MysoreRavindra

Enterprise Resource Planning (ERP)

2006-10-25T01:53:00.000-07:00

What is ERP ?

ERP is an acronym that stands for Enterprise Resource Planning. ERP is package software solution that addresses the enterprise needs of an organization by tightly integrating the various functions of an organization using a process view of the organization. It is a package software and not a custom made software for a specific firm. It understands the needs of any organization within a specific industry segment. Many of the processes implemented in an ERP software are core processes such as order processing, order fulfillment, shipping, invoicing, BOM processing, purchase order processing, preparation of Balance Sheet, Profit and Loss statement etc., that are common to all industry segments. That is the reason why the package software solution works so well. The firm specific needs are met through a process of customization. ERP addresses not merely the needs of a single function such as finance, marketing, production or HR. Rather it addresses the entire needs of an enterprise that cuts across these functions to meaningfully execute any of the core processes. ERP integrates the functional modules tightly. It is not merely the import and export of data across the functional modules. The integration ensures that the logic of a process that cuts across the function is captured genuinely. This in turn implies that data once entered in any of the functional modules (whichever of the module owns the data) is made available to every other module that needs this data. This leads to significant improvements by way of improved consistency and integrity of data. ERP users the process view of the organization in the place of function view which dominated the enterprise software before the advent of ERP. The process view provides a much better insight into the organizational systems and procedures and also breaks the "kingdoms" that work at cross-purposes in many organizations. To implement such a demanding software one needs high performance computing, high availability systems, large, high speed high availability on line storage and high speed, high reliable net works, all at affordable cost. Though many ERP software vendors have been around for more than two decades, ERP software started to make major inroads into the corporate world only in the last couple of years. Interestingly Indian corporate houses are taking the ERP route exceptionally fast, even by world standards in the past two years. The investments on a complete ERP implementation for a Rs. 100+ crore corporation would easily run into Rs 10+ crores. ERP is the only software whose deployment decisions are made in the corporate boardrooms and not by EDP / MIS departments. ERP software today represents possibly the single most expensive piece of general-purpose software.

Why ERP ?

Corporations go for ERP either to solve the existing problems or to explore new opportunities. I call these two approaches as negative & positive approach respectively. One aspect of the negative approach forces some corporations to go for ERP to solve their Y2K problem. This is particularly true of those corporations that are heavily dependent on legacy systems running on old main frames. The second aspect of the negative approach is to get over the problems of islands of heterogeneous and incompatible information systems that were developed over the past several years in many organizations. Functional IS modules representing areas such as Finance, Marketing, HR, and Production in these organizations would be running on diverse hardware and software platforms leading to nearly insurmountable problems of reconciling data locked up among the diverse systems. From a positive perspective many organization look at the great opportunity provided by ERP software that lead to almost instant access of transactional information across the corporation. Such an information rich scenario permits organization to reduce inventory across multiple units/ departments/ plants; reduce cycle times from weeks to hours; and improve customer satisfaction by orders of magnitude. All these translate to increased profitability or increase in market share and in turn much larger market capitalization. However ERP is only means and not an end by itself. ERP provides an opportunity for a corporation to operate as an agile entity to improve production / operation, customer service and customer satisfaction. The creative ingenuity of an organization to drive towards these corporate goals determines the extent of success an ERP implementation can deliver.

Is ERP too expensive for Indian Companies ?

It is a loaded question. The cost of ERP software should not be viewed as an expense. It is an investment towards an ability that provides better profitability, market share or customer service. Of course, the up-front cost of ERP software is very high. Most software pieces used by the corporations for commercial applications never had price tags of crores of rupees which ERP software carry. ERP decisions are a "high-risk high reward" decision. The view that ERP is expensive only looks at the risk but not the rewards.

What are the special challenges of ERP introduction in INDIA ?

The challenges of introduction of ERP in India are in general the same as in other countries. This includes change management, organizational intervention, shifting from function view to process view and faith in package software in the place of custom-built software. The special challenges in India arise from the existence of large IS shops inside many Indian corporations who may view ERP as a threat to their very existence. The Indian software companies also see a threat to their project-based software business in ERP. Traditionally organizations in India depended more on IS professionals rather than business professionals for commercial software developments. ERP places more value on domain knowledge of the functions rather than IT skills. This calls for a mind-set change, which is a challenge. Last, but not the least, is the lack of communication infrastructure, which is often necessary to implement ERP. The IT infrastructure needed for ERP implementation is orders of magnitude more than the infrastructure needed for the legacy application. This again calls for a mindset change.

Why is Top Management Commitment necessary for the success of ERP ?

ERP will ultimately affect everyone in the organization. An ERP implementation represents a major organizational intervention. The process view of ERP would remove many of the "kingdoms" in the organization. This would lead to a shift in power centers; naturally ERP represents a major change. Managing change of such high order cannot be done without top management commitment. ERP exercise is also a major exercise and can cost anyway from several lakhs to several crores of rupees. Such large resource requirements also necessitate commitment from top management. Last, but not the least, ERP implementation is a long process, generally running into several months. Keeping an activity alive for such long duration would be nearly impossible without top management commitment.

The Essence of Leadership - by Mr. Narayan Murthy, Sorce: SmartManager

2006-07-12T13:19:00.000-07:00

A leader is an agent of change, and progress is about change. In the words of Robert F Kennedy, 'Progress is a nice word; but change is its motivator.'

Leadership is about raising the aspirations of followers and enthusing people with a desire to reach for the stars. For instance, Mahatma Gandhi created a vision for independence in India and raised the aspirations of our people.

Leadership is about making people say, 'I will walk on water for you.' It is about creating a worthy dream and helping people achieve it.

Robert Kennedy, summed up leadership best when he said, 'Others see things as they are and wonder why; I see them as they are not and say why not?'

Adversity

A leader has to raise the confidence of followers. He should make them understand that tough times are part of life and that they will come out better at the end of it. He has to sustain their hope, and their energy levels to handle the difficult days.

There is no better example of this than Winston Churchill. His courageous leadership as prime minister for Great Britain successfully led the British people from the brink of defeat during World War II. He raised his people's hopes with the words, 'These are not dark days; these are great days -- the greatest days our country has ever lived.'

Never is strong leadership more needed than in a crisis. In the words of Seneca, the Greek philosopher, 'Fire is the test of gold; adversity, of strong men.'

Values

The leader has to create hope. He has to create a plausible story about a better future for the organisation: everyone should be able to see the rainbow and catch a part of it.

This requires creating trust in people. And to create trust, the leader has to subscribe to a value system: a protocol for behavior that enhances the confidence, commitment and enthusiasm of the people.

Compliance to a value system creates the environment for people to have high aspirations, self esteem, belief in fundamental values, confidence in the future and the enthusiasm necessary to take up apparently difficult tasks. Leaders have to walk the talk and demonstrate their commitment to a value system.

As Mahatma Gandhi said, 'We must become the change we want to see in the world.' Leaders have to prove their belief in sacrifice and hard work. Such behavior will enthuse the employees to make bigger sacrifices. It will help win the team's confidence, help leaders become credible, and help create trust in their ideas.

Enhancing trust

Trust and confidence can only exist where there is a premium on transparency. The leader has to create an environment where each person feels secure enough to be able to disclose his or her mistakes, and resolves to improve.

Investors respect such organisations. Investors understand that the business will have good times and bad times. What they want you to do is to level with them at all times. They want you to disclose bad news on a proactive basis. At Infosys, our philosophy has always been, 'When in doubt, disclose.'

Governance

Good corporate governance is about maximising shareholder value on a sustainable basis while ensuring fairness to all stakeholders: customers, vendor-partners, investors, employees, government and society.

A successful organisation tides over many downturns. The best index of success is its longevity. This is predicated on adhering to the finest levels of corporate governance.

At Infosys, we have consistently adopted transparency and disclosure standards even before law mandated it. In 1995, Infosys suffered losses in the secondary market. Under Indian GAAP (generally accepted accounting principles), we were not required to make this information public. Nevertheless, we published this information in our annual report.

Fearless environment

Transparency about the organisation's operations should be accompanied by an open environment inside the organisation. You have to create an environment where any employee can disagree with you without fear of reprisal.

In such a case, everyone makes suggestions for the common good. In the end everyone will be better off.

On the other hand, at Enron, the CFO was running an empire where people were afraid to speak. In some other cases, the whistle blowers have been harassed and thrown out of the company.

Managerial remuneration

We have gone towards excessive salaries and options for senior management staff. At one company, the CEO's employment contract not only set out the model of the Mercedes the company would buy him, but also promised a monthly first-class air ticket for his mother, along with a cash bonus of $10 million and other benefits.

Not surprisingly, this company has already filed for bankruptcy.

Managerial remuneration should be based on three principles:

Fairness with respect to the compensation of other employees;
Transparency with respect to shareholders and employees;
Accountability with respect to linking compensation with corporate performance.

Thus, the compensation should have a fixed component and a variable component. The variable component should be linked to achieving long-term objectives of the firm. Senior management should swim or sink with the fortunes of the company.

Senior management compensation should be reviewed by the compensation committee of the board, which should consist only of independent directors. Further, this should be approved by the shareholders.

I've been asked, 'How can I ask for limits on senior management compensation when I have made millions myself?' A fair question with a straightforward answer: two systems are at play here. One is that of the promoter, the risk taker and the capital markets; and the other is that of professional management and compensation structures.

One cannot mix these two distinct systems, otherwise entrepreneurship will be stifled, and no new companies will come up, no progress can take place. At the same time, there has to be fairness in compensation: there cannot be huge differences between the top most and the bottom rung of the ladder within an organisation.

PSPD model

A well run organisation embraces and practices a sound Predictability-Sustainability-Profitability-Derisking (we call this the PSPD model at Infosys) model. Indeed, the long-term success of an organisation depends on having a model that scales up profitably.

Further, every organisation must have a good derisking approach that recognises, measures and mitigates risk along every dimension.

Integrity

Strong leadership in adverse times helps win the trust of the stakeholders, making it more likely that they will stand by you in your hour of need. As leaders who dream of growth and progress, integrity is your most wanted attribute.

Lead your teams to fight for the truth and never compromise on your values. I am confident that our corporate leaders, through honest and desirable behaviour, will reap long-term benefits for their stakeholders.

Two mottos

In conclusion, keep in mind two Sanskrit sentences: Sathyannasti Paro Dharma (there is no dharma greater than adherence to truth); and Satyameva jayate (truth alone triumphs). Let these be your motto for good corporate leadership.

Narayana Murthy's 5 tips for success

2006-07-03T09:32:00.000-07:00

The five elements of success as said by Narayan Murthy are:

# Openness to learn: Openness to subordinate your ego to take ideas from others.
# Second, meritocracy: The best ideas are adopted and implemented using data to arrive at the best decision.
# Third, speed: Assuring you do things faster compared to yesterday and last quarter.
# Fourth, imagination: You continually bring better ideas and better innovation to the table.
# And finally, excellence in execution: That is implementation of these great ideas with a higher level of excellence today than yesterday.

4 investing mantras

2006-07-03T09:15:00.000-07:00

1. Do not invest in lump-sums

If you have Rs 1 lakh to invest, invest Rs 10,000 every month. Inculcate the discipline of investing regularly. Do not try to time the market.

2. Ignore market corrections

You can be immune to market corrections if you are looking at a 5-15 year horizon. The secular trend of equity markets is always northward.

3. Mutual fund returns are attractive

If you had invested Rs 10,000 every month for the last 10 years (Rs 12 lakh) in any of the 27 equity funds in existence, it would be worth anywhere from Rs 24 lakh (LIC equity fund) to Rs 1.1 crore (Reliance Growth fund) today. That means an impressive return of 70-100 per cent.

4. Real estate funds will take time to take-off

The real estate market is illiquid, rigged and totally non-transparent. There will be complexities in working out daily valuations. I think these funds are being launched a decade too soon (the Securities and Exchange Board of India has given the go-ahead earlier this week).

Some Good Books To Start With

2006-07-02T06:57:00.000-07:00

These are a few of my own favorite business - life related books!

7 Habits of Highly Effective People by Stephen R. Covey - this is an extremely useful book on habits anyone can adopt in any field and in doing so, be able to boost both their productivity and just as importantly their enjoyment of life.

The Essential Drucker: The Best of Sixty Years of Peter Drucker's Essential Writings On Management - Pete Drucker has long been considered the guru of business and this book is a fantastic compilation of all his amazing insight into the world of business.

Think and Grow Rich by Napoleon Hill - this book has been highly touted and read for years by folks in the business industry as well as the general populus. The concepts in the book cover the power of having a positive mental outlook, utilizing the power of your intuition and imagination and bringing forth all your resources to living a good life.

The World is Flat by Thomas Friedman - This book is a Must Read for anyone who wants to understand globalization and its history. The focus is on how best to adapt to the "flattening" world and how to be proactive in your response to the challenges of globalization and the new economic market.

Built to Last : Successful Habits of Visionary Companies by Jim Collins, Jerry I. Porras - This book identifies 18 visionary companies and definitively outlines both the diversity and the commonality of the companies on their route to success. You'll recognize all the companies in the book, but what it interesting is to see how they each made their way to stellar company amongst a field of competitors. The book serves up remarkable comparisons of the path to long-term success and serves as a great highlight for how companies can succeed.

5 tips for safe investment in Mutual Funds

2006-06-04T13:38:00.000-07:00

The market is a roller coaster and let no one tell you otherwise. In the short term the market outlook may seem uncertain due to concerns on oil prices and slowdown on foreign institutional investor inflows.
But on the longer horizon Indian markets look very good. The government has been making conscious business friendly policies; the fiscal deficit too is getting under control. India continues to be one of the fastest growing economies in the world. These factors coupled with many others are ensuring India's position as a global investment destination.
Choosing between the plentiful available mutual funds and schemes is not easy. A well thought out and well-planned decision is one that will bear fruits in the long run. Thus a structured approach to fund selection with a systematic checklist to achieve it is of utmost importance.
Even though there are many available methods of product comparisons, one doesn't want to be weighed down by all of them. Dwelling into too many numbers, will only lead to further confusion. Therefore only a few areas of comparison are of true importance and will be comprehensive enough to produce a thorough comparison.

1. Portfolio

Portfolio is very important while comparing schemes. Even though some of the underlying stocks in portfolios could be similar, most portfolios have differing mandates and investment philosophies. As a result it is rather important to understand the stance the manager has taken while building his scheme portfolio.
The portfolio will not only determine the future outcome of your investment but will also tell you how risky the product is and hence if it is appropriate for your appetite. For example, an equity scheme, which invests in large cap companies, could be safer than one that invests in mid or small cap companies.
The portfolio for debt instruments is determined on duration of securities. A high duration, high return investment is potentially volatile and risky; while a short duration investment Portfolio is less risky. This is where we come to the next parameter of comparison - Risk.

2. Risk

In today's scenario, investments that generate meaningful post tax; post inflation returns have risks attached to them. These are market risk, credit risk, government policy risk etc. At this point one has to understand how much risk he is willing to take in order to generate higher return. The rule of thumb is that the more risk one is willing to take the better the returns potential.
The measurement for risk to return is known as Sharpe Ratio. The higher the value, the better the risk attached to the scheme is managed. A volatile investment can also be very risky. Thus this aspect must also be quantified. Standard deviation will help us understand the volatility of a scheme vis-à-vis its benchmark. Be aware a riskier investment is not always better and a sure fire way to generate superior returns.

3. Performance comparisons

These are the most favored methods of investors and amongst the easiest. Performance numbers are available in plentiful. But performance is only measured in hindsight, and can never be guaranteed in the future. Also performance can only be compared across similar categories of funds.
For example, performance or return comparison between an equity scheme and a debt scheme should never be done. It must be kept in mind that comparison happens only between similar funds. A large cap fund should be compared with another large cap fund and not a mid cap fund. Thus compare apples to apples only.
Performance and return comparison should be conducted usually when one has decided on the above-mentioned factors like risk and product category.

4. Fund management and institutional backing

Since trusting your hard earned savings to some one can never be easy, it is important to evaluate their money managing capabilities. The markets are a game of understanding numbers and involve immense skill to generate growth from these numbers.
Only a very capable person with a lot of experience can generate capital appreciation in today's confusing market swings while managing risk.

5. Investment horizon

It is very important to determine investments based on one's time horizon viz equity typically being volatile should be considered for investment horizon of 1 to 3 years. While the short term debt schemes should be considered for investment horizons of up to 1 year.

It is therefore important to invest with a fund house with a good track record. It is also important to give due weightage to the quality and track record of the spouses of the fund. After evaluating these parameters and choosing a scheme one can be reasonable sure that the investment they are going into is the right one.
Any of these parameters could only be a guiding star and not a guarantee for the future.

Happy Investing!

Answers given by IAS officers in their Interviews

2006-02-16T08:52:00.000-08:00

Real life IAS i.e. UPSC Exam 1998 Interview

Question and the Answer given by Candidates oh sorry IAS Officer now

Q.How can you drop a raw egg onto a concrete floor without cracking it?

A. Concrete floors are very hard to crack! (UPSC Topper)

Q.If it took eight men ten hours to build a wall, how long would it take four men to build it?

A. No time at all it is already built. (UPSC 23 Rank Opted for IFS)

Q.If you had three apples and four oranges in one hand and four apples and three oranges in the other hand, what would you have?

A. Very large hands.(Good one) (UPSC 11 Rank Opted for IPS)

Q. How can you lift an elephant with one hand?

A. It is not a problem, since you will never find an elephant with one hand. (UPSC Rank 14 Opted for IES)

Q. How can a man go eight days without sleep?

A. No Probs , He sleeps at night. (UPSC IAS Rank 98)

Q. If you throw a red stone into the blue sea what it will become?

A. It will Wet or Sink as simple as that. (UPSC IAS Rank 2)

Q. What looks like half apple ?

A : The other half. (UPSC - IAS Topper )

Q. What can you never eat for breakfast ?

A : Dinner.

Q. What happened when wheel was invented ?

A : It caused a revolution.

Q. Bay of Bengal is in which state?

A : Liquid (UPSC 33Rank )

Q: what is the opposite of Nagpanchmi?

A: Nag did not punch me (Harsha. Shanbhag 1st Rank)

Jack Welch Quotes

2006-02-11T12:28:00.000-08:00

An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.

An overburdened, overstretched executive is the best executive, because he or she doesn't have the time to meddle, to deal in trivia, to bother people.

Change before you have to.

Giving people self-confidence is by far the most important thing that I can do. Because then they will act.

Globalization has changed us into a company that searches the world, not just to sell or to source, but to find intellectual capital - the world's best talents and greatest ideas.

I was afraid of the internet... because I couldn't type.

I've learned that mistakes can often be as good a teacher as success.

If GE's strategy of investment in China is wrong, it represents a loss of a billion dollars, perhaps a couple of billion dollars. If it is right, it is the future of this company for the next century.

If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it you almost don't have to manage them.

It's [the internet] like the flu - it just spreads like crazy.

My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds, too.

Strong managers who make tough decisions to cut jobs provide the only true job security in today's world. Weak managers are the problem. Weak managers destroy jobs.

The 1980s will seem like a walk in the park when compared to new global challenges, where annual productivity increases of 6% may not be enough. A combination of software, brains, and running harder will be needed to bring that percentage up to 8% or 9%.

The essence of competitiveness is liberated when we make people believe that what they think and do is important - and then get out of their way while they do it.

The Internet is the Viagra of big business.

Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while.
My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds, too.

An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.

Jack Welch - Biography

2006-02-11T11:57:00.000-08:00

Jack Welch grew to fame in the business world through his management success and skills during his many years at General Electric. Welch turned the struggling slow moving giant of a company into a dynamic growth company revered by many. During his 20 years of leadership at General Electric (GE) Welch increased the value of the company from $13 billion to several hundred billion.

Born John Frances Welch Jr. in Salem Massachusetts USA in 1935. Welch received his B.S. degree at the University of Massachusetts in Chemical Engineering and then went on to receive his M.S. and Ph.D degrees (as a Chemical Engineer) at the University of Illinois.

After graduating in 1960 Welch joined General Electric as a Chemical engineer and worked his way through the ranks to become the Chairman and CEO of GE, making him the eighth and youngest leader.

During his 20 year reign of General Electric, one of Americas largest and most well known companies Jack Welch's management skills became almost legendary. His no nonsense leadership style gave him a reputation of being hard, even ruthless, but also fair when making business decisions.

Welch had little time for bureaucracy and archaic business ways. If managers didn't change they were replaced with someone that could change. Managers were given free reign as long as they followed the GE ethic of constant change and striving to do better. He ran GE like a small dynamic business able to change as opportunities arose or when a business become unprofitable.

In his pursuit to change and streamline the General Electric giant Welch once earned the nickname of Neutron Jack. More than 100,000 GE employees had their jobs taken from them during his reign. GE businesses had to be the best performing business in their field or they were sold.

General Electric saw great growth and expansion under Jack Welch's leadership. Through streamlining operations, acquiring new businesses, and ensuring that each business under the GE umbrella was one of the best in its field the company was able expand dramatically from 1981 to 2001.

Love him or hate him, there is no denying that Jack Welch is an exceptional manager and improved the General Electric company dramatically. His management ideas and leadership skills are both admired by business commentators and imitated by business leaders worldwide.

Since retiring from his role as GE Chairman in 2001 Welch has written a best selling memoir "Jack, Straight from the Gut" and consults with several Fortune 500 businesses.

MFs im 2005 – The Year of Equity Funds

2006-01-24T11:26:00.000-08:00

In the year 2005 as well Mutual Funds (MFs) have proved that it is the best investment option available for retail investors. Conservative companies have also started investing in Equity Mutual Fund in a big way as it offers more safety than direct equity market investing.

Encouraged by record foreign capital inflows and strong support by the local funds, the Sensex breached one milestone after the other, to touch a high of 9,442.98. The Sensex gained close to 2800 points or more than 42% in the 12 months and was easily among the best-performing index in the world. MFs have also able to perform inline with the Sensex.

MFs remained the net buyers in equities at the end of year with investment of over Rs.12000cr in a year 2005 where as MFs have invested over Rs.40331Cr in debt segment.

Average Equity Funds Returns:

In the year 2005 Equity Diversified Funds have given 48% compounded annualized average returns and they have outperformed S&P CNX Nifty & BSE 500 indices by healthy margins, which have generated 38% & 44% compounded annulised returns respectively. If investors can hold MFs for longer duration they can give better returns. Fund managers turned out to be savvy investors, with a majority of the funds faring better than the market.

		Compounded Annualised % (P2P)
Scheme Name	NAV	3 Months	6 Months	1 Year
Equity Funds Category Average	-	38.6	81.7	48.2
Indices		-	-	-
S&P Nifty	2836.6	41.5	63.0	37.7
BSE Sensex	9397.9	40.5	70.4	44.1

Corpus Toppers: In terms of corpus Bank BeEs of Benchmark Mutual Fund has shown biggest growth with corpus under fund increasing by whopping Rs.2267Cr.

Scheme	Nov-05	Jan-05	Change
Bank BeES	2533	266	2267
Franklin India Prima Fund	2107	1196	911
HDFC Equity Fund	1861	1101	759

Corpus Losers: HSBC Equity Fund is among top losers in terms of corpus, which has lost Rs.393Cr of its assets.

Scheme	Nov-05 Rs Cr	Jan-05 Rs Cr	Change Rs Cr
HSBC Equity Fund	1231	1624	(393)
NIFTY UTI National Depository	22	209	(188)
PRINCIPAL Dividend Yield Fund	233	386	(153)

New Fund Offerings Toppers: 45 new Equity Funds were launched in the year 2005 which have managed generate 73% compounded annualized average returns in 6 months compare to S & P CNX Nifty & BSE 500 which have generated 63% & 68% compounded annualized returns respectively

ABN AMRO Opportunities Fund which was launched in Mar-05 has generated 111% compounded annualized returns in 6 months followed by SBI Magnum Midcap Fund (106%) and HSBC Midcap Equity Fund (103%).

Top 3 Equity New Funds Offerings (NFOs)

NFOs	Compounded Annualised % (P2P)
Scheme Name	1 Month	2 Months	3 Months	6 Months	1 Year	Since Inception
ABN AMRO Opportunities Fund	119.2	247.1	45.9	111.7	-	100.0
SBI Magnum Midcap Fund	112.8	224.5	42.2	106.2	-	79.8
HSBC Midcap Equity Fund	90.9	151.9	27.3	103.2	-	90.9
Category Average	96.3	178.7	33.5	73.1	49.9	48.6

Equity Diversified Funds Toppers: SBI is mutual fund of the year as its most of the schemes have managed to emerge in top 3 positions from their categories. Among equity diversified funds, SBI Emerging Businesses Fund is on top of the table with 83% compounded annualized returns followed by SBI Magnum Global Fund 94 (81%) and Prudential ICICI Emerging STAR Fund (74%).

	Corpus	Compounded Annualised % (P2P)
Scheme Name	(Rs Cr)	3 Months	6 Months	1 Year
SBI - Emerging Businesses	482.5	16.5	90.3	82.9
SBI Global Fund 94	371.9	45.7	119.3	81.3
Pru ICICI Emerging STAR Fund	311.0	47.5	124.2	73.5

Index Funds Toppers: UTI Master Index Fund with 45% compounded annualized returns bagged the top position among the index funds.

	Corpus	Compounded Annualised % (P2P)
Scheme Name	(Rs Crs)	3 Months	6 Months	1 Year
UTI Master Index Fund	32.8	38.7	69.7	44.9
Tata Index Fund - Nifty Plan	1.4	46.9	74.6	44.7
Pru ICICI Exchange Traded Fund	0.7	39.4	69.7	44.3

Sector Fund Toppers: Pru ICICI FMCG Fund has generated over 96% compounded annualized returns in the last one year followed by Reliance Diversified Power Fund (83%) and SBI Infotech Fund (68%). FMCG as a sector definitely performed better but Pru ICICI MFs has discovered this sector true potential this year.

	Corpus	Compounded Annualised % (P2P)
Scheme Name	(Rs Crs)	3 Months	6 Months	1 Year
Prudential ICICI FMCG	82.7	42.8	128.1	96.5
Reliance Diversified Power Fund	475.5	54.3	116.8	83.0
SBI Magnum Sector Umbrella - Infotech	59.6	111.7	121.9	67.9

Income Funds Toppers: Only 3 Income funds have managed to give over 9% compounded annualized returns in a year. The category average for the year is 4.9%.

	Corpus	Compounded Annualised % (P2P)
Scheme Name	(Rs Crs)	3 Months	6 Months	1 Year
Tata Income Fund	54.1	34.6	18.1	11.5
CanIncome Scheme	1.6	4.6	4.2	9.8
Prudential ICICI LTP	257.5	4.3	4.5	9.1
Average	-	3.7	4.2	4.9

Gilts Funds Toppers:

Due to more negatives than positives Gilt market continued to performance poorly with Gilt funds just managed to deliver 4.5 compounded annualized average returns in the year.

	Corpus	Compounded Annualised % (P2P)
Scheme Name	(Rs Cr)	3 Months	6 Months	1 Year
PRINCIPAL G Sec - Investment	20	7.0	5.2	6.8
Reliance G S F - LTP	119.2	5.3	6.0	6.7
DSP ML G Sec Fund Plan A Long	39.6	5.6	3.6	5.6
Category Average	-	5.2	4.5	4.5
Indices	-	-	-	-
NSE G Sec Composite Index	-	9.9	4.7	3.3

_{Liquid Funds Toppers: Liquid Funds have generated average returns of 5.1% for a year.}

	Corpus	Compounded Annualised % (P2P)
Scheme Name	(Rs Crs)	3 Months	6 Months	1 Year
LIC MF Liquid Fund	2449.6	6.1	5.9	5.7
Birla SunLife Cash Manager - I P	258.8	5.6	5.6	5.6
HDFC Cash Mgmt Fund - Savings Plus	1243.1	5.6	5.7	5.6
Average	-	5.3	5.2	5.1
Indices	-	-	-	-
Crisil Liquid Fund Index	1192.5	4.4	4.6	4.6

[Data as on 30-Dec-05, Source – ICRA]

The year 2005 once again proved that investor could invest their money through mutual funds and get more returns than respective benchmarks. Tomorrow is going to be another year and you could be a gainer by investing in Mutual Funds.

Naissance-06

2006-01-24T09:58:00.000-08:00

Naissance-06 is a novel attempt to bring together the cream of contemporary b-school talent for a test of the best.

Naissance-06 presents a forum for participants to discover new ground, innovate new thinking and provide new direction to evolving management thought.

Naissance-06 is spread over two exiting days of intense, challenging and stimulating events, which will be interspersed with just the right amount of fun to make it a memorable time for the participants.

Naissance-06 comprises:
Biz-Quiz
Buckmaster
Magistry – Online Game
Market Spin
Young Manager

For more info follow the link : http://www.sdmimd.net/Website_Dristi_T2/Frames.htm

Top 10 predictions for Indian IT in 2006

2006-01-24T09:14:00.000-08:00

Top 10 predictions for Indian IT in 2006

Rediff.com | January 24, 2006

India will be the fastest growing IT market in the Asia Pacific region with its domestic IT market set to grow at an estimated 19% in 2006 over 2005, according to IT and telecom consulting major IDC.

"Year 2006 will be governed by the underlying themes of mobility, convergence and infrastructure management," said Kapil Dev Singh, country manager, IDC (India) Ltd. Dynamic IT in the enterprise space and increasing proliferation of digital devices in the consumer space, will drive the growth of IT market in 2006.

IDC's top 10 predictions for the Indian IT market for 2006 are:

1. India to continue to be the fastest growing domestic IT market in the Asia-Pacific region, to continue to grow at 19% in 2006, with the other Asian giant China growing at 12%.

Country	Domestic IT market growth in 2006 over 2005
India	19%
Philippines	14%
China	12%
Malaysia	8%
Thailand	6%
Source: IDC, 2006

The major growth will come in the following areas:

Hardware: WLAN equipment (94%), digicams (70%), IP phones (50%), IP-PBX systems (43%), Smart handheld devices or SHDs (30%), Inkjet MFDs (21%), and Notebook PCs (20%)

Software: Application life cycle management software (32%), security software (29%), content applications (24%), BI software (24%), system management software (20%), network management software (20%), information and data management software (20%)

IT Services: Application management (32%), software deployment and support services (29%), network consulting and integration services (24%), IS outsourcing (23%).

2. Servers, the fundamental building blocks of IT infrastructure to cross 100,000 shipments in 2006 in India.

The challenge facing CIOs in 2006 would be to deliver higher IT service-level performance to meet diverse business needs while lowering the costs of infrastructure - a tough balance to strike.

Users have realised their IT infrastructure has become quite complex over a period of time as they continued to add different types of servers, storage, and software.

Servers are among the fundamental building blocks of a solid infrastructure in the making. The trend towards dynamic IT will necessitate an increasing need for server consolidation in 2006. After struggling for years to register consistent growth, the server market in India is now poised for strong gains over the next five years.

For the past 10 consecutive quarters, server shipments in India increased year-on-year in excess of 20% until 3Q05, while growth in spending was equally impressive.

3. Outsourcing services to outgrow technology product services (standalone) in 2006 and will contribute largest chunk (24%) to the Indian IT services market.

IDC believes that the Indian market is moving towards an era of outsourcing services in the domestic space. So far, the domestic market has been dominated by plain vanilla support services like software and hardware deployment and support, which includes revenue streams like AMC (annual maintenance service contract) revenues.

With the emergence of end-to-end operators in the services space and with more confidence on outsourcing service providers, end-users are awarding more contracts with long-term perspectives in mind.

Deals like IBM-Bharti, HP-Bank of India, Wipro-Sanmar group, TCS-Department of Company Affairs, etc show a definite change in the mindset of even the PSU/Government vertical to go for similar deals, where the complete headache of IT Infrastructure can be taken up by the specialist providers.

IDC estimates that managed services (outsourcing services) would be 24% of the total domestic IT services market vis-à-vis 22% for technology product services (TPS) in CY 2006.

4. Anytime, anywhere information availability to drive shift towards policy-based security management and administration in India.

Businesses are rapidly changing with growth and competition, pushing enterprises for high availability of information to enable better and faster decision-making. Enterprises are networking with both their downstream and upstream partners in the ecosystem so as to streamline and optimise their value chain. The need for higher availability coupled with compliance to regulations will put Identity & Access Management (IAM) solutions in the mainstream in 2006.

Higher mobility and faster decision-making require information to be made available anywhere, anytime. This, in turn would enable enterprises to respond to changing market needs in a shorter time-span.

Therefore, enterprises will need to design a centralised security policy, which takes into consideration the needs of employees and partners alike. This trend will increasingly set the boundaries that govern security management and administration policies in enterprises.

5. 2006, the year of the digital home revolution in India: 100% growth expected in digital camera shipments and home Internet connections.

Finally the Indian consumer segment is coming into its own. IDC has observed phenomenal growth in the adoption of digital devices and technologies that clearly signals the trend towards fructification of the concept of a digital home.

All major indicators, i.e. home PC, broadband, digital camera, high-end television, satellite radios, MP3 players etc., have shown very healthy growth in the year 2005. IDC predicts that the next year is going to be even rosier for a host of digital products aimed for this mass market.

India will see a few products enjoying more than 100% growth with digital cameras and consumer broadband connections becoming the flag bearers of this triumphant march.

The digital camera market is undergoing a sea change in the country. Indian consumers are maturing from 'casual clickers' to 'serious buyers', with increased attention towards higher pixels, zoom and other high-end features.

Low cost Broadband is another market where India is going to see unprecedented growth. The cost of owing a broadband Internet connection (primarily ADSL) has come down drastically, thanks to the bundling and offerings available from service providers.

6. Unrestricted IP telephony will boost IP-PBX shipments to over 25% of PBX line shipments by end-2006, but low PSTN tariffs will constrain VoIP usage in India.

The Indian IP telephony enterprise equipment market is finally emerging out of the shackles of government-enforced restrictions. The recent announcement further opening up IP telephony means that IP telephones and equipment will be able to freely interconnect with normal TDM lines, be it for calling within the user's closed group or outside, irrespective of whether the called party is outside India or inside India.

And it does not matter whether the receiver is on an IP phone or a normal PSTN phone or even the now more common mobile phone. IP telephony, unbridled and with full features, is what 2006 will see becoming a reality.

Given the fast dropping costs of IP phones and IP-PBX equipment, IP telephony will stop being a tool used for niche applications by early adopters to become a multipurpose communication medium used by a diverse set of enterprises.

In 2006, it will not only be the call centres and software houses who will adopt IP telephony -- many other organisations such as banks, manufacturers, educational institutions and government departments would begin adding IP telephones and IP-PBXs to their networks.

IDC expects that by the end of 2006, a quarter of PBX lines shipped will be IP lines compared to the 15 per cent today. The biggest drivers for IP telephony among enterprises would be investment protection and convergence -- businesses would look at investing on the latest technology that will give them the best return in the long run.

7. Industry-specific solutions to be major driver of corporate IT spending in 2006 and beyond.

As the Indian economy integrates and aligns more and more with the global economy, industry segments facing the heat of competition are gearing up to compete internationally. This is visible across segments as diverse as automotive, banking & insurance, consumer durables, textiles & garments, oil & gas, pharmaceuticals & biotechnology, retailing, telecom, et al.

This unprecedented scenario has made Indian companies scout for world-class enterprise applications/solutions from IT vendors to help them upgrade their legacy systems/applications in order to meet their goals as well as the expectations of their customers, business partners and shareholders.

IDC believes that this trend is going to gain traction in 2006. This in turn is forcing IT vendors/solution providers in India to realign their internal organisation structures as well as their go-to-market strategies in order to be able to adequately address these new market realities.

According to IDC IT vendors/solution providers will be:

Re-orienting their internal organisation structures to cater to the specific and emerging needs of their industry vertical focused customers, as against the traditional horizontal, product category-oriented structures.
Developing and providing specific, easily customizable and cost-effective (high RoI/low TCO) solutions to their customers.
Tying up with industry-specific solution partners who possess deep domain expertise and have access/proximity to local geographical industry clusters.

High revenue growth would be witnessed in vertical-specific applications across-the-board, which is expected to provide a positive boost to revenues (2006 over 2005) in such major product segments as servers (9%), PCs (21%), enterprise storage solutions (13%), packaged software (20%) and key IT services like application management (32%), ASP (20%), IT consulting (20%), network consulting & integration (24%), network management (26%), software deployment & support (29%) as well as enterprise-wide IS outsourcing services (23%).

8. Application integration, consolidation with business analytics will gain momentum in 2006.

Enterprises in India are growing rapidly and the need has arisen to have better control on growth and decision-making based on real time enterprise wide data. The business drivers across industries are different and range from compliance, better service to cost control.

Enterprises have deployed multiple applications with a mix of standardised packaged and custom-developed legacy applications. These disparate applications pose challenges like:

2006 will witness enterprises integrating multiple applications running within the organisation. They will also reduce the number of applications wherever possible and rollout applications from a single location, thus reducing the number of servers deployed.

9. Cost no more the key factor in colour adoption: Colour laser shipments growing by 50% in 2006 over 2005.

IDC believes that adoption of colour printing in the laser space will take off from 2006. While 2006 will witness an increased adoption of colour lasers in offices; the installed base will keep on increasing thereafter. Over the past two years there has been a concerted drive by the industry to develop and enhance the range of colour laser devices that they offer.

This drive will begin to see results from 2006 onwards. The CAGR for the next five years is predicted to be about 40%, while 2006 is likely to witness an increase of about 50% over 2005 shipments.

There are an increasing number of devices that employ technologies that deliver colour output to businesses, and there is an increasing awareness amongst organizations that colour can bring great benefits to their businesses.

The factors that will drive the adoption of colour printing are:

Prices to drop considerably across all products;
Businesses have a latent need for colour printing and would really begin to look strategically at what benefits colour could provide;
Vendors would continue to introduce products that will offer better print speeds, quality and consistency of print, which would enable a number of businesses to print many of their colour documents in-house.

To begin with, marketing and sales would drive the use of colour in offices. The phenomenon is likely to spread to other groups gradually. However there are a few challenges that both the printer vendors and offices (end-user organisations) themselves have to overcome. These are:

Increased costs -- one time cost as well as recurring costs;
Cost allocation between various departments; and
Colour printing through networked devices.

IDC expects a few organisations to act as innovators towards adopting colour printing cost effectively, thereby overcoming the above hurdles successfully. These organisations will gain an early advantage over their competitors and this would then lead to widespread adoption of colour in Indian offices.

10. Worldwide IT and business services: Focus on SMEs, global assets, global sourcing for innovation, and industry focused BPO.

In 2006, IT and business services vendors will continue to see major market changes, including a dramatic shift to more business process outsourcing, an increase in the number of players, and a reduction in total deal value.

These developments reflect increased competition and expansion in the marketplace and are continuing to put pressure on traditional outsourcers to alter their business models in order to successfully compete in the coming years - to include newer service capabilities, involve different ecosystems of partnerships, target 'non-IT' opportunities, and seek new customers in the SME and consumer spaces as well as emerging markets.

5 Ball Theory of Life.....

2006-01-21T11:40:00.000-08:00

There are 4 GLASS BALLS & 1 RUBBER BALL

4 Glass Balls represents -

FAMILY
FRIENDS
HEALTH
SPIRIT

1 RUBBER BALL represents

5. JOB

In life we keep on juggling these balls ....... and the life continues....... A small mistake and any of these balls might fall ...... if the rubber ball falls it would bounce back...... No matter in what time it would bounce back ... 1 month ... 3 months... 6 months, but it would definitely bounce back.....

But the Glass Ball..... Very delicate……once it falls.... It can never be brought to its original Shape… again....

"WE EARN TO LIVE .......NOT LIVE TO EARN "!!!!

Pattabhi Jois - Mysore's world famous Yoga teacher

2006-01-08T12:25:00.000-08:00

Sri Krishna Pattabhi Jois was born on the full moon day of July, 1915, Guru Purnima day. His ancestral village, Kowshika, near Hassan in Karnataka State, is inhabited by maybe 500 people and has one main street. At one end of the street is a Vishnu temple, just next to Pattabhi Jois' home. At the far end of the street, just 100 yards away, lies a small Ganapati temple, and just opposite, a Siva temple. Both are several hundreds years old, and are the focus of the village.

Pattabhi Jois's father was an astrologer and a priest, who acted as the pujari for many of the families in the village. From an early age, as most brahmin boys, Pattabhi Jois was taught the Vedas and Hindu rituals.

When Guruji was 12 years old, he attended a yoga demonstration at his middle school in Hassan. The next day he went to meet the great yogi who had given the demonstration, a man by the name of Sri T. Krishnamacharya, who had learned yoga for nearly eight years from his Guru, Rama Mohan Brahmachari in a cave in Tibet. For the next two years, Guruji learned from his Guru every day. When Guruji turned 14, he had his brahmin thread ceremony. Krishnamacharya left Hassan to travel and teach, and Guruji left his village to go to Mysore. Guruji wished to attend the Sanskrit University of Mysore. With two rupees in his pocket, he left with two friends. They traveled the 100 plus kilometers by bike, over dirt roads. For the first year or two, life was very difficult. With very little money, he begged for his food from some of the brahmin houses. Guruji attended classes and did his studies. Then, around 1930, he went to a yoga demonstration and saw that it was his Guru. He came forward and prostrated, and they recommenced their relationship, and Guruji his yoga studies.

The Maharaja of Mysore, Krishna Rajendra Wodeyar, had fallen ill. He learned that there was a great yogi who had come to Mysore. Krishnamacharya was called to him, and duly cured him. The Maharaja became a great patron of his and built him a yogashala (school of yoga) on the grounds of the Palace Art Gallery. Guruji was also beckoned to teach the Maharaja on occasion, and was called upon several times to give yoga demonstrations. The Maharaja, who had taken a liking for Guruji, told him, "I want you to teach yoga at the Sanskrit College. You teach. I will give you a scholarship to go to school, free food in my mess hall and a salary." Guruji, very happy, asked permission from his Guru. Krishnamacharya approved, and the Yoga Department of the Sanskrit College began on March 1, 1937. He continued as the head until his retirement in 1973.

From 1937 until 1973, Guruji earned his professorship at the University, granting him the title of Vidvan. He married, in a love marriage, Savitramma, who came from a long line of Sanskrit scholars. Her grandfather was the Sanskrit and philosophy teacher to the last Shankaracharya of Kanchi, Sri Chandrasekharendra Saraswati. They had three children, Manju, Ramesh, and Saraswati. Saraswati is the mother of Sharath, born in 1971, who is now Guruji's co-director of their school in Mysore.

In 1964, Andre Van Lysbeth bacame the first Westener to study with Guruji. Soon after that, more Europeans came. Around 1972, the first Americans came, after meeting Manju at Swami Gitananda's ashram in Pondicherri. It was at that point that ashtanga yoga began spreading in America, starting in California, and then later emerging in Hawaii. In 1975, Guruji and Manju made their first trip to America. Over the next 25 years, the practice spread through the United States, France, Germany, Russia, Japan, Israel, Chile, England, Italy, Spain, Switzerland, Canada, Australia, New Zealand, etc. Guruji has, for 63 years, been teaching uninterruptedly this same method that he learned from Krishnamacharya in 1927.

For more details tou can check out the links :
http://www.ayri.org

http://ashtanga.com

http://russell.blogs.com

How Warren Buffet Does It !

2006-01-08T11:29:00.000-08:00

24 simple investing strategies from the world’s greatest Value Investor

1) Choose simplicity over complexity

Ø Remember that degree of difficulty does not count in investing. Look for long-lasting companies with predictable business models.

Ø If you don’t understand the business, don’t buy it.

2) Make your own investment decision

Ø When approached by an investment advisor, ask, “What’s in it for them?” If their answer is not satisfactory, walk away.

Ø Become a value investor. It’s proven to be a very rewarding technique over the long term.

Ø Value investing consists of acting on discrepancies between price and value in the stock market: the figurative search for dollar bills that are selling for 40 cents.

3) Maintain proper temperament

Ø Keep your head when others do not, and you will benefit.

Ø Don’t own any stock that would cause you to panic and dump your shares if the price falls by 50%.

Ø Hold on to great business

Ø Know yourself

Ø Never make an investment decision because others tell you to

Ø To succeed in the market you need only ordinary intelligence. But in addition, you need the kind of temperament that can help you ride out the storms and stick to your long-term plans. If you can stay cool while those around you are panicking, you can prevail.

4) Be patient

Ø Think 10 years, rather than 10 minutes. If you aren’t prepared to hold a stock for a decade, don’t buy it in the first place

Ø Don’t dwell on the price of the stocks. Instead, study the underlying business, its earning capacity, its future, and so on.

5) Buy businesses, Not stocks

Ø Business performance and long-term track record of the company are the key to picking stocks.

Ø Which business to buy…?

· Businesses you can understand

· Companies with favorable long-term prospects

· Business operated by honest and competent people

· Businesses priced very attractively

Ø Search for certainty in uncertain markets….businesses that are likely to outperform their peers over the long run

Ø Don’t think about “stock in the short term.” Think about “business in the long term.”

6) Look for a company that is a Franchise

7) Buy low-tech, not high-tech

8) Concentrate your stock investments

9) Practice inactivity, not hyperactivity

10) Don’t look at the ticker

11) View market downturns as buying opportunities

12) Don’t swing at every pitch

13) Ignore the macro; Focus on the micro

14) Take a close look at the management

15) Remember, The Emperor wears no clothes on Wall Street

16) Practice independent thinking

17) Stay within your circle of competence

18) Ignore stock market forecasts

19) Understand “Mr. Market” and the “Margin of Safety”

20) Be fearful when others are greedy and greedy when others are fearful

21) Read, read some more, and then think

22) Use all your horsepower

23) Avoid the costly mistakes of others

24) Become a sound investor

Job Hopping - "DESERVE BEFORE YOU DESIRE"

2006-01-03T08:34:00.000-08:00

Mr.Gopalakrishnan succeeds Mr.Ratan Tata as Chairman of Tata Sons Ltd., the holding company for many of the Tata Bluechips like Tata Steel, TataMotors,Tata Power, Tata Chemicals, Voltas, etc., Possibly he is the first non-Tata person to head the Tata Empire.

The grass isn't always greener on the other side!! Move from one job to another, but only for the right reasons.

"Oh, I am getting a 200% hike in salary";

"Well, I am jumping three levels in my designation";

"Well, they are going to send me abroad in six months".

People who are considered successful today and who have reached the top - be it a media agency, an advertising agency or a company -Most of these people are the ones who have stuck to the company, ground their heels and worked their way to the top. People who have changed their jobs constantly usually stagnate at some level, in obscurity!

In this absolutely ruthless, dynamic and competitive environment, there are still no short-cuts to success or to making money. The only thing that continues to pay, as earlier, is loyalty and hard work. Yes, it pays!

Sometimes, immediately, sometimes after a lot of time. But, it does pay. Does this mean that one should stick to an organisations and wait for that golden moment? Of course not. After a long stint, there always comes a time for moving in most organisations, but it is important to move for the right reasons, rather than superficial ones, like money, designation or an overseas trip. Remember, no company recruits for charity.

More often than not, when you are offered an unseemly hike in salary or designation that is disproportionate to what that company offers it current employees, there is always unseen bait attached. The result? You will, in the long-term, have reached exactly the same levels or maybe lower levels than what you would have in your current company.

A lot of people leave an organisation because they are "unhappy". What is this so-called-unhappiness? I have been working for donkey's years and there has never been a day when I am not unhappy about something in my work environment-boss, rude colleague, fussy clients etc.

Unhappiness in a workplace, to a large extent, is transient. If you look hard enough, there is always something to be unhappy about. But, more importantly, do I come to work to be "happy" in the truest sense? If I think hard, the answer is "No".

Happiness is something you find with family, friends, may be a close circle of colleagues who have become friends.

What you come to work for is to earn, build a reputation, satisfy your ambitions, be appreciated for your work ethics, face challenges and get the job done.

So, the next time you are tempted to move, ask yourself why are you moving? and what are you moving into?

Some questions are:

* Am I ready and capable of handling the new responsibility? If yes, what could be the possible reasons my current company has not offered me the same responsibility?

* Who are the people who currently handle this responsibility in the current and new company? Am I as good as the best among them?

* As the new job offer has a different profile, why have I not given the current company the option to offer me this profile?

* Why is the new company offering me the job? Do they want me for my skills, or is there an ulterior motive?

An honest answer to these will eventually decide where you go in your career- to the top of the pile in the long term (at the cost of short-term blips) or to become another average employee who gets lost with time in the wilderness?

"DESERVE BEFORE YOU DESIRE" -

Dr. Gopalkrishnan,
Chairman TATA Sons

Book Review: The Search by John Battelle

2006-01-02T13:18:00.000-08:00

The Search: How Google And Its Rivals Rewrote The Rules Of Business And Transformed Our Culture by John Battelle

John Battelle's The Search is more than just a potted history of Google, although that company looms large throughout his book; rather, it's a book which takes stock of Google's giddy rise, the search engine wars between Google, Yahoo! and MSN, and the arrival of online contextual advertising which has irrevocably changed the nature of advertising itself. Battelle recognises that the real story about the search engines is actually outside the admittedly fascinating geek arms race between the big players: what's important is what the very act of searching for information on the Internet means for business and consumer alike. The simple act of keying in a phrase to a search engine is carried out billions of times a day and in totality provides an unprecedented map of human desires. The commercial ramifications are obvious, but our culture and our access to information are also being transformed by the nature of search. Put it this way - once the Net becomes a daily part of your life, it's hard to imagine doing without it.

It's difficult not to sink into hyperbole when discussing search engines, given the frankly insane stats generated by Google's meteoric rise (from zero to $1.3 billion annual revenue in five years, biggest IPO in Silicon Valley, shares at $300 a pop, trimester profits of $300+ million, and so on). But Battelle points out in his introduction that he didn't want to write a straightforward business biography of Google for the good reason that business biographies don't get read. There is a lot of coverage in here about the rise and fall of different search engines, to be sure, and Battelle has conducted hundreds of interviews with every key player in the industry to piece together an excellent overview of the industry's audacious growth. But Battelle is primarily interested in the implications of what the massive leaps in search engine indexing and intelligence mean for the future. The Search, then, isn't simply a business book or a geek book, although it will be marketed as such: it's actually tackling one of the most profound but almost invisible cultural influences on our daily lives: how search engines organise and present information in response to our queries. As more and more of our lives moves to being managed through the Net, the companies who can correctly analyse what we are looking for and give it to us in the most hassle free way are the ones who will prosper. And, as a by-product of that, the more users they have, the more they can analyse what's been asked for before to anticipate what will be asked for in the future. Battelle calls it the Database of Intentions, and mastering the analysis of all those billions of queries is where the money lies.

The most obvious example of the commercial gold in search queries is contextual advertising, those text ads that turn up next to your search results that are related to your query. Still in its infancy, contextual advertising has revolutionised online advertising and had a huge knock-on effect on old media. The targetted nature of contextual ads - they only get served to someone who's interested in that subject; the ad buyer only pays when someone clicks the link - has meant thousands of businesses that couldn't afford to advertise can now do so and, crucially, get results of real money-in-the-bank business driven by those ads. Shoestring businesses have enjoyed massive sales boosts as a result of this approach, without having to spend vast sums on marketing. The joy here is that everyone wins - the customer finds what they want, the business gets business, and the search engine makes money for connecting the two together. Advertising becomes - shock, horror - useful and even valued, rather than an irritant. That's the ideal scenario, anyway, and Battelle provides case studies showing both the up and potentially disastrous downside of relying on search engines to drive business your way.

Contextual ads have not only helped advertisers but also website owners too. The Net's free culture has always meant that paying for content has been a thorny issue - surfers loathe registering for access to newspaper archives online, much less paying for it. Google's Adsense program provided a way for sites to have relevant ads to their content appear on the page and in doing so, allowed site owners to earn some handy pocket change too. (Of course, I'm biased here: in the two years I've been running Google Adsense on Spike, its monthly revenue has steadily increased as Google tweak the system to display more relevant ads).

As Battelle has pointed out on his Searchblog, now is a great time to be a publisher on the Net, because there are more and more easy ways of earning cash from content. Blog networks like Weblogs, Inc which earn over $2000 a day from Adsense, or probloggers like Darren Rowse who recently earned $15000 in one month from Adsense, show that there's real money to be made from providing top quality, regular content. Indeed, Battelle has recently launched Federated Media Publishing, which will be teaming up with selected sites to manage matching ads to their content. Battelle, a former editor of Wired and founder of the Industry Standard, is already "band manager" for leading blog BoingBoing, and has considerably increased that site's revenues since coming aboard.

As founder of the Industry Standard magazine and a co-founder of Wired, Battelle has been round the block in both old and new media, and much of The Search's vitality stems from his own hands-on involvement in the industry. There's little of the usual business pomposity about Battelle's prose. Instead, Battelle writes in a lucid and informal style, clearly in command of his material but confident enough to not deluge the reader with extraneous info to demonstrate his research. The Search is, in short, refreshingly bullshit free.

The same can't be said for the future of search engines. With the realisation that the potential of search has only just begun, there are real dangers ahead too. Ownership of personal information is the major concern, with some beginning to see the likes of Google not as a benign info provider but a Big Brother like monitor of all online movements. Criticism of Google's "Don't Be Evil" moral code has also begun, with the company's current leadership of the search field making it walk point for the whole industry. Gaming contextual advertising is also an increasing problem, with clickfraud and spam blogs on the rise, clogging search results with poor quality websites. Each of the engines is working flat out to find ways to counter these emergent problems, and no doubt as they deliver solutions a whole new set of crises will arise; given the industry's flux and mutability, it's hard to imagine a point at which there will be no clouds on the horizon.

For now, though, search remains a huge success story - Google may well be about to have its own stock bubble popped, but the company is profitable and unlikely to be knocked off its leadership perch by Wall Street alone. Yahoo and MSN are moving into the contextual ad field, each looking to get the competitive edge to make advertisers and publishers alike use their particular system. Most importantly, all three are continually trying to find better ways to slice and dice the Database of Intentions to give you what you want quicker, simpler and faster. Google, to my mind, still remains out in front for innovation, constantly testing business boundaries and received wisdom, putting the user experience first and working backwards. In the last five years, it has continually gone its own way and managed to take the industry with it. But Yahoo and MSN and, indeed, people and companies we've never even heard of yet, are not to be underestimated. John Battelle's The Search provides a brilliant illustration that within five years everything in the search world can change absolutely. It has done so already once - it probably will do again.

Sensex 3rd best in Asia in 2005

2006-01-02T13:12:00.000-08:00

STOCK prices remained firm on the last day of the year 2005 with across the board buying pushing the BSE Sensex up 75 points.

BSE Sensex gained 42 per cent in 2005 and S&P CNX Nifty by 36 per cent.

It has been mainly the strong FII inflows and mutual fund buying that kept the bourses at lifetime high levels during the year. FIIs made net investment of Rs 47,181 crore ($10.7 billion) this calendar year and mutual funds invested Rs 11,000 crore between April and December.

India was the third best performing market in Asia this year. South Korea was the best performing market with returns of 54 per cent followed by Pakistan, which gained 53 per cent.

But the year 2005 was of mid-cap and small stocks as they were the best performers. Several FIIs and mutual funds made investments in such companies. Large funds like Templeton and Fidelity was more aggressive in these stocks.

Investors cheered in 2005!

2006-01-02T13:06:00.000-08:00

WHAT a year it was! Just when investors had established a level of comfort with the Sensex at the 6,500-point level, the index once again proved its ability to pull off a surprise by closing out 2005 well past the 9,000-mark. Indeed, 2005 may well go down as a year that confounded investors, analysts and journalists alike. And anyone who had hazarded a guess early in the year that the Sensex would end 2005 within striking distance of 10,000 would probably have been promptly told off to have his head examined.

The split in the Ambani family of Reliance was one of the key events of corporate India in 2005. But, it did not appear to have affected sentiment towards the Reliance Industries stock. Posting a gain of close to 70 per cent over the year, the stock played a pivotal role in powering the Sensex ahead. While Mr Mukesh Ambani got control of flagship Reliance Industries, his brother, Mr Anil Ambani, who got Reliance Infocomm and Reliance Capital, went about the process of setting up his business empire by acquiring strategic stakes in several companies.

The year will also go down as one of large-caps. Unlike in 2004, when mid-caps occupied centrestage, large-caps came back with a bang in 2005. This has also been aided to no small extent by the graduation of several stocks to the large-cap bracket (market cap above Rs 4,000 crore). The number of large-cap stocks has more than doubled in the bull market since April 2003 and is now close to 100. This has played no mean role in attracting higher foreign institutional interest. To put the performance of such stocks in context, returns of the Sensex in 2005 have outpaced those of the BSE 100, BSE 200 and the S&P CNX 500 by five to seven-percentage points.

Gains in the Sensex have not been entirely at the expense of mid and small-cap stocks, either. The newly constituted BSE Midcap and BSE Smallcap indices, which came into effect in April, have posted returns of 42 per cent and 51 per cent since. This clearly suggests that there is still steam left in the mid/small-cap theme. FIIs continued to pour money into Indian equities, investing in excess of $10 billion in 2005; over the past three years, they have invested about $26 billion.

And they have also shown a greater preference for stocks belonging to the mid-cap space, the universe of which has expanded significantly on account of several initial public offerings and the graduation of several small-cap stocks.

A substantial rise in the number of FIIs registered with the market regulator and investments spread across 750 companies reaffirmed that India is indeed a hot destination for such investors.

On the flip side, the performance on the PSU and healthcare index turned out to be a disappointment. While the reluctance to raise fuel prices to mirror escalating costs of crude and the issue surrounding the lowering of government holdings in public sector banks dragged the PSU index down, intensifying competition in developed markets and events in the domestic market such as the transition to MRP-based excise duty and the implementation of VAT led to the healthcare index turning in an anaemic performance.

Cos seek insurance cover for public offerings

2006-01-01T19:35:00.000-08:00

Cos seek insurance cover for public offerings

Radhika Menon

Mumbai , Jan. 1, The HIndu businessLine

WITH the growing interest of FIIs in domestic equity market, several companies going for public issues are opting for a new insurance cover, which would serve as a safeguard against any legal suit for wrong information in the public offer documents.

The insurance cover called `Public Offerings of Securities Insurance (POSI),' also covers claims by the underwriter of the issue.

Some of the companies, which have recently opted for this cover in the country include Jet Airways, Suzlon, NTPC, Punj Lloyd and Sasken Technologies. All these companies raised the money in domestic market.

POSI covers the wrongful acts of a company and its directors arising from the issue of a prospectus. If a company or its directors provide wrong information in the offer documents, the shareholders can file legal suits. Insurance would cover the legal costs incurred in defending civil and criminal proceedings relating to prospectus liability.

The cover also includes claims made by the underwriter or sponsor of the issue, which could arise due to warranties and indemnities given by the company or the directors personally in the agreement with the sponsor.

"The limit of the insurance cover depends on the risk perception of the company, the size of the issue, the business the company is involved in and the route through which capital is being raised," said Mr Praveen Vashishta, CEO, Managing Director, Howden India.

Howden India, an arm of Howden UK, is one of the providers of this specialised liability insurance cover in India.

Mr Vashishta said the cover purchased in India could be in the range of $10 million to $120 million. If a company were going for an ADR issue, exposures to US Securities Laws would attract a higher risk rating and subsequently a higher premium. The cost of the cover is usually 2-4 per cent of the limit of indemnity required.

He said the cover is usually purchased for three years and for a single premium payment and is underwritten by a select group of underwriters at Lloyds and major London Market Insurance Companies.

According to the research done by Howden globally, the allegations that have translated to highest average settlement include "Directors and Officers making false revenue disclosures which require reinstatement ($144 million)" and "Improper accounting practices ($115 million)".

Mr Vashishta said that while in the US and Europe the main source of claims (40 per cent) under liability insurance is shareholders' action, in South-East Asia and India, it is regulatory action that is mainly the cause.

In India, liability insurance accounts for just three per cent of the total non-life premium. This segment generates an annual premium of around $80 million. In the US, however, liability insurance accounts for 70 per cent of the non-life premium.

Performance of Indian Stock Market in 2005

2006-01-01T11:33:00.000-08:00

The year 2005 was clearly euphoric for the stock markets. Will 2006 be another exciting year for the stock markets? Most analysts are bullish about the long and medium term with a consensus to be cautious in the short-run.

The seemingly inexhaustible appetite of the bulls drove stock prices higher and the benchmark indices Sensex and the Nifty broke all earlier records. Some analysts are concerned about the speed with which the indices have risen in 2005. However, they add that the market shows no signs of movement without valuations, indicating the market is valued correctly.

The year 2005 will be remembered for many important milestones. The benchmark indices crossed a number of psychological marks. Sensex crossed both the 8,000 and 9,000 mark in quick succession.

The Sensex, which closed at 6602.69 on December 31, 2004, despite a few small corrections, kept hitting new highs at regular intervals and peaked to a new all-time high of 9,442.98 on December 23, 2005, gaining a mind boggling 2840.29 points almost gaining 43 per cent.

Stocks on an average gained more than 35 per cent in value in 2005, which is the third best in the past 15 years. The markets were driven up by $10 billion flowed in from foreign institutional investors. The year also saw 181 new FIIs enter.

With the bull run which began sometime in May 2003, the Indices has more than tripled. The major factors for this rally have been the earnings growth of over 25 per cent per annum, mergers and acquisitions, better corporate governance and improved regulations.

The year also witnessed a booming primary market with companies, large and small, more than eager to cash in on the upswing. Over Rs 22,000 crore was raised via 45 public issues till mid December in 2005.

Look at the performance of indices and stocks in the year 2005. The major gainers among the indices on BSE are given in the table below.

BSE Indices	30-Dec-05	31-Dec-04	Gain	High in 2005	Low in 2005
BSE Consumer Durable	3271.2	1525.0	115%	3,344.7	1,364.0
BSE Capital Goods	5811.1	3000.7	94%	5,811.1	2,760.4
BSESMLCAP	5943.1	3431.8	73%	6,363.6	3,177.3
BSE FMCG	1647.5	1059.0	56%	1,647.5	1,014.7
BSE AUTO	4256.5	2836.4	50%	4,262.1	2,546.2
BSEMIDCAP	4427.0	3019.2	47%	4,427.0	2,804.5
BSE IT	3742.7	2621.9	43%	3,752.0	2,346.5
SENSEX	9397.9	6602.7	42%	9,397.9	6,102.7
BSE TECk	2445.8	1737.3	41%	2,470.8	1,549.6
BSE OIL&GAS	4410.6	3147.4	40%	4,423.8	2,891.6
BSE-100	4953.3	3580.3	38%	4,957.0	3,287.7
BSE-500	3796.0	2779.7	37%	3,796.0	2,547.8
BSE BANKEX	5081.7	3722.0	37%	5,162.9	3,344.0
BSE-200	1186.2	886.6	34%	1,186.2	810.6
BSE PSU	5393.8	4425.7	22%	5,409.6	3,950.6
BSE METAL	6485.2	6210.4	4%	7,135.4	5,279.2
BSE Health Care	3114.9	3058.7	2%	3,147.8	2,426.1

S & P CNX Nifty	2836.6	2080.5	36%	2,857.0	1,894.4

Among the major stocks on Sensex and Nifty the gainers and losers of 2005 are given below.

Sensex Stocks	Closing Price (30-Dec-05)	P/E	EPS	Closing Price (31-Dec-04)	Price Gain
Toppers
Larsen & Toubro Ltd.	1844.2	32.9	56.1	982.0	88%
Bharat Heavy Electricals Ltd.	1386.3	28.0	49.4	769.9	80%
Satyam Computer Services Ltd.	737.8	28.2	26.1	409.9	80%
Bajaj Auto Ltd.	2000.8	22.9	87.4	1131.5	77%
Reliance Industries Ltd.	889.7	13.5	65.8	533.8	67%
Laggards
Hindalco Industries Ltd.	143.4	11.9	12.1	1426.8	1%
Gujarat Ambuja Cements Ltd. (*)	79.6	23.8	3.4	401.6	-1%
Tata Steel Ltd.	380.3	5.6	68.1	385.5	-1%
Wipro Ltd.	463.5	39.7	11.7	748.0	-38%
Ranbaxy Laboratories Ltd. (**)	362.4	65.6	5.5	1251.4	-42%
(*)Face value changed from Rs 10 to Rs 2
(**)Face value changed from Rs 10 to Rs 5

Nifty Stocks	Closing Price (30-Dec-05)	P/E	EPS	Closing Price (31-Dec-04)	Price Gain
Toppers
Dabur India Ltd.	210.5	36.5	5.8	93.0	126%
Tata Tea Ltd.	948.4	33.6	28.2	473.3	100%
A B B Ltd.	1929.0	42.0	46.0	970.1	99%
Larsen & Toubro Ltd.	1844.2	32.9	56.1	982.0	88%
Bharat Heavy Electricals Ltd.	1386.3	28.0	49.4	769.9	80%
Laggards
Steel Authority Of India Ltd.	54.0	3.5	15.6	62.6	-14%
Hindustan Petroleum Corpn. Ltd.	328.8	54.2	6.1	400.5	-18%
Oriental Bank Of Commerce	271.1	11.8	22.9	335.3	-19%
Wipro Ltd.	463.5	39.7	11.7	748.0	-38%
Ranbaxy Laboratories Ltd. (**)	362.4	65.6	5.5	1251.4	-42%
(**)Face value changed from Rs 10 to Rs 5

The biggest economic events in 2005

2005-12-28T09:23:00.001-08:00

Now that we are drawing a close to 2005, it normally makes sense to sit back and reflect on the year gone by, the surprises and disappointments of fascinating 12 months.

In that sense 2005 was an important year with its share of milestones and firsts as it marked a year wherein we saw a coming of age and maturing of the Indian capital markets. Some of the major events and issues of the year as I saw are as follows.

2005 saw a continuation of the roaring bull market, which began around March 2003. The Indian capital markets have more than doubled over the past 30-odd months (with market capitalisation up even more), surprising even the staunchest bull.

FIIs have rediscovered our markets with a vengeance, pouring in over $10 billion in 2005 after pumping in over $8 billion in 2004.

Towards the end of 2005, even the domestic investor base began to join the party, as flows into mutual funds surged in the last six months of the current year.

A major development was the broadening of flows into the country as Japanese investors for the first time participated in the India story in a big way with more than $3billion of India-dedicated funds raised in Japan alone. To cater to this new-found love for India, Indian companies like Infosys and ICICI even had special carve-outs for Japan in their international fund raisings.

India also made the grade as far as business economics goes as the Indian operations of most international brokerages became either their most profitable in Asia or right up there ranking just after Korea.

2005 also marked the coming of age of corporate India in terms of gaining confidence and moving overseas. The number, breadth and size of overseas acquisitions were unprecedented.

The Tata group alone did deals (overseas acquisitions) of over a billion dollars in 2005.

Not so long ago corporate India as a whole would have done less than this figure. The new-found confidence among Indian CEOs is sure to lead to even to bigger deals going forward.

In the IT services/BPO, pharma, and select areas of advanced manufacturing, Indian companies have now reached global scales (at least in terms of market capitalisation) and have the currency and cash to buy whatever they wish. Given the buzz in Mumbai these days, the days of billion dollar deals are not that far away.

2005 also saw the beginning of big-ticket FDI flows into the country. The $1.5 billion purchase of a 10 per cent stake in Bharati by Vodafone comes to mind straightaway as does Merrill buying a 50 per cent stake in DSP for $500 million.

Indian assets have never been more valuable or in demand. The year also saw the announcement by POSCO of a $13 billion commitment on building a steel plant in Orissa (India's largest FDI commitment till date).

Intel, Cisco, and Microsoft have announced multi-billion dollar investment plans in India within weeks of each other and many more such commitments are likely.

Given the number of global MNCs conducting their global board meetings in the country, it is clear that India is finally and firmly on the map and they need to figure out an India strategy.

2005 saw corporate India having unprecedented access to capital. Any decent company had a choice of private equity, FCCBs, domestic IPOs, or could go for an ADR/GDR.

While the top 100 companies did not really exercise this choice, there was significant fund raising among the mid-sized companies, as they had access to capital on terms they could not have dreamed of even 18 month ago.

Companies were able to float offerings and complete them overnight. The long-term implications of this capital raising for heightened competition will be something we need to track in the years ahead.

Private equity came of age in 2005, with the best names in the business either setting up operation (Blackstone, Carlyle) or snooping around for deals from overseas (KKR, Apax, etc).

While no major deals were completed in 2005, highlighting the competition to put money to work, the days of buyouts are not far away. Today at least 6 PE firms in India can write individual cheques of over $100 million, adding a new and significant financing option for Indian companies.

The beginnings of a similar rush into venture capital look to be just around the corner. Many of the best venture capital names from the US have now begun visiting India regularly and in 2006 I would expect at least 3-4 of the big names to set up shop.

Another 4-5 new VC firms are on the road trying to raise funds currently. The entire financing infrastructure of venture capital and private equity is slowly coming into place.

Reforms in 2005 hit a roadblock as far as movement in critical areas of power, PSU divestment, and labour laws was concerned, but the markets did not really seem to care. Such was the love story with India that most investors refused to even contemplate what could puncture their long-term growth expectations.

2005 marked the third year in a row of GDP growth over 7 per cent, and even the most die-hard cynics began to wonder whether India had hit an inflection point. Could 7 per cent GDP growth be the new base?

If yes what are the implications of this higher growth for corporate earnings and domestic demand? One heard the rumblings of reform in agriculture as well, as the smart money began to move in this direction.

If agriculture reform were to be real even 8 per cent growth would not be out of reach. Along with this euphoria around long-term growth rates, we had to contend with the crumbling infrastructure of our large cities as Bangalore, Chennai, and, most famously, Mumbai witnessed a total collapse of infrastructure and lack of urban planning exposed by unprecedented rainfall.

For the first time in 2005 we actually had significant movements of the rupee in both directions, with many a corporate caught out as the initial expectations of a strengthening rupee reversed towards the year-end. Companies can no longer take the rupee for granted in terms of pace and direction of movement.

These are just some of the developments of 2005 that caught my eye, I am sure there are many more. Be that as it may, I think we are poised for a very interesting 2006. Clearly expectations are running very high, and India has to now deliver economic and earnings growth to justify its status as the most expensive market in Asia. Can the markets be up for a fourth year running?

History would not favour such an outcome.

Modus operandi in YES Bank IPO deal

2005-12-28T09:23:00.000-08:00

THE modus operandi adopted in manipulating the YES Bank Ltd (YBL)'s initial public offering (IPO) allotment involved opening of over 7,500 benami dematerialised accounts.

These accounts were with the National Securities Depository Ltd (NSDL) through Karvy Stockbroking Ltd (Karvy-DP). Of the 13 erring entities, the chief culprits identified by SEBI were Ms Roopalben Panchal and Sugandh Estates and Investments Pvt Ltd.

While Ms Panchal opened 6,315 benami DP accounts, another entity Sugandh opened 1,315 benami accounts.

Each of these accounts applications were made for 1,050 shares, paying application money of Rs 47,250 each. By applying for small lots (1,050 shares through each accounts), they misused the retail allotment quota stipulated for IPOs.

The shares allotted in IPO to the benamis of Ms Panchal and Sugandh would have otherwise gone to genuine retail applicants.

The IPO of YBL opened on June 15, 2005 and its shares were listed on the BSE and the NSE on July 12, 2005.

It was observed that Ms Panchal had transferred 9,31,600 shares to various entities in seven off-market transactions on July 11 - a day prior to the listing and commencement of trading on the stock exchanges.

In order to get an allotment of 9,31,600 shares, Ms Panchal would have had to apply for crores of shares involving many crores of rupees in application money.

However, Ms Panchal's name did not appear in the list of top 100 public issue allottees. Thus, it was suspected that Ms Panchal must have made multiple applications or that other applicants were acting as a front for her.

Ms Panchal had applied for only 1,050 shares in the YES Bank IPO, paying the application money of Rs 47,250. And she did not receive any allotment in the IPO. On July 6, Ms Panchal received 150 shares each from 6,315 allottees through off-market transactions aggregating 9,47,250 YBL shares.

Curiously, as per the dematerialised account data furnished by NSDL, of the above 6,315 entities as many as 6,221 entities have a same address in Ahmedabad.

There are three more addresses of locations in Ahmedabad, which have been linked to Ms Panchal. All the 6,315 entities have their bank accounts with Bharat Overseas Bank and demat accounts with Karvy-DP.

By applying for the maximum possible number of shares per applicant while being categorised as retail applicant and by putting in large number of applications in the lot of 1,050 shares, Ms Panchal and her associates (real or fictitious) have attempted to corner the maximum possible number of shares in the IPO allotment.

This tantamounts to an abuse of IPO allotment process, the SEBI order said.

A similar modus operandi was adopted by Sugandh, which received 150 shares each from 1,315 dematerialised accounts aggregating 1,97,250 shares in off market transactions.

According to SEBI findings, Ms Panchal and others booked profits to the tune of about Rs 1.70 crore on the day of the listing of YES Bank shares.

What qualifies for exemption under Section 80C?

2005-12-26T12:18:00.000-08:00

The investments:

1. Contribution to Provident Fund

2. Contribution to Public Provident Fund

3. Payment of life insurance premium

4. Investment in pension plans

5. Investment in Equity Linked Saving Schemes of mutual funds

6. Investment in Infrastructure bonds

7. Investment in National Savings Certificate

The expenditure

1. Payments towards the principal amount of your home loan are eligible for an income deduction.

2. Payments towards the education fees for children are also eligible for an income deduction.

The limit

Overall, the limit under Section 80C is Rs 1,00,000. Unlike Section 88, there are no sub-limits.

This is irrespective of how much you are earn and under which tax bracket you fall.

However, there may be individual limits under each.

For instance, the maximum that you can invest in PPF is Rs 70,000 per annum.

Also, under Section 80CCC, the contribution made to pension funds is subject to a maximum of Rs 10,000.

Barring these exceptions, you can choose to invest the entire amount in ELSS or infrastructure bonds. The choice is entirely up to you as to how you want to reach this limit.

Or, if you are repaying a home loan and the principal repayment amounts to Rs 1,00,000, you can claim the entire amount as a deduction.

Similarly, the deduction for tuition fees under Section 80C is available towards payment of education fees for children upto a ceiling of Rs 1,00,000. However, in order to avail of this deduction, you will have to produce the fee receipt.

The calculation

Let's take an example to better explain the tax working:

Net taxable income	Tax rate
Upto Rs 1,00,000	Nil
Rs 1,00,001 – 1,50,000	10%
Rs 1,50,001 – 2,50,000	20%
Rs 2,50,001 onwards	30%

Salary income: Rs 3,20,000

Home loan interest payment: Rs 1,20,000

Home loan principal repayment: Rs 80,000

NSC investment: Rs 30,000

Salary (a)	320,000
Income from house property (b)*	120,000
Gross total income (c) (c = a – b)	200,000

Home loan principal repayment	80,000
NSC investment	30,000
Section 80C investments	1,10,000

Limit for Section 80C deduction (d)	1,00,000
Taxable income (c – d)	100,000
Tax on taxable income	Nil

* The tax man views the home loan interest payment as negative income from house property.

You don't have a long way to go for the financial year to come to an end (March 31, 2006). So, if you have not already done your tax planning, get cracking.

How to succeed at investment banking...?

2005-12-26T11:23:00.000-08:00

If confidence is the mark of an investment banker, Ashutosh Ghanekar sure fits the bill.

A rather exuberant personality, he is a far cry from Tom Wolfe's 'farcically arrogant investment banker' in The Bonfire Of The Vanities.

While other investment bankers crib about the long hours and the incessant travel, Ashutosh insists that, given a choice, he would never opt for any other profession.

Ask him what he loves about investment banking and his prompt answer: the kick of clinching a deal.

"And, of course," he candidly adds, "the fact that a closed deal rakes in big bucks doesn't hurt."

A chartered accountant by qualification, Ashutosh has worked in Price Waterhouse, Arthur Anderson and Ambit Corporate Finance before moving out on his own.

Late 2002, he tied up with two friends, Vikram Bihani (IIM-Bangalore) and Vinay Shah (MBA, University of Pittsburg), who were also chartered accountants by profession, and set up Mosaic Capital, an investment banking firm.

With a decade of investment banking experience behind him, he gives some advice to MBAs looking for a break in investment banking.

1. Have conviction

An investment banker is a financial advisor to a company. The services he offers include raising money and structuring mergers and acquisitions.

An investment banker will raise money for the company if its promoter approaches him to do so. The company then becomes his client. The investment banker will get a 'success fee', which is a percentage of the money raised. Typically, this fee could vary from 1% to 5%.

Such corporate events, that trigger the hiring of an investment banker, are crucial to the company's evolution and growth. Hence, firms will scout for investment bankers who are passionate about helping them succeed.

If you lack conviction about a company, you certainly can't go out and convince investors to put money in it.

"Be convinced about the deals you are working on," he insists. Else, you will never be able to convince anybody else.

2. Be committed to your job

Investment banking is a high-risk, high-reward profession. It also means a lot of hard work.

It's all about doing a sales pitch, sourcing clients, getting documentation in place, travelling, making presentations, replying to hundreds of e-mails, negotiating and so on and so forth.

Often you will have to pitch for, say, 10 clients before you close one deal.

The process is tedious. But then, it's part of the job.

When Ashutosh and his friends set up the firm, business did not start pouring in immediately. In fact, they did not close any deals in the first two years.

But they just dug in their heels and refused to quit.

They closed their first deal in December 2004 and have, since then, completed several others.

3. Network! Network! Network!

You need to constantly be networking with other professionals, ex-colleagues and business college alumni.

Touch base with them. Keep in touch. This does not mean you have to wine and dine constantly; just let them know you are around. Work at building relationships.

In all transactions, trust is of paramount importance. Your client must trust you implicitly. You are his banker and he will have to open up all his books to you. He can never do this if there is no trust between you.

And trust will not enter the scene if you don't build a relationship.

Interpersonal and relationship building skills are imperative and must be constantly honed. A lot will depend on your ability to communicate with clients and get deals done.

4. Work hard

The hours are undoubtedly tedious. Ashutosh has it much more easier since he runs his own firm and determines his own work hours and travel schedule.

But if you are not that fortunate, be prepared to be constantly on the go. People in sales and such professions too have periods of endless traveling. But, with an investment banker, there is no season. It is an all-around-the-year phenomenon.

On a lighter note, Ashutosh says one has to be prepared to do 'face time' -- an amusing term given to describe the period when you have to hang around the office just because your boss is still there.

"If your boss does not have a life, you too won't have one," he says. "If he is a late sitter, then you have to do face time."

When asked if he does not get sick of "doing face time," the late hours and the ceaseless travel, his answer: "That's why I am out on my own. The solution does not lie in quitting investment banking. The key is not to have a boss."

And the silver lining...

Let's face it.

Nobody goes into investment banking to save the world. The lure of investment banking lies in the money made.

A fresh MBA, with absolutely no job experience, could earn between Rs 3,00,000 to Rs 6,0,000 per annum (the latter if you are from any top-notch business school like an IIM).

This, of course, does not include the bonus that will be solely dependent on the business you bring in; your bonus would be around two to three times your annual salary.

And, of course, when you get to be a seasoned player, you could just keep adding zeroes to the above figures.

The Tipping Point by Malcolm Gladwell : A Book Review

2005-12-10T12:18:00.000-08:00

The Tipping Point by Malcolm Gladwell : A Book Review

Ever wondered how The Da Vinci Code became such a huge success overnight? Or how pedal pushers (or capris as they are better known as) suddenly became a fashion rage all across the world? Malcolm Gladwell provides some answers in his path-breaking book The Tipping Point.

According to Gladwell, “Ideas and products and messages and behaviors spread just like viruses do”. And the specific moment when a virus becomes an epidemic is called The Tipping Point. Citing the example of Hush Puppies, Gladwell explains how the brand, which had almost faded out of malls and shops and was dying a slow but certain death, suddenly became the ‘it’ accessory. He reasons with the reader how a group of teenagers in New York, by wearing Hush Puppies for the precise reason that no one else was wearing them, exposed other people to their fashion sense, or fashion ‘virus’. The virus slowly spread and soon became an ‘epidemic’. This was The Tipping Point for Hush Puppies. The shoes became so popular that they were being embraced not just by ‘cool’ teenagers, but also by fashion designers.

The book goes on to explain three factors, which determine the occurrence of The Tipping Point: The Law of the Few, The Stickiness Factor and The Power of the Context.

The Law of the Few

According to Gladwell, epidemics are the work of a handful of people. Just as a single person with flu can spread the virus to an entire office, a handful of people can spread the virus that starts a social epidemic. These people, through their connections, charm, personality, persuasiveness and expertise, spread the word around.

The Law of the Few identifies these people under three types:

Connectors: These are people who know lots of people. They quite simply ‘collect’ people, like others collect stamps or baseball cards. When something appeals to their fancy, they spread the virus among their acquaintances and friends.

Mavens: Gladwell describes Mavens as ‘data banks’. These are people who are experts on particular subjects. They want to give others the benefit of their expertise and their advice is regarded as helpful.

Salesmen: These are people who have the magical powers of convincing others. They ‘sell’ ideas to others. Few can resist their persuasive skills.

The Stickiness Factor

According to Gladwell, for a virus to spread, the idea has to be memorable, or sticky, in the first place. (For e.g. ‘Looks like it’s gonna rain today’ pales in stickiness to ‘Fire!’) It is however possible to tinker with an idea to make its message sticky. (For e.g. compare ‘XYZ is a great restaurant where food tastes like it is home made’ to just ‘XYZ is a great restaurant’.)

The Power of Context

According to Gladwell, “epidemics are sensitive to the conditions and circumstances of the times and places in which they occur.” (For e.g. If the kids wearing Hush Puppies were in Alaska, instead of Manhattan, the virus, in all probability, would not have started an epidemic.)

This is a book that offers some very persuasive answers to why and how ideas work. The book is radical at times, for instance Gladwell’s views on teenage smoking and the advice to “…stop fighting this kind of experimentation. We have to accept and even embrace it.” The book literally brims over with amazing bits of information such as how the American Revolution began, or origins of the phrase ‘six degrees of separation’. Written in a lucid, uncomplicated manner, the book is a welcome change from confusing theories, complicated equations and dreary business models. The book makes you start guessing about the tipping point of ideas, trends and brands around you, and especially about the tipping point of The Tipping Point.

Welcome !

2005-01-28T06:38:00.000-08:00

Welcome ! to the new site of Ravindra