ca newsletter week may 13th may 19th

8/6/2019 CA Newsletter Week May 13th May 19th

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11 Pages 13th MAY 2011 – 19th MAY 2011 www.xedintellect.com

BUSINESS NEWS

ECONOMIC INDICATORS 2 COVER STORY 3 PERSONALITIES OF THE WEEK 4 BUSINESS NEWS 5-8

INTERNATIONAL NEWS 9 MISCELLANEOUS NEWS 10 GENERAL AWARENESS 11

NEWS DIGEST…

IN BRIEF

PERSONALITIES OF THE WE

COMPILED BY

INDIAN IT INDUSTRY

BSE SENSEX 18,133

NSE NIFTY 5,427

RS/$ 44.98

ECONOMICINDICATORS

India fastest-

growing market for

Kraft Foods

COVER STORY

INTERNATIONAL

NEWS

China Raises

Reserve Ratio 50

Basis Points

MISCELLANEOUS

NEWS

India slips one rank

in world

competitiveness

XED NEWSLETTER… a weekly news bulletin

(as on 19.05.2Mamata Banerjee: Rising Sun on Bengal Horizon



TOP 10 HEADLINES OF THE WEEK

1. India fastest-growing market for Kraft Foods.2. Vodafone nets profit first time in India.3. Tata's Tetley tea brand gets new look.4. Bajaj to launch ‘Duke’ by Dec. 5. Hyundai Motor eyes big on rural markets with small car.6. Unilever launches Knorr noodles in Pakistan, Sri Lanka.7. China Raises Reserve Ratio 50 Basis Points.8. Google takes on rivals with Chrome book.

9. India slips one rank in world competitiveness.10. Burj Al Arab is best luxury hotel in Middle East.

ECONOMIC INDICATORS

EASE OF DOING BUSINESS

World Bank‘s Ease of Doing Business Index assesses the timeand effort required to start, run, and close a business. It Ibased on criteria like ease of obtaining construction permitsemploying workers, registering property, getting credit,paying taxes, and enforcing contracts.

In China it‘s quicker to start a business, get goods from factoryfloor on board a container ship, and register property. But Indiahas more flexible labor laws and fewer hassles with licenses.

SL NO Ease of ….. US 2010 Rank UK 2010

Rank

China 2010

Rank

India 2010

Rank

1 Doing Business 4 5 89 133

2 Starting Business 8 16 151 169

3 Dealing With ConstructionPermits

25 16 180 175

4 Employing Workers 1 35 140 104

5 Registering Property 12 23 32 93

6 Getting credit 4 2 61 30

7 Protecting Investors 5 10 93 41

8 Paying Taxes 61 16 130 169

9 Trading Across Borders 18 16 44 94

10 Enforcing Contracts 8 23 18 182

11 Closing a Business 15 9 65 138

Wealthy countries, no surprise, tend to be business-friendly, whereas most poor countries present formidableobstacles to would-be entrepreneurs.

Stock Market Indices as on 19th May’11 Values

BSE SENSEX 18,133

NSE (NIFTY) 5,427

Current Market Rates as on 19th May’11 Values

Rupee / US Dollar 44.98

Rupee / Pound 72.68



MAMATA BANERJEE: RISING SUN ON BENGAL HORIZON

Mamata Banerjee has come to power with a thumping majority in Bengal. What she inherits is a state that has beenmarred with politics of conflict and violence for decades. It‘s her turn now to f ulfill the promises that she has madebefore elections to see the vision of ‗Sonar Bangla‘ come true.

Reviving Bengal: TMC mentions that focus would be on labor intensive sectors such as textiles, apparel, leathertourism, gems and jewellery and agro based industries. It will initiate process ofrestarting closed public sector units in the state. Where PSUs cannot be revived,land will be used to set up new industries without compromising the rights of the

workers. It will also take up ambitious projects for infrastructure building programwith focus on state highways, rural roads, ports (including deep sea port inSundarbans), power, airports, waterways, dredging at Haldia, irrigation network etc

It assures of creating supportive financial structure for SMEs. They will beencouraged to go from mere raw material production to finished products. TMC hasidentified Darjeeling, Hoogly for apparel and readymade garments; Howrah,Burdawn for engineering goods; Darjeeling, Jalpaiguri for food processing. It wil

also create a collaborative plan with Airport Authority of India for development of Kolkata airport making itcomparable to Delhi, Mumbai airports. It will also demand 50 per cent share in the revenues collected by the Centrefrom the state in the form of income tax and corporate tax. Most importantly it has already demanded the landacquisition act of 1894 be amended suitably to protect the interest of the farmers.

People Mamata can bet on: Amit Mitra, who has for years lobbied for expediting reforms and defended the cause of

corporate India, is now expected to head the state's finance ministry and handle its business environment. He wasalso appointed to the board of beleaguered national carrier Air India to help the airline's management turnaround.Some former IAS and IPS officers have also won as Trinamool Candidates. People like Sultan Singh, Arun Mitra andManish Gupta know more than just a thing about administration. Mamata would do well in exercising their capabilitiesto reform the state.

Bengal all these years: Since 34 years of Left rule 72,000 small industrialunits got shut down. In Hawrah around 12,000 factories have been shutdown. Moreover, the laborers did not receive their provident fund and wages.Apart from the sputtering Haldia Petrochemicals and a clutch of IT projects,the Left has nothing to show. The state's share in the national manufacturinghad dwindled to 2.9% in 2007-08 from 11.5% in 1980-81.

One big reason for the lack of development was political violence in Bengalfrom the late 1960s to the mid-1970s. In 2007, 27 million man days werelost across India, with Bengal alone snatching away 24 million man days, or87% of the total. The imposition of the Freight Equalization Scheme, which put paid to the natural advantage WestBengal had in being close to the raw material sources of the engineering industry also proved to be a fatal blow. Thecombined effect was a steady flight of capital from the state. In the post-liberalization period, 1991 to 2004, industriainvestment in West Bengal accounted for only 4 per cent against 18 per cent in Maharashtra and 16 per cent inGujarat. Foreign Direct Investment flowed in copiously to Maharashtra, Gujarat, but not West Bengal.

Bengal in a fiscal mess: The Left Front government has left West Bengal‘s finances in a shambles with a debtburden of around Rs 2 trillion. The state‘s debt was 42.8% of its gross state domesticproduct in 2009-10, the second highest among the non-special category states afterUttar Pradesh at 43.5%. The state‘s debt-to-GDP ratio is high because West Bengahas a very large fiscal deficit. In 2009-10, the state‘s gross fiscal deficit to gross statedomestic product was 6.7%, the highest among all the non-special category statesexcept Goa, which too had the same fiscal deficit to state GDP ratio.

A third of the state‘s revenue receipts is used to pay interest. Starved of resources,the state government could not do much for development. West Bengal ‘s

development expenditure as a percentage of gross state domestic product in 2009-10 was 9.2% in 2009-10, thelowest after Kerala and Punjab. The lack of resources also led to a lack of investment by the state government and theWest Bengal government‘s capital outlay was a mere 1% of state domestic product in 2009-10.

Herculean Task: In short, Mamata Banerjee‘s government inherits a fiscal mess, with little scope for furtheexpenditure unless it is able to woo private investment or unless help is forthcoming from the Centre. Hope Didisucceeds in both.



PERSONALITIES OF THE WEEK

ANIL DHIRUBHAI AMBANI-THE FINANCIAL WIZARDAnil Dhirubhai Ambani is the chairman of Reliance Anil Dhirubhai Ambani Group, one of thelargest private conglomerates. As of 2010, he is the fourth richest Indian with a personalwealth of $13.7 billion, behind Mukesh Ambani, Lakshmi Mittal and Azim Premji.

Career: Anil joined Reliance; the company founded by his late father Dhirubhai Ambani, in1983 as Co-Chief Executive Officer and led India's first forays into overseas capital markets.After Dhirubhai‘s death in July 2002 Anil and Mukesh Ambani started having differences and

on June 18, 2005, Kokilaben Ambani announced the settlement through a press release.Mukesh was given the responsibility for Reliance Industries and IPCL while Anil wasbestowed with the responsibility of Reliance Infocomm, Reliance Energy and RelianceCapital.

Personal Life: He is married to Bollywood actress Tina Munim and has two sons Anmol and Anshul. He wakes updaily at 4:00am, checks the news and then goes for a run. He takes part in the Mumbai Marathon races. Anil Ambanis also the fittest CEO.

Reliance Big Entertainment: One of his major achievements in the entertainment industry is the takeover of Adlabsand the recently announced joint venture worth US$ 825 million with Steven Spielberg.

Controversies: Anil had been embroiled in a dispute with his brother, Mukesh Ambani, over the supply of gas fromthe latter's KG basin. SEBI had barred Anil from investing in publicly-listed securities until the end of 2012. Reliance

Infra and RNRL on Jan 14, 2011 settled the SEBI probe into possible violation of securities market norms by them fora collective settlement charge of Rs 50 crore.

Accolades: Anil was adjudged the 'MTV Youth Icon of the Year' in September 2003. According to the Forbes‘ 2009 lisof the world‘s billionaires, Anil Ambani is at the 34th position with a net worth of $ 10.1 Billion. In June 2004, Anil waselected as an Independent Member of the Rajya Sabha - Upper House, Parliament of India with the support of theSamajwadi Party but he resigned voluntarily on March 25, 2006.

WARREN EDWARD BUFFETT: SAGE OF OMAHA

Early Life: Even as a child, Buffett displayed an interest in making and saving money. He wentdoor to door selling chewing gum, Coca-Cola, or weekly magazines. On a trip to New York Cityat the age of ten, he made a point to visit the New York Stock Exchange. At the age of 11, hebought 3 shares of Cities Service for himself and 3 for his sister. He filed his first income tax

return at the age of 13. In 1945, in his first year of high school, Buffett and a friend spent $25to purchase a used pinball machine, which they placed in the local barber shop. Within months,they owned several machines in different barber shops. By the time he finished college, Buffetthad accumulated more than $90,000 in savings.

Work: Warren Buffett started his career in 1951 as an Investment Salesman in Omaha, then as a Securities Analystin New York. Presently he is the Chairman, CEO at Berkshire Hathaway Inc. In 1979, Buffett's net worth reached $620million, placing him on the Forbes 400 for the first time. Buffett ran into criticism during the subprime crisis of 2007 –2008, Berkshire Hathaway suffered a 77% drop in earnings during Q3 2008 and several of his recent deals appear tobe running into large mark-to-market losses. Yet in 2008, Buffett now worth $62 billion became the richest man in theworld.

Frugal Lifestyle: He lives in the same house in the central Dundee neighborhood of Omaha that he bought in 1958.It was reported that Buffett does not carry a cell phone, does not have a computer at his desk, and drives his own

automobile, a Cadillac DTS. He remains an avid player of the card game bridge, which he learned from SharonOsberg, and plays with her and Bill Gates. Buffett is a notable philanthropist, having pledged to give away 99 percentof his fortune to philanthropic causes, primarily via the Gates Foundation.

Wealth & Recognition: In 2008 he was ranked by Forbes as the richest person in the world with an estimated networth of approximately US$62 billion. In 2009, after donating billions of dollars to charity, Buffett was ranked as thesecond richest man in the United States with a net worth of US$37 billion. In 1999, Buffett was named the top moneymanager of the 20th century in a survey by the Carson Group. Buffett, along with Bill Gates, was named the mostinfluential global thinker in Foreign Policy's 2010 report. Numerous books have been written about Warren Buffett andhis investment strategies. In October 2008, USA Today reported that there were at least 47 books in print withBuffett's name in the title.



BUSINESS NEWS

1. India fastest-growing market for Kraft Foods-ET May 18 India is the fastest-growing market for Kraft Foods in Asia Pacific and possiblyaround the world. Cadbury Kraft India rode on established Cadbury brands andsuccessful launch of Oreo biscuits to grow its business twice as fast as Kraft's Chinaunit in the first quarter ended March. In India Kraft‘s business has grown more than40% and with the launch of Oreo and Tang the growth will continue.

A webcast presentation available on the Kraft Foods website quoting McLevish Kraf

Foods Global CFO says, China and Indonesia, the other two fast performing KraftFoods markets in the Asia-Pacific region, grew 20% each in the quarter, while

others such as Brazil grew in mid-teens. India is now among Kraft Foods' top 10 priority markets along with Brazil,Russia, Mexico, China and South Africa, across the 170 countries the foods maker operates in.

2. Vodafone nets profit first time in India- ET May 18 The Indian arm of Vodafone Group Plc, the world's largest private mobile-phone company,has recorded profits for the first time. Vodafone Essar posted a 134% jump in operatingprofit to £15 million for the 12 months ended March '11, compared with a loss of £37million during the corresponding period of the previous year, proof that underlying trendsare turning positive in the world's fastest-growing mobile market.

Vodafone does not give a quarterly profit figure for its Indian operations, which is thecountry's second-largest telco by revenues after Bharti Airtel. India also accounted for 80%

of the 12.9 million customers Vodafone added globally during the three months endedMarch '11. Sales jumped 16% during the period to £3,855 million. Revenues for the threemonths ended March '11 were up 17.2% to £988 million compared with the quarter ended March '10.

3. Tata's Tetley tea brand gets new look-PTI May 18 Tata Global Beverages is undertaking an image makeover of its flagship tea brand Tetley, aspart of a strategy to reposition the product and bring about uniformity across global markets.The firm said Tetley will have single new logo with a tagline --Free your mind...That's Tetley! -- in contrast to its current strategy of developing the product on a local basis, presenting thebrand differently around the world.

The company said the brand is present over 70 countries across the globe and has around 500different varieties of tea available around the world. The firm said the new look is part of itsstrategy to create a global brand logo that is presented uniformly worldwide.

4. Bajaj to launch ‘Duke’ by Dec- TNN May 19 Bajaj Auto Ltd (BAL), in association with its Austrian ally KTM Power Sports, plans tolaunch their off-road bike Duke 125cc by December in India as well as in Brazilmarket. The debut in the Brazilian market — where 20 lakh bikes are sold annually— may see launch of Pulsar and Discover depending upon the response to the Dukebrand.

Currently, Duke is manufactured exclusively for the export market at BAL‘s Chakanplant, about 30 kms from Pune city. The BAL also plans to further strengthen itsbase in the Indian market and has plans to reach out to a new category of customers, particularly those in semi-urban and rural areas.

5. Hyundai Motor eyes big on rural markets with small car-TNN May 15

Hyundai Motor India (HMIL), the second-largest carmaker in the country, isbetting heavily on its yet-to-be-launched small car to penetrate into the ruramarket, a top executive of the company said.

According to Y K Koo, Senior Director (Sales and Marketing) HMIL, the smalcar will be launched in the first half of next year and the company has noimmediate plans to export the car. To a query on market share, he admittedthat the brand is slightly losing sheen to the competitors. He, however, wasquick to add that the situation arose as there was no new vehicle launches in2010. "We launched a new Verna this year. To regain the market share of 20per cent is our target for this year (Jan to Dec). With new Verna, we aim to sel

4,000 to 5,000 units per month," Yoo said said. "New product will always create new demand," he said, adding thatgoing forward Hyundai will launch at least two new vehicles per year to stay ahead of the competitors.



6. Unilever launches Knorr noodles in Pakistan, Sri Lanka-ET May 18 Consumer products firm Unilever plans to take Knorr soupy noodles, a productdeveloped by its Indian subsidiary Hindustan Unilever, to global markets, particularlyemerging and developing countries. The company recently launched Knorr soupynoodles in Pakistan and Sri Lanka, making it one of a handful of Unilever's made-in-India international brands along with Fair & Lovely, Wheel, Annapoorna and Pureit low-cost water purifier.

Hindustan Unilever Regional Vice-President Sidharth Singh said initial response to theproduct is very positive in both Sri Lanka and Pakistan. The development reflects the

Indian arm's increasing importance in Unilever's global plans. In 2008, Unilever consolidated its research anddevelopment operations and Hindustan Unilever's Bangalore R&D centre was chosen as one of the six global centres.Since then an increasing number of brands and innovations are trickling from India to Unilever's global markets.

7. Corporate logos can both help and harm-IANS May 17 These stylized monograms can backfire for firms and have a double-edgedeffect on consumer perceptions, according to a Boston College researcherConsumers may perceive companies with incomplete typeface logos - such asthe horizontal baby blue stripes that form the letters IBM - as innovative.

However, they also run the risk of being viewed as untrustworthy, according toa forthcoming report in the Journal of Marketing. Therefore, although suchstylised logos might be a good idea for an entertainment firm, they mightbackfire for an insurance company.

8. Mahindra & Mahindra begins trial production of mini-Xylo- ET May 17 Small is beautiful, seems to be the new mantra for India's largest utility vehiclemanufacturer Mahindra & Mahindra. M&M is all set to launch a mini version of itspopular car -- Xylo. Sources tell ET NOW that the trial production has alreadybegun. The car will be launched in the next two months and is likely to be rolledout of company's new plant at Chakan.

A diesel mini-Xylo is expected to be priced around Rs 5 lakh, making it anattractive option for customers buying premium hatchbacks like Maruti SuzukiSwift, Hyundai's i20 or mid-segment sedans like Tata Motors Indigo. Experts alsobelieve that a more fuel efficient diesel sports utility vehicle (SUV) will be much in demand at a time when petrol pricehikes are burning a hole in a car owner's pocket. When contacted, M&M declined to comment. M&M's stock on theBombay Stock Exchange was down 0.10 per cent at Rs 672.45 from previous close.

9. Bollywood marketing goes mobile-TNN May 18 Times have changed in Bollywood from the days when all that was required topromote a film was a giant, hand-painted poster, a television or cinema trailer andthe pulling power of a star actor. Now, the popular Hindi-language film industry isharnessing the latest technology, hoping that the explosive increase in mobile phonesand rapid take-up of the Internet will draw in much-needed audiences.

In the first move of its kind, the upcoming Hrithik Roshan film Zindagi Milegi NaDobara " (You Only Live Once), will be promoted only via mobile phone and onlineFilm studio Excel Entertainment has tied up with one of India's leading mobile phonecompanies, Aircel, to push two three-minute trailers for free to its 55 millionsubscribers.

10. Digital marketing firms take to FaceBook to run brand, ad campaigns-Afaqs May 19 Increasing levels of acceptance of Facebook (FB) as a major force in branding andadvertising is having a momentous effect on the advertising industry. The digital andinteractive marketing industry is making use of FB page almost like a business portal (likea replica of websites) and deriving business advantage out of it.

According to Suresh Reddy, chairman and managing director of Hyderabad-based digitalmarketing solutions provider Ybrant Digital, in India FB has the highest reach with 24million people accessing it, followed by Google's Orkut with 18 million. Together, theycater to 90 per cent of the users of social media sites. It is estimated that Rs 85 crore wasspent on social networking sites last year and is expected to grow by 25 per cent thisfinancial year, he adds. In India, online advertising is estimated to have reached Rs 785crore last year, and expected to grow 26 per cent this year.



11. Ice cream maker Vadilal plans mango juice forayin Mumbai-The Hindu Business line May 18 Ice-cream and processed food maker Vadilal Industries Ltd plans to launch its mango

juice and pulp products in Mumbai and Rajasthan, besides targeting non-residenGujaratis abroad this season. The BSE-listed company will also launch three varieties omango pulp — alphonso, kesar and totapari — domestically in the next two years, MrRajesh Gandhi and Mr Devanshu Gandhi, Managing Directors, said here today.

Mango juice is a summer delicacy in Gujarat, Madhya Pradesh, Maharashtra andRajasthan, while frozen mango pulp is exported. Vadilal has been marketing its mango

products in Gujarat for the last 20 years under the brand name ‗Garden Fresh Kerino Ras', which will now be available

outside Gujarat as well. The 80-year-old Vadilal, currently exports frozen mango pulp and milk shake, besides otherproducts to 45 countries. It is also a major supplier to organised retail companies in India.

12. Premji Tests US Waters, Invests in Green Fund-ET May 16 In his first-ever overseas investment, Wipro‘s billionaire chairman, Azim Premji, hasinvested around $15 million in Vinod Khosla‘s clean-tech fund in the US, the biggestsuch fund focused on returns from Silicon Valley‘s hottest start-ups.

With nearly $1.5-billion corpus, Premji Invest, the investment arm that manages theWipro founder‘s wealth, now plans to look beyond India for diversifying its portfolioand also tap into lucrative opportunities offered by new technology companies in theUS. ―Risk appetites are higher in the Valley, and so are returns if you are betting withsomebody like Khosla,‖ said a Valley-based investor familiar with the development.

13. Top MNP loser Reliance Communication OK with loss-BS May 15 If numbers are anything to go by, mobile number portability has not made much of a dent in thefortunes of most telecom companies, as only about 4 million out of 771 million users havedumped their operators in the first five months of the much-vaunted initiative.

While Vodafone , Bharti and Idea gained significantly from the roll-out of MNP , RCOM bore thebrunt of the switch. But RCOM claims it is focused merely on adding numbers, but adding highvalue customers. "It is true - initially, we lost big time. And even now, the net numbers are inthe red. But we are happy with that," said President (Corporate & Wireless Customer Service)Anurag Prashar.

14. India’s No.1 Biz Channel-ET May 19 In less than two years since its launch, ET NOW has achieved the No. 1position in the business news segment with a 42% market share against

arch rival CNBC TV-18‘s 39%. This lead over its nearest rival is in the keytarget audience for business news—TAM all-India, 1 million+ cable & satellite homes, male 25+ in SEC AB, a popular benchmark for mediaagencies and advertisers.

The other two business channels—NDTV Profit and Bloomberg UTV—sharebetween them the remaining 19%. No matter which way you slice anddice the data, ET NOW is a clear market leader. In the top 6 metros, thediscerning viewer has voted for ET NOW—the channel has a 37% share on a four-week average, compared with 34%for the No. 2. And again, last week‘s data puts it in a commanding position: 47% in the six metros, compared with33% for CNBC. India‘s financial nerve centre, Mumbai, has also switched en masse to ET NOW: it has a 54% marketshare on a four-week average, compared with 26% for a distant No. 2 CNBC.

15. Laptop Cos Eye Windfall in Jaya’sWin- ET May 18

The cadre and supporters of AIADMK were not the only ones lustily cheering when JJayalalithaa took her oath as chief minister of Tamil Nadu on Monday. Ripples of heconvincing victory over rival DMK were also felt in the corporate world where laptopmanufacturers, sensing a huge opportunity in her triumph, were proposing a quiet toastto the mercurial actor-turned-politician. The reason: Jayalalithaa‘s campaign pledge todole out free laptops to students of class XI and XII.

Considering there are about 1.4 million students in the state eligible for this freebie,laptop makers are looking at an order valued between 140 crore and 350 crore from the

state government. ―This is obviously a sizeable order, whenever it comes through,‖ says S Rajendran, chief marketingofficer of Acer India, a subsidiary of Taiwan‘s biggest computer maker. As if seeking to challenge competitors,Rajendran says his company has old ties with Tamil Nadu where it supplied laptops at subsidised rates to students inpartnership with state government-promoted Electronics Corporation of Tamil Nadu.



16. iPad’s Runaway Success Short-Circuits PC Sales-Bloomberg May 18 The iPad is wreaking havoc on the personal-computer market. Hewlett-PackardCo‘s consumer PC sales plunged 23% last quarter, and the company lopped $1billion off its annual sales forecast. And while rival Dell Inc beat analysts‘ estimates because of corporate demand, its sales to consumers slumped 7.5%.More than 70 million tablets like the Apple iPad will be sold in 2011, a total thatwill balloon to 246 million in three years, according to Jefferies & Co.

At 7.3-inches across with a colour screen and an array of popular downloadablegames like Angry Birds, applications for watching movies and reading

magazines, and software for word processing and spreadsheets, the iPad has siphoned off more PC sales thananalysts and executives predicted.

17. As 2G Probe Digs Deep, Financial Pros Turn Wary-ET May 19 As the 2G probe lifts some carefully woven corporate veils, a fear is starting to gripmany finance professionals and chartered accountants. The investigation, which iskeeping some senior professionals behind bars, has raised serious questions thataccountants, corporate lawyers, auditors and structured finance wizards are grapplingwith.

These men cobble together smart structures and often take a technical view totransactions to help companies side-step the law and overcome regulatory hurdles. Foyears, that has been the way of life. But now, central investigative agencies and courtsare going beyond the structures and deals to look for criminal intent — a turn of events

that most professionals were not prepared for. More and more of them are taking extracare to make sure they are not pulled up for shady deals of their clients.

18. Clients Fret Over Freshers in IT Projects-ET May 19 Top outsourcing customers, including Amex spinoff Ameriprise and Capital One, are raisingconcerns over the increasing number of new engineering graduates employed by Indianand foreign tech firms in IT projects. People familiar with the discussions said customers,especially in the banking and financial services sector, are worried that a high proportionof freshers may affect quality in what they call critical back-office functions.

Already, customers such as Capital One—the Virginia bank that outsources to some of thetop tech firms based in India and overseas—are demanding more scrutiny on the ratio of freshers working on critical projects. For the over $100-billion US IT outsourcing market,these concerns are an early warning signal as rivals TCS, Infosys, IBM, HP and others

push to maintain profitability by increasing the proportion of fresh graduates at lower salaries in locations such asIndia.

19. IL&FS Engineering gets $100 million order-Reuters May 17IL&FS Engineering & Construction , formerly called Maytas Infra, said on Tuesday it haswon a contract worth $100 million from Prime Star Energy FZE (PSE) for construction of astorage tank terminal in UAE. PSE plans to undertake the development, operations andmaintenance of a storage tank terminal for oil and oil products.

PSE is part of the Emirates Trading Agency LLC group and has tied up with InfrastructureLeasing & Financial Services for financing and construction of this project, it said in a pressrelease. The facility is expected to be completed within the next 2 years, it added.

20. Companies going for background checks of employees- PTI May 17

Against the backdrop of the fake pilot scam shaking the aviation industry,companies in other sectors have woken up to the need of carrying outbackground verification of their new as well as existing employees. Humanresource officials of various companies are now cross-checking each and everydetail of job applicants prior to hiring them. The employee verification processincludes finding out the genuineness of work experience, educationaldocuments and whether the candidate has any criminal record or not.

"The unfortunate negative trend will soon lead to a more robust, centralised,and independent candidate verification process on the lines of a banking creditverification system," Suresh Director of Konnexions HR Pvt Ltd. said. Accordingto an industry survey, only 62 per cent of companies have done any form of background check before hiring anemployee.



INTERNATIONAL NEWS

21. China Raises Reserve Ratio 50 Basis Points- Bloomberg May 13China raised banks‘ reserve requirements for the fifth time this year to restrain pricesunderscoring the risk that tightening measures will cause a slowdown in the world‘ssecond-biggest economy. Reserve ratios will increase 0.5 percentage point from May18, the People‘s Bank of China (PBOC) said on its website today. That will boost levelsfor the nation‘s biggest lenders to a record 21 per cent.

Premier Wen Jiabao aims to tame inflation while sustaining growth amid signs the

economy is cooling after an expansion that peaked at 11.9 per cent during last yearBesides raising interest rates and reserve requirements, and guiding banks to limit credit growth, officials haveaccelerated gains in the yuan, which broke 6.5 per dollar for the first time since 1993 on April 29. A stronger yuanhelps to reduce import costs.

22. Google takes on rivals with Chromebook-TNN May 13 Laptop computers using Google‘s Chrome operating system will go on sale in June, as theworld‘s No. 1 Internet search engine challenges Microsoft Corp and Apple on their home turf.The new web-centric PCs, made by Samsung and Acer, are Google‘s latest attempt to changehow consumers and companies use their computers.

The bare-bones operating system is essentially a web browser that steers users to useapplications like email and spreadsheets directly on the web, instead of storing software suchas Outlook or Word directly on PCs. Moving day-to-day functions onto the Internet removes

the burden of time-consuming tasks associated with traditional PCs, like installing software and updates, backing upfiles and running antivirus checks, executives said.

23. Strauss-Kahn's arrest brightens Montek's chances for IMF top jobs?-TNN May 16 While allegations of attempted rape against Dominique Strauss-Kahn are yet to be proved,his arrest has nevertheless raised speculation of a non-European being elevated to the top

job at the International Monetary Fund for the first time since the multilateral body was setup in December 1945.

Montek Singh Ahluwalia , deputy chairman of Planning Commission, is being talked aboutamong candidates who could hold one of the top jobs at IMF. Before returning to India to

join the Planning Commission, the former finance secretary had served as the first directorof the IMF's independent evaluation office. Besides, the Europeans and the US are yet to agree to cede control of thetwo Bretton-Woods institutions . Since the two institutions were founded in 1944-45 , Europeans have headed IMF,

while the World Bank has stayed with an American.

24. World's smallest satellite to find alien life developed-PTI May 17 American scientists have developed what they claim is the world's first satellite with the size of a loaf of bread which is designed specifically to look for extra terrestrial life. The nano-satellite,called the ExoPlanetSat, will be launched next year with the task of finding exoplanets beyondour solar system having life-supporting environment like like the Earth.

Seamus Tuohy of Draper Laboratory, which developed the satellite in association with theMassachusetts Institute of Technology, said the mission was "ground breaking". At just 10centimetres wide and 30 centimetres long, the 3-million-pound device works by surveying thebrightness of a star as an orbiting planet passes in front of it. Scientists are hoping to launch a fleet of such tinysatellites in the future to survey hundreds of stars to see if they can discover other planets similar to ours.

25. Nokia’s Bosses Dump Services Brand Ovi-Reuters May 17 Nokia‘s new management will dump its Ovi services brand in favour of its company nameacross its offerings, the world‘s largest cellphone maker by volume said on Monday. Nokialaunched the brand in August 2007 for services such as maps and music offerings at a high-profile event in central London, at a time when it dominated the wireless industry witharound 40% market share of handset sales.

Nokia has scaled down several Ovi services over the past year and is focusing mostly onlocationlinked offerings. Nokia said it would start to rebrand its Ovi services from July. ―The

reasons for this decision includes the fact that Nokia is a well-known and highly-loved brand the world over. Ourmobile experiences are tightly integrated with our devices — there is no longer a differentiation,‖ Nokia's marketingchief Jerri deVard said in a statement. The value of the Nokia brand fell 28% last year to $10.7 billion, according tobranding agency Millward Brown.



MISCELLANEOUS NEWS

26. India slips one rank in world competitiveness-BS May 17 INDIA slipped one rank, to 32nd position in overall competitiveness among 59 nations,according to the ‗World Competitiveness Rankings‘, announced today by the InternationalInstitute for Management Development, Lausanne (Switzerland).

The recovery of financial markets pushed the US and Hong Kong to first place, followed by lastyear‘s topper, Singapore, which fell to third spot. In 2010, the US and Hong Kong rankedsecond and third, respectively. India‘s neighbouring competitor, China, also slipped one rank, to

19th and Japan went up one rank to 26th slot, said the business school‘s 2011 Yearbook.Sharply different trends were observed in India‘s ranking in four major parameters. While the ranking relating toeconomic performance, government efficiency and infrastructure availability marginally improved, India slipped onbusiness efficiency, which pulled down its overall ranking.

27. Burj Al Arab is best luxury hotel in Middle East-ET May 17 Burj Al Arab For the eight year running, the Burj Al Arab , the sail-shaped hotel onone of Dubai's pristine beaches, has been voted the best hotel in the Middle EastAnd it is a natural choice. The 7-star hotel is a perfect example of the excessiveluxury, what with walls embellished with gold leaf, 202 suites staffed with butlers, anunderwater signature restaurant and a fleet of Rolls Royces ready to chauffer guestsaround the city.

The award was presented by the World Travel Awards, dubbed the 'Oscars of the

travel industry', as part of the World Travel Awards 2011 Grand Tour.

28. Rs 30,000 crore blackmoney recovered in last 2 years-ET May 18 Taxmen have seized blackmoney to the tune of a whopping Rs 30,000 crore in thecountry in the last two years, said the Central Board of Direct Taxes (CBDT) which is setto get investigative powers to boost its drive against wrongdoers. The CBDT is in theprocess of creating a Directorate of Criminal Investigation after getting approval fromFinance Minister Pranab Mukherjee last week.

CBDT chairman Sudhir Chandra said they have gone after big shots and every search orsurvey has yielded more than Rs 100 crore in black-money. Addressing the 'NationalSeminar on Black-money', Chandra said, "Through IT searches and surveys, we haverealised around Rs 30,000 crore of black-money" in the past two years. Since February,the Income Tax Department has issued Rs 1.15 crore refunds across the country which

runs into Rs 1.04 lakh crore.

29. Pakistan’s 4th military N-reactor has India worried-TNN May 19 Pakistan is focusing on building low-yield, tactical nuclear weapons which it can use incase of skirmishes at the border with India. After disclosures that Pakistan is building itsfourth reactor at the Khushab military facility, fresh estimates made by security andintelligence officials here suggest Pakistan can add 8-10 such weapons in its kitty everyyear.

The news has come as a shock to the government here as its information, based onassessments by top scientists, was that Pakistan did not have enough uranium toundertake such expansion. Pakistan is internationally acknowledged to have a nuclear

arsenal of 100 weapons but the recent focus on low-yield weapons has become a source of worry to India. Pakistan‘stesting of a surface-to-surface missile for carrying smaller warheads has confirmed the suspicion.

30. Indians living 8 yrs more than they did in the 90s-TNN May 16 An average Indian (both sexes) lived eight years longer in 2009, compared towhat he did two decades ago. However, it was still three years less than the globalaverage life expectancy. An average Indian woman lived three years more thanher male counterpart in 2009. While a woman lived for 66 years, the lifeexpectancy of an Indian man stood at 63 years.

According to the World Health Organisation‘s health statistics 2011, released lateon Friday, an average Indian lived till 65 years in 2009 and 57 years in 1990 and61 years in 2000. WHO said life expectancy at birth reflected the overall mortalitylevel of a population. It summarized the mortality pattern that prevailed across allage groups in a given year — children and adolescents, adults and the elderly.



THE IT INDUSTRY: PROGRAMMING INDIA FOR A HI TECH FUTURE

The origin of IT industry in India can be traced to 1974, when the mainframe manufacturer,Burroughs, asked its India sales agent, TCS to export programmers for installing systemsoftware for a US client. When Rajiv Gandhi became PM in 1984, his New Computer Policyreduced import tariffs on hardware & software, recognized software exports as a de-licensedindustry, therefore eligible for bank finance and freed it from the license-permit raj.Permission was granted to foreign firms to set up wholly-owned, export-dedicated units. Heset up a chain of software parks that would offer infrastructure at below-market costs.These policies laid the foundation for the development of a world-class IT industry in India.

Today the IT sector contributes 5% of India‘s GDP of $1,488 Billion. Work done by ourSoftware industry includes system integration, software experiments, development,maintenance, Network, IT services and solutions. The country‘s IT-BPO industry expandedby 12% during 2009. With an expected compounded annual growth rate of 15% in the next10 years, the Indian IT and ITES sector could touch $285-billion by 2020 from $71.6 billionin 2009.

Tata Consultancy Services Limited is the largest provider of information technologyand business process outsourcing services in Asia. It has offices in 42 countries with morethan 142 branches across the globe. Promoters hold 74%, while the rest is public. Itreported a PAT of Rs 7,000 cr on revenues of Rs 30,300 cr in 2009-10. 45% of itsrevenues came from clients in banking, financial services and insurance. It began as theTata Computer Centre, whose main business was to provide computer services to Tata

group companies. JRD Tata was the first chairman.

In the early 1970s, TCS started exporting its services. The company pioneered the globadelivery model for IT services. In 1981, TCS set up India's first software R&D centre, theTata Research Development & Design Center. The first client-dedicated offshoredevelopment center was set up for Compaq in 1985.TCS pioneered the factory model fo

Y2K conversion. TCS is one of the largest private sector employers in India with core strength in excess of 1, 75,000employees. It now boasts of the lowest attrition rates in the Indian IT industry. But, in the recent past TCS has beencriticized by its employees in Public forums on its Appraisal and Promotion policies.

Infosys Technologies Limited, Bengaluru is a MNC IT Services Company. It is one of India's largest IT companies, with nine development centers in India and over 30 officesworldwide. It was founded on 2nd July 1981 by seven entrepreneurs, N R NarayanaMurthy, Nandan Nilekani, Kris Gopalakrishnan, S. D. Shibulal, K Dinesh and N. S.

Raghavan. The founders started the company with an initial investment of Rs. 10,000.The company was incorporated as "Infosys Consultants Pvt Ltd." in Model Colony, Pune.The company went public in 1993. Interestingly, Infosys IPO was under subscribed but itwas bailed out by US investment banker Morgan Stanley, which picked up 13% of equityat the offer price of Rs 95 per share. Promoters hold 16%, Government of India 3.84%while rest is public. For 2009-10 it earned profits of Rs 6,219 cr on a turnover of Rs.23,732 cr.Infosys is one of the first Indian companies to grant stock options (ESOPs) to itsemployees since 1993. It has the largest corporate university in the world, located on its Mysore campus. Infosys'sintranet, "Sparsh" connects its 114,822 employees across 26 countries in which Infosys operates.

Wipro Technologies is headquartered in Bengaluru and is the third largest IT servicescompany in India. Some of its customers are Nortel, Boeing, BP, Cisco, Ericsson, IBM,Microsoft, Prudential, Seagate, Sony, HP, Windriver, Airbus, Toshiba, Windstream

Communications, and Wal-Mart. It was the sole representative for Sun Microsystems in Indiabefore the Sun liaison office was set up in India, in the early 1990s.

Its PAT for 2009-10 was Rs 4,593 cr and revenues Rs 27,613 cr. It employs 1, 15,900 peopleworldwide as of September 2010. It has varying interests including IT, consumer carelighting, engineering and healthcare businesses. It is the 9th most valuable brand in IndiaAzim Premji is the Chairman of the board. Promoters hold 81%, while public share holding isonly 19%. It is the largest independent provider of R&D services in the world. Using"Extended Engineering" model for leveraging R&D, Wipro enables firms to introduce newproducts rapidly. Wipro BPO employs over 22,000, of whom 3,150 are at its Hyderabadcampus. The planned new recruitments will be from among science and commerce graduates

and under-graduates. The majority of Wipro BPO‘s business comes from the US , followed by Europe. The rest of theworld contributes only marginally to its top line. The company posted a turnover of $290 million in 2008.

ca newsletter week may 13th may 19th

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