the matter. The company will stick to the April 15 deadline. BillGammell, CEO of Cairn Energy stated that its in the governments hand and the government has to take adecision.LOSS-MAKING COMPANIES WANT PF RELIEFConfederation of Indian Industries (CII) has sought a relief from Employees Provident Fund Organization(EPFO) for loss-making companies that run their own PF trusts. As per the rule, companies that run theirown PF trusts would not get exemption if they are in the red for three consecutive years. Several firms,including a well-known oil company, have urged EPFO to extend the benefit. But, PF officials say, theorganization will not accede to the request. Representation from CII and from several companies hasargued that though they are making losses for three years, the workers monies are safe. However, PFofficials stated that they have made it clear to all the companies and also to CII that such a request is not inthe interest of the workers. As many as 2,775 companies, called exempted establishments in PF parlance,enjoy a special status under which the money from their employees provident fund is not given to EPFO,instead invested through trusts formed by the companies. The exemption, however, can be withdrawn if acompany makes losses for three years. EPFO suspects that the loss making firms may dip into employeesdues because of financial constraints.VOLTAS TO FORM JV WITH GERMANYS KION GROUP Air conditioner maker Voltas has signed an agreement with Germany-based Kion Group to establish a joint venture in India for developing and servicing industrial trucks and warehousing equipments. Voltas material handling operations will be integrated into a new joint venture company, where Kion Group will hold a majority share. The new firm will be named Voltas Materials Handling (VMH) and is expected to start operations from April, 2011.Kion has know-how and technological leadership in the forklift truck business, so the partnership will help VMH further consolidate its leading position in India.The Tata-group firm said the joint venture will focus on the Indian market with a product range that includesdiesel/LPG and electric trucks with load capacities of 1.5 to 16 tonnes. The JV firm plans to have 25branches and dealerships all over India. The Voltas brand will continue to expand its product range,particularly in the warehouse-equipment sector. The partnership will ensure long-term sustainability, and weare well positioned in the Indian forklift truck market.TPG, SHRIRAM GROUP ACQUIRE VISHAL RETAIL FOR RS70 CRORE TPG Wholesale Pvt. Ltd, a subsidiary of TPG VW Ltd, and Airplaza Retail Holdings Pvt. Ltd, a company owned by the Shriram Group, have completed their acquisition of debt-ridden Vishal Retail Ltd. The TPG-Shriram combine paid Rs70 crore to the erstwhile chairman and managing director of Vishal Retail, Ram Chandra Agarwal, for the transfer of all assets, rights, and interests, inventories, cash flows, store leases and liabilities, the company said on Monday in a stock exchange filing. Vishal shares rose nearly 20% to close at Rs37.55 on Monday on the Bombay Stock Exchange even as the exchange‘s bellwether equity index, theSensex, rose 1.55% to close at 18,455.69. Attempts to fund its ambitious expansion plan with borrowingsleft the retailer laden with debt and inventory. As much as Rs730 crore of debt was sought to berestructured.
  5. 5. The completion follows an announcement in September 2010 when Vishal‘s board approved a Rs100 croresale of assets and transfer of some liabilities to TPG and Chennai-based Shriram Group. The new structurewill see TPG Wholesale operate the back-end sourcing, merchandising, logistics and franchise operations,while Airplaza Retail will operate the retail shops along with other franchisee partners currently operatingVishal branded stores. THE DERRICK ECONOMY WATCHUK BUSINESSES URGED TO LOOK AT EMERGING INDIAN CITIESThe UK and India have shared interest in getting the Doha round completed as it would not only help boththe economies but also improve the world GDP by $160 billion. The negotiations on Free Trade Agreementbetween India and European Union were still going on, as sensitive areas need to be ironed out Thesensitive issue for India is opening up its service sector for multinational companies while in this case of EU itis agriculture and textile the major ones among others. UK Minister for Trade and Investment, Mr Greenhighlighted the need to embrace the vast opportunities to build on the vibrant, two-way relationship betweenthe two countries. Delhi, Mumbai, Chennai, Bengalore are already established base for business in India andbeyond but many of Indias emerging cities have often been overlooked in favor of more familiar cities. TheMinister said that UK companies should delve beyond the traditional business hubs and seek out newopportunities in these rapidly expanding cities. These cities are Coimbatore, Mangalore, Vadodara,Visakhapatnam, Thiruvananthapuram, Kakinada, Kochi, Madurai, and Jaipur among other cities.COMMISSION FOR FINANCIAL REFORMS GETS PMS NODPrime Minister Manmohan Singh approved the formation of Financial Sector Legislative ReformsCommission (FSLRC) that will rewrite and clean up the financial sector laws in the country. The need for thecommission was strongly felt, as much old legislation became complex, lengthy and ambiguous after manyamendments were made to these. The council was mandated to undertake macro-prudential supervision ofthe economy and address issues related to inter-regulatory co-ordination. The finance minister had, inBudget 2010, proposed to set up FSDC. The government had, earlier proposed two sub-committees, one onregulatory coordination chaired by the Reserve Bank of India governor and the other, on financial stability,headed by the finance secretary.However, after RBI raised concerns; the government changed the structureand said there would be only one sub-committee headed by the central bank governor. It also replaced theHigh Level Coordination Committee on Financial Markets.NPC SEEKS RENEWAL OF LICENCE FOR TARAPUR NUCLEAR PLANTThe Tarapur Atomic Power Station, the country‘s largest nuclear plant, has applied to the Atomic EnergyRegulatory Board (AERB) for renewal of its licence, days after the Fukushima plant in Japan suffered a majordamage following a devastating earthquake, leading to radiation leaks.The five-year operational licence ofthe Tarapur plant, being operated by Nuclear Power Corporation (NPC) since 1969 on boiling water reactors(BWR), expires on March 31. In India, nuclear plants are required to seek a fresh licence from AERB afterevery five years. After the Three Mile Island (TMI) accident in 1979 in the US, the NPC had installed anadditional battery bank capable of powering for 12 hours at Tarapur. Further, it has added a 100 per centstart-up transformer to enhance the off-site power reliability. In the aftermath of the Chernobyl nucleardisaster in 1986, NPC had revised all operating procedures at the Tarapur station, added a hydrogen-monitoring system and launched full scope inspection of primary containment.
  6. 6. CAG PULLS UP SEBI, IRDA, 3 OTHERS FOR RETAINING SURPLUS FUNDSGovernment auditor CAG has rapped five regulators, including Sebi, Irda and PNGRB, for keeping theirsurplus funds worth over Rs2,142 crore, collected through fee and penalty, outside the government accounts.Scrutiny of the annual accounts of the 5 regulators - Sebi, Irda, Pfrda, CERC and PNGRB - revealed thatthey were retaining their surplus funds aggregating to Rs2,142.47 cr at the end of FY10 outside thegovernment accounts. These five include Securities and Exchange Board of India (Sebi), InsuranceRegulatory and Development Authority (Irda), Pension Fund Regulatory Development Authority (Pfrda),Central Electricity Regulatory Commission (CERC) and Petroleum and Natural Gas Regulatory Board(PNGRB). The practice by the regulators are in contravention of the instructions issued by the financeministry that all ministries and departments of the government would ensure that funds of regulatory bodiesare maintained in the public account, the CAG said. The CAG report for the year ended March 2008 andMarch 2009 had also highlighted retention of funds by Irda and Sebi outside the government accounts.HASAN ALI’S INCOME ROSE TO RS54,268 CR IN 6 YEARS: CAG Income of Pune-based stud farm owner Hasan Ali Khan multiplied by over 100 times in six years from Rs529 crore to Rs54,268 crore in 2006-07, reveals CAG report tabled in Parliament on Friday. Income of Pune-based stud farm owner Hasan Ali Khan multiplied by over 100 times in six years from Rs529 crore to Rs54,268 crore in 2006-07, reveals CAG report tabled in Parliament on Friday. Khan, who is presently in custody of the Enforcement Directorate (ED), has not filed returns for several years despite earning crores, Comptroller and Auditor General of India (CAG) said. His taxable income, according to the assessment made by Income Tax authorities, jumped from Rs528.9 crore in 2001-02 (assessment year) to Rs5404.7 crore in 2002-03. Thereafter, it soared to Rs54,268.6 crore in 2006-07. The report further said that Hasan Ali did not file income tax returns for five assessment years from 2001-02 to 2003-04 and 2005-07. However, he filed the tax returns for these years in May 2007 after ITnotice following search operations. Hasan Ali, 53, on Thursday surrendered before the ED after the SupremeCourt cancelled his bail and remanded him to four days ED custody.RBI HIKES POLICY RATES BY 25 BPS TO FIGHT INFLATIONThe Reserve Bank of India, or RBI on Thursday increased its overnight lending and borrowing rates by aquarter percentage point each to control high inflation, which has already begun hurting the common man.The RBI hiked its repo rate or the rate at which it infuses money into the banking system to 6.75% andreverse repo rate, at which it sucks out excess money, to 5.75%. With the latest round of 25 basis point (bp)hike, the apex bank has hiked its short-term rates eight times since March 2010 to battle high inflation. Onebp is one hundredth of a percentage point. Immediately after the announcement, the benchmark sensex wastrading 62.11 points down at 18,296.58 points while the yield on the most traded 8.08 % government bondmaturing in 2022 remained largely unchanged at 8.07%. The headline inflation, which is still above thecentral bank‘s projection of 7% for the fiscal year ending March, 2011, rose to to 8.31% in February, from8.23% the previous month, defying forecasts of a slowdown. RBI has raised its projection for March inflationto 8%. Further, continuing uncertainty about energy and commodity prices may vitiate the investment climate,posing a threat to the current growth trajectory to the domestic economy, the RBI said.ECONOMIC SURVEY FORECASTS FARM GROWTH AT 5.4%The Economic Survey on Friday pegged the country‘s agriculture sector growth at 5.4% in the current fiscal,as against 0.4% in the previous year. The survey also called for a ―Second Green Revolution withtechnological breakthrough in the agriculture sector‖ to boost farm output and ensure the food security of thecountry. The growth of the agriculture and allied sector is expected to be higher this year on the back of arevival in foodgrains production in the 2010-11 crop year (July-June) following a good monsoon. Foodgrainsproduction is estimated to rise to 232.07 million tonnes in 2010-11 crop year from 218.11 million tonnes lastyear. The country is all set to harvest a record wheat, pulses and cotton crop this year. In the 2009-10 cropyear, farm sector gew at only 0.4% due to severe drought in 2009, which hit almost half the country, reducingfoodgrain production by 16 million tonnes.
  7. 7. CABINET APPROVES PFRDA BILLThe Union Cabinet gave its nod to the long-awaited Pension Fund Regulatory and Development Authority Bill(PFRDA) that aims to grant statutory status to the pension regulator and open up the sector for foreign directinvestment. The Cabinet also cleared the State Bank of India (Subsidiary Banks Laws) Amendment Bill,which proposes to transfer certain powers vested with the Reserve Bank of India, with regard to itssubsidiaries, to the central government. If the Bills are not introduced in the current session, they may betabled in a special session to be convened in end of May or in the Monsoon Session (July-August). The Billseeks to allow foreign direct investment in pension funds, in line with the insurance sector, in which FDI up to26 per cent is allowed. The State Bank of India (Subsidiary Banks Laws) Amendment Bill seeks to amend theState Bank of Hyderabad Act, 1956 and the State Bank of India (Subsidiary Banks) Act, 1959.Theamendment will reflect the transfer of ownership of State Bank from the Reserve Bank to the centralgovernment.The Bill seeks to empower the government to fix the authorized capital of SBI subsidiaries andappoint managing directors. It will also fix the terms of office, salaries and allowances of managing directorsof the subsidiaries by the government.INDIA’S BULGING GRAIN STOCKS RAISE EXPORTS HOPESIndia‘s bulging grain stocks prior to end-March harvest season make a strong case for lifting export curbs, butanalysts say it is unlikely due to political compulsions ahead of state elections in coming months. At 17.2million tonnes, wheat stocks on 1 March were more than double the 8.2 million tones target, governmentsources said on Wednesday, while rice stocks rose to 28.75 million tonnes against a target of 11.8 milliontonnes. High food prices pose a political challenge, drawing voter ire ahead of state elections in comingmonths that will help determine the strength of the ruling Congress party-led coalition for the rest of its term.State-run Food Corp of India, the main grain procurement agency, buys wheat from local farmers betweenMarch and May, while it procures rice throughout the year from October.The government buys rice and wheat from farmers to build reserves for emergency, run various welfareprogrammes and protect farmers from distress sale.ADB SIGNS $250 MN LOAN AGREEMENT WITH INDIAThe Asian Development Bank (ADB) on Thursday entered into a $250 million loan agreement with India aspart of its infrastructure financing project. This is the second tranche of loan for the ongoing Second IndiaInfrastructure Project Financing Facility, originally approved in 2009. In 2009, ADB had agreed to provide a$700 million multi-tranche financing facility to help IIFCL provide long-term funding for infrastructuredevelopment. The first tranche of $210 million was earmarked to finance three subprojects for improvingroads and highways in Madhya Pradesh, Punjab, Haryana, Himachal Pradesh and Delhi NCR, besidespartially funding a power project in Kutch district in Gujarat. ADB had previously provided a $500 million loanto IIFCL for the First Infrastructure Project Financing Facility in 2007. Of the loan, about $381 million wasdisbursed for 27 road subprojects and $89 million for two international airport subprojects in Delhi andMumbai.
  8. 8. THE DERRICK INDUSTRY WATCHSPECTRUM TO BE RESERVED FOR DESI MOBILE TECHNOLOGIESTo encourage development of local wireless technologies, the Wireless Planning and Coordination (WPC)wing has proposed to reserve nearly 40 Mhz spectrum across various frequency bands to be used forindigenously developed telecom network products. The WPC, which controls spectrum usage in the countryon behalf of the Telecom Ministry, has floated a draft National Frequency Allocation plan under which it hasmapped out airwaves in four different bands including the 900Mhz, 1,800 Mhz and 1,900 Mhz frequencybands for exclusive use for Made in India products. The move is aimed at encouraging local technologycompanies to come up with Indias own IPR in wireless technologies, thereby cutting down on imports.Currently, almost all of telecom network technology is being imported from multinational companies such asEricsson and Nokia Siemens. Reserving spectrum could act as an incentive to Indian companies such asShyam Group and Tejas Networks. Mobile operators are opposed to the move given that they are faced withsevere spectrum crunch in the same bands, parts of which are proposed to be reserved. The operators alsoviewed that it was too late to think about Indian technologies given that global players are much ahead inR&D.INDIA AHEAD OF THE US IN ENERGY EFFICIENCY:THE CLIMATE GROUPThe market for low carbon goods and services in India could touch $135 billion by 2020 creating some 10.5million jobs. The Climate Group‘s report – Indias Clean Revolution – stated that enormous potential exists forgenerating new income and jobs by developing domestic renewable energy resources and cleantechnologies that improve the efficiency of sectors such as transport and industry. India is making moreprogress than the US on energy efficiency, and this market is expected to treble to $77 billion in next 10years, the international NGO said. India now ranks fifth in the world in terms of wind energy production. Boldlow carbon policies will increase Indias energy independence and help provide access to energy to thosewho still lack it. The low cost labor and highly skilled manufacturing base will make India a major hub forclean technologies. Governments and companies around the world are waking up to the economic prospectsinherent in the clean revolution. By 2020, the global markets for low carbon goods and services are expectedto be worth $2.2 trillion. In the next decade, Indias share of the global low carbon could balloon to $135billion. Its compounded annual growth rate of 17 per cent is predicted to outstrip Europe, North America,China and the rest of the world. Only China and the US are likely to attract more clean energy investment inthe next 10 years but the rate of increase of Indias private investment (763 per cent) will be three times therate of either of these two competitors.TATA MOTORS TO HIKE PRICES OF PASSENGER VEHICLES BY UP TO RS36,000Tata Motors will hike the prices of its passenger vehicles, excluding the Nano, by up to Rs 36,000 from April1, to offset rising input costs. Despite continuous cost control initiatives, the company is being forced to takethese increases on account of steep rise in input costs. Under the revised price, the Indica will be costlier byRs 7,000-Rs 9,000, Vista and Indigo CS by Rs 8,000-Rs 11,000 and Manza by Rs 10,000-Rs 15,000. Theprice of Nano will, however, not be revised. In the utility vehicles segment, depending upon the model, Sumoprices will go up by Rs 13,000-Rs 15,000, Grande by Rs 16,000- Rs 19,000, Safari by Rs 18,000-Rs 29,000,Aria by Rs 30,000- Rs 36,000 and Venture by Rs 9,000-Rs 12,000. Tata Motors launched new diesel andpetrol variants of Indica, priced between Rs 2.95 lakh and Rs 3.95 lakh .Other leading car-makers, worriedover rising input costs are expected to take a call on whether to hike their product prices by end-this month.Honda Siel Cars India has already stated that it would up its prices by 2-3 per cent from April 1. Car sales in
  9. 9. India hit a record monthly high of 1.89 lakh units in February. The February sales number is higher than therecord 1.84 lakh cars sold in January. According to SIAM, Indias total domestic vehicle sales in the currentfiscal year are expected to grow 26-27% year-on-year.UNDER-RECOVERIES OF OMCS MAY GO UPTO RS 98,000 CR: IIFLIf the average crude oil prices continue to remain at USD 100 per barrel in the coming months, the totalunder recoveries for the oil marketing companies (OMCs) will go up to Rs 98,000-crore in FY 12, a report bya brokerage firm IIFL said. With the crude oil prices touching USD 100 per barrel mark in February, the underrecoveries for FY 11 is expected to touch Rs 72,000-crore. For the period April-December 2010, the grossunder recoveries of OMCs were Rs 47,000-crore based on average crude oil price of USD 80 per barrel.However, so far in Q4 FY11, crude oil prices have averaged at USD 101 per barrel, which would result ingross under recoveries of about Rs 25,000 for Q4 FY11. The unrest in the Middle East and North African(MENA) countries could further push the crude prices up. The profitability and cash flows for OMCs willcontinue to be strained on account of uncertainty on future subsidy sharing pattern. Predictability of earningsfor oil marketing companies has always been a difficult proposition considering high degree of uncertainty onsubsidy sharing mechanism. We expect the government to increase their sharing to 50 per cent for thecurrent fiscal. A decision on subsidy sharing formula will result in better earnings visibility for oil marketingcompanies, which will enable them to plan their cash flows better.3 INDIAN COS IN RACE TO BID FOR BANDANNA ENERGYS COAL ASSETSThree top Indian companies have joined the race to bid for the coal assets of one of Australias largestthermal coal explorers - Bandanna Energy - in a deal that could be valued at $1.5 billion. GVK, state-ownedconsortium ICVL and Reliance Power have shown early interest in bidding for the assets estimated to havereserves of over 1.3 billion tonnes of thermal coal. Bandanna Energy has initiated an auction process to sellthe assets and has mandated UBS to advise it on the transaction. The last date for submission of bids isMarch 31, 2011. An information memorandum circulated among bidders indicates that the company has$750 million worth assets.Thermal coal is used by utility coal-fired power plants. Expanding capacities by companies in variousindustries have led to a rise in power consumption. While India is also rich in thermal coal deposits, high ashcontent in local coal and reduced production by Coal India has prompted most user companies to scoutglobal resource rich nations to tap for coal assets.SAIL, ESSAR STEEL DENY CHARGES OF CARTELIZATIONLeading steel manufacturers SAIL and Essar Steel refuted the charges of cartelisation and unfair tradepractices, leveled by ancillary steel producers, by attributing steep hike in HR Coil prices to sky-rocketing rawmaterial costs and stated that SAIL decide it‘s our own pricing and marketing policyThe prices of coking coalhave seen a quantum jump during the financial year 2010-11 from a level of USD 128 per tonne in thebeginning of the financial year to USD 330 per tonne prevailing at present To produce one tonne of crudesteel it require one tonne of coking coal. It can be seen that prices of coking coal have jumped by two-and-a-half times.AIRLINES FACE “MAJOR SLOWDOWN” DUE TO JAPAN The nuclear and earthquake crises in Japan will cause the airline industry a ―major slowdown‖ it will not start to recover from until at least the second half of 2011, industry body IATA said on Friday. The International Air Transport Association said it was too early to assess the long-term impact but with the $62.5 billion Japan market representing 6.5% of scheduled worldwide traffic and 10% of industry revenues. IATA said the most exposed international market to Japanese operations was China, where Japan accounts for 23% of its international revenues. Taiwan and South Korea were equally exposed with 20% of their revenues related to Japanese operations, followed by Thailand (15%), the United States (12 %), Hong Kong (11%) and Singapore (9%). Japan produces 3-4% of global jet fuel supply, some of which is exported to Asia, IATA said.
  10. 10. ENERGY DEVELOPMENT SETS UP UK SUBSIDIARYEnergy Development Company has set up a subsidiary in the United Kingdom for trading and consultancybusiness. The company is into power generation and various infrastructure development businesses. In aregulatory filing, the company said it has formed a wholly owned subsidiary by the name ‗EDCL (Europe) Ltd´in the UK. The firm in a separate filing said it is in the process of acquiring five hydro electric projects havinga total capacity of 56 MW. Two projects -- having a capacity of 39 MW -- are in Arunachal Pradesh, whilethree are in Uttarakhand. These would be acquired by way of taking over 100 percent shares holding of theSPV companies formed. Shares of the company were down over 3% from its previous close at Rs35.40 inthe late afternoon trade on the Bombay Stock Exchange.JAPAN CRISIS TO HIT DIAMOND INDUSTRYDiamond producers like De Beers and diamantiares in India, especially in Surat were banking heavily on thegrowth of the diamond jewellery consumption in India, China and other Asian nations. But, the growthprospects are likely to be affected by the havoc in the aftermath of tsunami and earthquake in Japan.After the effects of global economic downturn in 2008, Japan`s polished diamond import had started to showsigns of recovery with the import touching $72.4 million in January, an increase of 44 per cent from January2010.The January 2011 data of polished diamond import show that India continued to be Japan`s main supplierwith an export of 1.99 lakh carats diamond worth $33.1 million, an increase of 46.2 per cent by valuecompared to January 2010. Belgium exported $11 million worth of polished goods followed by Israel shipping$5.8 million worth of goods.
  11. 11. THE DERRICK FACTS OF THE WEEK1. Indian investment in United Kingdom has gathered steam as 42 Indian companies are going to enter UK in2011.2. State owned carrier Air India is planning to take call soon on making Dublin airport in the Irish capital itsnew hub.3. Goldman Sachs group, the world‘s biggest securities firm will buy Exchange traded funds (EIFs) specialistBenchmark for Rs.130crore.4. Mumbai based Jyothy Laboratories Ltd (JLL), maker of UJALA fabric whitener has acquired 15% stake inHenkel India.5. Vishal Retail has sold its retail and wholesale businesses to private equity firm TPG and Shriram Groupfor a total cash consideration of Rs.70crore. Vishal had a debt of Rs.735crore.6. General Electric will invest $50million in manufacturing unit in India this year.7. Fortis Healthcare has made a tie up with US based TotipotentRX cell Therapy pvt ltd to set up stem celltherapy centres across its select hospitals.8. Internet giants YAHOO & MICROSOFT have made tie up to compete with Google together, the tie up ismoving beyond the technology, 200 engineers from Yahoo are working with Microsoft.9. Financial services firm Religare enterprises gas planned to raise up to Rs.2500crore for expansion,including investments in insurance business acquisition.10. Nippon Life insurance, the Japanese largest Life insurance company buys 26% stake in RelianceInsurance for Rs.3,062 crore.11. Essar steel which has 500 outlets at present will raise its Retail Network to 650 outlets by 2012.12. Carmakers are offering best discounts this march, Maruti is giving up to Rs.40,000 discount, Hyundai upto Rs.45,000 and Honda up to Rs.55,000.13. Bharti Airtel will not buy government‘s 30% stake in Hexacom as government had demanded a premiumover the Rs.1800crore base price fixed by Deloitte.
  12. 12. THE DERRICK INTERVIEWEMERGING MARKETS TO GROW STRONGER: DOUGLAS FLINT, HSBC As chairman of HSBC Holdings, Douglas Flint leads one of only a handful of banks that survived the global economic crisis without a government bailout. Flint, 55, tells ET in an interview that the time has come for banks to return to basics — being financial intermediaries — and rebuild trust with the public and governments. The banking sector may be out of the woods for now, but it is still stalked by numerous dangers. Edited excerpts from the interview: How would describe the state of the banking industry? Is it firmly out of the woods now? I think we have come out the acute phase of the major issues that were problematic in 2007, 2008. So structured credit, securitisation and sub-prime in the US I think have played largely through. Maybe if the US economy were to double dip or something, then there would be further bumps. But the causes of the severe stress that took place in 2008 I think have playedthrough. But there are a whole bunch of different problems. Sovereign debt issues in Europe; public financesin America at municipal, state and national level; global imbalances, North Africa & Middle East politicaltensions; impact of a higher oil price. There are plenty of things out there to disturb what people had plannedfor the next few years.Do you worry that the North African political crisis could spill over into China? Is China the elephantin the room?I think what‘s happening in the Middle East and Africa is a pointer to every regime of every shape that thepower of public opinion has to be respected and has to be understood. Some of the imbalances that havegrown in the last decade from the benefits of globalisation and the distribution of those benefits beingsomewhat skewed to a small proportion of the population and between generations is clearly going to createpolitical tensions particularly at a time when you‘ve got rising energy and food prices and in the developedworld fiscal tightening and fiscal consolidation to create a platform for growth in the future. So people canquite legitimately ask the questions: So what was my share of the fruits of globalisation and growth over thelast decade? And now I am going to tighten my belt so that we can grow again, what‘s my share of the fruitsgoing forward? So I think whether it‘s in the West or in the developing world, public perception of the equity ofincome distribution, trade flow equality and so on will play a big part in international dialogue and domesticpolitics of whichever shape.HSBC is one of the few banks that escaped the crisis. What will be the shape of the banking industry?What will drive revenue growth in banks?The finance industry is there to service the economic policies of governments and to help individuals andcorporates meet their personal and corporate objectives in terms of helping them finance their activities andmake money and have a safe home for savings, plan for retirement. It clearly needs to make money sufficientto reward those who give it the capital so that they would continue to give it capital. And I think we have to, asan industry, rebuild the trust and reputation that was lost.So do shareholders need to expect lower returns from banks over the next few years compared withthe past? Do they settle for lower profits?I think that‘s becoming a realisation. Returns will fall. You know that a lot of the high profitability turned out tobe recognising profits that never existed and were written off in the years that followed. So if you normalise,returns were never that high.
  13. 13. Globally, regulators and governments have been much tougher. And there has been an argument thatsuch regulations can stifle innovations that have helped the financial services industry. Do you thinkregulations can cut innovation in the fin services industry?The answer is yes. But that may not be a bad thing. I think when the industry says ‗you might stifleinnovation‘, it‘s perfectly reasonable to respond and say that many of the innovations in the structuredproducts area had no real utility. They were financial products designed to arbitrage the financial system.Derivatives have enabled small businesses, mid-sized enterprises and large businesses to do much moresophisticated risk management than they were ever able to do and therefore moderate their own risks. It‘sgetting the balance, which comes down not to regulations but to supervision.You were mentioning about the crisis in North Africa, rising oil and food prices. Are these issuesgoing to take some sheen off emerging markets?I think there‘s a risk that must be the case. Higher oil price, rising food and energy prices will clearly lead toeconomic difficulties in many of the developing markets. This will certainly put pressure on the lower-agesegments of those economies and flow through into interaction with political systems as to how toaccommodate it. So yes, I think there is a risk there that the pressures build up because of that.Where do global companies that took a bet on developing economies stand in such a scenario?If you are a portfolio investor and if you are running a totally free allocation, you can clearly move your moneyand decide that ‗I had a good run here, I go somewhere else‘. If you are an international bank like HSBC, wehave been here for decades, or centuries. We‘re committed through the cycles. One of the proudestmoments I had, one of the moments I‘ll always remember, was when we got a dividend in January 2010 fromArgentina, 10 years after the crisis. We stayed there, we stayed through. We rebuilt the business. For peoplelike us, in many respects, a slowdown in certain markets may give an opportunity to build more for the longterm. I have been in this group for about 15 years, which is not much in HSBC‘s terminology. During that timewe have been through (the collapse of the hedge fund) LTCM, Russian debt default, Latin American crisis,avian flu, Asian crisis, SARS, US sub prime crisis, a number of Middle East shocks. And we have copedbecause they haven‘t all come at the same time.A lot of growth for the emerging economies in the last few years has been because of investors indeveloped markets chasing yields. Will recent political developments trigger something similar to theAsian crisis?I don‘t think so because the emerging economies have learnt so many lessons from the Asian crisis. Therehas not been a huge induction of foreign currency borrowings. The reserve positions now of most of thecountries the world over have significantly improved from where they were. The breadth of international tradenow is much better than it was. So countries are in a much stronger position. I think that many countries havebeen quicker to adopt macro prudential controls on bubbles forming. China has been doing reservetightening, restricting the amount of money that can be lent into property. Hong Kong has been doing thesame. I don‘t think it is going to be a repeat of the Asian crisis now.We are in an era where Twitter, a company which has not made profit, is getting a $4.5 billionvaluation. $50 bn for Facebook. Does this situation look familiar?They defy logic in some ways. Yet every so often there are examples of companies that did not exist 20years ago, like Google, suddenly get enormous and very powerful. These valuations are indicative valuationsbecause you are extrapolating from one price what undoubtedly would be proven or not proven over time.Clearly people have got enough information to make a judgment as to whether they think thats right or not. Idont think that the amount of money going into that set is sufficiently large for it to have any real impact onthe real global economy. But its fascinating, particularly in the case of Facebook, just how many customersor people it can have interacting across its platforms. It is just an extraordinary phenomenon.
  14. 14. HSBC has been in India for ages. But look at your peers, particularly StanChart, the way they havegrown in this country. Will you re-look your strategy in India? Is there any bet that went wrong inIndia?We have grown organically since 1865. Some of our competitors have had the opportunity to merge, toacquire clients. We would love to do more in India. We would love to be able to expand faster. Wed love tohave a bigger platform commensurate with our commitment to the country. We have 32,000 people and Indiais in the top 10 of our countries in terms of profitability. It can easily be top 5. Easily. But obviously, we needto have a scale of operations that would commensurate with that. So, we have all the willingness in the worldto build in India as and when opportunities would present themselves in a way we will be able to take them.What will be the thrust areas when it comes to India? Between build and buy, assuming you getregulations that permit both, what would be preferable?One is just an acceleration in timing. Building is always less expensive to do, but it takes a lot longer. Buyinggives you basically the customer base already packaged and accelerates what you would have taken five,seven, 10 years to achieve. So it is a question of what‘s the value of the acceleration in the timing. We couldlook at both.The question was more aimed at ascertaining your hunger. How hungry are you to really ramp up,expand in a big way?If you said choose one country in the world that you could expand into, that would be India. You can haveone pick and you can do whatever you like, it would be India. I think the scale of opportunities is huge. Wemade significant investments in emerging markets in the last 15 years. In Latin America, we have mademajor investments (and) in China. We have not had the opportunities to make major investments in India. Wemade some investments but nothing of the scale if we had the opportunity to do. So we are hungry.The Reserve Bank of India has said that if you convert yourself into a subsidiary, you can have allthat you spoke about. Will you do it?That sounds a slightly more generous interpretation. I think the indications of what‘s being explored forsubsidiarisation are very interesting. We welcome the proposals. We think they are very interesting. We aregoing to study them very carefully. If that is a route to achieve what we want to do, then we will certainly lookat them very very seriously.What are the parts in the RBI’s discussion paper that you don’t like, the ones that would stop you? Isit that you still will not have the same treatment as local banks?In principle it looks very good. It‘s something we welcome very much. But we need to understand the detail.But it looks good and certainly we are certainly optimistic about the opportunity it gives us to build from wherewe are.What excites you the most in these proposals? Is it the room to have more branches? Or is itopportunity to acquire other banks?Both. It will be terrific if we are able to open branches in key locations. And it would be good if we had theopportunity to acquire.Are you re-looking your retail strategy? You have taken a hit of over $350 million on your retailportfolio in India.We have re-looked it. We have significantly curtailed. Nobody made a great success of going deeper intoconsumer lending. So we re-focused. We have a business that‘s getting to profitability, which is good.
  15. 15. What is the one thing that keeps you awake? I think technology is increasingly going to be potentially disruptive to the banking industry. It doesn‘t keep me awake at night, but I think technology is going to be a big opportunity and also potentially disruptive and potentially a threat. THE DERRICK ZARGONOMYPERIODIC INVENTORY METHODSystem of inventory control in which no continuous record of changes (receipts and issues of inventory items) is kept. At the end of an accounting period, the ending-inventory is determined by an actual(physical) count of every item and its cost is computed by using a suitable method such as FIFO,LIFO, weighted averages, etc. This amount is subtracted from the sum of purchases (or costof goods manufactured) and the beginning-inventory of the new accounting period to arrive at the cost ofgoods sold.PERPETUAL INVENTORY METHOD (PIM) System of inventory control in which the number of units of any inventory item (and the total value ofinventory) on anyday can be obtained from the stock records. In this method(1) all additions (purchases)and withdrawals (sales orconsumption) are recorded in inventory cards as they occur to provide arunning balance of quantity and cost of items, (2) a certain number of items are counted every day(orweek or month) so that, by the year end, every item has been actually (physically) counted at least once. Ifthere is any mismatch (due to human error, leakage, pilferage, loss) between the physical quantity and thequantity shown in inventory cards, the records are adjusted accordingly. Also called continuous inventorymethod.STAGGINGThe practice of buying initial public offerings at the offering price and then reselling them once trading hasbegun, usually for a substantial profit. This is more commonly done by institutional investors than retailinvestors, because institutional investors get most of the IPO shares at the offering price. Stagging ismost profitable in a hot IPO market, when the price of an IPO often rises dramatically above the offering priceon the first day. also called flipping.THROUGHPUT CONTRACTType of take-or-pay contract used mainly in oil and gas industry, often as an indirect guaranty for projectfinancing. In this arrangement, a party (usually a group of producers) undertakes to pass (put through) anagreed minimum amount of material (such crude or refined oil or gas) through a processing plant (called aprocessingagreement) or a pipeline (called a pipeline agreement) during a fixed period (month, quarter,year).TOLLING CONTRACTType of take-or-pay contract for conversion, processing ortransportation (usually through a pipeline) of rawmaterialor finished product. Used commonly in oil and gas industry, a tolling contract doesnot require the converter, processor, or transporter to purchase the input material orto sell theoutput product.
  16. 16. ALGORITHMIC TRADINGA form of automated trading in which computers execute trade orders based on a series of parameters, suchas time, price and volume. One benefit of algorithmic trading is that it allows a company, such as a hedgefund or mutual fund, to break up an order so that the trade does not influence market price. Becausecomputers automatically initiate the orders it is not necessary to have a person review the information.UNDERWRITING AGREEMENTSecurities-purchase contract between an underwriter or underwriting syndicate and an issuer of bonds orshares. Among other terms, it specifies the price at which the security will be offered to the public (publicoffering price), underwriters profit margin (underwriting spread), and the date by which the payments must besettled (settlement date).SUBSCRIPTION WARRANTA certificate, usually issued along with a bond or preferred stock, entitling the holder to buy a specific amountof securities at a specific price, usually above the current market price at the time of issuance, for anextended period, anywhere from a few years to forever. In the case that the price of the security rises toabove that of the subscription warrants exercise price, then the investor can buy the security at thesubscription warrants exercise price and resell it for a profit. Otherwise, the subscription warrant will simplyexpire or remain unused. Subscription warrants are listed on options exchanges and trade independently ofthe security with which it was issued. also called warrant.
  17. 17. THE DERRICK ENTREPRENEUR MICHEAL DELL Michael Saul Dell (born February 23, 1965) is an American business magnate and the founder and chief executive officer of Dell Inc. He is one of the richest people in the world, with a net worth of US$14 billion in 2010. EARLY LIFE AND EDUCATION Michael Dell was born to a well-off, Texan Jewish family, on February 23, 1965. The son of an orthodontist and a stockbroker, Dell attended Herod Elementary School in Houston, Texas. In a bid to enter business early, he applied to take a high school equivalency exam at age eight. In his early teens, he invested his earnings from part-time jobs in stocks and precious metals. Dell purchased his first calculator at age seven and encountered his first teletype machine in junior high, which he programmed after school. At age 15, after playing with computers at Radio Shack, he got his first computer, an Apple II, which he promptly disassembled to see how it worked. Dell attended Memorial High School in Houston, selling subscriptions to the Houston Post in the summer. While making cold calls, Dell observed that newlyweds and people moving into new homes were most likely to buy a subscription. He targeted this demographic group by collecting names from marriage and mortgage applications. Dell earned $18,000 that year, exceeding the annual income of his history and economics teacher.CAREERWhile a pre-med student at the University of Texas at Austin, Dell started an informal business upgradingcomputers in room 2713 of the Dobie Center residential building. He then applied for a vendor license to bidon contracts for the State of Texas, winning bids by not having the overhead of a computer store.In January 1984, Dell banked on his conviction that the potential cost savings of a manufacturer selling PCsdirectly had enormous advantages over the conventional indirect retail channel. In January 1984, Dellregistered his company as "PCs Limited". Operating out of a condominium, the business sold between$50,000 and $80,000 in upgraded PCs, kits, and add-on components. In May, Dell incorporated the companyas "Dell Computer Corporation" and relocated it to a business center in North Austin. The companyemployed a few order takers, a few more people to fulfill them, and, as Dell recalled, a manufacturing staff"consisting of three guys with screwdrivers sitting at six-foot tables." The ventures capitalization cost was$1,000.In 1992 at the age of 27, Dell became the youngest CEO to have his company ranked in Fortune magazineslist of the top 500 corporations. In 1996, Dell started selling computers over the Web, the same year hiscompany launched its first servers. Dell Inc. soon reported about $1 million in sales per day from Inthe first quarter of 2001, Dell Inc. reached a world market share of 12.8 percent, passing Compaq to becomethe worlds largest PC maker. The metric marked the first time the rankings had shifted over the previousseven years. The companys combined shipments of desktops, notebooks and servers grew 34.3 percentworldwide and 30.7 percent in the United States at a time when competitors sales were shrinking.In 1998, Dell founded MSD Capital L.P. to exclusively manage his and his familys investments. Investmentactivities include publicly-traded securities, private equity activities, and real estate. The firm employs 80people and has offices in New York, Santa Monica and London. Dell is not involved in day-to-day operations.
  18. 18. At a speech before the Detroit Economic Club in November, 1999, Dell defined the "3 Cs" of e-commerce(content, commerce, and community) while articulating his strategy for offering a superior customerexperience online.On March 4, 2004, Dell stepped down as CEO of Dell Inc. but stayed as chairman of the board, while KevinB. Rollins, then president and COO, became president and CEO. On January 31, 2007, Dell returned asCEO at the request of the board, succeeding Rollins.Accolades for Dell include: "Entrepreneur of the Year" (at age 24) from Inc. magazine; "Top CEO inAmerican Business" from Worth magazine; "CEO of the Year" from Financial World, Industry Week and ChiefExecutive magazines. Dell serves on the Foundation Board of the World Economic Forum, the executivecommittee of the International Business Council, the U.S. Business Council, and the governing board of theIndian School of Business in Hyderabad, India. He previously served as a member of the U.S. President‘sCouncil of Advisors on Science and Technology.In July 2010 Dell agreed to pay a $4 million penalty to settle SEC charges of disclosure and accounting fraudin relation to undisclosed payments from Intel Corporation. Dell Corporation and two other companyexecutives also paid to settle all the charges.WRITINGSDells 1999 book, Direct from Dell: Strategies That Revolutionized an Industry, is an account of his early life,his companys founding, growth and missteps, as well as lessons learned. The book was written incollaboration with Catherine Fredman.WEALTH AND PERSONAL LIFEAs of 2010, Forbes estimates Dells net worth at $13.5 billion.Dell resides in Austin, Texas with his wife, Susan, and their four children.PHILANTHROPYIn 1999, Michael and Susan Dell established the Michael and Susan Dell Foundation, which focuses onchildren‘s causes. By 2010, the foundation had committed more than $530 million to assist nonprofitorganizations serving urban communities in the United States and India. The foundation has also provided$65 million in grants to three health-related organizations associated with the University of Texas: theMichael & Susan Dell Center for Advancement of Healthy Living, the Dell Pediatric Research Institute, andthe Dell Children‘s Medical Center, as well as funding for a new computer science building on the Universityof Texas campus.In 2002, Dell received an honorary doctorate in Economic Science from the University of Limerick in honor ofhis investment in Ireland and the local community and for his support for educational initiatives.POLITICAL CONTRIBUTIONSIn 2004, Susan and Michael Dell were among 53 contributors of $250,000 (the maximum legal donation) tothe second inauguration of President George W. Bush.CRITICISMIn the April 2011 issue of Mother Jones, a timeline of Michael Dells life is included in the article AmericanMagnate: Michael Dell: How a homegrown geek outsources, downsized, and tax-breaked his way to the top.The article juxtaposes the CEOs spending on luxurious homes and private jet travel with his pursuit of taxbreaks and tax holidays and Dell Computers outsourcing of jobs overseas.
  19. 19. THE DERRICK ANSWERS TO BIZ WIZ-91. The foundations of this company were laid in 1884 by Dr. S. K. Burman. Today, it is Indias largest Ayurvedic medicine manufacturer. Which company? Ans: Dabur India Limited2. It was founded in New Delhi in 1983 and is today the worlds second largest optical storage media manufacturer. Which company? Ans: Moser Baer3. This beer company claims that it is "The King of Beers". Ans: Budweiser4. When consumers have a strong need that cant be met by any existing product, what is it called (term was coined by Philip Kotler)? Ans: Latent Demand5. In South America, Ford once marketed a car under the name Pinto, but the product didnt sell. Why? Ans: Pinto is Brazilian slang for "small male genitalia".6. Which organisation is behind the famous "Got Milk?" campaign? Ans: California Milk Processor Board7. KFC told the world that their chicken was finger lickin good. What did they tell the people of China when they first went there (hint: their sales were abysmal at first)? Ans: Lick it and love8. It was founded in 1996 and is ranked No. 10 Indian Web Portal. In 2001, it acquired the India Abroad newspaper. What? Ans:Rediff.com9. Which of these drinks called themselves the UnCola? Ans:7 up10. Toshiba is in talks with TerraPower to jointly develop an advanced nuclear reactor. Which well known business personality owns TerraPower? Ans: Bill Gates11. Which new car, planned by GM and its partner in China, gets its name from the Chinese word for treasured horse? Ans: Bao Jun12. Formula-1 hotel are the hotels from which company Ans: Accor13. What is the old name of Lenevo? Ans: Legrand14. This company, the worlds largest in its category, recently changed its logo for the first time in its 40-year history. Since it is now a well-known brand, it has made its logo a wordless one. Name it. Ans: Starbucks
  20. 20. 15. Name the brand which is the first to sponsor a farm in the hugely popular social game Farmville. Ans:McDonald‘s16. What is the term used to describe equipment placed on or near the streets such as bus shelters, signs, benches and kiosks. This is a medium for outdoor advertising too? Ans: Street furniture17. Whose initiatives are called 10,000 small businesses and 10,000 women? Ans: Goldman Sachs18. Which famous brand ran an ad during the 1930s with the lines "Big Business Demands" with the guarantee that read "Have your dealer fit your hand with ___, if it fails to suit you, he will refund your money without questions"? Ans:Sheaffer 19: Personality? Ans: Nato kan (prime minister of Japan) 20. Logo? Ans: Vedanta resource plc If you have any feedback, suggestions then mail us on . Disclaimer: Derrick does not have own reporters. These are the news collected from different sources. ................TEAM SYNAPZ