A Wealth Incorporation Publication - Christ University


A Wealth Incorporation Publication - Christ University

Agriculture, manufacturing to give small push to GDPAdvance estimates pegged the country‟s economic growth at 6.9 per cent for the currentfiscal, but IIP data and agriculture production numbers suggest the chance of a marginalimprovement from the initial numbers.Finance ministry officials had projected the economic growth to stand in the range of 7-7.3per cent for the ongoing 2011-12 financial year.Frozen bank accounts led to disruptions: KingfisherOn the eve of a crucial meeting with the Directorate General of Civil Aviation (DGCA),Kingfisher Airlines has said its current flight disruptions have stemmed from a “suddenattachment” of the company‟s bank accounts by the Income Tax (I-T) department.Mumbai-headquartered Kingfisher owes `53.8 crore for 2010-11 and `100crore for 2011-12to the tax department. Of the total amount of `153.8 crore, the tax department collected `21crore till December 2011. Kingfisher filed a commitment letter to pay balance `130 croresTDS liabilities by the end of the current financial year.Higher liquidity must for Basel III: RBIThe Reserve Bank of India said on 21 february 2012 that banks need to maintain additionalliquid assets as part of Basel III guidelines, over and above previously mandated levels.Banks will need to adhere to these norms from the month or quarter ending June 2012, theRBI said in its draft guidelines on "Liquidity Risk Management and Basel III Framework onLiquidity Standards." Indian banks currently need to meet RBI-set requirements of cashreserve ratio (CRR), and statutory liquidity ratio (SLR).Citi exits HDFC with $722-million gain after taxCitigroup Inc, the third largest lender by assets in the US, on 23rd February 2012 sold itsentire 9.85 per cent stake in the country‟s biggest housing finance company, HousingDevelopment Finance Corporation (HDFC), for `9,550 crore ($1.9 billion). The exit wasmeant to help the US bank shore up its balance sheet to meet the tighter Basel IIIrequirements. According to a release, Citi made a pre-tax gain of $1.1 billion (`5,490 crore)and an after tax gain of approximately $722 million (`3,550 crore).“It's not your salary that makes you rich, it's your spending habits.”Charles A. Jaffe4

Moody's cuts ratings of six European countriesInternational NewsBy Sanjeet KumarI MBA JBritain, Austria and France could lose their triple A ratings, as rating agency Moody's placedthe countries on negative watch, while lowering the ratings of six other Euro Zone nations.Italy, Malta, Portugal, Slovakia and Slovenia all had their ratings cut by one notch, with anegative outlook, while that of Spain was cut by two notches to A3, with a negative outlook.Europe job losses up on global cutGlobal companies from NEC Corp to PepsiCo Inc and AstraZeneca Plc are chopping jobsmore than three times faster than in 2011 as they brace for recession in Europe and aslowdown in China. Announced workforce reductions surged to 94,369 through February 10from 26,561 a year earlier, according to data compiled by Bloomberg. Employers based inWestern Europe accounted for the biggest group of job-cut disclosures, threatening to add tounemployment in the euro area already running at a 13-year high.Japan economy dips 2.3%, exports contractJapan‟s economy shrank an annualised 2.3 per cent in the fourth quarter, more thaneconomists estimated, as slumping exports undermine a recovery from last year‟s recordearthquake.The contraction compared with the median forecast for a 1.3 per cent decline in a BloombergNews survey of 26 economists. Growth was a revised seven per cent in the previous quarter,the Cabinet Office said on 14 th February in TokyoEuro zone output falls, GDP set to contractOutput at factories in the euro zone tumbled in December, reflecting a sick Europeaneconomy that probably shrank at the end of 2011 but it is hoped will recover this year.Industrial production in the 17 countries sharing the euro fell 1.1 per cent in December fromNovember, marginally less than the 1.2 per cent slide forecast by economists in a Reuterspoll.ECB lends $3.7 bn to European banksThe European Central Bank said it will lend $3.7 billion for seven days to euro area banks toease tensions in money markets.The Frankfurt-based central bank said it will provide the funds to 11 banks at a fixed rate of0.63 per cent. Last week, banks borrowed $4.1 billion in seven-day funds. The ECB doesn‟tdisclose the identity of the banks it lends to. Demand for dollars from European banks surgedin December after the ECB coordinated with the Federal Reserve to halve the cost ofborrowing in the currency.5

RatesBy Pankaj SharmaI MBA JRepo Rate 8.50%Reverse Repo 7.50 %Call rate 7.50%-9.05 %Inflation +7.65% for January 2012Forex Reserve $ 293.439 Billion as on 3 rd Feb 201191day T-Bill 9.0227%IIP 1.8% for December 20116.90 GS 2019 8.0907-8.0907%5150.550GraphsBy Pankaj SharmaI MBA JRs/$49.549Rs/$48.54816-Feb 19-Feb 22-Feb 25-Feb 28-Feb29000Gold(per 10 gram)286002820027800Gold(per 10gram)274002700016-Feb 19-Feb 22-Feb 25-Feb 28-Feb7

125Oil(per bbl)122119116Oil(per bbl)11311016-Feb 19-Feb 22-Feb 25-Feb 28-Febfuture ratesopen interest600058005600540052002400000019000000140000009000000500016-Feb 19-Feb 22-Feb 25-Feb 28-Feb4000000sensexnifty19,000.0018,600.0018,200.0017,800.0017,400.005800560054005200500017,000.0016-Feb 19-Feb 22-Feb 25-Feb 28-Feb48008

A Startup Country in Making?By Dhruv ChopraI MBA IThanks to capital, talent and mentors backing smart ideas, the startups are flourishing again inIndia. There are many examples which could highlight the positivity that the VentureCapitalists now have, to do business in this country.Hari Menon in 1999 with three others launched Fabmart, then India‟s first onlinedepartmental store supported by the dotcom boom. Those days headlines were easy to get, aswas funding but business was not so easy. He tried every other thing by undertaking raft ofchanges but was forced to cash out the company in 2006 to AV Birla Group. But then in 2011Menon came up with another launch www.bigbasket.com, an online retailer in Bangalore andthis time business got winds in its back and orders started pouring at an unprecedented rate.Comforting presence of angel investors do play a very crucial role in giving that initial pushwhich is required.India always had entrepreneurs but never had great startups. The eco system – investors,mentors, angel investors and smart talent- that seeded and nourished startups was simplymissing.Ernst & Young data on deals shows that in 2010, venture funds contributed 15% in volumeterms and 5% in value terms (PE + early stage funding) but in 2011, early stage fundingcomprised of 35% in volume and 10% in value terms. Clearly highlights the change inperception by the VCs and seed fund providers to invest in new ideas and the positivity intaking risks. The amount of funds available for early stage has almost trebled between 2006and 2012. More importantly this boom is not just about dotcoms. It is a diversified flourishranging from Jaldhara Technologies (waste water management solutions) to CleanMaxEnviro Energy Solutions, that is why their sustainability is inevitable.Its not Private equity which is enjoying the party rather the attention is now shifting to earlystage investments. There are scores of successful executives that are quitting cushy jobs toturn entrepreneurs because they are ready to take risk now, the most prominent example isMakeMyTrip‟s (MMT) Deep Kalra, who have made big in short time. MMT started in 2000and is today worth $800 million plus. “Startups and entrepreneurship have become cool now.Indians are not afraid to say I tried a startup and it failed. That stigma is gone” said by Kalra.His words highlights the risk taking trend nowadays.But there are some experts saying that it is the herd mentality that is pushing investors tostartup. Murthy from Seedfund is one of the cynics, he says that things will take a turn worsein the next six months as investors are not realizing that early-stage funding is messy.Is he right? Or will VCs and seed funds would remain bullish for a long term this time? Thisyear would give us all the answers elaborately.Sources:Insights from Economic times and E&Y reports9

Unabated Euro-Zone CrisisBy Dhruv ChopraI MBA IThere is negativity surrounding the euro zone nowadays; huge sovereign debt, austeritymeasures on the roll, further taxes for the public and lowering of credit ratings of countrieslike Britain, Austria, France, Italy, Malta, Portugal, Slovakia and Slovenia by Moody,Standard & Poor and Fitch clearly highlights the damaging financial scenario for the block ofnations. Presently only few countries like Germany, Norway, Sweden and Denmark areholding strong and keeping away from the negative ratings, rest all the other countries left areunder a close watch by these agencies.The crisis has taken toll on countries like Greece and Portugal in such an extent that now it isdifficult to find solutions for their debt-empowered economy. There are strings of bailoutpackages which are being utilized in such a way that it would reduce their Debt-To-GDPratio up to some extent to kick start their economies. But the things are not working; theausterity measures have almost crippled the public spending which resulted in an extremelyslow paced growth for the union. These countries have to deal with high fiscal deficits and sodropping the growth momentum too.Huge debt on these countries have raised obligations towards more interest payment and sothe government spends less for the welfare of people, levy more taxes by expanding the taxpayable population base and borrow more, which has great impact on the domesticcompanies. The crisis may even lead to fall in exports to the European countries cripplingIndia‟s total exports. 75% of these exports are from manufacturing sector which wouldimpact the domestic industrial production too. As slowdown will affect exports, it can lead toan increase in the already high India‟s current account deficit. Further, the stock markets canwitness a slowdown in funds from this region as the Foreign Institutional Investors and ECBwould require funds to meet their own capital requirements and obligations back home.So, all these factors clearly highlight the interdependency of one country over another andsignifies the crippling effect too. So if the Euro Zone crisis is not solved early it would have achain reaction which would not only engulf the European countries but also could haveserious impact on the developing countries like India.Though a positive for India is that it is trying its best of becoming a self sufficient country inall the aspects, barring Oil & Gas, and is not primarily dependent on exports. Secondly, Indiahas diversified its export portfolio in different geographical regions too which woulddefinitely act as a cushion for the country in mitigating the adverse impacts borne out of thiscrisis.Source:Insights from Financial & Economic TimesImage Source:http://www.industryleadersmagazine.com/euro-zone-crisis-more-countries-under-pressure/10

A ‘Green’ Revolution in the Stock Exchange - GreenexBy Sharnitha RamachandranI MBA IThe BSE on February 22 nd 2012, launched India‟s first ever carbon-efficient index calledBSE-GREENEX. This index is introduced to assess the carbon performance and energyconsumption patterns of companies. It will provide a benchmark for those investors who aresocially aware and want to invest in such companies. Dubbed as the „eco-friendly‟ index, itconsists of top 20 companies from the BSE -100 index. Some of them are Cipla, HindustanUnilever, ICICI Bank, L & T, NTPC, State Bank of India, Tata Steel.The GREENEX index was developed by the BSE in collaboration with IIM-Ahmadabad.IIM-A assessed the carbon performance of companies based on information obtained fromeach company‟s annual reports. The BSE-100 companies were ranked on the basis ofgreenhouse gas emissions in the last 4 financial years – from 2007 to 2011. On the otherhand, BSE evaluated the financial performance of these companies. Thus this new index willcomprise of only top 20 stocks which do remarkably well in terms of both energy efficiencyand profitability simultaneously. The essence of this index is that if companies becomeenergy-efficient and more responsible towards environment, then costs can be cutsignificantly which automatically leads to higher profits being posted. However, stocks ofnon-performing companies will be removed from the index to maintain competitiveness.Calculation of the indexGREENEX follows a sector-specific algorithm. So there will be fair representation from allsectors. Each company is measured against the best in the same industry. Firstly, scaling of 3factors of a company within the sector is done. Those 3 factors are – carbon intensity, averagefree float market capitalization and average turnover of a company.Next, a composite point for a company is calculated. This is done by taking into account thesum of points obtained from the above parameters and is multiplied by respective weightsassigned to them. The carbon intensity is weighted at 50%, the average free float marketcapitalization at 40% and average turnover at 10%. The top ranking company from eachsector makes it to this index.From a finance perspectiveIf we analyze this green index from a finance angle, it‟s benefits to investors are plenty. BSEannounced that GREENEX will create a realistic market-based response mechanism in theeconomy. This will happen since there are many socially aware investors who are willing topay a premium to invest in such green companies, hoping to get good returns. The businesseswill feel committed to the investors in this way.When companies balance both environmental cause and profit-motive, investors feelimmediately attracted and so a good block of funds and finances will enter green businesses.With a standardized index like GREENEX, investment flows will happen better and faster.This index will also be used to develop green financial products. Investments in such greencompanies can be done by asset management companies and insurance companies. The11

offerings will be in the form of mutual funds, exchange-traded funds, pension funds andstructured products etc. So investors can invest in mutual funds that invest in companiesforming the GREENEX. It serves the dual purpose of earning money and saving theenvironment.This index will help both domestic and international investors to invest in forward-looking,green enterprises. So India‟s overall business image will become „greener‟ in the eyes ofother countries as well.As businesses and investors can monitor „carbon‟ performance, it will go a long way insaving the environment from more serious damages and will also keep a moral check on thefinancial activities of business houses.With the functioning of this index, many investors will take more informed investmentdecisions especially regarding power companies engaged in coal and oil production etc.Ultimately, one analyst put GREENEX as an indication that global warming has started toheat up India's corporate climate as well !!Sources:Insights from ET- Financial TimesBuzz WordBy Prachi ShardaI MBA JLeverage RatioAny ratio used to calculate the financial leverage of a company to get an idea of thecompany's methods of financing or to measure its ability to meet financialobligations. There are several different ratios, but the main factors looked at includedebt, equity, assets and interest expenses.The most well known financial leverage ratio is the debt-to-equity ratio. Forexample, if a company has Rs.10M in debt and Rs.20M in equity, it has a debt-toequityratio of 0.5 (Rs.10M/Rs.20M).Source:http://www.investopedia.com/terms/l/leverageratio.asp#ixzz1na3iPkho12

THE MCX IPOBy Arnab BasakI MBA JThe start to the New Year 2012 as far as IPO is concerned was bad because the first IPO of2012 by Goodwill Hospitals and Research Centre was withdrawn by their promoters due topathetic response from the investors. The issue which was open from Dec 30, 2011 till Jan 9,2012 and was subscribed 0.01 times till Jan 6, 2012 and the Qualified Institutional Buyers,Foreign Institutional Investors and Domestic Institutional Investors categories did not bid atall. The main reason cited for such a failure was poor market condition and corporategovernance issue.The second IPO that recently hit the market was the MCX IPO whose response wasstupefying because of its strong fundamentals and improved market conditions.Multi Commodity Exchange (MCX) was incorporated in the year 2003 and is an India basedelectronic commodity futures exchange. It provides online trading facility along with clearingand settlement operations for commodity futures across India. MCX allows trading in morethan 50 commodities across sectors like bullion, metals, energy, weather, and agriculturalproducts. MCX is the largest commodity futures exchange in India and 5 th largest in theworld. The exchange is also the World‟s largest exchange in Silver, the second largest inGold, Copper and Natural Gas and the third largest in Crude Oil futures, with respect to thenumber of futures contract traded.MCX is the first exchange in India to come out with an IPO and at the right time when themarket was in the bullish trend due to some good economic numbers. The investors gave anawesome response to the IPO which was oversubscribed by 54 times. The IPO opened on22 February 2012 and closed on 24 February. In that time it received bids for ` 35,000 croreand the retail portion was oversubscribed by 24 times, the highest ever retail participation inan IPO in the country.MCX issue detailsIssue Open Feb 22, 2012 – Feb 24, 2012Issue Type100% Book BuildingIssue Size6,427,378 Equity Shares of `10 eachIssue Size`663.31 CroreFace Value`10 Per Equity ShareIssue Price`860 – Rs1032 Per Equity ShareMarket Lot6 sharesMin Order Quantity 6 sharesListingBSE13

MCX IPO GradingCRISIL has assigned an IPO Grade 5 to MCX IPO. This means as per CRISIL, company has„strong fundamentals’. CRISIL assigns IPO grading on a scale of 5 to 1, with Grade 5indicating strong fundamentals and Grade 1 indicating poor fundamentals.The Lead Managers to the MCX IPO were Citi Group Global Markets India Private Limited,Edelweiss Capital Limited and Morgan Stanley India Company Pvt Ltd. The Registrar to theissue was Karvy Computershare Private Limited.This IPO thus turned out to be one of the huge success in the Indian bourses where manycommon man got a chance to invest their money because of its low price band. With suchdynamic fundamentals, 5 on 5 grading, good corporate governance and improved marketconditions I would say that if any investor had not invested in this IPO they would havesurely lost a great opportunity to invest their funds, specially for those who lost their moneyin the market in the later part of 2011 when the market was in a bearish phase.Buzz WordBy Prachi ShardaI MBA JLeveraged buyoutThe acquisition of another company using a significant amount of borrowedmoney (bonds or loans) to meet the cost of cquisition. Often, the assets of thecompany being acquired are used as collateral for the loans in addition to theassets of the acquiring company. The purpose of leveraged buyouts is to allowcompanies to make large acquisitions without having to commit a lot ofcapital.One of the largest LBOs on record was the acquisition of HCA Inc. in 2006 byKohlberg Kravis Roberts & Co. (KKR), Bain & Co., and Merrill Lynch. Thethree companies paid around $33 billion for the acquisition.Sources:http://www.investopedia.com/terms/l/leveragedbuyout.asp#ixzz1na2OXJr3Image Source:http://news-views.in/national/mcx-gets-approval-from-sebi-for-draft-ipo-prospectus/6732700.html14

Infrastructure Development Finance Company LimitedBy Deebadwita DeI MBA JandShashank MishraI MBA NThe Infrastructure Development Finance Company Limited (IDFC) is India's leadingintegrated infrastructure finance player. The company is well known for providing end to endinfrastructure financing and project implementation services. The company was incorporatedin the year 1997. IDFC believes in the mandate of 'Enabling India'. The vision of thecompany is to built on the 'one firm' that looks after the diverse needs of infrastructuredevelopment. Whether it is financial intermediation or for the infrastructure projects andservices, adding value through innovative products to the infrastructure value chain is theirmoto. In their asset maintenance of existing infrastructure projects, the company focuses onsupporting other companies and individuals to get the best return on investments.Company Profile:Incorporated on January 30, 1997 in Chennai, the company was set up on the recommendationsof the 'Expert Group on Commercialization of Infrastructure Projects'.It was started under the Chairmanship of Dr. Rakesh Mohan.In the year 2002, the company was notified as a Public Financial Institution underSection 4A of the Companies Act.Within a few years IDFC had set up IDFC Private Equity as for managing privateequity funds.It has also set up Uttaranchal Infrastructure Development Company Limited (UDEC).In the year 2005 the company became a public company after listing its shares on BSEand NSEAgain in the year 2008 the company entered into asset management domain byacquiring the AMC business of the Standard Chartered Bank of India. IDFC has also Incorporated IDFC Capital (Singapore) Private Limited, for theemerging markets private equity fund-of-funds business.The equity funds of IDFC is Best suited for long term goals where as Income Fundsare suitable for long and short term goals.In July 2010, IDFC got the Infrastructure Finance Company (IFC) status within theNBFC category from the Reserve Bank of India.15

This year IDFC has entered the list of top 50 Indian companies in the Standard &Poor‟s Environmental, Social and Corporate Governance (ESG) India Index.Key Highlights:The growth of IDFC has been driven by the substantial investment requirements of theinfrastructure sector in India.The CAGR has seen a commendable growth of 34% in the last 5years.IDFC entered the list of top 50 Indian companies in the Standard & Poor‟sEnvironmental, Social and Corporate Governance (ESG) India Index which shows thatindividual portfolios is consciously balancing the interests of all stakeholders,thereby creating a platform for strong long-term performance.The Net Income from operations has increased by 27.34% from `3,569.98 crores in2010 to `4,545.96 crores in 2011.IDFC‟s quality of assets continues to be commendable with its Net NPAs standing at`38.91crore as on March 31, 2011.The Directors have recommended a dividend of `2/- per share (i.e. 20%) for the yearended March 31, 2011 on equity shares.The Company will also pay a dividend @ 6%on Compulsorily Convertible Cumulative Preference Shares as per the terms of issue. As on March 31, 2011, IDFC‟s total exposure to infrastructure projects was `58,273crores was the highest at 45.8%, followed by that in Transportation 28.7%,Telecommunication & IT 15.8% and Commercial & Industrial sector 9.7% .Balance Sheet:16

Stock Performance:BSE Index: `140.60Recommendation for the stock:The stock has been beaten up big time because of the gloomy industry outlook and highinterest rates. The year 2010-11 has been notable for IDFC‟s growth and development orseveral reasons. This has been a year where the company's performance on financial metricshas been more than satisfactory despite overall sluggishness in infrastructure sector growth.The recommendation for the stock is “BUY” for a period of 12 months.Call: BuyCMP: `140.60Target Price :`160Time Period:12 months17

SilverBy Srinivas Prasad KI MBA JSilver is a metallic chemical element (Ag) a soft, white, lustrous transition metal. The metaloccurs naturally in its pure, free form (native silver), as an alloy with gold and other metals,and in minerals such as argentite and chlorargyrite. Most silver is produced as a byproduct ofcopper, gold, lead and zinc refining.Silver has long been valued as a precious metal, and it is used to make ornaments, jewelry,high-value tableware, utensils (hence the term silverware), and currency coins. Today, silvermetal is also used in electrical contacts and conductors, in mirrors and in catalysis ofchemical reactions. Its compounds are used in photographic film, and dilute silver nitratesolutions and other silver compounds are used as disinfectants and microbiocides. Whilemany medical antimicrobial uses of silver have been supplanted by antibiotics, furtherresearch into clinical potential continues.Domestic MarketIndian Silver market is majorly Silver import market. Annual demand for silver in India isclose to 2500MT - 3200MT comprising 50% demand from Industry, 39% from Jewelry &Silverware, 9% from Coins & 1% each from photography & Net implied investment. 77.1%of the total demand is met through imports, 18.8% from secondary silver & 2.5% fromHindustan Zinc which is the largest producer of silver in India. Most of the imports close to50% is from China.International MarketSilver mine production rose by 4% to 709.6 Moz in 2009. Rise was mainly from primarysilver mines and as a by-product of gold mining. Peru was the worlds largest silver producingcountry in 2009, followed by Mexico, China, Australia and Bolivia. All of these countriessaw increases last year except for Australia, where output from the lead/zinc sector declinedmarkedly. With respect to scrap supply, 2009 saw a 6 percent decrease over 2008s figure to a13-year low of 165.7 Moz. This represented the third consecutive year of losses in the scrapcategory. Global primary silver supply recorded a 7 percent increase to account for 30percent of total mine production in 2009. Total fabrication demand was lower by 11.9% in2009 primarily due to global financial crises.Volatility in silver prices have fallen to a 16-month low which could have helped the preciousImage Source:http://www.silverfuturesprices.net/18

metal to break the key resistance level of $35 an ounce last week, according toETF Securities Ltd. US silver futures for May delivery has advanced to $35.604 an ouncerallying 28 percent so far this year, making it the best performing precious metal.“The silver price surged to a five-month high of US$35/oz. last week after moving above its200-day moving average, a key technical resistance barrier, for the first time since September2011,” ETF Securities said. The strength of the Euro has added upward momentum to broadcommodities and precious metals prices in particular, with silver seeing particularly stronggains. Silver this year has been in a “sweet spot”, with stronger growth indictors but yet stillstrong demand for “store of value” assets keeping silver in strong demand, ETF Securitiessaid in a weekly note.At India‟s Multi Commodity Exchange, march silver contract has fallen by 0.5%, whichwhich came to around `58710 per Kg, the US Dollar Index (DX) rose around 0.3 percent onMonday mainly on the back of mixed sentiments in the global markets which increaseddemand for the low-yielding dollar in yesterday‟s trading session, according to AngelCommodities. MCX Silver March support is seen at `58400, `58084 per kg, while resistanceis seen at `58936, `59152 per kg, Angel Commodities said.MCX Silver has recently brokenout of the `57500 resistance level indicating bullish momentum. The breakout is supportedby rise in volume. The 14-period RSI has also broken out of trend line resistance and issustaining well above the 50 mark which indicates positive momentum. Further, if the pricecontinues to hold support at `57500 level, an upside move till `65000-66893 levels could bepossible, according to Dharmesh Bhatia, Associate Vice President, Research at KotakCommodities.Silver Spot RateSources:http://en.wikipedia.org/wiki/Silverhttp://www.ncdex.com/GlobalSearch/Search.aspxSearchText=SILVER&SearchTitle=SILVERhttp://www.commodityonline.com/news/silver-volatility-low-best-performing-precious-metal-in-2012-46295-3-46296.html19

Adarsh ScamBy Ankita PagariaI MBA JIn 2010, the Indian media brought to public the alleged violations of rules at various phasesof construction in the Adarsh Society. Questions were raised on the manner in whichapartments in the building were allocated to bureaucrats, politicians and army personnel whohad nothing to do with Kargil War and the way in which clearances were obtained for theconstruction of the building of the Adarsh Society. The Adarsh society high-rise wasconstructed in the Colaba locality of Mumbai, which is considered a sensitive coastal area bythe Indian Defense forces and houses various Indian Defense establishments. The society isalso alleged to have violated the Indian environment ministry rules. Activists likeMedha Patkar had been trying to uncover the problems since at least 2004. It had led toresignation of the then Chief Minister, Ashok Chavan.Several inquiries have been ordered by the army andthe Government to probe into the irregularities. Someof the current occupants of the flats in the Adarshco-operative society building have offered to vacatetheir flats at the earliest, denying allegations that theywere allotted flats because they influenced or helped, insome manner, the construction of the society byviolating the rules.Despite repeated statements by outgoing Chief MinisterAshok Chavan that the land which houses thecontroversial 31-storey Adarsh Cooperative HousingSociety belongs to the Maharashtra government, RTIactivists have revealed that the Army had been in “defacto” possession of the 6,490-sq mt prime land forover 60 years before the Adarsh Society highrise cameup there in 2003.The society, originally meant to be a six-storey structure to house Kargil war heroes and warwidows, was converted into a 100-metre-tall building. Retired brigadier M W Wanchu, thepresident of the society, argued that it was not a defense land. The highrise was built subjectto the condition that it would house war veterans, but now has 103 members, which includerelatives of Chavan. However, the outgoing chief minister clarified that for him „family‟ isrestricted to his wife and two daughters. Chavan‟s late mother-in-law Bhagwati ManoharlalSharma, relatives Seema Sharma and Madanlal Sharma also figured in the list. BhagwatiManoharlal Sharma, 77, died at „Varsha‟, the chief minister‟s official residence, in July. Thetwo relatives have submitted letters of withdrawal of their membership. Former Army chiefsGenerals Deepak Kapoor and N C Vij and former Navy chief Admiral Madhavendra Singhand Vice-Chief Gen Shantanu Choudhary also got flats in the society. They have offered tosurrender their flats on the grounds that they did not know the land was meant for the widowsof Kargil war heroes. Former chief secretary D K Sankaran‟s son, Sanjoy, is also among theallotters. The list also includes the names of former Union environment minister SureshPrabhu, Nationalist Congress Party MLC Jitendra Avhad, Congress leaderKanhaiyalal Gidwani and his two sons, a close aide of a senior Maharashtra minister, thechildren of some bureaucrats, serving bureaucrats, Seema Vyas and Idzes Kundan, and an20

individual by the name of S B Chavan. Ashok Chavan‟s late fatherand former home and defense minister was also S B Chavan.According to the present market rate in the Colaba area, an averagetwo to three bedroom-hall-kitchen (BHK) flat in Adarsh society couldcost between `6 crores and `8.5 crores. However, members of thesociety paid `60-85 lakhs for each flat. The Western Naval Commandhad objected to the construction of the society as it also violates thestringent Mumbai Coastal Regulation Zone norms.The CBI is already investigating how the prime land in Mumbai,which was marked for Kargil war widows and war veterans, wasgiven to VIPs instead. The CBI enquiry was sought by the presentArmy chief to clear the names of defense service officers allegedlyimplicated in it. Defense Minister A K Antony had to agree to the CBIenquiry. Most of the files pertaining to the scam are now in CBI‟spossession. The Union environment ministry has also raised a red flag,saying it did not grant clearance to the society. The MumbaiMetropolitan Region Development Authority has scrapped theoccupation certificate in the wake of the controversy. Subsequently, Brihan Mumbai ElectricSupply & Undertaking has disconnected power supply to the society. Members plan toapproach the court of law against these actions.The state government has filed an application before the two-member inquiry commission,seeking an interim report on two of the 13 issues being looked into by the judicial panel. Twoissues including ownership of the land in south Mumbai, on which the 31-storey Adarshbuilding stands and secondly, whether the land was reserved to house the Kargil war widowsand their relatives. The commission, headed by retired Justice J A Patil, will hear theapplication on February 24. The commission was set up by the government in January lastyear, soon after the scam had come to light. While the panel was to complete its probe withinthree months, its term has been extended from time to time. The panel now has to submit itsreport by May 2012.Sources:http://en.wikipedia.org/wiki/Adarsh_Housing_Society_Scamhttp://timesofindia.indiatimes.com/india/Adarsh-scam-Maharashtra-govt-seeks-interim-report-frominquiry-panel/articleshow/11988535.cmshttp://www.business-standard.com/india/news/whatadarsh-scam-is-about/414324/Image Sources:http://www.thehindu.com/news/national/article96673.ecehttp://www.telegraphindia.com/1101113/jsp/frontpage/story_13171958.jsp“The world does not pay for what a person knows, but it pays for what aperson does with what he knows.”Laurence Lee21

Budget 2012 TeamBy Vinay GoelI MBA LFaced with the multiple problems of lower revenue growth, rising expenditure, high inflationand global slowdown: A lot is expected from Mukherjee‟s Commanders.Mr. RS GujralFinance SecretaryOversees the entire Budget process; holdsmeetings with various stakeholders to discussproposals and requirement of funds for differentschemes.Mr. Shaktikanta DasAdditional Secretary, Budget DivisionHeads the Budget Division; prime responsibilityis scrutiny and preparation of receipt andexpenditure estimates.Mr. Kaushik BasuChief Economic AdvisorPrepares the Economic Survey, which outlinesthe state of the economy and the areas of concern.Mr. Sumit BoseSecretary, Department of ExpenditureInterface between finance ministry and otherdepartments to finalise expenditure for theyear.22

Mr. D K MittalSecretary, Department of Financial ServicesGives inputs for policy initiatives in the financialsector, which includes banking, insuranceand pension.Mr. Haleem KhanSecretary, Department of DisinvestmentsProvides estimates of disinvestment of equityin public sector enterprises.Mr. S K GoelChairman, CBECGive proposals for the Finance Bill.Mr. R Gopalan,Secretary, Department of EconomicAffairsGuides and monitors the Budget-makingprocess; ensures its smooth finalisation.Source:Business standard- 27 th Feb, 2012Image Sources:http://www.babusofindia.com/2011/06/road-to-north-block-rs-gujral-appointed.htmlhttp://www.topnews.in/people/r-gopalanhttp://www.topnews.in/law/people/kaushik-basuhttp://www.thehindubusinessline.com/industry-andeconomy/article2897213.ece?homepage=true&ref=wl_homehttp://www.businessworld.in/businessworld/businessworld/content/Worthy-Contenders.htmlhttp://industrialeconomist.com/archives/Zone-Progress-Jul-31-Aug-14-2007/coverstory.asphttp://www.thehindubusinessline.com/industry-and-economy/logistics/article2772239.ecehttp://smehorizon.sulekha.com/indian-government-clears-three-key-infrastructure_automotiveviewsitem_592823

CrosswordBy Reddy Sreedhar TI MBA LAcross4. India and this 'country' on 21 February 2012 agreed to extend the agreement to reducethe risk from accidents related to nuclear weapons for another five years (till 21 February2017), in accordance with Article 8 of the agreement between the two countries.5. 'MICEX' is the stock exchange of this country.8. This country on 15 February 2012 launched three nuclear projects including a fourthgeneration Ultra Centrifuge, which is capable of enriching the Uranium faster than itsearlier models.10. In India , commercial papers can be issued by........Down1. A South Korean electronics equipment giant'......... electronics' on 24 February 2012launched Series 5Ultra Notebook for Indian market.2. ____ price is the price for orders after the orders get triggered from the stop loss book.3. The 10th Pravasi Bhartiya Divas was held in this city...... The event is held annually between7th to 9th January to commemorate the return of Mahatma Gandhi to India fromSouth Africa to join the Indian Freedom Struggle.6. He is the chairman of Priminister's Economic advisory council of India.7. This group is the sponsor of Indian cricket team.9. This mining giant '......' on 25 February 2012 merged its Indian subsidiaries, SterliteIndustries into sister concern and iron ore miner Sesa Goa.24

Team MembersKritika BanerjeeEditorSanjeet KumarNewsReddy Sreedhar TCrosswords & QuizPankaj SharmaGraph & RatesArnab BasakInvestors checkSharnitha RamachandranDebatePrasanth Pandiri &Pawan Kumar GundapuneediAlumni SpeakVinay GoelDid You KnowDhruv ChopraContemporary ArticlesAnkita PagariaScamsSrinivas Prasad KCommodity MarketDebadwita De &Shashank MishraStock WatchPrachi ShardaBuzz WordsVedang Dave &Sandeep KumarBoyapatiReview CommitteeKritika BanerjeeCreative Head &Design25

About UsChaanakya is the official Finance Magazine ofWealth Incorporation, the Finance Club. It is released fortnightly.Its objective is to keep each & everyone abreast with the activitiesand events of the world of finance.Christ University Institute of ManagementChrist University, Hosur Road,Bangalore - 560029,Karnataka, IndiaTel: +91-80-4012 9350/9351/9355Fax: +91-80-4012 9000Website: www.christuniversity.inPlease mail your valuable reviews and feedbacks atchaanakya@mba.christuniversity.in(For Private Circulation Only)26

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