XED NEWSLETTER a weekly news bulletin

11 Pages 06th OCT 2011 12th OCT 2011 www.xedintellect.com

IN BRIEF
COVER STORY
Middle Indias Romance with Luxury
IIP

ECONOMIC INDICATORS
BSE SENSEX 16,958 4.1%(Aug11) (as on 13th Oct2011)

PERSONALITIES OF THE WEEK

Chad Hurley

Suhas Gopinath

CORPORATE INTELLIGENCE

NEWS DIGEST
BUSINESS NEWS GLOBAL NEWS MISCELLANEOUS NEWS

COMPILED BY

Red Hat Acquires Bangalore Start-up Gluster for 667 crore ECONOMIC INDICATORS 2 INTERNATIONAL NEWS 9

Steve Jobs (19552011)

Humble guava is healthiest of all fruits

COVER STORY 3 PERSONALITIES OF THE WEEK 4 MISC NEWS 10 GENERAL AWARENESS 11

BUSINESS NEWS 5-8

TOP 5 HEADLINES OF THE WEEK

1. 2. 3. 4. 5. Red Hat Acquires Bangalore Start-up Gluster for 667 crore. HDFC Mutual replaces Reliance as top fund. Our desire is 1.2 bn Indians get a UIDAI number as soon as possible: Nandan Nilekani. Steve Jobs (1955-2011). Humble guava is healthiest of all fruits.

ECONOMIC INDICATORS
Current Market Rates as on 13th Oct11 Indias Index of Industrial Production Values 4.1 Stock Market Indices as on 13th Oct11 BSE SENSEX Values 16,958

India's Index of Industrial Production: 4.1% in August 2011 compared to 3.8% in July 2011 Industrial production in August grew at a slower-than-expected pace, prompting Finance Minister Pranab Mukherjee to warn that second quarter GDP may take a hit. The Index of Industrial Production (IIP) grew 4.1% in August, a slight improvement over July's upwardly revised 3.8% but lower than the market expectation of 4.8%, reinforcing fears that a slowdown was setting in after 12 rounds of rate increases and persistently high inflation. Markets, however, closed higher as good results from IT industry bellwether Infosys offset the news of sluggish growth. BSE SENSEX: Sensex closed at 16,958.39 on Wednesday 12th Oct 2011 (Source: www.bseindia.com) Date 7/10/11 10/10/11 11/10/11 12/10/11 Open 16,222.49 16,270.07 16,668.15 16,660.43 High 16,347.48 16,595.93 16,774.12 16,987.06 Low 16,148.97 16,230.77 16,510.71 16,608.57 Close 16,232.54 16,557.23 16,536.47 16,958.39

The gross domestic product (GDP) is one of the measures of national income and output for a given country's economy. GDP can be defined in three ways, all of which are conceptually identical. First, it is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time (usually a 365-day year). Second, it is equal to the sum of the value added at every stage of production (the intermediate stages) by all the industries within a country, plus taxes less subsidies on products, in the period. Third, it is equal to the sum of the income generated by production in the country in the periodthat is, compensation of employees, taxes on production and imports less subsidies, and gross operating surplus (or profits).

The highest gross Government debt as a percentage of GDP among countries tracked by Trading Economics was recorded in Japan (220% of GDP), Greece (143%) and Italy (119%). Debt to GDP ratio was also high in Singapore, Belgium, Ireland, United States and Portugal - above 90%. Government debt as a percent of GDP, also known as debt-toGDP ratio, is the amount of national debt a country has in percentage of its Gross Domestic Product. Basically, Government debt is the money owed by the central government to its creditors. The higher the debt-to-GDP ratio, the less likely the country will pay its debt back, and more likely the country is to default on its debt obligations.

COVER STORY: MIDDLE INDIAS ROMANCE WITH LUXURY

Indian luxury market is growing at a rate of over 20% a year and is estimated to reach $5.8 bn this year. The old theory of this industry being a showoff of Richie rich with no takers outside metros is fading fast. There are two studies that attempt to look at the rising middle class: "The Bunty Syndrome," by advertising agency Euro SCG India in October 2007, and "The Dhoni Effect: Rise of Small Town India," by Ernst & Young in March 2008. The titles require some explanation. "Bunty and Babli are popular names for boys and girls in small-town India. Contrary to popular belief, it is not the urban Indian who drives trends, but the long-ignored Buntys and Bablis. They are on the move. There is a sense of urgency, excitement and confidence as they race ahead. "The Dhoni Effect identifies a phenomenon where rapidly growing small towns of India are taking center stage. The study highlights the growing affluence levels, increased awareness due to media penetration, improved physical connectivity, and significant changes in consumption patterns with high aspiration levels of smalltown India that are compelling marketers to take notice. Take a look: According to a global affluence study by research firm TNS, India has 3 mn affluent households, defined as those with more than $100,000 (around Rs50 lakh) of investable surplus. In a report released last month, Swiss wealth manager Julius Baer forecast that the wealth of HNIs in India, with assets of $1 mn or more, would more than double to 403,000 by 2015. The statistics reveal that India has the second highest number of HNIs after the US. The report also estimated the potential market for luxury jewellery at Rs 22,900 Cr and for the luxury cars segment at Rs15,000Cr. At the recent luxury shopping festival in Delhi's DLF Emporio mall, about 18% of the shoppers were from small cities around Delhi. For the people from Ludhiana and Jalandhar, a quarterly trip to the mall in Delhi to buy Gucci bags, Armani suits or Porsche Design watches is becoming the norm. DLF consciously advertised the festival in Chandigarh, Ludhiana, Jalandhar and Lucknow. The UB City in Bangalore gets buyers from the nearby mining town of Bellary and for luxury watchmaker Tag Heuer, 30% of its sales in India come from non-metro cities where it sells through multibrand outlets. Luxury apparently doesnt seem to remain a metro thing. How we learned to splurge: Physical reach has increased to less-developed sections of the key urban towns. Logistics has traditionally been the big challenge for marketing beyond metros, especially in Tier III and Tier IV towns and rural India. Recent investments and developments in infrastructure and connectivity have brought marketers into closer contact with key urban towns, the rest of urban India and rural areas. The movement of organized retail into smaller towns has made things easier and more cost-effective for marketers. Media reach has increased significantly. Rising disposable incomes, easier access to credit and improved retail reach have helped push television, satellite and radio in the key urban towns in absolute terms. India's Many Small Mns: Of the 80 mn households that constitute the Indian middle class, only 25 mn are in Tier I cities. Close to 55 mn belong to the smaller towns. Mercedes sells more cars in small-town Ludhiana than it does in Mumbai. Consultancy firm Bijoor did a typecasting exercise across nine countries to assess how many "types" of people exist in different cities. Types were classified by their similar marketing behavior. In New York, they found 14 different types of people. In Boston, they found 9 and in Tokyo 11. In Middle India, the diversity was awesome. In Bhopal, they found 213 types and in Vijayawada 171 types. This may be one of the reasons why marketing in India is regarded as much more difficult than fighting for pieces of market share in the West. Marketing in Middle India: The Bunty Syndrome study provides examples of how companies are adapting to the needs and demands of Middle India. Consider how some of the Bunty traits are being tapped: Confidence: Grasim, a brand of suits, through the message of "be self-made," has saluted the "We'll get there no matter what" spirit of the youth. The message is enhanced by the use of a celebrity (the actor Akshay Kumar) who has made a name for himself on his own in a field where relatives already in the profession are seen as a prerequisite for creating equity in the industry. Gandhian values: Idea, a mobile-services brand, has propagated caste equality, while Tata Tea has tried to appeal to the young in Tier II cities with a call to "wake up to the issues." Pride: Durables brand Voltas has challenged the monopoly of Korean brands in the air-conditioner space by projecting itself as "India's own AC." Family values: The concept of being able to give back to parents has been used to good effect by MasterCard and HDFC Bank. Conclusion: Now many rules of the game are being challenged, the primary one being the quintessential 'trickledown theory.' Attitudes and behavioral trends that got formed in the Tier I markets would trickle down into the small towns and rural markets. What sold in Tier I would also percolate down and sell in Tier II cities. This theory is being turned on its head. Middle India now defines its own preferences and marketers increasingly are taking note of it as the market just gets bigger & bigger for them.

PERSONALITIES OF THE WEEK

SUHAS GOPINATH Enterprise is more important than high academic qualifications Juvenile aggression: At the age of 14 Suhas Gopinath was recognized as the worlds youngest certified Professional Web developer through his project coolhindustan.com. Mr. Gopinath was very sure that he wanted to be an entrepreneur & encourage the youth. He setup Globals Inc, in the year 2000 at San Jose, California as the laws in India did not allow him to setup a company in India as he was still a minor. Since then Globals Inc has drastically grown as a Multi-national IT consulting company with representation in more than 11 countries. At present, the average age of the employees in his company is around 21.The senior most employee is 26 yrs old with the youngest being 12 yrs, (Obviously they will not allow the youngest to do a full time job, abiding by the Child labor Act) who does web designing for them. Unshaken belief: Suhas was born in Bangalore & dreamt of becoming a veterinary doctor. But when his elder brother once showed him the world of the internet, he was enthralled by the power of the internet. Within a year, he had taught himself to create & design a website, HTML, ASP & any related software that he could lay his hands on. He was a good student till then but became an average student when he started exploring his new found world in cyber cafes. Suhas started his career in an Internet shop; he worked there and also designed websites for Western companies. That was when he started COOLHINDUSTAN.COM along with his friends (He abandoned that project when it was hacked and the logo was changed to coolpakistan.com). To start off he needed money but his parents refused to invest. He then wrote to Network Solutions headquartered in California, & they readily agreed & offered him a job that would also have paid for his education in US. But all he said was no. He wanted to do the stuff for his own company. He was motivated by failures, he says I just got more aggressive with failures, but I was never afraid of taking risks. I went with the flow and never questioned my abilities, he says. In December 2007, The European Parliament and International Association for Human Values conferred Young Achiever Award to Mr. Suhas Gopinath at the EU Parliament, Brussels, & he was also invited to address the European Parliament & other Business dignitaries assembled in the EU Parliament. In 2008, Suhas was announced as one of the Young Global Leaders by the prestigious World Economic Forum & he became the youngest member ever in the World Economic Forums history. CHAD HURLEY It feels good to be engaged again on finding a simple solution to a difficult problem, which is discovery. Rejuvenating ideas Chad Hurley, 34 & Steve Chen, 33 are the founders of YouTube. Their original ideas were videos for online auctions & ways for people to connect with each other, but realized they needed to generalize & create a video upload community along the lines of Flickr. When Nike soccer video took off on the site, Hurley, Steve Chen & investor Roelof Botha went to Nike HQ in Oregon. Nothing came of it but that was the beginning of thinking about commercial solutions beyond personal use & helping people reach a mass audience. YouTube quickly became one of the web's fastest-growing sites, and was ranked as the 10th most popular website just a year after its launch. There are reportedly 100 million clips viewed daily on YouTube, with an additional 65,000 new videos uploaded every 24 hours. Chad grew up near Birdsboro, Pennsylvania. Hurley received his bachelor's degree in fine art from Indiana University of Pennsylvania. After graduating, he joined eBay's PayPal division where he was asked to design a logo to show his skills & the result was PayPal's logo for many years. Passion to restart On October 16, 2006, Chen and Hurley sold YouTube to Google, Inc. for $1.65 billion. Chad believes that it was a hard decision to be acquired. YouTube could have tried to put everything on the line, raised another round, but it would have been even more threatening to a lot of the services out there & it would have been hard for them to operate in an efficient way. So they decided Google was going to be their answer. Chad says it was the right decision because YouTube grew & it continues to build a community. He says, I dont really think that would have been possible without the help of Google. Chad started all over again with his pal Steve & took over the bookmarking site Delicious from Yahoo. It allows people to save links from around the web & organize them using like-minded tags. Both of them are overhauling the site design. His advice for startups is that before you fund the product; launch it to gauge the response of the audience. As you start building it, do not assume you know all the answers. Listen to the community & adapt. Approach your business partners with concepts they understand & respond to their needs.

BUSINESS NEWS
1) Red Hat Acquires Bangalore Start-up Gluster for 667 crore- TOI 6 Oct Red Hat, the worlds leading provider of open source solutions, has acquired Bangalore-based cloud computing start-up Gluster for approximately Rs.667 crore ($136 million) in an all-cash deal. The deal is expected to close this month, subject to customary conditions. Gluster, founded in 2005 by Anand Babu Periasamy and Hitesh Chellani, sells open-source storage solutions to customers such as UK defence major BAE Systems, Stanford University, Deutsche Bank and the administrative office of US courts. Gluster, headquartered in Sunnyvale, California, has developed an open-source storage platform technology for working with large amounts of data (terabytes, all the way up to petabytes) that ties together everything from the operating system layer to the file system and management interface. The explosion of big data and the new paradigm of cloud computing are converging, forcing IT to rethink storage investments that are cost effective, manageable and scale for the future, said Brian Stevens, CTO and vice-president, worldwide engineering, at Red Hat. Cloud Computing in India is poised for a 10-fold growth to $4.5 billion up from $400 million today according to EMCZinnov India Study. 2) Pilots choose better options as Air India fails to keep its promise- TOI 6 Oct Cash-strapped national carrier Air India has lost 48 of its pilots to domestic and international rivals over the past 3 months, with thriving budget airliner IndiGo poaching two thirds of those. The rest have been hired by a clutch of carriers including domestic airlines like Jet Airways & SpiceJet as well as a few international carriers. Air Indias pilots have at least two good reasons to bail out: non-payment of salaries; & the government going back & forth on the issue of parity in service conditions between the pilots of the erstwhile Indian Airlines and those of Air India. We were told that salaries will be paid regularly but every month only some part is credited despite the government assuring us that the issue of parity with Air India pilots will be sorted out soon. Nothing has come through and we cant survive on promises alone, says a senior commander with Air India who is slated to join IndiGo. He adds that many more resignations are in the offing. IndiGo is dangling the carrot of a joining bonus of Rs.22 lakh for former commanders of Air India. 3) Services sector shrinks in Sept- TOI 6 Oct Activity in the services sector shrank in September as new orders sank, a new survey released. Overall economic activity is seen to be nearly stagnating, with employment falling for the second successive month, increasing worries for policymakers. The seasonally adjusted Service Sector Business Activity Index fell to 49.8 from 53.8 in August, the HSBC Purchasing Managers Index showed. Any reading of less than 50 indicates contraction, while economic activity is seen to be growing if the index is over 50. This is the first time since April 2009 that the services sector, which accounts for more than half the Indian economy, has slipped into negative terrain. 4) HDFC Mutual replaces Reliance as top fund- The Hindu Business Line 7 Oct Falling equity markets coupled with advance tax payments took a toll on the mutual fund industry as its average assets under management declined by about 4% in the quarter ended September as compared to the preceding quarter as of September-end, according to data on the AMFI Web site. However, fund analysts are not too ruffled by the decline. What has compounded the problems for the MFs is that equity funds have been seeing redemptions for more than a year now. Of the fund houses, the top five fund houses HDFC, Reliance, ICICI, UTI and Birla Sun Life saw their AUMs drop. The biggest drop was seen in the case of Reliance Mutual Fund, whose AUM fell by 10.4 per cent. This not only brought down the AUM of the fund house below the Rs 1 lakh crore level but also saw it ceding the number one position to HDFC MF. 5) Our desire is 1.2 bn Indians get a UIDAI number as soon as possible: Nandan Nilekani-ET 10 Oct As the government seeks a radical transformation in how it transmits Rs 3,00,000 crore of annual welfare spends, a lot rests on the shoulders of former Infosys CEO Nandan Nilekani. As the chairman of the Unique Identification Authority of India (UIDAI), he has to assign unique identity numbers for all Indians before a new subsidy regime of direct cash transfers can take off. But the UIDAI has run into its first spell of rough weather in recent weeks. The finance ministry has rejected its Rs 15,000 crore demand to capture biometrics of 1.2 billion residents through its registrars, citing duplication of expenditure as the census office is also doing this for the National Population Register (NPR). The Planning Commission, accountable to Parliament for the UIDAI's expenditure, has said the authority's structure goes against government procedures where as he has asserted that the UIDAI is accountable to Parliament, follows all government procedures and is flexible about which agency collects the biometrics of all 1.2 billion Indians.

6) Maruti strike costs government Rs 350 cr in excise duty-PTI 11 Oct A series of strikes at the country's largest carmaker Maruti Suzuki India's Manesar plant since June this year has resulted in excise revenue losses to the tune of nearly Rs 350 crore for the government, while the company has already suffered a hit of up to Rs 1,540 crore. Since the first round of strike for 13 days in June this year to the 33-day-long standoff from August 29-October 1, and the fresh strike at the Manesar plant from October 7, MSI has suffered a total production loss of 51,375 units. According to the industry calculations, it is estimated that per car on an average, the government is losing Rs 68,000 in the form of excise duty, thereby, resulting in a total loss of Rs 349 crore. The Haryana government, on the other hand, is also losing out Rs 6,000 per car on an average as sales tax, resulting in a total of Rs 30.8 crore so far. The revenue loss to the company from the series of strikes since June is estimated at Rs 1,540 crore. The year 2011 has proved to be a tough one for India's biggest carmaker. In June, the workers at the Manesar plant had gone on a 13day-long strike demanding the recognition of a new union -- Maruti Suzuki Employees Union. After it was resolved, a standoff broke out between the workers and the management on August 29 over the issue of signing of a good conduct bond, a prerequisite made for permanent workers to enter the factory premises. 7) Now, ICICI & AXIS Bank get ratings thumbs-up- BS 6 Oct ICICI Bank & Axis Banks financial positions today received the thumbs-up from rating agencies Moodys & Fitch, respectively. Moodys believes the probability of systemic support for ICICI Bank is high, given its sizeable retail deposit franchise, as well as its importance to the national payment system as the second-largest commercial bank, the agency said. ICICI Bank, the countrys largest private sector bank, got the rating because of a robust franchise and capitalization. Fitch affirmed Axis Banks long term foreign currency issuer default rating at BBB with a stable outlook. The rating reflects the banks strong franchise and its sound profitability and asset quality. The reiteration of a financial strength rating of C- for ICICI Bank came a day after Moodys downgraded SBI from C- to D+ on account of the public sector lenders deteriorating asset quality and rising nonperforming assets (NPAs). 8) Rs100cr court fine on Times Now in a defamation case- TOI 8 Oct Broadcast Editors' Association (BEA) expressed concern over a court order imposing a fine of Rs 100 crore against news channel Times Now in a defamation case. In its annual general meeting, the BEA said it would discuss the matter and seek legal opinion since the issue had implications for all TV journalists. BEA is the apex body of editors of national and regional TV news channels of India. 9) Mobile handset sales falls 12-13 mn, weak rupee may push prices-ET 10 Oct Mobile handset sales in the country have started sliding or stagnating in line with a slowdown in subscriber additions, forcing local players to push exports to maintain their growth rate. Monthly handset sales in the country has fallen to 12-13 million over the past two quarters, down from an average of 15 million last fiscal year, according to data from research firm GfK. The industry added only 6.67 million new subscribers in August, down from 23 million in November last year and more than 20 million in January, according to telecoms regulator Trai. Latest data from International Data Corporation (IDC) showed a 3% quarter-on-quarter slip in mobile phone shipments in the country during April-June at 42.8 million units. Indian manufacturers such as Micromax, Lava, Maxx and Karbonn seem to have been affected as Nokia and Samsung, the top two players in the industry, have increased their market share. Maxx Mobiles Chairman Ajjay Agarwal and Spice Mobility Managing Director Dilip Modi said their sales have remained same as last year. A senior Nokia official claimed that the Finnish company was the only brand to have grown in the industry over the last two quarters. "Our sales have increased significantly due to launch of our dual sim phones," the executive said on condition of anonymity. 10) Airlines sag more with rupee slide- BS 6 Oct The slide in the value of the rupee against the dollar is making the lives of airline companies, already beset with problems, a bit more difficult. Around a third of the operating cost of every airline is calculated in dollar terms. Airlines with less international exposure are seeing more impact because of the absence of any dollar revenue. With the depreciating rupee, our costs have increased by 10%. We have no option but to observe this cost, at a time when the pressure on fares continue because of low fares by two airlines, said a senior airline executive. Around 35% of our costs are paid in dollars. Even as the payments for parking and landing at international airports are paid in the local currency, the charges are calculated in dollars, making it the same for us, said another airline executive. Aviation turbine fuel constitutes half of the operating cost of an airline; Jet fuel prices have increased by 40% in recent times.

11) Draft IT policy aims creation of 10 million new jobs by 2020- ET 8 Oct The government today unveiled the draft policy on information technology, 2011 that is aimed at creating a pool of extra 10 million skilled manpower by 2020 & strengthening India's position as a global IT power. The policy also targets exports worth $ 200 billion and a total revenue of $ 300 billion by 2020 from the IT and ITes industry, Communication and IT Minister Kapil Sibal said unveiling the draft policy. The shipment is worth $ 59 billion, while the revenue is $ 88 billion at present. "Our objective from this policy is to increase revenues of IT and ITeS (IT-enabled services) industry from $ 88 billion at present to $ 300 billion by 2020 and expand exports from $ 59 billion at present to $ 200 billion by 2020" he said. The draft aims to provide fiscal benefits to small and medium enterprises & start-up ventures in the key industrial verticals for adoption of IT. 12) Roaming charges to be abolished-TNN 11 Oct If the government has its way, it will soon be One Nation as far as telecom is concerned with roaming charges becoming a thing of the past and countrywide number portability being the order of the day. Besides, broadband speed will go up more than nine times in four years and consumers may get a voice on quality of services in case of disputes with operators. There is also a move to cut costs for value-added services, such as text messages, as the government and the regulator prepare an appropriate regulatory framework for delivery of VAS at affordable prices. The National Telecom Policy 2011 is moving from e-governance to m-governance as mobile telephony is now cheaper resulting in more people having access to phones. The idea is to treat IT and telecom as a basic necessityjust like health or educationand work towards Right to Broadband. As part of the strategy, internet users can look forward to kissing goodbye to painfully slow broadband connections with the policy aiming to double the download speed to 512 kilobytes per second (Kbps) and then boosting it to 2 mega bps by 2015. 13) India 2nd only to US, with 3 mn affluent households: Survey- ET 7 Oct Strange as it may sound, with as many as one-third of its population still living in poverty, the country is also home to the second largest number of affluent people with a whopping three million households which have over USD one lakh of investible funds. According to a survey by the global market research agency TNS, while the US still is the world's most prosperous country with 31 mn affluent households, India, China and Brazil have overtaken many European countries in this measure of consumer wealth with three million affluent households each in these countries which have over USD one lakh investible funds. In other words, as many as 27 per cent American households are affluent, while this is only 1.25 per cent and 0.75 per cent in regard to India and China respectively, thanks to the sheer size of their population. Releasing the report, TNS business and finance director Reg van Steen said, "Our research confirms that emerging markets will become new centers of affluence in coming years. India and China have already surpassed major European markets like Germany and France in this. It's interesting to see that the entrepreneurial spirit of people in these markets is already paying off in terms of personal wealth." 14) Starbucks Coffee Company set for cafe joint venture with Tatas-TNN 10 Oct Starbucks chairman and CEO Howard Schultz is set to clinch a joint venture with Tata Group for opening coffee shops in Indi a, almost nine months after he struck a sourcing deal with Tata Coffee, a unit of India's largest private conglomerate and Asia's largest coffee grower, said two sources directly aware of the matter. The $11-billion Starbucks is finalizing an exclusive equity joint venture with Tata Coffee which would also be backed by other bigger firms within Tata Group. The country's foreign direct investment (FDI) regulations allow Starbucks to hold up to 51%. Tata shares may be routed through more than one group entity, including Tata Coffee, sources added. India's coffee shop sector is dominated by local players cafe Coffee day and Barista Bean Company, which was acquired by Italy's Lavazza. Several international brands like Costa, Coffee Bean, Segafredo Zanetti and Nescafe have embarked on building cafe chains in the country. More recently, Dunkin Donuts announced a tie-up with Jubilant. The Western-style cafe culture has helped boost coffee consumption in India by 6% in the last five years. Coffee consumption stood at 1e lakh tonne in 2010. 15) Industry pleads for cheaper credit-PTI 10 Oct Leaders of industry on Monday appealed to the Reserve Bank to cut interest rates in the forthcoming credit policy saying the economy could slide into difficulties if credit is not made cheaper. The monetary authority will unveil its second quarter credit policy on October 25. Niranjan Hiranandani, Managing Director of the Hiranandani Group, said recent data like the drastic fall in factory output numbers suggested that the IIP numbers too would fall if the interest rates continue to be high. "There is an urgent need to reduce the rates and all the industry bodies like Ficci, CII and IMC are united in that," Hiranandani, who was a part of a Ficci delegation, said.

16) BlackBerry has outages in Europe, Africa, India-Reuters 10 Oct BlackBerry users in Europe, the Middle East, Africa and India suffered email outages for several hours on Monday, adding to the woes of struggling manufacturer Research in Motion, increasingly seen as a takeover target. Twitter users and Reuters correspondents from Britain to Dubai to New Delhi reported disruptions or complete outages of their email and BlackBerry Messenger services. RIM, which once owned the corporate mobile email market, has been losing share to Smartphone rivals led by Apple's iPhone as employees from the boardroom down demanded more choice. A poor reception for its Playbook tablet computer has increased pressure on RIM's top management, while a string of senior staff have left. Monday's outage follows last month's BlackBerry Messenger disruption in the Americas. Last month, investors drove RIM stock down by 20 percent, or $3 billion in value, after dismal quarterly results, raising prospects of a break-up, sale or new leadership. 17) Skoda lines up new compact car Citigo for India-ET 10 Oct The company has not been able to crack the big volume compact car segment in India with the Fabia, and it now plans to launch new products in the lower-end of the market to corner higher numbers and market share. The Citigo is one of the newest and the smallest cars in Skoda's stable and will be launched in the Czech market in late 2011 and in Europe in the beginning of summer 2012. In line with the company's positioning of a value-for money brand within the Volkswagen (VW) stable, the Citigo will be a cheaper alternative to parent VW's Up! The Rapid will be launched in India in December and will compete with models like Nissan's Sunny, Toyota's Etios, Maruti's Dzire, Ford's Fiesta Classic and Tata's Indigo Manza. It will be priced lower than Volkswagen Vento, whose price starts at Rs 7lakh. The model will be manufactured at Volkswagen's Chakan factory. 18) Fiery Shareholders Force Crompton to Sell off Plane-TOI 8 Oct Crompton Greaves, which had bought the aircraft for an estimated Rs. 270 crore last fiscal, may sell the jet to an unlisted group entity at the price at which it was purchase. Top Crompton officials have been meeting fund managers of mutual funds and insurance companies that hold the stock to convey this decision. The two persons who did not want to be identified as they are not authorized to speak to the media said the latest move by the management is aimed at assuaging the feelings of these dominant investors, who were miffed by the companys decision to buy the aircraft at a time the company's profits were under pressure. What irked shareholders all the more was the companys remarks terming the purchase as an investment. We are not concerned about who will be the buyer of the aircraft. All we are concerned about is whether Crompton recovers the entire money (Rs. 270 crore) or not, said a fund manager with a private mutual fund and privy to the matter. Crompton shares plunged almost 44% in a month from July 19 the day the company reported disappointing first quarter results and after a wider section of investors took notice of the jet purchase. 19) Fresh Maruti Strike Spreads in a Flash-TOI 8 Oct Workers at Maruti Suzukis troubled Manesar car plant went on a so-called flash strike, in which no notice is served on the management, virtually seizing the premises in protest of the managements decision not to allow 1,100 casual workers to enter the factory. The strike, which started during the second shift at around 4 pm, took the company by surprise and within minutes spread to adjoining plants of Suzuki Powertrain India and Suzuki Castings, which supply components to Maruti Suzuki, as well to the factories of Suzuki Motorcycle India in Gurgaon. All these plants are wholly owned by the parent, Suzuki Motor Corporation, which also owns a majority 54.2% stake in Maruti Suzuki. The Maruti management described the actions of the workers as a breach of faith. The company said the casual workers would be absorbed once production increased. That is a non issue. We are gradually ramping up our production at Manesar, including our new 2.5-lakh capacity Manesar II assembly plant. 20) Western economies in deep freeze, expats look at India for jobs-PTI 09 Oct As the Western economies continue to remain in deep freeze, more and more foreigners, mostly from the US and Europe are looking at India for jobs, a trend that has seen up to 20 per cent spurt this year, according to head-hunters. The Indian experience also adds values to the expats' resume, reflecting an individual's ability to adapt and deal with diversity. The number of foreigners seeking jobs in the country are no longer limited to the middle and senior levels, but is spreading over to beginners as well, adding that at present, there are around 40,000 expats working in the country and the number is still growing. What is interesting is that these expats are given compensation almost at par with what is being paid in foreign countries. "Expats, with specialized skill sets, which are not available in the country due to financial or technology constraints such as molecular research, are being offered highly attractive packages," Elixir Consulting Manager Ratnesh Kumar said. However, the attrition rate of expats is around 10 per cent annually mainly due to difficulties in communication and cultural differences, Kumar added.

INTERNATIONAL NEWS
21) Steve Jobs (1955-2011)-WSJ 7 Oct Steven P. Jobs, the Apple Inc. chairman & co-founder who pioneered the personalcomputer industry & changed the way people think about technology, died on 5 th Oct, at the age of 56. The company didn't specify the cause of death. Mr. Jobs had battled pancreatic cancer and several years ago received a liver transplant. In August, Mr. Jobs stepped down as chief executive, handing the reins to longtime deputy Tim Cook. In addition to laying the groundwork for the industry alongside others like Microsoft Corp. co-founder Bill Gates, Mr. Jobs proved the appeal of well-designed products over the power of technology itself and transformed the way people interact with technology. The most productive chapter in Mr. Jobs's career occurred near the end of his life, when a nearly unbroken string of successful products like the iPod, iPhone and iPad changed the PC, electronics and digital-media industries. 22) Sony to buy Ericsson's stake in their 50:50 smartphone JV-Reuters 7 Oct Sony Corp is nearing a deal to buy Telefon AB LM Ericsson's stake in their 50:50 smartphone joint venture. Sony and Ericsson have been talking for weeks about the future of the venture because the companies' 10-year-old pact is up for renewal this month. The joint venture, formed in 2001, thrived after its breakthrough with Walkman music phones and Cybershot camera phones, both of which leveraged Sony's brands. But it lost out to bigger rivals Nokia and Samsung Electronics at the cheaper end of the market, and was late to react to Apple's entrance into the high-end of the market. It has refocused its business to make smartphones using Google's Android platform, but it has dropped to No. 9 in global cellphone rankings from No. 4 just a few years ago 23) Humbled Dubai looks to real economy, Arab world-Reuters 09 Oct Nearly two years after it was forced to go cap in hand to neighbor Abu Dhabi for a bailout, a chastened Dubai has ring fenced vulnerable assets, forced banks to bolster reserves and deferred debt maturities. A more modest approach to business -- in contrast with the excesses of its earlier model -- coupled with strengths in logistics and trade, and a growing focus on its own region, mean that Dubai's dreams of being a top financial centre are still just about alive. Luck certainly seems to be in its favour: the Gulf emirate has proven an oasis of calm amid the chaos of the Arab Spring, which saw rebellion in countries as far apart as Tunisia and Syria and, crucially, rival Bahrain. Dubai's boom and bust were closely linked to its real estate market. The market is still plagued by oversupply, but there's a sense that when a recovery eventually happens, it will be based on firmer ground. Florence Eid, CEO at research firm Arabia Monitor expects the property market to return to normal by 2015 because "the history of real estate bubbles suggests a five- to seven-year cycle". 24) S African Chain to Buy 26% in Max Healthcare-TNN 12 Oct Life Healthcare, South Africas second-largest hospital chain, is acquiring a 26% stake in Analjit Singh-led Max Healthcare for Rs516 crore, making this one of the largest foreign investment deals in the Indian healthcare sector. The proposed transaction values the Max India subsidiary at around Rs 2,000 crore, which is almost two-and-a-half times the valuation at which private equity fund Warburg Pincus exited the healthcare company in June this year. The private equity player had sold a 16.37% stake in the unlisted hospital chain to Max India for Rs140 crore at Rs 29.40 a share, pegging the valuing of the company at Rs 855 crore. Rise in disposable incomes, penetration of health insurance, lifestyle changes and increased government expenditure on healthcare are driving growth in the sector. 25) Skoda bets big on India as global growth driver-The Hindu Business Line 09 Oct Czech carmaker Skoda Auto is betting big on India as one of its key growth drivers in the future. Dr H.C. Winfried Vahland, Chairman of the Board of Management, said that the company would invest heavily in emerging nations with the top priorities being India, China and Russia. These three countries are expected to play a big role in helping Skoda achieve its global goal of 1.5 million cars by 2018. The company ended 2010 with 7.62 lakh units and hopes to wrap up this calendar with over eight lakh cars. Parent company, Volkswagen has also targeted 2018 as the year to attain its objective of being the world's largest automaker, ahead of General Motors and Toyota. Clearly, Skoda along with the slew of other brands in VW's kitty right from Audi, Porsche and Bentley to MAN and Scania will contribute to making this a reality. Dr Vahland said Europe, which accounts for nearly 60 per cent of Skoda's sales, would see its share fall to 40 per cent by 2018 as the rest of the world takes over. The Chakan facility near Pune, referred to as the volumes plant, is home to VW and Skoda models which are produced on a common platform like the Polo/Fabia and Vento/Rapid. Aurangabad, the variety plant', caters to top-end (and, hence, limited numbers) models of Audi, VW and Skoda.

MISCELLANEOUS NEWS
26) Humble guava is healthiest of all fruits-TNN 12 Oct A study by the National Institute of Nutrition (NIN) in Hyderabad has revealed that fruits like guava and apple are rich in antioxidants, which are intimately involved in the prevention of cellular damagethe common reason for cancer, aging and a variety of degenerative diseases. In an article published in the journal Food Research International, lead author Dr D Sreeramulu from the NINs endocrinology and metabolism division has said that while the anti-oxidant activity in guava was a high 496 mg/100 grams, it was a mere 22 mg/100 grams in pineapple. Dr Sreeramulu told TOI, The findings were an eye-opener for us. We usually believe that expensive fruits are the richest source of nutrition. Our extensive research shows that fruits that are rich in anti-oxidants help scavenge free radicals that destroy tissues. Free radicals are atoms that can start a chain reaction and cause damage when they react with important cellular components such as DNA or cell membrane. Cells may function poorly or die if this occurs. Studies show that fruits are rich sources of phenolic compounds and anti-oxidant activity (AOA). 27) Govt credibility at its lowest, governance below par: CAG-TNN 12 Oct The Comptroller and Auditor General (CAG), Vinod Rai said theres been an erosion of peoples faith in government. Their confidence in public institutions has declined. National trust in bureaucracy including the police force has collapsed. The integrity of civil servants is being questioned. We have CMs who have had to vacate their positions allegedly for graft, on whom courts and other judicial bodies have made adverse pronouncements. We have MPs who are being indicted by the judiciary for various acts including accepting cash for exercising their vote in Parliament Vinod Rai, comptroller & auditor general Need to stand up and be counted Rai said, It often provides very poor testimony of our capabilities if members of the all-India services allow themselves to be used if not as facilitators, certainly as a medium for wrongdoing by others All attempts to improve governance will come to naught if the agencies responsible for governance do not consider probity in public life and ethical behaviour as cardinal principles in their official dealings. Later speaking to reporters, Rai said he had written a letter to Public Accounts Committee chairman Murli Manohar Joshi saying he was willing to appear before the parliamentary body and explain the method of 2G auditing. 28) Ig Nobel for Indian scientists-TOI 7 Oct Anyone who digs nose-picking now has company. Chittaranjan Andrade and BS Srihari's first-hand knowledge of this deep-seated adolescent habit has so impressed the Harvard science-humor magazine, annals of improbable research, that it has honored them with the Ig Nobel for public health. Andrade and Srihari, from the Bangalore-based National Institute for Mental Health and Neurosciences (NIMHANS), went where no man had gone before and spent a year studying rhinotillexomania for that's what compulsive nose-picking is called in 200 adolescents from four urban schools. 29) Marans Raided, Booked by CBI in Aircel Case-TNN 11 Oct The Central Bureau of Investigation has raided premises connected with Tamil Nadus Maran brothers and booked them for prosecution under anti-corruption laws, further isolating the siblings who long thrived on a cocktail of business and politics. The raids also put back the corruption spotlight on the UPA government and its oversight of ally DMKs stewardship of the telecom ministry, where the 2G spectrum scandal, regarded as Indias worst instance of graft, erupted. The brothers got unexpected support from the stock market, which gave Sun TV shares a more than 10% boost, but their party, the DMK, was circumspect. Shares of Kalanithi Maran-owned Sun TV ended at 288.15 on BSE after yo-yoing through the day. Shares of SpiceJet, the low-cost carrier that Kalanithi bought last year, were up 1.65% at 21.6. Sun TVs rise was attributed to short covering. The CBI also raided the home of Suneeta Reddy, the joint managing director of Apollo Hospitals who owns a minority stake in Aircel. 30) UN blames sex test for Indias missing girls-TOI 8 Oct An overwhelming majority of the 117 million missing girls in Asia are from India and China, the United Nations has said. And it has laid the blame for this phenomenon squarely on the ultrasonography machine, which has been a topic of debate and heartburn in Mumbai. The problem does seem acute especially in Mumbai. Its child sex ratio stands at 892 girls for every 1,000 boys, which is not only much worse than the all-India figure of 914 girls but is also poorer than Vietnams 899 girls for every 1,000 boys under the age of six. But the UN Population Fund figures offer some cold comfortChina appears even more casual about the future of its girl child, with only 847 girls born for every 1,000 boys. However, the UN mentioning India and China in the same breath does not speak too highly of Indias efforts in this sphere, say experts in the city. Despite the efforts of the government and activists, Mumbai's sex ratio remains skewed.

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BERKSHIRE HATHAWAY
Head Quarters: Omaha, Nebraska, US Revenue: US$ 136.185 billion (2010)

CORPORATE INTELLIGENCE

Company Statistics: An American conglomerate with 260,519 employees, Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in diverse business activities including property & casualty insurance and reinsurance, freight rail transportation, utilities & energy, finance, manufacturing, services and retailing. Berkshires finance & financial products businesses engage in proprietary investing strategies (BH Finance), commercial and consumer lending (Berkshire Hathaway Credit Corporation and Clayton Homes). Fruit of the Loom, Russell, Vanity Fair, Garan, Fechheimer, H.H. Brown Shoe Group and Justin Brands manufacture, license & distribute apparel & footwear under a variety of brand names. Nebraska Furniture Mart, R.C. Willey Home Furnishings, Star Furniture and Jordans Furniture are retailers of home furnishings. Borsheims, Helzberg Diamond Shops and Ben Bridge Jeweller are retailers of jewellery. Other businesses include - The Buffalo News, a publisher of a daily and Sunday newspaper, Sees Candies, manufacturer & seller of boxed chocolates and confectionery products, The Pampered Chef, a premier direct seller of kitchen tools in the U.S and Business Wire, the leading global distributor of corporate news, multimedia and regulatory filings. Key People: Warren Buffett (Chairman & CEO); Charlie Munger (Vice Chairman) Owned by the Oracle of Omaha: Berkshire Hathaway traces its roots to a textile manufacturing company the Valley Falls Company established by Oliver Chace in 1839. In 1929 it merged with Berkshire Cotton Manufacturing Co. and with Hathaway Manufacturing Co. in 1955. At this time, Hathaway was run by Seabury Stanton. In 1962, Warren Buffett began buying stock in Berkshire Hathaway after noticing a pattern in the price direction of its stock whenever the company closed a mill. In 1964, Stanton made a verbal tender offer of $11&12 per share to buy back Buffett's shares. Buffett agreed to the deal. A few weeks later, Buffett received the tender offer in writing, but for only $11&38. Buffett later admitted that this lower undercutting offer made him angry. Instead of selling at the slightly lower price, Buffett decided to buy more of the stock to take control of the company and fire Stanton (which he did). However, this put Buffett in a situation where he was now majority owner of a textile business that was failing. Buffett initially maintained Berkshire's core business of textiles, but by 1967, he was expanding into the insurance industry & other investments. Berkshire first ventured into the insurance business with the purchase of National Indemnity Company. In the late 1970s, Berkshire acquired an equity stake in the Government Employees Insurance Company (GEICO), which forms the core of its insurance operations today (and is a major source of capital for Berkshire's other investments). In 1985, the last textile operations (Hathaway's historic core) were shut down. The Warren Buffett Way: As Chairman, Warren Buffett issued a booklet entitled An Owners Manual to Berkshires Class A & Class B shareholders in June 1996, explaining Berkshires broad economic principles of operation like We regularly compare the gain in Berkshires per-share book value to the performance of the S&P 500. Over time, we hope to outpace this yardstick. According to the Forbes Global 2000 List, Berkshire Hathaway is the 8th largest public company in the world. Included in the group of subsidiaries that underwrite property & casualty insurance and reinsurance along with GEICO (the 3rd largest private passenger auto insurer in US) are 2 of the largest reinsurers in the world - General Re & the Berkshire Hathaway Reinsurance Group. INTELLIGENCE BYTES: Berkshire Hathaway stock produced a total return of 76% from 20002010 versus a negative 11.3% return for the S&P 500. As per Berkshires 2010 annual report, over the last 46 years (that is, since present management took over), book value has grown from $19 to $95,453, a rate of 20.2% compounded annually. Berkshire's class A shares sold for $108,020 as of Sept 28, 2011, making them the highest-priced shares on the New York Stock Exchange, in part because they have never had a stock split and never paid a dividend, retaining corporate earnings on its balance sheet in a manner that is impermissible for private investors and mutual funds. Berkshire's annual shareholders' meetings, taking place in the Qwest Centre in Omaha, nicknamed "Woodstock for Capitalists", are considered Omaha's largest annual event. Known for their humour and light-heartedness, the meetings typically start with a movie made for Berkshire shareholders. Berkshires salary for the CEO -US$100,000 per year with no stock options- is among the lowest salaries for CEOs of large companies in US. Buffett, whose annual chairman's letters are widely read and quoted, recently argued in an article in New York Times that the richest members of US society are indulged with an unfairly generous tax regime and are not making a fair contribution to repairing the country's finances.

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CURRENT AFFAIRS QUIZ

1. Cloud Computing in India is poised to grow __________? a. 15 fold b. 10 fold c. 20 fold d. 25 fold 2. What is the IndiGo management offering the former Air India commanders to attract them to their workforce? a. 3 times more package than what is offered by Air India. b. Joining bonus of Rs.23 lakhs. c. 60% rise in salary and Rs.21 lakh joining bonus. d. Joining bonus of Rs.22 lakh. 3. Which a. b. c. d. 4. Which a. b. c. d. sector accounts for more than half the Indian economy? Services sector Agricultural sector Energy and power sector Banking & finance sector is the apex body of editors of national and regional TV news channels of India? Broadcasters Editors' Association Editor's Broadcasters Association Association of Broadcasters & Editors Broadcast Editors' Association

5. Why have airline companies been facing problems in India? a. Slide in the value of the rupee against the dollar & the fact that around a third of the operating cost of every airline is calculated in dollar terms. b. Rising infrastructure and maintenance cost. c. Prices for parking and landing at international airports have been raised by countries. d. Rise in the demand for pilots & airlines have increased their salaries resulting in high costs. 6. What does draft policy on information technology, 2011 aim to do? a. The draft aims to provide fiscal benefits to big companies & start-up ventures in the key industrial verticals for adoption of IT. b. The draft aims to provide fiscal benefits to SMEs & start-up ventures in the key industrial verticals for adoption of IT. c. The draft aims to provide fiscal benefits to cooperatives & start-up ventures in the key industrial verticals for adoption of IT. d. The draft aims to provide tax concessions to SMEs & start-up ventures in the key industrial verticals for adoption of IT. 7. Which a. b. c. d. Asian countries have surpassed the European countries as affluent countries in the world? Hongkong & China Japan & India India & China India & Hongkong

8. Steve Jobs stressed on _____________. a. Power of technology over appeal of well-designed products. b. Appeal of well-designed products over the power of technology. c. Power of simplicity over appeal of well-designed products. d. Power of easy user interface over appeal of well-designed products.

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9. What is the reason behind the fact that an overwhelming majority of the 117 million missing girls in Asia are from India and China, according to the United Nations? a. UN has laid the blame for this phenomenon squarely on low education level among women. b. UN has laid the blame for this phenomenon squarely on high rate of school drop out of girls. c. UN has laid the blame for this phenomenon squarely on the ultrasonography machines. d. UN has laid the blame for this phenomenon squarely on lack of government action.

10. The gross domestic product (GDP) is one of the measures of national income and output for a given country's economy. Which of the following countries has the least GDP? a. Australia b. India c. France d. Germany 11. Government debt as a percent of GDP, also known as debt-to-GDP ratio, is the amount of national debt a country has in percentage of its Gross Domestic Product. Which of the following countries has the highest gross Government debt as a percentage of GDP tracked by Trading Economics? a. Greece b. Japan c. Italy d. China 12. The finance ministry has rejected UIDAI's Rs 15,000 crore demand to capture biometrics of 1.2 billion residents through its registrars. Why? a. The finance ministry is not having sufficient funds for the project and hence rejected the demand. b. because UIDAI has failed to complete the first phase of it project all over India and hence not eligible for more grant. c. The finance ministry found some irregularities in the accounts of UIDAI and hence rejected the grant. d. because the census office is also doing this for the National Population Register (NPR) which means duplication of expenditure. 13. Nandan Nilekani, the chairman of the Unique Identification Authority of India (UIDAI) was a CEO of which of the following Information Technology companies? a. Infosys b. Tata Consultancy Services c. Wipro d. Cognizant Technology 14. Indian mobile handset manufacturers seem to have been affected as the top two players in the industry have increased their market share. Here we are talking about which of the following pair of mobile companies? a. Motorola & Samsung b. Nokia & Sony Ericson c. Motorola & Nokia d. Nokia & Samsung 15. The National Telecom Policy 2011 is moving from e-governance to m-governance as mobile telephony is now cheaper resulting in more people having access to phones. Which of the following is the idea behind it? a. The idea is to treat IT and telecom as a basic necessity just like health or education and work towards Right to Broadband. b. The idea is to double the download speed to 512 kilobytes per second (Kbps) for the mobile internet users . c. The idea is to increase the costs for value-added services and cover this increased cost by providing broad band services at cheaper rates. d. The idea is to popularize m-governance by providing countrywide number portability at one time activation price.

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16. Starbucks chairman and CEO Howard Schultz is set to clinch a joint venture with which of the following Indian groups for opening coffee shops in India? a. Aditya Birla Group b. Tata Group c. Future Group d. Sahara Group

17. Which of the following companies is the Asia's largest coffee grower and is a unit of India's largest private conglomerate? a. Nescafe b. Barista Bean c. Tata Coffee d. Costa Coffee

18. The Rapid will be launched in India in December and will compete with models like Nissan's Sunny, Toyota's Etios, Maruti's Dzire, Ford's Fiesta Classic and Tata's Indigo Manza. Rapid is a car model from which of the following car makers? a. Skoda b. Honda c. Mahindra & Mahindra d. Hyundai

19. Name South Africas second-largest hospital chain that is acquiring a 26% stake in Analjit Singh-led Max Healthcare for Rs516 crore, making it one of the largest foreign investment deals in the Indian healthcare sector? a. Johns Hopkins Clinic b. Life Healthcare c. Mayo Clinic d. Cleveland Healthcare

20. Which a. b. c. d.

of the following is a parent company of Czech carmaker Skoda Auto? Toyota Motors General Motors Volkswagen Ford Motors

21. Berkshire's chairman Warren Buffet has recently argued in an article in New York Times that: a. the Berkshire Hathaway stock has produced a total return of 76% from 20002010 versus a negative 11.3% return for the S&P 500. b. the richest members of US society are indulged with an unfairly generous tax regime. c. credit-rating agencies are to be blamed for grossly underestimating the risk of a housing collapse and a financial meltdown, while making profits. d. Greece needs to reduce its deficits and start selling off state-backed assets in order to meet the terms of a second bailout by the IMF. 22. Berkshire's class A shares sold for $108,020 as of Sept 28, 2011, making them the highest-priced shares on the New York Stock Exchange, in part because: a. they have never retained corporate earnings on their balance sheet. b. they are the most preferred stocks for long term capital appreciation. c. they have never had a stock split. d. the company has followed a policy of buybacks to create more value for their shareholders.

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23. India has 3 mn affluent households. Affluent households are defined as those with investable assets of how much? a. 1 Crore b. 10 Lakhs c. 50 Lakhs d. 1 Lakh

24. What has traditionally been the big challenge for marketing beyond metros, especially in Tier III and Tier IV towns and rural India. a. Advertising b. Logistics c. Retailing d. Pricing

25. Which a. b. c. d.

of the following "Bunty" traits have been tapped by Voltas in its advertising and marketing efforts? Confidence Gandhian Values Family Values Pride

ANSWER KEY: Q 1 2 3 4 5
A

b d a d a

Q 6 7 8 9 10

b c b c a

Q 11 12 13 14 15

b d a d a

Q 16 17 18 19 20

b c a b c

Q 21 22 23 24 25

b c c b d

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