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REALTY
Asten, says Raffi Mather, Joint Managing Director, seeks to deliver excellence to its customers through innovation and professional management. Its team brings more than 25 years of expertise to the table. It is on the Mather legacy that Asten has been built and it is this legacy that it carries forward. More importantly, Siraj, Managing Director, and Raffi, two of South India’s most respected professionals in the sector, bring with them a passion for new ideas and a determination to execute them.
Asten: Kerala’s new top address Siraj—an industry stalwart
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iraj Mather, the Managing Director, one of the stalwarts of the Kerala’s real estate industry, brings to Asten a keen understanding of the customer psyche and a thorough knowledge of the processes required for smooth implementation. An expert in operations, he is dedicated to ensuring that Asten secures and retains its place as a professional realty major. Through an extensive network of industry contacts and service providers, Siraj ensures that Asten delivers on vital parameters such as product quality, scheduled progress, customer satisfaction and environment-friendly and responsible use of resources. A bon vivant with impeccable taste, he also has a decisive role in the creative and aesthetic choices made by Asten. Siraj was a key member of the team that helmed Mather Projects, one of Kerala’s most-respected lifestyle housing firms. He has more than two decades of experience in the realty sector. As MD, his main functions include strategic management, financial planning, operations management, property identification and project planning and quality management. Passline News Service
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ith his extraordinarily charming nature and arresting demeanour, Raffi Mather fits your image of an erudite school teacher. On a recent October morning, Raffi is waxing eloquent on a subject he knows as well as any expert around: the housing market. “I am one who sees what’s happening on the ground, and in the sky, and in years I have never seen the price of a property going down, causing distress to its owner,” declares Raffi, 45, offering a PASSLINE team tea at his 6,500 sq ft modern house on the 14th floor of a posh Panampilly Nagar apartment complex in Kochi. Raffi is in a unique position to know. As one of the two founders, the other being his elder brother Siraj Mather,
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Managing Director of Asten Realtors, Raffi, its Joint Managing Director, has spent more than a decade, 12 years to be exact, tracking real-time data on Kerala’s —and the country’s—new and existing homes. “If all the noise you are hearing about housing has you totally confused, join the crowd. One day you will read that owning a home has never been more affordable. Property never lets you down. During my association with the industry for about a quarter century—I was a key member of the team that helmed Mather Projects, one of Kerala’s most respected lifestyle housing firms—I have learned all the intricacies involved in the field, a kind of experience that has stood me in good stead over the years. And the rich legacy that we have been carrying
Oct 31 - Nov 30, 2012
Raffi leads by example, not by rules
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affi Mather, the Joint Managing Director, has been in the forefront of the lifestyle revolution in Kerala. He has helmed one of the state’s finest lifestyle housing companies, Mather, in his previous assignment, for over a decade. He has overseen the creation of more than 15 high-end residences in prime locales across Kochi. Deeply involved in the state’s real estate industry, he has made numerous contributions as an active member of CREDAI and Government-related bodies. An avid traveller, Raffi draws inspiration for his projects from the exotic destinations he visits. With a passion for great architecture and design, he seeks to constantly reinvent life for his customers. He is uncompromising on matters of quality, aesthetics and finish. Raffi also takes a keen interest in the company’s branding strategies and strives to give Asten its voice as a creative market leader. As a Director, he leads by example rather than by rules. His propensity to dream big and his ability to translate his vision to reality, leveraging his extensive contacts within the industry and across nations, is the key differentiator at Asten. Raffi oversees brand management, project concepts, design control, creative management, talent identification and development. helped us a lot when we launched our own enterprise, Asten Realtors,” says Raffi. Raffi says brands and superbrands in the realty segment came on the scene only after Mather entered. “We have a construction background. Even from early on, I was very clear I would focus on realty: I thought this was my field.” In the last few years that Siraj and Raffi have been at the helm they have completed several projects. Asten, says Raffi, seeks to deliver excellence to its customers through innovation and professional management. Its team brings more than 25 years of expertise to the table. It is on the Mather legacy that Asten has been built and it is this legacy that it carries forward. More im-
portantly, Siraj and Raffi, two of South India’s most respected professionals in the sector, bring with them a passion for new ideas and a determination to execute them. According to Raffi, the last decade has seen the rise and fall of many players in the Kerala real estate industry. In the boom of the 2000s, many new firms were born, many, sadly, motivated solely by profit. Some were wellintentioned, but clueless about the dedication and organization required to create quality products day after day. Asten is more than just another well-intentioned company. Its inception came after years of deliberation and planning. The company’s two thought leaders, Siraj and Raffi, were already highly successful entrepreneurs who
3 Govt must make land available “In the real estate segment, as in all segments, trust is the main thing. Those having trust have survived and will survive. Of course realtors in Kerala face the problem of scarcity of land. If the Government makes enough land available, we are ready to provide affordable flats,” says Raffi, about housing prices increasing day by day. “We are not particular about filling paddy fields. But where is the land for construction? There is a provision in the relevant Act allowing land up to four cents to be filled. But the land itself may cost, say, Rs 20 lakh or Rs 30 lakh. The building on it may cost another Rs 20 lakh to Rs 30 lakh. How many people can afford this? But we are ready to provide flats at Rs 30 lakh if land is available.” Another unsavory trend that is seen in Kerala, according to Raffi, is that many living in the Gulf entrust their houses’ construction work to others. And they get cheated. “Many don’t realize that we builders can do this better.” had made their mark by steering one of Kerala’s most respected realty brands, Mather, into an enviable position of leadership. Always seeking new challenges, the duo launched Asten to offer distinctive and fresh concepts in the residential and commercial sectors.
According to Siraj and Raffi, Asten has one simple guiding thought: to rise above the ordinary—a precept that is easy to state, yet difficult to perpetuate. “If it is not unique, it is not worth doing. If it is not different, it is not worth attempting. Uniqueness starts from the moment we source our locations. Rather than creating a theme for our projects and then hunting for a location, we let our themes evolve from our
locations themselves. An undulating parcel of land inspires terraced villas. An educational institution inspires a campus-style formation,” they say. “You won’t find us recreating that Mediterranean villa lock, stock and barrel or a Kerala naalukettu. Respecting
that our customers are well travelled and discerning, we take inspiration from across the world, and yet put our unique spin on it, so that our spaces are new, functional, and completely relevant to your life,” say the brothers. The major Asten projects are Asten Mall and Campus Court on Rajagiri Vidyapeetom premises, Kakkanad, Kochi, and Dew Dale luxury villa at
Kanjirapilly in Kottayam district. Asten Mall presents a new way of life full of partying, fine dining, shopping and laughter. Set on the 100-acre Rajagiri Vidyapeetom premises, with Rajagiri’s famous educational institutions in the vicinity, Asten Mall faces the 35-m Infopark Road. It has unparalleled connectivity and is situated just 300 m away from the Seaport-Airport Road. Asten Mall has such facilities as multiplex, food court, hypermarkets and other lifestyle stores. This pioneering development also includes Campus Court, a high-rise residential apartment project, and a 120-room luxury hotel block. The apartments at Campus Court come in three and two beds with study. Of the 40 units at Kanjirappilly, 20 have been sold out. The construction remains to be completed. There are plans for waterfront apartments at Aluva and Panangad. “You seem to be particularly enamoured of your association with Carmelites of Mary Immaculate (CMI) fathers. Why?” we ask Raffi. “It’s an experience to work with or for them,” says a beaming Raffi. “We have been keeping wonderful relations with them for years. There is no field in which they have not shown their excellence. They are conversant with every detail of projects and keep up to date with what happens around. If we are able to take up such a huge lifestyle project at Rajagiri and are able to complete it exceedingly well, it is only because of the fathers and their unstinting support and cooperation.” Asten is a dedicated realty solutions provider that aims to bring next-generation concepts in construction, design and customer satisfaction to Kerala. It is luxury villas and apartments that are coming up at Kanjirappilly. The place is
truly identified as ‘the Queen of Malanad’ (the land of mountains) and ‘the Gateway of Malanad’. Asten is ready
Mafia? Not us. The building industry, asserts Raffi, is no mafia as many people think it is. It is one of the best and most honest industries in the world. We construct all kinds of buildings— hospitals, houses and hostels. It is one of the most respected industries and the largest provider of jobs. Without it many other industries will suffer. The construction industry can roll out the welcome mat for many other industries. Construction jobs will rise, carpenters and electricians will get more work, real estate agents will get more commissions. It is a big industry that makes big ripples in the economy. “But the pity is that the building sector has no industry status bestowed on it. The Government must remember that almost 99% of us are trusted taxpayers. We get money from respected financial institutions like banks. Our records are perfect. Our buildings are much superior to those of the Housing Development Corporation. We are self-regulated.” “Of course there have been some scams associated with the sector. But they are isolated incidents.” to give an urban touch to cosy mountains. The waterfront villas near Aluva are in the concept stage and the project is entrusted to one of the best architects in India. Asten also has a waterfront apartment project at Panangad. It is also in concept stage and is monitored by a highly talented team of top-notch engineers, professional architects, innovative designers and skilled labour-
Oct 31 - Nov 30, 2012
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4 What does the future hold for the company? Will it confine itself to Kochi and surrounding areas? “Though our activities are now confined to Kochi, we will soon enter some other towns and cities in the state but mainly important ones. In two years, however, we will cross the Kerala borders. Coimbatore and Bangalore are hot on the list. The team at Asten, besides Siraj and Raffi, consists of George G Thachil, Head of Marketing; Sudeep Cherian Koshy, Head of Operations; Ms Sheela Tharakan, Head of Marketing, GCC; and Ms Smita, Chief Architect. Among the staff and other employees, says Raffi, it is the youth that dominates: all are between 25 and 40. ers constituting a rich workforce. The aim of the company is to develop the sites where life is enriched, fun multiplies and work culture flourishes. All the ongoing projects when completed will come to 20 lakh sq ft in area, according to Raffi. Giving utmost importance to ecological concerns in all its projects is Asten’s aim. “With our decades of experience in the sector, we have carefully observed the evolution of the industry and its impact on the earth. From observation, we have been fuelled into action. As a young, evolving, 21st-century organization, Asten’s de-
pliant, an organization has to pass a clearly delineated quality management system with a set of specific parameters. This quality management system has to be implemented effectively to ensure customer satisfaction.
Raffi’s advice to would-be homebuyers? The first thing is: Don’t go for free offers. Nothing comes free in this world; everything has a price.
The company has to establish that it can offer products that meet customer requirements as well as statutory and regulatory norms over a consistent timeframe. Moreover, the organization has to institute systems for continual improvement and conformity to customer needs.
Another important aspect that buyers should look for is the title deeds. It is always best if clients buy flats, villas or houses through banks because banks have facilities to scrupulously go through all legal formalities.
Asten lays emphasis on strategic partnerships that enhance the product
Do’s and don’ts
The second thing is credibility of the builders. Examine their previous history, previous or existing customers, plans etc. The client has every right to look into all these. Every builder should follow certain national standards with respect to waste management, lifts etc.
There is no denying that our entire system is riddled with graft, bribery and corruption. It is on the rise, especially in Kerala. So one must be on one’s guard not to fall a prey to such things. What is his goal in life? Says Raffi: “I want to be known as a builder, a perfect one. I am following the righteous path—it is correct and honest. Builders suffer only because of diversion of funds and because they go for five or, at times, even 20 projects at a time. They don’t realize that they are handling other people’s money. We have to be careful even with our living. In other words builders should have credibility. In no area, says Raffi, is the maxim “change is the only constant” truer than in real estate. One would be hard-pressed to find a city or town completely untouched by real estate development. “And my ambition is to scrupulously follow the changes taking place all over the world. All this I am trying to incorporate in Asten’s houses because I am a frequent traveller to foreign countries. It is my proud privilege to have gone all over the world,” says Raffi.
cision had been to build environmental consciousness into our DNA right from inception. In the materials we choose and the streamlined processes we adopt, there has been a conscious attempt to reduce our carbon footprint. For all our projects, we ensure environmental compliances,” says Raffi. Asten complies with ISO 9001: 2008. To be ISO 9001: 2008-com-
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portfolio. The best architects, landscape designers and interior specialists are on board with the company. Alliances with other leading businesses translate into better opportunities for customers. “Thomas Associates, Mindspace and Synergy Consulting are some of the companies which we have chosen to work with, and which, equally importantly, have chosen to work with us,” says Raffi.
Oct 31 - Nov 30, 2012
From the Editor
5
‘Magical 8’: can they prove themselves? T
he induction of two more MPs from Kerala, Kodikkunnil Suresh and Shashi Tharoor, as Ministers of State in the Union Council of Ministers brings the number from Kerala to eight, two of them Cabinet Ministers—A K Antony, holding the Defence portfolio, and Vayalar Ravi, being Minister of Overseas Indian Affairs. For Kerala this is a major and meaningful achievement as it is a small state in the southern tip of the Indian Union. This is for the first time that it is getting such a significant representation whereas its neighbor Tamil Nadu, a much bigger state, is forced to be content with the same number of Ministers. The reshuffle also leaves some Northeast states with hardly any representation. It is clear that this reshuffle is not to project or protect the interests of the states but to infuse some young and some experienced hands in the team to appease the youth icon in the higher echelons of power and is an image booster for the UPA, whose term ends in 2014. On the surface of it, there seems to be a lot to cheer about for Kerala as it has hit the jackpot with eight Ministers which naturally is considered by many as a boon to a state where various developmental schemes are being implemented. Editor & Publisher
Varghese Paul Kochi SREEJITH N K Ph: 8129110602 Ashly Jose Ph: 9747736193 Chennai Augustine Joseph Ph: 09381000534 Manager-Marketing Sajan K Keethara Publications Pvt Ltd 38/125 1st Floor, Narakathara Road, Kochi-682 035, Kerala, India. Phone
: +91 484 3043325
Editorial : +91 484 3043572 Marketing Office: G-238, K C Joseph Road, Panampilly Nagar, Kochi-682 036 Marketing : +91 484 4010075 e-mail : passline.com@gmail.com
But on the very day of the swearing-in of Tharoor and Kodikkunnil on Sunday, October 29, what greeted the people was not vey encouraging and pleasing news. It related to the much-hyped Kochi Metro Rail work and an Indian Institute of Technology (IIT) for the state. Both Union Urban Development Minister Kamal Nath and Delhi Chief Minister Sheila Dikshit reportedly flaunted the red flag to Kerala Chief Minister Oommen Chandy expressing the inability of Delhi Metro Rail Corporation (DMRC) to undertake the Kochi Metro work. The IIT for Kerala which new Minister of State for Human Resources Tharoor had promised to take up with the Central authorities and which Prime Minister Manmohan Singh had endorsed at the time of laying the foundation of Kochi Metro Rail also seems to have turned a fiasco as the Central authorities have reportedly rejected the proposal on the grounds of cash crunch. Another area of concern for the state is that it still does not have a centre of excellence in health education. Even at the recently held `Emerging Kerala Summit’ educationists had pointed out that though Kerala was way ahead of other states in primary education, it lacked higher education institutions of repute. Though it does not exactly come under the Human Resource Ministry, Tharoor and his colleagues could ensure a centre of excellence in health education. But whether this would also have the fate of other Kerala projects remains to be seen. It is very clear that it is not the number of Ministers that counts but their effectiveness and persuasive skills that matter. The state has a lot of mega-projects that clamour for execution. The Kochi Metro Rail, now facing uncertainty, follows the Smart City, which has been lying in slumber for some time, the people ignorant about its fate. Kannur International Airport Ltd (KIAL), a prototype of Cochin International Airport Limited (CIAL) at Nedumbassery, Aranmula Airport and Vizhinjam Seaport, now in slumber, are some of the mega-projects that need immediate attention. Never in political history has any Minister of Cabinet rank from Kerala handled the portfolio of Railways which has often remained the monopoly of lobbies outside the state. This was an opportune time for a state like Kerala to have such a Minister in view of a project of the magnitude of the Metro Rail in the Government’s kitty. Likewise, the portfolio of Civil Aviation was taken away from Vayalar Ravi when a couple of airport proposals had been mooted in the state and when the national airline Air India was putting its passengers to untold hardships. Same is the case with the Port and Shipping and Industry portfolios as we have ports and IT and other industry projects in the pipeline. So it is time the eight-member Kerala ministerial team, with the other members of Parliament from the state, showed the spirit and sincerity required to force the Union Government to accept and implement its legitimate demands. They must not forget that they have been elected by the people just for this and nothing else. They must not forget that the eight Ministers and the remaining MPs should give a new life to the state’s dream of fulfilling the projects already undertaken and of starting new ones in the future. They of course have a tough job as many of the projects need policy decisions from those in authority. But it is incumbent on them to fight for the state’s interests as one man. Any lethargy on this account will not be tolerated by the people of the state.
Varghese Paul
Oct 31 - Nov 30, 2012
PASSLINE
6
IN BOX A blessing in disguise
t was the cover page price of PASSLINE (Rs 15, surprisingly the lowest for a I publication of this stature) in full multicolour
Prepaid was prepaid then
he letter on prepaid auto fare anomaly published in your columns (OcT tober issue) may be a random incident of a particular day because of some official lapse caused by the shortage of staff or an inexperienced person manning the counter.
The other day I travelled from the South railway station, Ernakulam, to Konthuruthy in Kochi. Contrary to my expectation the receipt issued at the prepaid counter had mentioned the destination and the fare, intact. The amount paid in advance at the counter was only Re 1 as service charge. I paid the auto fare after reaching my destination according to the receipt given to me. For veracity of my statement I am enclosing the copy of the receipt issued from the counter on that day for publishing. P E Vijayan, Thrissur
pages that attracted me to have one copy. I was on holiday in Kerala. The magazine, beyond my anticipation, provides information on eminent personalities and reputed institutions in Kerala and abroad. While going through the content I happened to see the writeup and advertisement on Nitta Gelatine, the company, and its product Gelixer which I tested and which has given solace to my knee pain allowing me to have a jointfree movement. I think that the advantage of magazines is that they come to the aid of readers as they give much time for leisure reading as they find a place for a month on the reading table, unlike dailies, and draw the attention of readers sometimes to some matters which they wanted the most. So PASSLINE is a blessing in disguise for me. P I Mariyadas, London
Vote for Emerging Kerala
A
great salute to Chief Minister Oommen Chandy and his ministerial colleagues for their new developmental visions because it is very good to hear that our state successfully completed the threeday ‘Emerging Kerala’ campaign. This is sure to attract large-scale investment into the state, especially in the tourism sector. quit the job at the restaurant to become a Kate double in a showroom for duplicates earning £650 ($1,000) an hour, according to London’s newspapers.
NEWS BUSTERS Luck in look
J K Rowling to sell house
ritish author of a series of fantasy novels depicting the adventures of B wizard Harry Potter J K Rowling’s former house could be yours if you can swap at least $3.7 million (£2.25 million). The au-
Agan, aged 32, mother of two, was the waitress at a restaurant earning £6 ($9.80) an hour. The customers at the restaurant convinced her she resembled the future Queen and was constantly mistaken for the Duchess. Even her three-year-old daughter couldn’t tell the two women apart. So she
PASSLINE
Oct 31 - Nov 30, 2012
The department should also conduct research in the area so that global investors would look upon Kerala as an ideal investment destination. Unni, Manjeri
PASSLINE emerging
am happy to find the `new-look’ PASSLINE with all pages in multi-colour coI inciding with the mega-event `Emerging Kerala Global Connect’ held in Kochi. As this new look was made on an auspicious occasion I wish PASSLINE every success and hope it will emerge with the time. Thomas K I, Kothamangalam
amazing treehouses, though. Those are reserved for Rowling’s three children at the new Barnton abode, according to BBC News.
Rolls Royce Phantom-II
olls Royce launched its Phantom Series II, the latest version of the suR perluxury car that came out in the Mumbai domestic market on September 21, 2003.
The car, priced at Rs 4.64 crore onwards, offers fully-LED headlamps as well as a characteristic whiter light, augmenting safety and preventing driver tiredness.
ou needn’t win a lottery to amass wealth. Wealth may come in weird Y ways also as has happened in the life of
Heidi Agan in London. Overnight she became a celebrity earning a wage 100 times more than her income as a waitress. Her fate had been rewritten when Prince William tied the nuptial knot around the neck of Kate Middleton because Heidi Agan is a look-alike of the Duchess Kate Middleton.
The Department of Tourism of the Kerala Government had showcased projects at the ‘Emerging Kerala’ meet targeting NRIs and foreign investors. Our state is blessed with backwaters, mountains etc. This is a flourishing sector of the country’s economy in general and Kerala in particular. We must however improve the facilities at our traditional tourist destinations and try to discover new locations. The state must also provide all help and expertise to intending investors and tourists.
thor has decamped from her spacious, eight-bedroom home (for sale) in Merchiston on the outskirts of Edinburgh for a new house in nearby Barnton. According to real estate listing, the house is located in `one of Edinburgh’s most exclusive conservation areas,’ and is sealed off by a `discreet landscaped and walled garden.’ It’s been remodelled recently, but with utmost respect for the `Victorian-period features.’ The home does not come with those
The company, which has currently three dealerships in Mumbai, Delhi and Hyderabad, will be adding two more outlets shortly and plans to expand the network. It is ready to set up one at Chandigarh shortly and the next in line could be close to Mumbai, according to reports.
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ANNOUNCEMENT
the best of reading to its readers has alProviding ways been the policy of PASSLINE. At the same
time, we thought that it’s time we also changed its style in keeping with the times. The result is the sophisticated, new, all-colour PASSLINE which is now in your hands. This has naturally added to the cost of its production. In addition to this are the rising overheads. We tried hard to absorb the additional costs by economies in other directions, but find that we cannot do so. An increase in the cover price of PASSLINE from the present Rs 15 per copy to Rs 30 is therefore unavoidable. The new price comes into force from this issue. We can only say now how sorry we are that this increase would have been forced upon us but we hope you will not feel that our increase is unreasonable because of the overall excellence of the product now and the general enormous increase in prices in all sectors.
INSIDE
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Alternative Tourism products to woo visitors
Kitex EXPERIENCE
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Can’t Kerala escape its past?
12-13 capacity to govern 14 ‘FDI will help expand The rapid loss of
insurance sector’
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Stock market on a lookout mode
22
Reforms... at last TiEcon Conclave
30-31 Banking & Finance
28-29
32-33
News
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Business stars in the making Oct 31 - Nov 30, 2012
PASSLINE
8
COVER STORY
K
erala has of late been witnessing various investment summits/shows intended to attract alien, domestic, NRI and NRK investments to the state by way of entrepreneurial enterprises. Close on the heels of the ‘Emerging Kerala’ summit, we had the Kerala Travel Mart (KTM) fair and the `TiEcon Kerala 2012’ quite recently. The main purpose of all these mega-events is to earn for the state an investor-friendly tag and project it mainly among NRK investors. Even before the focus of the Emerging Kerala summit is getting momentum, the dust and fury raised in Kochi over the issue relating to Kitex Garments is dampening the spirit of existing companies and emerging ones trying to make a retreat from the scene. The million-dollar question is: If the decision of the reputed well-spun and wellrun establishment is to unplug and pack off to other destinations, what will be the fate of the aspiring ones going to invest in Kerala? The answer lies in what is happening in and around Kitex Garments at Kizhakkambalam, a village hamlet which got food and blood with the inception of the company there. The Managing Director of Kitex Garments Ltd, Sabu M Jacob, declared at a recent press meet in Kochi that he was seriously contemplating shifting the venue of his Rs 262-crore expansion plan to Tamil Nadu, Sri Lanka or even China. This would definitely have sent shivers down would-be investors’ spines in the state. It was in this context that PASSLINE decided to study the situation which led one of the most prestigious industrial groups in the state to make such a startling revelation before the media. The magazine entrusted Mr Rama Mohanan Nair, a columnist and former General Manager of SIDCO, who is passionately interested in the industrialization of Kerala, with the task. He met Sabu Jacob and other stakeholders to unravel the behind-thescenes story of the Kitex issue. Here is what he has written.
G Rama Mohanan Nair
I
met a perturbed Sabu M Jacob, Managing Director, in the company’s sprawling visitors’ lobby, as big as a theatre, and he unfolded his version of the hassles created by the authorities and a class of politicians. He began with the story of the inception of the company: “Kitex Garments Ltd is a 100% export-oriented public limited company producing various garments of international standards, started in 1995 by the legendary Industrialist M C Jacob. Now the plants, residential complexes etc are situated in a total area of 52 acres. The administrative block and the garment processing plants
Sabu Jacob
PASSLINE
“Its major markets are the United States and the United Kingdom. Buyers are global companies like Walmart, Carters, TRE and Gerber in the US and TESCO and Mother Care in the UK. The company holds a Platinum Grade (highest) Social Compliance Certificate.
Oct 31 31 -- Nov Nov 30, 30, 2012 2012 Oct
`There is no problem in marketing; not only that, there is good scope
Trained by father M C Jacob had allowed his sons Sabu and his elder brother Bobby to actively participate in the management of various units of his group even when they were very young. When Jacob expired a year ago Sabu took over Garments and Bobby Anna Aluminium, Kitex Ltd and Sara’s Spices. They had by the time learned all the intricacies of the trade from their father. for much more. That is why the company has drawn up a massive expansion plan with employment potential for about 4,000 people. Even machinery has been ordered and finance also tied up. But under the present turbulent situation created by the local people, goaded mainly by the ruling parties fighting against the factory management in the name of alleged pollution, launching it has become almost impossible. ``Hence we are trying to identify locations in Tamil Nadu, Sri Lanka
or even China. Presently I am giving employment to about 8,000 people from all over the country. The new unit would have provided additional employment to about 4,000. The local people also would have benefited from the enhanced economic activity that it would have generated.” Sabu alleges that the present Congress MLA, Benny Behanan, who tried to form a union in Anna Aluminium, was manhandled by a group of workers who did not want any union. It is said that Benny turned hostile and since then has been with the agitators. To a question why in the interest of the industry and the livelihood of so many people he did not try for a compromise with Benny, Sabu said both his brother and he once met the MLA at Bharat Hotel, Ernakulam, and humbly pleaded with him: “Benny Chetta, why not we forget the entire past and start on a clean slate?” Benny did not budge an inch, Sabu lamented. When asked why Kitex, the pride of Kerala, wielding high influence at all levels in politics, is unable to contain this problem, Sabu’s answer was that we need not swerve our straight path since we have not violated the law of the land. “We got
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effluent treatment plants of international standards to treat both sanitary and chemical materials using latest Italian technology making use of a certain breed of bacteria. Further, the dyes used in kidswear are non-toxic as our buyers are globally renowned retail giants like Walmart, Carters and TRE who always insist on international standards in all the parameters. How can we survive by flouting the specifications?” ``There are some forces that are fighting with vengeance. In 1997 there was a brutal murder attack on my father, as a result of a 450-odd days’ labour strike by the CITU led by V B Cherian. A few of the people spearheading this agitation even got jail sentences as a result,” said Sabu. Now, the panchayat issued a stop memo to the company on September 24, 2012. Three days later Sabu called the press meet and explained his stand that since he was not being allowed to carry on his business peacefully he was trying to locate alternative pastures. Land in Tamil Nadu costs only Rs 5 lakh an acre. He can get a licence in Sri Lanka within a week. When asked whether it is like the proverbial “the other side is greener” he said, ``Traditionally there is a garmentmaking community in Lanka, land is cheaper there, and the Government welcomes investors with the red carpet. Even China would be a good choice.” Sabu showed me a few e-mails from the US assuring him of all support to go and settle there and take care of direct marketing of Kitex products in that country. To the query “Who will then take care of the affairs of the factory here?” his reply was that it was all streamlined and he could manage the whole show through the virtual office,
pointing to his laptop. After the talk was over, I was shown around the childrenswear part of the factory. There were several spacious halls with semiautomatic machines where young girls (I was told all were above 18 years of age) dressed like surgical theatre assistants were working in a sterile atmosphere. It was really an unexpected scene in a remote village in Kerala. Most of the girls appeared to be from the North/NE states. ``They are accommodated in nearby dormitories as clean as a five-star hotel. Free or subsidized food is served to them. They are given the company’s own transport to go for shopping and for other purposes. They are allowed to go to their native lands during their festival seasons. A monthly payment is sent to their parents. Balance is deposited in their accounts, which they can draw as a substantial sum useful for their marriage when they return after three or four years of service here,” said Sabu. I was not shown other parts of the factory like the textile processing, dying and bleaching departments probably because of lack of time. I could see two or three tall chimneys of a boiler at a distance behind a bushy area. Steam would be necessary for bleaching operations. That was where the effluent treatment plants (ETPs) also were situated. I had informed the Kizhakkambalam panchayat about my visit. The President, Ms Jolly Baby, and the Vice-President, Elias Karipra, were waiting to see me. Elias said that closing down the factory was not their agenda at all. They handed over to me a copy of the panchayat’s reply to the various points raised by the Managing Director of the company at the press
conference. Allegations like not getting prior permission before undertaking construction, not paying taxes on unauthorized construction, non-payment of employment tax from workers and above all not producing clearance from the Pollution Control Board for renewal of licence were pointed out. It was alleged that the company was drawing about 14 lakh litres of water every day. They said that issues relating to non-payment of building taxes and employment tax from workers had been sorted out during the tenure of this committee. But the most burning problem was the water and air pollution from the factory. The Pollution Control Department in its report dated September 17, 2012 had confirmed presence of pollution like letting out untreated or partially treated water into the canals leading to Kadambrayar, the water source for Infopark and Techno Park in Kakkanad. Smoke from the boiler was causing air pollution, they alleged. An action council of the residents of the locality had been formed in May 2012 and they were on an agitation. It is learnt that politically the Congress Mandalam Committee with the help of SDPI, PDP and Jamaat-e-Islami is strongly supporting them. Any time it may culminate in an explosive situation like the 1997 episode. Abdul Rahman, convener of the action council, also expressed similar sentiments. According to a petition submitted by the employees of the company, Opposition leader V S Achuthanandan paid a visit to the plant on October 7, 2012 and studied the situation. He suggested an early amicable solution to the problem. He told the media after the visit, “A committee comprising the District Collector and representatives from the Labour Department and
the Kizhakkambalam panchayat should make a joint report. If needed the number of members could be increased to five. On receipt of it, the Chief Minister should immediately intervene and find a sustainable solution to the problem.” Achuthanandan said that shifting the plant etc could be considered later. Nobody can dispute the fact that the Kitex Group of factories is not only Kerala’s but also the country’s pride. International quality standard is the buzzword of all their products. The group is among the country’s top taxpayers and foreign exchange earners. The company’s contribution to the community by providing means of livelihood to several thousands spread out all over the country is highly laudable. But at the same time no one can be allowed to flout the laws of the land. So if there are hardships to society by way of water and air pollution an amicable solution using state-of-the-art technologies should be found early, whatever be the additional investment needed. The leaders should shed their animosity towards the management if any by mutual conciliatory talks in the presence of top leaders. That would be regarded as the most patriotic act from their side. Shifting the units to other places is not the solution at all. Further, this issue should not be allowed to tarnish the investor-friendly tag put on the state with great efforts through mammoth shows like ‘Emerging Kerala Global Connect”. Let us hope that this will be a happy-ending story. (Rama Mohanan Nair is a retired General Manager of Kerala SIDCO; Chief Consultant, Industrial Consultancy Services; and a Visiting Professor in Indian Maritime University)
Oct 31 31 -- Nov Nov 30, 30, 2012 2012 Oct
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FARM SECTOR
Food insecurity on cards Passline News Service
R
ecent reports reveal that severe drought in America and Russia has pushed food prices up. The situation is similar to the acute food crisis that existed in 2008, according to the UN Food and Agriculture Organization (FAO). World Health Organization (WHO) statistics show that the food price index in September this year rose by 1.4%. Increases in the prices of cereals, oilseeds, milk, meat and sugar caused the increase in the index.
likely scarcity of food items soon. Of course, the years 2010 and 2011 Year % of rain* had marked a historic leap in the 2008 98.0 production of grain. India was able to reap over 200 million tonnes of 2009 77.0 grain during these years, a dream 2010 102.5 figure for the country’s economy. 2011 102.3 “The preliminary projections on rain 2012 78.8 in 2012 were fair but by the end of September, the time when the mon(*Percentage of long-term aversoon normally ends, we reached a age. Long-term average: 89%) Monsoon 2008 to 2012
America, reports indicate, is facing the severest drought in 50 years. Conditions are not different in Russia and many neighbouring countries. This will cause scarcity of food. Grain output globally will decline in the current year. Trends also suggest that prices will continue to rise even afterwards. FAO says there will be a shortage of 40 million tonnes in 2013.
In Kerala, the agricultural sector is mostly dominated by perennial cash crops like rubber, tea, coffee, coconut and cashew which play a vital role in the cash inflow of the state. Irrigation is mainly made available only for rice and banana in the state. All these are purely rain-fed crops which are very likely to face massacre because of the monsoon deficiency. A severe drought can take away all the perennial crops and can cause serious damage in its continuous growth crippling production.
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Oct 31 - Nov 30, 2012 Oct 31 - Nov 30, 2012
It is against this background that the food situation in India, Kerala in particular, has to be viewed. Agriculture in the country has been a gamble on the monsoon from time immemorial. When the rains fail it naturally suffers. Rainfall is the main source of water in the country which receives a substantial 4,000 billion cubic metres (BCM) of it annually. However, about 85% of this rainfall is confined to four-five months of the year and varies widely from just 310 mm in the western belt to a massive 11,400 in Meghalaya. This concentrated, yet uneven, rainfall leads to two main challenges: it causes floods as well as droughts at the same time. Kerala is one of the few states in the country which receive copious rain during both southeastern and northeastern monsoons. However, for some years now rainfall has been erratic in the state. A look at the figures of rainfall for the past five years will show this tendency. This year saw a heavy decline in rain. Even while the supply of water in the form of rainfall has remained low, the demand on water by all the consuming sectors has been increasing with our growing economy and population and the increasing use of electricity generated from water.
As is the case in most emerging economies, agriculture in the country uses about 80% of our water supplies and industry 8%. Domestic consumption amounts to 6%. Kerala, however, doesn’t fall in this category since agriculture does not use as much as 80% of water here as the land under it has been declining over the years. The state, the most consumerist among all Indian states, relies on others for meeting its food needs. It produces only 15% of its rice needed, 50% of vegetables and 60% of milk. Almost the entire pulse and 80% of meat requirements also come from outside. Paradoxically, however, about 65% of the population still depend solely on agriculture for a living. And the state no doubt is endowed, in the normal course, with abundant rainfall, and its soil is ideal for farming. Paradoxically, again, a significant part of Kerala’s revenue is generated by the agricultural sector and allied value-added services, which include paddy, vegetables, cash crops, milk, poultry, copra and marine products. The unpredictable monsoon in the state this year and the deficient precipitation in other states, it is feared, will have a bearing on food production and may cause a
state which created anxiety. This caused a pulling down of grain production to the lowest level ever”, says former Director of Agriculture R Hali. Monsoon and agricultural growth in the country Year
Rain (%)
Growth (%)
2009-2010
78
1.7
2010-2011
102
7.0
2011-2012
101
2.8
The erratic behaviour of monsoon is something that the country’s agricultural sector fears the most. Climate change has now taken firm and deep root in the Indian subcontinent, in the form of an unbelievable and fearful failure of the southwest monsoon. The current kharif failure in India due to scarce monsoon is the main culprit in the present crisis in the agricultural sector here. Last year, India had cultivated rice in 7.51 lakh hectares and harvested more than enough rice for this year. It could even save some for the coming years. But if the situation gets worse, we will see our granaries vacant.
11
11 Keralites’ demand for rice is about 4.0 million tonnes a year. However, India’s surplus of rice was 1.26 million tonnes in 2011 which is equivalent to one-fourth of the total yearly demand for rice in Kerala. It is sure to have a bearing on the economy of the state since it has already affected the paddy fields in Palakkad and Wayanad. Kerala thus will become helpless to manage the food demands as we have to buy great part of our food from outside. Apart from the poor kharif performance, the situation may lead to many other unfortunate happenings like farmer suicides and adverse circumstances like holiday for paddy cultivation in Andhra Pradesh. Kerala imports large quantities of rice from Andhra Pradesh too. As cultivation is mainly dependent on the irrigation waters of dams such as Malampuzha, Mangalam, Pothundy, Chulliyar. Meenkara, Walayar and Parambikulam group of inter-state water reservoirs situated in Palakkad district, farmers are discarding the second crop of paddy cultivation this year because all the dams except Mangalam have the bare minimum of water.
No state of the country has received sufficient rainfall this year. Most states received 60% less than the normal rainfall pushing the whole nation to pray for a better rabi season. “We purchase more than half of the rice that we need from North India, vegetables from Tamil Nadu, milk from Maharashtra, eggs and fruits from Tamil Nadu and Karnataka and meat from other South Indian states”, says Hali. “In this situation, the potential drought threatening the Indian subcontinent can cause significant damage to the health sector in the state.” The near-failure of the southwest monsoon has considerably wiped off the first-season paddy crops. Now, Kerala, which is blessed with 41 rivers and an evergreen canopy, has got an unfortunate saga to tell. The northeast monsoon should be good and fairly high. Otherwise a famine-like situation is sure to arise which will cause irreparable damage to the state,” says Hali. In Kerala, the agricultural sector is mostly dominated by perennial cash crops like rubber, tea, coffee, coconut and cashew which play a vital role in the cash inflow of the state. Irrigation
Granaries disappearing
I
n Kerala, the food security scene seems grim not mainly because of monsoon failure, which the state faces very rarely. The more important and crucial aspect is the alarming fall in the acreage under paddy cultivation over the years. The state’s granaries are gradually disappearing.
One will be amazed at the thought that the area under paddy cultivation has dwindled to just 1.5 lakh hectares now from 8.02 lakh hectares in 1966, even according to Government statistics. Moreover, about 57 hectares of green paddy fields are being filled every day in the name of urbanization and industrialization. Farmers have for years been fed by speculators and agents of real estate and big business that farming is no longer profitable in Kerala. In their places appear building complexes that very often pose challenges to the environment. When they get alluring prices for their land, farmers also don’t hesitate to part with their land. Though there is a piece of legislation passed by the Kerala Assembly in 2008 to save kayal, marshy lands, mangroves etc, even after the passing of this the land mafia had started converting acres of such areas for construction and other activities. According to revenue and land records, there were 217 water sources in the state totalling 1,27,930 hectares in area. But what remains now is a meagre one-fifth of this! The fate of other lands is not different. The result of all this is that farming has suffered irreparably over the years leading to Keralites being forced to depend more and more on other states for their food requirements. And successive governments are shutting their eyes to these goings-on.
is mainly made available only for rice and banana in the state. All these are purely rain-fed crops which are very likely to face massacre because of the monsoon deficiency. A severe drought can take away all the perennial crops and can cause serious damage in its continuous growth crippling production. Inflation and rupee depreciation will add fuel to the fire. The situation will cause price increases that have already landed the state in trouble. The insufficient rain this year can in turn bring in a drinking water scarcity as well as disruption to electricity generation. Already a one-hour curb in electricity use has been imposed. The Government will also be forced to check export of grain and cereals. Food and oil import will increase significantly. The country’s economy will be highly affected if this happens which will consequently add to increases in prices. “The contribution of the cash crops has a vital role in shaping the prosperity of the state. The letdown in the production of rubber, cashew, pepper etc will impinge on the educational as well as the healthcare sectors of the areas. The agricultural lands where crops grow are really an asset which can also be used for raising different kinds of loans, such as educational, marriage and housing. It is the perennial crops that help the farmers to repay the loans with interest. Thus, the perennial crops of Kerala are something more than what they are to the people as their value is not just confined to the products they generate”, says Hali. The loss the state has sustained because of the failure of the monsoon is great. Now all hope is concentrated on the northeast monsoon and the December rains that could probably fetch some water for agriculture as well as for power generation. Being a poor producer of resources like gas, oil and solar energy, Kerala depends mainly on hydel energy which used to be surplus in the state. Out of the state’s total installed capacity of 2,857.59 MW of power, hydel power produces about 2,040.8 MW. But now the state faces a significant demand-supply gap. “Not only agriculture but also hydroelectric projects and various other requirements which require water depend on the performance of the precipitation expected during the northeast monsoon and December rains”, says Hali. The most sensational part of the drought is that it will lead to drinking water shortage the effect of which will be beyond description. Our small rivers, canals, fields and wells are drying up and this will worsen the situation if the northeast monsoon too fails. Cli-
mate is another matter to be seriously considered. The climate change may leave the situation graver. It can even pave the way for more dangerous droughts, devastating floods and even tsunamis tomorrow. How can we prepare ourselves to face this bleak situation? “There must be coordinated efforts to promote agriculture. Everybody should be a participant in the movement. Panchayats, the Horticulture Department, the Civil Supplies Department etc should coordinate, linking the people for bettering the situation. Formulation of contingency plans for bringing maximum area under rice, vegetables, crops etc should get top priority for the revival of farming. This activity should be organized as a people’s movement and the entire responsibility must not be entrusted to the Government as it could be made successful only by public participation,” says Hali. “Everyone who possesses a piece of land or even a good terrace could be brought under the movement so that every house could be converted into a production centre. Production plans must be prepared for every panchayat and must be implemented too. The production must be marked regularly so that the effect of increased production must be felt in every village shandi (market). “The effect of the monsoon failure in other states is creating a steep increase in commodity prices in the Kerala market. This year’s Onam will perhaps be remembered for the high prices of commodities,” Hali says. “Funds should not be a constraint on agricultural growth during a drought. The official machinery should be geared up to prevent food insecurity. There are incidents of vegetables from border districts like Idukki having been sent to Madurai and their coming back to Kerala at higher rates!” “The drought situation has already alerted various developmental agencies, and the media is in the forefront to warn the public about dangers ahead. But the recently formed disaster management system has not come up with suitable measures to educate the people about the situation and to prepare them to overcome it. Are they waiting for the disaster to happen so that they can start managing things then? It is worth remembering the old saying, ‘Prevention is better than cure’,” concludes Hali.
Oct 31 - Nov 30, 2012 Oct 31 - Nov 30, 2012
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GOVERNANCE
The rapid loss of capacity to govern T
he two monorail projects proposed for Thiruvananthapuram and Kozhikode will be under the State Public Works Department, unlike Kochi Metro, looked after by the Transport Department. A new SPV (special purpose vehicle), with an estimated investment of over Rs 6,000 crore, will be floated for this purpose, under the overall control of the PWD Minister.
K Vijayachandran
Loss of capacity to govern and to develop and manage infrastructure is a glaring reality in Kerala. Poorly managed roads and bridges are a common sight everywhere. There are potholes everywhere. The sight of banyan trees growing on the RCC structures of bridges is depressing. Steel bridges hardly get their regular dose of paints. Steel shutters on spillways are attended to only when people around make a hue and cry during monsoon floods. The PWD or Irrigation departments, the custodians of these hydraulic strictures, do not consider preventive maintenance as a professional virtue.
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Discussions on the choice of the Administrative Department for urban transport development make very little sense in Kerala. Neither the PWD nor the Transport Department has the professional capacity or competence for even engaging external consultants, global or domestic, to take up feasibility studies or prepare detailed project reports for such infrastructure projects. Both are governed by senior IAS officers, designated as Principal Secretaries, and are as innocent about the subject as their political bosses.
not even sought. The situation spoke volumes for the lack of expertise and professionalism in the management of our transport infrastructure. Loss of capacity to govern and to develop and manage infrastructure is a glaring reality in Kerala. Poorly managed roads and bridges are a common sight everywhere. There are potholes everywhere.
True, the Kerala PWD has a separate roads and bridges division but it has no expertise on transportation engineering or urban transport development. It has a roads and bridges corporation directly controlled by the Minister and presided over by a senior IAS or IPS officer. Unlike the Kerala Construction Corporation, its senior counterpart institution, Kerala State R&B (Roads and Bridges) Corporation is an extremely lean organization, concentrating on the financial essentials of projects. Operation and maintenance of the eight national highways that pass through the state are under the charge of the National Highway Department that is supervised by the National Highway Authority of India from Delhi. The network of state and district highways as well as panchayat and municipal roads, more than 1,30,000 km long, is under the charge of the state PWD. By and large, these roads are ill-maintained, poorly managed and yet to catch up with the modern culture of road signs. Successive ministries gave very little attention to improve the work culture of the state PWD, which is looked upon as a milch cow by opportunist politicians. In the recent past, when the entire Kerala media and people at large were debating over the need for or desirability of widening NH47 and NH-17, the Kerala PWD was conspicuously silent: its views were
Oct 31 - Nov 30, 2012
of these hydraulic strictures, do not consider preventive maintenance as a professional virtue. They are hardly equipped with the tools, expertise and manpower to take up repair and maintenance of such sophisticated structures on a regular basis. These are then contracted out to foreign consultants or the risky jobs get assigned to petty contractors. The Kerala State Electricity Board owns and operates most of the large dams and reservoirs in the state. They are liberally instrumented for detecting and measuring even minor earth tremors. However, the data generated and recorded by them over the past decades is hardly used for studying and evaluating the seismic behaviour of the terrain. KSEB has never cared to build up any expertise of its own, on hydrology or dam engineering. KSEB has been developing as a monopoly organization of electrical engineers, and presently it has little skill or aspiration for the planning, design, operation and maintenance of power generation systems—hydro, thermal, nuclear or non-conventional. In recent years, it has been specializing in the import and distribution of electric power unlike in the 1970s and 1980s when it had in rapid succession completed and commissioned several hydroelectric power plants. It had to its credit vast experience in investigation, planning, design and construction of small and medium hydroelectric power plants. However, this experience and expertise could not be consolidated and turned into knowhow capital of the organization thanks to its vastly different business plans after the Silent Valley controversy as well as lopsided HRD policies.
The sight of banyan trees growing on the RCC structures of bridges is depressing. Steel bridges hardly get their regular dose of paints. Steel shutters on spillways are attended to only when people around make a hue and cry during monsoon floods. The PWD or Irrigation departments, the custodians
This writer remembers even today the findings of a detailed appraisal of the early 1990s on the HRD policies of KSEB. It was predicted that if the policy distortions were not corrected and large-scale recruitment and training resorted to at various levels, there would be hardly anybody left to manage KSEB by the turn of the century. In fact, by the year 2000 even the worse was happening: the vacuum at the top was quite visible, and KSEB was turning more and more dependent on petty contractors and contract workers for the operation and maintenance of its sophisticated equipment and systems.
13 Management and development of modern grid power systems demand, apart from traditional engineering skills, a fairly high level of exposure to information and communication technologies (ICT). The recent legal exposures related to the software contract given out to a South Korean firm have revealed the extremely low level of inhouse engineering and ICT capabilities within the KSEB organization. The situation is little different even with regard to non-power utilities like Kerala State Transport Corporation (KSRTC), Kerala Water Authority (KWA) or the other infrastructure de-
Piped water supply is seen as a luxury even today. As a matter of culture and state policy, water supply projects were built only with the support of foreign aid and charity. KWA was seen as an instrument for borrowing and piping in charity. With all sorts of foreign-funded projects like British, Dutch and Japanese water supply schemes, KWA did not have a chance to consolidate its experience and expertise and develop its own management systems and technological standards and practices that are in tune with the Kerala realities. Such
fundamental
weaknesses
pearance in the districts, reminiscent of the colonial days. The acute need for capacity building at every level of governance in the states was felt even by the reform enthusiasts in Delhi. They had tapped UN resources to launch a capacity building programme for states like Kerala. The Institute in Management in Government (IMG) was entrusted with a substantive project in 1995, aimed at capacity enhancement, and I had served it as a UNIDO Consultant. However, the project was a virtual non-starter. People’s planning was the priority agenda for the LDF ministry and not capacity building. The UDF Government that came in next had launched a Modernization in Government Programme (MGP) with a massive e-governance component. Instead of genuine capacity building and strengthening of governance, the last LDF Government launched its Kudumbasree, which has turned out to be a Frankenstein of sort. It is now being countered by the Jana Sree of the UDF. Possibly, the situation is no different in other Indian states, as well. Even in states like Gujarat and Maharashtra
velopment institutions in the public sector. Like KSEB, KSRTC is also a product of central statutes. Developing an effective public transport network on Kerala roads was its founding objective. With its less than 20% share in passenger buses operating on Kerala roads, KSRTC is unable to play any regulatory or developmental role in the road transport sector. The situation is qualitatively different in most other states where state road transport corporations virtually dominate the public transport network. People are far less dependent on personal transport and roads are far safer and less demanding on maintenance efforts. KWA tells another story of failures on the professional front. Urban sewerage and drainage were also part of KWA responsibility. It was originally designated as Kerala Water and Waste Water Authority (KW&WWA). As the name got rationalized into KWA, the organization dropped off its drainage and sewerage responsibilities, which were traditionally looked after by local-level governments with the help of what was called the Public Health Engineering Department (PHED), which was later abolished, leaving large gaps in institutional responsibilities, including sold waste disposal, which was left virtually uncared for.
where the most senior chief engineers and other departmental heads doubled up as Secretaries to Government, the situation has been rapidly deteriorating in recent years thanks to the economic and structural reforms. Central institutions like the Planning Commission, Central Electricity Authority, Central Water Commission, Railways, Shipping Corporation, Oil and Natural Gas Commission (ONGC), Gas Authority of India (GAIL) etc as well as the numerous other Central public sector organizations were under compulsion to devalue or dilute their federal role and responsibilities as the technology generators of the nation. As a result, the capacity of the Union to govern, at the Central as well as state levels, has been badly eroded. Even The Economist of London has lamented that babus and netas are now in the driving seat of the country (See special report on India in The Economist of October 5). Perhaps, that is a far more accurate assessment of the regime in Kerala than that of former Kerala Finance Minister Thomas Isaac. He had, a couple of years ago, qualified it as a regime of the babus, for the babus and by the babus
related to infrastructure development were noticeable even as early as in the 1980s at the time of the second Nayanar ministry when this writer had served the Kerala Government as its Secretary for the Bureau of Public Enterprises (BPE). Kerala State Planning Board, which was to play a key role in providing policy inputs, had turned dysfunctional by then thanks to lack of political vision at the state level and proliferation of centrally sponsored schemes. State public sector undertakings, including the public utilities, intended to serve as the extended arms of the Government, were looked down upon as mere commercial enterprises. R&D institutions and departments initiated in departments like Farming, Agriculture, Irrigation, PWD and others were neglected. Even the science and technology institutions established under the state S&T policy of the 1970s and dedicated to the study of natural resources of the state were not spared from this wanton neglect. By the time the third Nayanar ministry assumed power in 1996 the situation had further deteriorated under the impact of economic and structural reforms. IAS bureaucracy had further strengthened its stranglehold on state administration and ‘collector raj’ was making a reapOct 31 - Nov 30, 2012
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14
INSURANCE
‘FDI will help expand insurance sector’
Viswanathan Odatt
If we analyse the present situation our insurance sector is in, we will come to know that there is no better option than raising the cap on FDI. There are financial experts who argue even 49% will not be adequate. Credit rating agencies like Standard & Poor’s have already reported that the absence of progress in raising foreign ownership could result in ‘continued volatility’ in the life insurance market.
Passline News Service FDI (foreign direct investment) in insurance has been a much-anticipated reform measure that has undergone much debate and fierce opposition. The Insurance Laws (Amendment) Bill has been pending before Parliament for about four years as there has been no consensus among political parties on the issue of raising the FDI limit to 49%. Following pressure from key allies, the Government in May this year had postponed a decision on raising the FDI limit in the insurance sector to 49%. The Insurance Bill, which was tabled in the Rajya Sabha in 2008, proposed to increase the FDI limit in the insurance sector to 49%, but the Parliamentary Standing Committee on Finance wanted it to be retained at the current level of 26%. It again enlivened our political scene this month as the UPA Government decided to move ahead with its proposal to increase FDI ceiling in the insurance sector to 49% from the present 26%. With the Cabinet approving the proposal, the Insurance Laws (Amendment) Bill is likely to be taken up by Parliament for passage in the forthcoming winter session. Finance Minister P Chidambaram had said that the benefit of this amendment would go to the private sector insurance companies which require huge amounts of capital and that capital will be facilitated with increase in FDI to 49%. The Minister also clarified that state-run insurance companies will remain in the public sector. But we cannot hope that the way ahead will be easy for it to get approval. FDI in retail has already created a big furore which culminated in Mamata Banerjee’s Trinamool Congress withdrawing its support for the UPA. Much before TMC raising its voice against FDI, the Left and BJP had been in the forefront criticizing the Government move. The Left and others argue that once the cap is raised to 49% global giants would establish their full monopoly. Though there is an element of truth in the argument what gives us hope is that we have a strong regulatory system to check on these foreign firms. We are equipped with the stringent measures taken by the Insurance Regulatory and Development Authority (IRDA).
PASSLINE
Oct 31 - Nov 30, 2012
What motivates the foreign players to invest in India is the interesting fact that 80% of insurance still remains untapped here and they will be interested in the untapped market as insurance has already reached its saturation point in their native lands. On the other hand we have solid reasons to feel why the increase in FDI is inevitable. If we analyse the present situation our insurance sector is in, we will come to know that there is no better option than raising the cap on FDI. There are financial experts who argue even 49% will not be adequate. Credit rating agencies like Standard & Poor’s have already reported that the absence of progress in raising foreign ownership could result in ‘continued volatility’ in the life insurance market. Insurance companies are severely cashstarved. According to the IRDA projections, the life insurance industry will need capital of at least Rs 40,000 crore to ensure that the industry grows enough to be 8% of gross domestic product. Higher FDI limit will provide insurers with more capital. Let us glance through the events that lead to this catastrophic situation. From 2000 onwards a lot of private players started business in our market after the liberalization of the insurance sector. The main intention behind the liberalization was to put a healthy competition between the public and private sectors. It was hoped that the customer could benefit out of this competition. The amendments were made for making the insurance companies service-oriented thereby producing profits. IRDA hoped that the companies would make profit in 10 years. But even after 10 years the companies failed to make profits and many of them are on the verge of capital erosion. All this happened due to the unhealthy practices that existed in the companies. The companies had given unnecessary thrust to expanding or modifying their own facilities. Business promotional expenses increased. High salaries and foreign trips were offered for staff. Agents lured by the offer of foreign trips tried to get maximum numbers of customers by hook or by crook resulting in unhealthy practices. Miss-selling was the order of the day. The companies attracted customers by offering tempting gift schemes. The insurance advisers or agents were not properly educated. The agents had shown interest in selling policies but this interest was not there when the custom-
ers approached them for a claim. There were instances when the customer went to claim the policy expecting an amount, say Rs 5 lakh, but the companies said they could give only Rs 60,000, a typical case of miss-selling. The recession which followed dented the market further. In those years, in the general insurance sector, a visible trend was the customers with minor risk coverage shifting loyalty to the private sector. They put their faith in the hollow promises made by the private players. In an act of unhealthy competition with the public sector the private players adopted a strategy of underquoting. This was a bad strategy as it proved self-destructive for the private companies at the end. The life insurance companies on the other hand introduced a lot of policies which could not be said to be customer-friendly. They gave thrust to investment and forgot about giving importance to covering risk. Customers were led into a dream world as the companies tried to fabricate the projection. The customers who believed those false projections were eventually fooled. This was blatant miss-selling. As a result the customers moved away from the private companies realizing all that glitters is not gold. According to last month’s figures, life insurance recorded 15% negative growth. The only positive thing is general insurance which has a growth rate of 18%. FDI can bring in drastic changes resulting in a positive movement in the ailing market. A foreign partner can impart better quality and service standards. They will introduce a variety of innovative policies like employment insurance by which a person can insure the risk of losing his job. In foreign countries insurance has penetrated into every nook and cranny of the social set-up. In those areas everything which contains a risk is insured one example being a football player’s leg which is prone to injuries. We don’t have a culture like this in our market. Moreover our insurance sector has been centered on the urban areas. With the increase in FDI there will be a drastic decentralization into the rural and semi-urban areas. The country can also benefit from FDI as IRDA can control the funds and channelize them for the rural development projects. And within the industry there will be more job opportunities for HR personnel. The public sector will become more vigilant and equipped. Ultimately the industry will be evolved to become a fine-tuned system.
15
MOVERS
GCDA projects promise to put Kochi on superhighway of development N Venugopal
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office?
hy do you insist on choosing only those projects which could be completed during your term in
I have completed five months in the office and want to see the projects finished before my term is over because in our system the files still move slowly.
port Road and finally meeting the NH 47 at Kumbalam. We have already talked to Dr N S Sreenivasan, the transport planning consultant from Chennai with expertise in designing ring roads in metros like Delhi. In what way can the ring road solve our traffic problems? Most of the vehicles to Kochi are now plying through Vallarpadoa International Container Transshipment Terminal road. But once the mother ship comes the giant container vehicle will rule the road and the other vehicles will find it extremely difficult to pass through. The ring road will be the perfect solution for this. It seems implementing all these projects will require strong political will…?
At a time when there is the huge hype building around ‘Kochi Metro’ and everyone is touting it as the solution to our transportation problems GCDA is coming up with the concept of suburban railway. Can it deliver in a better way than the Metro? Metro can never be an alternative to the transportation problems of the people. It can never cater to the ordinary people’s needs. A suburban railway is the real solution to the transportation problems faced by people who daily visit the city mainly for work. Using the suburban railway a passenger from Thrissur can reach Ernakulam in 45 minutes at a cost of just Rs.8. It can carry around 1,500 passengers providing a comfortable journey. What is the estimated cost of the suburban railway project? It is a Rs 200-crore project. C Raju, retired Chief Engineer of Konkan Railways and Delhi suburban railway project, will provide his expertise for this project. Tell us about the plan to develop Kochi as a metropolitan city? The plan is to have under its ambit towns such as Vaikom, Thodupuzha, Cherthala, Muvattupuzha, Kothamangalam and Chalakudy. It is important to have satellite townships outside the city to develop Kochi as a metro. These townships will contain quality hospitals, schools and other forms of infrastructure. There will be four satellite townships, each requiring Rs 1,500 crore. The metro will be 664 sq km long and have 45 lakh people living within it. What about the ring road? Ring roads are inevitable for the development of a metro. In the light of the Vallarpadam International Container Transshipment Terminal it is felt that we should plan for providing an uninterrupted traffic flow corridor starting from Marine Drive through the coastal areas and linking the major existing human settlements like Kothad, Chennur,Varappuzha, Alangad, Aluva, Chengamanad, Keezhmad, Edathala, Puthencruz, Chottanikkara, Mulamthuruthy and Udayamperur and crossing NH 17, the New NH AI Container Highway, the NH 47, Seaport-Air-
We only need strong administrative will and we are certain about finishing the projects on time. What are the other upcoming projects from GCDA? We are into the second phase of the development of Marine Drive. This will follow the model of the first. Around 600 acres of backwaters will have to be reclaimed to realize the 10-km walkway and leisure areas between Chathiath and Varappuzha. We learn that GCDA is planning some projects for entertainment also? Yes. There is a plan for a dolphinarium and a cable car facility. In the case of the dolphinarium GCDA has no investment. The company will invest the full amount, but the revenue will be shared between the two parties.
It seems Kochi is on the superhighway of development given the recent announcements made by the Greater Cochin Development Authority (GCDA) highlighting a slew of projects including the plan for a metropolitan city, suburban railway, ring road, underground exhibition centre and shopping mall, among many other handsome projects. N Venugopal, the proactive Chairman of GCDA, says he is taking up only those projects which could be completed before his term in the office ends. Excerpts from an interview he had with PASSLINE:
Is there any particular project on the list which you think is ‘close to your heart’? Actually there are two of them. One is the underground exhibition centre at Jawaharlal Nehru Stadium and the other is the shopping complex at Manappattiparambu. The state-of-the-art exhibition centre will have a built-up space of 1.5 lakh sq ft separated into four divisions enabling it to host four exhibitions at a time. It will have a food court and space adequate enough for 500 stalls. The shopping mall would come up on 4.75 acres of land, which is in possession of GCDA, at Manappattiparambu. It will be implemented in the PPP (public private partnership) mode. I consider these two projects as my dream projects and I would put all my efforts to finish them on time.
Oct 31 - Nov 30, 2012
PASSLINE
16
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PASSLINE
Oct 31 - Nov 30, 2012
AAPI ( American Association of Physicians of Indian Origin ) 600 Enterprise Drive, Suite 108, Oak Brook,IL 60523,USA. Phone (630) 9902277 Fax (630) 990 2281 www.aapighsindia.org chair@aapighsindia.org www.aapiusa.org
17
MICROFINANCE and is disbursed only to those who own cattle. The cattle owners can use the loan amount for buying feeds and supplements. They may even get to Rs 30,000 at a time. They are allowed with a holiday period when the cow stops secreting milk after it has completed a lactation period following calving. The agriculture loan’s projection is supposed to be Rs 20 crore up to March 31. The loan programme is currently implemented in Perumbavoor on a trial basis and has been successful so far. Soon the agriculture loan will be raised as a large-scale programme. Both microfinance and agri-loans operate on the basis of group formation.
Thomas Muthoot
T
he Muthoot Pappachan Group (MPG), pioneer in non-banking financial services known especially for its gold loan services, is diversifying its services into more areas like microfinance and agri-loans. The microfinance services are available in Gujarat, Andhra Pradesh, Tamil Nadu and Karnataka and are being successfully executed in Kerala also. “Our new strategies for diversification are centered in South India,” says Thomas Muthoot, Executive Director, MPG.
The microfinance service is meant for the empowerment of women helping them to be successful entrepreneurs and making them economically independent. The loan is disbursed only for women who are ready to prosper through independent economic activities. The Muthoot Group takes special care to give them intense training in
the business projects and advises them how to utilize the loan amount effectively. The microfinance service has a customer base of 3,77,769 and the disbursement is up to Rs 2,25,98,61,812. “This year, during the Onam season, Muthoot had helped the microfinance customers to set up stalls free of cost to showcase and sell their products. They made a turnover of Rs 28,000 within two days. Field workers are recruited to monitor the microfinance activities including the training,” says Thomas Muthoot. According to the norms, profit limit is fixed on microfinance services, so provisions are made to see to it that the excess amount of profit is given back to the customers by some other means. Once the customers reach the bank to know about microfinance, information will be given about the other important products of Muthoot. Sometimes, the husband of the customer might be an autorickshaw driver, so the company will provide a three-wheeler loan to him. The agri-loans are the latest and prestigious product the group has to offer for the common man. An agriloan is meant only for dairy products
The two- and three-wheeler loan is the next major product from the Muthoot Group. Its exposure is estimated at Rs 450 crore. There are more than 10,000 customers for three-wheeler loans. The three-wheeler loan from Muthoot is very helpful to the autorick-
shaw drivers as they need to remit only Rs 260 per day. In other NBFCs these auto drivers have to remit Rs 500 a day. These loans along with microfinance and agri-loans enabled the group to extend its foray into the remote interior areas cutting across class barriers. MPG has been actively supporting social causes as part of the CSR (corporate social responsibility) initiatives. The CSR arm of the group known as Muthoot Pappachan Foundation (MPF) embraces the themes: ‘health, education, environment and livelihood’ (HEEL). Recently MPF launched the largest directory of blood donors in India. The Muthoot Pappachan Life Blood Directory will effectively respond to the increasing demand of blood in the country. Launched on October 1 on National Voluntary Blood Donation Day, its main objective is to drive the message of active voluntary blood donation among the masses through the group’s various entities. Initially to be launched in Kerala the directory would be steadily extended to all places in India making use of MPG presence and infrastructure. To maintain and constantly update the databank, MPG will soon launch a portal which will contain required information of the directory and act as platform for donor-patient interface. To reinforce its commitment to theatre and
the performing arts, the Pappachan Group will join hands with Soorya Stage & Film Society in its endeavour to promote Indian art and culture through the Soorya Festival 2012-13. The Muthoot Pappachan Group and Soorya Stage and Film Society together would also create a platform for disabled artists, artists of tomorrow (youth), and now rare folk art forms which have been slowly vanishing. According toThomas Muthoot, the Pappachan Group is the first company in Kerala to move into the wind power sector. Wind energy being the most cost-effective resource in India today, MPG had established wind farms in Tamil Nadu as early as in 1993. Today, with its manifold farms, the total installed capacity in wind power is 25 megawatts with an investment of Rs 125 crore. Significantly, MPG has put plans in place to double its wind power generation capacity. Thomas says Kerala should tap the opportunities that
the wind power sector offers. Muthoot has plans to explore the IT sector and at present a team is working on it. The new company will be housed at Muthoot Technopolis at the Cochin Special Economic Zone.Muthoot had already made its successful endeavours in hospitality with its hotels in Thiruvananthapuram, Chennai and Kochi. Renovation is taking place at the Muthoot Plaza in Thiruvananthapuram to add another 55 rooms. Muthoot Skychef, located in Thiruvananthapuram, is a state-of-the-art flight kitchen, covering an area of over 32,000 sq ft. Uniquely designed to follow international specifications and equipped to conform to AEA and HACCP standards, the unit has the capacity to cater 3,600 meals per day. Muthoot Skychef serves a wide variety of airlines, such as Air India, Indian Airlines and Qatar Airways. Other clients include charters and VVIP flights transiting Thiruvananthapuram. According to Thomas Muthoot, during the financial year 2011-2012 the gross revenue recorded an increase of 98.63%. Post-tax profit clocked Rs 300 crore, registering an increase of 43%. Income from retail loan registered an increase of 99% to Rs 1,473 crore from Rs 739 crore in the previous year. Earnings per share for the year increased by 31% to Rs 17.48 from Rs 13.35 in the previous year and dividend at 25% per equity share.
Oct 31 - Nov 30, 2012
PASSLINE
18
ECONOMY
Stock market on a lookout mode Nifty has strong support at 5,400 level and there are chances of it going up to 5,900-6,000 levels. Due to the recent rally major big shares in sectors like FMCG, pharma, IT and private banks have moved up.
T
he stock market was sceptical about the performance of stocks as it was awaiting the decision of the Reserve Bank of India (RBI) review meeting at the month end. But the RBI decision was not to relent to the Finance Minster’s anticipation and an interest rate cut was rejected by the banking regulator. Instead of a cut in the repo rate the bank reversed its stand
by a cut in CRR, releasing more liquidity to the banking system. As a result the bank move does not give much hope to the bourses. Further, the market is now looking at the result of the US Presidential election due in November as the policies of the elected President will definitely reflect in the economic agenda of the American economy as well as the other economies. India is growing to achieve the 4th rank in the world’s economy in the coming years. As a result neither Barak Obama nor Mitt Romney can avoid India. According to the business point of view Obama is not in favour of outsourcing whereas Mitt Romney favours outsourcing which will have impact on the Indian economy as well. He has also hinted at changes in visa rules. This may help India and the IT industry. Meanwhile, the storm striking the US has now ravaged the US equity market as the country, despite precautions, has suffered from its onslaught. This may further affect the US economy.
PASSLINE
But on the contrary, major global recession issues in most countries are under control. All countries have started positive action to improve growth. To solve global problems usually takes more time. But the situation has improved now. Contrary to expectations, the monsoon has helped to reduce food prices. Crude prices are also coming down globally. Crude prices are expected to stabilize around $82 per barrel in the coming months. During this calendar year foreign investments in stocks come to around Rs 1 lakh crore. High foreign institutional investment inflow keeps the value of the rupee steady. The market is expecting the rupee to stabilize at 52 range against the dollar in the coming days. We may also expect a better chance of fuel price reduction in the coming months. This may control inflation and if inflation is controlled the RBI may cut interest rates to further jack up the lending business. Finally this can boost loan availability and economic growth. Compared to other countries India maintains a better position on the economic map. Almost all companies have announced good Q3 results. The Central Government has finally taken some major decisions and announcements have been made to augment the market sentiments after a long wait by markets and economists. The stock market has viewed the announcements positively. Increase in diesel price, cut on number of subsidized LPG gas cylinders, FDI in multibrand retail, aviation, insurance and pension fund are some of the areas where the Government has initiated momentum recently. More-
Oct 31 - Nov 30, 2012
over, restructuring of state electricity distribution companies, foreign investments in power trade exchanges, increasing FDI limit in broadcasting companies from 49% to 75%, new drug policy, new company bill, banking law amendment bill, land acquisition bill, suggestions for setting up National Investment Board (NIM), a single-window body under the Prime Minister to clear all investment projects above Rs 1,000 crore, clarity on General Anti Avoidance Act (GAAR), disinvestment announcements of public sector companies like Hind Copper, SAIL, BHEL, Rashtriya Ispat Nigam, Tyre Corporation of India and also direct tax code and goods and services tax implementation etc help to get a new look to India growth and give more confidence to the market. The next question is whether the Government is able to pass these bills in Parliament or not, because at the present juncture if the Government passes these bills in the Lok Sabha, it may find it difficult to pass them in the Rajya Sabha because the UPA coalition is not having the required majority there. If these are passed and implemented without delay surely it will give a boost to the stock markets and the economy. Otherwise these will remain as usual announcements of politicians and lose all charm in the markets and the economy. Now Nifty has strong support at 5,400 level and there are chances of it going up to 5,900-6,000 levels. Due to the recent rally major big shares in sectors like FMCG, pharma, IT and private banks have moved up. Still valuations are good and can add good shares in every dip. Shares like ITC, TCS, HDFC Bank and Sun Pharma are good for long-term investments. Also mid cap shares like Apollo Tyres, Finolex Cables, DCB, Alembic Pharma, GIC Housing Finance, Infinite Computers etc are best for better returns in the coming months
Cochin Rubber Merchants Assn.
T
he following have been unanimously elected office-bearers and members of the Managing Committee of the Cochin Rubber Merchants Association held for 20122013: Mr G P Goyal— President; Mr Ashok Kumar Khurana—Vice-Presi-
G P Goyal
K B Rajan dent; Mr K B Rajan—Secretary; Mr Shabbir H Kapasi—Joint Secretary; Mr Raj Kumar Gupta—Treasurer; Mr Jasbir Singh Chawla, Mr Ketan R Joshi, Mr Sunil Parkash Kapoor, Mr Sushil Vijoy Arora and Mr Vikas Agarwal—committee members.
SBI MD
M
S Viswanathan
r S Viswanathan has been appointed Managing Director (MD) of State Bank of India (SBI). At present he is the bank’s Deputy Managing Director.
Allahabad Bank CMD
Shubhalakshmi s Shubhalakshmi Panse has joined as Chairman and Managing Director of Allahabad Bank from October 1, 2012. She has worked in almost all key segments of banking in various capacities. She has also worked as circle head in almost all parts of South India and served as Regional Manager in Karnataka.
M
19
GROWTH COMPANIES - II
Kitex—a cut above the rest
T
he most significant aspect is that the late M C Jacob, founder, and his son, Mr Sabu Jacob, made 2,17,55,890 persons richer by Rs 56.80, meaning that Kitex made others richer or it created wealth for others by utilizing investors’ small amounts. This is capital growth of the finest variety.In addition, Kitex helped 2,17,55,890 shareholders to participate in the industrial growth of Kerala and helped many to get jobs. Now the market capitalization of the company is Rs 2,65,05,00,000 grown from the original investment of Rs 4,75,00,000. Passline News Service One of the companies that have been creating wealth for the country’s and Kerala’s economies and for others is the Anna Group. Kitex Garments Ltd, the flagship of the group, headed by Mr Sabu Jacob, Chairman and Managing Director, is a garment company which is a cut above the rest. Its flexible manufacturing system makes Kitex extremely capable of adapting vigorously to the changing needs of the fashion market. Equally competent to execute garmentmaking tailor-made to customer specifications as well as standardized production, Kitex is very particular about the quality of every piece of its finished products. Kitex Garments was established in 1992. An export-oriented unit manufacturing garments of all varieties, Kitex supplies its products to worldclass retailers/manufacturers. It has a vertical setup—raw material to finished goods and specializes in childrenswear and adults’ innerwear. The certification includes WRAP (Platinum) and GSV (C-TPAT). The prime clients of Kitex are Babies RUs, Gerber, Mothercare, Jockey, Tesco and Carter’s. The Anna Group has diversified business activities. Its founder, the late M C Jacob, who hailed from a traditional agricultural family in Kerala, started his business adventure in 1968. Now Anna has emerged as one of the leading business groups in South India and manufactures and exports aluminium utensils, pressure and thermal cookers, spices, ready-to-eat products and school bags, besides textiles and garments. The market capitalization of the company in 1992 was only Rs 475 lakh. It has given Rs 832 lakh as dividend to the shareholders till now.
That means the company has already given the investors about 180% of the market capitalization of 1992 as dividend returns or investments repaid. In fact the original shareholders’ investment is free as they have already received their original investment in Kitex.
56.80, meaning that Kitex made others richer or
The company gave Rs 95 lakh as dividend in 2008, Rs 119 lakh in 2009, Rs.143 lakh in 2010, Rs 190 lakh in 2011 and Rs 285 lakh in 2012. The dividend paid in 2011 and 2012 equal the market value reported in 1994.
holders to participate in the industrial growth
it created wealth for others by utilizing investors’ small amounts. This is capital growth of the finest variety. In addition, Kitex helped 2,17,55,890 shareof Kerala and helped many to get jobs. Now the market capitalization of the company is Rs 2,65,05,00,000 grown from the original investment of Rs 4,75,00,000.
Dividend Details
Year
Dividend (%)
2012-03
60
2011-03
40
2010-03
30
2009-03
25
2008-03
20
2007-03
15
2006-03
10
Kitex touched a high of Rs 63.80 on August 11,.2011 and closed at Rs 55.8 on May 25, 2012. Those who invested Rs10 in its IPO have already received Rs 20 as dividend (investment received back doubled) and those who invested Re 1originally have already received Rs 2 as dividend (investment received back doubled). The capital appreciation comes to Rs 55.58. If they had invested Rs 1,000, then the dividend return was Rs 2,000 plus a capital appreciation of Rs 55,550. So the public shareholders of 2,17,55,890 shares become richer by Rs 56.80 by investing Re 1. The most significant aspect is that the late M C Jacob and his son Mr Sabu Jacob made 2,17,55,890 persons richer by Rs
Kitex Garments LTD No. of employees (staff and workers): 6,500 Sales turnover (Rs crore) 2010 -2011
376
2011-2012
528
Products manufactured: Infant wear (0-36 months)/adults’ innerwear Products exported: 100% export-oriented Destinations of export: The US and European markets Forex: (Rs crore) 2010- 2011
266
2011-2012
409
No. of shareholders: 6,474 Oct 31 - Nov 30, 2012
PASSLINE
20
MOVIE NOVICE
Before making her entry into the tinsel town, Sandra had proved her mettle as a successful entrepreneur with the media buying and event management firm, ‘Innovative Concepts’. Just before that she had tried her luck in real estate and tasted success. These success stories motivated her to take the bold step of setting up a production house ‘Innovative Film Concepts.’
movie. She is on cloud nine as Friday has been selected for the IFFK (International Film Festival of Kerala) 2012 along with other eight Malayalam films. Before making her entry into tinsel town, Sandra had proved her mettle as a successful entrepreneur with the media buying and event management firm, ‘Innovative Concepts’. Just before that she had tried her luck in real estate and tasted success. These success stories motivated her to take the bold step of setting up a production house ‘Innovative Film Concepts.’ But Sandra says what drew her to film production, which has been considered taboo for women in Kerala, is the sheer love of movies. But her position as a newcomer and a woman at the same time posed several challenges before her.
Passline News Service
W
hen the movie Friday 11.11.11 Alappuzha came out, what caught everyone’s attention was the new-generation hero Fahadh Faasil’s common man appearance and the surprising absence of interval. But another surprise was also in store: the movie was produced by a young lady named Sandra Thomas. Industries like Bollywood are familiar with powerful, flamboyant female producers like Ekta Kapoor, but the Malayalam industry is quite strange to such a phenomenon. Though there were sporadic instances of a woman producing films in the past, they failed to make a name for themselves in the industry and their credentials were restricted to one or two films. Sandra becomes different from her obscure and unsuccessful predecessors by announcing more than three projects after the critical success of her debut
PASSLINE
“Being a woman I had both advantages and disadvantages in the industry,” says Sandra. “In the film industry 99% of the people who approach you are tricksters. The Malayalam film industry is the only industry where the old system of feudalism still reigns,” she adds. Sandra says the male-dominated industry demands extreme levels of boldness to survive as the producer needs to handle a headstrong ‘star’ and a
Oct 31 - Nov 30, 2012
down-to-earth light boy with the same poise of mind. “We cannot change the system so better ignore them and go ahead unperturbed.” Sandra is proving that the system can’t fail her as she has already announced more than three projects. A family drama directed by acclaimed screenwriter/director Kalavoor Ravikumar with Revathy and Suhasini in the lead roles will be followed by Harameeze, a youth movie directed by Lijin Jose, the director of Friday. Sandra will also team up with Lijo Jose Pellissery, the director of crime thrillers like Nayakan and City of God. Sandra says these films will not be offbeat like Friday as she would like to experiment with a variety of genres. Sandra also plans to expand her business ventures. She is about to
launch her next venture named ‘Ticket Concepts’, a film distribution company. The company will kick off its operations by releasing the dubbed version of Telugu blockbuster Dookudu. According to Sandra, film promotion is an integral part of production as a film’s fate is decided by its reach among the masses. “Friday had good marketing strategies including hoardings, promotional events and social media marketing but we were short of posters,” she says. Taking a cue from this, Sandra is planning to start a film promotion agency. “This promotional agency will deal with A to Z of cinema including the buying and selling of satellite rights of a movie,” she says.
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EVENT
T
Global Healthcare Summit in Kochi from Jan 1-3
he American Association of Physicians of Indian Origin (AAPI), taking a cue from its IndoUS Healthcare Summit, is about to conduct a Global Healthcare Summit from January 1-3, 2013, at Kochi. The news of this summit has drawn the attention of several India-based professional associations like the Indian Medical Association (IMA), Medical Council of India (MCI), Association of Surgeons of India (ASI), IPS, American Psychological Association (APA), Association of Physicians in India (API), Indian Cooperative Oncology Network (ICON) and IOEA in addition to several international healthcare industry partners, who are looking for opportunities at such events for greater collabo-
This is for the first time in Kochi such a CEO forum is conducted and they will explore potential opportunities of collaboration also, he added.
summit, which has been simply designed to bring the best, most efficient and cost-effective healthcare solutions to the people of India, said Dr Narendra Kumar, current President of AAPI, who also holds the record of being the second Keralite to be the President. “Headquartered in Chicago, AAPI has projected member strength of 1 lakh and its active members would number more than 20,000. The objective of the summit is to bring the physicians of Indian origin under one roof. All of them
Dr Narendra Kumar ration on R&D and genuine philanthropic engagements. And the attendance is expected to exceed 800-1,000 delegates from all over the world, especially from the UK and the US. AAPI USA has been actively engaged in harnessing the power of the Indian diaspora and has successfully gained the support of several leading healthcare experts and professional physicians’ associations, including GAPIO and AKMG, to collaborate on a groundbreaking international healthcare
Dr Jayesh Shah would share their thoughts and ideas on how to provide affordable healthcare to Indian cities,” said Dr Narendra Kumar. The event will be based on knowledge sharing, not financial sharing; a mutual sharing of best practices among the experts from the US and those in India, said Dr Jayesh Shah, President-in-Waiting of AAPI. “We come together, dis-
cuss, come up with solutions to problems and then pass them on to the Central Ministry for its perusal,” he said.
Anwar Feroz “The Government has the history of taking our recommendations on a serious note. We had earlier initiated a smoking ban campaign which the Government was willing to endorse at any cost,” Dr Narendra Kumar said. “India, especially, Kerala state, is a place where we have a lot to contribute,” he added. The escalating price of medicines, one of the grave problems which the state now faces, will be a hot topic of discussion at the summit. “There is a CEO forum at the summit in which CEOs of reputed pharmaceutical companies, medical device and technology, hospitals and teaching institutions from all over the world will participate. We will raise the problem at the forum,” said Mr Anwar Feroz Siddiqi, Adviser to AAPI.
“This forum is by invitation only,” Mr Anwar reminded. They will also meet the ministers thereby opening doors to follow-ups at the ministry level. “We partner with the IMA and it has the power to follow up whatever recommendations we make,” Dr Narendra Kumar said. AAPI is aware of the ground realities of healthcare in India and it has already initiated some measures to speed up the distribution of healthcare facilities across the country. A website has been developed which has a solid database providing accurate information about what kind of service opportunities are currently available in India. Looking up this website doctors or other medical experts can volunteer to provide their knowledge and services to the needy. This is an innovative and efficient way of catering to the common people free of cost, said Dr Narendra Kumar. A major initiative that AAPI could take pride in is its charitable clinic. The Rajasthan Government, on AAPI’s recommendation, had started generic clinics in the state and the effort helped to boost the image of the Government as it was a major initiative to provide affordable healthcare to the common people. “There were no charitable clinics in Kochi but we hope to have one here” said Mr Anwar Feroz.
Oct 31 - Nov 30, 2012
PASSLINE
22
TOURISM
Abin K I
A
lternative tourism is based on the principle ‘small is gorgeous’ and it provides an authentic local and eco-friendly experience rather than luxury to the tourists which is mainly seen in conventional tourism. Alternative tourism attracts investments that will be sensitive to the natural environment, ensuring major benefits of tourism development for host communities and evaluating their contribution. It can surely be used as a tool to effectively promote and develop the state as a visible global brand. Wellplanned alternative tourism can benefit both the protected areas and the residents of the host communities by linking long-term biodiversity conservation with local, social, cultural and economic development. Kerala is famed for its breath-taking natural splendours, its shades of green, endless peace and innovative tourism products. Besides, it is also trusted for its transparent quality control systems, eco-friendly practices and sustainable approaches to the tourism industry, the host community and to the tourists. Yet another tourism season is going to commence and it is geared up to welcome its visitors with an array of alternative tourism products. The geographical and cultural diversity of the state is a treasure of ecosystems, heritage and cultural sites which are well protected and preserved. The diverse ecosystems are the major resources for developing alternative tourism and they include the wetlands, mangroves, backwaters, lakes, estuaries, mountains, forests, caves and rich flora and fauna. Besides eco-systems, the state’s cultural heritage is another major resource which enables it to develop alternative forms of tourism. Thus the state has an array of resources that can make it a leading alternative tourism destination. Alternative tourism is based on the principle ‘small is gorgeous’ and it provides an authentic local and eco-friendly experience rather than luxury to the tourists which is mainly seen in conventional tourism. Alternative tourism attracts investments that will be sensitive to the natural environment, ensuring major benefits of tourism development for host communities and evaluating their contribution. It can surely be used as a tool to effectively promote and develop the state as a visible global brand. Well-planned alternative tourism can benefit both the protected areas and the residents of the host communities by linking long-term biodiversity conservation with local, social, cultural and economic development. Alternative tourism programmes minimize the adverse effects of tra-
ditional tourism on the environment and enhance the cultural integrity of the host community. Alternative tourism products include products that are not conventional: paddy cultivation, trekking, fishing, birdwatching, village and farm visits and mangrove trail are ideal examples. However developing alternative tourism resource mapping in each district and integration with the identified potential resources and attractions is necessary. Introducing alternative forms of tourism products will definitely help the industry to promote varied experience to the tourist which is absent in the conventional forms of tourism. Alternative tourism packages and products can definitely broaden the average length of stay of a foreign tourist from the present 16 to 21 days. Thenmala Eco-Tourism is one of the famed alternative eco-tourism projects in the state. In the case of alternative tourism strict measures with regard to carrying capacity and sustainability are required to ensure success in the long run. Monsoon tourism is an alternative tourism product launched to counter the off-season nature of tourism in Kerala. Rural Kerala has enormous resources for developing alternative tourism. It includes participating in rural activities, village visits, interacting with local people, understanding their culture, heritage, cuisine, festivals and traditions. The concept of home stays and tree hut accommodation is based on alternative tourism concepts offering a wide-ranging experience. The Department of Tourism (DOT), Thenmala Eco-Tourism Promotion Society (TEPS), Kerala Forest Development Corporation (KFDC) etc are taking ideal steps to extend the duration of stay of foreign tourists by offering diverse alternative tourism products and services. Responsible marketing is necessary to inform visitors about alternative tourism products to create a realistic view of the state. The state is already a role model and trendsetter in tourism marketing initiatives and in introducing innovative alternative tourism products like houseboats, poorams, Chinese fishing nets and ayurveda. The state can do much more to develop and promote alternative tourism in a sustainable manner. Improvements should be made on basic infrastructure requirements to operationalize the proposed alternative tourism packages especially at the village level. Responsive customer service is one of the prime features of alternative tourism. Tailor-made packages which suit the needs of individual tourists should be introduced.
The relevance of alternative tourism in Kerala is very significant because it enables the state to avoid the serious consequences created by mass tourism development. DOT has implemented projects which are eco-friendly such as ‘Zero-Waste Kovalam Project’ in Kovalam beach and its prime aim was to transform it as a complete clean-beach destination. To ensure the conservation of heritage sites, monuments and the environment in a planned and regulated manner DOT has created special tourism zones (STZs) in select destinations like Kovalam, Kumarakom, Munnar, Fort Kochi and Bekal. Splash tourism held in Wayanad during the monsoon also woos visitors by offering colorful tourism products, activities and programmes. Major agencies involved in the development and promotion of alternative tourism practices in the state include DOT), Kerala Tourism Development Corporation (KTDC), TEPS etc. A tourism advisory committee helps the host community to reap the fruits from alternative tourism projects. Besides providing new experiences, alternative tourism is aimed at the conservation and preservation of natural sites and cultural resources. The revenue generated from alternative tourism projects is utilized for various community welfare and development programmes. The Kumbalangi model village tourism project and formation of Thenmala Eco-Tourism Society are the best examples of the design, implementation and conservation of natural resources which are the prime features of alternative tourism. Aaranmula village in Pathanamthitta, famed for the Aaranmula mirror, Iringal in Kozhikode, known for the Arts and Crafts Village, and Anakkara village in Idukki known for the Spice Park are the emerging alternative tourism destinations in the state. Kadalundi-Vallikkunnu Community Reserve is also an alternative tourism destination where conservation of mangrove eco-system and habitat of migratory birds is ensured through host community support and participation. Alternative tourism offers greater scope for Kerala’s future tourism development and the state is ready to welcome its esteemed guests by offering it. To promote this form of tourism we must firstly understand its concept and core components and thereafter identify a proper strategy. Only this form of tourism can ensure sustainable and responsible growth in the long run by satisfying the requirements of the tourist, the host community and all other stakeholders involved in the tourism business. (The writer is Lecturer in Tourism, Department of Tourism Studies, Mahatma Gandhi University, Kottayam)
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Oct 31 - Nov 30, 2012
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HELI-TOUR
“The advantage of helicopter tourism is that it is highly flexible in terms of height. You can go up to 1,000 metres and also brush past the seawater,” says Shoby. Air taxis, air ambulances, rental aircraft, air shows, air adventures and flying club are the future plans of Heli Tour. Passline News Service
“T
ourism being a multi-sector activity, the Government should ensure intergovernmental links and coordination and has to play a greater role in tourism management and promotion. This is possible through heli-tours. Helicopter tourism is the new face of tourism in Kerala.
tourists and other passengers. I will implement the air taxi service connecting different tourism spots, like Munnar and Kumarakom, and some remote areas soon,” says Shoby. According to him, the sector is expanding day by day with the increasing awareness among the people about the utility of helicopters for tourism purHibi Eden MLA, Tourism Minister A P Anil Kumar and Shoby T Paul.
Very soon, God’s Own Country will be available for tourists in an all-new perspective—Heli Tour, a company specializing in helicopter tourism, will launch two tourism packages on helicopters in the state,” says Shoby T Paul, CEO of Kochi-based Heli Tour. What made him think of this novel method of tourism promotion? Says Shoby: “During a foreign tour recently I saw a queue of helicopter tourists in front of some helipads. This, I thought, would be very attractive in our place and acceptable to foreigners. This inspired me to implement it here,” says Shoby. Helicopters have the advantage of linking inaccessible areas, particularly in the hills, and ensuring comfortable and short journeys over difficult terrain, which would take a long time by road. “Air taxi is the next innovative project. This will provide a better link between different tourist centres in Kerala and also help point-to-point travel. It will also help to reduce the travel time of
rules about the minimum safety requirements for helicopter landing on a regular basis. Shoby says that while travel by car from the Cochin International Airport to Munnar takes nearly four hours, his helicopter service completes the journey in just 25 to 30 minutes. A MunnarKumarakom-Alappuzha package from the Cochin International Airport in an air taxi takes only one and a half hours. Packages are being formulated in association with Kerala Travel Mart. The first package includes a 15-minute helicopter ride over Mulanthuruthy, Aroor, Willingdon Island, Fort Kochi, Bolgatty Palace, Vallarpadam, Vypeen, Chittoor, Kakkanad and Trippunithura. The sec-
ond package will include Trippunithura, Vaikom, Kumarakom, Pathiramanal, Mararikkulam Beach, Kumbalangi and Cherthala. “The advantage of helicopter tourism is that it is highly flexible in terms of height. You can go up to 1,000 metres and also brush past the seawater,” says Shoby. Air taxis, air ambulances, rental aircraft, air shows, air adventures and flying club are the future plans of Heli Tour. Shoby feels the Union and state governments should encourage private investment in the heli-tourism sector and consider development of heliports as a part of multi-modal transportation systems. Specific measures are also required to ensure safety and security of tourists and efficient facilitation services.
poses in the form of convenience, saving of time etc. The use of helicopter by people is growing in the tourism industry, especially with the regular passenger services connecting important tourist and religious places. It also caters to the requirements of large sections of people who find it difficult to otherwise commute either because of health or age problems. “The major benefit is the saving of time. It can also be used in emergencies as ambulance service. It will also help passengers to avoid the huge traffic on our roads while travelling. Foreigners particularly resent losing their time in traffic bottlenecks etc. Moreover travel by car or any other vehicles provides them with sights of only shops and buildings whereas helicopter tours will enable them to have a panoramic view of a large area.” For starting the service an agency should adhere to the standards set by the Union Government and follow the civil aviation requirements, the aerodrome standards and air traffic service Oct 31 - Nov 30, 2012
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WMC NEWS
WMC Swiss Province annual gathering T
he World Malayalee Council (WMC) Swiss Province will conduct its annual gathering programme ‘Art Festival and Kerala Piravi Celebrations’ on November 2, 2012 at Heslihalle, Switzerland. The programme will include Kalasangamam, Ratholsavam
and music presentations. Mr M A Yusuff Ali, MD of Emke Group of Companies, will be the chief guest at the function. Actor Nivin Pauly and Idea Star Singer fame Vivekanand and Preethi Warrier will also be present, besides many eminent personalities from different fields.
M A Yusuff Ali
The WMC Swiss Province, an organization of Malayalees living in Switzerland, was inaugurated on July 3, 1995 at the first World Convention of Non-Resident Malayalees in New Jersey.
Nivin Pauly
WMC works towards international brotherhood of Malayalees/people of Kerala origin to bolster their cultural, artistic and social uniqueness and understanding towards other cultures with
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which they have to coexist and interact. WMC also has international forums. The Youth and Women Forums have been formed in all provinces. The main objective of the organization is to provide a non-political forum to bring together the widely scattered community of people of Malayalee/Kerala origin and strengthen the common bonds of culture, tradition and way of life. One of the key areas of its activity is the promotion of young talents in the Europe Region. The money raised every year through the cultural programmes is used for charity purposes especially in Kerala
WMC Swiss Province office - bearers
Joshy Pannarakunnel Chairman
Jose Valladiyil Secretary
Joy Kochattu President
Jose Edattele Treasurer
Santy Mathew: entrepreneur, social activist
anty Mathew, a resident of Thodupuzha, is widely known as a good organizer, an entrepreneur and a social activist. Besides holding a number of prestigious positions in various sectors, he has proved his mettle in business, charity, social activity and education. He has been closely associated with many agencies working in the social and economic spectra of society.
Santy is the founder Director of Global Indian Public School; President, Global Malayalee Council India Region; and Vice-President, Energy Conservation Society (NGO). He is also a state council member of the Residents Associations of Kerala, the apex body of residents’ associations. He has visited many foreign countries and is actively involved in the meetings organized by various Pravasi Malayalee as-
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sociations worldwide. For the last couple of years he has been associating with the World Malayalee Council (WMC) celebrations and once got an opportunity to visit the Australian Parliament. Santy has been a distinguished guest at the Kerala Piravi Celebrations organized by the WMC’s Swiss Province during the last couple of years. He has also been invited by the organizers for its current year celebrations to be held in Zurich. Santy is a ‘guest speaker’ on TV channels on various social and political issues such as the nurses’ agitation, Nelliampathy land row and energy management which usually hamper the Government’s functioning and alter the social outlook. After his schooling at IMHS, Kaloor, Thodupuzha, Santy was actively involved in many social and general issues at his college where he was also the union chairman. Entrepreneurship in him came to the fore during his college days as he recognized his acumen both as a businessman and a social activist. After his education Santy started his first business venture,
Oct 31 - Nov 30, 2012
an aluminum fabrication unit, at his home town as a small-scale industry which helped more than 60 people to get jobs which eventually led him to open two showrooms for two-wheelers of reputed brands at Muvattupuzha and Thodupuzha. He bagged a series of awards for entrepreneurship in business including ‘Outstanding Dealer Award 2002’, ‘Best Businessman Award 2004’ and `WMC International Award for Best Social Activist.’ The self-made entrepreneur has other areas of interest which led him to spread the message of environmental protection and a pollutionfree state under the banner of Energy Conservation Society since his entry into the distinguished agency. He had served as its PRO before he was elected its Vice-President. Besides being eco-friendly he has a soft corner for the poor and the downtrodden to actively associate himself with many charitable organizations and charitable activities. He was an active member of ‘Divyarakhshalayam’, a charitable
organization run at Thodupuzha for many years. Rehabilitation of AIDS victims and awareness drive against pollution are the areas which he actively associated with. Santy cannot turn a blind eye to accidents that occur on roads. In those critical moments he turns a philanthropist of the helpless victims to rehab them without being a mere onlooker. His humane attitude has helped many victims to get a second lease of life after facing such fatal moments.
The dictum that behind the success of a man there is a woman is very true in Santy’s life. That woman is his wife Lovely. The couple have three children—Linta Mariya, Minta Rose and Emmanuel Mathew
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ONLINE DEAL
The tale of booming ‘e-tail’ shops
Passline News Service
O
ver the years the shopping patterns of our people have undergone changes. We are not shy to the latest trend of online buying too. The trend in Kerala cannot be compared with that in the big metros but it
is definitely on a par with the tier-II cities, says Anish Prakash, CEO, Offerkraft, the deals and discounts website from Kerala. The younger generation is embracing this trend. In India, the best sites that offer online shopping are Flipkart, Ebay.in, Myntra, India Times Shopping, Snapdeal, Homeshop18 and IndiaPlaza. Lured by the success of these major startups a lot of young entrepreneurs are jumping into the terrain of e-business. The major advantage that ‘online buying’ brings in as far as a customer is concerned is the reasonable price and the choice of products available.
As an e-commerce website needs very little investment for inventory management and store display, this saving can be easily passed on to the customer. This means that most of the products that you buy online are actually cheaper than those available in brick and mortar stores. Also, the wide variety of products that can be made available on a website compared to a retail store is a major advantage. Above all, you can shop at the convenience of your home when you buy online. Customers can read online reviews of products written by experts and us-
ers, compare the same product by two or more brands online and request personal customizations. Flipkart can be regarded as the Indian giant in ‘e-tail’ business. It can be considered as an online supermarket. The consumers will get a wide range of products there. Flipkart focuses on the quality of products and convenience of shopping while websites like Snapdeal focus on providing big discounts to customers. It may not have a big variety of products available. But whatever it has, it makes sure it sells it at a lower price. Though it is booming period for the e-tail shops young entrepreneurs have to be cautious about jumping into the market, warns Anish.
“I don’t find any great advantage in entering an e-commerce venture right now, just because the market is already full of competitors. We have more market players than the ones that can survive in the Indian market. But always there is scope for innovation and niche marketing. HushBabies. com is a big example. This website that caters to baby products entered the market recently and despite the big guns existing in the market was able to capture the baby products market from them. This is a typical example of differentiation getting acceptance.” The major challenge faced by e-tail
startups is to get noticed in a pool of similar websites. Credibility is a major challenge. “You pay to a new e-commerce website and you never know if it delivers the product the way it promised on time. Online shopping forums
The major advantage that ‘online buying’ brings in as far as a customer is concerned is the reasonable price and the choice of products available. As an e-commerce website needs very little investment for inventory management and store display, this saving can be easily passed on to the customer. Thismeans that most of the products that you buy online are actually cheaper than those available in brick and mortar stores. Also, the wide variety of products that can be made available on a website compared to a retail store is a major advantage. and complaint boxes are full of such complaints these days and given the sceptical mindset of a traditional Indian, it makes all the more difficult for new startups in this domain. This is where techniques to achieve credibility like ‘money-back guarantee’ and ‘cash on delivery’ can help new market players,” Anish says. Yet, with the growing popularity of the social networking sites, marketing has become less strenuous for the online shops. Social media is the cheapest means for marketing available today. These startups can do social media campaigns and reach out to a good number of customers without ac-
tually burning their pockets. They can also build up more personal relationships with customers through social media. Though online shopping is gaining wide popularity, it is not a good option for the brick and mortar shops to switch their mode of operation to the digital platform because the competence required for online and offline retailing is entirely different. One example can be the case of Barnes and Noble. Though it is the biggest name in brick and mortar book-selling, it was never able to compete with Amazon in online sales, which never had any history of offline
retailing in the first place. This shows that the skill set required for online and offline retailing is both different and being successful in one format doesn’t guarantee success in the other. There is a threat, but that does not
mean e-commerce will replace brick and mortar stores. While e-commerce provides a lot of advantages over physical stores to customers, there are many disadvantages as well. One of the major advantages of a physical store over online store is that the customer can be given a physical feel of things. This is particularly important in the case of apparel and the likes where a ‘personal-fit’ is a must. So online stores would take away a share of customers from offline stores but it is more
probable that both the versions, online and offline stores, are here to stay because of the unique advantages each provides to customers.
Oct 31 - Nov 30, 2012
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BUILDERS
Manappat Group proposed two major projects at ‘Emerging Kerala’ Passline News Service
A
meer Ahamed, Chairman and Managing Director, Manappat Group, said on the sidelines of the recently held ‘Emerging Kerala Global Connect’ in Kochi that the event was the final opportunity for Kerala to bolster its economic prospects as the state was now heavily dependent on foreign remittances from NRIs. The Government should move on with strict and timely follow-up to the proj-
Ameer Ahamed ect proposals submitted at the meet unlike what happened at the Global Investor Meet (GIM) 2003. “What happened at the GIM was the lack of strict follow-up and the bureaucracy was to be blamed,” Ameer said. But because of the introduction of Right to Information (RTI) Act there is now an option for the people to check on these bureaucrats. Ameer submitted proposals for two business projects at the meet. “The Manappat Group of Companies, headquartered in Muscat, Sultanate of Oman, having investments across
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the United Arab Emirates, Saudi Arabia, the United Kingdom and India, has formed a new company in India, Manappat Infratech (P) Ltd, which will implement various projects in Kerala,” Ameer said. The company is setting up a ‘mixed-use’ commercial/retail development project in 4.26 acres of prime land at the entry point of Perumbavoor town, Ernakulam district, on the Aluva- Munnar highway.
when completed. The total built-up area envisaged is around 8,00,000 sq ft in the first phase, which will give di-
“This mixed-use project shall be the first of its kind in suburban towns in Kerala with one of the biggest multilevel car-parking facilities to accommodate more than 1,000 cars,” Ameer said. “By developing the parking facility, we are eliminating the vehicle parking problems in the town, which is the biggest curse the town has been facing,” he said. The company is also establishing an SEZ-based IT/ITES Park near Kozhikode airport and proposes to join hands with the Kerala Government for providing state-of-the-art plug and play IT/ITES infrastructure in the state. An extent of 35 acres of land has already been acquired for the project and the necessary formalities for getting SEZ status for the project are being initiated. The project will have built-up space for IT/ITES companies, developed land with all basic infrastructure besides residential complex, shopping mall, hotel and other auxiliary facilities. The Manappat Knowledge Park, as it is called, will cost Rs 1,000 crore plus
rect and indirect employment to around 1,500 people.Ameer, originally hailing from Kodungalloor in Thrissur district, said NRIs like him would like to invest in Kerala to see the state becoming economically self-sufficient like other major states in the country. The group also has plans to set up various other projects for which land is already in possession: a healthcare hospitality project with JV partners in an area of 12 acres of land in possession at Pukkattupadi, Kochi, and development projects in five acres of
land near the Koratty Infopark. “We are in discussions with the Government to act as a co-developer with Infopark,” Ameer said. “We also have land banks in various parts of the state which we want to develop along with the Government or with potential JV partners, for which we are on the lookout for partners with viable project ideas,” Ameer said. The group also plans to set up an automatic roller shutter factory in association with the world leader in that segment, Norpa of Spain.
Heera: treading an offbeat path in construction
r A R Babu is a man who thinks differently and acts differently. This is evident from the fact that at a time when others were afraid to tread the path of entrepreneurship, Dr Babu plunged into it. He knew that a clear vision, sustained performance and a commitment to quality would always bear fruit. Until some three decades ago, almost every fresh graduate in Kerala had two options: they could either join engineering or they could end up being a doctor. Yet Dr Babu, son of Aliyaru Kunju, chose to take an offbeat path when Kerala was caught up in powerful trade union struggles and people were more concerned with their rights than their duties.
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Babu was born at Nedumangad, Thiruvananthapuram, in 1954. He had an inclination towards entrepreneurship from a young age. When a relative of his prompted him to visit Goa, Babu knew instinctively where he had to start work. Back in the 1990s life was difficult for a fledgling entrepreneur. The economy of the country was changing and there was a real threat of new entrepreneurs losing their battle to multinational giants. No more did the Government protect the entrepreneurs. So running a business was a risky proposition. But Babu persisted. In 1983, he started Heera Construction Co with an office at Panaji, the capital of Goa, as a contracting firm. A decade later, he expanded his opera-
Oct 31 31 -- Nov Nov 30, 30, 2012 2012 Oct
tions to other capital cities of states, like Kerala’s Thiruvananthapuram. The Heera Group has seen steady growth. Dr Babu says this is due to the three pillars of his business—quality, economy and Dr A R Babu comfort. It is this thrust to quality that has made Heera a household name, quite literally. The projects formulated by him are known for their meticulous planning and rigorous quality control and, because of this, most of them are completed ahead of schedule. With more than 100 lakh square feet of
built-up area to its credit, the Heera Group is now one of the most reputed builders in South India. With rising reputation, expectations about new projects have also increased, and pressure is on to build better and superior structures. And Heera does not disappoint these expectations. It has to its credit more than 5,000 happy families residing in projects spread over three major cities of Kerala— Thiruvananthapuram, Kochi and Kottayam. No wonder that with such growing reputation, Heera faced little trouble even during the recession period when most builders had to completely stall new projects. But Heera in fact added eight more projects to its kit and sold 7080 units every month in 2010.
ACTIONS
Dr V K Vijayakumar
T
he celebrated economist John Maynard Keynes once famously remarked, “Politicians will do the rational thing, but only after exploring all other possibilities.” This may not be applicable to all politicians, but is very much applicable to politicians in India, particularly when it comes to economic reforms. UPA-2 has been criticized for governance paralysis and static policy by economists and political observers for the last more than one year. Observ-
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Reforms…at last though the Opposition cried foul and Mamata Banerjee quit the UPA, the Prime Minister and the Finance Minister refused to budge. The party soon fell in line. Policy paralysis was slowly becoming a thing of the past. Soon, the policy paralysis became policy overdrive with the Finance Minister announcing the next set of reforms. On October 4 the Cabinet approved a set of legislative reforms including the Insurance Amendment Bill (allowing 49% FDI), the Pensions Bill (49% FDI), the Company Law Amendment Bill, the Competition Law Amendment Bill and the Competition Act Amendment Bill. These bold initiatives, which were swift and fast, came as a blast of fresh air in an environment characterized by a
Putting all doubts by economists and political observers to rest, the Government, with Finance Minister P Chidambaram leading from the front, has unleashed a wave of reforms lifting markets and sentiments.
P Chidambaram ing the talk? The Opposition cannot be expected to help the Government in the passage of the bills since the BJP is in a belligerent mood. Actions of the 3 Ms—Mamata, Mulayam and Maya— are crucial. Mamata is hell bent on pulling down the Government since it might pay her rich political dividends. Mulayam might not rock the boat at this juncture.
Pranab Mukherjee quisition bill brooks no delay. The proposed National Investment Board to fast-track big projects is a step in the right direction. Will the UPA walk the talk? The talk, particularly the logical and coherent persuasion by the Finance Minister, has, indeed, been impressive. But the million-dollar question is: Will the Government succeed in walk-
Maya will not certainly rush to pull the rug from under Manmohan’s feet since this is not the opportune time for her. This favourable alignment of political stars might turn out to be favourable for the UPA and the Indian economy. Let’s keep our fingers crossed. (Dr Vijayakumar is Investment Strategist at Geojit BNP Paribas. The views expressed in the article are purely personal)
Manmohan Singh ers even expressed surprise at inaction by the Government even when the macro-economic signals were flashing red. ‘How can a government led by an economist Prime Minister be so indifferent to the emerging crisis’ was the refrain. Putting all these doubts to rest, the Government, with Finance Minister P Chidambaram leading from the front, unleashed a wave of reforms lifting markets and sentiments. Welcome initiatives: The first initiative (it would be wrong to call it reform) came on September 13 when the Government raised the price of diesel by Rs 5 a litre and capped the number of subsidized LPG cylinders per family to six a year. This doesn’t amount to much in reining in the petroleum
Mamata Banerjee subsidy, but is significant as an initiative for fiscal consolidation. This was followed, the very next day, by the announcement of 51% FDI in retail and the opening up of aviation and broadcasting to foreign investment. Even
Ahmed Patel
severe drought of sensible economics. The stock and currency markets cheered the reforms with the Sensex rising by 10% and the rupee appreciating by 8%. While the Finance Minister and the Prime Minister led this blitzkrieg of reforms from the front, the political backroom boys like Ahmed Patel pulled the right strings to keep the UPA afloat after the Mamata pullout. More needs to be done The diesel price increase, though highly desirable, is not reform; it is only the implementation of a much-delayed administrative action. The real reform would be the decontrol of diesel prices. But we must appreciate the fact that in the current dispensation, there is no political space for such sweeping reforms. In a political milieu where populism rules the roost and sensible economics is frowned upon, the Government will have to manage a tightrope walk between what is economically desirable and politically feasible. In the present political situation, attempting brave reforms that cannot be implemented makes no sense.
A trust that has been built by fulfilling the needs of our customers, innovating constantly, creating new products and by harnessing numerous technological breakthroughs for over 12 glorious decades. En route, be it in our principles, ethics or offerings, we always remained steadfast and ever true. That’s why trust comes in one colour – Blue.
The Government, going forward, should initiate serious reforms like rolling out the GST, on which there is near consensus now. Passing the land acOct 31 31 -- Nov Nov 30, 30, 2012 2012 Oct
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28 “Going by the speed at which the Government made changes to the single-window concept, from ideas that cropped up during the workshop conducted by TiE, it is certain that TiEcon too will be a catalyst for tremendous changes to follow. Necessarily the Government must make its mission to create an enabling and fertile environment where entrepreneurship is sown, grown and allowed to flower.”
TiEcon conclave—a catalyst for future changes Passline News Service
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ndeavouring to gain something out of nothing is what an entrepreneur does or should do. But those who take up entrepreneurship as a challenge need push from several places. TiEcon Kerala 2012, held at Le Meridien International Hotel, Kochi, on October 25 and 26, was one such attempt to guide and promote local entrepreneurs. Organized by The IndUS Entrepreneurs, Kerala Chapter, the summit was witnessed by more than a thousand
delegates, and 80 speakers took part in its various segments. The conclave provided opportunities to
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local entrepreneurs, aspirants and students to interact with successful businessmen, leading angel investors and venture capitalists. Inaugurating the mega-entrepreneurial event, Kerala Chief Minister Oommen Chandy said the Government he represented was very keen to support all entrepreneurs who tried to venture into business in the state. He urged the youth to become job creators rather than job-seekers. “The biggest challenge facing Kerala today is the social setup which is more used to job-seeking than job creation. For
Kerala to emerge as a strong and vibrant economy, we have to transform our younger generation from
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being job-seekers to job creators and that too within the state. Our youth has to become more confident, parents and leaders of society have to support youngsters to take risks and our society has to accept failures in businesses which do happen in a competitive world,” he said. The Chief Minister also pointed out that even though the state had a number of investment-friendly factors that ignited economic growth, its growth pace was low compared with neighbouring states. “Kerala has its own unique advantages. These factors should have made it one of the fastest-growing economic centres in India. Unfortunately, we face challenges which act as impediments in our quest for fast-paced economic growth. The Government believes that continued economic development and progress of the state can be achieved only through sustained entrepreneurial growth within Kerala,” he added. He reiterated that his Government was committed to striving for the sustainable economic growth of the state. “We are trying to achieve sustainable and inclusive economic growth. We want each and every individual in Kerala to participate in the development process. We want entrepreneurial projects which are people-oriented— projects which create employment opportunities in the state and projects which are environment-friendly.”
In his inspirational keynote address, TiE Global Chairman Ashok Rao, a successful US-based entrepreneur owning six startups and partnering with many financial entities, said that innovation and entrepreneurship were the best way forward for Kerala. “Entrepreneurship is a process or idea that can be transformed into goods and services, so that people will pay for them,” he said. He said entrepreneurs energized innovation, created jobs and wealth and grew economies. “For entrepreneurs, institutions matter. It is the Government that creates the institutions, the public structures that support entrepreneurial endeavours. This infrastructure is the soil and fertilizer in which businesses thrive, wither or die. Innovation is fundamental to entrepreneurship. In order to make Kerala prosper, it is essential to create more opportunities through entrepreneurship and more public-private partnerships,” he said. He also urged the Chief Minister to create a Ministry of Entrepreneurship and Business. In his presidential address, Mr John K Paul, President of TiE Kerala, said, “It is said that the biggest failure one can have in life is not trying at all. Entrepreneurship is pretty much like a roller-coaster ride. There are highs and lows and every turn you take is another twist. The lows can be really low and the highs can be really high. You need
29 to be strong, keep your stomach tight, and ride along with the rollercoaster that you get on.” “Focus on the domestic private entrepreneurial ventures does not diminish the importance of FDI (foreign direct investment),” he said. “Beyond the financial resources that FDI brings, its infusion of a corporate culture can change the way business is done, bring managerial know-how and best practices, provide access to international markets, transfer technology and innovation, introduce competitive pressures in previously closed markets and be the principal driver for the growth of local business. “Going by the speed at which the Government made changes to the single-window concept, from ideas that cropped up during the workshop conducted by TiE, I am sure TiEcon too will be a catalyst for tremendous changes to follow. Necessarily the Government must make its mission to create an
to create job opportunities, wealth, products, services and innovation growth not only for the individual but also for the country. We need to create 10 million-15 million jobs every year, which have to come from entrepreneurship,” he said. He pointed that innovation was one of the tools that could solve the plight of the poor. There should be a mechanism to tap the talents of our countrymen. Focus should be given to skill development and education. Youngsters should be given innovative ideas in sectors such as IT, telecom, automotive and pharmaceuticals. He reckoned the biggest impediment in the way of an entrepreneur to be the mindset. “We should change our old mindset. Entrepreneurs should respect failures. Only then can they succeed,” he said. Mr S Vasudevan, General Manager, SBT, appreciated TiE Kerala’s effort to organize such a pathbreaking conference where leading angel investors, venture capitalists and PE investors met. There were concurrent four-track panel discussions and mentoring for delegates on diverse sectors.
enabling and fertile environment where entrepreneurship is sown, grown and allowed to flower,” he said. “We may say an entrepreneur should tend to bite off a little more than he can chew hoping he will learn to chew it one day,” said Mr Kanwal Rekhi, Founder President of TiE Global. He said that entrepreneurs were innovators and entrepreneurship was a journey which should be managed well. “To kill poverty we have to create new opportunities by tapping new resources and with new innovative ideas.” Mr Sam Pitroda, Chairman, National Innovation Council and Adviser to the Prime Minister, said through video conferencing from Chicago that the state should come up with an entrepreneurship policy. “Entrepreneurship is very important
Food and agri-processing segment: The session was chaired by Mr Shivdas Menon, MD, Sterling Farm Research & Services. In the keynote speech, Mr Rakesh Kacker, Secretary, Food Processing, of the Union Government, spoke on the importance of food processing for food security. “We have tremendous opportunities in the food processing segment. We could make good fortune if we grow high-value crops conveniently,” he said. “The National Mission on Food Processing has been launched to bring the various activities at the state level under the Central Government. Last year the country witnessed 15% growth in the food processing segment. The department has focused on sustaining and enhancing the productivity and growth in the food processing sector.” Mr Gian C Chouhan of Pressman India Breeding Pvt Ltd, urged farmers to take the climatology advantage of the state by breed-
ing alternative crops using modern technology. “The state is blessed with good climate that can produce high-value crops if we approach it in a convenient way. It is proposed to set up conventionally relevant research projects in the agricultural sector,” he said. Mr Alex Thomas, MD, Tierra Food, and Mr Viju Jacob, Director, Synthite Group, shared their successful stories in the food processing segment. Entrepreneurship in the higher education segment: The session was chaired by the Dr K M Abraham, Principal Secretary, Higher Education, Government of Kerala, who emphasized the need to improve the higher education sector in the state. “The state is top in many ways at the primary and secondary education levels but has not been able to achieve the best results in the higher education segment,” he said. He expressed the hope that the state could emerge as one of the educational hubs in the country if it followed a systematic way of functioning. He also narrated the State Government’s relentless attempts towards the uplift of the higher education segment through various promotional programmes. Investment deficit: The gap between investment and entrepreneurship in the educational sector should be reduced, according to Dr Abraham. More investment should be infused into the market to tap the potential in the sector and thus to create an environment that is free of deficit.
Public-private partnership: Investment should be channelized in a proper way. It would help to lessen the scarcity of quality educational institutions and bring out the best out of them.
Bridging quality gap: Both private and public parties should pay attention to bridging the quality gap.
Only quality institutions could survive. Quality institutions produced quality products, which would lead to economic prosperity. “There are many factors to be considered for the betterment of higher education. There are two models that can be adopted in the sector. One is the not-for-profit model and the other the profit model. The not-for-profit model is considered a more viable idea of imparting quality education,” said Dr Abraham. Rev Fr Dr Thomas C Mathew, Vice-Chancellor of Christ University, Bangalore, said that despite Kerala’s prosperity in many ways, it was still backward in economic growth. “Unemployability is scaling up in the state not because of the lack of graduates but because of lack of skilled employees. Only higher education can rub out unemployability. The people of the state are more interested in primary and secondary education, leaving higher education unnoticed. Attention must be paid to higher education as well. The effort should be idea-centric rather than institutional-centric. If we pursue idea-centric researches in the higher education sector, it could enhance social mobility growth. Create an environment conducive to Government policies. Tap the huge opportunity that lies in the higher education sector. Start new colleges in diverse departments. Tap NRI students’ flow,” Dr Thomas Mathew said. Mr Satya Narayana, founder and Chairman, Career Launcher, said opportunities were ample for entrepreneurship. Mr Krishnan Muraleedharan, education venture capitalist and Senior Associate, Trilegal, dwelt on the various legal procedures to get an entry into the higher education sector in the state
Oct 31 - Nov 30, 2012
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BANKING & FINANCE
KFC bond issue
Geojit BNP Paribas Q2 PAT at Rs 45.31 crore
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eojit BNP Paribas’ second quarter results for fiscal 2012-13 ending September 30, 2012, show that the company’s consolidated revenues rose by 4% to Rs 66.2 crore from Rs 63.57 crore for the same quarter of the previous fiscal, while net profit increased to Rs 45.31 crore from Rs 6.05 crore. Profit before tax rose to Rs 18.52 crore from Rs 10.44 crore, an increase of 77% for the same quarter of the previous fiscal. The company has accounted for the exceptional income of Rs 35.97 crore during the quarter arising from gain on the sale of a substantial portion of its stake in the JV with BNP Paribas for Institutional Broking. This resulted in the jump in net profit during the quarter. For the six months ended September 2012, Consolidated Income of the company was comparable to the income of the previous year of
Rs 125 crore. Consolidated Profit before Tax before exceptional item went up by 71% to Rs 32.18 crore from Rs 18.82 crore, while Consolidated Net Profit went up to Rs 53.78 crore from Rs 10.35 crore due to the exceptional item referred above.
Elaborating on the results, Geojit BNP Paribas Managing Director, C. J. George said, “The sale of Institutional broking business and overall control on cost helped the company to report better results during the quarter. Although the market volumes increased significantly during the last one month, due to sluggish market conditions during most part of the last quarter, the revenues increased only marginally.”
Muthoot Finance honoured with Golden Peacock M
uthoot Finance Ltd, the largest gold financing company in India in terms of loan portfolio, has been honoured with the Golden Peacock Award for ‘Excellence in Corporate Governance’ for the year 2012 in London. This award, according to the company, is another feather in the Muthoot Group’s cap by giving it
(L-R): Mr M G George Muthoot, Chairman, Muthoot Group, Mr Eric Pickles, Secretary of State for Communities and Local Government, UK, Mr Ola Ullsten, former Prime Minister of Sweden and Co-Chair of the World Commission on Forests and Sustainable Development, Mr Alexander George Muthoot, Director, Muthoot Group, and Lt Gen J S Ahluwalia (retd) President, Institute of Directors, India.
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global recognition in the field of corporate governance.
Says M G George Muthoot, Chairman of the group: “The main guiding principles of our company are trust, ethics, values, reliability, dependability, integrity and goodwill.” The award was presented by Mr Eric Pickles, MP, Secretary of State for Communities and Local Government, UK; Mr Ola Ullsten, former Prime Minister of Sweden and Co-Chair of the World Commission on Forests and Sustainable Development; and Lt Gen J S Ahluwalia (retd), President, Institute of Directors (IOD), India. The award was given based on the recommendations of the jury headed by Justice P N Bhagawati, former Chief Justice of India and Member, UN Human Rights Commission
Oct 31 - Nov 30, 2012
gets nod K
erala Financial Corporation (KFC), the pioneer financial institution of Kerala, is coming out with Rs 400 crore worth of non-SLR bonds in the coming months to increase its loan portfolio size to Rs 1,500 crore. The proposal has already got the final nod from the Government of Kerala with unconditional and irrevocable Government guarantee for 10 years. The bond raising proposal, announced by Finance Minister K M Mani in his budget for FY 2012-13, is aimed at extending easy loans at low rates of interest to manufacturing, hospitality, entertainment and housing and other real estate sectors etc in addition to small and medium enterprises. For this the corporation has targeted sanctions of Rs 600 crore and disbursement of Rs 500 crores for 2012-13.
KFC will be going to woo the market as the most healthy and vibrant organization of the State and number one state financial corporation of India with a record profit of Rs 45.65 crore made during FY 2011-12. Having a loan asset of Rs 1,240 crore and a low NPA level of 1.3%, the corporation had declared a dividend of 7.5% during the year which is the highest declared by any public sector undertaking in the state. “The corporation will go for a credit rating and we expect to get a good one considering our record performance. The bond issue will be after completing the process of credit rating and appointing a merchant banker and this process is expected to be completed by next month,” according to Mr Yogesh Gupta, KFC Chairman and Managing Director. KFC had created history in the last financial year by getting the entire bond issue of Rs 200 crore fully subscribed much before the date of closing of the issue. The bonds were issued as debentures with unconditional and irrevocable guarantee by the State Government offering 9.99% interest payable half-yearly. The bonds were rated ‘A-(SO)’ by Brickwork Rating Agency and the face value of each bond was Rs 10 lakh with maturity of
10 years. The investor had the option to redeem it at the end of the fourth year at the rate of 25% a year from the fourth to seventh year.
Lending rates slashed
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erala Financial Corporation has slashed the lending rates by 0.5% for all schemes in all sectors and the interest reduction will benefit thousands of manufacturing, industrial and service-sector units supported by the corporation to service their loans comfortably. With scientific credit rating continuum introduced recently to motivate good governance and best practices in business, the corporation will also provide interest reduction up to 2% from PLR for eligible borrowers by rating the units in addition to the interest rebate given for prompt repayments. An interest reduction of 1% to enterprises fully owned by women entrepreneurs or SC and ST entrepreneurs will be continued and the effective interest rate of the scheme for energy-saving projects, the special scheme to promote energy-saving measures in SMEs for the implementation of energy-saving devices/projects, will be 6% per annum. “This is an excellent opportunity for Kerala’s MSME sector to use loans at the lowest rates in the market with easy terms. KFC expects to achieve the targeted sanction and disbursement and also expects to increase the loan portfolio and take the current year profit to a new high”, according to Mr Yogesh Gupta, KFC Chairman and Managing Director. The corporation plans to woo the MSME sector in the coming months by conducting business meets with prospective customers throughout the state. The first such meet was held in Kochi on October 12. About 50 business houses participated
31 Land bank for Kudumbashree
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aunched by the Government of Kerala in 1998 for wiping out absolute poverty from the state through concerted community effort under the leadership of local self-governments, Kudumbashree is today one of the largest womenempowering projects in the country. The programme has 37 lakh members and covers more than 50% of the households in Kerala. Built around three critical components— micro-credit, entrepreneurship and empowerment of women—the Kudumbashree initiative has today succeeded in addressing the basic needs of the less privileged women, thus providing them with a more dignified life and a better future. The literal meaning of Kudumbashree is prosperity (shree) of family (Kudumbam). Chief Minister Oommen Chandy said the other day, ``The State Government is contemplating using vacant arable land for group farming for Kudumbashree projects.” The necessary law should be formulated to encourage the group farming projects, he added.He was speaking during the discussion on the suggestions put forward by the subcommittee endorsed by Kudumbashree. The available vacant land will be allotted on lease. Forming land banks in panchayats, extending
benefits enjoyed by individuals to the groups, setting up permanent sales outlets and ensuring bank loans are some of the 18 suggestions made in the report of the subcommittee.
Steps will be initiated to lend bank loans through cooperative banks at minimum interest rates. Loans will be granted with the state’s subsidy of 5% and the Central subsidy of 3% totalling 8%. Interest will be waived for prompt repayment. Panchayat and Social Welfare Minister M K Muneer said that top priority would be given to achieve food self-sufficiency by the activities of Kudumbashree. Local Bodies Minister Manjalamkuzhi Ali, Kudumbashree Executive Vice-Chairman Aruna Sunderarajan, Local Bodies Principal Secretary T K Manoj Kumar, Agriculture Secretary K R Jyothilal and Cooperation Secretary V M Gopala Menon were present on the occasion
CSB honours former Directors
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n connection with its 91st annual general meeting held at Thrissur recently, the Catholic Syrian Bank (CSB) honoured its former Senior Directors Joseph Alapatt, Jose Pulikken and Kurian F Manavalan. Bank Chairman S Santhanakrishnan appreciated the commendable service and good work rendered by them.
Federal Bank’s H1 net at Rs 405 cr
F
ederal Bank registered a profit of Rs 215.10 crore during in the second quarter of the financial year of 2012-13 as against Rs 191.16 crore during the same period of FY 2011-12. It also improved its half-yearly profit numbers with a net profit of Rs 405.45 crore during H1 of FY 2012-13 as against Rs 337.32 crore during H1 of FY 2011-12, registering growth of 20%. The bank could deliver substantial growth in the top and bottom lines despite the economic headwinds. The transformation journey it had embarked is well on its way to position itself as a national
player with focus on SME and NRI clientele. The bank also crossed the milestone of 1,000 branches by opening a priority banking branch at Thiruvalla. It now boasts more than 2,100 customer touch-points spread across the country. Total deposits increased from Rs 47,263.46 crore to Rs 49,518.07 crore and advances from Rs 33,606.69 crore to Rs 36,299.18 crore. Investments stood at Rs 18,550.22 crore and net NPA at 0.68%. NRE deposits grew by 62.30% to reach Rs 10,747.96 crore.
Corporation Bank to focus on SME segment
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orporation Bank has plans to build more business volumes in the current fiscal by giving thrust to the retail and SME segments, according to Mr Ajai Kumar, Chairman and Managing Director. “The opening of exclusive SME loan centres in various cities is one of the strategies to reach out to the segments,” he said in Kochi the other day. The bank was looking at SME loan disbursement of Rs 500 crore in Kerala this year, he said, adding that it had so far disbursed Rs 15,000 crore. With the opening of the Kochi centre, the total number of SME centres had increased to 14 and would touch 17 by the end of the current fiscal. Mr Ajai Kumar, who was in Kochi
in connection with the launch of Triple Festival Bonanza, said the bank was looking at 17% growth in its total business in the current fiscal Ajai Kumar at Rs 2,85,000 crore from Rs 2,40,000 crore. Plans were afoot to increase the number of branches to 3,000 in two years from the present 1,600. The bank, with 86 branches in Kerala, is targeting total business of Rs 8,500 crore in the current fiscal, against Rs 5,000 crore achieved in the previous fiscal. Kumar also said the bank had a gold loan portfolio of Rs 2,000 crore as on March 31, 2011 and had increased it to Rs 5,000 crore this year. The retail, gold loan and SME loan segments showed encouraging results in the last six months, he said.
Muthoot Fin posts Rs 514-cr net
M
uthoot Finance has ended the first half of the current fiscal with a profit after tax of Rs 514 crore, which represents a 27% increase over the same period of the previous year. For the quarter ended September 30, 2012, the company registered growth of 25% in its net profits to touch Rs 268 crore. Mr V P Iswardas, CSB Managing Director and Chief Executive Officer, Mr. Surachan Chawla, Mr Joseph Alapatt, former Director; and Mr Santhanakrishnan, Chairman.
The Director Board of the company has decided to raise the public holding of its shares to 25% from
the current 19.88% to meet the Sebi stipulation of 25% public holding by May 2014. Total income of the company saw a 29% increase in the first half of the year to climb to Rs 2,610 crore as compared to the same period of the previous year. Return on average retail loans stood at 4.30% as compared to 4.41% during the first half of the previous year. The company’s branch network increased to 3,853 in the first half of the current fiscal.
Oct 31 - Nov 30, 2012
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NEWS
FSSA ‘facilitation mela’ held
Vyapaar 2012, ‘the complete trade exhibition’
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yapaar 2012, the ‘complete trade exhibition’, being held at the Mascot Hotel, Thiruvananthapuram, from December 19, will feature a variety of sessions related to people’s specific areas of interest. Organized by One Roof India,
visitors. Lectures and seminars on online marketing, investment opportunities in Kerala, innovation and entrepreneurship, business integrating technology and tourism will be organized in association with Technopark, Thiruvananthapuram.
Dr G Srinivasan, Dy Director, Food Safety and Standards Authority of India in charge of the southern states, making a presentation at the ‘facilitation mela’ held under the aegis of the Indian Chamber of Commerce and Industry. Also seen are Mr Ramakrishnan, Secretary, and Mr Nishesh Shah, President, of the Indian Chamber.
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‘facilitation mela’ for registration and licensing procedures of the Food Safety Standards Act (FSSA) was conducted under the aegis of the the Indian Chamber of Commerce & Industry Cochin in Kochi th other day. Dr G Srinivasan, Deputy Director, FSSA Institute (FSSAI), Chennai, which has jurisdiction over all the South Indian states, made a detailed presentation on the salient features of FSSA and narrated the nuances of getting reg-
istration and licences easily. He was accompanied by other FSSA officials Ms Uma, in charge of Kerala, and Ms Geethu who overseas Karnataka. The mela was of immense benefit to many traders and manufacturers in the small and medium enterprise (SME) sector to know more about the licensing procedures. Forty licences were generated online and handed over to applicants across the counter on the spot
Yi workshop on Blue Ocean Dialogue
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he Kochi chapter of Young Indians (Yi) held a two-day workshop on October 12 and 13 on Blue Ocean Dialogue to inspire and initiate students to think differently and explore the unknown. The workshop was held by Dr Rahul Mirchandani,
past National Chairman of Yi and Executive Director, Aries Agro Private Limited, at Toc H Public school. Students from Toc H, Global Public School, The Delta Study and Vidyo-
daya School participated.
‘Blue Ocean’ is a term used to refer to clean, pristine market spaces. These are areas in an industry where customers exist but there are extremely limited or no competitors. Blue Oceans emerge because of new needs, new consumer groups, changed habits, new product development etc. In the context of the workshop, a Blue Ocean referred to ‘New Ideas’—innovations—that have never been thought of before. The students were encouraged to challenge existing ways of doing things by changing the status quo and developing the courage to think differently and a sense of trust in themselves that they too have an Edison or Newton within them
Shri Kailash Logistics’ expansion spree
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hri Kailash Logistics Ltd (SKLL), which commissioned the first phase of its Logistics Park at Oragadam (near Chennai) in fiscal 2012, is fast implementing the second phase. Phase-I, comprising three warehouses and a commercial complex (with an aggregate capacity of around 3.3 lakh sq ft), was set up at a cost of around Rs 81 crore. The warehouses have been rented out to MNCs on long-term lease. SKLL has now taken up the construction of the second phase. A por-
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Mr A P Anil Kumar, Tourism Minister, releasing the logo and Mr Anoop Jacob, Civil Supplies Minister(Right), the brochure of Vyapaar 2012. the five-dayVyapaar 2012 would also set a platform for wide-range discussions and demonstrations of technology and expertise. “Novel ideas and products from different industrial sections and new technologies that drive businesses will add charm to Vyapaar 2012,” says Mr Siji Nair, Managing Director, One Roof India. “We have planned the event in such a way that it will usher in better times on Kerala’s industrial horizon,” he adds.
The important part of Vyapaar 2012 will be the franchising day wherein representatives of 20 companies meet their investors face to face and discuss the new opportunities in investment. This will provide opportunities to all suppliers and end-users to interact with one another.
Siji Nair
The event is expected to attract over 200 companies, brands and organizations and more than 10,000
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These apart, quiz competitions and painting contests will be conducted for school and college students.
Mr A P Anil Kumar, Tourism Minister, released the logo and Mr Anoop Jacob, Civil Supplies Minister, released the brochure of Vyapaar 2012 the other day
Patta dealers’ meet
Mr A I Noushad, Managing Partatta International (Taiwan), the global brand in the fas- ner of A K Fasteners, welcomed teners industry, and A K Fasteners, the gathering and Mr Abdul Fattah, its Indian distributor from Kochi, management consultant, delivered the preamble. Mr Antony Kottaram, Press release issued by PATTA International, & A K Fastners, Kochi organized the Patta dealers’ meet Taiwan Vice-Chairman, Kerala Chamber at Kochi recently. Mr David Haung, of Commerce and Industry(KCCI), President, and Mr Muhammad Sageer, Vice-
tion of the second phase admeasuring about 2 lakh sq ft warehousing is scheduled to be commissioned before the end of fiscal 2013. The company expects to have a total warehousing space of 12 lakh sq ft at Oragadam by the end of calendar year 2013. After successfully commissioning phase-I of the Chennai-Oragadam Logistics Park, SKLL is now planning to replicate the model of warehousing facility in North Chennai, Bangalore, Hyderabad, Selam, Kochi, Pune and Coimbatore
Oct 31 - Nov 30, 2012
Patta International, launched its President, Kerala Merchants Union (KMU), Mr place Renew product, concrete nails, and meet Patta International (Taiwan) dealers and offered productfelicitations. launch took delivered the keynote address. jith A M, Manager-Operations, A Over 300 accredited entrepreneurs K Fasteners, proposed a vote of thanks Patta (Taiwan), the global brand in fasteners industry and A. K. Fasteners, its Indian distributor tookInternational part in the event. from Ernakulam conducted the Patta dealers meet at Mercy Hotel, Ernakulam. David Haung, President, Patta International launched its new product concrete nails and delivered the keynote address. Over 300 accredited entrepreneurs took part in the event. A. I. Noushad, Managing Partner, A. K. Fasteners welcomed the gathering. Abdul Fattah, Management Consultant delivered the preamble.; Antony Kottaram, vice
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Treatment package for Alzheimer’s sufferers
he Government of Kerala will develop and implement a comprehensive treatment package for sufferers of Alzheimer’s disease, Health and Family Welfare Minister V S Sivakumar said in Thiruvananthapuram on the occasion of World Alzheimer’s Day on September 21. The Health Department would work with the Kerala State Council for Science, Technology and Environment (KSCSTE) and organizations such as the Alzheimer’s and Related Disorders Society of India (ARDSI) to integrate medication, care and other services into a comprehensive package aimed specifically at people suffering from the debilitating mental condition, Mr Sivakumar said. “We are already providing healthcare services for the aged through schemes such as the National Programme for Health Care for the Elderly at the general hospitals in five districts. While we intend to expand the elderly clinics to other districts, we realize that Alzheimer’s sufferers and their families require special attention,” Mr Sivakumar said. “Conditions such as dementia are no longer age-linked. It is distressing to see people who have made significant contributions to our society rendered helpless by Alzheimer’s. The disease takes a toll on everyone, especially families that have to care for the patients.”
The Minister said the Government planned to extend its pain and palliative care centres, now functioning in 400 panchayats, to all panchayats in the state. Mr Sivakumar also released the World Alzheimer’s Report 2012 compiled by the UK-based Alzheimer’s Disease International (ADI) at the function, organized by KSCSTE. The report deals specifically with tackling the misconceptions and stigma associated with dementia. Mr K Muraleedharan, MLA, who presided, released ARDSI’s Dementia India Report, the first such authenticated study ever undertaken in a developing country. The report notes that in 2010 there were an estimated 3.7 million people in India suffering from dementia and that the figure is expected to more than double to 7.7 million by 2030. In Kerala an estimated 1,58,100 people over the age of 65 had dementia in 2011, with the number expected to rise to 2,12,900 by 2021. Dr Jacob Roy, Chairman of Alzheimer’s Disease International (ADI), urged the State Government to make dementia a health and social welfare priority. He called for a Kerala-wide study on the condition, setting up of memory clinics at district level, special training for doctors and nurses and the establishment of day care and respite care centres.
Cera’s impressive growth G
ujarat-based Cera Sanitaryware Limited, the total bathroom solutions provider and the third biggest player in the Indian Sanitaryware products field, achieved impressive growth of Rs 111.38 croe, a 52% increase in the top line and Rs 11.03 crore being 44% increase in profit after tax (PAT) for the second quarter of 2012-13 ending September 30, 2012. According to the company, despite the market vagaries, it was able to sustain the margins for its products. The EBITDA (earnings before interest and taxes) for quarter II of FY 201213 reached Rs 20.09 crore, a rise of 43.19%, compared with the same period of 2011.
In the first half of the current financial year Cera achieved a net sales income of Rs 201.89 crore compared with Rs 137.93 crore for the first half of 2011-12. Mr Vikram Somany, Chairman, says that at the rate at which the company is growing, it may achieve a sales turnover of Rs 500 crore during FY 2012-13. Mr Somany also says that CERA has launched an array of elegant HD digital wall and vitrified tiles with matching floor tiles. The company is also offering the normal vitrified tiles with nanotechnology
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Rajbhasha shield for HLL yet again
LL Lifecare Ltd has won the prestigious Indira Gandhi Rajbhasha shield for a seventh time for its outstanding performance in implementing the official language, Hindi.
President Pranab Mukherjee presented the award to Dr M Ayyappan, Chairman and Managing Director of HLL, in New Delhi on September 14 on the occasion of Hindi Diwas. Hindi Diwas is observed across the country to com-
Home Ministry and the Department of Official Language and are given to public-sector units that carry out outstanding work in promoting and propagating Hindi. Union Home Minister Sushilkumar Shinde, Minister of State for Home Affairs Jitendra Singh and senior Government officials were present on the occasion. Fair price outlet: HLL Lifecare has set up a fair price outlet at the Government Eye Hospital in Thiru-
Dr M Ayyappan, Chairman and Managing Director, HLL, receiving the prestigious Indira Gandhi Rajbhasha award from President Pranab Mukherjee in New Delhi. Union Home Minister Sushilkumar Shinde is also seen. memorate the historic occasion of the adoption of Hindi as the official language of the Constituent Assembly on September 14, 1949. HLL won the second prize in the C-Region category of the Rajbhasha awards, instituted by the Union
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vananthapuram which would make available ophthalmic products including spectacles, lenses and frames. Mr V S Sivakumar, state Health Minister, who inaugurated it said that the outlet would provide relief to poor patients.
KSCSTE announces fellowship programmes
he Kerala State Council for Science, Technology and Environment (KSCSTE), an autonomous body to encourage and promote science and technologyrelated areas in the state, has announced research fellowship programmes for the year 2012. The fellowship programmes, leading to PhD, are available in Agricultural Sciences, Bioinformatics, Biotechnology, Chemical Sciences, Earth System Sciences, Engineering Sciences, Environmental Sciences, Mathematical Sciences, Physical Sciences and Taxonomy (Botany and Zoology). Candidates who have passed MSc/MTech with first five ranks
from any universities in Kerala in 2010, 2011 and 2012 are eligible to apply for this three-year fellowship programme that will involve full-time research work. Fifty-two research fellowships are available. Selection will be based on a research aptitude test, which will be held on December 16, 2012. This will be followed by a personal interview. The selected candidates are eligible for a monthly fellowship of Rs 16,000 in the first and second years and Rs 18,000 in the third year. An annual contingency grant of Rs 20,000 and HRA according to CSIR norms will also be granted to the research fellows
Oct 31 - Nov 30, 2012
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AUTOMOBILES
Park safely with parking sensors
Passline News Service
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sn’t it amazing to see how quickly technology is advancing in today’s world? There are a number of electronic devices and gadgets on the market to make your life simpler and much more comfortable. Amongst these wonderful gifts of technology, ‘parking sensor’ is one of the mostsought-after devices in demand today. All of us have experienced parking problems in crowded places. Finding a parking spot, parallel parking and the danger of running into other vehicles are reasons enough to make you want to turn around to go back home. While reversing your car in narrow lanes, you may dream of somebody coming to your help with some advice. But none can be of any help to solve this Himalayan task of parking your vehicle. In such a situation you could make use of an appealing option—installation of parking sensors in your car. Why should you install a parking sensor in your car? Dents in the bumpers or underbody panels can happen all too easily when parking in unfamil-
iar places. There is a chance of a child stepping out behind you to cross the road as you are about to reverse. Sensors can be mounted at the front and
rear of the vehicle and these gauge the proximity of objects and give out an audible/visual warning as you drive closer to them. Parking sensors are now appearing as a factory-fitted item on some vehicles but are also available as an after-market fitment. Not only do they make parking less stressful and safer, they could pay for themselves in a short time. A set of parking sensors will help to make the average driver more confident, and the reduction of stress level alone makes it worthwhile. Where should one install the parking sensors? To begin with, you have
Royal Enfield launches Thunderbird 500
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ne of the most expected models from the Royal Enfield stable, ‘Thunderbird 500’, was launched in Kochi the other day. The highway cruiser is poised to enhance the pleasure of leisure motorcycling among the touring enthusiasts.
Combining distinctive ‘black’ styling with a powerful 500cc unit construction engine, 27.2 bhp power output being fed through an electronic fuel injection system and 41.3 Nm torque built in for very accessible power, the Thunderbird 500 makes a distinct statement on the Indian roads. Launching the vehile, Mr Shaji Koshy, Senior Vice-President, Sales & Marketing, Royal Enfield, said, “When we launched Thunderbird in 2002, it was a one-of-its kind motorcycle on the Indian roads that
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redefined the cruiser segment. Over the years, the Thunderbird brand has built its own cult following among Royal Enfield customers, as a comfortable touring motorcycle. Today, with the launch of the Thunderbird 500 with its unique 360-degree design language and its higher-powered engine that has our signature flat torque curve, Royal Enfield has again upped the ante in leisure motorcycling.” About Royal Enfield’s performance in Kerala, Mr Shaji Koshy said, “Kerala is a very well-performing market for Royal Enfield and the demand for our products constantly remains high. In 2011 our sales grew by 48% over 2010 in this region. This year we have already registered a growth rate of 23% over the average monthly sales volume of 2011. To keep up with the growing demand we have expanded our footprints aggressively and we have 17 dealers across Kerala.” Thunderbird 500 is available at Rs 1,72,539 (on-road price Kochi) and Thunderbird 350 at Rs 1,35,408 (on-road Kochi)
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to know that there are two places where you can mount them. The first one is on the bumper’s strip, a part on which normally the factory sensors are mounted. On some models, the strip has marks on it and you can drill and insert the sensor right there.
How to work parking sensors? When you shift into reverse the reverse light lids and control box send a command to the sensors which transmit calibrated sound waves that bounce really fast between the car and the obstacle. When the distance from your vehicle to the obstacle gets smaller, the parking sensors system, based on factory presets, will automatically calculate how fast the sound wave travels back and it estimates the remaining gap. The control unit receives data and then provides audible feedback. As the distance gets reduced, the beeps from the buzzer are more and more intense, and at close distance you’ll hear the constant beep. Other units also provide a digital display, so the driver can see how much space he has left. The direction indicators reveal where the obstacle is located. As more bars light up in each indicator, the obstacles be-
come closer. There are thousands of reported accidents each year that occur while reversing. In fact statistical data proves that almost every driver has had an accident while backing up. You need to be more careful not just about yourself and your car, but also about children that are mostly at risk of these kinds of fatalities. The reversing parking sensors could play a major role in reducing rear-end accidents by a significant margin. As a matter of fact investing in the reverse parking sensors is a wise option. It would save your money in the long run by preventing accidents and keeping auto insurance premiums low. So, with negligible insurance claims and low monthly premiums, these reversing sensors would eventually reap benefits for you in future. The reverse parking sensors or rear-end sensors could be installed in any types of vehicles, be it a car, van, lorry or SUV. All vehicles could make use of the numerous advantages of installing these reversing alarms.
New Alto 800 unveiled in Kochi
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ar market leader Maruti Suzuki unveiled its best-seller Alto in an all-new form as ‘Alto 800’ in Kochi the other day. The new Alto 800 sports a fresh look, is roomier, more fuel-efficient and is even better geared for city conditions. Alto 800 comes with a characteristic Wavefront design that goes perfectly with an entry-level car that enjoys wide appeal. The el-
focused efforts in engine engineering. Major factors that have helped increase the fuel efficiency are increased compression ratio and improved volumetric efficiency. These are achieved through significant improvements in engine intake systems. The use of the new-generation engine and transmission lubricants helps to reduce frictional losses and further to enhance performance. In the CNG range, branded ‘Green’, the patented intelligent Gas Port Injection (i-GPI) technology which comes as a factory fitment, achieves a fuel efficiency of 30.46 km/ kg on the new Alto 800 Green, an improvement of over 13% over the outgoing Alto Green.
egant and smooth long curves and the prominent wheel arches add volume to the side stance. At 22.74 kmpl the fuel efficiency of the Alto 800 is up by a whopping 15%. This has been possible with
The i-GPI technology offers more power and a peppier ride experience along with reliability and safety as compared to the aftermarket CNG fitment. The car is priced at Rs 2,51,613.83 (for ALTO 800 STD), Rs 2,84,403.85 (for LX) and Rs 3,45,445.83 (for LX CNG).
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SET-SHOPS
Business stars in the making Many
film
personalities
have proved their mettle in such diverse fields as real estate, hotels and lifestyle businesses. And Kochi, the state’s commercial and business capital, has become their, as many others’, favourite business spot. But many are into business in other places too. Passline News Service
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rofessionals in the entertainment world nowadays feel more insecure than they were a decade or two ago as more and more of their tribe come into the field with better talent and opportunities. No one perhaps knows this better than Mollywood glitterati. Many of them therefore have realized that it’s time to move onto pastures new and Siddique have entered the business world where, surprisingly, several have proved that business is in their veins. They have proved their mettle in such diverse fields as real estate, hotels and lifestyle businesses. And Kochi, the state’s commercial and business capital, has become their, as many others’, favourite business spot. But many are into business in other places too. The successful actor-businessmen include Mohanlal, Dileep, Lal, Jayasurya, Rima Kallingal, Kunchacko Boban, Lalu Alex, Innocent and Siddique. Why business? They have their own reasons. “A good artiste is also a good producer. A producer is not just a person who invests money in making the film. He or she should be a good artiste and have an aesthetic sense too,” says Lal, actor, director, scriptwriter, film distributor, producer and a good businessman. Having become a producer and distributor in the mid-1990s, he established a film production and distribution company named ‘Lal Creations’. Apart from this, Lal started
a leading studio, ‘Lal Media’, at Kakkanad, Kochi, nine years ago. Four years ago he started another studio ’DLS Studio’. Both are in the same compound. ”With new equipment and studios like these, Mollywood will prove self-sufficient in film-making technologies within a short time. With these studios we can do the work in Kerala and save money,” says Lal. His wife Nancy is running the studios. Lal has also started ‘I Vision’, an eye hospital, in Thrissur district. New-generation actor and model Rima Kallingal and two friends, Shwetha Vijay and Neetha Manoj, joined together and launched ‘Soul Sisters’ for opening boutiques in major cities in Kerala. They have already arranged exhibitions named ‘Fashion Circus’ in Kozhikode, Thrissur and Kochi, says Rima, a journalist turned dancer, model, Miss Kerala runner-up and an actress. Rima expects to achieve much more in business. “I always wish to start new ventures in life. ‘Soul Sisters’, she hopes, will be a new star of our fashion world. A fashion designer, Rima is trying to introduce her fashion sense to the fashion world.
and staff always there, I am able to take care of my family as well as my shop, a boutique in Kochi,” says Saritha, wife of actor Jayasurya. It was with Jayasurya’s encouragement that she opened ‘Déjavu’, the designer boutique in Panampilly Nagar, which is near her house. Saritha is a biotechnology degreeholder and recognizes that the degree is in demand only outside Kerala. She says that if she goes out of the state and with Jayasurya always busy with his shooting schedules, things at home cannot be managed. So they planned to start a business. During his free time, Jayasurya Jayasurya makes it a point to travel with Saritha to shop for the boutique and he spends time in the boutique as well.
The duo has also started a tailoring and designing unit, besides planning to expand the operations of the boutique. Saritha says: “I got married to Jaya six months after completing my postgraduate studies but did not pursue a job because I doubted whether I would be able to give my full attention to my family”. Most people wonder why celebrity wives are involved in businesses when their husbands are quite Lal capable of supporting them financially. Celebrity spouses are an active lot—they are not only homemakers but many have their own businesses as well. Gone are the days when celebrity wives sat idle just because their husbands were busy set-hopping.
Versatile entertainer and actor Siddique is now the Editor of a lifestyle magazine named Family Facebook, started in 2011 from Kochi. It provides information about the film industry, including news, pictures, film previews, stars’ interviews etc. Family FaceRima Kallingal book makes a sincere effort to cover all aspects of films and fashion. Many consider it a great read for the lovers of Malayalam films. Siddique has also produced many films, most of them boxoffice successes. His Nandanam, produced without any major stars, was a box-office hit and won major awards. Siddique’s combinations with Jagadeesh and Mukesh have been remarkable and the trio has been successful in comedy combinations. It remains to be seen how successful he will be in his role as an Editor. “With my supportive husband Oct 31 - Nov 30, 2012
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