Sunday, May 2, 2010


Current Events: Business & Economy

RBI announces repo, reverse repo rate cuts

Is being interpreted as a signal for banks to lower their lending rates

The Reserve Bank of India has sent fresh signals to banks to lower lending and deposit rates

by pruning the repo rate and the reverse repo rate by 50 basis points each on March 4, 2009.

The repo rate, or the rate at which RBI lends to banks, has been cut to 5 per cent, while the

reverse repo rate, or the rate at which the central bank absorbs liquidity, has been pared to 3.5

per cent. The market had given up hopes of an immediate reduction after the central bank

prodded banks last week to lower rates.

The RBI move is largely a sentiment booster for banks rather than a

technical one, as banks already have ample liquidity and hardly

borrow from the repo window.

A cut in reverse repo rates will discourage banks from parking

surplus funds with RBI through the liquidity adjustment facility and

encourage them to boost lending to the commercial sector.

Over the past three months, RBI has slashed the rate 250 basis

points. With the latest repo rate reduction, the fifth since October 20,

the overall cut since the global credit crisis intensified adds up to 400

basis points. Since September, the central bank has also lowered the

cash reserve ratio, or the proportion of deposits that banks set aside,

by another 400 basis points to inject Rs 1,60,000 crore into the

system. Through the series of measures, RBI has provided Rs

3,88,000 crore of primary liquidity to the system.

Banks have, however, refrained from passing on the entire benefits to borrowers and have

reduced lending rates 50 to 200 basis points, with private and foreign banks being reluctant to

cut rates. As a result of banks' risk aversion that prompted them to park larger sums of money

in government securities, the flow of resources to the commercial sector from banks and nonbanks

fell to Rs 4,98,136 crore between April and February 13, against Rs 6,08,351 crore in

the corresponding period of the last year. On a year-on-year basis, non-food credit growth,

which rose to 29.4 per cent on October 10, decelerated to 19.7 per cent on February 13.


RBI, while advising banks to "monitor their loan portfolio and take early action, to prevent

asset impairment" also asked lenders to appropriately price the risk "and ensure that

creditworthy enterprises continue to get funding".

Overall economic activity has slowed, with the economy projected to grow 7.1 per cent this

year, against over 9 per cent during the past three years. Industrial output contracted in

December, exports have shrunk for four months in a row and growth in the services sector

has slowed.

Railway budget: Lalu announces some more trains

Rs. 10,807-crore budget passed by voice vote

The Lok Sabha passed the interim rail budget, with Railway Minister Lalu Prasad announcing

some more new trains and outlining plans to step up security in view of terror threats. The Rs.

10,807-crore budget for implementation of the Sixth Pay Commission recommendations and

to fund various ongoing projects was passed by voice vote.

The Railway minister rejected the opposition charge that fares were being hiked through the

"backdoor" by way of "tatkal" bookings on higher payment. He claimed that in the past five

years, fares of all classes were lowered, in spite of which the Railways earned a cash surplus

of Rs. 90,000 crore.

Budgetary support to the Railways had declined from 53 per cent to 29 per cent since 2004

and it was investing over Rs. 20,000 crore out of its internal resources for its projects.

To strengthen security on trains and rail property, there was a proposal to recruit 22,000

additional personnel for the Railway Protection Force (RPF) and create battalions of Special

Protection Force. The Railways also proposed to acquire 3,000 AK rifles for the RPF and a

request in this regard had been sent to the Home Ministry. All railway stations in New Delhi,

Mumbai, Chennai and Kolkata, besides 140 other railway stations across the country have

been declared sensitive.

Security at these stations was being upgraded with new measures, including strict access

control, installation of CCTVs, setting up of facilities for detection and disposal of explosives

and passenger and baggage checking.

The Railway Minister announced the launch of some new trains, an increase in frequency of a

number of trains and extending the services of a few. Among the new trains, he said two

long-distance ones would connect Thiruvananthapuram with Mumbai and Bilaspur. A rail

coach factory would also be established in Palakkad, Kerala.



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Parliament adopts money laundering Bill

The law seeks to check use of black money for financing terror activities

Parliament has adopted the Prevention of Money Laundering (Amendment) Bill, 2009 with

the Lok Sabha passing the measure recently. The Bill aims at combating money laundering,

terror financing and cross-border economic offences.

Financial intermediaries such as full-fledged moneychangers, money transfer service

providers such as Western Union and International Payment gateways, including VISA and

MasterCard, have also been brought within the ambit of the Prevention of Money-Laundering

Act enacted in 2002. Consequently, casinos will be brought under the reporting regime of

enforcement authorities.

The law will also check the misuse of promissory notes. The provisions will check misuse of

the "proceeds of crime," be it from sale of banned narcotic substances or breach of the

Unlawful Activities (Prevention) Act.

The passage of the Prevention of Money Laundering (Amendment) Bill, 2009 will enable

India's entry into the Financial Action Task Force (FATF), an inter-governmental body that

has the mandate to combat money laundering and terrorist financing.

The Bill, after becoming an Act, will address India's international obligation and empower

the Enforcement Directorate to search the premises immediately after the offences are

committed and police have filed a report. The period of provisional attachment of property

will be increased from 90 to 120 days. But the investigating agency can attach property and

search a person only after completing the probe.

It has also expanded the scope of the Act, adding some more offences such as counterfeiting

currency notes or bank notes and counterfeiting government stamps.

SBI subsidiary Bill introduced

Transfer of power over SBI passes from RBI to Union government

The government has introduced a Bill in the Lok Sabha seeking to empower itself to fix the

authorised or issued capital of a subsidiary of the State Bank of India (SBI), as also appoint

and nominate top officials.

Introduced by Minister of State for Finance P.K. Bansal, the SBI (Subsidiary Banks Laws)

Amendment Bill, 2009 was necessitated for bringing about the changes. These powers were

hitherto vested with the Reserve Bank of India, from whom the ownership was transferred to

the Union government few years ago.



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According to the statement of objects and reasons, "due to change in ownership, those

provisions need to be suitably modified to reflect the change in ownership. Further, the

change of ownership in the State Bank necessitates consequential changes" in the SBI

(Subsidiary Banks) Act, 1959 and the State Bank of Hyderabad, 1956.

The legislation would amend the State Bank of Hyderabad Act and the SBI (Subsidiary

Banks) Act to incorporate these provisions. On enactment, the Union government would be

empowered to increase or reduce the authorised capital of a subsidiary bank, fix and raise

issued capital, issue bonus shares to shareholders and appoint the Managing Director.

Another Bill introduced by the Minister pertains to providing greater autonomy and

flexibility to private trusts to invest money in securities. The Indian Trusts (Amendment) Bill,

2009, also seeks to empower the government to notify a class of securities in which money

belonging to private trusts can be invested.

6 shortlisted for managing citizen pension fund

UTI has emerged as the top bidder

Reliance (ADAG), ICICI and Kotak Mahindra – are among the six bidders shortlisted by the

Pension Fund Regulatory & Development Authority (PFRDA) for managing pension funds

for citizens other than government employees. The other three are UTI, SBI and IDFC.

As per the Government plan, the New Pension System for all citizens will be rolled out from

April 1.

The six entities were shortlisted by PFRDA from more than a dozen participants in the

competitive bidding. According to information available, UTI emerged as the top bidder

quoting the lowest management fee of 0.09 paise for Rs 100. It was followed by Reliance

Capital and ICICI Prudential both quoting 0.18 paise and IDFC 0.50 paise. SBI came fifth in

the list quoting 0.63 paise and Kotak Mahindra, the last with 0.93 paise.

Some bidders feel that the shortlisted parties have bid too low and that it would be unviable

to manage the funds at such a low fee. They say mutual funds are allowed to charge up to 2.5

per cent of their assets under management as expenses, including 1.25 per cent as

management fee.

Under the NPS, fund managers, besides incurring the operating expenses, will have to pay

PFRDA Rs 10 lakh a year as marketing expenses, said one of the bidders. There was

aggressive bidding from private entities who feel that the corpus would be large as the

scheme is open to all. Analysts, however, think it may not be the case, going by the investor

response to some of the existing pension schemes.



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Private sector entities were barred from bidding for the New Pension System for government

employees launched last year. However, they were allowed to bid when it came to managing

funds for citizens other than government employees.

The NPS for the government employees is currently managed by three public sector

institutions – LIC, SBI and UTI. Under the new NPS – which is a voluntary scheme – an

individual can join any one of the funds and would have a permanent Retirement Account

Number (PRAN). The records of subscribers are run by a central record keeping agency.

Mukesh Ambani, Tulsi Tanti among world's 100 'eco barons'

Warren Buffett tops the list

RIL promoter Mukesh Ambani along with three other Indians are among the world's

wealthiest 'eco barons' who continue to make investments in green technology and

businesses. The 'Green Rich List' compiled by UK based The Sunday Times features 100

wealthiest people including four Indians and one India-origin person.

Apart from Ambani who is ranked at the fifth position, other Indians in the list are wind

power major Suzlon Energy's Tulsi Tanti (49th rank), Jaypee Group founder Jaiprakash Gaur

(50) and former executive at engineering entity Thermax Anu Aga (78). India-origin venture

capitalist Vinod Khosla is at the 52nd place.

The list is topped by legendary investor Warren Buffett with a "Wealth Green investment"

worth £27 billion. He is followed by software czar Bill Gates and Sweden's Ingvar Kampard,

at the second and third positions, respectively.

"The Green List has unearthed 100 tycoons or wealthy families worth 200 million pounds or

more who have made either serious investments in green technology and businesses or hefty

financial commitments to environmental causes. In total, the Green 100 are worth nearly

£267 billion," the publication said.

Gates have green investment worth £26 billion while Kampard has invested £22 billion. At

the fifth spot is Holland's Marcel Brenninkmeijer with green investments worth £19 billion.

According to The Sunday Times, Ambani has a green investment of £15 billion in life

sciences. Tanti has investments of £648 million in wind turbines and Gaur has put in £620

million in wind power. Aga has put in £250 million for energy conservation whereas Khosla

has invested £560 million for alternative energy.

Writing on Ambani, the report said that among his interests in Reliance Industries operation

is Reliance Life Sciences (RLS).



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On the seeds front, it noted that RLS is developing hybrid varieties of biofuels that would

double the yield under irrigated conditions.

At the farm level, RLS has alliances with Indian farmers to build clusters of 100,000 acres

feeding into 100,000-tonne biofuel extraction plants, the report added.

On Tanti who is at the helm of Suzlon Energy, the report said, "with factories on four

continents, Suzlon is the fifth-largest wind-turbine maker in the world but collapsing values

have hit him hard".

Govt to hold competition for Re symbol

Wants a distinct identity for the Rupee similar to $, €, ¥, £

The Indian rupee could soon get a unique symbol, with the finance ministry holding a public

competition for a design, just like the US dollar ($), the euro (€), the Japanese yen (¥) or the

pound sterling (£).

Unlike a host of global currencies, the Indian rupee does not have a unique symbol and Rs is

the abbreviated form which it shares with currencies from Nepal, Pakistan, Sri Lanka and


The winning entry for the rupee symbol carries a prize of Rs 2.5 lakh but its designer would

have to surrender the copyright to the government.

The jury of examiners would consist of seven members drawn from art institutes such as Sir

JJ Institute of Applied Art, National Institute of Design, Lalit Kala Akademi, Indira Gandhi

National Centre for the Art & Culture and officials from the government and the Reserve

Bank of India. In case of the rupee, the jury would look for symbols which represent the

historical and cultural ethos of the country as widely accepted across the country, said a

notice put out by the finance ministry on its website.

Besides, the symbol should be such that it is applicable to a standard keyboard in the national

language script or a visual representation. The rupee note has 15 Indian languages on it, apart

from Hindi and English. The notice said that participants would be required to submit a brief

explanation of the design and also justify how it symbolises the Indian rupee.

The finance ministry, which has called for entries by April 15, would shortlist five designs.

The five designers would have to make a presentation to the jury members, before a final

decision is announced. But even if the design was not selected, the five shortlisted entries

would be entitled to a prize of Rs 25,000 each.



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Ban lifted on Chinese toys

Imports from China will have to accompany a certificate

India announced that it had lifted the ban on import of toys from China provided they

conform to international safety norms. The import of Chinese toys for six months on grounds

of public health and safety on January 23. According to the Commerce Ministry, imports of

toys from China will be allowed if they conform to the regulations that primarily deal with

safety and health hazards. The government further stated that the imports from China will

have to be accompanied by a requisite certificate from laboratories accredited to the

International Laboratory Accreditation Cooperation (ILAC).

Following the restrictions on toys, the Chinese media had reported that Beijing was

contemplating dragging India to the World Trade Organisation (WTO) challenging the ban.

However, Union Commerce and Industry Minister Kamal Nath had said the ban was WTOcompatible.

The toys market in India is estimated at Rs. 2,500 crore while the volume-driven,

price-competitive Chinese toys are estimated to control 70 per cent of the global toys market.

World Bank sees NREGS as a barrier to economic development

The Bank wants govt to remove barriers to migration from rural to urban regions

The World Bank has described the much-acclaimed National Rural Employment Guarantee

Scheme (NREGS) of the UPA government as a policy barrier hurting economic development

and poverty alleviation.

Various schemes of the Indian government like NREGS, watershed programmes and schemes

for development of small and medium towns are acting as "policy barriers to internal

mobility", the bank said in its 'World Development Report 2009'.

The internal mobility, the report argued, is necessary as "lifting people out of poverty

requires shifting populations from villages to cities". The process of migration should be

encouraged, the bank said. "Negative attitudes held by (the) government and ignorance of the

benefits of population mobility have caused migration to be overlooked as a force in

economic development," it said.

In many cases, welfare policies and social services are designed for a sedentary population,

the bank said. "This is best exemplified by location-specific entitlements to social services,

housing subsidies, food rations, and other public amenities especially important to working

poor people," it said. The report, which recommends concentration of production and

mobility of people, said, "Current policies do not allow communities to fully capture the

benefits of labour mobility."



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The report calls for policies that promote mobility of people, products and ideas. Instead of

worrying about the size of metropolises, the report calls for policymakers to focus on

improving the basic infrastructure to make sure these places work well like Tokyo or New


Quoting example of Mumbai, the report says despite its attempts to discourage inflows of

people, who were attracted to economic opportunities, Mumbai has twice as many people as

in 1980s. Half of the city's population lives in slums as the government has not created the

requisite infrastructure.

The standard practice in cities with limited land is to raise the permitted Floor Space Index

(FSI) over time to accommodate urban growth, as in Manhattan, Singapore, Hong Kong and

Shanghai. However, the Municipal Corporation of Greater Mumbai went the other way by

lowering the permitted FSI, which has resulted in a vicious circle of supply shortages and

high land prices. The report lays special importance on 3Ds – density (of population closer to

economic activity), distance (reducing transport cost) and divisions (less divisions or barriers

to trade) — to make economic hubs.

New economic activity in the industry and services is now concentrated along India's

metropolises and coastal cities, increasing the central region's economic distance from

density. While people want to move closer to opportunities, mobility has not been helped by

ethnic and linguistic divisions, coupled with policies that seek to revive growth in lagging

areas through subsidised finance and preferential industrial licensing.

The report criticised India's special economic zones (SEZs), which are not as well located as

in China. China has located its SEZs in coastal areas and has promoted migration of its

people to these areas as well as foreign investment, and leading to greater connectivity to

foreign markets.

Dual-SIM patent-holder demands royalty

Customs told to stop imports of such phones

The dual-SIM handset manufacturers are in a spot after a Madurai resident, who holds patent

for such phones, asked the Indian Customs authorities to stop shipment of these phones till he

was paid a royalty for every handset brought into the country.

Industry experts expect the move to hit the sales of dual-SIM handsets, which are imported

into the country by companies including Nokia, Samsung, Meridian Mobile and Spice. More

importantly, this could also affect the plans to manufacture these handsets in the country. It is

estimated that around 100,000 dual-SIM phones are sold in the country every month.



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The Madurai resident, Somasundaram Ramkumar, holds patent "in India for phones with a

plurality of SIM cards allocated to different communication networks". The patent was

awarded to him last year.

Ramkumar has moved the Office of the Commissioner of Customs of Chennai Airport in this

regard. The office has accepted his application and directed officials throughout the country

to stop clearing shipments of dual-SIM phones. The application is valid for five years or till

the time the patent is valid, whichever is earlier. Ramkumar is believed to have sought

royalty (believed to be around Rs 35) for every dual-SIM phone shipped into the country.

European handset major Meridian Mobile CEO Rajiv Khanna said most of the companies

had inventory for a couple of months. He hoped that the issue would be resolved by then.

Meridian Mobile sells dual SIM handsets under the brand name 'Fly'. The Indian Cellular

Association (ICA), the body of handset vendors in India, has already formed a committee to

look into the matter, and has initiated dialogue with the Customs department.

Dual-SIM handsets have two SIM slots and can work on both CDMA and GSM networks.

They are popular among users due to the convenience of alternating between two numbers.

These phones are particularly useful to international as some countries (like South Korea) do

not have GSM networks, while others (certain places in the US) do not have CDMA


TRAI cuts domestic call termination charges

Telephone tariffs will be reduced further

The Telecom Regulatory Authority of India has announced reduction in domestic call

termination charges (paid by one operator to another on whose network the call ends). The

move is expected to further reduce telephone tariffs, particularly that of mobile. The new

charges will be effective from April 1.

Issuing "Telecommunications Interconnection Usage Charges (Tenth Amendment)

Regulations", TRAI said: "Termination charge for all types of domestic calls (fixed-to-fixed,

fixed-to-mobile, mobile-to-fixed and mobile-to-mobile) has been reduced to 20 paise from 30

paise a minute. The authority hoped that the telecom service providers would pass on this

benefit in the form of lower tariff.

However, the Cellular Operators Association of India (COAI), representing GSM operators,

has objected to the move saying that TRAI has not factored in all costs associated with the

termination of a mobile call. Old operators are against reduction in termination charges on

local calls but new licensees have been demanding 0-10 paise a minute termination charge.



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TRAI has however increased the termination charge for incoming international calls to 40

paise a minute against the existing charge of 30 paise a minute.

Goldman raises governance issues with ONGC

Has objected to ONGC selling crude at a discount to public sector refiners

Investment banker Goldman Sachs raised corporate governance issues with Oil and Natural

Gas Corporation (ONGC), saying the government took $20 billion in cash over the past six

years from the company without consulting minority shareholders. "Since 2003-04, the

promoter (the government), which owns 74%, has taken away cash from the company on a

quarterly basis for subsidising loss-making state-owned downstream companies. So far,

ONGC's promoters have taken cash of almost $ 20 billion from the company without

consulting the minority shareholders," Goldman said.

ONGC gives discounts on crude oil it sells to state-owned refiners to partly make up for the

losses they incur on selling fuel below cost. ONGC Chairman and Managing Director RS

Gupta denied compromising on corporate governance. "We give corporate governance

utmost importance. At no point has ONGC compromised on corporate governance issues."

He said the decision to give subsidy on fuel was taken after deliberation by the board and the

government was justified in asking for such discounts as unlike global peers, ONGC did not

have a production sharing regime with the government on oil and gas it produces from the

fields given to it on a nomination basis. Under the production sharing regime, companies

share a certain percentage of oil and gas they produce with the government, who is the owner

of the mineral resource.

"Despite repeated objections raised by investors and more recently by independent directors

on ONGC's board, there has not been headway on this issue," Goldman said. "The market

appears to have got used to this practice by ONGC promoters, while similar issues in

privately run companies would likely cause serious concern." "We believe minority

shareholders are likely to suffer in a situation where their interests are poorly protected.

Moreover, such ad-hoc cash withdrawals hurt ONGC even more since it has a poor

production profile and revenues are effectively a function of their oil realisation," it said.

Satyam strategic stake sale process set in motion

L&T, Spice group and Tech Mahindra are among the suitors

Satyam Computer Services has received a green signal from markets regulator Securities and

Exchange Board of India (SEBI) to divest a majority 51% to a strategic partner, through a

global competitive bidding process.



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Board member Deepak Parekh informed that "stake sale process would begin soon".

Investment bankers Avendus and Goldman Sachs, meanwhile, have already begun formal

discussions with potential suitors.

The successful bidder will first get 31 per cent of the company's share capital, after which it

will be required to make an open offer to buy a minimum of 20 per cent of the company's

share capital. The open offer will be made at the same share price as the investor pays for the

subscription. If the investor still fails to get 51 per cent, it will have the right to subscribe to

additional newly-issued equity shares.

The investor will not be allowed to sell any

equity shares acquired for three years from the

date of the acquisition, although it can

subscribe to additional ones. Qualified investors

are expected to have total net assets in excess of

$150 million (approximately Rs 780 crore).

SEBI had exempted Satyam from certain

requirements of the Indian takeover regulations

to facilitate the global competitive bidding

process. The Company Law Board (CLB) has said the strategic investor should be selected

through an open bidding process and that would be overseen by a retired judge. The entire

process, which normally takes around 75 days, should be over in five or six weeks, said

sources close to the development.

Among the leading contenders is global IT giant IBM; Larsen & Toubro (L&T), which owns

12 per cent in Satyam and expressed an interest to acquire management control; B K Modiowned

Spice group which also wants management control; Tech Mahindra and the Hinduja


ICAI tightens auditing norms

The objective is to avert a Satyam-like fraud

The Institute of Chartered Accountants of India (ICAI), the body that regulates the profession

of chartered accountancy in the country, has issued two revised accounting standards — SA

500 and SA 720 — to enhance the quality of audits and avoid a Satyam-like fraud.

The SA 500, which will become effective from April 1, 2009, lays down norms for obtaining

and evaluating audit evidence, on which the final audit findings are based. Under this, a CA

will have to go beyond verifying the balance sheet. "Audit evidence is fundamental aspect of

an audit on which the final audit opinion and the audit report is based.


The successful bidder for Satyam:

* Gets 31% shares of Satyam's share capital

* Then makes a 20% open offer at the same price it

paid for the subscription of the 31% shares

* If it still fails to get 51%, it will have the right to

subscribe to additional newly-issued equity shares

* The subsequent subscription, if any, will not require a

further open offer

* Lock-in period of 3 years, although the investor will

be able to subscribe to additional equity shares

* Qualified investors expected to have total net assets

in excess of $150 mn



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The quality and effectiveness of an audit is, therefore, to a large extent affected by the

adequacy and appropriateness of the auditor's procedures in gathering and evaluating the

audit evidence," said an ICAI statement.

The second standard — SA 720 — is a first of its kind standard to be issued by the Institute

that has already introduced guidelines for auditors to vet annual reports and other documents.

"It (SA 720) requires the auditor to read such other information to identify any material

inconsistencies vis-a-vis the audited financial statements since these can undermine the

credibility of those financial statements and the audit report," said the ICAI release. These

standards will become effective from April 1, 2010.

Reckitt to kick off 'greener ways to clean and save'

Reckitt Benckiser is the second biggest ad spender after Hindustan Unilever

Reckitt Benckiser, maker of Dettol and Harpic, is kicking off an exercise to re-label all its

products with a 'green panel'—informing consumers on optimal usage and how to best

dispose of products. The move is in line with the company's 'Carbon 20 programme'—an

internal guideline aimed at reducing total carbon footprint of Reckitt products by 20% by the

year 2020. Reckitt CEO Bart Becht said in a statement: "By following guidelines on the

packs, consumers can cut energy and water use and save money while making an impact on

climate change."

In addition to re-labelling the product packs, all television advertising of Reckitt products will

be adapted to highlight the exercise. The company proposes to use the strapline—'greener

ways to clean and save'. The 'green panel' initiative will be backed by extensive in-store

promotions. The on-pack information will be labelled across all products on how to use and

dispose off products.

Procter & Gamble gives back with 'Give Health'

P&G sponsored charitable programs help keep children in developing countries healthy

P&G is empowering consumers to help keep children in developing nations healthy through

GIVE Health, a campaign under the company's Live, Learn and Thrive corporate cause.

Through a coupon redemption program with P&G brandSAVER, Give Health invites

consumers to help raise one million dollars to give the gift of health to children in need

around the world through three charitable programs, including Pampers Maternal and

Neonatal Tetanus Global Campaign, PUR Children's Safe Drinking Water Program and

Always and Tampax Protecting Futures Program. For every coupon redeemed from the

March 1, 2009 and April 5, 2009 issues of P&G's monthly brandSAVER coupon book, P&G

will make a donation toward the cost of water, vaccine administrations and feminine

protection and puberty education for people around the globe.



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Meher Pudumjee of Thermax is the BS CEO of the Year

Four other award winners also announced

Thermax Chairperson Meher Pudumjee is the Business Standard CEO of

the Year for 2007-08. Pudumjee was selected by a distinguished six-person

jury chaired by Nandan Nilekani, co-chairman of Infosys Technologies.

The 42-year-old Pudumjee, who took over as chairperson in October 2004,

was chosen for sustained growth in sales and net profits, as well as value

return to shareholders, in an industry dominated by large players. The

Pune-headquartered Thermax posted a compounded 41% growth in net

sales and 62% in net profits in the three years to 2007-08.

The jury also took into account the reputation of the company, as one that

had grown rapidly without compromising on corporate ethics. The jury members felt that this

aspect needed to be highlighted in a year that has been dominated by news of corporate


Four other companies were selected for Business Standard's "Star" awards in different

categories. These were:

PowerGrid Corporation as Star Public Sector Company

Areva T&D as the Star Multinational

Opto Circuits as the Star Company in the Small and Medium Enterprises sector

Tractors and Farm Equipment (TAFE) as the Star Unlisted Firm

Sapat eyes Whittard

Pune based Sapat also owns Chaitime, Parivaar and Sapat Chaha

Sapat International, a Mumbai-based tea

company, is in talks with EPIC, a private

equity firm in the UK, to buy out its stake

in Whittard, an upmarket tea and coffee

retailer in the UK, according to

investment banking officials. Sapat was

founded 110 years ago by Nikhil Joshi's

grandfather RH Joshi, and operates through three business groups—Sapat Food & Beverages,

Sapat Retail & Food Service and Sapat International.

The company owns three brands—Chaitime in the luxury end of the market, Parivaar in the

mid-segment and Sapat Chaha in the economy segment. The first Sapat outlet was founded

by Ramashankar Haribhai Joshi in Nashik, way back in 1905.

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