IndUS Business Journal

Infosys board to face investors’ heat at annual general body meeting

Jun 23, 2017 0

By Fakir Balaji

Bengaluru–The 36th Annual General Meeting of troubled software major Infosys Ltd on Saturday is likely to be stormy, as retail investors brace for a showdown with its board on corporate governance and performance issues.

“The board and top management will face the heat of shareholders, unhappy with the way the company is being run, especially on governance and its performance in 2016-17,” a retail investor told IANS on Friday ahead of the AGM here.

Coming as it does amid board-room battles between promoters and the board, especially Executive Chairman R. Seshasayee and CEO Vishal Sikka on governance and wages, the meet is important in light of the lower revenue outlook for this fiscal (2017-18), tech disruptions and slowdown in the IT industry due to global headwinds.

“You can expect fireworks at the meeting from retail and some institutional investors as the company’s image or brand equity took a beating after co-founder N.R. Narayana Murthy voiced concerns over governance and other issues, which are affecting its operations and business prospects,” said the investor, who did not want to be identified.

Declaring financial results for the last fiscal on April 13, the company gave a lower revenue outlook of 6.1-8.1 per cent in dollar terms for 2017-18 from 7.4 per cent ($10.2 billion) annual growth last year.

In rupee terms, the revenue growth is projected to be 2.5-4.5 per cent as against 9.7 per cent (Rs.68,484 crore) annual growth in last fiscal.

The lower guidance stemmed from flat (0.2 per cent) net profit growth and 0.9 per cent revenue growth in the fourth quarter in rupee terms over last year.

“The bitter fight between the promoters and the board over the last four months has been a major distraction for the company and its stakeholders. There is a trust deficit between the board and promoters and between the top management and employees. The friction will have a bearing on its services and growth prospects,” said another long-term investor, who was also on the board as a director till 2013.

Admitting that Infosys was facing challenges due to uncertainties, slowdown and disruptive technologies, Head Hunters India Managing Director K. Lakshmikanth said though promoters may not confront the board at the AGM to avoid embarrassment, activist shareholders would certainly seek explanations on issues like governance and higher wages for top executives Murthy had raised.

“With a combined 12 per cent share-holding, the promoters are entitled to have one of them on the board as a director. It appears neither the board offered nor the co-founders asked for it to safeguard their interests. Other shareholders and institutional investors may ask the board to appoint any of them for the sake of the company’s welfare,” Lakshmikanth told IANS.

Though the notice for the AGM has four ordinary resolutions, including re-appointment of whole-time Director U.B. Pravin Rao and appointment of auditors, some investors are likely to seek revamp of the board, especially the ouster of Seshasayee as its Chairman for being unable to rein in Sikka.

“There is a perception that Seshasayee is unable to guide the company as he lacks expertise in the IT industry and is not able to control Sikka from profligacy and hiring top executives from other firms at fancy salaries,” said Lakshmkinath, adding that Director Ravi Venkatesan, a former Microsoft India head, was made co-chairman recently to provide leadership to the management team.

While the board has paid a total dividend of 495 per cent or Rs 25.75 per share of Rs 5 face value for 2016-17 and hinted at buyback of the company’s shares during this fiscal up to Rs 13,000 crore ($2 billion), investors are unhappy with its stock price (Rs 943.35 on Friday) at a three-year low. (IANS)

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India puts Cartosat, NIUSAT, 29 foreign satellites into orbit

Jun 23, 2017 0

By Venkatachari Jagannathan

Sriharikota, Andhra Pradesh–In yet another multiple satellite launch, India on Friday successfully put into orbit its own earth observation satellite Cartosat, nano satellite NIUSAT and 29 foreign satellites from 14 countries.

In the process, the Indian Space Research Organisation (ISRO) crossed the double century mark in launching foreign satellites. India started launching foreign satellites in 1999.

The rocket Polar Satellite Launch Vehicle’s (PSLV) main cargo was India’s 712 kg Cartosat-2 series satellite for earth observation with a design life of five years.

This satellite is similar to the earlier Cartosat-2 series.

The other 30 satellites weighing 243 kg were from 14 countries – Austria, Belgium, Britain, Chile, Czech Republic, Finland, France, Germany, Italy, Japan, Latvia, Lithuania, Slovakia, and the US – as well as one Indian nano satellite, NIUSAT.

The whole mission got over in around 23 minutes.

“The mission is successful. All the satellites are in the orbit,” ISRO Chairman A.S. Kiran Kumar said after the launch.

According to Kumar, the Friday mission had many activities that needs fuel and additional margins and hence one should not look at just the total payload carried by a rocket.

He said the next PSLV launch will be for putting into orbit a navigation satellite as a replacement for IRNSS-1A satellite whose three atomic clocks have failed.

Asked about the other upcoming satellite events, Kumar said two communication satellites-GSAT 17 and GSAT 11 will be launched this year.

“Our plan is to have two launches each of GSLV (Geosynchronous Satellite Launch Vehicle) Mark II and Mark III and eight-to-ten launches of PSLV rockets per year,” Kumar said.

He said the PSLV rocket was emerging as a credible satellite launch vehicle in the world and ISRO was trying to build various capabilities in it.

On the GSAT-19 communication satellite launched early this month, Kumar said it had reached its designated orbit and all the payloads had been switched on.

He said that by the end of this month, one more communication satellite will be launched by India.

Kumar said ISRO will continue work on its earth observation, navigation and communication satellites.

According to ISRO officials, the organisation has accelerated the work on developing the semi-cryogenic engine to increase the carrying capacity of heavier rockets geosynchronous satellite launch.

M. Annadurai, Director, ISRO Satellite Centre, said the signals from the satellites launched by the PSLV rocket on Friday were good. He said ISRO’s satellite systems were getting compact.

According to ISRO, the images sent by Cartosat satellite would be useful for cartographic, urban, rural, coastal land use, utility management like road network monitoring, water distribution, creation of land use maps, change detection to bring out geographical and man-made features and various other land information systems and geographical information system applications.

Queried about the strategic use of the images sent by Cartosat, Kumar said the satellite will provide the images and it is for the user agencies to put that to requisite use.

One of the 30 co-passenger satellites is the Indian nano satellite 15 kg NIUSAT belonging to Nooral Islam University, Tamil Nadu.

The satellite will provide multi-spectral imagery for agricultural crop monitoring and disaster management support applications.

Exactly at 9.29 a.m., the PSLV rocket – 44.4 metres tall and weighing 320 tonnes – tore into the morning skies with fierce orange flames at its tail.

Gathering speed every second, the rocket raced towards the sky amidst the cheers of the ISRO officials and the media team at the rocket port here.

The PSLV rocket is a four-stage engine rocket powered by solid and liquid fuel alternatively.

At the rocket mission control room, Indian space scientists were glued to their computer screens watching the rocket escaping the earth’s gravitational pull.

Just over 16 minutes into the flight, the PSLV rocket ejected Cartosat at an altitude of around 510 km. It was followed by NIUSAT and the 29 foreign satellites.

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Indian cabinet approves changes in bilateral agreement with Netherlands

Jun 23, 2017 0

New Delhi– The Union Cabinet on Thursday approved amendment to a bilateral Social Security Agreement (SSA) with Netherlands by incorporating the “country of residence” principle in the said agreement.

India has signed and operationalised SSAs with 18 countries – Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Hungary, Japan, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland and South Korea.

“The amended SSA between India and the Netherlands, when operational from the third month from the date of notifying the said amendment to the Netherlands by India, will strengthen bilateral ties and continue to favourably impact profitability and competitive position of Indian and Dutch companies with foreign operations in either country by reducing their cost of doing business abroad,” an official statement issued here said.

The SSA, which has been in successful operation since June 2010 and has benefitted Indian expatriates in Netherlands, will also help promote more investment flows between the two countries, it added.

Under the new Social Security (Country of Residence) Act, the amount of benefit or allowance paid to a qualified beneficiary (read as Dutch national) is adjusted to the cost of living of the country where the beneficiary is currently residing. (IANS)

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Wayfair Co-Founder Niraj Shah Achieves Billionaire Status

Jun 22, 2017 0

BOSTON —Thanks to surging stock prices, Wayfair co-founder and CEO Niraj Shah has achieved billionaire status, Bloomberg reported. Shah and co-founder Steve Conine’s net worth reached  $1.37 billion each, as of noon Wednesday, according to the Bloomberg Billionaires Index.

“The once-frugal founders of Wayfair Inc. have become billionaires after a revenue surge helped the online retailer’s value rise to a record,” Bloomberg said.

Niraj Shah (Photo courtesy: Wayfair)

Together, Shah and Conine hold 40 percent and nearly all voting rights for the Boston-based online seller of sofas, beds, and a wide variety of other home furnishings.

Wayfair shares have more than doubled this year, the best performance, by far, in the 97-company S&P Retail Select Industry Index, which includes Amazon.com. The stock closed at $75.41 Wednesday, up 1.2 percent.

“Shah and Conine, who met at Cornell University and studied engineering, founded Wayfair in 2002 and stitched together a network of more than 250 stand-alone websites, including EveryGrandfatherClock.com and HotPlates.com,” Bloomberg said. “Almost a decade later, they began to consolidate the sites and set out to build brand awareness. To pay for it, they raised $351 million in venture funding in 2011 and about $283 million in an initial public offering three years later.”

Wayfair’s revenue more than quintupled from 2012 to 2016, to about $3.38 billion, while its net loss more than doubled from 2015 to $194.4 million as the company increased spending on advertising, infrastructure, and international expansion, Bloomberg said.  Analysts surveyed by Bloomberg predict Wayfair will post additional losses this year and next before approaching break-even in 2019.

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GST impact: Customers benefit as retailers get busy clearing stocks

Jun 22, 2017 0

By Porisma P. Gogoi

New Delhi–With less than 10 days to go for the biggest indirect tax reform to take effect, retailers are rushing to clear their stocks by offering huge discounts ranging from around 30 per cent to 60 per cent.

Retailers said the “clearance sale” was being undertaken to liquidate their old stocks since they were unlikely to get input credit on the products once the new Goods and Services (GST) regime kicks in. Also, GST rates, compared to the existing VAT, would be higher.

“Instead of paying that extra amount to the government, which is a loss, we have put up a sale to liquidate these stocks,” Ashish Gupta, Managing Partner at Vijay Sales, told IANS.

Vijay Sales is an electronics goods retailer with many stores in the national capital.

“We are looking at July to be a lean month now. The migration to GST will be happening and because of the price increase, there will be a setback for at least some time to come,” he added.

Players in the field of apparels are also following the same path.

“There are going to be different tax brackets. For apparels, it is five per cent for products below Rs 999 and 12 per cent above that range. We are working towards adjusting to the GST. It will be a teasing stage initially,” said Farida Mahabat, Marketing Head of fashion retail store Splash India.

The GST Council has levied tax on textiles, such as yarn and fabric cotton at the lower slab of 5 per cent, apparels up to Rs 1,000 per piece at 5 per cent while costlier readymade garments would attract 12 per cent rate.

“It will take around a month for everybody to actually understand how the GST system is going to work. Once things settle, we will get an idea of the price increase,” she added.

According to Harkirat Singh, Managing Director of Woodland: “The percentage in our category has come as 18 per cent, since our shoes are normally in the price range of Rs 2,000 and above. If we compare 18 per cent to the taxation before, that is VAT (value added tax) — which averages at about 12 per cent all over the country — the GST rate would be higher.”

Woodland is offering discounts up to 40 per cent. “But since the GST has other parts as well, where you get input credits, the difference won’t be too much. It might increase by approximately one per cent or so, which will be absorbed by the company,” Singh said.

The GST tax rate on footwear costing more than Rs 500 has been fixed by the council at 18 per cent. At present, footwear less than Rs 500 is taxed at 9.5 per cent.

Gupta added: “The prices of goods will increase because, first, the brands will increase their prices. Secondly, the discounts offered now will not be given at that time. So obviously, there is a huge rush of customers right now.”

Singh, however, said there won’t be too much of a difference. “The prices are not really going to change. It’s only the customer’s perception that the prices will go up later,” Singh asserted. (IANS)

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Government will take corrective steps on telecom stress: Minister

Jun 22, 2017 0

New Delhi– Communications Minister Manoj Sinha said “corrective steps” would be taken by the government to ensure orderly growth of the telecom sector, after he met representatives of telcom companies here on Thursday.

“The necessary corrective steps will be taken by the government for ensuring orderly growth in the sector in terms of services to the common man, including in rural areas,” the minister told reporters after the two-hour meeting.

He said an inter-ministerial group (IMG) is examining systematic issues affecting viability and repayment capacity in telecom sector and the panel would soon furnish its recommendations for resolution of stressed assets.

“The telecom service providers discussed the financial stress they are facing. They already had meeting with the IMG. The IMG has been formed to examine the systematic issues affecting viability and repayment capacity in telecom sector and furnish recommendations for resolution of stressed assets at the earliest. The report will come out soon,” the minister said.

Apart from officials of Department of Telecommunication, representatives of the Department of Financial Services and State Bank of India were also present at the meeting.

Representatives of telecom companies Bharti Airtel, Idea Cellular, Reliance Jio, Tata Teleservices, Telenor India and Reliance Communications met the minister and Telecom Secretary Aruna Sundararajan besides other government officials in the ministry.

Among industrialists, Anil Ambani of Reliance Communications, Sunil Mittal of Bharti Airtel and Mahendra Nahata of Reliance Jio were present.

Initially, the company chiefs met Sinha separately. The government had set up the inter-ministerial group which has been holding hearings with all the stakeholders. The group members have already met the main telecom companies, including MTNL and BSNL.

The task of the inter-ministerial group is to examine systemic issues affecting viability and repayment capacity of the telecom sector and furnish recommendations for resolution of stressed assets. It is expected to submit its recommendations within three months.

The group, comprising officials from the finance and telecom ministries, was set up after top banks expressed concern about financial stress in the industry. (IANS)

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How to make it through the great American solar eclipse on August 21 successfully

Jun 22, 2017 0

By Mandy Bular

United States of America is going to undergo a historic and a universal event in the most literal sense of meaning as the moon is going to cover up the sun completely making a path of totality over a certain area of America. This is a total solar eclipse basically that is proposed to happen on the 21st of August this year. Quite obviously, there are bubbles of expectations as well as excitements throughout the world as everybody is trying somehow to make it to America in order to view this once in a lifetime event that the cosmos will be gifting us.

Mandy Bular

What’s so special about the path of totality?

Solar eclipses are quite common and keep happening in some part of the world or the other after certain intervals of time but when it comes to a total solar eclipse, the event becomes a little extraordinary in its own way. This happens because the disc of the moon covers the disc of the sun completely and this particular event is not at all very frequent or general thing to happen in the universe. In fact, the cosmic magic has a great role to play in this path of totalitythat occurs after some superb spells of geometry and other sciences that go in the huge universe.

The heavenly bodies especially those of the solar system are in the same line only once in eighteen months when they come together while revolving around in their respective orbits. The orbiting of the moon, the satellite around the earth is at an average of 2, 39,000 miles or roughly around 3, 85,000 kilometers from Earth. Hence, undoubtedly this is a pretty rare phenomenon and one cannot afford to miss a chance of watching the same happen, especially those staying or travelling to US during that time.

Visibility related facts about the total solar eclipse in the US

Apart from the total solar eclipse that will be visible in the periphery of Oregon to South Carolina in the US, there will be a partial solar eclipse visible from some surrounding areas of the US as well. In this case, the moon will be found to cover just a part of the sun and not the complete sun’s disc as is the case of total solar eclipse. Usually, the frequency of occurrences of normal solar eclipses are two to five times per year on an average but total solar eclipse happens after every 18 months and therefore, the path of totality invariably has to be explored at any cost this year!

Places to look out for during the D-day

The main areas of the United States where one can head to for making it count on the day of total solar eclipse are Idaho, Wyoming, Nebraska, Kansas, Missouri, Illinois, Kentucky, Tennessee, Georgia, North Carolina and South Carolina.

(Mandy Bular is a travel and lifestyle blogger. She enjoys writing about various places and topics and has recently taken a fascination with The Great American Total Solar Eclipse, the path of totality and how best to view it.)

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Is India Open for Business: Asks Largest US Manufacturers Association

Jun 22, 2017 0

Washington, D.C.– The National Association of Manufacturers (NAM), the largest manufacturing association in the United States that represents small and large manufacturers in every industrial sector and in all 50 states, has given a poor rating to Indian Prime Minister Narendra Modi’s efforts in enhancing India-US commercial ties and has urged the US government to press India for concrete action.

The Scorecard on India’s business environment shows insufficient progress on many of the same trade and market access barriers that have long troubled manufacturers trying to invest and trade in India. US manufacturers want President Trump and Prime Minister Modi to work together on policies to level the playing field and strengthen the U.S.-India commercial relationship.  The Scorecard is entitled: Is India Open for Business?

The NAM Scorecard report was released ahead of Modi’s visit to the United States this month. Modi is scheduled to meet President Donald Trump on June 26 in Washington, DC.

“In 2014, Indian Prime Minister Narendra Modi pledged a pro-business agenda as he came into office. Since then, Prime Minister Modi has publicly committed to improve the ease of doing business and promote manufacturing in speeches, campaigns, and business engagement. Have these efforts created real progress for manufacturers?” the Scorecard asked. “Resume and expand dialogue with the United States on key commercial issues that are holding back a stronger bilateral commercial relationship,” the NAM Scorecard said.

Narendra Modi

In order to promote a robust U.S.–India commercial relationship, the United States must press India for concrete action, NAM said. Here is the NAM Scorecard and recommendations:

In Progress

  • Streamline onerous licensing and government approval processes that make it more difficult for foreign and domestic companies to do business in India.
  • Quickly and robustly implement critical components of India’s National IPR Policy, including revising and streamlining IP laws and administrative processes.
  • Fully implement India’s immediate commitments under the World Trade Organization’s (WTO) Trade Facilitation Agreement to eliminate non-transparent customs and border practices and set short timelines to implement the remainder of the agreement.
  • Finalize details of India’s nuclear liability pool to provide a clear, predictable environment for foreign nuclear operators to evaluate their ability to invest and operate in the market.

Mixed

Fully open India’s investment environment for manufacturers in the United States, allowing 100 percent foreign ownership across manufacturing industries and eliminating bureaucratic hurdles.

Here are the issues with “X” mark in the NAM Scorecard:

  • Establish and implement a clear process requiring all agencies to institute a mandatory 30-day “notice and comment” period for proposed rules.
  • Reduce current high tariffs—including those that do not align with India’s commitments under the Information Technology Agreement—and avoid imposing burdensome new tariffs on manufactured products.
  • Fully eliminate forced localization rules impacting key manufacturing sectors, such as solar energy, information technology and medical equipment.
  • Fully comply with WTO decisions that ruled against Indian industrial policies, including those in solar energy and poultry.
  • Demonstrate a clear commitment to innovation through policies and practices that allow inventors of all nationalities to register, protect and use their IP in India.
  • Improve trade secret protection in India, making specific, concrete changes to law and practice that build on constructive bilateral dialogue.
  • Address structural barriers that prevent effective IP enforcement in India, including both policy barriers and limited enforcement capacity and political will.
  • Eliminate unwarranted restrictions on cross-border data flows that harm manufacturers and their ability to operate in both the United States and India.
  • Halt recent moves to impose price controls on medical device and pharmaceutical products that have raised major red flags about India’s business environment.

NAM is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12 million men and women, contributes $2.17 trillion to the U.S. economy annually, has the largest economic impact of any major sector and accounts for more than three-quarters of private-sector research and development. The NAM is the voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States.

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Smashbox founder excited for India expansion

Jun 20, 2017 0

Mumbai–Davis Factor, founder of Smashbox — a Los Angeles based cosmetic brand that was launched in India earlier this week, says he is excited to bring the experience of his make-up brand to India.

The cosmetics brand opened its first counter in Sephora in the Palladium Mall here om June 16.

“Namaste India! I’m so excited for you to experience everything Smashbox is — energetic, trendy, creative and colour obsessed. From LA to Mumbai, let’s get this colour story started!” Davis Factor, founder, Smashbox Cosmetics, said in a statement.

The make-up brand is available in Sephora outlets in Mumbai and New Delhi. It will make its digital presence on Nykaa in August.

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India-born Ishan Palit becomes first non-German board member of a German Company

Jun 20, 2017 0

New Delhi–Munich-headquartered safety, quality and sustainability solutions company TÜV SÜD on Tuesday announced the appointment of India-born Ishan Palit as its global Chief Operating Officer.

The German company, in a statement, said this appointment marks the first time in the 150-year history of the TÜV organisation that a non-German executive has been designated as member of the board of management.

Ishan Palit

According to the company, Palit will be responsible for operations and sales across all divisions and geographies, including the German market.

Mumbai-born Palit’s career at TÜV SÜD spans 23 years, including the founding of the company’s India subsidiary in 1994.

He studied in the US and the UK and holds a Bachelors Degree from Davidson College, US, a General Degree in Economics from the London School of Economics, UK, and a Masters in Business Administration from Georgia Southern University, US.

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