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News As We Read- 30th May'13

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Thought of the Day:

“Insanity is doing the same thing, over and over again, but expecting different results”
~Narcotics Anonymous

Did you know?

“The inventors of bubble wrap, Alfred Fielding and Marc Chavannes, were originally trying to make plastic wallpaper” 

Following made the Headlines:

India:


  • Airtel Could be Fined 650 cr: Communications Minister Kapil Sibal has approved a telecom department proposal to slap a 650-crore penalty on India’s largest mobile phone company, Bharti Airtel, for providing subscriber local dialling (SLD) services in 13 regions between 2003 and 2005. SLD is a facility that allows roaming customers to be on the local network and thereby avoid paying roaming and STD charges. The telecom ministry had directed Bharti and Hutch (now Vodafone) to stop providing this facility in June 2003, saying SLD amounted to violation of the national routing plan and helped companies avoid a levy charged with every long-distance call. However, the Sunil Mittal-promoted company continued offering this service till 2005, officials in the ministry said. Apart from the penalty, Sibal has cleared DoT’s plan to ‘recover the loss incurred to the exchequer in the form of licence fee and spectrum charges’, according to an internal note of the telecom department. ET has reviewed this May 27 note. Telecom department officials said Bharti would be issued a show-cause notice soon while adding they would also seek Sibal’s approval for initiating action against Vodafone for the alleged violation. The Bharti spokesperson declined comment and said the company had not got any notice on this issue so far. But an executive close to Bharti said the telco had offered this facility to benefit consumers by lowering their bills. “There was no revenue or profit gain to Bharti by offering this facility to its customers,” this executive added. The move will spell fresh trouble for Bharti Airtel, which is already confronted with penalties to the tune of several thousand crores for a slew of alleged violations. Indeed, every telecom operator is facing some penalty from some government arm.



  • Louis Philippe Wears the Pants at Shopping Chains: Department chains Shoppers Stop, Pantaloons and Lifestyle International may fiercely compete with each other to court customers, but they all swear by a common brand as their largest money-spinner in the apparel segment. Louis Philippe, the premium menswear brand from Aditya Birla Group has not only managed to top the charts in these department chains, but with sales of over 1,100 crore in FY2013, it is also the largest apparel brand in India. The company says that aggressive retail expansion and the launch of its youth-oriented sub-brand LP have helped grow the brand that was launched way back in 1989. “In retail, there is a huge trend towards branded fashion even in small cities which we didn’t see as potential markets earlier. We almost doubled the store count in the last two years to over 150 now,” says Jacob John, brand head, who joined Madura Fashion and Lifestyle over 18 years ago as a management trainee. He took charge of the Louis Philippe brand three years ago, and has doubled its sales from 450 crore in 2010 to 1,106 crore now. “The growth has also been augmented by LP Sport, which was launched to appeal the youth segment,” said the 42-year-old John. Experts and competitors feel that consistent focus on premium positioning has helped the brand gain sales traction. Clothing Manufacturers Association of India’s president Rahul Mehta says, “Unlike other brands that tried to diversify into newer categories, Louis Philippe hasn’t really diluted its brand.” For apparel, that includes trying to grab the most attractive space within the department stores – all in a quest to maintain its premium image. But retaining its top slot in the 2 lakh crore domestic apparel market won’t be easy even as just 15% of the segment is controlled by organised players. Rivals both international and Indian – have been growing rapidly, especially in the youth formal segment which is growing the fastest.



  • Speciality Restaurants Q4 Net Profit up 138%: Fine dining chain, Speciality Restaurants, reported a 138% jump in net profit for the fourth quarter ending 31 March 2013 at 5.34 crore, riding on 23% jump in net sales at 54.44 crore. The owner of popular brands such as Mainland China and Oh Calcutta, Speciality Restaurants managing director Anjan Chatterjee said the company achieved this high growth in net profit by rationalising manpower cost and cutting costs across levels, and without increasing menu prices. “During the year, we reduced manpower requirement per restaurant from 70-72 people to around 48-50, which we will further reduce. We are upgrading the skills of our existing staff for newer restaurants putting a hold on fresh recruitment,” said Chatterjee. The company has reduced manpower cost to total operating cost of a restaurant from 20% to 17% last fiscal and plans to further trim it to 15% this fiscal. “There will also be around 5% increase in menu prices over the next three months,” he said. Speciality Restaurants reported a 35.7% jump in net profit at 23.41 crore for the full year 2012-13 on the back of a 14.3% jump in net sales at 214.83 crore. The company’s stock rose 6.23% to 180.65 at close on the Bombay Stock Exchange on Wednesday. The board recommended a dividend of 1 per equity share for the last fiscal. Speciality Restaurants currently has 82 restaurants and 14 confectionaries across the country. Last year, it rolled out 14 new restaurants with ten new outlets for Mainland China.



  • TCS Bags 1,100-Cr Contract From Department of Posts: Tata Consultancy Services (TCS) on Wednesday said it has bagged a six-year contract from the Department of Posts (DoP) worth over 1,100 crore. The end-to-end IT modernisation programme to be implemented by TCS will equip India Post with modern technologies and systems to enable it to provide services to customers in an effective manner, TCS said in a statement. The scope of the project, dubbed India Post 2012, includes developing and supporting mail, finance and accounts, HR, and customer interaction management solutions for all channels including Rural ICT platform. Under the deal, TCS will also manage data migration, infrastructure, Service Level Agreement (SLA), call centre and centralised 24x7 service desk operation for DoP, it said. The end-to-end security solutions, Enterprise Management System (EMS) and over all integration for entire system is the responsibility of core system integrator (CSI), the statement said. “India Post has a vision of being a technology-enabled self-reliant market leader and is looking to move from a government service provider to a customer enabled service provider where the customer will be the focus of multifarious service delivery platforms,” DoP Secretary P Gopinath said.



  • Mafatlal Group Consolidates its Textile Biz: The Mafatlal Group has decided to merge its subsidiaries Mafatlal Denim (MDL) and Mishapar Investments into Mafatlal Industries for better operational efficiencies and faster expansion. According to the scheme of amalgamation sanctioned by the Bombay High Court and Gujarat High Court, the country’s largest school uniform fabric supplier Mafatlal Industries (MIL) will merge its two entities which will help the company expand its capacity to produce denim and other fabrics at the company’s Navsari and Nadiad plants in Gujarat. “We supply to brands like Wrangler, Lee, Madura brands, Marks & Spencer (M&S) and Killer, among others,” said Rajiv Dayal, company’s newly-appointed MD and chief executive. “This move will help us offer our entire textile portfolio to our clients. Globally, there are very few companies who can supply denim as well as textile, and we would be one of them after this merger,” he added. Earlier, Dayal was heading the company’s denim business. Founded in 1905, MIL also has a retail chain under the brand name ‘Mafatlal Family Shop’ with around 100 outlets, which it plans to expand to 150 in the next five years, said a senior official of the company. Also, it plans to use its over 400 dealers and 35,000 approved retail shops for greater brand push. The financial performance of Mafatlal Industries has been erratic in the last three fiscals. From a net profit of 52 crore in FY10, the company has reported a net loss of 95 crore FY12. The company’s net sales have improved only 3% to 136 crore in FY12 against 132 crore in FY10. At the end of FY12, the company has a negligible debt of 7.4 crore, which has fallen by 90% on a year-on-year basis.



  • Govt Plans to Put Checks on Airfare Pricing: The government is planning to prescribe dos and don’ts to the airlines on its policy of unbundling airfares, which allows separate charges for preferred seats, extra baggage, meals-on-board and other such services. In its present shape, the policy has left both airlines and passengers dissatisfied. While airlines, which were hopeful of an additional revenue stream with unbundled fares, are complaining of government interference, passengers, on the other hand, think it is just a way of fleecing them. To begin with, the government has now decided to tell all airlines to charge only a fixed percentage of the total seats in an aircraft, after passengers protested budget carrier IndiGo’s move of charging for all seats. “The way airlines are behaving is the principle of an immature market. How can you charge for or separate, say, two children travelling together? We will ask airlines to fix a percentage of seats, 15-20%, to be charged,” a senior official from civil aviation ministry said. As more issues surface in the implementation of unbundling of fares, we will make more changes, the official added. On April 29, the government allowed airlines to charge separately for services like preferential seating, meals/snacks/ drinks (except water), check-in baggage, carrying sports and musical instruments, declaration of valuable baggage and using airline lounges. The official release mentioned that this list would be reviewed every six months. 



  • Speciality to roll out noodle bars: Anjan Chatterjee promoted Speciality Restaurants, which operates fine-dining chains like Mainland China and Oh! Calcutta, is close to announcing a joint venture partnership with an FMCG company to roll out 100 noodle bars in the country. This will be the group’s first foray into the fast-growing quick-service restaurant space, which is clocking an annual growth of 30% buoyed by more Indians eating out. The publicly listed group is also in talks to bring an American fast food joint to India as it looks to grow its QSR vertical going forward. Chatterjee told TOI, “We already have the expertise in casual dining and so it is a natural extension to tap the growing QSR category with our existing resources. We have formed a separate QSR vertical and are looking to place our bets in this segment too.”

International:


  • Newton’s Apple: Cook Vows More Game Changers: Apple Chief Executive Tim Cook defended the company’s record of innovation under his stewardship, saying he expected it would release “several more game changers” and hinting that wearable computers could be among them. “It’s an area where it’s ripe for exploration,” Cook said on Tuesday at the All Things Digital conference, an annual gathering of tech and media executives in the California coastal resort town of Rancho Palos Verdes. “It’s ripe for us all getting excited about. I think there will be tonnes of companies playing in this.” His remarks come at a time when worries are mounting that the company which created the smartphone and tablet markets is ceding ground to competitors such as Samsung Electronics and Google, with a slowdown in earnings growth hitting its share price. Cook stopped short of clarifying if Apple was working on wearable products amid speculation that it is developing a smartwatch, saying only that wearable computers had to be compelling. He added that Google’s Glass — a cross between a mobile computer and eyeglasses that can both record video and access the Internet — is likely to have only limited appeal. “There’s nothing that’s going to convince a kid who has never worn glasses or a band or a watch to wear one, or at least I haven’t seen it,” he said in the near one-and-a-half-hour question and answer session. “So I think there’s lots of things to solve in this space,” he added. Cook also said he has a “grand vision” for television that goes beyond an existing $99 Apple TV streaming device, but did not go into details.



  • China's Shuanghui to buy US pork producer for $4.7bn: China's Shuanghui International plans to buy US pork producer Smithfield Foods for $4.7bn (£3.1bn) to meet the country's rising demand for meat. Shuanghui, which is China's biggest pork producer, is offering to pay for the company in cash. The deal, if approved, will be the largest takeover of a US company by a Chinese rival. In recent years there has been an increased appetite among Chinese firms for acquisitions abroad. In the US, however, regulators have blocked a number of potential purchases on national security concerns. Smithfield, which owns the Armour and Healthy Ones brands, said the deal would allow the firm to expand the sale of its brands abroad. However, the takeover bid is likely to be closely scrutinised in the US by regulators due to a regular series of Chinese food scandals, including the sale of tainted meat. In 2011, China's state broadcaster CCTV revealed that Hong Kong-based Shuanghui's pork products contained the banned chemical clenbuterol, which makes the meat leaner. One of the most infamous foods scandals was in 2008, when six infants died and about 300,000 fell ill from tainted milk powder. It was later found to have contained melamine, an industrial chemical. As a result, there is increasing demand among Chinese consumers for foreign food brands, which are viewed as a safer alternative to local products.



  • Jaguar Land Rover roars ahead to record £1.67bn profit: Profits at Jaguar Land Rover have roared to an all-time high. Pre-tax annual profits at the Coventry-based vehicle maker rose 11% to £1.67bn and helped temper a 36% fall in profits at the company's parent group, Tata Motors. Total world sales at Jaguar Land Rover were up 22% to almost 375,000 vehicles. Jaguar Land Rover chief executive Dr Ralf Speth said the numbers demonstrated a strong demand for the company's products. "We invested significantly in the product creation process, in our advanced manufacturing sites and created more than 3,000 jobs," he said. During the 2012-13 financial year, the company introduced the all-new Range Rover, the Jaguar XF and XJ and the XF Sportbrake. Net profits between January and March at Jaguar's parent company Tata Motors, itself part of the Indian salt-to-steel conglomerate Tata, fell 22.89bn rupees to 39.45bn rupees ($705m; £466m) compared to the same three months in 2012. But analysts were untroubled by the fall in the net profit figure, given that a one-off tax gain made up a significant slice of the profits in the January-to-March period in 2012. In addition, sales revenues were 10% higher in the first quarter of this year at 560bn rupees.



  • German unemployment rises in May: Unemployment in Germany rose during May, according to the latest set of official figures. The country's Labour Office said that, on a seasonally adjusted basis, the number of people out of work increased by around 21,000 to 2.963 million, well above analysts' expectations. Bad weather and a relatively high number of public holidays are being blamed for the increase. However, the jobless rate remained unchanged at 6.9%. Labour office chief Frank-Juergen Weise insisted that the German job market was "fundamentally sound and is developing solidly in a difficult economic environment". Analysts said that while the long, harsh winter was a factor, employers were also still cautious, following concerns about the economic situation in Italy and Cyprus. ING DiBa economist Carsten Brzeski said: "It is far too premature to start singing swan songs on the labour market." Natixis economist Paul Beaumont said he was confident that the German labour market would continue to remain reasonably resilient in the face of subdued economic conditions. "All in all, we expect the German unemployment rate to remain close to a post-reunification low at 6.9% in 2013," he said.



  • Google Licenses Data From StellaService for E-commerce Push: Google Inc. is putting a greater focus on e-commerce by going after Amazon’s business via a partnership with StellaService to provide data on merchants that offer exceptional shopping experiences. The partnership is via a multiyear licensing agreement. Specific terms of the licensing arrangement, such as how much Google is paying Stella for use of its information, are not being disclosed by either party. The aim is to use Stella’s data as a key differentiator in e-commerce where consumers searching for products can feel comfortable buying from a retailer they’re unfamiliar with through reliance on detailed information on customer service metrics. Many consumers now start their search online using Amazon, and then buy through an Amazon-affiliated retailer. The Google-StellaService partnership opens the door for consumers to a wider range of online stores. Stella uses proprietary metrics to determine monitoring, benchmarking and improving the end-to-end service experience across a range of operating categories for online retailers. Those categories include phone, e-mail, chat and Twitter, and shipping, returns and refunds. Some online stores already carry Stella’s seal of approval as a trusted site. According to Jordy Leiser, Stella’s chief executive officer and cofounder, “This development means our ratings-data will be served to the screens of hundreds of millions of shoppers to highlight retailers that provide consistently excellent service.…It’s a win for consumers, for retailers that provide great service and for creating even more trust and transparency for online shopping in general.”



  • Carrefour Partnering With CFAO in Africa: Setting its sights on effervescent economies in west and central Africa, Carrefour SA is partnering with trading company CFAO to develop various store formats in eight countries on the continent. The world’s second-largest retailer behind Wal-Mart Stores Inc. said Wednesday it has signed a memorandum of understanding to form a joint venture that will be owned 55 percent by CFAO and 45 percent by Carrefour. The entity will hold exclusive distribution rights in Cameroon, Congo, Ivory Coast, the Democratic Republic of Congo, Gabon, Ghana, Nigeria and Senegal. Carrefour operates more than 10,000 stores — supermarkets, hypermarkets, convenience stores and cash-and-carry outlets — in more than 30 countries. CFAO is mainly specialized in automotive and pharmaceutical businesses in Africa and French overseas territories.



  • Avoce to Launch Eyewear Web Site: On June 14, Avoce will launch a Web site featuring affordable women’s eyewear in bright, fun colors and feminine designs. “When you go to an optical store, the person behind the counter is going to steer you to certain frames,” said Raphael DeSouza, who launched the company with Manu Singhal. “With our online store, you select the frames you like from a style perspective.” Hence, the name Avoce, which means “You” in Portugese. The designs and colors reflect the style and architecture of DeSouza’s native Brazil. Nonprescription sunglasses with UV protection and antiscratch coating are $99, with antireflective coatings included at no extra charge. Prescription sunglasses with polarized lenses are $169. All orders include free shipping and free 30-day returns. Avoce wants to break down the cost barrier to eyewear, which can cost $400 or $500, or even more, DeSouza said. “Some women would like to use eyewear as a fashion accessory,” he said. “It’s a great way to enhance your style, but its really expensive to use as an accessory.” In terms of consumers, Avoce (pronounced Ah-vo-say) is targeting younger women from their 20s to mid-30s who are fashion-conscious and aware of trends. “They have an appetite for accessories,” Singhal said. “A big reason why people don’t have prescription sunglasses is because they’re so expensive.” The Home Style and Trial program allows customers to try the glasses on in their own homes. Customers can order up to four pairs of nonprescription glasses with free shipping in both directions. The company has a 30-day return and exchange policy.


Currency:

·         1 USD=  INR 56.1542 (↑)

·         1 EUR=  INR 72.7848 (↑)

·         1 GBP=  INR 84.9871 (↑)

·         1 AUD= INR 54.2779 (↑)


Glitter Meter: India


Gold (INR/10g)
Silver (INR/kg)
City
Current
Change
Current
Change
Chennai
26830.00
100
43650.00
90
Mumbai
26550.00
100
46084.00
2524
Delhi
26860.00
110
45858.00
2298
Kolkata
26830.00
100
46197.00
2637


World Indices:

Exchange
Last
Change
DJIA
15302.80
-106.59
FTSE 100
6627.17
-134.84
CAC 40
3974.12
-76.44
DAX
8336.58
-144.29
Nikkei
14063.31
-263.15
Hang Seng
22572.43
17.50
Sensex
20147.64
-13.18
NASDAQ
3467.52
-21.37


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