IT czar Azim Premji has given away almost half of his stakeholding in Wipro, India's third largest exporter of software services, to philanthropy.Wipro's billionaire founder has given away an additional 18 per cent of his stake in the IT company for charity, thus earmarking 39 per cent of stake (worth Rs 53,284 crore) for a charitable trust.The latest philanthrophic initiative by Premji would pump in an additional Rs 530 crore by way of dividends into the Azim Premji Trust's corpus this year.Premji, 69, is the first Indian to sign the Giving Pledge, sponsored by billionaires Warren Buffett and Microsoft co-founder Bill Gates to invite the world's wealthiest to donate majority of their wealth to charity."Over the past fifteen years, I have tried to put this belief into action through my personal philanthropic work...," Premji said in a letter to shareholders published in the company's annual report for the year ended March 2015.Premji said, "Over these years I have irrevocably transferred a significant part of the shareholding in Wipro, amounting to 39 per cent of the shares of Wipro, to a Trust (of which ownership in 21.14 per cent was transferred and for the balance the Trust is entitled to beneficial interest of dividends and sale proceeds)."The previously transferred 21 per cent stake was estimated at $4.3 billion. The promoter group led by Premji holds 73.39 per cent stake in Wipro.Premji was considered the 'most generous Indian' of 2014 according to the Hurun India Philanthropy List.He said the Trust supports the work of The Azim Premji Foundation and Azim Premji Philanthropic Initiative and thus a very significant part of the value created by Wipro, goes towards social causes.Premji also stated in the report that economic value is sustainable only if created on a foundation of ethics and responsibility."For us, this is the driving force in the form of our values and is something that we will continue to remain completely committed to," he added.The company's Social and Sustainability Initiatives are driven by the conviction that corporations should play a significant role in contributing to building a better society, Premji said."The owners - individuals or other entities - of such corporations can do a lot more for society, because they can choose to exercise the right of their ownership, and invest their wealth in any social cause, to their utmost," he said.(PTI)
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Russia is likely to participate in railway projects in India, funding for which could be routed through the newly-set up BRICS' New Development Bank. Indications in this regard came from the head of Russian Railways Vladimir Yakunin, who said negotiations are underway with India in this regard. "As of now we are only a part of the Business Council. We do not yet have projects that are in the process of signing or implementation. But...I am sure that such projects may appear in the near future. We are talking about Brazil, and negotiating on India," Yakunin said. The CEO of the Russian Railways said the company would be "interested" in funding from the New Development Bank of BRICS (Brazil, Russia, India, China, South Africa), according to Russian news agency Tass. Russian Railways is currently negotiating the possibility of participation in a number of projects in India, particularly in the modernisation and construction of railway infrastructure for increasing train speeds up to 160-200 km per hour, as well as the modernisation of railway stations. India has embarked on a massive task of upgrading and modernisation of its railways, which will require huge investment of about $120 billion. To attract investments, India has opened some elements of the railways to FDI. These include development of railway stations and coach manufacturing. Last week, Railway Minister Suresh Prabhu had said $120 billion will be made in next five years in the cash-strapped railways which is in the process of upgradation and expansion. Russia is likely to participate in railway projects in India, funding for which could be routed through the newly-set up BRICS' New Development Bank. (PTI)
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In a major restructuring of its mobile devices business, US tech giant Microsoft on Wednesday (8 July) said it is writing off $7.6 billion it spent on acquiring Nokia and will cut 7,800 jobs, but was silent on India impact."I want to update you on decisions impacting our phone business... We anticipate that these changes, in addition to other headcount alignment changes, will result in the reduction of up to 7,800 positions globally, primarily in our phone business," Microsoft CEO Satya Nadella said in an email to employees.He said that restructuring of phone business has led to an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia Devices and Services business in addition to a restructuring charge of approximately $750 million to $850 million.Microsoft had acquired mobile devices business from Nokia in a $7.2 billion deal which concluded in April last year.This is the second round of major job cut after Nadella took over as Microsoft CEO. About a year ago he announced axing up to 18,000 jobs, biggest cuts in its 39-year history.After fresh round of job cuts, Nadella said that there is need to focus on phone efforts in the near term while driving reinvention."We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family," he said.As per IDC report for the first quarter of 2015, mobile phones based on Android operating system dominated the market with 78 per cent share, followed by Apple's iOS. Windows-based phones stood at third spot with market share of 2.7 per cent."In the near term, we will run a more effective phone portfolio, with better products and speed to market given the recently formed Windows and Devices Group," Nadella said.As per the new strategy, Microsoft plans to narrow focus to three customer segments where it can make unique contributions and differentiate.The company's employee strength in India could not be ascertained. Microsoft had some 118,000 employees globally at the end of March.
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Call drops have become a part of life for Indians just like having mobile phones became a part of their lives a decade ago. However, the situation is deteriorating by the day and it is becoming impossible to have a seamless conversation over the phone in most parts of the cities during peak hours (Between 9am -11am in the morning and 5 pm -10 pm in the evening).The situation is so bad that despite changing telecom service providers through mobile number portability option, there is no respite for the consumers. The government is threatening telecom operators with penalties if the services are not improved but the companies are blaming the government for providing insufficient spectrum. Who Is Right?The telecom minister, Ravi Shankar Prasad has categorically said that the government has provided enough spectrum to the companies and they need to invest in the infrastructure to improve customer satisfaction. In the recent round of auction, the government sold 470 MHz of airwaves.Shankar has also discussed the idea of penalizing companies if they do not improve services.According to some media reports, the telecom regulatory authority of India (Trai) is working on a mechanism to penalise the telecom operators for every call drop.What Do The Telecom Operators Say?According to Rajan Mathews, Director General, The Cellular Operators Association of India (COAI): "There is not enough spectrum with the Indian telecom operators. “In India, the average amount of spectrum per operator is between 12-15 MHz, whereas internationally it is 45-50 Mhz. How can you have better services with more subscribers and less spectrum?” asks Mathews.Apart from this, in the past few years telecom companies have faced resistance from activists in installing mobile towers in residential areas. Many PILs have been filed in different High courts of the country against installation of mobile towers so far. Department of telecommunication (DOT) and World Health organisation have so far denied any relation between cancer or other types of health hazards and mobile tower radiations.Despite this, the companies have found it difficult to install their towers in residential areas in the past three years. Gopal Vittal, MD and CEO of India’s largest telecom company by revenue and market share, recently said , “We need both spectrum and more sites for mobile towers. In Delhi Lutyens area alone we need 217 sites, but we have only 117 sites. The statement came in the backdrop of telecom minister blaming the telecom companies for not doing enough to improve services.Vittal was ruing the fact that people are averse to having mobile towers in their area.Is this the only reason for not installing more mobile towers?According to some experts, telecom companies are not ready to invest enough to install upgrade their infrastructure.The spectrum auction of 2010 was fiercely fought between the Indian telecos. The telecom sector shelled out around Rs 70,000 crore to the government for getting buying the spectrum, in the hope that the 3G services will help them recover the cost. In 2010, Bharti, won 3G spectrum in 13 circles, bidding Rs12,300 crore. This resulted in a debt pile up of Rs 10,233.10 crore on the company’s balance sheet in March 2011, an increase of 103 per cent from a debt of Rs 5,038 crore in March 2010. A part of this, debt was also taken to buy business in the Africa continent. But clearly the company has been paying a higher interest outgo since then.The spectrum auctions in 2014 and 2015 have further dented the financials of the telecom companies restraining their ability to create new infrastructure. In 2014-15 The telecom operators shelled out over Rs one lakh crore to retain their spectrum that was up for renewable.Global credit ratings agency, Moody’s says: “These payments will cause debt levels to rise significantly for most operators, including Bharti Airtel Ltd. (Baa3 stable) and Reliance Communications Limited (RCom, Ba3 stable), and will limit their ability to make additional investments over the next 12-24 months, possibly slowing the rollout of 3G/4G networks in India”.Will The Telecom Companies Not Improve At All?If the government gets tough, the companies will have to improve their services, even if it means more debt on the balance sheet for investments.Some operators have already decided to recognize the issue. Anil Ambani's Reliance Communications doesn't charge a customer for the outgoing mobile pulse where the call gets disconnected due to network problems. Similarly, Uninor gives a minute of free talk time within 24 hours for disconnections during a call.If the government comes out with stringent laws to penalise poor service quality by telecom operators, chances are that every telecom company will start compensating the consumers in some way or other.However, everything comes at a cost. Given the leveraged balance sheets of the companies, the only way out to improve services will be to increase the voice tariffs. But, is the customer ready to pay higher cost for a glitch free call?
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High performing companies are backed by passionate teams and it does not happen by chance, says Dr. Yasho V. VermaWhich came first - Profitable companies or great companies to work at? This isn't a chicken and egg question but surely one that must not be ignored.Today is a age of fast learners and fast growing companies racing agaisnt time to turn into profitable ventures. Profit motive is a good thing but as the old saying goes, 'As you sow, so shall you reap' seems a suitable fit to describe how companies must look into employee engagement models to ensure they are nurturing winning teams while also not losing the commercial focus.It is a well established fact that highly engaged employees' quotient is directly proportinal to their greater commitment levels. More the employees are bound with a company behaviourally and intellectualy, they tend to contribute significanlty well in terms of knowledge, skills and capabilites resulting in an overall healthy and conducive work culture for all. They do not feel fatigued as work is no work for them, they relate to companies' philosophy, mission and vision and find a real connection and pride of their association with the company. They are easily identified as the passionate lot, a quality not easy to ignore soon after hiring.What keeps the employee engaged is the quality of work and satisfaction derived in terms of cognitive value and aspirational growth. His individual goals of personal growth get intuitively linked to that of organisation at large. The responisbilty of managers and top manegment becomes significant and influencing to help enrich the employees experience and continue to do so for all times to come. Rewards and recognition do boost the morale once in a while, but what makes them going is the camaraderie they share with one and all. It is becoming increasingly important for leaders and managers to hold a non-judgemental view about how an individual approaches a task, the end result must be explained and expected without breathing too much on the brave necks.Some significant influencing factors that may help create amiable work environments and happy employees contributing to company's profitabilty include:Leadership Style: Is it entreprenerial or bossy, the latter is obsolete. One may opt or create their own and usually it is a discreet mix of many styles.Transparency - Usually top down, it is the measure or degree intent to share and communicate.Organisational structure - Flat or layered, the modern way is moving towards larger span of control and more collaborative in nature.Systems and procedures - Turning more SOP driven and non bureacratic.Autonomy - Delegation is turning defunct, trust plays a key role as accountability is given weightage and end results matter to all parties concerned. Reward and Recognition - No longer a tool or means to reach objective, it is a mechanism to differentiate outstanding achievers, manifestation of self actualisation as per maslow's theory, though the theory may apparently seem archival to some.Environment- Cultural fabric, woven with a common intent to work hard, built with mutual trust and team work of those who are largely risk bearers, consider experience and learning as supreme, prefer a non - political, no blame game calm and peaceful work background.So while companies may run like formula one cars, it is advisable they wear their helmets, tighten their seat belts and do not forget to enjoy the ride, navigation well must be the resolve.The author is a management thinker & philosopher, advisor to Videocon and a member on board of Dena Bank
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Ronita Mitra has resigned as the SVP and Head of Brand, Media, Digital and Consumer Insights of Vodafone India. Sources close to the development have confirmed the news to Businessworld.At Vodafone India, Mitra was responsible for driving brand affinity through highly engaging communication and brand engagement though activation programs resulting in leadership in brand health metrics, including the IPL sponsorship.Mitra has 21 years of experience in business marketing and brand building across multiple categories and industries, including FMCG, financial services and telecom. The experience covers managing brands in India with significant global exposure.Her experience includes launch and re-launch of brands across categories and industries.Previously she has worked with FMCG organisations such as Johnson & Johnson, Bestfoods, Marico and Castrol. She has also worked in the financial services sector with ICICI Bank.She was behind reviving the reputation of the ICICI Bank brand post the 2008 crisis at the bank and launched the new brand identity of ICICI Bank articulated as 'Khayaal Aapka'.
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Microsoft Corp plans to announce a new round of layoffs as early as Wednesday to cut costs further, the New York Times reported.The latest job cuts are in addition to the 18,000 jobs that Microsoft said it planned to cut a year ago, the newspaper said, citing sources familiar with the matter.The layoffs are expected to affect employees at the company's hardware group, including the smartphone business that it acquired from Nokia last year, the newspaper said, adding that Microsoft had more than 118,000 employees globally at the end of March.
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Tennis legend STEFFI GRAF has been appointed the Ayurveda brand ambassador of Kerala. A decision in this regard was taken by the state cabinet, Kerala Chief Minister Oommen Chandy said. The Kerala Tourism Department was given the sanction to rope in Graf to promote the state under the department’s ‘Visit Kerala Scheme’. However, the details regarding the remuneration that she will be receiving has not been disclosed.
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India Inc may register a disappointing 3 per cent growth in the just ended April-June quarter, market research agency Crisil says.The Crisil Research report on corporate profitability for the first quarter of 2015-16 attributes sluggish growth to soft commodity prices, weak growth in investment-linked sectors, and subdued rural demand restrict earnings. The analysis covers 600 companies (excluding financials and oil & gas), which account for 70 per cent of overall market capitalization. “We believe continued weak performance of investment-linked sectors, and companies impacted by low global commodity prices will curb even the moderate growth anticipated in export-oriented and consumer-driven sectors. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins are seen dipping 70 bps on a year-on-year basis”, a CRISIL statement says. Revenue growth for petrochemicals, steel, sugar and manmade fibre sectors will be the most impacted because of low commodity prices. Cement makers are also likely to see yet another weak quarter with volumes for large players remaining flattish. Construction companies should see a mild 2-4 percent revenue growth after being flat in the three quarters preceding, it adds. The outperformers among the lot are expected to be the export-oriented sectors and some domestic consumption-driven sectors such as retail, FMCG, and media. “But here, too, there are headwinds –stuttering merchandise exports growth and weakness in rural demand, respectively. Going forward, revenue growth will be influenced by the progress of monsoon in July and August, and pick-up in the pace of public investments and project execution. Developments in China and the European Union will impact the fortunes of companies that have significant revenues accruing from overseas subsidiaries, apart from exports.” Prasad Koparkar, Senior Director, Crisil Research, states. The fragile state of rural consumption is reflected in volume and topline growth of companies heavily dependent on hinterland such as FMCG, tractors, and motorcycles. The FMCG sector reported just over 7 per cent top line growth in the fourth quarter ended March 31, 2015. Crisil does not foresee growth outpacing in the quarter ended June 30, 2015. Instead, it expects tractor manufacturers to witness a 20 percent decline in sales volumes. Ajay Srinivasan, Director, Crisil Research, said, “Fall in realisations will squeeze the EBITDA margins of steel, sugar, and pharmaceutical companies. For IT service providers, it could fall 90 bps as utilisation levels fall and pressure on realisations increase. For cement manufacturers, it will be a mixed bag -- margins of large companies could increase by 170 bps due to better pricing flexibility and operating efficiency, while that for mid-sized players are likely to slip 400 bps because of inability to pass on increase in freight cost amid timid volume growth.” On the positive side, surge in data revenues and control over operating expenses will boost EBITDA margins of telecom companies by ~120 bps. Margins of petrochemical players will increase over 400 bps following an improvement in polyester feedstock spreads, while those of road developers are likely to jump up 350-400 bps following an increase in operational BOT (build operate transfer) projects, the statement says. Last fiscal had started well with India Inc registering double-digit topline growth in the first quarter ended June 30, 2014. However, there was a near-stalling since then because of which, revenue growth for the whole of last fiscal came in at just 6.4 per cent.
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Govt wants to open up the economy to foreign chains at our expense, says Kishore BiyaniRetailers and brick-and-mortar chains are up in arms against what they believe is a ‘soft’ policy favouring e-commerce players. They perceive the BJP government intends to create a separate category of e-commerce or electronic retailing which will allow for 100 per cent foreign direct investment (FDI). This will not only mean disturbing the level playing field between retailers and e-commerce, but will also kill the multi-billion organised and unorganised retail industry, it is feared. A strong delegation of retailers led by Future Group, Shoppers Stop and others will be meeting Commerce & Industries minister Nirmala Sitharaman on Wednesday (8 July) in Delhi, where they expect to mount a strident opposition to these new FDI proposals.“It is very clear that the government is determined to bring in 100 per cent FDI for e-tailers. They are just not listening. They want to open up the economy to all these foreign chains at our expense,” Kishore Biyani, CEO of the Rs 22,000-crore retailer Future Group told BW in an exclusive interview. “The government has shut its ears. It is going to be a long-term fight. It seems they have ears only for white skins,” Biyani thundered striding around his large Sobo Central office in Mumbai.He described the differentiation being made for e-Commerce as ‘ridiculous’. “The government wants to create a special category of e-commerce defined as those who use electronic technology for trading. Don’t retailers like us use electronic technology to sell goods as well? Or, don’t e-tailing chains have a huge brick-and-mortar backend? So on what basis is the government favouring e-commerce as a special category?” Biyani asks rhetorically.The Commerce Minister, under pressure from free-trade partner countries to open up e-commerce, has called for a fresh round of consultations on Wednesday with stakeholders representing both e-commerce companies as well as with high street sellers and other retailing chains. Industry bodies such as Ficci and CII are expected to attend, as well as big e-tailers such as Flipkart, Snapdeal and Amazon. The first round of consultations in May proved inconclusive as both traders’ organisations and the Retailers Association of India had boycotted the meeting.Kishore Biyani, however, insists that the meeting called on Wednesday by Sitharaman is only in deference to a Delhi High Court order that has directed the government to give a hearing to the stakeholders, including the retailers who will be adversely affected if the law on FDI is changed. The current norms allow 100 per cent FDI in business-to-business or B2B e-commerce, but not in business-to-consumer or B2C companies that sell directly to consumers. On the other hand, brick-and-mortar retailing is allowed 51 per cent FDI.“The court has taken a dim view of the government’s intent. We will fight it out if we are not given a proper hearing by the government,” Biyani said.He said the e-tailing volumes of the likes of Flipkart and Snapdeal were currently based entirely on heavy discounting. “The thumb rule is: their losses are 30 to 40 per cent of their sale costs.” He said the current e-tailing model was based on the next round of investment, and if that did not come, the promoters would have to pack up.“It is already happening. The promoters of Fab Furnishers have called it a day, leaving the private equity (PE) investors to run the company. That is the next big e-commerce story: the PEs taking over and running companies after the promoters have quit,” Biyani said, adding: “Only the top 2-3 in each category are going to survive.”Giving a parting shot, the Future Group chief said: “The only model that will survive is one that does not sell at a discount. We do both-eTailing and retailing, but we don’t discount. Our costs are 16 percent of sales. The big eTailers cost model is 53 percent of sales. Their only disruption is the money coming in.”The government is under huge pressure to open up the entire e-commerce sector to foreign investment in the free trade pacts it is negotiating with different countries, but the huge community of traders and retailers who have a mass base, are unlikely to keep quiet as they perceive 100 percent FDI as detrimental to their interests.
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