The World This Week - 22nd Feb to - 26th Feb, 2016

The World This Week - 22nd Feb to - 26th Feb, 2016 from Karvy Private Wealth

The World This Week June 24 - June 29, 2013

The world this week June 24 - June 29, 2013 from Karvy Private Wealth

Economy and Realty at glance- June 2012

GDP at a nine year low of 6.5%, high inflation at 7.55%. Ironically, in the fight between taming inflation and propelling growth, we are losing out on both

- Revenues of top-25 realty companies declined 9.30% in Q4FY12, mainly on account of low sales off-take due to higher prices and higher mortgage rates.

- The Realty Index on Bombay Stock Exchange (BSE) has dropped by more than 26% during the last one year compared to a 10% fall in the Sensex during the last fiscal year. In order to bring back the enthusiasm of the investor community into the sector, real estate companies will have to focus on factors such as improving cash flow position, lowering inventory, reducing debt and increasing profit margins

- RBI in its mid quarter review of monetary policy in June reaffirms that cheap interest rate is a far-fetched expectation in the wake of high inflation rate

- During the March 2012 quarter, interest cost as a percentage to sales stood at 15% compared to only 8% reported during the March 2010 quarter

- Although international crude oil price has declined by 20% since the beginning of the last fiscal year, the price of domestic fuel has gone up because the depreciation in Indian currency against USD by 25% during the same period has made import of crude oil expensive

- The Indian Rupee has depreciated by 18%, 8% and 32% against the British Pound, Euro and Yen respectively. Hence, a stubbornly high inflation rate will defer a lower interest rate regime

Narayana Murthy and Growth of Infosys

Infosys Technologies is one of the few Indian companies that has changed the way the world looks at India. 

No longer is India a land of snake charmers and beggars. It is now perceived as an economic giant to reckon with, bursting with brilliant software engineers and ambitious entrepreneurs. And Infosys is an symbol of India's information technology glory. 

Infosys has many firsts to its name: The first Indian firm to list on Nasdaq; the first to offer stock options to its employees. . . The company crossed $1 billion in revenues for the first time in 2004. TCS, however, was the first Indian IT firm to top $1-bn in revenues.Infosys is an organisation that inspires awe and respect, globally. On July 2, Infosys completed 25 years in existence. This is its amazing success story, illustrated by rare photographs.

The idea of Infosys was born on a morning in January 1981. That fateful day, N R Narayana Murthy and six software engineers sat in his apartment debating how they could create a company to write software codes. 

Six months later, Infosys was registered as a private limited company on July 2, 1981. Infosys co-founder N S Raghavan's house in Matunga, northcentral Mumbai, was its registered office. It was then known as Infosys Consultants Pvt Ltd. 

What was the company's starting capital? 

US $250. Murthy borrowed $250 from his wife Sudha to start the company. The front room of Murthy's home was Infosys' first office, although the registered office was Raghavan's home. 

Who were Murthy's six friends who joined hands to launch Infosys? 

Nandan Nilekani, N S Raghavan, S Gopalakrishnan, S D Shibulal, K Dinesh and Ashok Arora. 

Are all of them still the founding directors? 

Murthy is currently chief mentor and chairman while Nilekani is the chief executive officer and managing director. Gopalakrishnan, Shibulal and Dinesh are directors. Raghavan retired as joint managing director in 2000. He is currently the chairman of the advisory council of the N S Raghavan Centre for Entrepreneurial Learning at the Indian Institute of Management, Bangalore. Ashok Arora worked for the company till 1988 and left after selling his shares in the then unlisted company back to the other promoters. He moved to the United States where he now works as a consultant. 

 

The idea of Infosys was born on a morning in January 1981. That fateful day, N R Narayana Murthy and six software engineers sat in his apartment debating how they could create a company to write software codes. 

Six months later, Infosys was registered as a private limited company on July 2, 1981. Infosys co-founder N S Raghavan's house in Matunga, northcentral Mumbai, was its registered office. It was then known as Infosys Consultants Pvt Ltd. 

What was the company's starting capital? 

US $250. Murthy borrowed $250 from his wife Sudha to start the company. The front room of Murthy's home was Infosys' first office, although the registered office was Raghavan's home. 

Who were Murthy's six friends who joined hands to launch Infosys? 

Nandan Nilekani, N S Raghavan, S Gopalakrishnan, S D Shibulal, K Dinesh and Ashok Arora. 

Are all of them still the founding directors? 

Murthy is currently chief mentor and chairman while Nilekani is the chief executive officer and managing director. Gopalakrishnan, Shibulal and Dinesh are directors. Raghavan retired as joint managing director in 2000. He is currently the chairman of the advisory council of the N S Raghavan Centre for Entrepreneurial Learning at the Indian Institute of Management, Bangalore. Ashok Arora worked for the company till 1988 and left after selling his shares in the then unlisted company back to the other promoters. He moved to the United States where he now works as a consultant. 

 

25 years sheer determination, and growth 

In the last 25 years, Infosys has been growing and growing. 

Today, Infosys is India's second largest software exporter. It now enjoys a strong liquidity position with over Rs 6,000 crore (Rs 60 billion) in assets, including surplus cash. 

During 2005-2006, the Infosys internal cash accruals more adequately covered working capital requirements, capital expenditure and dividend payments leaving a surplus of Rs 1,612 crore (Rs 16.12 billion). 

As on March 2006, the company had liquid assets including investments in liquid mutual funds of Rs 4,463 crore (Rs 44.63 billion). This collectively makes the liquidity strength of Infosys at Rs 6,078 crore (Rs 60.78 billion). 

Where are these funds parked? 

These funds have been deposited with banks, highly rated financial institutions and in liquid mutual funds. Infosys last year derived an average yield of 4.48 per cent (tax free) from these investments. 

The company received Rs 647 crore (Rs 6.47 billion) on exercise of stock options by employees and cash equivalents including liquid mutual funds increased by Rs 1,612 crore during 2005-06.

9 Management Lessons by Dhirubhai Ambani

Dhirubhai Ambani was not an MBA. He just believed in what was happening around and tried to understand the scenario. This management lessons might be theoretically meaningful for some people but practically what he explained was more of what he actually applied. Following are some of the key management lessons he believed:

1. Roll Up your sleeves and Help: Do not wait for the infrastructure to be created to support any operation. Go out and built yourself.

2. Be a safety net for your team: Always be on the side of your company whenever they need you. It is themost crucial part for any organization.

3. The silent Benefactor: Help is called an Help when it is done for the beneficiary of the benefit seeker and not the benefactor. Help and forget.

4. Dream Big but Dream with your eyes open: No work is impossible if you manage it to do with full passion. Whatever you do, do it as if it is made for you.

5. Leave the Professionals alone: Let the professionals do their work. They are well equipped and well deserving. Don't add to their problem and instead contribute by not questioning their ability.

6. Change your Orbit constantly: When you will change orbits, you will create friction. The good news is that your enemies from your previous orbit will never be able to reach your new one. By the time resentment builds up in your new orbit, you should move to the next level. And so on..

7. The arm-around-the-shoulder leader: Be a person who is easily approachable and frank. The person will be able to explain it to you only if you get into his comfort zone.

8. The Dhirubhai theory of Supply Creating Demand: Follow the market and from theer create a chain of supply within yourself.

9. Money is not a product by itself, it is a by-product by itself: Create opportunities and not money. Money will follow if the scope is huge and you built is to your ability.

Business Without Ethics

Gandhiji’s Belief – A Universal Truth In his book Moral Sentiment, which preceded Wealth of Nations, Adam Smith explained how foundational to the success of our systems the moral foundation is: how we treat each other, the spirit of benevolence, of service, of contribution. If we ignore the moral foundation and allow economic systems to operate without moral foundation and without continued education, we will soon create an amoral, if not immoral, society and business. Economic and political systems are ultimately based on a moral foundation.

To Adam Smith, every business transaction is a moral challenge to see that both parties come out fairly. Fairness and benevolence in business are the underpinnings of the free enterprise system called capitalism. Our economic system comes out of a constitutional democracy where minority rights are to be attended to as well. The spirit of the Golden Rule or of win-win is a spirit of morality, of mutual benefit, of fairness for all concerned. Paraphrasing one of the mottos of the Rotary Club, "Is it fair and does it serve the interests of all the stakeholders?" That's just a moral sense of stewardship toward all of the stakeholders.

I like that Smith says every economic transaction. People get in trouble when they say that most of their economic transactions are moral. That means there is something going on that is covert, hidden, secret. People keep a hidden agenda, a secret life, and they justify and rationalize their activities. They tell themselves rational lies so they don't have to adhere to natural laws. If you can get enough rationalization in a society, you can have social mores or political wills that are totally divorced from natural laws and principles.

I once met a man who for five years served as the "ethics director" for a major aerospace company. He finally resigned the post in protest and considered leaving the company, even though he would lose a big salary and benefit package. He said that the executive team had their own separate set of business ethics and that they were deep into rationalization and justification. Wealth and power were big on their agendas, and they made no excuse for it anymore. They were divorced from reality even inside their own organization. They talked about serving the customer while absolutely mugging their own employees.

Ashish Goyal - World's first blind trader

Ashish Goyal, an employee at J P Morgan's London office, has been selected for India's National Award for the Empowerment of Persons with Disabilities, this year. Ashish is the first blind trader to work for a bank and is also the first-ever blind MBA student at The Wharton School in the United States. The award -- highest honor in the country for outstanding individuals with disabilities -- will be conferred on Friday by President Pratibha Patil in New Delhi.

Ashish works for J P Morgan's chief investment officer and is passionate about macroeconomics and the financial markets. He has been feted by his colleagues for 'thriving in a very high pressure environment in these extremely difficult market conditions.' Outside his official assignment, Ashish represented the Metro London Sports Club in 2009 in the United Kingdom's domestic blind cricket league. In his very first year, he became a prominent member of the team contributing to winning the UK league. His friends find it difficult to keep pace with his social life that ranges from theatre, music, charity work to Formula F1, tennis and globetrotting to 'watching' cricket matches.

He began losing his eyesight early because of a condition called retinitis pigmentosa.  Instead of giving up hope, Ashish countered this adversity by focusing his energies on academics. Ashish stood second in his class at Narsee Monjee Institute of Management Studies in Mumbai.

Soon, in pursuit of a career in global financial markets, Ashish came to Wharton in 2006. Not only did he excel in academics by graduating with honours, Ashish became an inspiration in the campus. He was known for leadership and extra-curricular activities.

Today he has proved that strength & courage can overcome all the difficulties.

Source : Rediff Business

Azim Premji sets the best example of Corporate social responsibility

Azim Premji, who cut short his education to look after the family business after the death of his father in 1966, will use a portion of the wealth accumulated in shares of his company, Wipro, to build schools, train teachers, and fund other educational activities.

 Premji, chairman of India’s third biggest IT services exporter, will do this by transferring about 8.6% stake worth over 8,000 crore to a private trust controlled by him. The trust will then use the money to finance the educational initiatives being carried out under the ambit of the Azim Premji Foundation.

What Premji has done is very exceptional and will hopefully set the direction for other industry captains. Instead of selling the shares, Premji has chosen to transfer the shares & has set a very good example of Corporate social responsibility.

The foundation has touched over 25,000 schools and over 2.5 million children since it was set up in 2001 by working with state governments and assisting government-run schools. For the first time, it will now set up and run a few elementary schools on its own.

Source :ET

10 golden keys to a Rich financial future

Be it the affluent pre-retiree, small business owner, corporate executive, or recent college grad, all investors have different needs. To help address those varied and unique needs, over the coming months, Let’s discuss some relevant solutions for supporting long-term financial strategies amidst today's economic environment.
Here are 10 keys to consider when planning your financial future:

1. Start with a budget
Start by listing every category of expense, including housing, utilities, groceries, transportation, medical, clothing, insurance (life, car, home) and any other categories that may apply to you.
Also create a category for savings, so that you are putting away funds every month for your future dreams and goals. A budget will help you track the money you spend and prioritize your expenses.

2. Manage debt wisely
Long-term planning, much like what we do for individuals with established wealth, is an imperative mindset to adopt at a young age. A credit card is a convenient tool in a modern economy, but do not look at it as an unending supply of cash. A prudent strategy is getting a debit card tied to a savings account so that you can never spend more than what you have.

3. Be conscious of your credit rating and score
As you enter the workforce, credit rating companies are keeping track of your credit and payment history. Missed payments can have negative impacts on your ability to secure future credit for the larger expenses in life -- like a home purchase, an automobile or financing a wedding. If you establish good financial management habits early on, you will be more apt to understand the value of making your wealth grow when you have the opportunity.

4. Protect your future with insurance
Secure coverage for your home, automobile and any valuables. Consider signing up for group disability coverage that is offered by most employers.You never know what circumstances life may bring and this will protect you in the event of injury or disability. As your wealth grows, this type of policy can become ever more important as you have more assets that can transfer.

5. Save for the long term
Take advantage of pre-tax plans such as a 401(k) or 403(b) offered by most employers.Set aside a percentage of your pay cheque into these retirement plans.Since all contributions are pre-tax, you cut down your income tax liability and enjoy potential tax-deferred growth until retirement. Many employers also match, to some degree, the contributions you make.

6. Be sensible about risk
As you begin your investing, avoid frequent trading or speculation. Consider utilizing diversified vehicles such as mutual funds, taking a modest approach to grow your wealth. Take a long-term view of investing by adopting an appropriate asset allocation mix. Do not be tempted by short-term trading or market timing.

7. Remember the rule of 72
The rule of 72 is a simple formula to determine the length of time required to double your money. For example, if you were to invest your money at a rate of 8 per cent a year, using the rule of 72, 72 divided by 8 equates that it will require nine years for your investment to be worth double the amount of your original fund.

8. Create a basic will/trust
You may need a basic will and/or trust to help ensure that your assets pass on to your beneficiaries in the event of an untimely death. A trust can be used to transfer property to your beneficiaries. A will requires that you take an inventory of your assets, which may include your investment portfolio, your first house, your retirement plan and funds from your insurance plan.

9. Build equity, not just income
Income does not equal wealth. Only after years of consistent savings and intelligent investing does income grow into wealth. Many companies today offer stock options or stock purchase plans. This is often an excellent way, once you are secure with your job, to become a shareholder in your firm and build equity capital for the long term.

10. Develop your personal business plan for success
Consider yourself to be not just an employee, but the president of your own self-services corporation. In this business plan, list your short and long-term goals for career growth, income, wealth and other metrics.
As the saying goes, 'People do not plan to fail; they fail to plan.’


Source: ET