India welcome to play a role in reconstruction of Syria: Bashar al-Assad

New Delhi: Mr Bashar al-Assad, the President of Syria, has welcomed India to play a role in the economic reconstruction of Syria. He expressed that both the countries are victims of terror and should support each other in the fight against it. He has welcomed Indian companies to take part in the expansion projects that will be undertaken in most cities of Syria after liberation from ISIS and al-Nusra and other terrorist organisations. Further, he said that India and Syria could learn from each other and strive to build a genuine coalition in order to fight against terrorism. He also said that India's stand on the Syrian war is based on international law and United Nations Charter; and not influenced by the countries that try to force New Delhi to end ties with Syria. India will be one of the few countries that Mr Assad will visit once the war ends.

In a first, Reserve Bank of India to have CFO soon

Mumbai: The Reserve Bank of India (RBI) will soon have a chief financial officer (CFO) to oversee financial reporting and accounts, besides shaping policies.
Spelling out job responsibilities for the CFO, who will be of the rank of executive director, the RBI said he or she would be responsible for “accurate and timely presentation and reporting of financial information”.
The head of finance should essentially be a qualified chartered accountant with at least 15 years of experience of overseeing financial operations of banks or financial firms, the central bank said in a notification seeking applications for the position.
Till now, the central bank does not have a dedicated official handling the finance function, and the tasks are being carried out internally.
The CFO’s responsibilities will also include establishing accounting policies and procedures, and ensuring compliance with financial regulations and standards.
The CFO would communicate both the expected and actual financial performance of the bank. His work will also involve overseeing the Budget process, collecting inputs and comparing actual performance vis-à-vis the Budget Estimates.
Raghuram Rajan, during his tenure as RBI governor, had toyed with the idea of having a chief operating officer of the rank of deputy governor. Rajan wanted Nachiket Mor, presently director on the central board of the RBI, to be in that position, said two senior bankers.
The RBI expects the CFO to flag risks to the finances and develop strategies to counter and mitigate the same. He would have oversight of three departments, including department of government and bank accounts, corporate strategy and budget department, department of corporate services.
About the compensation package for the CFO, the RBI said that for regular appointment (on permanent basis), the selected person will draw a starting basic pay of Rs 1,20,500 a month and will also be eligible for dearness allowance, house allowance, special allowance and local compensatory allowance.
The gross monthly emoluments for the post will be about Rs 2,40,660. The person will get the perquisites as available to the post of executive director and will be eligible for superannuation benefits. For the person coming on contract, appointment would be on cost-to-company (CTC) basis.
The cost per month works out as Rs 2 lakh a month with housing. Without RBI’s housing, the CTC will about Rs 4 lakh a month. Those on contract would not be eligible for allowance and perks.

L&T Q4 profit rises 29.5% to Rs 3,025 crore

M

umbai: Larsen and Toubro Ltd (L&T), India’s largest engineering and construction company, on Monday reported a 28% jump in March quarter consolidated net profit on higher revenue and lower taxes, beating Street expectations.
The company missed its own 2016-17 target for order inflows and revenue, as a Rs20,000-crore defence order did not come through. L&T, however, said it expects order inflows to grow 12-14% and revenue by 12% in 2017-18, as the deferred orders materialize.
The private sector capex cycle is unlikely to recover this fiscal, group executive chairman A.M. Naik said. “With the current push on recovering of debt, about 90% of private sector today is worried about returning money and not borrowing and promoting new projects, at least in the infrastructure sector,” Naik said.
Consolidated net profit in the quarter rose to Rs3,025 crore from Rs2,335 crore a year earlier. Total income from operations rose 12% to Rs36,828 crore. Nineteen analysts polled by Bloomberg had expected L&T to report a consolidated net profit of Rs2,650.50 crore; 20 analysts had expected net sales of Rs36,582.20 crore.
In January, L&T said it expects 2016-17 orders and revenue to grow 10% each, revising its earlier forecast of 15% growth in order inflow and 12-15% for revenue. However, revenue for the year grew only 8% to Rs1.1 trillion, while order inflows rose just 5% to Rs1.43 trillion.
“Increasingly, for a big company such as L&T, it is a challenge to be dependent entirely on government orders to deliver about 15% order inflow growth. They are being conservative with the new forecast of about 12% growth,” said an analyst at a securities house, asking not to be named.
L&T said it won orders worth Rs47,289 crore in the March quarter, up 9.6% from a year earlier. International orders, at Rs.9,044 crore, made up 19% of the total order inflow.
The consolidated order book stood at Rs2.61 trillion as of 31 March, an increase of 5% from a year earlier.
Revenue from the infrastructure business, its largest unit, rose 8.2% to Rs20,300.96 crore in the quarter. Revenue in the power business fell about 2.8% to Rs1,838.55 crore.
In its outlook for the year, L&T said it expects an economic recovery to steadily improve, backed by structural reforms.The government’s thrust on infrastructure will be a strong driver of economic growth, L&T said.
On Monday, L&T also said it has appointed J.D. Patil to its board as whole-time director and senior executive vice president (defence business) with effect from 1 July. Patil joined L&T in 1978 and was involved in expanding the company’s nascent technology and product development group and the foray in defence sector.
In April, L&T appointed current deputy managing director and president S.N. Subrahmanyan as managing director and chief executive officer, heralding the first change of guard in L&T’s top management in 18 years.
Subrahmanyan, 55, will take on the top job at the complex and diverse conglomerate effective 1 July. Naik, 74, who currently is group executive chairman will be non-executive chairman for three years from 1 October for transition of leadership and to provide guidance and mentorship to the management.
L&T’s shares closed at Rs1,788 on BSE on Monday, little changed from previous closing. Results were announced after market hours.

VLCC acquires nutraceutical maker Wellscience

New Delhi: VLCC Health Care Ltd, a beauty and wellness firm, has forayed into the fast growing nutraceuticals industry with the acquisition of the direct selling business of Wellscience, a Gurugram-based nutraceutical products maker. The acquired company, which will be rebranded as VLCC Wellscience, offers a comprehensive range of high quality nutraceutical supplements and personal care products, catering to customer requirements across age groups, and has a direct selling network of over 35,000 associates. Mr Lajinder Bawa, CEO of VLCC Wellscience, has stated that the brand values of Wellscience and VLCC will likely provide the company with the necessary thrust required for its next level of growth.

India is the biggest growth driver for Essilor, says CEO Hubert Sagnieres

India is the biggest growth driver for Essilor, says CEO Hubert Sagnieres
Livemint: May 30, 2017
New Delhi: Earlier this year, French lens-maker Essilor International SA and Italian frame designer Luxottica Group SpA announced a merger to create a global eyewear giant with a market share of 13-14%. In India, the combined entity will have 15-20% market share in the Rs22,674 crore (as of 2016) eyewear market.
“But the market should actually be three times bigger,” says Hubert Sagnières, chairman and chief executive officer at Essilor International and executive vice-chairman and deputy CEO of Essilor Luxottica, referring to the number of people with bad vision in India and across the globe.
Essilor sells lenses under brands such as Varilux, Crizal, Definity, Xperio and Foster Grant, while frame designer Luxottica operates brands like Oakley and Ray Ban. The companies are expecting to complete the transaction latest by January 2018. Sagnières, who was in Delhi last week, talks about the idea behind the merger, expectations from the Indian market, and how e-commerce has been a game changer for eyewear. Edited excerpts from an interview:
How will the merger change things?
The main reason why Luxottica and Essilor are in business is to improve the vision of the people. Essilor has been in business for 180 years now; Luxottica is a little younger with 50-55 years. We have developed our activities for improving vision with lenses and Luxottica has done the same with frames. The combination of the two companies is to make sure that we develop the eyewear market which is currently facing two key challenges—awareness and accessibility. There is a lack of awareness when it comes to bad vision. Secondly, there are not enough stores or access points where people can go and have their eyes checked or purchase eye-glasses, contact lens and sunglasses.
Secondly, most of the Luxottica brands which are sold in India are produced mainly in the US. With the merged entity, we can produce Luxottica locally at our facility in Gurgaon. So, the big change will also be on the availability of all the brands that Luxottica has. There will be luxury fashion and affordable fashion with the combined entity.
How do you plan to resolve the issues of accessibility and awareness?
To eradicate poor vision from India, we don’t need to develop any new product. We just need to make sure that people pay attention to their vision. People assume that a good vision is forever but the dust, light and sun can anytime attack your iris and retina. It may not make you blind but you may have eye diseases like glaucoma or retina issues.
In India, we take the young people in rural areas and train them to be basic opticians over a period of one year. We give them a small grant so that they can go back to their own villages and start micro-enterprises. This is one way of solving accessibility issue. We started this about five years back and today we have trained close to 3,000 people. We will add 10,000 more by the end of 2020.
How has overall eyewear market evolved in India?
It’s growing very fast. The uncorrected vision was not being paid any attention earlier. Over the last 15-20 years, there has been a lot of awareness. The cost of poor vision in India is estimated (by World Health Organization) to be over Rs2 trillion annually, that is $37 billion. If you just put glasses on people’s faces, you increase the GDP (gross domestic product) of India by Rs2 trillion every year.
India stands second when it comes to number of people with bad vision. India has 1.3 billion people, out of which 550-600 million people have bad vision. China is number one. At the same time, this ranking is linked to population.
Which are your best markets?
Absolutely none. There is no market where we have eradicated poor vision. In US, 40 out of 300 million people and in France, four out of 60 million people don’t have access to eye-care. We have not solved the problem of poor vision but we are making progress everywhere. Essilor is doing business in every country of the world except North Korea.
Which countries are driving growth for you?
India is the biggest driver. We are growing much faster in India than in China and we are basically the same size in both the countries. India is among top 10 markets for us. It currently contributes less than 5% to our global revenue.
Also, some countries in Africa are good drivers, where we have low market share. Certain countries are more organized. Like in Latin America, Colombia is very well organized for eye care. Government has invested a lot in eye care development schools there.
How big a role does e-commerce play in eyewear accessibility globally and in India?
Globally, huge. It contributes around 5% to our global revenue, while it was nothing three years ago. It has solved the problem of accessibility to a great extent. The biggest markets where online eyewear is doing well, are China and the US.
In India, it is not where it should be, but it is growing. It is still perceived as a way to get deals and cheap stuff. India is still very small because it just started a year ago. We have recently started a site called www.coolwinks.com.
What is the revenue of the company post merger?
Globally, we have revenue of €7 billion. Combined with Luxottica, it will be €14 billion in a market which is close to €100 billion. The more important fact here is that the industry is underpenetrated because the market is three times bigger. That’s the size of uncorrected, bad vision across the world.

CPPIB scales up India investments, pumps in Rs 9,120 crore in fiscal 2017

New Delhi: Toronto-based Canada Pension Plan Investment Board (CPPIB), which opened its India office in 2015, has quickly scaled up its investments since then, figures from its annual report show.
The pension fund had investments of around Rs13,440 crore in the country by March 2016, and pumped in Rs9,120 crore more in the next year to take its total India exposure to Rs22,560 crore by 31 March 2017.
Canada’s largest pension fund has been investing in India since 2010 and made its first active investment in the country through a C$100 million commitment to Multiples Private Equity Fund in that year. (1 CAD=Rs48)
Most recently, CPPIB joined hands with Everstone Group’s industrial and logistics real estate development platform, IndoSpace, to form a joint venture named IndoSpace Core to acquire and develop modern logistics facilities in India. The Canadian pension fund will initially commit around $500 million and own a significant stake in the joint venture.
It has also formed a strategic investment platform with The Phoenix Mills Ltd (PML) to develop, own and operate retail-led mixed-use developments across India. The pension fund will initially own 30% in the platform, known as Island Star Mall Developers Pvt. Ltd, a PML subsidiary, which owns Phoenix MarketCity Bangalore, for about C$149 million. CPPIB’s total commitment to the platform is around C$330 million, which will increase CPPIB’s stake in the platform up to 49%.
In an interview published in Mint on 9 January, Mark Machin, who worked as CPPIB’s first president for Asia and was named president and chief executive of the pension fund a year ago, said India had the best profile as an investment destination in the world.
“There are three things that are discussed from time to time: the stability and the effectiveness of the government to effect change, the second thing is the oil price spike which is a real challenge for India and third thing is high interest rates. But right now, we are in a good place and that is why a lot of money is looking at India,” he said, adding that the pension fund’s emerging markets allocation is expected to grow from 15% to around 20% by 2030. It is looking to ramp up its exposure to emerging markets, in particular India and China.
Among its other bets, CPPIB bought an additional 1.5% stake in Kotak Mahindra Bank Ltd along with peer Caisse de depot et placement du Quebec (CDPQ) for $352 million in March this year. To date, CPPIB has invested a total of C$1.2 billion in the bank, representing a 6.3% stake.
The same month, CPPIB also bought 3.3% in telecom tower company Bharti Infratel Ltd for $300 million, as part of the purchase of a 10.3% stake alongside funds advised by PE firm KKR & Co. LP, from Bharti Airtel Ltd.
In January, CPPIB agreed to buy around 48% US-based digital product development services firm GlobalLogic Inc., from private equity fund Apax Partners LLP.
Meanwhile, the CPP Fund, which houses investments for CPPIB, saw an increase of about 13.5% in its net assets to C$316.7 billion as of 31 March, 2017 from C$278.9 billion at the end of fiscal 2016, according to a separate statement.
The C$37.8 billion increase in assets for the year consisted of C$33.5 billion in net income after all CPPIB-related costs and C$4.3 billion in net Canada Pension Plan (CPP) contributions. The portfolio delivered a gross investment return of 12.2% for fiscal 2017, or 11.8% net of all costs.
“This was a strong year for the CPP Fund as we achieved one of the largest yearly increases in assets since the inception of CPPIB,” said Machin in a media release.
“As always, we continue to focus on longer-term performance. Year-by-year results will swing, but it is noteworthy that our 11.8% five-year return mirrors our annual return. We believe this is a strong indicator of our ability to generate steady, sustainable returns for generations of beneficiaries to come,” he added.
To generate the C$33.5 billion of net income from operations after all costs, CPPIB incurred total costs of C$2,834 million for fiscal 2017, compared to C$2,643 million in total costs for the previous year.
CPPIB’s total costs for fiscal 2017 consisted of C$923 million of operating expenses; C$987 million in management fees and C$477 million in performance fees paid to external managers; and C$447 million of transaction costs.
This fiscal year reflected a decline in the operating expense ratio for the second year in a row, as well as a slowdown in the growth of CPPIB’s operating expenses, the company said. In fiscal 2017, CPPIB completed 182 global transactions through four investment departments. Nineteen of those investments were more than C$500 million.
“The composition of our highly diversified long-term portfolio continues to position us well, allowing us to take advantage of the strong performance of global stock markets this year, amid significant global geopolitical developments,” said Machin, adding that the diverse investment programs of the group generated strong earnings, while fixed income investments remained relatively flat.
In the 10-year period up to and including fiscal 2017, CPPIB has now contributed C$146.1 billion in cumulative net income to the Fund after all CPPIB costs. Since CPPIB’s inception in 1999, it has contributed C$194.1 billion.
On the other side, for the five-year period, the net nominal return was 11.8%, contributing C$129.6 billion in cumulative net income to the Fund after all CPPIB costs. While Canadian assets represented 16.5% of the portfolio, and totalled C$52.2 billion, assets outside of Canada represented 83.5% of the portfolio, and totalled C$264.7 billion.

Mahindra Q4 profit rises 26.3% to Rs 874 crore

Mumbai: Mahindra and Mahindra (M&M) Ltd on Tuesday said its net profit in the March quarter increased 26.3% from a year before.
Profit after exceptional items in the three months rose to Rs874 crore from Rs691.51 crore a year ago. Revenue and other income—that earned from avenues other than its business operations—grew 5.2% to Rs 12,289 crore
Standalone net profit grew 19.9% to Rs 725.16 crore in the quarter from Rs 604.63 crore a year ago. Revenue and other income on a standalone basis grew 4.05% to Rs 12,319.64 crore from Rs 11,840.47 crore.
A Bloomberg poll of analysts had estimated standalone net profit of Rs 605 crore and net sales of Rs 10,573.2 crore.
The company’s revenue from the automotive sector in the three months to March rose to Rs 7,612.77 crore from Rs.7,476.72 crore a year ago, while farm equipment revenue advanced to Rs 2701.97 crore from Rs.2,283 crore.
During the quarter, the maker of Scorpio and XUV 5OO sports utility vehicles (SUV) sold a total of 137,770 units of automobiles including SUVs, small trucks and pick-ups -- down 2% over a year ago.
The fall in sales in company’s automotive sector was compensated by strong deliveries of tractors, whose sales rose 16% to 50,253 units (including exports) over the same period a year ago.

We plan to invest ~5,000 crore to increase capacity in India

Mumbai: Aditya Birla group’s Hindalco announced a 7 per cent revenue growth to Rs 39,383 crore for FY17 and a net profit of Rs 1,557 crore, thanks to a rise in metal prices and higher productivity at its facilities. In an interview, Satish Pai, managing director and chief executive officer of Hindalco, tells Dev Chatterjee how the company turned around and what its future plans are. Edited excerpts:
This is the fifth quarter of good performance for Hindalco. What contributed to this change?
The London Metal Exchange (LME) prices for aluminium were up 6 per cent during FY17 at $1,688 a tonne, compared to $1,592 a tonne in FY16. All our plants have also ramped up production to full capacity.
We used the share sale money ($500 million or Rs 3,225 crore) to retire our debt (Rs 4,500 crore). Novelis refinanced $4.3-billion long-term debt, reducing our annual interest expense by $79 million.
Our debt is now down to Rs 19,000 crore. All these factors contributed to higher profits and increased margins of about 18.6 per cent.
Most Indian companies are currently holding on to new investments. Will Hindalco invest in new capacity?
We have drawn up plans to invest another Rs 5,000 crore to increase our capacity in India in the medium term. We believe the government’s increased focus on housing, electrification and infrastructure will lead to higher demand for our products. From a growth of 9-10 per cent in demand, we expect a growth of 21 per cent by next year.
How was the performance of Novelis? Do you expect its growth rate to continue, taking into consideration the current global prices when environmental and supply-side restriction in China are expected to drive LME further up?
The demand from automakers for aluminium autosheet is robust and we expect all the top car makers in the US to use aluminium.
There were lower can shipments, mainly because of weak growth in Brazil and West Asia. This impacted overall shipments.
The earnings before interest, tax, depreciation, and amortisation (Ebitda) of the company grew by 13 per cent to $1.08 billion to FY17. However, revenues decreased marginally to $9.6 billion on account of a slight decline in shipments to 3,067 kilo tonne.
In the future, we expect a similar demand for aluminium auto sheets from Indian car makers, but it will take time. The demand from Indian electric car makers will come first.
The country is getting ready for the roll-out of the goods and services tax (GST). How will this impact Hindalco in the coming years?
The GST would be a big boost for the overall economy and for our company.
It will reduce paperwork for us and the country will be like the European Union. We have made tweaked our software and have talked to our suppliers as well as our clients, so that the input credit can be given to all the parties seamlessly. Our products will be taxed at 18 per cent, slightly lower than before.

Narendra Modi meets Angela Merkel, says India waiting with open arms for German investments

Berlin: Prime Minister Narendra Modi on Tuesday called on “more and more German companies” to invest in India even as the speedy conclusion of an India-European Union (EU) free trade agreement (FTA) was the focus on the German side.
Highlighting the huge potential that remains untapped in the economic partnership during his inaugural address at the Indo-German Business Summit here, Modi said India will welcome German companies with open arms.
“There are 600 Indo-German joint ventures operating in India, employing 2,00,000 people. But there is huge potential as Indo-German economic cooperation is below its full potential and to enhance this, we in India are waiting with open arms because we value German partnership a lot,” Modi said.
The deadlock over the FTA between India and the EU was also highlighted at the summit, with German Chancellor Angela Merkel and senior business leaders urging the prime minister for a speedy conclusion to the agreement.
“There are growing protectionist trends around the world but Germany believes the value chains are so deeply interconnected that we will continue to create fair trading conditions. Within this context, it is important that the FTA makes progress,” Merkel said.
“Germany will continue to push Brussels to resolve negotiations more speedily and we are committed to implement and put into practice such an agreement. The negotiations have been tough because every country must safeguard its own interests and Germany will ensure that India’s concerns are also put on the table,” she said.
Dr Hubert Lienhard, president and chief executive officer of German industry body the Asia-Pacific Committee of German Business (APA), also urged Modi on resolving the agreement to enable investments. “Tension is not good for investment. It is important we join forces in pushing to reopen negotiations, to ensure stable trade relations for the future,” he said.
The representations came as the ministry of external affairs (MEA) confirmed that India and the EU negotiators are to take forward discussions on the agreement at a meeting in July. The details of this meeting have not been finalised, but the MEA said the aim was to work towards a speedy resolution of an agreement in light of the Indo-German bilateral trade treaty having expired in March this year.
“We are committed and have been engaging on this issue and hope an agreement can be reached as fast as possible,” MEA spokesperson told reporters at a briefing following the Fourth Inter-Governmental Consultations (IGC) between Modi and Merkel earlier in the day. Stressing that India refers to the deal as a Broad-based Trade and Investment Agreement (BTIA), he said both countries were committed to creating a healthy ecosystem for investments from Germany.
“They [Modi and Merkel] also reaffirmed their strong commitment to the EU-India Broad-based Trade and Investment Agreement and their commitment to bring about a resumption of the negotiations at the earliest possible date.
“This would, inter alia, allow to establish provisions for the mutual protection of new foreign investments,” said the joint statement issued by Modi and Merkel after the IGC.
At the business summit, the prime minister’s focus was on highlighting India’s liberalised FDI regime and growing ease of doing business. Describing GST as the “most historic reform India ever done”, he said the trend of reforms is spreading fast to all states. He highlighted the abolition of the Foreign Investment Promotion Board (FIPB) to “expand the engagement of overseas investors in Indian economy”.
After his address, Modi left for courtesy call on German President Dr Frank-Walter Steinmeier at Castle Bellevue, his official residence. Modi will leave for Spain after his meeting with the president later on Tuesday.

GST: State revenues to rise by Rs 40,000 cr, says Standard Chartered

New Delhi: The roll-out of the goods and service tax (GST) is likely to lead to a fiscal bonanza for states, with the additional revenue at the aggregate level likely to be around Rs 35,000-40,000 crore, says a report by Standard Chartered. But, some states, such as Gujarat, Tamil Nadu and Haryana, are expected to see a loss of revenue.
Six states, namely Uttar Pradesh, Bihar, West Bengal, Rajasthan, Madhya Pradesh and Punjab, are likely to be the main beneficiaries of the shift to the new indirect tax regime.
According to the report, Uttar Pradesh is likely to get a boost of 1 per cent of gross state domestic product (GSDP) in the revenue, while Bihar is expected to see a rise of roughly 2.7 per cent of GSDP. This additional revenue could help states contain their fiscal deficit, which is likely to see slippages on account of additional interest payments for UDAY, the Seventh Pay Commission and the possibility of farm loan waivers.
The total revenue gain at the aggregate level translates to around 0.2 to 0.3 per cent of GDP.
Standard Chartered estimates that the total GST pool was around Rs 8 lakh crore in FY16, rising up to Rs 9.6 lakh crore in FY17 (revised estimates). The Centre contributed 48 per cent of the total pool, with the balance accruing from the states.
Manufacturing states such as Gujarat, Tamil Nadu and Haryana, which are expected to see a loss of revenue will be compensated by the Centre for five years after the implementation of GST.
“The central government will receive a marginally higher share of taxes of Rs 15,000-20,000 crore in the first year,” the report said.