India Business Journal Online December 2015

 

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India Business Journal Online December 2015 Issue

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CONTENTS YOUR GATEWAY TO INDIA INC. DECEMBER 2015, Rs 35 EDITOR AMIT BRAHMABHATT ASSISTANT EDITOR SHRIVATSA JOSHI ADVERTISING MANAGER WILLIAM RUMAO GRAPHIC DESIGNER RENUKA SAWANT ADVISORY PANEL SHASHIKANT PATEL JITENDRA SANGHVI REGISTERED OFFICE 102, RAJASTHAN TECHNICAL CENTRE, PATANWALA ESTATE, GHATKOPAR (W), MUMBAI 400 086. INDIA PHONE: 6703 0250/6703 0251 FAX: +91 22 6703 0251 EMAIL: mail@ibj.in BUREAU CHIEFS AHMEDABAD: B D RAWAL CHENNAI: G JACINTH DELHI: RANJANA ARORA KOLKATA: DIPANKAR SEN COVER STORY THE 100-GW BET The ambitious solar mission is set to change the country's energy economics for the better even if a fraction of the mega target is met. 24 Viewpoint Seventh Pay Commission News Round-Up A brief on news, tie-ups, appointments and awards ..........4 ..........6 Labour Reforms ..........22 Clean-Up Act: The government is fast-tracking six key Bills to push through labour reforms. International Business .....32 Freeing Up Trade: As global trade faces rough weather, the WTO urges G-20 nations to eliminate existing restrictive measures. Management Mantra ..........44 "Have Faith In Your Strategy": Rakesh Rawal, CEO, AnandRathi Private Wealth Management Global Wrap-Up ..........46 A quick round-up of news and current affairs across the world Readers' Lounge ..........48 Catch up with new book launches - Who Cheats And How? - Working Out Of The Box - Who Will Cry When You Die? Policy ..........14 Foreign Push: Sweeping relaxations to the FDI regime are a right step in the right direction. But there is an urgent need to boost domestic investment. Disinvestment ..........16 Going Retail: The government is on an overdrive to tap small investors as it lunges ahead to meet its ambitious disinvestment target. Public Finance ..........18 Taxing Time: As disinvestment and tax proceeds fall short, the government looks to squeeze every penny out through cesses and higher dividends. ..........20 "Expanding 3G Network Also Improves Voice Quality": Gopal Vittal, MD & CEO (India & South Asia), Bharti Airtel Straight Talk SPECIAL REPORT B-SCHOOLS: BUOYANCY RETURNS B-schools are gearing up to cash in on the return of positive business sentiment and revival of the job market. 34 INDIA BUSINESS JOURNAL Printed and published by Amit Brahmabhatt for Issues Analysis and Research Pvt Ltd and published from 102, Rajasthan Technical Centre, Patanwala Estate, Ghatkopar (W), Mumbai 400 086 and printed at Graphtone (India) Pvt. Ltd., A1/319, Shah & Nahar Indl. Estate, Lower Parel, Mumbai 400 013 Processed at Graphtone (India) Editor: Amit Brahmabhatt Volume XI, No 6 Issue date December 1-31, 2015 Released on December 1, 2015 EDITORIAL ASSOCIATE Star Talk ..........50 Forecast by Bejan Daruwalla Knowledge Zone ..........52 - Arunachalam Vellayan, Chairman, Murugappa Group - Pulses - Spiritual Corner: Science of Karma Hot Seat ..........54 Neeru Anand, Director (Human Capital), Acreaty Management Consultant Press Trust of India MARKETING ASSOCIATE Milage ads & events SUBSCRIPTION RATES India Rs 420/- for 1 year (12 issues) Overseas Rs 1,860/- or US$32 for 1 year (12 issues) Add Rs 50/- for outstation cheques www.indiabusinessjournalonline.com DECEMBER 2015 3

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VIEWPOINT More Pay, But No Performance S Seventh Pay Commission: Yet another costly splurge Doling out higher pay to government employees without accountability is not just counterproductive. It is also obsolete for a country that aspires to be a superpower in the near future. 4 DECEMBER 2015 ome 47,00,000 Central government employees appear set for healthier pay packets if the Centre accepts the Seventh Pay Commission's recommendation. The pay panel, headed by Justice A K Mathur, has recommended a 23.55 per cent hike in pay and allowances. The recommendations, which will also benefit about 52,00,000 pensioners, will cost the exchequer Rs 1,02,000 crore, or 0.65 per cent of the GDP. The recent pay panel's 23.55 per cent increase in salaries is relatively modest, going by quantum of pay hikes given by previous commissions. The Sixth Pay Commission had doled out a whopping 40 per cent rise. But percentages can be misleading when looked at in isolation. Government servants get a guaranteed annual increment of 3 per cent and dearness allowance of around 5 per cent. The fresh increases indeed turn unwieldy when seen in this light. Moreover, the excess does not end here. As has always been the norm, pay hikes for Central government employees are inevitably followed by matching revisions in pay for State government employees, municipal employees as well as staff of State and Central public sector undertakings. With the commission also recommending the one-rank-one-pension principle for all civilian and defence employees, pension outgoes threaten to match or exceed salary spends. Add them all up, and the total outgo of Centre and States mounts to over 5 per cent of GDP. This is a substantial sum for an economy where nearly a third of the population is still below the poverty line. By some estimates, about half of what the Centre gets by way of tax revenue goes towards salaries and pensions. This is clearly unsustainable in the long term. While the Centre has always been quick to accept and implement recommendations on pay increases, it has been far less proactive in tackling the issue of reforming the structure of administration and providing better governance delivery. Despite growing digitisation and the thrust on e-governance, the government has essentially not changed the way it works. Amid the brouhaha over hefty pay, the real issue of getting government employees to deliver remains unanswered. Performance-linked pay has been talked about in the past, and the current pay panel also repeats it. But the issue has always been given a lip service and no government has dared to implement it on the ground. It would be too naive to believe that the present government will ensure that performance is commensurate with the pay. As the country integrates into the global economy and governance becomes ever more complex, the competence and work required of civil servants mount. Senior job vacancies must be filled from a common pool of talent that cuts across different services and cadres and includes potential lateral entrants as well. Pay and perks must not be linked to a service or a cadre, but to specific jobs. Perhaps the only saving grace for a demand-strapped economy is what the fat pay packets for government employees will do for purchase of automobiles and other goods. In this case though, it would be engaging in a far too costly exercise to raise domestic consumption. That can very well be done more efficiently by reforming the bureaucracy, cutting red tape, ensuring ease of doing business and ushering in deep, structural reforms. These measures will boost industry and enterprise, create more jobs, put more money into people's pockets and spur domestic demand for goods and services. Doling out higher pay to government employees without accountability is not just counter-productive. It is also obsolete for a country that aspires to be a superpower in the near future. INDIA BUSINESS JOURNAL

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NEWS ROUND-UP MISCELLANEOUS per cent of devices connected on mobile networks in the country are 3G enabled. Of this, only 45 per cent smartphones are used for the high-speed internet service, shows a study by Nokia Networks. The survey, however, notes that 3G service is witnessing a rapid adoption among users. Growth of 3G subscription in a span of six months surged by 26 per cent, while its penetration in India stands at 24.59 per cent, the study notes. The study adds that a significant population of subscribers today has 3Genabled devices, which are still untapped. Only 45% smartphones linked to Net Around 25 Service Tax. The government has introduced various other cesses on education, road and clean energy. The total of budgeted proceeds from all these cesses is pegged at around Rs 1,16,000 crore. Govt imposes 0.5% Swachh Bharat Cess The government has imposed a Swachh Bharat Cess of 0.5 per cent on all services currently liable for Service Tax. The proceeds of the cess are exclusively for its Swachh Bharat initiatives. UDAY to the rescue of debt-hit discoms The Central government has offered a bailout plan for State government-owned electricity distribution companies (discoms). The package could fundamentally change India's power sector and also reduce stress on books of banks that have loaned money to these financially unsound utilities. As a part of the Ujwal Discom Assurance Yojna, or UDAY, adoption of which is optional, States will have to take over 75 per cent of the debt of discoms. These loans will not be included in calculation of the States' fiscal deficit till 2016-17. In addition, States will issue bonds and the balance of discoms' debt will be converted into loans or bonds at concessional rates. The plan comes at a time when discoms are facing a combined debt of over Rs 4,30,000 crore. The funds will go to the Centre's kitty and not be shared with the States. Finance Minister Arun Jaitley had announced the cess in his 2015-16 Budget, at 2 per cent or less on services which attracted Excise Duty hiked by five times in a year, taxes and duties have now exceeded the actual cost of production of petrol. Of Rs 60.70 a litre of petrol in Delhi, the Central Excise Duty accounts for Rs 31.20. It costs Rs 24.75 to produce a litre of petrol at refineries. After adding company margin and other costs, the price charged to a petrol pump dealer is Rs 27.24 per litre. On this price is added Rs 19.06 of Excise Duty that the Centre collects and Rs 12.14 VAT that goes to the Delhi government. Taxes, duties exceed petrol output cost With Nod for airlines to offer zero bag fares Aviation regulator DGCA has allowed domestic carriers to roll out zero-bag fares and charge penalty against check-in baggage for tickets booked under such an offer. At present, all domestic private airlines, except national carrier Air India, allow a flyer to carry up to 15 kg of check-in baggage without any cost. Air India allows its passengers to carry up to 23 kg of check-in baggage free of cost. Three domestic carriers - IndiGo, SpiceJet and AirAsia India, had earlier approached the regulator with the zero-bag fare, offering discount on no check-in luggage. New subsidy scheme unveiled for exporters Exporters struggling to stay afloat in a global market hit by slowdown have been extended the long-awaited 6 DECEMBER 2015 INDIA BUSINESS JOURNAL

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Verbatim... interest subvention (subsidy) scheme. It will allow exporters in labour-intensive and small-scale sectors to avail themselves of loans from banks at a 3 per cent lower rate. The government will compensate the banks for the lower rate offered to exporters. The scheme, now re-named Interest Equalisation Scheme, was approved by the Cabinet Committee on Economic Affairs last month and will be implemented with retrospective effect from April 1, 2015. The scheme is set to cost the exchequer an estimated Rs 2,500 crore annually. Rs 1,000 crore. The CCEA's approval will be only for projects over Rs 1,000 crore. The National Highways Authority of India has been authorised to give road developers more time to finish their projects if delays have not been caused by developers. MISCELLANEOUS "FDI announcements are often followed by either nothing or lots of bureaucracy, red tape and nothing really happens on the ground." Jeff Chowdhury EQUITIES HEAD, LCM INVESTMENTS Centre to pay subsidy directly to cane farmers Policy boost for national highway developers The Cabinet Committee on Economic Affairs (CCEA) has given its approval to segregate construction cost from that of land acquisition and pre-construction activities for appraisal and approval of national highway (NH) projects. The Cabinet has empowered the Union Ministry for Road Transport and Highways to approve highway projects with a civil construction cost of up to The Centre will provide a subsidy of Rs 4.50 per quintal of sugarcane crushed to farmers. The total subsidy outgo for the government may work out to of about Rs 1,100 crore in the 201516 sugar season that started on October 1. The subsidy will be paid directly to farmers' bank accounts on behalf of the mills that fulfil the mandatory sugar export obligation of 4 mt for 201516. The subsidy will be adjusted against the cane price payable by mills to farmers. The scheme is expected to help cane farmers and the sugar industry, hit by low sugar prices amid glut. "FDI is great, but foreign currencydenominated debt is very dangerous." Arvind Subramanian CHIEF ECONOMIC ADVISER "We will be more than willing to invest, but we are not a charitable organisation. We have to earn a return to invest." Mayank Ashar CEO, CAIRN INDIA Rajasthan gets Rs 3,21,000 cr investment The Resurgent Rajasthan Partnership Summit, which concluded last month, has clocked in investment commitments to the tune of over Rs 3,21,000 crore. More than half of the commitments - nearly Rs 1,90,000 crore made through MoUs have been in the solar energy sector, with SoftBank emerging as the largest investor in the solar energy sector. The two-day global investment meet, organised by the Rajasthan government in association with the Confederation of Indian Industry, attracted commitments of investments from 295 MoUs amounting to Rs 3,21,199 crore with proposed employment for 2,39,694 lakh people. "It is critical to have direct benefits transfer pushed through the banking system to make financial inclusion work." Naina Lal Kidwai CHAIRPERSON, HSBC INDIA APPOINTMENTS Subir Gokarn, a former deputy governor of RBI, has been appointed as the Indian region's executive director of the International Monetary Fund, covering India, Bangladesh, Bhutan and Sri Lanka. TIE-UPS An MoU has been signed between the Ministry of Railways and the Odisha government to form a special purpose vehicle for implementing railway projects in the State. INDIA BUSINESS JOURNAL "Expecting government to do more miracles is not possible at this stage, given the fiscal constraints." Madan Sabnavis CHIEF ECONOMIST, CARE DECEMBER 2015 7

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NEWS ROUND-UP FINANCE (BoI) plunged into a quarterly net loss of Rs 1,126 crore in the JulySeptember 2015 quarter. The loss was a result of higher provisions for bad loans. In the same quarter of the last financial year, the bank had posted a Rs 786-crore profit. Gross bad loans climbed to 7.55 per cent in the second quarter compared with 3.54 per cent in the same quarter a year ago. The bank's total income decreased to Rs 11,317.97 crore in the Q2 of FY16 as against Rs 12,099.45 crore in the year-ago period. BoI slips into Rs 1,126-cr loss in Q2 Bank of India Lloyd's of London quarter decreased from Rs 2,885.22 crore in the year-ago period to Rs 2,872.08 crore. The bank's gross non-performing assets slipped further to 6.84 per cent of gross advances as of September 2015 from 5.12 per cent a year ago. ICICI sells 6% in insurance subsidiary Lloyd's gets nod for India branch office Insurance regulator IRDA has permitted UK-based reinsurer Lloyd's to set up its branch office in India. Lloyd's is one of the major global insurers headquartered in London and has been in business since 1688. The subsidiary of the UK reinsurer, Lloyd's India, will be granted certificate of registration to set up market and associated structures for conduct of reinsurance business in and outside India. The constituents of Lloyd's India will also be granted recognition. the Strategic Investment Committee for Liability Franchise Development, headed by K C Chakrabarty, an independent director on the board and ex-deputy governor of the RBI, specially constituted by the board for creating a practical roadmap to a deposit-taking franchise. Investment in former executive director of Indian Bank, has been elevated as managing director of the Chennai-haedquartered bank. Reserve Bank of India Governor Raghuram Rajan has been appointed as vicechairman of the Bank for International Settlements. Ashish Mehrotra, the former managing director of Citibank, has taken over as managing director and CEO of Max Bupa Health Insurance. OakNorth Bank will provide Indiabulls a global platform for growth. Housing Finance is acquiring a 39.76 per cent stake in the UK's OakNorth Bank for $100 million (about Rs 661 crore). The acquisition will help Indiabulls Housing chart a roadmap to a deposittaking franchise. Indiabulls Housing has said that the investment has been identified and approved by Indiabulls to buy 40% in OakNorth Bank Indiabulls Dena Bank Q2 net profit dips byAPPOINTMENTS 25% Dena Bank reported a fall of 24.85 per cent in net profit at Rs 38.76 crore during the JulySeptember quarter of 201516. Total income for the with GoCoop Solutions and Services, a social marketplace, for easy and transparent sourcing of craft products for the export market. The London Stock Exchange Group has signed an MoU with YES Bank to collaborate on bond and equity issuance, focusing on green infrastructure. FTSE TMX Global Debt Capital Markets and State Bank of India have signed a letter of intent to develop a new index - the FTSE SBI India Bond Index - to track Indian fixed income securities. ICICI Bank, the country's biggest private sector lender by assets, will sell a 6 per cent stake in its life insurance joint venture in two separate deals worth a combined Rs 1,950 crore. Premji Invest, promoted by Wipro Chairman Azim Premji, and its affiliates are buying 4 per cent of ICICI Prudential Life Insurance Company, the biggest Indian private sector life insurer, valuing the insurance business at Rs 32,500 crore. A unit of Singapore's State-owned Temasek will buy a 2 per cent stake in the life insurance business, which is 26 per cent owned by Britain's Prudential. Foreign insurers hike stakes in Reliance, Max APPOINTMENTS Suresh N Patel, the former executive director of Oriental Bank of Commerce, has been appointed managing director of Hyderabad-based Andhra Bank. R K Takkar, who was earlier executive director of Dena Bank, has taken charge as managing director of Kolkata-based UCO Bank. J K Garg, the ex-executive director of UCO Bank, has been named managing director of Corporation Bank. Mahesh Kumar Jain, the TIE-UPS Export-Import Bank of India has signed an MoU Foreign insurers are slowly increasing their stakes in their Indian joint ventures. The purchases follow amendment to an insurance law, hiking foreign investment in the sector to 49 from earlier 26 per cent. Nippon Life Insurance of Japan last month agreed to increase its stake in Reliance Life Insurance, a part of Reliance Capital of the Anil Ambani Group, from the existing 26 to 49 per cent at a cost of Rs 2,265 crore. Days before the Nippon-Reliance deal, UK insurer Bupa had picked up an additional 23 per cent stake in its health insurance joint venture with Max India for Rs 191 crore in an all-cash transaction. INDIA BUSINESS JOURNAL 8 DECEMBER 2015

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(Formerly known as Flex Industries Limited) Regd. Office: 305, 3 Floor, Bhanot Corner, Pamposh Enclave, Greater Kailash-I, New Delhi - 110 048 rd UFLEX LIMITED UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER & HALF YEAR ENDED 30th SEPTEMBER, 2015 (INR in lacs) Quarter Q u a r t e r Half Year Half Year Year Ended Ended Ended Ended Ended 30.09.2015 30.09.2014 30.09.2015 30.09.2014 31.03.2015 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) Sl. No. Particulars 01. 02. 03. 04. Net sales / Income from operations Other Income Total Income (1+2) Expenditure (a) (Increase)/decrease in stock in trade & WIP (b) Consumption of raw material/traded goods (c) Purchase of traded goods (d) Power & fuel (e) Employees cost (f) Depreciation (g) Other expenditure (h) Total 152487 1017 153504 (4294) 88897 5198 7572 12017 7143 22088 138621 4469 10414 2553 7861 -7861 32 119 7774 165938 412 166350 (2150) 103972 2448 8394 10852 7067 22585 153168 5254 7928 1497 6431 -6431 102 22 6511 312550 1379 313929 (6340) 181953 7997 15251 23661 14220 47525 284267 9147 20515 5094 15421 -15421 110 139 15392 318948 834 319782 (2757) 199873 3786 16060 21281 14207 41968 294418 10139 15225 2591 12634 -12634 302 22 12914 618034 1661 619695 4309 370756 6924 30481 43276 27940 89128 572814 18691 28190 3086 25104 -25104 445 74 25475 05. 06. 07. 08. 09. 10. 11. 12. 13. Interest Profit(+)/Loss(-) from ordinary activity before tax (3)-(4+5) Tax expenses Net Profit(+)/Loss(-) from ordinary activity after tax (6-7) Extra ordinary items (Net of tax expenses) Net Profit(+)/Loss(-) for the period (8-9) Share of Profit (+)/Loss(-) of Associates Minority interest Net Profit(+)/Loss(-) after taxes, minoirty interest and share of Profit/(Loss) of associates (10+11-12) EPS Basic Diluted 14. 10.77 10.77 9.02 9.02 21.32 17.88 35.28 21.32 17.88 35.28 (Non-statutory advertisement)

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NEWS ROUND-UP CORPORATE iQor setting up pan-India service network iQor, the world's largest aftermarket services provider, plans to invest $200 million (about Rs 1,350 crore) in building an expanded, pan-India, service network. Currently iQor operates depot, repair and refurbishment services at its facilities in Manesar, Mumbai, Kolkata and Bangalore. It also operates company-owned and operated, premium, customer-branded, walk-in centres and on-site services in 82 cities and 17 States. iQor is building India's and world's largest aftermarket services network with direct presence in more than 300 cities in 29 States delivering services in over 5,000 cities and towns. Apollo Tyres buys Reifencom for Rs 300 cr Pride Hotels launches New Delhi property Pride Group of Hotels launched its flagship hotel, Pride Plaza Hotel, Aerocity, New Delhi last month. The 385-room, luxury hotel is a blend of contemporary style, warmth and sophistication. Speaking on the occasion Pride Group of Hotels CEO Satyen Jain said: "Pride Plaza Hotel is an exciting addition to the Pride Group of Hotels portfolio. This property embodies the brand's drive to enable its guests experience unparalleled luxury." Located close to New Delhi's international and domestic air terminals, the hotel provides easy access to the corporate and commercial hubs of Delhi, Gurgaon and the NCR region. has issued a temporary restraining order with immediate effect on sale, delivery, transfer or other disposition of its generic esomeprazole product in the US market. The company had launched the generic version of AstraZeneca's Nexium in the US market in September. The order was a result of a motion moved by AstraZeneca, objecting to use of colour purple in the generic product. food regulator FSSAI and asked it to get samples tested in the three labs. Meanwhile, the FSSAI has moved the Supreme Court against the Bombay High Court lifting ban on Maggi. Communications (RCom) has entered into an agreement to acquire Russian conglomerate Sistema's Indian telecom business. The acquisition will be by stock and takeover of Sistema Shyam Teleservices' (SSTL) spectrum in instalments of Rs 392 crore a year for the next 10 years. According to sources, this pegs the deal size at about Rs 4,500 crore. Under the agreement, SSTL, which provides telecom services under the MTS brand, will be merged with RCom. Following the acquisition, SSTL will get a 10 per cent stake in RCom, and RCom will get superior 850-mhz band spectrum held by SSTL. RCom to buy Sistema's Indian subsidiary Reliance Apollo Tyres has acquired German tyre distribution company Reifencom for around Rs 300 crore. The acquisition is a strategic fit in further growing Apollo Tyres' European business. The purchase will enable Apollo Tyres improve its mix of distribution channels in Germany and Europe while helping in increasing the visibility of Apollo and Vredestein tyres in the offline and especially the fast-growing online retail space. Reifencom has an online presence in six countries - Germany, France, Italy, Austria, Switzerland and Denmark. In addition, it operates 37 stores and service centres across Germany. Ayurved, the FMCG venture promoted by Yoga guru Baba Ramdev, has launched Ramdev's Patanjali launches noodles Patanajali APPOINTMENTS Real estate website Housing.com has promoted Jason Kothari as its chief executive officer. K Udai Sagar has taken over as managing director of Bartronics, an identity solutions company. Philips India has appointed V Raja as vice-chairman and managing director of the leading lighting solutions provider. the largest Chinese Stateowned companies, to develop infrastructure projects in India. Ola Fleet Technology, a subsidiary of online taxi aggregator Ola, has partnered with auto-maker Nissan Motor India to buy and lend cars to its drivers. Uber has announced a strategic partnership with ItzCash Card to expand its customer base across Chennai, Chandigarh and Nagpur. Air France Industries KLM E&M, the maintenance, repair and overhaul arm of the European carrier, has joined hands with Ramco Systems for an R&D centre in Singapore for pursuing various MRO solutions. INDIA BUSINESS JOURNAL Maggi re-launched, FSSAI moves Supreme Court Maggi has been re- Sale of Dr Reddy's drug in US halted Dr Reddy's Laboratories has been restrained by a US court from selling generic esomeprazole (Nexium) in the US market. Nexium is used to treat severe abdominal and acid reflux. The court launched in 100 cities through 300-odd distributors and is being rolled out in a staggered manner across the country. Nestle India has, however, stayed away from launching its noodle brand in eight states where it is still not allowed. Maggi noodles had passed tests by three government-accredited laboratories last month. In August, the Bombay High Court had lifted ban on the instant noodles imposed by TIE-UPS RPP Infra Projects, a developer of highways and bridges in India, has signed an agreement with Hunan Construction Engineering Group Corp, one of 10 DECEMBER 2015

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noodles, aiming to take on Nestle's Maggi. The company, which is caught up in a row with the FSSAI for using the pasta licence to launch noodles, has plans to set up six manufacturing plants for Patanjali Atta Noodles to add to the existing unit based in Haridwar. Patanajali has priced its noodles of 70 gram pack at Rs 15, claiming it to be cheaper than competitors' products. The company is also foraying into childcare, cosmetic products and health supplement by the year-end. 2.5 crore tickets annually in India. This is 10 per cent of its global ticket sale. Cinepolis has 4,300 screens in 13 countries. In Asia, it has a presence only in India, where it is present in 32 cities and has a total of 46 megaplexes. CORPORATE United Phosphorus, Advanta in merger deal Idea buys Videocon's spectrum for Rs 3,310 cr In India's first telecom spectrum trading transaction, Videocon Telecommunication, a subsidiary of Videocon Industries, has sold its spectrum in Gujarat and Uttar Pradesh (West) circles to the Aditya Birla Group's Idea Cellular at a valuation of Rs 3,310 crore. Idea will use the spectrum, which is valid till December 2032, to roll out its fourth generation-based telecom services in the next few months. Idea will also be taking over the outstanding deferred payment liability worth Rs 482 crore of Videocon Telecommunication payable to the Department of Telecommunication for the two circles. guarantees of Rs 800 crore will also be released. In April, Reliance Power had sought a termination of the power purchase agreement and an exit from the Tilaiya project, citing delay by procurers in handing over land and related infrastructure for the power station. licences cleared by the Department of Industrial Policy and Promotion (DIPP). The Centre recently gave 32 licences to companies, including OIS Advanced Technology from Uttar Pradesh, C DET Explosives Industries in Maharashtra, Premier Explosives of Tamil Nadu and Ideal Detonators in Telangana. Of the cases approved by the DIPP, eight subsidiaries of Reliance Defence, itself a subsidiary of Reliance Infrastructure, bagged the licence to manufacture a full spectrum of defence equipment, including aircraft, helicopters, missiles and land systems. Reliance Power wriggles out of Tilaiya project Reliance Power has managed a clean and quick exit from the 4,000-mw Tilaiya ultra mega power project in Jharkhand. The company has done an out-of-court settlement with distribution utilities of 10 States. Under the settlement, Reliance Power will get Rs 114 crore in compensation, and bank Boeing and Hyderabadbased Tata Advanced Systems have teamed up to manufacture aerostructures, starting with those for the AH-64 Apache helicopter, in India. Parag Milk Foods, one of the country's leading manufacturers and marketers of dairy-based branded foods, has tied up with Germany's cheesemaker Hochland to bring its product Almette fresh cream to India. Lanco Solar has signed an agreement with the Chhattisgarh government for setting up a 100-mw solar cell manufacturing plant in a special economic zone in Rajnandgaon in the State. INDIA BUSINESS JOURNAL The board of global agrochemical company United Phosphorus has approved merger of itself with Advanta. United Phosphorus, the promoter of Advanta, holds a 46.5 per cent stake in the company. With this merger, United Phosphorus expands its product portfolio to cover the agro value chain. The merger also provides United Phosphorus with an opportunity to engage directly with farmers. Advanta benefits from the strong global distribution network of United Phosphorus and will be able to fasttrack its growth plans on the back of a strong balance sheet of the combined entity. Power, a leading engineering, procurement and construction company based in Chandigarh, has commissioned a 40-mw sub-station near Banmore in Morena district of Madhya Pradesh for its client Amba Shakti Group Hartek had recently bagged an order from Azure Power for providing electrification, automation and sub-station solutions for solar power projects of 113 mw spread across five States. Hartek starts sub-station in Madhya Pradesh Hartek Reliance Infra to sell cement, road businesses Cinepolis to add 85 screens by next year Reliance Infra arms bag 12 defence licences The Anil Ambani-led Reliance Group has bagged 12 of the 32 defence manufacturing Mexican big screen exhibitor Cinepolis is planning to open 85 screens in India next year to take its total screens to 300 from the current 215. The company launched its latest four-screen multiplex in Kolkata last month. The world's fourth-largest multiplex company now sells Reliance Infrastructure, the infrastructure subsidiary of the Anil Ambani-promoted Reliance Group, is looking to sell its cement and road businesses to focus on upcoming opportunities in the defence sector. The company is hoping to close the sale of cement and road businesses by March 2016. The company has already begun the process of due diligence on both the businesses and is expecting to get valuations in line with the last few transactions in the cement sector. For the road business, where valuations have remained under pressure, the company is not limiting itself to Indian buyers. DECEMBER 2015 11

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NEWS ROUND-UP PUBLIC SECTOR Mahanagar Gas files for IPO Mahanagar Gas has filed draft offer documents with the securities market regulator SEBI for an initial public offer (IPO). The IPO will be an offer-for-sale of up to 2,46,94,500 shares by its promoter GAIL (up to 1,23,47,250 shares) and BG Asia Pacific Holdings (up to 1,23,47,250 shares). Net offer to the public will be decided after the Mumbaiheadquartered gas distribution company decides on the employee reservation portion. government has told the Supreme Court that the oil ministry has decided to award the contract for laying of a 1,175-km EnnoreTuticorin gas pipeline to IOCL. The clarification follows displeasure expressed by the Supreme Court over two public sector IOCL to lay EnnoreTuticorin pipeline The BSNL lines up Rs 7,700-cr capex in FY16 Bharat Sanchar Nigam (BSNL) is planning to spend Rs 7,700 crore as capital expenditure (capex) in 2015-16 to expand its network and launch 4G LTE services and Wi-Fi hotspots. The capex figure was Rs 3,300 crore last year. In the last two years, the company has set up 25,000 additional mobile towers, taking its total towers to over 1,00,000. The company plans to focus on data to drive growth and is enhancing mobile network data capacity to improve coverage and service quality. BSNL's income from services increased by 4.16 per cent to Rs 27,242 crore in 2014-15. companies - IOCL and GAIL India - battling each other over laying of the EnnoreThiruvallur-BengaluruPuducherry-NagapattinamMadurai-Tuticorin natural gas pipeline. IOCL had sought to restrain GAIL from participating in the tender process for laying the pipeline having a capacity of around 18.35 mmscmd. However, GAIL had requested the apex court to allow it to participate in the tender process. per cent rise in its premium for the six-month period ended September 2015 at Rs 5,914 crore. The company's major growth drivers have been motor and health segments. MRPL's board had approved the retail plans a couple of years ago. Around 100 retail outlets will be set up in and around Karnataka, and an MRPL team is already working on it in terms of various policy formulations, infrastructure and talking to other business partners. Licences of parent company ONGC for setting up retail outlets will also be used by MRPL as the former has decided not to venture into the business of setting up retail outlets. Gujarat Refinery plans 1,400-kw solar system APPOINTMENTS I S Jha, the former director (projects) of Power Grid Corporation of India, has been appointed as chairman and managing director of the State-owned company. CIL invites bids to set up washery Coal India (CIL) AWARDS Narendra Kothari, the chairman and managing director of iron ore mining company NMDC, has been awarded the Tata Gold Medal by the Indian Institute of Metals for his outstanding contributions towards improving the efficiency of production processes at National Metallurgists' Day and Annual Technical Meeting in Coimbatore. United India eyes Rs 11,800-cr premium United India Insurance has set a target of a total premium of Rs 11,800 crore during the current financial year. The Chennai-based general insurer is betting on growth of motor and health insurance segments to reach the premium target. The insurance company had registered a total premium of Rs 9,709 crore in the previous financial year. The company recorded an 11.77 has invited bids from international companies to set up a coal washery in Jharkhand to provide quality coal to its customers, including power plants. The washery will be set up under the build-operate-transfer model. Coal washing is a process of separation, mainly based on difference in specific gravity of coal and associated impurities, like shale, sand and stones, to get relatively pure marketable coal without changing its physical properties. Gujarat Refinery of IOCL has laid out a plan to set up 1,400 kw of solar power systems that will be commissioned in the year 2016. The country's largest oil refiner is looking at reducing its carbon footprint and increasing utilisation of renewable energy. A gridconnected 250- kw solar power system is already catering to the partial electricity requirement of the oil company's technical building, including daytime lighting and air conditioning. Strategic sale may start with ITDC hotels The and Petrochemicals (MRPL) is planning to open 100 retail outlets in the first phase. MRPL to open 100 retail outlets Mangalore Refinery Central government is working on a list of about 50 PSUs as a part of its plan to sell a majority stake in sick and loss-making State-owned companies. Hotels under ITDC could be the first on the block. The Tourism Ministry is understood to have identified eight lossmaking ITDC hotels, including properties in Jaipur and Bhubaneshwar. The move comes even as the Finance Ministry is working to revive the Disinvestment Commission, mandated to identify sick PSUs and initiate strategic stake sale. INDIA BUSINESS JOURNAL 12 DECEMBER 2015

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CUPID LIMITED (Rs in Lacs) No. 01. 02. 03. 04. Regd. Office: A-68, MIDC, Sinnar (Malegaon), Nasik, Maharashtra - 422113. Tel No.: + 91 2551 230280 / 230178, Fax: + 91 2551 230279 E-mail : corporateaccounts@cupidlimited.com Website : www.cupidltd.com CIN No : - L25193MH1993PLC070846 UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30th September, 2015 Quarter Ended on 30-Sep-15 30-Jun-15 (Unaudited) (Unaudited) 1,532.21 41.03 1,573.24 523.49 4.32 105.74 47.78 270.89 952.22 621.02 6.30 614.72 614.72 16.86 187.10 410.76 1,111.50 3.70 3.70 57,28,700 51.54 53,86,300 100.00 48.46 1,249.11 28.59 1,277.70 468.23 (2.40) 86.67 46.69 233.15 832.34 445.36 4.69 440.67 440.67 (9.25) 148.40 301.52 1,111.50 2.71 2.71 57,28,700 51.54 15,93,900 29.59 14.34 37,92,400 70.41 34.12 30-Sep-14 (Unaudited) 1,003.1 5 7.63 1,010.78 474.77 (52.02) 74.04 42.51 221.14 760.44 250.34 7.53 242.81 242.81 70.50 172.31 1,111.50 1.55 1.55 56,89,700 51.19 10,01,500 18.46 9.01 44,23,800 81.54 39.80 Half Year Ended on 30-Sep-15 (Unaudited) 2,781 .32 69.62 2,850.94 991.72 1.92 192.41 94.47 504.04 1,784.56 1,066.38 10.99 1,055.39 1,055.39 7.61 335.50 712.28 1,111.50 6.41 6.41 57,28,700 51.54 53,86,300 100.00 48.46 30-Sep-14 (Unaudited) 1,975.49 8.76 1,984.25 871.55 54.94 136.92 94.42 376.44 1,534.27 449.98 18.42 431.56 431.56 70.50 361.06 1,111.50 3.25 3.25 56,89,700 51.19 10,01,500 18.46 9.01 44,23,800 81.54 39.80 Year Ended 31-Mar-15 (Audited) 4,444.05 70.13 4,514.18 1,848.66 89.71 315.70 183.21 906.72 3,344.00 1,170.18 26.05 1,144.13 (0.48) 1,143.65 82.83 290.00 770.82 1,111.50 975.57 6.93 6.93 57,28,700 51.54 15,93,900 29.59 14.34 37,92,400 70.41 34.12 PARTICULARS Net Sales Other Income Total Revenue Expenses (a) Cost of Material Consumed (b) Change in Inventories (c) Payment of Employees (d) Depreciation (e) Other Expenses Total Expenses Profit before finance costs, exceptional items & tax Finance Cost Profit before exceptional item & tax Exceptional items / prior period income / (Expenses) (Net) Profit Before Tax Deferred Tax Expenses / (Credit) for the year Income Tax Provisions Net Profit / (Loss) Paid Up Equity Share Capital (Face Value Rs 10/-) Reserves Excluding Revaluation Reserves Earning Per Share (EPS) of Rs 10/(a) Basic EPS (b) Diluted EPs Aggregate of non- promoter Shareholding (a) Number of shares (b) Percentage of shareholding Promoter and Promoter Group Share Holding (a) Pledged / Emcumbered (i) Number of shares (ii) Percentage of shares (as a % of the Total Shareholding of Promoter and Promoter group) (iii) Percentage of shares (as a % of the Total Share Capital of the Company) (b) Non Emcumbered (i) Number of shares (ii) Percentage of shares (as a % of the Total Shareholding of Promoter and Promoter group) (iii) Percentage of shares (as a % of the Total Share Capital of the Company) 05 06. 07. 08. 09. 10. 11. 12. 13. 14. 15. 16. 17. 18. STATEMENT OF ASSETS AND LIABILITIES AS AT 30th September, 2015 (Rs in Lacs) No. A 1 AS AT 30-Sep-15 (Unaudited) 31-Mar-15 (Audited) (Rs in Lacs) No. B 1 AS AT 30-Sep-15 (Unaudited) 1,624.60 6.00 39.45 357.21 893.71 877.39 483.02 106.42 31-Mar-15 (Audited) 1,561.24 6.00 38.11 346.85 817.55 319.82 300.19 102.15 PARTICULARS EQUITY AND LIABILITIES Shareholder's Funds a Share Capital b Reserves & Surplus c Money received against share warrant Non - Current Liabilities Deferred tax liabilities (Net) Current Liabilities a Short - term borrowings : Secured b Trade payables c Other Current liabilities d Short - term provisions TOTAL - EQUITY AND LIABILITIES PARTICULARS ASSETS Non - Current Assets a Fixed Assets b Non Current Investment c Other non - current assets Current Assets a Inventories b Trade Receviable c Cash and Cash equivalents d Short term loans and advances e Other Current Assets 1,111.50 1,887.24 222.72 51.24 170.54 55.86 888.70 4,387.80 1,111.50 1,308.33 - 2 3 2 215.11 218.68 186.59 42.40 409.30 3,491.91 TOTAL - ASSETS 4,387.80 3,491.91 Notes to the Quarterly Result :1. The above result were reviewed by the Audit Committee and have been taken on record by the Board of Directors of the Company at their meeting held on 31st October 2015 and has been subjected to Limited Review by the statutory auditors who have issued an unqualified report. 2. The Company's operations consist only of one segment i.e. pharmaceuticals (Manufacturing of Male and Female Condoms), hence segment reporting required under AS 17 is not applicable. a The figures of the corresponding period have been re-grouped wherever necessary. 4. Total number of Investors complaints received and resolved during the quarter ended on 30th September, 2015 were 14 and Complaints left unattended as on 30th September 2015 is NIL. 5. The Board of Directors at its meeting held on 31st October 2015 has declared an interim dividend of Rs 1/- per equity shares (10%) of face value of Rs 10/- each. For Cupid Limited Sd/Omprakash Garg Place : Mumbai Chairman & Managing Director Date : 31-10-2015

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POLICY he Modi government seems to have shrugged off the electoral debacle at the last month's Bihar legislative assembly elections. Continuing with economic reforms, the government has significantly liberalised the foreign direct investment (FDI) regime. The FDI norms have been eased in as many as 15 sectors, such as civil aviation, banking, defence, retail and news broadcasting. While 100 per cent FDI has been allowed in direct-to-home (DTH), cable network and plantation crop sectors, the overseas investment limit in up-linking of news and current affairs TV channels has been raised to 49 from 26 per cent. The government has also relaxed conditions for FDI in single-brand retail, allowed 100 per cent FDI under the automatic route in duty-free shops and limited liability partnerships (LLP) and eased foreign investment norms in the defence sector. Besides, the government has raised the Foreign Investment Promotion Board's (FIPB) monetary limit to Rs 5,000 crore from Rs 3,000 crore for approving FDI proposals. It will mean that only proposals envisaging foreign investment of over Rs 5,000 crore will go to the Cabinet for approval. Leg-up for FDI In the construction development sector, minimum capitalisation norms and floor area restrictions have been removed. The government has also eased exit norms for foreign players in the sector. "Hundred per cent FDI under the automatic route has been allowed in completed projects for operation and management of townships, malls and shopping complexes and business centres," the Union Commerce and Industry Ministry has said in a statement. Norms related to restriction of a minimum floor area of 20,000 sq m in construction development projects 14 DECEMBER 2015 T CHANDRA SHEKHAR Foreign Push Sweeping relaxations to the FDI regime are a right step in the right direction. But there is an urgent need to boost domestic investments through deep-rooted reforms. and minimum capitalisation of $5 million (a little over Rs 30 crore) to be brought in within six months of the commencement of business have been removed. A foreign investor will be permitted to exit and repatriate foreign investment before the completion of a project, subject to a lock-in period of three years. However, the lock-in period condition will not apply to hotels, hospitals, special economic zones, educational institutions and investment by non-resident Indians (NRIs). In the broadcasting sector, 100 per cent FDI has been allowed in DTH, teleports, mobile TV and cable networks. Of the foreign investment, 49 per cent will be allowed under the automatic route and investment beyond that will need the FIPB nod. In the case of terrestrial broadcasting (FM radio) and up-linking of news and current affairs TV channels, the foreign investment limit has been raised from 26 to 49 per cent under the approval route. As for the up-linking of non-news and current affairs TV channels, 100 per cent FDI has been now permitted under the automatic route. Earlier, it was allowed under the government approval route. In the retail sector, the government has permitted manufacturers to sell their products through wholesale and/ or retail, including e-commerce without the government approval. In the single-brand retail trading, the past FDI policy mandated that sourcing of 30 per cent of the value of goods purchased would be reckoned from the date of receipt of FDI. "It has now been decided that sourcing requirement has to be reckoned from the opening of the first store. Furthermore, it is seen that in certain high technology segments, it is not possible for retail entities to comply with the sourcing norms. To INDIA BUSINESS JOURNAL

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provide opportunity to such singlebrand entities, it has been decided that in the case of state-of-the-art and cutting-edge technology categories, sourcing norms can be relaxed, subject to the government's approval," the commerce ministry has added. Furthermore, an entity which has been granted permission to undertake single-brand retail trading will be permitted to undertake e-commerce activities. It has also been clarified that Indian brands are equally eligible for undertaking single-brand retail trading. In the defence sector, 49 per cent foreign investment has been allowed under the automatic route and anything beyond that through the FIPB nod. Earlier, investors were required to take approval of the Cabinet Committee on Security for foreign investment above 49 per cent. The government has introduced full fungibility of foreign investment in the private banking sector. "FIIs, FPIs, QFIs, following due procedure, can now invest up to a sectoral limit of 74 per cent, provided there is no “This is a Diwali gift for investors. This is the biggest-bang reform of the government." AMITABH KANT Secretary, DIPP "This move will be immensely helpful in boosting the investment environment." SUMIT MAZUMDER President, CII Red Carpet For Foreign Investors FDI norms eased across 15 sectors FIPB's monetary limit for FDI nod raised from Rs 3,000 crore to Rs 5,000 crore Minimum capitalisation norms and floor area restrictions in construction sector scrapped 100% FDI allowed in DTH, teleports, mobile TV and cable networks Sourcing norms for cutting-edge technology categories of single-brand retail relaxed In defence sector, 49% foreign investment permitted under automatic route Full fungibility of foreign investment introduced in private banking sector Coffee, rubber, cardamom, palm oil tree and olive oil tree opened up for 100% FDI under automatic route 100% automatic FDI permitted in LLPs Foreign investment norms eased in scheduled air transport service INDIA BUSINESS JOURNAL change of control and management of the investee company," the government has clarified. Earlier, portfolio investment was permitted up to 49 per cent. Structural reforms By getting back to business with a big-bang reforms push, the Modi government has signalled its resolve to regain the initiative on the economic front. The sweeping relaxations to the FDI regime in 15 sectors signal the Centre's sincerity in improving the ease of doing business in India and making it a more attractive destination for foreign investment. Some of the moves, such as putting more sectors on the automatic route till sectoral caps are reached, or upping the threshold limit for FIPB approval, also demonstrate the government's stated principle of "less government, more governance" at work. However, all the measures announced last month fall within the ambit of executive discretion and do not require parliamentary approval. Pushing through other key reforms, including the much delayed Goods and Services Tax regime or the contentious Land Bill, will not be as easy. They will require considerable political management on the ruling party's part to bring about broader consensus. The Opposition too needs to do its part to ensure that the legislative process is not held hostage to electoral politics. Easing the FDI regime is a right step in the right direction. But that alone cannot get the economy back on track. Apart from key legislation, the country's regulatory and bureaucratic regime needs nothing short of an overhaul to make it really easy to do business in India. Besides, instead of relying heavily on foreign investors alone, there is an urgent need to boost domestic investments and nurture entrepreneurial spirit. The road to real, broad-based and deep-rooted reforms is still a long way ahead. DECEMBER 2015 15

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