'We cannot regulate gas prices'

Two years after it was first constituted, the Petroleum and Natural Gas Regulatory Board continues to move ahead in a patchy manner -- it is inviting bids for 2,800 km of cross-country pipelines and 1,200 km of spurlines next week; it is in the process of fixing tariffs for the Mukesh Ambani-owned Reliance Gas Transportation India Limited pipeline; and will bid out around eight to ten geographical areas for city-gas distribution every month for another two to three years.

And yet, the powers given to it are limited. It can regulate the tariff charged for transporting city gas, for instance, but cannot regulate the overall cost of gas to consumers -- in some of the recent bids it has got, city-gas suppliers have bid a zero tariff for carrying the gas.

Its chairman L Mansingh spoke at length on several of these issues to Sunil Jain, including the controversy over whether his Board was suitably empowered to take decisions in a host of areas. Excerpts of the conversation:

Does the non-notification of Section 16 of the Petroleum and Natural Gas Regulatory Board Act mean you have no powers to regulate over pipelines and city-gas projects?

The government says we have all the powers that are needed and no stakeholder has questioned our powers -- Gail had got an opinion saying we had no power but it too is participating in our bidding process.

But there is an issue in the sense that the petroleum ministry continues to take decisions on 80 per cent of the gas produced in the country today -- this is the Administered Price Mechanism gas.

To give a related example, if the Controller of Capital Issues had not been abolished when Sebi was set up, its functioning would have been affected, wouldn't it? Interestingly, the first para of the government affidavit in the High Court said we had all powers but the second para took this away -- it said we could process applications for pipelines and city-gas projects but could not decide on them!

Some of the bids you're getting for city-gas projects have a zero value for pipeline tariffs. But who's going to ensure the overall gas price for the consumer is not high?

We have the power to do this under Section 11 F of the PNGRB Act. But for us to use this power, the government has to notify products and put them in this section. So far this hasn't been done. Logically, the government could have at least notified those products which are not subsidised as heavily as LPG and kerosene are -- products like naphtha, furnace oil.

But don't worry too much about city-gas pricing. Though we can regulate only the pipeline tariff which is a small part of overall costs, a natural ceiling on prices is the price of subsidised LPG for households. And after the initial problems, all existing city-gas projects will be subject to our regulations, so this will get sorted out. In addition to the pre-existing projects, we've identified 330 more areas and will put up eight to 10 for bidding each month for the next two to three years.

Isn't there the danger of cartelisation in the case of these city-gas projects? Some bidders never bid against each other in city-gas projects.

We have decided that we will accept single bids unless there is clear evidence of collusion. There will be four months of scrutiny which is plenty of time for objections to be made and examined.

The government authorised nine cross-country pipelines before you came into being and the RGTIL pipeline was also in existence before you came up. How will you deal with their tariffs since their costs are a given -- in the case of RGTIL it was hiked many times in comparison with the initial estimates.

Under our Act, all new pipelines have to be competitively bid for. In fact, after the government pre-empted us by approving nine pipelines, I didn't think we'd get the kind of response we've got.

There are already five Expressions of Interest we've got for new pipelines and these will be bid out in the next one week -- the total trunk length of these pipelines is 2,800 km and there are another 1,200 km or so of spurlines.

But this includes parallel pipelines from Kakinada. Why don't we have single pipelines which everyone can access? Why does each producer want to have its own pipeline to carry its product — what happened to the common carrier principle?

The Gail and GSPL pipeline proposals did have a parallel route for 700-odd km -- both opposed each other's proposals on this very ground and RGTIL opposed both saying it could serve the market they were going to serve by building spur lines!

We have a pipeline advisory committee that helps us. My view is that it is not a good idea to correlate supply with what looks like demand very closely -- once the gas is there, the demand will just shoot up and all demand-supply correlation exercises become infructuous. So it's important to be a bit liberal while granting permissions.

But we don't want parallel pipelines, so the Gail/GSPL projects will be combined and bid out and this will not be parallel to RGTIL. (Under the PNGRB way of functioning, companies wanting to set up pipelines can propose them and, after PNGRB has vetted their Expressions of Interest, the proposals are opened up to public bidding.)

How are you going to fix tariffs for already authorised pipelines? The capex is a given, so even if it is gold-plated, you can do nothing. Will you do benchmarking?

We debated this extensively and found that globally tariffs differ widely depending upon terrain. So while we will try and ensure the tariff is reasonable, there cannot be any benchmarking.

The Hazira-Vijaipur-Jagadishpur pipeline, for instance, was built on relatively flat ground, RGTIL's East-West is different terrain. We've hired a consultant who will take a first look at the tariff's reasonableness, then we'll examine his report.

We'll have consultants for each pipeline, and so will be in a position to compare their reports. . . .We've got the affiliate code of conduct in place as well -- the pipeline tariff has to be quoted separately and has to be offered to everyone. It will take us six months or so to fix the tariffs of the existing pipelines.

The tariffs will be reviewed after the first year, and then after every five years. If the tariffs we fix are lower than those being currently charged by various pipelines, the money will have to be refunded to consumers.

Of the nine pipelines authorised by the government in the period between the passage of the PNGRB Act and the notification of the Board, four haven't even started work -- we're taking legal opinion on whether we can bid these pipelines out.

But are you going to ask why pipeline costs have gone up so dramatically? In the case of RTGIL, its tariffs are far higher than what Gail had said it would charge if it was allowed to develop the pipeline.
We have asked companies to give us the documentation to show they've been approved of by the government — this has not been provided. In several city gas projects, for instance, the letters of approval provided to us have a date that is after the board was constituted!

We have also asked the government to give us the details of the approvals and the cost of various cross-country pipeline projects that it approved.

Bharti Airtel Q2 net up 13% at Rs 2,321 cr

The country's largest private telecom company, Bharti Airtel, on Friday posted a 13 per cent rise in net profit at Rs 2,321 crore (Rs 23.21 billion) for the second quarter ended September 30, 2009.

The revenue, as per the US accounting rules, grew by 9 per cent to Rs 9,846 crore, Bharti Airtel said on Friday.

The company's earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved to 42.1 per cent during Q2, against 41 per cent in the same quarter a year ago.

The EBITDA, a benchmark of profitability, was at Rs 4,142 crore (Rs 41.42 billion) in the second quarter, up by 12 per cent over the same period last year.

The company added 82.44 lakh customers during Q2, taking its market share in the wireless subscriber base to 23.5 per cent.

"Bharti continues to maintain the market leadership in the mobile segment, despite stiff competition," Bharti Airtel CMD Sunil Mittal said.

Shares of Bharti Airtel were trading at Rs 315.05 on BSE in morning trade, up 0.96 per cent over the previous close.

Glenmark Pharma net dips 31 percent

A sharp increase in interest costs has caused Glenmark Pharmaceuticals to post a consolidated net profit of Rs 80.9 crore for the second quarter, 31 percent lower than the Rs 117.3 crore for the previous corresponding quarter.

Glenmark's consolidated revenue for the quarter rose 5.5 percent at Rs 590.3 crore, as against Rs 559.7 crore in the same quarter last year.

The company, with a debt burden of about Rs 1,900 crore, had to earmark Rs 45.6 crore as interest costs for the quarter, whereas this was Rs 18.7 crore in the previous corresponding quarter. Depreciation costs also increased from Rs 22.5 crore in the previous corresponding quarter to Rs 36.2 crore. The company had recently raised Rs 400 crore through a qualified institutional placement issue and this will help to reduce interest costs by Rs 7-10 crore in the next quarter, said company sources.

"Sales growth across most regions for the quarter has improved. The India formulations business and the US generics business, the two largest for the group, performed well during the quarter," said Glenn Saldanha, chief executive and managing director.

Sales for the formulation business in India increased to Rs 184.2 crore for the second quarter, as compared to Rs 155.9 crore in the previous corresponding quarter, a growth of 18 per cent. For the second quarter, revenue from Africa, Asia and the CIS region was Rs 80.2 crore, an increase of 14 per cent as against the previous corresponding quarter.

Sales of its US subsidiary, Glenmark Generics, remained flat at Rs 177.1 crore for the second quarter, as against a revenue of Rs 176.1 crore. For the remaining part of the year, Glenmark expects demand conditions to further improve across all operating regions. While the US Generics and the India formulations business should continue to grow, the remaining regions are also expected to register good growth rates, said Saldanha.

RIL Q2 net down 6% to Rs 3,852 cr

Reliance Industries on Thursday reported 6.41 per cent drop in its standalone profit at Rs 3,852 crore (Rs 38.52 billion) for the second quarter of the current fiscal.

The total income rose 5.88 per cent to Rs 47,476 crore (Rs 474.76 billion) during the quarter from Rs 44,839 crore (Rs 448.39 billion) in the corresponding period a year ago, RIL said in a filing to the Bombay Stock Exchange.

"The timely completion of the new SEZ refinery and the deep water, oil and gas K-G D6 block and their safe and stable ramp-up are noteworthy accomplishment for the company.

These projects have contributed meaningfully in RIL achieving a record level of profits despite the challenging business and economic environment," RIL chairman Mukesh Ambani said in statement.

The company's revenue from refining business grew nearly 9 per cent to Rs 39,564 crore (Rs 395.64 billion). On other hand, income from petrochemical business stood at Rs 13,340 crore (Rs 133.40 billion), down by 14.20 per cent.

The revenues from the oil and gas segment, which includes exploration, development and production, more than tripled to Rs 2,937 crore (Rs 29.37 billion) during the period under review.

The company's expenditure on its employees stood at Rs 596 crore (Rs 5.96 billion) in the reviewed quarter, against Rs 605 crore (Rs 6.05 billion) in the corresponding period a year ago.

Retail investors give IPOs the cold shoulder

IndiaBulls Power IPO's charged-up performance (the issue was subscribed 21.84 times) earlier this month had only one jarring note: the retail portion of the initial public offer barely scraped through, with a subscription of 1.09 times.

Similarly, the Oil India issue was subscribed 31 times, but saw nominal retail participation of 1.71 times. Some of the other IPOs such as Raj Oil Mills and Globus Spirits never saw the retail portion being fully subscribed. 

Overall, in the last 12 public offers, the average retail participation was 2.39 times -- a sharp decline from 2007, when the average subscription was 14 times.

Since mid-March, the stock markets has seen a huge rebound, with the Bombay Stock Exchange Sensitive Index, or Sensex, which was languishing at 8,000-levels in the first week of March, more than doubling to 16,000 points in the last six months. 

But the story has not been encouraging for the IPOs that were launched in this boom period. The poor retail participation was also reflected in the performance of the listed companies on their market debut. Oil India, for instance, listed at an almost 3 percent discount.

All the others, including Adani Power, Raj Oils Mills, National Hydro Power Company, Globus Spirits, Pipavav Shipyard listed at less than 10 per cent premiums.

This is in stark contrast to 2007, when companies like Edelweiss Capital and Mundra Port listed at a 75 percent premium. Of 103 companies that listed during that year, 62 listed at a premium of over 10 percent.

Longer extended trading hours in NSE BSE good news for biz channels

With trading hours at stock exchanges set to be extended by two-and-a-half hours, the half a dozen business news channels together will get 20 percent more advertising inventory to sell, possibly resulting in an overall increase of ad revenue by 8-10 percent on an annual basis, say media agencies.

Advertising industry estimates put the ad revenues generated by business channels at Rs 300-350 crore, out of Rs 1,100-1,300 crore generated by the news channels annually.

"This pie may witness up to 10 percent increase on an annual basis once the increased trading hours come into effect," says a senior media planner who buys airtime on news channels.

Currently on the trading days (Monday to Friday) for the entire duration of market hours (9:55 am till 3:30 pm), each of the business channels, including CNBC, NDTV Profit, Bloomberg UTV and ET. Now, get around 90 minutes of on-air advertising time to sell to advertisers. With trading hours set to increase -- 9 am to 5 pm -- the channels will get another 18-20 minutes each trading day.

"The extended trading hours will have a positive impact in the evenings. Now there is a lull in advertisers' presence from 4 pm till around 7 pm. This period will now get reduced. But how much gain in business will happen is only a matter of speculation," says Ajay Chacko, director, business media for TV18.

"Certainly, there would be an increase in advertising time. And there would be willing advertisers who will buy the space -- both on the channels and their websites. But it's difficult to qualify this in numbers," says Sandeep Vij, CEO, DDB Mudra Group.

Currently, the business channels together attract over 300 brands on a monthly basis, including categories like real estate, banking, financial institutions, brokerage houses, airlines and telecom services, among others.

According to industry observers, of all the business channels, only CNBC TV18 (and CNBC Aawaz), NDTV Profit and Zee Business generate a significant revenue from selling on-air inventory. "Ultimately, every business channel will benefit from this move. The results of this will be seen in the next quarter, provided the markets actually extend the trading hours from 9 am to 5 pm as suggested by Sebi," says a senior executive of a business news channel.

Grey Market - Indiabulls Power, Den Networks

Company Name

Offer Price

(Rs.)

Premium

(Rs.)

Indiabulls Power

45

+/- 2 to 3

DEN Network Ltd.

195 to 205

Discount

Astec Life Science

77 to 82

4 to 5

'India, UK should work for reforms in global fin system'

India and Britain have a responsibility to work together for 'long overdue structural reforms' of the global financial system in the wake of recent global downturn, President Pratibha Patil has said.

"We are happy that our two countries, along with the other major economies of the world, have been able to demonstrate the virtue of working together to deal with the global downturn. I believe our two countries have a responsibility to consolidate this process through the long overdue structural reforms of the international financial system," Patil said at a reception hosted for her by London Mayor Boris Johnson Wednesday night.

75-year-old Patil made a strong pitch for making investments in India which, she said, provides enormous opportunities for investment and is ready to assume its responsibilities in this "reformed international system" emerging after the global downturn.

"My visit is taking place at a time when the global economy, which had been confronted by an acute economic and financial crisis, appears to be on the path of recovery," she said.

The President said India offers huge investment potential in diverse sectors like infrastructure, retail, real estate, automobiles, food processing, information technology, knowledge process outsourcing, business process outsourcing, healthcare and telecom among many others.

"In the infrastructure sector alone our investment requirements are expected to exceed $550 billion over the next five years," Patil said.

The President, who is the first Indian head of state to visit United Kingdom in last 20 years, said the British experience of public-private partnership and public sector capacity building would be especially useful to India.

"We look forward to significant investments from the City of London in this sector," the President said.

"The UK is the fourth largest investor in India, while the UK is the second most favoured destination for investment by Indian companies. The Indian companies last year secured more than 20,000 jobs. This is the second highest number of jobs secured by a foreign employer in the UK," she said.

The President said availability of cheap consumer finance has served to increase disposable incomes.

"These factors have generated a growing demand for a variety of quality products and services ranging from home appliances and electronic goods to restaurants, travel, communication and entertainment," Patil said.

India's kerosene stoves a climate hazard: Al Gore

Nobel Laureate Al Gore has warned that black carbon emissions from the kerosene powered lamps and stoves of the subcontinent will adversely impact the great rivers that are the lifeblood of India's agrarian economy.

Keynoting the gala Lighting a Billion Lives reception and dinner in New York recently, the former vice president said, "One of the scientific realities that has become ever more clear, partly as a consequence of the work of the eminent Indian-American scientist Dr V Ramanathan (of the University of California, San Diego's Scripps Institute of Oceanography) is that the so-called black carbon, which is different from the other global warming pollutants, is probably the third largest cause of global warming."

Gore pointed out that black carbon emissions from the subcontinent settle on the ice and snow in the Himalayas, in the foothills and on the Tibetan plateau.

By darkening the surface of all that ice and snow, the emissions cause more of the sun's heat to be absorbed by the ice and snow, tremendously accelerating the melting process. "The great rivers of India -- including the Indus, the holy Ganga and the Brahmaputra -- originate in that ice and snow, thus impacting on the water a large percentage of Indians use both for consumption and agricultural use," he pointed out.

Image: Left to right: John Kerry, member of US Senate; Steven Israel, member of the US House of Representatives; Jairam Ramesh, Minister of State for Environment and Forests; Farooq Abdullah, Union Minister for New and Renewable Energy; Al Gore, former US Vice President; and Dr R K Pachauri, Director General, TERI.

Gore said he was not suggesting that more conventionally recognised causes of global warming -- industrial emissions from the United States, deforestation in Indonesia and Brazil, etc -- did not apply.

He merely intended to point out that the use of kerosene as fuel 'is the proximate cause of a water shortage and the unfolding potential catastrophe that completely defies the human imagination.'

Lauding the shift in emphasis made by Prime Minister Dr Manmohan Singh and Environment Minister Jairam Ramesh, Gore said, "In our world, more global warming pollution anywhere is a threat to the future of civilization everywhere, and we all have to be a part of the solution."

Reminiscing about his decades-long relationship with Pachauri, Gore said, "What Dr Pachauri is doing in leading the scientific community of the entire planet to a realisation of what needs to be done is just fantastic, and in the capacity that brings us here, I am so proud and honored to support enthusiastically and wholeheartedly the Lighting a Billion Lives campaign."

He characterised the initiative as an effort to "transform people's lives and lift their prospects, and simultaneously reduce this deadly global warming pollution".

Gore rounded off a wide ranging speech by citing an old African proverb: If you want to go quickly, go alone; if you want to go far, go together. "We have to go far, quickly," Gore said, "and that's what Dr Pachauri's Lighting a Billion Lives programme is making possible."

New product mix nurses Biocon back to health

Biocon has managed to heal the wound fast. India's largest biotechnology company, which straddles high-end drug research to generics, bet the wrong way on how the rupee will move against the dollar and paid a big price last year.

The company incurred mark-to-market (MTM, marking down securities to reflect current value) losses of Rs 147 crore during FY09, which pulled down net profit by more than four times to Rs 93 crore as against a net of Rs 434 crore during FY08.

"We learned a lot from the blunder we committed last year in terms of hedging. We are out of the speculation game and that's why we are seeing a big turnaround this year," says Biocon CMD Kiran Mazumdar-Shaw.

Biocon has successfully immunised itself from currency volatility this year. The performance in the first two quarters showed a spectacular improvement, after the company adopted a new strategy that involves a currency insuring mechanism, which has helped it do away with MTM losses.

Even as the company was battling a complex hedging process and had to pay the price, its research and growth engine was humming nicely, as more global companies came in to leverage Biocon's expertise.

It is the new approach towards currency protection, coupled with a product-service mix that has put the company's financials back on track. Shaw attributes the turnaround to the company's performance across all sectors.

The company follows a business model wherein there is a balance between products and services. Its research efforts are balanced between generics and novel programmes. It has manufacturing capabilities in both high-end technologies such as biosimilars and small molecules such as statins (cholesterol lowering agents) and immunosuppressants (acting on the body's immune system).

Shaw says the gestation period is over, and the investment the company made in biopharmaceuticals in the past decade is beginning to pay off. The business of insulins and immunosuppressants has been a good contributor to both top line and bottom line. Similarly, the branded formulation business has yielded high returns.

The company, which began as a supplier of API (Active Pharmaceutical Ingredients), now has about 50 brands, mainly in the areas of diabetes, cancer and heart-care. Licensing income is also coming in, and Shaw believes IP (intellectual property) is going to be a big value driver. "We have focused on IP creation and innovation. We have chosen technologically challenging segments like biosimilars, where we think we can differentiate strongly," she says.

Analysts agree. Biocon is indeed aggressively charting its path forward in making diabetes care much easier for millions, as it is attempting to bring in oral insulin, which will do away the painful shots.

Biocon, along with its clinical research and contract research arms -- Clinigene and Syngene -- "is the only company in India that really has the biologics capability at the level and scale required, providing end-to-end high value research services and manufacturing," Shaw says. Given that India is a hub for clinical research, Biocon uses "the low-cost base to make high-end drugs," and aims to be among the top three biosimilar players in the world. Biosimilars or biologics are the approved versions of innovator biopharmaceutical products.

The company is parallely expanding its global footprints through partnerships. Its German subsidiary, AxiCorp, has started getting contracts for marketing insulin products in Germany. Milestone payments have also started trickling in from US-based Mylan Pharmaceuticals, with which the company entered into a partnership for development and marketing of biosimilars. Biocon recently teamed with US-based biopharma player Amylin Pharmaceuticals to develop, commercialise and manufacture peptide therapeutics for diabetes care. The company is beginning to have wider presence in Latin America through partnerships.

Biocon's revenues for the first half of the current financial year have crossed Rs 1,000 crore. "At this rate, we will almost be a half-billion top line company by the end of this year. Given the growth drivers, I am optimistic of reaching the $1 billion mark within four years," Shaw says.

And Biocon's oral insulin reaching late-stage clinical trials in India is being considered a global opportunity. "Oral insulin minimises the risk of hypoglycemia (lower than normal level of blood glucose) connected with insulin overdose. There are hordes of other benefits and we are excited about its potential. It will be the first oral insulin in tablet form. It is a blockbuster opportunity for Biocon, if things work as expected," she says.

There have been some voices of apprehension regarding oral insulin's safety aspects. Whether oral insulin turns out to be transformational for Biocon will be known only by next year, when the results of late stage trials will be out.

Insuring currency pays off

Last year, since there was a prediction that the rupee would strengthen and go down below 39 to the dollar, a number of companies were badly hit by hedging the rupee at a fixed price. Biocon, for instance, covered the rupee at about 41.5. That became disastrous for the company. For, contrary to expectations, the rupee weakened, climbing up to 48 and 49.

So, Biocon decided to insure the rupee this year, instead of hedging at a fixed price. "The insurance mechanism assures that we will get the value of the rupee at the given point of time, even if it goes below the level at which we insured it. And the beauty of this mechanism is that if the rupee weakens, we will get full benefit of it," Shaw says.

The mechanism allows for insuring the rupee by protecting the downside and getting the full benefit of the upside. This comes at a price. Banks charge more premium for insuring the currency. "Most companies want to pay a minimum premium and cover the rupee at a certain level. However, the moment you do forward cover, it is like taking a punt. So, it is worth paying a little more and protecting the volatility. It is a good way of de-risking," she says, adding, that companies are now beginning to see the advantages of insuring the currency.

Shaw says with this new strategy, the company is doing away with the MTM losses in the current financial year. For the first quarter ending June 30, its net jumped almost  four times to Rs 54 crore, and for the second quarter ending September 30, the net was up more than three times to Rs 74 crore, compared with the corresponding quarters of the previous year.

How flexible benefit plans can help employees

Instead of a one-size-fits-all strategy, employees can be allowed to tailor their benefits package to their specific needs, writes Shyamal Majumdar.

A leading multinational company in India had an elaborate healthcare and insurance scheme for its staff as a part of its employee benefits plan. The HR head thought the plan was a winner as it kept employees happy, thereby making the company an employer of choice.

Two things made him change his mind. One, the management woke up to the fact that the company was facing double-digit increases in healthcare costs and premium; and two, internal surveys showed employees, especially the younger ones, weren't too happy with the benefits plan.

The company has since shifted to what is called a flexible benefits plan where the costs are shared between the employer and the employees.

Under the flexible benefits programme, the MNC found that a quarter of employees chose a six-month sabbatical (after five years of service) and profit-sharing as their preferred benefits. And while over half of those over the age of 45 years chose private medical insurance as one of the main benefits they would like to receive, those in the 24-30 age group had a fancy car and a free in-house bar on top of their priority list.

Flexible benefits plans, also called cafeteria plans, are arrangements in which employees tailor their benefits package to their specific needs. Employees can select the benefits they value most and may forgo benefits of lesser importance to them.

Under a flexible arrangement, an employer allocates a specified amount of money to each employee to 'purchase' benefits. In this way, the employers control the amount they spend on each employee for benefits, while the employee selects the benefits. This method differs from a traditional benefits programme, in which an employer offers a standard package with few, if any, choices to employees

The MNC is still in a minority. Watson Wyatt, which recently conducted an employee benefits trends survey across 12 countries in the Asia-Pacific region, including India, found that provision of traditional benefits - under which a similar set of benefits are offered to all employees - is dominant in the Asia Pacific region.

This is despite the fact that such a benefits design has a limitation - employees cannot select the benefits they value the most and are provided with a one-size-fits-all solution. Only 17 per cent of the companies in the survey sample currently provide flexible benefits. The good news, however, is that 20 per cent of the companies are considering implementing it.

In view of the fact that employers spend a substantial amount of money on benefits provision, there is an increasing pressure on HR managers to deliver a more value-effective benefits design.

This is important as China and India stand out as countries that have the highest percentage of companies with a corporate benefits strategy - 84 per cent and 79 per cent, respectively.

The costs in providing such benefits, however, are rising. Flexible benefits is an approach that has the potential to overcome the limitations of traditional benefits as it provides a better control over costs and improves the employee's perception of benefits, Watson Wyatt says.

It is easy to understand why cost should emerge as both a key HR challenge and a driver of benefits provision. Companies in Asia seem to be spending a significant proportion of their payroll on benefits.

Forty per cent of the respondents in the survey spend over 20 per cent of the payroll on benefits, 35 per cent spend 10-20 per cent, while 25 per cent of companies spend less than 10 per cent on benefits.

However, irrespective of what they spend, over 40 per cent of them think that employees undervalue benefits provided to them. More than 55 per cent of the employers in China, for example, think that employees undervalue the benefits provided to them.

This is of course in contrast to countries such as India, Malaysia and Thailand where employees are more positive about the value associated with the benefits - only about one-fourth of employers think employees undervalue the benefits given to them.

The survey brings out quite a few disturbing trends as well. About half the companies in the sample do not provide communication programmes around the total employee reward; few allow employees to choose the benefits they value the most and therefore not surprisingly, the total investment is still not well appreciated by employees.

Watson Wyatt says the economic turbulence has driven companies to make short- and long- term cutbacks in almost every aspect of their operating costs. In many cases, the single biggest business cost is people: Salaries and benefits.

Most companies have responded by implementing salary freezes or containing salary growth. On the other hand, growth in benefit costs remains in double digits and shows no signs of easing, particularly with medical costs continuing to rise.

On top of that, a large number of employees still do not understand or fully value the benefits programme that their companies are providing at a substantial cost.

But if firms that are providing a flexible benefits scheme are compared with those that are providing traditional ones, it is found that it is more common for the former ones to think on their feet.

They have all reviewed their benefits strategy in the last six months and are more positive about the effectiveness of benefits provided. Based on the findings of the Watson Wyatt survey, it can be safely assumed that organisations that have a clearly-defined benefits strategy, effective employee communication programmes around total rewards, and which provide employee choice through flexible benefits are better positioned to manage costs and have greater success in the attraction, retention and engagement of key talent -the most important factor for competitive success.

The Law Society in the UK found that out after it launched a new flexible benefits scheme, called Your Flex with the idea of enabling staff to tailor their benefits to their needs. Making a benefits package more relevant means allowing staff to opt out of benefits altogether if they want to.

You Flex gave staff a 'flex pot' worth 3 per cent of base pay, which could be taken as cash or could be used to buy benefits. Despite the scheme being launched in the middle of a recession, the majority voted with their feet and showed they still value benefits over cash.

Green technologies can be profitable, say global CEOs

The public discourse on climate change has tended to frame the issue as a tradeoff between development and greening; as a choice between generating wealth and creating a less carbon-intensive environment.

With United Nations talks in Copenhagen aimed at negotiating a global deal to replace the Kyoto protocol round the corner, it is the governments and political leaders of the world's nations that have taken centre stage in the discussion.

But one crucial actor missing from much of the climate change conversation is business. If society is to make any fundamental changes in the model of growth, then business must not only be on board but must be a driver of innovation.

So, what does business have to say about the fight against global warming? How is the debate being framed by the wealth generators of society? Can climate change in fact be a money spinner?

Increasingly a number of businesses, both from traditional as well as newer, green-tech sectors, are answering that query in the affirmative. And unlike in the political sphere, the private sector's response reveals a surprising unanimity between operators in the developed and developing world.

A recent report by Dalberg, an international consulting firm, titled 'Champions of the Low Carbon Economy -- Why CEOs are ready for a global climate agreement,' undertook a survey of 40 global companies to conclude that business was eager for the opportunities an ambitious deal at Copenhagen would engender.

Three Indian groups were included: the Tatas, the SUN group and Praj Industries.

The common conclusion of the interviewed CEOs was that fighting climate change could be profitable, but a global deal would be necessary to secure the regulatory certainty required by business to truly commit to a new model of growth.

Pramod Chaudhari, Executive Chairman of Praj Industries, for example, envisioned a "2-3 times worldwide growth (for Praj) in the subsequent four- to five-year period, once a strong agreement and roadmap is in place."

"The energy revolution is one of the greatest economic opportunities of our time," added SUN Group's Uday Khemka. "It will make the tech sector's growth seem like a minor economic boom."

Khemka warned however that "the failure to establish certainty and a price on carbon could result in a categorical disaster, because this could fundamentally undermine the confidence in clean energy investing and move the sector back a generation."

Even companies without a specific focus on the environment underscored the need for a strong climate agreement, often in terms of protecting their customer base. Peter Foyo, who heads the wireless carrier Nextel Mexico, for example, claimed his business interest lay in the fact that, "My customer tomorrow needs to be a healthy person in a healthy world."

The profits of fighting climate change are, moreover, not only a thing of the future. Many companies have already experienced how greening can be good for business. S M Trehan, Managing Director of the Indian power sector heavyweight Crompton Greaves, told the company's foreign subsidiaries survived the financial crisis by converting their manufacturing units to making transformers for wind turbines rather than the thermal power equipment they traditionally focused on.

"Climate change is the business opportunity of the twenty-first century," said Trehan. "We need to focus on renewables and also energy efficiency. The opportunities lie in working out how to lower the losses during electricity transmission." Crompton Greaves is part of the Avantha Group whose other main focus is on thermal power plants.

"If we envision the India of 2040, then 80 per cent of that country is yet to be built," pointed out Richie Ahuja, the Indian representative of the Environmental Defence Fund.  "This begs the question - do we follow the old growth paradigm or do we shift and develop a new growth paradigm that not only creates jobs but in the long run places us at a competitive advantage in the global economy?" Ahuja alluded to the fact that China has already seized the business opportunity inherent in low-carbon technologies.

From being the poster-child for environmental degradation, China has managed to turn its image around in a few short years, primarily because there is money to be made from it.

The country already produces some 50 percent of the world's solar water heaters and nearly a third of the global solar photovoltaic units. The world's largest SPV manufacturer, Suntech, is Chinese.

Suntech's CEO Zhengrong Shi, also interviewed in the Dalberg Report, holds 11 patents and grew his business from a startup to its current size of $2 billion, in just eight years.

The Suntech story has encouraged a slew of companies to join the solar power sector, including Sunvim, a Zhejiang-based textile maker better known for one of the country's popular towel brands.

According to a China Daily report, entire towns in Zhejiang province, the heart of the country's light manufacturing region, are turning from textile production, in which China has long been a world-beater, to polysilicon manufacturing, a key component of the SPV industry.

The report quoted Shen Fuxin, the General Secretary of the Zhejiang Solar Energy Industry Association as saying that the average profits made by companies in the sector were reaching 20-30 percent.

China is also set to become the world's leading manufacturer of wind turbines, with production capacity already at 13 GW, way ahead of the 10 GW by 2010 target set by the government. Chinese firms are aggresively competing in other global, low carbon markets as well, including energy efficient home appliances, and rechargeable batteries.

According to the UK-headquartered Climate Group investment in renewable energy in China -- almost $12 billion in 2007 -- is almost level with world leader Germany as a percentage of GDP.

Pan Jiahua, Deputy Director of the Research Center for Sustainable Development at the Chinese Academy of Social Sciences told that green businesses in China were benefiting from a government that had realised that fighting climate change and economic development could go hand in hand rather than being seen in terms of a trade off.

"At the moment our power is coal based. But this is very dirty and we suffer from terrible pollution. Clean technologies will have a huge, positive health impact. What's more they create jobs," explained Pan.

"Looking at China," EDF's Ahuja concluded, "the question arises: Is this not the story we want to replicate in India based on the local context?"

Crompton's Trehan answers with optimism. "It's just a matter of time. India already has the fifth largest installed base for wind energy. As a business we are bullish on climate change."

How to get out of a debt trap

There are options like loan against property, stocks and life insurance policies, says Neha Pandey.

Mounting debt has become a problem for many. It just takes a few credit card bills, a personal loan, an auto loan and a home loan to make things bad.

Ideally, your total installment-to-income ratio should not be more that 40-50 per cent, but many exceed this limit. Result: They keep on borrowing to retire earlier loans – a classic debt trap.

When overleveraged, it is best to start looking to clean up one's act. This will ensure that the huge debt isn't a drain on your take-home salary. Also, lessening the debt will substantially increase your ability to raise more funds.

Start by targeting the most expensive loan. Mukesh Dedhia, director, Ghalla Bhansali Stock Brokers, said, "By this parameter, credit card loans should be cleared first." In case of credit card loans, one can end up paying as much as 40-50 per cent interest every year. Then come personal loans. Existing rates for personal loans are 14-30 per cent. The interest rates for credit card and personal loans are high as there is no collateral.

Car loans are also expensive but have the cushion of a collateral. One can sell the car if one is desperate for cash. Also, taking a car loan makes sense for businessmen as it gives them the chance to claim depreciation. D Sundararajan, CEO, Trendy Investments, said, "The interest payment for an auto loan is deductible from business income. However, this does not apply to salaried individuals."

Home loans, which are generally the biggest in terms of the amount, need not be paid off as fast as other loans because they provide tax benefits - interest payments up to Rs 1.5 lakh are deducted from taxable income while calculating the tax liability. Also, principal payment of up to Rs 1 lakh is eligible for tax benefits under Section 80C.

Now that the order of repayment has been identified, here's how one can go about it.

Suppose you have Rs 2 lakh credit card bills, a Rs 1-lakh personal loan, a Rs 4-lakh car loan and a Rs 35-lakh home loan. How you go about repaying them? There are various options.

One, use low-interest yielding fixed deposits or sell some investments to retire credit card and personal loans. If this is not possible, take a loan against your life insurance policy.

One can even take a bigger personal loan and pay off credit card and personal loans. In this manner, one can consolidate two high-interest loans into one.

Then, there are cheaper options like taking a loan against property. Most big banks allow you to borrow against property. The amount, in this case, is much higher and can allow you retire credit card, personal and auto loans at one go.

The product works like this. If you own a property worth Rs 45 lakh, the bank will be willing to loan you 40-60 per cent of the value of the property. However, if you have an existing loan on this property, the valuation will be done in a different manner.

Suppose that five years ago, you bought a property for Rs 45 lakh by taking a home loan and its present value is Rs 60 lakh. In such a scenario, the bank will loan you 40-50 per cent of the incremental value.

And then, there is the yellow metal. According to Dedhia, if one urgently needs money, one can keep the gold as a collateral with a bank to raise cash. But in India, most people have jewellery rather than gold bars. This reduces the value of the gold by 10-15 per cent.

India ranks 4th in Asia : CSR disclosure

India has been named among the top five Asian countries who lay heavy emphasis on corporate social responsibility (CSR) disclosure norms, says a survey.

According to social enterprise CSR Asia's Asian Sustainability Ranking, India ranked fourth in the list topped by Australia.

The 2009 ASR list was dominated by Australian companies, with eight out of the top 10 companies analysed coming from there, followed by India, the survey said.

However, the report further said that though there are increasing levels of disclosure in the Asian region, it still is generally poor compared with Europe and North America.

CSR India is a leading social enterprise that focusses on sustainable business practises in Asia. So check out the top Asian nations in CSR disclosure. . .

India: Rank 4

"In India we find surprisingly high levels of disclosure, particularly from large companies with recognised brands such as Tata and Infosys. Leading oil companies also have reasonable levels of disclosure," the report said.

The top 10 companies in India's CSR rankings include Tata Consultancy Services, ITC, Infosys Technologies, Larsen & Toubro, Reliance Industries, Oil and Natural Gas Corporation, Indian Oil Corporation, Bharti Airtel, Steel Authority of India Ltd, and NMDC Ltd.

Indian firms are most transparent in terms of governance, policies and code of conduct. They also provide more information than most companies on issues relating to community impact and development. Disclosure on environmental issues is also relatively high, the report said.

Australia: Rank 1

Australia is the 9th most admired country in the world. It is a developed country with a good record on healthcare, life expectancy, quality of life, human development, public education, economic freedom.

Australian cities routinely top among the world's highest in terms of cultural offerings and quality of life.

Australia is a member of the United Nations, G-20 major economies, Commonwealth of Nations, ANZUS, OECD, and the WTO.

China: Rank 2

China has one of the world's oldest civilisations and is a rapidly developing and influential market economy.

China is the fastest growing major economy in the world. It now has the world's third largest nominal GDP -- 30 trillion yuan ($4.4 trillion). It is a member of the World Trade Organization and is the world's third largest trading power behind the US and Germany.

China's economic objectives were stated in the Three Step Development Strategy of 1987:

• To double the 1980 gross national product and to ensure that the people have enough food and clothing;
• To quadruple the 1980 GNP by the end of the 20th century and
• To increase per-capita GNP to the level of the medium-developed countries by 2050.

People's Republic of China is the largest country in East Asia and the most populous in the world with over 1.3 billion people, approximately one-fifth of the world's population.

Hong Kong: Rank 3

Hong Kong, a self-governing territory of the People's Republic of China, is a global metropolitan and international financial centre, and has a highly developed capitalist economy.

Its highly capitalist economy has been ranked the freest in the world by the Index of Economic Freedom for 15 consecutive years.

Hong Kong is one of the world's leading financial centres. The Hong Kong Stock Exchange is the sixth largest in the world.

Hong Kong's economy was affected by the Asian financial crisis of 1997. The dangerous H5N1 avian influenza also surfaced that year.

After a slow recovery, Hong Kong suffered a setback again because of an outbreak of SARS in 2003. However, today, Hong Kong continues to serve as an important global financial centre. The Hong Kong dollar has been pegged to the US dollar since 1983.

Japan: Rank 5

Japan is the second largest economy in the world, after the United States, with about $5 trillion nominal GDP and third after the US and China in terms of purchasing power parity.

It is home to some of the leading and most technologically advanced producers of motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals, textiles and processed foods.

Japan's main export markets are the US, European Union, China, South Korea, Taiwan and Hong Kong. Japan's main exports are transportation equipment, motor vehicles, electronics, electrical machinery and chemicals.

The island country's service sector accounts for three quarters of the gross domestic product. Japan ranks 12th out of 178 countries in the Ease of Doing Business Index 2008.

Malaysia: Rank 6

This Southeast Asian country consists of 13 states and three federal territories.

Malaysia is separated into two regions, Peninsular Malaysia and Malaysian Borneo, by the South China Sea.

During the late 20th century, this Southeast Asian nation experienced an economic boom and underwent rapid development.

Manufacturing makes up a major sector of the country's economy.

Pakistan: Rank 7

It is the sixth most populous country in the world and has the second largest Muslim population after Indonesia.

It is still an undeveloped nation plagued by high levels of poverty, illiteracy, political instability and terrorism.

The country is listed among the Next Eleven economies and is the world's only Muslim-majority nuclear state.

The Philippines: Rank 8

The Philippines is the world's 12th most populous country, with an estimated population of about 92 million people.

It is estimated that there are about 11 million overseas Filipinos worldwide, equivalent to about 11 per cent of the total population of the Philippines.

Its national economy is the 47th largest in the world, with an estimated 2008 gross domestic product (GDP nominal) of over $168.6 billion (nominal).

Singapore: Rank 9

Since its independence on August 9, 1965, Singapore's standard of living has risen significantly.

Singapore's is an export driven economy and is one of the Four Asian Tigers along with Hong Kong, South Korea and Taiwan.

It happens to be the 5th wealthiest country in the world in terms of GDP per capita.

Foreign direct investment and industrialisation have created a robust economy focused on industry, education and urban planning.

In 2009, the Economist Intelligence Unit ranked Singapore the 10th most expensive city in the world and third in Asia, after Tokyo and Osaka.

The current economic crisis, however, has affected the economy of this island nation to a great extent.

Thailand: Rank 10

Thailand is the world's 50th largest country in terms of area.

About 75 per cent of the population Thai, 14 per cent Chinese and 3 per cent Malay. The rest belongs to minority groups, including Mons, Khmers and other tribes.

Thailand experienced rapid economic growth between 1985 and 1995 and today is an industrialised country with an emphasis on exports. The country has a flourishing tourism industry and houses famous tourist destinations like Pattaya, Bangkok, and Phuket.

How to understand a company’s balance sheet

Any investor wanting to invest in a company should first find out the financial health of the company. A financially strong company would mean that investing your money would ensure its safety and growth.

But how do you determine if a company is financially strong? A company's balance sheet can give you the answer.

Balance sheet is one of the most important and elemental financial statements found in a company's annual report and in other such filings. Here we will understand the fundamentals of the balance sheet, its components in assets, liabilities, equity and their sub-categories.

What is a balance sheet?

Simply put, the balance sheet of a company would give a clear idea to the investors on the company's health as of the date given in it. The balance sheet is a financial statement that basically tells you how much a company owns in the form of assets and how much a company owes in the form of liabilities.

You will also see the different terms in the balance sheet such as net assets, liabilities, stockholders' equity or net worth. The net worth is the difference between what the company owns and what it owes, or simply its equity.

If a company has more assets relative to its liabilities then the company can be considered to be in a good position and as an investor you can invest your money. However, if the company has more liabilities than its assets then as an investor you should carefully analyze the company's current position and future prospects before investing in it.

There are three parts to a balance sheet: assets, liabilities, and equity. Let us briefly see the meaning of these parts.

What are assets?

Assets are the things, tangible and intangible that the company owns and which could give benefits in the future. Broadly speaking, there are two types of assets: current and non-current assets.

There are many sub-categories within these two types of assets. Current assets are divided into cash and cash equivalents, short-term investments, account receivables, inventories and prepaid expenses among others.

Non-current assets are long-term investments, property, plant and equipment, goodwill and other intangible assets among others.

Current assets are those assets of the company that are likely to be exhausted or renewed into cash within one business cycle that is within one year. For instance, the groceries arranged in a supermarket for sales purposes can be called as current assets as these will be sold within the next year.

Non-current assets are all those that are not current assets. As in the above example, the refrigerators used at the supermarket to store groceries can be called as non-current assets as neither they will be exhausted nor converted into cash within a year.

What are liabilities?

As said already, liabilities are obligations owed by the company to its lenders. Like assets, liabilities also fall under two broad categories: current and non-current liabilities.

Current liabilities are the legal obligations which the company is expected to settle within the current year. The supermarket, for example, will get regular supplies of groceries from the wholesaler but might settle the amount only the next month. This is an example for current liabilities.

Non-current liabilities are the money the company will settle in the future or pay over a number of years. For example, the bank loan for a period of time taken by the supermarket developing the business.

What is equity?

From the investor's perspective, equity is the shares owned by the shareholders of the company, hence the name shareholders' equity. But how do you arrive at equity? Equity is the difference between the total assets and total liabilities. Like assets and liabilities, equity is also subdivided into several categories. However, the two biggest of them all are the paid-in capital and retained earnings.

When the stocks of the company was first offered to the public in the form of say initial public offering, the money paid by the shareholders for buying their share of shares is called the paid-in capital. In other words, the paid-in capital is the total amount received by the company on the sale of its shares.

Retained earnings, on the other hand is the total profits made by the company from its operations after deducting dividends paid to the shareholders. It is a cumulative number that is money earned or lost over time. Retained earnings can also be negative to be called 'accumulated deficit' if the company has made a loss over a period of time.

Bengal transfers 533 acres for airport city project

The West Bengal government has handed over the first tranche of 533 acres to Bengal Aerotropolis Projects Ltd (BAPL) for setting up a new airport city project. This is to come up in the Durgapur-Asansol region, of Bardhaman district, at an estimated investment of Rs 10,000 crore (Rs 100 billion).

A 99-year lease agreement has been signed between BAPL and the West Bengal Industrial Development Corporation, under which the premium paid by the company was Rs 44.37 crore (Rs 443.7 million).

The total land requirement for the project is 2,300 acres and acquisition of the remaining area would be completed over the next few months.

"Having already received the clearance from the ministry of civil aviation and attained financial closure for the project, we are in the process of completing the detailed engineering plan for the airport and expect to commence construction from March 2010. The airport will be operational by September 2011," said Arvind Pande, chairman of BAPL, in a statement.

Wong Woon Liong, CEO of Changi Airports International, which has a 26 per cent stake in BAPL, said: "We are happy that the first tranche of land for the project has been handed over and we look forward to continued support from the West Bengal government for the project. This is a significant milestone for BAPL, and Changi is confident that the project will progress on schedule."

This is Changi's first investment in India. They have also signed a technical services agreement under which they are providing advisory services to BAPL in planning, supervising execution and commissioning of the proposed airport.

Liong and Eugene Gan, Deputy CEO, Changi, have been inducted on the BAPL board.

All about block and bulk deals

In 2008, when the stock markets were bearish, many foreign institutional investors (FIIs) and other big investors chose to keep away from the 'block deals' in stocks plunging the trading volumes through such deals by 30 per cent.

However, things changed for good and when the Sensex raised by over 47 per cent since March 2009 the long term institutional investors and minority shareholders have started showing interest to raise funds through block deals. Between January 2009 and February 2009, there were six block deals worth Rs 232 crore. Recently, several big companies like Dish TV, UltraTech Cement, Ambuja Cements and Tata Steel like have carried out block deals to name a few.

But what are these block deals? How does it happen? And why is it being talked about now? How is it different from bulk deal? Let us see.

What is block deal?

According to Securities and Exchange Board of India a block deal is a single transaction of a minimum quantity of five lakh shares or a minimum value of Rs 5 crore and is done between two parties through a separate window of the stock exchange that is open for only 35 minutes in the beginning of the trading hours.

SEBI has also made it mandatory for the stock brokers to disclose on a daily basis the block deals made through DUS or Data Upload Software.

Difference between block deal and bulk deal

Unlike a block deal that happens through a separate window that is open for only 35 minutes in the beginning of the trading hours at the stock exchange, bulk deals happen all through the trading day. Another major difference is that a bulk deal is said to have happened if under a single client code and in a single or multiple transactions more than 0.5 per cent of a company's number of equity shares is traded.

Also, bulk deals are market driven while two parties are required for a block deal to take place. Bulk deals carried out for the day should be revealed by a broker on the same day to the stock exchange using the DUS.

Who can go for these deals?

Generally, only the institutional players including the foreign institutional investors are the major participants in this type of deals. This also includes mutual funds, the various financial institutions, and companies carrying out insurance business, banks, and venture capitalists. Sometimes, many promoters use this window to arrange the issues that are related to cross holdings.
Statutory requirements that must be followed for block deals

SEBI has rules in place certain rules for carrying out block deals. It is mandatory that block deals should happen only through a separate window and for a period of 35 minutes only in the beginning of the trading hours. Also SEBI rules state that block deal orders should be placed for a price not exceeding +1 per cent to -1 per cent of the previous day's closing or the current market price. Delivery must be made for every trade executed and cannot be squared off or reversed. All details like the name of the scrip, the client's name, number of shares and traded price should be disclosed to the public through the DUS every day after market hours.
Interpretation of such deals

Investors often rely upon the block and bulk deals and their movements for trading cues. However, this might not be completely true. A block or bulk deal in a particular scrip doesn't necessarily mean that the stock price of the specific stock will increase as there are buyers and sellers involved in every deal. Understanding the profiles of the institutions involved in the deal and their strategies is required. However in case of bulk deals happening on a continuous basis in a counter or share with high volumes and high pending shares it could be a sign of appreciation in price in the future. Yet this could also happen in an operator driven counters.

So the block or bulk deals can be considered only as a first level of investigation and an investor before investing in a share should look for more details like specific information about the company like its fundamentals, its performance and ranking in its industry, and its future plans and prospects.

Asia recovering rapidly; but challenges remain: IMF

The economic recovery in Asia is faster than the rest of the world and is projected to grow by 5.75 per cent during 2010, says the International Monetary Fund.

"The region (Asia) is out pacing other parts of the world, with the "green shoots" of recovery appearing earlier and taking firmer roots than elsewhere," the IMF said in its regional economic outlook on Thursday.

IMF forecasts suggest Asia will grow by 5.75 per cent in 2010, higher than the 1.25 per cent predicted for the G-7 economies, but short of the 6.66 per cent average recorded for the region over the past decade.

"Asian economies have been very strong in their stimulus from both monetary and fiscal sources," IMF Asia and Pacific department director Anoop Singh said.

Pointing out that Asia's outlook would be closely tied to the global economy, the report, however, warned that the continued weak global demand would have a considerable impact on the region's future growth because of heavy dependence on exports.

"Asia has boomed as America's consumption outpaced its income. If over the coming decade, US consumption slows markedly, the impact on Asia's growth could be sizeable," the report warned.

It added that over the longer-term, Asia's future prospects would depend on the region's success in allowing domestic sources to play an important role in promoting growth.

'China should be India's economic partner, not rival'

A high-level delegation from Chengdu, China's IT and outsourcing capital, is in Bangalore to promote investment in China. The team also aims at exploring an opportunity to work with the Indian IT and outsourcing industry.

Victor Johan Jansson, Vice President of Chengdu Tianfu Software Park Co Ltd and a core member of this Chinese delegation, said that the Chinese government will invest a total of $590 billion in infrastructure in 2009.

Jannson said that China is a land of opportunities and an excellent country to invest in.

Why should Indian companies invest in China and what are the attractions that are not available in other investment hot spots?

China is a land of opportunities and an excellent country to invest in. The reasons for investing in China are many.

• Large pool of talented engineers, especially in the research and development space.
• Low operation costs.
• Excellent infrastructure: The government will invest a total of RMB 4 trillion ($590 billion) in infrastructure in 2009, more than any other country in recent years.
• Mature business environment. China already has 30 years of opening up to businesses.
• Stable social and economical environment.
• Languages: English language skills are rapidly improving. The language is now taught at all levels starting from kindergarden or primary school.
• Large number of people speak Japanese and Korean since there are strong language affinities with Chinese. Also it is easier for a Chinese person to learn Japanese or Korean compared to a Western person.
• Favourable policies: The Chinese central government is pushing for the development of  IT and service industry. The government wants to turn into a greener economy, as opposed to an economy based on a manufacturing. It wants to move from 'made in China' to 'innovate in China'.
• Large domestic market. (Three of the top 10 banks in the world are headquartered in China).

Reasons to invest in Chengdu:

• Very efficient government. It knows how to deal with foreign invested enterprises and is fully dedicated to the development of the IT and service outsourcing industry
• Low operation cost in comparison to coastal cities such as Shanghai and Beijing (human resource cost is 30 to 50 per cent lower, while rental offices are at least 50 per cent cheaper).
• International city: It has13 five star hotels (including Intercontinental, Sofitel, Sheraton), sixth largest airport in China in terms of passengers volume, 31 international flight connection, 9 foreign banks with presence in the city (including HSBC, Citibank, OCBC, Standard Chartered), 134 'global 500' companies (more than any other 2nd tier cities in central and west China), international schools such as Leman International School.
• Good living environment. Chengdu has been ranked as one of the most suitable locations for living in China.
• Stable labour force with an attrition rate of about 5 to 8 per cent (reason: housing prices are much lower than prices in first tier cities such as Shanghai, so people do not not consider changing companies for salary increase. Average price in Shanghai: $165 per square feet, whereas in Chengdu it is $50).
• Well developed IT and electronics industry (Intel, Motorola, IBM, Accenture, Symantec, SAP, Alcatel-Lucent have operations in the city).

Given that China and India are considered economic rivals, doesn't it go against India's interests?

China should be an economic partner and not a rival. For example, China is the most suitable location to set up centres to back-up operations in India because with India, China has the largest talent pool in the world.

Also, IBM, Accenture, BT are all setting up back-up operations in China. Indian companies can also offer more solutions to their customers that way.

Indian hi-tech companies have developed technologies and products that can meet a demand in Chinese market.

How many companies have established operations in China? Who are the new ones? What is the kind of money they will be investing in the Dragon?

For the past 6 months the following companies have set up back-office operations in Chengdu: Accenture (500 seats), Wipro (1,000 seats, first phase), Alibaba (one building), DHL (800 seats, first phase), Maersk (1,500 seats within 1.5 year), Siemens, VXI (1,000 seats).

Is the atmosphere conducive to do business with India currently, given the border dispute between the two countries?

We have not seen border disputes affecting Indian businesses in China. In fact, Wipro set up an operation in Chengdu in May 2009 and NIIT in June 2009.

How is it doing business with India compared with other nations?

Since first establishing in China, Indian service providers (Infosys, Wipro, HCL, etc. . .) have not expanded as quickly as expected. This is quite unlike companies from the United States and Europe such as IBM, Accenture and HP, that are doing well in our country.

The reasons why Indian companies have not been as successful as expected are:

• There is no -- or very little -- localisation of management (staff is mostly from India).
• Cultural gap.
• Little brand recognition of Indian companies in China, which makes is harder to attract talent.
• Lack of reach in tier-2 cities (still mainly located in Shanghai/Beijing where competition is the hardest).
• Few partnership strategies, weak government relations and conservative investment strategies.

Will India have an advantage over other countries while establishing operations in China?

There will be no special incentives for Indian companies setting up in China and Chengdu. India will be treated like any other country.

Check out the world's 1st Android 2.0 phone

It's a pint sized power plant. Location aware. Voice recognising. App-mashing and multitasking. It can connect at breakneck speed. Power and intelligence can be more than a phone... It's Droid from Motorola, the world's first Android 2.0 phone.

Er...what is Android? Well, to put it simply, Android is a flexible software platform, or mobile operating system, designed to deliver a personalised and customisable user experience on mobile devices. It was first designed by Google.

How is Android different?

Compared to many existing platforms, Android is truly open to continued innovation and new experiences. This is because independent developers have almost unlimited access to the platform, so they can develop applications never seen before. End users will enjoy a much greater choice of mobile applications to enhance email, texting, Web browsing, music, camera and calling capabilities.

Android will serve as the operating system on many of Motorola's future handsets.

Media reports quoted Verizon's chief marketing officer John Stratton as saying that the price of the Droid is set at $199, with a two-year contract and a mail-in rebate.

However, no information is available on its launch date or price in India.

Read on to find out more about this amazing gadget. . .

The web is richer. Photos are sharper. Videos pop.

It has the most advanced Google browser and Android 2.0 software with a blazing-fast processor and 3G speed for faster search.

It has the world's thinnest QWERTY slider at 13.7mm. It can help you navigate turn-by-turn. It has a 5MP camera with a flash, plus loads of great camera features and a DVD-quality recorder to capture all the richer, bigger, wider experiences you're going to have.

Search and find: Tell Droid what you're looking for using voice-activated search and it will serve up both your contacts and Google Web search results based on your location. Want more? Simply type into the search bar and Droid will search your apps, contacts, browser, music and even YouTube.

Pocket camera: Take stills and videos with the 5MP camera with flash, zoom and auto-focus and DVD-quality video recorder.

Mails: Both Gmail and Exchange emails (Microsoft's Exchange server that resembles Outlook) are pushed directly to your inbox.

It's clutter free: Droid's status bar acts as your personal dashboard, so that new messages, emails, sync alerts and more show up as organised icons. Pull down the expandable notification panel to see what you want to see, when you want to see it.

Go anywhere, everywhere: With Google Maps Navigation Beta, DROID gives you spoken turn-by-turn directions, and your route overlaid on Google Maps Street View.

No wonder Moto proudly claims, it's the phone with the "Hi" IQ.

General specifications:

• Android (2.0) operating system
• CDMA 1X 800/1900, EVDO rev. A

Image:

• Slider camera: Image stabilisation, real-time colour effects, scene modes, and location tagging
• Megapixels: 5 MP
• Digital zoom: 4x
• Flash: Dual LED
• Focus: Automatic

Music and video enabled:

• Music player
• DVD quality (720x480 resolution)

Power:

• Up to 385 min.
• Usage type (Continuous)

Emails:

• Corporate (Exchange 2003 and 2007), Gmail, IMAP, POP3, Attachment and browser document viewer (Microsoft Office and pdf)

Multimedia messaging:

• Predictive text
• Text messaging
• Instant messaging
• Google Talk
• Image file formats: BMP, PNG, GIF, JPEG
• Voice mails: Standard voice mail, Verizon Visual Voice Mail

Accessory compatibility:

• Headset jack: 3.5 mm
• Hearing aid compatible

Calling:

• Caller ID
• On main display, Picture ID, Ringer ID
• Speaker phone, advanced speech recognition
• Automatic redial
• Conference calling
• Group call
• Emergency dialnoise reduction
• Dual microphone noise reduction
• Phone book
• Unified contact list

At 0.54 inch thick, the Droid is slightly bigger than the 0.48-inch iPhone 3GS, but it still has room for a 40-key, slide-out QWERTY keypad.

At just under 6 ounces, it's about an ounce heavier than the iPhone 3GS. When closed, the 4.56-by-2.36-inch Droid is almost the same size as the 4.5-by-2.4-inch iPhone 3GS.

Droid's 480-by-854-pixel display offers 409,920 pixels, more than double the 153,600 pixels that the 480-by-320-pixel, 3.5-inch screen on the iPhone 3GS offers.

The Droid's resolution also compares well against that of Android 1.6-based phones such as T-Mobile's myTouch 3G, which has a 3.2-inch, 480-by-320-pixel display.

Unfortunately, the keyboard is so shallow--and the keys themselves are so flat--that it will take a while to get used to it.
The Droid is also missing physical Talk and End keys, which are pretty much standard on every other cell phone.

Got a fake note by mistake? You still are in trouble!

Picture this. You are in a tearing hurry and you pay off the taxi guy as you reach your destination. He gives you the change, which you hastily dump in your purse and rush. Off you go to a shopping mall to buy something. You pay at the counter with the notes you just got from the taxi guy.

The salesperson looks at one of the notes with suspicion and gives you an eerie look. He checks the note against fluorescent blue light, smells, crushes and lick tests it. Yuck! You say in disgust. He declares it fake and asks you for another one.

Standing agape, you demand he takes it. He threatens to call the police. You run for your life.

You better do!

Rakesh Maria, joint police commissioner (crime), Mumbai City, says: "Possession of fake notes is an offence. One Rs 5 fake note is good enough [to be guilty of possession]." Well, now that you have a fake note in possession, you are already in trouble, technically! So what do you do now?

The legal tangle

With revenge on your mind, you determine to palm off the note to some unsuspecting fellow. In fact, if you think of palming off the note, you are not alone.

A quick dipstick survey shows 98 per cent people would do the same. But you better not do that, either.

Maria says, "It is unfortunate that people palm off fake notes. Palming off a fake note knowingly is also an offence."

You definitely do not want to be caught doing that. In fact, intentionally passing on a fake currency note is a cognisable offence, which could lead to a prison term.

Cursing your fate, you decide to get rid of the bummer right away, but how? A friend who inadvertently received a fake note donated it to a temple. (Another dipstick survey at a few local religious places shows that nearly 20 per cent of donations are in form of either soiled or fake notes.)

That's too low for you to do. Having run out of options, you march to a local bank, hoping to get an exchange.

The brutal truth

A Reserve Bank of India spokesperson says: "According to the RBI, when a customer takes a counterfeit note to a bank, the bank is supposed to impound it and give the customer an acknowledgement receipt."

After impounding the note, they will stamp it 'Counterfeit bank note impounded' and give you an acknowledgement receipt, even if you refuse to countersign the same. You lose your money since a fake note is never paid for but confiscated.

But that's not the end of the story.

The bank will file a First Information Report against your name at the local police station. A copy of this FIR is sent to the Forged Banknote Vigilance Cell at the bank's head office.

The bank will be alert if you try to deposit any fake notes in the future. The police will look into the matter and carry routine investigation in order to get any further leads and zero down on the exact source.

Says Maria: "Crime does not differentiate between class. Even if you are a housewife who inadvertently has a fake note, we can investigate. Once we know that there is no mens rea (criminal intent), we just make a diary entry."

Following the investigation, if you are found to be an inadvertent victim, the matter ends there.

But let's get real! Do you, even as a customer who honestly walked into a bank after being palmed off a fake note, want to face the police?

What if you are planning for studies abroad, or an employment visa? Wouldn't an FIR in your name have a negative influence on visa authorities? "No," says Maria. However, a source from British consulate says: ". . . on verification, things like this may give a wrong impression about you to visa authorities."

Are banks remiss?

Newspapers and news channels have been reporting about ATMs dispensing fake notes. Instances of bank staff diluting authentic currency with fakes have been reported, too.

Take the case of the chief cashier of a State Bank of India branch in Domariaganj, who was caught in the Rs 4 crore (Rs 40 million) fake currency scam. Such instances show that even banks can be a source of fake notes these days.

A cashier in a private bank says on the condition of anonymity: "We get customers who bring in fake notes, claiming that our ATM had dispensed it, but since they can't prove it, we are helpless to do anything about it."

Stories of banks brushing off responsibility, after dispensing fake notes via ATMs, is not uncommon.

The RBI has taken initiatives to deal with the dispensing of fake notes by ATMs. It has asked banks to set up note-sorting machines at all branches. In future, ATMs might be fitted with in-built detectors for fake currency notes.

The apex bank has proposed to introduce plastic notes, and it is common knowledge that improvisation in security features of the notes is an ongoing process.

Data from the RBI show that 398,111 counterfeit notes were detected during 2008-09 at the Reserve Bank's offices and branches alone. It goes without saying that there are many more in circulation and the number will only increase.

The best defence is to be vigilant while handling cash, especially with Rs 1,000 and Rs 500 notes. And of course, pray that you never receive a fake note again!

Yes, we can!

Our individual salvation depends on collective salvation. Thinking only about yourself, fulfilling your immediate wants and needs, betrays a poverty of ambition.

Salvation has come to the battered bulls. After four successive days of losses, Yes We Can look forward to a bright start and hopefully an upbeat close to the week as well. All thanks to the overnight gains on Wall Street, which put up a sterling performance after Q3 GDP growth came in ahead of estimates. The Dow finished up nearly 200 points in the biggest one-day point jump since July 15. European stock indexes too finished with gains. Markets are higher across Asia but lag Wall Street's gains. So, it’s a no-brainer that we will also open with a gap.

Don’t get carried away, as there are still worries on whether the ‘V’ shape recovery can continue without any hiccups. Whatever growth is happening in the economies that were hit badly is largely due to government stimulus. It is not clear as to what will happen once that starts to unwind though the same is going to take place gradually. Real growth, driven by household and corporate demand is yet to return to pre-crisis levels.

Risk appetite is generally good but the recent reversal in FII flows is a cause for concern. Quarterly report card of corporates has been mixed. Barring IT, Auto and FMCG sectors others have not been quite up to the mark. In short, further improvement is required by India Inc. for incremental earnings upgrades to take place.

Indiabulls Power shares will list on he bourses today.

Balrampur Chini and other sugar stocks could be in action amid reports the company's promoters are in talks to sell majority stake.

Results Today: ABB, Adani Enterprise, AB Nuvo, Alstom Projects, Arvind, Ashok Leyland, Aurobindo, BILT, Bank of Maharashtra, Bharat Electronics, Bharti Airtel, Blue Dart, Educomp, Essar Shipping, Gammon India, GSK Pharma, Godrej Consumer, GE Shipping, Gujarat Industries Power, GVK Power, Indiabulls Securities, ICICI Bank, Indiabulls Real Estate, Indian Hotels, IOC, IRB Infra, IVRCL Infra, J&K Bank, KEC Intnl, MTNL, Max India, Moser Baer, Mundra Port, NALCO, Nestle, Oracle Financial, RCF, Reliance Capital, SAIL and Torrent Power.

US stocks rallied on Thursday as a strong report on economic growth in the third quarter reassured investors that the recovery is on track. The Dow Jones Industrial Average gained just shy of 200 points, or 2%, closing at 9962.58. It was the Dow's biggest one-day percentage gain since July 15, and came exactly 80 years after Wall Street's darkest day, the Crash of 1929.

The S&P 500 index added 23 points, or 2.3%, to 1,066.11, managing its biggest one-day percentage gain since July 23. The Nasdaq Composite index climbed 38 points, or 1.8%, to 2,097.55, its biggest one-day percentage gain in about a month.

Gains were broad based, with 29 of 30 Dow stocks rising.

The Dow and S&P ended three of the last four sessions lower, and the Nasdaq declined in all four, as investors turned cautious after a seven-month stock rally. The S&P 500 lost 5% between the rally peak on Oct. 19 and Wednesday's close. Since bottoming at a 12-year low on March 9, the S&P 500 has gained 57.6% as of Thursday's close.

The rally in the financial sector boosted the KBW Bank index by 4%. Commodity shares spiked, with the Morgan Stanley Commodity index up 5%.

GDP grew at a 3.5% annualized rate in the third quarter, the government reported. That was better than the 3.2% rate economists had predicted and also marked the first quarter of growth in a year. GDP fell at a 0.7% rate in the second quarter.

Yet some economists are concerned that when those short-term factors are removed, the recovery could run out of steam.

A separate government report showed that the number of Americans filing new claims for unemployment fell to 530,000 last week from 531,000 the previous week. Economists thought it would drop to 525,000.

Continuing claims, a measure of Americans receiving benefits for a week or more, fell to 5,797,000 from 5,945,000 the week before. Economists thought claims would fall to 5,905,000.

Exxon Mobil said quarterly earnings plunged 68% in the quarter due to lower oil and natural gas prices. The No. 1 US oil company reported weaker quarterly revenue as well. Both earnings and revenue missed estimates. Shares of the Dow component ended little changed.

Dow component Procter & Gamble reported weaker quarterly earnings and revenue that topped estimates. The consumer products maker also boosted the low end of its fiscal 2010 earnings forecast. Shares gained 4%.

With 302 companies, or 60% of the S&P 500 having already reported results, profits are on track to have fallen 17.9% from a year ago, according to the latest results from Thomson Reuters.

The dollar fell versus the euro, resuming its slide after a few up days and moving closer to a 14-month low hit last week. The greenback gained versus the yen.

US light crude oil for December delivery rallied $2.44 to settle at $79.87 a barrel on the New York Mercantile Exchange, a gain of 3%.

COMEX gold for December delivery rallied $16.60 to settle at $1,047.10 an ounce. Gold has surpassed records repeatedly this month due to the weak dollar and longer-term worries about inflation.

Treasury prices tumbled, raising the yield on the 10-year note to 3.49% from 3.41% on Wednesday.

Reports on personal income and spending, consumer sentiment and manufacturing are all due Friday morning. Chevron, Duke Energy, Alcatel-Lucent and Sony are among the corporations reporting quarterly results in the morning.

It was the third straight trading session on the Indian bourses which belonged to the bears. Weak global cues coupled with the latest move by the RBI to tighten liquidity and an upward revision in inflation forecast continued to weigh on sentiments. In addition, meager quarterly earnings announced by select Indian companies further dampened the sentiment. Traders and investors also remained cautious and preferred to square their position ahead of the F&O expiry on Thursday.

Technically, the NSE Nifty which seemed to have found some support at the 50 Day moving average yesterday was unable to hold above the crucial level. The index closed below the vital moving average indicating that the markets would continue to remain under pressure in the coming days.

The BSE Sensex fell 70 points at 16,283 after touching a high of 16,411 and a low of 16,144. The index opened at 16,335 against the previous close of 16,353. The NSE Nifty fell 21 points to shut shop at 4,826.

In Asia, the Nikkei in Japan was down 1.4%, while Australia's S&P/ASX ended lower by 1.4% at 4,685. While, Shanghai SE Composite gained 0.3% and Hang Seng index in Hong Kong fell 2%.

In Europe, stocks were in the negative terrain. The FTSE in the UK was down 1.3%, The DAX in Germany was down 1.4% and the CAC 40 index in France fell 1.3%.

Coming back to India, among the BSE sectoral indices, the Consumer Durables index was the top loser, shedding 2%, followed by the Bankex index that was down 1.5% and the BSE PSU index was down 1.1%.

The BSE Mid-Cap index marginally gained 0.2% and the BSE Small-Cap index was down 0.5%.

Among the 30-components of Sensex, 19 stocks ended in the red and 11 ended in the positive terrain. Bharti Airtel, Wipro, Tata Motors, Reliance Industries and L&T were among the major gainers.

On the other hand, among the major losers were Maruti, Tata Steel, HDFC, ICICI Bank and HDFC Bank.

Outside the frontline indices, the big losers in the broader market were Sesa Goa, Areva Jet Airways and Sterline Biotech. On the other hand, gainers included PTC, Union Bank, Cadila and Apollo Hospital.

Shares of Jet Airways had a volatile ride on Wednesday. After crashing in the early trades, Jet Airways zoomed to higher altitude adding 9% shutting at Rs398.

The stock fell to a low of Rs331 after the carrier posted a net loss from ordinary Activity After Tax of Rs(4.06)bn for the quarter ended September 30, 2009 as compared to net loss of Rs(3.84)bn for the quarter ended September 30, 2008.

Total Income has decreased from Rs32.58bn for the quarter ended September 30, 2008 to Rs23.81bn for the quarter ended September 30, 2009.

Hexaware Q3 net profit stood at Rs413.5mn as against Rs115.1mn in the same period last year. The company’s other income stood at Rs94.3mn versus Rs52mn for the quarter ended September 30, 2008. Hexaware’s Forex loss stood at Rs197.7mn as against Rs246.4mn while its EPS was at 2.79 versus 0.8%.

Shares of Hexaware surgd by over 11% to end at Rs79.85. The stock opened at Rs73 and made an intra-day high of Rs83.60 and a low of Rs73. Total traded volumes stood at 1.7mn shares.

Chennai Petroleum posted a net profit from ordinary activities after tax of Rs1.39bn for the quarter ended September 30, 2009 as compared to Net loss of Rs(1.02)bn for the quarter ended September 30, 2008.

Total Income has decreased from Rs10.29bn for the quarter ended September 30, 2008 to Rs69.85bn for the quarter ended September 30, 2009.

The stock slipped 1.5% to end at Rs220 and made an intra-day high of Rs220 and a low of Rs213. Total traded volumes stood at 0.26mn shares.

Sun Pharmaceutical posted a net profit after tax of Rs2.03bn for the quarter ended September 30, 2009 as compared to Rs3.03bn for the quarter ended September 30, 2008.

Total Income has decreased from Rs9.59bn for the quarter ended September 30, 2008 to Rs6.01bn for the quarter ended September 30, 2009.

The Unaudited Consolidated Results are as follows

The Group has posted a net profit after minority interest of Rs4.53bn for the quarter ended September 30, 2009 as compared to Rs5.12bn for the quarter ended September 30, 2008.

Total Income has increased from Rs12.01bn for the quarter ended September 30, 2008 to Rs12.51bn for the quarter ended September 30, 2009.

Sun Pharma advanced by 1% to Rs1377. The stock opened at Rs1350 and made an intra-day high of Rs1399 and a low of Rs1300. Total traded volumes stood at 46,000 shares.

Gail India posted a net profit of Rs7.13bn for the quarter ended September 30, 2009 as compared to Rs10.23bn for the quarter ended September 30, 2008.

Total Income has increased from Rs63.58bn for the quarter ended September 30, 2008 to Rs63.71bn for the quarter ended September 30, 2009.

The stock was down by 1.3% to Rs338, it opened at Rs341 and made an intra-day high of Rs351 and a low of Rs337. Total traded volumes stood at 0.42mn shares.

Shares of BEML slipped by 4% to Rs975 after the company posted a net profit of Rs136mn registering a decline of 75% YoY for the quarter ended September 30, 2009 as compared to Rs555.1mn for the quarter ended September 30, 2008.

Total income has decreased Rs6.35bn for the quarter ended September 30, 2008 to Rs5.05bn for the quarter ended September 30, 2009.

The stock opened at Rs1005 and made an intra-day high of Rs1038 and a low of Rs972. Total traded volumes stood at 20,000 shares.

Tata Tea posted a profit after tax of Rs2.58bn for the quarter ended September 30, 2009 as compared to Rs437.9mn for the quarter ended September 30, 2008. Total Income increased from Rs3.70bn for the quarter ended September 30, 2008 to Rs4.62bn for the quarter ended September 30, 2009.

The Unaudited Consolidated Results are as follows

The Group has posted consolidated net profit of Rs2.87bn for the quarter ended September 30, 2009 as compared to Rs2.17bn for the quarter ended September 30, 2008. Total Income has increased from Rs12.09bn for the quarter ended September 30, 2008 to Rs14.25bn for the quarter ended September 30, 2009.

The stock gained by 1% to Rs840, it opened at Rs837 and made an intra-day high of Rs848 and a low of Rs825. Total traded volumes stood at 36,000 shares.