Wednesday, 7 August 2013

[www.keralites.net] OMG! Can this even be true?

 



OMG! Can this even be true?

#10An iPad 2 would cost $15,000 if made by American workers

If you didn't already, now you know why outsourcing is such a big deal! Yep, because foreign labor is a fraction of the price
of American labor. Is this okay? We're not going to judge, but this is definitely one to think about.


#9 Chocolate releases the same chemical into your body that you get when you start falling in love

Ever fallen in love? Then you've felt the effects of Phenylethylamine (PEA), and it probably felt pretty familiar. That's because
every time you grab a chocolate bar from the corner store, you're feeling the effects of raw love. No wonder we feel so strongly
about our favorite dessert!




#8 The whoopee cushion was invented by a Roman Emperor at age 14

Hey, at age 14, we thought whoopee cushions were hilarious, so this doesn't surprise us too much. Emperor Elagabalus was assassinated at age 18, however, so maybe it would've been good for him to hold off on the fart jokes around his powerful guests.

#7 In times of economic troubles, Russian teachers can be paid in vodka

I'm sure a regular paycheck would be preferred, but if your country doesn't have the money and you still have to deal with screaming kids every day,
a little something to ease the pain is probably good, right?

#6 91% of people text things they could never say in person

Texting sure made things a lot more convenient, and apparently it also made us more open. Before you send a text, take
a second to think if it's something you'd tell them in person.

#5 Laughter helps kill viruses and tumor cells

Apparently having a sense of humor is important for staying alive! Indeed, laughing increases antibody activity within your body by about 20%,
meaning you should watch tons of reruns of Parks and Recreation when you get sick (which is basically what we do already anyways).


#4 Crows can recognize human faces

As you might imagine, this isn't always a good thing. If you treat a crow badly (as most of us tend to), they will remember, and may annoy or even attack you on purpose. Sounds more like a vengeful ex than a common bird!


#3 Russia is just a little bigger than Pluto

Yep, the world's largest country has a surface area of a little over 17 million square kilometers, while the Solar System's smallest planet comes in at
around 16.6 million. Whoops, did we say "planet?" Well, now it's awkward...


#2 Scientists estimate that 86% of land creatures and 91% of sea creatures remain undiscovered

Seriously? Zoos better get a lot bigger soon. The researchers who conducted this study also estimated that the majority of undiscovered species are insects,
or live far beneath the ocean's surface.



#18 years worth of video is uploaded to YouTube every day

Suddenly, we respect the people that have to review and censor YouTube videos so much more. Yes, there are literally centuries worth of videos
on everyone's favorite procrastination website. How much of that do you think is cat videos?






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[www.keralites.net] India Shining: Not the funnies...!!!

 

MR Venkatesh
 

 

A fairly large South-Indian group with varied business interests had invited me to a strategy session to turn it around. It was the first meeting and was to be preceded by breakfast. As we waited to be served, I perused their latest balance sheet.

 

Noticing that it was a profitable, tax and dividend paying company, where was the question of turnaround I wondered? Nevertheless, I instantly zeroed in on the balance sheet. I observed that the company had invested approximately Rs 700 crore on its subsidiaries and lent another Rs 300 crore — in the aggregate Rs 1,000 crore. Flipping across the accounts, I asked a simple question – what is the return from this investment of Rs 1,000 crore?(Amounts changed for obvious reasons.)

 

The CFO was silent. The executive director hummed and hawed. The body language of the rest was a dead giveaway of their uneasiness to discuss this matter further.

 

The junior-most amongst them blurted out, perhaps unwittingly, that it was virtually nil. His answer got a cold stare from his superiors. "Nil!" I exclaimed to the horror of my hosts. "You must be paying approximately Rs 150 crore as interest annually on this sum." I commented, probably rubbing salt into their wounds. I went on to probe further, "Why, what happened to this money?

 

This time my question was followed by thundering silence. Even the junior one was quiet this time around. May be he had already got the message. As I helped myself to the breakfast I noticed radio silence at the table. Was I at a funeral?

 

Between mouthfuls, I attempted to be at my persuasive best. Probably my training as a chartered accountant helped me. Unable to bear my repeated questioning, the CFO finally broke down. "Sir, as you are aware we are in infrastructure. That requires tremendous pay-offs to politicians and bureaucrats. We have used approximately 150 subsidiaries, some of which are foreign ones, to route these payments."

 

I was stunned. My jaw dropped. "Sir, we expected you to know all these practicalities of our business. The turnaround strategy needs to factor these ground realities." Obviously, this time around I was at the receiving end. The breakfast meeting concluded abruptly.

 

Importantly, I understood that India's outbound investment policy was not a liberalisation process, but a facilitation one – one that ensured smooth pay-offs! Importantly in this mess, businessmen, politicians, professionals, bureaucracy, judiciary and even the media are involved. No one can blame the other.

 

The economics of kickbacks and payoffs

 

Instantly my thoughts raced to the Nira Radia tapes. Fifteen per cent was the kickbacks payable to the Minister concerned for approving every road contract. Add another fifteen to the bureaucracy and local politicians. Add another five to seven to bankers, lawyers, consultants and agents to procure funds.

 

What we have is a staggering 35-40 per cent additional cost to every infrastructure project.

 

That implies a road project costing Rs 100 crore would in effect be a Rs 140-150 crores project. Naturally, the toll for the stretch would not be Rs 100 but Rs 150. This has profound implications for the Indian economy. This extra Rs 50 in toll levy for every 100 km has a cumulative effect on the manufacturing cost.

 

The net result – imports from most of our neighbors of several items [despite cost of transportation and customs duty] are competitive than manufacturing the same in India. Forget competing abroad, Indian manufacturing has become uncompetitive in India!

 

There is another dimension to this issue. Somewhere down the line these "costs" were funded, mostly by our banks. Corporates altered their top-line as well as bottom-line to keep their banks in good humor. The Banks in turn suspended their sense of disbelief. As chartered accountants we too played ball in creating a mini-Satyam in most of India's corporates.

 

The impact of gold plating

 

But this gold platting of balance sheets cannot be done beyond a point. Everything has a breaking point isn't it, especially as the economy tanked?

 

These developments were brilliantly captured by a Report by the Centre for Monitoring Indian Economy (CMIE)

 

"As the topline growth continued to slow down, the manufacturing sector as well as the non-financial services sector saw profits fall in the March 2013 quarter compared to the year-ago levels. Operating profits of the manufacturing sector excluding the petroleum sector fell by close to four per cent while the net profit fell by a sharp 23.2 per cent."

 

The report goes on add

"The non-financial services sector managed to improve its sales growth from 3.2 per cent in the March 2012 quarter to 6.5 per cent in the March 2013 quarter on account of sectors like transport services and software. However, at the net level the sector saw a sharp 28.3 per cent decline in profits."

 

Well, both the manufacturing and services sector are going bust.

 

Simultaneously the CMIE points out that the

 

"Commissioning of projects dropped sharply to Rs 337 billion during the quarter ended June 2013 from Rs 827 billion in the June 2012 quarter. This was lowest since quarter ended December 2006."

 

Macro-economic data too corroborate these numbers. From a growth rate of 7.5 per cent in the first quarter of 2011-12 growth rate has witnessed a steady fall in the next seven quarters to less than 4.8 per cent in the fourth quarter of 2012-13.

 

If data released by the Finance Ministry for the first two months of this fiscal is any indication, manufacturing has recorded a negative – yes negative growth of two percent, mining a negative of 5.7 per cent, capital goods a negative of 2.7 per cent, consumer goods a negative of 4 per cent and consumer durables a negative of 10 per cent.

 

In short, when it comes to manufacturing, forget growth, we are in negative zone.

 

The net result – twenty per cent of lending by Indian Banks is stressed. Obviously, when banks end up funding pay-offs and kickbacks, this is the end result. And that is a whopping Rs 11 lakh crores – approximately $200 billion – a sum that even the banks in USA cannot afford.

 

Added to this is the stress on account of our external accounts.The foreign debt has risen to $390 billion. This was a mere $225 billion in 2008. What is galling is that the foreign exchange reserve has remained at a constant $300 billion during this period. Needless to emphasise, the ratio of foreign exchange reserves to foreign debt has deteriorated from 138 per cent then to less than 75 per cent now.

 

What is adding to the consternation is that in the short term – by March 2014 – we need to pay approximately $172bn of our foreign debts. This works out to approximately 44 per cent of the external debtand a staggering 60 per cent of the total foreign exchange reserves of the country.

 

The short-term external borrowings are surely the villain of the piece. Remember in 1991 the short-term external debt was a mere 10 percent of the total external debt. Now it is one-fourth.

 

Another important parameter – India's net international investment position [the net claims of non-residents against external claims of residents] stood at a negative $225 billion as at 30th June 2012. This deteriorated to a negative of $307 billion by March 31, 2013. That implies an addition of $82 billion in a matter of mere nine months.

 

Simply put, Indian manufacturing by and large is uncompetitive at current exchange rates. And if Rupee is devalued, prices of imports, especially crude oil, would increase leading to an inflationary spiral. Either way, that means increased unemployment. The services sector too as pointed out above is spluttering. And remember agriculture has been historically recording sub-three percent growth in the best of times.

 

As we witness large-scale unemployment, purchasing power in the hands of the people is rapidly decreasing. That implies demand compression which in turns puts the economy once again on the downward spiral.

 

Add to this the absolute lack of governance, indecision and Governmental apathy – you would know what it means to do business in India. Whatever be the reason – political or otherwise — bureaucracy in Delhi has simply refused to function. Likewise every assessment with our revenue departments ends up as extortion.

 

Unfortunately the Government's response has been pathetic. Surely, increasing FDI limits is not reforms. On this the UPA Government is completely off-target. What makes the set of reforms scandalous is that the Government is indirectly bribing foreigners to invest in India. The Jet-Etihad deal is a case in point.

 

Put pithily, we are witnessing a repeat of the 1991 crisis.

 

This time around, it is threatening to make the previous one look like a walk in the park. Well what makes the crisis different this time around?

 

Contrary to the popular belief this is not an economic crisis, this is a crisis of national character.

 

Forget fiscal, revenue and current account deficits – let us first talk about morality deficits.

 

(MR Venkatesh is a Chennai based chartered accountant.)

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[www.keralites.net] Beggar and Servant Boy - Story For Children

 


There was a boy who used to be a servant for a rich family. They provided him accommodation, food and everyday some money for tea or snacks. This boy after finishing his morning works used to go to tea stall nearby and spend sometime drinking tea, eating and talking to regular customers. One day he was out to tea stall as usual. There was one beggar newly arrived and stayed put near tea stall. This boy found some kind of attraction towards this beggar. May be sympathy? He bought a tea and some snacks for the beggar and sat near him talking. While leaving he gave beggar whatever money left with him. This became a routine and continued for sometime. On the other hand, beggar's regular collections started reducing because people now used to him. But he didn't want to move to other place for better income for the beggar felt somewhat attached to the servant boy. Sometimes all the beggar's collection for whole day was what the boy gave to him. The beggar didn't like to move out of their meeting place. One day the boy didn't appear as usual. Beggar got worried but thought he might have some work to finish. Next day also the boy was not seen. Thus gone ten days. By now beggar concluded that the boy might have either gone to his native or found a new job. But beggar was more worried for the boy didn't inform him about these. So he finally decided to move to a better place next morning. That night, somebody disturbed beggar's sleep. When he woke up, he saw the boy sitting near to him and crying. Boy was looking tired. He was locked up inside the house where he worked as servant. He was not given food to eat and allowed to go out for the rich man suspected the boy to stole the necklace of his wife. Later after ten days of torture, when they found necklace, they thrown him out of their house. It was not boy stole the necklace but the rich man's wife forgotten where she kept. Though mistake was of rich women, the boy was thrown out of house where he served sincerely for many years! Beggar listened to the story patiently. The boy was crying for he still couldn't understand why he was thrown out. Beggar was too matured to get emotional like the boy. For him, these are common and already witnessed things. He advised the boy not to worry and he promised to take the boy with him next morning. Next day beggar took the boy with him and fed him stomachful. After finishing the breakfast, they left for a new place searching for a new experience. Later it's heard that, the boy found a new house to serve. The beggar fixed a place in near area to take care of the boy. Moral of the story: 1. The boy didn't expect anything in return when given to beggar. All he had was sympathy towards the beggar. 2. Rich family treated boy very well for they want a good faithful servant. But when something went missing the faithful servant became the first suspect. For rich, it's easy to suspect and target poor. 3. When the rich man found his wife to be blamed for missing necklace, he didn't care to punish her or seek pardon from the boy. Instead he thrown the boy out of his house. 4. The boy was careless and spent all money he got for he was not matured to understand - the situations can't be same always. He thought his life will be same always. 5. Even while boy spent money, he spent it for a good cause which came to his rescue when he was in need. Even savings wouldn't have instantly helped as the beggar did. 6. Beggar was faithful for the hands that fed him. When got a chance he was happy to pay it back. 7. Life is a long journey. We don't know who will support us when in need. So treating everyone nicely is important saving for future. 8. Who to give and whom to give, who to connect with whom all decided by previous births. The boy was particularly attracted by this beggar shows some kind of past connection between them. So to fight or to embrace someone is what decided by us through our karma. 9. Also the people we meet, we love, we like, we hate, we fight, we depend are sort of steps towards our journey.
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[www.keralites.net] TODAY'S MESSAGE FROM TRICHY PRASANNAN

TODAY'S MESSAGE FROM TRICHY PRASANNAN
 

 

regards
Trichy Na Prasannan, Trichy, Tamil Nadu
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